Study Material

A Reference Book for Promotion Exercise

Compilation
by

Baroda Apex Academy

Bank of Baroda
Ahmedabad

(for internal circulation only)

INDEX
Sl. No.

Subject

Page No.

AWARENESS ABOUT OUR BANK

EMERGING TRENDS IN BANKING

21

LEGAL & STATUTORY PROVISIONS

33

RETAIL BANKING & THIRD PARTY PRODUCTS

42

ROLE OF TECHNOLOGY IN BANK

56

RURAL/AGRI. BANKING

80

MSME BANKING

120

WHOLESALE BANKING

137

NRI DEPOSITS, REMITTANCES FACILITIES for RESIDENTS, DFB

& TREASURY OPERATIONS
187

10

RISK MANAGEMENT

213

11

CREDIT MONITORING, RECOVERY & NPA MANAGEMENT

221

12

HUMAN RESOURCE MANAGEMENT

245

13

RETAIL ASSET PRODUCTS: AT A GLANCE

254

Disclaimer: Though all efforts have been made to incorporate latest and correct information of
the related topics but in case of any doubt please refer book of instructions, reference books
and circulars of the bank. This booklet is focusing mainly the written promotion exam. within
the bank looking the previous trends and should not be considered as instruction manual.

AWARENESS ABOUT THE BANK

Quick Bites
Bank of Baroda was established on 20th July, 1908 at Baroda by ruler of erstwhile Baroda State, His
Excellency Maharaja Sayajirao Gaekwad-III
Ten banks have since been merged with BOB
Logo, the Baroda Sun reflects our corporate brand identity
Founder
Bank of Baroda made a humble beginning on 20th July 1908 as Bank of Baroda
Limited founded by the Ruler of erstwhile Baroda State, His Excellency Maharaja
Sayajirao Gaekwad-III.

Mission Statement

To be a top ranking National bank of

International Standards committed to
augmenting stake holders value through
concern, care and competence.
A saga of vision and enterprise
It has been a long and eventful journey of almost a century across 25 countries. Starting in 1908 from a
small building in Baroda to its new hi-rise and hi-tech Baroda Corporate Centre in Mumbai is a saga of
vision, enterprise, financial prudence and corporate governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted in private capital, princely
patronage and state ownership. It is a story of ordinary bankers and their extraordinary contribution in
the ascent of Bank of Baroda to the formidable heights of corporate glory. It is a story that needs to be
shared with all those millions of people - customers, stakeholders, employees & the public at large who in ample measure, have contributed to the making of an institution.

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Our Logo

Our logo is a unique representation of a universal symbol. It comprises dual B letter forms that hold
the rays of the rising sun. We call this the Baroda Sun.
The sun is an excellent representation of what our bank stands for. It is the single most powerful source
of light and energy its far reaching rays dispel darkness to illuminate everything is touched. At Bank of
Baroda, we seek to be the sources that will help all our stakeholders realize their goals. To our
customers, we seek to be a one-stop, reliable partner who will help them address different financial
needs. To our employees, we offer rewarding careers and to our investors and business partners,
maximum return on their investment.
The single-color, compelling vermillion palette has been carefully chosen, for its distinctiveness as it
stands for hope and energy.
We also recognize that our bank is characterized by diversity. Our network of branches spans
geographical and cultural boundaries and rural-urban divides. Our customers come from a wide
spectrum of industries and backgrounds. The Baroda Sun is a fitting face for our brand because it is a
universal symbol of dynamism and optimism it is meaningful for our many audiences and easily
decoded by all.
Our new corporate brand identity is much more than a cosmetic change. It is a signal that we recognize
and are prepared for new business paradigms in a globalised world. At the same time, we will always
stay in touch with our heritage and enduring relationships on which our bank is founded. By adopting a
symbol as simple and powerful as the Baroda Sun, we hope to communicate both.
Heritage
It all started with a visionary Maharaja's uncanny foresight into the future of trade and enterprising in
his country. On 20th July 1908, under the Companies Act of 1897, and with a paid up capital of Rs 10
Lacs started the legend that has now translated into a strong, trustworthy financial body, BANK OF
BARODA.
It has been a wisely orchestrated growth, involving corporate wisdom, social pride and the vision of

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helping others grow, and growing itself in turn.

The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a bank of this
nature will prove a beneficial agency for lending, transmission, and deposit of money and will be a
powerful factor in the development of art, industries and commerce of the State and adjoining
territories."
Ethics
Between 1913 and 1917, as many as 87 banks failed in India. Bank of Baroda survived the crisis,
mainly due to its honest and prudent leadership. This financial integrity, business prudence, caution and
an abiding care and concern for the hard earned savings of hard working people, were to become the
central philosophy around which business decisions would be effected. This cardinal philosophy was
over years of its existence, to become its biggest asset. It ensured that the Bank survived the Great War
years. It ensured survival during the Great Depression. Even while big names were dragged into the
Stock Market scam and the Capital Market scam, the Bank of Baroda continued its triumphant march
along the best ethical practices.

Initiatives
Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking sector. Bank is
amongst first in the industry to complete an all-inclusive rebranding exercise wherein various novel
customer centric initiatives were undertaken along with the change of logo. The initiatives include
setting up of specialized NRI Branches, Gen-Next Branches and Retail Loan Factories/ SME Loan
Factories with an assembly line approach of processing loans for speedy disbursal of loans.
The major ongoing initiatives of the Bank are detailed below:
Business Process Re-engineering (Project Navnirmaan)
This project touched all aspects of Banks processes, structures and systems with an objective to
simplify processes, improve branch productivity and provide best in-class service to the customers.
The most important initiatives planned under this project include:
Conversion of all metro and urban branches into modern centers known as Baroda Next
branches.
Creation of Automated and Leaner Back Offices like City Back Office (for automated cheque
processing etc), Regional Back Office (for faster account opening etc), Establishment of two Call
Centres, Creation of Academy of Excellence, Introduction of Frontline Automation at select
branches for customer convenience and Organizational Restructuring.

People Initiatives
Bank is endowed with a competent and motivated employee base which is engaged in handling the
extensive business operations of the Bank across the globe. Strategic HR interventions like, according
cross border and cross cultural work exposure to its managers, hiring diverse functional specialists to

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support line functionaries and complementing the technical competencies of its people by imparting
conceptual, managerial and leadership skills, gave the Bank competitive advantage. People initiatives
were blended with IR initiatives to create an effectively harmonious workplace, where everyone
prospered.

New Technology Platform

Bank has made substantial progress in its end-to-end business and IT strategy project covering the
Banks domestic, overseas and subsidiary operations. All Branches, Extension Counters, overseas
business and sponsored Regional Rural Banks are on the Core Banking Solution (CBS) platform.
Bank has been providing to its customers Internet Banking, viz., Baroda Connect and other facilities
such as online payment of direct and indirect taxes, State Government taxes, utility bills, rail tickets,
online shopping, donation to temples and institutional fee payment. Bank has a wide network of ATMs
across the country and has also launched mobile ATMs.
Bank has implemented the Global Treasury Solution in its key territories like UK, UAE, Bahamas,
Bahrain, Hong Kong, Singapore and Belgium. Bank has taken various technological initiatives in
overseas operations such as implementation of Centralized SWIFT activity through Data Centre in
Mumbai, Payment Messaging System with Anti Money Laundering check, Anti Money laundering
Compliance and Online List Matching solution. While Bank implemented Transaction-based Internet
Banking facility for its customers in Uganda, Botswana, UAE, New Zealand, Kenya, Mauritius and
Seychelles, a View based e-banking facility was made available in Fiji, Oman, Tanzania and UK.

Marketing Initiatives
Bank focused on promotion of Brand and various products and services through a variety of marketing
initiatives with dual focus for a robust business growth and deepening of relationships. Marketing
initiatives involved effective utilization of different media vehicles such as print, electronic (TV / Radio),
digital and out of home (OOH) to support the below-the-line (BTL) activities undertaken at the Zonal /
Regional level.
In order to augment the Brand connect with its diverse stakeholders, Bank also participated in various
events such as FICCI-IBA Banking Conference 2014, Pravasi Bhartiya Diwas 2015, MINT Annual Banking
Conclave 2015, World Ranking Snooker Tournament Indian Leg, IL&FS BKC Run 2015 and Standard
Chartered Mumbai Marathon 2015, India - West Indies & India- Sri Lanka Cricket Series 2014, Dun &
Bradstreet Indian Exporters Excellence Awards 2015, SMAASH Entertainment Zone among many others
events thereby increasing visibility and Brand recall value.
Corporate Offices & Head Office
Head Office
Suraj Plaza 1, Sayaji Ganj,
Baroda 390005

Corporate Centre
Bank Of Baroda
Baroda Corporate Centre,
Plot No. C-26, Block G,
Bandra Kurla Complex,
Bandra (East),
Mumbai 400051

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Branch Network (as of 29.02.2016)

Area

No. of Branches

Metro

1002

Urban

927

Semi-Urban

1419

Rural

1953

Total (Indian)

5301

Foreign (Overseas)

105

Total (Global)

5406

Controlling Offices
Zonal Offices

13

Regional Offices

70

Subsidiaries & Joint Ventures

Domestic

Overseas

Subsidiary

Subsidiary

BOBCARDS Ltd.
BOB Capital Markets Ltd.
Nainital Bank Ltd.

Bank
Bank
Bank
Bank
Bank
Bank
Bank
Bank

of
of
of
of
of
of
of
of

Baroda
Baroda
Baroda
Baroda
Baroda
Baroda
Baroda
Baroda

(Botswana) Ltd.
(Kenya) Ltd.
(Uganda) Ltd.
(Guyana) Ltd.
(New Zealand) Ltd
(Tanzania) Ltd
(Trinidad & Tobago) Ltd.
(Ghana) Ltd.

5|Page

Joint Venture Company (J.V.)

Representative Offices

India First Life Insurance Company Limited

M/s India Infradebt Ltd.

Bank of Baroda (Thailand)

Associate

Associate

Baroda
Baroda
Baroda
Baroda

Indo-Zambia Bank Ltd. (Lusaka).

India International Bank Malaysia Berhad.

Pioneer Asset Management Company Ltd.

Uttar Pradesh Gramin Bank.
Rajasthan Gramin Bank.
Gujarat Gramin Bank.

State Level Bankers Committee (SLBC) Convenorship

Rajasthan
Uttar Pradesh
Banks Lead Districts - 48 (as on 31.03.2015)
State

No. of Lead Districts

Gujarat

14

Uttar Pradesh

15

Uttaranchal
Rajasthan

2
12

Madhya Pradesh

Bihar

Delhi

6|Page

Banks merged with Bank of Baroda

As many as 10 banks have been merged with Bank of Baroda during its journey so far:

Hind Bank Ltd (1958)

New Citizen Bank of India Ltd (1961)
Surat Banking Corporation (1963)
Tamil Nadu Central Bank (1964)
Umbergaon People Bank (1964)
Traders Bank Limited (1988)
Bareilly Corporation Bank Ltd (1998)
Benares State Bank Ltd (2002)
South Gujarat Local Area Bank Ltd (2004)
Memon Cooperative Bank Limited (2011)

Board of Directors
The constitution of the Board of Directors is as follows:
1.

Mr Ravi Venkatesan

Chairman

2.

Mr P S Jayakumar

Managing Director & CEO

3.

Mr Bhuwanchandra B Joshi

Executive Director

4.

Mr Mayank K. Mehta

Executive Director

5.

Mr Mohammad Mustafa

Director

6.

Ms Surekha Marandi

Director

7.

Mr Prem Kumar Makkar

Director

8.

Dr. R. Narayanaswamy

Director

9.

Mr Bharatkumar Dhirubhai Dangar

Director

10.

Ms Usha A Narayanan

Director

Banks Administrative and Functional Set Up

Indian Operations

7|Page

1.
2.
3.
4.
5.

Head Office, Baroda

Corporate Office (BCC) Mumbai
Zonal Offices
Regional Offices
Branches (Metro/ Urban/ Semi-Urban/ Rural)

Project NAVNIRMAAN:
A comprehensive transformation programme called Project NAVNIRMAAN was launched by our Bank
for its domestic operations on 22 June 2009. It is centered on our customers and our employees.
NAVNIRMAAN is a comprehensive change programme that seeks to rebuild the Bank for the future. This
change programme shall touch all aspects of the Banks processes, structures and systems with an
objective to simplify processes improve branch productivity and provide best-in-class service to our
customers. This is a change programme which seeks to create the Baroda Next, the brand promise that
we are making to our customers at large. Our Bank has partnered with well known consultants M/s
Mckinsey & Company to take this project forward.

NAVNIRMAAN has two main components:

Business Process Re-engineering (BPR) and
Organisational Restructuring (OR).

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Business Process Re-engineering has following objectives:

Improvement in branch productivity.
Best-in-class service levels for customer delight.
Redesign of front and back office processes and roles to reduce turnaround time and to simplify
processes.
Reduction in operating costs.
Organizational Restructuring has following objectives:
Appropriate organization structure and systems to support BPR and in line with future business
plans.
Sustainability of change programme through capability building.
To accomplish above objectives, different types of Back Offices have been proposed:
1. Account Opening and Maintenance Lean Service Factory- Regional Back Office
There are 13 Regional Back Office as on 31.12.2015
This will accomplish following activities:

Account opening and enrichment Savings and Current Account.

Generation of debit card request file & i-track number file for internet banking.
Personalised cheque book issuance.
Printing of customer statements and other intimations.
CRM data entry.
Changes in customer account details.
Account closure.
Account opening, renewal and printing of term deposits.

2. Payment Processing Centre City Back Office

More automation is proposed to be carried out at the existing City Back Offices so that productivity of
processing of cheques can be enhanced.
3. Credit Processing Centres SMELF /URLF
As part of business segmentation and to expedite our delivery mechanism, Bank has established -55SME Loan Factories and -66- Retail Loan Factories which work on assembly line principal as on
31.12.2015.
4. Business Intelligence Unit Data Warehouse
Business Intelligence Unit will undertake following activities:
Generation of all MIS from CBS and ASCROM.

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 Analysis of MIS.
Communication of MIS to Branches, Regions, Zones and Corporate office.
5. Contact Centre
Bank has set up two Contact Centres in Lucknow & Baroda to fast address the
customer queries & grievances. The service timing has been increased to 6 am to
10 pm (from earlier 8 am to 8 pm) for better customer convenience.
Launch of Signature Tune and mascot
Bank has introduced Brand in Sonic Medium by launching a Signature Tune on
the occasion of its Foundation Day in the year 2011. The prime purpose was to
highlight the spirit of the Bank as a vibrant and energetic organization
complementing the Logo.
Gen-Next Branches
To respond to the needs of the changing demographic profile of the country, the bank has been
endeavouring to customize delivery channels especially for youth segment. As a part of these efforts,
the bank has set up innovative Gen- Next branches dedicated to youth and young IT professionals at
certain places. There are 9 Baroda Gen-Next Branches as on 31.12.2015
The branch will have youth specific products and will function as a model for fusion of Hi-tech
and High-touch Banking.
The Branch is offering following liabilities and assets products to the customers:
1. Gen-Next Junior (Saving Account)
Target group
Minimum amount & balance
Non-maintenance of minimum QAB

: Children upto 18 years of age

: Quarterly Average balance (QAB) Rs 500/: Charges Rs 50/- +ST per quarter

2. Gen-Next Lifestyle (Term Loan - Combo Pack)

Maximum Loan Amount (Rs 8.00 lac). Subject to maximum of:

Furniture & Fixture / New Consumer Durables : Rs 2 lac

New Vehicle (Four Wheeler)
: Rs 6 lac
New Vehicle (Two Wheeler)
: Rs 1 lac
Old Four Wheeler (Not more than 3 years old) : Rs 4 lac
New modern gadget/s
: Rs 1 lac

3. Gen-Next Power (OD Facility)

This is a special Savings Deposit product having an in built feature of overdraft facility, Amount: 5
times of net take home monthly salary subject to:
Min Rs 50,000/-

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 Max Rs 2 lac
Some Other Important Initiative under NAVNIRMAAN:
Branch Front end Automation: The Queue Management System (QMS) & Cheque Deposit
Machine (CDS) machines and Personalized Pass Book Printers are installed in 98, 93 and 2,300
branches, respectively.
Mid Corporate Vertical: Separate Mid-corporate vertical has been created and 17 Mid-corporate
branches have been opened as on 31.12.2015
Roll out of enterprise-wide Sales Accountability Model Sales Operating Mode
e-Lobbies: Total independent e-Lobbies as on 31.12.2015 is 230. These lobbies operate 24X7
providing facilities for cash withdrawal, cash deposit, cheque deposit, pass book printing,
internet banking and phone banking.
This facility is known as Non Stop Banking
Chillr Mobile App
In continuation of endeavour to provide simple and smart solutions to customers, Bank has tied up with
Chillr to launch Chillr Mobile app. Using the Chillr app, Bank of Baroda customers can send and receive
money instantly to registered Chillr users added in customers phonebook.
Customers can send money through Chillr mobile app to both partner and non-partner bank customers.
Currently our Bank and HDFC bank are partner banks. Non-partner bank customers can only receive
funds.
Only the mobile number of the beneficiary in the remitter's phonebook is needed. Application enables
customers to send money to any registered Chillr user on phone contact list.
Baroda Academy
Implementation of BPR and OR will
require learning of new skill sets for the
employees. To train the employees on
new desired skills, entire training
system of the Bank under the aegis of
Baroda Apex Academy, Ahmedabad has
been converted into Baroda Academy

Major technology Initiatives:

Baroda Rewardz Banks Loyalty Program

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Online Loan Application Educational Loan, Home Loan, Car Loan

Balance enquiry through Miss Call
Introduction of m-passbook
New app m-connect
Baroda connect online registration
New Debit Cards - RuPay Platinum & MasterCard Platinum Chip Debit Card
Baroda MUDRA Card
Baroda Flash N Move+ Contactless Debit Card
EMV Chip Debit card
Baroda Travel Easy Card
Baroda Non-Stop 24x7 banking

Corporate Social Responsibility:

Bank of Baroda has been in the forefront for social commitment with its innovative approaches and
products viz.
1. Baroda Swarojgar Vikas Sansthan
2. Baroda Grameen Paramarsh Kendras
3. Financial Literacy and Credit Counseling Centres (FLCC)
1. Baroda Swarojgar Vikas Sansthan
Baroda Swarojgar Vikas Sansthans have been set up with following purpose:
1. To train youth and impart them the knowledge and skill for taking up self employment ventures.
2. To train youth to develop the attitude for working in rural areas, in rural development projects.
3. To assist trained youth, in self employment as far as possible, in obtaining credit facilities from
bank / other financial institution and to assist them in setting up their venture successfully.
4. To conduct various training programmes (either independent or in-collaboration with other
organization connected with rural technology, rural development and entrepreneurship
development.)
5. To provide counseling and consultancy guidance with all possible help to the youth in the field of
Self Employment and Rural Development.
2. Baroda Grameen Paramarsh Kendras
The bank has established Baroda Grameen Paramarsh Kendras where following activities are carried
out:

Financial Education and Financial Inclusion

Information sharing and problem solving on technical issues
Credit counseling
Synergy and liaison with other organizations and development activities

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3. Financial Literacy and Credit Counseling Centres (FLCC):

Bank has opened Financial Literacy and Credit Counseling Centres as a CSR initiative. The centre
opened is christened as SAARTHEE amply indicating its basic objective of steering those under
financial distress and educating to others to avoid financial mess.
Banks HR Initiatives

VOICE OF BARODIANS: Employee Engagement Survey-2016 was launched on 22.02.2016.

E-learning course - Code of Conduct for Officers aimed to familiarize all officers with various
guidelines of code of conduct policy for officers of our Bank.

Baroda Manipal School of Banking:

The Baroda Manipal School of Banking is a unique association of Bank of Baroda and Manipal Global
Education to train students for a banking career in Bank of Baroda on a first-day, first-hour productive
model, and thereby have a ready pool of trained Officers.
Wealth Management Services

Bank as part of customer centric measure initiated Wealth Management Services for our HNI and
affluent customers, a complete financial solution at one stop. The service has enabled our
customers to buy various investment products through our branches and is positioning our Bank
as One Stop Financial Super Market
Bank is offering Wealth Management Services to our customers with a view of providing various
financial services, apart from the regular banking activities which includes Life Insurance, NonLife Insurance, Health Insurance, etc.
Mutual Funds, Online trading account etc are offered to the customers through various tie-up
partners.

Under Wealth Management Services currently we are offering 3rd party products in Bancassurance,
Mutual Fund, e-Trading etc. under tie up arrangement with various partners.

Insurance

IndiaFirst Life Insurance Co. Ltd.

National Insurance Company Limited

Mediclaim Insurance

Baroda Health

ASBA

Application Supported by Blocked Account

Mutual Fund

UTI Mutual Fund

Birla Sunlife Mutual Fund
Reliance Mutual Fund -

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Sundaram Mutual Fund

Franklin Templeton Investments
Baroda Pioneer Asset Management Co.
Kotak Mahindra Mutual Fund
IDFC Mutual Fund
e-Broking

Baroda e - Trade
Baroda e-Trading

Audited Financial Results for the Quarter/Year ended 31st December, 2015 (Rs. In crore)
Parameter

31-03-2015

31-12-2015

Total Global Business

1045625

973959

Total Global Deposit

617560

589687

Total Global Advances

428065

384272

Net Profit

3398

(3342)

Gross NPA (%)

3.71

9.68

Net NPA

1.89

5.67

ROAA

0.49

-1.91

CAR (Basel II)

13.33

12.95

CAR(Basel iii)

12.60

12.18

Global NIM (%)

2.31

1.72

Bank's present BPLR 13.90 % (wef. 05.10.2015)

Base Rate: 9.65% (wef. 05.10.2015)
Shower of Awards & Accolades on Bank of Baroda

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 Best Public Sector Bank Award under the category of Global Business at the Dun & Bradstreet Banking
Awards 2015.
The Government of India awarded Bank with the 1st Prize in the Indira Gandhi Rajbhasha Shield
Competition in Region B. on Hindi Diwas 2014. Further, Bank was awarded first prize for ' B' Region
and second prizes for Region 'A' and 'B' by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield
Competition.
BML Munjal award in Public Sector Category for Business Excellence Through Learning & Development
2015.
Excellence in Banking (PSU Sector) at the 5th My FM Stars of the Industry Awards recently held in
Mumbai on 30.01.2015
National Prize First Rank in Innovative Training Practices for the year 2014 from Indian Society for
Training and Development (ISTD).
Golden Peacock National Training Award for the year 2014 under the aegis of Institute of Directors, New
Delhi.
Champion of Champions Award at the 54th annual ABCI Awards 2015, for 6 Categories- Indian
Language Publication Bronze; Exhibition Collateral Gold; Wall Calendar 2014 Silver; Environmental
Communication Silver; E-Zine Bronze; Corporate Film Gold.
3 Awards at the IBA Banking Technology Awards 2014 15, Winner in Best Financial Inclusion
Initiative; First Runner up in Training & Human Resources, E - learning Initiatives; First Runner up in
Best Use of Data.
Best Bank - Global Business Development (Public Sector) & Best Bank Overall (Public Sector) Award in
Dun & Bradstreet Polaris Financial Technology Banking Awards 2014.
Skoch Order of Merit in Indias Best 2014Financial Inclusion & Deepening Awards 2014.
ASSOCHAM Social Banking Excellence Award under Public Sector Banks category, in recognition of the
significant initiatives being undertaken by the Bank in social banking sphere.
The Most Efficient Public Sector Bank for the year 2014 by Dalal Street Investment Journal in the Best
PSUs of India Awards.
Business Policy Guidelines for 2015-16 (Domestic Operations)
Corporate Motto
Keeping in mind the goal of improved profitability, the motto of previous year Race Ahead is retained for
current year also with addition Good to Great.
RACE ahead stands for:
R- Retail Leaning
A- Asset Quality
C- Capacity Building
E- Earnings Focus
Business Strategies and Action Points:
1. Resource Mobilization
2. Resource Deployment

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3.
4.
5.
6.
7.
8.
9.

a. Retail Lending
b. MSME Advances
c. Rural & Agricultural lending
d. Large Corporate & Mid Corporate Banking
Financial Inclusion
Human Resource
Government Business
Customer Orientation
Branch Expansion
Information Technology
Risk Management

Core Values

Our values determine our thoughts and actions. Values act as internal compass and therefore provide
direction. When common values are chosen and owned by an Individual or a team, it creates a powerful
emotional connect. Individuals/teams following core values are dynamic and can achieve miraculous
results.
As we grow, our processes and strategies may change, but our values should always remain the same.
Our core values should always be the framework within which we make all of our decisions.
Bank of Baroda is practicing the following core values:
Customer centricity-Taking Ownership of Customer Service
The ownership of excellent customer service lies with each and every employee irrespective of the role
assigned. Bank has made it a practice of quick responsiveness as far as customer needs are concerned.
Bank of Baroda wants to create a new benchmark in the dissemination of customer service,
demonstrating care and concern that can catapult the standard of our service to create better value for
its customers. Inculcating the culture of sales/ cross sales and providing personal service has made us a
great differentiator in the market.
This may be possible with Trust, Transparency and Togetherness
Bank of Baroda strongly believes in to augment the value of its stake holders i.e. Customers,
Employees, Shareholders and Regulators are in tune with these values. Bank keeps transparency in all
dealings. It adopts collaborative approach, Encourage and complements each other, Maintain Team
spirit. Bank of Baroda wants to create an environment that is friendly, warm and exciting. It encourages
diversity in ideas, opinions and points of view.
Many of the Banks best ideas have been the direct result of informal interactions outside of the office.
Bank of Baroda is more than just a team, it is a family. Each one cares for another and goes beyond.
DEW

16 | P a g e

Dream Big, Enjoy life and Work hard

These are the philosophy followed by all Barodians. Bank of Baroda stretch the goals trusting potential
lies in employees, work hard to achieve it and in the process, enjoyment to maintain.
Every One is treated equally/ respecting each Role
Banks belief is that every role in an organization is important and, therefore, every person performing
such role deserves dignity. It is expected that seniors in the Organization should play the role of mentor
in grooming young ones and young ones should exhibit due respect to seniority and age. It is believed
that every person wants opportunity to speak their minds and have their ideas, opinions and feelings
heard regardless of their gender, age or hierarchy.
Humility
While celebrating individual and team successes, Bank does not treat others differently and carries
confidence, to believe that in the long run our character will speak for itself.
Observing Integrity and Honesty i.e. Walking the Talk and Talking the Walk
Bank believes in observing integrity at all times. Every Barodian is expected to honor his/her words/
promises. Every Barodian is expected to be trustworthy and honest in words and actions.
Pursue growth and learning
It is important for employees to grow both personally and professionally. All Barodians Endeavour to
acquire new skill sets, develop leadership traits and make learning a part of lifestyle to remain more
agile in the work space.
Bank believes that every employee is endowed with immense potential than what the employee
himself/herself realizes. The goal is to help employees unlock this potential. But it has to be a joint
effort: You have to be ready to face challenges, and stretch yourself in order to overcome them.
The key human resources need to develop leadership qualities to build capacity to outperform the
competition.
Embrace and drive change
Bank is all time ready to embrace change. it is instilled deep insight that being in a growing organization
change is constant. Barodians embrace it enthusiastically and, perhaps even more important, encourage
and drive it.
Although change can and will come from all directions, its important that most of the changes in the
Bank are driven from the bottom up from the people who are on the front lines, closer to the
customers and/or issues.
Never accept or be too comfortable with the status quo, because the organizations that get into trouble
are historically the ones that arent able to adapt to change and respond quickly enough.

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Creative and Open-Mind

Banks approach to deal with situations and challenges with an open mind. Bank always pursue to seek
adventure and having fun exploring new possibilities. By having the freedom to be creative in seeking
solutions, individual involvement evolves and bind the bank more stronger way.
Passion, Commitment, Competence and Determination of Barodians will surely take the Bank to greater
heights.
TEST YOUR UNDERSTANDING

1. Net NPA of our bank as on 31.12.2015 is

a) 3.50%
b) 5.95%
c) 4.65%
d) 5.50%
e) 5.67%
2. A comprehensive transformation programme called Project
Bank for its domestic operations on

NAVNIRMAAN was launched by our

a) 22 Jun-2009
b) 31 Dec-2008
c) 01 Oct-2010
d) 19 Jul-2011
e) 15 Aug-2012
3. Our banks present base rate is
a) 9.50
b) 9.65
c) 9.75
d) 10.50
e) 10.00

18 | P a g e

4. No of Baroda Gen- next Branches as on 31.12.15 are

a) 5
b) 6
c) 7
d) 8
e) 9

5. No of Mid corporate have been opened till 31.12.2015

a) 10
b) 12
c) 15
d) 17
e) 20

6. Which of the following is not the associate of our bank

a) Baroda Pioneer Asset Management Company Ltd
b) Baroda Uttar Pradesh Gramin Bank
c) Baroda Rajasthan Khetriya Gramin Bank
d) Nainital Bank Ltd
e) Baroda Gujarat Gramin Bank
7. The service timing of Baroda Contact Centres are
a) 6am to 06pm
b) 8am to 08pm
c) 6am to 10pm
d) 10am to 08pm
e) 10am to 10pm
8. Which of the following liabilities and assets products are not offered by Baroda Gen-Next Branches to

19 | P a g e

the customers?
a) Gen Next Junior
b) Gen Next Senior
c) Gen-Next Lifestyle
d) Gen Next Power
9. In how many countries Banks network of overseas branches is expended
a) 20
b) 24
c) 25
d) 26
e) 27
10. Where the Head Office of our Bank is situated.
a)
b)
c)
d)
e)

Baroda
Bombay
Delhi
Hyderabad
Ahmedabad

10

20 | P a g e

EMERGING TRENDS IN BANKING AND UPDATED GUIDELINES BY REGULATOR

Highlights of Budget 2016-2017 - Financial Sector Reforms

A comprehensive Code on Resolution of Financial Firms to be introduced.
Allocation of Rs.25,000 crore towards recapitalization of Public Sector Banks (PSBs).
A Financial Data Management Centre under the aegis of the Financial Stability Development
Council (FSDC) to be set up.
Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100%
stake in the ARC and permit non-institutional investors to invest in Securitization Receipts.
UPDATES
GYAN SANGAM
Gyan Sangam is a forum where the highest officials from public sector banks, the government and
the Reserve Bank of India, meet to discuss issues facing by the Banking Sector. The interaction of
ministry officials, RBI Governor and heads of PSBs in an informal setting is a novel idea. As a
management tool, a meeting away from the pressures of day-to-day work is meant to unfreeze the
established behavior patterns and enable the divergent shareholders i.e. the government, owner,
regulators and the banks themselves to open a healthy dialogue.
Indradhanush A Mission launched by Govt. of India to revamp PSU banks
As per the brain child of P J Nayak committee, Ministry of Finance under the Department of
Financial Services has launched Mission Indradhanush that aimed to revamp the functioning of public
sector banks so that PSBs can compete with the Private Sector Banks. The mission is regarded as one
of the big steps after the nationalization of banks in 1970s.
The mission includes the seven key reforms of appointments, which is also known as A2G for PS
Banks.
1)
2)
3)
4)
5)
6)
7)

Appointments
Bank Board Bureau
Capitalization
De-stressing PSBs
Empowerment
Framework of Accountability
Governance Reforms

P.J. Nayak committee on banking sector reforms

The Committee to Review Governance of Boards of Banks in India was constituted by the RBI
Governor on 20th January, 2014. The terms of reference of the committee included review of the
regulatory compliance requirement of the boards of banks, the working of these boards, regulatory
guidelines on bank ownership/concentration, and an examination of board compensation guidelines.

21 | P a g e

Government Announces Banks Board Bureau to Advise PSBs

Taking the first step towards a holding company structure for public sector banks (PSBs), the
government has setup of a Banks Board Bureau (BBB). It will recommend appointment of directors in
PSBs and advice on ways of raising funds and dealing with issues of stressed assets. Former
Comptroller & Auditor General of India Mr Vinod Rai has been named the first chairman.
RBI Guidelines to Banks on Implementation of Ind AS
RBI has released guidelines for banks on complying with the new norms under Companies (Indian
Accounting Standards Ind AS) Rules, 2015. Banks are required to comply with Ind AS for financial
statements for accounting periods beginning from April 1, 2018 onwards.
Fraud Reporting and Monitoring - Operationalisation of Central Fraud Registry by RBI
During his Fourth Bi-monthly Monetary Policy Statement, 2014-15, Governor of RBI announced,
Along with early detection mechanisms for frauds, a Central Fraud Registry is also proposed to be
created simultaneously as a searchable centralized database for use by banks.
Accordingly, RBI has operationalized the Central Fraud Registry a searchable centralized database
for use by banks with effect from 20th January 2016. This is in line with the various initiatives of RBI
for early detection and minimization of loan related frauds.
Regulatory Support to Start Up India
RBI has come out with various policy changes and initiatives to promote the ease of doing business
and contribute to an eco-system conducive for growth of entrepreneurship, particularly in respect of
the start-up enterprises. A majority of these changes relate to cross border transactions aimed at
addressing the funding concerns for the startup companies.
Asset Quality Review (AQR) by RBI
RBI has begun the Asset Quality Review (AQR) process to ensure cleaning of books of Indian Banks
which have been reeling under the pressure of high level of stressed assets. RBI has identified loans
which were of concern along with those with potential weaknesses.
RBI Relaxes Norms to IFSC Banking Units (IBUs)
RBI while issuing guidelines relating to setting up of financial institutions in the International Financial
Services Centres (IFSC) restricted the IFSC Banking Units (IBUs) from few activities which have been
now reviewed. While the IBUs were not allowed to open any current or savings accounts, now the
regulator has decided that the IBUs can open foreign currency current accounts of units operating in
IFSCs and of non-resident institutional investors to facilitate their investment transactions.
Norms for Financial Literacy Centers (FLCS) Revised

22 | P a g e

In view of the considerable progress made in the area of Financial Inclusion and to concentrate the
efforts of the FLCs on keeping the already opened accounts active, RBI has issued revised guidelines
for FLCs of lead banks and the operational guidelines for the conduct of camps by FLCs and rural
branches of banks.
Brick and Mortar Branches in Villages with Population more than 5000 without a Bank
Branch of SCB
The heads of SLBC convener banks have been asked by RBI to identify villages with population above
5000 without a bank branch of a Scheduled Commercial Bank (SCB) in their state. The villages thus
identified may be allotted among SCBs (including Regional Rural Banks) for opening of branches. It
has been asked to complete the opening of bank branches under this roadmap by March 31, 2017.
SEBI Releases a Concept Note on Green Bonds
Market regulator SEBI has released Consultation Paper on Issuance of Green Bonds. A Green Bond is
like any other bond where a debt instrument is issued by an entity for raising funds from investors
but what differentiates it from other bonds is that the proceeds of a Green Bond offering are earmarked for use towards financing green projects.
Pradhan Mantri Fasal Bima Yojana:
Government of India has recently approved Pradhan Mantri Fasal Bima Yojana (PMFBY) which would
replace the existing schemes of National Agricultural Insurance Scheme (NAIS) & Modified National
Agricultural Insurance Scheme (MNAIS) from Kharif 2016. PMFBY would be available to the farmers
at very low rates of premium which would be maximum upto 1.5% for Rabi and upto 2% for Kharif
for Food crops, Pulses and Oilseeds and upto 5% for Annual Horticulture/ Commercial Crops. This
scheme would provide insurance cover for all stages of the crop cycle including post-harvest risks in
specified instances.
Sovereign Gold Bond Scheme 2016
The Sovereign Gold Bond Scheme 2016 opened for subscription from 18th January to 22nd January
2016. The issuance of bonds for this second tranche of Sovereign Gold Bonds happened in February
2016 where the bonds are issued by RBI on behalf of Government of India. The bonds are sold
through banks, SHCIL and designated post offices.
National Investment and Infrastructure Fund (NIIF)
International pension funds and sovereign funds from countries such as Russia, Singapore and UAE
have evinced interest in participating in Indias INR 40000 crore NIIF. The NIIF is meant to fund
development of infrastructure projects, including reviving stalled ones.
RBI Announces Marginal Cost of Funds Methodology for Interest Rate on Advances

23 | P a g e

(MCLR):
RBI has finalized and released the guidelines under Marginal Cost of Funds Methodology for Interest
Rate on Advances. The new internal benchmark rate to which all rupee loans sanctioned and credit
limits renewed wef April 01, 2016 will be reference rate and has been christened as Marginal Cost of
Funds based Lending rate (MCLR). It will replace Base Rate and will be the internal benchmark for
such purposes.
The MCLR shall comprise of:
a. Marginal cost of funds
b. Negative carry on account of CRR
c. Operating costs
d. Tenor premium
Financial Engineering:
Financial engineering is about the development and creative application of financial technology for
solving financial problems, exploiting financial opportunities, and for otherwise adding value. Some of
trends and examples are E-Banking, Internet Banking, Mobile & SMS Banking, ATM expansion,
volumes of Debit & Credit Card, RTGS and NEFT.
Crowd funding
It is the practice of funding a project or venture by raising monetary contributions from a large
number of people, typically via the internet / social media. Usually Social / Cultural projects and startups are using this informal source of finance. Crowd funding is a form of alternative finance, which
has emerged outside of the traditional financial system.
Peer-to-Peer (P2P) lending
The practices of lending money to individuals or businesses through online services that match
lenders directly with borrowers. i.e. Lending Club. It is an online investment platform to enable
borrowers to attract lenders and investors to identify and purchase loans that meet their investment
criteria
5 / 25 Scheme of Reserve Bank of India
Reserve Bank of India launched the 5/25 scheme (officially called the Flexible Structuring of Long
Term Project Loans to Infrastructure and Core Sector Industries) and subsequently extended it to
existing project loans in addition to new loans there may have been a collective sigh of relief from
bankers and corporate. The 5/25 moniker summarily refers to the feature that the loan will be
repaid over a maximum period of 25 years. However, the banks will have to refinance the loan every
5 year

24 | P a g e

Red Flagged Accounts

A bank can label an account a Red Flagged Account (RFA) if the loan account is under suspicion of
fraudulent activity and such a suspicion is thrown up by early warning signal (EWS). Banks must use
such triggers to launch a detailed investigation. All RFAs will have to be reported to the Central
Repository of Information on Large Credits (CRILC).

IBA Approach Paper on IT-Enabled Financial Inclusion: Financial Inclusion is the delivery of
financial services to all the people in a fair, transparent and equitable manner at affordable cost.
Financial Inclusion has the potential to improve the standards of life of the poor and the disadvantaged.
Financial services permit individuals and households to manage the risk and uncertainties to save risk
free, borrow on better terms, to invest in a business venture or property and to cope with unforeseen
expenses.
IBA Sub-committee on Flow of Credit to Agriculture Sector: In the context of predominance of
agriculture as the largest employer of the countrys population and the financial exclusion as one of the
crucial obstacles in ensuring equitable agricultural growth of the nation, measures have been suggested
to increase the flow of credit to agriculture sector in general and especially to tenant farmers,
agricultural laborers and share croppers, and on Policy Support and State interventions that can
facilitate enhanced Agri Credit Flow minimizing Legal intervention encouraging contract farming and
Tenant farming.
IBA Approach Paper on Agro-Business as a Commercial Activity: The lack of investment into
agriculture sector has restricted the adoption of modern agricultural practices. The use of technology
has been inadequate and hampered by the lack of awareness of such (modern) practices, high costs
and impracticality especially in the case of small land holdings.
Considering ground realities and existing gaps viz-a-viz huge opportunity for processing of foods and
exports, it has suggested ways of harnessing the potential in agriculture and agri-business:
i.
ii.
iii.
iv.
v.
vi.

vii.

Modernization of existing Agri-infrastructure and creation of new capacities for handling and
storage of agricultural produce
Risk mitigation / de-risking of agriculture by extending insurance coverage
Reducing high cost of credit delivery to the agriculture/ rural sector and looking for linkages
(cost of credit is to be lowered by the use of technology (use of IT) and new form of banking
structures like - business correspondent, outsourced partners & facilitators)
Incentivizing commercial banks to increase credit flow to agriculture sector as well as rural
India and creating an enabling environment for contract farming
Removing legislative problems by introducing policy level initiatives
Export competitiveness is affected due to high international cargo freight and lack of focus
on Food Processing (FP) sector the number of drawbacks available from APEDA and other
Government departments should be made seamless and brought out in a single window
format for the horticulture and food processing industry which will save time and increase
efficiency
Small and marginal farmer is always distressed on the viability of his initiative- the fact is
farmer is stressed more on the viability of the project and not the debt, formation of SHGs/

25 | P a g e

JLGs helping the farmer to bring in economies of scale, alternate occupation for the small
and marginal farmers in terms of dairy, poultry and piggery and restricting use of fertile land
having multiple crops for agricultural purposes only whereas barren land should be
encouraged for industrial development
viii.
Reduction in probability of adverse selection- a scoring/ rating model to address the issue of
reducing the probability of default may be of immense use to the banks and to the farming
community at large.
Bandhan Bank Limited: (Inaugurated on 23 August 2015 in Kolkata)
Bandhan Bank Limited was incorporated on 23rd December 2014 as a wholly-owned subsidiary of
Bandhan Financial Holdings Limited. Bandhan received the in-principle approval of the Reserve Bank of
India (RBI) for setting up a universal bank in April 2014; the banking regulator gave its final nod in June
2015. Incidentally, Kolkata-headquartered Bandhan is the first bank set up in eastern part of India after
Independence.
IDFC Bank Limited: The Reserve Bank of India granted a universal banking license to IDFC Limited on
July 23, 2015. IDFC Ltd. demerged on October 1, 2015, transferring all assets and liabilities of its
lending business (Financing Undertaking) to IDFC Bank Limited. IDFC Bank Ltd. is a subsidiary of the
IDFC Ltd., and was inaugurated on October 19, 2015 in New Delhi. It is head quartered in Mumbai.
Payments Bank: The RBI on 19.08.2015 granted in principle approval for payment banks to 11
entities. Payments banks are new stripped-down type of banks, which are expected to reach customers
mainly through their mobile phones rather than traditional bank branches. They cant offer loans but can
raise deposits and pay interest on these balances. They can enable transfers and remittances through a
mobile phone. The list of approved Payments Bank includes:
1. Aditya Birla Nuvo Limited
2. Airtel M Commerce Services Limited
3. Cholamandalam Distribution Services Limited
4. Department of Posts
5. Fino PayTech Limited
6. National Securities Depository Limited
7. Reliance Industries Limited
8. Shri Dilip Shantilal Shanghvi
9. Shri Vijay Shekhar Sharma
10. Tech Mahindra Limited
11. Vodafone m-pesa Limited
The in-principle approval granted will be valid for a period of 18 months, during which time the
applicants have to comply with the requirements under the Guidelines and fulfill the other conditions as
may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part
of in-principle approval, the Reserve Bank would consider granting to them a license for
commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a
regular license is issued, the applicants cannot undertake any banking business.
No need of reporting fixed deposits in pre-existing accounts: The Indian government has
clarified that the implementation of the Foreign Account Tax Compliance Act (FATCA) and Common
Reporting Standards (CRS) will not entail reporting of all fixed deposits and auto sweep facilities in preexisting savings bank accounts. It is informed that in such cases, no additional documentation is

26 | P a g e

obtained for these fixed deposits accounts as they are intrinsically related to existing saving bank
account and all KYC documents are available for the existing saving bank account, the Central Board of
Direct Taxes said on their website.
Foreign Account Tax Compliance Act: The provisions commonly known as the Foreign Account Tax
Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts and focuses on reporting:

By U.S. taxpayers about certain foreign financial accounts and offshore assets
By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities
in which U.S. taxpayers hold a substantial ownership interest
The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not
reporting.

Highlights of Companies Act 2013

The 2013 Act has introduced several new concepts and tried to streamline many of the requirements
by introducing new definitions.
1. Immediate Changes in letterhead, bills or other official communications, as if full name,
address of its registered office, Corporate Identity Number (21 digit number allotted by
Government), Telephone number, fax number, email ID, website address if any.
2. One Person Company (OPC): It's a Private Company having only one Member and at least
One Director. No compulsion to hold AGM. Conversion of existing private Companies with paidup capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into OPC is permitted.
3. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100
Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at least one
Woman Director.
4. Resident Director: Every Company must have a director who
stayed
in India for a total
period of 182 days or more in previous calendar year.
5. Accounting Year: Every company shall follow uniform accounting year i.e. 1 st April 31st March.
6. Loans to director The Company CANNOT advance any kind of loan / guarantee / security to
any director, Director of holding company, his partner, his relative, Firm in which he or his
relative is partner, private limited in which he is director or member or any bodies corporate
whose 25% or more of total voting power or board of Directors is controlled by him.
7. Articles of Association- In the next General Meeting, it is desirable to adopt Table F as
standard set of Articles of Association of the Company with relevant changes to suite the
requirements of the company. Further, every copy of Memorandum and Articles issued to
members should contain a copy of all resolutions / agreements that are required to be filed with
the Registrar.
8. Disqualification of director- All existing directors must have Directors Identification Number
(DIN) allotted by central government. Directors who already have DIN need not take any
action. Directors not having DIN should initiate the process of getting DIN allotted to him and
inform companies. The Company, in turn, has to inform registrar.
9. Financial year- Under the new Act, all companies have to follow a uniform Financial Year i.e.
from 1st April to 31st March. Those companies which follow a different financial year have to
align their accounting year to 1st April to 31st March within 2 years. It is desirable to do the

27 | P a g e

same as early as possible since most of the compliances are on financial year basis under the
new Companies Act.
10. Appointment of Statutory Auditors- Every Listed Company can appoint an individual
auditor for 5 years and a firm of auditors for 10 years. This period of 5 / 10 years commences
from the date of their appointment. Therefore, those companies have reappointed their
statutory auditors for more than 5 / 10 years; have to appoint another auditor in Annual
General Meeting for year 2014.
Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016: The
provisions of these Directions shall apply to every Scheduled Commercial Bank {including Regional Rural
Banks(RRBs)} licensed to operate in India by Reserve Bank of India. These directions shall not be
applicable to operations of foreign branches of Indian banks.
Bulk Deposit:
1. Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial Banks
other than Regional Rural banks
2. Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs.
Interest Rate framework
1. The rates shall be uniform across all branches and for all customers and there shall be no
discrimination in the matter of interest paid on the deposits, between one deposit and
another of similar amount, accepted on the same date, at any of its offices.
2. The rates shall not be subject to negotiation between the depositors and the bank.
3. No interest shall be paid on deposits held in current accounts.
4. Differential interest rate shall be offered only on bulk (term) deposit
5. The additional interest may be paid on deposits after obtaining a declaration from the
depositor concerned, that the monies deposited or which may be deposited from time to
time into such account belong to the depositor:

member or a retired member of the banks staff, either singly or jointly with any member
or members of his/her family; or
the spouse of a deceased member or a deceased retired member of the banks staff; and
an Association or a fund, members of which are members of the banks staff;

6. Scheduled Commercial Banks shall, at their discretion, formulate term deposit schemes
specifically for resident Indian senior citizens, offering higher and fixed rates of interest as
compared to normal deposits of any size.
7. Scheduled Commercial Banks shall, at their discretion, give their resident Indian retired
staffs, who are senior citizens, the benefit of additional interest rates as admissible to senior
citizens over and above the additional interest payable to them by virtue of their being
retired members of the banks staff.
Scheduled commercial banks shall not pay any remuneration or fees or commission or brokerage or
incentives on deposits in any form or manner to any individual, firm, company, association, institution or
any other person except commission paid to agents employed to collect door-to-door deposits under a
special scheme, commission paid to Direct Selling agents/ Direct Marketing Agents as part of the
outsourcing arrangements and remuneration paid to Business facilitators or Business Correspondents.

28 | P a g e

Master Direction - Know Your Customer (KYC) Direction, 2016: In terms of the provisions of
Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of
Records) Rules, 2005, Regulated Entities (REs) are required to follow customer identification procedure
while undertaking a transaction either by establishing an account based relationship or otherwise and
monitor their transactions.
There shall be a Know Your Customer (KYC) policy duly approved by the Board of Directors of REs
(Regulated Entities) or any committee of the Board to which power has been delegated. The KYC policy
shall include following four key elements:
(a) Customer Acceptance Policy;
(b) Risk Management;
(c) Customer Identification Procedures (CIP); and
(d) Monitoring of Transactions
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises
(MSMEs):
In order to provide a simpler and faster mechanism to address the stress in the accounts of MSMEs and
to facilitate the promotion and development of MSMEs, the Ministry of Micro, Small and Medium
Enterprises, Government of India, vide their Gazette Notification dated May 29, 2015 had notified a
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises.
Thereafter, certain changes in the captioned framework have been carried out in order to make it
compatible with the existing regulatory guidelines on Income Recognition, Asset Classification and
provisioning pertaining to Advances.
Accordingly, a revised Framework along with operating instructions has been furnished by RBI on
17.03.2016 to operationalize the Framework by the banks (not later than June 30, 2016).
Recovery of excess payments made to pensioners: The following uniform procedure may be
strictly adhered to while effecting recovery of excess/wrong pension payments made to pensioners:
1. As soon as the excess/ wrong payment made to a pensioner comes to the notice of the paying
branch, the branch should adjust the same against the amount standing to the credit of the
pensioners account to the extent possible including lump sum arrears payment.
2. If the entire amount of over payment cannot be adjusted from the account, the pensioner may
be asked to pay forthwith the balance amount of over payment.
3. In case the pensioner expresses his inability to pay the amount, the same may be adjusted from
the future pension payments to be made to the pensioners. For recovering the over-payment
made to pensioner from his future pension payment in installments 1/3rd of net (pension +
relief) payable each month may be recovered unless the pensioner concerned gives consent in
writing to pay a higher installment amount.
4. If the over payment cannot be recovered from the pensioner due to his death or discontinuance
of pension then action has to be taken as per the letter of undertaking given by the pensioner
under the scheme.
5. The pensioner may also be advised about the details of overpayment/ wrong payment and mode
of its recovery.
Performance of Indian Banking Sector in FY-2015:

29 | P a g e

Growth in aggregate deposits and gross bank credit decelerated to 10.7 per cent and 9.8 per
cent respectively in March 2015 from 13.9 per cent and 13.8 per cent, respectively a year ago.
The above deceleration was broad based and observed across all population groups except
Rural. Growth in gross bank credit increased to 14.7 per cent for Rural in March 2015 from
14.0 a year ago
Metropolitan branches constituting around 52.9 per cent of aggregate deposits and 64.4 per cent
of gross bank credit, recorded the highest credit-deposit (C-D) ratio at 94.2 per cent. For other
population groups, C-D ratio was lower than the all-India ratio of 77.4 per cent.

Arranged according to size of total business (aggregate deposits + gross bank credit) of SCBs,
seven states, viz., Maharashtra, NCT of Delhi, Tamil Nadu, Karnataka, Uttar Pradesh, West
Bengal, and Gujarat accounted for 68.8 per cent of the total business. Maharashtra alone
contributed 26.1 per cent of the total business. These states together accounted for 66.4 per
cent of aggregate deposits and 71.9 per cent of gross bank credit.

The C-D ratio was the highest in March 2015 for Tamil Nadu (119.5 per cent) followed by
Chandigarh (106.2 per cent), Andhra Pradesh (105.7 per cent), NCT of Delhi (103.6 per cent)
and Telangana (102.4 per cent).
SBI and associates, private sector banks, and RRBs could maintain accelerated growth in
aggregate deposits in March 2015 as compared to their levels a year ago. As regards credit, only
private sector banks improved their growth rate in March 2015 compared to its level a year ago.
Public sector banks accounted for the largest share of 72.9 per cent in aggregate deposits and
71.6 per cent in gross bank credit followed by private sector banks (19.7 per cent and 20.9 per
cent, respectively) as on March 31, 2015.

ADDITIONAL FEATURES
Regulatory Ratio at a Glance:
Bank Rate Policy
Section 49 defines it as The Standard Rate at which it (the bank) is prepared to buy or rediscount
bills of exchange or other commercial paper eligible for purchase under this Act.
By varying the bank rate, the RBI can to a certain extent regulate the commercial bank credit and the
general credit situation of the country. The impact of this tool has not been very great because of the
fact that the RBI does not have a mechanism to control the unorganized sector. Further the money
market in our financial system is not fully developed, so that the Bank rate policy will have if desired
impact on the financial system. The present bank rate is 7.75% (wef 29.09.2015)
Statutory Liquidity Ratio (SLR)
According to Section 24 (2-a) of the Banking Regulation Act, every banking company in India
whether scheduled or non scheduled, is required to maintain in India in Cash, Gold or
unencumbered, approved securities an amount of which is not less than a certain percentage of the
total of its demand and time liabilities in India. This is known as Statutory Liquidity Ratio (SLR). The
ratio keeps on changing time to time. At present SLR is 21.50% (wef 07.02.2015).

30 | P a g e

The Reserve Bank is empowered to increase/ decrease this ratio. For calculating the SLR, the
following liquid assets are taken into account.

Cash in hand in India.

Balances in current account with the State Bank of India and its associates.
Balance maintained with the RBI in excess of the minimum CRR requirements.
Investments in Government Securities, Treasury Bills and other approved securities in India.

However, the approved securities must be valued at a price not exceeding the current market price.
Cash Reserve Ratio
Section 42 defines the Cash reserves of scheduled bank to be kept with RBI. Every scheduled bank
has to maintain with RBI an average daily balance the amount of which shall not be less than 3% of
the total demand and time liabilities and shall not exceed 15%. Presently the CRR is 4.00% (wef
09-02-2013).
Policy Repo Rate: Repo (Repurchase) rate also known as the benchmark interest rate is the rate at
which the RBI lends money to the banks for a short term. When the repo rate increases, borrowing
from RBI becomes more expensive. If RBI wants to make it more expensive for the banks to borrow
money, it increases the repo rate similarly, if it wants to make it cheaper for banks to borrow money
it reduces the repo rate.
Repo Rate wef 29.09.15 is 6.75%.
Reverse Repo Rate: Reverse Repo rate is the short term borrowing rate at which RBI borrows
money from banks. The Reserve bank uses this tool when it feels there is too much money floating in
the banking system. An increase in the reverse repo rate means that the banks will get a higher rate
of interest from RBI. As a result, banks prefer to lend their money to RBI which is always safe instead
of lending it others (people, companies etc) which is always risky.
Reverse Repo Rate wef 29.09.15 is 5.75%.
Marginal Standing Facility Rate: MSF is a special window for banks to borrow from RBI against
approved government securities in an emergency situation like an acute cash shortage. MSF rate is
higher than Repo rate.
MSF Rate wef 29.09.2015 is 7.75%
Indian Companies Act, 2013: After getting approval of both the houses of Parliament, the longawaited Companies Bill 2013 obtained the assent of the President of India on 29 August 2013 and
became Companies Act, 2013 (2013 Act).
The 2013 Act has introduced several new concepts and has also tried to streamline many of the
requirements by introducing new definitions. The changes in the 2013 Act have far-reaching
implications that are set to significantly change the manner in which corporate operate in India.

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Test your Understanding:

Q. 1 The Present CRR is?
a.
b.
c.
d.
e.

2%
3%
4%
5%
7.5%

Q. 2 The Present SLR is?

a.
b.
c.
d.
e.

20%
21.50%
22%
24%
26%

Q.3 P.J. Nayak committee on banking sector reforms was set up by:
a.
b.
c.
d.
e.

RBI
GOI
SBI
World Bank
IMF

Q. 4 : Number of Payments Bank given in principle approval by RBI are:

a.
b.
c.
d.
e.

13
15
14
11
10

Q. 5. MCLR is:
a.
b.
c.
d.
e.

Marginal
Marginal
Marginal
Marginal
Marginal

Capital based Lending Rate

Cost of Deposits based Lending Rate
Cost based Lending Rate
Cost of Funds based Lending Rate
Capital Funds based Lending Rate

32 | P a g e

LEGAL & STATUTORY PROVISIONS

Credit Information Bureau (India) Limited (CIBIL)
1. Credit Information Bureau (I) Ltd was set-up in January 2001, as a joint venture.
2. CIBIL is a composite Credit Bureau, which caters to both commercial and consumer segments. The
Consumer Credit Bureau covers credit availed by individuals while the Commercial Credit Bureau
covers credit availed by non-individuals such as partnership firms, proprietary concerns, private and
public limited companies, etc.
3. CIBIL is established with a primary purpose of information sharing between Banks and Financial
Institutions for curbing the undesired growth of NPA.
4. Banks are required to provide periodical information to CIBIL in the prescribed format. It helps in
compilation of credit information, accessible to member banks to improve quality of credit proposals,
better credit management and Credit dissemination function
6. Banks, FIs, SFCs, NBFCs, Housing Finance Companies and Credit Card Companies are Members of
CIBIL
7. CIBIL- Access to consumer credit information:
Branches will get data of existing standard Home Loan borrowers who have approached other Banks
for Home Loan, Personal Loan Auto Loan, Education Loan, Business Loan, Property Loan, Over Draft
and Commercial Vehicle. In case of NPA Home Loan borrowers Branches will get information on
enquires with other Banks for all type of loans.
Know Your Customer (KYC) Guidelines
The objective of KYC/AML/CFT guidelines is to prevent banks from being used, intentionally or
unintentionally, by criminal elements for money laundering or terrorist activities. KYC procedures also
enable banks to know/understand their customers and their financial dealings better which in turn help
them manage their risks prudently.
Key elements of KYC Policy:

Customer Acceptance Policy

Customer Identification Procedures
Monitoring of Transactions
Risk Management
Customer Acceptance Policy

Must ensure that explicit guidelines are in place on the following aspects of customer relationship in the
bank:
No account is opened in anonymous or fictitious/benami name Customer are categorized as low,
medium and high risk based on clearly defined parameters Required documents and other information
must be collected relating to different types of customers in line with the perceived risk. Necessary
checks before opening a new account profile for each new customer based on risk categorization.
(1) Customer Identification Banks to obtain all necessary information to establish the identity of
each new customer based on disclosures by customers themselves. The easy means would be
documents such as passport, driving license, Armed Forces ID cards, Income Tax PAN card,
Aadhaar Card, ID card issued by Government of India, State Government accompanied by

33 | P a g e

signature verification and photographs would help to establish the identity of the person opening
the account. Towards this, the following additional details need to be collected while opening the
account.
Employment details such as job specifications, name and address of the employer, length of
service etc.
Provide details about source of income and annual income.
Details of assets owned such as house, vehicle etc.
Finance ministry has recognized the Aadhar number issued by UIDAI as an officially valid document to
satisfy the KYC norms for opening of accounts. Recently, bank has also issued a circular that at the time
of opening of accounts the requirement of introduction may be waived.
Bank has introduced a new menu option FINDCUST for identification of multiple customer IDs for
limination and merger to single customer ID (UCIC)
Acceptance of e-KYC as a Valid Process for KYC Verification
Bank has decided to accept e-KYC service launched by UIDAI as a valid process for KYC verification in
consultation with Unique Identification Authority of India (UIDAI). The information authenticated and
transferred by UIDAI containing demographic details and photograph as a result of e-KYC process shall
be treated as sufficient proof of Identify and Address of the client.
Unincorporated Associations or body of individuals
(HO: BR: 107: 70 dated 12th May 2015)
Bank has shortlisted the list of documents to collectively establish the legal existence of Unincorporated
Associations or body of individuals i.e. unregistered entities (e.g. partnership firms, trusts, foundations
etc.) while opening of accounts, as below:
Certificate/ license issued by the municipal authorities under Shop & Establishment Act
CST / VAT certificates
Certificate / registration document issued by Sales Tax / Service Tax / Professional Tax
authorities
License issued by Professional bodies established under any statute/ Registering authorities, like
certificate of Practice issued by Indian Institute of Chartered Accountants of India, Institute of
Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council,
Food and Drug Control Authorities, etc.
The complete Income Tax return (not just the acknowledgement) in the name of the Firm where
the Firms income is reflected, duly Authenticated/ Acknowledged by the Income Tax Authorities.
Utility bills such as electricity, water, and landline telephone bills in the name of the firm.
RBOs/ Branches are to obtain any one of the above documents to collectively establish the
legal existence of such unregistered entities while opening of accounts of such entities to
comply with the extant guidelines of the RBI.
Obligation of Banks under PMLA 2002- "Beneficial Owner" - Declaration Form
(HO:BR:107: 83, dated June 17. 2015)

34 | P a g e

As per extant guidelines of Reserve Bank of India, the Bank is required to identify and maintain the
details of the Beneficial Owner" in all Non- Individual Accounts (other than Proprietorship). Branches
are, therefore, to obtain a common Declaration form of the "Beneficial Owner" from the prospective
customers while establishing the relationship:
To attach the declaration form for Beneficial Owners" to each account opening form for opening
of new accounts for Non-Individuals
Ensure obtaining the details of "Beneficial Owner" mandatorily in declaration form duly filled in
by the prospective customers.
While forwarding the account opening form to respective RBO, retain a copy of the account
opening form of Non- Individuals customers within the branch.
After activation of the newly opened accounts through RBO, enrich the 'Beneficial Owner' details
in the related fields through menu ACM function 'M' option 'A' under Relation Code field by
selecting "BO-Beneficial Owner" from the list in the CBS system.
For all existing Non- Individual accounts In the branch, mandatorily obtain the details of
"Beneficial Owner" from the customers and fill up the same in CBS through menu ACM function
'M' option 'A' under Relation Code field by selecting "BO-Beneficial Owner" from the list.
As per Bank's Customer Acceptance Policy (CAP), branches should undertake reasonable measures to
identify the beneficial owner(s) and verify his/her/their identity.
Anti Money Laundering
It is conversion of money, which is illegally obtained, so as to make it appear to originate from a
legitimate source. The main objective of the Act is:
1. To prevent, combat and control money laundering.
2. To confiscate and seize the property obtained from the laundered money.
3. To deal with any other issue connected with money laundering in India.
There are three independent steps or stages in Money Laundering -- Placement, Layering and
Integration
A) Placement - physical disposal of bulk cash proceeds derived from illegal activity
B) Layering - process of separation of illicit proceeds from their source by creating complex layers of
financial transactions it conceals the audit trail.
C) Integration re-injection of laundered proceeds back to the economy
Punishment: Whoever commits the offence of money laundering shall be punished with the rigorous
punishment for a term not less than 3 years but which may extend to 7 yrs and shall also
liable to fine, which may extend to Rs.5 lacs.
Vide HO:BR:107:33 dated 10/02/2015, revised policy on KYC/AML/PMLA policy Norms for furnishing
proof of address have been relaxed to allow submitting only one documentary proof of address ( either
current or permanent) while opening a Bank account or while undergoing periodic updation. In case
the proof of address where the customer is currently residing , the bank may take a declaration of the
local address. No proof is required to be submitted for such address for correspondence/ local address.
Amendment to Prevention of Money Laundering (Maintenance of Records) Rules, 2013
(Revised list of KYC Documents In CBS system)

35 | P a g e

(HO: BR: 107: 101, dated 24th July 2015)

In view of the change in the definition of 'Officially Valid Documents', RBI had made it clear that only
the documents mentioned in the PML Rules would be accepted by the branches while opening any new
account. Bank would not have the discretion to accept any other document for this purpose.
Citizens Charter
Citizen Charter gives the customersright as well as their demands on service from the bank. Citizens
charter covers the following:
1. Business hours to be prominently displayed at the branches.
2. Counters to remain attended to during business hours.
3. Space for customers in banking hall to be kept clean and tidy with proper seating arrangements.
4. Branch premises to be kept clean and hygienic.
5. Time norms for common Banking transactions to be displayed prominently in the Banking Hall.
6. At large branches May I Help You counters to be located for customers convenience.
7. Commencement of working hours of Bank staff to be 15 minutes before commencement of Banking
hours.
8. Banks name board to be clean and visible with suitable lighting arrangements.
9. Branch authoritys name and designation to be displayed on Name Plate.
10. Name, address, telephone number and fax numbers of Regional and Zonal Authorities to be
displayed in Banking Hall.
11. Customers Suggestions to be invited for better customer services.
Banking OMBUDSMAN Scheme:
1. Reserve Bank of India has announced the Banking Ombudsman Scheme, 1995 under section 35 of
Banking Regulation Act 1934. It was revised w.e.f. 14.6.2002 , which has been further revised on
01.01.2006
2. The Ombudsman has the authority to look into the complaint in the following areas;
Any complaint relating to Banking services.
Refer the complaint to concerned bank and try to facilitate redressal or settlement by agreement
between the bank and aggrieved party.
If complaint is not settled by agreement within the period of one month, pass an award after
listening to both the parties.
In the event Bank is unable to comply with the Award for any reason whatsoever, the Bank shall
file a review petition within one month from the date of receipt of copy of award.
Any dispute between banks or bank and its constituents may be referred to for arbitration
provided disputed claim does not exceed Rs. 10 lakhs.
The time limit for award is fixed as six months from the date of first hearing.
3. For approaching to OMBUDSMAN for banking complaints following are the conditions
Bank has rejected the complaint and/or no reply within one month.
A period of 1 year has not elapsed after bank had rejected the representation.
It is not subject matter already settled by Ombudsman.
It is not pending with any court.

36 | P a g e

4. All Commercial banks, RRBs and Schedule Primary Cooperative Banks are covered.
5. The appeal against the Award can be filed within 30 days to the Appellate Authority (DGM RBI).
Consumer Protection Act (COPRA) 1986
1. COPRA was initially enacted during 1986 and implemented w.e.f. 15.4.1987. The purpose of this act
was to enable the consumers to enforce his right as a consumer through simple legal procedures.
Further, on 17th December 2002, an amendment Act 2002 has been passed and implemented w.e.f.
15th March2003, the consumer day.
2. The act covers, all goods services including banking, insurance, transportation, electricity, processing
etc.
3. Any consumer individually or jointly, consumer organisation can file complaint within -2-years from
the date of cause of action preferably within 3 months.
4. Legal heirs/ can continue as complaints of unfair trade practice or restrictive trade practices against
servive provider and charging of prices for the goods in excess of the prices displayed.
5. Definition of complaint amended to include complaints of unfair trade practices or restrictive trade
practices against service provider, failure to disclose final results of scheme of gifts & prizes amt.
Prescribed fee payable on every complaint as court fees - no fees earlier
6. A person availing services for commercial purpose will not be a consumer under the act.
Note:
The Consumer Protection Bill, 2015, has since been introduced in Lok Sabha on August 10, 2015 by
the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan.
The Bill will replace the Consumer Protection Act, 1986.
Banking code and Standards Boards of India (BCSBI):
A comprehensive Bankers Fair Practice Code prepared by Indian bank Association has been used, as a
bench mark standard by the BCSBI. The code provides protection to the customers on day-to-day basis
on banking operations.
This is a voluntary code, which sets minimum standards of Banking practices to be followed by banks
when attending to customers. It has the following objectives
1. Promote good and fair banking practices by setting minimum standards,
2. Increase transparency
3. To encourage financial institutions to achieve higher operating standards,
4. Promote cordial and fair relationship between bank and customer,
5. Bring confidence in the banking system,
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act 2002 (SARFAESI Act 2002):
In India the enactment of SARFAESI Act 2002 enabled lending agencies (secured creditors) to foreclose
and sell underlying assets without court intervention to recover the secured debt. For the purpose of
the Act, Minimum Scale IV officer is designated as
Authorized Officer for the purpose of enforcement of security interest under the Act to realize /
recover banks dues in case of a NPA-account.

37 | P a g e

The Act deals with following aspects:

1. Enforcement of Security Interest by secured creditor without the intervention of Court. The action
under SARFAESI Act can be initiated for both moveable assets eg.
Vehicles, Plant & Machinery, stocks, etc. as well as immovable properties except agricultural land.
2. Transfer of non- performing assets to asset reconstruction company, the specialized agencies
created under this act, on sale on cash or SR basis, which will then resolve those assets either by
disposal/ recovery or by reconstruction and realise the proceeds.
3. To provide a legal framework for Securitisation of assets.
4. It also gives an option for the Bank to take over the management of the unit and to appoint a
manager to run the unit for recovering the NPA.
Brief guidelines:
1. In case of default, the Authorized Officers can write to the borrower [section 13 (2)] to repay
secured debts within 60 days from the date of notice. Possession notice to be given under Sec
13(4).
2. In the course of enforcement of security interests by the bank as Secured Creditor, all costs,
charges and direct & incidental expenses thereto, property incurred shall be recoverable from the
borrower and money received by the bank as secured creditor shall first be appropriated towards
meeting this expenses and thereafter for discharge of the banks secured debts.
3. In case of number of secured creditor being more than 1, the above said rights shall be exercised
only when 60% or more (in value terms) secured creditors agree to exercise of the rights;
4. The Record Date shall be the date agreed upon by the secured creditors representing not less
than 60% of the amount outstanding;
5. If dues of secured creditors are not fully settled / recovered out of / from sale proceeds of secured
assets, secured creditors may file an application in DRT or in a competent court;
6. The secured creditor shall be entitled to proceed against the guarantors or sell pledged assets
without first taking any of the measures or possession & sale of the borrowers / the guarantors
assets.
7. Followings are not covered under the Act: Pledge of moveable and lien on any goods and
security. Aircraft; Vessels; Hire purchase/lease, etc.; Any Security interest not exceeding Rs.1 lacs;
Agri. land.
Recent changes under the act in 2012:
Banks and ARC are allowed to convert any part of the debt of the defaulting company into equity.
Such a conversion would imply that lenders or ARC can be an equity holder rather than a creditor of
the company.
It also allows banks to bid for any immovable property they have put out for auction themselves, if
they do not receive any bid during the auction. Also, bank is free to sell these properties to a new
bidder at a later date to clear off the debt completely.
Bank can file the reply of objection raised by borrower within 15 days instead of 7 days.
Bank has right to file caveat at High court
Base rate for Bank loans:
RBI has advised Banks to switch over from Bench mark Prime lending rate to Base rate system wef July
1, 2010.
Criteria for determination of Base Rate: While each bank may decide its own base rate, some of

38 | P a g e

the criteria that could go in to determination of Base rate are

(i) Cost of Deposits
(ii) Adjustment for negative carry in respect of CRR & SLR.
(iii) Unallocated overhead cost for banks such as aggregate employee compensation relating to
administrative functions in corporate office, directors and auditors fee, legal and premises
expenses, depreciation, cost of printing and stationery, expenses incurred on communication and
advertising, IT spending and cost incurred towards deposit insurance and
(iv) Profit margin
(v) Average return on net worth
Since the Base rate will be the minimum rate for all commercial loans, banks are not permitted to resort
to any lending below the Base rate except some special categories like
(i)
Short Term agricultural loans.
(ii)
Export credit, where interest concessions are granted by GOI
(iii)
Loans granted to a corporate, post restructuring.
(iv)
Loans under DRI scheme.
(v)
Advance against Banks own term deposit receipts.
(vi)
Loan granted to Banks own employees.
Grievance Redressal Policy of our Bank:
Aim / Objective
This policy document aims at minimizing instances of customer complaints and grievances through
proper service delivery and review mechanism and to ensure prompt redressal of customer complaints
and grievances. The review mechanism helps in identifying shortcomings in product features and service
delivery. The banks policy on grievance redressal follows the under noted principles.
Customers be treated fairly at all times
Complaints raised by customers are dealt with courtesy and on time
Customers are fully informed of avenues to escalate their complaints/grievances within the
organization and their rights to alternative remedy, if they are not fully satisfied with the response of
the bank to their complaints.
Bank will treat all complaints efficiently and fairly as they can damage the banks
reputation and business if handled otherwise.
The bank employees must work in good faith and without prejudice to the interests of the customer.
In order to make banks redressal mechanism more meaningful and effective, a structured system has
been built up towards such end. This system ensures that the redressal sought is just and fair within the
given frame-work of rules and regulation. The policy document would be made available at all branches.
All the employees of the Bank will be made aware about the Complaint handling process
Framework
The customer complaint arises due to:
A. The attitudinal aspects in dealing with customers
B. Inadequacy of the functions/arrangements made available to the customers or gaps in standards of
services expected and actual services rendered.
Standardized Public grievance redresses System (SPGRS)

39 | P a g e

In order to bring in customer centricity in banking services and to improve the image of banks for
providing expeditious, redress of grievances to bank customers, ministry of finance has advised all
public sector banks to develop a SPGRS.
As advised by ministry of finance, Govt. of India, our bank has implemented a standardized public
Grievance redress system (SPGRS), an online complaint lodgment facility for the
customers/noncustomers w.e.f. 11/01/2013. An icon for online complaint registration has been provided
on banks home page: www.bankofbaroda.com

40 | P a g e

41 | P a g e

RETAIL BANKING & THIRD PARTY PRODUCTS

1 - FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER CURRENT ACCOUNT

NAME OF THE

BARODA ADVANTAGE

PRODUCT

CURRENT A/C

ADVANTAGE

BUSINESS BANKING

BARODA PREMIUM CURRENT A/C

CURRENT A/C PRIVILEGE

BUSINESS BANKING MAKES EAZY

MAKES EAZY
ELIGIBILITY

BARODA PREMIUM

BUSINESS BANKING MAKES

EAZY

INDIVIDUALS (14 YRS &

INDIVIDUALS (NOT

INDIVIDUALS (NOT MINOR)

ABOVE)

MINOR/NRI/OCB/BANKS/FI)

BUSINESS

BUSINESS ESTABLISHMENTS/ CLUB/

BUSINESS ESTABLISHMENTS/

ESTABLISHMENTS/ CLUB/

SOCIETIES

CLUB/ SOCIETIES

CORPORATES/ COMPANIES/

CORPORATES/ COMPANIES/ HUF/

CORPORATES/ COMPANIES/

HUF/ TRUSTS/

TRUSTS/ ASSOCIATIONS

HUF/ TRUSTS/ ASSOCIATIONS

GOVT ESTABLISHMENTS/

GOVT ESTABLISHMENTS/ TRUSTS/

GOVT ESTABLISHMENTS/

TRUSTS/ BANKS

BANKS

TRUSTS/ BANKS

M/ U/ SU/ R

M/ U/ SU/ R

M/ U/ SU/ R

NA

FREE IN MULTIPLES OF 25000/-

FREE IN MULTIPLES OF 25000/-

ABOVE THRESHOLD LIMIT 75000/-

ABOVE THRESHOLD LIMIT

(FOR 15-45 DAYS)

250000/- (FOR 15-91 DAYS)

QAB 75000/-

QAB 250000/-

NON-MAINTENANCE OF QAB-600/- +

NON-MAINTENANCE OF QAB-

ST

1000/- + StT

NO UPPER LIMIT

NO UPPER LIMIT

NO UPPER LIMIT

NOMINATION

YES

YES

YES

NO. OF

NO LIMIT

NO LIMIT

NO LIMIT

FREE

FREE

FREE

ONCE IN A YEAR

FREE

FREE

ONCE IN 3 MONTHS

FREE

FREE

No concession

50% concession

100% concession

CREDIT CARD

FREE CREDIT CARD (FOR Ist YEAR)

FREE CREDIT CARD (FOR Ist

(BOBCARD)

MAXIMUM TO 2 PARTNERS /

YEAR) MAXIMUM TO 2

DIRECTORS

PARTNERS / DIRECTORS

SOCIETIES

ASSOCIATIONS

AREA OF
OPERATION
AUTO / REVERSE
SWEEP

MINIMUM BAL

QAB (M/U) 15000/- (SU/R)

2000/-

MIN. BALANCE

500/- PER QTR+ ST

CHARGES
MAXIMUM
BALANCE

TRANSACTIONS
INTERNET
BANKING/ ATM/MCONNECT
FREE BALANCE
CERTIFICATE
FREE SIGNATURE
VERIFICATION
CONCESSION ON
REMITTANCE
(DD/BC) & ON OCC

42 | P a g e

PERSONAL

FREE PERSONAL ACCIDENT

FREE PERSONAL ACCIDENT

ACCIDENT

INSURANCE WITH CREDIT CARD

INSURANCE WITH CREDIT

INSURANCE

CARD

DISCOUNT OF

25% DISCOUNT OF DEMAT SERVICES

DEMAT SERVICES

25% DISCOUNT OF DEMAT

SERVICES

PROCESSING

WAIVER IN NAME OF PROP/ FIRM/

WAIVER IN NAME OF PROP/

CHARGES ON CAR

COMPANY

FIRM/ COMPANY

LOAN
INTER SOL

NIL FOR CASH DEPOSIT

NIL FOR CASH DEPOSIT UPTO 50000/-

NIL FOR CASH DEPOSIT UPTO

CHARGES

UPTO 25000/- PER DAY

PER DAY

100000/- PER DAY

(*Inter SOL cash

WITHDRAWL UPTO 25000/-

First two cash withdrawals of any amount

First three cash withdrawals of any

payments to third

PER DAY

during a calendar month are free and

amount during a calendar month are

parties is totally

thereafter for each cash withdrawal in

free and there after for each cash

withdrawn

excess of Rs. 25000/ per account in that

withdrawal in excess Rs.25000/ per

*Per transaction limit

calendar month, service charge will be

account in that calendar month ,

of ` 50000 /- is fixed

of Rs. 2/- per thousand or part thereof.

service charge will be @ Rs. 2/- per

for cash withdrawal by

thousand or part thereof

drawer by self cheque

at Non Base CBS
branches irrespective of
nature of accounts)
CASH DEPOSIT AT

FREE UPTO 50000/- OR 10

FREE UPTO 50000/- OR 10 PACKETS

FREE UPTO 50000/- OR 10

BASE & LOCAL

PACKETS PER DAY, Above

PER DAY, Above that Rs 10 per packet

PACKETS PER DAY, Above that

NON-BASE BRANCH

that Rs 10 per packet

BANK STATEMENT

FREE ONCE (MONTHLY)

FREE TWO TIMES IN A MONTH

FREE TWO TIMES IN A MONTH

BY E-MAIL

BY E-MAIL

BY E-MAIL

UPTO 20000/-

UPTO 50000/-

UPTO 150000/-

NO CHARGES IF AV.

FREE FOLIO USAGE

FREE FOLIO USAGE

FREE UNLIMITED

FREE UNLIMITED

IMMEDIATE

Rs 10 per packet

CREDIT OF OCC (*T

& C)
FOLIO CHARGES

BALANCE IS ABOVE 50000/CHEQUE BOOK

FIRST 50 LEAVES FREE

43 | P a g e

2 - FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER - SAVING BANK

(1)
NAME OF THE

BARODA

BARODA SUPER

BARODA SHUBH

BARODA

BARODA PENSION

PRODUCT

ADVANTAGE

SAVING A/C

SAVING A/C (SEMI-

CENTENARY

SAVING A/C

SAVING A/C

(METRO/ URBAN)

URBAN/ RURAL)

SAVING A/C

RESIDENT

RESIDENT

RESIDENT

RESIDENT

PENSIONERS (BOB

INDIVIDUALS

INDIVIDUALS (ABOVE

INDIVIDUALS

INDIVIDUALS

PENSIONERS ALSO)

(ABOVE 10 YRS/

10 YRS/ SINGLE/

(ABOVE 10 YRS/

(ABOVE 10 YRS/

SINGLE/ JOINT)

JOINT),

SINGLE/ JOINT),

SINGLE/ JOINT)

STAFF & SR CITIZENS

STAFF & SR CITIZENS

AUTHORISED

(NRI/ TRUSTS & OTHER

(NRI/ TRUSTS &

GOVT DEPTT/

INSTITUTIONS NOT

OTHER INSTITUTIONS

TRUSTS/

ELIGIBLE)

NOT ELIGIBLE)

INSTITUTIONS

ELIGIBILITY

FARMER'S CLUB,
VVV, SOCIETIES,
SHG ETC. STAFF &
SR CITIZENS
(NOT FOR NRIs)
AUTO / REVERSE

NA

SWEEP

MINIMUM BAL

QAB (M/U) 1000/-

FREE IN MULTIPLES

FREE IN

FREE IN

OF 10000/- ABOVE

MULTIPLES OF

MULTIPLES OF

THRESHOLD LIMIT

5000/- ABOVE

1000/- ABOVE

20000/- (FOR 181 DAYS)

THRESHOLD LIMIT

THRESHOLD LIMIT

10000/- (FOR 180

3000/- (FOR 180

DAYS)

DAYS)

QAB-10000/-

3000/- ON DAILY

QAB 20000/-

QAB 15000/-

(SU/R) 500/-

BASIS (A/C MAY BE

OPENED WITH Rs
5/-)

MIN. BALANCE

QUARTERLY (M/U)

NON-MAINTENANCE

NON-MAINTENANCE

MONTHLY Rs 100/-

100/- + ST/

CHARGES

100/- (SU/R) 50/- +

OF QAB-1000/- + ST

OF QAB-750/- + ST

+ ST

QUARTER

NO LIMIT

ST
MAXIMUM

100000 FOR MINOR

100000 FOR MINOR (10-

100000 FOR MINOR

100000 FOR MINOR

BALANCE

(10-14 YRS)

14 YRS)

(10-14 YRS)

(10-14 YRS)

INTEREST

4% P.A.

4% P.A. (QUARTERLY

4% P.A.

4% P.A.

4% P.A.

(HALFYEARLY ON

ON DAILY PRODUCT)

(HALFYEARLY ON

(QUARTERLY ON

(HALFYEARLY ON

DAILY PRODUCT)

DAILY PRODUCT)

DAILY PRODUCT)

DAILY PRODUCT)
NOMINATION

YES

YES

YES

YES

YES

NO. OF

100 WITHDRAWL

100 WITHDRAWL PER

100 WITHDRAWL PER

20 WITHDRAWL

100 WITHDRAWL

TRANSACTIONS

PER HALF YEAR

HALF YEAR

HALF YEAR

PER MONTH

PER HALF YEAR

INTERNET

FREE

FREE

FREE

FREE

FREE

UPTO 15000/-

UPTO 25000/-

UPTO 25000/-

UPTO 25000/-

UPTO 25000/-

FREE UNLIMITED

FREE UNLIMITED

FREE UNLIMITED

FREE UNLIMITED

BANKING/
ATM/MCONNECT
IMMEDIATE
CREDIT OF OCC
(*T & C)
CHEQUE BOOK

44 | P a g e

CONCESSION ON

No concession

REMITTANCE

FREE-Both DD/BC &

FREE-Both DD/BC &

OCC

OCC

FREE- Only OCC

FREE DD/ BC UPTO

100000/- PER

(DD/BC) & ON

MONTH, OCC-FREE

OCC
DISCOUNT OF

25% DISCOUNT OF

25% DISCOUNT OF

DEMAT

DEMAT SERVICES

DEMAT SERVICES

CREDIT CARD

FREE PARAS CREDIT

FREE SILVER

(BOBCARD)

CARD (FOR Ist YEAR)

CREDIT CARD (FOR

SERVICES

Ist YEAR)
PROCESSING

NO - ON RETAIL

CHARGES

LOANS

OD FACILITY

MAX OF 2 MONTHS
PENSION (ROIBR+5.50%)

PERSONAL

FREE PERSONAL

FREE PERSONAL

ACCIDENT

ACCIDENT

ACCIDENT

INSURANCE

INSURANCE WITH

INSURANCE OF 1

CREDIT CARD DURING

LAC WITH CREDIT

FIRST YEAR

CARD

3 - FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER - SAVING BANK (2)

NAME OF THE

BARODA BACHAT

BARODA SALARY

BARODA BASIC

BARODA ZERO

BARODA JEEVAN

PRODUCT

MITRA SAVING

ADVANTAGE SAVING

SAVING A/C

BALANCE SAVING

SURAKSHA

A/C

A/C

A/C

SAVING A/C

INDIVIDUALS -

REGULAR EMPLOYEES

NO FRILL ACCOUNT,

SALARY ACCOUNT

RESIDENT

SINGLE/ JOINT (HAVING

OF STATE/ CENTRAL

ALL RESIDENT

OF EMPLOYEES,

INDIVIDUALS

ATTAINED AGE OF 18 YRS)

GOVT, PSU,

INDIVIDUALS,

LIC/ GIC AGENTS,

(WITH LIFE

EDUCATIONAL

COMMON PEOPLE,

STUDENTS,

INSURANCE

INSTITUTIONS,

LOW AND MIDDLE

PERSONS GETTING

COVER UPTO Rs

SELECTED PVT LTD

INCOME GROUP,

COMPENSATION

5.00 LAC WITH

CO, WITH MINIMUM 1

HOUSE WIVES.

IFLIC, LOW

YR SERVICE

NOT FOR NRI/

PREMIUM)

MINIMUM AGE 21 YRS,

TRUSTS/ SOCIETIES

INDIVIDUALS

ELIGIBILITY

MINIMUM BAL

MINIMUM TAKE HOME

(SINGLE/ JOINT-

SALARY 5000/-

MAX TWO) 18-60

(NOT FOR BOB STAFF)

YRS

NO MINIMUM

NO MINIMUM

NO MINIMUM

NO MINIMUM

1000/- ON DAILY

BALANCE

BALANCE

BALANCE

BALANCE

BASIS

MIN. BALANCE

100/- + ST/

CHARGES

QUARTER

AUTO SWEEP

FREE IN
MULTIPLES OF
5000/- ABOVE
THRESHOLD LIMIT
5000/- (FOR 180
DAYS)

45 | P a g e

MAXIMUM

NO LIMIT

NO LIMIT

BALANCE
INTEREST

NO LIMIT

NO LIMIT

(10-14 YRS)
4% P.A.

4% P.A. (HALFYEARLY

4% P.A.

4% P.A.

4% P.A.

(HALFYEARLY ON

ON DAILY PRODUCT)

(HALFYEARLY ON

(HALFYEARLY ON

(HALFYEARLY ON

DAILY PRODUCT)

DAILY PRODUCT)

DAILY PRODUCT)

YES

YES

YES

DAILY PRODUCT)
NOMINATION

100000 FOR MINOR

YES

YES

NO. OF

4 WITHDRAWALS IN

100 WITHDRAWALS

TRANSACTIONS

A MONTH

PER HY

INTERNET

FREE

FREE

FREE

FREE

FREE

BANKING/
ATM/M-CONNECT
IMMEDIATE

UPTO 15000/-

CREDIT OF OCC
(*T & C)
CHEQUE BOOK

YES

FREE UNLIMITED

FREE 50 LEAVES IN A
YEAR

PROCESSING

NO

0.50% MIN-100/-

NIL

BUILT IN OD

CUSTOMERS HAVE

*MAXIMUM 100000

Maximum OD of Rs

FACILITY

OPTION TO GET OD

(SUBJECT TO 90% OF

5000/- subject to, 4-times

FACILITY AGAINST

NET TAKE HOME

of avg monthly balance

FDR IN SB A/C.

SALARY)

or 50% of credit

MINIMUM AMT OF

*THIRD PARTY

summation of 6-months

FDR 10000/- FOR 12

GUARANTEE

or Rs 5000/- whichever is

MONTHS/ OD UPTO

*ROI-BR+5.50%

lower

80% OF FD VALUE

*A/C TO BE IN CREDIT

(MIN LIMIT 8000/-

ONCE IN 60 DAYS

YES

FREE 20 LEAVES IN
A HALF YEAR

CHARGES

MAX 100000/-), ROI

FDR RATE+1.00%,

46 | P a g e

4 - FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER - TERM DEPOSITS (1)

NAME OF

ELIGIBILITY

THE

MINIMUM

PERIOD

ROI

AMOUNT

PREMATU

TDS

RE

PRODUCT

LABOD/
ODBOD

PAYMENT

BARODA

INDIVIDUALS ABOVE

1000/-

7 DAYS TO LESS

AS PER

APPLI

95%

SHORT

14 YR, HUF, CLUB,

(IN MULTIPLES OF

THAN 12 MONTHS

MATURITY (Paid

ALLOWED

CABL

(DEPOSIT

TERM

SOCIETIES

100/-)

(7-14 DAYS FOR

on

AMOUNT)

DEPOSIT

TRADERS, TRUST,

AMT 15 LAC &

Maturity/withdrawal)

BANKS,

ABOVE)

APPLI

95%

CORPORATES,
ASSOCIATIONS
RIRD -

INDIVIDUALS ABOVE

1000/-

MINIMUM-12

AS PER

ALLOWED

BARODA

14 YR, HUF, CLUB,

(IN MULTIPLES OF

MONTHS

MATURITY (Paid

CABL

(PRESENT

REGULAR

SOCIETIES

100/-)

MAXIMUM-120

Half yearly,

VALUE)

INCOME cum

TRADERS, TRUST,

MONTHS

compunded

RECURRING

BANKS,

DEPOSIT

CORPORATES,

quarterly)

ASSOCIATIONS
MIP& QIP -

INDIVIDUALS ABOVE

1000/-

MINIMUM-12

AS PER

APPLI

95%

BARODA

14 YR, HUF, CLUB,

(IN MULTIPLES OF

MONTHS

MATURITY

ALLOWED

CABL

(PRESENT

REGULAR

SOCIETIES

100/-)

MAXIMUM-120

(DISCOUNTED

VALUE)

INCOME

TRADERS, TRUST,

MONTHS

RATE IN MIP AND

INTERETST

PLAN

BANKS,

SIMPLE IN QIP)

IS TO BE

CORPORATES,

TRANSFER

ASSOCIATIONS

RED TO
LOAN A/C

BARODA

INDIVIDUALS

100/-

MINIMUM-60

AS PER

NOT

APPLI

NO LOAN

TAX

(SINGLE OR JOINT-

(IN MULTIPLES OF

MONTHS

MATURITY (AS

ALLOWED

CABL

ALLOWED

SAVING

MAXIMUM TWO

100/-)

MAXIMUM-120

PER THE SCHEME)

BEFORE 60

UPTO 60

TERM

ADULTS)

MAXIMUM-UPTO

MONTHS

DEPOSIT

HUF (IN THE NAME

150000/-

(RELIEF

OF KARTA)

MONTHS

MONTHS
NOT TO BE
PLEDGED

UNDER SEC

AS

80-C OF

COLLATER

INCOME

AL

TAX)
(UNDER
RIRD/ MIP /
QIP
SCHEME)
BARODA

INDIVIDUALS ABOVE

5000/-

MINIMUM-12

AS PER

PART

APPLI

95%

FLEXIBLE

14 YR, HUF, CLUB,

(IN MULTIPLES OF

MONTHS

MATURITY

PAYMENT

CABL

(PRESENT

FIXED

SOCIETIES

1000/-)

MAXIMUM-120

IN UNITS

VALUE)

DEPOSIT

TRADERS, TRUST,

MONTHS

OF 1000/-

SCHEME

BANKS,
CORPORATES,
ASSOCIATIONS

47 | P a g e

BARODA

INDIVIDUALS ABOVE

R/ SU 50/-

MINIMUM-6

AS PER

RECURRING

14 YR, HUF, CLUB,

U/ M 100/-

MONTHS

MATURITY

DEPOSITS-

SOCIETIES

(IN MULTIPLES OF

MAXIMUM-120

GENERAL

TRADERS, TRUST,

50/- & 100/-

MONTHS

SCHEME

BANKS,

RESPECTIVELY)

(MONTHLY)

CORPORATES,

ALLOWED

APPLI

95%

CABL

(PRESENT

VALUE)

APPLI

95%

ASSOCIATIONS
BARODA

INDIVIDUALS ABOVE

MINIMUM CORE

MINIMUM-12

AS PER

ALLOWED

FLEXIBLE

14 YR, HUF, CLUB,

INSTALMENT 100/-

MONTHS

MATURITY

CABL

(PRESENT

RECURRING

SOCIETIES

& IN MULTIPLES

MAXIMUM-36

(COMPOUNDED

VALUE)

DEPOSITS

TRADERS, TRUST,

OF 100/-

MONTHS

HALF YEARLY)

ACCOUNT

BANKS,

(MAXIMUM 3

(YSJY)

CORPORATES,

TIMES OF CORE

ASSOCIATIONS

INSTALMENT upto
10000/- PER
MONTH)

INTEREST

QUARTERLY

PREMATURE

NOT

PAYMENT

COMPOUNDING

CHARGES (1%)

APPLICABLE IF
DEPOSIT IS UPTO
Rs 5 lacs & RUN
OVER 12
MONTHS

ROI FOR SR

+0.50%

TDS

CITIZEN

IF TOTAL
INTEREST
PAYABLE IS
ABOVE 10000 PER
YEAR

ROI FOR

+1.00%

BOB STAFF

ROI ON LABOD/

SELF +1.00% OVER

ODBOD

FDR
IIIrd PARTY- @
+1.00% OVER FDR
OR BR+0.25%,
WHICHEVER IS
HIGHER

ROI FOR

+1.50%

NOMINATION

AVAILABLE

BOB STAFF
(SR
CITIZEN)

5 - FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER - TERM DEPOSITS (2)

NAME OF THE

ELIGIBILITY

PRODUCT

MINIMUM

PERIOD

ROI

AMOUNT

PREMATU

TDS

RE

LABOD/
ODBOD

PAYMENT
BARODA SPECIAL

FOR CLAIMANTS

AS PER COURT

AS PER COURT

AS PER

TERM DEPOSIT

OF MOTOR

ORDER

ORDER-

PREVAILING

SCHEME FOR

ACCIDENT

(DUPLICATE FDR

CARD RATE

CLAIMANTS OF

VICTIMS

IS NOT ISSUED)

MOTOR ACCIDENT

NA

APPLICA

NO LOAN

BLE

ALLOWE
D/ NOT
TO BE
PLEDGED

48 | P a g e

VICTIMS

AS
COLLATE
RAL

FLEXI DEPOSIT

HIGH

5 CRORE

MINIMUM-7 DAYS

AS

AS PER

APPLICA

SCHEME FOR HIGH

NETWORTH,

(IN MULTIPLES OF

MAXIMUM-12

APPLICABLE

PREPAYME

BLE

VALUE CUSTOMERS

HIGH VALUE

1 CRORE)

MONTHS

FOR BULK

NT

DEPOSIT (NO

CLAUSE

CUSTOMERS

ADDITIONAL
SR CITIZEN,
STAFF RATE)
FAST ACCESS

INDIVIDUALS

10000/-

MINIMUM-12

AS PER

DEPOSIT SCHEME

(INCLUDING

(IN MULTIPLES OF

MONTHS

MATURITY

ALLOWED

APPLICA

95%

BLE

(PRESENT

(UNDER RIRD

MINORS),

1000/-)

MAXIMUM-120

VALUE)

SCHEME)

TRADERS

MONTHS

TO OPEN
A
CURRENT
A/C

BARODA SAMRADHI

INDIVIDUALS

500/-

MINIMUM-36

AS PER

QUARTERLY

(MINORS ABOVE

(IN MULTIPLES OF

MONTHS

MATURITY

RECURRING

10 YR), CLUB,

100/-

MAXIMUM-120

DEPOSITS

SOCIETIES (NOT

RESPECTIVELY)

MONTHS

ALLOWED

APPLICA

95%

BLE

(PRESENT
VALUE)

FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA SAMRADHI

INDIVIDUALS

500/-

MINIMUM-36

AS PER

QUARTERLY

(MINORS ABOVE

(IN MULTIPLES OF

MONTHS

MATURITY

RECURRING

10 YR), CLUB,

100/-

MAXIMUM-120

DEPOSITS

SOCIETIES (NOT

RESPECTIVELY)

MONTHS

ALLOWED

APPLICA

95%

BLE

(PRESENT
VALUE)

FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA SAMRADHI

INDIVIDUALS

1000/-

MINIMUM-36

AS PER

HALF YEARLY

(MINORS ABOVE

(IN MULTIPLES OF

MONTHS

MATURITY

RECURRING

10 YR), CLUB,

100/-

MAXIMUM-120

DEPOSITS

SOCIETIES (NOT

RESPECTIVELY)

MONTHS

ALLOWED

APPLICA

95%

BLE

(PRESENT
VALUE)

FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA DOUBLE

INDIVIDUALS

5000/-

General Public: 108

AS PER

DHAMAKA FIXED

(MINORS ABOVE

(IN MULTIPLES OF

months and 12 days

MATURITY

DEPOSIT SCHEME

10 YR), CLUB,

1000/-)

Senior Citizens: 101

SOCIETIES

MAXIMUM- LESS

months and 27 days

ALLOWED

APPLICA

95%

BLE

(PRESENT
VALUE)

49 | P a g e

TRADERS,

THAN Rs 1 CRORE

TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
SENIOR CITIZENS

60 yrs, (55 yrs in

IN MULTIPLES OF

5 YEARS

AS ADVISED

AFTER

APPLICA

SAVINGS SCHEME -

VRS), Retired

1000/- MAXIMUM

(EXTENDABLE BY

BY RBI,

ONE YR

BLE

2004

Defence personnel

Rs 15 LAC

3 YRS)

Presently

(WITH

(Excluding civilian

@9.30%,

PENALTY)

employees)

compounded

irrespective of Age

quarterly

NA

BARODA CONNECT

BARODA CONNECT USERS WITH FULL TRANSACTION RIGHT CAN OPEN FIXED DEPOSIT ACCOUNT ONLINE

ONLINE FIXED

WITHOUT VISITING THE BRANCH

DEPOSIT THROUGH
NET BANKING
BARODA CAPITAL

INVESTMENT TO BE MADE WITHIN 2 YRS FOR PURCHASE & 3 YRS FOR CONSTRUCTION

GAIN ACCOUNT

TAX EXEMPTIONS UNDER CAPITAL GAIN AVAILABLE

SCHEME - 1968

INTEREST PAYMENT

QUARTERLY

PREMATURE

NOT

COMPOUNDING

CHARGES (1%)

APPLICABLE
IF DEPOSIT IS
UPTO Rs 5 lacs
& RUN OVER
12 MONTHS

ROI FOR SR CITIZEN

+0.50%

TDS

IF TOTAL
INTEREST
PAYABLE IS
ABOVE 10000
PER YEAR

ROI FOR BOB STAFF

+1.00%

ROI ON LABOD/

SELF- @

ODBOD

+1.00% OVER
FDR
IIIrd PARTY@ +1.00%
OVER FDR
OR BR+0.25%,
WHICHEVER
IS HIGHER

ROI FOR BOB STAFF

+1.50%

NOMINATION

AVAILABLE

(SR CITIZEN)

50 | P a g e

Public Provident Fund 1968 Scheme

Eligibility: Any adult in his / her name or in minor's name in the capacity of guardian of the minor. HUF
and

NRIs

cannot

open

PPF

account.

Online

subscription

facility

Existing customers having PPF account with Bank of Baroda can deposit online in PPF account from
Bank of Baroda savings account.
Minimum amount: Rs. 500/- per annum is required to be deposited. The accounts in which deposits
are not made for any reason are treated as discontinued accounts and such accounts cannot be closed
before maturity. The discontinued account can be activated by payment of the minimum deposit of
Rs.500/- with default fee of Rs.50/- for each defaulted year.
Maximum amount: Rs. 1.5 Lacs per annum (FY 2014-15). The depositor has flexibility and freedom
for depositing any amount in a maximum of 12 installments in a financial year.
Maturity period: 15 years. An Account, on the expiry of fifteen years, can be extended for a further
period of five years at a time.
Interest Rate: The interest is paid as per the rates declared by the Government from time to time.
The interest for the month is calculated on the minimum balance available in the account from 5th of a
month to the last date of the month.
Withdrawal facility: A depositor can make partial withdrawals, once every year from his PPF account
after expiry of five years, from the end of Financial Year, in which the initial deposit was made. The
amount of withdrawal is restricted to 50% of the credit balance at the end of the fourth year
immediately preceding the year of withdrawal or the year immediately preceding the year of withdrawal,
whichever is lower.
Premature Encashment: Premature closure of a PPF Account is not permissible except in the case of
death of the depositor.
Senior Citizens Savings Scheme 2004
Tenure of the scheme: 5 years, this can be extended by 3 more years;
Rate of interest: The rate of interest for every financial year will be notified by RBI. Rate of interest
remains unchanged for the entire duration of the investment till maturity irrespective of the revision in
subsequent years.
Frequency of computing interest: Quarterly
Investment to be in multiples of: Rs. 1000/Maximum investment limit: Rs. 15 lakh

51 | P a g e

Minimum eligible age for investment: 60 years (55 years for those who have retired on
superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence
Services (excluding Civilian Defence Employees) shall be eligible to invest irrespective of the age limits
subject to the fulfilment of other specified conditions
Premature withdrawal facility :Available after one year of holding but with penalty
Applicability to NRI, PIO and HUFs: Non resident Indians, Persons of Indian Origin and Hindu
Undivided Family are not eligible to open an account under the scheme.
Sukanya Samriddhi Account (SSA)
Eligibility: A Natural/ Legal Guardian can open account in the name of the girl child from the birth of
the girl child till she attains the age of ten years.
Minimum amount: Rs. 1000/- per annum is required to be deposited.
Maximum amount: Rs. 1.5 Lac can be deposited in a financial year. The amount can be deposited in
multiples of hundred on a single occasion or on multiple occasions but should not exceed the maximum
limit.
Maturity

period:

The

account

shall

mature

on

completion

of

21

years.

Income Tax benefit: Deposits under Sukanya Samriddhi Account scheme are eligible for Income tax
deduction under 80C of Income-tax Act, 1961.
Interest Rate: The interest is paid as per the rate declared by Government of India from time to time.
Other features: Partial withdrawal, maximum up to 50% of balance standing at the end of the
preceding financial year can be taken after Account holders attaining age of 18 years to meet the
financial requirements of the account holder for the purpose of higher education and marriage.
If account is not closed after maturity, balance will continue to earn interest as specified for the scheme
from time to time.Normal premature closure will be allowed after completion of 18 years of age of
account holder, provided that girl is married.
Government of India 8% Savings Bonds 2003 (Taxable)
Key Benefits

Bonds can be issued to resident Indian, in individual or joint names/on behalf of a minor as
father/mother/legal guardian, Hindu Undivided Family, Charitable Institution and University.

Bonds bear interest @ 8% p.a. No interest would accrue after the maturity of Bonds.

Bonds (Non-Cumulative) -Interest will be payable at half yearly intervals up to 31st July and 31st
January by crediting holder's a/cs or issuing cheque.

The bond shall be repayable on the expiry of -6- years from the date of the issue.

52 | P a g e

These Bonds are non-transferable.

Investment can be made with minimum Rs.1000/- and in multiple thereof with no maximum
limit.
Collection of Central/State Taxes

Bank of Baroda, provides the facility of collection of various types of direct taxes viz. Corporate Tax,
Income Tax, Hotel Tax, Wealth Tax, Gift Tax, & Expenditure Tax, through its network
Collection of Indirect Taxes (CBEC)
Bank of Baroda provides the facility of collection of various types of Indirect taxes viz. Excise duty,
Customs & Service Tax through its network of select branches in the States of Gujarat, Rajasthan,
Maharashtra (Mumbai), Delhi, Haryana, & Western UP. The Custom duties are collected by branches in
Gujarat State only
Collection of State Sales/Professional Taxes (ST/PT)
The facility of collection of State Sales Tax/Professional Tax through its select branches, in the States of
Gujarat, Maharashtra, Uttar Pradesh, Delhi & W. Bengal.
Treasury/Sub-Treasury business
Bank of Baroda undertakes State Governments Treasury-sub-treasury business at its select branches, in
the States of Gujarat, Rajasthan, Chhattisgarh and Tamil Nadu.
e-Stamping
Bank of Baroda is authorized to undertake e-stamping business in 8 States and provides the facility of
generation of e-stamps through its designated branches. It is a secured way of paying non-judicial
stamp duty to State Govt. Present system of physical stamp paper is being replaced by e-stamps
gradually by the State Governments. It prevents paper and process related fraudulent practices.
e-Biz
Bank of Baroda is authorized by Department of Industrial Policy and Promotion (DIPP) as one of the
accredited Bank for collection of fees/ charges through e-Biz Portal.
There are two modes of collection of e-Biz receipts:
1. Offline Mode By any of our branch across India
2. Online Mode Customer using their net banking facility can pay through online mode
Fee pertaining to the services like, Industrial License, Industries Entrepreneur Memorandum, and
Employer Registration Service etc. can be done through e-Biz

53 | P a g e

Atal Pension Yojana (APY)

Atal Pension Yojana is a Social Security Scheme introduced by Govt. of India, aimed at providing a
steady stream of income after the age of 60 to all citizens of India. It is based on National Pension
Scheme (NPS) frame work. Permanent Retirement Account Number (PRAN) will be provided to the
subscriber immediately by the Branch.
Under APY the subscribers have a choice to get Fixed monthly Pension amount from Rs. 1000/-,
Rs.2000/-, Rs. 3000/-, Rs. 4000/- and Rs. 5000/- by paying monthly subscription as per the table
Individuals between the age of 18 to 40 can visit our nearest Branch with ID proof, Address Proof and
Age Proof to fill the form for registration under the scheme. Saving Bank account is mandatory for
subscribing under the scheme.
ASBA (Applications Supported by Blocked Amount)
It is a supplementary process of applying in initial public offers (IPO), right issues and follow on public
offers (FPO) made through book building route and co-exists with the current process of using cheque
as a mode of payment and submitting applications.
ASBA means "Application Supported by Blocked Amount", enables investors to apply for IPOs / FPOs
and rights issues without making a payment. Instead, the amount is blocked in investors' own account
and only an amount proportionate to the shares allotted goes out when allotment is finalized.
"Baroda Health" (Mediclaim Insurance Policy)
It is a Medical Insurance Scheme, available only to account holders of our Bank, which takes care of the
hospitalization expenses incurred by the customer up to the amount of sum insured, in respect of the
following eventualities that required the minimum hospitalization for 24 hours

Any illness / disease

Accidental injury and/ or any ailment.

Any surgery that is required in respect of any disease or accident that has arisen during the
policy period
Salient features:

Very low premium

Health insurance cover is available to family of -4- (self, spouse and 2 dependent children) up to
the amount insured without any additional premium.

Premium paid is eligible for Income Tax exemption under Section 80 D as per Income Tax Rules.

Medical examination required for commencement of health cover.

54 | P a g e

Pre-existing diseases also get coverage after 3 continuous claim-free policy years

Upper age limit of primary member (first named person) is allowed up to 80 years, if insurance
cover availed before completion of 65 years.

The scheme is administered through Third Party Administrators (TPAs) for settlement of
Hospitalization Claims under the insurance cover.

55 | P a g e

ROLE OF TECHNOLOGY IN BANK

Contents
1.
2.
3.
4.

Some Recent Initiatives by the bank

Cash Recycler Machines (Cash Deposit + ATM Functions)
Multi Function Kiosk (MFK)
Self Service Passbook Printer (SSPBP) Introduction of new feature for Self mapping
of subsequent passbook
5. Contact Centre
6. Missed Call facility for Balance Inquiry
7. SMS Banking
8. Debit Cards
Credit Cards
9. Baroda Gift card
10. Baroda Travel easy card
11. Baroda Connect
12. Mobile Banking:
13. Baroda e-payment Gateway
14. Baroda Demat Services
15. Bank of Baroda Online Trading (OLT)
16. Baroda Cash Management System (BCMS)
17. Recent Developments in Digital Space
1. Some Recent Initiatives by the bank
a. New Products / Services

Chillr app

Express Lobbies (Includes Cash Recycler, ATM, Self Service Passbook printer)

Launch of Loyalty program for Debit Card Customers Baroda Rewardz

Master Card Platinum Chip Debit Card (enhanced transaction limits )

Master Card Classic Chip Debit Card

Baroda Flash n Move+ (VISA) Contactless Debit Card

Card to Card Fund Transfer through ATM

Cheque book request through ATM

Baroda e-trade now available on mobile devices (Android and ios) through mobile
app
b. New Customer Oriented functionalities in our Digital Banking products

Baroda Connect (Retail)

Online Self Registration by Customer by using Debit Card and Registered Mobile
Number

Online Retrieval of USERID

Online resetting of Transaction Password

Mobile OTP Generation of OTP on Smart Phone

Password now being sent in Activated Mode

Self mapping of new passbook in Self Service Passbook Printer

USSD Direct Access Code to minimise the steps involved in USSD based mobile
transaction e.g. for mini statement *99*48*2#

Baroda M-Connect Instant Registration through Branch and Interoperability

56 | P a g e

24X7 Debit Card Hotlisting and Webchat services through Contact Centre
Debit Card Blocking through SMS
Bank has launched its presence on social media platforms viz; Facebook and
Twitter

c. Simplification / Changes in processes

Branch retail customer relationship management (CRM) for 360 view of the
customer (through BRCRM option in Finacle). Following details of customer will be
available on the user screen Accounts
Transaction analysis
Customer Analytics
Personal details
Organization
Address/phone
Relationship

Issuance of NPDC (Non-Personalised Debit Card) discontinued w.e.f. 01.02.16

Migration of ECS Outward Services from RECS to NACH platform

New Menu options such as DCISS (Debit card reissuance, regeneration of PIN,
multiple account linking / delinking and card blocking) DCARDBLK (For f\blocking of
Debit card through branch), new portal of BOBCARDS for Debit Card CRM (complaint
resolution module)
2. Cash Recycler Machines (Cash Deposit + ATM Functions)
Salient functionalities available in Cash Recyclers are as follows
Cash Deposit with Card Transaction
Daily transaction limit for account without PAN (Permanent Account Number) registered in CBS
is Rs. 49,900/-. There is no restriction on number of transactions of cash deposit till daily limit
of Rs. 49,900/- is reached. This limit also includes the cash deposited over the counter at the
branches.
Daily transaction limit with PAN registered in CBS is Rs. 2,00,000/- without any restriction on
number of transactions. This limit also includes the cash deposited over the counter at the
branches.
Cash Deposit without Card Transaction
Cash Recycler machine facilitates customer to deposit the Cash in Savings / Current / Cash Credit /
Overdraft account by giving the account number (Card-less Transaction), where per transaction &
per day limit is of Rs. 20,000/- subject to daily transaction limit without PAN (Permanent Account
Number) registered in CBS of Rs. 49,900/-.
Cash Withdrawal
This facility is exactly like ATM operations and available with Debit / ATM Card only. The Cash Recycler
dispenses cash deposited by customers using Cash Acceptor facility.

57 | P a g e

Other Bank customers having Debit / ATM Card can also use Cash Recycler for Cash Withdrawal
only.
Maximum cash withdrawal limit per transaction for our Customer is Rs. 15000/-, however per
day Cash withdrawal limit is as per the variant of Debit Card.

3. Multi Function Kiosk (MFK)

Benefit to customers

Multiple facilities available on a single machine

Cheque deposit beyond the branch timings
Lesser time spent in the cheque clearing process as the data will be directly uploaded to
CTS server from the machine itself.

Benefit to Bank

Reduced branch visits of customers

Machine utilization is increased as one machine provides the facilities that were earlier provided
through multiple machines
Automation of the process of depositing a cheque Cheque clearing process is automated, no
need of manual data entry at branch level

4. Self Service Passbook Printer (SSPBP) Introduction of new feature for Self mapping
of subsequent passbook
To improve customer convenience and to reduce workload of staff to map subsequent passbooks, Self
mapping of subsequent passbook feature is now enabled in SSPBP. Details of this facility are as under:
1. Customer is issued the first SSPBP passbook from the branch counters after mapping the passbook
serial number with account number by branch staff (no change in current process).
2. Thereafter, customer prints passbook using Self Service Passbook Kiosks. On completion of the
passbook, system prompts customer to collect fresh passbook from branch for continuation. System
will provide 45 seconds to insert new passbook for auto mapping.
3. If customer inserts new blank passbook within 45 seconds, system automatically maps the serial
number of the blank passbook with customers account and deactivates the old passbook.
4. If customer is not able to insert the blank passbook within 45 seconds (primarily when he/she has to
collect blank passbook from branch) then the system returns to home screen. In that case, for
mapping of subsequent passbook, customer is required to first insert the old passbook. System will
prompt him/her to insert the new blank passbook and machine completes the mapping.
5. Contact Centre
Bank has established Two Contact Centres at Baroda and Lucknow.
Contact Centre Numbers
Toll Free Number 1800 22 33 44 or 1800 102 44 55 from anywhere in the country

The dedicated toll free number for providing contact centre services for Financial Inclusion /
Pradhan Mantri Jan Dhan Yojana (PMJDY) customers is 1800 102 77 88

58 | P a g e

Availability of Contact Centre Services:

Services through IVR by using TPIN

Round the Clock

Services through Agent

Hotlisting of Debit Card

Round the Clock

Web-chat facility

Round the Clock

All other services except others

6 a.m. to 10 p.m.

Services Provided
1. Through Agents

Account Enquiry of linked Accounts

Balance Enquiry
Statement
Transaction Status

Cheque Services in operative Accounts

Stop Payment

Status Enquiry
Cheque Book request

Debit Card Services

Clocking of Card

Request for regeneration of PIN

Request for reissuance of Debit Card

Complaint of Debit Card Failed transaction

Baroda Connect
Help Desk
Activation of Password

Regeneration of password
Complaint on failed transaction

Mobile Banking
General Queries

Resend link / PIN

General Enquiry
Products & Services

Branch & ATM Location

Interest Rate and Forex rates

Lead creation
Wealth Management Product

59 | P a g e

2. Through IVR (Interactive Voice Response)

Account Information Transaction details, Statement through e-mail
Cheque Related Service Cheque Status, Stop payment of cheque, Cheque book request
Change TPIN
Loan and Deposit Account Services Loan account inquiry, Loan account statement request,
Deposit account inquiry
General Information Menu Deposit & Retail Loan ROI, Forex rates, Branch/ ATM locator.

3. Through web-chat
This service is only for general queries and any information which requires disclosure of any
personal / account information is not provided through this service.
Presently this service is available in English only.
4. Missed Call facility for Balance Inquiry
Customers, who have registered their mobile number, can get balance of their accounts by just giving a
missed call from their registered mobile number to mobile number 09223011311.
Salient features of the facility are as under: This facility is available 24X7.
Balances of account under Saving, Current, Cash Credit and Overdraft schemes are
provided through this facility.
Customer may have more than one account with same mobile number. In that
Case SMS of maximum length of 320 characters (2 SMSs) will be sent to customers. For
remaining accounts, customer can avail the SMS Banking Services or our Contact Centre
services.
Customer can use this facility maximum 5 times in a day, system will not respond
thereafter.
mobile
This service is available only for resident accounts i.e. accounts with domestic
number only. In other words, customer with overseas country code /mobile number will not be
sent any SMS.
Customers do not have to pay any charges as the call would be disconnected after a ring
and customer would get the balance via SMS
5. SMS Banking
A SMS to be sent from their registered mobile number to 5616150 or 9176612303.
Services oferred are
Balance Enquiry
Mini Statement
Cheque Status
Customer has to send a SMS text as under
o
o

For Balance enquiry

For Mini statement

- BAL <space> last 4 digit of account number

- MINI <space> last 4 digit of account number

For Cheque status

- CHEQ <space> last 4 digit of a/c no <space>

cheque no

60 | P a g e

For Aadhar seeding

a/c no

- 12 digit aadhar number <space> last 4 digit of

6. Debit Cards
a) Launch of MasterCard Platinum Chip Debit Card
1. Higher limits of Cash Withdrawal up to Rs 50,000/- per day from ATM and Purchases up to Rs
1,00,000/- per day at POS/e-commerce merchants wherever Master Cards are accepted in India and
Abroad.
2. Validity of card is Five years from the month of issuance.
3. Maximum number of ATM cash withdrawals allowed per day is 10.
4. Secured with PIN and CVV2 for online transactions.
5. Ready for international usage on millions of MasterCard ATMs/Terminals.
6. Targeted for HNI, overseas travelers and privileged customers.
a) Launch of Baroda Flash N Move+ Contactless Debit Card
Bank has launched Baroda Flash n Move+ Contactless Debit Card in co-ordination with VISA. The card is
based on Near Field Communication (NFC) technology where in the debit card need not to be dipped or
swiped at the POS. Instead, the cardholder simply taps the card over special POS terminals (enabled for
accepting contactless cards) for making purchases at POS.
Key features of the card are as follows:
It is a Platinum variant of Visa debit card with higher limits of ATM Cash Withdrawal and POS/ecommerce transactions.
Can be used for domestic as well as international transactions
Same Card can be used for making payment through both Contactless modes (by
tapping/bringing the card near to POS terminal within a radius up to 4 cms) or Contact based
mode (either by swiping the card through Magnetic Stripe or dipping the Card through Chip).
Can be used at ATMs to withdraw Cash or avail any other value added service.
Make online purchases through Internet.
For convenient shopping, travelling, dining out at many locations wherever contactless debit
cards are accepted
As per RBI guidelines, Contactless transaction up to a maximum of Rs 2000/- can be done
without PIN at POS. If amount is more than Rs 2000/-, Customer has to mandatorily enter the
PIN. However, Customer also has choice of using PIN on purchase at POS for an amount less
than Rs 2000/- by opting for Contact based mode.
Card limits:
A. ATM:
Maximum per day limit Rs 1,00,000
Maximum per transaction limit on our ATM Rs 15,000
Maximum per transaction limit on other Banks ATM Rs 10,000
Maximum no of cash withdrawals allowed per day 10
B. POS
Maximum per day limits at POS (Inclusive of NFC & e-commerce transactions): Rs 2,00,000
Maximum per transaction limit using Contactless mode: Rs 2,000
Total Count of purchases at POS in a day using: Contactless mode (NFC i.e. Near Field
Communication): 5
Due to limited availability of contactless enabled POS terminals in India, presently Flash N
Move+ is being launched in 3 Regions of Greater Mumbai Zone viz MMSR,MMCR and MMNR,

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b) Discontinuation of magnetic stripe only debit cards

RBI has advised to discontinue the issuance of magnetic stripe only debit cards, from 1st
February 2016, except debit cards issued under government schemes.
In view of compliance, branches are to discontinue the issuance of Non Personalized Debit Card
lying unused in the branches.
Further, bank is in the process of introducing Chip Based Non Personalized Debit Card as
replacement of Magnetic Stripe Non Personalized Debit Card.
c) Summary of Debit Card variants effective from 01/02/2016
Name
Acceptance
Per day limit at ATM
Per day limit at POS
Visa Electron

Domestic only

Rs 25,000/

Rs 50,000/

MasterCard Classic

Domestic only

Rs 25,000/

Rs 50,000/

RuPay Classic

Domestic only

Rs 25,000/

Rs 50,000/

Name

Acceptance

Per day limit at ATM

Per day limit at POS

Visa Platinum

Domestic
International

& Rs 1,00,000/-

Rs 2,00,000/-

MasterCard

Domestic
International

& Rs 50,000/-

Rs 1,00,000/-

RuPay Platinum

Domestic
International

& Rs 50,000/-

Rs 1,00,000/-

Name

Acceptance

Per day limit at ATM

Per day limit at POS

RuPay PMJDY

Domestic only

Rs 25,000/-

Rs 50,000/-

RuPay BKCC

Domestic only

Rs 25,000/-

Rs 50,000/-

RuPay MUDRA

Domestic only

Rs 5,000/-

Rs 5,000/-

Platinum

d) Launching of Baroda MUDRA Card

Bank has launched Baroda Mudra Card in pursuit to offer better banking facilities to borrowers who avail
Working Capital facilities under Pradhan Mantri MUDRA Yojana (PMMY). The card is envisaged to meet
the requirements of MUDRA customers to use alternate delivery channels like ATMs for cash withdrawal
and also POS usage.
At present the Card can be used at ATM and POS only with a provision for allowing Online purchases to
be considered at a later date. This will ensure availability of funds 24x7 to borrowers any time as per
their needs, without visiting the branches.
Profile of Baroda MUDRA Card:
Baroda MUDRA Card is exclusively for PMMY borrowers enjoying Working Capital limits under all
three segments of PMMY viz. SHISHU, KITSHORE, TARUN.
The card is RuPay enabled and is linked to PMMY/ CC/OD accounts to be used at our Bank's ATM
network and NFS member ATMs in India.

62 | P a g e

Card can also be used at selected RuPay enabled POS outlets (as identified by NPCI).
This card is EMV chip card which can be operated through PIN at ATMs and POS.
Card can be issued to PMMY customers, on request, who will be availing Working
Capital facilities.
Withdrawal through Baroda MUDRA Card is restricted up to Drawing Power within the overall
operating limit as per the extant guidelines applicable under PMMY scheme,
Further, withdrawal through Baroda MUDRA Card is restricted up to Rs.5000/- per day with
maximum 4 number of withdrawal from our Bank's ATM and from other Bank's ATM and for
purchases up to Rs.5000/- per day at POS. (subject to balance available in the account).

e) NEFT Funds Transfer through ATM

This facility will be available on Bank of Baroda ATMs.

One time registration is required at branch for registration of Beneficiary account and IFSC
code.
The Registration Facility is provided in CBS through menu option BENRATM.
A Customer can register maximum -2- beneficiaries per day and altogether
maximum
-99- beneficiaries can be registered with a single debit card.
The minimum amount for NEFT through ATM is Re.1/-, maximum amount is Rs.
50,000/- per transaction and Rs. 2,00,000/- per day
There is no limit for number of transactions in a day (subject to the maximum cap of Rs
2,00,000).
NEFT fund transfer after the prescribed cut off time will be processed on the next working day.
Suitable communication screen about timing will be displayed to the customers.

f) Usage of ATMs- Rationalisation of number of free transactions on other Banks ATMS.

Number of mandatory free ATM transactions for savings bank account customers at other banks
ATMs is reduced from the present five to three transactions per month (inclusive of both
financial and non-financial transactions) for transactions done at the ATMs located in the six
metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
Except the six metros mentioned above there will be five free transactions per month (financial
or non-financial) at all other centres for Savings Bank customers, as existing.
There is no restriction for using our bank ATM by our customers upto permissible number of
transactions as per card variant
The charges that shall be levied to the Savings Bank Account Customer after permissible free
transactions on other Banks ATMs are as under:
a) Rs 20/- plus service tax per transaction for Financial Transaction.
b) Rs.10/- plus service tax per transaction for Non Financial Transaction.
For current/ Overdraft account holder: Rs 20/- plus Service Tax for every Financial transaction
and Rs.10/- plus service tax per transaction for Non Financial Transaction;
No transactions are free for these account holders for usage of Debit Card on other Banks ATMs.

g) Issuance of RuPay PMJDY Debit Card to Minors

Accounts opened under Financial Inclusion Scheme: Minors above the age of 10 years opening
Savings Bank Account under Financial Inclusion Scheme in his individual name with operational
instruction as Self (not through father & natural guardian) can be issued a RuPay PMJDY
debit card.
Accounts opened in Scheme other than Financial Inclusion Scheme:
Existing criteria of 15 years of age and above remains unchanged for issuance of debit

63 | P a g e

card (any variant) to Minors maintaining Saving Bank Account in his individual name with
operational instruction as Self (not through father & natural guardian).
h) Debit card Hotlisting/Blocking
The different options for hot listing of debit cards are
Cardholder calls at Banks Contact Centre at 1800 22 33 44/ 1800 102 44 55 and gets the card
blocked. This facility is available round the clock.
Cardholder calls at BOBCARDS Toll Free No. 1800 220 400 for card blocking. This facility is
available 24 x 7.
Through Branch by using menu DCARDBLK has been provided in CBS/Finacle to block
the debit card
by the cardholder himself by sending an SMS in a certain prescribed format from registered
mobile to <5616150>
An SMS alert will be sent as a token of confirmation to the Debit card holder on their registered
mobile number, whenever a debit card is hot listed/blocked.
i) Debit Card Dispute Management System
BOBCARDS has introduced new portal for branches and contact centers. New portal shall be used for
following activities:
1. Lodging the debit card related complaints for the failed/fraud transactions.
2. Viewing the status of card/ PIN processed and dispatch.
j) DCISS
A new menu in CBS/Finacle DCISS has been developed/ implemented for various card related
activities as under:i.
Debit Card Re-issuance
ii.
PIN Regeneration
iii.
Multiple A/c Linking or De-linking
iv.
Card De-blocking
Four eye principal/ Maker & Checker has been implemented for all these 4 activities. Hence
branches have to immediately verify the entries.
Multiple Account linking/ de-linking and Card de-blocking through DCISS will not be instant. It will
happen only after the request is processed by BOBCARDS within 1 working day.
k) Baroda Rewardz - Banks Loyalty Program
In order to increase the usage of our various ADC products, bank has embarked upon implementing a
comprehensive loyalty program - Baroda Rewardz. This loyalty program will cover Debit Cards, Mobile
Banking, Internet banking, Mobile wallet and other digital products launched from time to time.
As a first program under Baroda Rewardz, bank has launched the loyalty program for our debit card
customers wef 03rd December 2015. This program is aimed at encouraging our customers for usage of
debit card on POS and e-commerce transactions for all debit card variants. The program detail is as
follows:

64 | P a g e

l)

Card to Card Fund Transfer

This facility is an inter / intra bank fund transfer facility using NFS ATM network.
The fund is transferred instantly on a 24X7 basis including holidays.
The service is chargable at Rs.10/- + taxes per transaction
Fund Transfer limit is Rs.5000/- per transaction and Rs.25000/- per month

7. Credit Cards
Some of the type of credit cards being oferred by our Subsidiary BOBCARDS Ltd :
BOBCARD Signature (Visa)
BOBCARD Platinum (Visa, Master & Assure)
BOBCARD Titanium (Master)
BOBCARD Bombay Bullion (Visa)
BOBCARD Assure (VISA ) (Against FDR; Credit limit = 80% of FD amount ; Cash withdrawal
Limit: 80% of Credit Limit)
8. Baroda Gift card

Baroda Gift Card is a prepaid VERIFIED BY VISA enabled pre funded card that opens a
distinct proposition to individuals and corporates with its instant availability, ease of handling,
longer shelf life and extended shopping options for the beneficiary.
Card can be loaded with any amount between Rs 500 to Rs 50,000 in multiple of Rs 1
Cardholder can check balance & transaction history online through the URL
https://bobprepaid.enstage.com/prepaid/cms/customer/index.jsp or by calling at customer care
Toll free number -18001025627- or through ATM using the PIN number provided along with the
Gift card
Not reloadable-once the balance is exhausted or the card expires, card becomes a
souvenir
No ATM usage permitted
Can be used only in India
Card is valid till 1 year from the date of purchase or expiry date printed on the card whichever is
earlier

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Residual balance claim will be entertained only if balance amount is equal to or more than Rs.
100/- and claim is lodged within 3 months of card expiry.
Across counter availability
Competitively priced (almost best in the market)
Can be purchased by any customer through Baroda connect with an additional postage fee
irrespective of card availability at his base branch

9. Baroda Travel easy card

Issued in US Dollar, EURO and GBP.

Minimum load value - USD $200 /EURO 150/ GBP 150
Maximum load value - as per FEMA guidelines based on the purpose of visit
Activation within 24 hours of the card purchase
Minimise risk of carrying cash or travelers' cheque during foreign trips
Fees/charges lower than charges levied on domestic debit/credit cards when used
abroad
Cards are valid for -3- years from the date of activation or the date printed on card,
whichever is earlier. In this period, the card can be reloaded any number of times.
Cardholder will have access to 24x7 Customer care team as well as secured
online portal for viewing their card balance and transaction details.
Centralised accounting, reconciliation and customer support by Operations team,
based at Transaction Banking Department, in collaboration with the service
provider
KYC, AML/CFT requirements are as per prevailing Reserve Bank of India
guidelines
Card cannot be used in India, Nepal and Bhutan.
The cards are available for issuance from all the B category branches

10. Baroda Connect

a.

Services offered to Retail Customers

Balance enquiry in Operative account, Deposit accounts and Loan accounts.
Stop payments of cheques
Tax Deduction Enquiry
Account summary summary of all operative, deposit and loan accounts
Fund transfer to Self / linked account and Third party fund transfer.
Fund transfer and NEFT can be scheduled for a future date.
Request for cheque book, fixed deposit renewal, Switch Mailing address, account opening for
CBS and e-banking.
Profile customer can change his profile and change his password.
Activity history Customer can get details of all the activities carried out by bank.
Modeling Customer can model deposit / loan schemes of the bank and know about likely
maturity value, if he invests or likely EMI if he takes loan, etc.
Application Supported by Blocked Amount (ASBA) facility
School Fee options
Bill payment option
Facility of IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect
(This facility is available only to mobile banking customers) .
Online Fixed Deposit opening facility

66 | P a g e

Online RD account opening facility (Standing Instruction is MANDATORY and is automatically

noted)
Online Gift card request facility
Aadhar number linking with operative accounts
Our customers can link their PPF account (Maintained in our Bank) with their existing Bank
account through Baroda connect facility. Once linked, they can also credit fund in the PPF
Account through Baroda connect.
Online payment of India First Life Insurance Policy premium payment

b. Special Services offered to Corporate Customers

Approvals For corporate customers, there can be involvement of multiple users for transfer of
funds / payment of bills, etc and Baroda connect allows multiple users to log in and initiate /
approve the transactions, as per powers delegated by the corporate to their users.

Trade Finance queries relating to Import/Export, Inland Trade, B.G., Forward Contract.

Direct Salary upload facility.

c. Limit for transactions

Retail customers can have maximum -5- transactions/day. But in case of Corporate customers, there
will not be any restrictions on the Number of Transactions per day. The limit for corporate customer
can be increased on the request of the customer and recommendation of the concerned branch.

Per
transaction
Daily limit
Weekly limit
Monthly limit
Yearly limit

(Amt. in Rs.)
Limit for

Financial Transaction
Retail Customers

Limit for

Financial
Transaction
Corporate Customers

Self

Third

Online

Self

Third

Online

linked

party/Sh

NEFT/

linked

party/Sh

NEFT/

A/c

opping
payment
2,00,000

RTGS

opping
payment
5,00,000

RTGS

5,00,000

fund
transfer
Unlimited

4,00,000
12,00,000
30,00,000
1,50,00,00
0

10,00,000
30,00,000
50,00,000
4,00,00,000

Unlimited
Unlimited
Unlimited
Unlimited

15,00,000
45,00,000
1,00,00,000
6,00,00,000

50,00,000
2,00,00,000
5,00,00,000
30,00,00,00
0

Unlimited
Unlimited
Unlimited
Unlimited
Unlimited

10,00,000

d. IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect

IMPS (Immediate Payment Service) to facilitate instant Inter/ Intra Bank fund transfer for our
Baroda m- Connect users on 24 x 7 basis. This facility will be available only to Retail users,
having mobile banking facility. Funds can be transferred within India by debit to any available
operative account in the net banking account
This facility can be availed by users having Transaction right and who have
registered themselves for our Mobile Banking Services (M-Connect) giving mobile

67 | P a g e

Number registered with Baroda Connect facility.

IMPS fund transfer through MMID: Both remitter and beneficiary are required to be
mobile banking registered customers of their respective banks and need to have MMID
(Mobile Money Identifier) mapped to mobile number. MMID is a unique -7- digits number
which is provided to the customers as part of mobile banking service Under this option, user
can transfer funds to the beneficiary account by keying in Mobile No. and MMID (Mobile
Money Identifier) of the beneficiary. User can select the desired account number to be debited
from the drop down. This facility can be availed for transfer of funds to Bank of Baroda
account holders also.
IMPS fund transfer through IFSC: In this mode of funds transfer, the remitter is required to
be mobile banking customer. However, the beneficiary need not be mobile banking
customer and can specify only the IFS code and Account no. User can transfer funds by giving
IFS code and account number of the beneficiary. User can select the desired account number to
be debited from the drop down. This facility can be availed for transfer of funds to Bank of
Baroda account holders also.
One time beneficiary registration with beneficiary MMID / Beneficiary IFSC is required.
Only -2- beneficiaries can be registered in a day and fund can be remitted after 24 hours of
registration.
Details of the IMPS transactions and its status for any date can be viewed through
Status Inquiry.

e. Digital signature based Authentication facility in Baroda connect for corporate

users:
In order to provide personalized security feature for our Baroda connect corporate users and also as
mandate by RBI, our IT team has built infrastructure for extending the option of Digital signature
certificate (DSC) based authentication facility to our corporate users.
f. Mobile OTP Application (M-OTP)
In compliance with regulatory guidelines, as also to enhance security features of Baroda
Connect, two factor authentications were implemented in our Net Banking Portal since June,
2012. Authentication by way of OTP through SMS is one part of security process, which is
triggered by the system to validate the user/other credentials, if the system suspects unusual
activity/ behavior or non-registered PC.
To obviate the issue of delivery of SMS, our IT team has enabled OTP application on mobile
handset supporting Apple, Android, Windows and blackberry.
Activation of this application will involve two steps as under:
Downloading of Mobile OTP application ARCOT OTP on handsets
Users are required to download the application from respective app stores. However this
requires subsequent activation through their Net banking portals.
Activation of Mobile OTP
Users can themselves activate M-OTP facility through Baroda Connect. After logging-in, users
are required to click Mobile OTP Application link under Services tab at home page.
Key features of this new functionality are as follows:
This will help the users to manually generate the OTP on their mobile handset without using
GPRS/internet service.
Generation of manual OTP will be protected by PIN set by the user.
If User wishes to deactivate this facility, then the same can be done by clicking on the 'Mobile
OTP deactivation' link in the services Tab of Baroda Connect and will start receiving the OTP
by SMS on registered mobile number.
It will enable all the users to get the OTP generated within the time frame, without any delay.
This functionality will be specifically beneficial to NRIs/ Customers frequently visiting overseas,
facing issue of OTP over SMS.

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g. Self Registration Process for Baroda Connect - Retail Users

In order to provide customers self driven interface for availing internet banking facility and to reduce
turnaround time, bank has introduced Self Registration of Baroda Connect for Retail Customer,
whereby authentication is done through his/her Debit Card number and Pin.
Pre-requisites for using this facility are:

User should be customer of any domestic Branch with valid BANK OF BARODA debit card and
PIN.
User should have mode of operation as SELF, EITHER OR SURVIVOR, ANY ONE OR
SURVIVORS OR SURVIVOR, and MINOR NATURAL GUARDIAN OPERATION BY GUARDIAN.
User should have valid mobile number registered with bank.
Should have high speed internet connection.
Debit Card should have been activated at ATM (for first time).
h. Online resetting of Transaction Password By retail users
The customer can reset his password anytime if he has a valid Debit card in Active Mode.
The link isprovided on retail user home page
On entering valid details an OTO will be sent on customers Registered Mobile Number
a. Online resetting of Transaction Password By retail users
Customers has to enter details like Account number, Registered Mobile Number (RMN) and
email ID
After verification of Credentials an OTP is sent to Customers RMN
After authentication of OTP system would senf USER ID to registered email ID.

b. Discontinuing request for Activation of Baroda Connect Passwords

In order to reduce turnaround time and increase customer convenience, the passwords will be sent
to the branches in activated mode. The concept of activation of password using HDCR/REGPW menu
will no longer exist with effect from passwords printed on and after 20th August 2015. The branches
will be able to hand over the passwords to the customer for immediate use.
11. Mobile Banking:

Our bank offers Baroda M Connect, the mobile banking facility to its customers.
Customer can also link -5- more accounts held in the Bank and transact business on them. Much
beyond banking, customer will also be able to do transactions like bills payment, recharging the
mobile phones, NEFT fund transfer, IMPS fund transfer etc.
Mobile Banking services can be performed through a software or by dialing *99# (NUUP)
Customers can start using Baroda M-Connect facility in three simple steps:
1.
Registration either through ATM or through Base Branch or through Baroda Connect
2.
Downloading of an Application Software for M-Connect or dialing *99#
3.
Activation of M-Connect (creating login pw & changing mPIN for software based service
or changing mPIN only for NUUP service)

a. Baroda M-Connect New Application

This new application has following major advantages:
1. Modern look of the application is appealing and thus, would encourage the users to regularly use
the system.

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2. Customer is not required to pay SMS charges on every login. In Android / iOS / Windows
phones, new app works on GPRS mode. It is mandatory to activate Mobile internet (GPRS) while
using M Connect.
In case of Java phone users, there are options of running the application on GPRS or SMS mode.
In the later case, the customer would continue to pay for the SMS generated by the application.
3. Icon based menu would make the application language agnostic.
4. For mobile recharge, the improved search string option, provided to locate mobile operator,
reduces the current hassle of multiple entry by the customer.
Services:

Account Balance Enquiry

Account Mini-Statement with color coded debit and credit transactions
Fund transfer within Bank / Other Bank using NEFT
Fund transfer to other Banks using Immediate Payment Services (IMPS)
Mobile Recharge with auto saving of beneficiary name at first recharge. Mobile operator
search option is simplified for a hassle free recharge.

b. Baroda M-Connect facility to all New Customers

There are -3- menus in Finacle to open an account viz. OACC, HOPNACCT and SAO. Of these
options, branches are using predominantly HOPNACCT and SAO menu. To encourage and register all
new customers for mobile banking these menus have now been updated with following changes
1. HOPNACCT Menu: In Mobile Banking field, default option in drop down menu is set as YES
i.e. customer will be provided mobile banking service.
2. SAO Menu: In Mobile Banking field (presently shown as Mobile Subscription), default flag is
set as YES, where customer would be automatically enrolled for M Connect.
3. OACC Menu: Provision is being made to prompt the verifying officer to enable customers for MConnect.
In our account opening form, there is an option for the customer to choose for mobile banking
services. Branches are advised to inform the customer about advantages of mobile banking and
encourage all new customers to tick the option for Baroda M-Connect.
In case customer does not want to register for the service, then the branch is to select NO option
for mobile banking while opening account in Finacle using any of three menus.
If the registration is already completed through branch and at a later date, customer wants to deregister the mobile banking services, then the branch can de-register the customer through HDCR
menu.
c. Baroda M-Connect Instant Registration through Branch and Interoperability
To gear up the registrations under M-connect, bank has made 2 improvements in the current MConnect registration process viz., instant registration / de registration / mPIN generation in Finacle'
and 'interoperability between all M-Connect registration channels (Branch-ATM-Net Banking)'
Instant registration
Like ATM and Net Banking, Branch channel is also live, where there is no need to wait for 24 hrs to
register / de register / generate mPIN through Finacle menus. M-Connect for newly opened accounts:

Mobile banking registration option will appear automatically on HOPNACCT, OAAC and SAO menus
which are used to open a new account
Default option for Mobile Banking registration will be YES in these menus

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When the account is opened, customer is also registered for Mobile banking and the password
(mPIN) is generated at the same time (instantly)

With this, new customers can be on boarded instantly and can also be activated. Main advantage of
this implementation is, as mPIN will be delivered instantly, customers can be provided handholding by
branch staff to activate the mobile banking in branch itself. M-Connect for existing accounts: FINACLE menu for Mobile banking is HDCR
Now, with automation of the menu, Mobile banking registration / de registration / mPIN
generation will be effective immediately, within no time
As soon as the checker verifies the registration / de registration / mPIN generation request,
customer will receive the corresponding message / mPIN immediately.
Now there is no waiting period of 24 hrs
Branch can now regenerate mPIN of any customer who walks in with a problem regarding his / her
mPIN, and the problem can be resolved without any waiting time.
Interoperability
There are 3 modes of M Connect registration, viz., ATM, Branch and Net banking. Now all these 3
channels are interoperable and mPIN generation / de registration can be done through any of the three
channels irrespective of the channel of registration.
d. Direct Access Code in USSD Mobile Banking

USSD stands for Unstructured Supplementary Service Data

To increase the convenience of the users, a new update has been brought in USSD Mobile
Banking, wherein customers can dial multi mode codes (direct access codes) to access
different menus.
Login- Main menu of Bank of Baroda Mobile Banking- *99*48# (48 is short code for Bank of
Baroda)
Direct action Menu options are as under:

Salient features are, no need to internet/ GPRS connections to access Mobile Banking through
USSD and no need of Smart phones, works even on low end handsets.

e. Transaction limit
The daily upper ceiling per customer shall be Rs.50,000 for fund transfer, bill payment and
merchant payment within an overall calendar month limit of Rs.2,50,000 when the service is
used over the application/ WAP
Through National Unified USSD Platform (NUUP)

IMPS
transfers

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Per Transaction

Rs.5,000

Per Day

Rs.5,000

Per Week

Rs.20,000

Per Month

Rs.50,000

No. of txn per day

f. Launching of Chillr Mobile App

Chillr is a smartphone application that enables easy, secure and immediate transfer of money
between its registered users. Users can transfer funds to other Chillr users and also request
money from them. It uses the Immediate payment services (IMPS) of NPCI as backbone to
transfer funds immediately.
To start using Chillr, customer's bank account must have mobile banking activated with IMPS
facility. User will require his/her Bank of Baroda Mobile banking MPIN to transact using this
appplication. After registration, Chillr application is directly linked to the Bank account where the
customers' Mobile no. is registered and Mobile banking is activated.

Main Features of the product are as under:

Customers can send money through Chillr mobile app to both partner and non-partner
bank customers. Currently our Bank and HDFC bank are partner banks. Non-partner bank
customers can only receive funds.
Only the mobile number of the beneficiary in the remitter's phonebook is needed.
Application enables customers to send money to any registered Chillr user on phone
contact list.
Scenarios where the application can be used:
Person to person (P2P) money transfer
Split bills amongst friends
Check account balance
View transaction history
Request money from friend
Pay at stores & to online merchants through Near Me.
Mobile recharge and bill payment (will be launched shortly)
At one time, only one instance of the Chillr Application related to a particular mobile no.
and device no. can be used.
The IMEI device no. will be stored by Chillr. No passwords are stored on the phone locally.
Transactions cannot be made without mPIN which is assigned through Bank.

The minimum amount that can transferred is Rs. 10. The maximum amount that can
transferred is Rs. 1000 per transaction to other Bank customers. The daily limit is set
at Rs. 5000

The app is now available on iOS, Windows and Android mobile platform.
Utilities bill payment in all three platform is available

g. Baroda M-passbook

App is available in both Hindi and English Languages

Transaction and account details stored on the mobile arranged in the chronological order for all
the accounts linked to the registered mobile number with the Bank.
Customer can set his MPIN after OTP verification

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Customer can select the period of months for which the data can be stored in the app.
Search transaction history by transaction date, transaction amount
Personalise / add remarks of choice to the transactions, which can be used to track the
transactions on later date.

Presently this facility is enabled for Savings and Current account holders and the App is made
available in Android platform.
To avail this service, customer is required to download the app from the Google play store and
install the same.

12. Baroda e-payment Gateway

Internet Payment Gateway (IPG) is a payment and settlement infrastructure which a merchant uses to
collect payment from their customer for online sale of products or services. IPG shields the business unit
from complex technical infrastructure required for e-commerce business. It provides necessary access to
payment system including Interchange agencies like Master/Visa, card issuing bank, settlement bank
etc.
Internet Payment Gateway is essential for retailers, who have an online presence and are interested in
selling their products over Internet. IPG is safe & ensures encryption of sensitive card information
during secured transmission between customer, merchant and payment processors.
Operations team has been setup to enroll suitable merchants, provide assistance in configuring
secured access, arrange for day-to-day processing & settlement with Master Card/Visa and carry out
associated reconciliation
Software installed at merchant site, will enable them to track transactions and generate reports at
their end
Merchant will get payment on the next working day in their designated account
Facilitate our merchants to securely accept payment, for their online/web based sale, using
Credit/Debit cards
Accept Master Card/Visa credit/debit card issued by any institution
Merchant instantly gets confirmation of the receipt of payment. Based on that, goods/services can be
delivered to consumer
Implemented latest industry standard security features viz. Verified by Visa,
Master Card Secure Code, two factor authentication, 128 bit SSL, continuous monitoring of server
for vulnerability etc.
Benefits of Baroda e-Gateway for customers
Merchant is shielded from installing and maintaining complex payment gateway technology and
interacting with payment systems.
Payment is received on the next working day in merchant designated account.
Merchant can view/print their transactions.
Simple interface with banks system. If needed, support would be provided to configure the access.
Consumer is assured of safety of their card details/usage. In addition, they get convenience of
purchasing goods/services from the comfort of their home/office.
Round the clock, hassle free service. Create a tech savvy image for merchant.
Opportunities
Fast and emerging market in India, so branches should generate max. leads.

73 | P a g e

 Few numbers of entrants in the payment gateway sector.

Flexible price structure that can be improved on the basis of transaction volume and business
association.
Ability to move into new market segments that offer better profits.
13. Baroda Demat Services
Presently, there are only two depositories functioning in India and they are:i.
National Securities Depository Limited (NSDL)
ii.
Central Depository Services (India) Limited (CDSL).
Financial Institutions, banks, custodians and stockbrokers complying with the requirements prescribed
by Securities & Exchange Board of India (SEBI) can be registered as a Depository Participant (DP).
For trading in the equity market in India we need to have a demat account.
Benefits which encourage us to have a demat account:
1. We can buy and sell shares and stock of any company listed on the stock exchange of India i.e.
NSE and BSE
2. Make on line investment in mutual fund.
3. Apply in IPO
4. Trade in Futures and Options
5. No threat of loss of shares due to faulty/bogus/forged delivery.
6. Dividend and issuance of bonus shares are directly credited into linked accounts and demat
accounts respectively.
7. No share transfer fees or stamp duty.
8. Application can be made vide facility of ASBA (Application Supported by Blocked Amount)
wherein amount does not get debited into the account and is remitted only when shares are
allotted.
A DP ("Depository Participant") is an agent of the Depository (NSDL or CDSL) who is authorized to
offer depository services to investors. Thus to open a Demat account of an investor, a bank or its
branch has to get registered as a DP of a depository i.e. NSDL or CDSL or both. Bank of Baroda is a
DP of both the depository i.e. CDSL and NSDL.
An individual is eligible to have only one Basic Services Demat Account (BSDA)
Individuals shall be eligible to opt for BSDA subject to the following conditions
a. All individuals who have or propose to have only one demat account where they are
the sole or first holder.
b. Individuals having any other demat account/s where they are not the first holder shall
be eligible for BSDA in respect of the single demat account where they are sole or
first holder
c. The individual shall have only one BSDA in his/her name across all depositories.
d. Value of securities held in the demat account shall not exceed Rupees Two Lakhs at
any point of time.
14. Bank of Baroda Online Trading (OLT)
Our bank has launched Baroda e-trade an on-line trading facility in July 2012 in association with
BOBCAPS Ltd. our subsidiary. OLT is the state-of-the-art on-line securities trading platform for the

74 | P a g e

Banks customers. The on-line trading platform

Baroda e-trade is powered by a robust trading engine coupled with a comprehensive suite of
products and services. Since it comes with an in-built configuration with proactive approach towards
customer service, we aim to provide a constantly delightful trading experience to our customers through
this product.
Any customer or non-customer, who wants to avail of OLT would be required to have/open the
following 3 accounts.
Bank account, i.e., Savings Bank/Current Account with any of the branches of the Bank,
Demat account with any of the Depository designated branches of the Bank, and
Trading Account with BOBCAPS LTD.

Salient Features:
Seamless (3-in-1) trading experience (Savings bank/current, Demat and online trading accounts)
Savings bank/current and Demat accounts with Bank of Baroda and trading (OLT/Broking)
account with BOBCAPS ltd.
Account opening form for trading account, to be submitted to Demat designated branches for
onward submission to BOBCAPS LTD.
Instant fund/share transfer facility through lien marking.
Multiple market watch facility with streaming quotes( Live markets rates)
Customization of screen to show critical market information such as market depth, Most active
scripts, Top Gainers/Losers.
Works with low internet bandwidth.
Customers could review their margin status, Holding report, order and trade Book on a real time
basis.
Single window order entry with instant order confirmation.
128-bit encryption security certified by entrust SSL.
Telephonic assistance through centralized Helpdesk Telephone No.022-61389300 (9am to
5pm).
a. Baroda e-trade Upgraded new Online Trading Platform
BOBCAPS has come out with a new online trading platform (upgraded Baroda e-trade portal) with much
convenient user interface. This will help our bank in marketing this product, which in turn will give us
CASA float and fee income. This product will give long term benefit as well as customer
acquisition/retention.
The mobile application (Mobile App) Barodaetrade can be downloaded from the
Google play store for android mobile phones and the same can also be accessed using the chrome
browser on android and apple mobile phones.
There are NIL stamp charges for opening the demat account while Rs 500/- is the franking charges for
e-trade account.
15. Baroda Cash Management System (BCMS)
Cash Management Services is a software application (Cash@Will) that facilitates management of
customer funds, particularly, of corporate customers. Corporate customers with large volumes of
transactions are the target group for BCMS. Baroda Cash Management Services also facilitates Internet
Based Transactions.
Operational Model of BCMS is consisting of 3 tiers as listed below:Data Centre
1. Central Operational Hub (COH)

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2. Identified BCMS Branches / City Back Office / Service Branches

BCMS has three fund management modules, viz., Collection, Payment & Liquidity Management and a
front-end interface available to the customer through the Internet.
Collection Module The Collection Module handles all inflow of funds in customers accounts, which
can be by way of Cash Deposit
Proceeds of local cheques
Proceeds of outstation Cheques
Payment Module This module handles the outflow of funds by way of Direct Debit Instructions (DDI)
ECS ECS-debit
ECS ECS credit
Issuance of DD / BC
Payment through RTGS / NEFT
Issuance of DW
Liquidity Management Module This module facilitates sweeping of funds from various accounts
of the customers and pooling them in a single account called Concentration Account. The funds
available in this account help the customers in online decision making. The Liquidity Management
Module also facilitates funding of various accounts as per the requirement of the customers out of
the balance available in the Concentration account. The Liquidity Management Module facilitates both
sweep-in and sweep-out from the Concentration account.
Post dated Cheque Collection
Invoice management
16. Recent Developments in Digital Space
a. Social Media Policy for Employees
Bank has launched its presence on social media platforms viz; Facebook and Twitter today. The
presence on other social media platforms shall be done subsequently.
The presence on social media platforms also warrants Bank to put in place a comprehensive social
media strategy and policy framework to ensure consistent, reliable content creation, data governance
and regulatory compliance. The above policy shall be applicable to employees, contractors and
vendors.
Having clear guidelines regarding use of social media would be beneficial for the Bank and shall
provide an understanding on how to use social media for achieving business goals.
b. Bharat Bill Payment System (BBPS)
RBI, in November 2015, granted an in-principle approval to NPCI to be the Bharat Bill Payment
Central Unit under BBPS
RBI had received applications banks and non-bank entities for operating as Operating Units
BBPS is an integrated bill payment system which will offer interoperable bill payment
service to customers online as well as through a network of agents on the ground.
The scope of BBPS will cover repetitive payments for everyday utility services such as electricity,
water, gas, telephone and Direct-to-Home (DTH). Gradually, the scope would be expanded to
include other types of repetitive payments, like school / university fees, municipal taxes etc.
c. Trade Receivables Discounting System (TReDS)

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Three entities (NSE&SIDBI, Axis Bank Ltd and Mynd Solutions Pvt Ltd) have been granted Inprinciple Approval from RBI in Novemeber 2015
The TReDS will facilitate the discounting of both invoices as well as bills of exchange

Objective:

Conceptual Understanding

Improving flow of funds to MSME sector by reducing the receivables realisation cycles
Greater discipline on corporates to pay their dues on time

TReDS would involve the following

Uploading of invoices/bills and creation of factoring units by the MSME sellers
Its acceptance by the corporate and other buyers, including the Government Departments and
PSUs, within a specified time limit
Discounting, rating and re-discounting of factoring units
Sending of notifications at each stage to the relevant parties to the transaction
reporting and MIS requirements
Generation and submission of settlement of obligations
Reverse factoring: the buyer could also create factoring units based on the documents uploaded by
the MSME seller
d. In-Principle Approval to 11 payment Banks
In line with the Nachiket Mor Committee (2014)
recommendation regarding
Differentiated Banks RBI has granted in-principle approval to 11 applicants to set up
payments banks
Those who have received approval include
Ecommerce company - Pay TM
Four Major Telecom Companies Vodafone, Airtel, Idea and Reliance
Two Technology companies Tech Mahindra and Fino pyatech
Two Financial Services Companies NSDL and Cholamandalam
Postal Department
Sun Pharma
Objective: To further financial inclusion
Scope of activities :
Acceptance of demand deposits restricted to a maximum balance of Rs. 100,000 per
individual customer.
Issuance of ATM/debit cards.
Payments and remittance services through various channels.
BC of another bank, subject to the Reserve Bank guidelines on BCs.
Distribution of non-risk sharing simple financial products like mutual fund units and insurance
products, etc.
Restrictions
Payments banks, however, cannot issue credit cards.
The payments bank cannot undertake lending activities.
They will be required to invest minimum 75 per cent of its "demand deposit balances" in
Statutory Liquidity Ratio(SLR)
They will have to hold a maximum 25 per cent in Current A/c / Term Deposit A/c with other
scheduled commercial banks for operational purposes and liquidity management.
e. eBiz Indias G2B Portal
Our bank is one of the accredited bank and branches are suthorised to accept challans
pertaining to eBiz portal

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eBiz is one of the integrated services projects under the National E-Governance Plan (NEGP) of
the Government of India and is being implemented by Infosys
The focus of eBiz is to improve the business environment in the country by enabling fast and
efficient access to Government-to-Business (G2B) services through an online portal. This will
help in reducing unnecessary delays in various regulatory processes required to start and run
businesses.
f. Digital India
Promotion of e-Governance through a centralised initiative to ensure citizen centric service
orientation, interoperability of various e-Governance applications and optimal utilisation of ICT
infrastructure/ resources, while adopting a decentralised implementation model with respect to
various ministries / departments of the government

TEST YOUR UNDERSTANDING

1. Online RTGS can be done through
a)
b)
c)
d)
e)

ATM
Baroda Connect
Phone banking
Call Centre
Mobile Banking

2. MMID is related to
a) ATM
b) Baroda Connect
c) Mobile banking
d) Contact Centre
e) BCMS

3. In online RTGS through Baroda connect maximum amount per transaction for a Retail customer
is
a) Rs. 5,00,000/b) Rs. 1,00,000/c) Rs. 2,00,000/d) Rs. 10,00,000/e) Rs 20,00,000/4. Pre requisite for RTGS transactions are
a) Beneficiary name
b)Beneficiary account number
c) IFSC code
d) All of the above
e) None of these
5. IFSC code comprises of a) 13 characters
b) 14 characters c) 11 characters d) 16 characters e) 20 characters
6. Call Centre of our bank has been christened as
a) Contact Centre
b) Help Desk centre

78 | P a g e

c) Hot line centre

d) TPIN centre
e) Global IT Help Desk
7. The Toll Free Numbers of our Contact Centre (Non PMJDY) are
a) 1800 22 33 44 & 1800 100 44 55
b) 1800 102 44 55 & 1800 11 22 33
c) 1800 22 33 44 & 1800 102 44 55
d) 1800 33 44 55 & 1800 102 44 55
e) 1800 33 44 66 & 1800 102 44 77
8.Services for the Contact centre through agents is available between which time of the day
a) 7 am to 7 pm
b) 6am to 10 pm
c) 10 am to 5 pm
d) 9 am to 9 pm
e) 10 am to 10 pm
9. Two contact centres are located at - a) Lucknow &
Bareilly
b) Bareilly & Mumbai
c) Baroda & Rai-bareilly
d) Lucknow & Baroda
e) Bangalore & Lucknow
10. Password for caller verification at contact centre is known as
a) MPIN
b) Sign-on password
c) TPIN
d)
ATMPIN
e) PIN

1
Q
A

1
b

2
c

3
a

4
d

5
c

6
a

7
c

8
b

9
d

0
c

79 | P a g e

RURAL/AGRI. BANKING AND FINANCIAL INCLUSION

Financial Inclusion Plan
The bank has implemented Financial Inclusion Plan for providing banking services in the un-banked /
under-banked 20,000 villages having population of 2,000 and above during the first phase. The banking
services have been provided to these villages through information and communication technology based
models like smart cards, micro ATMs, mobile vans and brick & mortar branches, wherever feasible.
Moreover, under Roadmap for provision of banking outlets in villages with population less than 2000,
our bank has advised all the Financial Inclusion link branches to ask concerned BCs and KIOSK
operators/VLEs to visit periodically to their allotted sub service area villages on pre announced days
and time to cover 100% Service Area villages.
The basic approach of financial Inclusion is based on the fundamental principle of 5As of ensuring
Adequacy and Availability of financial services to all sections of the society through the formal
financial system covering savings, credit, remittance, insurance, etc. and, at the same time, increasing
Awareness of such services and ensuring Affordability and Accessibility of the appropriate financial
products through a combination of conventional and alternative delivery channels and technology
enabled services and processes.
Importance & Scope of FIP:

Huge potential at the Bottom of the Pyramid

Innovative and effective ways of delivery of financial products
Poor are bankable and Creditworthy
Financing the poor is not poor financing
Bank of Baroda has been in the forefront in financing the poor
Financial Inclusion is a business opportunity
Skill building Efforts
A new Alternate Delivery Channel
Life-line of future banking in rural areas

Steps taken by the Bank to Promote Financial Inclusion:

No Frill Savings Bank account with limited OD facility

RD account with Money Back facility
Baroda General Credit Card
Baroda Kisan Credit Card (All purpose credit to farmers)
Micro Insurance product
A remittance product
Introduced relaxed KYC norms as per RBI guidelines
Issuance of ATM/Debit Card to financial Inclusion customers(Savings Bank Scheme SB150)
4772- Gram Panchayats from all over India are connected on National Optical Fibre Network (NOFN)
as on 09.03.2016. Details of the same Gram Panchayat-wise is available on http://www.bbnl.nic.in
under the heading-Active GPs-List of active Gram Panchayats connected live on the Network.
Branches are advised to explore the possibility of getting broadband through NOFN for their Bank
Mitras/ATMs in the aforementioned Gram Panchayats. Regional Offices may explore the possibility of
getting broadband through NOFN for rural branches in those Gram Panchayats (where V-SAT is
used). New Gram Panchayats are added every month on NOFN on a continuous basis. Hence, the
said website may be checked up for keeping up with the updates.

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Business Facilitator Model

BF should be used to provide only nonfinancial support services.
The following services can be provided
by the Business Facilitators to the
bank:

Business Correspondent model

In Addition To Activities Listed Under
The Business Facilitator Model, The
Scope Of Activities To Be Undertaken
By The Business Correspondents Will
Include
1. Disbursal Of Small Value Credit,

Identification of borrowers as per KYC

norms and fitment of activities.
However, the branches are ultimately
responsible for adherence to the KYC
norms. Hence, they have to ensure that
KYC norms are scrupulously followed
while opening loan accounts.

Collection & preliminary processing of

loan applications including verification of
primary information / data

Creating awareness
liability products

Education and advice on managing money

and debt counseling

Of The Bank's Banking Business, But

Conducted
Through
The Entities

Processing
and
applications to banks

Indicated Above At Places Other Than

The Bank Premises.

Promotion and nurturing of Self Help

Groups / Joint Liability Groups

In View to Provide Flexibility to the Banks

and Technological Development in the

Post-sanction monitoring
Monitoring and handholding of Self Help
Groups / Joint Liability Groups / Credit
Groups /Others

Banking Sector ,The RBI has decided to

remove the earlier Distance Criteria
(Distance Between The Place Of Business
Of A B.C. / B.F. And The Base Branch)

Follow-up for recovery

for the Operation Of The Business

Correspondent(BC)for
Rural, SU And
Urban Areas of30 Kms and 5 Kms in
metropolitiancentre has removed.Now
there is no such any distance criteria.

about loans and

Submission

of

2. Recovery Of Principal / Collection Of

Interest
3. Collection Of Small Value Deposits
4. Sale Of Micro Insurance / Mutual Fund
Products / Pension Products / Other
Third Party Products And
5. Receipt And Delivery Of Small Value
Remittances /
Instruments

Other

Payment

The Activities To Be Undertaken By The

B.C. Would Be Within The Normal Course

Business Correspondent (BC) Model

BCs from the local area will be engaged

They will be provided with hand held devices having facility for enrolments and transactions with
bio-metric authentication using POS / KIOSK.
Authorised to collect and disburse cash.
The system is integrated with the Core Banking Solution (CBS)
RBI has now allowed BC appointed by one bank can also work for other banks and it will not only
facilitate the business continuity but also reduce the cost of operation further

81 | P a g e

Our bank has devised an incentive scheme for BCs for canvassing business.

Instant Account Opening at BC points: This facility has been launched since 10.12.2015 where the
customer will get the account number instantly and can deposit money in his account simultaneously.
This has been designed to prevent opening of zero balance accounts which has been a cause of concern
in PMJDY.
Though customer can get the account number instantly and can deposit the amount immediately,
however, he can withdraw only when the account get verified by the Branch. Therefore, BC should
submit the account opening form within 24 hours to link branch. Further Branch to verify these accounts
though menu FREEREC immediately and ensure that not a single account remain unverified beyond
3 days.
Scheme Code for opening of Saving Bank account at BC points: (BCC:BR:108:80 dated 1802-2016):SB150 scheme code is only meant for opening of Saving Bank Accounts at our
Business Correspondent (BC) points.
Opening of Term Deposit and Recurring Deposit Accounts at BC points: As a new initiative our
Bank has started opening of FD & RD accounts at BC points.
Target Group: The following customers are eligible to open FD and RD accounts at BC
points
i) Customers who have opened their saving bank accounts through BC points.
ii) Customers whose saving bank accounts have been Aadhaar seeded.
Remuneration to BCs:
Sr.
Activity
No
1
Opening of Recurring Deposit
account (Max 10000 per a/c
through transfer only)
2
Opening of Fixed Deposit account
(Max 1 lakh per a/c through
transfer only)

Remuneration for Mode of Payment

Kiosk Model BC
Rs.10/per Online credit
account
0.40% of deposit Online credit
amount; Max of
Rs.20/per
account

Provision for our customers to deposit loan amount in their loan accounts at our BC points
(Kiosk) (BCC:BR:107:627 dated 18-12-2015) : Any of our customer or his representatives, who
wants to deposit the loan installment need to visit our KIOSK point and provide the loan account
number wherein the deposit needs to be done. Currently, system is enabled for cash deposit in LAA
scheme type accounts only,limit being Rs 10000/- per day.
Services available at BC points: Following services are available at BC points:
Saving Bank account opening;
Opening of Term Deposit and Recurring Deposit Accounts
Opening of accounts through e KYC
Cash deposit in SB, CA, CC, OD and Loan accounts
Withdrawal from Saving Bank account
Aadhaar Enabled payments (AEPs)
Aadhaar Seeding
Balance Enquiry
Fund transfers / remittances
Canvassing of loan accounts
Micro Insurance product like PMJJBY, PMSBY
Atal Pension Yojana
Loan Recovery

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Incentive linked schemes for Business Correspondents for Mobilizing deposits in SB

accounts opened by them and Management of Asset quality (BCC:BR:107:613 dated 10-122015):
1. Mobilizing deposits in SB accounts opened by them Incentive for mobilizing Deposits in
Savings Account - This is applicable when at least 90% of accounts opened by BCs are
funded and BC maintains at least 1000 accounts. The incentive in % term is as under :

Average balance up to 25 lacs NIL

Average balance above 25 lacs and up to 40 lacs 0.5%
Average balance above 40 lacs and up to 60 lacs - 1%
Average balance above 60 lacs 1.5 %

2. Management of Asset quality: Incentive for follow up & recovery in loan accounts and
maintaining asset quality
Incentive is 1% of the Amount of loan account assigned to BC for follow up and recovery where the
account is standard and regular at the end of the year i.e. after 12 months.

The incentive amount will be paid only after the completion of one year.
The incentive will be payable only when 90% of the accounts assigned to the BCs are regular.
For Example- If a BC is assigned say 80 loan accounts is his area, amounting to Rs. 1.10 Cr on
01.01.2016 and 72 accounts (72 accounts is 90% of 80 accounts) are regular (out of 80
accounts) with outstanding amount of 1.02 Cr, the BC is entitled to get incentive of Rs. 1.02 lacs
(i.e. 1% of 1.02 Cr) on 01.01.2017.
In case of NPA accounts an incentive of 2% of recovered amount may be paid by branch
immediately after recovery by BC. In case of PWO accounts the incentive of 10% of the
recovered amount may be paid immediately after recovery by BC.
In the event of BC not able to maintain asset quality, in such case incentive shall not be payable
to BC.

Remuneration/ incentives available to our Business Correspondent (BCs): Bank has

empanelled 16 corporate BC for supporting Banks FI activities. To improve upon the service
delivery through the Model of BCs, Bank has been providing remuneration/ multiple incentives to the
BCs for different types of product & services delivery through them.
In case of Kiosk Model BCs, remuneration for both fixed and variable portions, are paid online by our
Corporate Office to the field level BCs.
In case of POS model BCs, remuneration for account opening is paid by braches, however fixed portion
and transaction charges are paid by our corporate office to the field level BCs.
In case of BCs operating under Corporate BCs, the remuneration net of TDS is shared in the ratio of 80
to 20 between the field level BC and corporate BC. In case of Direct BCs, the remuneration net of TDs is
paid fully to them by corporate office.
Incentives for Business Facilitation by BCs are paid at branch level to the debit of P/L head incentives
paid to BCs, account number xxxx0052201006 of respective branch subject to TDS.
Consolidated information of remuneration / incentive available to BCs have been provided in annexure
as per circular no. BCC:BR:108:48 dated 01-02-2016.

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Increment of incentive for Aadhaar seeding through branches and BCs from Rs. 3/- to Rs.
5/- and extension till 30/09/2016 (BCC:BR:108:59 dated 08-02-2016):Incentive of Rs. 5/- to
BCs for activation of RuPay card. Bank has increased the incentive amount from Rs. 3/- to Rs. 5/- and
scheme has extended till 30/09/2016. Bank has also decided to provide an incentive of Rs. 5/- per
RuPay debit card activation to our BC with immediate effect.
Opening of Settlement accounts (OD124) tor BC Operation (BCC: BR: 108:109 dated 10-032016): Bank has reiterated the modalities for opening of BC settlement account.
Branch should open settlement account of BCs under Scheme Code OD124 only and the account can
be opened with zero balance.
The Overdraft facility should be granted to the business correspondent against collateral security on
usual commercial terms and conditions as per bank's extant guidelines.
Branch has to monitor overdraft account of the BC on daily basis.
Quarterly Inspection/Audit of BC points (BCC: BR: 107:491 dated 03-10-2015): Bank has
decided to conduct inspection/ audit of BC points at regular interval. In this regards, Bank advised
Branches, Regional Offices and inspection to audit BC Points in their respective area of operation in the
following manner.

Branches to audit all their respective BC points once in every quarter and take appropriate remedial

action in case of any irregularity is found and same copy should send to RO for their record and action if
warranted.
RO on its own will audit 10% of the BCs of the region randomly every quarter (rotation basis) in
addition to branch audit and initiate necessary action.
The internal Auditors from ZIAD concerned will visit a few BC points randomly during their regular
inspection of the Branch.
Precautions to be taken by Branches to prevent frauds at BC points (BCC:BR:123:123 dated
17-03-2016): BC must be local preferably from same village or adjacent villages.BC must not use any
stationery such as Pay-in-slip, withdrawal slip, blank passbook etc. of the bank. They must issue system
generated receipts for all type of transactions. The branch along with BC must organize
meetings/camps/financial literacy programs in villages; schools at least once in a month and the system
followed by BC should be well explained.The customers should be convinced to seed their mobile
numbers in their accounts to receive alerts or SMS for all credit and debit transactions in their accounts.
Baroda Basic Saving Bank Deposit Account: RBI, with a view to do away with the stigma
associated with the nomenclature no frills account and making the basic banking facilities available in a
more uniform manner across the banking system, has decided to modify the guidelines for
opening of basic banking no-frills accounts. Modified guidelines on no-frill a/cs are as under :1. The Banks will offer a Basic Savings Bank Deposit Account which should be considered a normal
banking service available to all.
2. This account shall not have the requirement of any minimum balance.
3. The services available in the account will include deposit and withdrawal of cash at bank branch
as well as ATMs, receipt/ credit of money through electronic payment channels or by means of
deposit/ collection of cheques drawn by Central/ State Government Agencies and Departments.
4. While there will be no limit on the number of deposits that can be made in a month, account holders
will be allowed a maximum of four withdrawals in a month, including ATM withdrawals.

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5. Facility of ATM or ATM cum Debit card.

6. Above said facilities will be provided without any charges. Further, no charges will be levied
for non- operation/ activation of in-operative Basic Savings Bank Deposit Account.
Features of Baroda Basic Saving Bank Deposit Account:
Parameters

Features

Minimum Initial Deposit amount

Nil
The Account can be opened with Zero Balance also

No. of withdrawals allowed in a month

No. of
year

cheque

leaves allowed free in a 50

Charges for non operation/ activation of NIL Charges

in-operative/ dormant a/cs
Standing
availability

Instruction/

Internet Banking

ECS

facility To be provided
To be provided

Whether Account holder is eligible to No (if a customer has any other existing
open any other Savings Bank Deposit in savings bank deposit account in the bank, he/
Bank
she will be required to close it within 30 days
of opening of Basic Savings Bank Deposit
Account )
Small Account (KYC non-Compliant BSBD accounts) - A small account can be opened on the
basis of a self attested photograph and putting her/his signature/thumb print in the presence of an
official of the Bank.
Limitation in the account:
i) Aggregate credits not more than Rupees one lakh in a year.
ii) Aggregate withdrawals (not more than ten thousand in a month.
iii) Balance in the accounts not more than Rupees fifty thousand at any point in time.
Such accounts would be normally valid for 12 months. Thereafter allowed for further 12 months only on
condition that account holder provides a document that she/he has applied for any of the officially valid
document within twelve month of the opening the small account.
At branch level BSBD accounts to be opened only under following scheme codes:
1. SB124 Wherever KYC documents have been submitted by the customer.
2. SB136 Small accounts opened on declaration basis from the customer

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Mobile Vans- Mobile vans with systems having connectivity moving in a cluster of villages.
Bio-metric ATMs- Establishing Bio-metric ATMS, Fixed as well as mobile.
Ultra Small Branches
Ultra Small Branches have established by the bank for effective coverage under
Financial Inclusion.
It can be established between the base branch and BC locations so as to support to about 8-10 BC
units at a reasonable distance of 3-4 Km.
USB is brick & mortar unit of floor area of 100-200 sq.ft., from where banking facilities will be
provided to people and nearest branch from which it will be attached, officer of link branch will visit
once in a week to the USB just like earlier concept of Satellite Branch.
BoB- Kiosks Model under financial inclusion:
Presently we are covering financial inclusion villages through three models such as POS based BC
model, Mobile Van model and Brick & Mortar branch model. All these models have unique features and
own merits. As a part of continual development in financial inclusion, our bank has introduced one more
model Kiosk Banking which is web based application that can be accessed through desktop or laptop.
This is card less solution so that time period required for printing and distribution of smart card can be
eliminated and customer can start operating the account immediately from date of opening of account.
Transactions processing is based on centralized biometric authentication on real time basis. This model
is very useful to increase our reach into the villages as well as implementation of Urban Financial
Inclusion at urban and semi-urban locations.
Bank has already entered into an agreement with the CSC e-Governance India Services Ltd., which is
SPV for the purpose launched by Department of Information and Tech., Government of India to appoint
their Common Services Centers (CSCs) as Business Correspondents.
Linking of customerss Aadhaar number with their bank account
The government of India has decided to transfer direct payments to the bank accounts of the
beneficiaries under various government programmes such as MGNREGA wages, fertilizer subsidy,
scholarship, LPG subsidyetc through Electronic Benefit Transfer (EBT). In addition to the other platforms
like NEFT, RTGS etc. , the govt. of India has given emphasis to roll out subsidies/direct cash transfers
also on the basis of Aadhar /UID number of the resident.
The Aadhar number of the customer can be linked in existing account as well as for the new accounts
through menu option APBSLN .
Branch to senitize customer about the importance of seeding aadhaar with their saving bank account for
availing a) various Govt. benfits b) for claim settlement under various insurance schemes and c)
availing transaction facility through Aadhaar enabled payment system (AEPS) at BC points.
Following strategies in the strategic Board Meet have been devised to improve the Aadhar seeding
position (BCC: BR: 107:301 dated 24-06-2015):
Open the account through e-KYC
If e-KYC not possible, then obtain Aadhaar as KYC and seed the account
Link branch to ensure that all the BCs are opening accounts through e-KYC
Branches should allot challenging target to BCs
Branch should nominate one staff member as Aadhaar champion. A report to be generated
using UIDLNKOS menu.

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Consent cum declaration form submitted by customer to avail the insurance facilities under
PMSBY & PMJJBY scheme where in most of the customers have mentioned their Aadhaar
number can also be used for seeding.

Aadhaar linking with bank account through menu option HOPNACCT for accounts opened
at branches & RBOs (BCC:BR:107:381 dated 11-08-2015): Bank has enabled the menu option
HOPNACCT for Aadhaar seeding at the time of account opening. This will be done by the branch staff
at the branch level only.
Provision for Aadhaar seeding at BC Point (BCC: BR: 108:37 dated 27-01-2016): Bank has
enabled Banks BCs for Aadhaar seeding of customers who have opened their accounts at BC points.
Seeding of Aadhaar number in bank account (BCC:BR:108:38 dated 29-01-2016):Bank has
advised to all branches to improve voluntary seeding of Aadhaar in all bank account including pension
accounts of Central Government Pensioner. Banks has also advised to keep improving on Aadhaar
seeding position so that Bank as a whole reaches at least 80% mark by end of March 2016.
Aadhar seeding in Bank accounts of MGNREGA beneficiaries (BCC:BR:108:85 dated 18-022016): Ministry of Rural Development, Govt. of India has proposed camp mode approach to help the
banks for the prompt Aadhar seeding as per following action plan:
The Ministry will organize village level camps to reach out to MGNREGA beneficiaries.
The beneficiaries will be sensitized about benefits of using RuPay debit card and advantages of
Aadhar seeding of their accounts.
On a voluntary basis, they will try to obtain consent of beneficiaries for Aadhar seeding of their
accounts in writing.
Consent form contains details such as name and address of beneficiaries, bank account, Aadhar
number, etc which are required by Bank for Aadhar seeding.
The consent form will be duly signed by beneficiaries account holder. It is advised to obtain signature of
a witness wherever the beneficiary is illiterate and puts only thumb impression on consent from.
Rollout of Aadhaar enabled payment system (AEPS) BCC: BR: 107:130 dated 19-03-2015:
Our Bank has rolled out AEPS for providing banking services at BC/Kiosk locations. AEPS is interoperable
system through which any customer of our bank and other bank who has Aadhaar linked bank account
can avail banking services such as cash deposit, cash withdrawal, Balance inquiry, and fund transfer at
any of our BC location.
The transaction in AEPS is Aadhhar based and as such transaction is based on biometric authentication
and therefore, account should be aadhaar seeded.
Pradhan Mantri Jan DhanYojana (PMJDY):
Pradhan Mantri Jan Dhan Yojana is a scheme for comprehensive financial inclusion launched by the
Prime Minister of India, Narendra Modi on 28 August 2014. He had announced this scheme on his first
Independence Day speech on 15 August 2014.
Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore (15
million) bank accounts were opened under this scheme. By 28 January 2015, 12.58 crore accounts
were opened, with around 10590 crore (US$1.7 billion) were deposited under the scheme, which also
has an option for opening new bank accounts with zero balance.
The scheme has been started with a target to provide 'universal access to banking facilities' starting
with "Basic Banking Accounts" with overdraft facility of Rs.5000 after six months and RuPay Debit card

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with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card. In next phase, micro
insurance & pension etc. will also be added.
Under the scheme:
1. Account holders will be provided zero-balance bank account with RuPay debit card, in addition
to accidental insurance cover of Rs 1 lakh.
2. Those who open accounts by January 26, 2015 over and above the 1 lakh accident, they will be
given life insurance cover of 30,000 (to be given by LIC).
3. After Six months of opening of the bank account, holders can avail Rs.5,000 overdraft from the
bank.
4. With the introduction of new technology introduced by National Payments Corporation of India
(NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited
only to smart phones so far.
5. Mobile banking for the poor would be available through National Unified USSD Platform (NUUP)
for which all banks and mobile companies have come together.
PMJDY, Comprehensive Financial Inclusion based is proposed be achieved under the six pillars as under:
Phase I (15thAugust ,2014-14th August,2015) Universal access to banking facilities
Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit
card with inbuilt accident insurance cover of Rs. 1 lakh and RuPayKisan Card
Financial Literacy Programme
Phase II (15th August 2015-15th August,2018) Creation of Credit Guarantee Fund for coverage of defaults in overdraft A/Cs
Micro Insurance
Unorganized sector Pension schemes like Atal Pension Yojana
In addition, in this phase, coverage of households in hilly, tribal and difficult areas would be carried
out. Moreover, this phase would focus on coverage of remaining adults in the households and
students.
All the rural & semi urban areas of the country is proposed to be mapped into Sub Service Area
(SSA) comprising 1000-1500 households with an average 3-4 villages with relaxation in NE/ Hilly
states.
It is also proposed that looking to the viability of each centre around 74000 villages with population
more than 2000 which were covered by Business Correspondents under Swabhiman Campaign will
be considered for conversion into full fledged Brick & Mortar branches with staff strength of
1+1/1+2 in the next three years.
All the 6 lakh villages across the entire country are to be mapped according to the Service Area of
each Bank to have at least one fixed point Banking outlet catering to 1000 to 1500 households,
called as Sub Service Area (SSA). It is proposed that SSAs shall be covered through a combination of
banking outlets i.e branch banking and branch less banking.
Branch banking means traditional Brick & Mortar branches. Branchless banking comprises of fixed
point Business Correspondents agents, who act as representative of Bank to provide basic banking
services.
The implementation strategy of the plan is to utilize the existing banking infrastructure as well as
expand the same to cover all households. While the existing banking network would be fully geared

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up to open bank accounts of the uncovered households in both rural and urban areas, the banking
sector would also be expanding itself to set up an additional 50,000 Business correspondents (BCs),
more than 7000 branches and more than 20000 new ATMs in the first phase .
The comprehensive plan is necessary considering the learnings from the past where a large number
of accounts opened remained dormant, resulting in costs incurred for banks and no benefits to the
beneficiaries.
The plan, therefore, proposes to channel all Government benefits (from Centre/State/Local body) to
the beneficiaries to such accounts and pushing the Direct Benefits Transfer (DBT) scheme of the
Union Government including restarting the DBT in LPG scheme. MGNREGS sponsored by Ministry of
Rural Development (MoRD, GoI) is also likely to be included in Direct Benefit Transfer scheme.
Financial Support under Financial Inclusion Fund (FIF) to commercial banks by NABARD for
organizing Financial Literacy camps/ awareness camps (BCC:BR:107:559 dated 13-112015): In order to ensuring financial security to the poor and vulnerable, the Government
of India has initiated Financial Inclusion in a mission mode to provide all financial products
through its ambitious schemes i.e. PMJDY, PMSBY, PMJJBY, PMMY and APY. NABARD has
been supporting such programs out of Financial Inclusion Fund subject to a maximum of
Rs.15,000/- per program as grant assistance. As per existing norms, the cost of organizing
such Financial Literacy program can be shared between NABARD and the bank in the ratio
of 60:40, subject to a maximum of Rs.15,000/- per program.
Bank has advised to branches to to ensure certain deliverables during these programs in
the form of opening of new accounts, enrolments under PMJJBY, PMSBY and APY and the
same may be documented and submitted along with its claim for each of the program
separately.
PradhanMantri Jan DhanYojana(PMJDY)-Overdraft:
Under Financial inclusion after implementation of PradhanMantri Jan dhanyojana
It has been decided by the government of India to devise a uniform SBOD across the industry under
PMJDY. General purpose loan to provide hassle free credit to low income group/underprivileged
customer to meet their exigencies without insistence on security ,purpose or end use of credit.
Eligibility- Individuals having BSBD accounts, which are operated satisfactorily for at least six months.
OD to be granted to the earning member of family, preferably women of the house. There should be
regular credits under DBT/DBTL scheme /other verifiable source. For avoiding duplicate benefit,
account may be seeded with Aadhaar. Age of applicant between 18 years to 60 years years. (Not
eligible: minors, KCC/GCC borrowers, more than one member of the same family).
Period of sanction- 36 months to annual review of accounts
Loan Amount-a)4 times of Average monthly balance
b) or, 50 % of credit summations in accounts during the preceding 6months.
c) or,Rs 5000/- whichever is lower.
Procedures for sanctioning overdraft to PMJDY customers (BCC:BR:107:177 dated 20-042015): Branches are advised to follow the procedures given below while sanctioning the
OD facilities
1. It is required to confirm from NPCI repository that account holder (Aadhaar holder) has
not availed the OD facilities from any other bank. It is to be ascertained by using
UIDINQ menu option in Finacle.

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2. It is also mandatory to update the OD status of the account in NPCI repository so that
the customer will not be able to avail similar OD facility from any other bank or our
branches. For this, use the menu HAPBSLN
The user can create OD limit in the account of the customer through menu option
ACLHM
Overdraft up to Rs. 5000/- Pradhan Mantri Jan Dhan Yojana Non mandatory of Aadhaar
seeding (BCC:BR:107:469 dated 23-09-2015):Bank has advised to branches to take note of
Government of India and should not insist for Aadhaar seeding in the account for granting overdraft up
to Rs. 5000/- under PMJDY accounts.
Pradhan Mantri Jeevan Jyoti Bima Yojna ( PMJJBY) and Pradhan Mantri Suraksha Bima
Yojna (PMSBY): Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha
Bima Yojna (PMSBY) are the flagship schemes under ambitious social security schemes captioned "JAN
DHAN SE JAN SURAKSHA" launched by Government of India on 1st of June 2015. ln absence of any
formal social security system in India, Government had envisioned to cover a larger set of population
through the Banking channel.
Particulars
Pradhan Mantri Jeevan Jyoti Pradhan Mantri Suraksha Bima
Bima Yojna
Yojna
Type
Insurance

of Life Insurance

Eligibility

Accidental Insurance

All saving Bank account holders All saving Bank account holders
within the age group given within the age group given
below.
below.
The insurance premium amount The insurance premium amount
will be directly debited to their will be directly debited to their
account.
account.

Sum Insured

Rs. 2 lac

Rs.2 lac

Period

1 Year

1 Year

Age limit

18-50 Years

18-70 Years

Cover

Rs. 2 lac payable on death due

to any reason.

Yearly premium

Rs.330 + Service Tax

a. Accidental death & full

disability Rs. 2 lac
b. Partial disability Rs. 1 lac
Rs.12 + Service Tax

Commission
to Rs. 30 to BC & Rs.11 to Bank + Rs.1 to BC & Rs.1 to Bank +
Bank
from service tax
service tax
premium amount
The insurance cover shall be for one year period starting from 1 st June to 31st May for which
premium will be required to be paid from account of the customer by 31st May every year.

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There is waiver of self Declaration for good health for enrollment under PMJJBY till 31/05/2016.
Atal Pension Yojana (APY) : a pension scheme for citizens of India, is focused on the unorganised
sector workers. APY is being administered by the Pension Fund Regulatory and Development Authority
(PFRDA) under the overall administrative and institutional architecture of the National Pension System
(NPS). Under the APY, guaranteed minimum pension of Rs. 1,000/- or 2,000/- or 3,000/- or 4,000 or
5,000/- per month will be given at the age of 60 years depending on the contributions by the
subscribers.
Any Citizen of India can join APY scheme. The following are the eligibility criteria:(i) The age of the subscriber should be between 18 - 40 years.
(ii) He / She should have a savings bank account.
The prospective applicant may provide Aadhar and mobile number to the bank during registration to
facilitate receipt of periodic updates on APY account. However, Aadhar is not mandatory for enrolment.
The contributions can be made at monthly / quarterly / half yearly intervals through auto debit facility
from savings bank account of the subscriber. The subscribers are required to contribute the prescribed
contribution amount from the age of joining APY till age 60. The details of age-wise, pension-wise and
contribution-frequency-wise prescribed contribution amount and the indicative pension wealth available
for the nominee has been given in the scheme.
The co-contribution of the Government of India is available for 5 years, i.e., from the Financial Year
2015-16 to 2019-20 for the subscribers, who join the scheme during the period from 1st June, 2015 to
31st December, 2015 and who are not covered by any Statutory Social Security Schemes and are not
income tax payers.
Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing
the guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher
than the guaranteed returns embedded in APY. The same amount of monthly pension is payable to
spouse (default nominee) upon death of subscriber. Nominee will be eligible for return of pension
wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.
Baroda Kisan Group Loan Scheme (Joint Liability Group):
It is financing of joint farming groups of Bhoomi Heen Kisan. In the budget announcement of F.Y
2014-15 ,the Honble finance minister has proposed to provide finance to 5 lacs joint Liability Farming
Groups of Bhoomiheenkisan during the year .The scheme was formulated on the direction of the
Government of India/RBI and intended to open a separate window for Joint Liability groups oftenant
farmers, oral lessees, share croppers and ensuring that a certain production of the extended to them.
1. A joint liability group is an informal group comprising 4 to 10 individuals coming together for the
purpose of availing bank loan either singly or through group mechanism, against mutual
guarantees.
2. The JLG members are to engage in similar type of activities like crop production and must trust
each other.
3. The members should live in the same neighborhoods or in the same village and must be from
the same socio economic background and environment.
4. The members should be engaged in agricultural activity for a continuous period of not less than
1 year in the area of operation of the branch.
5. The group member should not be a defaulter of any other formal financial institution.

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6. The member to open an individual No frill account. However with mutual consent the group can
open and maintain SB account in the name of Group.
7. The JLG would prepare a credit plan for individual members and aggregate credit plan for the
group to be submitted to the bank.
8. The max. loan amount per member not to exceed Rs.100000 and for group Rs. 10 lacs for
Tenant farmers/oral lessee/share cropper.
9. The credit need assessment of individual members will be based on the crop to be cultivated,
available land and capacity also. However this is only with the mutual consent of the members.
10. The credit facility to the JLG will be assessed by way of production / investment
credit in the form of BKCC. The maximum loan limit for Small /Marginal will be need based ,to be
assessed as per the BKCC Norms.
11. Personal accident insurance for Rs.50000/- to one borrower per account.
12. Crop insurance available for notified crops
Baroda Kisan Credit Card:
1. The purpose of BKCC is to provide adequate and timely credit for the comprehensive credit
requirement of farmers under single window concept for their cultivation and development as
well as consumption needs.
2. All farmers, registered share croppers and tenant farmers cultivating crops for a period not
less than 5 years, individual tenant farmers and share croppers cultivating land on lease basis
at least for a period of 3 years are eligible for BKCC.
3. Baroda Kisan Credit Card will consist of Production Line of Credit as well as Investment Line of
Credit. Under the production line of credit requirements of farmers in terms of production loan
for various crops, maintenance of tractor/farm implements, allied activities like dairy, poultry,
annual repairs, fuel, cost of feed, etc., consumption needs, Working capital requirement for
allied activities, non farm sector activities and finance against storage receipts/produce
marketing loans are taken into account in the following manner:

Sr.

Requirement

Quantum/Remark

Production loans for raising

various crops
Maintenance of tractor/farm
implements, allied
activities like dairy, poultry,
annual repairs, fuel, cost of
feed, etc

Based on scale of finance

The consumption needs

To the extent of 15% / 25% / 35% of the

Crop Production expenses limit, depending
upon the category*of borrower subject to a
maximum of Rs.50000/-per card

Working capital for Allied

As per actual assessment of credit needs as

NO.
01.
02.

03.

04.

To the extent of 15% of the crop production

expenses limit

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05.
06.

activities
Working capital for Non farm
sector activities
Farm Produce Marketing Loan

per our usual norms

As per actual assessment of credit needs as
per our usual norms
As per actual assessment of credit needs as
per our usual norms
A separate demand loan account for the period not
exceeding 12 months is to be opened. The
disbursement under this loan component should be
made by direct credit to party/s Production credit
account.

* Various categories:
BKCC Green: New & existing agril. Borrowers dealing with us since last 3 years
BKCC Silver:Agril. Borrowers having satisfactory conducted borrowal account relationship with us for
more than 3 years and upto 5 years
BKCC Gold: Regular agril. Borrowers dealing and maintaining satisfactory account with us for the period
exceeding 5 years having excellent repayment record
Under Investment line of credit, credit facilities for agriculture activities (Investment related) , farm
development ,allied activities , loans for off farm activities/needs of farmer like personal loans including
purchase of consumer durables, housing subject to maximum of Rs. 1.00 lac as well as loans for
redemption of loan availed from Non Institutional lenders are considered.
However, quantum of loan under investment LOC is restricted to 6 times of net annual income or 3
times of total annual farm receipt /crop value plus other annual income (3 times of annual net income)
from allied activities, Non Farm Activities, salary, rent, etc. or, 75% of value of land plus 100 % of face
value of securities like, Banks FDR, NSC, KVP, LIC policies, whichever is lower.
However, Quantum of finance for investment credit may be decided as per the needs expressed by the
farmer for various investment and other purposes, subject to following:
1. Farm income- 6 times of net annual income Or 3 times of total annual farm receipts/value of crops
PlusOther income 3 times of net anticipated annual income/profit from allied activities/ salary
income Or
2. Value of Security-75% of value of land mortgaged as collateral security and 100% of value of other
securities like assignment of LIC Policy (surrender value), pledge of KVPs/
NSCs/Banks TDR/Gold Ornaments etc.
1)

2)

A concession in rate of interest on investment line of credit at the rate of 0.25% and 0.50% can be
considered to agriculture borrowers who is dealing with us for a period of above 3 and upto 5 years
(BKCC Silver card holder) and more than 5 years (BKCC Gold card holder) respectively with
good track record. No concession to new as well as existing borrowers having less than 3 years
dealing (BKCC Green card holder) with us. But this concession in rate of interest will not be
clubbed with any other concession including subvention.
Total limit under BKCC can be granted as per DLP of concerned authority.

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3)
4)
5)

For regular production line of credit, no margin to be fixed if it is on the basis of scale of finance.
On investment line of credit the margin is as per our individual scheme as prescribed and it can be
reduced to 10% by the sanctioning authority.
Credit balance under BKCC will fetch interest rate as applicable to Savings bank deposit.
The validity of the card has been increased from 3 year to 5 years subject to renewal after 12
months. The cash withdrawal facility in case of production credit account is extended by the issuing
branch only.

6)

The Baroda Kisan Credit card has 10 characters/digits (first 6 characters being alpha code of the
branch and last four digits being serial number of the card). The card also bears borrowers
signature, signature of issuing branch head with specimen number.
7) Bank has introduces personal accident policy for BKCC holders and branch to ensure that all BKCC
holders are covered under the said policy.
8) Personal accident insurance for Rs.50000/- to one borrower per account.
9) Crop insurance available for notified crops.
10) Baroda BKCC RuPay Card can be issued in existing regular accounts and all new BKCC borrowers.

Facility of the Line of Credit / Notional limit under BKCC:

At present the crop loan component in form of production credit under BKCC is given as a Cash Credit
facility for a period of 5 years, which is subject to review every year. The limit is computed on the basis
of total land holding of the farmer, cropping pattern adopted by him during a particular season and
approved scale of finance for the crops grown. Thus the limit available changes whenever there is a
change in any of the factors mentioned above. It is observed that the farmers and branches are
generally aversed to increase the limit due to the workload / cost involved in execution of fresh
documents, preparation of fresh proposals etc. This is ultimately adversely affecting the increased off
take and thereby the growth in outstanding level of crop loans. This also ends up in providing
inadequate crop loan to farmers.
To overcome this problem, bank has decided to provide the facility of the Line of Credit / Notional limit
wherein the farmers actual requirement worked out on the basis of cropping pattern and land area, can
be increased by maximum 50% at the time of sanction of the facility. Though this limit will be valid
for a 5 years period, the drawing power/eligible limit for each year shall be arrived based on the area of
cultivation and scale of finance for the proposed cropping pattern for that year.
This shall obviate the need for fresh sanction and documentation for 5 years thereby helping the farmer
to avail increased credit as per the prevailing scale of finance and also in reducing the workload at the
branches. This in turn will also expected to encourage the farmer to undertake improved cultivation
practices and bring more farmers into our fold due to the inbuilt advantage of hassle-free facility of
enhancement of the limits.
Baroda Kisan RuPay Card:
Our Bank has introduced Baroda Kisan RuPay Card in pursuit to facilities to farmers who avail
production credit under Baroda Kisan Credit Card from our Bank. The card meets the requirements of
BKCC customers to use channels like ATMs for cash withdrawal and also POS at merchant of Agriculture
Inputs such as seeds, fertilizers and pesticides etc.

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The National Payments Corporation of India, the administrator of RuPay Cards, has introduced insurance
coverage of KisanRuPay Card holders, as a value added feature. They have tied up with The New
India Assurance Co. Ltd for the same and it has come into effect from 01.04.2015 for a period of one
year i.e., up to 31.03.2016.
Salient features of the Rupay Insurance Programme are as under:
1) All BKRC holders are eligible for insurance cover under this programme.
2) Insurance cover of Rs.1 lac per card to Baroda KisanRuPay Card holders (accidental death and
permanent disablement only) is available.
3) The insurance premium is to be borne by NPCI.
4) This insurance programme will be an additional insurance cover over any existing insurance
cover, viz., free Personal Accident Insurance Scheme (PAIS) cover upto Rs.50000/- for BKCC
holders in our Bank.
5) Annual Fee- Waived for all the years
Transaction charges Cash withdrawal for use of ATMs of NFS member banks - Rs.16 + Service Tax per
& Rs.6 + Service Tax for per each non financial transaction.
Issuing Baroda Kisan RuPay Card (BKRC) to all BKCC Holders (BCC: BR: 107:465 dated 18-092015): Bank has advise to branches:
Issue BKRC compulsorily in all fresh BKCC accounts. Non-issuance of BKRC in new accounts will be
viewed seriously, since GOI has instructed to cover 100% farmers at the earliest.
All existing standard BKCC accounts, including those of illiterate/unwilling persons, where BKRCs
have not been issued so far, should be issued cards on an urgent basis. List of BKCC accounts
without BKRC has already been circulated to all Branches.
All BKCC holders should be requested to avail the facility by explaining about the advantages of
BKRC. It should be highlighted that the card has no issuance charges and also the added advantage
of personal accident insurance cover of Rs.1.00 lac, offered by Rupay.
BKRCs should be issued on a campaign mode so as to ensure achievement of 100% issuance i.e BKRC
in all standard BKCC accounts by December 2015.
Interest Subvention SchemeMonitoring of end use of Crop Loans(BCC:BR:107:398 dated 19-08-2015) :With reference of
RBI Circular, Bank has advised that the branches should ensure to finance short term crop loan
accounts strictly linking the same to scale of finance and other stipulated parameters and more so in the
case of Agriculture Gold Loan and financing to oral lessee, tenant farmers, etc. The Regions/ Zones are
also advised to ensure the compliance of above guidelines.
Calculation of Interest Subvention for Crop Loans in Finacle (BCC:BR:107:568 dated 16-112015):Our Bank is one of the first Banks which implemented interest subvention calculation through
CBS (Finacle) system. Even though we have been calculating subvention through the system since
2012, it is noticed that there are still gaps in the procedures adopted by Branches leading to revenue
loss, audit objections, customer complaints etc. Circular is issued so as to collate various guidelines and
operational procedures regarding subvention calculation and make it readily available to the operating
units.
Scheme code should be - CC003, CC008, LA 403

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Interest Table code should be - CC033, CC034, L4032, L4033 and CC091, CC092 (in Special
Agricultural Zone)
Other operational procedures are given in the circular.
Interest subvention of 2% will be made available for short-term crop loans up to
Rs.3,00,000/- per farmer, provided lending institutions make available short term credit at
the ground level at 7% p.a. to farmers. Further 3% Incentive in the form of intt.
subvention is given for prompt repayment to Farmers
Flow of credit to agriculture sector (VyasCommitte recommendations)
1. Bank should make efforts to increase their disbursement to Small and Marginal farmers to 40%
of their direct agriculture advances under special agriculture credit plan by March, 2007. For this
purpose small and marginal farmers means, farmers who are holding non-irrigated land up to 5
acres or 2.5 acres of irrigated land.
2. Banks to enter into the tie up arrangement with manufacturers of tractors and other farm
machineries.
3. The application form should be simplified and in regional language. It should contain a
comprehensive check list of information to be furnished to avail the credit facility.
4. To sanction composite cash credit limit to farmers.
5. Relaxation in margin & security norms.
6. Timely sanction of the credit facility in cost effective manner.
7. A separate flexible revolving limit to be considered to small borrowers of production or
investment loans, which will take care of consumption need of the farmers.
Self Help Groups
Self Help Groups fulfilling the following criteria would broadly be eligible:
The Group should be in existence for at least six months
The Group should have actively promoted the savings habit
Groups could be formal (registered) or informal (unregistered)
Membership of the group could be between 10 to 20 persons
If membership exceeds 20, the SHG should be registered
The sanction Savings-cum-overdraft limit is sanctioned for the amount, which a group will be entitled to
have in the ratio maximum upto 1:10 for the projected savings of ensuing five years. However,
disbursement (Drawing Power/DP) would be permitted after six months, based on actual corpus fund
including SHGs savings as above and thereafter reviewed each year in the ratio of corpus fund
including savings as prescribed above and accordingly DP be fixed time to time.
Discretionary Lending Powers
The finance to SHGs is considered as a clean loan facility and the Branch Managers are considering the
facility under their powers for granting such facilities in order to ensure quick disposal of application for
credit linkage of SHGs at Branch level itself. It has been decided to enhance the lending powers of
Branch Managers as under:
(Rs in lacs)
Scale of Branch Manager
Revised powers for SHG
Bank linkage

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JMG Scale - I
MMG Scale- II
MMG Scale-III

1.50
2.50
5.00

Procedure
for opening an S.B. account of SHG with the Bank

Resolution
from the SHG.

Copy
of
the
rules and regulations of the SHG.

Authorisation
from the SHG (Operating Instructions.

KYC norms.
Processes for Credit-linkage of SHG by the Bank
Opening of S/B Account for the SHG
Resolution from the SHG Authorisation from
the SHG
Copy of the rules and regulations of the SHG
Conduct of internal lending by the SHG
Assessment of SHGs
Sanction of Credit Facility to the SHG
Corpus / savings of the group includes following:
Groups balance in the SB A/c.
Amount held as cash with the authorized persons.
Amount internally lent amongst the members. Amount
received as interest on the loans.
Any other contributions received by the group like grants, donation, etc.
What are the advantages to the banks for banking with SHGs?
Advantages to the banks for banking with SHGs are following:
a. Transaction costs are reduced
b. Increase in the deposit base
c. Very little cost for appraisal and monitoring of the loan
d. Increase in the social base in rural area
e. Financial Services at door steps
f. NPA Reducing
g. Social Agenda / Corporate Social Responsibility
h. No subsidy Dependence Syndrome
Simplifying KYC norms for Self Help Groups (SHGs)
KYC verification of all the members of SHG need not be done while opening the savings bank account of
the SHG and KYC verification of all the office bearers would suffice. As regards KYC verification at the
time of credit linking of SHGs, it is clarified that since KYC would have already been verified while
opening the savings bank account and the account continues to be in operation and is to be used for
credit linkage, no separate KYC verification of the members or the office bearers is necessary.
Unified Processing Charges for Women SHGs (BCC:BR:107:379 dated 10-08-2015):
According to Central Level Coordination Committee of NRLM, Bank has been decided to waive
processing charges for loans granted to all women SHGs irrespective of the activity and limit sanctioned.
Loan to SHGs may be classified as Agriculture & other priority sector, based on the activity undertaken
by the group

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Engagement of SHG Leaders/ Members as BC Agents for Financial Inclusion Bank Sakhi
Approach (BCC:BR:108:42 dated 30-01-2016): Dept. of Financial Services, MoF and RBI have
advised that bank may appoint SHG leaders/ members as BC agents for Financial Inclusion. In view of
above Bank has decided to appoint leaders, members of SHGs as BCs Agents through our Corporate
BCs. Details like advantage, eligibility criteria and action plan are given in the circular.
Credit information reporting in respect of Self Help Group (SHG) members (BCC: BR:
108:105 dated 08.03.2016): Underscoring the importance of credit information reporting in respect
of the SHG members for financial inclusion, credit decision of banks and Micro Finance Institutions
(MFIs) and credit quality of the SHG loan portfolios, the working group has emphasized the need for
putting in place the credit information reporting for SHG members sooner than later. However, the
group has suggested a phased approach to the implementation of the RBI directions so as to ensure
that the data quality is not compromised.
National Rural Livelihood Mission (NRLM) Aajeevika - The Ministry of Rural Development,
Government of India has launched a flagship program National Rural Livelihood Mission (NRLM)
for promoting poverty reduction through building strong institutions of the poor, particularly
women, and enabling these institutions to access a range of financial services and livelihoods services
by restructuring Swaranjayanti Gram Swarojgar Yojana (SGSY) replacing the existing SGSY scheme,
effective from April 1, 2013 .
Key difference from SGSY: NRLM is promoting a major shift from purely allocation based strategy
to a demand driven strategy wherein states have the flexibility to develop their own plans for
capacity building of women SHGs and Federations, infrastructure and marketing, and policy for
financial assistance for the SHGs.
NRLM will identify the target group of poor through a participatory identification of the poor
process instead of using the BPL list as was done in SGSY. This will ensure that the voiceless,
poorest of poor are not ignored. In fact under NRLM, the first preference is given to the poorest of
poor households.
NRLM will promote the formation of women SHGs on the basis of affinity and not on the basis of a
common activity, as it used to be under SGSY. It is definitely possible that members who come together
on the basis of affinity could be having a common activity.
Unlike SGSY, the NRLM has taken a saturation approach and will ensure all the poor in a village are
covered and a woman from each poor family is motivated to join the SHG.
SHG Federations: All SHGs in a village come together to form a federation at the village level. The
village federation is a very important support structure for the members and their SHGs. The cluster
federation is the next level of federation. A cluster consists of a group of villages within a block. The
exact configuration will vary from State to State, but typically a cluster consists of 25 - 40 villages.
The Village federations and the Cluster federations are the two critical support structures for the SHG s
and their members in their long journey out of poverty.
NRLM will provide continuous hand-holding support to SHGs, and their federations. This was
missing in SGSY. Under NRLM this support will be provided to a great extent by capacitating the

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SHG federations and by building a cadre of community professionals from among the poor
women. The federations and the community professionals will be imparted the necessary skills by the
mission.
The objective of NRLM is to ensure that SHGs are enabled to access repeat finance from Banks, till
they attain sustainable livelihoods and decent living standards. This was missing in SGSY, where
the emphasis was on one time support.
National Rural livelihoods Mission (NRLM)- Ajeevika- Interest Subvention Scheme for
Women SHGs for the Year 2015-16 (BCC:BR:108:72 dated 12-02-2016) :RBI has informed
Bank that the revised guidelines for the year 2015-16 on Interest Subvention Scheme
under NRLM has been issued by the Ministry of Rural Development, Government of India.
Important points are as below:
1. Interest to be sub vented will be subject to a cap of 3.75% for our Bank for the year
2015-16 based on Weighted Average Interest Charged.
2. Interest Subvention claims (Regular and Prompt payment separately) will be uploaded
on quarterly basis only. Quarterly Interest Subvention claims to be supported with
certificate (Annexure- III & IV). Certificate on annexure- V will be submitted annually
as of March 2016 duly audited by the statutory auditors along with Annexure- III & IV.
For category II districts, (Other than 150 districts), all women SHGs under NRLM will
continue to be eligible for interest subvention to avail the loan facility at an interest rate of
7%. The funding for this subvention will be provided to the State Rural Livelihoods
Missions (S.R.L.Ms) from the allocation for NRLM.

REVISED GUIDELINES FOR PRIORITY SECTOR CLASSIFICATION:

Target for the Priority sector Lending - Priority Sector credit should be minimum 40 % of Banks
Adjusted Net Bank Credit (ANBC) or credit equivalent amount of Off-Balance sheet exposure whichever
is higher.
1. Major segments of Priority Sectors are Agriculture, Micro, Small and Medium Enterprises
(MSME), Export Credit, Education, Housing, Social Infrastructure, Renewable Energy
& Others
2. New Categories of the priority sector: Medium Enterprises, Social Infrastructure and
Renewable Energy will form part of priority sector, in addition to the existing categories.
3. Agriculture: The distinction between direct and indirect agriculture is dispensed with.
4. Small and Marginal Farmers: A target of 8 percent of ANBC or Credit Equivalent Amount of OffBalance Sheet Exposure, whichever is higher, has been prescribed for Small and Marginal
Farmers within agriculture, to be achieved in a phased manner i.e., 7 percent by March 2016
and 8 percent by March 2017.
5. Micro Enterprises: A target of 7.5 percent of ANBC or Credit Equivalent Amount of Off-Balance
Sheet Exposure, whichever is higher, has been prescribed for Micro Enterprises, to be achieved
in a phased manner i.e. 7 percent by March 2016 and 7.5 percent by March 2017.
6. Bank loans to food and agro processing units will form part of Agriculture.

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Within the overall priority sector lending target of 40 per cent of Adjusted Net Bank Credit (ANBC)
or equivalent amount of Off-Balance sheet exposure, it should be ensured that:
Agriculture:
18 percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is
higher.
Micro, Small & Medium Enterprises (MSME)- Advances to micro, small & medium enterprises
sector will be reckoned in computing achievement under the overall priority sector target of 40
percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.
The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as
notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006
are as under:Manufacturing Sector
Enterprises
Micro Enterprises
Small Enterprises
Medium Enterprises
Service Sector
Micro Enterprises
Small Enterprises
Medium Enterprises

Investment in plant and machinery

Does not exceed twenty five lakh rupees
More than twenty five lakh rupees but does not exceed five crore rupees
More than five crore rupees but does not exceed ten crore rupees
Does not exceed ten lakh rupees
More than ten lakh rupees but does not exceed two crore rupees
More than two crore rupees but does not exceed five crore rupees

Education Loan Loans to individuals for educational purposes including vocational courses
upto Rs. 10 lakh irrespective of the sanctioned amount will be considered as eligible for priority
sector.

Housing Loans - Loans to individuals up to Rs. 28 lakh in metropolitan centres (with population
of ten lakh and above) and loans up to Rs. 20 lakh in other centres for purchase/construction of
a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre
and at other centres should not exceed Rs. 35 lakh and Rs. 25 lakh respectively.

Social infrastructure: Bank loans up to a limit of Rs. 5 crore per borrower for building social
infrastructure for activities namely schools, health care facilities, drinking water facilities and
sanitation facilities in Tier II to Tier VI centres.

Renewable Energy: Bank loans up to a limit of Rs. 15 crore to borrowers for purposes like
solar based power generators, biomass based power generators, wind mills, micro-hydel plants
and for non-conventional energy based public utilities viz. street lighting systems, and remote
village electrification. For individual households, the loan limit will be Rs. 10 lakh per borrower.

Others :

Loans not exceeding Rs. 50,000/- per borrower provided directly by banks to individuals and
their SHG/JLG, provided the individual borrowers household annual income in rural areas does
not exceed Rs. 100,000/- and for non-rural areas it does not exceed Rs. 1,60,000/-.
Loans to distressed persons (other than farmers ) not exceeding Rs. 100,000/- per borrower to

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prepay their debt to non-institutional lenders.

Overdrafts extended by banks upto Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY)
accounts provided the borrowers household annual income does not exceed Rs. 100,000/- for
rural areas and Rs. 1,60,000/- for non-rural areas.
Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for
the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the
beneficiaries of these organisations.
Weaker section: In order to ensure proper attention in the matter of allocation of credit to
following preferred sector, known as WEAKER SECTION, RBI has stipulated mandatory target of
10 % of ANBC / Credit equivalent of Off-balance sheet exposure whichever is higher.

Following types of finance are included under Weaker Section finance:

No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Category
Small and Marginal Farmers
Artisans, village and cottage industries where individual credit limits do not exceed Rs.
1 lakh
Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment
Scheme for Rehabilitation of Manual Scavengers (SRMS)
Scheduled Castes and Scheduled Tribes
Beneficiaries of Differential Rate of Interest (DRI) scheme
Self Help Groups
Distressed farmers indebted to non-institutional lenders
Distressed persons other than farmers, with loan amount not exceeding Rs. 1 lakh per
borrower to prepay their debt to non-institutional lenders
Individual women beneficiaries up to Rs. 1 lakh per borrower
Persons with disabilities
Overdrafts upto Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts,
provided the borrowers household annual income does not exceed Rs. 100,000/- for
rural areas and Rs. 1,60,000/- for non-rural areas
Minority communities as may be notified by Government of India from time to time

DRI Advances.
The scheme is introduced in July 1972 with a view to give benefit of bank finance to weaker sections of
the society.
Eligibility: An individual who is engaged in agriculture and /or allied activities collect or process forest
products, collect fodder to be sold to farmers, SC/ST, etc. and whose family income from all sources
should not exceed Rs. 24000/- p.a. in Urban /Semi urban area and Rs. 18000/- p.a. in Rural.
He/She should not hold land more than one acre irrigated land and 2.5 acres in case of non irrigated
land, (this does not apply to SC/ST Cases), should not employ workers on regular basis, SHG members
who fulfill above criteria can be considered under DRI Scheme, any handicapped person.
Limit: - Composite loan limit Rs.15000/- and Rs.20000/- in case of Housing Loan (raised from Rs. 6500/BCC:BR:99/211 dt. 03.07.2007)
Margin: NIL.
Rate of Interest 4% p.a.

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Repayment: Generally -60- months.

CONTRACT FARMING
Definition: Cultivation of crops by the farmers under a buyback arrangement with an agency engaged in
trading and/or processing.
Types:
1. Procurement contract
2. Partial contract
3. Total contract
Advantages for farmers :
1. Even Small farmers can grow high value crops
2. Can avail benefit of high tech support
3. Less production credit will require
4. Least post harvest loss
5. Price & Marketing risks are minimised
Advantages to Firms :
1. Can get produce as per specific requirement
2. Assured and uninterrupted supply
3. Time saving
4. Less marketing investments
Advantages for Banks :
1. Better recovery
2. Cross selling of products
3. Deposits from farmers

Strategies to enhance Agriculture Portfolio

To increase Crop loans by financing to new as well as existing finance by assessing as per latest
scale of finance and also offering Line of credit / Notional Limit.

Financing agri. term loan mainly farm machineries like Four-wheeler to farmers, Combined
harvester/ power tiller, drip /sprinkler irrigation sets, tractor, horticulture & plantation crops.
Take-over of agri. Advances upto Rs.5.00 lac falling under BMs Power.
Identifying thrust branches for Agri. financing
More SHG Linkages as our Bank permits to go to 1:10 ratio of group corpus.
Finance to Agri-clinics & Agri-Business Centres
Finance under comprehensive scheme against Warehouse receipt.
Finance to Joint Liability Groups (JLGs)
Financing production and investment requirements for allied activities.
Loans to distressed farmers indebted to non-institutional lenders

Loans granted for post-harvest activities such as spraying, weeding, harvesting, grading, sorting,
processing and transporting.
Finance against gold ornaments/jewellaries.

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AGRI-CLINICS & AGRI-BUSINESS

Agriclinics and Agribusiness Centers Scheme: Continuation of Scheme for the financial year
2015-16 (BCC:BR:107:273 dated 10-06-2015): Gol has extended the implementation of
Agriclinics and Agribusiness Centers Scheme for the year 2015-16. The salient features of the scheme
remain unchanged
Agriclinics :Agriclinics are envisaged to provide expert services and advice to farmers on cropping
practices, technology dissemination, crop protection from pests & diseases, market trends and prices of
various crops in the markets and also clinical services for animal health etc. which would enhance
productivity of crops / animals.
Agribusiness Centres: Agribusiness Centres are envisaged to provide input supply, farm equipments
on hire and other services.
Objectives
To supplement the efforts of government extension system
To make available supplementary sources of input supply and services to needy farmers
To provide gainful employment to agriculture graduates in new emerging areas in agricultural sector.
Eligibility: Graduates of agriculture, horticulture, animal husbandry, forestry, dairy, veterinary, poultry
farming, pisciculture and other allied activities.
Project cost and coverage :
Either individually or jointly/group basis.
Individual -max. Limit Rs.20 lacs
Group - max . Limit.Rs.100 lacs.
Group number - max. 5, out of which 1 may be a management graduate with qualification &
experience.
Margin:
Upto 5 lacs- no margin
Above 5 lacs- 15 %
Rate of interest: As applicable to agri. Advances
Subsidy : 36 % (44% for SC/ST, women) of project cost
Repayment : 5 to 10 years with grace period of max 2 years.
Baroda Grameen Paramarsh Kendra:
It is an innovative idea towards Corporate Social Responsibility, showing Banks passion for
for agriculture and rural development and to serve the common man.
In the past, the Bank has taken a number of initiatives such as opening of specialized outlets of Gram
Vikas Kendras (GVKs) and Multi Service Agencies (MSAs). Baroda Swarojgar Vikas Sansthan (BSVS) is
another initiative for capacity building by providing appropriate training for skill upgradation to
unemployed youth and women for their gainful employment.
Concept
For the rural community, especially for the farmers, there is a big Knowledge Gap in financial

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literacy, better farming practices, technology adoption, diversification of opportunities, market linked
prices, value addition services offered by various institutions, women empowerment and also for
employment opportunities for rural youth. In addition to this, the deficiencies/ ignorance about credit
related repayment during distress situations call for credit counseling.
With a view to assist the rural community, the Bank has conceptualised Baroda Grameen Paramarsh
Kendra (BGPK) and its implementation by the dedicated team, which would build the confidence of the
rural people.
Activities to be covered:
Financial Education and Financial Inclusion
Information sharing and problem solving on technical issues
Credit counseling
Synergy and liaison with other organizations and development activities
Farmers Club Programme :
Objectives:
Farmers Clubs have been organised by our bank in the Service Area Villages with the sole objective
of improving the recovery climate for rural lending and creating better awareness about loan and
deposit products with the ultimate aim of building a Rural Credit Portfolio on a sound scale. Farmers
Club are intended to basically propagate the following five principles of Development through
Credit.
a. Credit must be used in accordance with the most suitable methods of science and technology.
b. The terms and conditions of credit must be fully respected.
c. Work must be done with skill so as to increase production and productivity.
d. A part of the additional income created by credit, must be saved.
e. Loan installments must be repaid in time and regularly so as to recycle credit.
Benefits to the Branch :
The formation of Farmers Club lead to better Banker-Borrower relationship in the area.
Mobilisation of deposits.

Increase in the credit flow and diversification of lending.

Generation of new business avenues.

Increase in loan recovery rate and decline in non-performing assets.

Reduction in transaction costs of financial institutions/Banks.

Socio Economic Development of the village.

A win-win situation both for the Banker and the borrower.

The Farmers Club has also been instrumental in certain social welfare measures like arranging free
eye check-up camp. Animal Health Care Camp, Mass vaccination camp, community works like roads,
check-dams, afforestation etc.

Priority Sector Loan against Gold ornaments / jewellery Scheme

Purpose: Agriculture or other Priority sector
Eligibility:
1. Applicant must be true owner of gold / gold & silver jewellery / gold coins
2. Should be local resident
3. Must have a savings a/c

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Loan limit: Rs. 3.00 lacs, but it should be need based or advance value of gold or 75.00% of the
appraised value by the assayer whichever is lower among the three.
Period Max. 12 month
Assayers
1. To be identified by branch and approved by R.O.
2. To give min security deposit of Rs. 5000.
3. must be changed every 2years
Advance Value of Gold Jewellery/ Ornament (BCC:BR:108:62 dated 08-02-2016): Bank has now
fixed the advance value of gold jewellary at Rs. 1800/- per gram for 24 carat purity with a provision for
reduction in valuation by Rs. 75/- per gram for every carat reduction. As such the advance value per
gram of gold jewellary of 22 carat purity is fixed at Rs. 1650/-.
Scheme for financing to farmers for purchase of four Wheeler :
Parameter

Prescribed Norms

Type of Facility

Term Loan

Purpose

For purchase of new/used four wheeler including jeep, SUV, station wagon
etc. for using in their farm management activities. Used vehicle should not be
more than 3 years old.

Eligibility/
Beneficiary

Farmer including those engaged in Allied activities having family income

sufficient to repay the loan.

If the main source of income of the farmer is from land based activities.

Farmers with minimum land holding of 4 acres perennially

irrigated land or 8 acres of seasonally irrigated lands.
The Regional Head is authorized to reduce the land holding criteria
by 50% i.e.up to 2 acres for perennially irrigated lands and 4 acres of
seasonally irrigated lands, on merits, provided the crops grown by
the farmers is generating sufficient income to insure repayment.

Age

Incase the main source of income is from Allied activities income

certificate from Revenue authorities /IT returns etc to be
obtained.(Ref.BCC/BR/106/338 dt-05-09-2014).
Minimum 21 years
MaximumUp to 65 years as on the date of availment of facility.
If the age of landholder exceeds 60 years, in such case the son to be made
co-borrower .

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Banking
Relationship

Loan can be extended to the Existing /New farmer including those engaged
in Allied activities
In applicable cases endeavour should be made to issue BKCC to the eligible
farmers who avail loan under this scheme.

Maximum
Amount

Loan New Vehicle : Rs.15.00 lac.

Old Vehicle :Rs. 10.00 lac.
*Limit in case New vehicleZonal Head is authorized to increase the limit
upto 50% i.e for New vehicle Maximum loan amount Rs 22.50 lacs. (Ref.
BCC/BR/106/338 dt. 05.09.2014)
Within the eligibility worked out as below:

Farm Income

times of net annual income OR

2
times
of
total
annual
farm
receipts/value of crops, whichever is
lower
(Anticipated from the farm, taking into
consideration type of crops, area under
cultivation, etc.)
Plus/OR

Margin
Rate of Interest
Repayment

Other
3 times of net anticipated annual
income/income from income/profit from economic activities/
allied activities and allied activities (existing and proposed to be
salary income if any undertaken) /salary income if any.
New vehicles: 15%
Used vehicle: 40%
Rate of interest applicable to Baroda Car loan minus 0.25%, subject to
minimum Base Rate
New vehicles : 7 years
Second hand vehicles : 4 Years
Loan repayment will be synchronized with the income generation from the
farm activities. The due date to be fixed taking in to account the time taken
for receipt of sale proceeds of the crop. The instalments may be fixed on half
yearly/ yearly basis based on cropping pattern.

Scheme for financing Two Wheeler(Motorcycle /scooter) loans to Famers :

The salient Feature of the Modified scheme are as under (Ref.BCC/BR/106/360 dt-15.09.2014):
Sr.no
1

Parameters
Types of Facility

Prescribed Norms
Term Loan

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2
3

Purpose
Eligibility/Beneficiary

Age

Maximum loan Amount

6.
7.

Margin
Rate of interest

8.

Repayment

Purchase of new Two Wheelers (Motorcycle/scooters)

All new and existing farmers engaged in Agriculture and/or
allied activities /others sources.
Minimum -21 years
Maximum-upto 65 years as on date of availment of facilities.
If the age of farmers exceeds 60 years ,in such case the son
to be made co-borowwer.
Rs.1.00 lacs
It will compromise of:
1. Cost of vehicle i.e invoice price.
2. One-time vehicle tax and registration charges.
3.Comprehensive insurance for first years
Note-cost of accessories not to be included.
Farm Income
6 times of net annual
income
OR
3 times of total annual
farm receipt /values of
crop, which is lower
(Anticipated from the
farm
,taking
into
consideration types of
crops,
area
under
cultivation, etc)
PLUS/OR
Other incomes/incomes 3
time
of
Net
from allied activities and anticipated
annual
salary income if any
income/profit
from
economic
activities
/allied activities(existing
and proposed to be
under taken )salary if
any
10 %
As applicable to invest loans under direct agriculture finance
from time to time (presently at Base Rate i.e 10.25 p.a)
Repayment Schedule to coincide with harvesting season. (As
per Banks Norms). Maximum period Not exceeding 5years.
Loan repayment will be synchronized with the income
generation from the farming & allied activities.
The due dates to be fixed taking in to account the time
taken for receipt of sale proceeds of the crop.
The instalments may be fixed on monthly / quarterly / half
yearly/ yearly basis depending upon cropping pattern/
allied activities / other source of income.

Baroda Kisan Tatkaal Loan:

107 | P a g e

In order to facilitate the farmers and to make the product more attractive Bank has been decided to (i)
to grant the facility as an overdraft or loan (ii) Increase the limit granted under the scheme.
1) Purpose: An instant credit for farming community to meet the emergent funds requirements
for Agriculture and domestic purposes during off season such as purchase of bullock, implements,
storage/packing material ,storage structures, onion sheds, purchase of pump set, pipes for irrigation
etc. and also domestic requirements for various religious ceremonies, festivals, emergent medical
expenses and other emergency expenses etc.
2) Eligibility: Individual Farmers/Joint borrowers who are existing Baroda Kisan Card (BKCC)
Holders.
3) Type of Loan: Term Loan repayable in 3-5 years or Overdraft facility for a period of 12 months.
4) Maximum Loan amount: Limit may be fixed as under:
BKCC Limit up to
Up to Rs.5.00 Lacs
More than Rs.5 Lacs but up to Rs.10.00 lacs
More than Rs.10 Lacs but up to Rs.20.00 lacs
More than Rs.20 lacs

Maximum Tatkal Limit

50% of BKCC limit subject to max of Rs.1.00 lacs
Rs.2.00 lacs
Rs.3.00 lacs
Rs.5.00 lacs

This is subject to the condition that the Tatkal limit now being sanctioned should be within the eligible
limit under Investment Line of Credit in BKCC (as per details in circular No.BCC:BR:100/50 dated
23.02.2008 given below for ready reference) i.e. the income and value of security conditions should
be met and this Tatkal limit should be deducted from the eligible/available quantum of finance for
investment credit also.
1.Income

Farm Income

6 times of net annual income

OR
3 times of total annual farm receipts/value
of crops (anticipated from the farm, taking into
consideration the type of crops, area under
cultivation, etc.)

PLUS
Other income/income
3 times of net anticipated annual income/
from allied activities
profit from economic activities/allied activities (
and salary income,
existing and proposed to be undertaken) /salary
if any
income if any.
OR
2. Value 75% of value of land mortgaged as
of
collateral security and 100% of
Security
value
of
other
securities
like
assignment of LIC Policy (surrender
value), pledge of KVPs/ NSCs/Banks
TDR/Gold Ornaments etc.
Whichever is less out of 1. Income and 2. Value of Security
5) Security:

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Existing security under BKCC to be extended

The existing norms of no collateral security up to Rs.1 lac to be followed if combined limit
is within Rs.1 lac.

6) Repayment (For term Loan): In half yearly/yearly instalments depending upon the income generation
and cropping pattern.
7) Rate of interest: As per rates applicable to Farm Credit under Agriculture from time to time.
8) Deviation: Any deviation in the scheme should be referred to the competent authorities for approval,
as per the extant guidelines contained in circular No. BCC:BR:107:186 dated 23.04.2015, issued by
Large Corporate Banking Department, BCC, Mumbai.
9) Penal Interest and other charges - As per norms applicable to direct Agricultural advances from time
to time.
10) Finacle Codes: The accounts are to be opened in the relevant scheme codes in Finacle as
given below:
For Term Loans: LA420
For Overdraft Accounts: OD022
Scheme for Installation of Photo-voltaic Pumping System for Small Irrigation Projects :
Objective:
To utilize the solar energy for water pumping and support irrigation schemes under Agriculture.
To provide sustainable economic activity to farmers in non-electrified or under electrified rural
areas.
Eligibility: All persons/SHGs/JLGs/Small & Marginal Farmers engaged in cultivation of crops as owners of
land or permanent tenants or lease-holders non electrified or under electrified rural areas..
Possible water sources: Pits, pen dug wells, medium tube wells, doggies, tanks, farm ponds and surface
water from canals and rivers.
Nature of Facility: -- Term Loan
Project Cost: Project Cost as decided / approved by PAC of MNRE/NABARD. Ranges from Rs.308320 to
Rs.767200 depending on the models (Model -1 to Model-IV)
Margin: - Minimum 60% including subsidy available from Central & State Govts. Capital
Subsidy
1) The Ministry of New & Renewable Energy under JNNSM programme provides subsidy for off grid solar
applications (solar Water pumping) @ 30% of capital cost.
2) Additional subsidy could be provided by the State Government.
3) It should be noted that the scheme is financially viable only with subsidy of 60%.Hence the additional
subsidy/margin contribution to be ensured from the state govt/beneficiary.
Repayment The loan will be repayable in - 10 - years with one year grace period. The beneficiary may

109 | P a g e

repay the loan installment with interest earlier than the period if he so desires.
Classification:--Priority Sector (Agriculture)
Finance against Warehouse / Storage Receipt:
Types of Warehouse/storage receipts eligible to be financed:
01. Warehouse Receipts issued by State/Central Warehouses upto the limits prescribed under the
Scheme.
02. Warehouse/Storage Receipts under tie up arrangement with Collateral Managers upto the limit
prescribed under the scheme.
03. Warehouse Receipts issued by private registered Warehouses approved by concerned Zonal Head
upto individual limits of Rs.50.00 lakhs per farmer.
4. Negotiable Warehouse Receipts issued by Warehouses approved by Warehousing Development
and Regulatory Authority (WDRA) upto the limits prescribed under the scheme.
(All the three types of Warehouse receipt at point no. 1, 2 or 3 may or may not be
negotiable warehouse receipt issued by warehouses approved by WDRA to issue negotiable
Warehouse Receipts)
Earlier, our Bank entered into a Collateral Management Agreement with National Bulk Handling
Corporation (NBHC) on 08.05.2009 and formulated the Scheme for financing against the
Warehouse/Storage receipts. To have another option available with our Branches, bank has entered into
another Tie up arrangement with National Collateral Management Services Ltd (NCMSL) on 18.01.2012
for providing of finance against Warehouse / Storage Receipts issued by them.
As per BCC/BR/105/475 dt 29.10.2013 In order to tap the large potential available for such financing
,we have now entered into a tie up agreement with one more collateral management company namely
,M/s star Agriwarehousing and collateral management Ltd.(STARAGRI) for financing against
warehousing /storage receipt issiued by them.
As per circular no. BCC/BR/108/110 dated 11.03.2016, Bank has discontinued the financing against
warehouse / storage receipt issued by NCMSL, until further instruction. However, Branches may
continue financing against warehouse / storage receipt issued by other Collateral Managers (NBHC and
STARAGRI) approved by our Bank.
Eligibility: Individual farmers who have produced the farm produce in their own farms, Food grain
traders, Millers &Arthias who store agri produce stocks in the Warehouses.
Loan Amount: For farmers: Maximum Rs.50.00 lakhs
For Others: Maximum Rs.5.00 crores. (However for private Godowns approved by WDRA, the maximum
loan amount of Rs.2.00 crores only be considered by the Branches subject to the discretionary lending
power of the sanctioning authority. For limit above Rs.2.00 croresuptoRs.5.00 crores, activity clearance
from the Regional Head be obtained)
Margin: Minimum of 25%.In case of tie up arrangement with Collateral Managers: 25% or as prescribed
by Collateral Managers, whichever is higher. (The margin should be increased if there is volatility of
price for a particular commodity).

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Nature of Facility: In case of Farmers: Demand Loan.

For others: Cash Credit (Pledge)
Rate of Interest:
For individual farmers upto Rs.50.00 lakhs: Base Rate+1.00% and Other than farmers upto Rs.5.00
crores : Base Rate+ 1.00%. For negotiable Warehouse Receipts issued by approved Warehouses.
Unified Processing charges: 50% of the applicable charges.
Commitment Charges: NIL
Other charges will be as per the extant guidelines.
Tenor: Maximum 12 months.
Agri. LAPS
Lending Automation Process System (LAPS) is a centralized web enabled software aiming at increasing
the efficiency of credit decisions by automating the lending process. We were already using this module
in Retail Lending but now, bank has rolled out its Agri. Lending module, which is really a milestone in
the area of rural/agriculture finance due to various obvious reasons. At present, 17 agri. Finance
schemes can be processed through it.
Benefits of Agri. LAPS to the branches:
1. Quicker loan processing
2. Standard and uniform approach in loan processing
3. Documents can be printed.
4. Application & Sanction letter can be printed in vernacular language also.
5. Review and renewal of advances can be done
6. Help in avoiding the repetitive work thereby saving precious time.
7. Centralized database remains available with the bank
8. Conforms to four eye principle
9. Adds to customer satisfaction
10.Utilities like generation of PSR statement , Loan application received register and security register
are inbuilt in the system.
Scheme for financing Mini Dairy Units
In order to support famers to increase their household income through adoption of improved dairy
farming and also to tap the business potential available in the segment, need was felt to formulate a
special Scheme on Dairy on pan India basis.
The following new scheme code has been created in Finacle for the accounts pertaining to the Scheme
under Agriculture:
LA428: .for TL/DL Mini dairy units, Interest table code: L4281
Sr.No.
1.
2.
3.
4.

. Parameter
Type of Facility
Purpose
Eligibility
Age

Approved Norms
Term Loan
To establish new small dairy units with -2- to -10- milch animals
Individuals , farmers, members of NGOs/SGHs/JLGs.
Minimum : -21- years
Maximum: up to -65- years, as on the date of availment of facility

111 | P a g e

5.

Loan Amount

6.
7.

Margin
Rate of Interest

8.

Repayment

9.

Security

10

Documentation

11
12
13
14

Processing Charges/
Documentation charges
Mortgage charges
Insurance
Subsidy

15
16

Classification
Disbursement of Loan

Rs.60,000/- (Rs.Sixty Thousand only) per animal, subject to

maximum of Rs.6,00,000/- (Rs.Six Lacs only)
No.of animals to be financed under the Scheme:
Minimum : Two; Maximum: Ten
Buffaloes producing more than -7- liters of milk per day and
cows producing more than -8- liters of milk per day
ONLY,preferably of the following breeds, are to be financed
under the Scheme:
Cross breed: Jersey cross, Holstein Friesian cross
Buffalo : Murrah breed, Graded Murrah, Mehsana,
Jaffarabadi, Godavari, Bhadawari, Surti
Indigenous breed of cows: Sahiwal, Tharparkar and Red Sindhi
10%
Limit upto Rs.3 lacs : @ Base rate
Limit above Rs.3 lacs & upto Rs.6 lacs: Base rate+0.25 %
Maximum period : Not exceeding 5- years (including moratorium
period of three months).
Loans upto Rs.1 Lac: Hypothecation of livestock
Loans above Rs.1 Lac and up to Rs.2 lacs:
1. Hypothecation of live stocks.
2. Mortgage of land or third party guarantee.
Loans above Rs.2 Lacs:
1. Hypothecation of live stocks.
2. Mortgage of land
3 Third party guarantee, if stipulated.
D.P. Note.
Composite Hypothecation Agreement for Agriculture Finance.
LDOC-28A.
General Form of guarantee, if third party guarantee is
stipulated
Authority to make direct payment to dealer
Nil (As applicable to Agriculture advances up to Rs.10 lacs) Nil (As
applicable to Agriculture advances up to Rs.10 lacs)
Nil
Comprehensive insurance with Banks clause
NABARD is providing subsidy @25% of the outlay (33.33% for
SC/ST ) as back ended capital subsidy subject to a ceiling of
Rs.1.25 lac for a unit of -10- animals (Rs.1.67 lacs for SC/ST).
Maximum
permissible capital subsidy is Rs.25,000/- (Rs.33,300/- for SC/ST)
for
a two animal unit. Subsidy is restricted on a pro-rata basis
depending on the unit size.
Agriculture
Payment to be made directly to the suppliers/seller

Scheme for financing to NBFC-MFIs (PS): As per the extant guidelines of RBI, financing to NBFCMFIs for on-lending to individuals/ groups is eligible for categorisation as Priority Sector advance under

112 | P a g e

respective categories viz. Agriculture, Micro, Small and Medium Enterprises and Others, subject to their
compliance with all the regulatory guidelines of RBI.
Bank has approved Scheme for financing to NBFC-MFIs which are engaged in on-lending to
individuals/groups under Priority Sector {here-in-after referred as NBFC-MFIs(PS)}, with the
following relaxation/modification:
Particulars

Relaxation/modification

Activity
Clearance

The stipulation of obtaining Activity Clearance in cases of the credit proposals

of NBFC-MFIs under Priority Sector is modified under the scheme, as under:

(i) The authority for granting Activity Clearance on the credit

proposals for financing to NBFC-MFIs (PS) falling upto the DLP of
ZOCC will be with ZOCC, subject to fulfilling the following conditions:

(a) Minimum external credit rating of NBFC-MFI (PS) should be as BBB+/- or

equivalent and the Company should be profit making with (+)ve Net worth as
per the last audited Balance sheet; and

(b) The loan amount should be within the maximum exposure ceiling, as
specified below:

Outstanding Loan portfolio of

NBFC-MFI (PS), as per the last
audited Balance sheet
(A)
Upto Rs.500.00 Crores
Above Rs.500.00 Crores and upto
Rs.1,000.00 Crores
Above Rs.1,000.00 Crores

5% of (A), subject to the

maximum exposure ceiling on a
particular NBFC-MFI (PS)
(B)
25.00 Crores
50.00 Crores
100.00 Crores

However, for the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as
mentioned above on point Nos.(i)(a) & (i)(b), and which are falling upto the
DLP of ZOCC, sanction will be granted by the respective authorities as per their
DLP.

(ii) For the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as

113 | P a g e

mentioned above on point Nos.(i)(a) & (i)(b), and which are falling beyond the
DLP of ZOCC, the stipulation of obtaining Activity Clearance has been waived.
Instead, the final credit proposal is to be submitted to the competent authority
for consideration.

(iii) For the credit proposals of NBFC-MFIs (PS), which are not fulfilling the
criteria, as mentioned above on point Nos. (i)(a) & (i)(b), any fresh / increase in
exposure would be subject to Activity Clearance from Corporate Centre, even
though proposals fall under the powers of Branch/Region/Zone , as per the
extant guidelines.
Relaxation
The following relaxations have been approved under the scheme:
in
other
norms
Parameter/
Norms

As per Domestic Loan Modified

Policy/
such
Banks Guidelines

guidelines

for

NBFC-MFIs(PS), under the

Scheme

Margin

25% on Book Debts

10% on Book Debts

DER
(TOL/TNW)

4.5:1 (Maximum)

Maximum DER to be allowed

as per the leverage Ratio
(Total outside liability/ owned
funds) stipulated by RBI for
NBFCs-ND, from time to time,
which is 7 at present.

Banking

Consortium
Banking
Arrangement is mandatory
for single borrower with
aggregate credit limits of
Rs.150.00 Crores & above.

Multiple Banking Arrangement

to be allowed for single NBFCMFIs (PS) with aggregate
credit limits of Rs.150.00
Crores & above

Arrangement

Personal
Guarantee of

Personal guarantee of all Not to insist for personal

the
Directors
of
the guarantee of Directors of the
Company to be obtained.
Company

Directors
Rate
of 1% upward revision in ROI as many Banks/FIs are charging higher ROI on
interest:
advances to NBFC-MFIs(PS). Thus, need was being felt to realign our ROI
structure on such advances in line with the ROI being charged by the peer

114 | P a g e

Banks.

Limit Rs.25 lacs and above: Ranging from Base Rate+2.50% to Base Rate
+4.25%, depending upon the Credit Rating of the individual borrower,
irrespective of the tenure

ZOCC has been authorized to grant concession upto a maximum of 1.00% in

the revised Rate of Interest on advances to NBFC-MFIs (PS), having limit Rs.25
Lacs and above, under the scheme on a case to case basis on merits.

Tenor Premium for Term Loans (applicable on accounts with limits of Rs.25 lacs
and above) to be charged extra as per extant guidelines.
The details of the Scheme for financing to NBFC-MFIs (PS) :
Facility

Demand Loan/Term Loan

Purpose of the
Facility

For on-lending to individuals/groups, which is eligible for categorisation as

Priority Sector advance under respective categories viz. Agriculture, Micro,
Small and Medium Enterprises and Others, subject to their compliance with
the laid down criteria, as per RBI guidelines.

Security

Primary Security:
Exclusive charge over the loan assets or book debts funded out of the bank
loan i.e. Assignment of book debt, created out of the funds borrowed from
the Bank
Collateral:
(i) Cash Collateral of minimum 10% of the sanctioned limit in the form of
Term Deposit to be kept for the tenure of the loan. Lien to be marked on the
said FDR in favour of our bank for the principal amount along with the interest
credited thereon in the account
(ii) Personal Guarantee of main promoter/Directors of the Company, if
offered by the Company. However, the personal Guarantee of the promoters/
Directors of the Company need not be insisted upon.

Other
Conditions

The names of promoters, directors, Company & its group concerns do

not figure in latest RBI defaulters list/willful defaulters list/ECGC
caution list /CIBIL list.

115 | P a g e

 There are no overdue in the account of the NBFC-MFI with existing

bankers/FIs and conduct of the accounts is satisfactory. Credit reports
are to be obtained, while considering the proposal.
The share holding pattern including of foreign entity and loan
outstanding with other Banks/FIs from CA/CS of the Company to be
obtained and satisfied upon.
Branch to carry out field visit and make random verification of books
of the account of the Company with regard to onward lending to JLGs
and satisfy with business model of the Company.
The recovery position in the existing advances to MFIs in the Region/
Zone must be satisfactory.
The NBFC-MFI undertakes KYC guidelines and other due diligence as a
part of appraisal. Further, the NBFC-MFI has put in place processes for
credit appraisal, pre sanction & post sanction follow up, Recovery
procedures, underwriting and monitoring mechanisms.
The MFI complies with all the regulatory guidelines of RBI. Further,
the Company complies with all the norms of Bank loan to MFIs for
onlending, to be eligible for categorization as Priority sector Advance,
as per the guidelines issued by RBI vide circular No.FIDD.CO.Plan.
BC.54/0 4.09.01/2014-15 dated 23.04.2015.
Due diligence in respect of the Company & shareholder Companies to
be carried out as per Bank s extant guidelines. All the extant
guidelines with regard to foreign investment in the Company, if any, to
be complied with.
The modification and relaxation approved under the scheme shall be
effective from the date of approval of the scheme i.e. 15.01.2016.
Renewal/Modification of Food & Agro Based Schemes (BCC:BR:107:458 dated 16-092015): Bank has been renewed Agro based Scheme with the following modifications:
(i) Zonal Authority i.e. ZOCC has been authorized to grant further concession upto a maximum of
1.00% in the applicable concessional Rate of Interest under the Scheme, subject to minimum
applicable ROI at Base Rate, on a case to case basis on merits.
(ii) Food processing units have now been included under purview of the Scheme
(iii) Sanctioning authorities have been allowed to sanction additional working capital limit upto 25% of
the sanctioned cash credit limit, keeping in view the peak season requirement of the customer,
subject to observing the amount and period specified for granting adhoc facility under their DLP
(where peak and non peak limits have not been sanctioned separately).
Bank has created two new scheme codes in Finacle for the accounts pertaining to Food & Agro based
Scheme under Agriculture:

116 | P a g e

LA429: .for TL/DL Food & Agro based, Interest table code: L4291 (Base Rate and tenor premium
included); and
CC021: for CC Food & Agro based, Interest table code: CC211 (Base Rate only)
Dispensing with No Due Certificate for Agri. Loan applications (BCC:BR:107/74 dated
16/02/2015):
It has been decided to dispense with obtaining No Dues Certificate for individual loan applicants/
borrowers (including JLGs and SHGs) for agriculture loan proposals in our rural and semi-urban
Branches and to adopt the following procedure for due diligence:

all loan amounts up to Rs. 1

lac
For all loan amounts more
than Rs.1 lac and up to Rs 5
lacs
For loans above Rs.5 lacs

Self Declaration/Affidavit by the applicant

Credit history check/obtaining credit report from credit
information
companies
like
CIBIL/
Equifax/Experian/Highmark etc with whom Bank has/will
tie-up.
In addition to credit history check as mentioned above,
information search by writing to all other Banks operating
in the centre where our branch is functioning and the
applicants residence/village, with an auto deadline
(Maximum 7 days). The branch should send the letter by
Regd. Post.

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1.
a)
b)
c)
d)
e)

TEST YOUR UNDERSTANDING:

Under which segment the loans to Agri clinics &Agri Business Centers advances are classified?
Direct Agriculture
Ancillary Activities
Other Priority Sector
Non priority Sector
Indirect Agriculture

2.
a)
b)
c)
d)
e)

What is the mandatory target for weaker section advances?

5% of ANBC
10% of ANBC
18% of ANBC
13.5% of ANBC
4.50% of ANBC

3. What is the effective rate, which Banks earns on the accounts eligible for interest subvention in
Agriculture?
a) 7 %
b) 4 %
c) 9 %
d) Base rate
e) 3%
4. What is the maximum repayment period under the scheme of Priority Sector loans against Gold
Ornaments/Jewellary?
a) 24 months
b) 6 Months
c) 36 Months
d) 12 Months
e) 18 months
5. What is the minimum margin under farm produce marketing loans/finance
against warehouse receipt?
a) 10%
b) 15%
c) 25%
d) 40%
e) 30%
6. Margin in case of New & Old Tracor loan is
a) 15% & 50%
b) 20% & 40%
c) 10% & 20%
d) 25% & 60%
e) 25 % & 35 %

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7. In Baroda Basic Savings Bank Deposit Account ------ Cheque Leaves shall be allowed free in
a year:-a) 10
b) 20
c) 30
d) 40
e) 50
8.The Aadhar number of the customer can be linked in existing account as well as for the new accounts
through menu option:
a. CUMM/HCUMM
b. APBS
c. APBSLN
d. HACM/ACM
e. HCLM
9.Under PMJDY scheme to get the benefit of accidental insurance cover ,Rupay debit card must be
used at least once ina.
b.
c.
d.
e.

15 days
30 days
90 days
30 days
30 days

10. The
a.
b.
c.
d.
e.

maximum limit under priority sector loan against gold Jewellery is :

Rs. 1 lac
Rs. 2 lacs
Rs. 3 lacs
Rs. 5 lacs
Rs. 8 lacs

Q
A

1
b

2
b

3
c

4
d

5
c

6
c

7
e

8
c

9
c

10
C

119 | P a g e

MSME BANKING
Micro Small and Medium Enterprises(MSME) : An Overview
MSMED Act was operationalized with effect from 2nd October 2006, which defines an enterprise
instead of an industry to give recognition to service sector and also defines a medium enterprise to
facilitate technology up gradation and graduation.
Section 7 of the Act protects the sector by restricting the investment in Plant & Machinery in case of
Industries and investment in equipments for service enterprises as below with effect from 2nd Oct. 2006:
Particulars

Micro
Enterprises
Investment in Plant & Not Exceeding
Machineries in case of Rs.25lakh
Manufacturing
Enterprises
Investment in Equipment Not Exceeding
in case of Service Sector Rs.10lakh
Enterprises

Small Enterprises

Medium
Enterprises
Above Rs.25lakh up Above Rs.5cr to not
to Rs.5cr
exceeding Rs.10cr
Above Rs10lakh up Above Rs.2cr to not
to Rs.2cr
exceeding Rs.5cr

Manufacturing Enterprise: is an enterprise engaged in manufacture/production or preservation of goods

and whose investment in plant and machinery (original cost excluding land and building and the items
specified by the Ministry of Small Scale Industries) does not exceed as mentioned in above table.
Service Sector Enterprises: engaged in providing or rendering services whose investments in equipment
(original cost excluding land & Building and Furniture, Fittings and other items not directly related to the
service rendered or as may be notified under MSMED Act, 2006) are as detailed in above table.
Computation of value of Plant & Machinery:
Investment under head Plant and Machinery should include the original price of every productive
item irrespective of whether new or second hand, acquired and proposed to be acquired, whether on
lease or hire purchase or on ownership basis by the industrial undertaking, irrespective of the manner in
which the cost has been shown in its books.
For computing the value of the investment in Plant and Machinery, cost of the following
items should be included:
1) Original cost of Plant and Machinery (price paid by the owner / hirer / lessor).
2) Cost of control panels, starters, Electric Motors, other electrical accessories mounted on
individual machines.
3) Cost of only those testing and quality control equipments, which are, used for/in process testing.
4) The investment in establishing of Wind Mills to generate electricity for captive consumption or
partly for captive consumption and remaining power to sell to Electricity Boards/others
Cost of following items should be excluded:
a. Equipments such as Tools, Jigs, Dies, Moulds, and Spares for maintenance and cost of
Consumable Stores.
b. Installation of P & M,

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c. Research & Development Equipments and Pollution Control Equipments

d. Power Generation Set and extra Transformer installed
e. Bank Charges and Service Charges paid to the NSIC or to the State Small Industries
Corporation
f. Fire Fighting Equipments, Cables, Wires for safety measures
g. Gas producer Plants, Transportation Charges for indigenous Machineries
h. Technical Know-how Fees
i. Storage Tanks not linked to manufacturing activities but are used for storing of Raw
material and Finished Goods.
j. The investment in establishing of wind mills to generate electricity for captive
consumption or partly for captive consumption and remaining power to sell to Electricity
Boards / Others.
In case of Imported machinery following should included:
i- Import duty.
ii- The shipping charges.
iii- Custom clearance charges.
iv- Sales Tax.
Our Banks approach - MSME sector for internal purpose:
Our bank considering vital role being played by such organizations in Economic development of the
Nation and in order to capture the business, has expanded the coverage of MSMEs well beyond the
Regulatory definition as under:
Our bank has therefore for internal purposes given focused attention to finance all Commercial
enterprises i.e. enterprises which may be outside the purview of regulatory definition of MSME but
having assessed turnover upto Rs.150.00 crores.
SME Banking business will thus include the following across the bank:
- Micro, Small and Medium Enterprises as per regulatory definition irrespective geographical
location, i.e. rural, semi-urban, urban, metro areas.
- All other entities with their assessed annual sales turnover up to Rs. 150/- crores and real estate
projects, where the project cost is upto Rs. 50/- crores. Other than Real Estate projects, where
project cost is up to Rs.50.00 Crores.
- SMEs which are Associate/sister concerns of Large Corporate Banking customers.
- Clubs, Trusts, etc. (other than NBFCs, Financial Institutions & Banks)
- Financing under various Government schemes launched for MSME Sector.
The new/extended definition will only be used internally for promotion of business across these
segments. All the proposals falling beyond the ambit of regulatory definition shall be covered by the
Loan Policy Document and will attract all provisions of C & I sector, if not specified otherwise.
However, such Units, which are outside the purview of regulatory definition will not form part of Priority
Sector lending.
Classification under Priority Sector:
Bank loans to Micro, Small and Medium Enterprises, for both manufacturing and service sectors are
eligible to be classified under the priority sector as per the following norms:

121 | P a g e

Manufacturing Enterprises: The Micro, Small and Medium Enterprises engaged in the manufacture
or production of goods to any industry specified in the first schedule to the Industries (Development and
Regulation) Act, 1951 and as notified by the Government from time to time. The Manufacturing
Enterprises are defined in terms of investment in plant and machinery.
Service Enterprises:
Bank loans up to Rs.5.00crore per unit to Micro and Small Enterprises and
Rs.10.00crore to Medium Enterprises engaged in providing or rendering of services and defined in terms
of investment in equipment under MSMED Act, 2006.
Other Finance to MSMEs
i. Loans to entities involved in assisting the decentralized sector in the supply of inputs to and
marketing of outputs of artisans, village and cottage industries.
ii. Loans to co-operatives of producers in the decentralized sector viz. artisans, village and
cottage industries.
iii. Loans sanctioned by banks to MFIs for on-lending to MSME sector as per the conditions
specified in paragraph IX of this circular.
iv. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami
Card, Swarojgar Credit Card, and Weavers Card etc. in existence and catering to the nonfarm entrepreneurial credit needs of individuals).
v. Outstanding deposits with SIDBI on account of priority sector shortfall.
Considering that the MSMED Act, 2006 does not provide for any sub-categorization within the definition
of micro enterprises and that the sub-target for lending to micro enterprises has been fixed, the current
sub-categorization within the definition of micro enterprises in the existing guidelines is dispensed with.
To ensure that MSMEs do not remain small and medium units merely to remain eligible for priority
sector status, the MSME units will continue to enjoy the priority sector lending status up to three years
after they grow out of the MSME category concerned.
The targets and sub-targets set under priority sector lending for Domestic scheduled
commercial banks and Foreign banks with 20 branches and above operating in India are
furnished below:

7.5 percent of ANBC(Adjusted Net Bank Credit) or Credit Equivalent Amount of Off-Balance
Sheet Exposure, whichever is higher to be achieved in a phased manner i.e. 7 per cent by
March 2016 and 7.5 per cent by March 2017.
The sub-target for Micro Enterprises for foreign banks with 20 branches and above would be
made applicable post 2018 after a review in 2017.

Credit rating:
(i) Internal Credit Rating System: The internal comprehensive credit rating system under BOBRAM
(CRISIL) Model has been approved by the bank and is already in place as advised to all branches. The
BOBRAM model is applicable to MSME accounts having exposure of above Rs. 2 Crores.
Bank has approved adoption of New Scoring Card type of Model for rating MSME accounts with
exposure of Rs.2.00 Lacs to Rs.2.00 Crores.
As per extant guidelines, periodicity of credit rating in respect of borrowal accounts is on annual basis.

122 | P a g e

In case of adverse features in the account, the rating has to be reviewed immediately in all such
accounts with exposure (FB+NFB) of Rs.5 crores and above.
(ii) External Credit Rating System (not eligible under BASEL-II norms of capital adequacy)
SME borrowers are rated by few external credit rating agencies. In case of MEs, some of the borrowers
are getting their accounts rated by external credit agency like CRISIL etc.
Our Bank has entered into MOU with credit rating agencies viz: CRISIL, ICRA, CARE, and BRICKWORK
INDIA to get our SME borrowers rated.
(iii) External Credit Rating System (under Basel-II norms of Capital Adequacy)
External Credit Rating should be carried out in all SME loan accounts with credit limits of above Rs 5
crores by any one of the RBI approved external credit rating agencies. Presently ICRA, CARE, CRISIL
FITCH, SMERA and Brickworks India are the only Reserve Bank of India approved external credit rating
agencies in India. The exposure to SME borrower rated by any of these rating agencies will be
recognized as rated exposure for the purpose of computation of Risk Weighted Assets under
Standardized Approach of credit risk under Basel-II guidelines.
Pricing be continued to be linked to our internal credit rating system. However due weightage will be
given for the external credit rating by the external rating agency. Detailed guidelines on credit rating are
covered under Loan Policy.
COMMON GUIDELINES
1. The simple standardized loan application form for borrowers in MSME Sector circulated by Indian
Banks Association has been adopted for credit limits upto Rs.100 lakhs.
2. Receipt and acknowledgement of application & Maintenance of Register for application received.
3. No application to be rejected without referring to next higher authority.
4. Our Bank has introduced online application & Loan Tracker Module and Our Banks website
provides such facility to MSME customer through which the credit application submitted by MSME
customers would be reaching our Loan Track system and accordingly, application tracking facility
is provided to the MSME customers
5. Time norms for disposal of loan application: As per Code of Banks Commitment to Micro
and Small Enterprises August 2015 (Para 5.1 j of BCC:BR:107:624 dated 31.10.2015) Disposal of
application for a credit limit or enhancement in existing credit limit up to Rs.5 lakh should be
within two weeks provided application is complete in all respects and is accompanied by
documents as per check list provided.
6. Financials for TAKE OVER of advance accounts:
Ratio
Norms
Micro
&
Small Medium Enterprises
Enterprises
CR
Min. 1.17 & above
Min. 1.20 & above

Others

DER (TTL/TNW)

Max.4:1

Max.3:1

Max.3:1

DER (TOL/TNW)

Max.4.5:1

Max.4.5:1

Max.4.5:1

Average DSCR

1.75 (anyone yr. should 1.75 (anyone yr. should not 1.75 (anyone yr.
not be below 1.25)
be below 1.25)
should
not
be

Min. 1.33 & above

123 | P a g e

below 1.25)
NON-FINANCIAL NORMS FOR TAKEOVER OF ADVANCE ACCOUNTS:
a. Profit-making (i.e. net profit before tax) concerns only as per last audited Balance Sheet
b. Accounts be rated internally as per the new credit rating model (BOBRAM) subject to minimum
BOB 6. In case of take over of accounts for Rs.25 lakhs and above and upto Rs.2 Crores , the
accounts are to be rated as per New MSME Credit rating model subject to a minimum of MSME
BOB 6.
c. No reschedulement / restructuring in the existing a/c. during last -2- years
{in a, b & c deviation can be allowed by ZOCC for accounts with exposure up to Rs.3 cr.; in other
cases COGM-MSME for proposals up to powers of RMCC; COCC-ED for proposals up to powers of
ZOCC and COCC ED/ COCC- CMD in all other cases}
d. Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as per latest
statement of accounts.
e. STANDARD ASSET with existing banker
f. All other existing norms , guidelines to be scrupulously followed
a. {Deviation can be allowed by the COCC-ED/COCC-CMD in respect of d, e, & f}
g. External rating in respect of credit proposal with exposure above Rs.5.00Crores by an approved
credit rating agencies should not be below BBB & equivalent.
7. Collateral Free Loan: Branches may be noted that Collateral securities are not to be obtained
by the banks in respect of MSE advances up to the credit of Rs. 10 Lacs.
8. Assessment of Working Capital:
The credit requirements of Micro, Small & Medium Enterprises (i.e. MSME-Regulatory) will be
computed on the basis of a minimum of 20 % of their acceptable projected annual turnover or
First Method of Lending, whichever is higher, for new as well as existing units.

Limits under non regulatory definition: The assessment of working capital credit limits
should be done based on second method of lending as per Tandon committee guidelines.

9. MARGIN:
(a) For Term Loan
In case of factory land & building, overall margin of 30%
In case of Plant & Machineries and Equipment margin is proposed at 25%
In exceptional cases, finance may be made available against second hand imported machinery,
with a minimum margin of 40% at the discretion of sanctioning authority, keeping in view the
extant guidelines for financing against second hand machinery.
(b) For Working Capital
25% uniform margin is proposed on stocks and receivables. For export credit margin may be
stipulated @ 10 %.
The next higher authority is authorized to reduce margin maximum by 5% in deserving cases in
respect of Land & Building & Plant & Machineries & Equipments/Current Assets.
If deviation is proposed beyond 5 %, Executive Director / Chairman & Managing Director is authorized
for the same.

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10. Rate of interest: If accounts are falling under SME category as per, regulatory definition, rates
as applicable to Micro, Small & Medium Enterprises to be applied. However, if accounts are
falling under SME category based on expanded coverage i.e. they are outside the purview of
regulatory definition, interest to be applied as per separate guidelines being issued from time to
time.
11. Penal Interest: Penal Interest @ 1% to 2% to be charged for the period of default in
repayment, non-submission of financial statement, non-compliance of terms and conditions etc.
as per extant guidelines of Bank.
12. Collateral Free Loans:
Presently, Banks guidelines for providing collateral free loans are as under:
Collateral free loan upto Rs.10.00 Lacs to Micro & Small Enterprises.
Collateral free loans (including third party guarantee/ security) upto a limit of Rs. 25.00 lacs to
units having satisfactory dealings with the branch for last 3 years and having sound and healthy
financial position.
It is already decided to dispense with collateral security including third party guarantee for loans
to Medium Enterprises upto a limit of Rs. 25.00 lacs as in case of loans to Micro & Small
Enterprises in manufacturing activities subject to satisfying the following criteria in case of
existing borrower as also takeover accounts:
Consistent growth in sales for last 3 years.
Continuous profit for last 3 years.
Credit rating of A or equivalent and above and no slippage in credit rating during last 3
years.
The units assets (fixed as also current) are charged to the bank and promoters / directors
personal guarantee are available
Asset coverage ratio of more than 1.5
Other take over norms are complied with.
For the existing borrowers enjoying limits up to Rs.25.00 lacs and fulfilling the above criteria, the
release of collateral securities obtained if any, at the time of previous sanction / review, is can
also to be released at the specific request of the borrower by PSR noting authority.
Coverage of collateral free loans under Credit Guarantee Fund Trust Scheme for Micro &
Small Enterprises (CGTMSE):
All the collateral free loans upto Rs.100 lacs sanctioned to Micro & Small Enterprises in manufacturing
and service sector as defined under MSMED Act, 2006, PMEGP scheme are eligible for cover under the
Scheme.
Detailed guidelines of Scheme are as under:

What is CGTMSE: It is a Trust established by Govt of India and SIDBI on 01st August 2008 in the ratio
of 20:80.
(I)

CGTMSE important Operational Guidelines:

Eligibility:

Following are eligible for coverage under CGTMSE scheme:

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 Credit facilities (Fund based and/or Non fund based) extended:

o To a single eligible borrower in the Micro and Small Enterprises sector(New or Existing
both)
o Not exceeding Rs.100 lakh
o Without any collateral security and\or third party guarantees
Quantum of Guarantee & Fee Payable:
Category/ Credit facilities upto
Micro Enterprise Upto 5Lacs

Category Maximum extent of Guarantee

85% of amount in default subject to Max 4.25Lacs

Women Enterprises/Units located in 80% of amount in default subject to Max 40.00Lacs

North Eastern Regions > 5Lacs to
50Lacs
(Other than Credit facility upto 5lacs to
Micro enterprises)
All other Category borrower limit above 75% of amount in default subject to Max. 37.50Lacs
5Lacs upto 50Lacs
All other Category borrower limit above 50% of amount in default subject to Max 50.00Lacs
50Lacs
Lodgment / Settlement of Guarantee Claim: Guarantee can be invoked (claim can be lodged) with
the TRUST for Ist installment of guaranteed amount when
Dues covered under CGTMSE classified as Non-performing Assett
Marking of NPA date be done with Trust before end of subsequent quarter of classification of
NPA i.e. If account turned to NPA on 15.01.15, Marking with trust be done prior to 30.06.15.
Lock in period is -18- months period from dt of Ist premium payment date or last date of

disbursement, whichever is later.

Trust will pay 75% of guaranteed amount as Ist Installment within 30days of lodgment of claim and
balance amount will pay after completion of recovery proceedings.
Our bank is sharing the one-time guarantee fees and annual service charges on 50:50 basis for
advances upto Rs.50 lacs covered under the scheme. In case of accounts with limits over Rs.50 lacs
entire guarantee fee is to be borne by the borrower. In case of accounts financed under erstwhile PMRY
scheme for manufacturing activity and covered under CGTMSE scheme, entire annual service fee is
borne by Bank.

13. Review with limits upto Rs. 20/- lacs pending receipt of audited financial statements
Branches have been authorized to review advance accounts of borrowers in trading activities, Micro &
Small Enterprises, borrowers in rural area, borrowers having only term loan accounts, financed under
government sponsored programme, borrowers enjoying only guarantee facility, etc, with limits upto Rs.
20/- lacs pending receipt of audited financial statements provided the conduct of the account is
satisfactory in terms of various parameters
14. New Originations-Priorities & Approval

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Bank has approved strategy to take fresh exposure including review with increase and other ancillary
business for corporate and clients. Pursuant to the approval, bank has advised as under
(i) Bank will prefer to take fresh exposure/ review with increase in following sectors:
i.
Pharmaceutical
ii.
Engineering
iii.
Defence Equipment Manufacturing
iv.
Automobile
v.
Renewable Energy
vi.
IT and IT enabled services
vii.
Financial Services (NBFCs, MFIs)
Bank has also advised to focus on channel financing, Trade Financing, CMS, financing of investee
companies of large Private Equity Funds, extending advisory Services as new avenues of Business
opportunity.
ii. Sectors to deal with cautions and selective approach
Bank will take cautions and selective approach in taking fresh exposure in following sectors
i.
Power Generation
ii.
Road Projects
iii.
EPC
iv.
Iron & Steel
v.
Ship Breaking
vi.
Gems & Jewellery
vii.
Coal Mining
viii.
Edible Oil & Vanaspati Manufacturing
ix.
Textile
x.
Large Trade Accounts (Wholesale Trading)
It is advised that fresh/review with increase proposals involving a limit of Rs 5.00 crores (Five Crores)
and above, coming under the purview of these sectors mentioned here in above under point no (ii)
should be referred to the respective credit verticals at BCC through respective Regional Offices for
approval before putting up to the Sanctioning Authority.
Implementation of Corporate Module (MSME Banking) of LAPS (Loan Automation
Processing System) to all branches: After rollout LAPS Corporate Module under MSME Banking
across all SMELF w.e.f. 03/11/2014, it was proposed to implement the module in branches also in
phased manner. Detail User manual and Reckoner can download from KM Portal (Intranet) with the
following path: BCC IT Dept. Projects LAPS - Corporate Module Manuals.
Financial Ratios for Credit Appraisal (Not Applicable in case of takeover of accounts)
Following ratios can be accepted for granting credit facilities to SME units failing as per regulatory
guidelines or SME as per expanded coverage.
Ratio
Micro & Small
Enterprises under
manufacturing

Norms
Medium Enterprises
under
manufacturing

Units covered under

SME Sector as per
expanded definition

127 | P a g e

Current Ratio (Min.)

DER(Max.)(TTL/TNW)
FACR (Net FA/ LTL)

sector and Service

Sector
falling under
regulatory
guidelines
1.17

sector and Service

Sector
falling under
regulatory
guidelines
1.20

and outside the

purview of regulatory
definition

3:1
Not below 1.25

3:1
Not below 1.25

3:1
Not below 1.25

1.75 with a condition

that in any one year it
should not be below
1.25

1.75 with a condition that

in any one year it should
not be below 1.25

Average DSCR for Term 1.75 with a condition

that in any one year
Loan
it should not be
below 1.00 instead of
1.25 as per extant
guidelines.

1.33

SME Products: The following products are launched for MSME sector across the country:
SME SHORT TERM LOANS
Sr
No

Parameter

Guidelines

1.

Purpose

2.

Borrower Group

To meet temporary shortfall/mismatch in liquidity, for meeting

genuine business requirements only.
The facility is not to be made available for other purposes like
repayment of loans of other banks or institutions, unsecured
loans etc. or for any purpose not related to the borrowers
activity.
SMEs as per Regulatory/ expanded definition given below:

Eligibility Criteria

Micro, Small and Medium Enterprises as per regulatory

definition irrespective of geographical location, i.e. rural,
semi-urban, urban, metro areas.
All other entities with their annual sales turnover up to
Rs. 150/- crores.
Satisfactory credit rating for the last three years (BOB-5 and
above) and for 4 half years in case of accounts where credit
rating is done on half yearly basis. Accounts with continuous
decline in credit rating will not be considered eligible.
Latest Balance Sheet etc. should be available.
Satisfactory financial performance in terms of sales /
turnover and profits. Negative variance, if any, should not
be more than 10%.
Satisfactory dealings with the Bank for at least three
years.
No major inspection/audit irregularities

128 | P a g e

Loan Amount

Up to 25% of the existing Fund based Working capital limits in

case of BOB-1, BOB-2 and BOB-3 rated accounts, 20% in case of
BOB-4, BOB-5 rated accounts, subject to a minimum of Rs. 10
lakhs and maximum of Rs. 250 lakhs.

Period

Powers to sanction

To be repaid in 12 months including moratorium period. Interest

to be served as and when charged.
Regional Manager and above only

Baroda Vidhyasathali
Sr
No

Parameter

Guidelines

1.

Target Group

Educational Institute

2.

Eligibility Criteria

Purpose

Loan Amount

Educational institutions, Schools, Colleges and other education

bodies running education activities set up by Firms, company,
Trusts, Society etc. (HUF are not eligible).
- Construction
of
building
including
expansion,
modernization & renovation activities of the education
institution for the purpose of education.
- Purchase of instruments
- Purchase of land alone is not permissible. However, if the
land cost is included in the total cost of project, the same
can be financed.
Minimum: Rs.25.00 lacs Maximum: Rs. 15.00 crores

Margin

Overall minimum margin of 25% of cost of Project.

Repayment Period

Security

Assessment
Limit

Maximum 84 months (including maximum moratorium up to 2

years) subject to annual review. Repayment period to be decided
based on the project cash flow.
Equitable mortgage of Land & Building of educational
institute
Hypothecation of Instruments & Equipment
Personal guarantees of the Promoters of the Institution.
When credit facilities exceed Rs.10.00 Crores, Collateral
security level should not be less than 30% by way of Land
& Building other than college/school property i.e. personal
property be obtained
of
OD Limit to be allowed only to existing profit making
institutions without any bank liability for meeting short
term requirement against fee receivable for one semester
with 25 % margin and security of mortgage of assets in
the name of the institution or promoters of the institution
as the case may be.
Assessment on cash budget system.
OD to be liquidated in maximum period of 6 months out of

129 | P a g e

fee collection and may be allowed max. 2 times a year.

Current Ratio
Regulatory MSE - 1.17
Medium Ent. - 1.20 SME
expanded - 1.33
DE Ratio(TTL/TNW)
3:1
DE Ratio (TOL/TNW)
4.50:1
DSCR
1.75 Average & should
not go below 1.25 in any
year

Financials

BARODA SME LOAN PACK

Sr No

Parameter

Guidelines

Eligibility

SMEs as per Regulatory/expanded definition

Purpose

Composite
Limit

To provide hassle free credit for working capital (fund based and
non-fund based) as also capital expenditure related to the business
of the borrower within the overall composite limit sanctioned to the
borrower.
4.5 times of borrowers tangible net worth as per last audited Balance
Sheet, or, Rs. 5.00 crores, whichever is lower.

Margin

25%

Security

Financial
Ratios

Other
Conditions

Exclusive charge on the assets of the enterprise.

Personal Guarantees of all promoter Directors/partners.
Charge on the unencumbered personal properties of the
partners, promoter Directors, wherever applicable. (Will not
be applicable in cases covered under CGTMSE scheme)
Third party guarantee in case of credit line above Rs. 100.00
lacs in case of Micro and Small Enterprises as per regulatory
definition.
Any other collateral for the credit line above Rs. 25.00 lacs for
SMEs as per expanded definition (i.e. based on Turnover
criteria and Medium Enterprises) to maintain asset coverage
ratio above 1.25
Current Ratio
1.20
DE Ratio(TTL/TNW)

3:1

DE Ratio(TOL/TNW)

4.50:1

Asset Coverage Ratio

1.25

Stock/Book Debts statement to be obtained every month/as per

credit rating. Book debts statement to be certified by Chartered
Accountant on quarterly basis

130 | P a g e

BARODA SME GOLD CARD

Sr No

Parameter

Guidelines

Eligibility

All MSME Enterprises As per regulatory definition irrespective of

geographical location, i.e. rural, semi-urban, urban, metro areas and
SMEs as per expanded definition viz;. entities with their annual sales
turnover up to Rs. 150/- crores fulfilling following criteria:- In case of
existing accounts1. A/c in Standard Category for last 2 years
2. Obligor credit rating of BOB-5 and above
3. Working capital limits of Rs. 25/- lacs and above.
In case of Take Over accounts:1. Obligor credit rating of BOB-5 and above
2. No deviation allowed in Take over norms while taking over account
3. working capital limits of Rs. 25/- lacs and above.

Purpose

Limit

Period

ROI

To meet emergent requirements and tie up temporary mismatch in

liquidity arising out of delayed payment by buyers, tax payment etc.
10% of the assessed MPBF
12 months to be allowed on 4 occasions during the year for a
maximum period of 2 months on each occasion. However, there
should be a minimum gap of 15 days between two drawals.
As per Credit Rating and as applicable to Cash Credit

BARODA LAGHU UDYAMI CREDIT CARD

Sr No

Particulars

Guidelines

Eligibility

The scheme is applicable to all existing customers in the categories

of small business, Retail Credit, Artisans, Village Industries, Small
Scale and Micro Enterprises units.

Purpose

The borrowers having credit limit up to Rs.10.00 Lacs and

satisfactory track record/dealing with the Bank for the last 3 years
are eligible to avail the facility of BOB Laghu Udyami Credit Card
(BOBLUCC) i.e. converting the existing account to BOBLUCC account.
To meet the credit requirements of Small business units, retail
traders, artisans, village industries, small scale industrial units and

131 | P a g e

Limit

Period

Margin

Assessment
of Limit

tiny units, professionals and self employed persons, etc.,

Maximum limit up to Rs. 10/- lacs.
The limit fixed under the scheme will be valid for a period of -3years, subject to internal annual review based on the conduct /
operations of the account. Wherever required, enhancement in Credit
Limit within the ceiling of Rs.10 Lacs will be considered without
submission of a detailed proposal by the borrower.
25%

For small business, retail traders, etc., 20% of the annual

turnover declared for tax purposes or last 12 months turnover
in the operative account, whichever is higher.
In respect of parties with good track record, where sales tax
returns are not available, the credit limits may be decided
taking into consideration the actual turnover in the account
during the last two years.
For professionals and self-employed persons, 50% of their
gross annual income as per IT return shall be considered as
the limit for issuing the BOBLUCC.
For Small Scale industrial Units including tiny sector units, the
assessment norms in vogue as per the Nayak Committee
recommendations would continue.

BARODA AROGYADHAM LOAN

Sr No

Particulars

Guidelines

Eligibility

SMEs as per regulatory/ expanded definition given below:

- Micro, Small and Medium Enterprises as per regulatory
definition irrespective of geographical location, i.e. rural,
semi-urban, urban, metro areas and irrespective of
Borrowers Constitution i.e., Individuals , partnership,
Trust, Pvt. Ltd., Public Ltd.etc.,
Note:
1) Real Estate Projects are not eligible
2) Promoters /owners should not be HUF.

Purpose

Note: The main Promoters should have requisite qualification in any

branch of medical science from a recognized University and should
have minimum 2 years of work experience.
- Setting up of new Nursing Home/Hospital/Pathological
Laboratory/Diagnostic Centres.
- Expansion/renovation/modernization of existing Nursing
Home/
Hospital /Pathological Laboratory/Diagnostic
Centers.

132 | P a g e

Limit

Purchase of medical diagnostic equipments as also office

equipments, viz. computers, air conditioners, office furniture,
etc.
Purchase of ambulance
To meet working capital requirements.
Construction of rest house, staff quarters

Portion of the Working capital limits should not exceed 10%

of the total limits sanctioned.
Rural: 0.50Crore
Semi-Urban: 6.00Crore
Urban: 12.00Crore
Metro: 15.00Crore

Margin

Assessment
of Limit

Period

Financial
Ratios

TEV Study

Other
Conditions

Need based Working Capital limits may be considered upto

10% of the annual sale or gross income, subject to 20% of
the above ceiling limit in case of borrowers requiring both
Term Loan and working capital facilities.
In case of only working capital requirements, limit to be
restricted to 20% of the above ceiling limit.
Uniform margin of 25% on the chargeable assets as per Project
details.
Demand Loan/Term Loan 75% of the cost of chargeable, movable,
immovable assets as per Project details. Working Capital: Need based
upto 10% of the annual sale or gross income, subject to 20% of the
overall limit approved for the Institution.
Demand Loan/Term Loan 35 months to 84 months including
moratorium, subject to annual review.
DE Ratio - TTL/TNW - 3:1
TOL/TNW - 4.5:1
DSCR Average - 1.75
DSCR should not go below the level of 1.25 in any
particular year.
Operating Profit Margin (before Interest, Depreciation &
Tax) not to be below 10%.
Minimum Interest coverage ratio should be 2.
TEV study to be carried out as per bank s extant guidelines.

Audited Balance Sheet and Profit & Loss or income

expenditure statement for the last 3 years in case of existing
Institution.
Credit rating of the account to be carried out as per banks
extant guidelines and the borrowers with credit rating not less
than BOB 6 as per CRISIL model only to be financed under
the Scheme.
All other terms and conditions as per bank s Domestic Loan
Policy, 2014 and SME Policy.

133 | P a g e

Stock/Book Debts statement to be obtained once in a year.

BARODA OVERDRAFT AGAINST LAND & BUILDING

Sr No

Particulars

Guidelines

Eligibility

Purpose

SMEs as per expanded definition, established in the line of

business for a minimum period of 2 years and
financed/proposed to be financed under sole banking
arrangement.
Notes:
The Manufacturing/Service sector units (other than Retail
Trade) should have been established in the line of activity for
a minimum period of 2 years.
In case of new Manufacturing/Service sector units(other than
Retail Trade), facility may be considered if unit is established
by our existing customers having satisfactory track record and
the same is set up from their own sources.
Manufacturing and Service Sector units (other than Retail
Trade)having less than two years establishment may be
considered with the prior approval of one authority higher
than the Sanctioning authority under whose powers the
proposal falls.
Units with credit rating of BOB-6 and above as per CRISIL
Module.
To meet Fund based Working capital requirements.

Limit

Minimum Limit Above Rs.10.00 Lacs

Maximum Limit
Rural

75.00Lacs

Semi-Urban : 200.00Lacs
Urban & Metro: 500.00Lacs
4

Margin

Assessment
of Limit

40% of the market value of property mortgaged. Regional Head is

authorized to reduce the margin up to 35% in deserving cases.
Working capital limits :
SMEs as per Regulatory definition
Manufacturing sector
- As per Nayak Committee recommendations viz; minimum
20% of the accepted estimated Turnover, or, under PBF
Method, whichever is higher.
Service sector
- 20% of projected Gross receipts subject to verification of
sales tax returns of previous years/quarters in case the
enterprise is not under audit.
SMEs as per expanded definition: To be assessed as given in loan

134 | P a g e

Period

Financial
Ratios

Other
Conditions

policy.
Demand Loan/Term Loan 35 months to 84 months including
moratorium
Current Ratio:
Small Enterprises: 1.17
Medium Enterprises: 1.20
SME(Expanded) : 1.33
DE Ratio (TTL/TNW): 3:1
DE Ratio(TOL/TNW): 4.50:1
Asset Coverage Ratio: 1.50
Stock/ Book Debts statement to be obtained on yearly basis, i.e.
February every year. This being a collateral security, certification
by Chartered Accountant is not mandatory.

135 | P a g e

Scheme for financing existing Borrowers under SME Segment for Purchase of New Vehicles
Sr No

Particulars

Guidelines

Eligibility

Purpose

Limit

Margin

Period

DLP

Proprietorship firms, Registered Partnership concerns, Limited

Liability partnership firms, Private Limited Companies, Limited
Companies, Trusts, Co-operative Societies (Except individuals) under
SME Segment with Internal credit rating up to BOB-6 in CRISIL
model in case of borrowers enjoying credit limits over Rs.25 lacs and
Internal Credit rating up to BBB in old model (Scoring Type)
For acquiring any type of new vehicle eligible for Registration with
Regional Transport Authority.
Maximum Rs. 200/- lacs
(Increased from the present level of Rs.50 lakhs )
10 % of total cost of transport vehicle i.e. inclusive of initial
insurance premium, RTO Tax, Octroi, body building charges & other
incidental charges in case of new vehicle.
Maximum 60 months subject to review every year. The facility to be
included in the regular review proposal.
- In cases where the proposal for regular facilities as also for
purchase of vehicles fall under the powers of Branch Head,
the same to be considered by Branch Head with the relaxed
norms as per the Scheme.
- Acs falling beyond DLP of Br Heads & Upto Zonal Head:
DRM/RM is empowered to sanction
- Acs falling beyond DLP of Zonal Head: Zonal; Head

136 | P a g e

WHOLESALE BANKING
Wholesale Banking Business:
As a part of Business Transformation initiatives, the bank is repositioning as Multi Specialist Bank.
Wholesale Banking Business Segment will include
All Banking business (Assets & Liabilities) across the Bank at Metro,Urban, SemiUrban & Rural branches with

Entities (including Private Sector , PSU & Foreign) with their annual sales/income
turnover of over Rs.150/- crore. Following types of customers irrespective of their
annual turnover

Financial Institutions ,including banks and all type of NBFCs (excluding RRB sponsored
by our Bank)

Central and State Governments

Associate/Sister Concerns of Wholesale Banking Customers.

(Reference BCC:BR/99/343 dated 14.11.2007)
Wholesale Banking Segment is further defined by our Bank in following two parts:
1. Large Corporates: The Companies with annual sales turnover of above Rs. 500 crore.
2. Mid Corporates: Companies with annual sales turnover of over Rs. 150 crore and up to Rs. 500
crore.
These segmentations facilitated to bring new large corporate whose sales turn-over is very high
but do not have any limits or are enjoying very small limits with the bank. Existing CFS branches
are functioning as Wholesale Banking Branch where the large/mid corporate accounts of other
branches in the city are being parked.
Advantages:
1. To increase the existing client base by canvassing new corporate accounts and to get optimum
share.
2. To increase the penetration by increasing the number of products used by clients.
3. To increase fee based income business.
4. To have a special focused attention over Large and Mid corporate customers.
Mid Corporate Branch:
OBJECTIVES:
1) To set up dedicated Mid Corporate Branches in important cities/centres in the country to tap the
potential that this sector offers.
3) To set up a Mid Corporate Banking segment within the Wholesale Banking Group at Corporate
Office to provide the necessary drive support to achieve the above objectives.
BANKS INTERNAL EXPOSURE CLASSIFICATION
DEFINITION :
1) All entities i.e. Corporate, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc, having a
Gross Turnover (Sales) of over Rs 500/- Crores as per the last Audited Balance Sheet or
Previous Financial Year would be classified as Large Corporate Borrowers.
2) All entities i.e. Corporate, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc having a
Gross Turnover of over Rs 150/- crores and upto Rs 500/- crores as per the last Audited Balance
Sheet or Previous Financial Year would be classified as Mid Corporate Borrowers.
3) All entities i.e. Corporates, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc having a

137 | P a g e

Gross Turnover of upto Rs 150/- Crores as per the last Audited Balance Sheet or Previous
Financial Year would be classified as SME borrowers.
4) All entities i.e. Corporates, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc that
satisfy the Investment in Plant and Machinery criteria as per Regulatory
Definition would also be classified as SME borrowers.
Note: Entities that have Gross Sales of less than Rs 450/- Crores as per Last Audited Balance Sheet
but have a Projected Gross Sales of over Rs 600/- Crores for the current year shall be classified as
Mid Corporate only. The status will be reviewed after reviewing the Actual Gross Sales for the
projected year based on Audited Financials. Similar situation would prevail in respect of SME
borrowers also i.e. borrowers with Actual Gross Sales of Rs. 125 Crores and projected gross sales of
Rs.200 Crores will be classified as SME only and will be reviewed based on Actual Sales on receipt
of Audited Balance Sheet for projected period.
5) In respect of New Projects whether Manufacturing, Services, Infrastructure etc Total Project Cost
would determine the Classification as under: (Ref: Page No. 58 of Domestic Loan Policy 2014 &
BCC/BR/106/454 dated 24.11.2014)
i) Other than Real Estate Projects a.
Project Cost <= Rs. 50cr. SME
b. Project Cost >Rs.50cr. but <Rs.500cr. Mid Corporate c.
Project Cost =>Rs.500 cr Large Corporate
ii) Real Estate Projects
a. Project Cost < Rs. 50 crs SME
b. Project Cost =>Rs.50 cr but <Rs.250 crs. Mid Corporate
c. Project Cost =>Rs.250 cr Large Corporate
6) The Classification of borrower would be Entity wise and not Group wise. So different entities in the
same Group can be classified as SME, Mid Corp or Large Corp depending on the Gross Turnover criteria
as above.
7) All agriculture and indirect agriculture accounts (as per regulatory definition) shall be classified
under Rural & Agriculture Banking Business Segment and be dealt at Rural & Agri Banking Deptt at BCC
8) Notwithstanding the above if there is any doubt about the classification of any borrower entity, it
shall be decided mutually by GM (Large Corporate Banking), GM (Mid Corporate) and GM (SME) based
on sound reasoning and justification. However in case of difference of opinion, it will be decided by the
Executive Director.
Loans & Advances- Loan Policy 2014
1. No loan to be granted to Wilful Defaulters (Refer to Recovery Policy) of our Bank/Other
Banks/Financial Institutions.
2. In terms of Section 20(1) of BR Act 1949, no loan against the security of Banks own shares.
3. Section 20(1) of the Banking Regulation Act, 1949 lays down restrictions on loans and
advances to the directors and the concerns in which they hold substantial interest. Without
prior approval of the Board or without the knowledge of the Board, no loans and advances
should be granted to Directors (including Chairman & Managing Director) and relatives of
directors of our Bank, other banks, Scheduled Cooperative Banks, Subsidiaries/Trustees of
Mutual Funds/ Venture Capital Funds set up by the Bank/ Other Banks subject to the
following: a) Loans & advances aggregating to Rs. 25 lacs and above are to be sanctioned by the MCB.
b) The proposals for credit facilities of an amount less than Rs. 25 lacs to these borrowers may be

138 | P a g e

sanctioned by the appropriate authority under powers vested in such authority, subject to reporting to
the Board.
Every borrower should furnish a declaration to the bank to the effect that:a) He is not a director or specified near relation of director of a banking company.
b) None of the partners is a director or specified near relation of a director of a banking company; and
c) None of its directors is a director or specified near relation of a director of a banking company. No
loan to be granted against partly paid shares.]
4. No loan to be granted against partly paid shares. No loan to be granted to
Partnership/Proprietorship concerns against the primary security of shares and debentures. (Ref
page no. 30 of Domestic Loan Policy)
5. Bank will not grant advance against FDR or deposits of other Bank.
Restrictions under Selective Credit Control (SCC): Presently the following commodities are
covered under Selective Credit Control (SCC): -Buffer Stock of sugar with sugar mills.
- Unreleased stocks of sugar with sugar mills representing levy sugar and free sale sugar.
6. Term Loan is granted for a period of 3 years and above but not exceeding 15 years except in
case of scheme specific advance i.e. Housing Loan, where repayment period of more than 15
years is permitted. However, generally a repayment period of 3 to 7 years is considered
taking into account the repayment capacity of the borrower, cash generation etc. In addition,
Infrastructure finance is also made available for a
period of more than 15 years on case-to-case basis on merits, in conformity with regulatory
guidelines. In case of restructured term loan accounts the tenor of the loan will be
considered on merits of each case. However, exposure to Term Loans
(Domestic) in terms of residual maturity of more than 3-years should not exceed
35% of the last quarter domestic credit.
7. Commercial lending proposals for Rs. 25 lacs and above (FB+NFB), for which BOBRAM Rating
Models are available, must be rated as per extant guidelines. Minimum investment grade /
acceptable for obligor (borrower) rating at entry point is BOB -6. In case of green-field
project the acceptable investment grade is BOBGF2 (BOB-6). Accounts rated BOB 7 and
below are considered as non-investment grades. No authority less than MCB will have the
power to sanction any credit facility at the entry level/review cum enhancement for accounts
rated BOB 7 and below. However, accounts rated BOB 7 & below in case of DR/Restructured/
Review/Review with decrease may be considered by the next level of sanctioning
authority/committee. But in the case of proposals falling under the power of CACB, COCCCMD and COCC-ED the proposals may be considered by the respective sanctioning
authorities only.
8. In case of commercial lending below Rs. 25 lacs (which are not covered under BOBRAM
Rating Models) the existing guidelines issued by SME department and Retail Banking
department will continue.
9. As per RBI guidelines, all credit exposures need to be rated. However in case, models for
rating of any kind of exposure to be taken up are not available, the exposure may be
considered as unrated. While taking up such unrated exposure banks extant guidelines
including financial, non-financial parameters etc. are to be followed.
10. With effect from 1st April 2014, the credit validation function of all borrowal accounts with
credit limit Rs.5 crores and above has been centralized at Risk Management Department,
Baroda Corporate Centre, Mumbai irrespective of the location of the sanctioning authority.
(Ref. Circular No. BCC: BR: 106/26 dated 25th March, 2014). However, for accounts with credit
limit up to Rs.5 crores existing guidelines will continue.
Exposure to unsecured guarantees and unsecured advances: Unsecured Exposure is defined as
an outstanding exposure where the realisable value of the security, as assessed by the Bank

139 | P a g e

/approved valuers / Reserve Banks inspecting officers, is not more than 10%, ab-initio, of the
outstanding exposure. Outstanding Exposure shall include all funded (excluding investments) and nonfunded outstanding exposures (including guarantees, Derivatives (LeR), underwriting & similar
commitments).
Security will mean tangible security properly charged to the Bank and will not include intangible
securities like guarantees & comfort letters, and rights, licences, authorisations etc. charged to the Bank
as collateral in case of infrastructure projects. However, annuities under "Built Operate and Transfer"
model in respect of road/highway projects and toll collection rights where there are provisions to
compensate the project sponsor, if a certain level of traffic is not achieved, shall be considered as
tangible security, if the Bank's right to receive annuities and toll collection is legally enforceable and
irrevocable.
RBI has further advised that for determining the amount of unsecured advances for reflecting in
Schedule 9 of the published balance sheet, the rights, licences, authorisations, etc., charged to the
banks as collateral in respect of projects (including infrastructure projects ) financed should not be
reckoned as tangible security. The total amount of advances for which intangible securities such as
charge over the rights, licences, authority, etc. has been taken as also the estimated value of such
intangible collateral should also be disclosed.
The domestic outstanding unsecured guarantee plus the total of domestic outstanding unsecured
advances in terms of definition of unsecured exposure of RBI as stated above should not exceed 30
percent of total domestic outstanding advances. The cap of 30% may be exceeded by additional 10%
provided the additional exposure is on account of financing to infrastructure projects for which
intangible securities such as charge over the rights, licences, authority, etc. only is available.
Short term loans (STL): The STLs may be on secured or unsecured basis depending upon merits of
proposal. Total unsecured Short Term Loans shall not exceed 10% of the total domestic credit as of
previous quarter. However, COCC-CMD/COCC-EDs is empowered to exceed the cap, subject to reporting
to Board.
Unsecured exposures will be considered only on clients having investment grade or
higher rating.
Activity Clearance & Agreement in Principle:
Looking to the increasing trend of stressed assets in Gems and Jewellary sector, Board of our Bank has
directed to adopt cautious approach in taking fresh exposure/additional exposure/ ad-hoc limit in Gems
and Jewellary sector and introduce the system of obtaining Activity clearance prior to regular sanction
irrespective of the quantum of exposure.
The activity clearance will be required from respective Functional Head (SME,Mid Corporate, Large
Corporate) at Baroda Corporate centre with immediate effect.
Therefore prior activity clearance will be a pre requisite before fresh sanction/ review with increase /adhoc of credit facility to Gems and Jewellary sector irrespective of amount of loan.
Following is the summarized table for activity clearance:
S.No

Industry/Activity

Authority

Remarks

1.

Leasing and Hire purchase Non-

Baroda Corporate

For fresh /RWI/ Ad-

Banking Finance companies (other

Centre

hoc-Irrespective of

140 | P a g e

than Central /state Govt NBFC)

amount ( Sanctioning
authority rests with
MD-CEO/COCC-ED only
within their delegated
power

2.

Capital Market ( other than advances

Baroda Corporate

For Fresh/RWI/Ad-hoc

against shares to individuals) stock

Centre

irrespective of amount

Brokers market makers

3.

Financing of film Making

Baroda Corporate
Centre

4.

Bridge Loan

Baroda Corporate
Centre

5.

6.

7.

8.

9.

10.

11.

12.

Financing of Education Institution

Baroda Corporate

With Limit of Rs.5.00

Centre

Crore and above

Baroda Corporate

For Fresh/RWI/Ad-hoc

Centre

irrespective of amount

Baroda Corporate

For Fresh/RWI/Ad-hoc

Centre

irrespective of amount

Baroda Corporate

For Fresh/RWI/Ad-hoc

Centre

irrespective of amount

Baroda Corporate

For Fresh/RWI/Ad-hoc

Centre

irrespective of amount

Securitisation through deed of

Baroda Corporate

For Fresh/RWI/Ad-hoc

assignment

Centre

irrespective of amount

Gems and Jewellary and Diamond

Baroda Corporate

For Fresh/RWI/Ad-hoc

Industry

Centre

irrespective of amount

A.Commercial Real Estate for Malls

Baroda Corporate

For Fresh/RWI/Ad-hoc

Centre

irrespective of amount

Baroda Corporate

For Fresh/RWI/Ad-hoc

Aviation

Infrastructure-Power

Infrastructure-Road

Infrastructure-Telecom

B. Real estate for Commercial

141 | P a g e

13.

activities

Centre

irrespective of amount

Advances to Cooperative Bank

Baroda Corporate

An exceptionally

Centre

meritorious
cases.Fresh//new
credit facility to
cooperative banks
and/or to their
customer on the
strength of counter
guarantee of a
cooperaaative bank
irrespective of amount

Activity Clearance from Zonal Heads

S.No

Industry/Activity

Authority

Remarks

1.

Plantation (excluding tea coffee and

Zonal Heads

For proposals falling up

Rubber plantations common

to the power of ROCC-

horticulture crops jatropha spices

RM

medicinal plants essential oils/Aromatic

plants)
2.

Manufacturing and trading of Liquor

Zonal Heads

For proposals falling up

to the power of ROCCRM

3.

Vegetable Oil Vanaspati

Zonal Heads

For proposals falling up

to the power of ROCCRM

4.

Cinema Halls,

Zonal Heads

For proposals falling up

Theatres/Auditoriums/Amusement

to the power of ROCC-

parks, Marriage Halls

RM

(Kalyanamandapams)
5.

Educational Institutions (Existing

Zonal Heads

Fresh)
6.

Advances to Hotels & Resorts

For proposal upto

rs.5.00 Crore

Zonal Heads

For proposals falling up

142 | P a g e

to the power of ROCCRM

7.

It & ITES

Zonal Heads

For proposals falling up

to the power of ROCCRM

8.

Real estate (Other than Malls) for

Zonal Heads

For proposals falling up

commercial activities but excluding

to the power of ROCC-

retail loans, priority sector advances

RM

Activity Clearance based on DLP

S.No

Industry/Activity

Authority

Remarks

1.

All other cases falling

BCC

For Proposals falling

under the power of

beyond the power of

ZOCC and above for

ROCC-RM please see

the above mentioned

the guidelines below**

activities are to be put

up to Baroda Corporate
Centre
** a) For proposals falling under the power of zonal head and the funvtional head at BCC activity
cleatance to be given by the functional head at BCC
a) For proposals falling under the power if COCC-ED activity clearance to be given by the Executive
Director
b) For any other proposal not covered above for the said activities the activity clearance will be
given by the Managing Director & CEO
c) Activities not encouraged by the Bank
S.No

Activities

1.

Financing for exports to countries for which Export Credit Guarantee Corporation
Limited (ECGC) does not extend Guarantee cover

2.

Further exposure to clients engaged in Jelly-Filled Cables manufacturing/trading

and any other category as may be specifically decided by the Bank on account of

143 | P a g e

Bank`s unsatisfactory experience

3.

Bank will not encourage financing for setting up new sugar factories in cooperative sector and/or sugar factories of capacity less than 5000 TCD (Tonnes of
Crussing per day) of sugar cane.Bank may however meet the working capital
request from the sugar factory if requested under pledge & subject to guidelines
of RBI under Selective Credit control.
Restrictions on loans & advances to industries producing/Consuming Ozone depleting substances
(ODS)

S.No

Sector

Type of substance

1.

Foam Products

Chlorofluoro Carbon-11 (CFC-11

2.

Refrigerators and Air

CFC-12

conditioners
3.

Aerosol Products

Mixtures of CFC-11 & CFC-12

4.

Solvents in cleaning

CFC-113 Carbon Tetrachloride Methyl

applications

Chloroform

Fire Extinguishers

Halons-1211, 1301,2402

5.

In respect of following activities, the activity clearance may be accorded by Zonal Heads for
proposals falling up to the power of Regional Heads irrespective of substantive rank of Zonal Heads.
1) Plantation (excluding tea, coffee and rubber plantations, common horticulture crops, Jatropha,
spices, medicinal plants, essential oils/ Aromatic plants),
2) Manufacturing & Trading of Liquor,
3) Vegetable Oil, Vanaspati.
4)
Cinema Halls, Theatres/ Auditoriums/ Amusement Parks, Marriage Halls (Kalyanamandapams).
5) Advances to Hotels/ Resorts.
6) Real Estate for Commercial Activities but excluding Retail Loans, Priority Sector Advances
7) Fresh/incremental exposure to Diamond industry.
8) Advances to Co-operative Banks
Fresh sanction of any credit facility, whether FB or NFB including Guarantees and Temporary
Overdrafts, are not to be sanctioned to any Co-operative Bank.
Also, guarantee or any other credit facility is not to be sanctioned to any customer of any cooperative
Bank merely on the strength of counter-guarantee of a co-operative Bank.
In exceptionally meritorious cases, the proposal for sanction of fresh/new credit facility to cooperative
banks and/or to their customers merely on the strength of counter-guarantee of a Co-operative bank
may be sent to the Corporate Office, Large Corporate Banking Dept.,BCC, Mumbai for consideration.
All other cases falling under the power of Zonal Head and above for the above mentioned activities are
to be put up to Baroda Corporate Centre for consideration as under.
1. For proposals falling under the power of Zonal Head and the functional Head at BCC activity
clearance to be given by the Functional head at BCC.
2. For proposals falling under the power of Executive Director activity clearance to be given by the

144 | P a g e

Executive Director.
3. For any other proposal not covered above for the said activities, the activity clearance will be given
by Chairman and Managing Director.
4. Bank will prefer to take fresh exposure /review with increase in the following sectors: Pharmaceuticals
Engineering
Defence Equipment Manufacturing
Automobile
Renewable Energy
IT and IT enabled services
Financial Services (NBFCs MFIs)
5. Fresh/review with increases proposals in these segment can be considered as per extant guidelines
of the Bank subject to Activity Clearance ( Circular letter no BCC: BR:70:171 dated 16.04.2015Wherever applicable )
6. Board has also advised to focus on Channel Financing Trade Financing Cash Management Service
financing if investee Companies of Large Private Equity Funds , extending Advisory Services as new
avenues of business opportunities.
7. Bank will take cautious and selective approach in taking fresh exposure in the following sectors: Power Generation
Road Projects
EPC
Iron and Steel
Ship Breaking
Gems and Jewellery
Coal Mining
Edible Oil & Vanaspaaati Manufaacturin
Textiles
Large Trade Accounts (Wholesale Trading)
8. This circular has further advice that fresh/review with increase proposals involving a limit of Rs 5.00

145 | P a g e

crores and above, coming under the purview of these sectors mentioned here in above under point ni
(ii) should be referred to the respective credit verticals at BCC through respective Regional Offices for
approval before putting up to the Sanctioning Authority CFS Branches and select Large Branches will
directly refer the proposals to BCC as mentioned in our letter no BCC/LCB/105/2220 dated 26.07.2013.
9. A Committee of General Managers (CoGM) at BCC will examine the proposal from viability and risk
angle. (CoGM) will also simultaneously look into the aspect of Activity Clearance (wherever applicable)
as mentioned in our circular no: BCC:BR:70:171 dated 16.04.2015
Fair Practices Code for Lenders:
RBI has advised all Banks and Financial Institutions to adopt the Fair Practices Code duly approved
by their respective Boards. The Fair Practices code applies to the following areas:
A) Applications for loans and their processing.
B) Loan appraisal and terms / conditions
C) Disbursement of loans including changes in terms and conditions
D) Post disbursement supervision
E) Other general provisions.
A. Applications for loans and their processing
Standard schedule of fee / charges relating to the loan application depending on the segment,
to which the accounts belong, will be made available to all the prospective borrowers in a
transparent manner, along with the loan application, irrespective of the loan amount.
Likewise, amount of fee refundable in the event of non-acceptance of the application,
prepayment options and any other matter which affects the interest of the borrower will also
be made known to the borrower at the time of application.
Receipt of completed application forms will be duly acknowledged.
The acknowledgment would also include the approximate date by which the applicant should
call on the Bank for preliminary discussions, if deemed necessary.
All loan applications will be disposed of within a period of 4 weeks from the date of receipt of
duly completed loan applications i.e. with all the requisite information/papers.
Time Limit observed by Bank (maximum time-limit for disposal of application as under)
Type of Advance
Time Frame for disposal of loan applications
Priority Sector
Upto Rs.25000
Upto Rs.25000
Within 2 weeks
Upto Rs.5.00 lacs
Branch Level
4 weeks
Above Rs.5.00 lacs
Above Rs.25000
RO/ZO Level
45 days
BCC Level
90 days
Export Credit
Branch Level
4 weeks
RO/ZO Level
45 days
Export Credit
BCC Level
90 days

146 | P a g e

In case of SME:
Upto Rs.2.00 lacs : 2 weeks
Above Rs.2.00 lacs: 4 weeks
At SME Factories : within 14 days if no TEV
required & -21-days if TEV study is required
Retail Loans
As prescribed at product level but not beyond 4 weeks/45 days/90 days at Branch, RO/ZO and BCC
level respectively.
(B) Other than Priority sector / Retail / SME Lending:
1) at branch level within 10 days from the date of submission of full information,
2) at Regional / Zonal office level within -7- days from the date of receipt of completed
proposal/information from branch.
3) at Zonal Manager within 7 days from the date of receipt of completed proposal/information
from branch.
4) at GM at BCC within -15- days from the date of receipt of full information from Zone/Brs.
5) ED/CMD - within -7 days from the date of receipt of full information.
CFS/IFS branches will have to forward their proposal directly to BCC with a copy to
Zonal Office and Zonal office will have to offer their views/comments within 15 days
to BCC.
*The time frame is for the sanction up to the level of COCC-CMD. In case of proposals falling within the
powers of the Management Committee of Board, the proposals are to be submitted at the next meeting
scheduled to be held after the clearance by the Chairman and Managing Director.
The above time frame for disposal of applications is from the date of receipt of loan
application, which is complete in all respects.
B. Loan appraisal and terms/conditions
In accordance with Banks prescribed risk based assessment procedures, each loan application
will be assessed and suitable margin/securities will be stipulated based on such risk assessment
and Banks extant guidelines, however without compromising on due diligence.
The sanction of credit limit along with the terms and conditions thereof is to be conveyed to the
loan applicant in writing and applicants acceptance of such terms and conditions will be
obtained in writing. Such terms and conditions as have been mutually agreed upon between the
bank and borrower prior to the sanction will only be stipulated.
Copy of loan documents, along with a copy each of all relevant enclosures quoted in the loan
agreement are to be furnished to all the borrowers at the time of sanction / disbursement of
loans.
Standard sanction letter would include instances of approval, disallowance, etc.
The bank is under no legal obligation to consider increase/additional limits/facilities without
proper review/assessment.
In case of lending under consortium arrangement, the participating banks would decide the
timeframe to complete appraisal of the proposal and communication of the decision. The Bank
will abide by the decision of the consortium.
C. Disbursement of loans including changes in terms and conditions

147 | P a g e

 Disbursement of loans sanctioned is to be made immediately on total compliance of terms

and conditions including execution of loan documents governing such sanction.
Any change in terms and conditions, including interest rate and service charges, will be informed
individually to the borrowers in case of account specific changes and in case of others by Public
Notice/display on Notice Board at the branches/on the Banks website/through Print and or other
Media from time to time.
Changes in interest rates and service charges will be effected prospectively.
Consequent upon such changes any supplemental deeds, documents or writings are required to
be executed, the same shall also be advised. Further, availability of facility will be subject to
execution of such deeds, documents or writings.
D. Post disbursement supervision
Post disbursement supervision, particularly in respect of loans upto Rs. 2 lacs, would be
constructive with a view to taking care of any genuine difficulties that the borrower may face.
Before taking a decision to recall/accelerate payment or performance under the agreement or
seeking additional securities the Bank would give reasonable notice to the borrower.
All securities pertaining to the loan would be released on receipt of full and final payment of
the loans subject to any legitimate right or lien and set off for any other claim that the Bank
may have against the borrowers. If such right is to be exercised, borrowers would be given
due and proper notice with requisite details.
E. Other general provisions
Complaints: In case of any complaint / grievance, received from the applicant/borrowers in
writing, the concerned branch/ the Branch Officials shall immediately take up the matter for
redressal.
Redressal: On receipt of the complaint, the branch would report the matter with
full details within 7 days from date of receipt, to Regional/Zonal Head, who would
take all necessary steps to redress and resolve the grievance/dispute, within a
maximum period of 30 days.
Rejection of proposals: Credit Proposals falling beyond the discretionary lending powers of
Branch Managers shall not be rejected at the level of Branches. The authority empowered to
sanction a credit proposal may reject such proposal. Branches shall at monthly intervals
submit a consolidated statement to the Regional Office, in respect of proposals falling under
their powers and rejected by them, giving the details of the applicant viz., name, activity,
facility sought etc., along with reasons for
rejection of the proposal for their perusal and comments. However, proposals of CACB/MCB
powers may be rejected by COCC-CMD.
The rejection of credit proposal pertaining to SC / ST beneficiaries and Export Credit shall be by the
next higher authority. The existing guidelines about reporting of rejection of Export Credit proposals
to CMD through concerned department at Corporate Centre to continue.
In case of rejection of loan application, irrespective of category of loans or threshold limits, the same
would be conveyed in writing along with the main reason(s), which led to rejection of the loan
application. The time frame for conveying the reason/s of rejection will be as per Schedule given
below:

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PRIORITY SECTOR
Up to Rs.25000
Above Rs.25000 and
up to Rs.5.00 lac
Above Rs.5.00 lac

Within 2 weeks
Within 4 weeks

NON PRIORITY SECTOR

Export Credit
Within
working days
Others
Within
working days*

45
46

Within 8-9
weeks

Discretionary Lending Powers:

Various functionaries in the Bank are exercising Discretionary Lending Powers in terms of the
approval granted by the Board of Directors from time to time. In line with the Ministry
guidelines the bank has constituted the following credit committee structure for different levels
in the bank:
1. At corporate level there will be following credit committees :
a. Management Committee of the Board (MCB).
b. Credit Approval Committee of the Board (CACB) Headed by the CMD
c. Corporate Office Level Credit Committee headed by the CMD (COCC-CMD)
d. Corporate Office Level Credit Committee headed by respective EDs, in-charge of respective
Corporate Credit Function (COCCED).
e. Corporate Office Level Credit Committee for International Division headed by the CGM/GM (Intl Div)
(COCCGM Intl Div)).
2. Zonal Office Level Credit Committee headed by Zonal Head i.e. ZOCC. 3.
Regional Office Level - Two credit committees:
a. Regional Office Level Credit Committee headed by Regional Manager (RMCC)
b. Regional Office Level Credit Committee headed by Dy. Regional Manager (DRMCC)
The Quorum of CACB, COCC-CMD, COCC-ED, COCC-GM (Intll) and ZOCC/ RMCC/DRMCC will be 3
members.
The powers of the credit committees shall be at the same level as hitherto exercised by the
Executive who will be heading the respective Credit Committee.
Before putting up the credit /compromise /write-off proposal to the Regional /Zonal /Corporate
level committees, Bank shall continue to have scrutiny /approval from the CREC (Credit Risk
Evaluation Committee) /SACs (Settlement Advisory Committees) at respective levels
The Officers/ Executives at Branches shall continue to exercise Grade/Scale wise powers
hitherto delegated by the Board.

Sanctions at SME /Retail Loan Factories: The SME/Retail Loan Factories for the purpose of
sanctions/credit decisions shall be considered as Branches only, in respect of SME/Retail
proposals. The respective SME/Retail Factory Head shall exercise powers within their delegated
powers at substantive Grade/Scale, as hitherto.
The present guidelines on delegated powers provide for exercising powers of next higher
authority for the purpose of review of existing credit facilities subject to the conditions

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a. No change in terms & conditions;

b. No downgrading in credit rating during the review period;
c. Latest rating is minimum BoB6 as per new credit rating system
The same guidelines would continue up to the level of RMCC i.e. RMCC may exercise powers of ZOCC
for review but ZOCC would not exercise powers of COCC-ED.
For exercising DLP the tangible security (Primary and Collateral) charged to the bank, is to be
taken into account to decide secured and unsecured advances.
For Export Finance, the authorities up to the level of General Manager are empowered to
exercise their discretionary lending powers up to 125% of their normal powers provided total
limits sanctioned exclusively for export business such as packing credit, post shipment credit
etc. amount to at least 25% of the delegated powers as hitherto.
Other than export credit proposal, all authorities upto the level of DGM shall have
discretionary powers as under ,based on credit rating of the borrowers):
1. Latest Credit rating as per CRISIL models (not more than one year old) BOB-1, BOB-2, and BOB-3, the DLP will be 125 % of the normal powers.
2. Latest Credit rating as per CRISIL models (not more than one year old), BOB-4,
BOB-5, & BOB-6, the DLP will be 100 % of the normal powers.
3. Latest Credit rating as per CRISIL models (not more than one year old) BOB-7,
BOB-8, BOB-9 & BOB-10; the DLP will be 75 % of the normal powers.
The lending powers of the General Managers shall be irrespective of the credit rating of
the borrower- customers.
For new borrowers approaching first time, to be rated as BOB6 for the purpose of
sanctioning powers
As regard accounts under old rating models (i.e. exposure less than Rs. 25 lacs) the DLP
will be 100% of normal powers for A+, A & B+ rated accounts and 75% of normal
powers for accounts rated below B+.
The officers/ executives who are second in line and those in-charge of credit department in all
branches are authorized to grant advances against Zero-Risk Assets such as banks own
deposits, NSC, LIC Policies, IVPs, KVIPs, Government Securities etc up to the lending powers
subject to reporting to branch manager under PSR system
Authorities below the level of Chief Managers may exercise delegated lending powers to
consider credit facility against hypothecation of book debts, provided the constituents offer
sufficient tangible collateral security, the value of which being at least 75 % of the
advance, by way of mortgage of immoveable property and/ or other securities. In case no
collateral securities are offered/ available, the proposals are to be referred to Higher
Authorities as hitherto.
Annual Cap for discretionary lending power :

Cap on Discretionary Lending Powers per year of various authorities are as follows: - (For
fresh and increase in existing limits)

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Sr. No.

DGM & AGM

SMGS VI&V
1

Group Limit

Per Party Limit

30timesof
Group Limit

CM & SM
GS IV & III

Mgr & Officer

GS-II
JMGS-I

25 times of
Group Limit
25 times of Per
Party Limit

20 times of
Group Limit
20 times of Per
Party Limit

&

30 times of Per
Party Limit
Following advances are excluded from the annual cap limit:
a. Advances to staff members under the specific schemes for the banks staff only.
b. Advances against our own deposits and securities such as NSCs / KVPs / LIC Policies / Relief
Bond/ IVPs etc.
c. Advances under Govt. Sponsored programme and to weaker sections
d. Review (including review with decrease in limit) of accounts at the existing level.
e. In case of review with increase only existing limit is excluded whereas increased portion will be
counted for cap limit.
f. However, sanction of retail loans to the Proprietor/Partners/Directors of a firm/ company
stands de-linked from per party/group discretionary lending powers.

This provision of annual cap will not be applicable to GMs, the in-charge and second line
officers of Central Processing Cells (CPCs) of Retail Lending / Urban Retail Loan Factory
and SME Loan Factory.
Depending upon business needs the sanctioning authority may be authorized to exceed the annual
ceilings by the next authority not below the level of Asst. General Manager, by considering suitable
increase in the ceiling.
Financial Ratios for Credit Appraisal:
In our loan policy following Ratios are considered as bench mark
1. Current Ratio (Current Assets/ Current Liabilities) 1.33:1 (1.20 for Medium Enterprises and 1.17
for Micro & small enterprises)
2. Debt Equity ratio 3:1 (Total term Liabilities/TNW). TDE= Total outside liabilities/TNW is 4.5:1
3. FA coverage Ratio (Net Fixed Assets / Term Debts (Medium & Long) 1:1 (Net FA/Term
Liabilities) SSI/SME Not below 1.25
4. DSCR (Profit after tax + Dep.+ Int. on TL) / (Int. on TL+TL Instalments) average 1.75 however
in any year it should not be less than 1.25 (For Micro & Small enterprises it should not be less
than 1.00 in any year)
5. The above ratios are indicative and deviations can be considered by the sanctioning authority
on case to case basis, depending on industry, specific problems of unit, etc.
6. An Interest Coverage Ratio (ICR=EBDITA / Interest expense) of 5 may be considered
satisfactory.
Pricing of the loan
Pricing of Loans is quite crucial for banks business. Bank follows a transparent pricing
policy and is also guided by RBI on Government directed/ sponsored lending.

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 The credit rating/scoring in respect of the borrower enjoying credit facilities above Rs.2 lacs
but less than Rs.25 lacs shall continue, even-though the pricing is de-linked, for determining
the credit risk perception
For loans of Rs.25 lacs and above pricing continues to be determined by the rating
of the borrower with appropriate spread.
Base rate concept: Bank has migrated to Base rate based pricing since 01.07.2010. Base Rate
computation is function of four parameters mentioned hereunder.
Cost of Deposits or Funds
Negative Carry on SLR & CRR
Unallocatable Overhead Cost
Profit Margin
The Base Rate will be reviewed by the Asset Liability Management Committee (ALCO) of the Bank with
a periodicity of at least once in a quarter. The spread over base rate will be fixed taking into account
factors like allocable expenses, credit Risk premium and tenor premium where applicable. Tenor
premium will be applicable for all loans with tenor above three years.
Risk Based pricing methodology: It is feasible to have spreads (Credit premium +Term Premium)
over base rate driven by a framework, which incorporates under mentioned elements;

Competitive price in Market place

Expected Loss (Based on Banks Internal PD Estimate for various rating grades)
Spread offered by in Bond market in relations to borrower external rating
Hurdle Rate
Capital at Risk
Return on Capital at Risk.

Based on above parameters, Bank has computed the credit spread to be quoted in reference to the
over composite rating of the facilities to the borrower under different segments.
The risk based minimum rates are not applicable to loans with maturity up to 90 days. These loans
shall be priced based on rates computed/provided by Treasury / Planning / Large Corporate dept,
keeping in mind Banks and system liquidity into account plus the applicable risk spread subject to the
floor of Base Rate or any other stipulated minimum rate.
Penal interest & additional interest:
Bank may apply penal interest of maximum 2% p.a. each, for delay in submission of financial
statement, stock statements, creation of security, quarterly information, overdues, breach of
covenants etc. without any explicit approval /concurrence of appropriate authority. Penal interest
would be exclusive of the existing pricing of the asse t and additional to any other charge for excess
ad-hoc limits.
The bank shall charge overall penal and additional interest upto 2% p.a. over the applicable/regular
interest rate.
Verification of documents:
Advances accounts with aggregate limit of above Rs. 2.00 crore (Funded plus Non-Funded)
would be verified by the Banks Law Officer posted in the respective Zone/ Region and the
documents relating to Advance Accounts with aggregate of Rs. 10 lacs and above but up to and
inclusive of Rs. 2.00 crore shall be verified by the Banks identified Advocate /

152 | P a g e

Lawyer other than the one who has given the Title Opinion / Non-Encumbrance Certificate (NEC)
/ Report in respect of mortgage(s) in the account.
Further, as per Circular No. BCC:WB:POL:F30:99/4511 dated 11th August 2007, it has been approved
by our higher authorities that in respect of following Zones, documents verification in respect of
credit limits between Rs.1 crore and Rs.5 crore can be got done from empanelled advocate/s of the
bank, provided original documents at some stage have been vetted by Zonal Legal Dept./Law officer
of the bank.
1) North Zone 2) Greater Mumbai Zone 3) Southern Zone 4) Eastern Zone 5) Gujarat Operations 6)
Mah. & Goa Zone and 7) Rajasthan Zone.
Notwithstanding what is mentioned above, all documents pertaining to consortium accounts have to
be necessarily got verified from Corporate Legal Dept./Zonal Legal Dept./Law Officer of Bank.
It may be noted that the documents shall be verified by the Banks identified panel
Advocate/ Lawyer other than the one who has given the Title Opinion/NonEncumbrance Certificate (NEC)/ Report in respect of mortgage(s) in the account.
Legal Audit of Title Documents
In response to RBI guidelines, A system of periodical Legal audit of title deeds and other
loan documents in respect of all credit exposure of Rs.5.00 Crore & above is introduced for
all existing as well as new accounts.
In addition to existing practice of verification of documents, Re-verification of title deed as to
their genuineness with relevant authorities along with verification of other loan documents
will be carried out within a period of 05years from the date of such first verification of title
deeds/ documents and for every block of five years thereafter till the loan is settled in full.
The re-verification will be carried out by the Banks empanelled advocate.
Regular Review
Credit facilities sanctioned to borrowers are subjected to annual review (except LABOD, staff loans
and the accounts where facilities sanctioned are for a period less than one year etc.) as per the
prevailing guidelines. However in case of borrowal accounts enjoying credit facilities of Rs.10 Crores
and above, where the credit rating is BOB-7 or below, the account should be reviewed on half-yearly
basis.. The accounts are required to be reviewed on or before the due date.
Branches have been advised vide Circular No. BCC: BR: 100:14 dated 14.01.2008 to review
advances accounts with limit up to Rs. 20 lacs for facilities enjoyed by borrowers in trading
activities, Micro & Small Enterprises, borrowers in rural area, borrowers having only term loan
accounts, financed under government sponsored programme, borrowers enjoying only guarantee
facility, etc, pending receipt of audited financial statements, provided the conduct of the account
is satisfactory.
SMA status should be part of the credit proposal. In every proposal e.g. Review/RWI/Review
with decrease the SMA status must be incorporated as Point No 5.10 of the credit proposal .In
concession/Modification proposals also SMA status should be given.
Short Review / Status Note:

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The bank has also the practice of Short Review / Status Note, which is done when it is not
possible to carry out a comprehensive Regular Review of the account within the stipulated period
pending receipt of certain particulars/ information or where the account is placed under special
monitoring, etc.
We continue to deal with the matter as under:Consecutive Short Reviews shall be restricted to two with a maximum period of six months for each
short review. But in exceptional cases, status review can be done in respect of accounts marked for
strict monitoring or for recovery. Relaxation is also provided to restructured accounts and accounts
under rehabilitation where for a variety of reasons only, Short Reviews may have to be done till such
time the unit/account becomes normal and healthy.
Where there is impairment of borrowers quality indicated through various adverse features like
default, diminution in value of security etc., suitable communication and if need be a Short Review /
Status Note should be placed before competent authority for perusal, direction and necessary action.
Inspection of Securities
Periodicity of the inspection of securities to be carried out is as under: Prime securities charges for working capital as per BOBRAM rating:
Latest Credit Rating for BOB 1, BOB 2, BOB 3 (A+ as per old rating model) Half-yearly basis.
Latest Credit Rating of BOB -4 and BOB 5 (A as per old rating model)-Quarterly
basis.
Latest Credit Rating BOB 6 & Below (B+ & below as per old rating model)-Bi-monthly.
Fixed Assets (Charged against Demand/Term Loan/DPG)-Half-yearly i.e. as of January and
July.
Under consortium arrangement (Exchange of inspection reports / information with other banks
to be ensured)-As per periodicity fixed by the consortium.
Inspection of Collateral Securities
The inspection of collateral securities to be carried out preferably on annual basis for all types of
facilities i.e. Funded as well as Non-Funded.
Bridge Loans
Bridge loans may be sanctioned to companies against the expected equity flows/ issues, for a
maximum period of one year. Such loans (fund-based & non-fund based) would be included in the
overall ceiling of 40 % of the Bank's TNW as on March 31 of the previous year prescribed for capital
market exposure (both Fund based and non-fund based)..
Banks may also extend bridge loans against the expected proceeds of Non-Convertible
Debentures, External Commercial Borrowings, Global Depository Receipts and/or funds in the
nature of Foreign Direct Investments, provided the banks are satisfied that the borrowing
company has already made firm arrangements for raising the aforesaid resources/funds.
Keeping in view the RBI guidelines, Bank has devised the following guidelines:
Such loans to be considered only at our Corporate Centre, for Corporates who are banking
with us with satisfactory track records.

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 Such Bridge Lending should be used for the purpose for which the issue
(debenture/ECB/Equity etc.,) is proposed and not for any other purpose.
The amount of individual Bridge Loan shall not exceed 75% of the amount called-up on the
shares minus any other similar bridge lending, interim finance availed or to be availed.
Repayment period upto a maximum of one year.
Credit Risk Rating/Scoring
Credit Risk Rating is a method of systematically classifying credit proposals according to their Quality
and inherent risk characteristics. Rating is an important single -point indicator of credit quality to the
Bank as also to outsiders (viz. regulators, analysts, auditors, etc.). All credit proposals would need to
be rated in an internal credit rating model except for under mentioned i.e. Rating Exception
a. MSME proposals upto `2 crore, which need to be rated in MSME scoring model;
b. Product specific proposals to be rated in respective product scoring models;
c. Retail products to be rated in LAPS using Retail credit scoring model.
d. Proposals for Bill Discounted under Letter of Credit and assistance backed by SBLC/BG on
standalone basis, where the rating of the respective banks may be used;
e. Portfolio acquired under Interbank Participation Certificate (IBPC) on risk sharing basis;
f. Exposure to foreign banks, where the external rating of the respective banks may be used; and
g. Proposals backed by 100% cash collateral.
h. Borrowers availing Loan against Banks own Deposit (LABOD) Facility
i. Exposures to Urban Municipal Bodies (on account of non-availability of financial results) who can
generate revenue through taxation
j. Facility having 100% Central or State Government guarantee
k. Home country sovereign
l. Foreign country sovereign (External rating is used)
m. Accounts turned NPA, after the date of NPA
n. Advances to Central/State Govt. Departments. Undertaking/ Establishments, which are not running
on commercial basis (e.g. Industrial/Agricultural/Rural Development Boards of various State Govts.).
o. Borrowers who are availing only those loans/limits where full powers have been granted as per
loaning power chart e.g. purchase of cheques drawn by Central & State Govts and drafts of public
sector banks, ILCs/FLCs where full cover is held by way of deposits till maturity, etc.
p. Advances against clearing instruments/ bills/ clean overdrafts permitted within the vested loaning
powers at various levels where the client is not availing any other loan/limit for which risk rating is
applicable as per guidelines.
The Bank continues to have different rating models for Green field / Brown field Projects, Large
Corporate, SME, Traders, MSE segment, NBFCs, Banks,
Credit Score Card Model for Retail Loan hosted on LAPS
1. HL: Housing Loan
2. CL: Clean Loan
3. SL: Secured Loan
4. EL : Education Loan
5. BTL: Traders Loan (For credit facilities under Baroda Traders Loan upto Rs.200 lacs)
Credit Rating Models
Model for Corporate entities, BOBRAM
Model for MSME rating having exposure of Rs.2 lacs and above and upto Rs.2 crores.

155 | P a g e

 All Traders Loans proposals of above Rs. 200/- Lacs continue to be rated under
Traders Model of BOBRAM under CRISIL. In case of Traders Loan of More than Rs.200 Lac,
no loan to be sanctioned to the proposal rated below BOB-6 (Obligor Rating for BOBRAM
Model) in web based BOBRAM model.
Use of Ratings: The rating assigned at the time of credit approval process shall form the basis for
taking following decisions:
Acceptance criteria : cut-off grade for investment - based on obligor rating (BOB-6
and above and GF2 for Green Field Projects)
Risk based Pricing - based on composite rating
Discretionary lending power for sanction / review - based on obligor rating
Sanction of ad-hoc / excess / DAUE - based on obligor rating
Inspection of securities - based on obligor rating
Rating based exposure ceiling - based on obligor rating
Risk Assessment Model (BOBRAM)
Management of Credit Risk determines the asset quality of the Bank. An effective way to mitigate
credit risk is to have robust credit rating system in place.
Bank has introduced Basel II compliant credit risk rating models of M/s CRISIL. The rating models
are based on two-dimensional rating methodologies specified under Basel II requirements
wherein 4 types of risks viz. industry risk, business risk, financial risk and management quality
risk are assessed pertaining to characteristics on an obligor(borrower) while facilities
proposed/sanctioned to a borrower are assessed separately under second dimension of rating i.e.
Facility Rating
The Credit rating can (i) Identify potential risk in a particular asset.(ii) Allow a bank to maintain
healthy Asset Quality (iii) Impart flexibility in pricing assets to meet the required risk return
parameters as per the banks strategy and credit policy.
Risk Rating Models for Credit Risk rating of all commercial advances i.e. existing as well as new
with exposure of Rs.25 lacs and above (FB+NFB) for implementation have been introduced by
our Bank.
These Models involves three types of ratings Obligor Rating(PD)
Facility Risk Rating(LGD)
Composite Rating(EL)
Obligor (borrower) Rating for credit worthiness indicating the Probability of Default (PD). The
obligor rating is indicative of creditworthiness of an obligor or the Probability of Default (PD) and
it is based on the assessment of past; and projected cash flows of the company. Obligor rating
grades range from BOB 1 to BOB 10.
Facility Rating:-It involves assessment of the security coverage for a given facility and indicates
the Loss Given Default (LGD) for a particular facility. Facility Rating is dependent upon the type of
facility and securities charged to the bank against the facility.
Facility rating grade ranges from FR 1 to FR 8

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Composite Rating (CR 1 to CR 10) It is matrix of PD and LGD and indicates the Expected Loss in
case the facility is defaulted. The composite rating is worked out automatically by software based
on the matrix of Obligor Grade and Facility Rating Grade
Composite rating grade ranges from CR 1 to CR 10. Bank has accepted BOB 6 as the cut off point
for the acceptance of an obligor based on obligor rating carried out as the applicable model

Periodicity of Credit Rating

Bank has decided to carry out the credit rating on BOBRAM models based on annual audited financials
in all eligible commercial advance accounts. Only in case of any adverse situation
faced by the relevant industry/ company/ management which may come to the notice of the Bank,
either by the borrower or from any other source, rating may be reviewed immediately in all such
accounts with exposure (fund based +Non fund based) of Rs. 5 Crore and above. In respect of
accounts having exposure (fund based +Non fund based) below Rs. 5 Crore, existing guidelines will
continue.
Issuance of NO Objection Certificate:
In respect of borrowers seeking fresh/additional finance from other bank/FI:
-

In case of accounts falling upto the powers of General Manager, the NOC may be given
by the authorities under whose powers the concerned account falls.
For all other cases, Chairman & Managing Director/Executive Director
In respect of advance accounts sanctioned by authorities at the level of Executive
Directors and above (i.e. Executive Director, Chairman and Managing Director and
Management Committee of Board) General Managers have been authorised / delegated,
authority to modify, allow concessions in certain specific terms of sanction.

Methods of Lending for MSME:

Methods of assessment are made by way of Regulatory and Non-Regulatory segments.
(Ref BCC/BR/107/12 dated 05.01.2015)
MSME (REGULATORY)
MSME (Non-REGULATORY)
Turnover method or the finance as per 1st
Asset Holding Method
method of lending (i.e., operative cycle
i.e., NWC is to be higher of actual amount or
basis), whichever is higher provided the
25% of Total Current Assets (2nd method )
Current ratio for MSE/ME segment at
and balance amount in Working Capital Gap may
1.17 / 1.20.
be financed by the bank,
Methods of Lending for Non- MSME
Methods adopted in Bank of Baroda for assessing F.B. Working Capital finance
PBF-I
PBF-II
PBF-III
PBF-IV
For Working Capital
For WC limits over
For Working Capital
For Working
Capital
limits over
Rs 2.00 Rs 2.00 Crs and up
limits over
Rs 5.00 limits over Rs 10.00
lac and up to Rs.2 cr
to Rs 5.00 crore to
crore, and up to Rs
crore, to Non
SME
to
non-SME non-SME
10.00 crore to NonBorrower

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borrowers

borrowers

SME Borrower

Turnover method

Turnover basis

Borrowers Margin
5% *

Borrowers Margin
6.25% *

Bank Finance
20% *

Bank Finance
18.75% *

Asset
Holding
Method
i.e., NWC is to be
higher
of
actual
amount or
25% of
Total
Current
Assets (2nd method
) and balance amount

Cash Flow basis

where 100% of
cash
deficit
from
operations is financed
provided,
interalia, (a)
current ratio is
not
less than 1.33; and (b)
DER is acceptable and

*
of
projected
annual turnover
or
the finance as
per
1st
method
of
lending
(i.e.,
operative
cycle
basis), whichever is
higher.

* of
projected
annual turnover or
the finance as per
method
2nd
method of lending
(i.e.,
operative
cycle
basis),
whichever
is
higher.

in Working
Capital
Gap may be financed
by
the
bank
provided, inter-alia,
(a) current ratio
is
not less than 1.33;
and (b) DER
is
acceptable.

the cash surplus

in
non-business
operations
and
in
Balance Sheet items is
not genuinely available
to fund cash deficit in
business operations.

The following categories of borrowers / activities are covered by separate individual

guidelines for assessing Working Capital finance:

NBFCs.
Construction companies.
Tea Companies.
Ship-breaking Companies.
Diamond Industry.
Sugar, Gur and Khandsari Industries.
Software companies.
Any other activity, which may be advised from time to time.

The methodology, followed under the Asset basis, emphasizes, inter-alia, that the current ratio
of the borrowing unit should not be less than 1.33:1 or the actual current ratio whichever is
higher. This benchmarking of current ratio at 1.33:1 ensures the borrowers stake at a minimum
of 25%. However, the actual current ratio, wherever higher than 1.33:1, may be allowed to slipback up to 1.33:1 in the following circumstances:
(a) Without the banks concurrence / consent:
i. Temporary transport bottlenecks deterring sales;
ii Cancellation of purchase orders (leading to piling up of stock but necessitating retirement
of liabilities on raw material purchased on credit);
iii Prudent bulk or economic size procurement of stock-in-trade on credit;
iv Abnormal rise in purchase price of stock-in-trade.
(b) With the banks concurrence / consent:
i. Diversification, expansion, modernization, take-over, acquisitions, merger etc.
ii Rehabilitation of sick units.

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PENAL Interest and ADDITIONAL Interest:

Bank may apply penal interest of maximum 2% p.a. each, for delay in submission of financial
statement, stock statements, creation of security,quarterly information, overdues, breach of
covenants etc. without any explicit approval /concurrence of appropriate authority. Penal interest
would be exclusive of the existing pricing of the asset and additional to any other charge for excess
ad-hoc limits..
The bank shall charge overall penal and additional interest upto 2% p.a. over the
applicable/regular interest rate.
Export facilities are exempted from the purview of penal and additional interest.
Priority sector lending up to Rs. 25000/-is also exempted from the guidelines of penal and
additional interest. DRI advances.
Waiver/ relaxation of penal interest for non-compliance of terms and conditions other than
default of Interest / instalment payments, Zonal head and other executive not below the rank
of GMs are authorised to waive / relax levy of penal / additional interest on case to case basis
strictly on merits.
Advances to accounts where HUF is a partner
1. No credit facility to be granted to a firm where the HUF is a partner.
2. In case of existing accounts where one or more HUF is/are partners, branches shall obtain
letters of consent from the major members of the HUF declaring themselves as partners of
the firm and also to ensure than total number of partners in that firm not to exceed 20-.
3. Alternatively partnership firm can also decide to carry out reconstitution of the firm by
inducting one or more adult members of HUF as partners.
4. Any of the above changes taking place must be brought to the notice of the guarantor.
5. While doing so, fresh set of documents shall be obtained from all the partners and guarantors.
6. LAD confirming the previous date balance by the existing partners and guarantors
7. No HUF property shall be obtained as security for any facilities given to any other individual
person, partnership firm and/or any corporate accounts unless and otherwise the Karta
and/all major co-parceners of HUF shall claim that offering of such joint family property is
only for the benefits of the HUF and that the guardians of minor co-parceners shall also
indicate the same.
As per guidelines (Circular No. BCC: BR: 98 / 203 dated 01.07.2006) providing any credit
facilities where HUF is shown as a partner in a partnership firm, should not be considered
at all. Further, as regards HUF, in one of the judgments the Supreme Court has expressed
that HUF cannot enter into a contract due to floating nature of the organization as it's
composition changes by births, deaths, marriages & divorces.. Bank should desist from
accepting HUF as borrower (proprietor/ partner) or guarantor.
Compliance of terms and conditions and disbursement of credit facilities:
If any advance sanctioned is not availed of within four months (six months in case of Priority Sector
advance & Project Finance / Infrastructure Finance) from the date of sanction, the facility should not
be allowed without referring the matter to the sanctioning authority.
Stipulated terms and conditions of the sanction are to be conveyed to the borrower in writing and on
acceptance; the disbursement should take place after due execution of necessary documents,
compliance of various terms and conditions of sanction.

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Where borrower approaches multiple banks/ financial institutions for funding their project, it should be
ensured that the borrower is in a position to tie-up with definite commitment from all the participants
and achieve FINANCIAL CLOSURE within the committed time frame
Personal Guarantee of Promoters/Directors:
1. In case of all new advances to Pvt Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors (other than nominee and professional directors) are to be obtained.
2. In case of all new advances to Public Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors who are exercising control or having significant influence and hold equity
share of the company in sole or joint name or in associate concern, group etc are to be obtained. Now
it has been decided to left out this matter to the sanctioning authority.
3. However in case of consortium/multiple advance where all other member banks are not
insisting on personal guarantee of promoters and Directors, our bank may also not insist on
such guarantee considering large business interests.
Requirements before disbursements
i) In case of advances accounts falling within the discretionary Lending Powers of the
Branch Manager:
The Branch Manager has to make necessary arrangements to ensure compliance of the following
aspects before making any disbursement under fresh / increase credit facilities and the proper record
inthis respect has to be kept by the Branches for perusal of higher authorities / inspecting officers
/auditors:
a. Full compliance of the stipulated terms and conditions (unless specifically exempted by the
competent authority)
b. Getting the documents duly vetted (wherever required) as per Banks extant guidelines.
c. Ascertaining that the Borrower has obtained necessary licence, permission, clearance, approvals
required for running the business.
d. Pre-disbursement inspection / site/unit(s) visit.
e. Creation of charge over Security
1. Filling of Charges with ROC in case of Limited Company
2. Registration with CERSAI in respect of all the mortgages.
ii) In case of advances accounts falling beyond Branch Managers powers:
The Branch Manager has to personally verify and confirm in writing to the concerned competent
authority that the aspects mentioned in (i) a to d are fully complied with and obtain the prior approval
from the designated authorities in writing before making any disbursement under fresh / increased
credit facilities. The authorities from whom the clearance for disbursement is to be obtained by the
branches are as under:
Clearance to be given by:
For Branch headed by Officers up to MMG/SS III- Deputy Regional Manager or Regional Head
(where DRM is not posted)
For Branch headed by Chief Manager (i) Deputy Regional Manager in the rank of AGM or Regional
Head in the Rank of AGM and above, otherwise (ii) Zonal Head
For Branch headed by Assistant General Manager - Regional Head in the rank of Deputy General
Manager or Zonal Head (where Regional Head is in the rank of AGM)
For Branch headed by Deputy General Manager Zonal Head
ForBranch headed by Corporate Financial Service branches GM/DGM at Zonal Office can authorize

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the disbursement.
Note:
1. Disbursement permission of all sanctions made by SMELF/RLFs head will be given by respective
factory heads unless the sanction is made by some next higher Authorities
2. For Loan sanctioned by Sr. Manager (SME-Processing) or CM (SME) and parked in AGM Headed
branch, the disbursement authority should vest with AGM Branch Head instead of sending it to SME
Loan factory, subject to the compliance of existing process of disbursement.
GUIDELINES FOR TAKE OVER OF THE LOAN ACCOUNT FROM OTHER BANK:
Bank provides the operating units to take over accounts from other FI s/Banks keeping in view
the foremost objective of canvassing only good quality accounts. The following financial and Non
financial aspects are however to be followed:
Non-Financial:
a) Accounts of profit-making (i.e. net profit before tax) concerns only as per last audited balance
sheet.
b) Accounts with existing lenders should be under the category of Standard Assets
c) Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as per latest
statement of accounts.
d) External Rating in respect of credit proposal with exposure above Rs.5 Crore by an approved credit
rating agencies should not be below BBB & equivalent. The concessionary facilities to
Taken over Accounts should be extended only in extremely deserving cases with specific reasons
recorded in writing. (MoF Directives).
e) No credit facility should be taken over by a Bank from other Bank where any of its
Executive Director or Chairman & Managing Director has worked earlier. In case any such account is
proposed to be taken over, the proposal will required to be put up to the Board of the Bank with
specific reasons justifying the need for taking over the account. (MoF-Directives)
f) The WC facilities against the pledge of sugar stock to sugar factories under collateral management
services are outside the purview of Takeover norms with regard to external credit rating of below
BBB.
g) Take-over accounts are to be rated as under:(i) As per the BOBRAM credit rating model, minimum BOB6 obligor rating grade for all exposures
of Rs. 25 Lac and above, other than MSME exposures. For MSME exposures, this rating model is
applicable for accounts having exposure of above Rs. 2 Crore.
(ii) As per MSME Credit rating Model for MSME accounts of Rs. 25 Lac and above up to Rs. 2 Crore
subject to minimum MSMEBOB6 rating. (Refer circular No. BCC:BR:101:194 dated
13.07.2009)
Accounts, which are not covered under above categories may be considered under permitted
deviations.
h) Take-over accounts (retails) are to be rated as per the applicable scoring model subject to
minimum grade as per the scoring model.
i) There should not have been any reschedulement / restructuring in the account during last two
years.
j) All other existing norms, guidelines as applicable to borrowal accounts are to be scrupulously
followed.
Financial(other than Retail & SME Regulatory & Expended)
a. Current Ratio

: Min. 1.33.

b. TOL/ TNW

: Max. 4.5:1

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c. Debt Equity Ratio (TTL/TNW) : Max: 3:1

d. Debt Service Coverage Ratio : Min 1.75 in case of Term Loan
(Average DSCR to be calculated for entire repayment period).
Authority for Take-over
1. Proposal for takeover under the powers of Chief Manager and above: Proposals under the powers of Chief Manager and above no prior clearance from next higher
authority is required for takeover.
Delegated authorities under banks discretionary lending powers may consider takeover cases
within their powers.
2. Proposal for takeover under the powers of below Chief Manager: Prior approval of next higher authority i.e. Regional Manager is required for takeover.
After obtaining prior clearance as above, delegated authorities may consider the proposals as
per their discretionary lending powers.
In case of take-over of retail loan, approval from Regional Manager/Zonal Manager
is not required.
Take-over of Retail Loan Accounts
Take over accounts are to be rated as per the applicable scoring model subject to securing
minimum investment grade for the specific produce.
I.
Accounts with existing lenders should be under the category of Standard Assets.
There should not have been any reschedulement/restructuring in the account
during the last two years.
II.
In case of traders loan, accounts should be profit-making and with minimum of Current
Ratio 1.17 and maximum Debt Equity Ratio of 6.1
III.
All existing norms, guidelines as applicable to borrowal accounts are to be scrupulously
followed
Further, it has been decided to introduce the following additional measures in non-financial aspects
of takeover norm:
I.
Concession in RoI / charges should be extended to Taken over Accounts , only in
extremely deserving cases with specific reasons recorded in writing by the Competent
Sanctioning Authority.
II.
No credit facility should be taken over by a Bank from other Bank where any of its
Executive Director or Chairman & Managing Director has worked earlier.
Validity of sanction for Credit facilities:
1. Branches to ensure that credit facility is disbursed within the stipulated time frame fixed for
the same. The facility should not be allowed without referring to the sanctioning authority
giving full reasons/justifications and confirming that there is no adverse changes have been
taken place in the means of the party, financials and line of the business during the
intervening period.
2. Guidelines for validity of the sanction:
i. Priority sector advances maximum six months
ii. All other advances- maximum four months

Release of existing security/ Guarantee in advances account:

1. Wherever a request is made by a borrower for release of a security including personal guarantee

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2.
3.

4.

5.

whereby dilution of security is taking place, the sanctioning authority should refer such requests
to the next higher authority for prior approval for release of security/guarantee with proper
justification, even though the advance falls under the powers of the concerned sanctioning
authority.
The immediate higher authority to whom a request for release of existing
security/guarantee is referred may, at his discretion, accede to the request keeping proper
record of such authorization.
The sanctioning authority may authorize release of mortgage of an existing property against
creation of mortgage of another property if the market value of the new property is at least
equal to the current market value of the property proposed to be released. In such cases,
the actual discharge of the mortgage should be affected only after the mortgage of the new
property created. This guidelines will be applicable to GM and below.
The securities/ corporate guarantees obtained to secure the loans before the provisions of
Companies Act, 2013 came into effect need not be disturbed and can be continued to cover the
facility granted. Branches should take care not to release securities/ guarantees taken in
facilities already extended prior to this act ,since our facilities would be rendered
unsecured.However, such guarantees should be kept alive by obtaining LAD within a period of
limitation,as per extant guidelines.
Corporate guarantee/ security so obtained prior to the new Act coming into force cannot be
extended to cover increased/ additional facilities (after the new Act came into force). The same
can be extended to cover enhanced facilities only if it is not hit by the provisions of sections and
will be subject to provisions of 186 of the new Act.

Levy of Commitment Charges on Unutilized W.C. facility:

It is observed that despite sanction of adequate working capital facility, borrowers are raising
fund at lower rate from the market through various money market instruments. This is being
done by earmarking the working capital facility. The result is poor utilisation of working capital
sanctioned limit.
To monitor borrowers to utilize sanctioned working capital facilities and for effective deployment of
resources, the bank has decided to levy commitment charges in case of non-utilisation / under
utilization of working capital limits for advances accounts with fund based working capital limits of
Rs. 1 Crore (One Crore) and above. Commitment charges are to be levied on quarterly basis at
following rates:a) Where average utilization is upto 60% of the limit or as indicated in QIS statement, no
commitment charges to be recovered separately.
b) Where the average utilization is below 60% of the limit or as indicated in QIS statement,
commitment charges to be recovered @ 0.50% p.a. (Plus Service tax)
c) In case of Line of Credit, the average utilization of non-fund facility can also be counted as
utilization for arriving the overall under utilization.
Changes in company law:
Ministry of Corporate Affairs, Govt. of India has issued few notifications related to changes in the
Companies Act, 2013. There are changes in existing provisions of Law inter-alia relating to
borrowing powers by the Companies:
- Term Undertaking and Substantially whole of the undertaking have been defined
under the New Act. Undertaking shall mean an undertaking in which the investment
of the Company exceeds 20% of its net worth as per the audited balance sheet of the

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preceding financial year or an undertaking which generates 20% of the total income of
the company during the previous financial year.
Substantially whole of the Undertaking in any financial year shall mean 20% or more
of the value of the undertaking as per the audited balance sheet of the preceding
financial year.
In case the total borrowngs of any company, whether private or public, exceeds the
aggregate of its paid up share capital and free reserves, apart from temporary loans , for
sale, lease, disposal of its undertaking, including mortgage, Company shall be required to
pass Special Resolution u/s 180 of 2013 Act.
Copies of the special Resolution passed by the company, certified true by the
Director / Company Secretary, should be obtained and kept on records
besides certificate from Statutory Auditor of the company that total borrowings by the
company, including present borrowings, are within the limit specified in the said
special Resolution.

Statutory limit of borrowing Powers of the Companies (BCC: BR: 105/514 dated 18 th
November, 2013)(Provisions effective from 12.09.2013)
Henceforth, in case the total borrowings of any company, whether private or public,exceeds the
aggregate of its paid up share capital and free reserves, apart from temporary loans as stated
above, and for sale, lease, disposal of its undertaking, including mortgage, Company shall be
required to pass Special resolution u/s 180 of 2013 Act.
Copies of the special Resolution passed by the company, certified true by the Director /Company
Secretary, should be obtained and kept on records besides certificate from Statutory Auditor of
the company that total borrowings by the company, including present borrowings, are within the
limit specified in the said special Resolution.
Provisions effective 01.04.2014 (Circular no. BCC:BR:166 dated 29.04.2014)
W.e.f. 1st day of April 2014, Section 186 (which deals with Loans and Investments by company) ,
Section 77, (Registration of Charges) The Companies (Meeting of Board and its Powers) Rules
2014 and The Companies (Registration of Charges) Rules 2014 are also notified to come into
force.

Section 186 - Loans & Investments by Company.

Apart from other provisions as per section 186 (2) of the Companies Act, 2013, no company shall
directly or indirectly give any guarantee or provide security in connection with a loan to any
other body corporate or person; exceeding sixty per cent, of its paid-up share capital, free
reserves and securities premium account or one hundred per cent, of its free reserves and
securities premium account, whichever is more.
Section 186 (3) stipulates that where the giving of any loan or guarantee or providing any
security or the acquisition under sub-section (2-) exceeds the limits specified in that subsection,prior approval by means of a special resolution passed at a general meeting shall be
necessary.
No investment shall be made or loan or guarantee or security shall be given by a company unless
the resolution sanctioning it is passed at a meeting of the Board with the consent of all the
directors present at the meeting and the prior approval of the public financial institution
concerned where any term loan is subsisting, is obtained. Provided that prior approval of a public

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financial institution shall not be required where the aggregate of the loans and investments so far
made, the amount for which guarantee or security so far provided to or in all other, bodies
corporate, along with the investments, loans, guarantee or security proposed to be made or given
does not exceed the limit as specified in sub-section (2), and there is no default in repayment of
loan installments or payment of interest thereon as per the terms and conditions of such loan to
the public financial institution.
No company which is in default in the repayment of any deposits accepted before or after the
commencement of this Act or in payment of interest thereon, shall give any loan or give any
guarantee or provide any security or make an acquisition till such default is subsisting.
Branches/concerned authorities to examine and confirm that corporate guarantees issued by
companies forthwith are not hit by the limits provided in section 186 (2). In case the limits so
specified are exceeded by the company, a special resolution as contemplated in the provision is
required.
However, Rule 11 o f Companies (Meetings of Board and its powers) Rules 2014
stipulates the circumstances where subsection (3) o f section 186 (passing of special
resolution etc) shall not apply - i.e.,
where a loan or guarantee is given or security has been provided by a company to its wholly
owned subsidiary company or a joint venture company or where acquisition is made by a holding
company by way of subscription, purchase or otherwise of securities of wholly owned subsidiary
company. This is subject to company disclosing the details of such loans or guarantees or security
or acquisition in the financial statement as provided under section 186
(4) of 2013 Act.
Section 186 except sub-section (1) does not apply in cases of following:
a) Banking company, insurance company, housing finance company etc.
b) Any company whose main business of acquisition of shares or securities etc.

Section 185 - Loans to Directors etc.

As per section 185, there is prohibition on giving any Guarantee or providing any Security by any
Company, for any loan taken by any of its Director or by any other person in whom Director is
interested, unless the corporate guarantor company in the ordinary course of its business
provides loans or gives guarantee or securities for the due repayment of any loan. For the
purposes of this section, the expression to any other person in whom director is interested
means
(a) any director of the lending company, or of a company which is its holding company or any
partner or relative of any such director;
(b) any firm in which any such director or relative is a partner;
(c) any private company of which any such director is a director or member;
(d) any body corporate at a general meeting of which not less than twenty five percent of the
total voting power may be exercised or controlled by any such director, or by two or more such
directors, together; or
(e) any body corporate, the Board of directors, managing director or manager, whereof is
accustomed to act in accordance with the directions or instructions of the Board, or of any
director or directors, of the lending company.
Rule 10 of Companies (Meetings of Board and its powers) Rules 2014 exempts from the
requirements of section 185 for any guarantee given or security provided by a holding company

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in respect o f loan made by any bank or financial institution to its subsidiary company provided
that such loan is utilized by the subsidiary company for its principal business activities.
Hence before accepting/ entertaining proposal for corporate guarantee branches should ascertain
whether same is permissive/ exempted under section 185 and 186 of the Act and rules made
there under, subject to the restriction if any stipulated therein.

Section 77 - Duty to register charges, etc.

Every company creating a charge on its property or assets or any of its undertakings (whether
tangible or otherwise) shall register the particulars of charge, signed by the company and the
charge-holder together with the instruments creating such charge, with the Registrar within 30
days of its creation. This shall be applicable irrespective of charge being created within or outside
India or whether the property is situated in or outside India.
It is observed that the details as mentioned in section 125 (4) of the Companies Act, 1956 are
withdrawn in the corresponding section 77 of the Companies Act, 2013, leaving room for wider
interpretation.
In case the charge is not created within 30 days, the Registrar may, on application by the
company allow such registration to be made within a period of three hundred days.
Any subsequent registration of a charge shall not prejudice any right acquired in respect of any
property before the charge is actually registered.
It is clarified that now charge in respect of Pledge is also required to be registered with the
Registrar of Companies.
Branches to insure to have Certificate of Compliance of the provisions of the Companies Act 2013
from the Director / Company Secretary and Statutory Auditors of the Company besides practicing
Company Secretary/ Chartered Accountants (wherever empanelled) on our panel, be also
obtained & kept on record, to protect the interest of our Bank. Also an undertaking that no
default is subsisting in the repayment of any deposits accepted or in payment of interest thereon,
before or after the commencement of this Act to be taken by the company giving guarantee or
providing security.
It has been clarified by the Ministry of Corporate Affairs vide its General Circular No. 04/2014 that
the resolutions passed under section 293 of the Companies Act, 1956 prior to 12.09.2013 with
reference to borrowings (subject to the limits prescribed) and/ or creation of security on assets of
the company will be regarded as sufficient compliance of the requirements of section 180 of the
companies Act, 2013 for a period of one year from the date of notification of section 180 of the
Act. (i.e. one year from 12.09.2013).
MCA has clarified that ordinary resolution passed with reference to borrowing and/ or creation of
security prior to September 12, 2013 will continue to be valid until September 12,2014.
The securities/ corporate guarantees obtained to secure the loans before the provisions of
Companies Act, 2013 came into effect need not be disturbed and can be continued to cover the
facility granted. Branches should take care not to release securities/ guarantees taken in facilities
already extended prior to this act ,since our facilities would be rendered unsecured. However,

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such guarantees should be kept alive by obtaining LAD within a period of limitation,as per extant
guidelines.
Corporate guarantee/ security so obtained prior to the new Act coming into force cannot be
extended to cover increased/ additional facilities (after the new Act came into force). The same
can be extended to cover enhanced facilities only if it is not hit by the provisions of sections and
will be subject to provisions of 186 of the new Act.
Filing of charge with Registrar of Companies is not mandatory w.r.t. corporate guarantee.
Following are the circumstances where Bank can obtain/ stipulate corporate guarantee/ security
from a company (which is also illustrated by way of an example) in fresh sanctions/
enhancements.Where a guarantee is given by the company (public or private) in the ordinary course of its
business.
Where a holding company gives guarantee for a loan given to its subsidiary provided the loan is
utilized by the subsidiary for its principal business activity.
(Exemption provided under Rule 10 (2) to section 185, which came into effect on 01.04.2014).
Though guarantee by a subsidiary company for a loan taken by its holding company is not
specifically mentioned, the same can be considered if the same is not otherwise hit by section
185.
Where guarantee is given by a company (whether public or private) for a loan taken by a public
company even if the Director of the guarantor company is a Director or Member of the borrower
company (provided it is not otherwise hit under any of the other Explanations (a), (d) or (e) of
section 185).
Where guarantee is given by a company (whether public or private) for a loan taken by a private
company where director of the guarantor company is not a Director or member of the borrower
company, provided it is not hit by section 185 (e).
Where guarantee is not otherwise hit by section 185.
The same principles need to be applied while taking security provided by Guarantor Company.
The working units are advised to refer to the above mentioned guidelines/circulars in this regard
and clarification circular no. BCC: BR: 106:284 dated 04.08.2014

Purchase/Discount/Negotiation of Bills under Letter of Credit: As per the revised

guidelines of the Reserve Bank of India, of their borrower constituents who have been sanctioned
regular credit facility by the banks.

Bank shall not extend funded or non funded facilities to non constituent borrowers.
Bank shall open Letters of Credit and purchase/discount/negotiate bills under LCs only in
respect of genuine commercial and trade transactions of borrower constituents who enjoy
regular credit facilities.
In cases where negotiation of bills drawn under LC is restricted to a particular bank, and
the beneficiary of the LC is not a constituent of that bank, the bank concerned may
negotiate such an LC, subject to the condition that the proceeds will be remitted to the

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regular banker of the beneficiary. However, the prohibition regarding negotiation of

unrestricted LCs of non-constituents will continue to be in force.
The bank may negotiate bills drawn under LCs, on with recourse or without recourse
basis, as per their discretion and based on their perception about the credit worthiness of
the LC issuing bank. However, the restriction on purchase/ discount of other bills (the bills
drawn otherwise than under LC) on 'without recourse' basis will continue to be in force.
Bills purchased/discounted/negotiated under LC (where the payment to the beneficiary is
not made under reserve) will be treated as an exposure on the LC issuing bank and not
on the borrower for the capital adequacy purpose. All clean negotiations as indicated
above will be assigned the risk weight as applicable to inter bank exposure, for capital
adequacy purposes. In Documentary Bill purchased/discounted/negotiated under Prime
Bank LC, which has been accepted for payment by the LC issuing Bank/Drawee Bank and
confirmation of due date of the bill has been received, would not be reckoned as exposure
on borrower. Such exposure will be treated as exposure on LC issuing Bank/Drawee Bank
and branches have to ensure that such exposure is noted in the exposure limit on such
bank fixed as per POLICY ON EXPOSURE LIMITS ON COUNTERPARTY BANKS .
Bank shall rediscount only usance bills of other banks. However bank shall not re-discount
bills discounted by NBFCs except those arising from sale of light commercial vehicles and
two/three wheelers.
The Bank shall scrupulously follow the other stipulations of RBI regarding safe
custody of LC forms, discounting of bills of Services Sector (to be treated as
unsecured advance) etc.

Loans and Advances against Share debentures etc.

1. No loan to be granted against partly paid shares.
2. No loan to be granted to partnership/proprietorship against primary security of shares
and debentures.
3. Loans against security of shares, convertible bonds, convertible debentures and units of
equity oriented mutual funds to individuals would not exceed the limit of Rs.10 lakh per
individual from banking system if the securities are held in physical form and Rs. 20 lakh
per individual from banking system if the securities are held in demat form.
4. A uniform margin of 50% shall generally be maintained on advances against shares. A
minimum cash margin of 25% within the overall 50% ceiling shall be maintained in
respect of guarantees issued by the bank for capital market operations.
5. As per section 19(2) of the Banking Regulation Act 1949, no banking company shall
hold share in any company whether as pledgee or mortgagee or absolute owner, of an
amount exceeding 30% of the paid up share capital of that company or 30% of its own
paid up share capital and reserves, whichever is less.
6. This limit is to be observed while granting any advances against shares, underwriting an
issue of shares or acquiring any shares for investment or even in lieu of debt of any
company.
7. Bank and their subsidy should not undertake financing of Badla transactions
8. List of approved shares & debentures will be advised periodically by CO For any addition
following criteria will be adopted
(a) quoted in major stock exchange
(b) company must have declared dividend for last 3 years
(c) market price should not have fallen below face value any time during last 3 yrs
9. The aggregate exposure of a bank to the capital markets in all forms (both fund based and

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nonfund based) would not exceed 40 per cent of its Net Worth as on March 31 of the previous
year.
Safety Net Scheme:
1. Often merchant banker assume large exposures by way of commitments to buy the
relative securities from the original investors at any time during a stipulated period at a
price determined at the time of issue irrespective of the market price.
2. In some cases such schemes were offered without any request from the company whose
issues are supported under the schemes.
3. RBI has advised to banks/subsidiaries to refrain from such Safety Net facilities.
REJECTION OF LOAN APPLICATIONS:
1. Credit proposals falling beyond the powers of BM shall not be rejected at the branch
level.
2. The authority empowered to sanction the credit proposal may reject such application.
3. A monthly statement for rejection of applications by the BM to be submitted to the
Regional office.
PSR (Post Sanction Reporting):
Bank follows a Post Sanction Reporting System replacing the erstwhile Post Sanction Scrutiny.
The features are:
- Covers all sanctions and credit decisions viz., Fresh / Increase / Renewal / Rejection /
Adhoc / Excess / Modifications / Waivers / restructuring / rescheduling etc., excluding
sanction of staff advances, LABOD (i.e. post sanction reporting of LABOD and staff
loans is not required).
- Broad parameters relating to sanction are only examined by the PSR authority
whereas the sanctioning authority shall take care of all procedural details on credit
appraisal, adequacy of security, documentation etc.,
- Observations of PSR authority are to be attended immediately, which shall also serve
as guide to the sanctioning authority for future.
- Disbursement of credit facility/ies is not to be withheld merely for want of
observations of the competent authority on PSR.
A. PSR reporting is required to be submitted on monthly basis to PSR
Authority
Branches in Area

Metro & Urban

Semi Urban & Rural

Sanction Threshold
(FB+NFB) Other than Retail,
Excluding LABOD
&
Staff Loan
Rs.25 Lakhs
Rs.10 Lakhs

Retail

Rs. 5 Lakhs
Rs.5 Lakhs

B.Where Copies of Credit Proposals are to be submitted PSR authority within 3

days of sanction along with Appraisal Note, latest financials with necessary
comments by the sanctioning authority, latest credit rating sheet, gist of major
adverse features and noncompliance of stipulated terms and conditions and the
sanctioning authoritys comments thereon.

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Branches in Area

Metro & Urban

Semi Urban & Rural

Sanction Threshold
(FB+NFB) Other than Retail,
Excluding LABOD
&
Staff Loan
Above Rs.25 Lakhs
Above Rs.10 Lakhs

Retail

Above Rs. 5 Lakhs

Above Rs.5 Lakhs

The PSR authority is required to clear the proposal from PSR angle within a period of 30-days
from the date of receipt of proposal. If the PSR authority has not made any observation within
the said period, it will be presumed that the PSR authority has no observation to make and the
proposal is cleared from PSR angle.
COMMERCIAL PAPERS
1. Commercial paper is introduced in India in the year 1990 by RBI as per the
recommendations Voghul Committee to enable high rated corporate customers to
diversify their source of short term finance.
2. Commercial paper is a short term money market instrument issued as a usance
unsecured promissory note which is freely negotiable through endorsement and
delivery. It is privately placed at a discounted rate to face value as decided by the
issuing company.
3. Any company whose
a) tangible net worth is not less than Rs. 4 crores as per latest audited balance sheet,
b) has been sanctioned funded working capital finance by the bank.
c) account / s has been classified as standard. In case of consortium lending, the assets
classification with all the member banks should be standard.
d) minimum credit rating as per CRISIL - P2, ICRA - A-2, or equivalent rating by other
agency.
4. Minimum maturity period 07 days and maximum up to one year.
5. Minimum amount of the CP would be Rs. 25 lacs and in multiple of Rs. 5 lacs maximum up
to 100% of Funded working capital finance including bill finance.
6. The total amount should be raised within a period of two weeks from the date of issue
open.
7. Can be issued to any individuals, corporate bodies and also to NRIs on non repatriable and
non transferable basis.
8. Banks and FIs have the flexibility to provide for rollover of the working capital limit at their
individual judgment and discretion.
9. Every issue of CP is to be reported to IECD of RBI within 3 days from the closure of the
issue.
10. After implementation of Base rate system, a many big corporates including banks / FIs
are raising shrt-term funds by issuing CPs, hence, interest rate under CP has increased
considerably.
Yield on advances
1. Yield on advances means the amount of total income received by the bank/branch
out of the total operations of the borrower with the branch as compared to fund
based limit utilized.
2. Yield = (Interest Recd. + Exchange, Commissions and other income + Notional

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income of deposit) / Avg. Fund Based limit utilised

3. Notional income means interest at notional rate of interest as advised by the bank on
all the deposits of the borrower. The present guidelines is that interest @ 8% on 50%
of the average deposits maintained by the borrower during the year is to be
considered.
4. It has further decided that whenever borrower enjoys FCNR Loans the same should
be ignored for the purpose of computation of yield. The calculation of yield should be
based only on deployment of Rupee funds and interest received thereon. However,
amount of interest received on FCNR loans by the branches must be mentioned as
foot note in the yield sheet.
Guidelines for TOD
TODs to be granted only on rare occasions to meet temporary and unforeseen
contingencies
No TOD to be allowed in accounts other than current accounts of the Customer
No TOD to be allowed during first 6 months of operation of the account. However
Bank may also consider sanction of TOD after 3 months of operation, if the
account is Premium / Premium Privilege current accounts

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granted in accounts
where cheques
have been returned for
TODs not to be
financial reasons, where cheques deposited by customers
are returned frequently,
minimum balance is not maintained, turnover
is not
satisfactory and/or TODs
granted in the past, were not adjusted in time
and MMG
Scale-II, are not allowed
Branches headed by officer in JMG Scale-I
to grant TODs but Rural Branches headed
by
officer in MMG Scale-III and above
are authorised to allow TOD.
TOD can be allowed upto 25% average monthly turnover in the account.
twice a month subject to maximum period of 15 days
TOD may be given
altogether. TOD may be sanctioned 10 times within a financial year subject to
maximum 15 days in a month(twice in a month)
in anticipation of sanction of regular limits and should
TOD should not be granted
not be converted into demand
loans or any other credit facilities.
Granting of TOD in one account for the purpose of adjusting an advance
outstanding in another related account is prohibited.
TODs should not be granted to the parties enjoying separate cash credit facility
also from the branch.
DAUE (Drawing Against Uncleared Effects) Drawing against uncleared effects:1. No DAUE is to be allowed/sanctioned in newly opened accounts for first -6- months.
2. Not more than 25 % of the amount of instruments or discretionary lending powers
whichever is lower.
3. The facility should be considered/ recommended depending upon the relationship with
the customers, yield on advances, average credit balance in the account etc.
4. Operations in the account must be satisfactory no instances of return of inward or outward
cheque.
Other Guidelines:
1. No adhoc to be considered in the newly opened account for a period of -12- months by the
branch head
2. Request for adhoc/ excess may be considered only in reviewed accounts with credit rating
not less than BBB, B+, BOB6 . In all other cases reference should be made to R.O.
3. Delegated authority may grant secured non fund based limit in excess of lending powers for
NFB against proportionate reduction in fund based limit.
LINE OF CREDIT
Line of Credit system offers flexibility to clients to switch over between the various working
capital facilities sanctioned with relative ease as per their needs compared to the prevalent
system of restricting the usage of funds within the maximum limits available within the facility
only. This system will essentially facilitate medium/large business units in efficient
management of their borrowing requirements within the sanctioned Line of Credit facility.

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1. Bank of Baroda is a first runner in introduction of this novel product called Line of Credit. Under
this LOC borrower has been sanctioned an outer limit within which he has full flexibility to switch
over from fund based to non fund based limit and vice a versa for procurement of current assets.
2. This is to be implemented for all borrowers where the banks exposure by way of working capital
finance ( Funded and non Funded) is of Rs. 1 crore and above. The conduct of the account must
be satisfactory and there is no major adverse features.
3. Under LOC, instead of separate limit for CC stock, Book Debt and DA letter of credit, a combined
limit for CC (Stock) & ( Book Debt) - Cum- DA L/C may be considered with a sub limit for DA L/C .
4. Margin will be decided separately on case to case basis / facility to facility basis.
5. While calculating the drawing power for Cash Credit facility, deduct the value of accepted bills
under DA L/C from the stock value. On retirement of Advance bill by debiting CC account the
drawing power reinstated i.e. overall DP will cover the outstanding under CC facilities and DA L/C.
6. Following facilities are not covered by LOC:
(a) DP L/C for procurement of raw materials.
(b) DP & DA L/C for procurement of capital goods
(c) Performance guarantee and guarantee issued in connection with fulfillment of export obligations.
(d) Financial Guarantees issued in lieu of security deposit and earnest money deposit.
The Line of Credit as a product is innovative and the branches should make every effort to canvass
and make it the Unique Selling Proposition (USP) of the bank.
PARKING OF LIMITS / SUB-LIMITS AT THE BRANCHES
1. Reveiw of the account to be done by base branch.
2. Drawing power will be advised by the base branch to transferee branch on regular basis.
3. Advising position to the base branch by the transferee branch on last friday of the month.
4. Advising base branch immediately about irregularities in the conduct of the account with
transferee branch. Turnover in the account also to the base branch.
5. Responsibility is cast on the transferee branch to advice the details of the account on monthly
basis to base branch, it will be the responsibility of the transferee branch to have up dated
information also.
LOAN SYNDICATION:
1. In the year 1993 the Shetty Committee had recommended the syndication of credit as an
alternative to consortium lending.
2. Syndication of credit is an agreement between two or more bankers/lending institutes to provide
credit facility/ies to a single borrower using one common loan documents.
3. The borrower who intend to raise long term resources through this method give a mandate to
lead manager to arrange for the credit on his behalf. The memorandum spells out the terms
of the proposed credit.
4. On the basis of the memorandum, the lead manager will offer an opportunity to lenders to
lend to prospective borrower as per the terms of memorandum.
5. If the proposal is acceptable to the banks/ lending institute, they will convey their acceptance.
On receipt of acceptance/ offer from the lenders, the lead manager will negotiate the terms
of syndication such as, cost burden, sharing pattern of debt, recovery, other income and
other business etc.
6. There after, loan agreement is signed by all the participating lenders.
Vide Circular No BCC:BR:105:249 dated 17-06-2013 Loan Syndication Desk has been merged with
BOB Capital Market Ltd.

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SECURITISATION OF LOAN
1. Securitisation is a process by which the future income or receivables (loans) of an
organization are converted into debt instrument say bond and then sold.
2. Under securitisation lending institutes transfer the loans granted by them to investor s/
purchaser of the loans through an intermediary by packaging them in the form of securities
which are usually termed as pass through certificate .
3. The SPV (Special Purpose Vehicle) raises the fund from the investor and pass on to the
originator. On due date the payment by SPV to the investors are funded by the cash flow
from the underlying assets during the life of the transaction. The assets themselves will be
the security for investments but will be managed by the originator.
4.The securitisation may be backed by movable assets or by mortgages backed assets. The PTC
will be backed by assets or backed by mortgage.
5.The PTC will have slight lower rate of interest than the loan granted and that will be the profit
of PTC issuer.
6. Securitisation can be against movable assets which is known as backed by assets and
against immovable assets known as backed by mortgage
7. By securitisation lender can liquidate its assets before its maturity.
8. The PTC will be traded in security market . e.g. NHB will purchase housing loan of LIC
Housing Finance. Can bank Housing finance Ltd. , purchases housing loan granted by canara
bank.
9. Securitisation helps to financing bank/ lenders in following ways
a. Transfer its credit risk or other risk associated with the assets.
b. Create liquidity and room for fresh financing.
10 For example: The lender who has financed for long term projects and want to improve
immediate cash flow position and get liquid funds against the above security. The lender will
sell the above pool of loans to an institute called the SPV. The SPV now converts the above
pool of assets into small bundles that are called PTC (pass through certificate). These PTCs
are collaterised / backed by the above underlying security.
FACTORING
1. In India the concept of factoring is introduced during 1991 as per the recommendation of Shri
Kalyansundram committee..
2. Factoring is a continuous arrangement in which receivables created out of sale of goods or
services are sold to an agency known as factor. This arrangement is called factoring.
3. The factoring is an arrangement for management of receivable, maintaining the sales or
receivables ledgers, submitting sales accounts , collection of debt etc. This will be with recourse
or without recourse, but in India without recourse is not permitted.
4. Under this arrangement , as soon as the invoice is submitted to the factor, the factor will pay say
85% of invoice to the seller. In turn factor will collects dues on due date from the customer,
purchaser. The balance payment will be paid to the seller on recovering from the purchaser.
5. The factor will recover finance charges for funds prepaid to the seller against the invoice. They are
also recovering service charges for management of receivable also.
6. The advantages of factoring are that practically sales become cash sales and liquidity of the seller
will be maintained resulting into efficient management of working capital finance.
7. There are various types of factoring, Recourse factoring, Full service non recourse, maturity

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factoring
8. Advantages: Manufacturer or seller will relieved from the responsibility of credit collection,
recovery, administration etc and can focused on selling and marketing
9. The liquidity position will be improved and will give better current ratio
FORFEITING
1. Forfeiting in India is approved by RBI in the year 1992 and it is to be provided by an International
forfeiting agency with EXIM bank or any other A.D.
2. When an exporter transfers his right to receive payment in favour of a forfeiture, the transaction is
called forfeiting. Thus, forfeiting is a method of discounting of international trade receivables on a
without recourse basis.
3. Three elements of cost are involved in forfeiting ; discount rate or rate of interest commitment fee
and option fee.
4. The credit is extended by exporter from 180 days to -7- years under forfeiting.
5. It is not only tool for financing but also an important risk management tools.
6. It offers an opportunity to do business where ECGC does not offer a cover.

VENTURE CAPITAL FUND

1. Sometimes an entrepreneur who is having a new idea , relatively untried technology, desires to
implement the project but they are lacking in business experience and finance to shape their
ideas. Moreover due to inherent risk, common investor will not come forward to invest in the
project.
2. At that time venture capital fund provides finance to high-risk, high technology ventures which
are usually promoted by qualified entrepreneurs. Thus, venture capital is a source of funds used
to finance new proposals / ideas involving new technology or products which are risky but with a
potential of high returns. Venture capital is a source of funds used to finance new proposals/ideas
involving new technology or products which are risky but may provide high returns
3. Financial assistance will be by way of (a) Participating in equity capital with or without buy back by
the company, (b) Long term loans, (c) Conditional loan with option to convert a part/full loan to
equity and (d) Managerial and marketing support through participative management.
4. It can be provided as start-up capital but at a later stage finance is provided to help the
company to raise public offer also.
5. In India, IFCI, IDBI, SBI capital venture Fund, etc. are the major sponsor for venture capital Fund
or Company.
6. As per Govt. Guidelines, the minimum size of VCC or VCF would be Rs. 10 crores.
7. They may raise the fund also from public provided the promoters contribution should not be less
than 40% of the capital.
8. Total assistance to a unit should not exceed Rs. 10 crores.
9. The entrepreneurs should be relatively new , professionally, technically qualified having a new
untried technology , lacking in adequate resources to finance the project are to be considered.
10. Investment made by bank in venture capital will be classified as Priority sector lending.
Sensitivity Analysis:
1. While considering project finance a credit officer should carry out future risk inherent due to some
adverse circumstances which may affect the profitability or cash inflow and out flow during the
life of the project. Thus, sensitivity analysis means an examination of the effect on the project
profitability estimates due to variations in the forecast of cash flow predictions / projections.

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2. Mainly four factors; Sales, cost of raw material, cost of Power and Fuel and interest are to be
considered. As per banks guidelines 10% negative variance in sales and simultaneously, 5%
positive variance on all cost aspects are to be considered to know the sensitivity of the project.
3. After doing the sensitivity analysis, revised DSCR and cash flow DSCR are to be worked out to
derive conclusion about the sensitivity analysis.
4. The concept of margin on safety is also a part of sensitivity analysis where in variance in sales as
compared to BEP sale is studied.
5. Sensitivity analysis can be taken-up for comparison of different projects (assuming mutually
exclusive and looking apparently worthwhile in terms of return in the basic workings)
Infrastructure Finance:
1. Any credit facility provided to a borrower company engaged in ; developing or operating and
maintaining or developing, operating and maintaining any infrastructure facility is falling under
the definition of infrastructure lending.
2. As per RBI, definition of infrastructure would include sectors, such as, power, roads, highways,
bridges, ports, airports, rail system, water supply, irrigation, sanitation and sewerage system,
telecommunication, housing, industrial park or any other public facility of a similar nature as may
be notified by CBDT in the Gazette from time to time. The relaxation in "group exposure" norm
would be available only in respect of four sectors, viz., roads, power, telecommunication and
ports.
3. There are two types of financing options: (a)Private sponsor participation and (b) Structured
financing operations
4. The participation of private sponsors in infrastructure development at progressively diminishing
levels is depicted as under:
BOO = Build-Own and Operate,
BOOT = Build Own Operates and Transfer,
BOT = Build - Operate and Transfer,
BOLT = Build - Operate Lease and Transfer,
DBO = Develop - Build- Operate
Structured Financing Option:
This is a concept relating to Infrastructure lending. The structuring of debt and equity is a crucial
aspect in funding of any infrastructure project. Generally, the project sponsor may not like other
share holders to have recourse to the assets of the project. Besides this the companies setting up
infrastructure projects have only the prospect of a future earnings stream to collateralize their
borrowings.A key issues while structuring appropriate financing instruments do not yield the
expected returns. The structured financing options assume two forms:
Non recourse financing: Under this option the debt instrument is secured by the cash-flows
generated by the project or the collateral value of the specified assets financed by the instrument
under consideration. In case of default the debt holders recourse would be limited to the underlying
assets only and not extend to general reserves and assets of the company.
Limited recourse financing: Under this variant, in addition to project assets, the parent company
attaches other assets/ revenue stream for servicing the instrument to improve its credit worthiness.
Securitisation is one of the method.
Take-out financing:
1. Take-out financing is a method of providing finance for longer duration projects say 15 years or

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more by banks, particularly in infrastructure lending.

2. Take out financing structure is designed to avoid maturity mismatch of assets and liability due to
the infrastructure financing/ longer duration projects.
3. Under the arrangement, banks financing to the infrastructure project will have an arrangement
with IDFC (Infrastructure Finance development Corporation) or any other financial institution for
transferring to the latter the out standing in their books on pre determined fixed period/pricing.
4. It allows bankers to lend for infrastructure with the freedom to decide the lending period and risk
profile. When the period end the bank can exit and IDFC will take out the obligation and charge a
fee as per the commitment at the point of sanction, to take out the entire outstanding loan or part
of the loan to the bank after an agreed period say five years. The credit risk on the project will be
appraised by the bank concerned and not by the IDFC.
1.IDFC and SBI have devised different take out financing structures to suit the requirements of
various banks, addressing issues such as liquidity assets-liability mismatches, limited availability of
project appraisal skills etc. They have also developed a Model Agreement that can be considered
for use as a document for the purpose.
Trust and Retention Agreement (TRA):
1. TRA mechanism is a common feature of infrastructure financing. It seeks to protect the project
lenders against the credit risk of default by insulating the cash flows of the project company.
2. This is done through shifting the control over future cash flows from the hands of the borrowers to
an independent agent called TRA agent duly mandated by the lenders. This is then allocated in a
predetermined manner to various requirements including debt service obligation. After meeting all
the requirement residual cash flow will be available to the project company. Thus, the lender will
have a security of cash flow in addition to the assets of the company.
3. Under this arrangement the lenders, the borrower and the TRA agent enter into a tri-partite
agreement directed to deposit all cash inflow in a single designated account with TRA agent.
4. The lenders in consultation with the borrowers draw up a detailed mandate for the TRA agent as
to periodical transfer and utilization of funds available with TRA agent. For example it spell out
appropriation as under:
(a) All operation and maintenance expenses of the project,
(b) Monthly dues/accruals of net principal and interest to lenders,
(c) A debt service reserve equal to say, six months dues which could also be backed by a letter of
credit to be arranged by the sponsors of the project company,
(d) A cash reserve equal to four months operating expenses,
1. After meeting all above either through cash flow or through L/C the residual funds if any, would be
available to the company by the TRA. TRA is thus a version of No Lien account on which the
lending bank does not exercise right of Lien.
FIXED, FLOATING CHARGE & PARI-PASU CHARGE
1. A Fixed charge is one which is created on some specific property of the company like land and
building etc. against which the finance is extended. The owner can not deal with this property
without the consent of the lending institution
2. Floating charge: A charge on all the property of the company which is continuously changing.
However, despite charge thereon, company can sell or otherwise dispose off the property. The
floating charge can be converted into fixed charge and all the assets existing as on the date of
crystallisation will be covered by this charge.
3. Pari-pasu Charge: When a company has availed credit facilities from more than one bank on the
same security / ies with a condition that the charge on the security will be on equal footing (
right basis) in proportion to the amount they have advanced,such charge is called pari-pasu

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charge. In case of consortium finance or multiple banking facilities, a charge on the same
security is given to more than one lender this is called the pari-pasu charge.
SECOND CHARGE
1. Second charge means the assets on which we want to create our charge are already charged to
other financing institutions. The financing institution will have first charge on the same assets and
in case of default after making payment of dues of the FI, the residual amount will be made
available to the bank who is holding the charge.
2. Generally second charge is created on fixed assets of the company such as land building, plant
and machinery.
3. Generally bank do not prefer to have second charge.
4. The procedure for creation of second charge is under:
a. No Objection Certificate from the institute having first charge is to be obtained.
b. Our second charge in case of company is to be registered with the ROC.
c. However, it is to be noted that when we are holding the first charge on the assets authority to
create second charge by other lending institution does not fall under the power of the branch.
INTERNAL RATE OF RETURN:
It is a discounted rate where projected cost and projected benefits are equal to zero. Uses of
IRR :(a) A project is acceptable when the IRR > the expected rate of return or market rate of return
(b) A project is acceptable when the IRR > the cost of capital.
(c) Higher the IRR, better the project.
ADVANCE BILL AND BILLS PAST DUE ACCOUNTS
Advance Bill account:
When documents received under Letter of Credit issued by our branch is presented for payment/
reimbursement by the negotiating bank, L/C issuing branch is suppose to make payment/
reimbursement if terms and conditions are strictly complied with.
The payment will always be made through debit of G/L Advance Bill account even though
balance in the customer account permits debit. Subsequently this entry is to be reversed.
In case of Import Bill under L/C, the party is suppose to retire the bill within 10 days otherwise
the bill will be treated as overdue and fetch higher rate of interest of 2%
over the applicable rate as above.
Bill Past Due Account:
In case of Guarantee issued by our branch, beneficiary has a right to invoke the guarantee as
and when default is committed. The issuing bank/ branch will make immediate payment to the
beneficiary by debiting G/L Bill past due account.
Even in case of Bills purchased remains overdue for a longer period, the entry is to be reversed
to the debit of this bills past due account with permission of RO.
The amount then to be recovered from customer as mentioned in case of A.B.
FUND FLOW STATEMENT:
1. Fund Flow statement depicts the various sources of the fund and their uses. It is a statement
of inflow and outflow of the fund during a specific period.
2. Inflow and out flow of the fund can be noticed by increase or decrease in assets and
liabilities. If assets are increasing it is an application and if it is decreasing it is source of fund.
Likewise, If liabilities are decreasing it is an application and if it is increasing it is source of

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fund.
3. To carry out fund flow analysis one should have an idea about the long term sources and
short term sources as well as uses of the fund.
Liabilities are the sources of the fund and assets are the uses of the fund.
4. From financing bankers point of view it is always advisable that
LTS - LTU = +Ve
STS - STU = - Ve
Liab - Assets = 0
If above equation/result is reversed which represent diversion of short term fund to long term
use.
CASH FLOW STATEMENT
1. Cash Flow is a statement which depicts changes in cash position from one period to another
period as against the changes in total funds. This indicates how much cash is generated at
the end of financial year. This will give an idea about the increase/decrease in liquid position
of the borrower.
2. The cash flow is prepared as per AS-3 of ICAI. For listed Compnies and other borrowers
where the annual turnover is exceeding Rs. 50crore it is a statutory requirement.
3. The sources of cash are PAT, Depreciation, sale of assets, gains form sale of fixed assets,
increase in capital or other liabilities, decrease in assets. The uses of cash are loss, decrease
in liabilities, dividend payment personal drawing etc.
4. Cash flow statement helps the management for short term liquidity planning.
DEBT SERVICE COVERAGE RATIO:
1. While granting loans banker to satisfy about the repaying capacity of the applicant
2. The DSCR indicates repayment capacity and adequacy of repayment period.
3. The acceptable DSCR is 1.75 But it is not necessary that DSCR of each year should be 1.5 to 2
but to work out average DSCR for the entire term loan repayment period, which should be
within the stipulated ceiling.
4. DSCR is helpful to work out the repayment period and initial moratorium. Larger DSCR
indicates units ability to pay more than its commitments. Repayment period may be curtailed
or vise a versa
BEP = Break Even Point:
1. BEP indicates No Profit and No Loss situation i.e. Sales of the Unit is equal to Cost of
Unit sold .
2. BEP means, Sales Revenue = Cost of Units Sold .
3. Therefore, Profit = Sales > BEP and Loss = Sales < BEP
4. BEP in Rupees: = (Fixed Cost / Contribution ) X sales. Here, Contribution means sales value Variable cost.
5. Cash BEP = {(FC - Depreciation & non cash charges) / Contribution } x sales
6. BEP decides the level of production in order to achieve desired profit
7. BEP analysis is useful to know the Viability Study of Sick Units.
8. The BEP concept has certain limitations also.
a. It is assumed that Variable Cost and Sales vary proportionately. This may not true all the
time.
b. In long run, fixed cost may not be fixed. It is true in short term.
Margin of Safety:

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1. MOS describes the tolerance level of the units. The difference between projected Sales and
BEP Sales in terms of actual sales is MOS. Lower the BEP, higher will be the MOS. But this
should be studied in connection with correctness of estimated profit and loss figures and BEP.
2. MOS gives and idea about the cushion available in case of deviation in cost of production and
sales estimation.
3. Margin on Safety indicates up to how much variance in Sales will sustain by the Unit. Where
the MOS is low, the possibility of unit coming to loss is high and higher the MOS
greater the safety.
4 The project with low MOS and high break even is not preferable.

FINANCIAL GUARANTEE:
Many times Bank issue guarantee in respect of constituents financial liabilities wherein purely
monitoring obligation of the customers are involved. In lieu of such financial commitment , Bank
issues guarantee which is known as "Financial Guarantee".
Following are the some of financial guarantee.

Guarantee in lieu of Sales tax, custom duty, Excise duty, Earnest money deposit, tender
money deposit, favouring court authorities etc.

Advance Payment or mobilisation of advances. In case of contract work, contractors have

been provided with advance money or raw materials etc. To perform the Contracts this is
called mobilisation advance. In case of default in repayment of advance/ cost of raw materials
due to non performance of the contract, the beneficiary can invoke the guarantee.

Bid Bond Guarantee, this is in case of export in a global tender, Guarantee issued in lieu
of tender/earnest money deposit to be submitted with the tender/ bid is known as Bid Bond
Guarantee.

Retention Money Guarantee: In case of contracts, there is a clause of retains certain

percentage of contract value for specific period to ensure proper performance of the work. In
lieu of which Bank guarantee is also issued and retention money is released by the deptt.

However it is to be noted that guarantee for export obligation is not a financial

guarantee.
PERFORMANCE GUARANTEE:
1. Performance guarantee guarantee the satisfactory performance of the work allotted to the
contract as per agreed terms and conditions.
2. The purpose of performance guarantee is to fix the financial responsibility in the event of
default or failure on the part of the customer to perform the obligation undertaken by him
3. In such guarantee Bank does not undertake such specific performance. The Bank will be
liable to pay a sum not exceeding the guaranteed amount.
4. While issuing such performance guarantee, branches should ensure technical, managerial
and financial aspects of the borrower / contract. Reasonable cash margin and charge on
collateral securities to be obtained.
5. This type of guarantee is generally asked for in case of (a) Turn Key Project and (b)
Performance of machinery/ equipment supplied. (3) Government Contract works.
DEFERRED PAYMENT GUARANTEE:
1. The guarantee is issued at the request of customers for purchase of capital equipment on
long term credit from the supplier.
2. This guarantee, guaranteed the payment of due installment and interest in deferred manner

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over a specific period of time. So guarantee amount should inclusive of principal and interest
thereon.
3. DPG is a non fund based facility. However for the purpose of sanctioning/ processing etc. the
guarantee is to be treated as Fund based only. It is to be issued by the Branch Manager as
per Discretionary Lending Power of fund base facilities
4. This guarantee should be considered in line with guidelines for Term Loan.

SHIPPING GUARANTEE
1. Shipping Guarantee is issued in favour of shipping company/ agent when the goods arrived
at port of destination but shipping documents are yet not received i.e. to take delivery of
goods without delivery of shipping documents such as Bill of Lading.
2. The guarantee is to be issued at 100% cash margin, where the bill is routed through the
Bank.
1. An undertaking from the customer to be obtained that the borrower will honour the bill
irrespective of discrepancy, if any with the terms of L/C.

Real Estate Sector:

Real Estate Sector includes (1) Residential Mortgage (2) Commercial Real Estate and (3)
Investment in Mortgage Backed Securities (MBS) and other securities exposures.
(1)Residential Mortgage means finance against the mortgage of residential property which is
occupied by the borrower or is rented.
(2)Commercial real Estate means lending secured by mortgage on real estates ( office
buildings, retail space, multi-purpose commercial premises, multi- family residential building,
multi-tenanted commercial premises, individual or warehouse space, hotels, land
acquisition, development and construction etc.) This also includes Non Fund Based Exposure
also.
(3) Investment in Mortgaged Based securities and other securities exposures in Residential and
commercial real estate sector.
(4)Fund based and non-fund based exposures on National Housing Bank and Housing Finance
Companies (HFCs) which is considered as Indirect Exposure.
MCA21
Project of Ministry of Company Affairs for e-governance
- Online Filing of Charges by companies through e-Forms. The Ministry of Company
Affairs, Government of India is implementing a major e-Governance initiative known as
MCA21. This project envisages introduction of secure electronic filing (e-Filing) for all
services provided by the Registrar of Companies including incorporation of a company,
annual filing, registration of charges and other event-based filings.

New Credit Product

Nature of facility

Corporate Loan Facility :

Key Features:
Term Loan

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Eligibility

Quantum of Finance

Repayment

Existing Borrowers with 3 years satisfactory track record with

our Bank.
BOB -5
Existing Borrowers with Internal Credit rating of
& above and External Credit
rating of BBB and above. (BB
& below rated
borrows are not
eligible) External Credit
Rating is mandatory.
New
Borrowers with existing (and satisfactory) group
relationship
are also eligible provided
the internal credit
rating is BOB-4
& above and external credit rating of A
and above.
The account
should not have
been restructured in the last -3years period.
Minimum :Rs 10 crore
Note: In principle approval
to be obtained
from BCC for extending
any corporate loan.
Repayment period not to exceed 10 years or the useful life
of the
fixed assets under
cover, whichever is earlier.
The repayment schedule may be flexible (quarterly/half
yearly),

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Uneven or bullet repayments also be permitted, if the cash accruals so

justify.

New Product Baroda Channel Financing: Key Features:

Facility
Drawee Bill finance for suppliers
Drawee Bill Finance or Overdraft /Cash Credit facility for dealers.
Eligibility
To ensure that integrated financial and commercial solution
is available to
the entire supply and distribution chain, which would ensure the health of the
firm financed by the bank.
The dealers
to be covered under
the scheme
would be
referred by the Sponsoring Corporate. Though due weightage shall
be given to the recommendation of the sponsoring
corporate
Bank shall
take a decision based on merits of each case. Sponsoring
Corporate
can be a
Manufacturing
Unit, Wholesale dealer of goods or a provider
of Services.
Existing/new borrowers with Credit Rating of BOB-6 and above.
Proprietorship, partnership concerns, private limited companies.
1. Facilities to suppliers/dealers would be extended based on the referral of
the Sponsoring Corporate.
2. Sponsoring corporates referral letter to state that their past dealings with
the suppliers/dealers are
satisfactory.
No prior period of association to be
prescribed.
Limit
Min.-Rs.25.00 Lacs
Max.-Rs.10.00 Crores

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Ratio at a glance :
RATIO
Current Ratio

Quick Ratio

Solvency Ratio

Debt-Equity Ratio

Assets
Coverage
Ratio
Debt-Service
Coverage Ratio

Debtor
turnover
Ratio (No of Days)

FORMULA
Current Assets /
Current Liabilities

Quick Assets /
Current Liabilities
OR
C.A.-Inventory
C. Liab.-Bank Borrowing.
Net Tangible assets /
Total Outside Liabilities
DE(TOL/TNW)=
Outside Liab. /
Tangible Net worth
DE(TTL/TNW) =
Liab /
Tangible. N.
W.
Net Fixed Assets
Term Liability

INDICATION
Ability to meet current liabilities.
Higher the ratio better the liquidity
Shortfall indicates diversion
of
short term fund.
1.5 to 2 is
desirable
Availability of Liquid resources to
meet current liabilities.
1 is desirable

Ability to repay debt from own

assets on long term basis.
Higher the ratio better the solvency.
Total Coverage of outside liabilities to own
fund. Lower the ratio higher the
safety. Asper loan policy,
Term DE(TTL/TNW) 3:1 & DE(TOL/TNW)
4.5 :1,

Extent to which FA covers Term

Liabilities.
More than 1 is desirable.
PAT + Depri. + Int. on Loan Debt Servicing Ability
To work out repayment
schedule.
Instal. of TL + Int. on Loan is desirable.
Average 1.75 & min.1.00(For Micro &
Small enterprises), 1.25(Others) in
any year.
Average O/S Debtors x 365 Credit policy of the unit/ firm.
Average Period of
the credit
Credit Sales

Creditor
T/Over
Ratio (No.of days)

Average O/S Creditors

365

extended.
x

Ability to get goods on credit.

Ability to repay

184 | P a g e

Assets
ratio.

turnover

Credit Purchase
Net Sales

Efficient use of assets

Net Operating Assets means FA +
CA + Non CA- Investments.
Must have increasing trend.
Margin available
after meeting
manufacturing cost.
Efficiency of
Production and Pricing.
Net Profit margin on business.
Overall efficiency of the unit.

Net Operating Assets

Gross Profit Margin

Gross profit X 100

Net profit Margin

Net Sales
Net Profit After tax X 100

Dividend per shares

Return
Investment
Return
Investment

Net Sales
Total distributable profit
Equity holders

on

No of equity shares
Profit before Int.& Tax

on

Net Operating assets

. Return . x 100
Capital employed

Price earning Ratio

Market Price of the share

to

Total dividend payable to per

shares

Measure the business performance.

Inter firm comparison.
Return means PAT + Interest on
long term debt + Prov. For tax
Int. div on non trade investment
+ non trading adjustment
Price earning on present market
value.

Earning Per share

PAT = Profit After Tax, FA = Fixed Assets, BEP = Break Even Points, MOS =
Margin of Safety.
Re: Capital Conservation Undrawn Commitments. Bank has issued the circular No BCC: BR:
108:114 dated 14.03.2016 which described asunder:
Bank is required to allocate capital under Basel III guidelines issued by Reserve Bank of India
against undrawn/ partially drawn commitments to borrowers.
Looking to the surge in stressed assets, declining profitability, to support the growth in loan book,
optimum utilization of scarce capital has emerged as basic pre-requisite for the Bank.
In this scenario it is imperative to ensure that Banks capital is put to optimum utilization. It is
therefore essential that we put in place a mechanism to ensure that capital outlay against undrawn
commitment is maintained at the minimum level.
Towards this objective, the following changes in process is being proposed:a.

QIS statements as per extant guidelines be obtained from the customers and operative limit
as indicated in the QIS statements may be fed in the CBS system.

b.

Identify the Cash Credit/ Overdraft limits of the borrowers which are inactive/ where limits

185 | P a g e

are
resolution

sparingly utilized. Reduce the limit in the CBS system to a minimum operative limit after
discussing with borrowers and obtaining their consent letter (coupled with Board
wherever required).

However, accounts where commitment charges are being recovered should be excluded from this
exercise.
In both the eventualities, mentioned against (a) and (b), borrowers may be advised to inform the
Bank in advance (2/3 days) their requirement of funds above the operative limit and the limit may
be revised upwardly up to the regular sanctioned limit according to their requests subject to
availability of drawing power. This should not be effected unilaterally by the Bank.
Borrowers consent should be obtained (under the signature of authorized officials) without leaving
any scope for complaint/ legal complications in future.
I.

All expired Bank Guarantees/ Letter of Credits should be reversed in the CBS system from
time to time after complying with the laid down guidelines of the Bank.

II.

Full Limit Node for Non Fund Based facilities may not be entered in the CBS system. Limit
may be updated up to the level of utilization of Non Fund Based facilities. Limit may be fed
as and when the request for issuing BG/LC facility is received from the borrower.

III.
IV.

Ensure that External Credit Rating is carried out in respect of all the eligible borrowers as
per extant guidelines of the Bank.
Branches are requested to incorporate the External Credit Rating and modified limit correctly
in to the ASCROM systems to effectively reap the benefit of capital conservation. Similarly
security updation in ASCROM is to be ensured. Latest and correct value of security to be
incorporated in the ASCROM.

MCLR
Marginal Cost of Funds Based Lending Rate (MCLR) shall be new internal benchmark lending rate for
all new sanctions and disbursements w.e.f. 1st April 2016.
RAROC
decided to introduce the evaluation of Risk Adjusted Return on Capital (RAROC) in appraisal of
all credit proposals with aggregate credit exposures of Rs. 5 Cr and above.

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NRI Deposits, Remittances facilities for Residents, DFB & Treasury operations
NRI BUSINESS:
NRI customers are very important for Bank for resource mobilization and pitching retail
asset products as well as wealth management products.
Some suggestive steps to facilitate & attract NRI customers :1. NRI Customers look for Professional Approach and Personalized Services from Bankers.
Displaying professionalism will attract NRI Customers.
2. Pro active actions like sending E-mails for their program, asking for any personalized services
required by them, Welcoming NRI Customer at their place may be taken.
3. If possible, NRI Customers meet should be arranged for welcoming / entertaining them.
4. All Staff should be updated with the various products / schemes offered by the Bank to NRI
customers and USPs of those products / schemes.
5. Welcome with smile to NRI customer, offer seat, asks for Tea/Coffee/Soft drink/Water.
6. Provide all information/USPs of various products. Also Provide them Banks brochure.
7. Help them filling up of various forms and politely ask for their documents.
8. Politely explain them the mandatory requirements like KYC/AML/FATCA norms and obtain
related documents/declarations.
9. Issue NRE cheque book / Credit / Debit card etc as applicable. Also arrange for registration
in Baroda connect and Mobile banking wherever possible / applicable.
10. Encash Currency notes, if Customer requires, observing all related guidelines and obtain
Currency Declaration form if encashment is more than USD 5000 equivalent.
11. Complete the work / all the formalities in respect of NRI Customer as early as possible. If the
job may take some time, due to reasonable ground, offer them the delivery of service at
their door step / place where they stay.
12. Entertain properly the person coming with the NRI though he/she may be a resident Indian.
Definition of Non Resident Indian (NRI)
Non-Resident Indian (NRI)
NRI is defined in Regulation 2 of Notification No. FEMA 5 / 2000- RB dated May 3, 2000. In terms of
this Notification, an NRI means a person resident outside India who is a citizen of India or is a
person of Indian origin.
a) A person resident outside India who is a Citizen of India i.e.
i) Indian Residents stay abroad for more than 182 days in the preceding financial year
ii) Indian citizens who proceed abroad for employment or for carrying on any business or
vocation or for any other purpose in circumstances indicating indefinite period of stay
outside India.
iii) Indian citizen working abroad on assignment with Foreign Government/Government
Agencies/International / Multilateral Agencies like United Nations Organization (UNO),
UNICEF, World Bank, International Monetary Fund etc.

187 | P a g e

iv) Officials of the Central and State Government and Public Sector Undertakings deputed
abroad on temporary assignments or posted to their offices (including diplomatic missions)
abroad except those situated in Nepal and Bhutan.
b) Person of Indian Origin (PIO)
PIO for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any
country other than Bangladesh or Pakistan, if
(a) he at any time held Indian passport; or
(b) he or either of his parents or any of his grandparents was a citizen of India by virtue of
the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
(c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or
(b).
c) Indian Students studying abroad
In terms of FEMA regulations Indian students studying abroad can be treated as Non
Resident Indians having regard to the circumstances stated as under
i) their stay abroad for more than 182 days in the preceding financial year and
ii) their intention to stay outside India for an uncertain period when they go abroad for
their studies
Accordingly, students going abroad for studies are treated as Non - Resident Indians and
are eligible for all the facilities available to NRI under FEMA.
For the purpose of Investment in India in immovable property, a person of Indian origin means
an Individual of Indian origin other than a citizen of Bangladesh, Pakistan and Sri Lanka
Persons of following categories will not be considered as NRI:
i) Indians who go abroad for the purpose of
a) tourism
b) pursuing research
c) undertaking business promotion visits.
d) to receive training
e) obtaining medical treatment.
f) participating in sports or cultural activities.
ii) Indians or Persons of Indian origin residing in Nepal/Bhutan /Pakistan/Bangladesh.
iii) Crew members working for shipping/airlines companies posted in India and those companies
whose registered offices are in India.
NON RESIDENT DEPOSIT (NRE/NRO/FCNR(B)/RLFCD)/FCLR/RFC:
Features of NRE Deposit in INR:
Current / Saving / Term Deposit Accounts
Eligibility : Any NRI (except Bangladesh/ Pakistan nationality which requires RBI prior approval)
Eligible Credits : Proceeds of remittance from Overseas to India/From other NRE, FCNR (B).
Transfer from NRO A/C (USD one million per financial year subject to deduction of applicable

188 | P a g e

tax)
Permitted Debits: Local Payments, Remittances outside India, Transfer to NRE / FCNR(B) Accounts
of the account holder or any other person eligible to maintain such account, Investment in Shares /
Securities of an Indian Company or for purchase of Immovable Property in India provided such
investment / purchase is covered by the regulations made, or the general / special permission
granted, by the RBI, any other transaction if covered under general or special permission granted
by RBI.
NRE Rupee FD:
Tenure of Time Deposit : Min. 1 Year; Max. 10 Year
Repatriability: Fully Repatriable ( Principal plus interest amount)
Joint Accounts : Allowed with other NRI. Resident close relative may also become joint account
holder with operational instructions Former or Survivor
Loan against Term Deposit : Up to any amount subject to advance value of Term Deposit.
Premature Withdrawal : Allowed. No interest is paid if the deposit is withdrawn before one year
of deposit.
Tax Exemption ; Interest earned is exempted from TDS.
Other Facilities : International Debit Card, Internet Banking (Baroda Connect), Account operation
allowed for local payments through Power of Attorney.
There is a Centralized Processing for opening NRE/NRO Savings Bank Accounts for applications
sponsored by our UAE, Kenya and Uganda territories.
Feature of NRO A/Cs in INR:
Current/Saving/Term Deposit Accounts
Eligibility: Any Non Resident.
Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of
Bangladesh ownership requires prior approval of the Reserve Bank.
Opening of accounts by individual/s of Bangladesh nationality may be allowed by Authorised
Dealer or Authorised Bank, subject to satisfying itself that the individual/ s hold a valid visa and
valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional
Registration Office (FRRO) concerned.
Eligible Credits: Some local credits as permiteed under FEMA, Proceeds of remittance from
overseas to India, From other NRE, FCNR(B), and other NRO A/Cs
Permitted Debits: All local payments in Rupees, Remittance outside India of current income
like rent, dividend, pension, interest, etc.
Repatriability : Rapatriable upto USD 1 million per financial year out of balance held in A/c.
subject to payments of tax and production of C.A. certificate i.e Form 15CA and Form 15 CB.
Loan Against Term Deposit : Permitted without any limit (As per Advance value of the deposit)
Joint Accounts : Allowed with other NRIs and local residents also.
Premature Withdrawal: Allowed, Rules applicable as per Resident Deposits.
Tax : TDS is levied at present @ 30% + surcharge on interest earned, Concession if any is
subject to double tax avoidance agreement (DTAA)with certain countries.
Other Facilities : International Debit Card, Internet Banking (Baroda Connect), Account operation
allowed for local payments through Power of Attorney.

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FCNR (B) Time Deposit:

Term Deposit accounts in USD, GBP, EUR, JPY, CAD, AUD.
Eligibility : Any NRI (except Bangladesh/Pakistan nationality which requires RBI prior approval)
Eligible Credits : Proceeds of remittance from overseas to India in foreign currency, transfer from
NRE a/c and conversion in foreign currency.
Tenure of Deposit : Min. 1 Year to Max. 5 Years
Repatriability : Fully Repatriable
Joint Accounts : Allowed with other NRI.
Loan Against Term Deposit: Up to any amount subject to advance value of Term Deposit
Premature Withdrawal : Allowed. No interest is paid if the deposit is withdrawn before one year
of deposit
Tax Exemption ; Interest earned is exempted from TDS
Other facilities : Opening of new A/C/Payment/Transfer is done through centralized FCNR Back
office using Finacle menu option HFCNR
Rupee Linked Foreign Currency Deposit (RLFCD):
A high yielding deposit product with inbuilt feature to protect depositors from exchange risk
A/C is maintained in USD, GBP, EUR, JPY, CAD, AUD
Minimum amount of deposit is USD 10,000 or its equivalent. Maximum amount of deposit can be
upto any amount
Period of deposit is one year fixed
Applicable rate of interest is the same as the rate of interest given under FCNR (B) deposit for
the period of one year in respective currency
A forward contract of one year is booked at the time of opening the deposit account on the
principal amount to enhance the yield out of the forward premium in order to protect the
depositors from exchange risk
On maturity, the deposit will be converted in to INR at the contracted rate and will be credited to
NRE or NRO a/c as per depositors instruction. Interest amount will be converted in to INR at
the exchange rate prevailing on maturity date.
Foreign Currency Linked Rupee Deposits (FCLR) Scheme
This deposit plan offers the dual advantage and benefits of both NRE Rupee Deposits and FCNR
Deposits. Moreover, since the maturity value is determined in foreign currency at the time of
application, the risk of losing money due to a fall in the exchange rate is eliminated.
Features:
Option to keep the deposit receipt free of cost in Bank's safe custody.
Acceptance and execution of Standing Instructions.
Addition and Deletion of name of account holders is permitted.
Provision for nomination.
The minimum deposit amount: is USD 10000/- or its equivalent.
NRI's can open this account by Inward remittances in any convertible currency from abroad through
normal banking channels by way of
Demand drafts
Telegraphic Transfers
Telex
Mail Transfers
SWIFT
Foreign Currency

190 | P a g e

Foreign Travellers cheques (during their personal visit) as well as transfer from any non-resident
(External) Rupee Savings & Fixed Deposit account or Foreign Currency Non Resident deposit
accounts
of
any
NRI
on
maturity.
However local Rupee cheques and Cash Currency in Indian Rupees cannot be deposited in this
account.
The remittance received from abroad is converted into Rupees and placed in NRE Rupee Deposit for
12 months. The customer is required to book forward contract for the maturity amount on the date
of deposit itself.
The effective yield to the customer will be the difference between the Rate of Interest on NRE
Rupee deposits and the Forward Premium prevailing on the date of effecting the transaction.
The deposit is subject to the Rules framed by the Reserve Bank of India. Deposit Receipts are not
transferable by endorsement.
Deposit Receipts will, when so required, be issued in the names of two or more persons and be
made payable to any one or more of them or to any one or more of the survivors of them or the last
survivor. However, all the persons must be Indians resident abroad or persons of Indian origin,
resident abroad.
Deposit will be accepted for period of 12 months only. In case of premature withdrawal of the
deposit receipt, the receipt needs to be signed by all the depositors irrespective of the operational
instructions "Either or Survivor", or "Anyone or Survivors/Survivor".
Interest on deposits will be paid on maturity along with the principal. No interest will be payable for
deposits run for less than twelve months.
Baroda Premium NRE SB Account:
A premium saving bank account specially designed for valued NRI customers.
Average quarterly balance required to be maintained is INR 50,000.00
Free remittance facility if beneficiary maintains account at any of branch in India
No charges for collection of cheque drawn on self a/c / travelers cheques / Currency notes
surrendered during personal visit
Demand draft / Bankers cheque issued free of any charges Cheque book facility available free of
cost
Preferential Exchange Rate for conversion
Interest and principal fully repatriable
Tax exemption on interest earned
Baroda Double Dhamaka NRE Term Deposit Scheme for NRIs: As per the prevailing rate of
interest the principal amount is doubled in a given period under RIRD scheme.

BARODA DOUBLE DHAMAKA NRE TERM DEPOSIT SCHEME FOR NRI (w.e.f. 16.12.2015)
Feature
Product Specification

Particulars
Term Deposit Product wherein NRI
depositor gets more than double of his

191 | P a g e

initial deposit amount after a period of9

years, 7 months and 2 days.
NRI individual in his own name
NRIs jointly

Eligibility and Target Group

NRIs jointly with resident with mode

of operation as Former or Survivors
NRI Minor of age 10 and above on
terms laid down by the Bank.
Account in the name of minor with
their father/mother as guardian
Minimum Amount of Deposit Rs 5000/(further amount in multiples of Rs 1000/-)
9 years 7 months and 2 days
7.30 % p.a. at present (subject to change from
time to
time)
As per RIRD Scheme for NRE Term
Deposits
Less than Rs.1.00 crore
TAX Free Interest
Principal and interest accrued is FULLY
Repatriable
Permitted with usual penalty clause.
However, no interest shall be payable In
case pre-mature payment is requested
before completion of 12 months
Allowed
No auto renewal is envisaged under the
scheme

Minimum Deposit Amount

Period
Rate of Interest
Payment of Interest
Maximum Deposit Amount
Tax
Repatriation
Pre-mature repayment

Nomination
Auto Renewal
Additional Rate of Interest to Senior
Citizens and Staff/Ex-Staff
Availability of Loan/Overdraft

NIL
Permitted up to 95% of outstanding
balance as per the Interest rate guidelines
in force at the time of loan

Resident Foreign Currency Account - for NRIs returning to India for settling in India
Our Bank offers remunerative deposits for NRIs returning to India with the intention of
permanently settling down. NRIs can also open RFC account with the ASSETS brought by them
on return as well as their foreign assets held abroad at any future date in case they desire so.

192 | P a g e

Their present NRI accounts will be re classified and called RFC accounts while the continuity of
the deposit will be maintained till maturity date of the deposit.

Foreign Currency Accounts For Residents:

Exchange Earners' Foreign Currency (EEFC) Accounts:1.All categories of foreign exchange earners are allowed to open and to credit up to 100 per
cent of their foreign exchange earnings to their EEFC Accounts with authorized dealers in
India subject to the condition that the sum total of the accruals in the account during a
calendar month should be converted into rupees on or before the last day of the
succeeding calendar month. This account shall be maintained only in the form of noninterest bearing current account. No credit facilities, either fund-based or non-fund based,
shall be permitted against the security of balances held in EEFC accounts by the AD
Category I banks
2.Funds held in EEFC account can be utilized for all permissible current account transactions
and also for approved capital account transactions as specified by the extant
Rules/Regulations/ Notifications/ Directives issued by the Government/RBI from time to
time.
RFC (Domestic) Account:
1. A person resident in India can open, hold and maintain with an authorized dealer in India,
a Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the
form of currency notes, Bank notes and travelers cheques from any of the sources like,
payment for services rendered abroad, as honorarium, gift, services rendered in
settlement of any lawful obligation from any person not resident in India proceeds of
export of goods and/or services, royalty, honorarium, etc., gifts received from close
relatives (as defined in the Companies Act) and repatriated to India through normal banking
channels by resident individuals. Also the unspent portion of foreign exchange availed for
travelling purpose can be credited in this account for use in subsequent travels abroad.
2. The account shall be maintained in the form of Current Account and shall not bear any
interest. There is no ceiling on the balances in the account.

Foreign Exchange Facilities for Resident Indians under Liberalized Remittance Scheme (LRS)
Foreign Exchange can be released under Liberalized Remittance Scheme for maximum amount
of USD 2,50,000 per financial year to undertake a range of miscellaneous non trade current
account transactions for the following activities:
1.
2.
3.
4.

Private Visits: For one or more private visits to any country (except Nepal & Bhutan)
Business Visits and travel for international conference/seminar/ training
Employment abroad
Emigration to other country

193 | P a g e

5.

Medical treatment

6.
7.
8.

Education abroad
Gift/Donations
Maintenance of close relatives abroad

The permissible capital account transactions by an Resident individual under LRS are:
(i) opening of foreign currency account abroad with a bank, (ii) purchase of property abroad;
(iii)making investments abroad- acquisition and holding shares of both listed and unlisted overseas
company or debt instruments; acquisition of ESOPs (the Scheme is in addition to acquisition of
ESOPs linked to ADR / GDR and acquisition of qualification shares); investment in units of Mutual
Funds, Venture Capital Funds, unrated debt securities, promissory notes;
(iv) setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013)
outside India for bonafide business subject to the terms & conditions stipulated in Notification No
FEMA.263/RB-2013 dated March 5, 2013;
(v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are
relatives as defined in Companies Act, 2013.
Notes:
Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign
currency notes and coins may be sold up to the limit indicated below:
Travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian
Federation and other Republics of Commonwealth of Independent States - not exceeding USD
3000 or its equivalent.
Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its equivalent
Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republics of
Commonwealth of Independent States - full exchange may be released.
Documents for releasing Foreign Exchange
Passport & VISA, Form A-2 as per prescribed format and Application-cum-Declaration for
purchase of foreign exchange under LRS as per format, PAN card.

Period of surrender of foreign exchange:

General permission is available to any resident individual to surrender received / realised /
unspent / unused foreign exchange to an Authorized Person within a period of 180 days from
the date of receipt / realization / purchase / acquisition / date of return of the traveler, as the
case may be.
However, a returning traveller is permitted to retain with him, foreign currency travelers
cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins
without any ceiling beyond 180 days.
Highlights of the scheme:
Remittance under this scheme is on a gross basis.
The facility is available to all the resident individuals including minors.
Remittances under the facility can be consolidated in respect of family members subject to the

194 | P a g e

individual family members complying with the terms and conditions of the Scheme.
Remittances under the Scheme can be used for purchasing objects of art subject to the
provisions of other applicable laws such as the extant Foreign Trade Policy of the Government
of India.
Remittance against gifts and donations cannot be made separately and have to be made under
the LRS Scheme only and therefore no separate limits for gift and donation are available.
The Scheme can also be used for remittance of funds for acquisition of ESOPs in addition to
acquisition of ESOPs linked to ADR/GDR and acquisition of qualification shares.
A resident individual can invest in units of Mutual Funds, Venture Funds, un rated debt
securities, promissory notes, etc under this Scheme. Further, the resident can invest in such
securities out of the bank account opened abroad under the Scheme.
It is mandatory to have PAN number to make remittances under the Scheme and the A/c
Should be 6 months old. Separate Application cum declaration Form has been devised for this
remittance scheme.
Import of foreign exchange into India
A person on arrival in India, has to make a declaration to the Custom Authorities at the Airport
in the Currency Declaration Form (CDF) where the aggregate value of the foreign exchange in
the form of currency notes, bank notes or travellers cheques exceed USD 10,000 (US Dollars
ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash
portion) exceed USD 5,000 (US Dollars five thousand) or its equivalent.
Baroda TravelEasy Card
Our Bank has launched a foreign currency pre-paid card viz. Baroda TravelEasy Card.
These cards have to be issued to resident Indians and are usable abroad for ATM cash withdrawal
and making merchant payments at physical/online stores from the loaded currency
Salient features of Baroda TravelEasy Card:
Issued in USD, EUR & GBP
Minimum load value - USD $200 or its equivalent foreign currency.
Maximum load value - as per extant FEMA guidelines based on the purpose of visit
Activation within 24 hours of purchase
Travelers are relieved of the risk of carrying cash & travelers cheque during foreign visits
Fees/charges are lower than applicable charges on domestic debit/credit cards used abroad
Cards are valid for -3- years. In this period, the card can be reloaded
Cardholder will have access to 24x7 Customer Care team as well as secured online portal for
viewing their card balance and transaction details Accounting, reconciliation and customer
support shall be provided by the Operations team, based at e-Business Department, in
collaboration with the service provider
KYC, AML/CFT requirement are as per RBI guidelines
Cards cannot be used in India, Nepal & Bhutan

FEMA (Foreign Exchange Management Act-1999).

All transactions in foreign exchange are governed by Foreign Exchange Management Act1999.
FEMA came into effect from 1st June 2000 replacing the stringent and draconian FERA of 1973
(Revised in 1993). The object of FERA was to conserve the foreign exchange resources. The
objective of enactment of FEMA, on the other hand, is to manage foreign exchange resources and
facilitate external trade and payments for promoting the orderly development of foreign
exchange market in India.

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The difference between FERA and FEMA can be summarized as under: Feature
FERA
FEMA
1. No. of Sections 81 sections
49 sections
2. Features
Presumptions of Mens Rea and
Presumptions of Mens Rea and
Abatements
Abatements excluded
3. Definition of
Capital/Current
transactions, These transactions/terms
are well
Terms
Person,
defined
Service etc. not defined
Concept of authorized
4. Concept of
persons was limited
to ADs and Concept of authorized
personAuthorized
AMCs
included ADBanks,
Authorized moneychangers, and off
Person
shore-banking
units
5. Definition of
Resident/Non-Resident
definition This definition is in harmony with
Resident
different from in Income Tax
Income Tax Act
Act
6. Nature of
Violations are criminal
offences Violations
are
civil
offences
Offence
punishable with imprisonment
punishable with monetary penalties
7. Provision of
Arrest

8. Amt. of
Monetary
Penalty
9. Right of
Impeded
Person to
take
assistance
10. Power
of
Police Officer
/ ED

Sweeping powers to officer of ED

Powers to arrest and imprisonment

Is restricted and prescribed only when
to arrest a person alleged to have
one fails to
committed
offence
under
the pay monetary penalty
contract
Could be as much as five times the
Decreased
to three times
the
amount involved
amount involved in the transaction
Impeded person did not have the
right to take legal assistance of
Lawyer or Chartered Accountant

Impeded person has a right to take

legal assistance of Lawyer or
Chartered Accountant

Sweeping powers

Restricted powers

PRE-SHIPMENT EXPORT CREDIT

Pre-shipment / Packing Credit' means any loan or advance granted or any other credit provided
by a bank to an exporter for financing the purchase, processing, manufacturing or packing of

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goods prior to shipment / working capital expenses towards rendering of services on the basis
of irrevocable letter of credit opened in his favour by an overseas buyer or a confirmed order
for the export of goods / services or any other evidence of an order for export having been
placed on the exporter.
Period of Advance
(i) The period for which a packing credit advance may be given by a bank will be operating
cycle or maximum period of 360 days and depending upon the circumstances of the
individual case, such as the time required for procuring, manufacturing or processing
(where necessary) and shipping the relative goods / rendering of services.
(ii) However, the benefit of concessional rate of interest on Pre Shipment Export Finance will
be granted for the maximum period of 270 days only. It is primarily for the banks to decide
the period for which a packing credit advance may be given, having regard to the various
relevant factors so that the period is sufficient to enable the exporter to ship the goods /
render the services.
If pre-shipment advances are not adjusted by submission of export documents within 360 days
from the date of advance, the advances will cease to qualify for concessive rate of interest to
the exporter ab initio.
Disbursement of Packing Credit should be made on FOB vale of LC/Export Order.
Liquidation of Pre-shipment Credit:
Pre-shipment credit is to be liquidated by the purchase / discount of export bills received from
Exporter in respect of Goods / Services exported. Further, subject to mutual agreement
between the exporter and the banker, it can also be repaid out of balances in Exchange
Earners Foreign Currency Account (EEFC A/C) representing Export proceeds, as also from
proceeds of any other unfinanced Export (collection) bills or lastly from Rupee resources if no
export takes place.
POST-SHIPMENT EXPORT CREDIT
'Post-shipment Credit' means any loan or advance granted or any other credit provided by a
bank to an exporter of goods / services from India after shipment of goods / rendering of
services.
Types of Post-shipment Credits:
Post-shipment advance can mainly take the form of (i) Export bills purchased/discounted/negotiated.
(ii) Advances against bills for collection.
(iii) Advances against duty drawback receivable from Government.
Liquidation of Post-shipment Credit:
Post-shipment credit is to be liquidated by the proceeds of export bills received from abroad in
respect of goods exported / services rendered. Further, subject to mutual agreement between
the exporter and the banker it can also be repaid / prepaid out of balances in Exchange
Earners Foreign Currency Account (EEFC A/C) representing Export proceeds, as also from
proceeds of any other unfinanced (collection) bills. However, such adjusted export bills should

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continue to be followed up for realization of the export proceeds and will continue to be
reported in the XOS statement.
Normal Transit Period: Export Bills in Foreign Currencies ( Demand / Sight Bill ) 25 days
Crystallization : Overdue Export Bills, which are purchased/discounted/negotiated by the Bank,
will be crystallized on 30th day after expiry of Normal Transit Period / Notional / Actual Due Date of
the Export Bill.
For crystallization into Rupee liability, the Authorized Dealer shall apply its TT selling rate of
exchange. The amount recoverable, thereafter, shall be the crystallized Rupee amount along with
interest and charges, if any.
The outstanding Export Bill which is crystallized will be treated on collection basis and will be
realized at TT Buying rate when actual realization proceed is coming.
GOLD CARD SCHEME FOR EXPORTERS
Eligibility
1. All exporters, including those in small and medium sectors, having a good track record
and credit worthiness as per credit rating of the bank
2. The account should be Standard continuously for three years and should not be in
the caution list of ECGC or RBI.
3. Export firms making losses for the past three years or having overdue export bills in
excess of 10% of the current years' turnover are not eligible for Gold Card.
Limits:
1. Gold card to the Exporter is issued for a period of three years subject to annual
review..
2. A stand by limit of 20 percent of the sanctioned limit may be additionally granted for
facilitating urgent credit needs of Gold Card Holder Exporter for executing sudden
orders.
3. Norms for inventory may be relaxed in case of unanticipated export orders, taking into
account the size and nature of the export order.
Concession in Rate of Interest: 0.25 % concession on applicable Interest Rate for Export Credit to
the Gold Card Holder Exporter
Concession in Other Charges: 10% concession will be given to the cardholders in commission and
exchange.
Tenor: The Gold Card will be issued for a period of three years and will be renewed unless any
adverse/ irregularities are noticed, subject to annual review of the account.
Other Features:
* Preference will be given for grant of PCFC.
* Premium on ECGC policy for Pre Shipment Finance will be borne by the Bank and not
* recovered from the Gold Card Holder Exporter.
* The loan application of such export clients will be processed expeditiously

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Diamond Dollar Account :

Firms and companies dealing in purchase/sale of rough or cut and polished diamonds are
permitted to open and transact their business through Diamond Dollar Accounts provided, they
have a satisfactory track record of at least three years in import / export of diamonds have an
average annual turnover of Rs. 3 crores or above during preceding three licensing years
(licensing year is from April to March). Eligible firms and companies may be allowed to open
not more than 5 Diamond Dollar Accounts with their Bank.
EXPORT DECLARATION FORM (EDF):
RBI has simplified the existing GR/PP forms used for declaration of exports of Goods and a common
form called Export Declaration Form (EDF) has been devised to declare all types of export of
goods from Non-EDI ports. The EDF will replace the existing GR/PP form used for declaration of
export of Goods.
Deemed Exports
Projects aided by bilateral or multilateral agencies/funds (world bank, IBRD, IDA). Under
deemed export goods will not cross the boundary of the India but will be supplied to Govt.
aided projects and the remittance in the form of foreign exchange will be received into the
India. Export Finance to such projects can also be considered by way of pre-shipment/post
shipment credit.
Documentary Credit/Letter of Credit
Letter of Credit is a definite undertaking issued by a bank, on behalf of the buyers (importer),
to the seller (exporter), to pay for goods and/or services, provided that the seller presents
documents which comply fully with the terms and conditions of the documentary credit .
There are three formal contractual relationships in the use of documentary credits as means of
payment and these are:The contractual relationship between the buyer and seller as evidenced by the terms of the sale
contract.
The contractual relationship between the buyer and the buyers bank, which agrees to issue the
documentary credit on behalf of the buyer.
The contractual relationship between the buyers bank and the beneficiary of the documentary
credit who is the seller/exporter of the goods.
PARTIES TO A DOCUMENTARY CREDIT
1.

APPLICANT: He is also known as the Importer or Buyer of the goods.

2.

ISSUING BANK: Usually the applicants banker, which issues a letter of credit.
Issuing Bank is ultimately responsible for payment under the letter of credit.

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3.

ADVISING BANK:A correspondent of the issuing bank who is able to authenticate

the LC message before advising the same to the beneficiary. The advice to the
beneficiary is without any undertaking or liability on the part of the advising bank.

4.

CONFIRMING BANK: The confirming bank provides an undertaking to the beneficiary

that, notwithstanding any occurrence ( bankruptcy of the Issuing Bank etc.), they will
pay, accept or negotiate documents presented in conformity with the terms and
conditions of letter of credit.

5.

BENEFICIARY: He is an exporter or seller of the goods.

REVOLVING LETTER OF CREDIT

A Letter of Credit issued for a specific amount within which series of BP or BN are purchased/
negotiated. The limit will be automatically reinstated on retirement of earlier bill purchased or
negotiated, is called Revolving Letter of Credit. Bank should recover the commission on each
reinstatement. In case of Revolving L/C's aggregate turnover of bills under the L/C within the
validity period of L/C in addition to a suitable limit for single transaction should be specified.
RED CLAUSE AND GREEN CLAUSE LETTER OF CREDIT
Red clause Letter of credit which authorize the bank to provides finance to exporter at the preshipment stage which is known as packing credit finance. The credit facility granted under
such letter of credit is to be liquidated by purchase or negotiation of Bills under the L/C.
Green Clause letter of Credit is one which authorize the bank to grant further finance to exporter
for storage of goods in the name of bank, payment of dockyard, port and insurance charges etc.
Before the shipment is taking place. Green Clause L/C is only an extension of Red Clause Letter of
Credit.
STAND - BY LETTER OF CREDIT
In certain countries where issuance of guarantee is prohibited, banks are issuing stand by L/C.
This L/C guaranteed the payment in the event of failure of the opener to perform the
contractual obligations.
Stand-by credit is one which provides for tendering of documents relating to transactions
between the buyer and seller at the counter of the issuing bank for settlement of transactions in
case of failure of the buyer. The stand by L/C also provides for availing finance by the seller or
exporter from the bank, before the transactions are settled.
BACK TO BACK LETTER OF CREDIT
On many occasion, it may happen that the beneficiary of letter of credit has to procure raw
materials or finished goods etc. from various suppliers. He will request his banker to issue letter
of credit in favour of these suppliers on the basis of letter of credit he is having.
The letter of credit issued in favour of the local or other suppliers as above is called back to
back letter of credit. The terms and conditions of such back to back L/C should be in conformity
with the original letter of credit.

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TRANSFERABLE CREDIT
When a letter of credit authorise to transfer the credit to the second beneficiary at the request
of first beneficiary to the extent of amount and quantity of goods. This is called transferable
credit. This credit can be transferred once only. This means that second beneficiary cannot
transfer the portion allotted to him to next supplier.
Uniform Customs & Practices for Documentary Credits (UCPDC):
These are universally recognized set of rules governing Letter of Credits. The rules are published in
the form of Brochure by the International Chamber of Commerce. These rules are binding on all
parties. The latest publication is known as ICC 600 and adopted with effect from July 1, 2007.
INCOTERMS 2010
INCOTERMS means International Commercial Terms. These are trade terms commonly used in
commercial contracts. INCOTERMS are now separated into 2 Groups. Group 1 terms applicable
to all modes of transport and Group 2 terms only applicable to sea and inland waterway
transport.
In all there are a total of 11 INCOTERMS. The expanded form of the same are as under:
Applicable for all modes of transport:
EXW
FCA
CPT
CIP
DAT
DAP
DDP

:
:
:
:
:
:
:

Ex Works
Free Carrier
Carriage Paid To
Carriage and Insurance Paid
Delivered At Terminal
Delivered At Place
Delivered Duty Paid

Only applicable for sea and inland waterway transport:

FAS
FOB
CFR
CIF

: Free Alongside Ship

: Free on Board
: Cost and Freight
: Cost, Insurance and Freight

External Commercial Borrowings:

ECB are commercial loans in Foreign Currency and INR raised by eligible resident entities from
recognized non-resident entities and should conform to parameters such as minimum maturity,
permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.

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External Commercial Borrowings (ECB) refer to commercial loans availed from non-resident
lenders in Foreign Currency with a minimum average maturity of 3 years in the form of
i. Loans including bank loans;
ii. Securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally
convertible or partially convertible preference shares / debentures);
iii. Buyers credit;
iv. Suppliers credit;
v. Foreign Currency Convertible Bonds (FCCBs);
vi. Financial Lease; and
vii. Foreign Currency Exchangeable Bonds (FCEBs) (under approval route only)
Eligible borrowers :
Corporates in manufacturing and software development sector, Infrastructure, SIDBI, EXIM
Bank, SEZ units, are eligible to raise ECB in Foreign Currency. However, NBFCs, NGOs in
microfinance, trusts, cooperative societies, companies in miscellaneous services etc are eligible
to raise ECB in rupees only.
Recognized lenders are as under
i. International banks.
ii. International capital markets.
iii. Multilateral financial institutions (such as, IFC, ADB, etc.) / regional financial institutions and
Government owned (either wholly or partially) financial institutions.
iv. Export credit agencies.
v. Suppliers of equipment.
vi. Foreign equity holders.
vii. Overseas long term investors such as: a. Prudentially regulated financial entities;
b. Pension funds; c. Insurance companies; d. Sovereign Wealth Funds;
e. Financial institutions located in International Financial Services Centres in India
viii. Overseas branches / subsidiaries of Indian banks
Permitted uses:
ECB proceeds can be utilized for capital expenditure like
Import of capital goods, Local sourcing of capital goods, New project, Modernization /expansion of
existing units, Overseas investment in Joint ventures (JV)/ Wholly owned subsidiaries (WOS),
Acquisition of shares of public sector undertakings at any stage of disinvestment process,
Refinancing of existing trade credit
Units of SEZs can raise ECB only for their own requirements
For on lending by NBFCs / NGOs in microfinance, SIDBI, Exim Bank etc
Two routes for raising ECB
(a) Automatic Route : ECB under Automatic Route do not require approval of Government of India
/ RBI.
(b) Approval Route: Cases falling outside the purview of Automatic route and cases specified by
RBI for approval route.

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The framework for raising loans through ECB comprises the following three tracks:
Track I : Medium term foreign currency denominated ECB with minimum average maturity of 3/5
years. The all-in-cost ceiling for track 1 is prescribed through a spread over the benchmark as
under:
a. For ECB with minimum average maturity period of 3 to 5 years - 300 basis points per annum over
6 month LIBOR or applicable bench mark for the respective currency.
b. For ECB with average maturity period of more than 5 years 450 basis points per annum over 6
month LIBOR or applicable bench mark for the respective currency.
ii. Penal interest, if any, for default or breach of covenants should not be more than 2 per cent over
and above the contracted rate of interest.
Track II : Long term foreign currency denominated ECB with minimum average maturity of 10
years. The all-in-cost ceiling for track 2 is prescribed through a maximum spread over the
benchmark will be 500 basis points per annum. Remaining conditions will be as given under Track I
Track III : Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.
The all-in-cost for track III, ( i.e. ECB in INR) should be in line with the market conditions.
All-in-cost includes : - Rate of interest, other fees and expenses in foreign currency except
commitment fee, pre- payment fee, and fees payable in Indian Rupees. Moreover, the payment of
withholding tax in Indian Rupees is excluded for calculating the all-in-cost.
Amount wise Individual Limits:
The individual limits refer to the amount of ECB which can be raised in a financial year under the
automatic route.
i. The individual limits of ECB that can be raised by eligible entities under the automatic route per
financial year for all the three tracks are set out as under:
a. Up to USD 750 million or equivalent for the companies in infrastructure and manufacturing
sectors;
b. Up to USD 200 million or equivalent for companies in software development sector;
c. Up to USD 100 million or equivalent for entities engaged in micro finance activities; and
d. Up to 500 million or equivalent for remaining entities.
ECB proposals beyond aforesaid limits will come under the approval route. For computation of
individual limits under Track III, exchange rate prevailing on the date of agreement should be taken
into account.
Issuance of Guarantee :
Issuance of Guarantee, standby letter of credit, letter of undertaking or letter of comfort by Indian
banks, All India Financial Institutions and NBFCs relating to ECB is not permitted. Further, financial
intermediaries (viz. Indian banks, All India Financial Institutions, or NBFCs) shall not invest in FCCBs
in any manner whatsoever.
End use not permitted:
The proceeds of the ECB borrowing can not be used for the following purposes:
i. Real estate activities other than development of integrated township / affordable housing projects;
ii. Investing in capital market and using the proceeds for equity investment domestically;

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iii. Activities prohibited as per the foreign direct investment guidelines;

iv. On-lending to other entities for any of the above purposes; and
v. Purchase of Land
Foreign Currency Convertible Bonds (FCCBs):
The issuance of FCCBs was brought under the ECB guidelines in August 2005. Issuance of FCCBs
shall conform to the Foreign Direct Investment guidelines including sectoral cap. In addition to the
requirements of (i) minimum maturity of 5 years, (ii) the call & put option, if any, shall not be
exercisable prior to 5 years, (iii) issuance without any warrants attached, (iv) the issue related
expenses not exceeding 4 per cent of issue size and in case of private placement, not exceeding 2
per cent of the issue size, etc. as required in terms of provisions contained in Regulation 21 of the
Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000 read
with Schedule I to the Regulations, FCCBs are also subject to all the regulations which are applicable
to ECBs.
Foreign Currency Exchangeable Bonds (FCEBs):
FCEBs can be issued only under the approval route and shall have minimum maturity of 5 years.
The bonds are exchangeable into equity share of another company, to be called the Offered
Company, in any manner, either wholly, or partly or on the basis of any equity related warrants
attached to debt instruments. Issuance of FCEBs shall conform to the provisions contained in
Regulation 21 of the Foreign Exchange Management (Transfer or Issue of any Foreign Security)
Regulations, 2000 read with Schedule IV to the Regulations which contain eligibilities in respect of
the issuer, offered company, subscriber, permitted end-uses, etc. The all-in-cost of FCEBs should be
within the ceiling specified by RBI for ECB.
Buyers Credit
Buyers Credit is a financing arrangement under which a lending bank outside India lends
directly to the buyer or to Buyers bank in the buyers country to enable the buyer to make
payments against Imports.
Benefits to the Bank:
Good Income and self liquidating
Higher returns with greater safety
Better risk coverage
Better utilization of our resources overseas
Visibility and image creation
Relationship building and customer satisfaction
Benefits to Corporates
Extremely competitive pricing & Service
Interest rate linked with LIBOR increases stability
Need not to go overseas market as our bank arranges for everything through Overseas
presence
No payment of withholding tax, if availed from our foreign branches
(Foreign Banks are subject to withholding tax)
Better risk coverage by various hedging options
Less formalities
Suppliers Credit

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Suppliers credit is a financing arrangement under which a supplier agrees to accept deferred
payment terms from the buyer. Supplier avails funds by discounting or selling the bills of
exchange or promissory notes so created with the bank in its own country.
FCNR(B) LOANS
The foreign currency denominated loans in India are granted against the foreign currency
funds accumulated by the Bank by way of FCNR (B) Deposit The loans given from this
FCNR deposit funds are commonly known as FCNR (B) loans.
BOB with a wide global presence has a large base of NRI customers / depositors.
Therefore, BOB has a large resource base of FCNR (B) deposits and is in a position to offer
the Foreign Currency Loans in India under FCNR (B) Loan Scheme at very competitive
rates.
Advantages of FCNR (B) loans:
At times, it may entail lesser interest cost vis--vis Rupee borrowings. The borrower is not
required to go to the International market for raising the funds as foreign currency funds
are made available in India reducing the cost of raising such funds.
Features
Corporate can raise FCNR (B) loans from the Banks who are authorized dealers. BOB
grants FCNR (B) Loans through its Position Maintaining Offices at Mumbai, i.e. SITB
Mumbai
The Indian corporate are allowed to raise the funds through FCNR (B) Loans at the
selected Indian branches within the prevailing policy guidelines of the Bank/ RBI. The
period of FCNR (B) loan is 6 month which can be rolled over further. The spread of 350
bps over LIBOR will be taken for Rate of Interest on FCNR(B) loans.
Purpose
Corporate is allowed to obtain foreign currency denominated loans in India under the
above scheme for the following purposes: 1.
2.
3.
4.
5.
6.
7.

For meeting working capital requirements in Indian Rupees.

By way of pre-shipment advances/post shipment advances to the exporters.
Import of raw materials.
Import of capital goods.
Purchase of indigenous machinery.
Repayment of the existing Rupee Term Loan.
Repayment of any existing ECBs with the permission from RBI, Govt. of India.

The loan can be granted after proper assessment and sanction of working capital
requirements/ Maximum Permissible Bank Finance (MPBF) . The borrowers should have
natural hedge to cover themselves from exchange risk, which are required to be borne by
them. The exporters can avail this facility by way of pre-shipment credit as well as post
shipment credit in foreign currency. All other terms applicable to such type of Rupee
advances shall also be applicable to foreign currency advances.

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Exchange Rate Mechanism:

a. Direct quotations:
Under a system of Direct Quotations, the exchange rates are quoted where the unit(s) of
foreign currency remains constant, whereas the home currency units fluctuates : i.e.
USD 1 = Rs. 66.65
b. Indirect Quotations:
Under a system of Indirect Quotations, the exchange rates are quoted where the unit(s) of
home currency remains constant against variable units of foreign currency. i.e. Rs. 100/- = USD
1.52
In India we follow the direct method of quoting exchange rates since August 1993.

Types of Rates:
(i)

Cash / Ready: When the deal is entered into and its settlement is done on the very
same day then it is known as Cash / Ready Rate.(T + 0)
(II) TOM: When the deal is entered into but the settlement is done on the next working day
then it is known as TOM.(T + 1)
(iii) Spot Rate : Where the settlement is to take place after two working days from the date
of contract. It is termed as "SPOT RATE." (T + 2)
(iv) FORWARD RATES: All exchange rates quoted, where the settlement is to take place after
the spot rate are termed as "FORWARD RATES" (T + > 2). Forward Rates are generally
quoted as a margin against the spot rate for currency concerned. The margin may
represent either "PREMIUM" or "DISCOUNT". There is a facility of settlement of forward
contract either on a fixed date or with an option of settlement within a period agreed
which can be maximum one months period.
Premium: Premium is a value of exchange in excess of spot rate. In relation to forward
exchange rate, it means that the currency is dearer for future delivery than for the spot
delivery i.e. currency is dearer for forward purchase than the spot purchase.
Discount: Discount is a value of exchange below spot rate. In relation to forward exchange
rate, it means that the currency is cheaper for future delivery than for the spot delivery i.e.
cheaper for forward purchase than the spot purchase.
LIBOR (London Inter-Bank Offered Rate):
LIBOR is a daily reference rate based on the interest rates at which banks offer to lend funds
to other banks in the London inter-bank market. LIBOR is published by the British Bankers
Association (BBA) at 11:00 A.M London time , every day, and is a filtered average of interbank deposit rates offered by designated contributor banks, for maturities ranging from
overnight to one year.
SWIFT
Society for Worldwide Interbank Financial Telecommunication is a co operative society created

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under Belgian law and having its corporate office at Brussels. It operates computer guided
communication system for transmission of international payment transfers messages in a
secured system driven environment. Only authorized officials can access and decode the data /
information / message.
Categories of AD branches:
Category A: Offices and branches maintaining independent foreign currency accounts
(NOSTRO A/C) with overseas correspondents / branches in their own names. Specialized
Integrated Treasury Branch (SITB) Mumbai is the only Category A Branch of Bank of
Baroda.
Category B: Offices and branches not maintaining independent foreign currency accounts
but having powers of operating on the accounts maintained abroad by their A category
branch.
Category C: All other offices and branches handling foreign exchange business through
other category B Branches, but not having powers to operate on the Foreign Currency
accounts maintained by their Bank.

ACCOUNTING ARRANGEMENTS:
NOSTRO ACCOUNT (OUR ACCOUNT): means our account in foreign currency with a bank or
branch abroad. They are the current accounts of the bank with their correspondents /
branches in foreign centers in their currencies.
VOSTRO ACCOUNT (YOUR ACCOUNT): means foreign banks or branchs account with us in
Indian Rupees.
LORO ACCOUNT: Entries passed to the account of a third bank are said to be for
LORO account, e.g., a remittance made by one bank to another for account of a third
bank may be sent by the remitter for credit of a LORO a/c (bank), meaning their account with
you.
What do you understand by Derivatives?
It is a financial contract value (spot rate) of which is derived from another financial
products/commodity called underlying (that may be stock, foreign currency, commodity etc.)
Forward contract in forex business is a best example of derivatives.
The basic object of the derivative is to hedge the risk. Future, forwards, options, swaps are the
common instruments of derivatives.

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A derivative is an instrument / contract whose value depends on the values of other underlying
instrument / contract.
These variables may be :
Stock Prices
Exchange rates
Interest rates
Functions of Derivatives :
Derivatives shift the risk from the buyer of the derivative product to the seller and as such are
very effective risk management tools.
Derivatives improve the liquidity of the underlying instrument. Derivatives
perform an important economic function viz. price discovery. They provide
better avenues for raising money.
They contribute substantially to increasing the depth of the markets.
Share of Exchange Profit
Treasury Branch passes share of profit on exchange transaction done by Authorized Branches
on half yearly basis i.e. March to August and September to February. This is passed on to the
branches during first fortnight of September and March every year.
FORWARD CONTRACT
A forward foreign exchange contract is one which is booked today at a rate agreed today but
settlement takes place at an agreed future date.
The contract is negotiated directly by the buyer and seller. It is an OTC (over the counter )
product
No money exchanges between the parties when it is contracted and the actual conversion
/ settlement takes place at agreed rates at future maturity date.
Both the parties are obliged to fulfill their contractual terms.
Cancellation of Forward Contract
Cancellation of forward contracts before the maturity date may be at the discretion of bank.
Purchase contracts shall be cancelled at T.T. selling rate Sale contracts shall be cancelled at T.T.
buying rate
In the absence of any instructions from the customer a contract which has matured shall be
cancelled by the bank on the 3rd working day after the maturity date
Fixed Forward Contract and Option Forward Contract
In a fixed forward contract, the transaction will have to be completed on the specified future
date.
In Option Forward Contract, the option period of delivery in future should be specified and
should not exceed a period of one calendar month.
Forward Rate Agreements (An interest rate derivative)
1. A Forward Rate Agreement is a contract between two parties by which they agree to settle
between them the interest differential on a notional principal on a future settlement date for
a specified future period.
2. Further, as the commitment is only to settle the interest differential, the credit risk with the
counter party is minimal.

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3. FRAs can be used effectively to lock in interest rates and thus manage the gaps between
rate sensitive assets and liabilities of the balance sheet. Thus they are very useful in Asset
Liability Management.
4. FRAs could easily replicate cash market transactions with a lower capital requirement and
can also improve the liquidity of the underlying cash markets.
Interest Rate Swaps :
An Interest Rate Swap is invariably an over the counter contract. It is a contact between two
parties who agree to exchange interest payments on a notional principal at pre -agreed
intervals of time for a given maturity. Mostly, Interest payments are based on a fixed rate on
the one side and a floating rate on the other.
Options :
1. An Option contract is essentially a contract between two parties wherein one party buys the
right to sell or buy a given underlying at a future date at a pre-agreed price and the other
sells this right. Obviously, this means options are basically forward contracts on rights. In
other words, they are simply insurance products against adverse movements in the market
prices.
2. The right to buy an underlying is called a Call Option and the right to sell the underlying is
called the Put option.
3. The option which can be exercised by the buyer only on the date of maturity is called an
European Option.
4. American Option is the Option which can be exercised on any working day before the
maturity or on the maturity date.
Interest Rate Options :
Interest Rate Options are fundamentally of two types, the Cap and the Floor. A Cap is an
interest rate option in which, the buyer of the option, with the intention of locking himself to a
ceiling in interest costs for his borrowing, reserves the right to receive the difference in
interest rate on a notional principal in case the interest rate on the underlying borrowing goes
higher than the ceiling he has chosen at pre-agreed periodic intervals for a given time
maturity.
LAF - REPO and Reverse REPO :
1. RBI gives LAF Liquidity Adjustment facility as recommended by Narsimhan Committee. The
purpose of LAF is to provide short-term liquidity support to Banks in India. The rate for LAF
is REPO (Repurchase Option) for injection of liquidity and Reverse REPO for absorption of
liquidity.
2. A financing arrangement used primarily in the Govt. security markets whereby a dealer or
other holder of the security sells the securities to a lender and agrees to repurchase the
same at an agreed future date at an agreed price is called Repo transaction when viewed
from the sellers perception. It is reverse repo for the suppliers of fund who are purchasing
such security.
MARKET INTEREST RATE
The interest rate, or discount rate, or yield to maturity is an interest rate which changes
constantly depending on various factors like demand/supply of the Financial asset, future
economic outlook etc.

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FACE VALUE
The principal value of the Bond, which is printed on the bond and which is fixed throughout
the bonds life.
YIELD TO MATURITY
This term popularly known as YTM connotes redemption yield and is very useful for Treasury
Managers whose investment horizon is long term. YTM can be interpreted as the bonds
average compounded rate of return if the bond is bought at the current asked price and held
until it matures and the face value is repaid. That is, YTM can be defined as the discount rate
that equates present value of all cash flows to the present market price of the Bond. Future
cash flows includes interest and capital gain/loss.
MARK TO MARKET (REVALUATION):
1. RBI has directed all the banks in India in valuing their investment portfolio at market rates.
Valuation of securities at market rates is known as marking to market.
2. This process of valuation of the portfolio exposes the Bank to the market risk and forces the
treasury to take suitable steps to hedge such risk. For example if the value of the securities
in the portfolio have depreciated, as per the prevailing market rates, the profitability and
thereby the net worth of the bank also gets adversely affected.
3. Conversely, if there is an appreciation, which are unrealized gains, cannot be taken to
profits of the Bank. However RBI issues guidelines on valuation norms from time to time.
3. This portion of portfolio which is marked to market is termed as Current category while the
remaining portion which is not marked to market is termed as Permanent category.
4. This will ensure that Banks Capital base could withstand any eventuality of high volatility in
the value of its portfolio at a later date, say when the Capital account convertibility comes.
Terms for money market:
1. HTM = Held to maturity, securities which are not meant for sale and shall be kept till
maturity date
2. HFT = Held for trading, securities acquired with the intention to trade by taking advantage
of the short term price/interest rate movement are classified as HFT.
3. AFS-Available for sale: The securities which do not fall under the above two categories will
be under this category.
4. Coupon rate = The rate which is displayed on the instrument and fixed at the time of
issuance.

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Multiple Choice Question

1. Which of the following Category is not considered as a NRI
a. Indian Citizen who proceed abroad for Education
b. Indian Citizen working in UNO
c. Indian Citizen going abroad for Business Promotion
d. Officials of State Government posted to abroad
2. A Non Resident External account can be maintained by
a. A National/Entity of Sri Lanka
b. A National/Entity of Bangladesh
c. A person working for an Airline Company and posted in India
d. Offices and Branches situated in Nepal.
3. Which of the following statement is not True with regard to a NRO A/c.
a. Account can be opened Jointly with Resident close relatives
b. Remittances outside India is permissible for Current Income like rent, dividend etc.
c. Remittance up to One Million USD from the Account in a calendar year
(January
December)
d. NRO account can be opened by a Foreign National of Non Indian Origin visiting India
4. Availing Foreign Exchange is prohibited for
a. Travel to Nepal and / or Bhutan
b. Remittance of Income from any type of Hobby
c. A transaction with a person in Nepal
d. All of Above.
5. Which is not True with regard to NRE S B A/c.

a. Interest on Govt. Securities can be credited if the same securities was purchased by using
FCNR fund.
b. Interest Rate cannot exceed MIBOR/SWAP rate Plus 175 bps.
c. A loan to third party can be granted against collateral security of NREFD.
d. Account can be opened jointly with Resident close relatives
6. Which is not True in regards to FCNR a/c.
a. AD banks in India may be permitted to accept FCNR(B) deposits in any permitted
currency
b. Interest cannot be more than LIBOR + 100 bps

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c. TT Buying rate is applicable for conversation into INR

d. Bank need not to maintain Reserve requirement (SLR/CRR) on this deposit.
7. Which act provides guidelines for the flow of Foreign Exchange in India.
a.
b.
c.
d.
8. The

FEMA
RBI Act 1935
FEDAI act
ICC
minimum deposit amount required for opening RLFCD A/c.

a) USD 5000 Equivalent

b) USD 10000 Equivalent
c) USD 15000 Equivalent
d) USD 25000 Equivalent
9. In case of export bill crystallization, which rate will be applicable?
a.TT Selling

b. TT buying c. Bill Selling

d. Bill Buying

10. Transferable LC is one that can be transferred

a. Only once, i.e. From the First Beneficiary to any number of Secondary
Beneficiaries
b. Only once to one second beneficiary or
c. To any number of beneficiaries several times
d. Only by first beneficiary to second beneficiary and not vice versa

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RISK MANAGEMENT
What is Risk?
Risk is a probability of loss, may be direct or indirect. Direct loss may be relating to loss of
capital or earning whereas indirect loss may be loss of business. Thus, risk means probability of
loss of earning, capital or business.
For example:
In case of non-payment of dues bank will suffer a loss, in case of compromise loss of earning
(waiver) or loss of capital in case of write off.
Frauds committed by either employees or outsiders results into loss of business.
What is Risk Management?
The four letters RISK indicates that risk is an unexpected event or incident, which needs to be
identified, measured monitored and control.
R = Rare (Unexpected)
I = Incident (Outcome)
S = Selection (Identification)
K = Knocking (measuring, monitoring, controlling)
Thus, the risk management is a sum of (1) Risk identification (2) Risk measurement (3) Risk
monitoring and (4) Risk control with a view to maximize Risk Adjusted Return on Capital
Employed = (RAROCE).
Different Types of Risks?
Broadly speaking the risk can be divided into four main categories.
(1) Market Risk (2) Operational Risk (3) Credit Risk and (4) Country Risk
Market Risk
Market risk is the risk that the value of an investment will decrease due to moves in
market factors. Volatility frequently refers to the standard deviation of the change in
value of a financial instrument with a specific time horizon.. Market risk may be
relating to:

Liquidity Risk: Potential inability of a bank to meets its repayment obligations in a

timely and cost effective manner e.g. Mismatch of deposits and assets.

Interest Rate Risk: Risk due to change in market interest rate, which might adversely
affect the banks financial position. The NIM will reduce. This depends on types of assets
such as fixed or floating rate, quantum of advance etc.

Foreign Exchange Risk: Risk due to upward/downward movement in exchange rate

when there is an open position, either spot or forward or both in an individual currency.

Commodity Price Risk: The price fluctuation in commodity, which are charged to the
bank as security etc. by way of hypothecation and /or pledge.

Equity Price Risk is a loss in value of the banks equity investments and or equity
derivatives, arising out of change in equity price. Price fluctuation in stock market where
bank has invested fund.
OPERATION RISK:
It is a risk relating to direct or indirect losses arising out of inadequate or failure of people,
process, system, business, management and/or external factors. Generally, any risk not
categorized as market or credit risk is called operational risk.
Broadly speaking operational risk covers following:

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(1) People (2) Process (3) Management (4) System (5) Business and (6) External.
COUNTRY RISK:
Country Risk is the possibility that a Country will be unable to service or repay its debts foreign
lenders in a timely manner. Country Risk is the risk arising while dealing with other countries
such as sovereign risk, political risk, transfer risk, currency risk, cross border transactions,
defaulter country risk etc.
WHAT IS CREDIT RISK?
Credit risk is a risk of potential loss arising out of inability or un-willingness of a customer or
counter party to meet its commitments in relation to lending. Hedging, settlement and other
financial transactions. Thus, credit risk may be relating to;
Direct lending: Default risk, (non-payment of instalment and interest by the loanee), portfolio
risk.
Off Balance Sheet items: Counter party risk-Invocation of Guarantee or crystallization of L/C
liability for which dues have not been paid or denied by the counter party.
Treasury Operations: Forward Contract obligations, Credit Derivatives etc. On due date the
party is refusing/ denying the payment/ delivery.
Security transaction: The counter party may not effect fund settlement/ security settlement.
Counter Party Risk:When there are two or more contracts entered into and liabilities are
depending upon happening of certain events and the party on whose behalf we have taken
exposure express his inability to pay out is called counter party risk.
Portfolio Risk : is also called Credit Concentration Risk. This arises due to failure of particular
segment/activity where the bank is having substantial exposure. To mitigate such risk there are
sectoral exposure, single /group exposure ceiling, activity ceiling etc.
Defaulter Risk there is one contract only i.e. between bank and borrower, may be due to
unwillingness or inability of the borrower.
TOOLS FOR CREDIT RISK MANAGEMENT:
Credit is considered as core business activity of banking which results into profit. Therefore, it is
necessary to increase the credit portfolio and also to mitigate the risk relating to credit. Following
are the tools available for risk assessment and monitoring:

Operations in the account

Stock Statements
QIS/QMR
Review of account and financial statements
ASCROM and PSR
Audit & inspections: concurrent audit, annual audit, Stock audit, periodical inspection, ZIC
inspection, etc.
Discretionary Lending power and Cap
Exposure ceiling- Single, Group, and activity exposure.
Insurance and Credit rating
Secured & unsecured

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SMA 02

CREDIT RATING METHODOLOGY

The BOBRAM Risk Rating Models for Commercial Advances are based on two dimensional rating
methodology specified under Basel -II Accord requirements. The credit risk rating process as per
BOBRAM Rating Models involves three types of ratings for each credit facility
1. Obligor (Borrower) Rating -for credit worthiness indicating the Probability of Default
(PD)
2. Facility Rating -representing the Loss Given Default (LGD) and
3. Composite Rating -which is indicative of the Expected Loss (EL)
OBLIGOR (BORROWER) RATING
The obligor (Borrower) rating is indicative of creditworthiness of an obligor or the Probability of
Default (PD) and it is based on the assessment of past and projected cash flows of the company.
For assessment of an obligor, the rating structure consists of evaluation by way of four modules viz.
1) Industry Risk, 2) Business Risk, 3) Financial Risk and 4) Management Quality.
Obligor (Borrower) Rating Grades:
Obligor Rating Grades range from BOB-1 to BOB-10. However depending upon the model used, the
rating grades ranging from BOB-1 to BOB-10 or BOB-3 to BOB-10 or BOB-6 to BOB 10.
FACILITY RATING
Facility Rating involves assessment of the security coverage for a given facility and indicates the
Loss Given Default (LGD) for a particular facility. Facilities proposed/ sanctioned to a company are
assessed separately under this dimension of rating.
Facility Rating (FR) Grades:
Facility Rating grades range from FR-1 to FR-8.
COMPOSITE RATING
The Composite Rating (CR) which is the matrix or the combination of PD and LGD; indicates the
Expected Loss in case the facility is defaulted. The Composite Rating is worked out automatically by
the software based on the matrix of Obligor (Borrower) Grade (BOB Rating) and Facility Rating
Grade (FR).
Composite Rating Grades:
Composite rating grade ranges from CR-1 to CR-10. CUTOFF GRADE FOR ACCEPTANCE
Bank has accepted BOB-6 as the cut-off point for the acceptance of an obligor (borrower) based on
Obligor (Borrower) rating carried out as per the applicable model. The rating models have been
grouped in three categories for the purpose of specifying cutoff point for the acceptance of an
obligor (borrower) as per details mentioned hereunder:

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PRICING
The composite Rating or the Combined Rating (CR- 1 to CR-10) is computed on the basis of matrix
of Obligor Rating for credit worthiness and the Facility Rating representing the expected loss in
case of default.
Difference between Internal Audit & Risk Based Internal Audit
Internal Audit
Transaction
based.
No risk
assessment. 100% transaction testing
Process
identical
for
branch/unit.
Periodicity linked to rating.

each

Backward looking - focus on historical

accounts, past performance and
compliance because of lack of risk
focus.
Inadequate optimization of audit
resources.
No direct linkage to supervisory
process.

Risk Based Internal Audit

Risk based. Level of transaction
testing
depends
on risk
assessment.
Process differs according to risk
assessment.
Periodicity
linked
to risk
assessment.
Forward looking - suggestions for
risk mitigation.

Effective
optimization of audit
resources.
Essential
for regulatory Risk
Based Supervision.

Risk Management approaches

As per RBI guidelines the foreign banks operating in India and the Indian banks having
operational presence outside India are required to migrate to the Standardized Approach for
Credit Risk and the Basic Indicator Approach for Operational Risk with effect from March 31,
2008. All other Schedule Commercial banks are encouraged to migrate to these approaches
under Basel-II in alignment with them. RBI has also specified that banks would have to maintain
a minimum Tier-I ratio of 6 %, while continuing to maintain CAR of 9 %.
As regard the Market Risk, under Basel-II also, the banks will continue to follow the
Standardised-Duration Method as already adopted under the Basel-I framework and maintain
capital charge for market risk on securities included in the Held for Trading (HFT) and Available
for Sale (AFS) categories, open position of Gold - Forex-Derivatives .
With regard to pillar 2, the banks have been advised to put in place an Internal Capital adequacy
Assessment Process (ICAAP), with approval of their Board. Banks will formalize their capital
adequacy assessment process in alignment with their business plans and performance budgeting
system. This together with the adoption of Risk Based Supervision would enable factoring in the
pillar-II requirements under Basel-II.

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To deal with the different Risks, Basel-II suggests the following approaches
1. Credit Risk
a) Standardised Approach
b) Foundation Internal Rating Based (FIRB) Approach
c) Advanced Internal Rating Based (IRB) Approach
2. Market Risk
a) Standardized Approach (Maturity Method)
b) Standardized Approach (Duration Method)
c) Internal Models method
3. Operational Risk
a) Basic Indicator Approach
b) Standardised Approach
c) Advanced Measurement Approach
Roll out of operational Risk Management system SASEGRC (BCC: BR: 107:257 dated 0106-2015): Bank has decided to roll-out this system for all entities of the bank, on solo basis, in
India w.e.f. 01-06-2015. The system will benefit the bank in online collection of operational risk loss
data and its tracking in terms of recovery, impact of the banks profit and loss account. All the
operating units of the bank i.e. all branches, RO, SME, RLF etc are required to report the operational
risk losses of their respective unit to this system. The structure of the reporting and all other related
issues are described in annexure I of the above circular.
Standardised Approach to Credit Risk
Under the Standardized Approach, banks credit portfolio have been grouped into various class types
like Domestic and Foreign Sovereign, Banks, Corporate, Public Sector entities, Regulatory Retail
portfolio etc. The bank will allocate risk weight to fund and non-fund based assets, depending on
the quality of assets as reflected in the risk rating secured by the borrower from External Credit
rating institutions.
For example AAA rated account will have risk weight of 20%, while the A rated accounts will
have risk weight of 50%, BBB rated account will have risk weight of 100% and so on. Off Balance
Sheet items will be converted to credit risk exposure by multiplying with
Credit Conversion Factor from 0% to 100%. Risk weight of 100% may entail a capital charge of
9%, risk weight of 50% may entail a capital charge of 4.5% and a risk weight of 20% may entail a
capital charge of 1.8% etc.
Credit Conversion Factor (CCF)
The off balance sheet items have to be converted to credit risk exposure by multiplying with Credit
Conversion Factor. Basel II standardized approach has prescribed CCFs of 0% to 100 % for
different types of Off Balance Sheet Items.
Credit Risk Mitigation (CRM) Techniques
1. Collateralised Transactions - Certain securities are eligible to be considered for Basel-II
purpose. The securities may be either prime securities or collateral securities like cash margin,
Banks own deposit, NSC, Indira Vikas Patras & Kisan Vikas Patra, LIC policies, Gold, etc i.e. cash
or near cash securities are considered as security for Basel-II purpose. In respect of Standard
Assets Basel-II does not recognize land and building, Plant and Machinery as Collateral for risk
mitigation purposes.
2. On Balance Sheet netting - It is confined to loans / advances and deposits, where banks have

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legally enforceable netting arrangement, involving specific lien with proof

documentation. Loans and advances are treated as exposure and deposits as collateral.
Exposure may be offset against eligible collateral credit.
3. Guarantees - The eligible guarantors are Sovereign, sovereign entities, ECGC, PSEs, Banks,
Primary Dealers with a lower risk weight than the counter party (borrower), other entities rated
AA or better External Credit
Rating Agencies approved by RBI
Domestic - CARE, CRISIL, ICRA, FITCH & BRIPL (Brickwork Rating India Pvt. Ltd.) Foreign
Standard & Poor, Moodys & FITCH
Basic Indicator Approach (BIA)
Under this approach, banks must hold capital for operational risk equal to the average over the
previous three years of a fixed percentage (denoted alpha, in the formula below) of positive annual
gross income. If annual gross income is negative or zero, it should be excluded while calculating the
average. It can be expressed as below;
K= (GI 1.3*a)/3
Where K = Capital Charge under Basic Indicator Approach
GI- Gross Income (annual), where positive, over the previous three years. a 15% as per Basel-II accord.
Internal Capital Adequacy Assessment Process (ICAAP)
ICAAP comprises of all banks procedures and measures to ensure the appropriate identification and
measurement of risks, appropriate level of Internal Capital in relation to banks risk profile and
applications and further development of suitable risk management systems, comprehensive
strategies and procedures for continuous evaluation and regular review, composition and
distribution of internal capital which is considered adequate to cover current risk and any future risk
in both quantitative and qualitative terms.
Risks to be captured in Pillar II:
1. Credit Concentration Risk Concentration Risk may be used in a broader sense to include
concentration by sector, Concentration by Industry, geographical location and concentration of
risk mitigant measures.
2. Country Risk The exposure to various countries are in terms of rating categories as specified
by the ECGC guidelines on Country Risk Management in terms of percentage to Tier 1 and Tier 2
Capital.
3. Interest Rate Risk in the Banking Book Interest Rate Risk is taken to be the current or
prospective risk to both the earning and capital of the bank arising from adverse movements in
interest rates. In the context of Pillar 2, this is to be estimated for only, given that the interest
rate risk in the trading book is already covered under Pillar 1 market risk regulation.
4. Liquidity Risk - Liquidity Risk occurs when an institution is unable to fulfil its commitment in
time when commitment falls due. The liquidity risk for the bank will be monitored and measured
as per the ALM Policy. It is not mandatory to maintain capital for liquidity risk.
5. Reputation Risk - Reputation risk is the current or prospective indirect risk to earnings and
capital from adverse perception of the image of the bank on the part of customers, shareholders

218 | P a g e

and regulator. Reputation risk may originate in lack of compliance with industry service standards
and regulatory standards, failure to deliver on commitments, lack of customer friendly service and
fair market practices, a service style that does not harmonize with customer expectation.
6. Business and Strategic risk - Business risk means current or prospective risk to earnings and
capital arising from changes in the business environment and from adverse business decisions.
Basel III Capital Accord
Reserve Bank of India has issued guidelines based on Basel II reforms on capital regulation
applicable to banks operating in india. The Basel III capital regulation has been implemented from
1st April 2013 in india phases and it will be fully implemented as on 31.03.2019.
Minimum total capital requirement under Basel III
Regulatory Capital
(i)
(ii)
(iii)
(iv)
(V)
(vi)
(vii)
(viii)

Minimum common equity Tier I Ratio

Capital conservation Buffer (comprised of
common equity)
Minimum common equity Tier 1 Ratio plus capital
conservation buffer (i+ii)
Additional Tier I capital
Minimum Tier I capital(i+iv)
Tier 2 capital
Minimum total capital ratio (MTC){(v)+(vi)}
Minimum total capital ratio plus capital
conservation buffer[(vii)+(ii)]

As % Of RWA (Risk
Weighted Asset)
5.50
2.50
8.00
1.50
7.00
2.00
9.00
11.50

Capital Adequacy under New Capital Adequacy Framework (Basel II) and Basel III
(BCC: BR: 107:477 dated 28-09-2015):
Our Bank has implemented the New Capital Adequacy framework (NCAF), popularly
known as Basel-II guidelines, w.e.f. 31st March, 2008. It this reference, RBI has
directed
the banks in India to implement Basel III guidelines on capital Regulation from
01st April 2013 and disclose the Basel III capital ratio from quarter ended 30 th June
2013 onwards.
There has not been much change in Calculation of RWA under Basel II and Basel III,
other than that for claims on Bank Assets Class, where Risk Weight of Indian Banks and
banks operating in India would be calculated on Minimum common Equity Capital and
Capital Conservation Buffer ratio prescribed by RBI, rather than on Total CRAR under
Basel II guidelines.

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MULTIPLE CHOICE QUESTIONS

1. RBI has advised Banks in India to calculate capital requirement for operational risk as per:
a) IRB Foundation Approach
b)
Basic
Indicator
Approach
c) IRB Advanced Approach
d) Standardized Duration Approach
2.
Branch Manager of Branch A, purchased huge amount cheques of a new customer, beyond
his discretionary lending powers. The cheques were returned unpaid and bank lost huge amount.
Name the risk bank was exposed to.
a)
b)
c)
d)

Credit Risk
Operational Risk
Systemic Risk
Settlement Risk

3. What do you mean by Sovereign Exposure

a) Exposure against security of gold
b) Exposure to Govt.
c) Exposure to Foreign Govt.
d) None of the Above
4. Investment in Post Office time deposit is
a)
b)
c)
d)

Zero Risk investment

Low Risk investment
Medium Risk investment
High Risk investment

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CREDIT MONITORING, RECOVERY & NPA MANAGEMENT

Bank has laid down following guidelines on credit monitoring & its reporting:
Early Warning Signals
Reserve Bank of India has issued broad guidelines on preventing Slippage to NPAs by recognizing
the problems early and initiating corrective measures to restructure the accounts after an objective
assessment of the viability of the unit and promoter's intention (and his stake). Bank shall put in
place 'Early Alert System' that captures early warning signals in respect of accounts showing first
signs of weakness.
The following features may be treated as early warning signals:
1. Avoiding of visit / inspection at Business premises and/or godowns
2. Avoiding the lenders direct contact with other promoters /partners/guarantors
3. Avoiding of sharing of contact details of other lenders /banks and /or avoiding mutual
meeting of lenders (whether in consortium or otherwise)
4. Non-disclosure of other borrowings and/or details of securities charged to other lenders;
5. Avoiding of obtaining credit opinions or other reports (i.e. valuation, NEC etc)directly by the
banks and offering/insisting to arrange the same themselves from other lenders or
professionals;
6. Continuous irregularities in cash credit/ overdraft accounts such as inability to maintain
stipulated margin on continuous basis or drawings frequently exceeding sanctioned limits,
periodical interest debited remaining unrealized.
7. Outstanding balance in cash credit account remaining continuously at the maximum without
appropriate turnover.
8. Failure to make timely payment of installments of principal and / or interest on term loans
9. Complaints from suppliers of raw materials, water, power etc about nonpayment of bills
10. Delay and/or not honoring of inward bills
11. Non submission or undue delay in submission or submission of incorrect stock statements &
other control returns and statements.
12. Attempts to divert sale proceeds through accounts with other banks
13. Downward trends in credit summations
14. Downwards trends in sales and fall in profits
15. Longer period of credit allowed on sale
16. Delay in realization and/or frequent returns of cheques /Bills (purchased/ discounted or sent
on collection)
17. Non-payment of bills discounted or under collection.
18. Larger & longer outstanding in bills accounts
19. Unreasonable variations in sales/ receivables
20. Issuance of cheques / bills for amount in round figures;
21. Steep decline in production figures
22. Rising level of inventories, which may include large proportion of slow or non moving items
23. Failure to pay statutory liabilities
24. Utilization of funds for purposes other than running the units
25. Not furnishing required information/ data on operations in time
26. Devolvement of DPG installments and non-payment within a reasonable period.

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27. Frequent devolvement of LCs and non-payment within a reasonable period

28. Frequent invocation of BGs and non-payment within a reasonable period
29. Poor financial performance in terms of declining sales and profits, cash losses, net losses and
erosion of net worth etc.
30. Non-compliance of terms and conditions of sanction.
31. Avoiding of insurance and/or under insurance of securities
32. Incomplete documentation in terms of creation/registration of charge/Mortgage etc.
33. Frequent queries from other banks;
34. Sharp decline in charged current assets and /or the advance value against the charged
assets;
FRAMEWORK FOR REVITALIZING DISTRESSED ASSETS IN THE ECONOMY-CENTRAL
REPOSITORY INFORMATION ON LARGE CREDITS (CRILC) - SMA
Reserve Bank of India (RBI) has set up a Central Repository of Information on Large Credits (CRILC)
to collect, store and disseminate credit data to lenders.
Banks are required to identify incipient stress in the account by creating three sub-categories under
Special Mention Account (SMA) category
SMA sub categories

Basis for classification.

SMA-0

Principal or interest payment not overdue for more

than 30 days but account showing signs of incipient
stress. ( Annex-1)
Principal or interest payment overdue between 31-60
days.
Principal or interest payment overdue between 61-90
days.

SMA-1
SMA-2

Joint Lenders Forum (JLF) {Applicable for lending under Consortium and Multiple Banking

Arrangements (MBA)}

As soon as an account is reported by any of the lenders as SMA-2, they should mandatorily form a
committee to be called Joint Lenders Forum (JLF) if the aggregate exposure (AE) [FB and NFB taken
together] in the account is Rs. 100 Crore and above.
Lenders also have the option of forming a JLF even when the AE in an account is less than Rs. 100
Crore and / or when the account is reported as SMA-0 or SMA-1.
Borrower may request the lender/s, with substantiated grounds, for formation of a JLF on account of
imminent stress.
All the lenders should formulate and sign an agreement incorporating the broad rules for the
functioning of the JLF. The JLF should explore the possibility of the borrower setting right the
irregularities / weaknesses in the account.
Corrective Action Plan (CAP) by JLF

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The JLF may explore various options to resolve the stress in the account and to arrive at an early
and feasible solution to preserve the economic value of the underlying assets as well as the lenders
loans.
(a) Rectification
Obtaining a specific commitment from the borrower to regularize the account.The commitment
should be supported with identifiable cash flows within the required time period and without
involving any loss or sacrifice on the part of the existing lenders.
(b) Restructuring
Consider the possibility of restructuring the account if it is prima facie viable and the borrower is not
a wilful defaulter.
(c) Recovery
Once the first two options are seen as not feasible, due recovery process may be resorted to. The
JLF may decide the best recovery process to be followed among the various legal and other
recovery options available with a view to optimizing the efforts and results.
Restructuring process

If the JLF decides to restructure an account independent of the CDR mechanism, the JLF
should carry out the detailed Techno-Economic Viability (TEV) study.

For accounts with AE of less than Rs. 500 Crore the restructuring package should be
approved by the JLF and conveyed by the lenders to the borrowers within the next 15 days
for implementation.

For accounts with AE of Rs.500 crore and above the TEV study and restructuring package
will have to be subjected to an evaluation by an Independent Evaluation Committee (IEC) of
experts.

Asset classification benefit as applicable under the extant guidelines will accrue to such
restructured accounts as if they were restructured under CDR mechanism.

Restructuring cases will be taken up by the JLF only in respect of assets reported as
Standard, SMA or sub-standard by one or more lenders of the JLF.

Wilful defaulters will normally not be eligible for restructuring.

The viability of the account should be determined by the JLF based on acceptable viability
benchmarks determined by them.

Accelerated provisioning
In cases where Banks fail to report SMA status of the accounts to CRILC or resort to methods with
the intent to conceal the actual status of the accounts or evergreen the account, Banks will be
subjected to accelerated provisioning for these accounts and / or other supervisory actions as
deemed appropriate by RBI.

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Annex-1
SMA-0 Signs of Stress
Illustrative list of signs of stress for categorising an account as SMA-0:
1. Delay of 90 days or more in
(a) Submission of stock statement / other stipulated operating control statements or
(b) Credit monitoring or financial statements or
(c) Non-renewal of facilities based on audited financials.
2. Actual sales / operating profits falling short of projections accepted for loan sanction by 40% or
more;
or a single event of non-cooperation / prevention from conduct of stock audits by banks;
or reduction of Drawing Power (DP) by 20% or more after a stock audit;
or evidence of diversion of funds for unapproved purpose;
or drop in internal risk rating by 2 or more notches in a single review.
3. Return of 3 or more cheques (or electronic debit instructions) issued by borrowers in 30 days on
grounds of non-availability of balance / DP in the account or return of 3 or more bills / cheques
discounted or sent under collection by the borrower.
4. Devolvement of Deferred Payment Guarantee (DPG) instalments or Letters of Credit (LCs) or
invocation of Bank Guarantees (BGs) and its non-payment within 30 days.
5. Third request for extension of time either for creation or perfection of securities as against time
specified in original sanction terms or for compliance with any other terms and conditions of
sanction.
6. Increase in frequency of overdrafts in current accounts.
7. The borrower reporting stress in the business and financials.
8. Promoter(s) pledging/selling their shares in the borrower company due to financial stress.
Joint Lenders Forum Empowered Group (JLF EG):
1. Sometimes Boards of the banks find it difficult to approve the decisions taken by JLF as the JLFs
do not have senior level representations from the participating lenders.
In this regard, RBI clarified that, although RBI has not explicitly prescribed the level of
representation in its guidelines, banks are expected to depute sufficiently empowered senior level
officials for deliberations and decisions in the meetings of JLF.
2. Nevertheless, JLF will finalise the CAP and the same will be placed before an Empowered Group
(EG) of lenders, which will be tasked to approve the rectification/restructuring packages under CAPs.
The JLF-EG shall have the following composition:

A representative each of SBI and ICICI Bank as standing members;

A representative each of the top three lenders to the borrower. If SBI or ICICI Bank is
among the top three lenders to the borrower, then a representative of the fourth largest or a
representative each of the fourth and the fifth largest lenders as the case may be;

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A representative each of the two largest banks in terms of advances who do not have any
exposure to the borrower; and
The participation in the JLF-EG shall not be less than the rank of an Executive Director in a
PSB or equivalent.

The JLF convening bank will convene the JLF-EG and provide the secretarial support to it.
Strategic Debt Restructuring scheme (BCC:BR:107:295 dated 18-06-2015):In accordance
with the general principle of restructuring and as directed by RBI , the shareholders should bear the
first loss instead of the debt holders. To ensue more involvement and ownership of the promoters in
the business /project, JLFs CDR cell may consider following options at the time of restructuring of
the loans.

Possibility of transferring equity of the company by promoters to the lenders to compensate

for their sacrifices.
Promoters infusing more equity into their companies
Transfer of the promoters holding to a security trustee or an escrow arrangement till
turnaround of company. This will enable a change in management control, should lenders
favour it.
Branches/Regions/Zones are advised to take note of the guidelines given in the circular and which
have been issued by RBI in order to further empower the lenders to curb the rising NPA menace in
the banking industry. Staff at all levels should endeavor to make best use of guidelines and keep a
close watch on accounts/JLFs/CDRs where Bank may invoke such provisions and initiate prompt
action for appropriate decisions an implementations
Prudential Norms on change in ownership of borrowing entities (outside strategic Debt
Restructuring Scheme) (BCC:BR:107:579 dated 24-11-2015):In order to further enhance
banks ability to bring in a change in ownership of borrowing entities which are under stress
primarily due to operational/ managerial inefficiencies despite substantial sacrifices made by the
bank, RBI has permitted allow banks upgrade credit facilities extended to borrowing entities whose
ownership has been changed outside SDR, to Standard category upon Such change in ownership,
subject to certain guidelines which are detailed in the circular.
Mandatory time lines for restructuring of Advance A/cs as per the revised restructuring
framework of RBI(BCC:BR:107:493 dated 05-10-2015): In the respect of NON CDR
restructuring cases, the time for approving the restructuring package by the JLF would stand as 15
days only instead of 30 days.
Therefore, the total time for CDR cases is:
For aggregate Exposure (AE) above Rs. 500 crore and above 307 days
For aggregate Exposure (AE) upto Rs. 500 crore 255 days
For Non CDR cases:
For aggregate Exposure (AE) above Rs. 500 crore and above 285 days
For aggregate Exposure (AE) upto Rs. 500 crore 240 days

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Definition of Lender
The term lender covers all banks/FIs to which any amount is due, provided it is arising on account
of any banking transaction, including off balance sheet transactions such as derivatives, guarantees
and letter of credit.
Definition of Unit
The term unit includes individuals, juristic persons and all other form of business enterprises,
whether incorporated or not. In case of business enterprises (other than companies), bank /FIs may
also report the names of those persons who are in charge and responsible for management of
affairs of the business enterprises.
Wilful Defaulter
Considering the concerns over the persistence of wilful default in the financial system, Reserve Bank
of India has put in place a system to disseminate credit information pertaining to wilful defaulters
for cautioning banks and financial institutions so as to ensure that further bank finance is not made
available to them. Enforcing such provisions also help the Bank in credit discipline and creating a
Recovery climate.
Though the guidelines inter alia the penal measures as indicated herein above normally are
applicable to all the borrowers identified as wilful defaulters.
The system of reporting with the cut-off limits of Rs. 25 lac and above has been introduced. The
present guidelines are as follows:
Definition of wilful default
The term wilful default has been redefined in supersession of the earlier definition as under:
A wilful default would be deemed to have occurred if any of the following events is noted:

The unit has defaulted in meeting its payment / repayment obligations to the lender even
when it has the capacity to honour the said obligations.

The unit has defaulted in meeting its payment / repayment obligations to the lender and has
not utilised the finance from the lender for the specific purposes for which finance was
availed of but has diverted the funds for other purposes.

The unit has defaulted in meeting its payment / repayment obligations to the lender and has
siphoned off the funds so that the funds have not been utilised for the specific purpose for
which finance was availed of, nor are the funds available with the unit in the form of other
assets.

The unit has defaulted in meeting its payment / repayment obligations to the lender and has
also disposed off or removed the movable assets or immovable property given by him or it
for the purpose of securing the facility/ies without the knowledge of the bank/ lender.

Diversion and siphoning of funds

The terms diversion of funds and siphoning of funds should construe to mean the following:Diversion of funds would be construed to include any one of the undernoted occurrences:

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(a) Utilisation of short-term working capital funds for long-term purposes not in conformity with the
terms of sanction;
(b) Deploying borrowed funds for purposes / activities or creation of assets other than those for
which the facility was sanctioned;
(c) Transferring funds to the subsidiaries / Group companies or other corporates by whatever
modalities;
(d) Routing of funds through any bank other than the lender bank or members of consortium
without prior permission of the lender;
(e) Investment in other companies by way of acquiring equities / debt instruments without approval
of lenders;
(f) Shortfall in deployment of funds vis--vis the amounts disbursed / drawn and the difference not
being accounted for.
Siphoning of funds would be construed to occur if any funds borrowed from banks / FIs are
utilised for purposes un-related to the operations of the borrower, to the detriment of the financial
health of the entity or of the lender. The decision as to whether a particular instance amounts to
siphoning of funds would have to be a judgment of the lenders based on objective facts and
circumstances of the case.
Non-Cooperative Borrowers
A Non-Cooperative Borrower is one
Who does not engage constructively with his lender by defaulting in timely repayment of dues while
having ability to pay,
Thwarting Lenders efforts for recovery of their dues by not providing necessary information sought,
Denying access to assets financed /collateral securities, obstructing sale of securities etc. In effect, a
non-cooperative borrower is a defaulter, who deliberately stone walls legitimate efforts of the
lenders to recover their dues.
In
this connection, RBI advised Banks to take the following measures in classifying
/declassifying a borrower as non-cooperative borrower and reporting information on such borrowers
to Central Repository of Information on Large Credits (CRILC),
The cut off limit for classifying borrowers as non-cooperative would be those borrowers having
aggregate fund-based and non-fund based facilities of Rs 50 million from the bank.
A non-cooperative borrower in case of a company will include, besides the company, its promoters
and directors (excluding independent directors and directors nominated by the Government and the
lending institutions).
In case of business enterprises (other than companies), non-cooperative borrowers would include
persons who are in-charge and responsible for the management of the affairs of the business
enterprise.
This is a prudential measure since the expected losses on exposures to such non-cooperative
borrowers are likely to be higher.

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IRAC NORMS
The reform process initiated by RBI based on the recommendations of Narsimham Committee
has brought about many changes in the Indian Financial System. As a part of the economic
reforms, the norms relating to the capital adequacy, income recognition, assets classification
and provisioning have been further strengthened to match the international standards
NPA DEFINITION
When any asset ceases to generate income for the bank

A non-performing asset (NPA) is defined as a credit facility in respect of which the

interest and / or instalment of principal has remained overdue or, out of order for a
specified period of time i.e. 90 days.
CLASSIFICATION
OF ADVANCE

Loan

Cash Credit / Overdraft

Bills Purchased / Discounted

Other Accounts
IDENTIFICATION OF NPA
LOAN
A Loan account [term loan/DL] is to be classified as NPA when interest and/or installment of
principal remain overdue for a period of more than 90 days.
For example, a loan account will not be classified as NPA on 31st March 2013, if the interest and
installment on principal have been fully serviced up to 31st December, 2012.
A loan account where the interest has been serviced but the installment has remained unpaid will
also be classified as NPA.
CASH CREDIT / OVERDRAFT
A cash credit or overdraft account is to be classified as NPA when it remains out of order as on
date of Balance Sheet for reasons as given below:
If the outstanding balance remains continuously in excess of the sanctioned limit / drawing power
for 90 days, OR
where the outstanding balance in the principal operating account is less than the sanctioned
limit/drawing power, but there are no credits for 90 days as on the date of Balance Sheet, OR
Credits are not enough to cover the interest debited during the same period;
Example
As on 31.03.2013, if we find that the outstanding balance in a cash credit account has remained
continuously in excess of the sanctioned limit / drawing power during the March 2013 quarter, it
should be classified as NPA.
If as on 31st March 2013, we find that in a cash credit account the outstanding balance in the
account is less than the DP / sanctioned limit and there has been no credit to the account during

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March 2013 quarter, the account has to be classified as NPA.

Further if as on 31st March 2013, we find that in a cash credit account the outstanding balance in
the account is less than the DP / sanctioned limit and the total of all credits made during March
2013 quarter is less than the interest debited in this quarter, the account has to be classified as
NPA.
BILLS PURCHASED / DISCOUNTED
A bill purchased / bill discounted account will be classified as NPA if the bill remains overdue for a
period ofmore than 90 days from the due date.
OTHER FACILITIES
In case of interest payments, banks should, classify an account as NPA only if the interest due and
charged during any quarter is not serviced fully within 90 days from the end of the quarter.
Agricultural advances
A crop loan account for short duration crop will be classified as NPA if the instalment of principal or
interest thereon remains overdue for two crop seasons subject to maximum 12 months. [i.e.
remains unpaid for two crop seasons beyond due date.]
A crop loan account for long duration crops will be classified as NPA if the instalment of principal or
interest thereon remains overdue for one crop season, subject to maximum 12 months . [Long
duration crops means crops with crop season longer than one year.]
RBI has directed that the repayment schedule of the rural housing advances to agriculturists under
Indira Awas Yojana and Golden Jubilee Rural Housing Finance Scheme should be linked to crop
cycles.
In case of term loans given to non-agriculturists the account becomes NPA on the basis of 90 days
delinquency norms as applicable to non-agriculture finance.
Does not cover activity allied to agriculture where normal norms are applicable
GOVERNMENT GUARANTEED ADVANCES
Guarantee of the Central Government though overdue may be treated as NPA only when the
Central Government repudiates its guarantee when invoked. However, not applicable for
income recognition.
State Government guaranteed advances will become NPA, if interest and / or instalment of
principal or any other amount due to the bank remains overdue for more than 90 days.
EXEMPTED CATEGORY
Treated as performing even though interest or instalments in following accounts have not been
paid for more than 90 days
Advances against banks own term deposits, NSCs, IVP, KVP, Surrender value of LIC
policies

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Provided debit balance in account is less than the market / surrender value of the
securities in all above cases.
NPA due to temporary deficiencies in Accounts
In case of cash credit accounts, where the stock statement has not been obtained for a continuous
period of more than three months and the outstanding in the account is based on drawing power
calculated from stock statements which is older than -3- months would bedeemed as irregular.
A working capital borrowal account will become NPA if such irregular drawings are permitted in the
account for a continuous period of -90- days even though the unit may be working or the borrowers
financial position is satisfactory.
An account where the regular/ ad hoc credit limits have not been reviewed/ renewed within 180
days from the due date/ date of ad hoc sanction will be treated as NPA.
Other points on NPA classification
Consortium advances: In case of consortium advances, the account will be classified as NPA by a
member bank depending on the record of recovery in its own books irrespective of the recovery
status with the lead bank or any other member bank.
NPA classification borrower wise and not facility wise: In case any one of the facilities
sanctioned to a borrower is classified as NPA, all other credit facilities availed by him and also the
investments made by the bank in all securities issued by him will also be classified as NPA.
Reversal of income
If any advance, including bills purchased and discounted, becomes NPA, the entire interest
accrued and credited to income account in the past periods, should be reversed if the same is not
realised. This will apply to Government guaranteed accounts also.
In respect of NPAs, fees, commission and similar income that have accrued should cease to
accrue in the current period and should be reversed with respect to past periods, if uncollected.
Upgradation of loan accounts classified as NPAs
If arrears of interest and principal are paid by the borrower in the case of loan accounts
classified as NPAs, the account should no longer be treated as nonperforming and may be
classified as standard accounts.
ASSET CLASSIFICATION
Standard AssetsStandard assets are those, which are regular in payment of interest and Installments due as per
sanction.
Non performing assets:
Banks are required to classify nonperforming assets further into the following three categories

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based on the period for which the asset has remained nonperforming and the realisability of the
dues:
i. Substandard Assets ii. Doubtful Assets iii. Loss Assets
SUB-STANDARD
A sub standard asset is one, which has been classified as an NPA for a period not
exceeding 12 months
DOUBTFUL
A doubtful asset is one which has remained NPA for a period exceeding 12 months.
In case of accounts where there is a significant erosion in the value of security i.e. if the realizable
value of the security is less than 50% of the value of security assessed in the last year by the bank /
RBI inspectors or where the borrower has provided fraudulent security, the account can be straight
away classified as doubtful.
LOSS ASSETS
Assets which are classified as Loss by the Banks Internal/External Auditors or where securities,
personal worth etc. are practically zero or less than 10% of the outstanding amount.
Where the realizable value of the security is less than 10 % of the outstanding of the borrowal
account, the existence of the security should be ignored and the account should straight away be
classified as loss asset
PROVISIONING NORMS:
NPA Category
Sub Standard

Secured portion of
loan outstanding
15% ( General
Provision on O/S )

Unsecured portion of
loan outstanding
25%

25%
40%
100%

100%
100%
100%

100%

100%

Doubtful:
Up to one year
One to three years
More than three
years
Loss assets

However unsecured exposures in respect of Infrastructure Loan accounts classified as substandard, in case of which certain safeguards such as escrow accounts are available will attract an
additional provision of 5% only. i.e a total of 20% as against the existing 25%.
Provisioning Requirement on Standard Assets
Agriculture & SME where it is 0.25%
Commercial Real estate(CRE) 1.00%,

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 Commercial Real Estate Residential Housing Sector (CRE RH) 0.75%

Teaser home loans 2%
Povision required on all other standard advances except above: 0.40%
Accelerated provisioning
In cases where Banks fail to report SMA status of the accounts to CRILC or resort to methods with
the intent to conceal the actual status of the accounts or evergreen the account, Banks will be
subjected to accelerated provisioning for these accounts and / or other supervisory actions as
deemed appropriate by RBI.
Accelerated provisioning Asset Classification Period as NPA
Asset
Period as NPA
Current provisioning Revised
Classification
(%)
accelerated
Provisioning (%)
Sub- standard
Up to 6 months
15
No Change
(secured)
6 months to 1 year 15
25
Sub-standard
Up to 6 months
25 (other than
(unsecured
abinitio)
infrastructure
loans)
25
20 (infrastructure
loans)
6 months to 1 year 25 (other than
infrastructure
40
loans)
20 (infrastructure
loans)
Doubtful I
2nd year
25 (secured portion)
40 (secured
portion)
100 (unsecured
100 (unsecured
portion)
portion)
Doubtful II
3rd & 4th year
40 (secured
100 for both
portion)
secured and
100 (unsecured
unsecured
portion)
portions
5th year
Doubtful I
100
100
onwards
DISPOSAL OF ASSETS IN NPA/ PWO ACCOUNTS :
Many times, borrowers approach the bank to allow them to sell the assets charged to the bank and
deposit the proceeds in the borrowal accounts with the bank. Another bank or Financial Institution
may also approach for sale of assets commonly charged to them and us. In such cases, not below
the ROCC can authorise sale of such assets in accounts, as per norms, falling upto his lending
powers. In case the account exposure is beyond his powers, the same may be referred to the
competent authority, under whose powers, the account falls. (For the Accounts falling above ZOCC,

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may be considered by Executive Director).

Before authorizing sale of current assets, a fair value of such assets should be ascertained. In
respect of fixed assets, valuation of such assets should be conducted by banks (or other banks/ FIs
Valuer) approved valuer. In respect of movable machinery, fair market value should be ascertained
or valuation should be done before authorising sale of assets (valuation of the lending FI may be
considered for approval if done by an Government/ Wealth tax approved valuer).
The sanctioning authorities should ensure that the amount to be deposited in the borrowal accounts
consequent upon such authorization of sale of assets should generally not be lower/less than the
fair Market value of the asset being allowed to be disposed off (Fair Market Value and not the
Distress Value)..
Floating Provision: If any institution makes additional provision, over and above the level
prescribed in IRAC norms of RBI, it is termed as Floating Provision. Floating provisions means,
provision not against any particular account but on the entire portfolio of advances or investments.
Floating provisions can be treated as a part of the Tier II capital within the overall ceiling of 1.25 %
of the total risk weighted assets. Alternatively it can be netted from the gross npas to reach at
disclosure of Net NPAs. Floating provisions once made can not be reversed back to Profit & Loss
Account.
Provision Coverage Ratio:Provision coverage ratio is the ratio of provisions to gross NPA and
indicates the extent of funds, a lender keeps aside to cover loan losses. It is also called as Loan
Loss Coverage Ratio, which is mandatory as per RBI to maintain at least 70% of its Gross NPA.
This ceiling has been withdrawn now.
SANKALP 8 SALIENT FEATURES: (BCC:BR:107:616 dated 11-12-2015):
Bank has launched SANKALP 8 Scheme for recovery in smaller accounts by Recovery
and Compromises. Branches also can use the platform of Lok Adalat for recovery.
A. Date of launching: 11th December 2015
B. Validity of the scheme: upto 31st March 2016
C. Amount Covered - Books dues/ written off amount up to and inclusive of Rs. 25 lakh
per borrower.
The account classified as NPA as on 31st March, 2014 and classified as doubtful or loss
as on 31-03-2015 with outstanding upto & inclusive of Rs. 25 lakh and presently
outstanding as on 30-11-2015.
All the PWO/ TWO and written off accounts as on 31-03-2015 with outstanding
balance upto & inclusive of Rs. 25 lakh and presently outstanding as on 31-11-2015.
Written off account.
Special power for the Branches Heads in the JMG/S-1, MMG/S-2 and MMG/S-3 for
sacrifice in respect of compromise proposal under the scheme is given as under:
Authority

As per Recovery Policy Power

Revised Power under Sankalp -8

scheme

JMG/S-1

0.50 Lakh

4.00 Lakh

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MMG/S-2

1.00 Lakh

6.00 Lakh

MMG/S-3

6.00 Lakh

10.00 Lakh

Details note and important action are given in the circular.

Pure write off without Cash Recovery by compromise settlement is not considered in this scheme.
Recovery in Fraud Accounts:
Bank has framed a policy for Recovery in Fraud accounts (Advances) pursuant to the instructions
from the Govt. of India. Accordingly policy for Recovery in Fraud accounts has been approved by
our Board of Directors in the meeting held on 21.10.2012.
The silent features of the above policy are, as under:
I. Committee at Zonal/ Regional Level:
In compliance with the Govt. of India guidelines it is envisaged that fraud accounts will be
monitored by a separate committee at the Zonal and Regional level for the purpose of maximizing
the recovery in shortest period and reducing the loss to the Bank.
II. Amount involved:
The fraud cases involving amount up to Rs.50 lacs will be monitored by the Regional Committee &
above Rs.50 lacs by the Zonal Committee.
Reschedulement:
1. Under reschedulement pattern of debt repayment obligation will be changed from EMI to
ballooning or descending schedule.
2. In reschedulement no change in repayment period, no increase in our exposure, no
change in the nature of credit facility/ies, no sanction of additional /fresh limit even
within the existing exposure.
3. All Standard, Sub Standard and doubtful accounts can be considered for reschedulement.
4. All Senior Branch Managers and Sr. Manager (Credit) can consider for a period of six months in
case of proposal falling under their powers.
5. This is to be considered by the Regional Authority after satisfying the needs for reschedulement.
Rephasement: Rescheduling with increase in repayment period.
Restructuring:
Restructuring can be considered in following ways:
(1) Changing existing repayment period of the debt.
(2) Changing outstanding exposure of the bank
(3) Changing the nature and quantum of existing credit facilities
(4) Sanctioning of fresh credit facility or additional facility
Thus restructuring involves, rephasement of loan installments, waiver of penal interest, considering
FITL, converting irregular portion into WCDL/WCTL, fresh/additional loans, working capital limits.

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Corporate Debt Restructuring:

Objective
The objective of CDR is to ensure timely and transparent mechanism for restructuring the
corporate debts of viable entities facing problems, outside purview of BIFR/DRT/other legal
proceedings, for the benefit of all concerned.
Three tier structure:CDR is a non-statutory mechanism consisting three tier viz:
CDR Standing forum and its core group

CDR Empowered Group

CDR Cell
CDR Core Group is carved out of the CDR Standing Forum to assist the Standing Forum in
convening the meetings and taking decisions relating to policy, on behalf of Standing Forum.
CDR Standing Forum and the CDR Empowered Group are assisted by a CDR Cell in all their
functions. The CDR Cell makes the initial scrutiny of the proposals received from borrowers/lenders,
by calling for proposed rehabilitation plan and other information and puts up the matter before the
CDR Empowered Group, etc. within the ambit of guidelines.
Eligibility:Multiple banking/syndication/consortium
O/s exposure Rs. 10 crore and above with Banks/FIs
Should not be willful defaulter
No fraud
Standard and Sub-Standard Accounts If the accounts is classified as Standard or
Sub-Standard by 90% of the lenders in their books, the same could be treated as Standard or
Sub-Standard to become eligible for CDR

Doubtful Accounts Consent by minimum of 75% of the creditors (by value) and 60% creditors
(by number) for such restructuring is required.

Suit filed cases Consent by minimum of 75% of the creditors (by value) and 60% creditors (by
number) for such restructuring is required.

BIFR cases can also be considered on case to case basis after obtaining approval of BFIR
before implementation of CDR package

Reference to CDR could be triggered by (i) any or more or the secured creditors who have
minimum 20% share in either working capital or term finance or (ii) by the concerned corporate, if
supported by a bank or financial institution having stake as in (i) above.
Legal Basis of CDR

CDR is a not statutory mechanism. it is a voluntary system based on Debtor Creditor Agreement
(DCA) and Inter Creditor Agreement (ICA)
DCA & ICA shall provide legal basis to CDR mechanism
The debtors shall have to accede to DCA, either at the time of original loan documentation or at
the time of reference to CDR Cell.
ICA would be legally binding agreement amongst the Creditors whereby creditors would commit
themselves to abide by the various elements of CDR system
If 75% of creditors by value and 60% by number agree to a restructuring package of an existing
debt the same would be binding on remaining creditors.

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Revised Guidelines on Corporate Debt Restructuring

Based on the recommendations made by the Special Group constituted in September 2004 to
review the corporate debt restructuring (CDR) scheme and also the feedback received on the
revised draft guidelines circulated amongst banks for comments, the scheme has been modified as
below:

The coverage of the scheme has been extended to include entities with outstanding exposure
of Rs.10 crore or more.

With a view to making, decision making more equitable, the support of 60 per cent of
creditors by number in addition to the support of 75 per cent of creditors by value, is
required.
The core group to be given the discretion in dealing with willful defaulters in cases, other
than those involving frauds or diversion of funds with malafide intentions.

Restoration of asset classification prevailing on the date of reference to the CDR Cell to be
linked to implementation of the CDR package within four months from the date of approval
of the package.

Regulatory concession in asset classification and provisioning to be restricted to the first

restructuring where the package also has to meet norms relating to turn-around period and
minimum sacrifice and funds infusion by promoters.

Convergence in the methodology for computation of economic sacrifice among banks and
financial institutions (FIs).
Reserve Banks role limited to providing broad guidelines for CDR mechanism.
Disclosures in the balance sheet to be enhanced for providing greater transparency.

Additional finance requirement by both term lenders and working capital lenders, to be
shared on pro-rata basis.

One time settlement to be allowed as a part of the CDR mechanism to make the exit option
more flexible.

Non-SLR instruments acquired while funding interest or in lieu of outstanding principal to be

subjected to regulatory treatment and valuation.

Discount rate for computing present value of Future Cash flow (BCC:BR:107:328 dated
07-07-2015): On review, it has been decided by RBI that a rate equal to the actual interest rate
charged to the borrower before restructuring may be used to discount the future cash flows for the
purpose of determining the diminution in fair value of loans on restructuring. In cases where the
existing credit facilities to a borrower carry different rates of interest the weighted average interest
rate may be used as discounting rate. This discount rate may be used to discount both the prestructuring cash flows as well as post restructuring cash flows. It is also clarified that this instruction
will be applicable to all projects where changes in amortization schedule have been carried out
under the above circular
Lok Adalat
The Lok Adalats are established under the Legal Services Authority Act. It is a loan recovery
redressal mechanism where the banks organize a camp for recovery in one place under the aegis
of Civil Court and DRT as well. A spot settlement of recovery is made after hearing the case of
bank and borrower and the underlying securities. It is the version of a small court set up to settle
the recovery disputes of borrowers. It is a cheap method of enforcing recovery. Lok Adalat can:

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1.
2.
3.
4.
5.

Take evidence.
Call for any Public Documents from any Public office or court.
Advantages of Lok Adalats
There is no court fee involved when fresh disputes are referred to it.
It can take cognizance of any existing suit in the court as well as look into and adjudicate
upon fresh disputes.
6. If no settlement is arrived at, the parties can continue with court proceedings.
7. The decrees by Lok Adalats are as good as a decree passed by civil court and are binding on
the parties.
8. No appeal lies against the decree passed by Lok Adalats as the matters are settled through
negotiation and mutual consent of the parties.
The ceiling amount for coverage under Lok Adalat is Rs. 20 lacs. All NPA accounts, both suit filed
and others, which are in Doubtful and Loss category, can be included for reference to the Lok
Adalats. Cases pertaining to Non-compoundable offence / offences are not taken up by Lok Adalat.
Prudential Write-off (PWO)
Prudential write off is generally resorted to by the bank in respect of following advances accounts
where suits have been filed unless specifically exempted by Corporate Centre, Mumbai.
1. Loss asset with 100 % cover by way of Provision, Interest Suspense, DICGC / ECGC claim
received, amount held in Suit Filed Sundry Deposit account etc.
2. Doubtful 3 categories and is covered by 85 % or more by Provision, Interest Suspense, DICGC /
ECGC claim received, amount held in Suit Filed Sundry Deposit account etc. (except tangible
security available) in the accounts of the bank. A decision on PWO will
always be taken by Corporate Centre, Mumbai.
Prudential Write off of the following accounts should not be done
1. TODs in current account and BOBCARD TODs and adhoc / one time BP/BD.
2. Accounts where frauds have been reported.
3. Quick mortality accounts (NPA within one year of sanction / disbursement)
4. Staff accounts (if any) and staff related / guaranteed accounts.
5. Advances accounts such as Cash Credit, Demand Loan, Term Loan etc. Along with TOD in current
account / SB account, BOBCARD TOD etc. (unless the TOD / BOBCARD TOD is recovered).
Cut Back Arrangement:
1. A borrowers account may have become NPA due to un-serviced interest, L.C. devolvement,
excess allowed to meet statutory dues, wages, insurance premium
etc. Or reduction in drawing power. Any credit coming into the account will be appropriated
completely towards the over-dues.
2.The borrower under such circumstances opens a current account with another bank and
routes all sales proceeds through that account. As a consequence the bank not only fails to
recover its legitimate dues but also faces the problem of erosion of security. Under this
circumstance, the bank can consider allowing operations, on merits, till a revival package is
prepared and sanctioned or an acceptable compromise proposal is submitted by the borrower,

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up to sanctioned amount or outstanding with a suitable cut-back, say, ranging from 5 to 10%
(or more) of the credits in the account to reduce/wipe-out the excess/overdues in the account.
3.Therefore, Branch Managers are allowed to permit operations in such accounts falling under their
Discretionary Lending Power with a cut back arrangements for a period up to 3 months subject to
confirmation of their action by Regional Head/Zonal Head from the date of such cut back
arrangement permitted by them and for further period/ restructuring etc. suitable proposal be
submitted to competent authority.
Criteria for transferring NPA Accounts to ARMB:
Following NPA and write off accounts can be transferred to ARMBs:
a. All NPA accounts invariably suit filled involving Rs.100/- lacs or more.
b. All prudentially/Technically written off accounts wherein amount involved is Rs.100/- lacs or
more.
NPA accounts referred to BIFR/AAIFR shall not be transferred to ARMBs. In case any account is
transferred to ARMB and subsequently the account becomes a BIFR case, the same shall be retransferred by ARMB to the original base branch.
Accounts under nursing programme/rehabilitation/ restructuring also shall not be transferred to
ARMBs
SARFAESI ACT-2002
Consent of Secured Lenders : Either our Bank must be the sole banker to the borrower i.e. 100%
lending is done by us or in case of consortium lending consent of secured lenders representing not
less than 60% of the amount outstanding in value is obtained
Prefer suit filing where documents are getting time barred. To make clear that initiating of
SARFAESI action does not provide limitation to the security documents and suit filing is to be done if
documents are getting time barred and renewal of documents (obtaining LAD) is not possible for
particular account.
When SARFAESI Notice can be given To cover consortium a/cs Wherever we are leader in
consortium, notice must contain dues and details of Secured Assets. For consortium advances
the notice must contain dues of all Banks and details of secured assets charged to Other
Lenders.
When SARFAESI Notice can be given To cover restructured a/cs. Restructuring / CDR is done
for possible revival of the unit and in such accounts recovery action is deferred. After failure of CDR
/ restructuring, recovery action may be initiated under Sarfaesi act
When SARFAESI Notice can be given To cover BIFR accounts Reference made to BIFR by the
Company seeking rehabilitation does not debars Bank from initiating SARFAESI action. How ever
after issuance of notice, BIFR is to be intimated of the same
Incorporate filing of caveat : Bank has right to lodge caveat against the borrowers / guarantors after
initiating action under SARFAESI, where an application or an appeal is expected to be made or has
been made by the borrower / guarantor against the Banks SARFAESI action under the provisions of
SARFAESI Act.

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Validity period of caveat application filed with DRT / Civil Court / High Court is -90-days, as such
Bank has to proceed for taking possession of the secured assets keeping in mind the validity time of
the caveat.
Reply to representation of borrower / guarantor: Bank or raises any objection, the Bank shall reply
the representation within fifteen days positively of receipt of such representation / objection (to
be replied by authorized officer) with the reason for non acceptance of the objection.
Adjudication of tenancy rights of lessee) in SARFAESI Before filing the prescribed afidavit with
DM/CMM seeking permission to take physical possession, AO has to visit the prperty to ascertain
whether it is tenanted or not. This is an important determining fact beause if valid lease is created
before the mortgage in accordance with the requirements ofSection 65A of the Transfer of Property
Act and that the lease has not been deermined in accordance with the provisions of section 111 of
Transfer of Property Act DM/CMM cannot pass an order for delivering possession of the secured
asset to the Secured Creditor.
Banks and financial institution can accept immovable property to settle their claims: Now the banks
are empowered to accept any immovable property in realization of a claim from a defaulted
borrower, as the banks were not able to find appropriate buyers to buy for these secured assets. If
the sale of such asset is postponed due to lack of a bid at the reserve price, the secured creditor
(including banks) may bid for the asset at a subsequent sale and make appropriate adjustments of
the amount due to the Bank. This change enables the banks to secure the asset(s) in part fulfillment
or full and final fulfillment of the defaulted loan. Branches should take prior permission from
controlling offices before bidding for such immovable property.
Conversion of debt into equity: The Act allows for converting any part of debt into
equity shares of a borrower company, and such conversion shall always be deemed as
valid. The change ensures ARCs with more legal protection while restructuring loans
and supporting weak units
Appoint
Recovery / Enforcement Agent

Administrative powers for empanelment of Enforcement Agencies are vested with the
Zones so this aspect is to be ensured at the Zonal level.

Regional Heads may appoint Recovery Agent in NPA accounts in Sub-Standard category
(irrespective of the age) with outstanding upto Rs 25.00 lacs. & Zonal heads up to Rs 100
lacs.

However, Regional Heads may appoint Recovery- Cum- Seizure Agent in case of NPA a/cs
(including Sub-Std a/cs) under Vehicle loan/ Tractor Loan category irrespective of amount
Hand Holding:
Under hand holding operations the small units will be permitted to draw funds from their
cash credit account upto the amount equal to the amount of sale proceeds deposited in
the account. This will facilitate the smooth running of the business.
Once the implementation of rehabilitation package is finalized during the first six months
such hand holding operations are stiupulated/permitted.
SARFAESI Act Sale of Secured Assets with symbolic possession (BCC: BR: 108:74
dated 15-02-2016): Bank has authorized to effect sale of secured assets with symbolic
possession as well, on case to case basis: Authorised officer may consider on selective
basis, sale of secured assets with symbolic possession, after obtaining prior Authority of
the Regional Manager. If sale with symbolic possession is proposed by the Authorised
Officers, the Sale Notice issued by the Bank should contain explicit statement that the
sale/auction is proposed on the basis of Symbolic Possession, on As is where is and

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As is What is Basis, and the buyer should ascertain the status of the statutory dues and
other encumbrances, if any.
SARFAESI Act Sale of secured Assets through Private Treaty (BCC: BR: 108:74 dated
15-02-2016): Bank has restated the procedure to be followed for sale by private treaty
as follow
a) Public auction/inviting tenders should be the preferred mode of sale in all cases
covered under SARFAESI Act
b)As an alternate,sale by Private Treaty may be resorted to only if the attempt/s for sale
of secured assets through Public Auction/Inviting Tenders in the following manner fails:
Value of Secured Asset (as per the latest Number
of
Attempts
Valuation Report of the Approved Valuer) Auction/Inviting Tenders
Upto Rs 1 Crore

Two Times

Above Rs 1 Crores

Three Times

by

Public

c)The Authorised Offficer should prepare Minutes recording proceedings of sale by

public auction/tenders including reasons for failure of the public auction,and reasons
for going ahead with sale through Private Treaty.
d)Reserve Price for Private Treaty should not be less than the Reserve Price fixed for the
last auction conducted.
e)In all cases of sale by Private Treaty, clear 30 (thirty) days Notice to be given to the
Borrower/Guarantor, including the Mortgagor (as per annexure I of this circular)
f) In all the cases of sale by Private Treaty, an agreement to be entered into with the
Borrower/Guarantor, including the Mortgagor (as per annexure II of this circular).
Decision of the Supreme Court of India on SARFAESI proceedings SA/ Appeal under
Section 17 of the SARFAESI Act is available to the borrower/Guarantor only after losing
the possession of the secured Assets Standard Chartered Bank Vs. Nobel Kumar &
others (BCC:BR:107:413 dated 27-08-2015: Banks has advised to ROs/Branches may
scan the SA/Appeals pending u/s 17 of the SARFAESI Act and if any case is falling under
above category, then appropriate application may be filed in consultation with dealing
advocate, at the earliest, by quoting the captioned judgment given by the Honble
Supreme Court, with a prayer for rejection/dismissal of the SA/Appeal for the above
reason.
Modification in the guidelines given in the Recovery Policy for appointment of
Enforcement/ recovery Agency for the purpose of Repossession/ Seizing the vehicles in
Retail Vehicle Loan (BCC:BR:108:20 dated 12-01-2016): Bank has approved the
modification in the guidelines given in the Recovery Policy so as to cover Repossession/
Seizing the vehicles in Retail Vehicle Loan even before the account become NPA by

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appointment Enforcement/ recovery

BCC:BR:108:20 dated 12-01-2016.

Agency.

For

detailed

Guidelines

refer

to

Constitutional validity of Section 2 (1) (o) of SARFAESI Act, 2002 upheld by Honble
Supreme Court (BCC:BR:107/85 dated 21/02/2015):
Section 2(1)(o) of the SARFAESI Act, which defines Non-Performing Asset (NPA) was amended by
Act 30 of 2004
It has been observed that several borrowers (of our Bank as well) have filed Writ Petitions in various
High Courts challenging the constitutionality of the amended section 2 (1) (o) of the SARFAESI Act,
2002. In this regard, while the Honble High Court of Gujarat has taken a stand that the amended
section 2 (1) (o) is unconstitutional, the Honble High Court of Madras rejected the challenge.
It is the constitutionality of the amended section 2 (1) (o) which was the subject matter of dispute
before the Honble Surpeme Court of India in Re Keshavlal Khemchand & Sons v. Union of India &
Ors., wherein the Honble Supreme Court upheld the constitutionality of the amended section 2 (1)
(o).

All the writ petitions and the appeals are disposed of declaring that the amended definition of the
expression NPA under Section 2(1)(o) of the Act is constitutionally valid In the result, all the writ
petitions either filed before this Court or filed before the Madras and Gujarat High Courts and the
appeals of the borrowers stand dismissed.
The appeals of the CREDITORS are allowed. Each of the writ petitioners/borrowers shall pay costs to
the respective CREDITORS calculated at 1% of the amount outstanding on the date of the notice
under Section 13(2) of the Act in each of the cases.
All the branches are advised to bring to the notice of our panel Advocates the judgment of the
Honble Supreme Court upholding the validity of the amended section 2 (1) (o) of Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Reduction of reserve Price Sale of Secured Assets under SARFAESI Act
(BCC:BR:108:78 dated 16-02-2016):To expedite the recovery process under SARFAESI Act,
2002 and to maximize recovery by describing the procedure for reduction of Reserve Price, Bank has
authorized adoption of the following procedure
1. For movable secured assets the Authorized Officer to obtain the estimated value and fix the
Reserve Price. A Committee consisting of the Authorized Officer and Two officers of the
concerned Branch may fix the Reserve Price.
2. For immovable secured assets the authorized officer to obtain valuation from an Approved
Valuer and fix the Reserve price, based on the Realizable Value. A committee consisting of
authorized officer and two officers may fix the Reserve Price.
3. In respect of Secured Assets, value of which is more than Rs. 5 crore, 2 valuation report
from approved valuers to be obtained and average of 2 valuation to be taken into
consideration to arrive at Reserve Price. In case variation in 2 valuation is more than 25%,
fresh valuation from 3rd Approved valuer to be obtained and Reserve Price to be fixed
accordingly by the below mentioned committee.

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4. If bids are not received at Reserved Price fixed in 1st auction, then the committee headed by
the Regional Manager and consisting of the Deputy Regional Manager, official attached to
Regional Recovery Dept. and authorized officer may reduce the Reserve Price as per table
here:
Number of Auctions
I
II III
Percentage of reduction vis--vis the last auction 10 20 25
Reserve Price
However, the reserve price should not be below the distress value.In case of consortium accounts
where we are the leader/ sale is undertaken by our Bank the Authorized Officer to fix the Reserve
Price in consultation with the Consortium Members
RECOVERIES RECEIVED IN NPA - LOAN ACCOUNTS:
For effecting recovery received in NPA LOAN accounts, Branch should use only the menu
NPATM at the time of recovery.
Further if recovery is received by way of clearing cheque, for direct credit to loan account, then
the proceeds should be first credited to either operative (SB/CA/CC/OD) or GL Intermediary
account and thereafter credited to respective loan account by using NPATM menu.
For NPA CC/OD accounts etc., Branches should continue to use the existing options i,e,TM,
HCASHDEP, HXFER etc. The reversal of unrealized interest if any will be handled through
monthly batch job and Branches need not do any such reversal manually.
Appropriation of Recoveries in NPA accounts.
In respect of existing NPAs where suit is not filed, recoveries effected in the account ( Including
recovery under Pubic Money Recovery Act ) from time to time shall be appropriated in the following
manner.
i)
ii)
iii)

Towards reduction in Book Dues.

Towards recovery of expenses.
Towards unapplied interest.

Recovery in suit filed/decreed accounts shall be appropriated first towards legal charges/expenses
awarded by the court, there after interest due and finally principal amount.
Record of Unapplied Interest /charges
Branch shall maintain a record of unapplied interest and other charges at contracted rate and
update the same at periodical intervals.
Insurance Charges, Assets Valuation charges, Stock Audit Charges, Security Charges
etc.
In respect of NPA accounts, which are not operated, the above mentioned charges shall not be
debited to the accounts. The expenses incurred shall be debited to the Banks Profit and Loss
account and record of the same shall be maintained.
Appropriation of Fixed Deposits of NPA Borrowers (free from margin) to the concerned
NPA loan accounts (BCC: BR: 108:68 dated 06-02-2016): Bank has advised to all
branches to appropriate fixed deposits of NPA borrowers (free from margin) to the
concerned NPA Loan accounts.

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Recording follow up status for NPA and PNPA accounts in Finacle:With a view to record
follow up made by field staff for recovery in NPA and PNPA accounts our data centre has provided
the functionally to record follow up actions with menu id RECVFLW.
Write off of unrealized export bills- Compliance of Foreign Exchange Management
Act 1999(BCC: LCB: DFB: 108 / 15 dated 22-02-2016): According to Reserve Bank of India
circular No. A.P. (DIR Series) 88 dated 12.03.2013 and our circular No. BCC: WB: DFB: 105/20
dated 14.03.2013 regarding simplifying and liberalizing the procedure for write-off of unrealized
export bills, the following would not qualify for the write-off facility:
a. Exports made to countries with externalization problem i.e. where the overseas buyer has
deposited the value of export in local currency but the amount has not been allowed to be
repatriated by the central banking authorities of the country.
b. GR/ SDF forms which are under investigation by agencies like Enforcement Directorate,
Directorate of Revenue Intelligence, Central Bureau of Investigation, etc as also the outstanding bills
which are subject matter of civil /criminal suit.

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Multiple Choice Questions

Questions
1. Submission of CIBIL data is done through______
a) ASCROM system
b) Finacle
c) a&b
d) None
e) Cloret
2. The Demand Notice under SARFAESI ACT must be issued at least for a period of
__________ days.
a. 30 days
b. 07 days
c. 60 days
d. 15 days e. 14 days
3. An action under SARFAESI ACT can be initiated in case of following:
a. If balance outstanding in the account is more than Rs 1 lac
b. contractual dues in the account are more than Rs 1 lac
c. No such ceiling.
d. If the balance in the account is RS 50000 and above.
4. Maximum period within which an appeal can be filed in DRAT, against the order passed by
DRT is ___________ days.
a. 45 days
b. 30 days
c. 60 days
d. 90 days e.100 days
5. Accounts where total dues are of Rs __________ and above are referred to DRT
a. Rs 5 Lac
b. Rs 10 Lac c. Rs 50 Lac d.
Rs 20 Lac
e. Rs 100 lacs.
6. If we have to refer the account to Lok Adalat the total dues should not exceed
a. Rs 10 Lac b. Rs 50 Lac c. Rs 20 Lac
d. No ceiling
e. Rs 5 lacs
7. In case of unsecured exposures in substandard category the provision to be made is
______% of the total exposure
(a) 10
(b) 25
(c) 12.5
(d) 100
(e) 50
8. An account will be classified as substandard if it remains NPA for a period not exceeding
________ months
(a)
18
(b) 12
(c) 24
(d)
6
9. Special Mention account is a category which would fall between the following
a)Substandard and Doubtful category.
b) Standard and sub-standard category.
c) Doubtful and Loss category.
d) Loss account and written off account.
10. A cash credit account will be treated as irregular if stock statement has not been obtained for
more than
a)Three months

b)90 days

c) 180 days

d) Three months+ 90 days

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Human Resource Management

Bank of Baroda has the tradition of continuous enrichment of its human assets so that they deliver
value to the business.
In the ongoing Business Transformation Programme, our people play a vital role and are one of the
key business enablers. Under its plan of organizational transformation through people processes and
systems, the Bank has launched various innovative employee centric initiatives and has also
undertaken revamp of key systems and practices.
HR Objectives
To initiate & institutionalize globally competitive HR practices in the Bank in our pursuit to become a
Bank of international standards and to become an employer of preferred choice:
To put in place relevant HRD strategies and use modern methodologies to undertake organizational
renewal; identify and nurture talent, bring about marked changes in the mindset of employees at all
levels so as to enhance HR Quality;
To create a performance-driven culture and an exciting workplace for the employees
To create a pool of entrepreneurial managers and business leaders for future;
To inculcate a strong and effective sales and service culture across levels in the organization in
order to generate strong stakeholder affiliation;
To create a learning organization for employees intellectual growth and creativity; and to re-skill the
workforce to operate in digitally enabled modern core banking environment.

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HR Business Model

The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission and
Philosophy and is focused towards attainment of long-term organizational goals.
A very strong Organizational Leadership at different levels forms the key link in the Model. These
are:

Strategic Leadership - Corporate level

Business Leadership - Zonal & Regional level
Operational Leadership - Business unit level i.e. branch

The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-System &
Competency Based HRD Sub-System shape the very crucial Performance Environment within the
Bank which facilitates development of enabling capabilities of people.
Through proper developmental inputs, Positive Attitude & Right Mindset is created among people.
Through proper Communication Medium and an Organizational Culture of sharing, openness,
collaboration & confrontation, autonomy etc., people in the organization are facilitated to give their
best output (performance).
The Model is adequately supported by a suitable Learning Platform, which imparts proper
Knowledge and enhances Learning among people (functional, behavioral etc) so that their
Competence increases and their potential could be properly leveraged for greater Individual and
Organizational Effectiveness.
These create proper Employee Motivation, which ultimately facilitates Goal Achievement.

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HR Initiatives
People oriented Deployment, Promotion and selection policies
Bank has formulated and put in place well documented and comprehensive deployment, promotion
and selection policies oriented towards identifying the best talent and providing opportunities for
fast-track growth and development. Some of the prominent HR policies put in place are:

HR Resourcing policy
Promotion policy for officers
Transfer policy for officers
Promotion policies for clerical and subordinate cadre
Overseas selection policy

Talent identification & grooming programmes

Various programmes are being run by the Bank for grooming of officers in specialized areas of
Credit, Forex, Treasury / Dealing, Wealth Management, for grooming of Branch heads, etc.
HRNes (Human Resource Network for Employee Services)
To take full advantage of technology for enhancing operational efficiency in HR Processes, Bank has
introduced a comprehensive web-enabled Human Resources Management System called HRnes
(Human Resource Network for Employee Services).
Objectives:
To facilitate bringing technology in HR and thereby brining benefits of technology such as
reduction in cost and time by eliminating routine tasks and improving operational efficiency
of HR Processes by creating central database and online applications.
Ensure complete control, Mgmt & monitoring of HR data on near real time basis;
Providing employee Self Service/manager Self Service/Facility for online communications
Bring about transparency in HR operations across the organization;
Cost effective HR administration;
To plug the revenue leakage;
Harnessing the power of workflow to speed up HR processes
"HRNes" covers the entire gamut of human resources management function in the Bank currently
being performed and also includes many new sub-functions. It comprises of four broad modules
encompassing different functions:

Oracle Core HR Module, covering all current HR processes in the Bank;

Fluous Payroll Module, - centralized payroll, payments of various benefits, perks, welfare
schemes, terminal benefits, etc.;
Employee Self-Service Module.

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Oracle Learning Management Module which includes training administration & e-learning;

Various E-Learning modules are gradually being put on the system for employees to avail of and
undergo these courses.
Employee performance management system
A new Performance Management system has been formulated and implemented for all officers. The
new system enables a holistic approach to the issue of managing performance and does not limit to
only an appraisal. It starts from performance planning and Goal-setting and takes it forward into
performance review discussions, feedback and development. The new system is business-linked,
highly objective and fully transparent, with individuals owning and managing their own performance
themselves.
APAR (Annual Performance Appraisal Review)
In terms of Ministry of Finance, Govt. of India advice, Bank has adopted the revised Annual
Performance Appraisal Report (APAR) for different categories of officers with a view to bring in
uniformity in the performance assessment of officers at various levels in all PSBs, especially with
regard to evaluation of different parameters and marking systems.
Following Annual Performance Appraisal Report (APAR) formats have now been mandated for the
performance assessment of the officers:
1. APAR for officers in S-I to S-VI (Budgetary)
2. APAR for officers in S-I to S-VI (Non-budgetary)
3. APAR for officers in S-VII (General Managers)
APAR envisage a -3-tier system of Review:
Reporting authority (minimum one Scale higher than the Appraisee)
Reviewing Authority (minimum one Scale higher than the Reporting Authority)
Accepting Authority (one grade above the reviewing Authority)
PASAS (Performance Appraisal System for Award Staff)
`Performance Evaluation' and `Performance Recognition' have been the focus of various HR
initiatives taken by the Bank. Keeping in view its importance and criticality to various employee
development initiatives, Bank devised a Performance Appraisal System for Award Staff (PASAS). It is
3 tiered performance appraisal system:
1. Self Appraisal by the individual employee (This is optional)
2. First review by Reviewing Authority (RA)
3. Second and Final Review by Final Reviewing Authority (FRA)

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The Broad Objectives of the Performance appraisal system are:

To promote a performance oriented culture
To identify good performers and talent amongst employees
To improve upon strengths
To identify employees for proper placements
To match job roles of individuals during job rotation exercise for effective utilization of
aptitude and potential.
To identify Training needs

Uses and Advantages of Performance Appraisal System for Award Staff:

To
To
To
To
To
To
To

generate a performance oriented culture.

identify factors that hinders performance and reduces them as far as possible.
identify training and developmental needs.
identify exceptional talents for special assignments.
identify high performers and groom them for higher order roles.
facilitate comprehensive data base on information about award staff.
provide feedback to the employee to help achieve better performance in future.

The Performance Appraisal System for Award Staff shall cover:

All clerical staff (including those having combined designations and also all those drawing
any Special Pay)
All full-time subordinate staff (including staff having combined designations or drawing any
Special Pay)
The performance appraisal shall be 3-tiered:
Self Appraisal by the individual employee (This is optional)
First review by Reviewing Authority (RA)
Second and Final Review by Final Reviewing Authority (FRA)
Project Sparsh- Human Touch for Business Excellence
Project SPARSH a focused HR project, has been undertaken by Bank engaging services of
The Boston Consulting Group (BCG) to revamp our HR processes, structures and policies
and to create an integrated HR framework.
Under Project SPARSH, bank has covered:

Manpower
Training and development
Incentives to staff
Talent management and
Performance management.

A few of the initiatives taken by bank under the project SPARSH:

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Inauguration of HR shared services pilot back office at Baroda (HRCPC)

Banks career portal
On-boarding scheme for newly recruited officers
Employees survey
Baroda Academy
Baroda Sujhav (ideaonline@bankofbaroda.com)
Idea channels for eliciting new ideas from employees with structured rewards provisions for the best
ideas.
In the context of technology driven business, Staff Suggestion Scheme has been titled as Baroda
Sujhav. The Scheme is applicable to all employees. The objective of the Scheme is to encourage the
ideation process amongst staff members to offer innovative suggestions which are in tune with
Banks priorities and concerns, Customer Service and its effectiveness.
Paramarsh
Our banks vision envisages providing not only a healthy work-life but also a satisfying personal and
social life to our employees. With this objective in mind, Paramarsh Centre at BCC have started
personal counseling for employees for providing psychological assistance and guidance to overcome
their stress, complexities and conflicts in order to lead a better life.
It is a progressive, far sighted and proactive step taken by bank to ensure that our employees can
lead happy and satisfied work life through personal counseling for psychological care from trained
and experienced clinical psychologist.
Streamlined Induction schedule for all new joinees
Bank has put in place a well-defined and properly structured induction programme, phase-wise for
different batches of directly recruited officers, campus recruitees and newly recruited clerks, which is
imparted through a mix of classroom and on-the-job training.
Role-change programmes and executive development programmes
Executive Development programmes are being regularly conducted for newly promoted senior and
top management people in conjunction with leading Business schools like ISB, Hyderabad, MDl,
Gurgaon, National Institute of Bank Management, Pune, etc.
Role change programmes are being conducted for newly promoted employees at Bank's internal
training establishments which give them inputs on behavioral issues, soft skills, team work,
leadership, etc. besides ways on how to cope with the challenges of the new role better.

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Grooming and etiquettes programmes

Grooming and etiquettes programmes are being conducted for front-line employees and also for
employees selected for overseas posting in order to improve their service levels and qualitative
interaction with customers and various stakeholders better.
SEED (Self Efficiency and Effectiveness Development) programme being run for frontline staff of the
Bank in order to improve their service skills and servicing efficiency.
Employees Group Health Insurance
Bank has two separate Employees Group Health Insurance policies with United India Insurance
Company Ltd. for existing as well as for retired Bank of Baroda employees:

Insurance policy for existing employees

Insurance policy for retired employees

Baroda Manipal School of Banking

Bank of Baroda has entered into an MOU with Manipal Education and opened Baroda Manipal
School of Banking. It conducts a dedicated one year diploma program for training students in
various areas of Banking and Finance.
On successful completion of the course, the students are awarded a post graduate diploma in
Banking and Finance from Manipal University and are absorbed in the Bank as Probationary Officers,
fully trained and ready to deliver from the first day itself.
The thrust of the training is to impart functional as well as specialized knowledge on Banking
and related subjects. Participants are put through on- campus curriculum spread over 9 months
(divided into 3 semesters of 3 months each). Training at the school is supplemented with
practical training at branches of Bank of Baroda through a focused 3 - months internship.
The campus is at Bangalore.
Mobile Snippets:
For sharing industry related and bank specific information with employees, Bank has launched an
application Mobile Snippets for android phone users. The application can be installed on android
phone using the following link:
http://barodaeacademy.bankofbaroda.co.in//install/
The application is available on Google Play Store also. There are nine Sections in Mobile Snippets:

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1. News Collection of important banking news published in various newspapers

2. Events Photographs along with description in respect of important events that took
place in branches, regions, zones and central office
3. Announcements Announcements in respect of future events.
4. BoB Circulars Gist of important BoB circulars on fortnightly/ monthly basis.
5. RBI Circulars - Gist of important RBI circulars fortnightly/ monthly basis.
6. Messages Video messages from higher authorities/ video of any event.
7. Publications Various publications from Apex Academy, Vigilance, Marketing etc.
8. e-Library Power Point presentations and quiz on important topics for creating
awareness.
9. a.Feedback Users may provide feedback.
b.Image upload Users may upload image at their end for including in Events section
c.Video Upload-Users may upload important even for sharing with all users.
All the staff members who have their mail address in HRNES entered, are automatically registered in
the system.

VOICE OF BARODIANS
Employee Engagement Survey-2016 was launched on 22.02.2016.
Message of MD & CEO on the subject:

As we march forward to realize our aspirations and dreams to take our Bank to further
heights, it is imperative that our team is truly energized and fully engaged. Each member of
the Barodian family makes a difference and plays a unique role in our quest to achieve
business excellence and customer delight.
Towards this endeavor, the Bank seeks to understand your perspective, thoughts, perceptions
and opinions on a wide range of matters that impact you such as Job Role, Rewards,
Recognition, Working Conditions, Performance Appraisal, etc., which will help us, define the
HR transformation journey for the Bank. The Bank has partnered with Aon Hewitt, a global
leader in human resource consulting solutions, for conducting Employee Engagement Survey
2016.
The survey was through online link in HRnes-HRMS under the Employee Self Service.
The survey was for the purpose of identity authentication. Response to the questionnaire was
directly sent to Aon Hewitt with full anonymity and it was assured that responses would
remain completely confidential to feel free to air individuals thoughts. The feedback would be
collated by Aon Hewitt and will be shared with the Banks leadership team on a consolidated
basis.
It was reiterated that the views and feedback are very important as bank strongly believes
that the ideas play a key role in helping strengthening our organization. And also that the

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information obtained from this study will be used to shape the organizations HR policies and
programs going forward.
E-learning course - Code of Conduct for Officers
Baroda NetAcademy launched a course on Code of Conduct for Officers. The course aimed to
familiarize all officers with various guidelines of code of conduct policy for officers of our Bank.
Salient features of the course:

Duration of the course - 45 minutes approx

The course might be stopped at any time in between and learner could start it again from
that point
It got quizzes during the course and self assessment of 10 MCQs at the end
Learner has to score 100% in the self assessment to complete the course.
Facility of printing a Certificate on completion of the course.

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Retail Loan products of our Bank at a glance

1. BARODA HOME LOAN
PURPOSE:
Purchasing of new residential house / flat and construction of new dwelling unit.
Purchase of old dwelling unit (not more than 25 years old). Beyond 25 years Regional
Head permission required subject to ascertaining structural soundness / residual life of
the building (5 yrs more than the repayment period).
Purchase of plot of land, subject to construction thereon within 3 years or upto the
period allowed by Development Authority (whichever is earlier) from the date of
purchase of plot.
If borrower could not construct house within above mentioned stipulated period due to
circumstances beyond his/her control or genuine difficulties, Zonal Authority is authorized
to waive the commercial ROI on case to case basis . A suitable undertaking to be
obtained from borrower to construct the house within further period of maximum 2 years
without attracting commercial ROI.
Repayment of loan already availed from any other Bank / HFCs and /or other sources.
For houses / flats constructed / purchased (not prior to 24 months) from own sources.
Loan for purchase / construction of second house can be considered who secure HL-1 to
HL 3 risks rating under home loan rating model. [Reimbursement of cost of plot is not
admissible under the scheme ]
ELIGIBILITY:

All individuals singly or jointly

Principal applicant must be employed minimum for three (03) years.
Minimum Age Principal Borrower 21 yrs and Co-borrower - 18 yrs
Maximum age:

Salaried Persons:
Maximum age is 70 years. i.e., the age by which the Loan should be fully repaid, subject to
availability of sufficient regular and continuous source of income for servicing the loan
repayment, Provided:
(i) Son/ Daughter/ Spouse who is a legal heir and preferably below 50 years of age, with
sufficient income for servicing the loan repayment joins as coborrower/Guarantor
(OR)
(ii) if borrower pledges FDRs / NSCs / Govt. Security etc. of adequate value to ensure
Continuity of income for repayment of loan installment with interest if sanctioning authority
is satisfied about the same

If not fulfilling the above criteria (i) or (ii), age of the borrower plus repayment period
should not be beyond retirement age.

Maximum age can be considered upto 70 years, also in case of salaried persons drawing
pension, subject to the condition that 40% of the pension is sufficient to pay EMI. In
case EMI exceeds 40% of the pension, the borrower to deposit adequate amount in the
loan account so as to reduce the outstanding amount of loan to the extent it can be
serviced by 40% of the pension.

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Others (Non-salaried/self-employed/professionals/agriculturists etc.):

Maximum age is 70 years. i.e., the age by which the Loan should be fully repaid,
subject to availability of sufficient regular and continuous source of income for servicing
the loan repayment, provided
(i) Son/ Daughter/ Spouse who is a legal heir and preferably below 50 years of age, with
sufficient income for servicing the loan repayment joins as Co-Borrower/Guarantor.
(OR)
(ii) if borrower pledges FDRs / NSCs / Govt. Security etc. of adequate value to ensure continuity of
income for repayment of loan installment with interest if sanctioning authority is satisfied about the
same.
If not fulfilling the above criteria (i) or (ii), age of the borrower plus repayment period
should not exceed 65 years

Housing Loan to HUF is not to be considered as it is not meant for family business of HUF.

LIMIT:
Maximum Amount of Loan
Rs. 300/- Lacs for Urban & Metro branches
Rs. 100/- Lacs for Rural & Semi-Urban branches
For extension: Rs 10/- Lacs.
Total amount of the loan sanctioned including that for extension should not Exceed Rs 300/Lacs for Urban & Metro branches and Rs100/- Lacs for Rural & Semi-Urban branches.
INCOME CRITERIA:
SOURCE INCOME
Up to Rs. 20,000/=
More than Rs. 20,000/
Salaried
and up to Rs. 1 lac
More than Rs. 1 lac
Other than Salaried Persons

CRITERIA
36 times of monthly gross income
48 times of monthly gross income
54 times of monthly gross income
5 times of average ( last 3 years ) annual
income (Depreciation to be considered for
computing eligibility subject to certain conditions

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REPAYING CAPACITY:

(i)

Total deductions including proposed EMI should be as below :

In case of Salaried Persons :
Monthly Income (Bracket)

Total Deductions not to exceed

( including proposed EMI )

Up to Rs. 20,000/-

40%

50%

Rs. 20,000/- and up to Rs.

50,000/Rs. 50,000/-

60%

(ii)In case of Others :

Annual Income

Total Deductions not to exceed

( including proposed EMI )
50%

Up to Rs. 2,40,000/

Rs. 2,40,000/- and up to Rs. 12

lacs
Rs. 12 lacs

60%
70%

LOAN TO VALUE (LTV) and MARGIN

Margin (%)

LTV ratio (%)

10%

90%

Loans above Rs.30/- Lacs upto 20%

Rs.75/- Lacs

80%

Loans above Rs.75/- Lacs

75%

Loans upto Rs.30/- Lacs

25%

Stamp duty, registration charges, other documentation charges and other expenses like Life
Insurance premium etc. in the cost of house property should not be included to calculate
margin.
However, where cost of the house/ dwelling unit does not exceed Rs.10 Lacs, branches may
add stamp duty, registration and other documentation charges to the cost of the house/
dwelling unit for the purpose of calculating LTV Ratio & margin.

REPAYMENT:
Maximum repayment period is -30- years, including moratorium period
Maximum moratorium shall be -36- months as under:
o

18- months moratorium period for under construction Houses and Building upto 7th
floor, thereafter -6- months additional moratorium per floor subject to maximum of -

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36- months
Or
One month after completion of house/ taking possession of flat/house, whichever is earlier.
RISK RATING:
All Home Loan applications are subject to Risk rating. Credit rating to be done as per Home Loan
Model under Retail Rating Models. Total marks are 168 and the cutoff is set at 96 (Investment
Grade HL-8)
New Home Loan Products
Baroda Home Loan Advantage Scheme:
The scheme will be available to Resident Individuals, NRIs/PIOs and for Home Loan to
Staff under Public scheme.
Facility: Home Loan linked with Savings Bank Account.
The Home Loan sanctioned will be linked with Saving Bank Account.
The rate of interest applicable on this SB account will be Zero
Under the scheme, the borrower shall have the option to deposit all his savings in the
linked SB account to avail maximum benefit of interest in the Home Loan account. Any
credit available in the linked SB a/c at the end of the day will be counted for credit in
linked Home Loan account. Consequently, the borrower will get the benefit of interest
amount reduction in the Home Loan account to the extent of daily outstanding credit
balance in the Savings Bank account.
The branch can verify the interest debited in Home Loan account by taking interest
product sheet anytime after interest application / at the end of the month.
The borrower will remit the Equated Monthly Installments (EMIs) into the linked SB
account.
Recovery of EMI will be made by way of auto recovery from linked SB account only.
Facilities available for linked SB account: Balance in SB account is available for drawal on
demand. Hence, borrower is eligible for Cheque book facility, ATM cum debit card, internet
banking facility, mobile banking facility etc. as per normal Savings Bank rules. Charges for
cheque book, ATM card etc will be as applicable in Savings Bank accounts.
Conversion of Existing Home Loan to Baroda Home Loan Advantage Scheme: New Savings
Bank account will be opened in separate scheme code (even if the borrower is maintaining
another SB account as per normal scheme) and will be linked to existing Home Loan
account. The Home Loan account may continue in the existing scheme code itself. In such
a case, branch needs to link the new SB account to existing home loan account.

Baroda Pre Approved Home Loan

Baroda Pre Approved Home Loan provides in-principle approval for a Home Loan
prior to identification of a specific house/flat/plot by a prospective applicant of Home Loan.
It gives the customer greater flexibility in negotiations with builders/sellers.
The in-principle sanction letter for Baroda Pre Approved Home Loan will give eligible loan
amount calculated as per prevailing interest rates and other existing guidelines of Home Loan.
Therefore all the documents in support of income and repayment capacity (except property
documents) to be obtained and duly verified before issuing the Pre Approved Sanction letter.
The in-principle approval shall be valid for -4- months from the date of issue
50% of unified processing charges applicable to regular Home
Loan scheme with a minimum of Rs.2,500/- +ST and a maximum of Rs.10,000/- + ST will be

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recovered upfront and will be non-refundable (in case of not availing the loan)
Baroda Home Loan Suraksha Personal Loan
Purpose
Exclusively for Home Loan borrowers along with Home Loan for funding the premium amount under
Group Credit Life Insurance cover provided by M/s. IndiaFirst Life Insurance Company Ltd. & M/s.
Kotak Mahindra Old Mutual Life Insurance Company Ltd.
Baroda Home Loan Suraksha Personal Loan will be sanctioned along with Baroda Home Loan. For
existing Home Loan borrowers, loan can be availed separately
Maximum Amount:

Upto the applicable premium amount for Group Credit life insurance cover for the Home Loan
borrower/s and or co-borrower/s provided by M/s. IndiaFirst Life Insurance Company Ltd. &
M/s. Kotak Mahindra Old Mutual Life Insurance Company Ltd.

The maximum amount will be worked out within the overall eligibility of the borrower like
income criteria, repayment capacity etc except margin/LTV on cost of project for Home Loan.

The eligible amount for loan will be the residual portion of eligible amount worked out based
on income criteria, repayment capacity except margin/LTV on cost of project for Home Loan
OR the applicable premium amount for Group Credit life insurance for the borrower/coborrower/s, whichever is lower.

Repayment Period:
New borrowers: Maximum Period up to of the repayment period under Home Loan
sanctioned.
Existing Home Loan borrowers: Residual period of Home Loan sanctioned or of the original
repayment period under Home Loan sanctioned, whichever is lower.
BARODA HOME LOAN TO NRIs /PIOs / Overseas Citizen of India (OCI)
PURPOSE:

Purchase of new residential house / flat

Construction of new dwelling unit
Purchase of old dwelling unit ( not more than 15 years old )
Purchase of plot of land, subject to the condition that a house will be constructed thereon
within -3- years from the date of purchase of plot.
Repayment of loan already availed from any other Bank / HFC
For repair / renovation / extension of existing house
For purchasing / constructing second house / flat for the purpose of self occupation.
Loan shall be considered for residential properties situated in India only.

ELIGIBILITY:

Non Resident Indians (NRIs) holding Indian passport or Persons of Indian origin (PIOs) holding
foreign passport, singly or jointly.
For this purpose person of Indian Origin means an individual ( not being a citizen of

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Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or

Bhutan
) if

He at any time held Indian Passport or

He or either of his parents or any of his grandparents was a citizen of India by virtue of the
constitution of India or the Citizenship Act 1955, or
The person is a spouse of an Indian citizen or a person referred to in sub clause
(a) or (b) above.
Principal applicant should be having a regular job abroad in a reputed Indian / foreign
company, organization or government department holding a valid job contract / work permit
for the minimum past 2 years,
Must be employed / self-employed or having a business unit and staying abroad at least for 2
years.
Must have minimum gross annual income equivalent to Rs. 5 lacs per annum.

AGE:

Minimum age must be 21 years. However, the minimum age of co-borrower can be 18 years.

Age of the borrower plus repayment period should not be beyond retirement age or 65 years
whichever is earlier.

LIMIT & MARGIN:

For determining total cost of the house, the cost of car parking place / area located in the
same building / compound / society can be considered. However, it should be noted that such
car parking area should be specific, identifiable and incorporated in the sale agreement /
allotment letter.

PARTICULARS

MINIMUM MAXIMUM

Purchase new / old house / construction

Rs. 5 lacs

For repairs / renovations / extensions

Rs. 1 lac

Rs. 300 lacs for metro/urban

branches
Rs 100 lacs for SU/Rural
Branches
Rs. 25 lacs

For purchase of plot of land

---

Rs. 50 lacs

INCOME CRITERIA:
The maximum amount of loan should not exceed the following:
In case of salaried persons
Monthly Income

Eligible amount of loan

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Upto to Rs.1 Lac

-48- times of monthly gross income

More than Rs. 1 lac

-54- times of monthly gross income

In case of others viz. professionals / self-employed / business persons etc., -4- times of average
(last two years) annual income.

Repayment Period: Maximum 15 years including moratorium.

Moratorium Period: For construction of new house - one month after completion of the house
subject to maximum period of 12 months from the date of first disbursement
For purchase of new/ old house/ flat - one month after taking possession subject to maximum of 3
months from the date of first disbursement.
In case of repairs/ renovation/ extension, repayment to commence one month after completion of
renovation/ extension / repair work subject to maximum moratorium period up to 6 months.
BARODA HOME IMPROVEMENT LOAN
Purpose:
For repair / renovation / improvement / extension of existing house.
Purchase of furniture / fixture / furnishing / other gadgets such as fans, geysers, air
conditioners, water filters, air purifiers, heaters, desert coolers, etc.
The House should not be older than 35 yeas. Residual life of the house may be minimum
repayment period plus 5 years to be certified by approved architect/valuer vis--vis total
repayment period of the loan
Age: Minimum age - 21 years.
Maximum age of the borrower + repayment period should not be beyond retirement for
salaried person and 65 years in case of others.
(HUF, NRIs, Staff members are not eligible)
Principal applicant must have consistent and stable source of income minimum for last -3-years.
Take over of existing Loans for repair/renovation/improvement taken from other Banks/HFCs.
Maximum Amount of Loan: Rs 10.00 Lacs
with the provision that the loan component for furniture / fixture / fittings / other gadgets
should not exceed Rs 5.00 Lacs
Salaried persons: -2- times of gross annual income
Other than salaried persons i.e, professionals/self employed/business persons
-3- times of net annual income (average of last three years) plus depreciation claimed in individual
capacity and not by the business unit. This may be verified from income tax return and statement of
income and expenditure.
Baroda Additional Assured Advance (AAA):
Baroda Additional Assured Advance (AAA) product under Retail Lending was basically devised for
our existing Home Loan Borrowers to provide hassle free finance to them for their various emergent
needs (other than speculative purpose). The facility is granted against the security of extension of
Equitable Mortgage of House Property already mortgaged to secure Home Loan and the facility can

260 | P a g e

be availed up to a maximum of 5 times during the entire tenure of Home Loan

Purpose of loan

Any purpose excluding speculative or illegal purpose

Eligibility

All Existing Home Loan Borrowers including NRIs /PIOs, Staff and
Ex-staff Members (availed home loan under public scheme as well as
Staff Housing Loans) whose conduct of the account is good and the
account is classified Standard
There is no adverse feature / Auditor's/Inspecting Officer's
remarks in existing Housing Loan a/c
The facility can also be considered when an account is taken over
from other banks/HFCs
Minimum Rs 1/- Lac
Maximum Rs 200/- Lacs
Or
75% of Residual Value of House Property after deducting 150% of
outstanding loan amount of Existing Home Loan whichever is lower.
25% of Residual Value of House Property after deducting 150% of
outstanding loan amount of Existing Home Loan
As per request of the borrower subject to repayment capacity. However the
maximum period should not be more than the remaining period of Home Loan
Age of borrower + tenure of AAA Loan should not exceed 70 years, in
synchronizing with Home Loan.

Loan Limit

Margin
Repayment
Period
Maximum age

BARODA AUTO LOAN

Purpose of loan

Eligibility

For purchase of New Car / Old Car (not more than 3 Years) for
private use.
For Installation of CNG/LPG Gas kit in four wheelers (New vehicle/
old vehicle not more than 5 years) and owned by individuals
Take over of existing Car Loans from other Banks.
For purchase of Two wheeler
Salaried Employees
Businessmen, Professionals, Farmers,
Directors of Private/Public Ltd Co.
Proprietors of firms, Partners of partnership firms
High Networth Individuals (HNIs): Individuals with minimum salary of
Rs 1.25 Lacs per month and carry home salary should be at least 40%
(inclusive of proposed deductions) OR with annual income of Rs15/Lacs in case of business persons/farmers
Corporates with minimum Tangible Networth of atleast 10 times of
the Loan requested.

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Minimum :
Applicant: 21 Years;
Co-applicant: 18 years
Age
Maximum :

Age of the applicant/co-applicant/ guarantor + repayment period should not

exceed 70 years.
If the applicants age + repayment period exceeds retirement age (in case of
salaried person) or 65 years (in case of others), addition of co-borrower, preferably
a family member should be stipulated. If co-borrower is not available in such cases,
proper justification thereof should be given in the proposal by the sanctioning
authority.
However, if income of the co-applicant is not considered for assessment of eligible amount of loan,
the above stipulation of maximum age is not applicable for co-applicant.
Maximum Loan
For HNIs/ Corporates : Rs 100 Lacs
Limit
For Others:
For New Vehicle : Rs 15.00 Lac
For Old vehicle : Rs 10.00 Lac
For Eco friendly Gas Kit : Rs 0.25 lac
Subject to:
24 times of gross monthly income for salaried persons
3 times of gross annual income (average of last 2 years) for others
For Two wheeler:
Rs 1.00 Lac or 5 times of gross monthly income whichever is lower

Margin

Repayment
Capacity

For Takeover of Car Loan: Outstanding balance in the existing account or

85% of cost of the vehicle (on Road Price), whichever is lower.
Loans upto Rs 15.00 Lac : 15% on On Road Price
Loan above Rs 15.00 Lac : 20% on On Road Price
(On Road price includes Invoice Price, Road Tax, Cost of Registration and
Insurance)
Old Vehicle : 40% of Agreed Sale Price
Gas Kit :
15%
Two wheeler : 10% on invoice value
Income Level (For all segment of
people)
Up to Rs20,000/- p.m.

Total deduction not to exceed

> Rs 20,000/- and up to

60% of Gross Monthly Income

50% of Gross Monthly Income

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Rs 1,00,000/>Rs1,00,000/-

Repayment

70% of Gross Monthly Income

New cars : Maximum 84 months

Old cars : Maximum 36 months

BARODA EDUCATION LOAN BARODA VIDYA

Target Group
Eligibility

Coverage of
expenses for

Maximum Loan
Limit
Margin
Repayment
Period

Parents of Students pursuing school education from Nursery to

Class XII.
Should be a Resident Indian.
Student should have secured admission to a Recognized school
/ Highschool / Jr. College (including CBSE / ICSE / State Board)
for any of the following courses
1. Stage I : Nursery to V th STD.
2. Stage II: VI th to VIII th STD.
3. Stage III:IX th to XII th STD
4. Evening courses of institutes approved by State/ Central Govt.
No minimum qualifying marks
Loan to be granted in the name of father/mother of the student
Fee payable to college / school
Examination / Library / Laboratory fee.
Fee and other charges payable to hostel
Purchase of books /equipments/ instruments/ uniforms.
Personal Computers/Laptops wherever required.
Caution deposit / building fund / refundable deposit supported by
Institution bills / receipts.
Cost of external coaching /tuition is not to be considered
Maximum Rs 4.00 Lac
NIL
Loan for each yearly sub limit is repayable in 12 equal monthly
installments. First installment to be due 12 months after first
disbursement of each ears loan component .
Interest to be serviced as and when applied during the moratorium
period
Option to repay the loan after moratorium by way of EMI is also
available

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Security

Classification
of Advances
Discretionary
Lending Power

No security
In case the loan is given for purchase of computer the same is to
be hypothecated to the Bank.
Priority Sector
DLPs of Clean advance

BARODA EDUCATION LOAN - (ii) BARODA GYAN

Target Group
Eligibility

Coverage of
expenses for

Maximum
Loan Limit
Margin

Students pursuing Graduation, Post Graduation, Professional and other

courses in India.
Should be Resident Indian.
Should have secured admission in recognized institution for approved courses
by UGC/Govt. /AICTE through Entrance Test/Merit Based selection process
after completion of HSC (10 plus 2 or equivalent)
Fee payable to college/Institution/University/school/hostel.
Examination / Library / Laboratory fee.
Hostel fees / charges.
Purchase of books / equipments / instruments / uniforms.
Caution deposit, Building fund / refundable deposit supported
by institution bills/ receipts, subject to condition that the amount does not
exceed 10% of the total tuition fees for the entire course.
Purchase of Personal Computer / Laptop - essential for completion of the
course.
Insurance premium for student borrower
Any other expenses required to complete the course like study tours,
project works, thesis, etc.
Cost of external coaching / tuition is not to be considered.
For admission taken under Management Quota Seats, considered under the
scheme, fees as approved by the State Government/ Government approved
regulatory body for payment seats will be taken, subject to viability of
repayment

.
Maximum Rs 10 Lac
Up to Rs 4 Lac NIL

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Rate of Interest
Moratorium
period
Repayment
Period

Security

Classification
of Advances

Above Rs 4 Lac 5%
Up to Rs.7.50 Lacs : Base Rate + 2.50 % p.a.
Course period + 1 year, or 6 months after getting job, whichever is earlier.
The loan is repayable in maximum 10 15 years after the above period as
under:
For loans upto Rs.7.50 lac : Maximum -120- installments
For Loans above Rs.7.50 lac : Maximum -180- installments
If the student is not able to complete the course within the scheduled
time,
extension of time for completion of course may be permitted for a
maximum
period of 2 years. If the student is not able to complete the course for
reasons beyond his control, sanctioning authority may at his discretion
consider such extensions as may be deemed necessary to complete the
course.
In case of above extension, moratorium period will stand extended
accordingly.
Up to Rs. 4.00 Lacs: Co-obligation of parent. No Security.
Above Rs. 4.00 Lacs and up to Rs. 7.50 lacs:
Collateral in the form of a suitable third party guarantee along with
assignment of future income.
Above Rs.7.5 lacs :
Tangible collateral security equal to 100% of the loan amount along with
assignment of future income of the student for payment of installments.
Priority Sector (Upto Rs. 10.00 Lacs)

Discretionary For Loans upto Rs.7.50 Lacs, where no tangible securities are available,
Lending
DLPs of Clean advance
Power
BARODA EDUCATION LOAN - (iii) BARODA SCHOLAR
Target Group

Students going abroad for Professional / Technical studies

Eligibility

Should be an Indian National.

Secured admission to professional / technical courses Abroad
through Entrance Test / Merit Based Selection process
Fee payable to college/Institution/University / hostel / Mess charges.
Examination / Library / Laboratory fee.
Purchase of books / equipments / instruments / uniforms.

Coverage of
expenses for

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Maximum Loan
Limit
Margin
Moratorium
period
Repayment
Period

Personal Computers/Laptops wherever required.

Caution deposit, Building fund / refundable deposit supported by institution
bills/ receipts, subject to condition that the amount does not exceed 10%
of the total tuition fees for the entire course.
Purchase of computers if essential for completion of the course.
Insurance premium for student borrower.
Any other expenses required to complete the course like study
tours, project works, thesis, etc.
Travel expenses / passage money.
Cost of external coaching / tuition is not to be considered.
Maximum Rs 20 Lac
Up to Rs 4 Lac NIL
Above Rs 4 Lac 15%
Course period + 1 year, or 6 months after getting job, whichever is earlier.
The loan is repayable in maximum 10 15 years after the above period as
under:

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Security

For loans upto Rs.7.50 lac : Maximum -120- installments

For Loans above Rs.7.50 lac : Maximum -180- installments
If the student is not able to complete the course within the scheduled
time, extension of time for completion of course may be permitted for a
maximum period of 2 years. If the student is not able to complete the
course for reasons beyond his control, sanctioning authority may at his
discretion consider such extensions as may be deemed necessary to
complete the course.
In case of above extention, moratorium period will stand extended
accordingly.
Up to Rs. 4.00 Lacs: Co-obligation of parent. No Security.
Above Rs. 4.00 Lacs and up to Rs. 7.50 lacs:
Collateral in the form of a suitable third party guarantee along with
assignment of future income.
Above Rs.7.5 lacs :
Tangible collateral security equal to 100% of the loan amount along with
assignment of future income of the student for payment of installments.

Classification

of Advances
Discretionary
Lending Power
Freebies

Loans to individuals for educational purposes including vocational courses upto Rs.
10 lakh irrespective of the sanctioned amount will be considered as eligible for
priority sector.
For Loans upto Rs.7.50 Lacs, where no tangible securities are available, DLPs
of Clean advance
Drafts in foreign currencies drawn on our branches / subsidiaries required in
favour of college/University /Student will be issued free of exchange /
commission.

VIDYALAKSHMI
Bank has launched the facility of online submission of Education Loan applications
by Students, integrated with the 'VIDYALAKSHMI' portal hosted by the Government
of India through NSDL.
Vidya Lakshmi Portal provides single window for Students to access information and
make application for Educational Loans provided by Banks and Govt Scholarships. It
has the following features:
i. Information about Educational Loan Schemes of Banks.
ii. Common Educational Loan Application Form for Students.
iii. Apply to multiple Banks for Educational Loans.
iv. Facility for Banks to download Students Loan Applications.
v. Facility for Banks to upload loan processing status.
vi. Facility for Students to email grievances/queries relating to Educational Loans
to Banks.

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vii. Linkage to National Scholarship Portal for information and application for
Govt. Scholarships.

BARODA TRADERS LOAN :

Nature of
Overdraft or Loan
Facility
Purpose
Working capital requirements.
Development of shop (e.g. purchase of equipment, P.C., air-conditioner,
furniture etc. but not for purchase of shop), for need based
requirements subject to a maximum of 25% of the working capital
limit sanctioned.

Eligibility

Limit

Non-fund based facilities within the limits assessed based on value of

securities (i.e. Bank Guarantee and Letter of Credit).
Individuals, Proprietorship & Partnership Firms, Private Limited
Companies and Registered Cooperative societies engaged in trade of
any commodity/goods in physical form required by the community and
trading in them is not prohibited by law or opposed to public interest.

(HUF & Public Limited Companies are not eligible).

Dealers in Silver / Gold jewelers against the jewellery, but not
against bullion/ raw gold.
The business units should have been established in the line of
business for minimum period of- 2-years.
Trading units established by our existing customers with satisfactory
dealings or their close relatives, even if these are established for
less than -2- years.
Trading units of non-customers having less than -2- years
establishment with the prior approval of Regional Head.
Minimum: Rs. 25,000/Maximum:
I.
For Rural & Semi urban Branches Rs.300 Lacs
II.
For Urban & Metro Branches
Rs 400 Lac
Assessment of working capital limit:
The credit limit is to be considered as under:
20% of the projected/Accepted sales
OR

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Advance value of collateral assets to be charged, whichever is lower.

Margin

Assessment of loan for Shop Development:

Need based finance to be considered as per requirements subject to a
maximum of 25% of the working capital limit sanctioned (within overall limit
assessed based on value of security).
40% on realizable market value as per recent valuation report of
immovable property.
If the property is purchased within last three years, the registered
value to be accepted as the market value.
10% on Banks own FDRs.
15% on the surrender value of Life Insurance Policies, NSCs,
Government Bonds etc.

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Period

12 months subject to annual review.

Repayment

Loan - Maximum 60 EMI (depending on repayment capacity).

Commitment
charge
Security

0.50% p.a. for utilization of limits below 75% (on quarterly average Basis) of
sanctioned limit in case the Limit sanctioned is Rs.500 lacs and above
Tangible collateral securities in the form of Equitable mortgage of:
Residential House/Flat or Commercial property)Building/Land and
Building)
OR
Plot of land (not agricultural land) allotted/purchased from any
Development/Government authority subject to margin of 50% of
Realizable Market value of security.
(The allotment/ sale of plot/land by such development/ Govt. authorities
should not contain any clause stipulating fixed time limit for construction
of house/commercial building)

Zonal Authority is authorized to allow deviation for accepting plot of

land NOT purchased/allotted from Govt./Development Authority after
obtaining opinion from Zonal Legal Officer subject to:
Margin of 60% of Realisable Market value of security.
Plot is clearly demarcated by boundaries, preferably compound
walls.
Site plan/location sketch/lay out plan of the plot obtained from
respective Govt. authority of the state, wherever available as per
state laws.
Plot is located in reputed development area, where proper by lanes
and roads have been carved out as per development plan of the
area so that there is no likely hood of deterioration in valuation of
the property.
Direct and independent access to the open plot.
Display board clearly mentioning bank name to be fixed/cemented
to the plot.

Property to be mortgaged to be ONLY in the name of Borrower,

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Proprietor, Partner, Director or their close relatives.

Credit Rating

Take over
Norms

Other
Provisions

Property standing in the name of third party can also be accepted,

provided:
i.
Owner of property offers personal guarantee, and
b) The credit facility is for Rs. 1 lac and above.
Fresh advance can be granted only to the applicants securing minimum
credit rating of BTL-6 under the new Credit Rating Model applicable
for limits upto Rs.200 lacs hosted on LAPS.
Facilities of more than Rs.200 lacs shall be rated on BOBRAM.
The operating units may take over good quality accounts from other Banks
subject to complying with non-financial norms laid down in Domestic Loan
Policy.
The entity must also satisfy following financial norms:
Current Ratio : Minimum 1.17:1
Debt Equity Ratio : Maximum 6:1
Stock statement to be obtained once a year i.e. as of last day of February,
by 10th of March every year.

BARODA TRADERS GOLD CARD SCHEME

Nature of
Overdraft
Facility
Eligibility
Individuals, Proprietorship & Partnership Firms, Private Limited Companies
and Registered Co-operative Societies engaged in trade of any
commodity/goods and have been sanctioned overdraft facility under Baroda
Traders Loan Scheme above
Rs 25 Lacs and fulfilling the following criteria;
1. Existing account in Standard Asset Category for last 2 years
2. No major inspection irregularity in the account
Credit Rating
Minimum BTL 4 for limit up to Rs 200/- Lacs including proposed limit under
Baroda Traders Gold Card.
Obligor Rating of minimum BOB-4 for limit above Rs 200/- Lacs.
In respect of external rating for Baroda Traders Loan, it has been clarified by our Risk
Management Department that external credit rating is to be done where exposure is
above Rs.5.00 Crores under Baroda Traders Loan also.
Purpose
Limit

To meet the emergent working capital requirement arising due to peak

season requirements, delayed payments by debtors, for tax payment, etc.
20% of the sanctioned Baroda Trader Limit
OR
70 % of realizable market value of immovable property (including realizable

271 | P a g e

Security
Period

market value set aside for sanctioning of regular Baroda Traders Limit),
whichever is lower.
Extension of equitable mortgage of property/ies mortgaged
12 Months - to be allowed on 3 occasions in a year for a maximum period of 2
months on each occasion. However, there should be gap of 1 month between
two drawls

BARODA MORTGAGE LOAN:

Purpose
For any purpose except for financial speculation of any type.

Eligibility

Age

Type of Facility

Limit

(Proposals from persons involved in Real Estate Developments, Property

Dealers/Brokers, Share/Stock Brokers and Persons engaged in speculative
activities should not be considered.
Individuals
Salaried Employees/ Professional, Self Employed & Others, who are
income tax assesses for a minimum of last 3 years.
Minimum Gross annual income : Rs. 60,000/ NRIs
Must be holding a valid job contract /work permit for minimum past 2
years or employed / self-employed or having a business unit and
staying abroad at least for 2 years.
Minimum gross annual income: Rs 5 lacs.
Existing staff members are not eligible.
Minimum - 21 years
Maximum - 60 years
(The customer age + Loan tenure should not exceed retirement age for
salaried class & 65 years for NRIs & others)
Term Loan/ Demand Loan/ Overdraft
In case of Overdraft, minimum annual turnover in the account should
be at least 25% of the limit.
NRIs will be granted Term Loan/Demand Loan only.
( NRIs are not eligible for Overdraft facility)
(a) Minimum : Rs. 1.00 Lacs
(b) Maximum:
For Rural Branches : Rs.10.00 Lacs
For other Branches : Rs. 300.00 Lacs.
Loan to professional : Rs.100.00 Lacs
(Subject to income criteria, repayment capacity and advance value of the

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property offered as security)

Income Criteria

Margin
Personal
Guarantee
Repayment
Period

Salaried Class: 36 times of Gross Monthly income.

Other Individuals: 5 times of Average (last three years) annual
income.
In case of Loan to Professional: 25% of Average annual Business
Turnover /Professional receipt for last - 3- years.
(Income of all the joint owners of the property who are co -borrowers can be
clubbed.The facility can be considered against property to be mortgaged in
the personal name of borrower or his/her close relatives viz. spouse,
parents, son,daughter, brother, sister, brothers wife who should stand as a
co-borrower.)
50% of the Distress Sale Value of the immovable property to be mortgaged.
Up to Rs 10 Lacs: Personal Guarantee may not be insisted upon.
Over Rs.10 Lacs: Third party guarantee of an individual having
adequate worth.
Term Loan : Maximum 84 Months in Equated Monthly Installments (EMI)
Overdrafts : 12 months subject to annual review
Moratorium period: Maximum 3 months.
Interest to be recovered separately as & when applied in the account during
moratorium period.
For Agriculturists To be fixed as annual/ Half yearly repayment for principal
and interest considering the harvesting pattern and / or other sources of income.

Valuation of
Property

In case of Overdrafts:
Minimum annual turnover in the account should be at least 25% of the
limit.
Wherever it is observed at the time of review that stipulation of
annual turnover is not complied with, the limit should be reduced
annually as under:
Maximum period of overdraft: 10 years.
Reduction in operative limit proportionately by end of each year,
synchronizing with review of the account.
Alternatively it may be explored the possibility of converting the
overdraft facility into term loan and fix EMI for recovery of the
balance amount.
In case of properties acquired within last -3- years, amount of registered
sale deed should be taken as value of property.

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Lending Powers

(In such cases fresh valuation may be dispensed with if the sanctioning
authority is satisfied with registered value).
Sanctioning authorities upto Grade/Scale III are authorized to
sanction Facilities upto Rs. 25.00 Lacs only.
Sanctioning authorities in Grade/Scale IV and above are authorized
to exercise their normal DLPs for sanction.

Activity

Activity Clearance for Sanctions under this product is required to be

Clearance

obtained from Regional Heads for facilities upto Rs.3 Crores and for
facilities beyond Rs.3 Crores Zonal Heads are authorized to grant
Activity clearance.
Retail Loan Factories have been kept out of purview of activity
clearance.

Baroda
Premium
Personal Loan
(New Personal Loan Scheme for Salaried Employees w.e.f. 01.11.2013.)
Purpose
For any purpose other than speculation
Eligible
Borrowers

Account
Relationship

Age

Permanent confirmed employees of Central/State Govt.

Autonomous Bodies /Public/ Joint sector undertakings,
Reputed Limited Co. / MNCs and Reputed Universities/Colleges
/Schools/Educational Institutions/Research In with minimum one year of
confirmed service.
(Employee
Partnershi
s
of
Proprietorship, p
firms and Pvt. Ltd.
companies are not eligible)
(Employees maintaining any Salary linked Loan/ Overdraft accounts with
any Bank are not eligible for this Scheme)
The Scheme is based on the concept of CHECK OFF.
Check-Off: The process by which the salary disbursing authority
undertakes to deduct loan installments from the salary of the borrower
and remits the same to the Bank for credit of the Loan account.
With our Bank for at least 6 months and the Branch Head is satisfied with
the conduct of the account. (OR)
With any other Bank for at least 6 months. (Original
statement of account for last 6 months to be obtained,
verified and satisfied upon by the conduct of the account)
Minimum: 21 years
Maximum: Age of Borrower plus repayment period should not exceed
retirement age.

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CHECK OFF
(Stipulations
for Category A

& Category B)

CATEGORY- A (with Check Off)

II
as
per
Satisfying stipulations I(AND) below:
l. The salary disbursing authority undertakes to deduct loan
installments from the salary of the borrower and remits the same to Bank
for credit to the Loan account
Or
The employer pays the borrowers salary into the
employees Saving / Current Account with our bank.

ll. (a) The borrower gives an irrevocable Standing Instruction (SI)/

instruction for
auto Recovery for payment of the loan instalments from his
aforesaid

275 | P a g e

account with the SI/Auto Recovery being synchronized with the date of
credit of salary in the borrowers Savings/Current Account
(AND)
(b) Undertaking from the employer to inform the Bank if and
when there is a transfer or severance due to borrowers resignation,
retirement, death
etc.
(AND)
(c) Undertaking from the employer to obtain a NOC from the Bank
before
settling the dues of the borrower on resignation, retirement, death
etc.
CATEGORY- B (without Check Off)
Satisfying
(OR)

Minimum Net
Monthly
Income
(NMI)

Loan Amount

stipulations

I
II as per below:

I. (a) The employer pays the borrowers salary into his

Savings/Current Account with our Bank (AND)
(b) The borrower gives an irrevocable Standing Instruction (SI)/
Instruction for auto Recovery for payment of the loan
installments from
his aforesaid account with the SI/Auto Recovery being
synchronized with
the date of credit of salary in the borrowers Savings/Current Account.
(AND)
(c) Undertaking from the employer to obtain a NOC from the Bank
before settling the dues of the borrower on resignation, retirement,
death etc.
(OR)
II. (a) Conditions I(a) & (b) are not fulfilled but the borrower
provides ECS mandate for recovery of monthly installments and if other
eligibility criteria are fulfilled. (AND)
(b) Undertaking from the employer to obtain a NOC from the Bank
before settling the dues of the borrower on resignation, retirement,
death etc.
For Category- A: Minimum Net Monthly Income (NMI) of the employee
should be
Rs 10,000/For Category- B: Minimum Net Monthly Income (NMI) of the employee
should be
Rs 15,000/For Category- A:
Rs 10.00 Lacs or 24 times of Net Monthly Income (NMI) whichever is

276 | P a g e

Repayment
Period
Credit Rating

lower.
For Category- B:
Rs 5.00 Lacs or 24 times of Net Monthly Income (NMI) whichever is lower.
Maximum -84- months in Equated Monthly Installments
Clean Loan Model should be used. Cut off score is 30 and Investment
Grade is CL7 & above.

SOME OTHER RETAIL LOAN PRODUCTS

PRODUCT

Eligible Amount

Loan
for
consumer
5 times of GMI
Durable/PC/Lapto
p
or Max Rs 1 Lac
Whichever is
lower
Personal Loan
6 times of
GMI Max Rs 2
Lac
Pension Loan
18 times of
(Regular)
monthly pension
Max Rs 8 Lac
Loan to Doctors
Min Rs 50,000
Max: R/SU Rs
15 lac
(of which
working
capital
Rs 1 Lac)
U/Metro Rs 50
Lac
(of which

Margin

Repayment

For Consumer

60 EMI

Durable 10%
For PC/Laptop
25%
36 EMI

60 EMI

Upto Rs 5 Lac
25%
Above Rs 5 Lac
15% of cost of

Loan 60
EMI

project
Working capital Nil

277 | P a g e

working capital
Rs 3 Lac)
Baroda Ashray
(For Senior
citizens, Age 60
yrs. Joint
borrower spouse
not below 55 yrs

Max Rs 100 Lac

Loan Against
Future Rent
receivable
(Non Commercial
real Estate)

60% of rent
due(Net of
TDS, advance
rent, SD) &
receivable
subject to min
Rs 25 lac
For Landlord
of Bank of
Baroda
Premises: No
Min Limit
Max Rs 200 Cr
(Single)
Rs 250 cr
(group)
CRE- 55% of

Loan Against

Future Rent

rent (net of

20% on Present
market value

The loan shall

become
due
and
payable
only when the
last surviving
borrower dies
or would like
to
sell the
home /
permanently
moves out of
the home for
aged care to
an institution
or relatives.
EMI, for
Max 10 yrs
or
unexpired
certain of
lease
period,
which ever
is less

Loan to be
repaid
in
Equated
Monthly
Instalments
(EMI) with a
maximum
period of 10

years
or
unexpired
certain lease
period and
uncertain
period of lease
(optional
period
of
maximum next
10
years)
whichever
is
less.
Repayment to
commence one
month
after
disbursement.
The
maximum
rental period
(including
the
certain
and optional
period)
should be 10
years.
receivable
( Commercial real
Estate)

TDS, advance
rent, security
deposit), due
and receivable,
for the
unexpired
certain period
of lease and
uncertain
period of lease
(optional period)
Max Rs 200 Cr
(Single)
Rs 250 cr (group)