A Reference Study Material

for
Promotion Exercise

2020-21

Baroda Academy

Bank of Baroda
(For internal circulation only)

Do Not Print unless extremely required. Save Paper, Save Trees, Preserve
Environment.

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 Índex
Sr. No. Topics Page No.
01. Awareness about the Bank 3-17
02. Emerging Trend In Banking 18-49
03. Legal & Statutory Provisions 50-89
04. Retail Banking & Third Party Products 90-125
05. Role of Technology 126-175
06. Rural & Agri Banking 176-245
07 MSME Banking 246-289
08 NRI Deposits, Remittance Facilities 290-297
09 Risk Management 298-309
10 Credit Monitoring, Recovery & NPA Management 310-354
11 Human Resource Management 355-376
12 Retail Loan Products 377-439
13 Inspection & Audit 440-451
14 Tresury & Forex 452-470
15 Finacle Menus 471-474
16 Government Business 475-502

Disclaimer: Though all efforts have been made to incorporate latest and correct information of
the related topics, in case of any doubts please refer to Book of Instructions, reference books and
circulars of the Bank. This booklet is focusing mainly on the written promotion exam within the
Bank (based on previous trends) and should not be considered as an instruction manual.
Employees are supposed to update themselves by reading Bank’s latest circulars, guidelines and
other communications.

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 AWARENESS ABOUT THE
BANK

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 1. Know Your Bank

1.1. A Saga of Vision and Enterprise - 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.

1.1.1. Our Mission - To be a top ranking National Bank of International Standards committed to augmenting stake
holders' value through concern, care and competence.

1.1.2. Our 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. The Bank along with 13 other major commercial Bank
of India, was nationalised on 19th July 1969, by the Government of India and has been
designated as profit making Public Sector Undertaking (PSU).

1.1.3. Our Logo1 - 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 it touches. At Bank of Baroda, we seek to be the source 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.

Brand Endorsement announced with ace Indian Badminton Players – Ms. P. V. Sindhu and Mr. K. Srikanth for three
years.

1.2. Our Core Values2: Our Bank has adopted six core values which we have been following throughout the Globe
across multiple locations & countries and which are the guiding principles based on which operate:

1-Integrity: We are ethical & transparent in our words, actions and dealing with all stakeholders
2-Cusomter Centricity: Our customers ‘interests lie at the core of all our actions.
3- Courage: We are resilient in the face of adversity and having faith in our beliefs.
4-Passionate Ownership: We display energy, enthusiasm & commitment towards our Bank and we work
together for our Bank
5-Innovation: We create value with break-through ideas.
6-Excellence: We strive for continuous improvement in our polices, systems & processes.
1.3. 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.

1
(LOGO was introduced w.e.f. 6th June 2005)
2
On the occasion of 110th foundation day, bank has adopted 6 core value for exhibiting expected behavior with confirming and
nonconforming behavior.

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 It has been a wisely orchestrated growth, involving corporate wisdom, social pride and the vision of helping
others grow, and growing itself in turn.
The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a bank of this nature will
prove a beneficial agency for lending, transmission, and deposit of money and will be a powerful factor in the
development of art, industries and commerce of the State and adjoining territories."
1.4. 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.
1.5. Offices & Branches –

Bank’s Administrative and Functional Set Up – Indian Operations –

1) Head Office
2) Corporate Office
3) Zonal Office
4) Regional Office
5) Branches/ offices (Metro/Urban/Semi-Urban/ Rural)

First Branch of Bank of Baroda was located in Mandvi area of Baroda (Now Vadodra).

Corporate Offices & Head Office

Head Office, Baroda Bhavan, R C Dutt Road, Corporate Centre, Bank of Baroda, Baroda Corporate
Alkapuri, Baroda - 390007 Centre, Plot No. C-26, Block G, Bandra Kurla Complex,
Bandra (East), Mumbai 400051

Branch Network (as of 30.06.2019)

Area No. of Branches
Metro 2137
Urban 1853
Semi-Urban 2525
Rural 2930
Total (Domestic) 9445
Total Office (Domestic) 353
Foreign (Overseas) Branches/Offices 100
Total (Global) 9898

Controlling Offices
Zonal Offices
Regional Offices
Subsidiaries & Joint Ventures3
Domestic Subsidiary
 BOB Financial Solutions Limited.
 BOB Capital Markets Ltd.
 Baroda Global Shared Services Limited
 Baroda Asset Management India Ltd.
 Baroda Trustee India Pvt. Limited
● Nainital Bank Ltd.
18
108
Overseas Subsidiary
 Bank of Baroda (Botswana) Ltd.
 Bank of Baroda (Kenya) Ltd.
 Bank of Baroda (Uganda) Ltd.
 Bank of Baroda (Guyana) Ltd.
 Bank of Baroda (New Zealand) Ltd
 Bank of Baroda (Tanzania) Ltd
 Bank of Baroda (Trinidad & Tobago) Ltd.
● Bank of Baroda (UK) Limited

3
https://www.bankofbaroda.co.in/subsidiaries-joint-ventures.htm -

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 Joint Venture Company (J.V.)
India First Life Insurance Company
M/s India Infradebt Ltd.
Associate & Regional Rural Bank
● Baroda Uttar Pradesh Gramin Bank.
● Baroda Rajasthan Gramin Bank.
● Baroda Gujarat Gramin Bank.
Joint Venture Company (J.V.)
Limited India International Bank (Malaysia), Berhad
Associate
● Indo-Zambia Bank Ltd. (Lusaka).
Overseas Non-Banking Subsidiaries
BOB (UK) Limited

1.6. Banks merged with Bank of Baroda - As many as 10 banks have been merged and 2 amalgamated 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)
Banks amalgamated with Bank of Baroda -
❖ Vijaya Bank (2019)
❖ Dena Bank (2019)

Updates: The government has notified in November 2019 about amalgamation of regional rural public sector banks
— Baroda Uttar Pradesh Grameen Bank, Kashi Gomti Samyut Gramin Bank and Purvanchal Bank — into a single
regional rural bank, Baroda UP Bank. Its headquarters will be in Gorakhpur under sponsorship of Bank of Baroda,
as per the notification.

1.7. Board of Directors - The constitution of the Board of Directors is as follows:

Dr. Hasmukh Adhia

Non-Executive Chairman

Mr. S L Jain Mr. Vikrmaditya Singh Khichi Shri Murali Ramaswami

Executive Director Executive Director Executive Director

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 Shri Biju Varkkey
Mr. Debashish Panda Mr. Ajay Kumar Director
Director Director

Mr. Bharatkumar Dhirubhai

Mr. Srinivasan Sridhar Smt Soundara Kumar Dangar
Director Director Director

1.8. 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.

1.8.1. Brief Initiatives - 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.

1.8.2. Business Process Re-engineering: Bank had initiated a major Business Process Reengineering to give a big
boost to sales growth by enhancing customer satisfaction and by making possible alternate channel migration
thus reinventing itself to challenges of the 21st century. Bank’s BPR project known as “Project- Navnirmaan”
has altogether 18 activities covering both the BPR and organisational restructuring, aimed at transforming the
Bank’s branches into modern “sales & service” outlets.

The most important initiatives planned under this project include – (1) Conversion of all metro and urban
branches into modern centres known as Baroda Next branches; (2) 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 Organisational Restructuring.

1.8.3. 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, Gandhinagar has been converted into Baroda Academy. Baroda Academy has initiated many
initiatives to impart learning culture in our bank. Some are as -

Quiz: - It is expected that Barodians remain updated about our products and initiatives. Baroda Academy used to
have regular quiz competition through Baroda Gyani. It is now providing same feature in this mobile application. It
will periodically have quiz competition for different class of employees and they will also be suitably rewarded. This
will facilitate learning with fun.

Marg Darshak:-Employees need support/handholding in their day to day operations, hence now Employee can ask
their Banking operations queries and will get solution within reasonable time.

Baroda Radio: Baroda Radio is now made part of this new application and many more features has been incorporated
in Radio.

Baroda Tube: In this section important video clips are available and employee can update their knowledge and learn
many more through this feature.

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 Baroda Net Academy:-Our E-learning platform "Baroda Net academy" can be accessed through the menu option Net
Academy. The Menu redirects net academy courses. You can use the application by your credential.

Knowledge Base: -Important journals/magazines and reference material like The Indian Banker, Gist of circulars etc.
are available with this option. Employee can read the journals/magazine online anytime anywhere

a) Baroda Gurukul4 – Baroda Academy has launched new learning management system “ ”.In the
process our existing e-learning platform i.e. “Baroda Net Academy” is now discontinued and replaced with
new system. is designed to provide different user experience, increased accessibility and
optimized utilization. System will facilitate learning through pull rather than push approach.

provides tools and features to maintain stringent and continual process of competency gap analysis,
training need assessment and impact measurement tools. Virtual classroom, rapid authoring capabilities, multi lingual
support, seamless integration with third party APIs, these are some robust features which makes Baroda Gurukul a
comprehensive solution for learning.

Salient features of – are as under –

➢ URL for Web based login - https://barodagurukul.co.in/

➢ Single sign on for ease of login (Domain ID and password)

➢ E-Learning Course Launch, Rating and review

➢ Training calendar for upcoming class room trainings (with facility for self-nomination)

➢ Blended learning i.e. combination of e-leaning, video, documents, CLT, etc. forming one course

➢ Facility to conduct surveys, Announcement and Online Quiz.

➢ Mobile app Availability on Android and IOS app with off-line course download

➢ Competency Mapping of employees

➢ Leader Board for learning competition

➢ Micro learning through Video Library

➢ Virtual Classroom or Webinar

1.8.4. 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 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.

Bank’s HR policies and strategic human resources development initiatives have made the Bank a breeding
ground for business leaders. The Bank provided several leaders to the industry- men who went on to build
other great institutions.

1.8.5. New Technology Platform: Bank has made substantial progress in its end-to-end business and IT strategy
project covering the Bank’s domestic, overseas and subsidiary operations. All Branches, Extension Counters,
overseas business and sponsored Regional Rural Banks are on the Universal Banking Solution
(UBS)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

4
Circular No. –BCC:BR:110:302 dated 15.06.2018 – Launching New Learning Management System – “Baroda Gurukul”

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 has also launched mobile ATMs. Mobile based apps such as Updated version of M Connect i.e. M Connect
Plus, UPI based BHIM Baroda Pay, Baroda Rewardz have been launched by the bank for bill payments and
online shopping. E-Lobby has been set up at branches for customer’s convenience.

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.

1.8.6. Marketing Initiatives: Ever since its rebranding in 2005, Bank has consistently promoted its major strengths
viz. large international presence; technological advancement and superior customer service etc. Bank had
introduced the sub brand BARODA NEXT-State of the Art-Straight from the Heart to showcase how it has
utilized technology to nurture long term relationships for superior customer experience. The sub brand has
been reinforced by alternate delivery channels such as internet banking, ATMs, mobile banking etc and robust
delivery outfits like Retail Loan Factories, SME Loan Factories, City Sales Office etc. Bank’s constant endeavor
to strengthen its branch/ATM network combined with well informed staff offering personalized service at its
various touch points have enhanced customer interactions and satisfaction. Thus the Bank has firmly
positioned itself as a technologically advanced customer-centric bank.

1.8.7. Project Navoday5 - On 20.07.2016 Bank of Baroda has unveiled Project Navoday, a comprehensive
transformation for the Bank across our business strategy, products, systems and organization that is going to
propel us forward in our ambition to be India’s (Premier) International Bank with a global standing, delivering
a differentiated world class experience to our customers. Under Project Navoday following priority areas are
being undertaken:

➢ Establish long term and profitable customer relationship across businesses.

➢ Expand our corporate and international banking businesses through dedicated Relationship Managers.

➢ Redesign processes and systems.

➢ Make our future ready.

➢ Realignment of structures across the Bank.

➢ Unleash the potentials of our people.

Bank has established a central Project Management Office (PMO) that will drive the change and send out regular
communication on the progress achieved. Additionally dedicated Change leaders are being identified. Every Month
this office published Navoday times where in all updates and changes are enshrined and a monthly quiz is also
conducted with announcement of three monthly winners.

Under “We Lead” initiative the next generation of Leaders are being developed across the Bank as under-

Scale Leadership interventions

I, II and III Sayaji Rao Gaekwad Scholars Program

IV Baroda Rising Stars Program

V Baroda Emerging Leadership Program

VI and VII Baroda Senior Leadership Program

5
Circular No. –BCC:BR:109:1 dated 02.01.2017 – Project Navoday – Business Transformation Exercise

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 1.8.8. Project Sparsh plus6 - On 06.05.2017 Bank of Baroda has unveiled HR transformation project christened as
Project Sparsh Plus, for enhancing the Performance Management & Talent Effectiveness in our Bank. Hence
a new digital PMS (Performance Management System) is launched as GEMS: BARODA GROWTH &
EMPOWERMENT MANAGEMENT SYSTEM. New PMS system will be more scientific than existing APAR
system & key benefits of GEMS are:

a. Result Oriented

b. Objectivity & Rationality

c. Empowerment

d. Recognition of High Performance

1.8.9. Baroda Anubhuti7 - Based upon the findings of Employee Engagement Survey “Voice of Barodians”, Bank is
taking many initiatives. Baroda Anubhuti Programme is a key initiative to improve Employee Experience of
working in the Bank. Under this umbrella in initial stage Bank has started following five initiatives-

a) Employee of the month

b) Spot Recognition – Creating Wow moments

c) Zero Hour ( Fun Hour) at Branches/Offices

d) Compulsory local community service / Social Activities by employees

e) Anubhuti Workshop

1.8.10. Bank’s HR Initiatives – Bank has taken many 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.

➢ Launch of dedicated helpline for Redressal of grievances / issues of employees

Voice of Barodians -2018 : This is a similar survey that was conducted in 2016 and through this survey, Bank aims at
obtaining feedback for continuous improvement in our existing policies & practices in order to remain competitive.
Employee feedback & suggestion plays a very critical role in the whole transformation journey of the Bank. This survey
started from Saturday, 7th April 2018 and ended on Monday, 30th April 2018.

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.

1.8.11. Major technology Initiatives:

❖ Baroda Rewardz – Bank’s Loyalty Program

❖ Online Loan Application – Educational Loan, Home Loan, Car Loan

❖ Balance enquiry through Miss Call

❖ Introduction of m-passbook

❖ New app M-connect+

6
Circular No. –BCC:BR:109:327 dated 01.07.2017 – Project SparshPlus – Launch of new Performance Management System –
Baroda GEMS
7
Circular No. –BCC:BR:108:331 dated 20.07.2016 – Baroda Anubhuti Programme – Enhancing Employee Experience

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 ❖ Baroda connect – online registration

❖ New Debit Cards - RuPay Platinum & MasterCard Platinum Chip Debit Card

❖ Baroda MUDRA Card

❖ Baroda M Invest

❖ Baroda Flash N Move+ Contactless Debit Card

❖ EMV Chip Debit card

❖ Baroda Travel Easy Card

❖ Baroda Non-Stop – 24x7 banking

❖ Baroda Radio

❖ Bhim Baroda Pay- Making Payment under the UPI

❖ Baroda Kissht

❖ Digital Portable Branch

Our Bank has evolved an innovative concept of pre-fabricated banking outlet equipped with Self Service machines to
meet routine customer requirements and space for 2-3 officials/ BCs for a face to face interaction/ handholding. These
outlets are highly secure, conducive to varying weather conditions and are conceptualized to offer 24x7 convenient
banking facilities. Self Service machines are designed to offer Instant Account opening, Debit Card dispensation, Cash
withdrawal, Passbook updation, Funds transfer, Utility Bill payment, Account based enquiry services etc.

Bank opened the First Digital Portable Branch in September 2016 at Bhagesara Village in Pratapgarh District, located
in the Sultanpur Region in the state of Uttar Pradesh. This Digital Branch has the state-of-the art digital technology
available for usage of the residents in the hinterland – an Automatic Account Opening Machine, a Pass Book Printer
and an ATM. This innovative initiative of our Bank has been lauded by the local people and is being expanded further
in this financial year.

1.9. Corporate Social Responsibility - Bank has a long legacy and tradition of contributing actively to the social and
economic development of the communities in which it operates through various development activities in the
realm of education, health, human welfare and other social activities. Bank of Baroda always transcends from
business interest and reaches out to weaker section of society, with a view to make a meaningful difference to
them.

In order to promote self employment on sustained scale to the unemployed rural youth by providing them
training and hand holding support, bank has set up 64 Baroda Swarojgar Vikash Sansthan (Baroda-R-SETI)
in seven states. Upto 30.09.2016 Baroda RSETIs have trained 283171 youth out of which 44999 are SC, 70808
ST, 30519 minorities and 75855 are other backward communities.

Bank has also established 87 Financial Literacy and Credit Counseling Centres (FLCC) in the name of
‘SAARTHI’ in nine states to provide the financial counseling services, financial literacy and awareness of
banking services in rural and urban areas. Since inception 660353 persons have been benefited from the
services of FLCCs.

1.10. Wealth Management Services8 - 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.

8
https://www.bankofbaroda.co.in/wealth.htm

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 ❖ 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, Non-Life Insurance, Health
Insurance, etc.

❖ Mutual Funds, Online trading account etc. are offered to the customers through various tie-up partners.

Life Insurance India First Life Insurance Co. Ltd.

General Insurance Cholamandalam MS General Insurance Company Limited

TATA AIG General Insurance Company Limited

Mediclaim Insurance Max Bupa Health Insurance company Limited

Star Health and Allied Insurance company limited

ASBA Application Supported by Blocked Account

Mutual Fund ● Motilal Oswal Asset Management Co Ltd.

● Aditya Birla Asset Management Company
● Baroda Asset Management India Limited.
● Franklin Templeton Mutual Fund
● IDFC Mutual Fund
● Kotak Mutual Fund
● Reliance Mutual Fund
● SBI Mutual Fund
● Sundaram Mutual Fund
● UTI Mutual Fund
● Axis Mutual Fund
● Canara Robeco Mutual Fund
● DSP Blackrock Mutual Fund
● Edelweiss AMC
● ICICI Prudential Asset Management Company Ltd
● Mirae Asset Management Co.
● Principal Mutual Fund
● HDFC Mutual Fund
● L&T Mutual Fund
● Tata Mutual Fund
e-Broking Baroda e Trade 3-in-1 Online Trading

❖ 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. Baroda Radiance Wealth Management,
a scientifically oriented and professionally managed Financial planning platform which endeavours to be a
one-stop solution for your wealth management requirements. As has been the legacy of Bank of Baroda, the
objective of this initiative is to be the partner and to partner with you in your wealth creation journey.

1.11. PSB loan in 59 minutes – PSB Loans in 59 minutes is an online marketplace, which will enable in principle
approval for MSME loans up to Rs 1 crore within 59 minutes from Public Sector Banks.

This platform has reduced the loan processing turnaround time from 20-25 days to 59 minutes. Post receiving of In-
principle approval letter, the loan is expected to be disbursed in 7-8 working days.

The loans are processed without human intervention till sanction and/or disbursement stage. In this platform, MSME
borrower is not required to submit any physical document for in-principle approval. The solution uses advanced
algorithms to analyze data points from various sources such as IT returns, GST data, bank statements etc.

1.12. Tie Ups/MOUs:

Name of the Company Category

AMAZON Micro Loans o sellers
Switch ME Home loan

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 M/s Edelweiss Agri Value Chain Limited Agri Products

Tie up with FCI /Other Government (Central & State) Scheme for financing construction of Silos/Go downs
Agencies: in PPP Model
Credit Mantri Algorithmic credit assessment services
Funds tiger Technology to lower the cost of MSME loan
application processing
Probe42 ROC, defaulter’s lists, public filing
Power2SME Buying club’ for SMEs
India lends Credit underwriting, analytics and lending
marketplace
KredX Invoice discounting platform
Fisdom Personal wealth management app
M/s Frankfinn Aviation Service P Limited Skill Loans to their students
M/s EM3 Agri Services Pvt Limited (MOU) Farm Machinery
M/s CGR Collateral Management Limited Agri-lending through WH Receipt (Supply Chain
Management)
M/s Access Livelihood Consulting India Limited Farmer Producer Company
M/s All Fresh Supply Management P Limited Agri-lending through WH Receipt (Supply Chain
Management)
M/s Universal Collateral Management P Ltd Agri-lending through WH Receipt
M/s Khyeti Tech Private Limited (MOU) Green House Units
M/s Netafim Irrigation India P Ltd Drip/Sprinkler Irrigation
M/s Poorti Agri services P Ltd (MOU) Online purchase of Farm Inputs
Small Farmer Agri Business Consortium (MOU) Equity Grant & CGF
M/s FInolex Plassion Industries P Ltd (MOU) Drip/Sprinkler Irrigation
M/s Jain Irrigation System Limited
Piaggio Vehicles (ALL MOU) Small Road Transport
Atul Auto Ltd
Bajaj Auto Ltd
TVS Motors
VE Commercial Vehicles
Volvo Group India Ltd
Ashok Leyland

1.13. The Fintech Initiatives

1.13.1. SME & Large Corporate –

➢ Digital Seller Financing -

Collaboration with Amazon to offer collateral-free working capital loan to over 2 Lac sellers on the latter's platform.

➢ Alternate Data Based Underwriting -

Tie-up with CreditMantri for technology that helps Bank to draw data of our SME merchants and assess the customers
on the strength of personal and business data points. Also helpful in offering low ticket credit products to first time
borrowers and gradually capture other business requirements from them.

➢ Vehicle Financing -
Bank of Baroda partnered with UBER, to finance individuals desirous of owning a vehicle and attaching it to UBER's
platform. This initiative is promoting "Start up India" Scheme by plummeting entry barrier to financing and fostering
drivers to become entrepreneurs.

➢ GST Enabled Accounting Solution -

Tie-up arrangement with Versify to offer their ready built GST enabled accounting software as 3rd party product to our
customers on monthly subscription basis.

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 ➢ Bankability Kit -
Bank of Baroda has partnered with SIDBI for mentoring and supporting the MSE ecosystem. A bankability kit is
designed enabling MSEs to evolve as bankable entities. This kit features different themes ‘Know Enterprising Self ’,
‘Know your Banker’ and ‘Know Banking’. The kit helps to look beyond financial literacy of aspirant entrepreneurial
India to Bankability literacy. Download the entire Bankability Kit

➢ MoU with SIDBI -

Bank of Baroda signed a MoU with SIDBI with the objective of working together to strengthen credit delivery system
and facilitate smooth flow of credit to the MSMEs and Startups in a hassle-free manner and thereby becoming preferred
partner for various initiatives of SIDBI to support the MSMEs.

➢ Information-as-a-Service -
Collaboration with Probe42 to obtain information on listed/un-listed companies from a number of sources, including
the ROC, defaulter's lists, public filing, etc. available on demand for lending and gaining new business.

➢ TReDS: Online Discounting Platform -

Bank of Baroda has on boarded all 3 RBI approved Trade Receivables Discounting System (TReDS) platforms i.e.
A.TREDS, RXIL, MYNDSOL thereby becoming the first Bank to support this novel Fintech initiative. This online
platform enables discounting of invoices of MSME sellers through a bidding process to ensure prompt realisation of
receivables.

1.13.2. Retail –

➢ Housing Loan -
Partnership with Deal4loans for generation of housing loan leads through their platform. Deal4loans is an online
platform which allows customers to understand the different loan products available in the market and help them to
select the right offering from the show-cased products.

Bank of Baroda has tied up with Switchme for targeting existing housing loan borrowers who are looking to switch
lenders to take advantage of lower interest rates. Switchme is a loan aggregator that helps loan seekers to understand
the different loan products available in the market and help customers in selecting the right lender.

➢ Education Loan -
Tie-up arrangement with Gyandhan to source mortgage backed Education loan applications for overseas studies.
Gyandhan provides financial assistance for pursuing higher studies in India and abroad.

Collaboration with Eduloans to source mortgage backed Education loan applications for overseas studies. Eduloans
provides a platform for students to avail the best possible financial option for funding their studies.

1.13.3. Wealth Management –

➢ Baroda M-Invest -
Bank of Baroda partnered with Fisdom to launch Baroda M-Invest app in the market for the customers. The app blends
cutting edge technology with personalized financial advice for investing in mutual funds. The entire enrolment and
compliance process happens on the app after which the customer can do goal based investments in mutual funds.

1.13.4. Technology

➢ Sound Based Payment -

Bank of Baroda partnered with ToneTag for contactless proximity communication using sound wave. The app SDK is
integrated with Bank of Baroda’s M-Connect Plus mobile banking application for making payment on ToneTag enabled
POS terminals.

➢ Payment Gateway -
Collaboration with Razorpay, a payment gateway with the aim to revolutionize online payments by providing clean,
developer-friendly APls and hassle-free integration.

➢ Blockchain -
Bank of Baroda is founding member in two major Blockchain communities to explore, build and implement blockchain
solutions in a collaborative environment. BankChain community has total 37 member banks across the globe, which is
managed by Primechain Technologies Pvt. Ltd. Another community which is managed by EdgeVerve Pvt. Ltd having
nine major Indian banks in it. The communities were formed with an objective to enable banks to minimize fraud and
maximize efficiency, security and transparency. Bank of Baroda is experimenting with around 10 interesting use-cases
on Blockchain.

Page 14 of 502
 ➢ Baroda Finathon Challenge -
Bank had introduced “Baroda Finathon Challenge”, a hackathon contest, inviting the techies, developers, students and
start-ups to come up with exciting, innovative, novel and viable solutions themes such as Innovation, Customer
Acquisition, Customer Experience, Conversational Banking, Collections, Compliance and Operational Efficiency. The
challenge successfully concluded by sifting out the most innovative solutions out of 4,600 teams. On 26th Feb, the
Finale was conducted in Mumbai to adjudge 3 winners amongst 8 shortlisted teams.

1.13.5. Fin – Agritech

➢ Post-Harvest Finance -
Bank of Baroda signed MOU with Allfresh Supply Management Pvt Ltd for extending finance to the farmers against
pledge of warehouse receipts issued by the company. Allfresh Supply Management Pvt Ltd procures and supplies fresh
produce to its customers after appropriate post-harvest management activities designed to deliver fruit conforming to
customer requirements.

➢ Greenhouse-in-Box -
Collaborated with Kheyti Tech Pvt Ltd to finance the Greenhouse-in-Box (GIB). Company offers services like inputs,
training and market linkage creating a seamless path for steady income.

➢ Farm Machinery on Rent -

Partnership with EM3 to provide finance for farm machinery & farm implements to be given on rent. EM3 offers its
services on a Pay-for-Use basis for every step of the farming process – from soil preparation to harvest.

➢ Mobile Based Information -

Tie-up with RML Agtech Pvt Ltd to provide mobile based information to the farmers. RML Agtech Pvt Ltd provides agri
support solution to the farmers to improve farm productivity and profitability through their information technology
platform (mobile app/SMS/customer care centre) and field intervention.

➢ High Quality Inputs -

Bank of Baroda partnered with Lawrencedale Agro Processing India Pvt Ltd (LEAF) for providing access to farmers to
high quality inputs. LEAF’s community farming helps to enhance every stage of the crop lifecycle, while ensuring
profitable market linkages to enrich realization.

* In collaboration with Rural & Agri Banking and CSR Department

1.13.6. Publication –

➢ FinTalk -
‘FinTalk’ is a daily Newsletter which has all relevant news pertaining to the Fintech sector and events that affect the
Fintech space. Rolled out a few months ago, it is the only Fintech newsletter in the Indian eco system. The Newsletter
has already achieved a subscriber base of more than 6000 readers across corporates, academia and students within a
short span of time. The Newsletter is available for everyone who subscribes to it, through the following link
- https://tiny.cc/FinTalk

➢ Collections -
Collections is a Special Edition of our daily fintech newsletter FinTalk marking the top 15 FinTalk themes from over
200 digests published in 2017. This will provide a great way to revisit the trends and developments of Fintech space.

1.14. Economic Scenario - Monthly Chartbook, Weekly Wrap and Macro Daily

1.15. Financial Indicators -

Audited Financial Results (Rs. In crore) - Amalgamated Entity

Parameter 30.06.2019 30.09.2019

Total Global Business 1528723 1531470
Total Global Deposit 895542 894130
Total Global Advances 633181 637340
Net Profit 710 737
Gross NPA (%) 10.28 10.25
Net NPA 3.95 3.91
CRAR (Basel III) 12.12 13.45
Global NIM (%) 2.62 2.81

Page 15 of 502
 ❖ Bank's present BPLR 13.50 % (w.e.f. 01.10.2019)

❖ Base Rate: 9.20% (w.e.f. 01.10.2019)

❖ MCLR: 8.30% (1 year MCLR w.e.f. 07.11.2019), Strategic Premium is 0.25% over and above MCLR

❖ BRLLR (Baroda Repo Linked Lending Rate): 8.15 % w.e.f. 01.12.2019 (Current RBI Repo Rate + Mark Up
(2.95 %) + SP (0.25%)

1.16. Shower of Awards & Accolades on Bank of Baroda –

❖ The Government of India awarded Bank with the 1st Prize in the Rajbhasha Kirti Puraskar n in Region ‘B’ for
implementation of official Language for the year 2016-17. Further, Bank was awarded first & second prize in
the Rajbhasha Kirti Puraskar for “A” & ' B' Region under TOLIC category for the year 2016-17.

❖ Our Bank Executives Dr. Ramjas Yadav (RH Agra) & Dr. Dinesh Kumar (CM, ZO Lucknow) also made us
proud by bagging Third Prize Pan India under Rajbhasha Gaurav Puraskar for the year 2016-17 for their
exemplary book jointly on Inclusive Banking.

❖ Bank of Baroda won the following six Atal Pension Yojana scheme awards from PFRDA

● Ist Top performing Bank in sourcing APY accounts FY 2016-17

● IInd Best performing Bank in sourcing APY accounts FY 2016-17

● Ist APY Transformative Leader

● Ist APY SLBC Leader

● Ist APY Foundation Day winner

● Ist APY Brand Ambassador

❖ Best Bank Award Rank- II under Public Sector Category 2013-14 by Financial Express.

❖ Social Banking Excellence Award 2017 by ASSOCHAM.

❖ Bank of Baroda Ranked 21st amongst Best Indian Brands 2016 in Brand Equity – The Economic Times.

❖ Bank received ‘Kirti Award’ – First Prize for Implementation of Official Language for the year 2017-18, on
14.09.2018, in the hands of His Excellency, Vice President of India, Shri Venkaih Naidu.

❖ Bank was awarded with “Best Performing Bank (In House Model) in terms of Total Aadhaar Generations &
Update”, at ‘Aadhaar Excellence Awards 2018’ organized by UIDAI, on 04.10.2018.

❖ Winner of National Award for Best Deployment of Learning Management System Excellence in Training &
Development Award by World HRD Congress 2018-19

❖ Bank of Baroda was awarded Best 50 PCI Companies for 2019.

❖ Been conferred “SKOCH Order of Merit” awards for Project Sparsh Plus and Baroda Anubhuti.

❖ Bank of Baroda was awaarded two awards at Atal Pension Yojana Awards 2018-19.

❖ Bank of Baroda was awarded CSR Excellence award on 16.02.2019.

❖ “Baroda Rajasthan Gramin Bank” was awarded Best Technology Bank of the year at the IBA Banking
Technology 2019 Awards Function, held at St. Reges, Mumbai

❖ Bank of Baroda was awarded “Winner for the Most Customer Centric Bank Using Technology” at the IBA
Banking Technology 2019 Awards Function, held at St. Reges, Mumbai.

Page 16 of 502
 ❖ Bank of Baroda was awarded the National Award for outstanding performance in SHG Financing during FY
2018-19, among the Public Sector Banks.

❖ Bank of Baroda was awarded ‘National Award for Excellence in Training & Development’ for Excellence in
Training & Development and ‘National Awards for Best in Class Learning & Development’ for Best
Deployment of a Learning Management System by World HRD Congress 2018-19.

Page 17 of 502
 EMERGING TRENDS IN
BANKING

Page 18 of 502
 2. Emerging Trends in Banking & Updated Guidelines by Regulator
2.1. Highlights of Budget 2019-2020 -

 The Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman made her maiden Budget
Speech today and presented the Union Budget 2019-20 before the Parliament. The key highlights of Union
Budget 2019 are as follows:

10-point Vision for the decade

 Building Team India with Jan

Bhagidari: Minimum Government
Maximum Governance.
 Achieving green Mother Earth and Blue
Skies through a pollution-free India.
 Making Digital India reach every sector
of the economy.
 Launching Gaganyan, Chandrayan,
other Space and Satellite programmes.
 Building physical and social
infrastructure.
 Water, water management, clean rivers.
 Blue Economy.
 Self-sufficiency and export of food-
grains, pulses, oilseeds, fruits and
vegetables.
 Achieving a healthy society
via Ayushman Bharat, well-
nourished women & children, safety of
citizens.
 Emphasis on MSMEs, Start-ups,
defence manufacturing, automobiles,
electronics, fabs and batteries, and
medical devices under Make in India.

Towards a 5 Trillion Dollar Economy

 “People’s hearts filled with Aasha (Hope), Vishwas (Trust), Aakansha (Aspirations)”, says FM.
 Indian economy to become a 3 trillion dollar economy in the current year.
 Government aspires to make India a 5 trillion dollar economy.
 “India Inc. are India’s job-creators and nation’s wealth-creators”, says FM.
 Need for investment in:
o Infrastructure.
o Digital economy.
o Job creation in small and medium firms.
 Initiatives to be proposed for kick-starting the virtuous cycle of investments.
 Common man’s life changed through MUDRA loans for ease of doing business.

Measures related to MSMEs:

Page 19 of 502
 o Pradhan Mantri Karam
Yogi Maandhan Scheme

 Pension benefits to about three crore

retail traders & small shopkeepers with
annual turnover less than Rs. 1.5 crore.
 Enrolment to be kept simple, requiring
only Aadhaar, bank account and a self-
declaration.
o Rs. 350 crore allocated for FY
2019-20 for 2% interest
subvention (on fresh or
incremental loans) to all GST-
registered MSMEs, under
the Interest Subvention
Scheme for MSMEs.
o Payment platform for
MSMEs to be created to enable
filing of bills and payment
thereof, to eliminate delays in
government payments.

 India’s first indigenously developed

payment ecosystem for transport, based
on National Common Mobility Card
(NCMC) standards, launched in March
2019.
 Inter-operable transport card runs on RuPay card and would allow the holders to pay for bus travel, toll taxes,
parking charges, retail shopping.
 Massive push given to all forms of physical connectivity through:
o Pradhan Mantri Gram Sadak Yojana.
o Industrial Corridors, Dedicated Freight Corridors.
o Bhartamala and Sagarmala projects, Jal Marg Vikas and UDAN Schemes.
 State road networks to be developed in second phase of Bharatmala project.
 Navigational capacity of Ganga to be enhanced via multi modal terminals at Sahibganj and Haldia and a
navigational lock at Farakka by 2019-20, under Jal Marg Vikas Project.
 Four times increase in next four years estimated in the cargo volume on Ganga, leading to cheaper freight and
passenger movement and reducing the import bill.
 Rs. 50 lakh crore investment needed in Railway Infrastructure during 2018-2030.
 Public-Private-Partnership proposed for development and completion of tracks, rolling stock manufacturing
and delivery of passenger freight services.
 657 kilometers of Metro Rail network has become operational across the country.
 Policy interventions to be made for the development of Maintenance, Repair and Overhaul (MRO), to
achieve self- reliance in aviation segment.
 Regulatory roadmap for making India a hub for aircraft financing and leasing activities from Indian shores, to
be laid by the Government.
 Outlay of Rs. 10,000 crore for 3 years approved for Phase-II of FAME Scheme.
 Upfront incentive proposed on purchase and charging infrastructure, to encourage faster adoption of Electric
Vehicles.
 Only advanced-battery-operated and registered e-vehicles to be incentivized under FAME Scheme.

National Highway Programme to be restructured to ensure a National Highway Grid, using a financeable
model.

 Power at affordable rates to states ensured under ‘One Nation, One Grid’.
 Blueprints to be made available for gas grids, water grids, i-ways, and regional airports.
 High Level Empowered Committee (HLEC) recommendations to be implemented:
o Retirement of old & inefficient plants.

Page 20 of 502
 o Addressing low utilization of gas plant capacity due to paucity of Natural Gas.
 Cross subsidy surcharges, undesirable duties on open access sales or captive generation for industrial and
other bulk power consumers to be removed under Ujjwal DISCOM Assurance Yojana (UDAY).
 Package of power sector tariff and structural reforms to be announced soon.
 Reform measures to be taken up to promote rental housing.

Model Tenancy Law to be finalized and circulated to the states.

 Joint development and concession mechanisms to be used for public infrastructure and affordable housing on
land parcels held by the Central Government and CPSEs.
 Measures to enhance the sources of capital for infrastructure financing:

o Credit Guarantee Enhancement Corporation to be set up in 2019-2020.

o Action plan to be put in place to deepen the market for long term bonds with focus on infrastructure.
o Proposed transfer/sale of investments by FIIs/FPIs (in debt securities issued by IDF-NBFCs) to any
domestic investor within the specified lock-in period.
 Measures to deepen bond markets:
o Stock exchanges to be enabled to allow AA rated bonds as collaterals.
o User-friendliness of trading platforms for corporate bonds to be reviewed.
 Social stock exchange:
o Electronic fund raising platform under the regulatory ambit of SEBI.
o Listing social enterprises and voluntary organizations.
o To raise capital as equity, debt or as units like a mutual fund.
 SEBI to consider raising the threshold for minimum public shareholding in the listed companies from 25% to
35%.
 Know Your Customer (KYC) norms for Foreign Portfolio Investors to be made more investor friendly.
 Government to supplement efforts by RBI to get retail investors to invest in government treasury bills and
securities, with further institutional development using stock exchanges.
 Measures to make India a more attractive FDI destination:
o FDI in sectors like aviation, media (animation, AVGC) and insurance sectors can be opened further
after multi-stakeholder examination.
o Insurance Intermediaries to get 100% FDI.
o Local sourcing norms to be eased for FDI in Single Brand Retail sector.
 Government to organize an annual Global Investors Meet in India, using National Infrastructure Investment
Fund (NIIF) as an anchor to get all three sets of global players (pension, insurance and sovereign wealth
funds).
 Statutory limit for FPI investment in a company is proposed to be increased from 24% to sectoral foreign
investment limit. Option to be given to the concerned corporate to limit it to a lower threshold.
 FPIs to be permitted to subscribe to listed debt securities issued by ReITs and InvITs.
 NRI-Portfolio Investment Scheme Route is proposed to be merged with the Foreign Portfolio Investment
Route.

 Cumulative resources garnered through new financial instruments like Infrastructure Investment Trusts
(InvITs), Real Estate Investment Trusts (REITs) as well as models like Toll-Operate-Transfer (ToT) exceed
Rs. 24,000 crore.
 New Space India Limited (NSIL), a PSE, incorporated as a new commercial arm of Department of Space.
 To tap the benefits of the Research & Development carried out by ISRO like commercialization of products
like launch vehicles, transfer to technologies and marketing of space products.

Page 21 of 502
 Banking and Financial Sector:

 NPAs of commercial banks reduced by over Rs. 1 lakh

crore over the last year.
 Record recovery of over Rs. 4 lakh crore effected over
the last four years.
 Provision coverage ratio at its highest in seven years.
 Domestic credit growth increased to 13.8%.
 Measures related to PSBs:
o Rs. 70,000 crore proposed to be provided to PSBs to
boost credit.
o PSBs to leverage technology, offering online personal
loans and doorstep banking, and enabling customers of
one PSBs to access services across all PSBs.
o Steps to be initiated to empower accountholders to
have control over deposit of cash by others in their
accounts.
o
o Reforms to be undertaken to strengthen governance in
PSBs.

Page 22 of 502
 Measures related to NBFCs:

o Proposals for strengthening the regulatory

authority of RBI over NBFCs to be placed in the
Finance Bill.
o Requirement of creating a Debenture
Redemption Reserve will be done away with to
allow NBFCs to raise funds in public issues.
o Steps to allow all NBFCs to directly participate
on the TReDS platform.
 Return of regulatory authority from NHB to RBI
proposed, over the housing finance sector.
 Rs. 100 lakh crore investment in infrastructure intended
over the next five years. Committee proposed to
recommend the structure and required flow of funds
through development finance institutions.
 Steps to be taken to separate the NPS Trust from PFRDA.
 Reduction in Net Owned Fund requirement from Rs.
5,000 crore to Rs. 1,000 crore proposed:
o To facilitate on-shoring of international
insurance transactions.
o To enable opening of branches by foreign
reinsurers in the International Financial
Services Centre.
 Measures related to CPSEs:
o Target of Rs. 1, 05,000 crore of disinvestment
receipts set for the FY 2019-20.
o Government to reinitiate the process of
strategic disinvestment of Air India, and to offer more CPSEs for strategic participation by the private
sector.
o Government to undertake strategic sale of PSUs and continue to consolidate PSUs in the non-
financial space.
o Government to consider going to an appropriate level below 51% in PSUs where the government
control is still to be retained, on case to case basis.
o Present policy of retaining 51% Government stake to be modified to retaining 51% stake inclusive of
the stake of Government controlled institutions.
o Retail participation in CPSEs to be encouraged.
o To provide additional investment space:

 Government to realign its holding in CPSEs

 Banks to permit greater availability of its shares and to improve depth of its market.
o Government to offer an investment option in ETFs on the lines of Equity Linked Savings Scheme
(ELSS).
o Government to meet public shareholding norms of 25% for all listed PSUs and raise the foreign
shareholding limits to maximum permissible sector limits for all PSU companies which are part of
Emerging Market Index.

 Government to raise a part of its gross borrowing program in external markets in external currencies. This will
also have beneficial impact on demand situation for the government securities in domestic market.
 New series of coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, easily
identifiable to the visually impaired to be made available for public use shortly.

Digital Payments

 TDS of 2% on cash withdrawal exceeding Rs. 1 crore in a year from a bank account

Page 23 of 502
  Business establishments with annual turnover more than Rs. 50 crore shall offer low cost digital modes of
payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well
as merchants.

Mega Investment in Sunrise and Advanced Technology Areas

 Scheme to invite global companies to set up mega-manufacturing plants in areas such as Semi-conductor
Fabrication (FAB), Solar Photo Voltaic cells, Lithium storage batteries, Computer Servers, Laptops, etc
o Investment linked income tax exemptions to be provided along with indirect tax benefits.

Roadmap for future

 Simplification of procedures.
 Incentivizing performance.
 Red-tape reduction.
 Making the best use of technology.
 Accelerating mega programmes and services initiated and delivered so far.

RBI Monetary Policy Oct. 2019 HIGHLIGHTS: To keep the public and market sentiment high, RBI in its fourth bi-
monthly monetary policy statement for 2019-20 has cut the Repo rate by 25 bps to 5.15 percent.

Subsequently, the Reverse Repo rate reduced to 4.9 percent.

The RBI has also reduced the GDP growth forecast from 6.9 percent to 6.1 percent for the current fiscal year
2019-20.

The MPC has continued with its accommodative stance, which it had adopted during the second bi-monthly policy
2019-20, departing from its earlier neutral stance. The accommodative stance will remain as long as necessary to revive
growth while ensuring inflation remains within target.

Following are the highlights of the fourth bi-monthly Monetary Policy Statement 2018-19 issued by Reserve Bank of
India:

1. Repo rate and reverse repo rate: The repo rate has been cut by 25 bps to 5.15 percent. The reverse repo rate has been
cut by 4.9 percent. The bank rate continues to stand at 5.4 percent.

2. The MPC has continued with its accommodative stance, which it had adopted during the second bi-monthly policy
2019-20, departing from its earlier neutral stance. The accommodative stance will remain as long as necessary to revive
growth while ensuring inflation remains within target.

3. GDP growth forecast: The GDP growth forecast has been cut from 6.9 percent to 6.1 percent for the ongoing fiscal
year 2019-20.

4. CPI: The Consumer price inflation (CPI) forecast has been retained for the second half of the fiscal year 2019-20 at
3.5-4 percent.

5. Weak rural and urban demand: The MPC noted that the slump in real GDP growth in Q2 was followed by weaker
demand. The committee highlighted that the government has announced several measures in the last two months to
revive demand. Overall, the RBI Governor Shaktikanta Das stated that the global economy has lost momentum.

6. Inflation: Households expect inflation to rise by 40 basis points over a 3-month ahead horizon and 20 basis points
over a one-year ahead horizon.

7. Global economy loses momentum: The RBI said that the September 2019 inflation expectations survey indicates that
households expect inflation to rise by 40bps over a 3-month ahead horizon and 20bps over a one-year ahead horizon.

8. Agriculture: The RBI said that agriculture in India is well-positioned to lead the recovery in domestic demand.
Vegetable prices, however, may continue to remain elevated in the coming months but are likely to moderate as winter
supplies enter the market.

9. Manufacturing and construction sector activities looked up in August.

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 10. Surplus Liquidity: The RBI noted that the liquidity remained in surplus during August and September despite the
expansion in the currency in circulation.

In conclusion, RBI Governor Shaktikanta Das assured that the Indian banking sector remains sound and stable and
that there is no reason for unnecessary panic. On the PMC Bank issue, the RBI governor stated that as soon as the issue
was brought into the notice of RBI, the apex court took immediate corrective action. He further added that one such
incident cannot be used to generalize the whole cooperative banking sector.

The RBI also announced that it will allow all domestic banks to offer foreign exchange prices to NRIs for free at all
times, either by a domestic sales team or through their overseas branches.

Financial Sector: Regulation and Developments:

Well over a decade after the global financial crisis, financial vulnerabilities continue to build globally although the
financial system resilience has increased. Domestic financial markets saw some disruption emanating from the non-
bank space and its growing importance in the financial system. In order to finetune the supervisory mechanism for the
banks, the Reserve Bank has recently reviewed the structure of supervision in the context of the growing diversity,
complexities and interconnectedness within the Indian financial sector.

The Securities and Exchange Board of India (SEBI) has put in place broad guidelines for interoperable framework
between Clearing Corporations. It has also concurrently overhauled the margin framework to make it more robust. The
Insurance Regulatory and Development Authority of India (IRDAI) has constituted a committee to identify
Systemically Important Insurers. The Insolvency and Bankruptcy Board of India (IBBI) is showing steady progress in
the resolution of stressed assets. National Pension System (NPS) and Atal Pension Yojana (APY) have both continued
to progress towards healthy numbers in terms of total number of subscribers as well as assets under management
(AUM).

With an increase in the quantum of frauds reported in the banking system being attributed to prevalence of legacy cases
particularly in PSBs, there is a need for timely recognition and reporting to reduce their economic costs and to address
the vulnerabilities in a proactive and timely manner.

Domestic developments

I. The Financial Stability and Development Council

3.9 Since the publication of the last FSR in December 2018, the Sub-Committee of the Financial Stability and
Development Council (FSDC) held its 22nd meeting chaired by the Governor, RBI on March 14, 2019. It discussed
various issues that impinge on financial stability in the country, including ways of addressing challenges pertaining to
the quality of credit ratings, interlinkages between housing finance companies and housing developers and interlinking
of various regulatory databases. The Sub-Committee also reviewed the activities of its various technical groups and the
functioning of State Level Coordination Committees (SLCCs) in various states / union territories. A thematic study on
financial inclusion and financial stability and a National Strategy for Financial Inclusion (NSFI) are the other issues
that were discussed.
3.10 The Financial Stability and Development Council held its meeting on 19th June, 2019 which was chaired by the
Finance Minister of India. The Meeting reviewed the current global and domestic economic situation and financial
stability issues including, inter-alia, those concerning Banking and NBFCs. The Council also held consultations to
obtain inputs/ suggestions of the financial sector regulators for the Budget. All the regulators presented their proposals
for the Union Budget 2019-20. The Council took note of the activities undertaken by the FSDC Sub-Committee chaired
by Governor, RBI and the action taken by members on the decisions taken in earlier meetings of the Council.

II. Banks

(A) Supervision

3.11 The revised prudential framework on stressed assets issued by the Reserve Bank on June 7, 2019 significantly
extends the erstwhile stressed asset resolution framework as also builds in incentive for early adoption of a resolution
plan (RP). The major features of the revised framework are as follows:

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 i. Applicability: Scope widened to include Small Finance Banks, Systematically Important NBFC (non-Deposit taking)
& NBFCs (Deposit taking) besides SCBs (excl. RRB) & All India Term Financial Institutions.
ii. Resolution Strategy: Lenders shall undertake a prima facie review of the borrower account within thirty days from
default (“Review Period”) and may also decide on the resolution strategy, including the nature of the Resolution Plan
(RP), the approach for implementation of the RP, etc. The lenders may also choose to initiate legal proceedings for
insolvency or recovery.
iii. Adoption of Inter Creditor Agreement (ICA): All Lenders (including NBFCs and ARCs) to sign ICA; ICA addresses
concerns of dissenting lenders who are to receive value greater than or equal to Liquidation value in RP.
iv. Adoption of Majority vote: Resolution Plan (RP) will be binding on all lenders if approved by lenders representing
75% in value of outstanding debt (Fund based+Non-fund based) and 60% by number. Earlier, no such limit was
prescribed.
v. Time-Lines: Defined time-lines of 210 days, after the date of first default, for cases with Aggregate Exposure (AE) of
greater than ₹20 billion (accounts with AE upto ₹15 billion to be covered by January 1, 2020, and other accounts from
a date that would be specified in due course).
vi. Implementation Conditions for RP: RPs involving restructuring / change in ownership in respect of accounts where
the aggregate exposure of lenders is ₹1 billion and above, shall require independent credit evaluation (ICE) of the
residual debt by credit rating agencies (CRAs) specifically authorised by the Reserve Bank for this purpose.
vii. Disincentive on delay in resolution: Additional provisioning for delayed implementation of RP or filing of insolvency
application under IBC.
viii. Incentive for Implementation: Reversal of additional provisioning on implementation of RP or filing of insolvency
application under IBC.
3.12 The Central Board of the Reserve Bank recently reviewed the present structure of supervision in RBI in the context
of the growing diversity, complexities and interconnectedness within the Indian financial sector. With a view to
strengthening the supervision and regulation of commercial banks, urban co-operative banks and non-banking
financial companies, the Board decided to create a specialised supervisory and regulatory cadre within RBI.

(B) Banking Frauds

3.13 A brief analysis of frauds with amounts involving ‘₹0.1 million and above’ reported during the last 10 years is
presented in Chart below. It was observed that in many cases frauds being reported now were perpetrated during earlier
years. The recognition of date of occurrence is not uniform across banks. To ensure timely and assured detection of
frauds in large accounts, the Government issued a direction in February 2018 to all PSBs to examine all NPA accounts
exceeding ₹0.5 billion from the angle of possible fraud. Systemic and comprehensive checking of legacy stock of NPAs
of PSBs for fraud during 2018-19 has helped unearth frauds perpetrated over a number of years, and this is getting
reflected in increased number of reported incidents of frauds in recent years compared to previous years.

3.14 The time-lag between the date of occurrence of a fraud and the date of its detection is significant. The amount
involved in frauds that occurred between 2000-01 and 2017-18 formed 90.6 per cent of those reported in 2018-19
(Chart below).

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 3.15 With regard to frauds reported, the relative share of PSBs in the overall fraud amount reported in 2018-19 was in
excess of their relative share in the credit (Chart below).

3.16 Similar to earlier trends, loans and advances related frauds continued to be dominant, in aggregate constituting
90 per cent of all frauds reported in 2018-19 by value. In the advance related fraud category, cash credit / working
capital loans related frauds dominated in PSBs whereas retail term loans (non-housing) were a major contributor to
advance related frauds in PVBs (Chart below).

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 3.17 As on December 31, 2018, 204 borrowers who had been reported as fraudulent by one or more banks were not
classified as such by other banks having exposure to the same borrower. One of the major areas of non-uniformity in
processes pertains to identifying Red Flagged Accounts (RFA). The red flagging of accounts based on an indicative list
of early warning signals is not uniform across banks. In several cases, banks are unable to confirm RFA tagged accounts
as frauds or otherwise within the prescribed period of six months. As per CRILC data, at the end of March 31, 2019, the
RFA reported by banks exceeded the stipulated six-month period in 176 cases. The reasons cited for delays in
recognising frauds include delays in completing forensic audits or inconclusive findings of forensic audits. It is proposed
to revise the Master Direction on Frauds in this regard and issue necessary guidance to banks.
3.18 Since it is much more difficult to quantify operational risks than credit or market risks as some operational risks
interact with credit and market risks through people and processes in a complex way, timely recognition is one
important aspect that can reduce the economic costs of frauds. The Reserve Bank is reviewing its Master Direction on
frauds and considering additional measures for timely recognition of frauds and enforcement action against violations.

(C) Enforcement

3.19 During July 2018 to June 201915, the Enforcement Department (EFD) undertook enforcement action against 47
banks (including nine foreign banks, one payment bank and a co-operative bank), and imposed an aggregate penalty of
₹1,221.1 million for non-compliance with/contravention of directions on fraud classification and reporting, discipline
to be maintained while opening current accounts and reporting to the CRILC platform and RBS; violations of
directions/ guidelines issued by the Reserve Bank on know your customer (KYC) norms and Income Recognition &
Asset Classification (IRAC) norms; payment of compensation for delay in resolution of ATM-related customer
complaints; violation of all-inclusive directions and specific directions prohibiting opening of new accounts; non-
compliance with the directions on the cyber security framework and time-bound implementation and strengthening of
SWIFT-related operational controls; contravention of directions pertaining to third party account payee cheques and
non-compliance with directions on note sorting, directions contained in Risk Mitigation Plan (RMP), directions to
furnish information and directions on ‘Guarantees and Co-acceptances’, among others.

(D) Resolution and recovery

3.20 The Insolvency and Bankruptcy Code, 2016 (IBC or Code) is an evolving piece of economic legislation. The
implementation of the Code has greatly overhauled the regulatory measures in respect of resolution of impaired assets
and contributed to a more efficient deployment of capital. The corporate insolvency resolution process under the Code
envisages estimating a fair value and liquidation value of the assets of the corporate debtor (CD). The Insolvency and
Bankruptcy Board of India (IBBI) commenced the valuation examination for asset classes of (a) securities or financial
assets, (b) land and buildings, and (c) plant and machinery with effect from March 31, 2018. The Insolvency Law
Committee submitted its second report on October 16, 2018 recommending the adoption of the UNCITRAL Model Law
of Cross Border Insolvency, 1997, which provides for a comprehensive framework to deal with cross-border insolvency
issues. It also recommended a few carve-outs to ensure that there is no inconsistency between the domestic insolvency
framework and the proposed cross-border insolvency framework.
3.21 Quarter wise progress in terms of insolvency resolution is given in Table 3.3. Out of 1,858 corporates in the
resolution process till March 2019, 152 were closed on appeal or review, 94 resulted in resolution and 378 yielded

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 liquidation. About 50 per cent of the admitted corporate insolvency resolution processes were triggered by operational
creditors (OC) and about 40 per cent by financial creditors (Table 3.4).
Table 3.3: The corporate insolvency resolution process -- Number of corporate debtors

Closure by
CIRPs at CIRPs
the Approval at the
Quarter beginning Admitted Appeal/ Withdrawal
of Commencement end of
of the Review/ under the
Resolution of Liquidation
Quarter Settled Section 12A Quarter
Plan*

Jan-
Mar, 0 37 1 0 0 0 36
2017

Apr-Jun,
36 129 8 0 0 0 157
2017

July-
Sept, 157 232 18 0 2 8 361
2017

Oct-Dec,
361 147 38 0 7 24 439
2017

Jan-Mar,
439 195 20 0 11 59 544
2018

Apr-Jun,
544 246 20 1 14 51 704
2018

Jul-Sept,
704 238 29 27 32 86 768
2018

Oct-Dec,
768 275 7 36 14 77 909
2018

Jan-Mar,
909 359 11 27 14 73 1143
2019

Total NA 1858 152 91 94 378 1143

*: These exclude 3 resolutions which have since led to liquidation.

Source: IBBI.

Table 3.4: Initiation of the corporate insolvency resolution process

No. of CIRPs initiated by

Quarter
Operational Financial Corporate
Total
Creditor Creditor Debtor

Jan-Mar, 2017 7 8 22 37

Apr-Jun, 2017 58 37 34 129

Jul-Sept, 2017 101 92 39 232

Oct-Dec, 2017 69 64 14 147

Jan-Mar, 2018 89 84 22 195

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 Apr-Jun, 2018 129 99 18 246

Jul-Sept, 2018 138 84 16 238

Oct-Dec, 2018 161 98 16 275

Jan-Mar, 2019 168 172 19 359

Total 920 738 200 1858

Source: IBBI.

3.22 The resolution plan with respect to six of the 12 large borrowers of SCBs that constituted the first batch of referrals
to IBC for resolution have been approved. Other accounts are in different stages of the process. The outcome of the six
large accounts that ended with resolution plans is given in Table 3.7.
3.23 Rising stress in balance sheets of companies and that of large banks and the recovery risks associated with credit
portfolios has led to deliberations on an optimal institutional response to tackle the NPA overhang. The framework
pertaining to resolution of NPAs has evolved from asset reconstruction companies (ARCs) to setting up of resolution
mechanisms under IBC. While so far this chapter has dealt with recovery related performance under IBC, Box 3.2 gives
insights into the performance of asset reconstruction companies (ARCs).
Table 3.5: No. of CIRPs ending with orders for liquidation

No. of CIRPs initiated by

State of Corporate Debtor at the
Commencement of CIRP Financial Operational Corporate
Total
Creditor Creditor Debtor

Either in BIFR or Non-functional or both 99 117 67 283

Resolution Value < Liquidation Value 113 134 67 314

Resolution Value > Liquidation Value 30 15 19 64

Note: 1. There were 33 CIRPs, where CDs were in BIFR or non-functional but had resolution value higher than
liquidation value.
2. Where liquidation value was not calculated, it has been taken as ‘0’.
Source: IBBI.

Table 3.6: Value of CIRPs ending with orders for resolution

(amount in ₹ billion)

Realisable by
Total
Liquidation Realisable by FCs as a per
admitted
value FCs cent of claims
claims of FCs
admitted

Apr - Jun 2018 762.4 180.8 428.9 56.3

Jul - Sep 2018 404.1 92.5 106.17 26.3

Oct - Dec 2018 76.9 27.8 69.1 90

Jan - Mar 2019 380.5 57.8 91.1 24

Up to March 31 2019 1733.6 384.4 744.97 43

Source: IBBI Quarterly Newsletters for the period FY 2018-19.

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 Table 3.7: Status of 6 large accounts initiated by the Reserve Bank

(amount in ₹ billion)

Name of corporate debtor Claims of financial creditors dealt under resolution

Realisation as a
Amount
Amount realised per cent of
admitted
claims

Electrosteel Steels Ltd. 131.8 53.2 40.38

Bhushan Steel Ltd. 560.2 355.7 63.5

Monnet Ispat & Energy Ltd. 110.2 28.9 26.26

Essar Steel India Ltd. 494.7 * *

Alok Industries Ltd. 295.2 50.5 17.11

Jyoti Structures Limited 73.7 36.8 50.02

*: Apportionment between FCs and OCs is under consideration by NCLAT.

Source: IBBI Quarterly Newsletter (January - March 2019).

Box 3.2: Asset reconstruction companies - A review

This study is based on the recovery data of top six ARCs although during the initial years ARCIL was the only operating
ARC. Table 1 lists the summary statistics of ARCs’ recovery performance. The generally higher median relative to
average recovery implies that smaller portfolios have shown better recovery performance. The significant variability
in recovery performance, given any year of origination, needs to be examined as it has implications for embedding a
more realistic loss given default estimation in provisioning. Also, the general recovery of low double digits across years
possibly points to the inadequacies of the resolution model based on collateral disposal.
Notwithstanding a fairly poor recovery experience for banks as illustrated in Table 1, the recovery performance when
measured with regard to the SRs issued (that is, after factoring in the discount to the total bank claims) is generally
better. Table 2 documents the SR recovery distribution of the top six ARCs. As can be seen, while the performance of
ARCs given the recovery rates is fairly impressive, the recovery performance in some recent years appears to be on a
decline. The recovery rate specifically shows a precipitous decline for assets that originated after 2014. Moreover, the
higher recoveries with regard to SRs as compared to bank claims across ARCs possibly reflects the pricing power of a
few of them rather than their recovery prowess.
Table 1: Recovery distribution of assets based on security receipts’ origination dates (per cent)

Average
Date of Origination Max Min Median
recovery

2004* 12.0 12.0 12.0 12.0

2005* 13.1 13.1 13.1 13.1

2006 34.6 13.3 23.9 13.8

2007 33.1 15.8 24.4 17.0

2008 28.2 15.2 21.7 15.7

2009 57.4 16.5 28.1 18.3

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 2010 46.0 4.5 20.1 21.5

2011 47.8 9.2 15.8 15.6

2012 71.9 3.1 30.1 13.7

2013 28.7 7.0 15.9 12.3

2014 11.0 1.8 8.4 3.5

2015 19.1 2.0 7.7 4.6

2016 9.0 1.4 5.9 3.9

2017 18.7 1.2 1.6 2.4

2018 9.5 0.3 0.9 2.3

*: All the measures of central tendency for years 2004 and 2005 are the same since ARCIL was the only accredited
ARC during this period.
Source: Respective ARCs.

Table 2: Recovery distribution of assets based on security receipts origination dates

Average
Date of Origination Max Min Median
recovery

2004* 50.9 50.9 50.9 50.9

2005* 59.6 59.6 59.6 59.6

2006 143.9 52.3 98.1 54.3

2007 134.3 39.8 87.0 44.3

2008 132.5 67.2 99.9 69.5

2009 146.7 87.2 96.4 91.9

2010 118.4 41.6 96.9 96.9

2011 170.3 39.7 91.7 76.9

2012 98.9 56.5 79.0 74.6

2013 225.8 28.5 48.4 48.8

2014 29.0 2.8 16.5 8.1

2015 53.8 4.8 13.2 10.6

2016 21.7 2.9 12.6 8.8

2017 34.5 3.4 6.4 5.8

2018 24.6 0.8 3.0 5.7

*: All the measures of central tendency for years 2004 and 2005 are the same since ARCIL was the only accredited
ARC during this period.
Source: Respective ARCs.

The aging of recovery (discounted to the year of the origination of SRs) shows that recovery in the early stages
dominated aggregate recovery (Chart 1). This is in line with international experience although the recovery rates in
the Indian case are significantly lower.

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 Given the aging profile of recovery given in Chart 1, there is possibly a case to look at the efficacy of collateralisation
in the Indian context with regards to recovery. In this regard the prudential framework for resolution of stressed assets
released on June 7, 2019 may have a salutary effect through its inbuilt incentivizing of early resolution. Such built in
incentives through aggressive provisioning norm ensures that banks are incentivised to look for an early resolution of
the impaired assets thereby improving recovery prospects. More importantly, in the Indian context such higher
provisioning requirements ensure better accountability of PSB managements, as the timely provisioning gives a better
assessment to the government as owner given the sovereign bank doom loop that was referred to in Chapter 1 of this
report.

III. Securities and commodity derivatives markets

(A) Regulatory developments

3.24 The broad guidelines to operationalise the interoperability framework between clearing corporations by June 01,
2019 have been laid down. Interoperability provides for linking of multiple clearing corporations and allows market
participants to consolidate their clearing and settlement functions at a single clearing corporation, irrespective of the
stock exchange on which the trade is executed. It is envisaged that interoperability will lead to efficient allocation of
capital for market participants, thereby saving on costs and also providing better trade execution.
3.25 To bring the margin period of risk (MPOR) in greater conformity with the principles for financial market
infrastructures (PFMI), and based on the recommendations of the SEBI’s Risk Management Review Committee
(RMRC), it was decided that:
a) Stock exchanges/clearing corporations estimate the appropriate MPOR, subject to a minimum of two days, for each
equity derivative product based on liquidity therein and scale up the applicable margins accordingly.
b) With a view to make the risk management framework more robust, the payment of mark-to-market (MTM) margin
be mandatorily made by all the members before start of trading on the next day.
c) To align the margin across index futures and index options contracts, the short option minimum charge (SOMC) for
index option contracts was revised to 5 per cent from 3 per cent.

(B) Market developments

(i) Mutual funds

3.26 During October 2017 – March 2018 there was a net inflow of ₹697.9 billion, which declined by 9.2 per cent to
₹639.4 billion in October 2018 – March 2019. AUM increased by 11.4 per cent in March 2019 compared to March 2018
(Chart 3.8). SIP has been growing continuously, which is adding stability to the inflows.

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 3.27 Share of Individual holdings in total AUM, which comprises of the holdings of retail and HNIs, grew from 51.2 per
cent in October 2017 to 56.4 per cent in October 2018 and it further increased to 58.1 per cent in March 2019. The
individual category AUM had grown by 17.8 per cent by the end of March 2019 as compared to March 2018.
3.28 Share of Institutional holdings, which comprise of corporates and banks declined from 48.8 per cent in October
2017 to 43.6 per cent in October 2018 and it further declined to 41.9 per cent in March 2019. Sustained growth in
individual holdings in mutual funds could provide more diversity in holding patterns and consequent stability to mutual
funds from the point of redemption pressures (Chart 3.9).

3.29 Systematic investment plans (SIPs) grew constantly and remained a favoured choice for investors (Chart 3.10).
Net folio increase during 2018-19 over 2017-18 was 9.3 million, which is a 42.4 per cent increase during the year. There
was enormous growth of 421.6 per cent in the number of SIPs from 2013-14 to 2018-19 with the numbers increasing
from 6 million to 31.3 million. Investments through SIPs in mutual funds are relatively more stable from the point of
view of sustainability of fund inflows.

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 (ii) Trends in capital mobilisation

(a) Corporate bonds

3.30 During 2018-19, ₹366.8 billion was raised through 25 public issues in the bond market, which is highest in the last
five years. Additionally, corporate bonds worth more than ₹6 trillion issued through private placement were listed on
stock exchanges during the same period (Chart 3.11). The major issuers of corporate bonds were body corporates and
NBFCs accounting for more than 50 per cent of outstanding corporate bonds as on March 31, 2019 (Chart 3.11 a)
whereas body corporates and mutual funds were their major subscribers (Chart 3.11b). Chart 3.12 details the
disaggregated issuer / investor profiles of public and private issuances.

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 3.31 An analysis of the credit rating of debt issues of listed companies by major credit rating agencies (CRAs) in India
for the last four quarters shows that on an aggregate basis there was an increase in the share of downgraded/ suspended
companies during the September - December 2018 and January - March 2019 quarters. The agency wise rating
movements confirm the trend with the exception of CRISIL (Chart 3.13).

(b) Initial public offerings (IPOs)

3.32 The incremental yearly growth in Capital raised through primary markets flatlined (₹8.9 trillion) after an
impressive growth of 10 per cent in 2017-18 (8.8 trillion) (Chart 3.14).

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 3.33 During 2018-19, the funds raised by public and rights issues in equities went down significantly by more than 80
per cent as compared to 2017-18. However, capital raised by public issues in the debt market witnessed a sharp increase
during the same period. The funds raised by preferential allotments also went up 2.9 times during 2018-19 as compared
to 2017-18.

(iii) Commodity derivatives

3.34 During 2018-19, benchmark index TR-MCX iCOMDEX increased by 2.1 per cent and NCDEX NKrishi increased
by 12.4 per cent. During the same period, the S&P World Commodity Index decreased by 3.1 per cent and the Thomson
Reuters CRB Index decreased by 5.9 per cent. During October 2018 – March 2019, TR-MCX iCOMDEX declined by 6.8
percent while the NCDEX NKrishi Index increased by 7.8 per cent. Both the S&P World Commodity Index and the
Thomson Reuters CRB Index declined during the same period by 13.7 percent and 5.8 percent respectively (Chart 3.15)

3.35 The total turnover at all the commodity derivative exchanges (futures and options combined) saw a growth of 22.6
per cent during April 2018-March 2019 as compared to April 2017-March 2018. During 2018-19, the volume of

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 commodity futures registered a growth of 19.8 per cent while the options volume jumped over 16 times 19 in comparison
to last year.
3.36 The commodity derivatives markets witnessed mixed trends during October 2018–March 2019. Concerns of US-
China trade tensions, slower economic growth in China, and other commodity specific fundamentals reverberated with
decline of metal segment. In the energy segment, array of geopolitical and macroeconomic factors impacted the crude
oil prices. The total share of non-agri derivatives in the turnover was observed to be 91.1 per cent during October 2018
– March 2019 (Table 3.8).
Table 3.8: Segment wise turnover in commodity derivatives

Period/Turnover (₹billion) Agri Metals Bullion Energy Total

Apr 2018-Sep 2018 3,450.4 13,774.6 8,070.8 10,426.4 35,722.2

Oct 2018-Mar 2019 3,072.7 11,587.0 8,927.9 14,469.7 38,057.2

Change (%) -10.9 -15.9 10.6 38.8 6.5

Share (%) 8.8 34.4 23.0 33.7 100

Source: SEBI.

3.37 Trading in commodity derivatives commenced at BSE and NSE from October 2018. Commodities currently trading
on BSE include gold, silver, crude oil, copper, guar gum, guar seed and cotton. The commodities trading at NSE include
gold, silver and crude oil.

IV. The insurance market

3.38 Exponential growth in insurance was observed post opening up of the sector in 2000-01. Sizeable market share
coupled with higher interconnectivity of some insurers engendered a need to identify systemically important insurers
as also to have adequate regulatory framework for them.
3.39 The risk-based capital (RBC) approach links the level of required capital with the risks inherent in the underlying
business. It represents an amount of capital that a company should hold based on an assessment of risks to protect
stakeholders against adverse developments. In September 2017, IRDAI formed a ten-member steering committee for
planning and implementation of Risk-based solvency regime.
3.40 IRDAI constituted a ‘Project Committee’ to study and develop an appropriate framework for Risk-based
Supervisory Framework in Insurance industry. The Project Committee submitted their report in November 2017.
Subsequently, in January 2018, an Implementation Committee was formed which has submitted its interim report in
June 2018. A note to the industry regarding Authority’s intention of moving towards Risk Based Supervisory
Framework (RBSF) was circulated to all the insurance companies in October 2018.

V. Pension funds

3.41 The National Pension System (NPS) and Atal Pension Yojana (APY) both continued to progress towards healthy
numbers in terms of the total number of subscribers as well as assets under management (AUM). The number of
subscribers in NPS and APY reached 12.4 million and 14.9 million respectively (Table 3.9). AUM under NPS and APY
touched ₹3.11 trillion and ₹68.60 billion respectively (Table 3.10).
Table 3.9: Subscriber growth in pension funds

Sector March 2018 (million) March 2019 (million)

Central Government 1.92 1.99

State Governments 3.87 4.32

Corporate 0.70 0.80

All Citizen Model 0.69 0.93

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 NPS Lite 4.40 4.36

APY 9.61 14.95

Total 21.18 27.36

Source: PFRDA.

Table 3.10: Assets under management

Sector March 2018 (₹ billion) March 2019 (₹ billion)

Central Government 849.54 1,090.10

State Government 1,156.79 1,584.92

Corporate 213.78 308.75

All Citizen Model 57.43 95.69

NPS Lite 30.05 34.09

APY 38.17 68.60

Total 2,345.76 3,182.14

Source: PFRDA.

3.42 The Pension Funds Regulatory and Development Authority (PFRDA) continued its work for financial inclusion of
the unorganised sector and low-income groups by expanding the coverage under APY. As on 31st March 2019, 406
banks were registered under APY with the aim of bringing more citizens under the pension net.
3.43 As on March 31, 2019 pension funds under NPS had an aggregate debt exposure (investments in debentures issued
by IL&FS) of around ₹12.8 billion to the distressed IL&FS Group. The total NPAs in this exposure were around ₹3.6
billion as on March 31, 2019. Out of this exposure, ₹2.3 billion is in the form of unsecured debt. As per the recent
National Company Law Appellate Tribunal (NCLAT) order dated February 13, 2019, all investments made in IL&FS by
PFs are now classified as ‘Red’ category under IBC, meaning that these companies are not even able to make payments
to senior secured financial creditors.
3.44 Given the sudden and sharp downgrade of some corporate debt by credit rating agencies (CRAs), PFRDA advised
the pension funds not to depend only on the ratings given by the rating agencies but also undertake detailed research
and analysis of the issuer/entity in which they propose to make investments.

VI. Recent regulatory initiatives and their rationale

3.45 Some of the recent regulatory initiatives, along with the rationale thereof, are given in Table 3.11.
Table 3.11: Important regulatory initiatives (November 2018 - June 2019)

1. The Reserve Bank of India

Date Measure Rationale/ Purpose

January 01, Micro, Small and Medium Enterprises (MSME) Sector - To facilitate meaningful
2019 Restructuring of Advances: RBI declared special forbearance for restructuring of MSME
MSMEs under which one-time restructuring of MSME debt is permitted accounts that have
with a maximum exposure of ₹250 million subject to the condition that become stressed.
existing loans to MSMEs should be classified as ‘standard’ and without
any downgrade in the asset classification. Banks will incur an additional

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 provision of 5% for the restructured accounts. Banks and NBFCs are
required to make appropriate disclosures related to such restructured
MSME accounts.

January 16, External Commercial Borrowings (ECB) Policy - New ECB To simplify the ECB
2019 Framework: RBI notified the new ECB framework under which eligible policy by removing the
borrowers can now raise ECBs up to USD 750 million or equivalent per scope of inter-track
financial year under the automatic route. The existing Track I (medium- arbitrage, create a level
term foreign currency denominated ECB) and Track II (long-term playing field for all
foreign currency denominated ECB) have been merged into one track as eligible borrowers, and
‘Foreign Currency Denominated ECB’. Existing Track III (Indian rupee widen the base of
denominated ECB) and the Indian rupee denominated bonds (masala borrowers and lenders.
bonds) route has been merged as ‘Rupee Denominated ECB’. The list of
eligible borrowers and recognised lenders has been expanded.

February 07, ECB Facility for Resolution of Applicants under the Corporate To facilitate better value
2019 Insolvency Resolution Process: RBI amended guidelines to relax recoveries (lower
the end-use restrictions for resolution applicants under the Corporate haircuts) for the Indian
Insolvency Resolution Process (CIRP) and allow them to raise ECBs from banks
recognised lenders, except the branches / overseas subsidiaries of Indian
banks, for repayment of rupee term loans of the target company under
the approval route.

February 22, Harmonisation of different categories of NBFCs: The RBI To allow greater
2019 decided to harmonise three different categories of NBFCs into one, based operational flexibility to
on the principle of regulation by activity rather than regulation by entity. NBFCs.
Accordingly, three categories of NBFCs, that is, asset finance companies
(AFCs), loan companies (LCs) and investment companies (ICs) are to be
combined into a single category NBFC Investment and Credit Company
(NBFC-ICC).

March 01, 2019 VRR for Foreign Portfolio Investors (FPIs) Investment in To encourage FPIs willing
& May 24, 2019 Debt: The Reserve Bank launched the Voluntary Retention Route (VRR) to undertake long-term
in debt on March 1, 2019 under which, FPIs can voluntarily commit to investments to invest in
remain invested in a Committed Portfolio Size (CPS) for a committed Indian debt markets.
retention period (minimum period of three years or as decided by the
Reserve Bank). Investments through this Route will be free of certain
regulatory norms applicable to FPI investments under General
Investment Limit. Participating FPIs are provided special facilities such
as permission to carry out repo/reverse repo transactions for cash
management and the use of currency/ interest rate derivatives to hedge
currency/ interest rate risks. The first tranche of investment limits (₹400
billion for investment in Government Securities (VRR-Govt.) and ₹350
billion for investments in Corporate debt instruments (VRR-Corp)) were
made available for allotment ‘on tap’. Subsequently, additional
operational flexibilities viz., VRR-Combined (for investment in both G-
Sec and corporate debt instruments) and option to hold investments till
their maturity/sale at the end of retention period were introduced vide
the revised scheme notified on May 24, 2019.

June 03, 2019 Large exposures framework (LEF): The large exposures framework To address concentration
(LEF) became effective from April 01, 2019.Banks must apply LEF norms risk
at two levels viz consolidated (group) level and Solo level. An exposure to
counter-party will constitute both on and off-balance sheet exposures.
The limit for a single counterparty is 20% which can be increased to 25%
under exceptional circumstances with approval of the Boards of the
banks. Also, banks’ exposures to a single NBFC will be restricted to 15
percent of their eligible capital base whereas for group level it will be
restricted to 25 percent of their Tier I Capital.Banks shall lay down a

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 board approved policy for determining connectedness among the
counterparties. Any breach of the above LE limits shall be reported to
RBI immediately and rapidly rectified.

2. The Securities and Exchange Board of India

Date Measure Rationale/ Purpose

November 13, Guidelines for Enhanced Disclosures by Credit Rating To further enhance the
2018 Agencies (CRAs):The circular inter-alia covers the disclosures quality of disclosures
pertaining to support from parent/group/government, including a made by CRAs and
section on liquidity, inter-linkages of subsidiaries, material event strengthen the rating
specifications and average one-year rating transition rates for long-term framework.
instruments.

December 17, Review of the risk management framework for the equity To bring MPOR in greater
2018 derivatives segment: The review discusses the mandatory payment of conformity with the
mark-to-market (MTM) margin by members, before start of trading on Principles for Financial
the next day, aligning the margins across index futures and index options Market Infrastructures
contracts, estimation of the appropriate margin period of risk (MPOR) (PFMI).
by stock exchanges/clearing corporations based on the liquidity of the
equity derivative product.

February 21, To give effect to the

To give effect to the recommendation of SEBI’s Risk
2019 Management Review Committee: SEBI has revised minimum recommendations of
haircut applicable to G-sec based on the type and tenor of the securities, SEBI’s Risk Management
as under: Review Committee.
• Treasury bills and liquid G-sec having residual maturity of less than 3
years - 2%.
• Liquid G-sec having residual maturity of more than 3 years - 5%.
• All other semi-liquid and illiquid G-sec - 10%.
April 10, 2019 Risk-based capital and net worth requirements for clearing corporations. To ensure that the net
worth of a clearing
corporation adequately
captures the risks faced
by it.

3. The Pension Fund Regulatory and Development Authority (PFRDA)

Date Measure Rationale/ Purpose

January 07, Cyber Security Policy for Intermediaries. To enhance the cyber
2019 security framework for
intermediaries.

January 31, Implementation of the recommendations of the Committee for To rationalise NPS.
2019 Streamlining National Pension System (NPS) pertaining to monthly
contributions, choice of pension fund for central government subscribers
including default option and choice of investment patterns.

March 11, 2019 Display of information by points of presence (PoPs) while processing the With a view to ensuring
National Pension System’s (NPS) contributions in the online mode. greater transparency and
fairness in the interest of
NPS subscribers.

March 25, 2019 Amendment to Investment Guidelines (Applicable to Scheme To provide flexibility to
CG, Scheme SG, Corporate CG and NPS Lite and Atal Pension pension funds to improve
Yojana): It was decided to increase the cap on government securities the scheme’s

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 and related investments and short-term debt instruments and related performance depending
investments by 5% each. on market conditions.

4. The Insolvency and Bankruptcy Board of India (IBBI)

Date Measure Rationale/ Purpose

October 16, The Insolvency Law Committee submitted its 2nd report recommending For consistency between
2018 adoption of the UNCITRAL Model Law of Cross Border Insolvency, 1997, the domestic insolvency
which provides for a comprehensive framework to deal with cross-border framework and the
insolvency issues. proposed cross-border
insolvency framework.

November 13, The central government amended the Companies (Registered Valuers It streamlines the
2018 and Valuation) Rules, 2017 making them applicable for valuation with requirements of
respect to any property, stocks, shares, debentures, securities or goodwill qualification and
or any other assets or net worth of a company or its liabilities under the experience for
provisions of the Companies Act, 2013. registration as valuers.

January 24, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, To bring more clarity to
2019 2016 amended to clarify procedural issues pertaining to resolution plans procedural issues and
and actions to be taken by RP. streamlining the
resolution process.

Compliance Function in Banks

The banking landscape of India is changing rapidly. With the evolution of technology, the entire industry has undergone
a massive transformation that has changed the way financial procedures are carried out, and the way financial
institutions operate. The collaboration between finance and technology has led to a radical change in several aspects of
banking. Financial technology is said to be a disruptive force that in the future is expected to reshape the financial
sector, business models and banking structures. This paradigm change has posed significant challenges to the banks as
well as the regulators. One of the important challenges is ‘compliance’; a very important aspect for sustainable success
story for any banking and financial system.

Benefits of good compliance culture

 It is very important for banks to demonstrate a good compliance culture to maintain their reputation and win
the trust of customers, investors and regulators. Such culture is important for banks to avoid poor conduct
and loss of trust.
 A good compliance culture can benefit banks in several ways1; which includes:
i) low organizational and individual risk;
ii) low reputational risk;
iii) less hesitance and more confidence among employees while performing their jobs;
iv) Helps attract and retain talent and ensure employee engagement.
v) improved transparency which enables better decisions;
vi) enhanced relationship with regulators and other stakeholders and
vii) enhanced valuation among investors;
 In a stress tests survey conducted by banks, it was observed that compliance can have some business benefits.
Over a third of bankers who have undergone the stress testing program indicated that top benefits of
complying with stress testing principles are better informed capital planning decisions, and maintaining 2 a
forward-looking view of the organization’s risks.
Costs of poor compliance culture

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 Compliance risk is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may
suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards,
and codes of conduct applicable to its banking activities. On the other hand, an effective process would identify
compliance risks in each business line, product and process, and devise ways to mitigate such risks. The processes and
requirements should be properly documented with a list of do’s and don’ts accompanying the same. The instances of
failure to adhere to proper conduct should be converted into case studies and disseminated among the staff for
education and entrenchment of desired attitudes.
Banks should eschew the tendency to treat compliance merely as cost and should recognise that proper conduct saves
the bank from possible reputational loss and penalties – thus, generates hidden earnings which most banks do not
quantify, and hence do not realise. A poor compliance culture may lead to heavy costs to the banks. Globally, from the
beginning of the financial crisis and until 2020, penalties and fines on banks is are expected to top USD400 bn. Quinlan
and Associates, a Hong Kong-based financial services consultancy estimated that bad behaviour had erased $850 billion
in profits for the top 50 global banks since the 2008 financial crisis in the form of write-downs, trading losses, fines and
higher compliance costs3. From June 2018 to July 2019, the Reserve Bank has imposed monetary penalties on 76
occasions amounting to ₹ 122.9 crore on various commercial banks operating in India.

Minimum supervisory expectation on compliance culture

Compliance starts at the top. It may be recalled that, in February 2019, I had drawn attention of the CEOs of select
banks, wherein the board of directors along with the senior management were urged to set the tone at the top and usher
in a strong compliance culture in banks. Compliance should be an integral part of the culture of the organisation; it
should not just be the responsibility of staff working in compliance function. It should be a shared responsibility of each
staff member of the bank, and business unit of a bank should be equally responsible for any non-compliance. A bank
should hold itself to high standards when carrying out business, and at all times strive to observe the spirit as well as
the letter of the law. Failure to consider the impact of its actions on its shareholders, customers, employees and the
markets may result in significant adverse publicity and reputational damage, even if no law has been broken.

Strong compliance culture is a pre-requisite for an effective compliance function.

If we may further delve into it, a robust compliance culture has the following essential elements-

Tone from the top- Whether the value statements of Board members, senior management are in sync with value
demonstration in actions. The Board’s oversight over compliance function should not be limited to framing policies,
and its periodic review. A bank’s compliance policy will not be effective unless the Board of Directors promotes values
of honesty and integrity throughout the organisation. The Board should also formulate and maintain a quality assurance
and improvement program that covers all aspects of the compliance function.

Accountability – The bank’s senior management is responsible for effective adherence to the compliance policy of
the bank by the management and staff; and tofor ensuring that compliance risk is minimised. Culture of owning the
responsibility individually and collectively by board; clear demarcation of accountability of senior management,
functional head and operational head; role of business unit as first line of defence and role of internal audit as third
level of defence in facilitating robust compliance culture are all important.

Communication: Clarity and transparency should be promoted by making a distinction between general standards
for all staff members and rules that only apply to specific groups of staff. An effective compliance culture requires
continuous communication of expectations on risk and compliance and practices across the bank; compliance
awareness channels for existing and new Board members, senior management and employees; process for containing
conduct risk and whistle-blower mechanism.

Incentive Structure: An adequate incentive structure should be in-built in the bank’s decision making systems and
processes to achieve the desired compliance culture.

Ex Ante and Forward Looking: Compliance is distinct from other assurance functions viz., risk management and
internal audit. The focus of the compliance function should be preventive compliance. By definition, preventive
compliance would assess the activities of the bank before hand and prevent non-compliant activities/transactions from
being carried out. Compliance should be an ex ante activity and forward looking.

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 Compliance Organsiation, Authority and Resources: A bank should organise its compliance function and set
priorities for managing its compliance risk in a way that is consistent with its own risk management strategy and
structures. For instance, some banks may wish to organise their compliance function within their operational risk
function, as there is a close relationship between compliance risk and certain aspects of operational risk. Others may
prefer to have separate compliance and operational risk functions, but establish mechanisms requiring close co-
operation between the two functions on compliance matters. Regardless of how the compliance function is organised
within a bank, it should have sufficient authority, stature, independence, resources and access to the Board. Its
responsibilities should be clearly specified, and its activities should be subject to periodic and independent review by
the internal audit. Management should respect the independence of the compliance function and not interfere with
their fulfilment.

Nevertheless, even at the cost of repetition, I would like to stress that compliance is a shared responsibility of each and
every staff of the bank.

Importance of Corporate Governance

While feedback mechanisms are important in a bank to permeate a strong compliance culture, enabling environment
in a bank that fosters such culture embedded with strong internal control has to emanate from the directions of the
Board. Aspects with benefits to the bank not apparent has to be enforced through a top down approach.

Corporate governance determines the allocation of authority and responsibilities by which the business and affairs of a
bank are carried out by its board and senior management, including how they: align corporate culture, corporate
activities and behaviour with the expectation that the bank will operate in a safe and sound manner, with integrity and
in compliance with applicable laws and regulations. In this context, it may be noted that Board should adopt policies in
accordance to each bank’s size, complexity, risk appetites, business model and philosophy. Board approved policies
should factor in entity specific vagaries. Also, mere adoption of policies does not solve anything. An effective
implementation of Board approved policies is essential to percolate down the philosophy embedded in policy
throughout the firm. A strong compliance culture has a significant role to play in this context.

Conclusion

Lot of improvement is needed in compliance culture across banks. As a supervisor of banks, the Reserve Bank has keen
interest in sound corporate governance and compliance culture, as it is an essential element in the safe and sound
functioning of a bank and if not followed effectively may adversely affect the bank’s risk profile. Well governed banks
contribute to an efficient and cost-effective supervisory process, as there is less need for supervisory intervention. Such
sound culture would help in building organisations that are strong, resilient, disciplined and enjoy the benefits of
sustained growth and customer confidence. It will also pre-empt several supervisory actions, and attendant
reputational risk, that would follow in case transgressions are detected.

NEWS & UPDATES

 RBI grants licence to Bank of China to set up branch in India: RBI has issued licence to Bank of
China to launch operations in India. Prime Minister Narendra Modi had made a commitment to Chinese
President Xi Jinping to allow Bank of China to set up branches in India when they met on the sidelines of the
SCO summit last month. "The RBI has issued licence to Bank of China to set up its first branch in India. It was
a commitment made by the Prime Minister to the President of China," said a source. Bank of China is one of
the very few state-owned commercial banks in China. India and China have been focusing on expanding their
economic ties notwithstanding differences on several sticky issues including on the boundary dispute.
 Lok Sabha clears amendments to strengthen financial creditors’ rights: The Lok Sabha on
Thursday approved amendments to the Insolvency and Bankruptcy Code (IBC), explicitly endorsing greater
rights for financial creditors than operational ones and fixing the period to complete the resolution process –
including litigation – of a stressed firm at 330 days to cut delays. The amendments also give lenders explicit
power over the distribution of resolution proceeds of toxic assets. Since the Rajya Sabha has already cleared
the IBC (Amendment) Bill 2019, it will now be made into law after the Presidential asseny.
 RBI bans NBFCs from charging loan foreclosure penalties: The Reserve Bank on Friday barred non-
banking finance companies from charging pre-payment penalties or foreclosure charges from individual
borrowers. "NBFCs shall not charge foreclosure charges/pre- payment penalties on any floating rate term
loans sanctioned for purposes other than business to individual borrowers, with or without co-obligants," the
central bank said in a notification, without specifying from when the new ruels will be effective.
 RBI updates fit & proper norms for PSB boards: Members of Parliament, state legislatures, or local

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 bodies such as municipal corporations cannot be on the boards of public sector banks. Also, partners of
chartered accountancy firms engaged as statutory central auditors at any public sector bank cannot join the
boards of these banks, Reserve Bank of India (RBI) said in an updated circular on fit and proper criteria in
state-run lenders. Candidates for the post of board members in public sector banks should also not be a
member of the board of any rival bank, or the RBI or any financial institution, insurance company or
nonfinancial holding company of any other bank that includes commercial banks, State Bank of India, a co-
operative bank, or a regional rural bank.
 Govt issues guidelines for Rs 1 Lac Crore partial guarantee scheme for NBFCs: The Centre has
issued guidelines on operationalising Rs 1 Lac Crore partial guarantee scheme under which public-sector
banks can purchase high-rated pooled assets of financially sound NBFCs. NBFCs, including HFCs, came under
stress following series of defaults by the group companies of IL&FS in September last year. In the budget, the
government had said for purchase of high-rated pooled assets of financially-sound NBFCs, amounting to Rs 1
Lac Crore during the current financial year, it will provide a one-time six months' partial credit guarantee to
public sector banks for their first loss of up to 10 percent. The step, however, does not address investors' long-
term concerns about the exposure of NBFCs' to stressed real estate, rating agency Fitch said in a report
Thursday.
 RBI tweaks norms for priority sector lending: The RBI on Tuesday said on-lending by registered
NBFCs (other than MFIs) towards agriculture, MSEs and housing sector up to prescribed limits will be treated
as priority sector loans. The Reserve Bank said it is being done in order to boost credit to the needy segment
of borrowers. As per the revised norms, on-lending by NBFCs for ‘term lending’ component under agriculture
will be allowed up to Rs 10 lakh per borrower. In case of micro and small enterprises (MSEs) the limit will be
Rs 20 lakh per borrower. In housing sector, the limit has been enhanced from Rs 10 lakh to Rs 20 lakh per
borrower for classification of the loan as priority sector lending.
 RBI eases net worth norms for regulatory sandbox: In its final guidelines for a regulatory sandbox
(RS) for fintech firms, the RBI relaxed the minimum net worth requirement for applicants to Rs 25 lakh from
Rs 50 lakh earlier, while also specifying that it would ease regulatory requirements with respect to liquidity,
board composition, management experience, financial soundness and track record. In addition, it declared
banks and financial institutions constituted under a statute in India as eligible to apply. A regulatory sandbox
usually refers to live testing of new products or services in a controlled/test regulatory environment, for which
regulators may or may not permit certain regulatory relaxations for the limited purpose of the testing.
 RBI tweaks rules on ATM transactions: Banks can't include non-cash withdrawal transactions like
balance enquiry, cheque book request, payment of taxes and funds transfer under free ATM transactions.
Banks also can't include failed ATM balance enquiry, cheque book request, payment of taxes, or funds transfer.
Banks provide a certain number of free transactions at ATMs to their customers every month and beyond that
they impose charges. For the benefit of bank account holders, the banking regulator Reserve Bank of India or
RBI has come out with clarifications on free ATM transactions.
 Govt exempts NBFCs, listed firms from debenture reserve requirements: The government has
removed the redemption reserve requirement for issuance of debentures by non-banking financial companies
(NBFCs), housing finance companies and listed firms, a move aimed at reducing cost for raising capital. Under
the companies law, these entities raising money had to create Debenture Redemption Reserve (DRR) and that
requirement has now been done away with. The corporate affairs ministry said the requirement for a DRR of
25% of the value of outstanding debentures issued by listed companies, Non-Banking Financial Companies
(NBFCs) and Housing Finance Companies (HFCs) has been removed.
 RBI blasts banks on poor compliance with regulations: Reserve Bank of India Deputy Governor MK
Jain criticized banks for poor compliance with regulations, and pointed out that high value frauds and fines
are a result of their relaxed attitude on this. He pointed out that between January and July, RBI has marked
out 70 instances where banks have been cumulatively fined Rs 122.9 crore, with a majority of it being levied
for lack of compliance. Jain said he expects banks to make “serious efforts” on the compliance side, and look
at the aspect beyond a regulatory mandate.
 Reserve Bank of India to transfer ₹1.76-lakh crore to government: In a move that will help the
Centre bridge its fiscal deficit, the Central Board of the Reserve Bank of India on Monday decided to transfer
a staggering ₹ 1,76,051 crore as surplus transfer to the government for 2018-19. This amount is also much
more than what the government is expecting (₹ 1,05,000 crore) via disinvestment in FY 2020. The surplus
transfer includes ₹ 52,637 crore of excess provisions identified as per the revised Economic Capital Framework
(ECF), which was recommended by the Bimal Jalan Committee and adopted at the Central Board’s meeting.
 RBI increases banks' loan exposure limit to single NBFC: The RBI on Thursday increased loan
exposure limit of banks to a single NBFC (excluding gold loan companies) from 15% to 20% of its capital base.
This move that will help increase credit supply to the crisis-ridden shadow banking sector. It should be noted
that the liquidity crunch in the NBFC sector has hit the retail loan segment in the country leading to slowdown
in key consumer sector lending.
 RBI questions, if agriculture credit being used for the right purpose: In the latest report of its
Internal Working Group to review agricultural credit, the RBI says it found that in some states, credit disbursal

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 to the farm sector was higher than their agricultural GDP thereby indicating the possibility of diversion of
credit for non-agricultural purposes. Kerala, Tamil Nadu, Telangana, Karnataka and Punjab came in this
category. The ratio of crop loans disbursed to input requirement was not only unusually high in some states —
it was also highly unevenly distributed. In Goa, the report says, five times more farm credit was disbursed in
2014, 2015 and 2016 than its input requirement.
 RBI panel suggests measures to boost credit to farm sector: To address gaps in credit delivery to the
agriculture sector, a RBI panel has recommended suitable measures, including the setting up of a credit
guarantee scheme jointly by the Centre and States, upping the target for banks to lend to small and marginal
farmers (SMFs), and avoiding loan waivers. The Government of India, in partnership with State governments,
should set up a credit guarantee fund for the agriculture sector one of the key recommendation read. It also
recommended that the government should set up a federal institution, on the lines of the GST (Goods and
Services Tax) Council.
 RBI considering bringing payment aggregators and gateways under direct supervision: The RBI
recently released a discussion paper detailing the possibility of bringing all payment aggregators and payment
gateways under its direct regulation. As per the current guidelines, these companies are indirectly supervised
by the Reserve Bank. Banks with which these entities have business operations are required to create a nodal
account and scrutinise the daily settlements in these accounts. If the regulators goes through with the
proposal, these companies would be required to apply for a license within a stipulated period failing which the
businesses would be asked to fold, the central bank said.
 RBI looking at how NBFCs, HFCs set their lending rates: The Reserve Bank of India (RBI) is studying
how non-bank lenders and home financiers price their loans, close on the heels of directing commercial banks
to link their loan rates to external benchmarks. The matter came up at an internal RBI discussion on external
benchmarks, which are binding on all banks beginning 1 October. The central bank is keen on greater
transparency and order in the rate-setting process at non-banking financial companies (NBFCs) and housing
finance companies (HFCs), which are not bound by RBI regulations.
 RBI restricts access to credit data of consumers: The Reserve Bank of India has ordered commercial
banks and non-banking lenders to stop providing unregulated entities access to consumer data held by credit
bureaus, dealing a blow to scores of fintech startups that have based their business models on such
information. In a letter to banks and NBFCs, the central bank said it noticed that they had appointed agents
and permitted them to access the database of credit information companies. Such actions are against the
Credit Information Companies (Regulation) Act, 2005 (CICRA), it said and warned of penalties if any of the
regulated entities violated its order.
 RBI tightens norms for banks, up penalties: The RBI has prescribed a TAT for banks to settle failed
transactions for customers and also notified compensations payable for various types of customer complaints.
The financial compensation should be done suo motu by the bank, without waiting for a complaint or a claim
by a customer, the RBI said. The RBI has categorised eight different avenues of transaction in which the new
guidelines will be applicable, including ATMs, card transactions, immediate payment system, unified payment
interface and prepaid cards. Most financial compensations have been set at ₹100 per day if the reversal does
not happen within a specified timeline.
 RBI raises export credit limit: To encourage banks to support exports, which are facing global headwinds,
the Reserve Bank of India has upped the sanctioned limit that can be classified as export credit under priority
sector lending (PSL) from ₹25 crore per borrower to ₹40 crore per borrower. Further, the central bank has
also removed the existing criteria of ‘units having turnover of up to ₹100 crore’ for PSL classification.
 RBI asks banks to cover risk sensitive areas under concurrent audit: The Reserve Bank of India
(RBI) has asked banks to cover risk sensitive areas identified by them as per their specific business models
under concurrent audit. It also said follow-up action on the concurrent audit reports and rectification of the
deficiencies should be accorded high priority by the Head Office/Controlling Office of the concerned
branch/business unit of the bank. In its revised guidelines on the concurrent audit system in banks, which
comes in the backdrop of the Rs 13,600 crore letter of credit fraud at Punjab National Bank and the IL&FS
imbroglio rattling the financial system, the Reserve Bank of India said the broad areas of coverage under
concurrent audit will be based on the identified risk of the unit and must include random transaction testing
of sufficiently large sample of such transactions wherever required.
 RBI enables banks to lend more to customers: Banks will be able to lend more to customers for buying
consumer products such as mobile phones, home appliances, two-wheelers, and three-wheelers, with the RBI
cutting the risk weight for consumer credit, including personal loans. While credit card receivables have been
excluded, what this cut means is that banks can offer consumer loans by setting aside relatively lesser capital.
The RBI has cut the risk weight to 100 per cent from 125 per cent. This reduction in risk weight comes at a
time when the consumers’ perception of the economic situation and the employment scenario has softened,
according to the RBI’s Consumer Confidence Survey in July.
 Bank of Baroda signs MoU with Indian Army for customised services: Bank of Baroda (BoB) has
signed a Memorandum of Understanding (MoU) with Indian Army under which the bank would offer
customised services along with a host of facilities to account holders. The MoU includes handsome free

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 personal accident insurance cover, free air accident insurance cover of Rs 15 lakh to Rs 50 lakh and an
overdraft facility up to three times of monthly net salary, the public sector bank said in a statement. The
features are also applicable for pensioners of Indian Army up to the age of 70 years.
 RBI cuts repo rate by 25 bps to 5.15%: The RBI in its 4th monetary policy review this fiscal year has
reduced the policy repo rate by 25 basis points (bps). The repo rate now stands at 5.15 per cent. The central
bank had lowered the repo rate by a cumulative 110 basis points in just a matter of seven months till August.
But RBI Governor Shaktikanta Das did not want to commit more rate cuts, even after a clear communication
on the policy stance. “We have not said anything about the lower bound of the policy rate … you cannot infer
the minimum repo rate and at what level the RBI will take a pause,” Das said in the conference after the
announcement.
 RBI raises lending capacities of MFIs: Expanding the lending capacities of MFIs, the RBI raised the
household income limit for borrowers of NBFC-MFIS. The household income limit for borrowers of NBFC-
MFIs in rural areas will be hiked to ₹1.25 lakh from the current ₹1 lakh, while for urban and semi-urban areas
it will be increased to ₹2 lakh from the current ₹1.6 lakh. The RBI has also announced raising the lending limit
to every eligible borrower to ₹1.25 lakh from the current ₹1 lakh.
 RBI announces moves to boost digitization, payments infra: The RBI, along with its monetary policy,
announced a number of moves in the payments space, aimed at boosting digitisation and data availability.
Apart from extended liquidity support for 24X7 NEFT, the RBI has mandated the creation of an internal
ombudsman by non-bank issuers of prepaid payments wallets. Only issuers with more than 10 million (1 crore)
prepaid payments instruments outstanding will be covered by this directive. To ensure payment acceptance
infrastructure needs due to rapidly growing card usage RBI has decided to create an ‘Acceptance Development
Fund’, which will be operationalised by December 2019.
 RBI introduces new reporting system for co-operative banks: The RBI has introduced a new
reporting system – the Central Information System for Banking Infrastructure (CISBI) – for all co-operative
banks. Under this system, these banks are required to submit information pertaining to opening/closing/
conversion of branches, offices, non-administratively independent offices (extension counters, satellite
offices), and customer service points (ATMs) in a single proforma online on the CISBI portal. The new
reporting system is applicable to urban co-operative banks, State co-operative banks and district central co-
operative banks.
 RBI bans use of agents to chase loans: The RBI has prohibited banks from deploying direct selling agents
(DSAs) to sell retail loans and verifying borrowers' documents. Currently, a substantial proportion of retail
assets namely personal loans, credit cards and consumer credit are sourced via the DSA conduit. While the
regulatory decision is aimed at reducing incidents of data theft and minimising operational risk for banks,
high-street lenders fear this could slow down the growth in consumer loans and credit cards. Banks are
planning to take up the matter with the regulator and the government. Agents hired by banks and business
correspondent (or facilitators) may carry out eKYC of borrowers or physically carry a biometric reader to a
customer’s residence for identity verification.
 SEBI tightens norms for banks: Markets regulator SEBI now has a strict framework for banks to report
bad loans. The regulator said that listed banks will have to disclose any divergence in bad loan provisioning
within 24 hours of receiving the RBI’s Risk Assessment Report, rather than waiting to publish the details in
their annual financial statements. This comes into force with immediate effect. Banks have been under-
reporting bad loans and have even attracted RBI action. The SEBI move was in consultation with the RBI.
 RBI set to recast inter-creditor agreement: The inter-creditor agreement (ICA) is in for a makeover
with the Reserve Bank of India (RBI) weighing options to clear the logjam in the resolution of bad assets due
to bottlenecks in its working. Among the aspects that can be looked into by the central bank is the feasibility
of weaving the ICA right from the start of a relationship within consortiums and multiple banking
arrangements, so that there is visibility on what needs to be done when an account defaults or faces difficulty.
 RBI panel for maximum of two-layered core investment companies by 2021: The Reserve Bank of
India’s (RBI’s) working group set up to review the extant regulations on core investment companies (CICs)
has favoured restricting the number of layers of such entities within a group to two by 2021. “Any CIC within
a group shall not make investment through more than a total of two layers of CICs, including itself,” said the
panel in its report. If the recommendation is implemented, it will cut down the room for leverage by
companies. The RBI’s recent Financial Stability Reports had pointed to the central bank’s discomfort over the
high level of pledged shares by India Inc, and the risks arising out of the systemic inter-connectedness of
various financial players.
 Moody's lowers India's outlook to negative from stable: Moody’s Investors Service on Thursday
changed its outlook on India’s ratings to negative from stable, citing increasing risks that the country’s
economic growth will remain lower than in the past. The outlook partly reflects government and policy
ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high
levels, the ratings agency said. India’s economy grew only 5.0 per cent year-on-year between April and June,
its weakest pace since 2013, as consumer demand and government spending slowed amid global trade
frictions.

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  WhatsApp can’t start payments business, RBI tells SC: As WhatsApp battles the Israeli spygate
(Pegasus) controversy in India, the Reserve Bank of India has told the Supreme Court that the messaging
platform, owned by Facebook, is non-compliant with data localisation norms and that it has directed National
Payments Corporation of India (NPCI) to not allow a full-scale launch of a payments business by WhatsApp
on the Unified Payments Interface. Further, NPCI has been advised by RBI not to permit WhatsApp to go live
for full-scale operations on UPI payments system, till the time they are fully compliant, it added.
 UPI hits 1 billion transactions in October, plans to go global: Transactions using India’s own
domestic payments platform—Unified Payments Interface (UPI)—hit a landmark of one billion in October,
three years after its launch. The UPI also recently crossed 100 million users, making it the fastest adoption of
any payments system anywhere in the world. Having achieved this double milestone, the NPCI, which operates
the UPI platform, aims to take the network global by enabling acceptance of UPI in Singapore and the UAE.
NPCI expects the user base of real-time payment system UPI to expand fivefold to 500 million in the next
three years. NPCI’s objective for the next three years is to expand the UPI user base to 500 million, chief
executive officer Dilip Asbe said. We expect collaboration between fintechs and banks to drive the acceptance
abroad. Our focus will always remain on enhancing acceptance infrastructure for digital payments so as to
encourage customers towards digital transactions to achieve RBI and government's less cash objective and
facilitate faster adoption of UPI, Asbe said.
 3 years of IBC, Only 6 per cent cases resolved so far: The latest data put out by the Insolvency and
Bankruptcy Board of India (IBBI), for the July-September 2019 quarter, underlines the growing concerns over
the slow progress under the Insolvency and Bankruptcy Code, 2016. Of the 2542 cases admitted till date, 186
have been closed on appeal/review, while only 156 have seen approval of resolution plan. In a substantial 587
cases, liquidation has been ordered. What is interesting is the fact while of the 1497 undergoing resolution,
535 have been in the system for over 270 days (existing timeline for resolution is 330 days), even cases under
liquidation are seeing undue delays.
 World Bank says India halved its poverty rate since 1990s: India has halved its poverty rate since the
1990s, the World Bank said. It also said the country has achieved annual growth exceeding 7% over the last 15
years. India’s growth is expected to continue and elimination of extreme poverty in the decade is within reach.
The report said “India’s rapidly growing economy needs investment in infrastructure an estimated 8.8 percent
of GDP or $343 billion a year until 2030. While an estimated 13 million people enter the working age
population each year only three million new jobs are being generated on an annual basis.”
 Government Fund for completing stalled housing projects achieves first closure at Rs 10,530
crore: The Special Window for Affordable and Mid-Income Housing Fund (SWAMIH) Investment Fund I,
sponsored by the Government of India for providing last-mile funding to enable completion of construction of
stalled housing projects, has achieved its first closing at Rs 10,530 crore. This Category II Alternate
Investment Fund (AIF) has been formed under the SWAMIH as announced by Finance Minister on September
14, 2019, to provide last-mile funding to enable completion of construction of stalled housing projects.
 NEFT transactions to be made 24x7 from December 16: Bank customers will be able to transfer funds
through NEFT around the clock on all days including weekends and holidays from December 16, the Reserve
Bank of India announced on Friday. These transactions after the usual banking hours are set to be automated
initiated using 'Straight Through Processing (STP)' modes by the banks. The existing discipline for crediting
the beneficiary's account or returning the transaction within 2 hours of settlement to the originating bank will
also continue, the central bank said in a press statement.
 RBI hikes aggregate lending limit to Rs 50 lakh for P2P lenders: With a view to expand peer to peer
(P2P) lending platform business, the Reserve Bank on Thursday raised aggregate lending limit by five times
to Rs 50 lakh for such lenders. At present, the aggregate limits for both borrowers and lenders across all P2P
platforms stand at Rs 10 lakh, whereas exposure of a single lender to a single borrower is capped at Rs 50,000
across all NBFC-P2P platforms. “A review of the functioning of the lending platforms and lending limit was
carried out and it has been decided that in order to give the next push to the lending platforms, the aggregate
exposure of a lender to all borrowers at any point of time, across all P2P platforms, shall be subject to a cap of
Rs 50 lakh,” the RBI said in its statement on developmental and regulatory policies.
 No way privately-issued digital currencies can be allowed, says RBI governor: It is "too early" to
talk about a central bank-issued digital currency due to technological handicaps, but the RBI is looking into
this, governor Shaktikanta Das said on Thursday. He, however, made it clear that the RBI is completely against
private digital currency, asserting the sovereign's right over this function. The comments come a year after the
government tagged Bitcoins and other crypto-currencies illegal and following which the RBI banned trading
on them.
 Reserve Bank sends DHFL to NCLT for debt resolution: The Reserve Bank on Friday sent the troubled
mortgage lender Dewan Housing Finance (DHFL) for bankruptcy proceedings, making it the first financial
services player to go to NCLT for a possible debt resolution. Earlier the central bank had superseded the board
of the third-largest pureplay mortgage lender on concerns over its corporate governance and defaults, and
appointed an administrator.

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 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 5.40%
 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 18.50 % w.e.f. 12-10-2019

 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 09-02-2017).

 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 04-10-2019 is 5.15%.

 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 is 4.90% w.e.f. 04-10-2019.

 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 is 5.40 %

 Liquidity Coverage Ratio:

The liquidity coverage ratio (LCR) refers to the proportion of highly liquid assets held by financial institutions,
to ensure their ongoing ability to meet short-term obligations. This ratio is essentially a generic stress test that
aims to anticipate market-wide shocks and make sure that financial institutions possess suitable capital
preservation, to ride out any short-term liquidity disruptions, that may plague the market.

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 LEGAL AND STATUTORY
PROVISIONS

Page 50 of 502
 3. Introduction:
With the widening areas of banking operations, transactions which are undertaken by banks are ever growing, both in
volume and veracity. Certain important provisions of laws which embody rights, powers, duties, liabilities and
responsibilities of a Bank, are briefly dealt with, in this chapter. Certain important provisions of following laws are
covered:

3.1. Negotiable Instruments Act, 1881: Certain important Sections are given below.

Negotiable Instrument Act 1881: At a glance -

SEC. TERM MEANING

3 Banker Banker includes any person acting as a Banker and any post office savings bank.

4 Promissory Note A Promissory Note is an instrument in writing, containing an unconditional

undertaking signed by maker, to pay a certain sum of money only to or to the order of
a certain person or to the bearer of the instrument.

5 Bill of Exchange A Bill of Exchange is an instrument in writing containing an unconditional order,

signed by the maker, directing a certain person to pay certain sum of money only to
or to the order of a certain person or to the bearer of the instrument. Here, the promise
to pay is not conditional.
6 Cheque A cheque is a Bill of Exchange drawn on a specified banker and not expressed to be
payable otherwise then on demand and it includes the electronic Image of a truncated
cheque & a cheque in the electronic form.
7 Drawee The maker of a Bill of Exchange or Cheque is called the drawer, the person thereby
directed to pay is called the Drawee.
The person named in the instrument, to whom or to whose order the money is, by the
Payee
instrument directed to be paid, is called the payee.

8 Holder The Holder of a promissory note, bill of exchange or cheque means any person entitled
in his own name to the possession thereof and to receive or recover the amount due
thereon from the parties thereto.
Where the bill of exchange or cheque is lost or destroyed, its holder is the person so
entitled at the time of such loss or destruction.

9 Holder In Due Holder in due course means any person who for consideration became the possessor
course of the promissory note, bill of exchange or cheque ,if payable to bearer, or the payee
or endorsee thereof, if, before the amount mentioned in it became payable and without
having sufficient cause to believe that any defect existed in the title of the person from
whom he derived his title.
10 Payment in Due Payment in due course, means payment in accordance with the apparent tenor of the
course instrument in good faith and without negligence to any person in possession thereof
under circumstances which do not afford a reasonable ground for believing that he is
not entitled to receive payment of the amount therein mentioned.
11 Inland Instrument A Promissory Note, Bill of Exchange or Cheque drawn or made in, and made payable
in or drawn upon any person resident in (India) shall be deemed to be an Inland
Instrument.
13 Negotiable A NI means Promissory Note, Bill of Exchange or Cheque payable either to order or
Instrument to the bearer.
14 Negotiation When a Promissory note, bill of exchange or cheque is transferred to any person, so
as to constitute the person the holder thereof, the instrument is said to be negotiated.
15 Endorsement When the maker or the holder of the negotiable instrument signs the same, otherwise
than as such maker, for the purpose of the negotiation, on the back or the face thereof
or on a slip of paper annexed thereto or so signs for the same purpose a stamped paper

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 intended to be completed as a negotiable instrument, he is said to endorse the same
is called the Endorser.
16 Endorsement in If the endorser signs his/her name only, the endorsement is said to be “in blank”, and
Blank and Full if he adds direction to pay, the amount mentioned in the instrument, or to the order
of a specified person the endorsement is said to be in full and the person so specified
is called the endorsee of the instrument.

18 Legal Amount & When the amount written in 'words' and ‘figures’ differs, banks can pay the amount
Courtesy Amount written in 'words' provided the payment is in due course.
20 Inchoate stamped Where one person signs and delivers to another person a paper stamped in accordance
instrument with the law relating to negotiable instrument then in force in India and either ,wholly
blank or having written thereon an incomplete negotiable instrument, he thereby
gives prima facie authority to the holder thereof to make or complete, as the case may
be , upon it a negotiable instrument, for any amount specified therein and not
exceeding the amount covered by the stamp. The person so signing shall be liable upon
such instrument, in the capacity in which he signed the same, to any holder in due
course for such amount.

21 “At Sight” / “On In a promissory note or bill of exchange the expressions “at sight” and “on
presentment”/ presentment” means “on demand”. The expression “after sight” means, in a
“After Sight” promissory note, after presentment for sight and in a bill of exchange after acceptance
or noting for non acceptance, or protest for non acceptance .

22 Maturity The maturity of a promissory note or bill of exchange is the due date at which it falls
due.
Every promissory note or bill of exchange which is not expressed to be payable on
demand, at sight or on presentment is at maturity on the third day after the day on
which it is expressed to be payable.
25 When maturity is a When the day on which a promissory note or bill of exchange is at maturity, is a public
holiday holiday, the instrument shall be deemed to be due on the next preceding business day.
26 Minor A minor may draw, endorse, deliver and negotiate such instruments so as to bind all
parties except himself.
30 Liability of Drawer The drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee
or acceptor thereof, to compensate the holder, provided due notice of dishonor has
been given to or received by the drawer as hereinafter provided.
31 Liability of the "The drawee of a cheque having sufficient funds of the drawer in his hands properly
drawee applicable to the payment of such cheque must pay the cheque when duly required so
to do and in default of such payment, must compensate the drawer for any loss or
damage caused by such default."
46 Delivery The making, acceptance or endorsement of a promissory note, bill of exchange or
cheque is complete by delivery, actual or constructive.

47 Negotiation by A promissory note, bill of exchange, or cheque, payable to bearer is negotiable by

delivery delivery thereof.
48 Negotiation by A promissory note, bill of exchange, or cheque, payable to order is negotiable by the
Endorsement holder by endorsement and delivery thereof.
49 Conversion of The holder of a negotiable instrument, endorsed in blank may without signing his own
Endorsement in name by writing above the endorser’s signature a direction to any other person as
Blank in to full endorsee, convert the endorsement in blank into an endorsement in full.

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 77 Liability of banker When a bill of exchange, accepted payable at a specified bank, has been duly presented
for negligently there for payment and dishonored, if the banker so negligently or improperly keeps,
dealing with bill deals with or delivers back such bill as to cause loss to the holder, he must compensate
presented for the holder for such loss.
payment.

80 Interest Payable on Interest @ 18% p.a. is to be paid by the parties charged on the basis of a negotiable
Negotiable instrument if no rate of interest is specified in the instrument (w.e.f. 30.12.1988). The
Instrument interest is payable from the date the amount ought to have been paid by the party
charged until tender or realisation of the amount due thereon or until such date after
the institution of a suit to recover such amount as the court directs. When the party
charged is an endorser of an instrument, he is liable to pay interest only from the time
that he receives notice of the dishonour.

85 Cheque payable to Where a cheque is payable to order purports to be endorsed by or on behalf of the
order payee, the Drawee is discharged by payment in due course.
87 Effect of Material Any material alteration of a negotiable instrument renders the same void as against
Alteration any one whom is a party thereto at the time of making such alteration and does not
consent thereto, unless it was made in order to carry out the common intention of the
original parties.
99 Noting & Protest Interest @ 18% p.a. is to be paid by the parties charged on the basis of a negotiable
instrument if no rate of interest is specified in the instrument (w.e.f. 30.12.1988). The
interest is payable from the date the amount ought to have been paid by the party
charged until tender or realisation of the amount due thereon or until such date after
the institution of a suit to recover such amount as the court directs. When the party
charged is an endorser of an instrument, he is liable to pay interest only from the time
that he receives notice of the dishonour.

100 Protest "When a promissory note or bill of exchange has been dishonoured by non-acceptance
or non-payment, the holder may, within a reasonable time, cause such dishonour to
be noted and certified by a notary public. Such certificate is called a protest."

Note: Protest is a formal certificate issued by the notary public certifying the fact of
the dishonour of bill of exchange or promissory note and is based on the noting.
115 Drawee in case of Where a Drawee in case of need is named in a bill of exchange or in any endorsement
need thereon, the bill is not dishonored until is has been dishonored by such Drawee.
123 Cheque crossed Where a cheque bears across its face an addition to the words “and company” or any
generally abbreviation thereof, between two parallel transverse line, or of two parallel
transverse lines simply, either with or without the words “not negotiable”, that
addition shall be deemed a crossing , and the cheques shall be deemed to be crossed
generally.
124 Cheque crossed Where a cheque bears across its face an addition of the name of a banker either with
specially or without the words “not negotiable”, that addition shall be deemed a crossing, and
the cheque shall be deemed to be crossed specially and to be crossed to that banker.
128 Payment in due Where the banker on whom a crossed cheque is drawn has paid the same in due
course of crossed course, the banker paying the cheque, and (in case such cheque has come to the hands
cheque of the payee) the drawer thereof, shall respectively be entitled to the same rights, and
be placed in the same position in all respects, as they would respectively be entitled to
and placed in if the amount of the cheque had been paid to and received by the true
owner thereof.
129 Payment of crossed Any banker paying a cheque crossed generally otherwise than to a banker, or a cheque
cheque out of due crossed specially otherwise than to the banker to whom the same is crossed, or his
course agent for collection, being a banker, shall be liable to the true owner of the cheque for
any loss he may sustain owing to the cheque having been so paid.
130 Not Negotiable A person taking a cheque crossed generally or specially, bearing in either case the
words “not negotiable”, shall not have and shall not be capable of giving, a better title
to the cheque than that which the person from whom he took it had.

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 131 Non liability of A banker who has in good faith and without negligence, received payment for a
banker receiving customer of a cheque crossed generally or specially to him-self shall not, in case the
payment of cheque title to the cheque proves defective, incur any liability to the true owner of the cheque
by reason only of having received such payment.
138 Dishonor of Cheque Where any cheque drawn by a person on account maintained by him with a banker for
for insufficiency payment of any amount of money to another person from out of that account for the
etc. of funds in the discharge, in whole or in part, of any debt or other liability, is returned by the bank
account. unpaid, either because of the amount of money standing to the credit of that account
is insufficient to honor the cheque or that it exceeds the amount arranged to be paid
from that account by an agreement made with that bank, such person shall be deemed
to have committed an offence and shall, without prejudice to any other provision of
this Act, be punished with imprisonment for a term which may be extended up to two
years, or with fine which may extend up to twice the amount of the cheque, or with
both.
The Provisions of the Article is also applicable in bouncing of cheques due to stop
payment Instructions.
139 Recent Following are the recent amendments:-
to amendments in
147 Negotiable 1. Definition of a ‘cheque’ widened to include electronic image of a truncated
Instruments cheque and a cheque in electronic forms.
(amendment and
Misc. Provisions) 2. Right of the banker who received payment on electronic image of a truncated
cheque to retain the truncated cheques.
Act 2002.
3. Certificate of text of print out of electronic image of truncated cheque by
paying Banker as proof of payment.

4. Doubling of the imprisonment term from one year to two years.

5. Doubling of penalty for the offence, i.e. up to twice the amount of the
instrument.
6. Doubling of the period of time to issue demand notice to drawer from 15 to 30
days.
7. Immunity from prosecution for nominee directors, who are nominated by
virtue of holding any office or employment in Central Government or State
Government or a financial corporation owned or controlled by the Central
Government or State Government.
8. Compounding of offence under the N.I.Act.
Empowering the magistrate to condone delay in filing complaint.
Bank’s slip or Memo having Bank’s Official mark denoting that the cheque has
been dishonoured shall be presumed to be the fact of dishonour.
143 Introduction of In accordance with section 143A of the Amendment Act, any court while trying an
A section offence for dishonour of a cheque can now direct the drawer, who is the issuer of the
cheque, to pay interim compensation to the complainant. This amendment has been
made in line with Section 138 of the Act which refers to the bouncing of cheque due to
insufficiency of funds in the account or the amount as mentioned in the cheque
exceeding the amount arranged to be paid from the bank account.

Under this section of the Amendment Act, the court now has the authority to direct
such interim compensation in circumstances of a summary trial or a summons case
wherein the drawer pleads to be not guilty and upon the framing of any other charge.
The amount of compensation payable cannot exceed 20% of the amount as stated in
the cheque. This amount has to be paid within a stipulated time period of 60 days from
the date of the order passed by the court, or further within the extended period of 30
days, as may be directed by the court on showing sufficient cause for the delay caused.

On acquittal of the drawer, the court will consequentially direct the complainant to
pay the drawer the prescribed amount along with the interest. The interest will be

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 levied at the rate which was prevalent at the beginning of the financial year. As per the
section such recovery of the payment has to be made within a time period of 60 days
in furtherance to a delay of 30 days.

It has to be further noted that the final compensation if awarded to the complainant
on the disposal of the case, will be after the deduction of the interim compensation.

In July 2019, the Supreme court has clarified that Section 143A of the Negotiable
Instruments (NI) Act shall not have a retrospective effect.

148 Introduction of The protection that has been provided in Section143A of the Amendment Act extends
Section during the period of appeal as well. Section 148 of the Amendment Act provides that
in the event of the conviction of the drawer of the cheque, if the drawer proceeds to
file an appeal, the appellant court has the power to order the drawer of a cheque to
deposit an amount. This deposited amount has to be a minimum of 20% of the fine or
compensation awarded by the Magistrate Court in the appeal preferred against
his/her conviction. This amount can be ordered anytime during the pendency of the
appeal. The procedure relating to payment of the above stated fine and refund of the
same if the appeal succeeds, is similar to what has been laid down in Section 143A of
the Amendment Act.

Sec.23 - Determination of 'due date' of a bill payable so many months after date or sight –

- Determine the corresponding date of month after the stated number of months.
- Add 3 days of grace.
- It will be due on the 4th day.
Illustration:

Bill date Tenor Date of acceptance Due date

Before grace After grace

period period

27/10/2017 4 months after 15/11/2017 27/02/2018 01/03/2018

date

27/10/2017 4 months after 15/11/2017 15/03/2018 18/03/2018

sight

Sec.24 - Determination of 'due date' of a bill payable so many days after date or sight:

- Calculate so many days from the date of the bill or date of acceptance after excluding the date of bill or date of
acceptance. Add 3 days to the day so arrived at. It will be due on the 4th day.
Illustration:

Bill date Tenor Date of acceptance Due date

Before grace period After grace period

27/10/2017 120 days after 15/11/2017 24/02/2018 27/02/2018

date

27/10/2017 120 days after 15/11/2017 13/03/2018 17/03/2018

sight

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 01/11/2017 120 days after 15/11/2017 28/02/2018 03/03/2018
date

If14/03/2018 is a Sunday, the bill is due on preceding day i.e. 13/03/2018 (Sec.25)

If 01/03/2018 is a Sunday, the bill is due on preceding day i.e. 28/02/2018 (Sec.25)

Difference between 'Holder' and 'Holder-in-due-

Course’

Consideration: To become a 'holder-in-due-course' a person

should have obtained the instrument for a lawful
consideration. Whereas it is not so to become a 'holder'.

Before maturity: To be a 'holder-in-due-course' a person

must acquire title and possession of the instrument before its
maturity. In case of 'holder' he may obtain the possession
thereon even after maturity.

Good faith: Person who claims to be 'holder-in-due-course'

of a negotiable instrument must have acquired it in good faith,
Minor: A minor may draw, endorse, deliver and negotiate such instrument so as to bind all
parties except himself. Nothing herein contained shall be deemed to empower a corporation to
make, endorse or accept such instrument except in cases to which under the law for the time
being in force, they are so empowered."

Under the provisions of General Clauses Act (X of 1897), the term "person” includes any
company or association or body of individuals, whether incorporated or not. The last paragraph
of the above section specifically negates any interpretation of the section that may be relied
upon to confer any power on a company for making, endorsing or accepting a negotiable
instrument and its powers in this regard are regulated by the Companies Act, 1956 and other
statutory enactment.
3.2. Indian Contract Act, 1872:
Banking involves interaction between a banker and customer. A customer of a bank may be a depositor, borrower or
any other person merely utilizing one of the various services provided by the banker. The interaction of a bank with its
customer creates certain obligations and gives certain rights to both the bank and the customer.
“All Agreements are contracts, if they are made by parties competent to contract, for a lawful consideration and with a
lawful object, and are not expressly declared to be void.”

All Banking transactions are therefore, separate contracts and the knowledge of Indian Contract Act is essential for
each Banker.

Section124. "Contract of indemnity" defined-

“A contract by which one party promises to save the other from loss caused to him by the contract of the promisor
himself, or by the conduct of any other person, is called a "contract of indemnity".

Sec. 126 "Contract of guarantee", "surety", "principal debtor" and "creditor" -

A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third person in case of his
default. The person who gives the guarantee is called the "surety", the person in respect of whose default the guarantee
is given is called the "principal debtor", and the person to whom the guarantee is given is called the "creditor". A
guarantee may be either oral or written.

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 Section 148. ‘Bailment’, ‘bailor’ and ‘bailee’ defined. -

A ‘bailment’ is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when
the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering
them. The person delivering the goods is called the ‘bailor’. The person to whom they are delivered is called the ‘bailee’.

Section 172. "Pledge", "Pawnor", and "Pawnee" defined -

The bailment of goods as security for payment of a debt or performance of a promise is called "pledge". The bailor is in
this case called "pawnor". The bailee is called "pawnee".

Section 182. "Agent" and "principal" defined -

An "agent" is a person employed to do any act for another, or to represent another in dealing with third persons. The
person for whom such act is done, or who is so represented, is called the "principal".]

In form of Indian Contact (Amendment) Act, 2017 Chapter VI A (Special Provision relating to Farming Contracts) have
been inserted containing Section 75A to 7L.

3.3. Indian Partnership Act, 1932:

A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all
or any of them acting or all. In India it is governed by the Indian Partnership Act, 1932, and came into force on 1st
October 1932. In the usual business of the partnership.

According to Companies Act 2013, the number of partners in any association shall not exceed 100. However, the rules
given under Companies (Miscellaneous) Rules, 2014 restrict the present limit to 50.

Dissolution of a firm: A firm may be dissolved in the following manner:

 Dissolution by Court
 Dissolution by agreement
 Dissolution by operation of law
 Dissolution on the happening of certain contingencies
 Dissolution by notice

3.4. Reserve Bank of India Act, 1934:

The Act was enacted on 6th March, 1934 to constitute the Reserve Bank of India and has been amended from time to
time to meet the demands of changing times. It has the following objectives:

➢ To regulate the issue of Bank Notes.

➢ For keeping reserves for securing monetary stability in India and,
➢ To operate the currency and credit system of the country to its advantage.

The Act deals with the following:

➢ Incorporation, capital, management and business of the bank.

➢ Central banking functions like Issue of Bank Notes, monetary control, acting as banker to the Government and
Banks, lender of last resort etc.
➢ Collection and furnishing credit information.
➢ Acceptance of deposits by Non Banking Financial Institution (NBFS).
➢ Handling Reserve Fund, Credit funds, publication of bank rate, audit and accounts etc.
➢ Penalties for violation of the provision of the act or direction issued there under.

Important Provisions

Scheduled Bank:

According to Section 2(e), Scheduled Bank means a bank whose name is written in the 2 nd schedule of RBI Act, 1934
and which satisfies the conditions laid down in Section 42(6), - Paid up capital and reserves of not less than `5 lac,
satisfaction of RBI that the affairs will not be conducted by the bank in a way to jeopardize the interests of the
depositor.
It may be a State Co-operative Bank, a company defined in Companies Act, 1956, an institution notified by Central

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 Government for the purpose and a corporation or a company incorporated by or under any law in force, in any place
outside India. Any bank that is not included in the 2nd Schedule of RBI is called Non-Scheduled Bank.
“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 5.40%.
(w.e.f 04-10-2019).

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% (w.e.f 09-02-2017).

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 18.50 % w.e.f. 12-10-2019

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.

Liquidity Coverage Ratio:

The liquidity coverage ratio (LCR) refers to the proportion of highly liquid assets held by financial institutions, to ensure
their ongoing ability to meet short-term obligations. This ratio is essentially a generic stress test that aims to anticipate
market-wide shocks and make sure that financial institutions possess suitable capital preservation, to ride out any
short-term liquidity disruptions, that may plague the market.

Inspection of Banks:

The most significant supervisory function exercised by the RBI is the inspection of Banks. The RBI’s powers to conduct
inspections are contained in various provisions of the Banking Regulation Act, the most important being Section 35.
This apart, inspections may be necessary under the provisions of Section 23, 37, 38, 44, 44A, 44B and 45 of the Act.

Audit of Annual Accounts of Banks:

Banks have to close their books of accounts every year as at March 31st and prepare a Balance Sheet and Profit and Loss
account as prescribed in the III schedule of the Banking Regulation Act. These annual accounts are required to be
audited by auditors appointed by the Bank each year with the prior approval of the Reserve Bank of India, as per Section
30(1A) of the Banking Regulation Act, in respect of private sector banks.

Section 10(1) of the Banking Companies [Acquisition and Transfer of Undertakings] Act, 1970 / 1980 provides for
audit of annual accounts of banks in the case of nationalized banks.

3.5. BANKING REGULATION ACT, 1949:

Some of the important provisions of the Act affecting day-to-day transactions at branches are discussed hereunder. The
amendments made operative by the Banking Laws (Amendment) Act, 1981 have also been incorporated herein.

Powers Of Reserve Bank of India to control advances by banking company:

Section 21: Where the Reserve Bank of India is satisfied that it is necessary or expedient in the public interest or in
the interest of depositors or banking policy so to do, it may determine the policy in relation to advances to be followed
by banking companies generally or by any banking company in particular and when the policy has been so determined,

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 all banking companies or the banking company concerned, as the case may be shall be bound to follow the policy as so
determined.

Without prejudice to the generality of the power vested in Reserve Bank of India under sub-section (1), the Reserve
Bank of India may give directions to banking companies either generally or to any banking company or group of banking
companies in particular as to: -

- the purpose for which advances may or may not be made.

- the margins to be maintained in respect of secured advances.
- the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital,
reserves and deposits of a banking company and other relevant considerations, may be made by that banking
company to any one company, firm, association of persons or individual.
- the maximum amount upto which, having regard to the consideration referred to in clause (3), guarantees may
be given by a banking company on behalf of any one company, firm, association of persons or individual and;
- the rate of interest and other terms and conditions on which advances or other financial accommodation may be
made or guarantees may be given;
Every banking company shall be bound to comply with any directions given to it under this section.

Rates of interest charged by banking companies:

Section 21 A9: "Notwithstanding anything contained in Usurious Loans Act, 1918 (10 of 1918) or any other law relating
to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be reopened by
any court on the ground that the rate of interest charged by banking company in respect of such transaction is
excessive."

The Banking Regulation (Amendment) Act, 2017:

Section 35AA - The government has notified the Banking Regulation (Amendment) Act under which it can authorise
the RBI to issue directions to banks to initiate insolvency resolution process to recover bad loans.

Section 35AB - Without prejudice to the provisions of section 35A, the Reserve Bank may, from time to time, issue
directions to any banking company or banking companies for resolution of stressed assets. The Reserve Bank may
specify one or more authorities or committees with such members as the Reserve Bank may appoint or approve for
appointment to advise any banking company or banking companies on resolution of stressed assets.’.

Return of paid instruments to customers: Section 45 (Z) of the Banking Regulation Act, 1949:

Where a banking company is required by its customer to return to him paid instruments before the expiry of the period
specified by rules made under this section, the banking company shall not return the instruments except after making
and keeping in its possession true copies of all relevant parts of such instruments, such copies being made by a
mechanical or other process which in itself ensures the accuracy of the copy.

The banking company shall be entitled to recover from the customer the cost of making such copies of the instruments.

In this section "customer" includes a government department and a corporation incorporated by or under any law."

BANKER'S BOOKS EVIDENCE ACT, 1891:

9
By Banking Laws (Amendment) Act, 1983, a new section 21 A has been added in the Banking Regulation Act, 1949. This section
provides protection to banks in respect of rates of interest charged to the borrowers' accounts and prohibits any court from reopening
the loan transaction on the pretext that the rate of interest charged is on the higher side. Reliance on this specific provision will help
banks to ward off defences taken by debtors before courts that the rates of interest charged by banks offend provisions of Usurious
Loans Act, 1918 or other similar Acts applicable to particular state/states.

However, when a suit is filed before the court, the transaction between the bank and its debtor comes to an end in as much as the
loan or advance is recalled. Hence, from and after the date of filing of suit, a court is empowered under the provisions of Sec.34 of
Civil Procedure Code to order that interest at such rate as the court deems reasonable should be paid on the principal sum adjudged
from the date of the suit to the date of the decree with further interest at such rate, not exceeding six percent per annum, as the
court deems reasonable on such principal sum from the date of the decree to the date of payment or to such earlier date as the court
thinks fit, provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate
of such interest to be awarded by the court may exceed six percent per annum but shall not exceed the contractual rate at which
moneys are lent or advanced by nationalised banks in relation to commercial transactions.

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 Banker's Books Evidence Act, 1891 is a legislation, which facilitates, in certain cases production of certified copies of
entries made in the books of a banker without the necessity of producing the original books of record so that the normal
functioning of a bank is not dislocated.

In terms of Sec. 2(3) of the Act, "Bankers' books" include ledgers, daybooks, cash books, account books and all other
books used in the ordinary business of a bank.

Sec. 2(4) defines legal proceedings:

"Legal proceedings" means (i) any proceeding or inquiry in which evidence is or may be given, (ii) an arbitration and
(iii) any investigation or inquiry under the code of criminal procedure or under any other law for the time being in force
for the collection of evidence, conducted by a police officer or by any other person (not being a magistrate) authorised
in this behalf by a magistrate or by any law for the time being in force.

Under Sec.2 (8) of the act, "Certified copy" means a copy of any entry in the books of a bank together with a certificate
written at the foot of such copy that it is a true copy of such entry, that such entry in contained in one of the ordinary
books of the bank and was made in the usual and ordinary course of business and that such book is still in the custody
of the bank.
Where the copy was obtained by a mechanical or other process, which in itself ensured the accuracy of the copy, a
further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual
course of the bank's business after the date on which the copy had been so prepared, a further certificate to that effect,
each such certificate being dated and subscribed by the principal Accountant or Manager of the bank with his name and
official title.
3.6. COMPANIES ACT, 2013:
In India, now companies are governed by Companies Act, 2013. Now All the companies are required to be registered
under Companies Act, 2013. A company is a juristic person created by law, having a perpetual succession and common
seal distinct from its members. Section 11 of the Companies Act provides that an Association or Partnership consisting
of more than 10 in the case of Banking Business and more than 20 in the case of other business shall be registered under
the companies act. If not registered, the said association or partnership will be illegal.
The business and the objects of a company and the rules and regulations governing its management is known by two
important documents called Memorandum of Association and Article of Association.

Registration of charges:

Under Section 125 of the Act, the following charges created by a company, whether public or private, on the security of
its property or undertaking are void against the liquidator and/or any creditor of the company unless the prescribed
particulars of charge together with the instrument, if any, by which the charges are created or evidenced or a copy
thereof verified in the prescribed manner are filled with the concerned Registrar of Companies within -30- days from
the date of its creation.

As may be observed, equitable-mortgage created by deposit of title deeds, though without any instrument evidencing
the charge, requires registration. However, a charge created by pledge of movables does not require registration.

Important changes in Company Act 2013:

● Statutory limit of borrowing Powers of the Companies(BCC: BR: 105/514 dated 18th 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.

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

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 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 sub-section, prior approval by means of a special resolution
passed at a general meeting shall be necessary.

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.

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.

Highlights of Companies Act 2013:

A. 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.
B. 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 paid-up capital up to Rs 50 Lacs
and turnover up to Rs 2 Crores into OPC is permitted.
C. 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.
D. 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.
E. Accounting Year: Every company shall follow uniform accounting year i.e. 1 st April -31st March.
F. 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.
G. 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.
H. 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.

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 I. 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 same as early as possible since most of the
compliances are on financial year basis under the new Companies Act.
J. 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.

Recent Amendments - The Ministry of Corporate Affairs (the MCA) in the month of January & February 2019 has
issued the following amendments notification under the Companies Act 2013 (the Act):
 Changes in Companies (Significant Beneficial Owners) Rules 2018 to identify individuals/entities having
significant control over the affairs of a company
 Companies (Incorporation) Rules, 2014 mandating all the companies incorporated prior to 31 December 2017
to upload all their particulars of various compliances including details of registered office in Form INC 22A
Active.
 Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers)
Order, 2019, mandating all the companies who receives goods or services from MSME and the payment for
which is not made within 45 days from the date of acceptance or the date of deemed acceptance of goods or
services from MSME to report such transactions in MSME Form I.
 Changes in Companies (Acceptance of Deposits) Rules, 2014 mandating all companies to file a return of
deposits in Form DPT 3 with the MCA, furnishing information about file the transactions that has not been
considered as deposit or both under the Companies (Acceptance of Deposits) Rules 2014 (Deposit Rules).
Companies (Amendment) Act, 2019:
The main reforms undertaken through the Ordinance include the following:

 Re-categorising of offences which are in the category of compoundable offences to an in-house adjudication
framework. However, no change has been made in respect of any of the non-compoundable offences.
 Ensuring compliance of the default and prescribing stiffer penalties in case of repeated defaults.
 De-clogging the NCLT by:
- enlarging the jurisdiction of Regional Director (“RD”) by enhancing the pecuniary limits up to which they can
compound offences under section 441 of the Act.
- vesting in the Central Government the power to approve the alteration in the financial year of a company under
section 2(41); and
- vesting the Central Government the power to approve cases of conversion of public companies into private
companies.
 Other reforms include re-introduction of declaration of commencement of business provision; greater
accountability with respect to filing documents related to creation, modification and satisfaction of charges; non-
maintenance of registered office to trigger de-registration process; holding of directorships beyond permissible
limits to trigger disqualification of such directors.

Additional Amendments Through Companies (Amendment) Act, 2019

1. Section 26 - Matters to be stated in prospectus
The requirement of registration of prospectus with the Registrar of Companies has been done away with. Instead
the prospectus would be filed with the Registrar.
2. Section 29 - Public offer of securities to be in dematerialised form
The term ‘public’ has been omitted under section 29(1)(b). Government would now prescribe the class of companies
(not restricted to public companies), which would be mandatorily required to issue the securities only in
dematerialised form.
3. Section 35 - Civil liability for mis-statements in prospectus
The reference of ‘Registration of Prospectus with the Registrar’ is replaced by ‘Filing of copy of Prospectus with the
Registrar’.
4. Section 90 - Register of significant beneficial owners in a company

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  The company shall take necessary steps to identify an individual who is a SBO. Failure to take necessary
steps has been made punishable.
 Sub-Section (9A) inserted to provide the power to the Central Government to make rules for the purposes
of this section.
 The company or the person aggrieved by the order of the Tribunal may make an application to the
Tribunal for relaxation or lifting of the restrictions placed, within a period of one year from the date of
such order.
5. Section 132 - Constitution of National Financial Reporting Authority (NFRA)

 NFRA to perform its functions through such divisions as may be prescribed by the Central Government.
 Executive body of NFRA shall consist of the Chairperson and full-time Members for efficient discharge
of its certain functions.
 Debarring of the member or firm from being appointed as an auditor or internal auditor etc. or
performing any valuation under section 247 by NFRA in case professional or other misconduct is proved.
6. Section 135 - Corporate Social Responsibility
 In case the unspent amount does not relate to any ongoing project, unspent amounts to be transferred to
a Fund specified under Schedule VII within a period of six months of the expiry of the financial year.
 In case the unspent amount relates to any ongoing project subject to fulfilling of prescribed conditions,
unspent amounts to be transferred by the company within a period of thirty days from the end of the
financial year to a special account to be opened by the company in that behalf for that financial year in
any scheduled bank to be called the Unspent Corporate Social Responsibility Account.
 Such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social
Responsibility Policy within a period of three financial years from the date of such transfer, failing which,
the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days
from the date of completion of the third financial year.
 Penal provisions inserted as under:
The company - punishable with fine which shall not be less than Rs. 50,000 but which may extend to Rs.
25 lakh. Every officer of such company who is in default - shall be punishable with imprisonment for a
term which may extend to 3 years or with fine which shall not be less than Rs. 50,000 but which may
extend to Rs. 5 lakh, or with both.
 MCA empowered to give general or special directions to a company or class of companies as it considers
necessary to ensure compliance of provisions of this section.

3.7. TransUnion CIBIL earlier known as Credit Information Bureau (India) Limited – (CIBIL):

1. Credit Information Bureau (I) Ltd was set-up in January 2001, as a joint venture. 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.
2. CIBIL is established with a primary purpose of information sharing between Banks and Financial Institutions for
curbing the undesired growth of NPA.
3. 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
4. Banks, FIs, SFCs, NBFCs, Housing Finance Companies and Credit Card Companies are Members of CIBIL
5. CIBIL- Access to consumer credit information:
● Identified branches have been given user ID.
● The sanctioning authority should confirm in his note having accessed CIBIL data and the information on borrowers
found in order.
● Consumer Credit information (CIR) fee is Rs.50, for the report which is to be recovered as upfront fee from the
applicant.
6. A Credit Information Report (CIR) is a factual record of a borrower’s credit payment history compiled from
information received from different credit grantors. Its purpose is to help credit grantors make informed lending
decisions quickly and objectively.
7. TransUnion acquired a 92.1% stake in CIBIL in the year 2017.

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3.8. Goods & Service Tax Act 2016

Goods & Services Act was enacted in 2016 and came into effect from 01.07.2017.
Features:
1. GST would be applicable on “supply” of goods or services as against the present concept of tax on the manufacture
of goods or on sale of goods or on provision of services. Four slabs have been defined 5%,12%,18%,28%. It would be
applicable to all products except liquor for human consumption. First time SIN goods have been defined by the tax
authorities.
2. GST would be based on the principle of destination based consumption taxation as against the present principle of
origin-based taxation.
3. It would be a dual GST with the Centre and the States simultaneously levying it on a common base. The GST to be
levied by the Centre would be called Central GST (central tax- CGST) and that to be levied by the States [including
Union territories with legislature] would be called State GST (state tax- SGST). Union territories without legislature
would levy Union territory GST (union territory tax- UTGST).
4. An Integrated GST (integrated tax- IGST) would be levied on inter-State supply (including stock transfers) of goods
or services. This would be collected by the Centre so that the credit chain is not disrupted.

In 2018-19, following key announcements were made:

- Aadhar mandatory for registration of taxpayers under GST and it may become mandatory for claiming
refunds.
- Quick Response (QR) code may be made mandatory in the Tax Invoice and Bill of supply at a later date to be
notified.

3.9. Registrar of Companies

Registrars of Companies (ROC) appointed under Section 609 of the Companies Act, covering the various States and
Union Territories are vested with the primary duty of registering companies and LLPs floated in the respective states
and the Union Territories and ensuring that such companies and LLPs comply with statutory requirements under the
Act. These offices function as registry of records, relating to the companies registered with them, which are available
for inspection by members of public on payment of the prescribed fee. The Central Government exercises administrative
control over these offices through the respective Regional Directors.
The charge of the financing Institutions on the assets of the company are required to be registered with the ROC within
30 days from the date of creation of charge. If the charge has remained to be created within the stipulated time of 30
days, then also the charge can be created by paying the additional fee by way of penalty.

3.10. Central Registry

Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) is a central
online security interest registry of India. It is primarily created to check frauds in lending against equitable mortgages,
in which people would avail multiple finances against the same asset from different banks.
CERSAI's mandate is to maintain a centralized data bank of equitable mortgages created and registered where it
contains information on the equitable mortgage taken on a property along with details of the financial institution that
has extended the loan as well as details about the borrower. CERSAI also allowed lenders to register transactions
of securitization and asset reconstruction.
According to the government's directives, financial institutions must register details of security interests created by
them with CERSAI within 30 days of its creation.

3.11. SARFAESI ACT 2002

This Act gives powers of “seize and desist” to banks. Banks can give a notice in writing (By Authorised officer) to the
defaulting borrower requiring it to discharge its liabilities within 60 days (Section 13 (2)). If the borrower fails to comply
with the notice, the Bank may take recourse to one or more of the following measures (Section 13 (4):
A-take possession of the security for the loan
B-Sale or lease or assign the right over the security
C-Manage the same or appoint any person to manage the same.

This act also provides for establishment of Asset Reconstruction Companies (ARCs) regulated by RBI to acquire assets
from Banks and Financial Institutions. The Act provides for sale of financial assets by Banks and Financial Institutions

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 to Asset Reconstruction Companies. RBI has issued guidelines to Banks on the process to be followed for sale of
financial assets to ARCs.

3.12. THE INSOLVENCY AND BANKRUPTCY CODE, 2016

This act was passed by Parliament on 16.05.2016 to consolidate and amend the laws relating to reorganization and
insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization
of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the
stakeholders. This act proposes to establish INSOLVENCY & BANKRUPTCY BOARD to make a paradigm shift from
the existing ‘Debtor in possession’ to a ‘Creditor in control’ regime. National Company Law Tribunal will be
the adjudicating authority under the aforesaid. This ACT envisages a “creditor in control” regime with financial
creditors exercising control through IPs in the event of a single default in repayment of any loan or interest. This can
be affected without any notice and the law is very stringent as compared to the SARFAESI Act, 2002.

Key points:
A. Corporate Insolvency Resolution Process
Application on default – Any financial or operational creditor(s) can apply for insolvency on default of debt or
interest payment subject to minimum monetary limit.
Appointment of Insolvency Professional – IP to be appointed by the regulator and approved by the creditor
committee. IP will take over the running of the Company. From date of appointment of IP, power of Board of
directors to be suspended and vested in the IP. IP shall have immunity from criminal prosecution and any
other liability for anything done in good faith
Moratorium period – Adjudication authority will declare moratorium period during which no action can be taken
against the company or the assets of the company. Key focus will be on running the Company on going concern
basis. A Resolution plan would have to be prepared and approved by the Committee of creditors.
Credit committee - A credit committee of creditors will be constituted. Related party to be excluded from committee.
Each creditor shall vote in accordance to voting share assigned if 75% of creditor approve the resolution plan
same needs to be implemented.

B. Liquidation Process
Initiation – Failure to approve resolution plan within specified days will cause initiation of Liquidation. Debtor can
also opt for voluntary liquidation by a special resolution in a General Meeting. Liquidator – The IP may act
as the liquidator, and exercise all powers of the Board of Directors. The liquidator shall form an estate of the
assets, and consolidate, verify, admit and determine value of creditors’ claims

Order of priority for distribution of assets

• Insolvency related costs

• Secured creditors and workmen dues up to 24 months
• Other employee’s salaries/dues up to 12 months
• Financial debts (unsecured creditors)
• Government dues (up to 2 years)
• Any remaining debts and dues
• Equity

Key Amendments In IBC recently -

 A strict 330-day timeline for the insolvency resolution process, including any legal challenges, and uphold
secured creditors’ priority right on the sale or liquidation proceeds of bankrupt companies.
 The amendments specify that financial creditors, who have not voted in favour of a rescue plan, as well as
that of operational creditors will get a share of proceeds from the sale of the debtor company or its
liquidation as per the hierarchy specified in IBC.
 Lenders can include commercial considerations in the manner of distributing the proceeds.
 The amendment specified that the bankruptcy resolution or liquidation arrived at under IBC is binding
on central, state and local governments, to whom the bankrupt firm may owe dues. This will prevent state
authorities including income tax officials from questioning a rescue plan adopted in a court-monitored
process.
 The amendments proposed also rework voting rights in the case of companies where there are a large
number of creditors such as homebuyers and bondholders.

3.13. Standardized Public Grievances Redressal System (SPGRS)

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 This is a Standardized system for addressing public grievances.
It has been launched on 11.01.2013, under the directives of Government of India.
1) Complaint Redressal Committee Chaired by the Managing Director.
2) Evaluate feedback from the customers on quality of service received by them
3) To review the implementation of codes of commitment under BCSBI.
4) Submit the report on its performance to the customer service committee on quarterly basis.
5) Icon provided on the Bank’s website “Online complaints (SPGRS)”.
6) Tracker ID is generated to know the status of the complaint.
7) Complaint escalates to next higher authority after the stipulated no of days, if the complaint remains unaddressed at
a particular level.
9) Non-customers also can lodge complaints through Toll free numbers/online.
10) Public Grievance portal introduced by the Govt. of India (www.pgportal.gov.in)
The Bank shall examine the grievance as per its Internal Grievance Redressal Mechanism and in case the Bank decides
to reject a complaint and / or decides to provide only partial relief to the complainant, it should invariably forward such
cases to the Internal Ombudsman for further examination.
Bank has advised that No confidential information to be shared /furnished through this portal and Official
communications should be made only on Registered Mobile No./ E-mail ID of the Customer.

3.14. CHEQUE TRUNCATION SYSTEM: CTS 2010

Truncation is the process of stopping the flow of the physical cheque issued by a drawer to the drawee branch. The
physical instrument will be truncated at some point en-route to the drawee branch and an electronic image of the
cheque would be sent to the drawee branch along with the relevant information like the MICR fields, date of
presentation, presenting banks etc.
The images captured at the presenting bank level would be transmitted to the Clearing House and then to the drawee
branches with digital signatures of the presenting bank. Thus, each image would carry the digital signature, apart from
the physical endorsement of the presenting bank, in a prescribed manner. The physical instruments are required to be
stored for a statutory period. It would be obligatory for presenting bank to warehouse the physical instruments for that
statutory period. In case a customer desires to get a paper instrument back, the instrument can be sourced from the
presenting bank through the drawee bank.
3.15. Banking Ombudsman
Banking Ombudsman is a quasi-judicial authority functioning under India’s Banking Ombudsman Scheme 2006 and
the authority was created pursuant to a decision made by the Government of India to enable resolution of complaints
of customers of banks relating to certain services rendered by the banks. The Banking Ombudsman Scheme was first
introduced in India in 1995, and was revised in 2002. The current scheme became operative from 1 January 2006, and
replaced and superseded the banking Ombudsman Scheme 2002.
One can file a complaint before the Banking Ombudsman if the reply is not received from the bank within a period of
one month after the bank concerned has received one's complaint, or the bank rejects the complaint, or if the
complainant is not satisfied with the reply given by the bank.

The type and scope of the complaints which may be considered by a Banking Ombudsman is very comprehensive, and
it has been empowered to receive and consider complaints pertaining to the following operational issues (Grounds of
Complaint):

(1) Any person may file a complaint with the Banking Ombudsman having jurisdiction on any one of the following
grounds alleging deficiency in banking including internet banking or other services.

(a). non-payment or inordinate delay in the payment or collection of cheques, drafts, bills etc.;
(b). non-acceptance, without sufficient cause, of small denomination notes tendered for any purpose, and for
charging of commission in respect thereof;
(c). non-acceptance, without sufficient cause, of coins tendered and for charging of commission in respect
thereof;
(d). non-payment or delay in payment of inward remittances;
(e). failure to issue or delay in issue of drafts, pay orders or bankers’ cheques
(f). non-adherence to prescribed working hours;

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 (g). failure to provide or delay in providing a banking facility (other than loans and advances) promised in
writing by a bank or its direct selling agents;
(h). delays, non-credit of proceeds to parties' accounts, non-payment of deposit or non-observance of the
Reserve Bank directives, if any, applicable to rate of interest on deposits in any savings, current or other
account maintained with a bank;
(i). complaints from Non-Resident Indians having accounts in India in relation to their remittances from
abroad, deposits and other bank- related matters;
(j). refusal to open deposit accounts without any valid reason for refusal;
(k). levying of charges without adequate prior notice to the customer;
(l). non-adherence to the instructions of Reserve Bank on ATM /Debit Card and Prepaid Card operations in
India by the bank or its subsidiaries on any of the following:
i. Account debited but cash not dispensed by ATMs
ii. Account debited more than once for one withdrawal in ATMs or for POS transaction
iii. Less/Excess amount of cash dispensed by ATMs
iv. Debit in account without use of the card or details of the card
v. Use of stolen/cloned cards
vi. Others

(m). non-adherence by the bank or its subsidiaries to the instructions of Reserve Bank on credit card
operations on any of the following:
i. Unsolicited calls for Add-on Cards, insurance for cards etc.
ii. Charging of Annual Fees on Cards issued free for life
iii. Wrong Billing/Wrong Debits
iv. Threatening calls/ inappropriate approach of recovery by recovery agents including non-observance
of Reserve Bank guidelines on engagement of recovery agents
v. Wrong reporting of credit information to Credit Information Bureau
vi. Delay or failure to review and correct the credit status on account of wrongly reported credit
information to Credit Information Bureau.
vii. Others
(n). non-adherence to the instructions of Reserve Bank with regard to Mobile Banking / Electronic Banking
service in India by the bank on any of the following:
i. delay or failure to effect online payment / Fund Transfer,
ii. unauthorized electronic payment / Fund Transfer,

(o). non-disbursement or delay in disbursement of pension (to the extent the grievance can be attributed to
the action on the part of the bank concerned, but not with regard to its employees);
(p). refusal to accept or delay in accepting payment towards taxes, as required by Reserve Bank/Government;
(q). refusal to issue or delay in issuing, or failure to service or delay in servicing or redemption of Government
securities;
(r). forced closure of deposit accounts without due notice or without sufficient reason;
(s). refusal to close or delay in closing the accounts;
(t). non-adherence to the fair practices code as adopted by the bank;
(u). non-adherence to the provisions of the Code of Bank's Commitments to Customers issued by Banking
Codes and Standards Board of India and as adopted by the bank ;
(v). non-observance of Reserve Bank guidelines on engagement of recovery agents by banks;
(w). non-adherence to Reserve Bank guidelines on para-banking activities like sale of insurance /mutual fund
/other third party investment products by banks with regard to following:
i. improper, unsuitable sale of third party financial products
ii. non-transparency /lack of adequate transparency in sale
iii. non-disclosure of grievance redressal mechanism available
iv. delay or refusal to facilitate after sales service by banks
(x). any other matter relating to the violation of the directives issued by the Reserve Bank in relation to banking
or other services.

(2) A complaint on any one of the following grounds alleging deficiency in banking service in respect of loans and
advances may be filed with the Banking Ombudsman having jurisdiction:
(a) non-observance of Reserve Bank Directives on interest rates;
(b) delays in sanction, disbursement or non-observance of prescribed time schedule for disposal of loan
applications;
(c) non-acceptance of application for loans without furnishing valid reasons to the applicant; and
(d) non-adherence to the provisions of the fair practices code for lenders as adopted by the bank or Code
of Bank’s Commitment to Customers, as the case may be;

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 (e) non-observance of Reserve Bank guidelines on engagement of recovery agents by banks; and
(f) non-observance of any other direction or instruction of the Reserve Bank as may be specified by the
Reserve Bank for this purpose from time to time.
(3) The Banking Ombudsman may also deal with such other matter as may be specified by the Reserve Bank from time
to time in this behalf.

One's complaint will not be considered if:

 One has not approached his bank for redressal of his grievance first.

 One has not made the complaint within one year from the date of receipt of the reply of the bank or if no reply
is received, and the complaint to Banking Ombudsman is made after the lapse of more than one year and one
month from the date of complaint made to the bank.

 The subject matter of the complaint is pending for disposal / has already been dealt with at any other forum
like court of law, consumer court etc.

 Frivolous or vexatious complaints.

 The institution complained against is not covered under the scheme.

 The subject matter of the complaint is not pertaining to the grounds of complaint specified under Clause 8 of
the Banking Ombudsman Scheme. If the complaint is for the same subject matter that was settled through the
office of the Banking Ombudsman in any previous proceedings.

Amendments as on 1 July, 2017

Reserve Bank of India has widened the scope of its banking ombudsman platform for addressing mis-sell of third party
products, and customer grievances on and mobile banking and electronic banking issues, recognising customers’ plight
in dealing with such troubles.

Under the amended scheme, a customer would also be able to lodge a complaint against the bank for its non-
adherence to RBI instructions with regard to mobile banking/ electronic banking services in India.

The RBI had widened the scope of its Banking Ombudsman Scheme, 2006, to include, inter alia, deficiencies
arising out of sale of insurance, mutual fund, and other third-party investment products by banks.

The new rule will be effective from July 1, and the banking ombudsmen will enjoy more power in their pecuniary
jurisdiction.

The pecuniary jurisdiction of the banking ombudsman to pass an award has been increased from existing Rs
10 lakh to Rs 20 lakh. Ombudsman can direct banks to pay compensation up to Rs 1 lakh to the complainant for loss
of time, expenses incurred as also, harassment and mental anguish suffered.

3.16. Know Your Customer (KYC) Guidelines:

Reserve bank of India has now come out with guidelines for “KNOW YOUR CUSTOMER” (KYC) with a view to put in place
systems and procedures to help control frauds, identify money laundering and suspicious activities and for scrutiny
/monitoring of large value transactions. The guidelines are also applicable to foreign currency accounts / transactions.

The four pillars under the policy

a) Customer Acceptance Policy -
b) Customer Identification procedure
c) Risk Management ( MLRC)
d) Monitoring of transactions

Reporting Requirements
a) Reports to be furnished to FIU-IND
Bank follows the detailed guidelines contained on compilation and manner / procedure of submission of following
reports prescribed by FIU-IND and ensure for its error free and timely submission to them.
a. Cash Transactions Report (CTR)
b. Suspicious Transactions Report (STR);

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 c. Counterfeit Currency Report (CCR);
d. Non Profit Organizations Transactions Report (NTR)
e. Cross-Border Wire Transfer Report (EFT)

a) Cash Transaction Reports (CTRs):

Bank files following types of Cash Transactions to FIU-IND, New Delhi. -
a. All cash transactions of the value of more than Rupees Ten Lakh or its equivalent in foreign currency;
b. All series of cash transactions integrally connected to each other which have been valued below Rupees Ten Lakh or
its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate
value of such transactions exceed Rupees Ten Lakh;

While filing CTRs, details of individual transactions below Rupees Fifty Thousand will not be furnished.

CTRs contain only the transactions carried out by the bank on behalf of their clients/ customers excluding
transactions between the internal accounts of the bank.

IT initiatives for filing of CTRs in electronic format:

a. Bank has developed in-house utility for generation of CTRs of all branches by Data Centre.
Bank has developed HO Module for Head Office for consolidation of CTRs of branches.

Manner and Procedure of filing CTRs:

a. Our Data Centre generates CTRs for all branches through the system and submits it to Head office through Email
within -4- days of succeeding month.
b. Head Office consolidates CTRs received from Data Centre and prepares XML files and converts them to Hash files
which is further uploaded to Fin-net portal of FIU- IND for onward submission to FIU-IND, New Delhi.
c. The CTR filed with FIU-IND is also uploaded in corporate intranet and respective Regional office provides a copy of
the monthly CTR data submitted by PO to FIU-IND to the concerned branches for preservation and production to
Auditors/ Inspector / regulator when asked for, and
d. The instruction on Maintenance of Record of Transactions; information to be preserved and maintenance and
Preservation of records as contained in KYC- AML-CFT policy should be scrupulously followed by the branches.

Time Schedule for Filing Cash Transaction Reports (CTR)

The Cash Transaction Report (CTR) for each month for Bank as a whole is submitted to FIU-IND by 15th of the
succeeding month as advised by Reserve Bank of India.
In order to ensure above time schedule, various offices are required to ensure following time schedule:
a. Data Centre submits CTRs for branches invariably on monthly basis (not on fortnightly basis) by 04th of the
succeeding month to Head Office in text format by e-mail.
b. The Principal Officer of the bank ensures submission of CTRs for entire bank every month to FIU-IND
within the prescribed time schedule i.e. by 15th of the succeeding month.

b)Suspicious Transaction Reports (STRs)

Bank files all suspicious transactions as mentioned in the PMLA Rules to Financial Intelligence Unit – India (FIU-
IND). While determining suspicious transactions, bank is guided by definition of suspicious transaction contained in
PMLA Rules as amended from time to time. Bank also files Suspicious Transaction Reports (STR) to FIU-IND for
Mobile Banking Transactions as in case of normal banking transactions.
Definition of Suspicious Transaction in PMLA Rules:
“Suspicious Transaction" means a transaction whether or not made in cash which, to a person acting in good faith –
a. Gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or
b. Appears to be made in circumstances of unusual or unjustified complexity; or
c. Appears to have no economic rationale or bonafide purpose; or
d. Gives rise to a reasonable ground of suspicion that it may involve financing of the activities relating to terrorism.

It is likely that in some cases transactions are abandoned / aborted by customers on being asked to give some details
or to provide documents. Branches should report all such attempted transactions through the menu “AMLALERT”
and Regional Offices should file STRs on these attempted transactions, even if not completed by customers,
irrespective of the amount of the transaction.
Indicative List of Suspicious Activities:
(1) Transactions Involving Large Amounts of Cash
(2) Transactions that do not make Economic Sense

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 (3) Activities not consistent with the Customer’s Business
(4) Attempts to avoid Reporting/Record-keeping Requirements
(5) Unusual Activities
(6) Customer who provides Insufficient or Suspicious Information
(7) Certain Suspicious Funds Transfer Activities
(8) Certain Bank Employees arousing Suspicion
(9) List of alert Indicators of suspicious activities/transactions to be monitored by the operating staff at branch
level:

S. Alert Indicator Indicative Suspicion

No.

1 Customer left without opening Customer did not open account after being informed

account about KYC requirements

2 Customer offered false or forged Customer gives false identification documents or

identification documents
documents that appears to be counterfeited, altered or
inaccurate

3 Identity documents are not Identity documents presented are not verifiable i.e.

verifiable Foreign documents etc.

4 Address found to be non- Address provided by the customer is found to be non-

existent existent

5 Address found to be wrong Customer not staying at address provided during

account opening

6 Difficult to identify beneficial Customer uses complex legal structures or where it is

owner difficult to identify the beneficial owner

7 Customer is being investigated Customer has been the subject of inquiry from any law

for criminal offences enforcement agency relating to criminal offences

8 Customer is being investigated Customer has been the subject of inquiry from any law

for TF offences enforcement agency relating to TF or terrorist activities

9 Adverse media report about Match of customer details with persons reported in local

criminal activities of customer media / open source for criminal offences

10 Adverse media report about TF or Match of customer details with persons reported in local media
terrorist activities of customer / open source for terrorism or terrorist financing

related activities

11 Customer did not complete Customer did not complete transaction after queries

transaction such source of funds etc.

12 Customer is nervous Customer is hurried or nervous

13 Customer is over cautious Customer over cautious in explaining genuineness of the

transaction.

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 14 Customer provides inconsistent Customer changes the information provided after more
information detailed information is requested.

Customer provides information that seems minimal,

possibly false or inconsistent.

15 Customer acting on behalf of a third Customer has vague knowledge about amount of money
party involved in the transaction.

Customer taking instructions for conducting transactions

Customer is accompanied by unrelated individuals.

16 Multiple customers working as a Multiple customers arrive together but

group pretend to ignore each other

17 Customer avoiding nearer Customer travels unexplained distances to conduct

branches transactions

18 Customer offers different Customer offers different identifications on different

different
identifications on occasions in an apparent attempt to avoid linkage of multiple
occasions transactions

19 Customer wants to avoid Customer makes inquiries or tries to convince staff to avoid
reporting reporting

20 Customer could not explain Customer could not explain source of funds

source of funds

21 Transaction is unnecessarily Transaction is unnecessarily complex for its stated

complex purpose

22 Transaction has no economic The amounts or frequency or the stated reason of the
rationale transaction does not make sense for the particular

customer

23 Transaction inconsistent with Transaction involving movement of which is inconsistent with

business the customer’s business

24 Unapproved inward remittance Foreign remittance received by NPO not approved by

in NPO FCRA

25 Complaint received from public Complaint received from public for abuse of account for

committing fraud etc.

26 Alert raised by agent Alert raised by agent for suspicion

27 Alert raised by other institution Alert raised by other institutions, subsidiaries or business

associates including cross border referral

Branches should report any of the above suspicious behaviour of the customer
/ walk-in-customer noticed by them through CBS menu “AMLALERT”.

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 Manner and Procedure of filing STRs: a. Assistant Money Laundering Reporting Officers (AMLROs) should examine /
scrutinize the Alerts assigned to them by the AML Software from money laundering and terrorist financing angle and
should arrive at conclusion whether the transaction/s behind the Alert is/are suspicious in nature.

b. AMLROs should prepare the STRs in Excel Format and send it to Principal Officer through E-mail within four days
of arrival of conclusion that transaction is suspicious one. Documents related to the STRs as received from the
branches should also be submitted to Principal Officer at Head Office for his/ her examination.

c. Principal Officer examines such STRs and records his reasons for treating transaction or a series of transactions as
suspicious and reports to FIU-IND, New Delhi within -7- days of arriving at conclusion that transaction is suspicious
one.

Time Schedule for Filing Suspicious Transaction Reports (STR)

Bank will adhere to the following time schedule and procedure for reporting STRs to FIU-IND:
a. The Suspicious Transaction Report (STR) will be furnished within -7- days of arriving at a conclusion that any
transaction, whether cash or non-cash, or a series of transactions integrally connected are of suspicious nature. The
Principal Officer will record his reasons for treating any transaction or a series of transactions as suspicious. It will be
ensured that there is no undue delay in arriving at such a conclusion once a suspicious transaction report is received
from the Regional Offices.
b. Regional Office will submit the STRs to the Principal Officer after validation in four days of arriving at a conclusion
that any transaction is suspicious one.

d) Counterfeit Currency Reports (CCRs)

All cash transactions, where forged or counterfeit Indian currency notes have been used as genuine will be reported by
the Principal Officer (PO) to FIU-IND in the specified format (Counterfeit Currency Report – CCR) by 15th of the
succeeding month. These cash transactions will also include transactions where forgery of valuable security or
documents has taken place and will be reported in the form as prescribed by bank to FIU-IND for the present.
In no case, the counterfeit notes will be returned to the tenderer or destroyed by the branches/ currency chests. An
acknowledgement receipt must be issued to the tenderer, after stamping the note. The receipt, in running serials
numbers, should be authenticated by the cashier and the tenderer. The receipt is to be issued even in cases where the
tenderer is unwilling to countersign it.

Manner and Procedure of filing CCRs: Branches will submit Detection of Counterfeit Currency at the end of the month
to their respective District Nodal Officer who, in turn, is further required to send the reports to their respective Regional
Offices/ Zonal Offices. Regional Offices/ Zonal Offices in turn, will consolidate the CCRs and forward it to FNVC Cell
at Head Office, Baroda. Bank’s Principal Officer to report the CCRs to FIU-IND by the 15th of the succeeding month.

d) Non-Profit Organisation Transaction Report (NTR)

The report of all transactions involving receipt by non-profit organizations of value more than rupees ten lakh or its
equivalent in foreign currency is being submitted every month to the Director, FIU-IND by 15th of the succeeding
month in the prescribed format.

e) Cross-border Wire Transfer Report (EFT)

Cross-border Wire Transfer Report is required to be filed with FIU-IND by 15th of succeeding month for all cross
border wire transfers of the value of more than five lakh rupees or its equivalent in foreign currency where either the
origin or destination of fund is in India. The Principal Officer at Head Office submits EFT to the Director FIU-IND,
New Delhi.

The objectives of the KYC framework are to ensure appropriate customer identification. In this connection branches to
obtain all information necessary to establish the identity /legal existence of each new customer, based preferably on
disclosures by customers themselves. Mainly, KYC norms are for (1) Identification of the customer, (2) Proper
introduction of the customer and (3) monitoring of large value transactions.

1) Customer Identification –
(a) Customer identification means undertaking client due diligence measures while commencing an account
based relationship including identifying and verifying the customer and beneficial owner on the basis of one of the
Officially Valid Documents (OVDs).
(b) Bank has a policy approved by its Board which clearly spells out the Customer Identification Procedure to be

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 carried out at different stages,i.e.,
i) While establishing an account-based relationship with the customer;
ii) Carrying out any international money transfer operations for a person who is not an account holder
of the Bank;
iii) When the branch has a doubt about the authenticity or adequacy of the customer identification data
it has obtained;
iv) When branches sell third party products as agents;
v) While selling bank’s own products, payment of dues of credit cards/sale and re-loading of prepaid/
travel cards and any other product for more than Rs.50,000/-
vi) While updating identification data of the existing customer at prescribed intervals.
vii) While carrying out transactions for a non-account based customer i.e. a walk-in customer, where the
amount involved is equal to or exceeding Rs. 50,000/- whether conducted as a single transaction or several
transactions that appear to be connected;
viii) When a branch has reason to believe that a customer (account-based or walk-in) is intentionally
structuring a transaction into a series of transactions below the threshold of Rs.50,000/-

2) The branches to undertake periodical updation of KYC data (including photograph/s) after the accounts are
opened. The periodicity of such updation should not be less than once in five years in case of low risk category
customers and not less than once in two years in case of high and medium risk categories.
It has also been advised to enter all relevant information pertaining to customer and account in Finacle and update CBS
data regularly. In order to comply with the guidelines and ensure perfection in KYC and CBS data (report can be
generated through RPTRA).

3.17. Financial Intelligence Unit (FIU-IND) was setup in Nov.2004 and reports directly to the Economic Intelligence
Council headed by Finance Minister. The responsibility of FIU includes collecting, analysing and sharing of information
acting as a central repository and coordinating with local and overseas agencies involved in anti money laundering
activities.

E-KYC:-

Acceptance of E-KYC as a process for KYC is launched by UIDAI-Unique Identification authority of India is a vaid
process for KYC verification .The information authenticated & transferred by UIDAI carrying demographic details &
photograph as a result of E-KYC Process shall be treated as sufficient proof of identity. E-KYC is also accepted as a valid
proof of identity for oprning of Basic SB a/c at BC/KIOSK level.

CKYC: - Central KYC Registry is a centralized repository of KYC records of customers in the financial sector with
uniform KYC norms and inter-usability of the KYC records across the sector with an objective to reduce the burden of
producing KYC documents and getting those verified every time when the customer creates a new relationship with a
financial entity.(HO: BR: 108:129 dated 06.08.2016)

The OVD (Officially Valid Documents) are:

Passport/ Driving License with photo, Aadhaar card issued by the UIDAI, Voter ID issued by the Election commission
of India, job card under NREGA issued by the State Governments,

Registration certificate of the firm issued by the Municipal corporation under the Shops and establishment Act,
Certificate of incorporation in case of companies, Sales Tax/ IT returns, in case of corporate a/cs.

List of ‘Officially Valid KYC Documents’ for Account Opening must be obtained from the customers to verify the identity
and address of the customers. It must be noted that only the documents mentioned in the list provided by the RBI
would be accepted by the branches while opening of any new account. Branches would not have the discretion to accept
any other document for this purpose.

The RBI also enforces the compliance of stipulated norms in respect of Forex transactions by the banks.

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.

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 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.
(HO: BR: 109:153 dated 01.09.2017 –KYC guidelines, Anti Money Laundering /CFT & Obligations
under PMLA Act 2002 -Master Circular).

3.18. FATCA- (Forign Account Tax Compliance Act):

FATCA is an acronym for Foreign Account Tax Compliace Act, a new set of US Tax Regulations brought in by the US
Government to prevent the tax evasion by US Nationals and the same enacted through the Internal Revenue Services
(IRS). FATCA promotes cross border tax compliance by implementing an international standard for the automatic
exchange of information related to US taxpayers. FATCA regulations require tax authorities obtain detailed account
information for US taxpayers on an annual basis. FATCA is intended to increase transparency for the Internal Revenue
Service (IRS) with respect to US persons that may be investing and earning income through non-US institutions. While
the primary goal is to gain information about US persons, FATCA imposes tax withholding where the applicable
documentation and reporting requirements are not met.

CRS: CRS stands for Common Reporting Standards. The primary role of CRS is to combat the problem of offshore tax
evasion and avoidance/stashing of unaccounted money abroad through mutual exchange of information among
countries. 98 countries are members of CRS.

Now FATCA CRS information can also be submitted through Baroda Connect. (BCC:BR:111:247 dated 31.05.2019)
FATCA details in CBS is managed through menu HFATCA. Following are mandatory fields in HFATCA:

1. Date of Birth
2. City of Birth
3. Country of Birth
4. PAN or Father’s Name
5. Tax Resident Country
6. TIN or Tin equivalent

In order to comply with the requirement of reporting under FATCA by our Government, Branches were advised as
under.

1. As per FATCA all accounts as on June 30th 2014 will be treated as “Pre Existing Accounts” and new accounts
opened from July 1st, 2014 should be FATCA compliant.
2. To obtain undertaking for new accounts opened after 1st July, 2014 in all types of accounts of Individuals
and Non Individuals and to keep the same with account opening form.
3. FATCA Declaration forms were revised as Annexure – I, For Individuals Including Sole proprietor Annexure
– II, For Entitles i.e. Proprietorship Firm, Partnership Firm, Company, HUF, Trust, Association etc- and
Part-D containing definitions under FATCA. (If controlling persons are more than 3, obtain separate
declaration forms from them.) (HO: BR: 107:139 dated 14.09.2015 and HO:BR:111:246 dated
03.09.2019)
3.19. Citizen’s Charter
Citizen Charter gives the customers’ right as well as their demands on service from the bank. Citizen’s 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.

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 6. At large branches “May I Help You” – counters to be located for customer’s convenience.
7. Commencement of working hours of Bank staff to be 15 minutes before commencement of Banking hours.
8. Bank’s name board to be clean and visible with suitable lighting arrangements.
9. Branch authority’s 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. Customer’s Suggestions to be invited for better customer services.

The basic objective of the Citizen’s Charter is to empower the citizen in relation to public service delivery. The basic
principles of the Citizen’s Charter movement as originally framed were:
i. Set standards of service;
ii. Be open and provide full information;
iii. Consult and involve;
iv. Encourage access and the promotion of choice;
v. Treat all fairly;
vi. Put things right when they go wrong;
vii. Use resources effectively;
viii. Innovate and improve;
ix. Work with other providers.

3.20. 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 March, 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.
7. The authority or jurisdiction are;
a) District forum for a complaint up to Rs. 100 lakhs.
b) State Commission from Rs. 100.00 Lac to Rs. 1000 lakhs.
c) National Commission above Rs. 1000 lakhs.

3.21. Banking code and Standards Boards of India (BCSBI) 2006-

➢ A comprehensive Banker’s Fair Practice Code prepared by Indian bank Association has been used (Based on Shri
S S Tarapore Committee Recommendations) 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,
6. This code is applicable to almost all services of banks.

3.22. Information Technology Act 2000:

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 The Act has given legal recognition to Electronic Data, Electronic Signature, Interchange, Electronic Commerce (E-
Commerce), more specifically to electronic records such as data recorded, data generated through computer network,
sound stored, received or sent in an electronic form or stored in micro film or computer generated micro fiche, etc.,
thereby making significant headway from the era of recognition of paper based documents alone as legal mode.
Consequential amendments to Reserve Bank of India Act, Evidence Act, Indian Penal Code and Banker’s Books
Evidence Act.
3.23. Foreign Exchange Management Act (FEMA) 1999:
Foreign Exchange Management Act (popularly known as FEMA) was enacted in 1999, it came into effect from 1st June
2000. FEMA has made considerable improvement of FERA Act 1974.

An Act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade
and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

“Foreign exchange” under section 2(n) means foreign currency and includes, -

● deposits, credits and balances payable in any foreign currency.

● Drafts, travellers cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but
payable in any foreign currency.
● Drafts, travellers cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside
India, but payable in Indian currency.
● “Foreign security” under section 2(0) means any security in the form of shares, stocks, bonds, debentures or
any other instrument denominated or expressed in foreign currency and includes securities expressed in
foreign currency, but where redemption or any form of return such as interest or dividends is payable in Indian
currency.

Capital and Current Account Transactions:

Current account transaction’ and ‘capital account transaction’ are two new expressions defined in conformity with the
convertibility of rupee on current account. All current account transactions are now permitted subject to certain
restrictions.

All capital account transactions are now permitted subject to certain restrictions. Sections 5 and 6 of FEMA provide for
the convertibility of rupee into other currencies for “current account transactions” which are now freer as compared to
the rupee and also, the convertibility on capital account transactions.

Separate definitions of “capital account transaction” and current account transaction” have been given in FEMA

Section 2(e) read with section 6(1) and 6(3) deals with “capital account transaction”. While the general exemption has
been granted in respect of capital account transactions, it has been provided that the Reserve Bank of India is
empowered to place restrictions on specified capital account transactions. A review of various Regulations shows that
the capital account transactions are now governed by greater number of restrictions than the current account
transactions.

Capital account transaction means a transaction which alters, the assets or liabilities, including contingent liabilities:
outside India of persons resident in India; or assets or liabilities in India of persons resident outside India; and includes
transactions referred to in section 6(3).

3.24. Types of Customers

A bank opens accounts for various types of customers like individuals, partnership firm, trusts, companies, etc. While
opening the accounts, the banker has to keep in mind the various legal aspects involved in opening and maintenance of
these accounts. Normally banks have to deal with the following types of customers:

1.24.1. Individuals:

1. Normally the account should be opened with cash only and not with cheque, drafts. This is to protect the bank’s
interest under section 131 of the N. I. Act.
2. Branch to follow all the guidelines for opening of the accounts under ‘KYC’ Norms as mentioned in the chapter
on deposits.
3. The account can be opened in the single name or joint name. Various types of operating instructions for the
joint accounts of the individuals are as follows:
a) Jointly,
b) Either or Survivor,

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 c) Former or survivor,
d) All of them jointly or Survivors or Survivor,

1.24.2. Minor:

According to Section 3 of Indian Majority Act, a person attains majority at the age of 18, except in case where a guardian
is appointed by a court, where the age of majority is 21. As per Indian Contract Act, a minor is not capable to enter into
the contract and any contract with the minor is void. Following points are to be kept in mind:

● A minor of 10 years can open SB account and a minor of 14 years can open Current account in his name.
However, there is a specific ceiling to maintain a maximum balance in the account/s.
● Operations in the account – by minor or by natural guardian
● Legal guardian cannot open a joint account
● No overdraft is created in the account
● Date of majority to be recorded in the account
● No joint account of two or more MINORS TO BE OPENED.

1.24.3. Illiterate Persons:

Some times illiterate person will approach to the bank / branch for opening of the account. As per Indian Contract Act
illiterate persons are competent to enter into contract so they can open and maintain bank accounts. However, following
precautions are to be taken while opening and maintaining such accounts:

● No cheque book should be issued

● No current account should be opened
● Joint account of two illiterates (close relatives can be opened) – operational instructions should be jointly
or survivor and not either or survivor
● Joint account of illiterate with literate close relative can be opened but no cheque book should be issued
(joint operation only.

1.24.4. Blind Persons:

As per Indian Contract Act, blind persons are competent to enter into contract. They can open and maintain any type
of bank accounts. However, following precautions are to be taken while opening and maintaining such accounts:

● Various risks in operations of the account should be explained to the account holder
● Joint account with close relative can be opened
● Cash receipts and payments should be made in presence of witness preferably bank customer
● Account opening form etc. should be stamped “blind person”
● For withdrawal of the amount he/ she should come personally. However, on merits, next of kin may be
allowed to operate the account, if authorized.
● Cheque book can be issued

1.24.5. Partnership Firms:

Definition of partnership – section 4 of Indian partnership act 1932 “ the relationship between persons who have agreed
to share the profits of a business carried on by all or any of them acting for all”

The account to be opened in the name of the firm. The account opening form should be signed by all the partners. A
letter of partnership duly signed by all the partners should be obtained. When a minor is admitted as partner in the
firm, a letter of restrictive operations to be obtained.

Specific operational instructions duly signed by all the partners to be obtained. Stop payment of the cheque by any
partner even in case of it is signed by another partner. Death, insolvency or lunacy of any partner – operations in the
account should be stopped.

1.24.6. Limited Company:

Joint stock Companies are governed by the Companies Act, 2013. A Company is incorporated under the Companies
Act. The Company is a separate entity from its members.

There are three types of the companies:

(1) Public Limited Company (2) Private Limited Company (3) Government Company.

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 Certified true copy of the following documents to be obtained at the time of opening of the account.
1. Certificate of incorporation
2. Memorandum of Association
3. Articles of Association
4. Board Resolution to open an account with the bank and operational instructions
5. List of the present directors.
Following care to be taken while maintaining such accounts:

1. The account opening form should be signed as per the resolution passed by the Board
2. Introduction is not necessary for opening of the account because certificate of incorporation issued by registrar
of the companies itself serve the purpose
3. Death of a director does not affect the operation in the account
4. A cheque payable to the company should never be deposited in the personal account of director
5. While granting any credit facility, purpose clause of MOA of the company must be verified
6. Provisions of section 180 (1)(d) of the Companies Act 2013 regarding borrowing in excess of Net worth to be
observed.

1.24.7. Limited Liability Partnership:

It is an alternative corporate business vehicle that provides the benefits of the limited liability , but allows its members
the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement.every LLP
shall have at least two partners.

The following persons can be partners in LLP. For example individuals, LLPs, Companies, Foreign Limited Liability
Partnerships, LLPs incorporated outside India, Foreign companies etc. A Cooperative society , society and corporation
cannot be a member of LLP.A person of unsound mind , undischarged insolvent , minor cannot be admitted as partner
of LLP a they lack capacity to contract.

LLP agreement is the main document governing the relationship between the partners inter se & partners & the
LLP.signature of each & every partner is not required in the documents executed on behalf of LLP as it is a corporate
entity.

1.24.8. Trust Accounts:

A trust is an obligation annexed to the ownership of property, arising out of confidence reposed in a person/ group of
persons and accepted by him/them for the benefit of another or of another and the owner.
The persons who, accepts the confidence are called trustees. The instrument/ document by which the trust is created is
called the ‘Trust Deed”.
While opening of the account of a trust following documents are required to be obtained:
1. Copy of the trust deed
2. Copy of the certificate issued by charity commissioner.
3. List of present trustees,
4. Resolution passed by the trust to open and maintain an account with the bank.
5. Operational instruction to operate the account.

1.24.9. Executor and Administrator:

A person to whom the execution of a will is entrusted by the deceased (testator) is called the executor of the will. The
executor is supposed to obtain a probate from the court.
For a person who dies without leaving a will (intestate), the court appoints a person to look after the property is called
the administrator.
Following precautions are to be taken while opening such accounts:
1. A copy of the probate or letter of administration should be obtained and verified with the original

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 2. Account in the name of executor /administrator is opened in the style “xyz executor/administrator of the estate
of …….deceased”
3. No credit meant for the account of the estate of the deceased is made to the accounts of
executor/administrator.
1.24.10. Joint Hindu Family:
The concept of HUF is recognized by law. As per the law whenever a Hindu dies, leaving behind a business, it passes on
to the heirs and property becomes the Joint Hindu Family property. The eldest member is called ‘Karta’ and the male
& female (except widow) members of the family are called ‘coparceners’. Following precautions to be taken while
dealing with such accounts:
1. HUF letter should be signed by the karta and all the major co-parcerners
2. The account is to be operated by the ‘Karta’ only
3. Names of the minor coparceners should be kept on record and on attaining the majority a fresh letter of HUF
duly signed by all to be obtained
4. Death, Lunacy, insolvency of the members does not effect the operations in the account

1.24.11. CLUBS, ASSOCIATIONS:

Clubs, Associations, Committees, Funds etc are not a legal entity unless they are incorporated under the Companies
Act. As they have no contractual powers. Following points must be kept in mind while dealing with such accounts:
Clubs can be registered or un-registered. While opening an account in the name of registered club, following documents
should be obtained:
1. Copy of Certificate of Registration,
2. Copy of bye law, rules and regulations.
3. Copy of resolution of the managing committee/governing body etc..
4. A list of the members of the managing committee.
5. No advance including TOD should be permitted.

1.24.12. CO-OPERATIVE SOCIETIES:

The Society is registered under the Society Registration Act 1960. Documents to be obtained for opening of the account:
1. Copy of Certificate of Registration,
2. Copy of bye law, rules and regulations.
3. Copy of resolution of the managing committee/governing body etc.
4. A list of the members of the managing committee.
5. No advance including TOD should be permitted.

1.24.13. LOCAL AUTHORITIES:

1. Examples are Municipal Corporations, Zilla Boards etc.
2. Bank must obtain copy of such statute and find out the provisions as to who would authorize opening of the
account.
3. Generally these authorities have managing committees, with president, vice president and treasurer and the
treasurer is given powers to open and operate the account.
4. No Overdraft should be given in the account

1.24.14. GOVERNMENT DEPARTMENTS:

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 1. Copy of the govt. notification should be obtained authorizing the concerned person to open and operate the
account
2. Certified copy of rules and regulations framed by the department for opening and operations of such accounts
should be obtained

3.25. Method of Charging of Securities

Charging of securities means making it available as a cover for an advance. This means the bank's right over the security
is ensured by legal procedures. Selection of security should be appropriate depending upon the type of credit facility,
type of borrower and purpose.
Once the appropriate security is selected bank's charge on the security should be ensured by observing necessary
formalities, so that in case of default by a borrower, the security will be available to the bank to recover its dues.
The important six methods of charging of securities are given below with brief explanation.
Pledge:
Section 172 of the Indian Contract Act, 1872 defines 'Pledge' as 'the bailment of goods as security for payment
of debt or performance of a promise is called 'pledge'. The bailor is, in this case, called the 'pledger' and the
bailee is called the 'pledgee'.
Above definition reveals that: Pledge means bailment of goods, Its purpose is to secure payment of a debt
or To secure performance of a promise. Any movable property can be pledged. Delivery (actual or constructive)
is necessary to complete a pledge.
In case of Bank's advance against the pledge of goods, customer is called the 'pledger' and the bank is called
the 'pledgee'. Where pledged securities or goods are indivisible, the pledgee can sell the securities or goods
only of that much quantity by which the loan amount will be satisfied.
Hypothecation:
The term 'hypothecation' is described as "Charge against property for an amount of debt where neither
ownership nor possession is passed on to the creditor." Hypothecation is defined in none of the acts.
In case of pledge, the borrower's goods are placed in the bank's possession under its own locks whereas in the
case of hypothecation, goods remain in the possession of the borrower.
If the borrower fails to liquidate the advance granted to him against hypothecated goods, under agreement, he
has to give the possession of the goods to hypothecatee (bank). At this stage, hypothecation converts into
pledge and the banker as hypothecatee enjoys the powers and rights of a pledgee.
Mortgage:
It is the transfer of an interest in specific immovable property for the purpose of securing the payment of
money advanced or to be advanced by way of loan, an existing or future debt or the performance of the
agreement which may lead to a pecuniary liability. The borrower is called the 'mortgagor' and the lender the
'mortgagee'.

Forms of mortgage: As per Sec. 58 of the Transfer of Property Act, there are six types of mortgages:
(1) Simple mortgage
(2) Mortgage by conditional sale
(3) Usufructuary mortgage
(4) English mortgage
(5)Anomalous mortgage
(6) Mortgage by deposit of title deeds/ equitable mortgage

Generally only two types of the mortgage are preferable by the banks
(1) Simple Mortgage and (2) Equitable mortgage
Simple Mortgage;

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 according to section 58 (b) of the Transfer of Property Act, a simple mortgage is a transaction whereby without
delivering the possession of the mortgaged property, the mortgagor binds himself personally to pay the
mortgage money and agrees, expressly or impliedly, that in case of default the mortgagee shall have a right to
cause the mortgage property to be sold by a decree of the court.
Equitable mortgage or Mortgage by deposit of title deeds:
According to section 58(f) of Transfer of Property Act, where a person delivers the documents of title to the
immovable property to the creditors with an intention to create a security thereon, the transaction is called
equitable mortgage.
Assignment
Assignment means transfer of a right of an actionable claim, existing or future. 'Actionable claim' means a
claim to any debt, other than a debt secured by mortgage of immovable property, by hypothecation or pledge
of movable property, or to any beneficial interest in movable property in possession, either actual or
constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such
debt or beneficial interest be existent, accruing, conditional or contingent.
Section 130 describes the manner in which actionable claims can be transferred, as follows:
The transfer of an actionable claim, whether with or without consideration, shall be effected only by the
execution of an instrument in writing signed by the transfer or his duly authorised agent, shall be complete
and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transfer,
whether by way of damages or otherwise shall vest in the transferee, whether such notice of the transfer is
hereinafter provided be given or not.
Lien:
Lien is the right of a creditor to retain in his possession the goods and securities owned by the debtor until the
debt has been discharged, but has no right to sell the goods and securities so retained. Lien is of two types,
particular and general.
Banker's right of lien:
Banker has a right of general lien against his borrowers. Section 171 of the Indian Contract Act, 1872 confers
the right of general lien on the bankers as "Banker may, in the absence of a contract to the contrary, retain as
a security for a general balance of account, any goods bailed to them."
There are certain unique features about bank's right of general lien, these are:
Right of sale is also available under bank's right of lien. Therefore, it is said that banker's lien tantamount to
an implied pledge.

The banker's right of lien is not barred by law of limitation. The Limitation Act only bars the remedy and does
not discharge debt. As such, banker has a right of lien against time barred debt also. When banker exercises
this right, property of goods remains with owner even though the same is in possession with the bank.
Right of set-off:
Banker has right of set-off between two or more accounts maintained by a customer, if one of them is in debit
and their relationship in both the accounts is of debtor and creditor.
The right of set-off is a statutory right which enables bank to combine several accounts of a customer in his
own right unless there is any agreement expressed or implied to the contrary. Before exercising the right of
set-off a reasonable notice should be given to a customer to avoid dishonoring of cheques drawn by the
customer being unaware of the situation.
Though the right of set-off is available to a banker as his legal right banks take letter of set-off from customer. It helps
the bank to overcome future legal complications and it dispenses with the need for notice.

BANKER CUSTOMER RELATIONSHIP

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 The banker is rendering various types of services to the customers and non-customers also. During the course of such
banking transactions various relationships arise. Various relationships are as under:

Transactions Relationship
Bank Customer
Deposit Account with bank Debtor Creditor
Loan from the Bank Creditor Debtor
Locker Lessor Lessee
Safe custody of Articles Bailee Bailor
Collection of Bills/ Cheques Agent Principal
Purchase of DD/ MT/ TT Debtor Creditor
Payment of Draft Trustee Beneficiery
Pledge of goods Pledgee Pledger
Mortgage Mortgagee Mortgager
Standing instruction Agent Principal
Article left by the bank Trustee Beneficiery
Hypothecation of goods Hypothecatee Hypothecator
Assignment of securities Assignee Assignor
Indemnity Indemnifier Indemnified

Clayton’s Rule:
This rule is applicable mainly in case of overdraft & cash-credit account of other than sole proprietor firm and as per
this rule the credit entry will set-off the debit entry, in chronological order

Termination of Banker-Customer relationship:

The relationship seizes once
 If customer closes the accounts
 If customer dies,
 If customer becomes insane or
 If customer becomes insolvent.
 Banker may close the a/c by serving notice to A/c holder

Classification of Legal Rights of Banker :

1. Right of General Lien.

2. Right of Set-Off.
3. Right of Appropriation.
4. Right to Charge Interest, Commission, Incidental Charges etc.

Right of General Lien :

'Lien' is the right of a creditor to retain in his possession the goods and securities owned by the debtor until the debt
has been repaid. This right does not confer the right of sale of such goods and securities.

(a) Particular Lien:

A 'particular lien' gives the right to retain possession only of those goods in respect of which the dues have arisen, e.g.
a tailor retaining the possession of a suit he has stitched for a customer until the stitching charges are paid.
(b) General Lien
A 'general lien' gives the right to retain possession of any goods in the legal possession of the creditor until the whole of
the debt due from the debtor is paid.

Banker has a right of general lien against his borrower. Sec.171 of the Indian Contract Act, 1872 confers the right of
general lien on the bankers as under –

 Banker can retain as a security for a general balance of account, any goods bailed to them.
 It is available unless there is any explicit contract to the contrary.
 The 'Right of Sale' of goods under lien is also available to the banker. It is, therefore, said that banker's lien is
tantamount to an 'Implied Pledge'.
 Banker's right of lien is not barred by the Law of Limitation.

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  If the bank has obtained a particular security for a particular debt only, then the banker's right gets converted
into a particular lien.

Where right of lien can be exercised:

1. On all the goods and securities entrusted legally in the capacity as banker.
2. On goods and securities standing in the name of the borrower.
3. On the securities remaining in the possession of the banker even after the loan taken against them has been paid,
for the dues of the same borrower.
4. If the securities offered by the customer for a personal loan are given to the banker in the capacity of a 'trustee',
right of lien can be exercised.
5. Cheques deposited by a customer for collection can be subject to banker's lien.
6. Only goods and securities are subject to banker's lien. Balance in account etc. are subject to right of set-off and not
lien.

Where right of lien cannot be exercised:

1. Specific contract at variance with this right.

2. Goods and securities entrusted to the banker as a 'trustee' or as an agent of the customer.
3. Where the goods or securities are owned by two or more persons, right of lien cannot be exercised for the loan
granted to any one of them.
4. Goods or securities given for safe custody.
5. Goods or securities kept in a safe deposit locker. The bank can exercise a particular lien for recovery of unpaid
locker rentals.
6. When bills or other documents are delivered by the customer with instructions to utilise proceeds for a specific
purpose.
7. Banker has no right or lien on documents or valuables left in his possession by the customer by mistake or
negligence.
8. No 'Right of Lien' can be exercised on the securities lodged to secure a loan, which is yet to be granted.
9. Bank has no lien on deposits of partnership firm for the balance due from one of its partners.
10. To exercise the right of lien the possession of the goods and security or the property must be obtained lawfully in
the capacity of the banker and not otherwise.

Right of Set-Off:

1. It is a statutory right, which enables it to combine several accounts of a customer in his own right unless there is
any agreement expressed or implied to the contrary.
2. Even though the Right of Set-Off is available to a banker as a legal right, banks usually take a letter of set-off from
the customer to overcome future legal complications and also it dispenses with the need of notice.
3. Even where such letters are obtained, a reasonable notice should be given to a customer before exercising the right
of set-off to avoid complications arising out of exercising the right without notice e.g. Bank has exercised a right of
set off against a balance of ` .10,000/- lying in savings bank account of a customer without giving any notice.
Meanwhile, the customer has issued a cheque favouring Mr.X for ` .5,000/- which is returned unpaid due to set-
off. The customer may sue the bank for 'wrongful dishonour'.
4. The customer has no corresponding right of set-off to combine his several accounts for the purpose of withdrawal
e.g. customer has two accounts with a branch. He has drawn a cheque for ` .5,000/- in the first account. There is
insufficient balance in the account to pay the cheque but there is sufficient balance to pay the same in the second
account. Customer cannot assume that bank will pay the cheque adjusting the balance in the second account.

Where right of set-off is applicable :

1. Against customer's two or more accounts provided both/all the accounts are in the same name and same right of
the customer.

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 2. Two or more accounts though with different title but belonging to one person, right of set-off can be applied. For
example customer's personal savings bank account and customer's loan account of a proprietorship firm in which
the customer is the proprietor.
3. It can be applied to recover the firm's debts from partner's individual account, provided the partners are jointly
and severally liable. In case of joint accounts also this is applicable.
4. It can be exercised even if two accounts are in different branches.
5. It is applicable only in debts which are due and becoming due. It is not applicable on future debts.
6. It is available in case of time barred debts also.
7. In case of insolvency of a person or liquidation of a company all future debts/contingent liabilities become due
immediately. In such cases right of set-off is available.
8. Where a customer has a loan account and a current account with credit balance and banker holds security for the
loan, on the insolvency of the customer, banker can combine these accounts and appropriate the security for the
consolidated balances of these accounts.
9. Whenever a branch receives a garnishee order or income tax attachment order, the bank will exercise its right of
set-off on amount due and then operate the order.

Where right of set-off is not applicable:

1. It is not applicable if by specific agreement they are to be kept separated.
2. Bankers cannot set off the credit balance of customer's personal account for a joint loan account of
the customer with another person unless both the joint accountholders are jointly and severally
liable.
3. It is not available for future or contingent debts.
4. It is also not available if a customer has two accounts, one in personal name and another as a trustee
/ administrator / executor/agent/guardian of a minor.

Right of appropriation:

When there are two or more accounts wherein amounts are due from the customer to the bank, and the customer
deposits some money without indicating the account to which it should be credited a question arises as to the
appropriation of the said amount.Secs.59, 60 and 61 of the Indian Contract Act, 1872 deal with appropriation of
payments:

Sec.59: Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express
intimation, or under circumstances, implying that the payment is to be applied to the discharge of some particular debt,
the payment, if accepted, must be applied accordingly.

Sec.60: Where the debtor has omitted to intimate, and there are no other circumstances indicating to which debt, the
payment is to be applied, the creditor may apply it at his discretion to any lawful debt, actually due and payable to him
from the debtor, whether its recovery is or is not barred by the law of limitation of suits.

Sec.61: Where neither party makes any appropriation, the payment shall be applied in discharge of debts, in order of
time, whether they are or not barred by the limitation of suits. If the debts are of equal standing, the payment shall be
applied in discharge of each proportionately.

Clayton’s Rule:
In case of running accounts like current account or cash credit accounts, normally there is no specific appropriation of
funds to exact debit. In such cases it is the first item on the debit side that is discharged or reduced by the first item on
the credit side. This principle was originally formulated in Devaynes v. Noble known as Clayton’s Case. The same clause
is incorporated in Section 61 of the Indian Contract Act, 1872.
This rule is applicable in case of
Death or insolvency or insanity of a borrower or joint borrower
A death, insolvency, insanity retirement of partner in a firm or death

Banker's right to charge interest, commission, incidental charges etc.:

1. Banker has the right to charge interest on amount advanced by the bank, charge commission, exchange, incidental
charges etc. for services rendered and sold to a customer.

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 2. It is an implied term of any loan agreement that the bank may debit customer's account with the amount of interest.
Similarly it is an established practice that banks cannot refuse payment of a cheque on the ground that if payment
is made, no amount will be left for charging interest, commission or incidental expenses.

Garnishee Order and Attachment Order:

Garnishee means a judgement debtor’s debtor (i.e. banker) and the order is issued for recover private dues by a
competent court under section 60 of The Code Of Civil Procedure (CPC), 1908 at the request of a creditor to attach his
debtor’s fund in the hand of garnishee (Order XXI and Rule 46).

Attachment order is issued by the Government authority say Income Tax, Sales Tax, Customs department for recovery
of statutory dues from a person under the respective law which governs the concern department.

Particulars Garnishee Order Attachment Order

Issuing Authority Competent Court of Law Government Department i.e. Income Tax,
Sales Tax, Customs Department etc.

Under which Act Section 60 of Civil Procedure Code, 1908. Respective law governing the concerned
department.

Depositor called Judgement debtor Assessee

Bank called Judgement debtor’s debtor Assessee’s debtor

Stages Involved First Order Nisi is issued and after that order Always issued in absolute form.
absolute issued.

Issued to recover Recover of Private Due Recover of Statutory due

Applicable to (Amount) On clear balance available with the garnishes at Amount in the account at the time of
time of receipt of order. receiving order and future credit also
attachable.

Joint accounts, order Not Applicable Applicable pro-rata basis.

single name

Order in name of partner, Not applicable for accounts in name of firm, trust, Not applicable for accounts in name of
trustee, executor, company i.e. accounts in fiduciary capacity etc. firm, trust, company i.e. accounts in
liquidator, director of a fiduciary capacity etc.
company, etc

Order in name of Individual Account of partner/ director is Individual Account of partner/ director is
partnership/ company. attachable. attachable.

Deceased Applicable. Applicable

Preference of Order, If Attachment order will have the preference over Attachment order will have the preference
received simultaneously or Garnishee Order. However, banker’s right of set- over Garnishee Order. However, banker’s
is pending for payment off is superior. right of set-off is superior.

DUTIES OF A BANKER

The banker is bound by duties arising out of banker-Customer relationship.

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 These are-

 Duty to honour cheques drawn by customers on their accounts.

 Duty to maintain secrecy/confidentiality of customers' accounts.
 Duty to render proper accounts for services rendered.

(A) Duty to honour cheques:

As 'banking' means accepting of deposits withdrawable by cheque, draft, order or otherwise, the banker is duty bound
to honour cheques issued by the customers on their accounts.Further Section 31 of Negotiable Instruments Act, 1881
lays down that

“The drawee of a cheque (banker) having sufficient funds of the drawer in hand, properly applicable
to the payment of such cheque must pay the cheque when duly required to do so and in default of such
payment must compensate the drawer for any loss or damage caused by such default."

The banker will honour the cheques under following circumstances :

 The cheque must be properly drawn.

 Cheque should be properly dated, amount in words and figures expressed properly, signature of accountholder
tallies with the specimen on record, cheque is not stale, not mutilated etc.
 Cheques/drafts issued by clients containing fractions of a rupee are valid and it should not be rejected or
dishonoured.
 The cheque must be presented for payment on a working day within business hours of the branch.
 Endorsements on the cheque are regular and proper.
 There is sufficient balance in the account and the balance is properly applicable for payment of the cheque.
 The relation between the banker and the customer has not been determined/terminated due to any of the
following reasons
1. death of the drawer and the notice of drawer's death has been received.
2. drawer of the cheque has become insolvent and/or was a lunatic at the time of drawing the cheque.
3. The payment of the cheque is not stopped by the drawer.
4. A garnishee order has not been served attaching the balance in the account or an income-tax
attachment order has not been received by the banker.

Where the bank will refuse to honour the cheques:

1. The balance in the account though sufficient to pay the cheque, is not clear i.e. it consists of credits which are
not cleared/realised.
2. There is balance lying in another account of the customer either at the same branch or at any other branch but
balance in the account in which the cheque is drawn is insufficient to pay the same.
3. Cheque issued is out of a cheque book issued to some other account by some other branch.
4. There is sufficient balance in the account but a portion of it is earmarked for some specific purpose and the
remaining balance is not sufficient to pay the cheque.
5.

(B) Duty to maintain secrecy:

1. Banker has a duty to maintain secrecy of customers' accounts. This duty of secrecy is not only a moral one but
also a legal one arising out of the implied terms of the contract with the customer at the time of opening an
account. The underlying principle behind this duty is that if the balances in accounts and financial position of
the customer and details of dealings in customer's account are disclosed to any unauthorized person it may
harm the reputation of the customer financially or otherwise and the bank may be held liable.This duty of
secrecy extends to all the transactions that go through the account and securities offered therein.

2. Duty of secrecy continues even after closing of an account or death of the customer.
3. This obligation also extends to information obtained from various sources regarding customers'
account/financial position.

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 4. Section 13 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 specifically requires
the banks to observe, except as otherwise required by law, the practice and usages customary amongst bankers
and in particular not to divulge any information relating to the affairs of the constituents except in
circumstances in which they are, in accordance with law and practice and usages customary among bankers,
necessary and appropriate for them to divulge such information.

5. The branches have to ensure that the information collected from the customers is kept invariably confidential.
The customers may be kept informed about the purposes for which the collected information will be used after
explaining the objectives to them and taking their express approval for the specific uses to which such
information could be put.

Disclosure of information of customer's account:

There are certain circumstances under which banker can disclose information regarding customer's account to a
person(s) other than the customer. They are –
 Disclosure under compulsion of law.
 Disclosure under express or implied consent of the customer.
 Disclosure to protect national interest.
 Disclosure to protect bank's own interest.
 Disclosure under banking practices.

Disclosure under compulsion of law:

(i) Banks are sometimes required to disclose information about customer's account by various authorities by virtue of
powers vested in them under provisions of various acts, like:

 Banker's Book Evidence Act, 1891 - Sec.4

 Reserve Bank of India Act, 1934 - Sec.45(B)
 Banking Regulation Act, 1949 - Sec.26.
 Gift Tax Act, 1958 - Sec.36
 Foreign Exchange Management Act ,1999, Sec-12
 Industrial Development Bank of India Act, 1964 -Sec.29
 Order XI R- 14 & Order XVI R- 6 of Code of Civil Procedure, 1908 (The Court).
 Section 131, 132 & 133 of Income Tax Act, 1961 (The Assessing Officer, Deputy Commissioner (Appeals), Joint
Commissioner, Commissioner (Appeals) and the Dispute Resolution Panel, OR any Additional Director or
Additional Commissioner or Joint Director or Joint Commissioner or Assistant Director or Deputy Director
or Assistant Commissioner or Deputy Commissioner or Income Tax Officer as authorized by the Chief
Commissioner or Commissioner or the Director General or Director).
 Section 11(3) of Securities and Exchange Board of India Act, 1992 (The Securities & Exchange Board of India).
 Section 37 of Foreign Exchange Management Act, 1999 (The Director of Enforcement and other officers of
Enforcement, not below the rank of an Assistant Director).
 Section 108 of Custom Act, 1962 ( Any Gazetted Officer of Customs).
 Section 14 of the Central Excise Act, 1944 ( Any Central Excise Officer duly empowered by the Central
Government).
 Section 58 of Information and Technology Act, 2000 (The Cyber Appellate Tribunal).
 Section 8 of the Central Vigilance Commission Act, 2003 ( The Central Vigilance Commission)
 Section 91 & 94 of Code of Criminal Procedure, 1973 (any Court or any Officer in charge of a police station)
(Ref Bcc br 102/153 dated 04.06.2010)

The above list is not exhaustive and there are several other laws under which the Authorities would be having similar
powers which are generally vested in a Court for summoning of witnesses and production of documents

(ii) In all the cases, as above, the bank may furnish information provided the request is received in writing quoting the
relevant section and the act under which the information is sought the request is made by a person who is authorized
under the said act to ask for the information and the authority of the same is established only information asked for is
furnished. No additional or voluntary disclosure should be made.

(iii) The authorities when they seek the information should be specific in their requirements and no general information
should be entertained. For example, Income Tax Officers cannot ask for information about all NRE accountholders, all

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 savings bank accountholders with balance more than ` 1,00,000/- etc. In such cases, their request can be politely turned
down asking them to be specific about the account.

(iv) If the account number or name of the accountholder differs from the information on record, the branch should not
furnish the information unless all details are correct.

(v) The facts of the disclosure are advised to the customer immediately.

Disclosure under express or implied consent of the customer:

Banks can furnish information about customer's account if the customer himself directs the bank in writing to furnish
such information to a designated person.While giving such information, bank must take care to disclose only the
information required and not beyond that.

Under some circumstances, the customers may impliedly authorise the branch to furnish information to others by his
actions or deeds. For example, when a customer avails a loan from the bank and furnishes a personal guarantee of a
third party, he impliedly authorises the bank to give information to the guarantor or when a customer furnishes the
name of a banker to the third party for the purpose of trade reference it is to be construed as an implied consent.

Disclosure to protect national interest:

Sometimes branches may come across certain instances when they feel obligatory to furnish some information about
some customer's account to law enforcement or other security agencies to protect national interest. In such cases
branches must make absolutely sure that such disclosure is warranted and is in national interest and in bank's interest.
In all such cases discreet reference should be made to next controlling authority and its approval obtained before
furnishing the information.

Disclosure to protect Bank's own interest:

Sometimes banks may be required to furnish some information about the customer or his account to a third party to
protect bank's interest. For example, filing an FIR in a fraud case, filing a suit in a court of law for recovery of money
lent to a borrower, invoking a guarantee and calling for the guarantor to settle the borrower's debt. Again in such cases
only relevant information should be furnished.

Disclosure under banking practices:

(i)It is customary among bankers to obtain information about parties from other bankers where they are maintaining
accounts in order to ascertain their financial position and credit worthiness. It is an established practice among bankers
and implied consent of the customer is presumed to exist.

(ii)Opinion must be based on the dealing with the customer and information available as per the records of the branch.
It should not be based on market reports or rumours.Disclosure should be by a general statement and not by actual
figures.Disclosure must be impartial and without prejudice.

(iii) The opinion so given should be given in strictest confidence and without responsibility.

Disclosure under RBI/Ministry of Finance Direction :

To display the list of unclaimed deposit i.e. inoperative/ dormant accounts more than ten years on Bank’s website. In
case of individuals only Name and address of the person and in case of Non-Individual accounts name of person who
is authorized to operate the account will be displayed with “Find”option

(C) Duty to render proper accounts for services rendered:

1. Bank has a duty to render proper accounts of the customer's transactions with it. While it is customary for the bank
to submit a statement of accounts maintained by the customer, they also advise the customer of the credits and
debits initiated by them to enable the customer to know the balance in his account.

2. Branches should avoid use of inscrutable codes in pass book / statement of account and ensure that brief,
intelligible particulars are invariably entered in passbook / statement of account. Operators in all branches be

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 advised to invariably mention brief, intelligible particulars while doing any transaction entry. Branch should also
ensure that they adhere to the monthly periodicity prescribed by us while sending statement of accounts.

3. The account statement of our CA / CC / OD (except SOD) clients are e-mailed by our Data Centre every month to
the account holders whose email –ids are registered.

Banker's liability in case of wrongful disclosure:

1. If any bank fails to fulfil its duty to maintain secrecy and discloses information relating to a customer's account or
conduct of the account to any person(s) unauthorisedly, it can be liable not only to the customer but also to the
third party.

2. To the customer, banker may be liable to pay damages for loss of money and reputation, in case of unwarranted
disclosure or furnishing unjustified opinion.
3. Banker's wrongful disclosure may also harm the interest of the third party if—
(a) Knowingly wrong information is given
(b) Over estimated favourable opinion has been given
(c) There has been a misrepresentation of fact

4. While computing damages, courts may consider the actual monetary loss and loss of credit/reputation suffered.
This may vary with the constitution of the customer or the third party.

CRILC: The RBI has set up a Central Repository of Information on Large Credits (CRILC) to collect, store,
and disseminate credit data to lenders. Hence, banks will have to furnish credit information to CRILC on all
their borrowers having aggregate fund-based and non-fund based exposure of Rs.5 crores and above.
Similarly, banks will be required to report, among others, the SMA status of the borrower to the CRILC.

Page 89 of 502
 RETAIL BANKING
&
WEALTH MANAGEMENT SERVICES

Page 90 of 502
 Retail Liability Product - Current Accounts

Name of the Product Baroda Advantage Current Account Baroda Premium Current Account Baroda Premium Current
(BPCA) Account Privilege (BPCAP)

Eligibility Individual (14 Yrs. & Above)/ Non- Individual Individual/ Non- Individual Except NRIs/ Individual/ Non- Individual
OCBs, Minors, Banks and Financial Except NRIs/ OCBs, Minors,
Institutions Banks and Financial Institutions
Area of Operation All Branches
Auto/ Reverse Sweep Not Applicable First Sweep out for Rs. 25,000 will happen only when account balance reaches
Rs. 5,25,000. Upon receipt of customer’s request, the threshold amount of Rs
5,00,000/- can be increased preferably in multiples of Rs 1,000
(e.g. Rs 5.01, Rs 5.02 lacs and so on)

If customer desires, the Sweep out amount of Rs 25,000/- can be increased in

multiples of Rs 25,000 (e.g. Rs 50,000, Rs 75,000 and so on).

Sweep will be carried out every Monday (at the end of the day)
Minimum Quarterly Average Balance Metro- Rs. 10000/- Rs. 75000/- Rs. 250000/-
Urban – Rs.5000/-
SU/R- Rs. 2000/-
Min. Balance Charges Metro : Rs.800+GST per quarter Non-maintenance of QAB-600/- + GST Non-maintenance of QAB-
Urban : Rs.600+GST per quarter 1000/- + GST
Rural/SemiUrban: Rs.400 + GST per quarter
Maximum Balance No Upper Limit
No. of Transactions No Limit No Limit No Limit
Internet Banking/ M-Connect+ Free

Folio Charges Rs. 125/-+GST per 25 entries. Nil Nil

Free folio allowed based on Average Credit
balance as follows:
Av.Cr.Bal Folios(Free)
Up to Rs.25000 -Nil
Above 25000 to 1 lakh - 2
Above 1 lakh to 2 lakh - 5
Above 2 lakh to 5 lakh-10
Above 5 lakh - Free
Cheque Book First cheque book of 50 leaves will be issued Free Unlimited Free Unlimited
free. Additional cheque @ Rs. 5 + GST per leaf

Page 91 of 502
 Bank Statement Once Free (Monthly) Free Two Times in A Month

Balance Certificate Free Once in a Year Free

Signature Verification Normal Charges Free
Concession on Remittance (DD/ BC) & On No concession 50% concession 100% concession
OCC
POS, Bharat QR Code & Bhim QR Code

Locker No concession 20% Rebate/ Discount on locker Rent to proprietor/ partners/ directors if
locker rent is paid in advance for three years and above in lump sum

Complementary Credit Card (BOBCARD) No First year free of charge, limited to two partners, two directors, up to two
persons of other bodies authorized to operate the account

Personal Accident Insurance -- Free Personal Accident Insurance with Credit Card

Demat Annual Maintenance charges No concession Discount of 25% on annual custody charges to partners, directors, proprietors
and up to two authorized members of other bodies.

Processing Charges for Car Loan No concession 100% waiver

Immediate Credit of Outstation Cheques Up to 20000/- Rs. 50000 Rs. 150000

Cash Deposit Cash Deposit Up to Rs. 50000/- Or Up to 10 packets i.e. 1000 pieces of notes of any denominations taken together, whichever is
Base & Local Non-Base Branch higher - free of charge per day.

Above that charges @ Rs.10/-per packet (Min Rs.10/- & Max. Rs.1000/-) + Taxes as applicable will be charged.
Cash Deposit Cash deposit of Rs 25000/ -per day per account free of charges.
(Outstation Branch)
Thereafter in excess of Rs. 25000/-, service charges will be levied at Rs. 2.50 plus Taxes per thousand or part thereof.

Cash withdrawal
(Base,Local non-base & Outstation
Branch) Beyond First five transactions per month (excluding withdrawals from ATM) charges of ` 150/- + GST per transaction.

Page 92 of 502
 Scheme Code CA101 CA108 CA107

Baroda Current Account Exchange Baroda Local Main Office /Local Baroda Supply Chain
Name of the Product House Branch office Current Account Finance Current Account

Eligibility This is an office account (other liabilities).The This is an office account. The main branch All entity who avails the supply
overseas exchange houses and overseas banks participating in clearing where the City chain finance from our bank.
are allowed to open Vostro A/c. GL Subhead Back Office is not available. In this case the
code is 31105/31106, This account is not for main branch will maintain current
customer. accounts of each branch separately called
LBO. The local branches also open a
Shadow account for the clearing
transaction called Local Main office current
account.
Area of Operation It is Anchor Intermediary
Account.
Only credit of disbursement
proceeds from dealer Finance
and transfer the same amount for
crediting the virtual account of
the Anchor.
Minimum Quarterly Average Balance No minimum balance limit
Maximum Balance No upper limit
Internet Banking/ M-Connect+ Not Applicable.
BCMS/Bank on net/Bank Digi-
Next/Mobile banking not
allowed.
Folio Charges
Cheque Book Cheque book facility not
available. Manual Debit allowed
only through branches.
Immediate Credit of Outstation Cheques Not Applicable.

Cash Deposit Not allowed.

Base & Local Non-Base Branch
Cash Deposit NA

Outstation Branch

Page 93 of 502
 Cash withdrawal NA
Base & Local non-base Branch
Cash withdrawal NA
Outstation & Non- Base Branch

Circular No. Master Circular dated 28/03/2019 of Current Master Circular dated 28/03/2019 of Master Circular dated
Scheme parameters and services is subject Account Current Account 28/03/2019 of Current Account
to change, please refer latest circular of the
schemes and BOI.
Scheme Code CA-113 CA-114 CA-115

PARAMETERS Baroda Current Account Exempt Inter Baroda Small Business Current Current Account for
sol : CA117 Account(BSBCA)- Scheme Code –CA LIC/other Insurance
124,
This product is originally designed for allowing
large corporate customers to receive collection This product is designed for small
in the accounts by way of cash at any sol of Bank business having turnover of Rs.20 Lacs
without levying inter sol charges. per annum.

Eligibility Any Merchants having wide network of Small business (individual, proprietorship All life & general insurance
satellite branches & partnership concerns only. companies

KYC norms As per Bank’s extant guidelines As per Bank’s extant guidelines(Annexure As per Bank’s extant guidelines
enclose)
Area of operation All Metro and Urban Branches only. All

Minimum Quarterly average Rs.10000/- Rs.2500/-. Nil

balance (QAB)
Charges for Non maintenance of Rs.600 plus GST Rs.300/- per Quarter Nil
QAB

LF Charges Rs. 125/-+GST per 25 entries. --- Rs. 125/-+GST per 25 entries.
Free folio allowed based on Average Credit Free folio allowed based on
balance as follows: Average Credit balance as
follows:
Av.Cr.Bal Folios(Free)
Up to Rs.25000 -Nil Av.Cr.Bal Folios(Free)
Above 25000 to 1 lakh - 2 Up to Rs.25000 -Nil
Above 1 lakh to 2 lakh - 5 Above 25000 to 1 lakh - 2
Above 2 lakh to 5 lakh-10 Above 1 lakh to 2 lakh - 5
Above 5 lakh - Free Above 2 lakh to 5 lakh-10

Page 94 of 502
 Above 5 lakh - Free
Cheque Book First cheque book of 50 leaves free, thereafter First cheque book of 50 leaves free, First cheque book of 50 leaves
charges per leaf will be levied as per latest thereafter charges per leaf will be levied as will be issued free. Additional
service charge guidelines. per latest service charge guidelines. cheque @ Rs. 5 + GST per leaf

Sweep facility Not available. Not available. NA

Internet Banking/ Mobile Banking Free Internet Banking/ Mobile Banking Free

Discount on Demat Services. -- Waiver of 1st year AMC charges of 250/- ----
for individuals and Rs 550/- for Non
individuals. ( individuals, partners,
proprietors)

POS, Bharat QR Code &Bhim QR Rs.10 + GST charged quarterly Available on payment of monthly nominal -----
Code charges.

Debit Card --- Ru-Pay card (for Individuals & proprietors
only) – free for first year and chargeable
subsequently as per standard rates.
Transaction Charge --- First 5 non ADC transactions are free per
month. Thereafter charges @Rs.10/- will
be levied for all non ADC transactions.
All ADC transactions are free irrespective
of numbers
If annual turnover in the account crosses
Rs.20 Lakh system will send an SMS to
customer advising him for levy of higher
transaction charges @ Rs.15/- per
transaction due to breach of permissible
turnover of Rs.20 Lakh. Customer will be
advised to approach his branch to convert
his account to Baroda Advantage Current
Account
Charges will be levied only for all
transactions routed through branches
(non ADC transactions).
----
Cash Deposit
(Base & Local Non-Base
Branch )
Cash Deposit Up to Rs. 50000/-
Or Up to 10 packets i.e. 1000
pieces of notes of any
denominations taken together,
whichever is higher - free of
charge per day.
Above that charges @ Rs.10/-
per packet (Min Rs.10/- & Max.
Rs.1000/-) + Taxes as applicable
will be charged.
(Outstation)
Cash deposit of Rs 25000/ -per
day per account free of charges.
Thereafter in excess of Rs.
25000/-, service charges will be
levied at Rs. 2.50 plus Taxes per
thousand or part thereof.

Page 95 of 502
 Cash withdrawal
(Base,Local non-base &
Outstation Branch)
Beyond First five transactions per
month (excluding withdrawals
from ATM) charges of ` 150/- +
GST per transaction.

Parameter Baroda General Tax Remittance

Account: CA 118

Purpose A current account under special scheme code

“CA118 GEN TAX REMI CORP CA “shall be
opened at each CBS branch for payment of
taxes through E mode. The account may be
titled as “General Tax Remittance Account-
Name of the Branch”.
OTHER CONDITIONS 1. Branch will have to obtain the Baroda
Connect Facility for the account with
transaction password restricted only
for tax payment.
2. For that purpose Customer ID of at
least 04 officers should be created.
3. Where number of officer is less, at
least two officer’s customer ID be
created.
4. All users to be added in related party
after opening current account as
mentioned above.
5. An application in the prescribed
format for Baroda Connect should be
made to BCOT at Mumbai.
Procedure The TDS amount deducted should be
transferred to this special current account.
After such transfer, the authorized officer
should
1. Log In to our home page
i.ewww.bankofbaroda.com.
2. Select the Option “Online Taxes” and
then option Income tax.
3. Select the Challan number 281.
4. Fill in all the details and proceed for
making payments.

Page 96 of 502
 5. Select Corporate User, key in
Corporate ID with user ID and
password of the dealing officer.
6. The details of the account will be
displayed, complete the details in
respect of amount and proceed for
making payment.
7. User ID will be asked along with the
transaction password.
8. After successful completion of the
transaction, Tax paid counterfoil will
be generated which is to be kept as
record.
9. The branch should take care that
under any circumstances, no amount
remains to be remitted to the Tax
authority as the system has been
configured not to allow “End of Day “
activity without initialization of this
account.

Name of The Product Current Account for other Banks Current Account RRB BOB sponsored

Nature of deposit. Inter Bank Deposit Inter Bank Deposit

Who can open acurrent account Any Scheduled Commercial Bank included in the 2nd schedule Regional Rural Bank of Bank of Baroda only
ofRBI act, 1934

Eligibility Branches may open accounts of the following Banks without RRB of BOB sponsored.
referring to the regional office:
1. All Scheduled commercial Banks
2. All apex Cooperative Banks
3. All District cooperative Banks
4. All Land Mortgaged Banks etc.
5. All RRB’s ( except RRB of BOB)
6. All Urban Cooperative Banks.
Minimum Quarterly Average Rs.5000/- Rs.15000/-
Balance

Page 97 of 502
 Maximum Balance No upper limit. No upper limit.

Interest Payment Interest is not payable Interest is payable at par with Saving bank

Cash deposit At Local Base and No upper limit.

local Non BaseBranch
Cash deposit at Outstation Non-
Base Branch
Cash Withdrawal at
Local Base Branch
Folio Charges
Beyond Cash Deposit of Rs. 50000/- Or above 10 packets i.e. 1000pieces of notes of any denominations taken together, whicheveris
higher charges will be levied as under –
Above 10 packets – i.e. 1000 pieces of notes charges will belevied @ Rs. 10/- per packet or a part thereof. (Min. Rs. 10/- , Maxi.Rs.
10000/- .”
Cash deposit of Rs 25000/ -per day per account free of charges.
Thereafter in excess of Rs. 25000/-, service charges will be levied at Rs. 2.50 plus Taxes per thousand or part thereof.
No limit Only through Base Branch
charges is Rs 125/-+GST per 25 entries (one Ledger folio page);Quarterly chargeable

Monthly statement Free (once in a calendar month) Free (once in a calendar month)

Cheque Book First cheque book of 50 leaves free.

Subsequent cheque charge @ Rs.5/- per leaf.
Quarterly Average balance of Rs.2 lakhs and above : no charges
Immediate Credit of Outstation
Cheque Rs.20,000/-
Circular No.** MASTER MANUAL ON CURRENT ACCOUNTS dated 28.03.2019 MASTER MANUAL ON CURRENT ACCOUNTS dated
28.03.2019

Scheme Code CA110 CA111

Name of The Product
Nature of Account
Eligibility
QAB
Minimum Balance Charges
Baroda Start-up Current Account Baroda Scale-Up Current Account
Scheme Code : CA 127 Scheme Code : CA 128
CA for early stage start-ups CA for established/high growth Start-ups
Private Limited Company/Partnership Firm/Limited Private Limited Company/Partnership Firm/Limited
Liability Partnership having turnover not more than Rs.25.00 Liability Partnership having turnover not more than
Crore as per last ABS. Rs.25.00 Crore as per last ABS
Entity should not be more than 5 years old.
Rs.75,000/- Rs.2,50,000/-
Nil for first 2 years Nil for 1st year

Page 98 of 502
 Then,Rs.1000/- + GST Then,Rs.1000/- + GST
Mobile Banking Not allowed Not allowed
Sweep facility First Sweep out for Rs. 25,000 will happen only when account First Sweep out for Rs. 25,000 will happen only when
balance reaches Rs. 5,25,000. Upon receipt of customer’s account balance reaches Rs. 5,25,000. Upon receipt of
request, the threshold amount of Rs 5,00,000/- can be customer’s request, the threshold amount of Rs 5,00,000/-
increased preferably in multiples of Rs 1,000 can be increased preferably in multiples of Rs 1,000
(e.g. Rs 5.01, Rs 5.02 lacs and so on) (e.g. Rs 5.01, Rs 5.02 lacs and so on)
FFD to be made between 15 to 45 days FFD to be made between 15 to 45 days
If customer desires, the Sweep out amount of Rs 25,000/- can If customer desires, the Sweep out amount of Rs 25,000/-
be increased in multiples of Rs 25,000 (e.g. Rs 50,000, Rs can be increased in multiples of Rs 25,000 (e.g. Rs 50,000,
75,000 and so on). Rs 75,000 and so on).
Sweep will be carried out every Monday (at the end of the day) Sweep will be carried out every Monday (at the end of the
day)
Cash Deposit & Withdrawal As per Baroda Premium Current Account As per Baroda Premium Privilege Current Account
NEFT,RTGS & IMPS (Outward Free for first 2 years,therafter 50% of applicable charges Free
and Inward)
Charges for Collection Outstation 50% of Normal collection charges Free
Monthly Statement Free twice a month Free twice a month
Folio charges Free Free
Cheque Book 200 leaves per month free Unlimited Free
Issuance of Balance Certificate Free Free
POS,Bharat QR Code & Bhim QR 50% of charges Applicable Charges
Code
DD/BC 50% of applicable charges Free
Credit Card Complimentary free for 1st year to two Complimentary free for 1st year to two
partners/directors/authorized persons with free personal partners/directors/authorized persons with free personal
accident insurance accident insurance
DEMAT charges 25% on annual custody charges to partners/directors 25% on annual custody charges to partners/directors
Processing Charges for CAR Loan 100% waiver 100% waiver
Signature Verification Free Free
Welcome KIT Welcome Letter,BOB branded goodies & discount vouchers Welcome Letter,BOB branded goodies & discount vouchers
Documents required KYC guidelines to be followed KYC guidelines to be followed
Anyone of the following : Anyone of the following :
1. Recommendation Letter from an Incubator 1. Recommendation Letter from an Incubator
2. Evidence of being funded by recognized funds 2. Evidence of being funded by angel investor of a
3. Certificate of Recognition from DIPP/DPIIT reputed network or VC fund
3. Certificate of Recognition from DIPP/DPIIT

Retail Liability Product - Savings Bank Accounts

Page 99 of 502
 Name of The Product Baroda Advantage Saving A/C Staff Salary Account

Eligibility All resident individuals including minors above age of 10 years Savings bank staff accounts can be opened in the names of staff
members, singly or jointly with any other member or members
of his/her family.
Auto / Reverse Sweep NA Staff : Minimum Rs.10000/- above threshold limit Rs.50000/-
for 365 days with 1% additional interest.
Ex-Staff cum Senior Citizen :
Minimum Rs.10000/- above threshold limit Rs.100000/- for
365 days with 1.5% additional interest.

Minimum Balance NIL

Individual / Non Individual
Rural Rs 500/-
Minimum Balance Semi-Urban Rs 1,000/-*
Charges Urban / Metro Rs2000/-*
* Quarterly Average Balance
SB Accounts
Rural/Semi- Rs 125/- per
urban quarter
Urban/Metro Rs 250/- per
quarter

Charges will be levied as under

If QAB is in the range
Rs 250-499 50%
Rs 100-249 80%
Below Rs 100 100%

Semi-Rural
If QAB is in the range
Rs500-999 50%
Rs250-499 80%
Below Rs250 100%
Metro/Urban
If QAB is in the range
Rs1000 to 1999 50%
Rs500-999 80%
Below Rs500 100%
Maximum Balance No ceiling; No ceiling
In case of minor account, maximum amount that can be kept is
Rs 1 Lac.

Page 100 of 502

 Internet Banking / M- Free Free
Connect+
Locker Charges As per the applicable rate 50% Discount to Staff/ Ex-staff on rent

Cheque Book -30- leaves free in a financial year thereafter@Rs.5 per cheque Free Unlimited
leaf
Immediate Credit of Up to 20000/- Up to 20000/-
OCC (*T & C)
Concession on No Concession Free
Remittance (DD/BC)
and on OCC
/NEFT/RTGS
Discount of Demat -- ----
Services
Credit Card -- ---
(BOBCARD)

Cash Handling Charges As per the applicable rate NA

Overdraft Facility NA NA

Personal Accident
Insurance

Circular No.** MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated
28.03.2019 28.03.2019

Scheme Code SB101 SB112

Name of The Product BARODA ADVANTAGE PENSION SB ACCOUNT BARODA ADVANTAGE ZERO BALANCE SB ACCOUNT

Eligibility Pensioners who are getting pension from our branches on the All resident individuals
basis of Pension Payment Orders (PPO)
.
Minimum Balance NIL, however account to be opened with Rs.5/- NIL

Page 101 of 502

 Maximum Balance No ceiling; No ceiling;
In case of minor account, maximum amount that can be kept is
Rs 1 Lac.
Non Maintenance NIL NIL
charges
Internet Banking / M- Free Free
Connect+
Locker Charges As per the applicable charges As per the applicable charges

Cheque Book Unlimited free Unlimited free

Immediate Credit of Up to 20000/- Up to 20000/-

OCC (*T & C)
NEFT/RTGS/IMPS Free Free
(outward and inward)

Cash Handling Charges No Charges No Charges

Overdraft Facility Overdraft facility in Savings Bank a/c upto a maximum of Not Allowed
2months pension amount (net credit to SB a/c last month) **
T&C applicable
Circular No.** MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated
28.03.2019 28.03.2019

Scheme Code SB114 SB115

Name of The Product BARODA SUPER SAVINGS ACCOUNT BARODA SB CAPITAL GAINS 1988 SCH - A

Eligibility All individuals’ viz. Salariedclass people, Businessmen, Self- Any person/ firm/ association of persons / company / HUF etc.
employed,Professionals,Business Executives, Housewives, who had long term capital gains on sale of anyasset who desires
minors above the age of 10 to utilize the net consideration for purchaseof residential house
years within two years (2 years) from the dateof sale of the capital asset
is exempt from tax on the capitalgains provided he deposits the
sales consideration inauthorized branches of Banks authorized
to receivedeposits and maintain accounts.
Operation : Self

Page 102 of 502

 Minimum Balance Metro – Rs 20000 (QAB) NIL
Rural/ Semi Urban- Not available

Maximum Balance No ceiling; There is no ceiling on the amount deposited / held in theaccount.
In case of minor (Age 10 to 14) account, maximum amount that
can be kept is Rs 1 Lac. The amount standing to the credit of the depositor inthis
account cannot be charged as security for loans/guarantees or
alienated in any manner, whatsoever
Non Maintenance Rs 1000+GST NIL
charges
Internet Banking / M- Free ----
Connect+
Locker Charges As per the applicable charges, locker allotment should be on Not Applicable
priority basis
Cheque Book Unlimited free Not Applicable

Auto sweep facility Yes (Linked FFD Account Scheme Code – TD110) Not Applicable
Threshold Limit – Rs.50,000/-
First Sweep out for Rs.10,000/- will happen only when account
balance reaches Rs.60,000.Auto Sweep will happen on every
Monday.Auto reverse sweep in the multiples of Rs.1, 000/- on
LIFO basis.
Period : 181 days
Branches can increase the threshold amount of Rs.50,000/-
preferably in multiples of Rs.1,000 ( e.g. Rs.51,000,
Rs.52,000,and so on)
Sweep out amount of Rs.10,000/- can be increased in multiples
of Rs.10,000 (e.g. Rs.20,000, Rs.30,000 and so on)

Immediate Credit of Up to 25000/- Not Applicable

OCC (*T & C)
Other benefits DD/ BC for personal needs is issued free of charge Not Applicable
25% discount on Demat annual maintenance charges

Cash Handling Charges Not Applicable Not Applicable

Circular No.** MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated MASTER MANUAL ON SAVINGS BANK ACCOUNTS dated
28.03.2019 28.03.2019

Page 103 of 502

 Scheme Code SB117 SB121

Savings account –Salary variants

Name of The Product Baroda Salary Baroda Salary Super Baroda Salary Baroda Salary Privilege
Classic Premium
Salary Band Net Monthly Salary Net Monthly Salary Credit Net Monthly Salary Net Monthly Salary Credit
Credit of Less than Rs between Rs 50000 to Rs 1.00 Lacs Credit between Rs. 1.00 more than Rs 2.00 Lacs
50000 , Minimum Lacs and less than Rs
Salary Credit Rs 10000 2.00 Lac

Eligibility Age of the applicant should be 18 years & above

Suitable For Entry level Staff Junior Management Middle Management Top Management
Minimum Deposit Amount Nil Nil Nil Nil
Maximum Deposit Amount No Limit No Limit No Limit No Limit

QAB /Charges for non maintenance Not Applicable

of QAB
Cheque Book Free 50 Cheque leaves Free 75 Cheque leaves per year Free 100 Cheque leaves Free 150 Cheque leaves per
per year thereafter Rs 5 thereafter Rs 5 Per leaf per year thereafter Rs 5 year thereafter Rs 5 Per leaf
Per leaf Per leaf
SMS Alerts Free Free Free Free

Interest payable in SB Account
Auto Sweep Facility
3.25% for balance up to 3.25% for balance up to Rs. 50.00 3.25% for balance up to 3.25% for balance up to Rs.
Rs. 50.00 Lacs & 3.75 % Lacs & 3.75 % above Rs. 50 Lacs Rs. 50.00 Lacs & 3.75 % 50.00 Lacs & 3.75 % above
above Rs. 50 Lacs above Rs. 50 Lacs Rs. 50 Lacs
Multiples Of 10000/- Multiples Of 10000/- Above Multiples Of 10000/- Multiples Of 10000/- Above
Above Threshold Limit Threshold Limit 100000/- (For Above Threshold Limit Threshold Limit 200000/-
50000/- (For 181 Days) 181 Days) 200000/- (For 181 (For 181 Days)
Days)
Sweep out will happen Sweep out will happen on Monday Sweep out will happen on
on Monday of every of every Week Sweep out will happen Monday of every Week
Week on Monday of every
Week

Page 104 of 502

 Reverse Sweep : In Reverse Sweep : In multiples of Reverse Sweep : In multiples
multiples of Rs.1000/- Rs.1000/- in LIFO basis Reverse Sweep : In of Rs.1000/- in LIFO basis
in LIFO basis multiples of Rs.1000/-
in LIFO basis
Credit Card Facility Free Life time easy Free Life time easy variant of Free Life time easy Free Life time easy variant of
variant of Credit Card Credit Card variant of Credit Card Credit Card
But,Minimum Salary : But,Minimum Salary : But,Minimum Salary : But,Minimum Salary :
Rs.25000/- Rs.40000/- Rs.60000/- Rs.60000/-
Signing Auto debit Signing Auto debit mandate form Signing Auto debit Signing Auto debit mandate
mandate form is is compulsory mandate form is form is compulsory
compulsory Complimentary Air accidental compulsory Complimentary Air
Complimentary Air Insurance : 15 lakh Complimentary Air accidental Insurance : 50 lakh
accidental Insurance : 15 Other Accidental Insurance : 5 accidental Insurance : Other Accidental Insurance :
lakh lakh 50 lakh 10 lakh
Other Accidental Other Accidental
Insurance : 5 lakh Insurance : 10 lakh
Remittances NEFT/RTGS free NEFT/RTGS free through online NEFT/RTGS free NEFT/RTGS free through
through online channels channels through online channel online channels & Branch
& Branch
Collection of outstation cheque Immediate credit of Immediate credit of outstation Immediate credit of Immediate credit of
outstation cheques up to cheques up to Rs. 20,000/- outstation cheques up to outstation cheques up to Rs.
Rs. 20,000/- Rs. 20,000/- 20,000/-
Conditions :
Conditions : 1. satisfactory conduct of Conditions : Conditions :
1. satisfactory account for the last six 1. satisfactory 1. satisfactory conduct
conduct of months conduct of of account for the
account for the 2. Maximum outstanding account for the last six months
last six months should not cross last six months 2. Maximum
2. Maximum Rs.20,000/- 2. Maximum outstanding should
outstanding outstanding not cross
should not should not Rs.20,000/-
cross cross
Rs.20,000/- Rs.20,000/-

Inbuilt overdraft Facility Available immediately Available immediately after 2 Available immediately Available immediately after
after 3 salary credits salary credits after first salary credits first salary credits

Maximum Rs 50000 Maximum Rs 100000 Maximum Rs 200000 Maximum Rs 300000

Clean Overdraft Clean Overdraft Clean Overdraft Clean Overdraft

Amount of overdraft Amount of overdraft equivalent to Amount of overdraft Amount of overdraft
equivalent to net credit net credit of average of last two equivalent to net credit equivalent to net credit first
salary credit round off salary credit round off

Page 105 of 502


Demand Draft /Banker Cheque /
Other benefits
of average of last three
salary credit round off
Overdraft is to be
adjusted in full once in
60days of availment of
the same
Three DD/BC per
quarter for personal use ,
Maximum amount Rs
100000 per quarter
50% discount on Demat
AMC
25% waiver on issuance
charges for Gift/Travel
card
Overdraft is to be adjusted in full
once in 60days of availment of the
same
Four DD/BC per quarter for
personal use , Maximum amount
Rs 200000 per quarter
75% discount on Demat AMC
50% waiver on issuance charges
for Gift/Travel card
first salary credit round
off
Overdraft is to be Overdraft is to be adjusted in
adjusted in full once in full once in 60days of
60days of availment of availment of the same
the same
Five DD/BC per quarter Six DD/BC per quarter for
for personal use , personal use , Maximum
Maximum amount Rs amount Rs 500000 per
300000 per quarter quarter
75% discount on Demat 100% discount on Demat
AMC AMC
75% waiver on issuance 75% waiver on issuance
charges for Gift/Travel charges for Gift/Travel card
card

Internet Banking/Mobile Banking Free Free Free Free

Debit Card Free , Baroda Rupay
Classic Debit card for
first year, there after
chargeable @150+ Taxes
per year . Daily Cash
withdrawal limit Rs
25000 and online
purchase Limit is Rs
50000. Inbuilt accident
insurance of Rs 1 Lacs ,
attractive offers linked to
debit cards
Waiver in processing charges on 25% waiver on
Retail Loans processing charges for
Housing Loan , Auto
Loan , Education Loan &
Mortgage Loan , 100%
waiver in processing
charges for personal
loan . Subject to recovery
of minimum Rs 7500 per
property to be
mortgaged as out of
pocket expenses
Discount on Locker 5% on locker rentals
Convertibility of existing accounts Permissible
Free , Master Platinum debit Card
for first year, there after
chargeable @150+ Taxes per year
. Daily Cash withdrawal limit Rs
50000 and online purchase Limit
is Rs100000. Inbuilt accident
insurance of Rs 1 Lacs , attractive
offers linked to debit cards
50% waiver on processing charges
for Housing Loan , Auto Loan ,
Education Loan &Mortgage Loan ,
100% waiver in processing
charges for personal loan . Subject
to recovery of minimum Rs 7500
per property to be mortgaged as
out of pocket expenses
10% on locker rentals
Permissible
Free ,Rupay Platinum Free , VISA Platinum Debit
Debit Card for first year, Card for Life Daily
there after chargeable withdrawal limit Rs 100000
@150+ Taxes per year . and online purchase Limit is
Daily Cash withdrawal Rs 200000.
limit Rs 50000 and
online purchase Limit is
Rs 100000. Inbuilt
accident insurance of Rs
2 Lacs , attractive offers
linked to debit cards
75% waiver on 100% waiver on processing
processing charges for charges for Housing Loan ,
Housing Loan , Auto Auto Loan , Education Loan
Loan , Education Loan & &Mortgage Loan , 100%
Mortgage Loan , 100% waiver in processing charges
waiver in processing for personal loan . Subject to
charges for personal recovery of minimum Rs
loan . Subject to recovery 7500 per property to be
of minimum Rs 7500 per mortgaged as out of pocket
property to be expenses
mortgaged as out of
pocket expenses
15% on locker rentals 20% on locker rentals
Permissible Permissible

Page 106 of 502

 Scheme Code SB 174 SB 175 SB 176 SB 177

Name of The Product Baroda MACT Claims SB A/c Baroda Senior citizen Privilege Baroda Mahila Shakti SB A/c
SB A/c

Eligibility Individuals having Motor Accident Resident Individuals 60 Yrs or more

Claims Annuity Term Deposit Account Resident Indian woman of 18 years &
A/c is to be opened with restrictive above
operation

Only Single account

For Minor : A/c to be operated by

Guardian

Auto Sweep No In Multiples Of 10000/- Above In Multiples Of 10000/- Above

Threshold Limit 50000/- (For 181 Threshold Limit 50000/- (For 181
Days) Days)
Reverse Sweep : Rs.1000 multiples Reverse Sweep : Rs.1000 multiples
Minimum Bal Nil
Rs.3,000 in Metros/Urban Centre Rs.3,000 in Metros/Urban Centre
(QAB) (QAB)
Rs. 2,000 in Semi Urban Rs. 2,000 in Semi Urban
Rs.1,000 in Rural Rs.1,000 in Rural

Minimum Balance Charges Nil R/S- Rs.150/- R/S- Rs.150/-

M/U – Rs.300/- M/U – Rs.300/-
Maximum Balance No Limit No Limit No Limit
Debit Card Not Allowed VISA Platinum Chip Debit Card RuPay Platinum Debit Card (1st year
No Internet Banking and Mobile free) with Rs.200000 inbuilt
Banking allowed accidental insurance
Cheque Book Not Allowed Free 50 Leaves in a Financial Year Free 30 Leaves in a Financial Year

Immediate Credit of OCC (*T & C) Not allowed Up to 20000/- Up to 20000/-

Concession on Remittance (DD/BC) Nil Nil Nil

and on OCC

Page 107 of 502

 Overdraft Facility No No No

Other Benefits No existing account to be converted to
this scheme.
No transfer of account from branch to
branch
Closure is permissible only with the
directive of Court/ Tribunal
25% waiver on annual locker rental 25% waiver on annual locker rental
charges charges
50% Waiver in processing fees of 0.25% lower interest rate on Two
Reverse mortgage Loan Wheeler Loan

25% waiver on issuance of Travel/ Gift

Card charges 25 % waiver on processing charges
for Auto Loan and Mortgage Loans.
Waiver on Demat AMC for 1st Year 100% waiver in Processing charges
for Personal Loan.

25% waiver on issuance of Travel/

Gift Card charges

Waiver on Demat AMC for 1st Year

Scheme Code SB178 SB 180 SB 181

Name of the BARODA GOVT BODIES/CORP ETC SB BARODA SB NO FRILL ACCOUNT - BARODA SB SHG–GENERAL
Product ACCOUNT NREGA ACCOUNT
Eligibility Government Departments / bodies / agencies All resident individuals in single or joint names. SHG including women SHG.
in respect of grants/subsidies.
Auto Sweep Available on specific request of the customer Not available. Not available.
duly routed through Zonal/ Regional authority.
Minimum Bal Branch Category With Without Nil Rs.1,000/- (QAB)
Cheque Cheque
Book Book
Metro/Urban Nil Nil
Rural /Semi Urban Nil Nil
Minimum Semi Urban/ Rural Nil Nil Branch With Without
Balance Charges Metro/ Urban Nil Category Cheque Cheque
Shortfall in average Nil Book Book
balance Metro/Urban 1000 500
Upto 25% Nil

Above25%to50% Nil

Page 108 of 502

 Above50%to 75% Nil Rural /Semi 500 0
More than 75% Nil Urban

Maximum Balance no ceiling The balance should not exceed Rs.50, 000/- at No ceiling on the amount deposited /
Cash Deposit Free unlimited in Home Branch any point of time. held in the account.
Cash withdrawal from home branch: Up to The total credits in the account should not
Rs.20,000/- without R-Menu exceed Rs.1, 00,000/- during a year.
Cash Withdrawal at Non home branch : Not The balance in the account shouldn’t exceed
allowed Rs.50,000 at any point of time.
Nomination Not Applicable Available. Not Applicable
Facility.
Debit Card Variant Not Applicable. Rupay Classic Debit Card. Annual Fee – NIL Not Applicable
& Annual Fee
Bank of Baroda Not Applicable. Unlimited. Not Applicable.
ATM: No. of Free
Transactions
Number of Free Not Applicable. Metro ATM-3, Non Metro-5 thereafter Rs 20/- Not Applicable.
OFFUS ATM +GST per financial transaction and Rs. 10/-
transactions +GST per non-financial transaction
Value Added Free Rs.10 + GST charged quarterly Rs.10 + GST charged quarterly
SMS alert facility
Internet Free Available Not Available
Banking/Mobile
Banking
Cheque Book Unlimited Free No chequebook facility. If QAB above If QAB - above
The account will be operated only through BCs Rs.2.00 lacs Rs.2.00 lacs
or through mobile vans under ICT model Unlimited free 30 Cheques free
per FY. There
after Rs.5/- per
cheque.
Auto Sweep Threshold Limit : Rs.5,00,000/-
In multiples of Rs.50,000/- for 180 days

For Nil Charges

NEFT/RTGS/IMPS
Immediate Immediate credit of outstation cheques uptoRs. Immediate credit of outstation cheques uptoRs.
credit of 20,000/-. 20,000/-.

Page 109 of 502

 outstation
cheques
Overdraft Facility Not Applicable. An inbuilt OD limit of Rs.10000/-.
Overdraft up to Rs.250/- immediately after
opening of account.
Thereafter overdraft will be allowed up to 50%
of amount of credit turnover subject to the
maximum limit of Rs.5000/- for 1 year.
After one year of overdraft, limit may be
increased up to 50% of the turnover or
Rs.10000/- whichever is lower.
Available.
Limit up to Rs.3.00 Lacs: As
applicable to Agriculture /Other
Priority Sector Advances, presently
One year MCLR+ SP+ 0.50%
Limit above Rs.3.00 Lacs: One year
MCLR+ SP+ 1.00% .

Convertibility of Permissible Not permissible. Customers, are required to Not Permissible

existing close their other Savings Bank accounts, if any
accounts. within 30 days of opening of Baroda Basic
Savings Bank Deposit Account
Circular Number** BCC/BR/111/532 Dtd.10.10.2019 Master Manuals on Saving Bank Accounts. Master Manuals on Saving Bank
Accounts.
Scheme Code SB 129 SB 130 SB 131

Baroda Centenary Savings A/c Baroda Basic Saving Bank Deposit A/C
Name of The Product

Resident Individuals (Above 10 Yrs./ Single/ Joint)  No Frill Account

Farmers’ Clubs – Vikas Volunteer Vahini, Primary
Co Op. Credit Societies, APMC, SHGs, Government  All Resident Individuals
Departments, which are authorized to open SB
Eligibility A/c, Trusts and Institutions, whose entire income  Not For NRI/ Trusts/ Societies
is exempted from payment of income tax under
Income Tax Act, 1961 and otherwise eligible to
open Savings bank account
(Not for NRE Deposit)
Multiples Of 5000/- Above Threshold Limit NA
10000/- (For 180 Days)
Auto / Reverse Sweep

QAB-10000/- No Minimum Balance

Minimum Balance

Minimum Balance Charges Rs 100/- + GST Per Month Nil

Page 110 of 502

 Maximum Balance No Limit No Limit
Rs. 1.00 Lac for Minor (10-14 Yrs.)
Number of Transactions No Limit 4 Withdrawals in a Month including ATM transactions

Internet Banking / M-Connect+ free Rupay Classic Debit Card. Annual Fee – Rs.150 + GST

Cheque Book Free Unlimited 30 cheque leaves in a FY

Immediate Credit of OCC (*T & C) Up to 25000/- uptoRs. 20,000/-.
Concession on Remittance (DD/BC) Only OCC Free Nil
and on OCC

Discount of Demat Services NA ----

Credit Card (BOBCARD) -- ---

Overdraft Facility Nil An inbuilt OD limit of Rs.10000/-.

Initial overdraft of Rs.250/-immediately after opening of account.
Thereafter overdraft will be allowed up to 50% of credit turnover
subject to the maximum limit of Rs.5000/- (turnover up to
previous day shall be considered for allowing OD).
After one year of satisfactory conduct of the account the overdraft
limit may be increased up to 50% of the turnover of the account or
Rs.10000/- whichever is lower.

Personal Accident Insurance Nil --

Circular No.** Master circular Mater circular

Scheme Code SB125 SB124

Customers, having " Baroda Basic Savings Bank Deposit Account”
are not eligible to open any other Savings Bank in Bank and they
are required to close their other Savings Bank accounts, if any
within 30 days of opening of Baroda Basic Savings Bank Deposit
Account.

Page 111 of 502

 Details OF BARODA SMALL SB ACCOUNT Details OF BARODA GOVT. SCHOLARSHIP/ DBT
PARAMETERS WITHOUT INTRO (scheme code – SB 136) ACCOUNT (scheme code – SB 138)

Eligibility Persons those belonging to low income group both in urban All resident students including minors (above age of 10 years and
and rural areas and are not able to produce officially valid able to read & write on own) in single or jointly with his/her natural
documents to satisfy the bank about their identity and guardian i.e. father or guardian i.e. mother or both.
address.
Mode of Operation 1.Singly , 1.Singly
2. Jointly by 2. Jointly with his/her natural guardian
a. any one or more of the survivors
b. Either or anyone or more of them or the survivors jointly,
or survivor.
c. former or survivor
d. latter or survivor
Number of Free OFFUS Metro ATM-3, Non Metro-5 thereafter Rs 20/- +GST per Metro ATM-3, Non Metro-5 thereafter Rs 20/- +GST per financial
ATM transactions financial transaction and Rs. 10/- +GST per non-financial transaction and Rs. 10/- +GST per non-financial transaction
transaction
Maximum balance 1. The aggregate of all credits in a financial year does There is no ceiling on the amount deposited / held in the account.
not exceed Rs.1,00,000/- (Rupees one lakh) However, in the accounts of minors of age between 10 years and 14
2. The aggregate of all withdrawals in a month does years maximum amount that can be kept in the account is Rs.1/-
not exceed Rs.10,000/- (Rupees ten thousand). lac.
3. The balance at any point of time does not exceed
Rs.50,000/- (Rupees fifty thousand).

Debit card Variant and RuPay Classic Debit Card RuPay Classic Debit Card (minimum age requirement for Debit
Annual fee Annual Fee – NIL Card is 15 years for individual)
Annual Fee – Rs.150 + GST

Page 112 of 502

 Collection of outstation Not Applicable Applicable
cheque
Pre Closure Charge NIL. These small accounts are valid normally for a period of NIL.
twelve months. Thereafter, such accounts are allowed to Note – The account will remain active permanently and
continue for a further period of twelve more months, if the will not become dormant.
account holder provides a document showing that she/he has
applied for any of the officially valid document, within twelve
months of opening the small account.

PARAMETERS Details of BARODA HOME LOAN LINKED SB Details of Baroda Champ SB Account (scheme code – SB
ACCOUNT (scheme code – SB 152) 156)

Eligibility All resident individuals. This SB product can be opened only by Account only for resident individuals
Home Loan borrowers. The balance available in linked SB Age – 0years up to 18 years of age, single in the name of minor
account is reckoned for the purpose of passing on the benefit of above 10 years to the age of 18yearsOr jointly with either of the
interest in his/ her Home loan account. The borrower will get parent/guardian.
the benefit of interest amount reduction in home loan account
to the extent of daily outstanding credit balance in linked SB
account.
Mode of Operation 1.Singly Mode of operation – Individually, Jointly with parents
2. Jointly by
a. any one or more of the survivors
b. Either or anyone or more of them or the survivors jointly,
or survivor.
c. former or survivor
d. latter or survivor

Number of Free OFFUS Metro ATM-3, Non Metro-5 thereafter Rs 20/- +GST per Metro ATM-3, Non Metro-5 thereafter Rs 20/- +GST per financial
ATM transactions financial transaction and Rs. 10/- +GST per non-financial transaction and Rs. 10/- +GST per non-financial transaction
transaction

Maximum balance There is no ceiling on the amount deposited / held in the maximum amount that can be kept in the account is Rs.1/- lac.
account.

Balance in linked SB account will not be counted as SB

deposit.
Debit card Variant and VISA, MASTER,RUPAY No issuance charges
Annual fee Classic Variant-Rs.150+GST RuPay Classic Debit Card
Platinum variant-Rs.200+GST Debit card to be issued for applicant of more than 10 years of age.
Renewal charges-Rs.150/-+GST
Pre Closure Charge If an account is closed after 14 days or before 1 year of first If an account is closed after 14 days or before 1 year of first customer
customer induced credit transaction in the account, a service induced credit transaction in the account, a service charge of
charge of Rs.200/- plus GST will be levied. Rs.200/- plus GST will be levied.

Page 113 of 502

 No charges, if account is closed due to death of Account No charges, if account is closed due to death of Account Holder
Holder
Collection of outstation Immediate credit of outstation cheques up to Rs. 20,000/- . Applicable
cheque

Product Name Platinum Savings Bank Account ( SB-171)

Target Group Individuals only suited for HNI,salaried class & business man
Minimum Deposit Amount Nil
QAB Rs.1,00,000/-
Auto sweep Threshold limit Rs.2,00,000/-
FFD in multiples of Rs.10,000/- for 181 days
Auto sweep out on every monday
Withdrawal allowed Unlimited without charges
Cheque Book Free Unlimited
Cash Deposit at Home Branch Free
Charges for Cash Deposit Inter Sol Up to Rs.1,00,000/- free per day
Immediate Credit of Out Station Cheque Rs.50,000/-
NEFT/RTGS/IMPS Free unlimited for personal use
ATM Card Visa Platinum EVM Chip Card Free
Other Benefits Discount on Travel & Gift Card : 50%
Demat Charges : 100% waiver
Discount in Locker Charges : 10%
SMS Alerts : Free
Staff are allowed to open account under this scheme
BCC/BR/111/533 Dtd.11.10.2019

Page 114 of 502

 Wealth Management Services

Life Insurance:-10
 Life Insurance is a contract between the insurer and the insured wherein the insurer promises to pay the
beneficiary a sum of money in exchange for a premium on the death of an insured person or the policyholder.
The Human Life Value (HLV) concept is mostly used to determine the amount of life insurance to be
recommended to an individual.

Life Insurance at Bank of Baroda:-11

Our Bank offers Life Insurance products to its customers through India First Life Insurance Company Ltd. IFLIC
Ltd. is a joint venture between Bank of Baroda, Andhra bank and UK’s financial and investment company Legal &
General. The stake holding of the partners in the joint venture is as follows:-

Bank of Baroda 44%

Andhra Bank 30%
Warburg Pincus 26%

Following products of India First Life Insurance are offered by Bank of Baroda:-12

 IndiaFirst MahaJeevan Plan – A traditional non – linked participating plan. This plan also offers Term
Rider to enhance life cover. Guaranteed death benefit and maturity benefit is the key feature of this plan.

 IndiaFirst Life Cash Back Plan – A traditional non – linked non – participating plan which offers
guaranteed additions as a percentage of premium paid depending on the premium paying term. Periodic
survival benefits as a percentage of sum assured and balance sum assured on maturity is payable under the
plan.

 IndiaFirst Life Wealth Maximizer Plan – A unit linked plan offering three investment strategies to suit
your profile. A plan which provides additions to your fund value for paying your premiums regularly and
Systematic Partial Withdrawal (after completion of 5 policy years) to access your funds when you require.

 IndiaFirst Life Money Balance Plan – A unit linked plan offering market linked returns. The Automatic
Trigger Based Investment Strategy helps you to safeguard your returns from the upside of the equity market.

 IndiaFirst Life Plan – This is a pure term plan which offers only death benefit. Nothing is payable if the life
insured survives the policy term. This plan offers high cover at very economical rates.

 Baroda Jeevan Suraksha – A group term plan offering only death benefit to the group members. Ideal for
employer to take care of the employees’ families in case of untimely demise of the employee.

 IndiaFirst Group Credit Life Plan – A group term plan to take care of your loan liabilities so that the
burden of repaying the outstanding loan does not fall on the shoulders of the family members of the person
who has taken a loan.

10
https://www.bankofbaroda.com/life-insurance.htm
11
www.indiafirstlife.com
12
www.indiafirstlife.com

Page 115 of 502

 Life Insurance Vs. Other Savings13
2.2.1. Contract Of Insurance:

A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing
all material facts is embodied in this important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly
answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk
would render the insurance contract null and void.

2.2.2. Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise,
Insurance Company assures payment of the entire amount assured (with bonuses wherever applicable) whereas in
other savings schemes, only the amount saved (with interest) is payable.

2.2.3. Aid to Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the
'easy installment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half
yearly or yearly).

2.3. Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides,
a life insurance policy is also generally accepted as security, even for a commercial loan.

2.3.1. Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid
by way of premium for life insurance subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium
for insurance than otherwise.
2.3.2. Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain
monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be
less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from service and used for any
specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for
house building or for purchase of flats (subject to certain conditions).
2.4 Who Can Buy an Insurance Policy?14
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and
those in whom he/she has insurable interest.
Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting
proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors
are considered by the Corporation.

Standalone Health Insurance:-15

The Health Insurance Regulations of IRDA define health cover as follows:-

“Health Insurance Business” or “Health Cover” means the effecting of insurance contracts which
provide for sickness benefits or medical, surgical or hospital expense benefits, including assured
benefits and long term care, travel insurance and personal accident cover.

There are mainly two types of Health insurance policies offered by insurance companies:-

13
www.licindia.in/Top-Links/About-Us/Know-About-Your-Life-Insurance
14
www.licindia.in/Top-Links/About-Us/Know-About-Your-Life-Insurance

15
www.insuranceinstituteofindia.com

Page 116 of 502

 Health Insurance
Schemes

Indemnity Based
Benefit Type Policies
Policies

Reimbursement of
Provides for lumpsum
expenses incurred as a
payment on happening
direct result of
disease, illness or injury
hospitalization

Available for Examples

Individual, include Daily
Family and Allowance or
Group Basis Hospital Cash
Cover and
Again, these types of expenses are very high and mostly beyond the reach of the common man due to increasing
cost of healthcare, surgical procedures, new and more expensive technology coming in the market and cost of
newer generation of medicines. In fact, it is becoming very difficult for an individual even if he is financially
sound to bear such high expenses without any health insurance.

Therefore, health insurance is important mainly for two reasons:

 Providing financial assistance to pay for medical facilities in case of any illness.

 Preserving the savings of an individual which may otherwise be wiped out due to illness.

Health Insurance at Bank of Baroda:-16

A wide range of health insurance products are available for our customers. In purview of the extent regulations,
Bank of Baroda has entered into corporate agency agreement with two leading Stand Alone Health
Insurance companies (Max Bupa Health Insurance Co Ltd & Star Health and Allied Insurance Co
Ltd) on 7th May, 2016 for distribution of health insurance products.

Max Bupa Health Insurance Co Ltd.

Following are the Health Insurance products offered by Max Bupa Health Insurance Co Ltd for Bank of Baroda
customers:-

A) Group Health Insurance- Family Plan

16
https://www.bankofbaroda.com/health-insurance.htm

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 B) Max Health Plus
C) Max Health Plus Loan Linked
D) Max Health Plus SB Attachment
E) Max B-Health
F) Max Health Recharge- Top up Plan
G) Group Critical Illness Plan
H) Group Personal Accident Plan
I) Group Criti Care Plan

Star Health & Allied Insurance Co Ltd.

Following are the Health Insurance products offered by Max Bupa Health Insurance Co Ltd for Bank of Baroda
customers:-

A) Star Family Health Optima Insurance Plan

B) Star Group Criticare Gold Loan Protect
C) Star Medi-Classic Insurance Policy
D) Star Comprehensive Health Insurance Plan
E) Star Senior Citizens Red Carpet Health Insurance Plan
F) Star Cardiac Care Health Insurance Plan
G) Star Diabetes Safe Health Insurance Plan
H) Star Accident Care Plan

General Insurance:-

17Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General Insurance comprises of
insurance of property against fire, burglary etc., personal insurance such as Accident and Health Insurance, and liability
insurance which covers legal liabilities. There are also other covers such as Errors and Omissions insurance for
professionals, credit insurance etc.

Non-life insurance companies have products that cover property against Fire and allied perils, flood storm and
inundation, earthquake and so on. There are products that cover property against burglary, theft etc. The non-life
companies also offer policies covering machinery against breakdown, there are policies that cover the hull of ships and
so on. A Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles
against damages and theft forms a major chunk of non-life insurance business.

In respect of insurance of property, it is important that the cover is taken for the actual value of the property to avoid
being imposed a penalty should there be a claim. Where a property is undervalued for the purposes of insurance, the
insured will have to bear a rate able proportion of the loss. For instance if the value of a property is Rs.100 and it is
insured for Rs.50/-, in the event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be

17
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 Rs.25/- (50% of the loss being borne by the insured for underinsuring the property by 50%). This concept is quite often
not understood by most insured.

Personal insurance covers include policies for Accident, Health etc. Products offering Personal Accident cover are
benefit policies. Health insurance covers offered by non-life insurers are mainly hospitalization covers either on
reimbursement or cashless basis. The cashless service is offered through Third Party Administrators who have
arrangements with various service providers, i.e., hospitals. The Third Party Administrators also provide service for
reimbursement claims. Sometimes the insurers themselves process reimbursement claims.

Accident and health insurance policies are available for individuals as well as groups. A group could be a group of
employees of an organization or holders of credit cards or deposit holders in a bank etc. Normally when a group is
covered, insurers offer group discounts.

Liability insurance covers such as Motor Third Party Liability Insurance, Workmen’s Compensation Policy etc. offer
cover against legal liabilities that may arise under the respective statutes— Motor Vehicles Act, The Workmen’s
Compensation Act etc. Some of the covers such as the foregoing (Motor Third Party and Workmen’s Compensation
policy) are compulsory by statute. Liability Insurance not compulsory by statute is also gaining popularity these days.
Many industries insure against Public liability. There are liability covers available for Products as well.

There are general insurance products that are in the nature of package policies offering a combination of the covers
mentioned above. For instance, there are package policies available for householders, shop keepers and also for
professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer
customized or tailor-made ones.

Suitable general Insurance covers are necessary for every family. It is important to protect one’s property, which one
might have acquired from one’s hard earned income. A loss or damage to one’s property can leave one shattered. Losses
created by catastrophes such as the tsunami, earthquakes, cyclones etc. have left many homeless and penniless. Such
losses can be devastating but insurance could help mitigate them. Property can be covered, so also the people against
Personal Accident. A Health Insurance policy can provide financial relief to a person undergoing medical treatment
whether due to a disease or an injury.

Industries also need to protect themselves by obtaining insurance covers to protect their building, machinery, stocks
etc. They need to cover their liabilities as well. Financiers insist on insurance. So, most industries or businesses that are
financed by banks and other institutions do obtain covers. But are they obtaining the right covers? And are they insuring
adequately are questions that need to be given some thought. Also organizations or industries that are self-financed
should ensure that they are protected by insurance.

Most general insurance covers are annual contracts. However, there are few products that are long-term.

It is important for proposers to read and understand the terms and conditions of a policy before they enter into an
insurance contract. The proposal form needs to be filled in completely and correctly by a proposer to ensure that the
cover is adequate and the right one.

General Insurance at Bank of Baroda:-18

Our Bank has tied up with following partners for offering various General Insurance Products to our customers:-

National Insurance Company Limited:-

18
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  Householders Insurance:- A packaged policy which provides a range of covers required for a common
householder.

Tata-AIG general Insurance:-

Following products of TATA-AIG General Insurance are available for distribution at our Bank:
 Mediprime :- Comprehensive medical insurance without sub limits which lets you focus on your family’s
recovery without any financial worry.
 Motor Insurance:- A comprehensive package policy covering “Own Damage + Third Party + Add Ons”
 Travel Guard:-A Travel Plan to take care of any unforeseen contingency while travelling abroad.
 SME protect:-A specifically developed and designed product for insurance coverage options under SME.
 Baroda Medicare-TATA AIG

Chola MS General Insurance:-

 Group Health Insurance:-A Family floater plan covering Self, Spouse, Parents and 3 Dependent Children.
 Group Health Insurance-Chola MS
 Group Personal Accident:- Cover for accidental death, disablement and medical expenses
 Motor Insurance:-Comprehensive insurance cover for all vehicle classes.
 Fire Insurance:-Covering financial loss following damage to the property by fire and other specified named
perils.
 Burglary Cover:-Covering of damages caused to self/premises resulting from actual or attempted burglary.
 Package Policies:-Combines multiple insurance products as sections and covers in one insurance.

Mutual Fund:-19
 A mutual fund is a pool of money managed by a professional Fund Manager.
 It is a trust that collects money from a number of investors who share a common investment objective and
invests the same in equities, bonds, money market instruments and/or other securities.
 The income / gains generated from this collective investment is distributed proportionately amongst the
investors after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV.
 Simply put, the money pooled in by a large number of investors is what makes up a Mutual Fund.

Why do we need Mutual Fund?20

The basis of Mutual Fund schemes is: “Don’t just save but Invest”. Spending less than earnings is saving
but rising prices will mean your saving will actually be reducing in value with time. An investment should not
just match inflation but deliver something more thus becoming a second source of income. It is with this
objective of financial gains or convenience, mutual funds are offered for the benefit of its investors.

Mutual funds perform following roles for the different constituents that participate in it.

 Assist investors in earning an income or building their wealth, by participating in the opportunities available
in various securities and markets.

 Structure a scheme for different kinds of investment objectives, thus, making it possible to tap a large corpus
of money from investors with diverse goals/objectives.

 Offering different kinds of schemes to cater to the need of diverse investors.

 Money raised from investors, ultimately benefits governments, companies and other entities, directly or
indirectly, by way of investing in various projects or paying for various expenses.

19
www.nism.ac.in
20
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  The projects that are facilitated through such financing, offer employment to people; the income they earn
helps the employees buy goods and services offered by other companies, thus supporting projects of these
goods and services companies. Thus, overall economic development is promoted.

Advantages of Mutual Funds for Investors:-21

1. Professional Management
Mutual funds offer investors the opportunity to earn an income or build their wealth through professional management
of their investible funds. There are several aspects to such professional management viz. investing in line with the
investment objective, investing based on adequate research, and ensuring that prudent investment processes are
followed.

2. Affordable Portfolio Diversification

Investing in the units of a scheme provide investors the exposure to a range of securities held in the investment portfolio
of the scheme in proportion to their holding in the scheme. Thus, even a small investment of Rs.500 in a mutual fund
scheme can give investors proportionate ownership in a diversified investment portfolio.

3. Economies of Scale
Pooling of large sum of money from many investors makes it possible for the mutual fund to engage professional
managers for managing investments. Individual investors with small amounts to invest cannot, by themselves, afford
to engage such professional management.

4. Liquidity
Investors in a mutual fund scheme can recover the current value of the money invested, from the mutual fund itself.
Depending on the structure of the mutual fund scheme, this would be possible, either at any time, or during specific
intervals, or only on closure of the scheme. Schemes, where the money can be recovered from the mutual fund only on
closure of the scheme, are compulsorily listed on a stock exchange. In such schemes, the investor can sell the units
through the stock exchange platform to recover the prevailing value of the investment.

5. Tax benefits
Specific schemes of mutual funds (Equity Linked Savings Schemes) give investors the benefit of deduction of the
amount subscribed (up to Rs. 1, 50,000 in a financial year), from their income that is liable to tax. This reduces their
taxable income, and therefore the tax liability.

6. Convenient Options
The options offered under a scheme allow investors to structure their investments in line with their liquidity preference
and tax position.

There is also great transaction conveniences like the ability to withdraw only part of the money from the investment
account, ability to invest additional amount to the account, setting up systematic transactions, etc.

7. Investment Comfort
Once an investment is made with a mutual fund, they make it convenient for the investor to make further purchases
with very little documentation. This simplifies subsequent investment activity.

8. Regulatory Comfort
The regulator, Securities and Exchange Board of India (SEBI), has mandated strict checks and balances in the structure
of mutual funds and their activities. Mutual fund investors benefit from such protection.

21
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 9. Systematic Approach to Investments
Mutual funds also offer facilities that help investor invest amounts regularly through a Systematic Investment Plan
(SIP); or withdraw amounts regularly through a Systematic Withdrawal Plan (SWP); or move money between different
kinds of schemes through a Systematic Transfer Plan (STP). Such systematic approaches promote investment
discipline, which is useful in long-term wealth creation and protection. SWPs allow the investor to structure a regular
cash flow from the investment account.

Products available under Mutual Fund:-22

There are wide variety of Mutual fund schemes that cater to your needs, whatever your age, financial position, Risk
Tolerance and return Expectations. Before investing in Mutual Fund Schemes; you should know which scheme suits
your requirements.

Growth Schemes

Aim to provide capital appreciation over the medium to long term. These schemes normally invest a majority of their
funds in equities and are willing to bear short-term decline in value for possible future appreciation.

Income Schemes

Aim to provide regular and steady income to investors. These schemes generally invest in fixed income securities such
as bonds and corporate debentures. Capital appreciation in such schemes may be limited.

Balanced Schemes

Aim to provide both growth and income by periodically distributing a part of the income and capital gains they earn.
They invest in both shares and fixed income securities in the proportion indicated in their offer documents. In a rising
stock market, the NAV of these schemes may not normally keep pace or fall equally when the market falls.

Money Market / Liquid Schemes

Aim to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer,
short term instruments such as treasury bills, certificates of deposit, commercial paper and interbank call money.
Returns on these schemes may fluctuate, depending upon the interest rates prevailing in the market.

Tax Saving Schemes (Equity Linked Saving Scheme - ELSS)

These schemes offer tax incentives to the investors under tax laws as prescribed from time to time and promote long
term investments in equities through Mutual Funds.

Index fund schemes are ideal for investors who are satisfied with a return approximately equal to that of an index.

Sectoral fund schemes are ideal for investors who have already decided to invest in a particular sector or segment.

Fixed Maturity Plans

Fixed Maturity Plans (FMPs) are investment schemes floated by mutual funds and are close- ended with a fixed tenure,
the maturity period ranging from one month to three/five years. These plans are predominantly debt-oriented, while
some of them may have a small equity component.

Exchange Traded Funds (ETFs)

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 Exchange Traded Funds are essentially index funds that are listed and traded on exchanges like stocks.

Capital Protection Oriented Schemes

Capital Protection Oriented Schemes are schemes that endeavor to protect the capital as the primary objective by
investing in high quality fixed income securities and generate capital appreciation by investing in equity / equity related
instruments as a secondary objective.

Gold Exchange Traded Funds (GETFs)

Gold Exchange Traded Funds offer investors an innovative, cost-efficient and secure way to access the gold market.
Gold ETFs are intended to offer investors a means of participating in the gold bullion market by buying and selling
units on the Stock Exchanges, without taking physical delivery of gold.

Quantitative Funds

A quantitative fund is an investment fund that selects securities based on quantitative analysis. The managers of such
funds build computer- based models to determine whether or not an investment is attractive. In a pure "quant shop"
the final decision to buy or sell is made by the model. However, there is a middle ground where the fund manager will
use human judgment in addition to a quantitative model.

Funds Investing Abroad

With the opening up of the Indian economy, Mutual Funds have been permitted to invest in foreign securities/
American Depository Receipts (ADRs) / Global Depository Receipts (GDRs). Some of such schemes are dedicated funds
for investment abroad while others invest partly in foreign securities and partly in domestic securities. While most such
schemes invest in securities across the world there are also schemes which are country specific in their investment
approach.

Fund of Funds (FOFs)

Fund of Funds are schemes that invest in other mutual fund schemes. The portfolio of these schemes comprise only of
units of other mutual fund schemes and cash / money market securities/ short term deposits pending deployment.
Fund of Funds can be Sector specific e.g. Real Estate FOFs, Theme specific e.g. Equity FOFs, Objective specific e.g. Life
Stages FOFs or Style specific e.g. Aggressive/ Cautious FOFs etc.

Please bear in mind that any one scheme may not meet all your requirements for all time. You need to
place your money judiciously in different schemes to be able to get the combination of growth, income
and stability that is right for you. Remember, as always, higher the return you seek higher the risk you
should be prepared to take.

Who regulates the Mutual Fund in India?

All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to
protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Who can sell the Mutual Fund in India?

As per SEBI Mutual Fund Regulations, all MFDs must fulfil the following two requirements before engaging in sale
and/or distribution of mutual fund products, namely

 Obtain the relevant certification of National Institute of Securities Management (NISM)

 Register with Association of Mutual Funds in India (AMFI) and obtain AMFI Registration Number (ARN). Our
Bank’s ARN is : 35783 (Valid till 6th June 2020)

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 Likewise, before being employed in sale and/or distribution of mutual fund products, employees of MFDs are also
required to obtain the relevant NISM certification and register with AMFI and obtain Employee Unique Identification
Number (EUIN).

Baroda m-invest- A mobile based app for investing in mutual funds23

 With the objective of leveraging technology, Bank has developed ‘Baroda m-invest’, a mobile based investment
app for mutual fund distribution

 This App besides provides a paperless, hassle-free and seamless experience to the customers, has also resulted
into reaching to our customers riding the technology across the geographical boundaries thereby widening our
distribution network.

 The App has been powered by M/s Finwizard technology Pvt. Ltd.

Objectives of Baroda m-invest

 Offer more investment options to the customers as well as to meet the customer’s demand for mode of investment in
Mutual Funds in a hassle free and efficient manner.

 Increase the fee based income of the bank through distribution of mutual fund

 Leveraging the technology for distribution of mutual fund.

 To reach out to the population through technology driven investment process whereby reach can go beyond Top 15 cities
and thus fetching a higher fee based income.

Benefit to Customers and Bank

Benefits to Customers Benefits to Bank

Ease of investing in Mutual Funds at click of a button An excellent App to facilitate the investment in mutual fund.

Customers can view the NAV position of their investment Being live and functional with end to end integrations,
online and real time. Baroda m-invest will speed up Bank’s efforts to go the
market.

Statement of investment account is readily available to The online approach of the app will help us to reach out to
customers customers where our offline reach is negligible (NRIs, Tier
2/3 cities)

Quick and convenient redemption of investment funds All products features enhancements can be scaled up easily.

Easy registration, Paperless KYC verification and seamless All transactions will be carried out in our Bank’s ARN code
operations in investments and the AUM will accrue to the Bank.

MDRT 2019 concept in LIFE Insurance24:

Our Bank has launched Million Dollar Round Table (MDRT) programme 2019 to recognize all the specified staff who has done
extremely well in Life Insurance Business.
 Million Dollar Round Table (MDRT) is an international, independent association of around 38000 professional who
are world’s leading life insurance and financial services experts from 450 plus companies in 79 countries.
 MDRT is a member driven international network of insurance and investment financial service professionals who serve
clients by exemplary performance and highest standards of ethics.
 MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service.

23
Circular No: BCC:BR:109:51 dated 20.01.2017-“Launch of Baroda m-invest a mobile based App for
investment in Mutual Funds”
24
BCC:BR:111:57 dated 01.02.2019

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  MDRT membership is recognized internationally as the standard of sales excellence.
 Becoming member of this MDRT is recognition.
MDRT council has 3 levels of membership. Criteria for qualification of these level for 2019 is given below-
Level Recognition Standard Thresh hold defined
I Million Dollar Round Table (MDRT) Rs. 39,95,600 Regular Premium
II Court of Table (COT) Rs. 1,19,86,800 Regular Premium
III Top of Table (TOT) Rs. 2,39,73,600 Regular Premium
The weightage for various products under MDRT 2019 will be as under-

Plan Weightage
Traditional & GCL Regular 100%
ULIPs 25%
Single Premium & GCL Single 6%

For qualifying each level of membership all specified staff who have acquired IRDA certification mobilize business under each
category from 01.01.2019 to 31.12.2019.

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 ROLE OF TECHNOLOGY
IN BANK

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 5.1 Baroda Connect (Internet Banking)

 Introduction of Baroda Connect

Baroda Connect" is an internet banking facility introduced as an alternative delivery channel for rendering
effective customer service on 24 X 7 basis. It offers unique customized services to both Retail & Corporate
customers.

 Country wide launch

“Baroda Connect” is a transaction based internet banking product being offered to our customer’s w.e.f. 14th
September, 2006.

 “Baroda Connect” customers are classified in two categories (i) Retail (ii) Corporate

Baroda Connect – Retail

All INDIVIDUALS (including joint accounts) are considered as Retail customer for the purpose of “Baroda
Connect”.

Baroda Connect – Corporate

All NON-INDIVIDUALS are considered as corporate customer for the purpose of “Baroda Connect”.

 Advantages to the Bank

 Cost effective.
 To meet market competition.
 To meet customer’s requirement.
 Divert customer to alternate delivery channel and utilize manpower for other activities.

 Advantages to the Customers

24 x 7 x 365 Round the Clock anywhere online banking.

Safe & Secure 128 bit SSL encryption.

Cost Efficient Almost all services are available free of cost.

Fund Transfer  Instant / Scheduled online fund transfer to self-linked BOB account, third party account
within BOB & to accounts of other Bank (NEFT/RTGS)
 Instant / Scheduled online fund transfer to self-linked loan accounts as well as third
party loan accounts within BOB.
 IMPS fund transfer (our customers with mobile Banking facility) through MMID/IFSC
for our retail and corporate customers 24 x 7 x 365.

Tax Payment FREE Direct / Indirect / State tax payment and instant TAX receipt.

Form 26AS Free online viewing of Tax Credit Statement (Form 26 AS).

Online Ticket Online RAIL / AIR ticket booking.

IPO / FPO - ASBA FREE Online subscription of IPO/FPO/Right issue through ASBA.

On line request Switch Mailing Address | Generation of ESBTR receipt/GRN | Generation of TDS Certificate
| Generation of Interest certificate of SB/TD/OD and Loan accounts |Tracking of Loan status
| Get access to SPGRS | Direct access to e trade | Download pensioner life certificate | navigate
to NPS site and contribute to NPS | direct access to Baroda eTrade, where customer can login
using his/her credentials and can perform DEMAT transactions |Can check CIBIL score | Hot
listing of Debit card | Can do FATCA Self Certification | Can do Aadhar Verification | Can
register for Pradhan Mantri Bima Yojana | Can check status of their Clearing Instrument |
Can check Lien marked, if any | Can register for Atal Pension Yojana (APY)

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 Registration / Customer can Register/Deregister himself/herself or RESET M-PIN for our Bank’s Mobile
deregistration for M Application i.e. M Connect Plus.
Connect Plus & RESET M-
PIN

E-Commerce FREE Bill presentment | Bill Payment | On line Shopping | Receive and view bills online | Alert
on pending bills | Payment to India First Life Insurance | Payment to Baroda Pioneer.

Institution fees FREE on line fees payment of more than 125 School & Institutions.

Donation FREE online Temple / other Donation / Donation to Prime Minister Relief fund.

Mobile Alerts FREE Mobile Alerts of Debit and Credit transactions.

Mobile OTP To avoid non delivery or delayed delivery of OTP our IT team has developed OTP application
on mobile handset supporting Apple, Android, Windows and Blackberry.

Services Support Centralized dedicated Internet Banking Operations Team. 5000+ Support centers all over
India (branches).

Modeling Modeling of Loan / Deposits.

On line FD Request Customers including NRI/PIO with full transaction rights are provided facility to create
online Term deposits by themselves with facility of its Pre Mature closure.

On line RD Request Domestic retail customers with full transaction rights are provided facility to create online
Recurring deposits account by themselves with facility of its Pre Mature Closure.

Online Self registration, To reduce TAT and to ease customer convenience, the online Self Registration for new retail
User ID Retrieval & customers, online User ID retrieval & resetting of Transaction Password facility is available
Resetting of Transaction for retail customers in Baroda Connect, whereby authentication done through his/her debit
Password. card number and Pin.

Linking of PPF & SSA Our retail customers can link & View their PPF & Sukanya Samriddhi accounts through
accounts Baroda Connect and also they can deposit in their PPF & SSA account. Facility available under
services tab in Baroda Connect post login.

Viewing of KVP certificates The KVP customers can view their KVP certificate (opened through BOB Branches) by
in Baroda Connect. logging to their Baroda Connect account.

De linking of Accounts Customers can de link their SB/CA/OD accounts from their Internet Banking accounts lists,
except primary account.

Facility to purchase SGB Bank has launched the facility for purchasing of Sovereigns Gold Bond online through Baroda
Connect.

View Swift sent Messages Customers can view sent swift messages.

Updation/ addition/ Updation/ addition/ deletion of nominee can be possible through Baroda Connect.
deletion of nominee.

Digital Signature Corporate user who wants to secure their net banking portal with personalized authentication
Authentication can subscribe to this facility.

 HOW TO APPLY FOR BARODA CONNECT?

 Application Form is available in bank’s website www.bankofbaroda.com and in internet banking portal
www.bobibanking.com
 Customer is required to submit duly filled in prescribed application form, Retail or Corporate as the case may be,
to his base branch.
 E-mail ID and Mobile Number are mandatory.

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  For Retail customers, Date of Birth is mandatory.
 Branch is required to verify details mentioned in application form with the details available in Finacle. Any change
should be entertained with supporting document.
 Branches are required to process application through HDCR menu in Finacle.
 The application submitted by customer is to be retained at branch.
 Retail customers having our bank’s debit card, can register themselves for Baroda Connect from his office/home
without visiting branches. A link ‘NOT REGISTERED (RETAIL USERS) CLICK HERE’ is available on the
home page of Baroda Connect i.e. www.bobibanking.com
 ELIGIBILITY CRITERION

 GUIDELINES FOR SIGNING OF APPLICATION FORMS

 Retail:
Account Type Proposed User To be Signed by Remarks
Individual Himself Himself
Individual (Power of POA holder Account holder Provided all other formalities
attorney given to POA holder of his mandate are completed
someone) properly
Joint Any one of the account All other account holders Only if the operating
holder Proposed e-banking user instructions are “either or
survivor”, any one of survivor”.

 Corporate:
Account Type Proposed User To be Signed by Remarks
Sole Proprietorship Himself Himself To sign in capacity of
individual and prop.
Sole Proprietorship Any authorized Proprietor To sign in capacity of
signatory. Proposed user individual and prop
Partnership Any authorized All partners To sign in capacity of the
signatory Proposed user individual and prop
Public/Private limited Any authorized Authorized signatories Resolution duly signed by
companies signatory. Proposed user authorized signatory on
company’s letter head (in
the bank’s standard format)
must be submitted by the
company
Trust Any authorized Authorized signatories Letter from authorized
signatory Proposed user signatory on trust’s letter
head (as per trust deed) be
submitted
HUF Any authorized Authorized signatories Letter of HUF be submitted.
signatory Proposed user

 TYPES OF RIGHTS FOR BARODA CONNECT

Two types of rights available under “Baroda Connect”, (i) View right (ii) Transaction right.

 View Right
If view right is assigned to a customer then customer will not be able to make financial transactions through
“Baroda Connect”.

 Transaction Right
If transaction right is given to a customer then customer will be able to view his accounts and also make specific
or all kind of financial transactions through “Baroda Connect”.

--Branches are advised to select “View” or “Transaction” right carefully while doing HDCR.

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  Persons / Accounts not eligible for “Baroda Connect”
a) Illiterate account holder.
b) Dormant accounts.
c) Inoperative accounts.
d) Minor account holders (note that guardian can avail the facility).
e) Accounts where garnishee/ attachment order is received.

 Finacle Menu Options to be used by the Branches

 HDCR - For new registration of Baroda Connect.
 REGPW – Submitting Request for regeneration of Passwords only for corporate customers.
 ACUID- Create new Baroda Connect User id for corporate customers.
 Delete existing Baroda Connect user id for corporate customers.
 Change customer rights (from transaction to view and vice versa).
 CUSTMOB - Mobile number updation for Retail user.
 MRCR – Email ID updation for retail user.
 MOBUPLD- Mobile number updation of corporate user.
 BCPD- Branches can track the passwords by entering customer ID of the corporate customers only.
 Consignment number would be available to the branch which would facilitate follow up with the postal
department at local level/tracking the same through website of India PostHDCR - For new registration of
Baroda Connect.

 HBDTM MENU
 HBDTM Menu: HBDTM menu in Finacle is used for account related information pertaining to a customer
to flow to ebanking servers. HBDTM menu cannot be used for deletion of net banking facility.
 Even if the branch deletes a customer id in HBDTM, the customer continues to use his/her net-banking
without any issue.
 This menu is used to do modifications in customer id which are registered for net banking, only when
customer id is deleted in HBDTM, finacle allows modification to customer id.
 Branches to note that net-banking cannot be deleted/discontinued by modifying custid through HBDTM
menu.
 DELETION/Discontinuation of Internet Banking can only be done by admin users in Baroda connect
department at HO only upon receipt of request from respective Branches.
 For this, Branches has to send scan copy of the request letter of customer along with their recommendation,
to barodaconnect.bcc@bankofbaroda.com for deletion of his/her Internet Banking Facility permanently.

 Online Self generation of Baroda Connect Password (GREEN PASSWORD) using registered Mobile Number &
Email ID by retail customers (Domestic & NRI) (Refer Circular No : HO:BR:111:244 dated 03/09/2019):

 On receipt of fresh request for Baroda Connect issuance / Password Regeneration by Retail customers (NRI/
Domestic) at Branch, the Branch then enters his/her request in Finacle through respective menu (i.e. HDCR
for new issuance & REGPW for regeneration of passwords).
 The request entered by Branches is then processed at BCOT level on next working day.
 After successful processing of the request received through HDCR/ REGPW menu, an email is automatically
sent to the registered email ID of the customer mentioning the steps for setting/ resetting his/her passwords.
 In case of fresh Baroda Connect user, the user ID will be mentioned in the email ID.

Please note: Existing Retail user (NRI/ Domestic) may directly visit www.bobibanking.com for instant
reset of his/her passwords without approaching Branch.

 The New/ existing user visits www.bobibanking.com and clicks on “Retail USER”.
 The user enters the user id which he has received on his registered email id and instead of clicking “Enter”
button, user has to click on the link provided for set/ reset of passwords.
 On the next screen the user has to click on the option “Regenerate Passwords using Activation Code/ OTP”
 The system prompts the user to enter mobile number and the customer clicks on NEXT button.
 On successful validation of user id and Mobile Number, the activation code is sent on the registered email id
and one time password will be sent on registered mobile number.
 The user has to enter his Activation code (sent on registered email) & OTP (sent on registered mobile) and
clicks on NEXT button.

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  The screen will be displayed where the customer will be provided an option to confirm that he has got the same
rights which he has requested through branch. The screen is displayed to enter the new passwords as per
profile allotted. (Detailed step by step workflow is enclosed)

Benefits

To Customers:

 New retail customer need not visit Branch for collection of credentials.
 Existing retail customer can reset credential on their own anywhere anytime by visiting
www.bobibanking.com.
 Password generation is safe secure and instant.
 Beneficial to all retail customers and specifically to our overseas customers.

To Branches:

 Will not be required to maintain the inventory of the undelivered Password mailers, organise and deliver the
same to the customers against their acknowledgement for Retail customers (NRI/ Domestic).
 Branch need not be required to enter password regeneration request in REGPW menu for Retail customers
(NRI/ Domestic) unless so requested by customer.
 Retail customer (NRI/ Domestic) grievances related to non-receipt of Passwords, re-generation of Passwords,
delays in delivery of Passwords will be eliminated.
 Reduction if footfalls with regards to password related issues.

Important:

 Presently, we are introducing Green Password facility only for Retail Customers and Branches to ensure that
email ID and Mobile number are properly updated in Finacle.
 The printing and dispatch of physical Passwords for Retail Customers will be discontinued effective from
03.09.2019 for the requests received for issuance/ Regeneration of passwords.
 The existing process of physical printing and dispatch of Passwords of Corporate customers to the branch will
continue as it is.
 In order to Set/Reset Baroda Connect Password online using Activation Code/ OTP, the Customer’s email ID
& mobile number must be registered with the Bank.
 In case, Baroda Connect user is not able to Set/ Reset Password he/she will have to contact branch or Contact
Centre helpline 1800 258 44 55 or 1800 102 44 55.

 Major Development in Baroda Connect

 Online Self generation of Baroda Connect Password (GREEN PASSWORD) using registered Mobile
Number & Email ID by retail customers (Domestic & NRI).
 Reduction in cooling period for registration of Beneficiary from 24 hours to 4 hours.
 Blocking of Debit card.
 Online Retrieval of User ID for Retail Customers
 Online Linking and credit to Sukanya Samriddhi Savings account.
 Online net banking Registration Using Debit Card for Retail User.
 Virtual keyboard for secure login or input of secure information.
 FMS-ARCOT registration for self-regeneration/ reset of “Sign on Password”(online without approaching
Branches).
 Online Regeneration of Transaction Password for retail users Using Debit Card.
 IMPS for Instant Inter/Intra Money transfer through Baroda Connect
 Online viewing of Income Tax Credit Statements (26AS) through Baroda Connect
 On line TAX payment facility for Direst, Indirect & State Taxes.
 Online Generation of Interest Certificate, TDS Certificate & ESBTR receipt/GRN
 Online request for CA Mobile OTP for self-generation of OTP.
 Online FD/RD
 Premature closure of FD/RD opened through Internet Banking.
 Online Linking and Amount transfer to PPF a/c
 Linking of Aadhar Card.
 Online Transfer of Saving Account from one Branch to other Branch

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  Online credit to loan accounts.
 Online viewing of eKVP.
 Online Updation/ addition/ deletion of nominee
 Enrolling for Pradhan Mantri Bima Yojana and Atal Pension Yojana.
 Registration/De-registration & regeneration of MPIN of Mobile Banking.
 Linking and delinking of accounts through ACCOUNTS tab  Link/Delink Accounts.
 FATCA / EPFO payments.
 Sovereign Gold Bonds.
 Online subscription of IPO / FPO i.e. ASBA.
 Online payment of school / institutional fees
 Submission of 15G/15H online through Baroda Connect
 Online payment of IndiaFirst Life Insurance Policy premium payment
 Digital Signature based authentication facility in Baroda Connect for Corporate Users
 Upgrading Net banking version shortly.

 Useful Information / Links

 Apply for Lockers
 BOB Credit cards login
 BOB Insta login
 Apply for Baroda FASTag
 Login to recharge Baroda FASTag
 Apply for BOB Credit Card
 Apply for Home, Education and Car Loan
 Apply for Baroda Pioneer Mutual Fund
 Apply for IndiaFirst Life Insurance
 Open NPS Account
 NPS Contribution
 Submit 15G/H
 Manage Demat Account
 Download Pensioner Life Certificate Form
 Aadhaar Verification
 Check CIBIL Score
 Online Complaint
 Track Loan Status

 Facilities offered in Baroda Connect

The following facilities are offered to Retail and Corporate Baroda Connect customers

Retail Corporate
View Txn. View Txn
Balance inquiry    
Mini Statement    
Statement of Accounts    
Account summary    
Tax deduction enquiry.    
SMS Alert    
NEFT/RTGS  
Fund transfer to Self  
Fund transfer to Linked & Third Party account  
Payment scheduling.  
Payment of Direct/Indirect Tax & State Tax  
Bill Payment  
Alerts on Bill Payment  
Request.  
Mails on large value transaction.    
Profiling (Password Change)    
Activity History    
Modeling    

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 ASBA  
Institution Fees payment  
Online FD 

Cheque Book Request  

Online RD 

Gift Card 

Regenerate Challan  
Form 26AS  
Tax deduction inquiry along with interest  
IMPS  
Digital Signature 

PPF statement and transaction 

 Fund Transfer Limits

The default transaction limits for various financial services for retail and corporate customers are provided in
below table. . The limits would be refreshed on daily basis

1. Retail Customers
Shopping Mall / NEFT/RTGS
Funds Transfer limit in Self-Linked A/c &
Third Party A/c (Rs Amount
Baroda Connect Govt. payments
(Rs Amount in Lacs) in Lacs)

Per Transaction unlimited 7 10

Daily unlimited 10 15

2. Corporate Customers
Shopping Mall / NEFT/RTGS
Funds Transfer limit in Self-Linked A/c &
Third Party A/c (Rs, Amount in
Baroda Connect Govt. payments
(Rs. Amount in Lacs) Lacs)

Per Transaction unlimited 10 20

Daily unlimited 25 75

 The default limits for addition of beneficiaries for Retail and Corporate customers in a day are as under:
No. of Beneficiary Retail Corporate
NEFT/RTGS 5 8
TPT(Within Bank) 3 4
IMPS 2 3
Total Number Of Beneficiaries per day. 10 15

5.2 MOBILE BANKING – BARODA M-CONNECT PLUS

Bank of Baroda presents an appealing new channel for accessing your Bank Account through personal Mobile
Phone. Baroda M-Connect Plus – A true Anytime, Anywhere Banking Facility.

Technology has enabled the delivery of banking services through multiple channels, improving the convenience, reach

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 and speed. With rapid growth in number of mobile phone subscribers and wider coverage of mobile phone networks,
this medium is prompted as the most potent channel to reach-out to masses. In this endeavor, Bank launched “Baroda
M-Connect” on 14.05.2011, mobile banking facility to its customers. It evolved as a robust and safe banking utility on
customer’s mobile phone.

In the current digital banking scenario, where needs are changing and mobile apps are evolving, it was necessitated to
bring out a new robust, feature rich and user friendly Mobile banking application to our customers and to provide them
convenient, secure and user friendly platform to access their accounts.

Accordingly, a completely new Mobile Banking solution, with the name “Baroda M-Connect Plus” was launched by the
bank on 23.11.2016. It is received well by the customers and has become one of the most preferred alternate delivery
channels. The application comes with all new features and completely new interface. The application is available for
Android Phones (Version 4.5 and above), iOS-Apple Phones (Version 9.0 and above) and Windows phone (Version 8.0
and above)

All services through Mobile Banking is presently free of cost. Internet Data and SMS charges applicable as per the tariff’s
charged by Service Provider

Customers can start using Baroda M-Connect Plus facility in three simple steps:
1. Registration through Branch or ATM or Internet Banking
2. Downloading of application as per the device make from respective Play store (Android – Google Play Store,
iOS – App Store, Windows – Windows Store)
3. Activation of M-Connect Plus – Begin using the facility

Apart from the above channels, customer can also, self-register for the application. However, for this mobile number
should be updated in account and customer should possess a valid Bank’s debit card.

Benefits of Baroda M-Connect Plus

Baroda M-Connect Plus offers a variety of services to customers. The services can be grouped as:

FINANCIAL SERVICES

Fund transfer within Bank Fund transfer to other Banks

 Self-linked accounts  IMPS

 Third party accounts  NEFT
Recharge & Bill pay Premium services

 Mobile recharge  Cash on Mobile

 DTH recharge  BOB card bill payment
 Data card recharge  Scan to Pay (BHARAT QR payment)
 Quick bill payment  Opening of term deposit (Fixed / Recurring deposit)
 Registered bill payment  Tone Tag (Sound wave based proximity payments)
 Bharat Bill Payment System  Closure of FD/RD
NON-FINANCIAL SERVICES

Account related Cheque book related

 Account Balance  Cheque book request

 Mini statement  Stop Cheque
 360 degree view of account  Cheque status enquiry
Password related Other services

 Unlock / Forgot application Password  Aadhar seeding

 Change mPIN  Request for Internet Banking registration and Password reset.
 Change Application password  Add/Modify Communication Email Id
 Access Investments through Baroda Wealth Option
 Pre-login option to access Baroda Kisan Platform.
 Transaction history
 Complaints & Feedback
 Branch / ATM locator

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  Language selection (Select your preferred language amongst 13
different languages)
 Account statement
 Interest certificate
 TDS Certificate
 Debit card hotlisting
 Refresh operative account list
 De-link accounts
 Submission of Form 15G / 15H
 Request for new Debit Card
 Add/Modify/Delete nomination details
 Request for Savings Account Transfer
 Transfer to Sukanya Samriddhi Account
 Enrollment of PMJJBY & PMSBY
 Set Transaction limits
 My favourites
 Contact Us
 Help (FAQ-Frequently asked questions)

Using Baroda M-Connect Plus, the customers can now perform financial and non-financial transactions like enquire,
transact and transfer funds by debiting their account. Similarly, customers can do recharge, pay utility bills, etc.

Under ‘Bill Pay’, customers will be able to make payments to billers listed with Bank’s Service Provider BillDesK and
Bank’s one to one billers onboarded on the BBPS platform. However, common billers (energy bill, telephone bills, mobile
bills, Insurance, etc.,) are available.

Target Customers
Baroda M-Connect Plus mobile banking application is targeted towards:

 All Rural, semi-urban, urban and metro customers, and

 All the customers owning a mobile phone Android Phones (Version 4.5 and above), iOS-Apple Phones (Version
9.0 and above) and Windows phone (Version 8.0 and above)

Role of ZDMs, RDMs and Branches

ZDMs/RDMs at Zone/Region:

Regional Digital Managers / Zonal Digital Managers / Marketing team at Zone / Region should guide the branches for
activating maximum number of customers so as to meet the targets set for zones. Regular training sessions and
promotional exercises could be conducted to apprise branch staff of its benefits and for getting regular feedbacks which
could be aggregated and passed on, periodically, to Service Helpdesk at Baroda Bhavan (Head Office, Vadodara), for
quick redressal.

Branches:

Branches are requested to identify & contact the potential customers and explain about Baroda M-Connect Plus facility.
They should be encouraged to enroll a large number of customers for this facility and guide customers about how to use
it. The M-Connect Plus (Mobile Banking) application form is enclosed as ANNEXURE - I for ready reference.

Branches should motivate customers to use this facility as it costs very less in per transaction cost in comparison to all
ADCs as well as manual banking and reduces footfall in the branches, thereby, providing staff time to concentrate on
new sales and service their customers efficiently.

OPERATIONAL GUIDELINE

Mobile Banking Registration Eligibility

The mobile banking facility is available to customers, who fall under the below eligibility criteria:

A. Domestic Customers:

Sr. Type of account Constitution Mode of Eligibility

No. operation

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 1 SB Account Single Self Account holder is eligible
2 SB Account Joint E (or) S As per choice of all account
holders. Application to be
signed jointly
3 SB Account Joint Jointly NOT eligible
4 SB Account Minor Self Minor above the age of 15 is
eligible
5 PMJDY Account Single Self, E (or) S Account holder is eligible
6 Current Account In the name of Self, E (or) S Account holder is eligible
Self, Single
7 Current Account In the name of Proprietor Account holder is eligible
Firm
8 Current Account Partnership Jointly NOT eligible
Firm operated
9  OD against Banks own deposit Single Self, E (or) S, Account holder is eligible
 Staff OD Proprietor
 OD – NSC/KVP/LIC etc.
 OD against property
 OD Traders above 2.00 lac
 OD Baroda Mortgage Loan
 OD Traders upto 2.00 Lacs
 OD Baroda Traders to Comm
 OD Baroda Mortg-Non Ind
 New OD against Banks own deposit
10  OD against Banks own deposit Joint E (or) S As per choice of all account
 Staff OD holders. Application to be
 OD – NSC/KVP/LIC etc. signed jointly
 OD against property
 OD Traders above 2.00 lac
 OD Baroda Mortgage Loan
 OD Traders upto 2.00 Lacs
 OD Baroda Traders to Comm
 OD Baroda Mortg-Non Ind
 New OD against Banks own deposit

B. NRI Customers:

Sr. Type of account Constitution Mode of Eligibility

No. operation
1 NRE Single Self Account holder is eligible
- SB201-Saving Banks (NRE)
- SB205-SB NRE Portfolio Inv.
- SB206-Baroda Premium (NRE) SB
A/c
- SB224-Baroda Happiness NRE SB
- SB252-Home Loan Linked SB NRE

NRO
- SB301-Savings Bank (NRO)
2 NRE Joint E (or) S As per choice of all account
- SB201-Saving Banks (NRE) holders. Application to be
- SB205-SB NRE Portfolio Inv. signed jointly
- SB206-Baroda Premium (NRE) SB
A/c
- SB224-Baroda Happiness NRE SB
- SB252-Home Loan Linked SB NRE

NRO

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 SB301-Savings Bank (NRO)

 In case of Either or Survivor Accounts, both the Primary holder and Secondary holder can operate mobile
banking, provided both holders have different mobile numbers linked to their respective Customer IDs.
 Account holder holding a savings account and current account in the name of Firm can avail mobile banking for
both the accounts, by registering for mobile banking on the savings bank account.
 Accounts where mode of operation is “joint” which are operated by more than one holder as also accounts in
the name of minor below the age of 15 years or where minor is a joint account holder are not eligible for Baroda
M-Connect Plus.
 Following accounts are not eligible for availing M-Connect plus: Partnership, Companies, Joint accounts with
mode of operation other than ‘Either (or) Survivor’.
 Bank will not provide mobile banking facility to Illiterate account holders, Inoperative accounts/Dormant
accounts, Joint accounts with mode of operation Jointly operated by more than one holder, Accounts where
court/attachment order is received or account is NON-KYC compliant and account is kept credit / debit freeze
by the branch. There is a check to restrict transactions in Dormant /Inoperative accounts through Mobile
Banking.
 Accounts under the customer ID which have the mode of operation BLANK will not be fetched in mobile banking.
 The mobile banking facility is by default enabled/registered for accounts opened by branches through menu
HOPNACCT and Tab Banking.

NRI Status:

Change of residential status of the account holder:

NRE accounts should be re-designated as resident accounts or the funds held in these accounts may be transferred to the
RFC accounts (if the account holder is eligible for maintaining RFC account) at the option of the account holder
immediately upon the return of the account holder to India for taking up employment or for carrying on business or
vacation or for any other purpose indicating intention to stay in India for an uncertain period.

Where the account holder is only on a short visit to India, the account may continue to be treated as NRE account even
during his stay in India.

As per FEMA Guidelines:

“Persons returning to India permanently are considered residents from day 1 of return. By the way, only the person knows
if he/she have returned permanently. Hence, there can be an element of subjectivity in this case.”

A customer cannot hold both domestic and NRE A/c’s simultaneously, if the customer has returned to India permanently,
then he/she has to get the NRE status changed to ‘No’ at the Customer Id level and the Scheme Codes to be changed to
resident at account level also through menu option – HACXFRSC.

Service Charges
At present, Bank is offering this facility absolutely FREE. To use Baroda M-Connect Plus, customer pays either for
internet usage or for the SMS sent during the activation of the application, as per their tariff plan with their service
provider.

However, w.e.f 01.04.2019, the service offering outward remittances to other banks i.e. IMPS/NEFT transactions will
be charged as per the below table.

TYPE OF TRANSACTION AMOUNT CHARGES (exclusive CHARGES (inclusive

TRANSACTION SLAB of GST) of GST @ 18%)
Up to 1000 1.00 1.18
IMPS 1001 – 25,000 1.50 1.77
Above 25000 5.50 6.49
Up to 10,000 2.50 2.95
10,001 – 1,00,000 5.00 5.90
NEFT
1,00,001 – 2,00,000 15.00 17.70
Above 2,00,000 25.00 29.50

Bank reserves the right to charge the Customer fee for the use of other services provided under the facility and
change the fee structure at its discretion. Display of such charges on Bank’s website would serve as sufficient
notice and the same is binding on the customer.

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 WITHIN BANK FUND TRANSFER (SELF-LINKED - PPF) / (THIRD PARTY)

If customer has made a self-linked fund transfer to PPF account, where the account is debited and the transaction is
not successful where the PPF account is not credited, then branch should check the credit leg. The amount would be
lying in the ‘NET LIAB CDS SD ADA PPF ETC – XXX0015181012’. Branch to reverse the entry from this account to
customer debit account or PPF account.

Transaction Limits
Txn-Transaction, Min-Minimum, Max-Maximum, Amt-Amount
No. of
Max amt Max amt
Services Txn in a Min amt Per Week Per Month
per txn per day
day

100 5000 5000 10,000 25,000

Cash on Mobile
Fund Transfer - 5 Un-limited Un-limited Un-limited Un-limited
Self-linked
Fund Transfer -
Third Party 50000 1,00,000 2,00,000 5,00,000
5
Radiance (1,00,000) (2,00,000) (5,00,000) (10,00,000)
Customers
Fund Transfer -
IMPS/NEFT 50000 2,00,000 5,00,000 15,00,000
5
Radiance (2,00,000) (5,00,000) (10,00,000) (20,00,000)
Customers
Bill Pay &
Recharge
Recharge
Quick Bill Pay 5 25,000 50,000 1,00,000 2,50,000
Registered Bill Pay
Scan to Pay
Tonetag
BobCards Credit
5 50,000 1,00,000 1,00,000 2,50,000
Card Payment
Fixed Deposit 1000 Un-limited Un-limited Un-limited Un-limited
Recurring Deposit 1000 Un-limited Un-limited Un-limited Un-limited
WMS - Mutual
5 5,00,000 10,00,000 25,00,000 1,00,00,000
Funds
WMS - Insurance 5 5,00,000 10,00,000 25,00,000 50,00,000

Major changes in the limit:

 Maximum number of transactions in a day capped to 20, as the services are presently available for Retail
customers.
 Overall channel transaction / daily / weekly / monthly limit removed looking into the sub-limit available for
all transactions.
 Capping of limit removed for self-linked transfers and FD/RD account opening as funds remain in same
CID.
 Credit card per / daily transaction limit increased looking into the increase in usage of credit card facility.
 Higher limits are proposed for Radiance customers looking into the customer profile (Limit for radiance
customers shown in bracket)
 In view of proposed integration of Wealth Management Solution “MILES” in Mobile banking, the investment
limit advised by Wealth Management Department have been incorporated in the revised mobile banking
limit.

General Business Rules Governing Baroda M-Connect Plus

The following Business rules will apply to the facility being offered by the Bank:

i). The Facility will be available to customers having a satisfactory running Savings/ Current/Overdraft account
with the Bank.

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 ii). Fund transfer limit shall be Rs. 50,000/- per transaction, Rs.1,00,000/- per day. However, service code wise limits
for mobile banking are revised after obtaining approval as mentioned in the Transaction Limits section.
iii). Entering the wrong MPIN thrice will lock the user ID. Customer has to unlock by regenerating the MPIN from
branch / ATM / Internet Banking and set his / her own MPIN.
iv). Any change in the business rules of any of the processes will be notified on Bank’s website
www.bankofbaroda.com, which will be construed as sufficient notice to the customer.
v). Bank reserves the right to reject a Customer’s application for M-Connect Plus without assigning any reasons.
vi). Bank shall reserves the right t o suspend the registration of any Customer if the facility has not been accessed
by the Customer for three months or more.
vii). If the facility has not been accessed for six months or more, the registration of the Customer will be cancelled.
viii). Customer can de register mobile Banking through ATM / Net banking / Contact Centre / by submitting request
to base branch of the primary account enabled for mobile banking.
ix). It shall be the Bank’s endeavor to give a reasonable notice for withdrawal or termination of the facility, but
the Bank may at its discretion withdraw temporarily or terminate the facility, either wholly or partially,
anytime without giving prior notice to the Customer.
x). The facility may be suspended for any maintenance or repair work for any breakdown in the Hardware/
Software for Baroda M-Connect Plus or any emergency or security reasons without prior notice and bank shall
not be responsible if such an action has to be taken for reasons of security or emergency.
xi). The services offered under the facility will be automatically terminated if the customer ID for the Mobile Banking
Services is merged / closed.
xii). The Bank may also terminate or suspend the services under the facility without prior notice if the Customer
has violated the terms and conditions laid down by the Bank or on the death of the Customer when brought
to the notice of the Bank or when prohibited by law or an order by a court or Authority.

5.3 BHIM BARODA PAY (UPI)

Unified Payment Interface (UPI) is a platform to bring digital inclusion in India. The objective of this initiative is to
transform India into a cashless economy while making transaction simple for consumers.

Simply put, UPI enables all bank account holders to send and receive money from their smartphones by creating a
Virtual Payment Address (VPA) of their choice and link it to any bank account.

The VPA acts as their financial address and users need not remember any bank account information for sending or
receiving money.

Merchant can use this facility for collection purpose. It is seamless and convenient and the transactions happen on real-
time basis

 Key features of BHIM Baroda Pay, UPI application

 One App for multiple bank Account
Add multiple Bank Accounts in same application.
 Send and receive money instantly
Send or Collect payments with a Virtual Payments Address.
 Self-declaration as merchant (I am a Merchant)
Customers can declare themselves as merchant and receive payment from their clients.
 Safe and Secure
1 Click two-factor authentication makes it a safe and secure payment option.
 24 X 7 Availability
You can send or receive money 24 X 7, even on public/bank holidays.
 Instant Payment of any transaction
Real time settlement of Funds based on Account Number and IFSC.
 Secrecy of account and card details by using VirtualPayment Address.
No need to remember or share account details while sending and collecting payments.
 One App for all Payments
Use 1 app to do all payment like Send, Collect, utility and merchant payments.
 Easy access to Complaint module
Application has inbuilt integration where user can lodge and trace complaint of any transaction.
 Scan and Pay
Customer can make a P2P (Person to Person) payment based on VPA or IFSC + Account No. or MMID + Mobile no.
and P2M (Person to Merchant) by using QR code. It can scan both UPI and Bharat QR Code.
 QR Code: Customer can generate Dynamic and Static QR Code and the same can be scanned through any UPI
enabled application for collecting payments.

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  App availability: App is available in Android and IOS and can be downloaded from Google Play Store and App Store
 Bilingual App: App is available in English and Hindi

 Who can use UPI services?

 Mobile number should be registered with bank accounts.
 Saving account holders with mode of operation “Self” and “Either or Survivor” (except NRE/NRO & Sukanya
Samridhi).
 Current Account holders with mode of operation “Sole Proprietor”.
 OD Account holders with scheme codes:
• OD002 – OD against Banks own deposit
• OD003 – Staff OD
• OD004 – OD – NSC/KVP/LIC etc.
• OD005 – OD against property
• OD006 – OD Traders above 2.00 lac
• OD016 – OD Baroda Mortgage Loan
• OD017 – OD Traders upto 2.00 Lacs
• OD023 – OD Baroda Traders to Comm
• OD026 – OD Baroda Mortg-Non Ind
• OD028 – New OD against Banks own deposit.

 At a time only single Customer Id accounts can be linked to send or receive money.
 Debit Card is mandatory for linking of Account, setting of UPI PIN and transacting through the App.
 Services Available:

FINANCIAL SERVICES
 Send Money using VPA / IFSC + Account No. / MMID + Mobile No.
 Collect Money using VPA(UPI ID) / QR code
 Account Balance
 Make payment by scanning BHIM UPI QR
 Approve collect request
 Recharge of NETC RFID FASTag

NON-FINANCIAL SERVICES
 View Linked Account Details
 Transaction History
 Contact Management
 Customer Dispute Management
 Change UPI PIN
 I am Merchant option (customer can declare himself/ herself as a merchant to receive payment)
 Creation of Sub Agents by Merchant
 Bulk Collect Request generation by Merchant
 Debit block the account linked to Bank of Baroda.
 Generate QR for payment collection
 Unblock VPA’s blocked earlier

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  Branch/ ATM Locator
 Deregister
 Forgot Login PIN
 Contact Us
 Do’s & Don’ts

 How to send Money on BHIM Baroda Pay:

1. Using Virtual Payment Address (VPA)
2. Using Account Number and IFSC
3. Using Mobile Number & MMID

 How to Collect Money on BHIM Baroda Pay:

1. Using Virtual Payment Address (VPA)
2. QR Code

 Transaction Limits:
FUND TRANSFER (P2P – Person to Person)

Per Day No. of transactions

Per Transaction Min Amount
Transaction per day, per
(amount) (amount) per transaction
account

10
Fund Transfer Rs.25,000/- Rs.1,00,000/- Re. 1/-
(24 hrs. rolling limit)

Fund Transfer
Rs.5000/- Till 24 hours. Old 10
(After setting /
limits applicable Re. 1/-
resetting of UPI (PIN Set or Reset) (24 hrs. rolling limit)
post cooling period
PIN)

IPO (ASBA) Rs.2 lac Not applicable Not applicable Not applicable

MERCHANT TRANSACTIONS (P2B – Person to Business)

Maximum per transaction Rs.25,000/-

Maximum per day Rs.1,00,000/-

 ELIGIBILITY:
Sr. Type of Constitution Mode of operation Who is eligible for BHIM Baroda
No. Account Pay (UPI) facility?

SB Account Individual Self All Customers

1 (except NRE/NRO & Sukanya
Samridhi Accounts)

2 SB Account Joint Either or Survivor All Customers

3 SB Account Minor Self All Customers

4 Current Account Individual Self All Customers

Current Account Sole Sole Proprietorship All Customers

5
Proprietorship

Over Draft Individual Self OD Accounts with scheme code

6
Account (OD002,OD003,OD004, OD028,

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 OD005, OD006, OD016,
OD017,OD023)

 Advantages (Customer)
• Round the clock availability.
• Single Application for accessing different bank accounts.
• Use of Virtual ID is more secure, no credential sharing.
• Single click authentication.
• Raise Complaint from Mobile App directly.
• Low transaction cost.
• Direct debit from account.
 Advantages (Bank)
• Single click Two Factor authentication [Mobile number (IMEI number) and UPI PIN]
• Universal Application for transactions.
• Leveraging existing infrastructure.
• Safe, Secured and Innovative.
• Payment basis Single/ Unique Identifier.
• Enable seamless merchant transactions.
• Bank earns revenue income from the Merchant Discount Rate levied on the Merchant. Maximum merchant on
boarding will benefit Bank
• Seamless fund collection from customers - single identifiers.
• No risk of storing customer’s virtual address like in Cards.
• Tap customers who don’t have credit/debit cards.
• Suitable for e-Com & m-Com transaction.
• Resolves the COD collection problem.
• Single click 2FA facility to the customer - seamless Pull.
• In-App Payments (IAP).
• Cost benefit. Considering the fact that about 150 million smartphone users exist today and that number is expected
to grow to 500 million in the next 5 years. The solution leverages the growing use of mobile phones as acquiring
devices and uses virtual addresses instead of physical cards, thus reducing cost on both acquiring and issuing
infrastructure.
 Merchant On-boarding
Merchant on-boarding can be done on BHIM Baroda Pay in following ways:

Self-Registration

Any user can declare themselves as Merchant through Bank’s application under option “I Am Merchant”. There would
be no imposition of MDR (Merchant Discount Rate) for the merchants. This option is preferable in case of individual
merchants operating with single outlet having android smartphone.

Retail Direct Merchant on-boarding (Turnover up to 12 lacs per annum)

Any current account holder/ small merchants maintaining account with Bank of Baroda can be on-boarded through a
single page format form post commercial acceptance. The commercial terms mentioned in form are amended from time
to time as per Govt, RBI and NPCI guidelines.

Corporate Direct Merchant on-boarding (Turnover above 12 lacs)

Corporate Merchants can be canvassed and on-boarded under UPI. They will be provided customised solutions based
on their needs and portal to access MIS. The commercials involved will be negotiated depending on the Merchant size,
business, nature of activity, transaction ticket size, etc.

 UPI 2.0
UPI has been enhanced by NPCI to upgraded version 2.0 which comes with a lot of security, enhancements and benefits.
Some of the benefits are highlighted as under:

Linking all types of overdraft account on UPI

All the overdraft customers who were not able to use this application can use the same with ease

Mandate creation

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 Customer can now create a pre-authorized mandate transaction for debit from the account later. Mandate will be
executed at a date set by the customer. This mandate will be for one time only.

Invoice in the Inbox (view & pay)

While making payment for Collect Request received, customer can check invoices sent by merchants and thereby verify
the details before proceeding. Only verified merchants will be able to display the invoice. This will reduce any third
party unauthorized payments, where the customer fails to verify authenticity of the merchant, resulting in loss of funds.

Signed Intent & QR

While making payment using intent or through QR scanning, user will get additional security in form of signed QR/
intent. With this facility, the issues related to tampering of QR as well as non-verified entities shall be reduced.

5.4 Baroda e-Gateway and Paypoint (Internet Payment Gateway)

Baroda e-Gateway is the Internet Payment Gateway facility provided by Bank of Baroda which provides a secure
payment collection interface between merchants (B2B, B2C, C2C and G2C) and their customers using online modes
like Cards, Net Banking, UPI etc. It caters to all major category of merchants like Government, Education, Retail, Utility,
Mutual Funds and Insurance.

Baroda Paypoint is a web/mobile based payment collection portal for Merchants who don’t have their own website,
online infrastructure or IT Team / developer. It is powered by Baroda e-Gateway and is suitable for Educational
Institutes, Housing Societies and Retail category Merchants. It supports various modern technologies such as – online
and offline fee collection through cards/net banking/UPI/RTGS/NEFT, fee management, courses & student data
management, email alerts etc.

Baroda Paypoint encompasses the following services:

1. Baroda Paypoint – Education – Suitable for educational fee collection
2. Baroda Paypoint – Colony World – For Housing Society fee and other payments collection
3. Baroda Paypoint - Get-e-Kart – Well designed e-Commerce website and payment gateway

TARGET CUSTOMER GROUPS

Merchant Categories Baroda e-Gateway Baroda Paypoint

(for Merchants having website / (for Merchants without website /
IT solutions) IT solutions)

1. Government Municipal Corporations, Tax Collection, Paypoint Education – Government Colleges /

Forest Corporations, Hospitals, Universities
Housing Boards, Relief Funds etc. Paypoint ColonyWorld – Housing Development
Authorities

2. Education School / College / University Paypoint Education – All educational institutes

3. Retail Sellers of goods & services, Society
Collection, Grocery, Tours / Travel
operators, Hotels and Resorts, Cinema
Theatres etc.
Paypoint ColonyWorld – Co-op Housing
Society, Colonies etc.
Paypoint Get e-Kart – Online sellers who need
web development and online payment service

4. Utility Electricity Board, Water Board, Mobile Not applicable

/ DTH recharge services etc.

5. Mutual Funds Asset Management Companies Not applicable

6. Insurance Insurance Companies Not applicable

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 Benefits of Baroda e-Gateway

Consumer perspective Merchant perspective Bank’s perspective

• Fast and hassle free

payment mechanism
• Fully secured with 128-bit
SSL encryption
• Paper less transactions
• 24 x 7 x 365 - Anywhere,
Anytime
• All major Nationalised and
Private Banks’ Net banking
• Paperless payment collection via
multiple modes of payments
• Customized MIS reports
• Data updated instantaneously
• Split fee and split cashbook
• Dedicated admin module
• Canvas new business to
increase CASA
• Provide additional services to
existing customers
• Earning non-interest income
• Retention of Principal
business account

Launch of Society Fee and Retail Collection facility on Baroda Paypoint

Bank is association with the Bank’s Internet Payment Gateway aggregator M/s ATOM has developed another
customized solution for Society fee and Retail Collection that accept payment through online and offline mode.

 Society Fee Collection module i.e. Baroda Paypoint Colony world is a Mobile App / Web Portal which provide
solution to society who don’t have their own websites or developer to collect the Society maintenance / other
charges from the society members.
 Baroda Paypoint Colony world gives a complete assistance in society fee management flat & block data
management, email alerts etc.
 It is fully integrated multi-user system with 100% protection against unauthorized access. It is also providing
secured, accurate & timely information to users at all levels for better decision making.
 It also have special features like incidental fees, multiple fees collection, parking and visitor management etc.
 Flat owners and tenants can make online payments for maintenance and any other charges as defined by the
Society. It accepts all online/offline modes for Payments like Card, Net Banking, Wallet, NEFT / RTGS etc.

Target Customers:

Baroda Paypoint Colony World – Real estate / Flats / Societies (Government / Non-government organization) who
have or not have their website or subscription management solution and are interested to collect society fees in online
and offline mode without having ERP / Developer.

Retail Collection Module i.e. Baroda Paypoint Get-eKart

 Get-eKart is a complete online Mobile and Web Store platform which enables the merchant to launch its e-
commerce and mobile store platform in quick time. The merchant will get their own branded Mobile app and
website with shopping platform pre integrated with various useful plug-ins.
 Easy to use back end console for the merchants to manage the products, pricing and orders.
 Merchants can accept Online / Offline modes for payments Like Cards, Net Banking, Wallet, NEFT / RTGS etc.
 The Solution is having features like webstore, invoice management, order management analytics and all type of
payment collection etc.

Target Customers:

Baroda Paypoint Get-eKart – Retailer who want to expand their business in online mode, e.g. Kirana Shop, small
departmental store, small and medium trader, fashion and cloth store etc. can use Baroda Paypoint-Get-eKart, for
seamless collection in online/offline mode.

Benefits of Baroda Paypoint

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 Student / Parent / Customer
Merchant perspective Bank’s perspective
perspective

 Easy & secure login

 Ease of access via both URL
and Mobile App
 Customised / personalised
interface
 Simple steps to pay
 Immediate SMS / email
 Get exact payments due and
pay in online and offline
mode
 Immediate receipt
generated
 Record / receipt of all
payments made
 Additional features like
parking allotment,
reminders, circulars etc.
 Designed as per latest market trends  Canvas new business
 Don’t have to maintain individual student with hassle free
/ resident file/folder application increase in
 Go paperless, generate e- reports on a CASA
click of a button  Leveraging technology
 Reduce manpower in accounting / to acquire merchants
administrative departments with low technical
 Customized MIS reports investment
 Day to day, category wise, payment status  Able to provide various
 Real time data update online & offline payment
 Split fee and split cashbook modes in a single
module
 Dedicated admin console module for
proper administration  Increase in non-interest
income
 Fee can be paid online and offline
without website and developer to reduce
technology infrastructure cost

No. of Direct Merchants Volume Of

On-boarded220 Transactions
225
150
108 (in cr.)
42
75
0 2000 1711
2017-18 2018-19 2019-20…
1500
895
1000
453
No. of transactions (in lakhs) 500

0
78
51 2017-18 2018-19 2019-20
18 up to
Sep
2017-18 2018-19 2019-20…

Page 145 of 502

Page 146 of 502
 5.5 Bharat Bill Payment System (BBPS)

Bharat Bill Payment System (BBPS) is an initiative of national importance which offers real time bill payment services
to customers across geographic and demographic lines. BBPS is functioning as a tiered structure for operating the bill
payment system in India with a single brand image providing convenience of ‘anytime anywhere’ bill payment to
customers.

National Payments Corporation of India (NPCI) has been authorized by RBI as the Bharat Bill Payment Central Unit
(BBPCU) and is responsible for setting business standards, rules and procedures for technical and business
requirements for all participants.

BBPS System of Bank of Baroda has been certified as both Customer Operating Unit (COU) and Biller Operating Unit
(BOU) by NPCI. As a COU Bank is providing services through various channels to the customers for making the bill
payment and can on-board Agent Institutions and Agents for accepting the bill payments of customers and non-
customers also. As a BOU Bank can on-board Billers into the BBPS platform. Billers which are on-boarded under
BBPS platform by BOUs are available for payments under all channels of BBPS of all COUs.

Initially RBI approved 5 category of Billers such as electricity, gas, water, post-paid (telecom, landline and Broadband)
and Direct to Home (DTH)

Current Scope

RBI has approved expanding the scope and coverage of BBPS to include all categories of biller who raise recurring
bills (except prepaid recharges) as eligible participants, on a voluntary basis such as Insurance, Credit Card, Mutual
Fund, Institution Fees, Housing Society, FASTag, EMI of NBFCs etc. NPCI is in process of finalizing the modalities
for these bill payments.

Eligibility (Who can use it)

Available for both, Bank’s Customers as well as Non-Customers.

a) For Bank’s Customer, bill payment through Baroda Connect, Baroda M-Connect plus, BHIM UPI, BC points
(Financial Inclusion gateway), Baroda MPay options are available.

b) For Non-Customers, bill payment is available through Baroday MPay

c) Bank as a Biller OU can on-board billers into the Bharat BillPay systems If the Biller is already available in the
Bharat BillPay, our Bank can also on-board the same biller as a second default OU.

USP of Bharat BillPay

a) Anytime anywhere payment of all types of bills at one place.
b) Aims to facilitate seamless payment of any bill at any agent outlet/bank branch/portal in all geographies.
c) Standardized charges for entire Bharat BillPay ecosystem including banks, non-banks, agents, customers etc.
d) Bharat BillPay acts as an integrated platform.
e) Bharat BillPay lays standardised complaints management system to handle ON-US and OFF-US transactions.
f) Standard commercial arrangement.
g) Single and trusted brand connect and Bharat BillPay Assurance.
h) Sufficient business and technical MIS that may help in analyzing consumer behaviour and system performance
of biller partners

Secured Bill Payment Platform

a) It involves two steps in bill payment. One is Bill Fetch Request/ Response and the other is Bill Payment
Request/ Response. So, a bill payment is facilitated only when user first fetches the bill and confirms the bill amount.

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 (However, some of the billers are Pay Only billers, i.e. bill will not be fetched and user will have to enter amount
manually. E.g. Vodafone Post-paid.)
b) User’s details are highly confidential and also the User’s log-in credentials are encrypted using suitable
algorithms so that there is no compromise with user’s data.
c) Payment is considered complete only when user gets the confirmation message.

Usage (How to use it?)

5.6 BHIM Aadhaar Baroda Pay

Introduction
BHIM Aadhaar Baroda Pay is a digital payment acceptance solution from Bank of Baroda. It is a merchant mobile
application using an Android smartphone and biometric device meant for merchants to receive digital payments from
customers over the counter through Aadhaar authentication. Customer performs transaction by providing his Aadhaar
number and biometric. The transaction will be interoperable in nature allowing any bank customer to transact on BHIM
Aadhaar Baroda Pay. The merchant funds will be credited real time to the merchant account linked at the time of
registration after successful completion of the transaction. The per- transaction limit is Rs. 10000/-BHIM Aadhaar
Baroda Pay is different from BHIM (NPCI UPI’s Product). Among all the channels for acquiring merchants, “BHIM
AADHAR PAY-involves provision of a micro USB based biometric finger print capturing devices to Merchants, which
is to be attached to their Mobile Devices for accepting payments.

Salient Features

 Merchant’s account and customer’s account should be Aadhaar seeded

 Merchant should have account with bank
 Meant for merchants to receive digital payments from customers over the counter through Aadhaar authentication
 Customer performs transaction by providing his Aadhaar number and biometric.
 The transaction will be interoperable in nature allowing any bank customer to transact on BHIM-Aadhaar-Baroda-
Pay.
 The merchant funds will be credited real time to the merchant account linked at the time of registration after
successful completion of the transaction

Requirements for the merchant to start using BHIM Aadhaar Baroda Pay
 Aadhaar seeded account with Bank of Baroda.
 STQC Certified Biometric Reader with Micro USB / USB C-Type connector.
 Android smartphone with Android version 4.2 or higher with internet connectivity and OTG support for connecting
biometric device.
 Phone should be able to power the biometric reader.

Steps to follow before going Live

 BHIM Aadhaar Baroda Pay Application is available on Play store.
 Merchant has to download 3 Mobile Applications (3 Apk) from the Play Store as follows :
 IDEMIA Management Client
 IDEMIA RD Services

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  BHIM Aadhaar Baroda Pay

Activation of merchant

 Merchant will enter the Amount equal to which purchase has been made by the customer.
 Customer will enter his/her Aadhaar number, Mobile number and select the bank where he has maintained his/her
account which is Aadhaar seeded.
 App prompts to click proceed button.
 App prompts to provide biometric credentials (thumb impression) of the customer.
 After successful authentication of finger print, transaction entries will be passed i.e merchant will receive amount
in real time and credit message. Debit message will be sent to customer’s mobile number

Merchant Registration
 The registration process for BHIM-Aadhaar-Pay for individual merchants includes following steps:
 Branches identify the potential merchant and share the onboarding details of merchant in excel sheet for
registration of merchant.
 Using onboarding details merchant ID is created.
 Merchant download the App from the play store by following steps for going live.
 Merchant register himself using his Aadhaar number (that was taken as part of onboarding) and biometric
credentials.
Merchant is asked to agree the terms and conditions for using the app which are displayed on the mobile itself.

Benefits for Merchant and Customer

 Merchant receive transaction on real Time.
 Customer no need to carry debit or credit card with them.
 Cashless purchase transaction
 Affordable for merchant due to Lesser MDR as compare to Card transaction
 One application for multiple bank account
 Secrecy of Account details by using VPA mode of fund transfer
 Available 24 X 7

Benefits for Banks

 Opportunity to increase the CASA of Bank
 Opportunity to increase the digital transactions
 Merchant will open Current Account with Bank of Baroda

Charges for the merchants for using BHIM-Aadhaar-BOB

To bring in the clarity sought, we write to inform you that ownership of the device remains with the Bank however,
supply of the said device attracts rent recoverable in the following options:-

Option Amount Debit Account

Rs 2,200 + GST to be paid by merchant as one time rent

Option 1 upfront at the time of on boarding. No further rent is
required to be recovered.
Merchant account in
Option 2 Rs 2,520/- + GST to be paid as monthly instalments of Rs which the merchant has
(Not available for 210/- + GST for a period of 12 months. No rent will be availed the BHIM
Corporate Merchants) collected after the said 12 months. Aadhaar Baroda Pay
Service.
Option 3 Rs 3,000 + GST to be paid as monthly instalments of Rs
(Not available for 125/- + GST for a period of 24 months. No rent will be
Corporate Merchants) collected after the said 24 months.

Purchase Limit

 Minimum Rs. 10/-

 Maximum Rs. 10,000/-

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 5.7 Baroda Gift Card

Baroda Gift Card is ideal gifting solution for marriage, engagement, birthday, Diwali, Holi, Raksha Bandhan,
Christmas, and EID and can be used for corporate incentives etc.

It facilitates the recipient to buy items as per their requirement from their preferred outlet.

Baroda Gift Card is a prepaid “VERIFIED BY VISA” enabled prefunded card that opens a distinct proposition to
individuals and corporate with its instant availability, ease of handling, longer shelf life and extended shopping options
for the beneficiary.

Features of Gift Card

 Card can be loaded with any amount between Rs 500/- to Rs 10,000/- in multiple of Rs 1/-
 Card is valid for a period of one year from the date of purchase
 Hot listing can be done by anybody but re-issue at the request of purchaser only
 24 hour toll free number available-1800 102 5627
 No ATM usage permitted
 It is now capped at Rs.10,000/- w.e.f. 01-07-2018 as per BCSBI code of Bank’s Commitment to Customers
Prepaid card can be issued to anybody with a
 Valid Bank of Baroda account
 Non-customer: Card can be purchased after submitting regular KYC documents
Baroda Gift Card –Important Information
 Activation For convenience the card will be activated within 24 hours from the time of purchase and will be ready
for use at merchant outlets.
 Available at 800+ identified branches. For details, please visit our website http://www.bankofbaroda.com prepaid
section.

Load Amount Issuance Fee

Rs.500/- to 2,000/- Rs.50 + GST
Rs. 2,001 to 10,000 Rs.100 + GST

5.8 Baroda Travel Easy Card

An Introduction

Baroda TravelEasy Card - It is a prepaid International currency card, designed to make your international travel a worth
of memorable experience. The card is safer, secure and convenient to carry as compared to currency & traveller’s
cheques. Baroda TravelEasy card ensures that your time is best utilized in your pleasure or Business trip instead of
wasting your time for money changers or enchasing your travellers’ cheque.

Features
 Issued in foreign currencies USD EURO and GBP.
 Card available at 150+ authorized foreign exchange branches in India
 Card valid for a period of Three years from the date of issue or date printed on the card whichever is earlier. Card
is reloadable
 ATM withdrawal is permitted abroad
 No worry of exchange rates fluctuations, as card is issued in foreign currency
 Card not valid for use in India, Nepal and Bhutan.
 Minimum load value – USD $200/EURO € 150/ GBP £150
 Maximum load value - As per FEMA guidelines based on the purpose of visit
 For any assistance & information related to your travel easy card call our 24X7 customer service number (+91-80)
43428177.
 Cardholder can check available balance and/or transaction details online
through https://bobprepaid.enstage.com/prepaid/cms/customer/index.jsp

Particulars Issuance Fee

Issuance fee Rs.150 + GST

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 Reload fee Rs.55 + GST
Cancellation fee Rs.250 + GST

5.9 Baroda Reloadable Card

An Introduction of Reloadable Card

In our endeavour to meet customer needs to stay competitive in the market, Bank has launched Baroda Reloadable
card available in INR currency. Card can be reloaded multiple number of times. This makes it perfect dole out for
recurring overheads like pocket money, travel allowance, daily/monthly wage, meal allowance etc.

Salient Features
 Baroda Reloadable card is a EMV chip variant card that can be activated with minimum load amount of Rs.100/-
and maximum up to Rs.50,000 in multiples of Rs.1
 Cash withdrawal at ATM is allowed.
 Card is valid for maximum period of 36 months from the date of activation or date printed on the card whichever
is earlier
 Fully compliant with LKYC, AML/CFT requirements as per RBI guidelines.
 SMS alert facility will be made available to notify activation & expiry etc.
 Card holder will have access to 24X7 customer care team as well as secured online portal for viewing their card
balance and transaction details.
 Cardholder can check available balance and/or transaction details online
through https://bobprepaid.enstage.com/prepaid/cms/customer/index.jsp

Particulars Issuance Fee

Issuance fee Rs 100 + GST
Reload fee NIL
Cancellation fee NIL

5.10 Baroda FASTag (NETC)

Introduction of FASTag
Government of India has undertaken an initiative to build India’s highway network. This emphasises the need for
instituting toll collection points on large scale, which leads to a framework for creating an automated and
interoperable electronic tolling structure across the country’s highway network. For providing a composite solution
on Electronic Toll collection, National Highways Authority of India (NHAI) & Indian Highway Management Company
Ltd. (HMCL) have authorized NPCI.

In our pursuit to enhance Customer Convenience, we have started with NETC. This will enable the customers hassle
free toll payment service by just affixing the Baroda FASTag (based on radio-frequency identification technology
(RFID)) on a vehicle’s windscreen, the amount of toll will be automatically debited from the tag balance of the
customer.

Guidelines issued by Governing bodies to strength the NETC network:

According to Gazette Notification dated November 02, 2017, affixing of FASTag has been made mandatory to all
new vehicles of category M and N w.e.f. December 01, 2017.
Ministry of Road Transport and Highways had mandated the payment of toll transactions through FASTag from
01st December 2019. On 14th October 2019, MoRTH has signed MoU with State Toll plazas for on-boarding them
on NETC system. Also the integration of GST EWAY Bill with NETC is proposed.

Features of FASTag:
 Various payment options like Internet Banking, Debit card & Credit card (Bank of Baroda / Other banks),
UPI are available for recharging Baroda FASTag online. SMS alerts are issued on payment of toll charges or
when the balance becomes low etc.
 2.5% cashback are made available on all toll payments using it for 2019-20.
 Can avoid long queues at tolls leading to saving fuel and time. Separate Lane on Toll Plazas

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  Dedicated 24 x 7 Customer Care Support on 18001034568
 Online Portal for customers
 Baroda FASTag has a validity of 5 years from the date of issunace.
 Available for any individual/Corporate for both customers and non-customers.

Benefits to Bank:

 Earning from Issuance fee.

 Interchange income on transactions.

Charges applicable on Baroda FASTag:

The basic components of the FASTag cost are Security Deposit (refundable), Issuance fees and Initial (minimum)
Recharge amount.

The amount under the mentioned component varies based on the Class of the vehicle. The Issuance fees remains Rs.
100/- through-out independent of the class of the vehicle.

Initial Recharge/
Security Deposit
Vehicle Class Description Threshold Amount
(Rs.)
(Rs.)
1 Car/Jeep/Van 200.00 200.00

2 Light Commercial vehicle 2-axle 300.00 140.00

3 Bus 2-axle 400.00 300.00

4 Bus 3-axle 400.00 300.00
5 Mini-Bus 400.00 300.00
6 Truck 2 - axle 400.00 300.00
7 Truck 3 - axle 500.00 300.00
8 Truck 4 - axle 500.00 300.00
9 Truck 5 - axle 500.00 300.00
10 Truck 6 - axle 500.00 300.00

11 Truck Multi axle ( 7 and above) 500.00 300.00

12 Earth Moving Machinery 500.00 300.00

13 Heavy Construction machinery 500.00 300.00

Tata Ace and Similar mini Light Commercial

14 200.00 100.00
Vehicle
Goods and Service tax (GST) will be levied on all the prescribed fees & charges at the applicable rates. Convenience fee
will be applicable for online recharge

The revised structure of FASTag issuance for staff members is as below:

Issuance Fee Rs. 75/- (including GST)

Deposit Amount Rs. 200/-

First Recharge Value Rs. 200/-

The issuance fee for corporate customers has been waived of by Bank for current financial year 2019-20.

Sales Model for Baroda FASTag:

I. Retail model –

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 a. Master POS agent creation
 Sending duly filled in and signed UCMR form to barodafastag@bankofbaroda.com by zone.
 Creating Master Agent user, providing access of the portal and handholding to the zone by FASTag operations
team at Digital Banking department.
 Inventory of FASTag: Zone has to raise indent mentioning the class of vehicle to barodafastag@bankofbaroda.com
 The physical tags will be sent to the mentioned address by NETC operations team at Vadodara and at the same
time those tags will be assigned to the master agent on the Master Agent web portal
 Master agent has to accept the inventory and transfer the same to sub agent’s account in portal

b. Sub agent access creation

Providing sub agent access and handholding to Regions and identified branches by Zones using the master user
access, upon receiving master user ID and password.

c. Documentation of end user

Collecting required KYC & other documents from the end user by sub agent after duly verifying with the originals,
once he / she is convinced with the identity of the end user & the vehicle. Hard copy of the duly verified documents
along with duly filled in application form should be safely kept at zone / region / branch level for any future reference.

d. Fee collection & accounting procedure

 Collection of fees (Tag issuance + Tag deposit + 1st recharge amount) from the end user and crediting the amount
to NETC Pool A/c number 03910015181640 by sub agent after duly verifying and collecting the documents
 Requesting fund through web portal by master agent on the same day of credit of fund to Bank A/c, quoting the
transaction ID of the ‘credit to pool account’ transaction.
 Approval of the fund request by FASTag operations team, which enables reflection of amount in Master agent
account.
 Transferring the amount from Master Agent account to sub agent account by Master Agent, in accordance with
amount deposited.

e. Tag issuance
 Creation of end user FASTag account / ID through web portal and uploading the scanned copy of application form,
KYC, RC copy, etc. in the portal by sub agent, on receipt of funds in his/her account.
 Affixing Baroda FASTag on end user’s vehicle and uploading the photo of the vehicle with Baroda FASTag in web
portal, by the Sub agent.

Note: TAG must be invariably affixed and must not be handed over directly

II. Tie up model

 Canvass
Contacting the dealers by zones / regions / branches and explaining the product and its advantages.
 Sharing the commercials (incentive)
At present Bank is offering the following pay out/ incentive structure for dealers:

Issuance of FASTag to Class 4 vehicle (car/Jeep/Van) Rs. 50/- + GST

Issuance of FASTag to commercial vehicle Rs. 100/- + GST

The incentive is paid by NETC operation team centrally upon receipt of invoice from dealer.

 Agreement
 Signing of Agreement (in the format provided) between dealer (authorized person) and the Bank (Regional
Head), after incorporating the agreed Commercials and monthly inventory requirement (projected sales).
 Sending duly executed scanned copy of agreement to barodafastag@bankofbaroda.com and
missiondigital@bankofbaroda.com by Zone / Region and ensure safe keeping of the original copy.
 MPOS and POS ID creation for dealership model is same as that of Retail model.
 Inventory as per the request of the dealer will be provided by Zone.
 Deposit collection model will be same as that of retail model. In case the dealer is not having the account with Bank
of Baroda, the funds needs to be transferred to the NETC pool account through NEFT.
 Once the funds are remitted to the NETC pool account, NETC central team will assign the inventory to the MPOS
in the portal. Post which MPOS will be able to issue the FASTag to end users

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  Accounting / Reconciliation (T+1 basis)
These activities are to be performed on T+1 basis by Toll plus and NETC operations team.

Promotion of FASTag:

The followings marketing promotion activities needs to be carried out by branches/regions/zones to market our
product, try to tap vehicle OEM/dealers and on-board them as dealer for Baroda FASTag issuance.

 Tapping of customers individual/corporate who are engaged with activities viz. transport, tour & travels, freight
related activities etc.

 State Road transport bodies may also be tapped for FASTag issuance.

 Business correspondents also may be on-boarded as dealer and their services may also be utilized for increasing sales
of Baroda FASTag.

 Promotional materials may be displayed in branches for FASTag issuance.

Latest Updates about FASTag:

https://fastag.bankofbaroda.com/Pages/Common/FAQ.aspx

5.11 Baroda ATMs / Cash Recyclers

Introduction of ATM / Cash Recyclers

Post amalgamation of erstwhile Vijaya Bank and Erstwhile Dena Bank with Bank of Baroda w.e.f. 01.04.2019, our
Bank’s widespread network of ATMs / Cash Dispensers makes it easy and convenient for customers to bank 24 hours
a day. With more than 13,153 ATMs & Cash recyclers set-up within India, we ensure that you are never too far from
an ATM.

Bank of Baroda has partnered with National Financial Switch (NFS), Visa, MasterCard, Discover , JCB & UnionPay,
Therefore, Debit / ATM card issued by members of NFS, Visa and MasterCard, Discover , JCB & UnionPay cards are
accepted at our all ATMs.

User-friendly graphic screens and easy to follow instructions in a language of your choice makes our ATM Banking a
smooth experience.

Talking ATMs for visually challenged persons -

Talking ATMs provide financial access to blind persons in getting cash on their own anytime and also provides greater
banking usability for the low vision, illiterate and aged population.

All the ATMs are having 4 currency cassettes and are presently dispensing following 4 denominations

1 Cassette for Rs 100/- denomination (old design)

1 Cassette for Rs 200/- denomination

1 Cassette for Rs 500/- denomination

1 Cassette for Rs 2000/- denomination

The Cash Recycler machine (CR) is a self-service terminal that lets you and me to make deposit and withdrawal
transactions of cash. All successful transactions are immediately credited or debited in real time and customers will
be issued an acknowledgment slip confirming the transaction.

A person having Debit Card can use the CR machine for withdrawal, however to use the CR machine for depositing
the Cash, customers need to have either his/her Bank of Baroda debit card or to know beneficiary’s account number
in Bank of Baroda. The transaction receipt also gives you your updated account balance. Some of the salient features
of this product are:
 Cash recyclers are able to accept cash from customers and dispense as well.
 Machines are supported with Bill Validation Technology to ensure genuineness of currency.
 Counterfeit Recognition and retention (as per RBI Note Authentication and fitness Sorting parameters) with
accuracy along with 100% trace for serial number of the currency notes to the account of the customers, i.e. all
counterfeit notes that are rejected/not given value can be traced to the customer accounts.

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  Cash deposit with debit card up to Rs.2,00,000/- (2 Lacs) per day where PAN is registered and Rs.49,999/- where
PAN is not registered in account.
 Card less transaction (by feeding account number) up to Rs. 20,000/- per day.
 If customer deposits over the permissible limit then the RECYCLER rejects the transaction and notes are
presented back to the customer.
 Upon Cash deposit, RECYCLER counts the notes and displays the count denomination wise and the total amount
inserted in RECYCLER for deposit, Customer has to confirm the same.
 Fake note, Suspicious Note is impounded and receipt will be given to the customer.
 Torne/Mutilated/Taped notes are not accepted by this machine.
 The machines will accept the Rupee notes in the denominations of 2000, 500, 100.
 Other bank customers can also use BOB cash recycler, however at present they can use only for cash withdrawal
facility.
 Cash Withdrawal will be supported for NFS/VISA/ MasterCard/ Discover/ JCB & UnionPay Cards network on
Cash Recycler
 Hindi Language option is available with all Hindi screens and Hindi receipt for benefit of customers.
 NRE / NRO, Time Deposit and Loan Accounts are not supported.
 Cash can NOT be deposited in In-active accounts.

SERVICES AVAILABLE
Following services are available free of cost at our ATMs to our Saving Bank account holders:

 Cash withdrawal
 Balance Inquiry
 PIN Change
 Mini Statement
 Mobile Banking Registration/Deregistration/MPIN regeneration
 Self-linked Fund transfer
 Card to Card Fund Transfer
 NEFT remittance
 India First Life Insurance Premium payment
 Direct Tax Payment
 Gujarat Urja Utility Bill Payment
 Cheque Book Request
 Aadhaar Seeding
 Green PIN Facility for ATM PIN regeneration
 Cash on Mobile

Other Bank (member of NFS) Customers can also use our ATMs for 4 basic functionalities such as PIN Change, Cash
withdrawal etc. Applicable Charges as decided by other Issuer Bank shall apply.

Service Charges for Using ATMs / Cash Recyclers -

Product Particular Limit/ Charges
Number of Free ON-US
Unlimited/No charge
transactions
ATM Usage
Number of Free OFF-US 6 Metro city ATM-3,
transactions All Non-Metro city-5
ATM charges after free For Financial Transaction Rs 20/- per transaction
OFFUS transactions For Non – Financial Transaction Rs. 10/- per transaction
For Classic variant : Rs. 250/-
ATM International Usage Cash Withdrawal
For Platinum variant : Rs. 450/-
Charges
Balance Inquiry Rs. 30/-

Major Development/changes in ATM Operations-

 Handover of ATM Monitoring activity to BGSS, GANDHINAGAR for Day to Day operations w.e.f. 08.04.2019
 Setting of per transaction limit of Cash withdrawal at ATM/CRs from Rs.15000/- to Rs.25000/- for all Debit Card
Variants at Bank of Baroda ATM/CRs (ON-US transaction) w.e.f. 01.04.2019 at all BOB/eVB/eDB ATMs
 Waiver of ATM Usage Charges(interbank) for all the BOB/eDB/eVB customers for ON-US transactions at
BOB/eDB/eVB ATMs w.e.f. 01.04.2019

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  Enabling EMV Transaction processing at all the ATMs machines of BOB/eVB Network
 Disabling printing of Receipt for all ON-US transaction at all the BOB ATMs
 Enabling of Green PIN facility at all the Cash Recyclers.
 Rollout/calibration of new currency of Rs 200 at ATMs

Major Projects/Road Ahead for ATM Operations-

 Integration of all eDB/eVB ATMs with BOB Base24 Switch for uniform ATM services
 ATM and Vendor rationalization of eDB/eVB ATMs post switch/branch migration
 Decentralization of various support services of ATM Operations
 Rebranding/Renovation of existing sites as per new branding guidelines of all the ATM sites
 EMV rollout at all the Cash recyclers machines
 Rollout/calibration of new currency of Rs 100 at ATMs and Rs 100 & Rs 200 at Cash recyclers machines
 Interoperable Cash deposit facility at all the Cash Recyclers
 Interoperable Cash withdrawal facility from ATMs through UPI/QR code App
 Rollout of various RBI directive like, ASD, Terminal Security solution, Cassette Swaps etc. in time bound manner.

ATM sites security Arrangements – E-surveillance Solution-

Electronic surveillance is the monitoring of a ATM site, Branch lobby etc. using a variety of devices such as CCTV,
digital video equipment, various sensors and other electronic, and audio-visual means.

Safety and security of the Bank’s ATMs and other Self Service Machines has been a matter of concern to the Bank
apart from their availability to the customers. For this purpose, Bank has appointed caretakers through Managed
Services Provider. However, Bank has to incur huge cost towards caretaker services. Also, there has been instances of
security compromises despite the availability of caretakers and in some of the cases, even caretakers life has been
under threat.

With the availability of latest technology in the industry, Bank has decided to implement a robust, reliable and proven
technology solution for Comprehensive Centrally Monitored Electronic Surveillance system for ATM / e-Lobby /
Express Lobby installations of Bank of Baroda on OPEX Model. E-Surveillance system would consist of the following
services:

- Event based e- Surveillance at all the ATM sites, e-Lobbies and Express Lobbies placed under e-Surveillance.
- Quick Response Team (QRT) for attending to the sites on event based requirements.
- Maintenance of the ATM cabins and site surroundings by roaming beat marshal
- AC , UPS & Signage energy Management and functional monitoring

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 - CMS-Central monitoring System with reporting mechanism

The vendor will provide the following security measures at the ATM sites through the E-surveillance system installed
–
Event Based detection of loitering or unauthorized activity, using motion detectors through PIR
(Passive Infrared) sensor/ IP Camera on a round the clock basis / or on a shift basis, wherever the
ATMs functioning is on a shift basis. In other words, the Trigger action in all the ATMs including the
Night closer ATMs would be on event based basis however, all the ATMs would remain under
Surveillance for the 24 hrs basis.
Video verification by viewing images of site on above event.
Storing of Images and Video for any Verification (90 days minimum) (Expandable to meet higher
period for storing in case of any future administrative / regulatory requirements)
2-way audio will be used to deter the attempted crime.
Ticket related notes / recordings of conversation with various parties will be stored for 90 days
minimum and tickets for suspicious / criminal events will be stored for beyond 90 days, till the closer
of the case. The flow of ticket after a trigger is generated is explained in ticket flow chart.
Bank can carry out mock drills etc. with availability of log details.

5.12 Baroda Debit Cards

Bank of Baroda International Debit Card enables you to access over Bank of Baroda Interconnected ATMs
spread across major centres in the country, and 118,000+ ATMs of member banks of National Financial Switch in
India and multimillion ATMs worldwide.

These cards also provide you convenience of usage at literally all major merchant outlets in India and abroad. Enjoy the
convenience of cash-less purchasing power without the fear of overdrawing your account. We offer wide range of chip
based debit cards to suit growing requirements and lifestyle

Baroda Visa Classic Debit Card

Eligibility: All customers who are eligible to operate the account individually.

Feature:

 ATM Cash withdrawal Limit : Rs.25,000/-

 Purchase limit at POS : Rs.50,000/-

Baroda Visa platinum International Debit Card:

Eligibility:

 All customers who are eligible to operate the account individually

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 Feature:

ATM Cash withdrawal Limit: Rs 1,00,000/- (Note: As per circular no. BCC:BR:111:533 dated
11.10.2019, Cash withdrawal limit per day from ATM for Baroda Platinum Saving Account
(Visa Platinum Card) is Rs. 1,00,000.00)
 Purchase limit at POS: Rs.2,00,000/-
Baroda MasterCard Classic Debit Card:

Eligibility:

 All customers who are eligible to operate the account individually

Feature:

 ATM Cash withdrawal Limit : Rs.25,000/-

 Purchase limit at POS : Rs.50,000/-

Baroda Master Platinum International Debit Card:

Eligibility:

 All customers who are eligible to operate the account individually

Feature:

 ATM Cash withdrawal Limit: Rs.50,000/-

 Purchase limit at POS: Rs.1,00,000/-

Baroda Rupay Classic Debit Card:

Eligibility:

 All customers who are eligible to operate the account individually

Feature:

 ATM Cash withdrawal Limit : Rs.25,000/-

 Purchase limit at POS : Rs.50,000/-

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 Baroda Rupay Platinum International Debit card

Eligibility:

 All customers who are eligible to operate the account individually

Feature:

 ATM Cash withdrawal Limit: Rs.50,000/-

 Purchase limit at POS: Rs.1,00,000/-

Key Benefits and Features of Debit Card:

 Merchant shops, it can also serve as your electronic purse, and money gets debited instantly from your account, as
you pay.
 The Card allows you to get mini-statements from Bank of Baroda ATMs, or to check the balance in your account,
avoiding visits to even our nearest branches.
 The Card is accepted at over 3,50,000 Point-of-Sales (POS) in India and around 29 million globally, which display
the VISA/ Master / Rupay sign Depending upon card variant.
 In the event of loss or theft of your Bank of Baroda International Debit Card or for any kind of assistance, please
take advantage of our 24-hour help line by calling us at Toll Free No. 1800-258-44-55 and 1800-102-44-55,
 For more information visit
http://www.bankofbaroda.com/pfs/atm_debitcards.asp

Baroda World Radiance (MasterCard Contactless) Debit Card

Eligibility:

Targeted for HNI customer maintaining QAB balance of 50 lacs

Feature:

 Domestic as well as International usage is enabled.

 Daily cash withdrawal is Rs. 2 lac.
 Daily POS/ECOM limit Rs. 5 lac.
 Free Domestic airport lounge access.

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/e-commerce
transactions.
 Can be used for domestic as well as international transactions

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  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 (by 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.

Baroda Deposit Card

Our Bank has introduced Baroda Deposit Card for our corporate customers maintaining Current account, Cash Credit,
Overdraft accounts to deposit cash through Cash Recyclers. The corporate customer can utilize the cash deposit facility
using Cash recycler’s machines with this card. Customer can be issued up to 10 deposit cards per account.

Eligibility:
Only CA, CC and OD accounts (other than individual and sole proprietorship accounts are eligible).

Previous Conditions:
 Deposit Cash amount of Rs. 20,000/- to any account without any debit card in cash recycler machine.
 Max Rs. 2 Lakh if PAN is available in the account.
 Can Deposit Rs. 49,900/-, if PAN not available, when having Debit Card of the account holder.
This card is apparently similar to a Debit Card but it can be used only for depositing cash in a designated accounts.
It will be issued to Non-individual Customer on specific request.

Limits:
 Withdrawal: Card will be having Zero Cash withdrawal/purchase limit through POS & E commerce.
 Cash Deposit: Maximum Cash that can be deposited in a day is Rs 5,00,000 per account which can be enhanced
as per Business Requirement.
 No of Add on Cards: Maximum 10 Baroda Deposit Card can be issued for an account.
Usage: Card can be used only at Bank of Baroda Cash recyclers for Pin change & Cash deposit facility.
Charges: Annual Charges (Rs. 200 +18% GST) per card shall be recovered from card holder in line with other
existing debit card variants.

Baroda MUDRA Card

Bank has launched Baroda Mudra Card on 02.01.2016 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.
 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).

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 Usage of ATMs - Rationalization of number of free transactions on other Bank’s ATMS.
 Number of mandatory free ATM transactions for savings bank account customers at other banks‘ ATMs is 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.
 There is no restriction for using our bank ATM by our customers up to 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:
 Rs 20/- plus GST per transaction for Financial Transaction.
 Rs.10/- plus GST 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 Bank’s ATMs.

Rupay National Common Mobility Card (NCMC) Debit cum Prepaid Card
 RuPay “National Common Mobility Card” (NCMC) Debit cum Prepaid card in affiliation with RuPay Card Network
of NPCI. RuPay NCMC (National Common Mobility Card) is also called as “One Nation One Card”.
 This card can be used for transit payments (Bus, Metro, Cab etc.) toll, parking, small value offline retail payments
having NCMC specification terminal as well as normal day to day cash withdrawal and retail payments – POS and
e-commerce.

Target Customers:

 Individuals maintaining any Savings Bank Account (excluding FI accounts) with our Bank with mode of operation
as “Self” or “Either or Survivor”.
 Individuals/ Sole Proprietor firms opening Current Account with mode of operation as Self or Sole Proprietor.
 Salaried employee, Businessman, Professionals, etc.
 HNI Customers.

Card limits are as under:-

 ATM – Cash withdrawals

Maximum Per day limit Rs 50,000

Maximum per transaction limit on our ATMs Rs 15,000

Maximum per transaction limit on other Bank’s ATM Rs 10,000

Maximum number of cash withdrawals allowed per day 10

 POS – Retail payments

Maximum Per day limit at POS Rs 1,00,000

Maximum per transaction limit using Contactless mode Rs 2,000

Total count of purchases at POS in a day using Contactless mode 10

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 Note: As per RBI guidelines, Contactless transaction up to a maximum of Rs 2,000/- can be done without PIN at POS.
If amount is more than Rs 2,000/-, 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 2,000/- by opting for Contact based mode.

Prepaid Wallet Contactless transactions-

Maximum per transaction limit for money add transaction Rs 500

Maximum daily limit for money add transaction Rs 2,000

No. of money add transactions allowed per day 4

Maximum balance in card (stored value) at any point Rs 2,000

Maximum per transaction limit for card for offline purchase Rs 2,000

Maximum daily limit for card for no. of offline purchase transactions 20

Summary of Debit Card variants as on 21.12.2019:

Various EMV debit card variants in use and being issued
Sr. Variant Name Daily Limit Daily BINS International
Cash Limit Usage
Withdrawal (POS/ (Yes/No)
Ecom)
1 Visa Platinum / Contactless 50,000 200,000 431393 YES
2 RuPay Platinum 50,000 100,000 652211 YES
3 MasterCard Platinum 50,000 100,000 536018 YES
4 RuPay Classic 25,000 50,000 652151 NO
5 Visa Classic 25,000 50,000 402985 NO
6 MasterCard Classic 25,000 50,000 527253 NO
7 RuPay PMJDY/Bhamashah 25,000 50,000 606994 NO
8 RuPay Samagra 25,000 50,000 607848 NO
9 RuPay BKCC 25,000 50,000 607029 NO
10 RuPay Mudra 5,000 5,000 508847 NO
11 IFFCO co-branded RuPay Classic 25,000 50,000 652151 NO
12 Baroda Radiance (MasterCard World) 2,00,000 5,00,000 552230 YES
13 RuPay NCMC qSparc 50,000 1,00,000 608259 NO
14 Baroda RuPay Champ** 3,000 3,000 652151 NO

** Baroda RuPay Champ Combined limit including ATM/POS/Ecom is 3000.

Withdrawal limit per transaction from BOB ATM: 15000/-.

Withdrawal limit per transaction from other Bank ATM: 10000/-.

Note: As per circular no. BCC:BR:111:533 dated 11.10.2019, Cash withdrawal limit per day
from ATM for Baroda Platinum Saving Account (Visa Platinum Card) is Rs. 1,00,000.00

Customer Protection Policy – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions

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 While the primary responsibility for preventing frauds lies with banks themselves, Reserve Bank of India (RBI) has
been advising banks from time to time about the major fraud prone areas and the necessary precaution to be exercised
for prevention of frauds.

a) Zero Liability of customer

 Customer shall be entitled to full compensation of real loss in the event of contributory fraud / negligence /
deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer)
 Customer has Zero Liability in all cases of third party breach where the deficiency lies neither with the bank nor
with the customer but lies elsewhere in the system and the customer notifies the bank within three working days
of receiving the communication from the bank regarding the unauthorised transaction

b) Limited Liability of customer

 Liability in case of financial losses due to unauthorized electronic transactions where responsibility for such
transaction lies neither with the bank nor with the customer, but lies elsewhere in the system AND
 There is a delay on the part of customer in notifying / reporting to the Bank beyond 3 working days and less than
or equal to 7 working days (after receiving the intimation from the Bank), the liability of the customer per
transaction shall be limited to transaction value or amounts mentioned in following tables –

Table 1 - Overall liability of the customer in third party breaches in such Unauthorised

Electronic Banking Transactions where the deficiency lies neither with the bank nor with the customer but lies
elsewhere in the system as per RBI guidelines –

Time taken to report the fraudulent transaction from the date of receiving the communication

Customer liability

 Within 3 working days Zero liability.

 Within 4 to 7 working days The transaction value or the amount mentioned in below Table 2, whichever is lower
 Beyond 7 working days 100% Liability (subject to Board approval)

Table 2 - Maximum Liability of a customer in fraudulent transaction reported to the Bank within 4 to 7 days as per
RBI guidelines.

Type of Account Maximum Customer Liability

 Basic Saving Bank Deposit accounts - > Rs. 5,000/-

 All other SB accounts Pre-paid payment Instruments and Gift Cards Current / Cash credit / Overdraft Account of
MSMEs Current Accounts / Cash Credit / Overdraft Account of Individuals with annual average balance (during
365 days preceding the incidence of fraud) / limit up to Rs. 25 lacs Credit cards with limit upto Rs. 5 lacs - > Rs.
10,000
 All other Current / Cash Credit / Overdraft Account Credit cards with limit above Rs. 5 lacs - > Rs. 25,000/-

c) 100% Liability of customer

 Customer shall bear the entire loss in cases where the loss is due to negligence by the customer, e.g. where the
customer has shared payment credentials, Account / Transaction details, Internet Banking user Id & Password,
Debit / Credit Card PIN / OTP / CVV / other details or where unauthorised debit was happened due to improper
protection on customer devices like mobile / laptop / desktop leading to malware / Trojan or Phishing / Vishing
attack. This could also be due to SIM deactivation by the fraudster. Under such situations, the customer will bear
the entire loss until the customer reports unauthorised transaction to the bank. Any loss occurring after reporting
of unauthorised transaction shall be borne by the bank.

 ii) In cases where the responsibility for unauthorized electronic banking transaction lies neither with the Bank nor
with the customer, but lies elsewhere in the system and when there is a delay on the part of the customer in
reporting to the Bank beyond 7 working days, the customer would be completely liable for all such transactions.

Debit Card- Insurance Coverage for Debit Card transactions

In order to safeguard our customer’s interest against fraudulent siphoning of money from their accounts using their
Debit Card credentials. Bank has taken Insurance coverage from M/s New India Assurance Company Limited.

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 Risk Coverage, variant wise insurance coverage is as under:-

Daily Limit Daily Limit (POS/

Sr. Variant Name Coverage
Cash withdrawal Ecom)

1 Visa Platinum/ Contactless 50,000 200,000 4,00,000

2 RuPay Platinum 50,000 100,000 2,00,000
3 MasterCard Platinum 50,000 100,000 2,00,000
4 RuPay Classic 25,000 50,000
5 Visa Classic 25,000 50,000 1,00,000
6 MasterCard Classic 25,000 50,000 1,00,000
RuPay PMJDY (Bhamashah /
7 25,000 50,000 1,00,000
Samagra)
8 RuPay BKCC 25,000 50,000 1,00,000
9 RuPay Mudra 5,000 5,000 1,00,000
10 IFFCO co-branded RuPay Classic 25,000 50,000 1,00,000
11 IFFCO co-branded VISA Electron 25,000 50,000 1,00,000
12 Baroda Radiance (MasterCard World) 2,00,000 5,00,000 10,00,000
13 RuPay NCMC 50,000 1,00,000 2,00,000

Note: As per circular no. BCC:BR:111:533 dated 11.10.2019, Cash withdrawal limit per day
from ATM for Baroda Platinum Saving Account (Visa Platinum Card) is Rs. 1,00,000.00

5.13 Digital Signage System

(DSS)

Introduction of Digital Signage Systems

Digital Signage Systems are envisaged to fulfil bank’s requirement of providing latest and relevant product information
to customers in an appealing manner using video content, still banners, text/graphical information etc. on a large size
(46” or more) LED display screen.

These systems are designed to display high quality content to visitors in a banking hall, lobby or office premises etc.
having high public footfall. These are industrial grade LED screens with attached media player also called as thin client
to store content locally.

The content is pushed from a central server for an immediate or scheduled time display.
Monitoring of DSS and content distribution would be carried out centrally. Digital Banking Department in co-
ordination with Marketing Department would update the latest product information on these screens. We also propose
to display information in regional languages catering to local requirements.

Scope of information Broadcast Contents

DSS can be used to broadcast latest information about bank’s new products or features in form of audio visuals / 2D
animation as it is centrally controlled so, these contents can be pushed in few minutes to all or upon selected DSS
installed pan India.
DSS can also be put to use , to display latest interest rates of Fixed deposits, Recurring deposits, loans, foreign currency
exchange rate ,Bank’s share prices on NSE/BSE index and other products in real-time. File formats supported by DSS
of Bank of Baroda e.g. / shockwave file(.swf), Jpeg image, Bitmap image (.btm).
It can also be used to display contents not only in visual form but in text-form in the form of ticker which keep on
moving at bottom of screen.

Benefits of DSS to Bank

To communicate with people, you have to get their attention. Watching TV and using computers has trained us to look
at screens for information, so digital signage is a natural choice for reaching large audiences. It’s also better than email,
printed posters, and bulletin boards because:

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  We can deliver breaking news in real-time: Like updated real-time Bullion markets, stock markets rates, Forex
rates etc.
 Screens are bright and show motion: This feature can be used to provide video tutorial to the customers for
learning the process to operate mConnect Plus, Baroda connect, mPassbook, M-clip etc.
 We can display multiple things on a screen at once: At a time multiple information can be displayed on screen
like Ticker showing information in text, Images showing product information and guidelines.
 We can change what’s on the screen throughout the day :full control is in our hands by using centrally
connected Server we can display Stock prices in real-time and can be updated on real-time basis
 It’s cheaper than print for big audiences: It can be used as Digital Poster hence can be used to display
content to promote latest products or information.
 It’s better than print for green reasons-By using DSS in Bank of Baroda we are saving paper which
is used for printing these ads hence it is a green initiative by using: environment friendly methods and
cost saving initiative by using DSS in bank we are saving lacs of funds by not using traditional paper and printer
format of Commercials to display new feature and schemes over a long period of time.

5.14 SELF SERVICE PASS BOOK PRINTER (SSPBP)

Self Service Passbook Printer is an automated kiosk where customer can print the passbook on their own. Customer
can use this facility 24x7 from the SSPBP machine installed in Elobby/ATM.

There are two types of Self Service Passbook Printers (SSPBP) available in merged entity – Fully automatic Self Service
Passbook Printers (BOB) and Semi-automatic Self Service Passbook Printers (eDena & eVijaya).

1. Fully automatic SSPBP set up (BOB) –

These machines are fully automatic machines with auto page flipping feature. Salient features of the machine:

a) Fully automatic machine with auto page auto page turning facility. Customer has to simply insert passbook
with only cover page opened and machine will automatically flip and align the pages and print on appropriate
page/locations.
b) Passbook used is magnetic stripe based. It will bear a pre-printed number which is already stored in the
magnetic stripe of the passbook and mapped with the customer’s account.
c) Passbook pages have been made with grey scale strips, facilitating easy reading.
d) Auto mapping feature is available. If a customer’s passbook is printed completely and transactions are pending
then machine asks the customer to insert a fresh blank passbook within 45 seconds. If customer inserts the
passbook then machine automatically issues the passbook to the customer.
e) There are 3490 fully automatic SSPBP installed. These machines work on magnetic strip based passbooks.
Steps for placing order for passbooks:
i. Regions send request to central SSPBP team at HO.
ii. Central team places order with passbook vendor M/s Seshaasai and vendor supplies the passbooks
to respective regions.

Annual Maintenance Cost (AMC) – AMC for SSPB machines is processed centrally by SSPBP team.

Passbook Payment – Payment for Self Service Passbooks is processed centrally by SSPBP team.

2. Semi- automatic SSPBP setup (eDena) –

These machines are semi-automatic machines. Salient features of the machine:

a) Customer inserts the passbook by opening the page from where printing is to be started.
b) After printing that page machine ejects the passbook and customer has to manually turn the page and reinsert
the passbook.
c) These machines work on Bar code based passbooks.
d) There are 121 semi-automatic SSPBP machines deployed.
e) Steps for placing order for passbooks:
i. Branches send email to psd@denabank.co.in .
ii. Central stationary team send passbooks directly to branches.

Annual Maintenance Cost (AMC) – AMC for SSPB machines is decentralized and is processed by respective
Regional offices.

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 Passbook Payment – Payment for passbooks is processed centrally.

3. Semi- automatic SSPBP setup (eVijaya) –

These machines are semi-automatic machines. Salient features of the machine:

a) Customer inserts the passbook by opening the page from where printing is to be started.
b) After printing that page machine ejects the passbook and customer has to manually turn the page and reinsert
the passbook.
c) These machines work on Bar code based passbooks.
d) There are 386 semi-automatic SSPBP machines deployed.
e) Steps for placing order for passbooks:

i. Branches send email to email id pns@vijayabank.co.in or place indent through portal

http://172.16.1.193:8000/
ii. Central stationary team send passbooks directly to branches.

Annual Maintenance Cost (AMC) – AMC for SSPB machines is decentralized and is processed by respective
Regional offices.

Passbook Payment – Payment for passbooks is processed centrally.

5.15 MULTI – FUNCTION KIOSK (MFK)

To provide hassle free and convenient banking services through alternate delivery channels to customer by leveraging
Technology, Bank of Baroda has launched an innovative Self Service kiosk called Multi Function Kiosk (MFK). As
the name suggests it offers a number of customer centric services from a single hybrid services box.
1. Product USP: Key Features
 Cheque Deposit facility with CTS interface
 Bill payment facility using our Debit card and Net banking

 Browser based Internet Banking

 Non cash / Enquiry services including Balance enquiry and Mini Statement

Performance:
During Financial year 2018-19, total number of 11, 93,463 cheques were processed through Multifunction Kiosks.
For Current Financial Year, i.e. FY2019-20, the volume of cheques processed through Multifunction Kiosks is
mentioned below:

Month No. of Cheques Deposited in MFK

April-2019 80,178
May-2019 77,753
June-2019 76,578
July-2019 82,851
Aug-2019 89,215
Sep-2019 74,986
Total 4,81,561

2. Cheque Deposit Facility

Customer can deposit cheques by entering few details prompted by the system and he/she would get instant receipt
with cheque image and date/time stamp. CTS compatible front, back and UV scanned images would be transferred to

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 CTS server through MFK server. This facility will help reduce the time taken for clearing process and there is no need
of scanning /entering the cheque details by the branch/service branch staff as this machine is having the feature of
capturing necessary details.

3. Non CTS Centres

Where the CTS system is not enabled, the machine is working as cheque deposit box with instant receipt. Branch staff
has to remove cheques from MFK (Onsite/Offsite) and send these cheques to service branch as per normal clearing by
following existing guidelines. Account number of cheque will be printed on the backside of cheque.

4. Process of cheque deposit in MFK

 Customer selects the cheque deposit menu.

 System asks the user to enter the A/C number in which the amount is to be credited.
 System fetches the A/C holder name from CB Sand show to the customer and gets confirmation.
 After confirmation, machine will prompt the user to insert the cheque.
 After processing of one cheque, machine allows depositing more cheques in the same account, if required by
the user.

5. Bill payment facility using our Debit card and Net banking
Bill payment facility is available in MFK through internet banking and debit card based authentication. Customer can
use any of the options i.e. his/her Internet Banking or Debit Card details to pay the Bill/Recharge Mobile / DTH etc.

6. Process of bill payment using MFK

 Customer needs to click on the Bill Payment option after selecting the language option
 Customer needs to select the Bill category (Electricity, water, prepaid, post-paid etc.) from the icons and selects
the Biller.

 Customer has to enter the required information like unique bill number, mobile number, amount
 System will validate the information entered by the customer and ask for Payment.
 On clicking Pay button, it would ask to choose the option of Debit Card/ Internet Banking.
 On click in Net Banking, icon customer needs to login with net banking credentials and pay the amount.
 On clicking Debit card icon, customer need to dip the card in card reader and enter the PIN
 On success/failure of the payment, machine would display appropriate message on the screen and customer
gets the receipt.
7. Browser based Internet Banking
Net banking is based on secure web browser/ with interactive UI same as Baroda Connect. Non cash / Enquiry
services including Balance enquiry and Mini Statement

8. Balance Enquiry
The customer will select view balance option under the Banking services. It would ask to swipe the card for
authentication, thereafter, it will display the balance available in primary account and allow taking a print if desired by
the customer.

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 9. Mini Statement
For mini statement, the customer will select the mini statement option under the Banking services. It would ask to
swipe the card on machine for authentication, thereafter, it will display the last eight transactions held in primary
account and allow to take a print if require.

10. SMS Banking/Missed Call Facility

Weblink: https://www.bankofbaroda.co.in/missed-call-facility.htm
A SMS to be sent from their registered mobile number to 8422009988

Services offered are:

 Balance Enquiry
 Mini Statement
 Cheque Status

Customer has to send a SMS text as under:

1 For Balance enquiry - BAL <space> last 4 digit of account number

2 For Mini statement - MINI <space> last 4 digit of account number

3 For Cheque status - CHEQ <space> last 4 digit of a/c no <space> cheque number

4 For Aadhaar seeding - 12 digit Aadhaar number <space> last 4 digit of a/c no

For Registration of preferred

5 REG <space> last 4 digit of a/c no <space> cheque no.
account

BLOCK<space>C<space> Last Four Digit of Card Number or

6 Debit Card Blocking
BLOCK<space>A<space> Last Four Digit of Account Number

7 Subscribe or Unsubscribe ACT/DEACT<space> Last Four Digit of Account Number

8 PMJDY OD Request ODREQ <space> Y

9 PMJJBY /PMSBY Enrolment PMJJBY/PMSBY <space> Nominee Name <space> Y

5.16 Baroda e-Lobby

E-lobby is a place where automated banking is done without any manual intervention; it is designed in a unique way
to create a brand image of the bank and to accommodate 5 different machines which makes banking easy for the
customers 24 X 7. E-Lobby comprises of ATM Machine for cash withdrawal, Cash Recycler for accepting and
withdrawing cash, SSPBP Machine for automatic passbook printing and an MFK which is a multifunction kiosk that
offers various services including Internet Banking.

Our Bank has 506 number of e lobbies PAN India that provide uninterrupted banking services to the customers.
Currently we have more than 503 (363 (BOB), 40 (eVB), 100 (eDB)) e-lobbies operational across India. Details of the
machine installed in E-lobby are as follows:

Bank of Baroda (e-lobbies)

 2 X ATM
 BNA / Cash Recycler (CR)
 MFK (MultiFunction kiosk)
 SSPB (Self Service Passbook Printer)
 DSS (Digital Signage System)

eVijaya (e-lobbies)

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  ATM
 CDK (Cash Deposit Kiosk)
 PBK (Passbook Kiosk)

eDena (e-lobbies)
 ATM
 BNA (Bunch Note Acceptor)
 PBK (Passbook Kiosk)

e-lobbies USP:-

 Multiple machines are available under a single roof for BOB/eVijaya/eDena customers and acquirer customer so
that most of the services can be availed by the customer without visiting Branches.
 User friendly machines such as talking ATMs are installed for customer convenience.
 Ambience is offered in such a way to bring customer delight and to retain customers so that they visit again.
 Other current products information (Retail and corporate) such as leaflets, posters are readily available for
customers for their awareness about our new/existing products and services.
 We provide separate UPS connection that can provide sufficient back up for ensuring the 24x7 availability of all
the services through e-lobby.
 Ramp is available for disabled customers for their convenience and Machines are available with braille key pads
for blind customers so that they can readily use our machines.
 Customers can get their passbooks printed on real time through the Self Service Passbook Printing Machines and
can also use internet banking services, bill payment services, branch locator, ATM locator services through Multi-
Functional Kiosk.
 Our bank also displays various products and services through the DSS, Digital Signage System in the e lobby.

e-lobbies Benefits:-

A. Benefits to customers
 Most of the services are available for the customers under a single roof
 Customer need not wait in queue in Branches for availing services

B. Benefits to Bank
 These heavy duty machines shed a lot of load from the staffs and thus enables staff to devote time to other business
aspects.
 Appeal and ambiance of e lobby gives customer a feel of happy banking which causes “customer delight”
 Service/Maintenance/Operational cost is reduced as all machines are available at same place.
 These are proven profit making centre as the machines canvas customers by surveys and display.
 Digital signage installed at these sites promotes latest bank product amongst customers which also creates new
business opportunities.

5.17 Digital Grievance Redressal

Digital Banking Department- Digital Grievance Redressal Mechanism

Digital Products have gained lot of prominence due to the ease of banking, availability and host of functionalities.
Government of India is giving lot of thrust for the growth of digital transactions. More than 60 percent of customer
facing transactions are through Digital Banking channels and products. Major Digital products are ATM, Cards (Debit
& Prepaid), Net Banking, Payment Channels (NEFT, IMPS, UPI, BBPS) etc.

Number of digital transactions have increased from 30.46 Cr in FY 16-17 to 57.5 Cr in FY 18-19 to 35.39 Cr during April
2019 to August 2019. With rise in digital transactions, there is rise in queries/enquiries/complaints related to digital
channels. Hence it becomes very imperative on the knowledge of the digital products so as to handle the queries and
customer complaints.

At Digital banking department, a centralised Grievance Redressal Team (Digital – Customer Service Team) which will
address the complaint / request/ suggestion received from Bank’s branches/ customers for all the Digital products
except Debit card complaints which is presently handled at Jogeshwari by BGSS/outsourced vendor under the
supervision of the Bank’s team.

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 Presently all the complaints are lodged under SPGRS portal (Bank’s Online Grievance Redressal System) for lodging
complaints for customers/branches. This is available on the bank’s website to customers and at branches. It must be
encouraged to all the customers and advise the branches to lodge the complaint under SPGRS system for better tracking
and resolution.

As per definition of the complaint (Source: Grievance Redressal Policy of the Bank).

“Complaint means a representation in writing or through electronic means containing a grievance alleging deficiency
in services on part of the Bank, an employee, or Bank’s vendor”

If a branch receives a complaint directly from a customer in writing then:

i) Branch needs to ensure that every complaint must be lodged in SPGRS with all required details.
ii) Branch needs to ensure that previously the same complaint is not being lodged, if lodged then status needs
to be provided to complainant.
iii) After lodging the complaint Tracker ID must be provided to complainant with tentative TAT (Turn around
Time). (refer to table below)

TAT for Resolving Digital Complaints in line with the recent RBI Guidelines on harmonisation of TAT received
on 20th September 2019 and is applicable for technically failed transactions. In case of chargeback and representations
and merchant refunds, the TAT is as per the interchanges i.e Rupay, Visa and Mastercard

Sr. No. Digital Product Type of Complaint Turnaround Time

Issuance T+5
1 Debit Card ATM/ CR T+5
POS - ECOM T+5
Financial T+5
2 Net Banking
Non-Financial T+2
Financial T+1
3 UPI
Non-Financial T+1
4 IMPS/ NEFT Financial T+1
Financial T+5
Prepaid Card -
5 Gift Card and Reloadable Card Non-Financial T+1
Financial T+35
Prepaid Card -Travel Easy Card
Non-Financial T+1
For escalated complaint, RO/ZO need to route the complaint in accordance to its product to the concerned resolver
team. Further, if any further clarifications is requested from the resolver group, then they can utilize following option
in SPGRS -

 Seek Clarification

 Refer/ Send to

Unauthorised Electronic Transaction:

RBI vide notifications on regular interval is providing guidelines for better services to the customer for developing the
awareness of the Bank/Branches. One of the major circular is Customer Protection – Limited Liability of Customers
in Unauthorised Electronic Banking Transactions circular ref no.: RBI/2017-18/15
DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017.

Salient features of this circular are:

A customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:
(i) In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the
customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the
reporting of the unauthorised transaction shall be borne by the bank.

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 (ii) In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor
with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after
receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction,
the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table
below, whichever is lower.

Maximum Liability of a Customer

Maximum liability
Type of Account
(in Rupees)
BSBD Accounts 5,000

• All other SB accounts

• Pre-paid Payment Instruments and Gift Cards
• Current/ Cash Credit/ Overdraft Accounts of MSMEs
• Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average
balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh 10,000
• Credit cards with limit up to Rs.5 lakh

• All other Current/ Cash Credit/ Overdraft Accounts

• Credit cards with limit above Rs.5 lakh
25,000

Further, if the delay in reporting is beyond seven working days, the customer liability shall be determined as per the
bank’s Board approved policy. Banks shall provide the details of their policy in regard to customers’ liability formulated
in pursuance of these directions at the time of opening the accounts. Banks shall also display their approved policy in
public domain for wider dissemination. The existing customers must also be individually informed about the bank’s
policy.

Overall liability of the customer in third party breaches, where the deficiency lies neither with the bank nor with the
customer but lies elsewhere in the system, is summarised in the Table below:

Customer’s Liability for fraudulent transactions

Time taken to report the fraudulent transaction Customer’s liability (in Rupees)
from the date of receiving the communication

Within 3 working days Zero liability

Within 4 to 7 working days The transaction value or the amount mentioned in Table
above, whichever is lower
Beyond 7 working days As per bank’s Board approved policy

The number of working days mentioned in table above shall be counted as per the working schedule of the home branch
of the customer excluding the date of receiving the communication

As per Bank’s Customer Protection Policy, Right and Obligation of customer in case of unauthorized electronic
banking transaction:

i) Scenario 1: Customer Negligence - Unauthorized Electronic Banking Transaction happened due to customer
negligence (such as where he has shared the payment credentials etc.)

Customer Liability – 100% customer liability.

Customer Right – Customer to bear the entire loss until he / she reports the unauthorized transaction to the bank.
Any loss occurring after the reporting of the unauthorized transaction shall be borne by the Bank.

Customer Obligation – Approach the Bank as soon as the customer becomes aware of the unauthorized debit.
Customer is required to be vigilant while doing electronic banking transaction.

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 ii) Scenario 2: Bank’s Negligence - Unauthorized Electronic Banking Transaction happened due to Contributory
fraud / negligence / deficiency on the part of the Bank (either committed by Bank staff or Bank vendor) – (irrespective
of whether or not the transaction is reported by the customer):

Customer Liability – Zero Liability

Customer Right – In such cases where customer has suffered loss due to Contributory fraud / negligence / deficiency
on the part of Bank’s, Customer is having right to get compensation from Bank.

Customer Obligation – Customer is required to check the SMS / Email alert sent by Bank and approach the Bank
as soon as the customer becomes aware of the unauthorized debit.

iii) Scenario 3: Third Party Breach - Unauthorized Electronic Banking Transaction happened due to Third Party
breach:

Customer Liability – Based on the time taken by the customer to report the fraudulent transaction from the date of
receiving the Bank communication as shown below.

Customer Right – In such cases where customer has suffered loss due to third party breach where the deficiency lies
neither with the Bank nor with the customer but lies elsewhere in the system, and the customer has notified the Bank
within seven working days of receiving the communication from the bank, Customer is having right to get
compensation from Bank (refer to Bank’s Customer Protection Policy)

In such cases where customer has notified the unauthorized transaction to Bank after 7 days, Bank will have no liability
and Bank will try to pass the customer claim through Bank’s Insurance Agency (if any insurance was taken by the Bank)
on best effort basis.

Customer Obligation – Customer is required to check the SMS / Email alert sent by Bank and approach the Bank
as soon as the customer knows about unauthorized debit.

Digital Banking Dept. have issued Customer Protection Policy and various Circulars related to Grievance Redressal
from time to time. Below is list of the same:

 Customer Protection Policy – Limited Liability of Customers in Unauthorized Electronic Banking Transactions
dated 27th June, 2018
 Circular for NEFT – Process to handle cases for funds transferred in wrong account by Branches dated 19th July,
2018
 Circular for UPI/IMPS – Process to handle cases for funds transferred in wrong account

Recent initiative by RBI: RBI have issued new guidelines for Harmonisation of Turn Around Time (TAT) and
customer compensation for failed transactions using authorised Payment Systems vide RBI circular no. RBI / 2019-20
/ 67 DPSS.CO.PD No.629 / 02.01.014 / 2019-20 dated 20th Sept 2019.

General Instructions covering the TAT:

1. The principle behind the TAT is based on the following :

a. If the transaction is a ‘credit-push’ funds transfer and the beneficiary account is not credited while the debit
to originator has been effected, then credit is to be effected within the prescribed time period failing which
the penalty has to be paid to the beneficiary;
b. If there is delay in initiation of a transaction at the originator bank’s end beyond the TAT, then penalty has
to be paid to the originator.

2. A ‘failed transaction’ is a transaction which has not been fully completed due to any reason not attributable to
the customer such as failure in communication links, non-availability of cash in an ATM, time-out of sessions,
etc. Failed transactions shall also include the credits which could not be effected to the beneficiary account on
account of lack of full information or lack of proper information and delay in initiating a reversal transaction.

3. Terms like, Acquirer, Beneficiary, Issuer, Remitter, etc., have meanings as per common banking parlance.

4. T is the day of transaction and refers to the calendar date.

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 5. R is the day on which the reversal is concluded and the funds are received by the issuer / originator. Reversal
should be effected at the issuer / originator end on the same day when the funds are received from the beneficiary
end.

6. The term bank includes non-banks also and applies to them wherever they are authorised to operate.

7. Domestic transactions i.e., those where both the originator and beneficiary are within India are covered under
this framework.

Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using
authorised Payment Systems

Sl. Description of the incident Framework for auto-reversal and compensation

no.
Timeline for auto-reversal Compensation payable

I II III IV
Automated Teller Machines (ATMs) including Micro-ATMs
1

Customer’s account debited but Pro-active reversal (R) of failed ₹ 100/- per day of delay beyond
cash not dispensed. transaction within a maximum of T T + 5 days, to the credit of the
+ 5 days. account holder.
a

2 Card Transaction
Card to card transfer Transaction to be reversed (R) latest ₹ 100/- per day of delay beyond
within T + 1 day, if credit is not effected T + 1 day.
Card account debited but the to the beneficiary account.
a beneficiary card account not
credited.

Point of Sale (PoS) (Card Present) Auto-reversal within T + 5 days. ₹ 100/- per day of delay beyond
including Cash at PoS T + 5 days.

Account debited but

b confirmation not received at
merchant location i.e., charge-
slip not generated.

Card Not Present (CNP)

(ecommerce)

c Account debited but

confirmation not received at
merchant’s system.

3 Immediate Payment System (IMPS)

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 Account debited but the If unable to credit to beneficiary ₹100/- per day if delay is beyond
beneficiary account is not account, auto reversal (R) by the T + 1 day.
credited. Beneficiary bank latest on T + 1 day.
a

4 Unified Payments Interface (UPI)

Account debited but the If unable to credit the beneficiary ₹100/- per day if delay is beyond
beneficiary account is not account, auto reversal (R) by the T + 1 day.
credited (transfer of funds). Beneficiary bank latest on T + 1 day.
a

Account debited but transaction Auto-reversal within T + 5 days. ₹100/- per day if delay is beyond
confirmation not received at T + 5 days.
merchant location (payment to
b merchant).

Sl. Description of the incident Framework for auto-reversal and compensation

no.
Timeline for auto-reversal Compensation payable

I II III IV

5 Aadhaar Enabled Payment System (including Aadhaar Pay)

Account debited but transaction Acquirer to initiate “Credit ₹100/- per day if delay is beyond
a confirmation not received at Adjustment” within T + 5 days. T + 5 days.
merchant location.
Account debited but beneficiary
b
account not credited.
6 Aadhaar Payment Bridge System (APBS)
Delay in crediting beneficiary’s Beneficiary bank to reverse the ₹100/- per day if delay is beyond
a
account. transaction within T + 1 day. T + 1 day.
7 National Automated Clearing House (NACH)
Delay in crediting beneficiary’s Beneficiary bank to reverse the ₹100/- per day if delay is beyond
a account or reversal of amount. uncredited transaction within T + 1 T + 1 day.
day.
Account debited despite Customer’s bank will be responsible
revocation of debit mandate with for such debit. Resolution to be
b
the bank by the customer. completed within T + 1 day.

8 Prepaid Payment Instruments (PPIs) – Cards / Wallets

Off-Us transaction
a
The transaction will ride on UPI, card network, IMPS, etc., as the case may be. The TAT and compensation
rule of respective system shall apply.
On-Us transaction Reversal effected in Remitter’s account ₹100/- per day if delay is beyond
within T + 1 day. T + 1 day.
Beneficiary’s PPI not credited.
b
PPI debited but transaction
confirmation not received at
merchant location.

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Page 175 of 502
 RURAL AND
AGRICULTURE BANKING

Page 176 of 502

 6. “RURAL & AGRICULTURE” BUSINESS SEGMENT

Agriculture occupies a very important place in the Indian Economy. It supports various sectors of the country by
providing food grains to the growing population, supplies raw material to industries, generates purchasing power
and demand for consumer goods in rural areas and also plays a significant role in exports. Agricultural credit is a
critical resource support to farm sector in India, given the dependence of a large section of its population on
agricultural activities. In the recent times, multiple challenges have led to stress in the agricultural sector, which also
got manifested in episodes of untimely deaths of distressed farmers. Farm loan waiver is often suggested as a possible
solution to such distress situations.

Agriculture credit is an important prerequisite for agricultural growth. Agricultural policies have been reviewed from
time to time to provide adequate and timely availability of finance to this sector. Rural credit system assumes
importance because for most of the Indian rural families, savings are inadequate to finance farming and other
economic activities. This coupled with the lack of simultaneity between income realization and expenditure and
lumpiness of agricultural capital investments. The institutional credit system is critical for agricultural development
and its role has further increased in the liberalized economic environment. In India a multi-agency approach
comprising co-operative banks, scheduled commercial banks and regional rural banks (RRBs) has been followed to
allow credit to agricultural sector.

Demand for credit to meet requirements of agriculture has increased considerably owing to use of modern
technology, increase in use of fertilizers, insecticides and pesticides, increase in irrigation facilities, and increase in
coverage under high yielding varieties programme. Besides, it is also necessary to encourage activities allied to
agriculture for increasing the income of poor farmers and providing full employment to them. In view of high
importance of agriculture in Indian economy, efforts are being made by Reserve Bank of India, NABARD, Public
Sector Banks and Government Agencies to increase the flow of bank credit to agriculture.

We are having a very specific business segment “Rural & Agri Banking” which is contributing significantly in
accelerating the pace of rural development by providing finance to farmers by way of providing various agriculture
products. We extend loans for agricultural activities and a host of services for farmers well-tuned to the rural market,
and aim to make a Self-Reliant Rural India.

“Rural & Agri. Banking” segment of our Bank constitutes mainly of the following sub segments:
 Agriculture Finance
 Micro finance (SHGs/JLGs etc.)
 RRBs sponsored by our Bank

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 PRIORITY SECTOR LENDING – GENERAL

1. INTRODUCTION:

i. Credit is an important instrument required for national development and it should be utilised according to the
national priorities. Till late sixties, commercial banks in India were mainly financing trade, commerce and industry.
The flow of credit towards agriculture and weaker sections of the community was quite low. In order to ensure
equitable distribution of credit, keeping in view the relative priorities of development needs, the Scheme of social
control over banks was initiated in December 1967. The National Credit Council was set up in February 1968 mainly
to periodically assess the demand for bank credit from various sectors of the economy and to determine the priorities
for grant of loans and advances having regard to the availability of resources. Social control was followed by
nationalisation of 14 major Indian scheduled commercial banks on 19th July 1969. The main objectives of
nationalisation were "to control the heights of the economy and to meet progressively, and serve better, the needs of
development of the economy in conformity with national policy and objectives." The nationalised banks were advised
to open branches in rural and semi-urban areas and provide funds for all productive activities irrespective of the size
and social status of the borrower, particularly to those in the weaker sectors of the economy. Six more private sector
banks were nationalised on 15th April 1980 extending further the area of public control over the country's banking
system.

ii. Certain sectors of the economy were declared as priority sectors for the purpose of providing bank credit to them.
The concept of priority sector lending has been evolved to ensure that bank credit flows in an increasing measure to
certain vital sectors of the economy, which is included in the priority sector for the purpose of lending by banks.
This concept has been reviewed from time to time to make necessary changes according to national planning
priorities. In November 1974, public sector banks were advised that their priority sector lending should reach a level
of not less than one-third of their outstanding credit by March 1979. Private Sector banks were also advised in
November 1978 to undertake similar responsibilities and lend at least one-third of their total advances to the priority
sector by the end of March 1980.

iii. It was further decided in March 1980 that banks should raise the proportion of their advances to priority sector
to 40 per cent by March 1985. Reserve Bank constituted a Working Group on 13th March 1980 under the
Chairmanship of Dr. K.S. Krishnaswamy its then Deputy Governor, to give suggestions for implementation of the
above decisions. The Working Group submitted its report on 22 nd April 1980. It had suggested introduction of the
concept of weaker sections in the main component (agriculture and small scale industries) of the priority sector
with separate sub-targets for lending to such weaker sections. On the basis of its recommendations, the Reserve Bank
introduced certain sub-targets for weaker sections within the overall target of priority sector.

iv. The Reserve Bank of India constituted on 11th March 1982, a Working Group under the Chairmanship of Shri.
A. Ghosh, its Dy. Governor which submitted its report on 17 th June 1982.The group recommended modifications in
sub targets of different segment of Priority Sector and weaker sections.

v. With a view to increase the flow of credit to agriculture, banks were advised to step up direct finance to agriculture
(including allied activities) so as to reach a level of atleast 16 per cent of their total outstanding credit by march, 1987,
17 per cent by March, 1989 and 18 per cent by March, 1990 within the overall target of 40 per cent for priority
sector lending.

2. PRESENT NORMS FOR PRIORITY SECTOR LENDING:

The targets & sub-target set under priority sector lending for domestic banks operating in India are given below:

Sector Target for Domestic Commercial Banks

Total Priority Sector 40 percent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent
Advances Amount of Off-Balance Sheet Exposure, whichever is higher.
Total Agricultural 18 percent of ANBC or Credit Equivalent Amount of Off Balance Sheet
Advances Exposure, whichever is higher.

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 Within the 18 percent target for agriculture, a target of 8 percent of ANBC or
Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher is
prescribed for Small and Marginal Farmers.

Additionally, domestic banks are directed to ensure that the overall lending to
non-corporate farmers does not fall below the system-wide average of the last
three years achievement. The applicable system
wide average figure for computing achievement under priority sector lending
will be notified every year.

Micro Enterprises 7.5 percent of ANBC or Credit Equivalent Amount of Off-Balance

Sheet Exposure, whichever is higher.
Advances to 10 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet
Weaker Sections Exposure, whichever is higher.

2.1 Adjusted Net Bank Credit (ANBC):

The computation of priority sector targets/sub-targets achievement will be based on the ANBC or Credit Equivalent
Amount of Off-Balance Sheet Exposures, whichever is higher, as on the corresponding date of the preceding year.
For the purpose of priority sector lending, ANBC denotes the outstanding Bank Credit in India [As prescribed in item
No.VI of Form ‘A’ under Section 42 (2) of the RBI Act, 1934] minus bills rediscounted with RBI and other approved
Financial Institutions plus permitted non SLR bonds/debentures under Held to Maturity (HTM) category plus other
investments eligible to be treated as part of priority sector lending (e.g. investments in securitized assets). The
outstanding deposits under RIDF and other funds with NABARD, NHB and SIDBI in lieu of non- achievement of
priority sector lending targets/sub-targets will form part of ANBC. Advances extended in India against the
incremental FCNR (B)/NRE deposits, qualifying for exemption from CRR/SLR requirements, as per the RBI
guidelines will be excluded from the ANBC for computation of priority sector lending targets, till their repayment.
The eligible amount for exemption on account of issuance of long-term bonds for infrastructure and affordable
housing as per RBI’s guidelines will also be excluded from the ANBC for computation of priority sector lending
targets. For the purpose of calculation of Credit Equivalent Amount of Off-Balance Sheet Exposures, banks may be
guided by the Master Circular on Exposure Norms issued by RBI’s Department of Banking Regulation.

COMPUTATION OF ADJUSTED NET BANK CREDIT (ANBC):

Bank Credit in India [As prescribed in item No.VI of Form ‘A’ under I
Section 42 (2) of the RBI Act, 1934].
Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC)* III (I-II)
Bonds/debentures in Non-SLR categories under HTM category+ other IV
investments eligible to be treated as priority sector +Outstanding Deposits under
RIDF and other eligible funds with NABARD, NHB and
SIDBI on account of priority sector shortfall + outstanding PSLCs
Eligible amount for exemptions on issuance of long-term bonds for V
infrastructure and affordable housing as per RBI circular
DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014.
Eligible advances extended in India against the incremental FCNR (B)/NRE VI
deposits, qualifying for exemption from CRR/SLR
requirements.
ANBC III+IV-V-VI

* For the purpose of priority sector computation only. Banks should not deduct / net any amount like provisions, accrued
interest, etc. from ANBC.

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 DIFFERENT COMPONENTS OF PRIORITY SECTOR AND WEAKER SECTION

As per the extant guidelines, under Priority Sector, there are following categories of advances.

(i) Agriculture
(ii) Micro, Small and Medium Enterprises
(iii) Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others

The criteria for classification of various advances under the above broad categories are explained hereunder:

1. AGRICULTURE:
The present distinction between direct and indirect agriculture is dispensed with. Instead, the lending to agriculture
sector has been re-defined to include (i) Farm Credit (which will include short-term crop loans and medium/long-
term credit to farmers) (ii) Agriculture Infrastructure and (iii) Ancillary Activities. A list of eligible activities under
the three subcategories is indicated below:

1.1. Farm credit A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability
Groups (JLGs), i.e. groups of individual farmers, provided banks
maintain disaggregated data of such loans], directly engaged in Agriculture and
Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-
keeping and sericulture. This will include:
(i) Crop loans to farmers, which will include traditional/non-traditional plantations and
horticulture, and, loans for allied activities.
(ii) Medium and long-term loans to farmers for agriculture and allied activities (e.g.
Purchase of agricultural implements and machinery, loans for irrigation and other
developmental activities undertaken in the farm, and developmental loans for allied
activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting,
sorting, grading and transporting of their own farm produce.
(iv) Loans to farmers up to Rs.50 lakh against pledge/hypothecation of agricultural produce
(including warehouse receipts) for a period not exceeding 12 months.
(v) Loans to distressed farmers indebted to non-institutional lenders.
(vi)Loans to farmers under the Kisan Credit Card Scheme.
(vii) Loans to small and marginal farmers for purchase of land for agricultural purposes.
B. Loans to corporate farmers, farmers' producer organizations/companies of individual
farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and
Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture
up to an aggregate limit of Rs.2 Crore per borrower. This will include:
(i) Crop loans to farmers which will include traditional/non-traditional plantations and
horticulture, and, loans for allied activities.
(ii) Medium and long-term loans to farmers for agriculture and allied activities (e.g.
purchase of agricultural implements and machinery, loans for irrigation and other
developmental activities undertaken in the farm, and developmental loans for allied
activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting,
sorting, grading and transporting of their own farm produce.
(iv) Loans up to Rs.50 lakh against pledge/hypothecation of agricultural produce
(including warehouse receipts) for a period not exceeding 12 months.

1.2. Agriculture i) Loans for construction of storage facilities (warehouses, market yards,
infrastructure godowns and silos) including cold storage units/ cold storage chains designed to
store agriculture produce/products, irrespective of their location.

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 ii) Soil conservation and watershed development.
iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-
pesticides, bio-fertilizer, and vermicomposting.
For the above loans, an aggregate sanctioned limit of Rs.100 Crore per borrower
from the banking system, will apply.
1.3.Ancillary (i) Loans up to Rs.5 crore to co-operative societies of farmers for disposing of the produce of
activities members.
(ii) Loans for setting up of Agriclinics and Agribusiness Centres.
(iii) Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs.100 crore
per borrower from the banking system.
(iv) Loans to Custom Service Units managed by individuals, institutions or organizations
who maintain a fleet of tractors, bulldozers, well-boring equipment, threshers, combines,
etc., and undertake farm work for farmers on contract basis.
(V) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies
(FSS) and Large-sized Adivasi Multi- Purpose Societies (LAMPS) for on- lending to
agriculture.
(vi) Loans sanctioned by banks to MFIs for on-lending to agriculture sector.
(vii) Outstanding deposits under RIDF and other eligible funds with NABARD on account of
priority sector shortfall.

For the purpose of computation of achievement of the sub-target, Small and Marginal Farmers will include the
following:-

 Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a
landholding of more than 1 hectare and upto 2 hectares are considered as Small Farmers.
 Landless agricultural labourers, tenant farmers, oral lessees and share croppers, whose share of
landholding is within the limits prescribed for small and marginal farmers.
 Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual Small and
Marginal farmers directly engaged in Agriculture and Allied Activities, provided banks maintain
disaggregated data of such loans.

 Loans to farmers' producer companies of individual farmers, and co-operatives of farmers directly engaged
in Agriculture and Allied Activities, where the membership of Small and Marginal Farmers is not less than
75 per cent by number and whose land-holding share is also not less than 75 per cent of the total land-
holding.

GENERAL GUIDELINES ON AGRICULTURE FINANCE:

REGISTER OF APPLICATION RECEIVED:

A register should be maintained at branch level wherein the date of receipt, sanction, and rejection with reasons
thereof, etc. should be recorded. The register will be made available for verification by inspecting agencies and higher
authorities.

DISPOSAL OF APPLICATIONS:
All loan applications will be disposed of generally within a reasonable period from the date of receipt of duly
completed loan applications i.e. with all the requisite information/papers. Generally, the following timelines are
applicable for disposal of completed credit applications:

Type of Credit Facility Time frame for disposal

Up to Rs.25,000 Within -1- week
Above Rs.25,000 Within -10 working days ( Branch Level)
RO/ZO level Within -15- working days
BCC Level Within -30- days

REJECTION OF CREDIT PROPOSALS:

Bank shall exercise due care to see that the credit facilities are not denied to the legitimate applicants. In order to
ensure this, it shall follow the following procedure for rejection of loan applications:
 The loan applications pertaining to general category of borrowers may be rejected on valid grounds by
the respective sanctioning authorities. However, the next higher authority would satisfy upon the
reasons for rejection.
 In case of loan applications of beneficiaries belonging to SC & ST communities, the sanctioning
authorities shall obtain prior concurrence of their next higher authority for rejection of loan

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 applications.
 Applications of BSVS trainees should not be rejected without obtaining prior concurrence of the
Regional authority.

MARGIN AND SECURITY NORMS FOR AGRICULTURE ADVANCES:

Stipulated Margin on Agriculture Advances except advances to Food & Agro Based units and Loans for construction
of storage facilities viz: warehouse, market yard, godowns, silos, cold storage etc. under “Regulatory Agriculture”:

PARTICULARS MARGIN
Loan Limit up to Rs.1,00,000/- Nil
Loans for purchase of Tractor 15%
Loans for purchase of Heavy Agril. Machinery 10% (*)
Other Agriculture Loans 15%
Agri-Clinics & Agri- Business: Up to Rs.5.00 Lacs Nil
Above Rs.5.00 Lacs 15%
NBFC-MFI under Agriculture- margin on book debts created out of the funds 10%
borrowed from the Bank

(*) For Small/Marginal Farmers, Agriculture labourers and other specified categories, no margin by borrowers is required
where subsidy is available under special development programmes/ Govt. sponsored Schemes.
For borrowers mentioned above, where back-end subsidy is available, the same will be considered as margin. In case
subsidy is not available, 5% margin by borrower is required (NABARD requirement may be borne in mind).

Stipulated Margin on advances to Food & Agro Based units and advances for construction of storage facilities viz:
warehouse, market yard, godowns, silos, cold storage etc. under “Regulatory Agriculture”:
Facility Particulars Margin
Term Loan Land & Building 30%
Plant & Machinery and Equipment (New) 25%
Working Capital Stocks and receivables 25%
Export credit 10%

SECURITY NORMS:
A-Crop Loans/Short Term Loans
Upto Rs.160,000/-  D.P. Note
 Hypo. of crops
Above Rs.160,000  D.P. Note
 Hypo. of crops
 Mortgage of land or third party guarantee etc.
B-Investment loans wherever moveable assets are created
Up to the cost of economic unit  D.P. Note
(wherever applicable) or Rs.1.60 lac  Hypo. of assets
whichever is lower
For loans above Rs.1.60 lac  D.P. Note
# For loans above Rs. 2 lakhs, mortgage of land  Hypo. of assets
is to be created. However, sanctioning authority  Mortgage of land or third party guarantee etc.
on merit may waive mortgage of land if creating
mortgage is not possible owing to genuine
difficulties
for loan limit upto Rs. 3 lakhs.

C- For Agri clinic - Agri Business

Upto Rs. 5 lacs  D.P. Note
 Hypo. of assets
Above Rs. 5 lacs  D.P. Note
 Hypo. of assets
 Mortgage of land or third party guarantee etc.

REFERENCE: BCC:BR:102:183 dated 06.07.10 Agriculture Advances – Revised Margin and Security Norms

AGRICULTURAL FINANCE SCHEME NO.1: PURCHASE OF AGRICULTURAL IMPLEMENTS

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 PURPOSE  Purchase of agricultural implements such as indigenous wooden implements,
improved iron implements, agricultural equipments such as sprayers, dusters etc.,
hand tools such as khurpi, sickles, secateurs etc. for farm use, threshers,
winnowers, seed-cum-fertilizer drills, etc.
 Purchase of bullocks or camel (draught animals) and/or animal drawn cart.

ELIGIBILITY Persons engaged in cultivation of crops as owners of land or as permanent

tenants or as leaseholders (for reasonably long period)
NATURE OF Demand loan/Term Loan
FACILITY
MARGIN AND As per criteria mentioned above under the chapter
SECURITY “GENERAL GUIDELINES ON AGRICULTURE FINANCE”
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
DISBURSEMENT Loans should be disbursed directly to suppliers along with margin amount. Wherever
considered necessary, loan amount may be released in installments
after ensuring proper utilization of installments released earlier.
REPAYMENT Maximum period: 7 Years. Repayment period to be fixed on quarterly/half yearly or
PERIOD annual basis based on income generation of the beneficiary.
OTHER  Branches can extend credit facilities for purchase of agricultural implements either
CONDITIONS to an individual or a group of individuals.
 Branches may counsel the farmers not only to utilize the implements on their own
farms but also provide custom service for operations on the nearby farms.
 Branches should ensure that only good quality implements are purchased with the
loan amount.

REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.2: PURCHASE OF TRACTORS AND OTHER HEAVY AGRICULTURAL
MACHINERIES

Note: A. For the branches having high NPA in tractor loan portfolio prior Activity clearance must be availed by
the Branches from concerned Regional office for sanctioning Tractor Loan.
B. Disbursement of tractor loan to be made in two phases: (i) 95% of disbursable amount initially (ii) Rest
5% after receiving proof of RTO registration.

PURPOSE Purchase of new or second hand tractors, tractor drawn implements, power
tiller and other agricultural machineries.
ELIGIBILITY Persons engaged in cultivation of crops as owners of land or as permanent tenants or as
lease-holders (for reasonably longer period) and who can utilize the tractor/machinery
economically to the minimum extent of 50% (40% in case of Eastern States) on their own
holdings so that the incremental income generated from the proposed change in the
farming practices and cropping pattern should suffice to a large extent to repay the loan
amount. Further, each beneficiary/group of beneficiaries of a tractor loan should fulfill
the following conditions:
 Should possess perennially irrigated land of four acres or corresponding acreage as
prescribed for different categories of land under the State Land Ceiling Act.
 Should possess progressive outlook in adoption of improved farm practices and
modern agricultural technologies and cultivate high value commercial crops such as
sugarcane, grapes, bananas and vegetables etc which make the proposal
economically viable.
 Incremental income generation should be sufficient to serve the loan installments
and interest.
 Finance for tractors to farmers with land holding below –6- acres of irrigated land
will be considered for tractors with horse power upto 35 hp.
 Second loan for tractor should be granted only after 3 years from the date of granting
first loan provided the first loan is fully repaid.

TYPE OF Term Loan

FACILITY
LOAN AMOUNT Cost of vehicle including implements net off margin

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 MARGIN 25% of the cost of Tractor.
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
REPAYMENT For tractors maximum repayment period allowed are 9 years and for power- tillers -7-
PERIOD years. For other purposes it is to be decided depending upon the repaying capacity on half
yearly and annual basis based on surplus generation
from crops and other activities:

For Tractor Loan fixation of minimum repayment period is subject to generation of sufficient income and should
be fixed as follows:
Land holding in acres Minimum repayment
(Irrigated land or corresponding acreages of un-irrigated lands) period
Upto –6- acres irrigated lands -8- years (8 to 9 Years)
Above –6- acres but less than 10 acres irrigated lands -7- years (7 to 9 years)
Above 10 acres of irrigated lands -6- years (6 to 9 years)

SCHEME FOR FINANCING SECOND HAND / USED TRACTORS:

 To provide opportunity to interested farmers in dry-land farming or having a small land
PURPOSE holding and who cannot afford to purchase a new tractor.
 It also aims at enhancing level of farm mechanization for timely agricultural operations
which are essential for diversification and commercialization of farm sector.
 To enable farmers who already own one tractor and may need to buy one more tractor
for supplementary uses with limiting his investment.

ELIGIBILITY  All agriculturists having minimum land holding of 2 acres of perennially irrigated land
or corresponding acreage prescribed for different categories of

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 land under State Land Ceiling Act either owned individually or jointly with other family
members who will be co-borrowers.
 Borrowers of other agriculture lending schemes viz. Dairy, Poultry, Fisheries are also
eligible to undertake the transportation of their production as well
as haulage work.
TYPE OF Term Loan
FACILITY
LOAN AMOUNT Maximum Rs. 2 lacs Subject to the following: (assessed as under i + ii + iii)
i. 80% of Value assessed, Or
Depreciated value after 12% per year depreciation on straight-line method on
current purchase price of same model of same manufacturers, whichever is lower
Plus
ii. Repair expenses not exceeding Rs. 50000/- as per estimates.
Plus
iii. Equipment cost (depreciated) if not considered in valuation mentioned above.

MARGIN 20% of value assessed by the Government valuer / dealer approved surveyor of General
Insurance Company.
RATE OF As per Banks guidelines as applicable from time to time
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
REPAYMENT Percentage of standard performance* Nos. of years of repayment
PERIOD More than 85% 5 years
More than 70% but below 85% 4 years
More than 40% but below 70% 3 years
* as mentioned in fitness certificate / valuation report.
SECURITY As per norms applicable for tractor financing.
OTHER TERMS Over and above our usual requirements for purchase of tractor following additional /
AND alternative requirements will have to be complied with:
CONDITIONS  Fitness Certificate / valuation report: Fitness Certificate / valuation report to be
obtained from the approved dealer of tractor manufacturing companies or the approved
machinery valuer as specified in point 4 above. The valuation report must state the
percentage of standard performance. It should not be less than 40% of standard
performance and first purchase / manufacturing of the said tractor should be within a
period of 6 years on the date of loan application. Tractor must be in satisfactory working
condition.
 Quotation of second hand tractor from authorised dealer of the tractor manufacturing
company or its subsidiary or indent letter from present owner with sale value decided
for its sale must be obtained.
 Branch should obtain Warranty of insurance company on engine and transmission on
old certified tractors if available from tractor manufacturing
/ certifying company.
 “No Objection / Clearance” from concerned RTO that a vehicle may be transferred to
new owner and there in no pending issue against vehicle should be obtained.
 Comprehensive insurance policy should be obtained and the sum assured should not be
less than valuation amount with “agreed Bank clause”, assigned in favour of our Bank.
 If the lien of any other financial institution is there on the said tractor, direct payment
should be made to the said financial institution / Bank after obtaining the consent of the
present owner of the tractor as well as the applicant borrower and certificate for
cancellation of their lien must be arranged simultaneously to enable to register lien
of our bank as financier
and change of the name of our borrower with RTO.

REFERENCE  Book of Instruction

 BCC: BR:97:39 dated 22.02.05 on financing Old/ used Tractors

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 AGRICULTURAL FINANCE SCHEME NO.3: CULTIVATION OF CROPS (EXCLUDING PLANTATION AND
HORTICULTURAL CROPS)

PURPOSE Purchase of agricultural inputs such as seeds, fertilizers, pesticides, etc. and for
payment of labour charges, irrigation cess, etc.
A farmer whether he had availed the loan for raising the crop or not, can also be
granted post-harvest finance i.e. extension of crop loan for a maximum period of
twelve months against pledge/hypothecation of produce or pledge of warehouse
receipt covering his farm produce. In case such farmer also owes crop loan to the
Bank, the outstanding in the crop
loan account should be adjusted from the post-harvest advance.

ELIGIBILITY Persons engaged in cultivation of crops as owners of land or as

permanent tenants or as lease-holders (for a reasonably long period) or
sharecroppers.
NATURE OF FACILITY 1. Demand Loan or Cash Credit
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
SECURITY AND As per the BKCC ( Baroda Kisan Credit Card) norms.
MARGIN
DISBURSEMENT Disbursement of crop loan should be made in three or more suitable installments
depending upon the nature of crops/age of crops. Crop loans should be divided into
cash and kind components. In respect of kind component it should be ensured that
payments are made directly to the suppliers. As per the BKCC scheme the facility is
to be allowed as cash credit and the borrower is to be allowed to draw by cheques,
Baroda
Kisan Rupay Card etc. as per his requirement.

REPAYMENT PERIOD Crop Loans: Generally 12 months; however, it can be extended upto 18 months in
respect of crop with longer life period like sugarcane etc. Loan should be repaid in
single installment preferably from the sale
proceedings of crops.
OTHER CONDITIONS  Branches should adopt the same scale of finance for crop loans as fixed by the
DLTC (District Level Technical Committee).However the Regional offices are
empowered to revise the scale of finance based on the farming practices
adopted by the farmers, repaying capacity etc. Regional offices are empowered
to do upward revision in Scale of Finance where ever there is a scope after
taking into consideration the rate adopted by DLTC and other peer Banks.
(Ref. Circular No: BCC:BR:109/610 dated 18.11.2017)
 Eligible advances should be covered under the Crop Insurance Scheme.

REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.4: DEVELOPMENT OF IRRIGATION POTENTIAL

PURPOSE Loan facilities may be considered for

 Construction of surface well
 Deepening/renovation of existing wells
 Purchase of oil engine/electric motor and pump set
 Construction of shallow and deep tube wells
 Layout of field channels (open as well as underground)
 Leveling of land for irrigation
 Construction of bandharas
 Lift irrigation from river basins, tanks, bandharas and other catchments
 Installation expenses of oil engines/electric motor/pumpsets
 Construction of pump house
 Sprinkler irrigation
 Drip irrigation and windmills.
 Facility may also be considered for boring alone of the well.
 Construction of Water Storage tanks, farm ponds, water harvesting structures etc.

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 ELIGIBILITY All persons engaged in cultivation of crops as owners of land or permanent tenants or lease-
holders (for a reasonably long period).
For installation of tube well no minimum land holding is stipulated.
If necessary loan can be sanctioned to a group of farmers in their joint names provided they
have contiguous plots of land.
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
SECURITIES As per criteria mentioned above under the chapter “GENERAL
AND GUIDELINES ON AGRICULTURE FINANCE”
MARGIN
REPAYMENT Maximum period of 9 years depending upon purpose of investment and economic life
PERIOD of asset.
OTHER  Borrower should produce a feasibility certificate in respect of tubewell from the appropriate
CONDITIONS authority. In case of river lift irrigation project, permission from Collector / appropriate
authority should be obtained.
 Borrower should give an undertaking to buy equipments with BIS specifications.
 A minimum distance of 150/200 meters should be maintained between the well/pump
set/deepening of well to be financed and the nearest existing irrigation well. No minor
irrigation investments should be financed within 10 kms from the seacoast.
 Before granting/disbursing of loans for electric pump sets, branches should satisfy about
early energisation of the pump sets, duration of power supply and Installation of suitable
capacitor.
 Branches should satisfy themselves that the beneficiary has the necessary minimum area of
land to be brought under irrigation to ensure viability of investment and repayment of loan
within the prescribed period. However, branches may sanction loans to farmers with smaller
land holdings provided they are satisfied in each individual case that by virtue of adopting
better farm management practices and higher intensity of cultivation of land to be benefited
by the investment, the beneficiary is likely to derive sufficient income to enable him to make
prompt repayment of loan.
 Branches should satisfy themselves that adequate after- sales service and repairing facilities
for pump sets, etc. are available in close proximity or such facilities are provided by the firms
supplying pump sets to beneficiaries covered by the scheme.
 Where financing of pump sets for lifting water from river/canal is envisaged, a letter from
the competent authority of the State Government authorising the beneficiary to lift water
from river/canal and also indicating the validity period of the sanction should be obtained
before processing the loan proposal. Branches should ensure that the permission for lifting
the water is available for a period, which will cover at least 3 years longer than the entire
period of loan. It should
also be verified for any restrictive clauses regarding the water use.

REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.5: DISTRIBUTION OF AGRICULTURAL INPUTS SUCH AS SEEDS

FERTILISERS, INSECTICIDES, ETC.

PURPOSE  For maintaining stocks of agricultural inputs like seeds, fertilizers and pesticides,
etc. which could be hypothecated or pledged to Bank.
 Dealers/distributors of cattle/poultry feed upto Rs. 40 lacs.
 Dealers in tools required for Horticulture/Poultry, etc.
 Sprinklers/Drip Irrigation/Agricultural Machineries up to Rs.30/lacs.
 Fishing Nets
 Spare parts for oil engines/tractors/fishing boat engines
 Petrol diesel pump run by Co-op. Sugar Factory, Agricultural Produce Marketing
Society, Fishermen Co-op. Society at Fisheries Jetty, etc.
 Advances against high yielding/hybrid seeds produced under contract with the
National Seeds Corporation Ltd. or State Government or which bear the
certification of the said Corporation or as the case may be, the concerned State
Government or any certification agencies authorised under the Seeds Act, 1966
and at present completely exempted from all
provisions of the directives of the Selective Credit Control.

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 ELIGIBILITY Any trader, firm or company or any institution or co-operative society engaged in
distribution of agricultural inputs is eligible under this scheme to the extent of the credit
needs related only to the distribution function (individual farmers
are not eligible under this scheme).
NATURE OF Cash Credit/BP/BD/LC/Guarantee, etc.
FACILITY
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
SECURITY Pledge/hypothecation of stock of agricultural inputs. Wherever feasible
collateral security in the form of land and building.
MARGIN 15 %
REPAYMENT 12 months.
PERIOD
OTHER Stocks should be adequately insured against fire and SRCC risks with Bank
CONDITIONS Interest Clause.
REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.6: FINANCING AGENCIES PROVIDING CUSTOM

SERVICES TO FARMERS

PURPOSE  Purchase of tractor, bulldozer

 Purchase of fixed wing aircrafts and helicopters together with the accessories for
aerial spraying
 Purchase of drilling rig for boring wells/drilling of tube wells
 Purchase of equipment for construction of wells and /or execution of lift
irrigation scheme for water supply service
 Purchase of combine harvesters, threshers, etc. for hiring on custom basis
 Establishment of cold storage units for providing cold storage facilities to
farmers on rental basis
 Construction of godowns, stores, warehouses for providing storage facilities to
farmers on rental basis
 Purchase of truck and trailer units to be hired to farmers for transporting farm
produce from farms to processing factories or market yards.
 Purchase of Excavator for earth works
 acquiring tankers engaged in transportation of milk
 Acquiring specialized trucks for transportation of poultry birds
 Purchase of bullock cart
 Establishing curing barns for tobacco
 Providing canning and processing facilities to farmers on custom basis and
 Financing capital expenditure and working capital requirements of organizations
or institutions carrying out farming operations on contract basis
 Providing processing/grading facilities at market yards on hire basis.

ELIGIBILITY All individuals, entrepreneurs, organizations, institutions, corporations such as Agro

Industries Corporations, market yards or authorized licensee in market yards,
warehouses, panchayats and agro service centers who are capable of carrying out such
activities and have viable schemes for providing
custom services to farmers.
NATURE OF Term Loan (for capital expenditure requirement)
FACILITY Cash Credit (for working capital requirement)
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
MARGIN 15 %

Page 188 of 502

 SECURITY Term Loan:
 Hypothecation of machinery purchased out of bank finance
 Mortgage of land/building and/or third party guarantee where the limit
exceeds Rs 1,60,000/-
Cash Credit:
 Pledge/hypothecation of stock-in-charge
 Wherever feasible collateral security in the form of land and building,
 Where the borrower is sanctioned term loan facility, extension of charge on
the assets created should be insisted upon.
DISBURSEMENT Amount should be disbursed along with margin amount directly to suppliers of
machinery. On completion of civil works valuation report from Banks
approved valuer to be obtained.
REPAYMENT  Term Loan: Maximum 7 years on monthly/quarterly/ half yearly annual
PERIOD installments based on income generation of the borrower.
 Cash Credit: 12 months subject to annual review.
REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.7: FINANCING CONSTRUCTION OF FARM BUILDINGS AND

STRUCTURES

PURPOSE  The credit requirements of farmers for construction and repair of farm buildings
and structures viz; bullock shed, implement shed, tractor and truck shed, farm
store, godowns and farm silos, dutch barn, water trough for farm animals,
threshing yard, “gur” making shed and fencing.
 For construction of farm house cum dwelling unit (with one or more farm
structures as above) on own farm.
 The farm house constructed on the farm, along with the other structures as stated
above, is thus a necessity and will serve as a utility house for farmer’s residence
as well for his other farming related activities. This will also help to meet the
housing requirement of farmers.
 For reimbursement of expenses incurred for farm house cum dwelling unit
constructed recently from own sources to good clients selectively, subject to
additional terms and conditions. It should have been constructed / purchased
recently (not prior to 24 months).
 Proposal for specific buildings such as dairy shed, poultry shed, pig house, cattle
shed, dairy buildings, cold storage plants should be considered under the
respective schemes

ELIGIBILITY  All persons engaged in cultivation of crops as owners of land or as permanent

tenants or as lease-holders (for a reasonably long period) and who have adequate
productive utility of proposed construction.
 For construction of farmhouse cum dwelling unit: All farmers having own land
having sufficient income to repay the instalments.

NATURE OF Term Loan

FACILITY
QUANTUM OF Depending up on the cost of project and subject to assessment as
LOAN Investment line of credit under BKCC.
INTEREST RATE One year MCLR + Strategic Premium

SECURITY  Third Party Guarantee, if stipulated.

 Mortgage of land and house (Declaration as per Talwar committee norms as
applicable.)
MARGIN 15% (25% for reimbursement)
DISBURSEMENT 25% of the loan amount to be disbursed on execution of documents and the balance
amount in 2-3 installments depending upon the progress. On completion of entire civil
works certificate from Bank's approved valuer be obtained.

REPAYMENT  For Farmhouse cum dwelling unit Maximum 15 years.

PERIOD  For others maximum 7-10 years depending upon the project undertaken.
 Loan repayment will be synchronized with the income generation from the
farm activities. The installments may be fixed on half yearly/
yearly basis based on cropping pattern.

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 OTHER  Buildings and structures constructed with Bank finance should be adequately
CONDITIONS insured against fire and SRCC risks with Bank clause.
 Plans should be approved by the competent authority.
 Disbursement to be done in stages after verifying the work done and keeping
the reports on record.
 State specific norms of construction of farm cum dwelling units on farm
lands to be complied with.
 The farm house cum dwelling unit will necessarily be for farmers residence which
will also serve as storing/sorting/grading of farm produce during the harvesting
season and may also comprise of cattle sheds, tractor sheds etc.
ADDITIONAL CONDITIONS FOR REIMBURSEMENT OF EXPENSES
INCURRED FOR FARM HOUSE
 It should have been constructed / purchased recently (not prior to 24
months)
 Minimum Margin: 25%
 Valuation Report to be obtained from approved valuer of the Bank.
 Branch to satisfy that there are no institutional / external borrowings against
the house and the amount already spent on the construction has come from own
sources.
 The construction expenses only to be considered for reimbursement excluding
margin.
 For takeover of existing Loans availed from other Banks/FIs by our existing
customers with good track record should only be considered.

REFERENCE  Book of Instruction

 BCC:BR:104:313 dated 30.08.12
 BCC:BR:108:338 dated 29.07.2016

AGRICULTURAL FINANCE SCHEME NO.8: DEVELOPMENT OF HORTICULTURE INCLUDING RAISING FRUIT

(ORCHARD) GARDEN, PLANTATION AND NURSERY CROPS

PURPOSE For establishing new orchards or for maintenance of existing orchards, gardens,
plantations and nurseries. All capital costs for development of orchards, gardens,
plantations (including purchase and installation of machinery, construction of
processing houses etc.) and maintenance costs (such as cost of plants, seedlings, grafts,
fertilizers, insecticides, pesticides etc., wages and salaries of permanent employees such
as supervisors,
gardeners etc. can be financed under the scheme.

ELIGIBILITY All persons engaged in raising fruit gardens, plantations and nursery crops as
owners of land or as permanent tenants or as lease-holders.
NATURE OF  Term Loan (for capital expenditure)
FACILITY  Cash credit (for working capital)
MARGIN AND As per criteria mentioned above under the chapter
SECURITY “GENERAL GUIDELINES ON AGRICULTURE FINANCE”
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)

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 REPAYMENT Term Loan:
PERIOD Minimum and –
maximum re- Loan
Gestation/
Payment - period instalments
Plantation/Horticulture grace
in years with
period
(including interest
gestation period)
Cashew Plantation 12-15 Yearly 6-7 yrs.
Mango Plantation 12-15 --do-- 6-7 yrs.
Lime/Citrus Plantation 10-15 --do-- 5 yrs
Sapota Plantation 10-15 --do-- 5-6 yrs
Guava Plantation 10-16 --do-- 4-5 yrs.
Ber Plantation 10-15 --do-- 4-5 yrs
Acid Lime Plantation 10-15 --do-- 4-5 yrs.
Casurinna Plantation 07-12 --do-- 6 yrs.
Coconut Plantation 14-15 --do-- 8-9 yrs.
Grape Plantation 07-09 --do-- 3 yrs.
Orange Plantation 10-15 --do-- 5-7 yrs.
Betelvine Plantation 05-10 --do-- 1 year
Arecanut Plantation 13-15 --do-- 7-8 yrs.
Pineapple 04-05 --do-- 1-2 yrs.
Cash Credit: 12 months subject to annual review

OTHER  Loans should be sanctioned for raising plants in the first year and for
CONDITIONS maintenance in subsequent years till the plants come to a bearing stage.
 Plants and other materials of good quality and in required quantities should be
purchased by the borrowers from reliable sources.
 Borrowers should have sufficient resources of their own to meet the deficit
during the initial years.
 Since the replanting will be done by the interlining method, old plants should be
removed at the appropriate time.
REFERENCE Book of Instruction

Page 191 of 502

 AGRICULTURAL FINANCE SCHEME NO.9: LAND DEVELOPMENT

PURPOSE Credit facility may be considered for bunding, terracing, levelling, Kyari preparation,
drainage lay outs and reclamation of saline, alkaline and ravine
lands.
ELIGIBILITY All persons engaged in cultivation of crops as owners of land or as permanent
tenants or as lease-holders (for reasonably long period)
MARGIN AND As per criteria mentioned above under the chapter “GENERAL
SECURITY GUIDELINES ON AGRICULTURE FINANCE”
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
NATURE OF Term Loan
FACILITY
DISBURSEMENT 25% of the sanctioned amount should be disbursed on execution of
documents and the balance amount in 2-3 instalments depending upon the progress.

REPAYMENT  Small & marginal farmer: Yearly instalment 9-15 Years and gestation period
PERIOD: up to 23 Months
 Other Farmer: Maximum 7 years. One-year holiday / moratorium may be
given.
OTHER  Plans and estimates of land development work should be obtained from an
CONDITIONS officer of the Soil Conservation/Agriculture/Irrigation Department or from a
qualified engineer.
 Pre-development/post development photographs of the area to be kept
on records as an evidence of the development work.
REFERENCE Book of Instruction

AGRICULTURAL FINANCE SCHEME NO.10: DEVELOPMENT OF DAIRY, POULTRY, PIGGERY, DUCK

REARING, FISHERY, SERICULTURE (UP TO COCOON STAGE) AND APICULTURE

PURPOSE To meet capital expenditure and working capital requirements of units engaged in
dairy, piggery, poultry, fishery, sericulture (up to cocoon stage), agriculture and rearing
of sheep, goat and camel, for construction of animal sheds, pig houses, poultry sheds,
etc. for purchase of milch animal such as cows, buffaloes, breeding pig, one day old
chicks, layers, equipment/machinery, transport vehicles for purchase of feed and for
meeting other expenses such as labour, marketing etc.

ELIGIBILITY All persons including small and marginal farmers and agricultural labourers
engaged in agriculture and allied activities.
NATURE OF Term Loan: for capital expenditure
FACILITY Cash Credit: for working capital
INTEREST RATE As per RBI/Bank’s guidelines revised from time to time.
(Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
MARGIN AND As per criteria mentioned above under the chapter
SECURITY “GENERAL GUIDELINES ON AGRICULTURE FINANCE”
DISBURSEMENT  Loan should be disbursed as and when purchases are made.
 In respect of construction work, 25% of the sanctioned amount should be
disbursed on execution of documents and the balance amount in 2-3
instalments depending upon the progress of the work.
REPAYMENT a) Term Loan: For purchase of milch cattle – 4-5 years.
PERIOD For fishery, piggery, apiculture, sericulture, etc. 3 to 7 years depending upon
the economic viability of the scheme but not less than 36 months.
b) Cash Credit: 12 months subject to annual review.

REFERENCE Book of Instruction

OTHER AGRICULTURAL SCHEMES:

Page 192 of 502

 1. BARODA KISAN CREDIT CARD:

SCHEME CODE CC 003- For Double/Mixed Crops CC

IN FINACLE 025- For Long Term crops
CC 028- For Mono Crop (Kharif/ Rabi)
CC 029- For Single Crop for 12 months.
OBJECTIVES/ Kisan Credit Card Scheme aims at providing adequate and timely credit support from the
PURPOSE banking system under a single window to the farmers for their cultivation & other needs as
indicated below:
a. To meet the short term credit requirements for cultivation of crops including fodder
crops.
b. Post-harvest expenses.
c. Produce marketing loan.
d. Consumption requirements of farmer household.
e. Working capital for maintenance of farm assets and activities allied to agriculture, like
dairy, poultry, fisheries, piggery, sericulture etc.
f. Investment credit requirement for agriculture and allied activities like purchase of farm
equipment/machinery like pump sets, sprinklers/drip irrigation equipment, pipe line, power
tiller, tractor, Sprayers, milk animals, vehicles for transportation of farm produce etc.
ELIGIBILITY * All farmers –individuals/joint borrowers who are owner cultivators.
• Tenant farmers, Oral lessees and Share croppers etc.
• Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant
farmers, Share croppers etc.
• Recorded / registered Share croppers and tenant farmers who are cultivating crops for a
period not less than five years in order to meet the production credit needs are also eligible
• The individual tenant farmers / share croppers cultivating crops on oral lease basis who
are resident of the village at least for a period of three years continuously and cultivating
lands and raising crops for a reasonably long period, but not less than three years could also
be issued BKCC with a farm credit limit upto Rs. 10000/- in general and in exceptional
cases not exceeding Rs. 25000/-as approved by our Board.
Now, Staff & its family members i.e. spouse, unmarried children & mother, father is eligible
for getting loan in this scheme if inherited agriculture land stands in their name.
The Power of sanctioning and PSR will be vested as under;
The Urban and Metro Braches can also provide credit under KCC by adopting cluster
approach for financing under Agriculture. The distance criteria in cluster for extending
finance will be maximum 30 KM

S Branch/office Sanctioning PSR Authority

No Authority
1 Staff at Branches Dy. Regional Manager Regional Head
of the
Region
2 Staff at Regional office and other Regional Manager of Zonal Head
offices reported to regional head the Region
(LDMs, RSETIs
etc.)
3 Staff at Zonal Office and other Dy. Zonal Head of Zonal Head
offices established in that particular Zone
Zone like Zonal Inspection Centre,
Training
Centre, RRBs etc.)
4 Staff at Head Office or Corporate Dy. Zonal Head / Zonal Head / GM
Office Zonal Head of Rural & Agri
Concerned Zones Banking and CSR as
where the financing the case may be.
branch is
situated

*One scale higher norms must be followed in case of sanctioning and PSR.

Page 193 of 502

 AGE CRITERIA  Minimum 18 years - Maximum up to 70 years as on the date of availing facility (if
OF THE the age of land holder exceeds 70 years, in such case the legal heir to be made co
APPLICANT borrowers.
DOCUMENTS TO BE  Application Form
OBTAINED  Two Passport Sized Photographs
 ID Proof like Driving License, Aadhaar Card, Voter Identity Card, Passport etc. Any
one of these document need to be taken. According to the RBI circular Aadhaar
number along with PAN number or Form 60 as defined in Income Tax rule, 1962 is
mandatory for conducting customer due diligence procedure.
 Documents stating Land holding details duly certified by the revenue authorities/
Online Land records (wherever it is available)
CROPS KCC accounts are bifurcated into short term and long term crops.
GROWN/CROP (i) Short term crops are further bifurcated into
SEASONS 1. Mono crop (Kharif / Rabi): When a farmer cultivates only one short duration crop in a
year either during Kharif/Rabi season, it is called as Mono Crop. Example (a): If a farmer
cultivates only Maize crop as a rain fed crop (in Kharif) during the year and no other crops
during the whole year, then it is called as Mono Crop (Kharif).
2 .Double / Multiple crop: If a farmer cultivates two or more crops in a year, it is called
Double or Multiple Crops. Example (a): If a farmer grows Paddy in Kharif season followed
by Pulses in Rabi season, it is called as double/ multiple crop.
3 .Single crop for 12 months: If a farmer grows only one crop in a year then it is called
as Single crop for 12 months. Example (a): If a farmer request for loan for Banana cultivation
which has got a longer harvesting period upto 12 then it is called as Single crop for 12
months.
4. Long Term Crop: The crops with crop season longer than one year are long
duration crops. Example: If a farmer cultivates Sugarcane crop whose duration is more than
12 months, it is called as long term crop. Example Sugarcane
QUANTUM OF  Minimum loan amount:Rs.5000/-
LOAN  Maximum loan amount: No ceiling
MARGIN Crop Loans/ Short Term Loans:
For Crop Loans no separate margin need to be insisted as the margin is in built while fixing
the Scale of Finance.

Term Loans:
(a) Loan Limit upto Rs.1,00,000- NIL
(b) Above Rs. 1,00,000 –
i. Tractor and heavy agri. Machinery – 25%
ii. Other Loans – 15%

Note: For Small/marginal farmers, agriculture labourers and other specified categories, no
margin by borrowers is required where subsidy is available under special development
programmes like SGSY (Now NRLM)
For borrowers mentioned above where subsidy is not available, 5% margin by
borrower is required (NABARD requirement may be borne in mind)

NATURE OF KCC is in the nature of revolving cash credit.

FACILITY
FIXATION OF KCC will consists of Production Line of Credit as well as Investment Line of
CREDIT LIMIT Credit.
LLPS (LOAN Loan Lifecycle processing System (LLPS) generically called as LMS, is a Web based
LIFECYCLE processing system which does end-to-end Credit Management. In simple words it is
PROCESSING digitization of ‘Credit Process’. LLPS, in integration with other credit process enablers (like
SYSTEM) Internal rating, spreadsheet applications, Bureau score checking, Core Banking solution,
Loan Policy & DLP rule and many more) is aiming to minimize manual efforts/interventions,
and thus leading to error reduction, better efficiencies, cleaner data and improved
compliance. The LLPS system is successfully rollout in all the zones.

Page 194 of 502

 Production Line of Credit

(1) All Farmers other than Marginal Farmers: Scale of finance as decided by DLTC x Extent
of area cultivated + 25 % of limit towards maintenance of tractor/farm implements, allied
activities like dairy, poultry, annual repairs, fuel, cost of feed, etc.(Farm Maintenance) + 15%
/ 25% / 35% (Family Maintenance) of the limit towards consumption needs to , depending
upon the category of borrower subject to a maximum of Rs.1,00,000/- per card + premium
for Crop Insurance and or accident insurance including PAIS, health and asset insurance.

Category of Farmer

# Category of the Borrower

Parameter I. (KCC Green) II. (KCC Silver) III. (KCC Gold)
1 Number of New and Agri borrowers Regular agri
years of existing agri having borrowers dealing and
relationship borrowers satisfactory maintaining
dealing with relationship satisfactory accounts
us less than 3 with us for with for a period of
years more than 3 more than 5 years
years and up having excellent
to 5 years repayment history
2 Family 15% 25% 35%
maintenance
(Max. Rs.1L)
3 Farm 25% 25% 25%
maintenance

First year Limit for crop cultivation arrived at as above plus 10% of the limit towards cost
escalation/increase in scale of finance for every successive year (2 nd, 3rd, 4th and 5th
year) i.e for 5 years is to be provided.

(2) For Marginal Farmers : A flexible limit of Rs 10,000/- to Rs. 50,000/- may be
provided based on the land holding and crops grown including post-harvest credit needs,
other farm expenses, consumption needs etc plus short term loan requirements. Whenever
higher limit is required due to change in cropping pattern and or scale of finance, the limit
may be arrived at as per the estimation indicated at point no.1.

Investment Line of Credit

 Extending credit facilities for horticulture crops, investment on farm developments such
as development of land/irrigation facility, purchase of tractor, farm machineries and
equipment, farm structures & buildings, draught animals/carts, miltch cattle, transport
vehicles, pre/post harvesting processing equipment and practicing modern/hi-tech
agriculture with need- based project/farm infrastructures, plantation activities etc.
 Extending facilities for setting up units of allied activities like dairy, poultry, fisheries,
piggery, sericulture, etc. to supplement farm income/activities and also to ensure
optimum utilization of available resources
 Loans for redemption of loan availed by farmers from non-institutional lenders
 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

(Farm Receipts- Expenses incurred)
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.)

Page 195 of 502

 Plus
Other income / 3 times of net anticipated annual income/profit from
income from economic Activities /allied activities (existing and
allied activities proposed to be undertaken) /salary income if any.
and salary
income, if any.
OR
2. Value of 75% of value of land mortgaged as collateral security and 100% of value of
Security other securities like assignment of LIC Policy (surrender
value), pledge of KVPs/ NSCs/Bank’s TDR/Gold Ornaments etc.
Whichever is less out of 1. Farm Income and 2. Value of Security
NOTE :
1. Sanctioning Authority can assess the value of agricultural land for farm credit limits upto
Rs 10 lakhs taking into consideration the market rate prevailing in revenue village/Block and
giving due weightage to type of land / irrigated or non- irrigated etc.
OR
Value as per the last sale deed available or the market value assessed by the office of the
Registrar of Assurances for the area giving due weightage /discount in accordance with
specific location and type of lands with or without irrigation facilities etc.
OR
As per the valuation report obtained from the Revenue Authority in the respective States or
approved Architect /Engineer/ Surveyor/ Valuer of agricultural land registered with
Government/under Bank’s approved panel, wherever available.

However as per need based assessment and subject to viability of project, in case the amount
of Investment Line of Credit limits assessed is more than the value of securities as mentioned
above, sanctioning authority can relax the requirement of collateral securities as per the
extant guidelines applicable.

However, if the same is not falling within the relaxation which the sanctioning authority can
grant as per applicable norms, Regional Authority will have the powers to delegate authority
to grant such advances on case to case basis under
the scheme on relaxed terms, as far as collateral securities are concerned.
ISSUE OF ATM  It is mandatory for issuance of ATM enabled KCC RuPay cards to all eligible KCC
ENABLED KCC holders.
RUPAY CARDS  All KCC holders should be requested to avail the facility by explaining about the
(BKRC) advantages of KRC (Kisan RuPay Card).
 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 (free of cost), offered
by Rupay.
 As per RBI directives, request from the customer is mandatory for issuing debit card
in the account.
 Due Diligence process must be followed while handing over the RuPay card to the
KCC Holder.
 The various charges to be levied are as below;
Particulars Revised guidelines
Annual Fee Waived for all the years
Transaction charges for use of Rs.16+GST per Cash withdrawal.
ATMs of NFS member banks Rs.6+ GST for each non-financial
transaction
VALIDITY KCC Limit is valid for 5 years, subjected to annual review. (However in case of investment
line of credit the Branch may fix repayment schedule for more than 5
years, as per requirement of the project.)
RATE OF
INTEREST AND SN Parameter Rate of Interest
APPLICATION OF 1 Limit up to 3 Lacs Crop Loan: 7.00% p.a. (fixed), subject to
INTEREST. Govt. of India providing Interest Subvention to
Bank on such advances, otherwise applicable
rate of interest on such advances shall be

Page 196 of 502

 One year MCLR+ Strategic premium
Other than Crop Loan: One year MCLR+
Strategic premium
3 Limit Above 3 Lacs One year MCLR+ Strategic premium+1.25%
to 25 Lacs
4 Limit Above 25 lacs One year MCLR+ Strategic premium+2.00%

 At present, rate of interest for raising short term crop loans up to Rs.3.00 lacs per
season / per farmer will be charged @7% p.a (fixed) as per Government of India
(GoI) directives. It is subject to GoI providing 2% p.a interest subvention to Bank on
such advances.
 Simple interest will be applied up to repayment due date or for one year
whichever is earlier.
 The interest on current dues should not be compounded. However, interest on overdues
can be compounded. In case of non-payment within the
repayment due dates, interest will be applied at applicable rate, after the repayment due
date, compounded at half yearly rests.
INTEREST (A) As per RBI guidelines, Interest Subvention @2% for limits up to Rs 3 lacs, is
SUBVENTION available from the date of disbursement up to the repayment due date (not
exceeding 12 months) or the actual date of repayment by the farmer, whichever is
earlier. In this regard every year RBI issues a circular informing about the
availability of interest subvention.
(B) As per RBI guidelines, Additional interest subvention to farmers for prompt
repayment (Currently @3%) is also available from the date of disbursement up to
the actual date of repayment which should be on or before repayment due date,
subject to a maximum period of one year from the date of disbursement. In this
regard every year RBI issues a circular informing about the availability of additional
interest subvention for prompt repayment.
(C) RBI vide circular noRBI/2019-20/48 -
FIDD.CO.FSD.BC.NO.10/05.02.0001/2019-20 dated 26.08.2019 advised
operational guidelines of the Interest Subvention Scheme for Kisan Credit Card
facility to fisheries and animal husbandry farmers for a period of two years i.e. 2018-
19 and 2019-20 with the stipulations.
(D) RBI vide circular no. RBI/2017-18/48 FIDD.CO.FSD.BC.No.14/ 05.02.001/2017-
18 Dated 16.08.2017 has advised banks to ensure hassle free benefits to farmers
under Interest Subvention Scheme to make Aadhaar linkage mandatory for availing
short term crop loans in 2017-18.
(E) Branches are advised to strictly follow the laid down guideline and procedure for
claiming subvention in KCC accounts as per Bank of Baroda circular
BCC/BR/107/568 Dated 16.11.2015 and BCC/BR/108/596 Dated 09.12.2016.
Detailed circular also attached for interest subvention in CBS System.
(F) Total Limit made under Production line of credit must be bifurcated into crop loan
and consumption limit in CBS System and accordingly interest to be charged and
subvention is only to be charged on crop loan
component only not on consumption limit.
REPAYMENT The repayment period may be fixed as per the anticipated harvesting and marketing
PERIOD period for the crops for which a loan has been disbursed.
Repayment Due dates based on crop duration and cropping pattern are as follows:
A.FOR PRODUCTION LINE OF CREDIT

Sl Cropping pattern Crop cultivation Repayment due date(fixed)

No period
(Loan disbursement
period)
Short Term Crop
1. Mono Crop 1st April to 30th Maximum 12 months from the
(Kharif / Rabi) September(Kharif first disbursement date in case
season) and 1st of new accounts or maximum
October to 31st 12 months from
March(Rabi season) first withdrawal date after

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 renewal of crop loan in case of
renewed accounts (to be
synchronized with harvesting
of crop)
2. Double/Multiple Kharif & Rabi Maximum 12 months from the
Crops seasons first disbursement date in case of
new accounts or maximum 12
months from the first withdrawal
date after renewal of crop loan in
case of renewed accounts. (to be
synchronized with harvesting of
crop)

3. Single crop for 12 As per crop needs all Maximum 12 months from the
months round the year first disbursement date in case of
new accounts or maximum 12
months from the first withdrawal
date after renewal of crop loan in
case of
renewed accounts

Long Term Crop

4. Long term crops( All round the year as Maximum 18 months from the
More than 12 per crop needs first disbursement date in case of
months) new accounts or maximum 18
months from the first withdrawal
date after renewal of crop loan in
case of
renewed accounts.

B. FOR INVESTMENT LINE OF CREDIT- As per the scheme under which the
finance has been extended.
SECURITY Under Non Tie Up arrangement
Limit Security
Primary Collateral
Up to Rs 1.60  DP Note NIL
lac  Hypothecation of crops
Above Rs 1.60 grown/assets to be Equitable Mortgage / Registered
lac created out of Bank’s Mortgage of land
finance. or Third Party Guarantee etc.
Under Tie Up Arrangement:
Up to Rs 3 lac  DP Note NIL
Above Rs 3 lac  Hypothecation of crops Equitable Mortgage / Registered
grown/assets to be Mortgage of land or Third Party
created out of Guarantee etc.
Bank’s finance.

Wherever there are genuine difficulties for mortgaging/creation of charge on the landed
properties, suitable third party guarantee or other appropriate security could be taken, with
Regional Office permission.
In States where facility is available for online creation of charge on the landed properties for
agricultural loans, same to be ensured.

Legal opinion from Banks empanelled advocate to be obtained invariably above Rs.1 Lac, if
land is mortgaged/charge is created on land.

While arriving the security norms, total credit limits of both production credit and term loan
component to be taken into account.

NO DUES  RBI has dispensed with obtaining of No Due Certificate (NDC) from individual
CERTIFICATE borrowers, including SHGs and JLGs in rural and semi urban areas for all types of
loans. However branches should use alternate ways of due diligence by following
one or more of the following;
 Checking of credit history of the borrower

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  Self-declaration or a stamped affidavit from the borrower
 CERSAI registration
 Peer Monitoring
 Information sharing among lenders
 Writing to other lenders
 The guidelines to be adopted/followed by branches for due diligence are as under;

Loan Particulars Due diligence procedure

For all loans amount up to Self-declaration/Affidavit by the applicant Rs.1
lac
For all loan amounts more Credit history check/obtaining credit report from than Rs.
1 lac and up to credit information companies like Rs.5 lacs
CIBIL/Equifax/Experian/Highmark etc. with
whom Bank has/will tie-up.
For loans above Rs. 5 lacs In addition to credit history check as mentioned
above, information search by writing to all other Banks
operating in the center where our branch is functioning
and the applicant’s residence/village, with an auto
deadline (Maximum 7 days).
The branch should send the letter by Regd.Post.
 For detailed guidelines we may go through Bank of Baroda circular on this aspect,
please refer to Bank of Baroda Circular No.BCC:BR:107:76
dated 16.02.2015.

CONCESSION/IN In order to recognize loyalty, satisfactory dealings, good recovery records, better use of
CENTIVES TO Kisan Credit Card, improvement in farm production, productivity and farm income, the
KCC HOLDERS following facilities / concession / incentives to different category of farmer/ borrowers is
provided.
Sr Category of the Borrower
No Concession/Inc I (KCC Green) II (KCC Silver) III (KCC Gold)
entive
1 Number of years New and Agri borrowers Regular agri
of relationship existing agri having borrowers
borrowers satisfactory dealing and
dealing with relationship maintaining
us since last 3 with us for satisfactory
years more than 3 accounts with
years and up to us for a period
5 years@ of more than 5
years having
excellent
repayment
history*.
2 Concession in No Concession 0.25% 0.50%
applicable rate
of interest #
*The default/delay due to natural calamities/drought etc. will not be considered as an
adverse feature for the period by the Government and accordingly be justified in the
sanction.

# The facilities are to be sanctioned on reduced rate of interest on the basis of satisfactory
dealing of the borrowers for specific period. The rate mentioned on DP Note will stand
reduced to the extent of 0.25% or 0.50% as the case may be from the applicable rate of
interest. This concession in rate of interest is subjected to a condition that the borrower do
not enjoy other concession in the interest rate. However the ROI for KCC upto Rs 3.00 Lacs
shall not be below 7.00
%.( Fixed) subject to availability of Interest subvention from GOI.

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 CROP  All crop loans under KCC are to be covered under Pradhan Mantri Fasal Bima
INSURANCE Yojana (PMFBY) compulsory and the relevant particulars are to be uploaded in
Crop insurance portal of Government of India.
 All farmers who are growing notified crops in the notified area are eligible for
insurance coverage.
 The premium is to be deducted from the farmers account well within the cutoff date
as notified by the respective state govt. and premium amount to be remitted though
electronic mode (NEFT/RTGS) only to the insurance companies along with the
declarations/proposals.
 Branches are advised to put in efforts for covering non-loanee farmers, especially
those non-loanee farmers who maintain accounts in the branch need to be focused
upon and brought under ambit of crop
insurance.

PERSONAL  All KCC holders (Existing and new) are covered under the policy
ACCIDENTAL  The age of the KCC holder should be 18 years and above but not exceeding 70 years
INSURANCE in order to become eligible for coverage
SCHEME (PAIS)
 In case of Joint accounts, first holder will be eligible for insurance coverage. If the
age of 1st holder is above 70 years as on date of accident, other holder will be
eligible for insurance claim if he was authorized to hold KCC in his name and was
authorize to operate the KCC account.
 The entire premium payable on the policy will be borne by the Bank and will be paid
by Head Office and will not be debited to the a/c of the beneficiary/ KCC holder.
 The following risks are covered under the policy
 For detailed guidelines and Claim lodgement procedure, please refer Bank of
Baroda Circular No.HO:BR: 110/86 dated 28.05.2018.

Accidental
 death/ Permanent Disability Rs. 50,000/-
Loss of two limbs or one limb and one eye Rs. 50,000/-
Loss of one limb or one eye Rs. 25,000/-

IRAC NORMS #(# The extant guidelines for income recognition, asset classification and provisioning
ILLUSTRATION will continue to apply for loans granted under Kisan Credit Card Scheme.
WITH DATES Accordingly, KCC accounts will become ‘overdue’, if the principal and interest
MENTIONED IN remains unpaid on due date of payment
ANNEXURE.) The ‘overdue’ KCC loans will be classified as NPA if it remains overdue for a period
of two crop seasons in case of short duration crops (Maximum 24 months from the
repayment due date) and one crop season in case of long duration crops ( Maximum
18 months from the repayment due date), as the case may be.
The crops with crop season longer than one year are long duration crops and crops
which are not long duration crops will be treated as short duration crops.
Depending upon the duration of crops raised by the agriculturists, NPA norms
would also be made applicable to agriculture term loans availed by the
agriculturists.
As per RBI guidelines the crop season for each crop, which means the period up
to harvesting and marketing of the crops raised, would be determined by the
State Level Bankers’ Committee in each State. In absence of any specific
guidelines by SLBC the bank’s guidelines issued vide Bank of Baroda vide
Circular No. BCC:BR:110:148 dated
22.03.2018 will be followed by branches in the state.
MARKING OF Branches are advised to put correct restructuring information in all those accounts in
RESTRUCTURING Finacle, which are restructured so as to generate proper MIS data and to report in RBI
CODES IN Portal for natural calamities.
FINACLE

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 2. TATKAL LOAN SCHEME-

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.
ELIGIBILITY: Individual Farmers/Joint borrowers who are existing Baroda Kisan Card
(BKCC) Holders.
TYPE OF LOAN Term Loan repayable in 3-7 years or Overdraft facility for a period of 12 months.
MAXIMUM LOAN Limit may be fixed as under:
AMOUNT BKCC Limit upto Maximum Tatkal Limit
Up to Rs. 10.00 Lacs 50% of BKCC limit subject to max of Rs. 2.00 lacs
More than Rs. 10 lacs Rs.3.00 lacs
This is subject to the condition that the Tatkal limit being sanctioned should be within
the eligible limit under Investment Line of Credit 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 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/ profit from
from allied activities economic activities/allied activities (existing and
and salary income, if proposed to be undertaken)
any /salary income if any.

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/Bank’s TDR/Gold
Ornaments etc.
Whichever is less out of 1. Income and 2. Value of Security
SECURITY:  Existing security under BKCC to be extended.
 The existing norms of no collateral security up to Rs.1.60lac to be followed if
combined limit is within Rs.1.60 lac.
REPAYMENT (FOR In half yearly/ Yearly instalments depending upon the income generation and cropping
TERM pattern.
LOAN) :
RATE OF As per rates applicable to Farm Credit under Agriculture from time to time.
INTEREST:
REFERENCE BCC:BR:104:336 dated 28.09.2012 Baroda Kisan Tatkal Loan(BKTL) scheme
BCC:BR:106:265 dated 12.07.2014 Modifications in BKTL
BCC:BR:107:456 dated 15.09.2015 Modifications in BKTL

3. FINANCING FOOD & AGRO BASED UNITS:

Scheme For Financing Units Engaged In Processing Activities Of:

1) Oil Mill/Solvent Extraction
2) Rice/Dal/Flour Mill
3) Seed Processing/Agro Processing
4) Food Processing
5) Cotton Ginning And Pressing Mills And Cotton Seed Oil Extraction (Comprehensive Units) (Applicable for
Advances to the above mentioned units eligible to be classified as "Agriculture advances" having sanctioned limits
upto Rs.50.00 crore with our Bank, provided the aggregate
sanctioned limit per borrower from the Banking system not to exceed Rs.100.00 Crores)

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 ELIGIBILITY All Advances to new/existing (including take over from other banks) Food and Agro
based processing units under "Agriculture" (i.e. having an aggregate sanctioned limit
upto Rs.100.00 Crores per borrower from the Banking system) having sanctioned
limits upto Rs.50.00 Crores with our Bank (provided their aggregate sanctioned limit
per borrower from the Banking system does not exceed Rs.100.00 Crores), irrespective
of internal classification and turnover of the unit.
Individual, Proprietorship, Partnership concerns, Private Limited Companies, Public
Limited Companies and Limited Liability Partnership
Concerns

PURPOSE  Working capital requirements

 Financing new project i.e. acquisition/construction of land & Building and
Plant & Machinery based on the project cost including takeover of existing
units.
 Non Fund based facilities ( i.e. Bank Guarantee and Letter of Credit)
NATURE OF FACILITY Term Loan/Demand Loan/Cash Credit/Cash Credit against Warehouse; Receipt/
Bank Guarantee/ Letter of Credit/BP/BD, Export Credit pre- shipment and post-
shipment
Note:
1. To consider combo limit of Cash Credit (Hypothecation of stock & Book debts) or LOC
as per Bank's guidelines;
2. The concessions/relaxations available under the Scheme may also be extended on
the export credit facilities granted to a borrower covered under the Scheme. However,
rate of interest & other charges are to be charged/recovered on the export credit
facilities granted under the Scheme,
as per the Bank's extant guidelines.

LIMIT Upto Rs.50.00 Crores with our Bank (However, the aggregate sanctioned limit per
borrower from the Banking system not to exceed Rs.100.00 Crores)
MARGIN Stocks & Book debts: 25 % Plant &
Machinery: 25%
Land & Building: 30%
RATE OF INTEREST Internal Immovable Property security Coverage (including both
ON ADVANCES TO Credit primary and collateral immoveable properties)
THE UNITS ENGAGED rating
IN Above 100% Above 75% 50% to Below 50%
(I) OIL MILL/ to 100% 75%
SOLVENT CR-1 to MCLR+SP MCLR+SP+ MCLR+SP+ MCLR+SP+
EXTRACTION CR-3 0.10% 0.35% 0.60%
(II) RICE/ DAL/FLOUR
MILL MCLR+SP+
(III) SEED PROCESSING / 1.10%
AGRO PROCESSING;
AND
(IV) FOOD PROCESSING,
HAVING LIMITS UPTO MCLR-> One year MCLR, SP-> Strategic Premium
RS.50.00
CRORES WITH OUR
BANK
UNDER THE SCHEME

RATE OF INTEREST Internal Immovable Property security Coverage (including both

ON ADVANCES TO Credit primary and collateral immoveable properties)
UNITS ENGAGED IN rating Above Above 75% 50% to 75% Below 50%
v) COTTON GINNING 100% to 100%
AND PRESSING MILLS
CR-1 to MCLR+SP+ MCLR+SP+ MCLR+SP+ MCLR+SP+
AND COTTON SEED OIL
CR-3 0.25% 0.35% 0.60% 0.85%
EXTRACTION
ACTIVITIES CR-4 to MCLR+SP+ MCLR+SP+ MCLR+SP+ MCLR+SP+
(COMPREHENSIVE
CR-6 0.60% 0.85% 1.10% 1.35%
UNITS), HAVING LIMITS
UPTO RS.50.00 CRORES MCLR-> One Year MCLR; SP-> Strategic Premium
WITH OUR BANK
UNDER THE SCHEME

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 CREDIT RATING  For Existing/ Fresh/ Green field accounts External Credit rating with
exposure upto Rs. 50 crore may be exempted, subject to carrying out SME
Rating (not eligible for CRAR) and complying with internal credit rating
standards. (Ref: BCC: BR: 110/590 dated 05.12.2018).
 External credit rating, if applicable, in respect of Additional Exposure (RWl)
& Fresh/ Greenfield project (above Rs. 50 crores) and takeover Accounts
(Above Rs. 5.00 Crores)" may be permitted with stipulations detailed as
under:
Deviation-
1. For immovable security coverage norms by way of relaxation can be allowed
by ZOCC for proposals falling under the power of RMCC/DRMCC.
2. For immovable security coverage norms by way of relaxation can be allowed
by COCC ED for proposals falling under the power of ZOCC..

(Note:- Stipulation of minimum 70% immovable property coverage is applicable for

Fresh and takeover account upto Rs. 50.00 Crores, wherein external rating is BB
rating and internal rating is BOB-6/MSMEBOB 6, lf the external credit rating is
above BB (i e BBB and above) and internal credit rating above BOB 6/MSMEBOB6,
Sanctioning authority can take a view and accept immovable property coverage based
on merits on case to case basis).

Particulars Fresh/ Additional Additional Takeover

Greenfield Exposure/ Exposure/ (Up to
project (up to RWI (up to RWI/ Rs.50.00
Rs.50.00 Rs.50.00 Fresh/ Crores)
Crores) Crores ) takeover
(above
Rs. 50,00
Crores
External Exempted, Exempted, BBB BB (Exposure
Credit subject to subject to above Rs. 5.00
rating carrying out carrying Crores and
(Minimum) SME rating out upto Rs. 50 00
Wherever SME Crores)
applicable rating
Internal BOB 6/ BOB 6/ BOB 6 BOB 6
credit rating MSMEBOB 6 MSMEBOB
(Minimum) 6
Immovable Minimum 70% Sanctioning authority to Minimum 70%
Security for BOB take a view based on for BOB
Coverage 6/MSMEBOB6 merit 6/MSMEBOB6
(Minimum) rated accounts on case to case basis rated accounts
(out of which (out of which
part of security part of
should be security
other than should be
Factory Land & other than
Building. Factory Land
& Building.

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 For Negative outlook Sector- Exposure will be limited to “A” rated accounts only.

However as per Bank circular no. BCC:BR:111:386 dated 03.08.2019, External Credit
rating for borrowers with exposure up to Rs. 50.00 Cr may be exempted and Sector
Outlook and rating criteria not applicable for Food and Agro Based units qualifying under
priority sector classification.
METHOD OF As per the extant guidelines on working capital assessment for MSME units.
ASSESSMENT OF
WORKING CAPITAL
PERIOD 12 months for working capital
Up to 84 months for term loan (including up to -12- months moratorium period),
subject to annual Review
INSURANCE Security charged/mortgaged should be insured as per Bank’s norms preferably
under Bancasurance.
FINANCIAL RATIO The norms for Financial ratio as applicable for credit appraisal (not for
FOR CREDIT Takeover) of MSME units shall be applicable for credit Appraisal of fresh
APPRAISAL UNDER exposure, Review, Review with Increase under the Scheme. The said
THE financial ratios are indicative and deviations can be considered by
SCHEME (NOT FOR sanctioning / competent authorities on a case-to-case basis as advised vide
TAKEOVER) Global Credit Exposure Management Policy, 2018 ant other guidelines
issued by the bank from time to time.
GUIDELINES FOR In respect of takeover of accounts under the Scheme, takeover norms for
TAKEOVER Agriculture advance accounts stipulated in the Global Credit Exposure
OF ACCOUNTS UNDER Management Policy 2018 and other guidelines issued from time to time,
THE other than relaxation mentioned in this Annexure, are to be followed. Any
SCHEME deviation in the takeover norms is to be considered by the Competent
Authority mentioned in the Chapter “Takeover of Agriculture advance
accounts” of the Global Credit Exposure Management Policy 2018 and
circular No. BCC:BR:110:590 dated 05.12.2018.
DEVIATION ALLOWED IN  Current Ratio of minimum 1.10 provided that current ratio computed
NORMS FOR TAKEOVER excluding current term loan instalments meet the policy norms for MSME units.
OF  Debt Equity Ratio (TOL/TNW) of maximum 5.00.
ACCOUNTS FROM
 DSCR, if applicable, should be average 1.50.
OTHER BANKS/ FIS
UNDER THE SCHEME  Account should not have been restructured in the last -2- years.
 Account should be in standard category.
 Conduct of the account should be satisfactory based on credit report obtained/
verification of account statements for last -6- months.
 External Credit Rating, if applicable, in respect of Takeover Accounts upto “BB”
(excluding Negative outlook sectors) may be permitted
All other norms for takeover of facilities as per the Global Credit Exposure
Management Policy 2018 and other guidelines issued from time to time, other
than the relaxation mentioned in this Annexure, are to be followed.

(Note: Any further deviations in takeover norms in financial ratios apart from deviations
allowed in the scheme will be governed by BCC:BR:110:590 dated
05.12.2018).
MAINTAINING Unit enjoying credit facilities shall be allowed to open/ maintain current account with
ACCOUNT WITH only one other local bank for cash payment purpose after obtaining NOC from our Bank
OTHER BANK (With due permission from sanctioning authority). The Branch to obtain statement of
accounts every month for the account maintained with other Bank and satisfy about
the transactions routed through the account.
However, as per the extant guidelines of IBA on diversion of funds by the borrowers
through current account with other Banks, sanctioning authority has to accord
permission for operating / maintaining account with other Bank strictly in the extreme
deserving cases and not in a routine manner. Further, the concerned Bank is to be
informed about the credit facilities
availed by the unit with our Bank.

PROVISION FOR Sanctioning Authorities have been allowed to sanction additional working
SANCTION OF capital limit upto 25% of the sanctioned Cash Credit Limit, keeping in view

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 ADDITIONAL the peak season requirement of the customer, subject to observing the
WORKING CAPITAL amount and period specified for granting adhoc facility under their DLP
LIMIT/ PEAK-NON (where peak and nonpeak limits have not been sanctioned separately).

PEAK LEVEL LIMITS In Cotton Ginning, Pressing sanctioning of Peak-level (October to June) and Non-peak
level limits (July to September), bringing the Cash Credit account
in credit once in a year etc. are to be continued.
ACTIVITY Activity clearance for financing the units engaged in Vegetable Oil and
CLEARANCE Vanaspati is to be obtained, as per the extant guidelines.
RESTRICTION ON The existing restriction imposed by Credit Policy Committee (CPC) of our Bank on
FRESH FINANCING IN fresh financing in the accounts rated below CR-5 under "Other Food Processing
THE ACCOUNT RATED Sector" (i.e. all Food Processing Industries other than Sugar, Edible Oil & Vanaspati,
BELOW CR-4 IN "OTHER Tea and Coffee) shall continue to remain in force under this Scheme till the time the
FOOD same is removed by Credit Policy Committee (CPC)
PROCESSING
SECTOR"

ALLOWING TRADING If trading activities are also undertaken by the unit engaged in Food/Agro Based
SALES activities under the "Food & Agro based Scheme", the ratio of trading sales in total sales
should not be more than 49% in a financial year.
Otherwise, the benefits available under the scheme will not be admissible.
OTHER INFORMATION Various benefits/concessions/relaxations available under this Scheme are available
upto an aggregate limit of Rs.50.00 Crores per borrower with our Bank. However, on
advances to the “Food and Agro Based units” (under Agriculture) having limits above
Rs.50.00 Crores and upto Rs.100.00 Crores with our Bank, the rate of interest
shall be charged @1% over and
above the rate of interest applicable under this Scheme.
REFERENCE  Global Credit Exposure Management Policy 2018 (BCC:BR:110:346 dated
10.07.2018)
 BCC:BR:110:590 dated 05.12.2018.
 BCC:BR:111:20 dated 10.01.2019

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 4. OVERDRAFT SCHEME FOR WORKING CAPITAL ASSISTANCE TO THE FOOD & AGRO PROCESSING
UNITS:

ELIGIBILITY  All Advances to new/existing (including take over from other banks) Food
and Agro based processing units under “Agriculture”
 Individual, Proprietorship, Partnership concerns, Private Limited
Companies, Public Limited companies and Limited Liability Partnership
Concerns.
 If trading activities are also undertaken by the unit, the ratio of trading sales
in total sales should not be more than 49% in a financial year.
(Working Capital Limit should be under Sole banking Arrangement.)

CREDIT RATING The units having internal rating up to BOB6 /MSME 6 will be eligible
under this scheme
PURPOSE Working capital requirements.
SCHEME CODE OD035
Interest table code is MCL5 (12 months MCLR+SP) The Branch will have to adjust
the load above this in “account preferential DR” field.
NATURE OF FACILITY Overdraft (Against Land & Building). However, sanctioning authority may allow
Non-Fund based Working Capital facilities, viz, Letter of Credit and
Bank Guarantee by earmarking the overdraft limit.
LIMIT Minimum Limit – 10.00 Lacs
Maximum Limit – (Rs. In lacs)
Rural 100.00
Semi Urban 300.00
Urban & Metro 400.00
METHOD OF (i) 25% of projected sales of the borrower for Micro and Small enterprise and
ASSESSMENT OF 20% of the projected sales for medium enterprise and SME expanded units
LIMIT (other than retail trade).
(ii) 60% of the realizable value of the property.
Lower of (i) & (ii) to be allowed as overdraft limit of the borrower.
MARGIN  40% of the realizable value of property mortgaged. Regional Head is
authorized to reduce the margin up to 35% in deserving cases.
 Two valuation for cases where the valuation is more than Rs.
200.00 lacs and the lower valuation will be considered as Global Credit
Exposure Management Policy 2018.
PERIOD 12 months
RATE OF INTEREST ON
ADVANCES TO THE
UNITS Internal Credit rating Rate of interest
CLASSIFIED UNDER CR-1 One year MCLR+SP p.a. at present
AGRICULTURE SECTOR.
CR-2 & CR-3 One year MCLR+SP+0.05 p.a. at present
CR-4 & CR- 5 One year MCLR+SP+0.25 p.a. at present
CR-6 and below One year MCLR+SP+0.50 p.a. at present
SANCTIONING AUTHORITY As per Discretionary lending powers.
Proposal under this scheme are delinked with SME Loan Factories and to be
processed at Branch/Region/Zone level as per their respective DLP.
SECURITY Mortgage of factory land and building and/or any other property(Land & Building)
belonging to unit or Promoters of the unit, or close relatives of the promoters, viz.
father, mother, Spouse, son , son’s wife, daughter, daughter’s husband, brother ,
brother’s wife , sister, sister’s husband only
, provided they stand as guarantors.) (Please note that property should not be in the
name of HUF).

In case of residential/commercial building, age of property should not be more than

25 years at the time of sanction.

For properties which are older than -25- years, Regional Head may authorize such
cases on selective basis, subject to ascertaining structural

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 soundness of the building by obtaining an Approved Engineer’s certificate, certifying
structural soundness and residual life of the building, which should be at least -10-
years more.

The branch will further be required to carry out inspection of the property every year
at the time of review of facility and obtain structural soundness report from Architect
every 3rd year along with valuation of property and also ensuring that at any time
the residual life of the property is not less than 5 years.

If the property is purchased within last -3- years, the registered value as per sale deed
or the distress value as per valuation report whichever is lower is to be accepted as
the security value.

(Note: If the present realizable value is higher than the Registered value (Sale deed
Registered within last 3 years) and if it requires to consider present realizable/
Market value as value of property, for any reason, deviation approval from Regional
Authority to be obtained for the same based on merits.)
Extant guidelines for valuation of properties, obtaining of title clearance and
registration with statutory agencies with Sub-Registrars and ROC, CERSAI etc.,
should be complied with.

Note: Exclusively vacant land as security is not permitted under the scheme.
However the same can be permitted along with other eligible securities. The value of
the vacant land shall not exceed 50% of the total security value.

FINANCIAL RATIO FOR Financial ratios (including takeover account) be as under:

CREDIT APPRAISAL Particulars Micro Medium SME
UNDER THE SCHEME Enterprises Enterprises Expanded
Current Ratio 1.17 1.20 1.33
Debt Equity Ratio 3.00 3.00 3.00
(TTL/TNW)
Debt Equity Ratio 4.50 4.50 4.50
(TOL/TNW)
GUIDELINES FOR In respect of takeover of accounts under the scheme, takeover norms for advance
TAKEOVER OF accounts stipulated in the Global Credit Exposure Management Policy 2018 and
ACCOUNTS UNDER other guidelines issued from time to time,
THE SCHEME
OTHER CONDITIONS  Credit rating applicability would be as per loan policy/Bank’s guidelines issued
from time to time.
 Borrower to route the entire sales and all other transactions through their
overdraft account with the branch. Borrowers will not be considered for Working
Capital Assistance both under the scheme as well as under usual scheme
simultaneously.
 However, existing borrowers enjoying finance under any other scheme can have
the facilities transferred into overdraft against land and building, if they so
desire, after compliance of terms and conditions.
 In case any defect is observed during inspection of the security, branch will be
required to ensure substitution of the security having requisite value
immediately or ensure liquidation of the facility at the earliest but not later than
12 months period in any case
 Sales to be verified from GST Return.
 Property mortgaged should be insured as per Bank’s Norms. Obtaining
insurance of stocks may not be a condition for sanction of facility. However,
Branches may counsel their Borrowers to have the stock insured in their own
interest at their cost.
 Any deviation other than mentioned herein above to be allowed by Corporate
Office Credit Committee headed by Executive Director.

REFERENCE BCC:BR:110:493 dated 28.09.2018

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 5. AGRICULTURE AND OTHER PRIORITY SECTOR ADVANCES AGAINST SECURITY OF GOLD
ORNAMENTS/ JEWELLERY.

PURPOSE Any purpose covered under Priority Sector

TYPE OF FACILITY Cash Credit and Demand Loan
ELIGIBILITY All individuals including staff members being the true owner of the gold
ornaments/jewellery/specially minted gold coins sold by the Bank.

The applicant must be local resident & must have a saving account with the
Branch.
AGE Minimum- 18 Yrs. and Maximum Age-70 Yrs.
LIMIT Maximum limit under the scheme is Rs 25.00 lakhs per borrower.
MARGIN 25 % on value of Gold ornaments/jewellery/specially minted gold coins.
ADVANCE VALUE To be advised on daily basis taking into consideration average of the last 30 days closing
OF GOLD price of the Gold or current rate, whichever is lower. The same will be advised/
circulated to the Branches/ offices by our Treasury Department.
INTEREST RATE
For Farm Credit & other priority sector advances:
Limit > Rs.3.00
Parameters Limit upto Rs.3.00 Lacs Lacs and upto
Rs.25.00 Lacs Crop
Loan: 7.00% p.a. (fixed), One year MCLR+ subject
to Govt. of India Strategic
providing Interest Subvention premium+1.25%
to Bank on such advances,
otherwise applicable rate of Farm
Credit interest on such advances
shall be One year MCLR+ Strategic
premium.
Other than Crop Loan: One year
MCLR+ Strategic
premium
Agriculture One year MCLR+ Strategic One Year MCLR+
Infrastructure premium+ 0.50% Strategic
& Agriculture premium+1.50%
Ancillary (*)
Other Priority One year MCLR+ Strategic One Year MCLR+
Sector premium+ 0.50% Strategic
Advances (*) premium+1.50%

For MSME regulatory segment:

Limits Micro Small Medium
Enterprises Enterprises Enterprises
Upto Rs 50000/- MCLR+SP MCLR+SP+0. MCLR+SP+1.20
50% %
Above Rs 50000 to MCLR+SP+0. MCLR+SP+0. MCLR+SP+1.20
2.00 lacs 50% 70% %
Above Rs 2.00 MCLR+SP+0. MCLR+SP+0. MCLR+SP+1.20
lacs to Rs 10 lacs 70% 85% %
Above Rs 10 lacs MCLR+SP+0. MCLR+SP+1. MCLR+SP+1.20
to Rs 25 lacs 85% 00% %
*For detail refer to latest Interest Rate circular on Agriculture & Other Priority
Sector Advances.
PERIOD Maximum 12 months.
REPAYMENT OF Repayment schedule will be as per the income generation of the borrower. In the
LOAN repayment clause, the interest/principal servicing be synchronized with the harvest of
crop in case of loan to farmers & cash flow in case of other borrowers. For advances
other than crop loan, the loan should be repaid in monthly/quarterly/half yearly
installments with maximum moratorium period of 12 months as per cash accrual.
However, the period of loan should not exceed 12 months.

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 SECURITY The loan shall be secured by minimum 18 carat gold
jewellery/ornaments/specially minted coins /hall marked gold
jewellery/ornaments.
INSURANCE No insurance cover at the cost of borrower.
PROCESSING AND The service charges will be applicable as advised vide our circular no:
OTHER CHARGES HO:BR:111:476 dated 25.09.2019 ( Revision in Service Charges w.e.f 01.04.2019).
0.25% of the Sanctioned Limit
Working Capital Loan Fresh Rs 3.00 lakhs –Rs 10.00 Lakhs
+ GST
/Review
Above Rs 10 Lakhs 0.25% of the Sanctioned Limit
For Term Loan (Fresh ) Above Rs 3.00 lakhs + GST (Maximum Rs 3500)
ASSAYER CHARGES The assayer may be paid a commission of 50 paise per every RS. 100/- net assayed value of
gold ornaments with a minimum of Rs 25/- and a maximum of RS. 350/- per assaying.
Amount of assaying charge along with applicable GST payable at the time of initial
assaying to be recovered from the borrower to the credit of Bank P/L and the assaying
charges is to be paid to the assayer to the debit of Banks P/L. Payment to the Assayer may
be made in the same day.
REAPPRAISAL OF  Re-assaying of pledged Gold ornaments/jewellery to be done in case of Gold Loan
GOLD JEWELS accounts with sanctioned limit of above Rs 3.00lakh within -15- days by another assayer/
assayer of another branch.
 Re-assaying of the pledged Gold ornaments/ jewellery outstanding at the end of each
quarter sanctioned during that quarter is to be carried out by Officer/Assayer of another
Branch, in first month of next quarter.
 Re-assaying charges (at the time of Internal Audit of the Branch by ZIAD) of Rs 100/=
per account Packet be paid to the assayer to the debit of Banks PL Sundry Charges
(others) account of the Branch.
 Re appraisal charges for amount of loan above Rs 3.00 lakh is of amount 50 paise per
every Rs. 100/- net assayed value of gold ornaments with a minimum of Rs 25/- and a
maximum of RS. 250/- per assaying as per circular no. BCC:BR:111:347 dated
17.07.2019.
 Regional Office to ensure that the re-assaying officer/ assayer to bepicked up at random
from any of the Branches in the Region and not on a routine basis to have an element of
surprise.
INFRASTRUCTURE Branches identified by the Regional offices on the basis of availability of following basic
REQUIREMENTS infrastructures are only authorized to lend under this scheme:
 Safe/Strong room for safe keeping of pledged gold under dual control i.e. Manager and
Officer.
 CCTV camera at entry/exit of safe, counters and other main areas. CCTV camera
should remain operative even during non-business hours and with minimum
recording of 1 week. However as per instructions issued by Security Dept., BCC
minimum recording should be of 45 days. Kindly ensure that the CCTV recording is
kept separately in a safe place.
 Panic alarm/ Burglary alarm to be fitted at Branch.
 Pledged gold ornaments/jewellery to be kept in safe/strong room under dual control.
 Branch has to ensure that annual maintenance contract for CCTV, Burglary alarm /Panic
alarm is valid at all time and regular maintenance is being carried out by the concerned
agency.
 Arrangement for safe keeping of keys to safe/vault/strong
room/alarm system.
SAFE KEEPING OF Separate record/ register needs to be maintained for such accounts where the pledged jewels
JEWELS LEFT WITH are left with the Branch after close of the Gold loan account. Details of the accounts and the
BRANCHES IN CLOSED identification number etc. will be entered in the Register maintained for such purpose.
ACCOUNTS.
The officer carrying out quarterly verification of re-assaying will also carry out verification of
all such packets and tally it with the system / record maintained.

Charges of Rs 100/: per month are to be levied for each 30 completed days, the jewel remains
in the custody of the branch and will be credited to Incidental charges A/c No-
XXXX0042701006.

Branches to incorporate a clause in the sanction letter to effect that "charges of Rs 100/= per
month will be levied for the jewel remains in the custody of the branch after closure of the
loan account,'"
INCENTIVE PAID TO Incentive on canvasing fresh Gold Loan accounts has been revised to 0.10% of the Loan
BC’s and BF’s FOR amount subject to minimum of Rs 100.00 & maximum of Rs 1000.00 per account vide
SOURCING/GENERATIN circular no. BCC:BR:111:347 dated 17.07.2019.
G FRESH GOLD LOANS

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 Discrepancies observed Bank vide circular no. BCC:BR:111:2013 dated 01.05.2019 has informed that following
discrepancies are observed/noticed by RBI and advised as under:

REFERENCE BCC:BR:108:451 Dated 27.09.2016.

6. FINANCING AGAINST WAREHOUSE/ STORAGE RECEIPTS OF AGRICULTURE PRODUCE:

TYPES OF
WAREHOUSE/STORAGE
RECEIPTS ELIGIBLE TO BE
FINANCED

SECTORIAL a) Loans to Individual farmers [including Self Help Groups (SHGs) or Joint
CLASSIFICATION ( Liability Groups (JLGs), i.e. Groups of individual farmers, provided banks
AGRICULTURE & PRIORITY maintain disaggregated data of such loans] and Proprietorship firms of
SECTOR)/ LIMITS farmers, Corporate farmers, Farmers' Producer Organizations/ Companies of
individual farmers, Partnership firms and Co-operatives of farmers directly
engaged in Agriculture and Allied Activities up to a limit of Rs 50.00 lakhs for
a period not exceeding 12 months.
b) Food and Agro-processing units up to an aggregate sanctioned limit of Rs 100
crore per borrower from the entire Banking system. In case of Food & Agro
processing units, storing the commodity in warehouses for their processing
under WHR/SR can be considered under Food & Agro processing activity
within the overall cap of Rs. 100 crores by the entity from the entire Banking
system to be classified under agriculture.
c) All bank loans to Micro, Small & Medium Enterprises (Services) fulfilling
criteria of Micro, Small & Medium Enterprises under MSMED Act 2006
engaged in providing or rendering of services as defined in terms of
investment in equipment under MSMED act 2006 shall qualify under priority
sector without any credit cap.
d) All other loans will be classified under Non Priority Sector.
MARGIN  Minimum 30%.
NATURE OF FACILITY In case of Farmers, Demand Loan. For others: Cash Credit (Pledge).
Cash Credit Pledge in case of Food & Agro Processing Units
RATE OF INTEREST MCLR + +SP+ 0.25%.

COLLATERAL MANAGER Collateral Manager Charges (Maximum @ 1 % + applicable taxes if any) to be

CHARGES: recovered from borrowers account separately.

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 UNIFIED PROCESSING  Up to Rs 50 lakhs - Rs 1000.
CHARGES:  Above Rs 50 lakhs up to Rs 10 crores - Rs 25/lakh subject to maximum of
Rs 20000.
 Above Rs 10 crore - Rs 20/lakhs and subject to maximum of Rs 50000.

SECURITY Pledge of agricultural commodity and duly discharged Warehouse Receipts

DOCUMENTATION Following documents are to be obtained:

For Farmers:
Prescribed Application form.
FINANCING AGAINST Bank vide circular no. BCC:BR:111:227 dated 21.05.2019 has advised that Branches
ELECTRONIC NEGOTIABLE to extend pledge finance only against Negotiable Warehouse Receipt (eNWR)
WAREHOUSE RECEIPTS issued by warehouse registered with the WDRA.
i) Warehouse Receipts in original duly discharged and assigned in bank’s
favour.
ii) D. P. note.
iii) Loan agreement.

INSURANCE: Insurance of the goods stored in Warehouses is obtained by Warehouses owners.

The financing Branch to ensure that the insurance of the agriculture produce kept
in the Warehouses represented by Warehouse Receipts pledged with the Bank is
obtained by covering all necessary risks.
In case, the insurance is not taken by the warehouse/cold store owner, separate
insurance with bank’s clause for the agriculture produce pledged with the bank be
obtained by the borrower and kept on branch record.

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Page 212 of 502
Page 213 of 502
 LIST OF EMPANELLED 1. M/s National Bulk Handling Corporation Ltd (NBHC)
COLLATERAL MANAGERS 2. M/s Star Agri Warehousing and Collateral Management Ltd.
(STARAGRI)
3. M/s Edelweiss Agri Value Chain Ltd (EAVCL) now called M/s Edelweiss
Rural & Corporate Services Limited
4. M/s Shree Shubham Logistics Limited
5. M/s Arya Collateral Warehousing Services Pvt. Ltd
6. M/s Universal Collateral Management Pvt. Ltd (UCML)
E AUCTION At present, whenever a pledge loan facility financed against Warehouse Receipt
/ Storage Receipt becomes overdue, branches conduct auction of the pledged
commodity to recover Bank's dues after publication of the auction notice in the
local newspaper. The auction process is generally limited to that particular
locality and many times the auction process fails due to lack of bidders or the
amount quoted by the prospective buyers do not match the market/ base price"

Now, our bank has signed an MOU with NeML (M/s NCDEX E-markets Limited)
to conduct e-auction of pledged commodities financed by banks against
Warehouse receipts/storage receipts. Branches are advised to take advantage of
our tie-up with NeML "with this MoU with NeML. the auction process will be
more effective since NeML provides & facilitates online platform for auction
process. NeML also has a large client base registered with them who can be the
prospective bidders/ buyers there by providing more options for a successful
bid/auction process.

BCC:BR:111:589 dated 08.11.2019

REFERENCE  BCC:BR:105:357 dated 19.08.2013
 BCC:BR:109:566 dated 01.11.2017
 BCC:BR:111:408 dated 20.08.2019 (Master Circular)
 BCC:BR:111:589 dated 08.11.2019

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 7. FINANCING AGAINST WHR/SR TO FOOD AND AGRO UNITS ENJOYING CREDIT FACILITY WITH OUR
BANK

ELIGIBILITY Food and Agro-processing units presently enjoying regular working capital limit with
our Bank.

Individual, Proprietorship, Partnership concerns, Private Limited Companies, Public

Limited Companies and Limited liability Partnership concerns having working capital
limits with our Bank at present under Food & Agro Processing activity and are defined
under Agriculture as per RBI agriculture sector classification.

PURPOSE Working capital requirement.

NATURE OF Cash Credit (Pledge).
FACILITY
LIMIT Cash Credit pledge limit of maximum Rs 10.00 crores
MARGIN Minimum of 30% for all agriculture commodities proposed to be kept as security or as
prescribed by Collateral Manager, whichever is higher.
(The valuations of the commodity will be the indicative price as advised by
the Collateral Manager or the market price, whichever is lower)
RATE OF
One year MCLR+ Negotiable Collateral Manager Charges. (Maximum 1%) on average
INTEREST
loan outstanding and applicable taxes on Collateral Manager Charges.

COMMISSION TO
CM Cases where there is no negotiation in charges with the Collateral Managers, Branches
to charge 0.75% or 1.00% above One year MCLR depending on whether the loan has
been marketed by the Bank or the Collateral Managers.
PROCESSING Up to Rs 50 lakhs Rs 1000/=.
FEE Above Rs 50 lakhs up to Rs 10 Rs 25/- per lakh Subject to Maximum of Rs 20000/=.
Crore
**Excluding applicable taxes from time to time.
TENOR Maximum up to 12 months, as advised by CM for commodity to commodity but not
more than 12 months. Repayment period to be fixed according to
life/ quality of the pledged commodity.
SECURITY Warehouse/Storage receipts issued by CM and their associates/franchise
duly certified by CM.
DISCRETIONARY As per DLP vested upon the sanctioning authority.
POWERS:
INSURANCE: Insurance of the goods stored in warehouse shall be obtained by Collateral Manager/
warehouse owners covering all necessary risks. The insurance
policy to have our Bank’s clause incorporated in it.
COLLATERAL At present we have tie up arrangements with the following Collateral Managers :
MANAGERS 1. M/s National Bulk Handling Corporation Ltd (NBHC)
2. M/s Star Agri Warehousing and Collateral Management Ltd.
(STARAGRI)
3. M/s Edelweiss Agri Value Chain Ltd (EAVCL)
4. M/s Shree Shubham Logistics Limited
5. M/s Arya Collateral Warehousing Services Pvt. Ltd
6. M/s Universal Collateral Management Pvt. Ltd (UCML)
7. M/s CGR Collateral Management Ltd. &
8. M/s Navjyoti Commodity Management Services Limited (NAVJYOTI).

METHOD OF Assessment of limit under the scheme be based on value of the commodity held/
ASSESSMENT OF proposed to be held by the borrower net off proposed margin.
LIMIT
FINANCIAL Since the facility and limit is to be considered against pledge of commodities which are
RATIOS taken as security the financial ratios may not be strictly complied with. However
sanctioning authority to incorporate the justification for
variance in the ratios, if any, in the proposal.
OTHER POINTS  The scheme will cover units classified/covered under our Banks
“Food and Agro Based Units” and are sanctioned credit facility from

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 our Bank.
 Facility can be sanctioned as and when approached by the customer on
standalone basis not to be linked with review of the existing account.
 However during the regular review of the existing credit facilities an overall
view/status/ conduct of all the credit facilities will be taken by the Branch and
comments on the conduct of the accounts to be incorporated in the proposal.
 While calculating the security coverage for arriving at the ROI part the facility
and the security for the Warehouse/Storage receipt finance to be kept aside
and not to be linked with the other existing credit facilities.
 Branch to ensure that in case of fall in the price of the commodities adequate
margins are available. In adverse cases additional securities may be stipulated
or steps taken to sell/ dispose off the commodities after following the laid down
guidelines of the bank.
 The existing facilities of the borrower should be in standard category and the
accounts should be conducted satisfactorily.
 Branches to ensure that the pledged stock is free from any other charge and
utmost care is to be taken to avoid chances of double financing against the same
stock.
 Inspection of the pledged stock to be carried out as per the extant guidelines of
the Bank.
 Since price of the pledged commodity is most important aspect of the scheme,
Branch to independently verify the price from other sources (agmarknet.gov.in,
Local Mandi Market) apart from what is quoted by the Collateral Manager and
keep the same on record.
 Inspection irregularities pointed out in the Internal Audit of the Branch for the
regular credit facilities to the borrower to be incorporated and status of these
irregularities to be commented upon in the proposal
 Branches to ascertain requirement of limits under WHR/SR of the “Food &
Agro Processing units” dealing with us at the time of regular review of their
existing credit facilities and process the proposal simultaneously. This would
avoid unnecessary delays in processing the proposal at a later stage.
 Credit rating for the fresh facility in this scheme to be carried out as per existing
guidelines. However ROI is delinked from the credit
rating of the borrower.
REFERENCE BCC:BR:110:316 dated 22.06.2018

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 8. FINANCING TO FARMERS FOR PURCHASE OF FOUR WHEELER

TYPE OF Term Loan

FACILITY

PURPOSE
Rural Transport Vehicle etc. for using in their farm management activities.
 Used vehicle should not be more than 3 years old.
ELIGIBILITY/  Farmers including those engaged in Allied activities having family income sufficient
BENEFICIARY to repay the loan.
 If the main source of income of the farmer is from land based activity:
 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 farmer is generating sufficient income to
ensure repayment.
In case of main source of income being from Allied activities, income certificate from
Revenue authorities / IT returns etc. to be obtained.
AGE Minimum – 21 years
Maximum–up 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.
MAXIMUM LOAN New Vehicle: Rs.15.00 lac*; Old Vehicle: Rs. 10.00 lac. Within the
AMOUNT eligibility worked out as below:

Farm Income -4- 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.)
OR
Other income/ -3- times of net anticipated annual income/profit
income from from economic activities/ allied activities (existing and
allied activities proposed to be undertaken) /salary income if any.
and salary
income if any
*Limit in case of New Vehicle - Zonal Head is authorized to increase the limit upto 50%
i.e. for New Vehicle – Maximum loan amount - Rs.22.50 lac.
MARGIN New vehicles : 15% ; Used vehicle : 40%
RATE OF One year MCLR + Strategic Premium+0.25%
INTEREST

REPAYMENT New vehicles : 7 years; Second hand vehicles: 4 Years.

Loan repayment will be synchronized with the income generation from the farm activities.
The due dates to be fixed taking in to account the time taken for receipt of sale
proceeds of the crop. The installments may be fixed on monthly / quarterly/ half yearly/
yearly basis based on cropping pattern / income generation.
PAYOUT Payment of pay out to all Car Dealers at the rate of 1% of Car Loan Amount disbursed
PAYMENT against the leads directed by them and converted in to real business.
Payment of service charges of Rs. 1000/- per car loan to the Sales Executives of Car
Dealers against the leads directed by them and converted into real business.
INSURANCE Comprehensive insurance of the vehicle with Bank’s clause.
 In case of used vehicle, the existing insurance policy be got transferred in the name
of the borrower with Bank clause.
OTHER TERMS  Banker’s Cheque / demand draft issued by the bank while disbursing car loans should
& CONDITIONS be super scribed “Purpose: Car Loan to Mr./Mrs. .”

REFERENCE BCC:BR:106:338 dated 05.09.2014

BCC:BR:108:338 dated 29.07.2016
BCC:BR:110:258 dated 18.05.2018

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 9. FINANCING TWO WHEELERS LOAN TO FARMERS.

TYPE OF FACILITY Term Loan

PURPOSE Purchase of new Two Wheelers (Motorcycle / Scooter)
ELIGIBILITY/ All new and existing farmers engaged in Agriculture and / or allied
BENEFICIARY activities having repayment capacity assessed by the branch based on crops
grown / allied activities / other sources.
AGE Minimum – 21 years
Maximum–up 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.
LIMIT Maximum Rs.1.00 lac which will include :
1. Cost of Vehicle i.e. invoice price.
2. One-time Vehicle tax and registration charges.
3. Comprehensive Insurance for first year. Note:
Cost of accessories not to be included.
ASSESSMENT The limit is assessed based on the income and repaying capacity of the farmer as
under::
Farm 6 times of net annual income OR 3 times of
Income total annual farm receipts/value of
crops, whichever is lower
OR
Other income/income 3 times of net anticipated annual income/profit
from allied activities and from economic activities/ allied activities
salary income if (existing and proposed to
any be undertaken) /salary income if any.
MARGIN 10%
RATE OF MCLR+ Strategic Premium
INTEREST
REPAYMENT Repayment Schedule to coincide with harvesting season. (As per Banks
Norms). Maximum period – Not exceeding –5- years.
Loan repayment will be synchronized with the income generation from
the farming & allied activities.
SECURITY Hypothecation of vehicle
INSURANCE Comprehensive insurance of the vehicle with Bank’s clause.
DISBURSEMENT  Full cost of the vehicle (Bank Loan amount plus Margin/Contribution by the
OF LOAN borrower) is to be disbursed by issuance of Banker’s Cheque/Demand
Draft/NEFT in favour of authorised dealers as per the quotation. No service
charges for issuing DD/BC/NEFT.
 Banker’s Cheque / demand draft issued by the bank while disbursing loans
should be super scribed “Purpose: Two wheeler
Loan to Mr./Mrs. .”

OTHER • In case of the farmers engaged in allied activities (main source of income is from
GUIDELINES allied activities), any of the income proof (IT return / certificate issued by
Revenue authorities/ panchayat / Municipal authorities / other income proof to
the satisfaction of the Branch).
• In case of the existing farmers the Branch to ensure about satisfactory track
record of the borrower. However, in case of new farmer, Branch to satisfy that
the conduct of their account, if any, with
other Bank / FI is satisfactory.

REFERENCE BCC:BR:106:360 dated 15.09.2014

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 10. FINANCING SILOS/GODOWNS FOR STORAGE OF AGRICULTURE PRODUCE ON DESIGN, BUILD,
FINANCE, OPERATE AND TRANSFER (DBFOT) BASIS IN PPP MODEL UNDER TIE UP ARRANGEMENT
WITH FOOD CORPORATION OF INDIA / OTHER GOVERNMENT AGENCY

ELIGIBILITY  All Advances to new/existing borrower (Including take over from other Banks) for
acquisition/construction of storage facilities/Silos for food grains on DBFOT
basis in PPP model under tie up with Food Corporation of India/ other
Government (Central & State) Agency
 Individuals, Proprietorship concerns, Partnership concerns, Limited Liability
Partnership concerns, Private Limited Companies and Public
Limited Companies
PURPOSE  Financing new project i.e. acquisition/construction of Silos, storage facilities,
Plant & Machinery etc. based on project cost including takeover of existing units
 Working Capital requirements for operational requirement of the project
 Non fund based facilities

NATURE OF FACILITY Term Loan / Demand Loan / Cash Credit / Bank Guarantee / Letter of
Credit etc.
LIMIT Minimum Limit : Rs.10.00 Crores
Maximum Limit : Rs.100.00 Crores (However, the aggregate sanctioned limit per
borrower from the Banking system not to exceed Rs.100.00 Crores)

MARGIN 20% for Term Loan; 25% on Stock & Receivables;

EXTERNAL CREDIT  External Credit Rating upto “BB” may be permitted (for fresh financing only).
RATING However, for takeover of account minimum rating should be “BBB”;
 For fresh financing (not for Takeover), if External Rating is not available, a
minimum Internal Rating of “BOB- 6” (duly validated as per norms) may be
accepted by the sanctioning authority, not below the rank of Regional Head. In
such cases, External Rating is to be carried out through an RBI’s approved credit
rating agency within 3-6 months
of release of the facilities.

RATE OF INTEREST For Term Loan:

Internal Collateral Security
Credit >100% > 75% to > 50% to < 50%
Rating 100% 75%
CR-1 to CR-3 MCLR + SP MCLR + SP + MCLR + SP MCLR + SP
+ 0.30% 0.40% + 0.65% + 0.90%
CR–4
For to CR–6
Working MCLR + SP
Capital: MCLR + SP + MCLR + SP MCLR + SP
+ 0.65% 0.90% + 1.15% + 1.40%

Internal Collateral Security

Credit Rating >100% > 75% to > 50% to < 50%
100% 75%
CR-1 to CR-3 MCLR + SP MCLR + SP + MCLR + SP MCLR + SP
Note: MCLR -> 1 Year MCLR , SP ->0.10%
Strategic Premium
+ 0.35% + 0.60%
CR-4 to CR-6 MCLR + SP MCLR + SP + MCLR + SP MCLR + SP
+ 0.35% 0.60% + 0.85% + 1.10%
OTHER PROVISIONS/  Waiver of TEV study. However, project to be vetted by Technical Officer posted
RELAXATION UNDER at the Zone.
THE SCHEME  Scheme is also applicable for customers enjoying other credit facility (ies) who
have been awarded contract for construction of storage facilities/Silos for food
grains on DBFOT basis in PPP model under tie up with Food Corporation of India
/ other Government (Central & State) Agency. Benefits will be available if
facilities under the scheme
are assessed separately.

METHOD OF As per the guidelines on “Working Capital Assessment” applicable for

ASSESSMENT MSME Advances

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 PERIOD  -12- months for working capital facility
 Up to -15- years for term loan facility (including moratorium period), subject
to annual Review
REPAYMENT OF TERM In EMI/ ballooning installments, after initial moratorium period.
LOAN Maximum period: Not to exceed–15- years (including moratorium period).
Moratorium period is to be allowed as per the Project
PREPAYMENT 2% per annum on the balance amount of loan for the residual period of prepayment
CHARGES
PROCESSING CHARGES/ 50% concession in the applicable unified processing charges and Documentation
DOCUMENTATION charges as per the Bank’s extant guidelines on Service Charges.
CHARGES, UPFRONT
FEE Further, in case of takeover of accounts under the Scheme, Zonal Head may allow
concessions up to 75% for the first year. However, from the next year, only 50%
concession may be allowed in such accounts.

SECURITY i) Ist Charge on the Project Assets/Structures jointly created by FCI / other
Government (Central & State) Agency and borrower. If the project is being
developed on the land owned by FCI/other Government (Central & State)
Agency and being allotted to the Company, 1st Charge to be created on all
Project Assets excluding land and grains
ii) Mortgage of project land in name of the Borrower, if available under the
concession agreement between Borrower and FCI/other Government (Central &
State) Agency.
iii) Security interest by way of security of all rights, titles, benefits, claims and
demands of the Borrower on each Project document
iv) Charge on Irrevocable, revolving Letter of Credit equivalent to one month rental
charges, issued on behalf of FCI/ other Government (Central & State) Agency by
the Bank where FCI/other Government (Central & State) Agency maintains the
default Escrow Account or as per the concession agreement.
v) Charge on hypothecation/assignment deed equivalent to 10% of annual rental
charges payable to the Borrower by FCI / other Government (Central & State)
Agency or as per the concession agreement.
vi) Ist Charge on the Borrower’s Bank account for the project including but not
limited to Escrow/TRA account(s).
vii) Substitution agreement executed by the Borrower, FCI / other Government
(Central & State) Agency and Bank.
viii) Exclusive Ist charge on current assets of the Borrower
ix) Cash margin in form of our Bank’s FDR for Bank Guarantee facility
{Bank Guarantee is to be issued only in the name of FCI/other Government
(Central & State) Agency}.
x) Escrow Agreement. The rent receipt and Margin contribution by the Borrower are
to be routed through the ESCROW account opened for this purpose
xi) Assignment of Rental Income.

DOCUMENTATION Security Documents including concession agreement and substitution agreements are
to be obtained as per the Bank’s extant guidelines. Security documents and Tri-partite
Agreements are to be vetted by the Bank’s legal
Department.
INSURANCE Security charged/mortgaged are to be insured as per bank’s norms
preferably under Bancasurance
OTHER CONDITIONS  Any further deviation/modification in the proposal under the scheme should be
referred to the Competent Authorities for approval, as per the extant guidelines
contained in circular Nos.BCC:BR:107:186 dated 23.04.2015 and Annexure-VI of
BCC:BR:108:172 dated 07.04.2016, issued by Large Corporate Banking
Department, BCC, Mumbai.
 The rating be done invariably in all accounts and only eligible accounts with the
minimum cut off rating i.e. BOB-6/MSME BOB-6 should be financed.
 Bank’s other extant guidelines are to be strictly followed while sanctioning/
dealing with the accounts under the Scheme.

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  Region/Branch to endeavour to tap business of other associate/group concern
and of other retail lending products.
 The rent receipt and Margin contribution by the Borrower are to be routed
through the ESCROW account maintained for this purpose
 Tri-partite Agreements and other security documents are to be vetted by the
Bank’s legal Department
 Repayment of Term Loan is to be done in EMI/ballooning installments
 Takeover of accounts should not be entertained below “BBB’ rating.
 For property valued Rs.5.00 Crores and above, two valuations from different
empanelled Valuer should be obtained and lower of the two
valuations should be accepted, as per the Bank’s extant guidelines

DEVIATIONS Current Ratio of minimum 1.10 and Debt Equity Ratio (TOL/TNW) of
ALLOWED IN NORMS maximum 5.00
FOR TAKEOVER OF Average DSCR should be Minimum 1.50.
ACCOUNTS FROM Account should not have been restructured in the last -2- years.
OTHER BANKS/FIS Account should be in standard category.
Conduct of the account should be satisfactory based on credit report obtained/
verification of account statements for last -6- months.
In respect of takeover of accounts, take over norms as per Global Credit
Exposure Management Policy and other guidelines issued from time to time,
other than relaxation mentioned in this Annexure, are to
be strictly followed.

ACTIVITY CLEARANCE As per extant guidelines, issued by the Corporate & Institutional Banking
/ AIP Department, BCC Mumbai
CLASSIFICATION OF Loan to the eligible borrowers with an aggregate sanctioned limit upto Rs.100
ADVANCES UNDER Crores per borrower from the banking system are eligible to be covered under
THE SCHEME this Scheme. Such facilities are to be classified under
“Agriculture” in Finacle.
REFERENCE BCC:BR:109:329 dated 01.07.2017

11. FINANCING OF SELF HELP GROUPS (SHG):

PURPOSE To provide credit facilities to SHGs for livelihood development and taking up different
Agricultural, Agri-allied and other Non Agri income generating activities.
ELIGIBILITY  SHG/JLG should be in active existence at least for the last 6 months as per their books of
account (and not from the date of opening of S/B account with the Branch/ Bank).
 SHG/JLG should be practicing ‘Panchasutras’ i.e. Regular meetings, Regular savings,
Regular inter-loaning, Timely repayment and maintaining up-to-date books of accounts.
 Qualified as per grading norms fixed by NABARD. As and when the federations of the
SHG/JLGs come to existence, the grading exercise can be done by the federations to support
the Banks.
 The existing defunct SHGs/JLGs are also eligible to be covered under the scheme if they are
revived and continue to be active for a minimum period of 3 months prior to considering the
credit assistance.
 The SHG/JLG should not be having any running loan from other financial
institutions. Members of the concerned SHG/JLG should be involved in livelihood promotion
activities.
DOCUMENTS  Application Form along with KYC of Office bearers
REQUIRED  Resolution of the SHG for availing bank Loan and authority to office bearers to open
and operate the account.
 Seal of the SHG.
 Letter of Sponsorship from the Sponsoring agency, if any.
NATURE OF TL/DL, CC & OD
FACILITY

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 METHOD OF SHGs may be sanctioned savings linked loans by banks (varying from a saving to loan ratio of
ASSESSMEN T 1:1 to 1:4). However, in case of matured SHGs, loans amount may be beyond the limit as per the
AND LOAN discretion of the bank.
LIMIT
(MINIMUM & As advised by NRLM Banks should sanction minimum limit of Rs.5 lakhs to each eligible SHGs
MAXIMUM for a period of 5 years with a yearly drawing power (DP). The drawing power may be decided as
LIMIT) follows:
i) First Year: 6 times of the existing corpus or minimum of Rs. 1 lakh whichever is
higher.
ii) Second Year: 8 times of the existing corpus or minimum of Rs. 2 lakh, whichever is
higher.
iii) Third Year: Minimum of Rs. 3 lakhs based on the Micro credit plan prepared by the
SHGs and appraised by the Federations
iv) Fourth Year onwards: Minimum of Rs. 5 lakhs based on the Micro credit plan prepared
by SHG/JLG and appraised by the Corporate BC and the previous
credit History.

MARGIN Up to Rs.10,00,000/-- NIL

RATE OF As per Banks guidelines for SHG financing under other priority sectors advances. Presently:
INTEREST  Limit up to Rs.3.00 Lacs: One year MCLR+ Strategic premium+ 0.50%
 Limit above Rs.3.00 Lacs and less than Rs.25.00 Lacs: One year MCLR+ Strategic
premium+ 1.25%
 Limit above Rs.25.00 Lacs: As applicable for other priority sectors advances
Note:
1) There is wide variance among Banks in applicable ROI. Hence ROI may be fixed according
to the Guideline decided by the Committee for fixing Pricing of loan Products of the
amalgamated entity.
2) Under DAY-NRLM norms Women SHGs availing credit from Public and Private Sector
Banks are to be financed at 7% p.a. on credit up to Rs. 3 lakhs in 250 Category I Districts
(DAY NRLM identified Districts). Further there is provision for prompt repayment
subvention @ 3% p.a. Banks will be subvented to the extent of difference between the
applicable Interest and 7% subject to the maximum limit of 5.5% p.a.
For other Districts Banks will charge the SHGs as per their respective lending norms and the
difference between the lending rates and 7% p.a. subject to a maximum of

5.5% will be subvented in the loan accounts of the SHGs by the SRLM.
SECURITY  No collateral and no margin will be charged up to Rs. 10.00 lakhs limit to the SHGs.
 No lien should be marked against savings bank account of SHGs and
 Hypothecation of assets, if any, created out of loan amount.

REPAYMENT  For Cash credit or Over Draft: 12 months subject to annual review.
 For Demand/ Term Loans: as per credit plan and term of sanction which may vary
from 24 months to 84 months or as per the norms respective scheme/
project for project financing.
NPA NORMS  Based on nature of finance.
 Norms for Agriculture advance will be followed where advance has been granted for
Agricultural and Allied Activities.
 For other advances usual IRAC Norms for Priority Sector finance will be applicable.
PROCESSING No loan Processing fee/ Documentation Charges/inspection charges for loan up to Rs.
CHARGES 25,000 per member. This limit will be applicable per member and not to the
group as a whole.
INSURANCE, IF  All Members should be covered under available Social Security Schemes like PMSBY,
ANY PMJJBY, APY etc. as per eligibility.

 Asset created out of loan amount will be adequately insured with Bank’s clauses, wherever
feasible.
RATING OF SHG must qualify as per grading norms fixed by NABARD. As and when the federations of the
SHGS SHG come to existence, the grading exercise can be done by the federations or by SRLM.
AS per the Scale Maximum Marks is 100
More than 85 : Excellent Between
75 to 85 : Very Good
Less than 75 to 60 : Good
Less than 60 : Needs improvement
The SHGs with score of 60 (or equivalent) and above may be considered for Credit linkage.

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 OTHER Discretionary Lending Powers (DLP)
CONDITIONS  For loan to New/ Fresh SHG (up to 2nd Linkage), where the amount financed is majorly
/ REMARKS used for consumption, debt-swapping etc. will be considered as Clean Loan and the DLP
of sanctioning authority will be as follows (Rs. in Lakh): JMGS I : 5.00
MMGS II : 5.00
MMGS III : 10.00
 Loan to matured SHGs (3rd Linkage onward) where income generating assets are created
using loan amount will be considered as general loan (treating hypothecation of assets
created out of loan amount as primary security) and
normal DLP of the sanctioning authority will be accessed.
REFERENCE BCC:BR:96:413 dated 15.12.2004 Master Circular titled Modifications in micro
financing- SHG Linkages
Scheme- Loans to SHGs – Modified set of Documents BCC:BR:104:176 dated
18.05.2012 Cash credit limit to SHGs
BCC:BR:108:42 dated 30.01.2016 Bank Sakhi Approach- SHGs leaders/ members as BCs
BCC:BR:108:105 dated 08.03.2016 Credit information in respect of SHG members
BCC:BR:109:349 dated 12.07.2017 Self Help Group – Bank linkage programme BCC:BR:110:357
dated 17.07.2018 Master Circular- SHG-Bank linkage Programme

12. FINANCING SHGS/ JLGS IN PARTNERSHIP WITH CORPORATE BC

PURPOSE To provide credit facilities to SHGs in partnership with Corporate BCs for taking up different
Agricultural, Agri-allied and other Non Agri income generating activities.
ELIGIBILITY  SHG/JLG should be in active existence at least for the last 6 months as per their books of
account (and not from the date of opening of S/B account with the Branch/ Bank).
 SHG/JLG should be practicing ‘Panchasutras’ i.e. Regular meetings, Regular savings,
Regular inter-loaning, Timely repayment and maintaining up-to-date books of accounts.
 Qualified as per grading norms fixed by NABARD. As and when the federations of the
SHG/JLGs come to existence, the grading exercise can be done by the federations to support
the Banks.
 The existing defunct SHGs/JLGs are also eligible to be covered under the scheme if they are
revived and continue to be active for a minimum period of 3 months prior to considering the
credit assistance.
 The SHG/JLG should not be having any running loan from other financial institutions.
Members of the concerned SHG/JLG should be involved in livelihood
promotion activities.
DOCUMENTS  Application Form along with KYC of Office bearers
REQUIRED  Resolution of the SHG for availing bank Loan and authority to office bearers to open
and operate the account.
 Seal of the SHG.
 Letter of Sponsorship from the Sponsoring agency.
NATURE OF Cash Credit and Term/ Demand Loan and Over Draft (TL/DL, CC & OD)
FACILITY

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 METHOD OF Emphasis is laid on multiple doses of financial assistance. The scheme provides for need based
ASSESSMEN T financing to the SHGs/JLGs either in the form of Term Loan (TL) or Cash Credit (CC) or Over
AND LOAN Draft component or both.
LIMIT Cash Credit Limit (CC):
(MINIMUM & Minimum cash credit limit of Rs. 5 lakh to the eligible SHG/JLG over a period of 5 years with a
MAXIMUM yearly Drawing Power (DP) as mentioned below. The subsequent increase in the DP or limit will
LIMIT) be based on the repayment track record and conduct of the account of the SHGs/JLGs with us.
 DP for First Year: 6 times of the existing corpus or minimum of Rs 1 lakh whichever is
higher.
 DP for Second Year: 8 times of the corpus at the time of review/ enhancement or minimum
of Rs. 2 lakh, whichever is higher.
 DP for Third Year onward: Minimum of Rs.3 lakh based on the Micro credit plan prepared by
SHG/JLG and appraised by the Corporate BC and the previous credit History.
 DP for Fourth Year onwards: Minimum of Rs. 5 lakhs based on the Micro credit plan prepared
by SHG/JLG and appraised by the Corporate BC and the previous credit History.
Term Loan: Sanction of loan amount should be in installments as mentioned below:
 First Installments: 6 times of the existing corpus or minimum of Rs. 1 lakh whichever is
higher.
 Second Installments: 8 times of the existing corpus or minimum of Rs. 2 lakh, whichever is
higher.
 Third Installments: Minimum of Rs. 3 lakhs based on the Micro credit plan prepared by the
SHG/JLGs and appraised by the Corporate BC and the previous credit History.
 Fourth Installments : Minimum of Rs. 5 lakhs based on the Micro credit plan prepared by the
SHG/JLGs and appraised by the Corporate BC and the previous credit History
 In the case of specific projects branches can consider the facility for higher limits
on merits as per technical feasibility & financial viability of the proposed projects.
LOAN LIMIT  Minimum Rs 100000/-; Maximum Rs 15,00,000/- Note: Exposer to individual
member should not be more than 1 Lakh.
MARGIN  Nil --up to INR 10,00,000/-
 Above 10 Lacs – preferably 15% or as per the activity/purpose of the loan taken (If taken for Agri
then margin norms of agriculture will apply and if taken for SME than margin norms of SME
will apply)
RATE OF As per Banks guidelines for SHG financing under other priority sectors advances. Presently:
INTEREST  Limit up to Rs.3.00 Lacs: One year MCLR+ Strategic premium+ 0.50%
 Limit above Rs.3.00 Lacs to Rs.15.00 Lacs: One year MCLR+ Strategic premium+ 1.25%
SECURITY  Hypothecation of assets, if any, created out of loan amount.
 Third Party Guarantee by the Corporate BC
 No Collateral security will be stipulated for loans up to Rs. 10.00 lakhs.
REPAYMENT  For Cash credit or Over Draft: 12 months subject to annual review.
 For Demand/ Term Loans: as per credit plan and term of sanction which may vary from 24
months to 84 months or as per the norms respective scheme/ project for project financing.
Ideally:
 First Dose To be repaid in 6-12 months
 Second Dose To be repaid in 12-24 months
 Third Dose The repayment has to be either monthly/ quarterly/ half yearly based
on the cash flow and it has to be repaid in 2 to 5 years.
 Fourth Dose The repayment has to be either monthly/ quarterly/ half yearly
based on the cash flow and it has to be repaid in 3 to 6 years.
PROCESSING No loan Processing fee/ Documentation Charges/inspection charges for loan up to Rs. 25,000
CHARGES per member. This limit will be applicable per member and not to the group
as a whole.
INSURANCE, IF  All Members should preferably be covered under available Social Security Schemes like PMSBY,
ANY PMJJBY, APY etc. as per eligibility.
 Asset created out of loan amount will be adequately insured with Bank’s clauses, wherever
feasible.
RATING OF SHG must qualify as per grading norms fixed by NABARD. The Corporate BCs should assist Bank
SHGS in this grading exercise.
As per the Scale Maximum Marks is 100
 More than 85 : Excellent
 Between 75 to 85 : Very Good
 Less than 75 to 60 : Good
 Less than 60 : Needs improvement
Note: SHGs with score of 60 and above may be considered for Credit linkage.

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 OTHER  Business Correspondent will assist Bank in Awareness, SHG/JLG Formation, Credit
CONDITIONS Assessment/Investment Plan for SHG/JLG, Training, Credibility check, KYC docs and
applications building, Primary Loan appraisal and Recommendation, Loan documentation,
Post Disbursement Inspection/ Asset Verification, Follow-up/ Monitoring and Loan
collection/recovery, Loan Closure
 Charges/ Commission/ Incentives for Corporate Business Correspondent (CBC) for
promoting SHGs will range between 2-6% which will be fixed through negotiation and mutual
agreement between Bank and CBC
 Charges/ Commission/ Incentives will be payable monthly by debiting SHG’s account in
proportion to the interest collected during the month.
 Bank may pay the Corporate BCs SHG promotion charges as per agreed terms and conditions
per new SHGs promoted and credit linked with our Bank.
 BC-Transaction Charges 0.5% of the Transaction amount and maximum amount payable as
BC-Transaction Charges should not exceed 1% of the operative limit in a year.
 Any overdue will be deducted by the Bank from the Charges/ Commission/ Incentives payable
to Corporate BCs
 Corporate BC and Bank will enter into Tie-up Arrangement and details terms & Condition and
operational procedures will form part of the MOU
REFERENCE BCC:BR:110:246 dated 15.05.2018

13. NEW SCHEMES FOR FINANCING OF TRACTOR:

The schemes have been implemented with “Nodal Branch approach”. These Nodal Branches are called “Tractor
Financing Branch”. These branches will sanction tractor loans under these schemes not only for their Branch
but will also assist nearby branches in business canvassing and
sanctioning.
PARAMETER Tractor Loan- Tractor Loan- Agri Tatkal Tractor
Agricultural end use cum commercial End Loan-
and Agri Hiring use
LANDHOLDING A minimum land holding of Land holding up to 2.5 First time users (FTUs)
2.5 acres of agricultural land acres of agricultural based on KYC
(single or jointly owned) is land (single or jointly documents
required. Proof of land owned) required. Proof of
record to be land record to be
obtained/maintained by obtained/maintained by
the Bank the Bank

AGE NORMS Borrower’s age should not be less than 18 years & should not exceed 70 years at the
time of agreement, In case borrower’s age exceeds 70 yrs., family members (blood
relation and/or legal heir) who satisfy the above criteria
need to sign the agreement as co- borrower.

MINIMUM 15% 20% 30%

MARGIN
TRACTOR HP No restriction of tractor HP range
RATE OF 14.50% fixed 14.00% fixed 13.00% fixed
INTEREST
REPAYMENT 72 Months (6 Yrs.) / 72 Months (6Yrs.) 60 Months (5 Yrs.)
PERIOD& Monthly/ Quarterly/Half Monthly/ Quarterly Monthly/ Quarterly
FREQUENCY* Yearly (Based on cash flow
(Based on the cropping (Based on the cropping with the applicant, This
pattern in case of Agri pattern in case of Agri will be decided by the
purposes and cash flow in purposes and cash flow in Sanctioning authority).
case of commercial case of commercial
operations. This will be operations. This will be
decided by the decided by the
sanctioning authority). sanctioning authority).

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 In case of Half Yearly installment the first instalment is to be linked with season of crop
/ cash flow but should be within maximum 6 months from date
of sanction in any case.
MORATORIUM Half Yearly – 180 Quarterly – Quarterly – 90 Quarterly – 90
(DAYS) 90 Monthly - 30 Monthly - 30
Monthly - 30
PROCESSING 1% of Loan amount.( 50% waiver may be obtained from Regional authority in
CHARGE deserving cases)
PAYOUT/ (A) Flat 1.0% pay out on the loan amount, Financing Branch will pay to dealer on
INCENTIVE TO each Tractor financed.
DEALER/ SALES (B) Incentive of Rs 1000/- per tractor is to be paid to sales executive of
EXECUTIVE Tractor Dealer.
CIBIL CRITERIA For all the parties to the agreement, a CIBIL score of 0,-1 and anything > 650 will be the
eligibility norm. A score above 650 is considered to be good for agri products. If CIBIL
report reflects any irregularity/overdue, a regularized statement of account to be
obtained.
If there is a misrepresentation in CIBIL or Customer having other strengths -
separate deviation approval to be obtained on case to case basis from

Regional authority with due justification on the basis of criticalness of default.

LTV & DLP (DEALER LTV will be calculated on the DLP/Invoice price whichever is lower. Max LTV
LANDED PRICE) of DLP ( To be advised by Corporate office) is as under:
AND LTV Tractor Loan- Tractor Loan- Agri Tatkal Tractor
DEVIATION Agricultural end use cum commercial Loan- based on KYC
and Agri Hiring End use documents
A-85% A-80% A-70%
B- 80% B- 75% B- 65%
C-75% C-70% C-60%
1. Up to 5% in LTV on A and B category asset by Regional authority
2. Up to 3% in LTV on C category asset by Regional Authority
POST Invoice /Bill & Insurance Policy (with Bank clause) should be ensured immediately after
DISBURSEMENT disbursement. RC book to continue as a post disbursement document. Which should
DOCUMENT be obtained within 60 days of the
disbursement.
REFERENCE BCC:BR:110:471 dated 18.09.2018

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 14. FINANCING OF CONSTRUCTION OF STORAGE STRUCTURE TO STORE AGRICULTURE
PRODUCE/PRODUCTS

PURPOSE Term Loan / Working capital facilities may be considered for any / all the activities
as following:
 For creation of scientific storage capacity viz. godowns, dry warehouses, cold
storages, cold chains, silos and market yards.
 The above facilities may be considered for financing towards construction of new
projects.
The structures should be designed and used to store agriculture
produce/products and the scheme does not include takeover incomplete/partially
completed proposals.

ELIGIBILITY  Individuals, Group of farmers/growers, Registered Farmer Producer Organisations

(FPOs).
 Partnership / Proprietary firms, LLP, Companies and Corporations.
 Non-Government Organizations (NGOs), Self Help Groups (SHGs).
 Cooperatives, Cooperative Marketing Federations.
 Autonomous Bodies of the Government.
 State agencies including State Government Departments and autonomous
organization / State owned corporations such as Agricultural Produce Market
Committees & Marketing Boards, State Warehousing Corporations,
State Civil Supplies Corporations etc.
NATURE OF  Term Loan
FACILITY  Cash Credit
LIMIT Minimum – Rs 25.00 Lakhs
Maximum loan Limit –Rs.100.00 crores
METHOD OF WORKING CAPITAL- As per Global Credit Exposure Management Policy
ASSESSMENT
PERIOD Based on business plan with a maximum period of 15 years including moratorium
period of maximum of 2 years
MARGIN 25% of the project cost (other than Subsidy if any )
SECURITY  Hypothecation of structure/ equipment/ machinery purchased or created out of bank
finance
 Mortgage of Fixed assets like project land and building /shed.
 Personal guarantee of Proprietor/Partners / Promoters / Directors/ owner of the
property offered as security etc.
EXTERNAL CREDIT  External rating is to be obtained for any proposal with a credit exposure of more than Rs
RATING 5 crores.
 Rating norms to be complied as per Global Credit Exposure Management Policy 2018.

RATE OF INTEREST Internal Credit Collateral Security

Rating
>100% > 75% to >50% to >25% to-50%
100% 75%
CR – 1 to CR – 3 MCLR + SP MCLR + SP MCLR + SP MCLR + SP +
+0.45% + 0.60% + 0.85% 1.10%
CR – 4 to CR – 6 MCLR + SP MCLR + SP MCLR + SP MCLR + SP +
+ 0.95% + 1.10 % + 1.75% 2.25%
$ MCLR> 1 Year MCLR SP>Strategic Premium
SUBSIDY/GRANT IN  Any proposal, under any State/Central Government scheme for subsidy, an undertaking
AID from the borrower to be obtained for routing subsidy/grant in aid claims through our Bank
accounts.
 Dealing with the subsidy/grant in aid amount to be made as per the scheme/policy of the
nodal agency.
REPAYMENT For Term Loan:
 Repayable in 3 to 15 years (including moratorium period as per the project plan i.e not
more than 24 months) period depending upon the purpose of investment, economic life
of asset and cash flow of the activity.
 Repayment of the term loan can be fixed monthly/quarterly/half yearly/yearly based
on the purpose of loan /cash flow of the project.
For working capital: 12 months subject to annual review.

57
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 PREPAYMENT 2% p.a. on amount being prepaid for the period for which the amount is prepaid.
CHARGES

INSURANCE Projects sanctioned under this scheme should have relevant insurance coverage.
FINANCIAL RATIO The norms for Financial ratio as applicable for credit appraisal of MSME units shall be
FOR applicable for Credit Appraisal of fresh exposure, Review, Review with Increase under
CREDIT the Scheme. The said financial Ratios are indicative only. Sanctioning authorities / competent
APPRAISAL authority can consider deviations from them on case-to-case basis, depending upon the
UNDER THE industry specific, borrower specific situations and with cogent reasons / justification. Further,
SCHEME any scheme-specific benchmark ratios shall continue to hold good.
Deviations from above-mentioned benchmark ratios that can be permitted at different levels
of sanctioning authorities are as under:

Authority Current DER DER Avg. Min DSCR

Ratio (TOL/ATNW) (TTL/ATNW) DSCR in a Year
ZOCC/ Up to Up to 5.50 Up to 4.00 Up to Up to 1.15
COCC-GM 1.00 1.50
COCC- ED 0.75-0.99 5.51-9.00 4.01-8.00 1.25-1.49 1.05-1.14
CACB 0.50-0.74 9.01-12.00 8.01-12.0 1.00-1.24 1.00-1.04
MCB Full powers

The deviations should be considered on merits of the proposal with a definite time- bound plan,
on the part of the borrower, to bring them to the benchmark levels.
CLASSIFICATION Loan to borrowers with an aggregate sanctioned limit upto Rs.100 Crores per borrower
from the banking system, is to be classified under “Agriculture”.
 If the limit exceeds Rs. 100 crores per borrower from the banking system, account to be
classified under MSME/SME expanded/others, as per the extant guidelines of the bank
in force and concessions applicable under this scheme will not stand applicable.
OTHER TERMS  Technical feasibility of the project will be verified by the branch before any
& CONDITIONS sanction/recommendation.
 Branch to process and decide on the loan applications strictly on merit and in compliance
with the laid down norms under Agriculture and repayment capacity of the borrower.
 Branch needs to monitor the borrower account and maintain records of periodical
monitoring and actions initiated on observations, if any.
 The branch shall ensure proper business linkages for maximum utilization of the financed
structure.
 The branch shall undertake regular desk and /or field monitoring of the borrowing units
and report should be kept on bank’s record.
 The repayment will be linked according to the cash flow proposed by the borrower.
 Branches to obtain an undertaking from the borrower towards routing of Interest
subvention or subsidy and grants if any applicable for the project through the account
maintained at BoB.
 Bank reserves the right to inspect the project as and when required.
 Branch to ensure that the track record of the borrower and market feedback is satisfactory.
 All other terms and conditions with regard to appraisal, follow up, due diligence,
monitoring and recovery of loans as applicable, to be adhered.
 Branches to ensure that all standard of construction is made as per WDRA standards.
REFERENCE BCC:BR:111:35 dated 22.01.2019

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 15. FINANCING FARMER PRODUCER COMPANIES (FPC)

TARGET GROUP Farmer Producer Company (FPC)

DEFINITION It is a company of farmer producer members as defined in section IX A of the Indian
Companies Act, 1956 (including any amendments there to or re-
enactment thereof) and incorporated with the Registrar of Companies (RoC)
PURPOSE Loan facilities may be considered for any / few / all the activities depending on the
requirement of FPC:
1) Purchase of Input material for supplying to the farmers
2) Warehouse receipt finance
3) Marketing activities
4) Setting up of Common Service Centres
5) Setting up of Processing Centre
6) Common Irrigation Facility
7) Custom Purchase/Hiring of Farm Equipment
8) Purchase of High-Tech Farming Equipment
9) Other productive purposes – based on submitted investment plan
ELIGIBILITY All registered Farmer Producer Companies with at least six months of
operations since registration
NATURE OF Cash Credit/ Term Loan (Based on business plan and assessment of capital
FACILITY investment plan).
CREDIT SCORE Exempted for Board of Directors
LIMIT Minimum – above Rs 3.00 Lakhs Maximum
loan Limit –Rs.1.00 Crs.
RATE OF INTEREST LIMIT APPLICABLE ROI CONCESSIONAL ROI
Limit Above Rs 3.00 One year MCLR + SP One year MCLR + SP +
lakhs to Rs 25.00 lakhs + 1.25% 0.75%
FOR LIMIT ABOVE Rs 25.00 Lakhs
Loan tenure of less than One year MCLR + SP One year MCLR + SP
03 years +2.00 % +1.50 %
Loan tenure of above 3 One year MCLR + SP One year MCLR + SP
and upto 5 years +2.10 % +1.60 %
Loan tenure of above 5 One year MCLR + SP One year MCLR + SP
and upto 7 years +2.15 % +1.65 %
Loan tenure of above 7 One year MCLR + SP One year MCLR + SP
and upto 9 years +1.85 % +1.35 %
(This concessional ROI approved by CPC is valid for 12 months till 30.08.2019)

METHOD OF Working Capital- As per Global Credit Exposure Management Policy

ASSESSMENT
MARGIN 15% of the loan amount
SECURITY  Hypothecation of structure/ equipments/ machinery purchased or created out
of bank finance
1. For credit facilities up to Rs 100.00 lakhs and CG from SFAC sought- No
collateral security required
2. For credit facilities without CG from SFAC and credit facilities upto
Rs 100.00 lakhs – As per Bank’s policy.
REPAYMENT For Cash credit: 12 months For
Term Loan:
 Repayable in 3 to 9 years period depending upon the purpose of investment,
economic life of asset and cash flow of the activity.
 Repayment of the term loan can be fixed monthly/quarterly/half yearly/yearly
based on the purpose of loan /cash flow of the FPC.
 Moratorium period- As per project plan
LOAN GUARANTEE In case of FPC seeking collateral free loan under Credit Guarantee available from SFAC
FEES – Fees @ 0.85% of sanctioned loan amount will be charged at time
of sanction and every year 0.25% loan amount till coverage of guarantee.
PROCESSING, Above Rs 10.00 Lakhs, 50% concession in processing & documentation charges.
DOCUMENTATION &
OTHER CHARGES
OTHER TERMS &  Technical feasibility of the project will be verified by the branch before any

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 CONDITIONS sanction.
 Branch to process and decide on the loan applications strictly on merit and in
compliance with the laid down norms of our bank norms under Agriculture and
repayment capacity of the borrower.
 Branch needs to monitor the loan account and maintain records of periodical
monitoring and actions initiated on observations, if any.
 Ensure that the Guarantee Claim in respect of the credit facility to the FPC
Borrower is lodged with SFAC in the form and manner and within such time as may
be specified by SFAC in this behalf. Further, there shall not be any delay to notify
SFAC of the default in the Borrower’s Account.
 The branch shall ensure through an Agreement with the FPC that the borrower shall
not create any charge on the assets held as primary security for the credit facilities
without seeking prior permission.
 The branch shall undertake regular desk and /or field monitoring of the borrowing
FPCs and report should be kept on bank’s record.
 The repayment will be linked according to the cash flow proposed by FPC borrower.
 FPC borrower shall maintain sole banking relationship with our bank.
 Interest subvention or subsidy and grants if any applicable for the FPC shall be
routed through the account maintained at BoB.
 Bank reserves the right to inspect the project as and when required.
 Branch to ensure that the track record of the borrower is satisfactory.
 All other terms and conditions with regard to appraisal, follow up, due diligence,
monitoring and recovery of loans as applicable, to be adhered.
DOCUMENTATION  After arranging/enduring due diligence, KYC verification and pre-sanction
inspection etc., final sanction will be advised by respective branch.
 List of documents:
1. Complete Loan Application.
2. Demand Promissory Note.
3. Hypothecation Agreement.
4. KYC Document of Directors.
5. Last six months’ bank statement.
6. PAN, DIN, TIN, VAT etc. registration of FPCs.
7. Audited statement of last 2 years or at least six-month for new FPCs.
8. MoA and AoA of FPC.
9. List of Board of Director and office bearers.
10. Promoter’s request letter addressed to the Bank Manager on original letter head
of FPC.
11. Equity/CA Certificate.
12. Other document as per SFAC CG Scheme requirement.
13. ROC Search Report.
REFERENCE BCC:BR:109:340 dated 07.07.2017
BCC:BR:110:470 dated 14.09.2018

16. FINANCING PROTECTED CULTIVATION PROJECTS.

PURPOSE Loan facilities may be considered for the following activity/ies:

i) Towards construction of Green House/Poly house / Shade Net House /plastic tunnels &
walk in tunnels / Anti-bird/anti hail nets
ii) Towards Purchase of plastic mulching / purchase of components/equipment
for use under protected cultivation
ELIGIBILITY  All individual engaged in farming of land or permanent Tenant or lease holder (at least 10
years lease period).
 Groups of individual farmers, SHGs, JLGs directly engaged into agricultural
activity
 All new and existing Proprietorship/Partnership/LLP concerns, Private
Limited/Public Limited Companies engaged in the activities of modern farming.
NATURE OF Term loan
FACILITY
AGE  Minimum: 21 years
 Maximum: Up to 65 years as on date of availing of facility
RATE OF Limit Applicable ROI
INTEREST Limit upto Rs 3.00 lakhs One year MCLR + SP
Limit above Rs 3.00 lakhs and less than Rs One year MCLR + SP + 1.25%
25.00 lakhs
Page 230 of 502 LIMIT OF RS 25 LAKHS AND ABOVE:
 3 years & above and upto 5 years One year MCLR + SP + 2.10%
Above 5 years and upto 7 years One year MCLR + SP + 2.15%
Above 7 years and upto 9 years Five year MCLR + SP + 1.85%
MARGIN  Loan limit up to Rs 1.00 lakh: Nil
 Loan limit of >Rs 1.00 lakh: 10% of the total project cost (The margin will not include
subsidy amount, if applicable for the project).
Note: The relaxed margin norm of 10% will remain applicable in the following conditions:
 The farmer should necessarily belong to small or marginal category.
 The farmer should have an arrangement with an agency providing crop growing practices
and market linkage for sell of final produces.
 The agency / company should have a tie up with our bank for recovery assistance
Viz. MOU with Kheyti Tech Private Limited (BCC:BR:109:379 dated 31.07.2017)

SECURITY Upto the cost of  Demand promissory Note

economic unit wherever  Hypothecation of crops
applicable or Rs 1.60 lakh  Hypothecation of structure/ equipments/ machinery purchased
whichever is lower or created out of bank finance

For loans above Rs  Demand promissory note

1.60 lakhs  Hypothecation of crops
 Hypothecation of structure/ equipments/ machinery purchased
or created out of bank finance
 Mortgage of land# or third party guarantee
# For loans above Rs 2 lakhs, mortgage of land is to be created.
However, sanctioning authority on merit may waive mortgage of
land if creating mortgage is not possible
owing to genuine difficulties for loan limit upto Rs 3 lakhs.
REPAYMENT  Repayable in 3 to 9 years period depending upon the purpose of investment, economic life
of asset and cash flow of the activity.
 Moratorium period- A period of 6 to 12 months subject to cash flow of the project
 Repayment of the term loan can be fixed monthly/quarterly/half yearly/yearly based on
the cropping pattern/cash flow of the borrower.
INSURANCE Comprehensive insurance with Bank’s lien clause.
COST NORMS The maximum cost of different project components for calculation of the total project
cost and margin will be based on the current cost specified in the circular mentioned below.

REFERENCE BCC:BR:109:339 dated 07.07.2017

BCC:BR:110:469 dated 14.09.2018

Page 231 of 502

 17. SCHEME FOR FINANCING MINI DAIRY UNITS

PURPOSE To establish new small dairy units with -2- to -10- milch animals
ELIGIBILITY Individuals, farmers, members of NGOs/SGHs/JLGs.
AGE Minimum: -21- years
Maximum: up to -65- years, as on the date of availment of facility
TYPE OF Term Loan
FACILITY
LOAN AMOUNT Rs. 60,000/- per animal, subject to maximum of Rs.6,00,000/- No. of
animals to be financed under the Scheme:
Minimum: Two & Maximum: Ten
Buffaloes producing more than -7- litres of milk per day and cows producing more than -
8- litres 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, Graded Murrah, Mehsana, Jaffarabadi, Godavari, Bhadawari, Surti
Indigenous breed of cows: Sahiwal, Tharparkar and Red Sindhi

MARGIN 10%
RATE OF Limit up to Rs.3 lacs: one-year MCLR+SP
INTEREST Limit above Rs.3 lacs & up to Rs.6 lacs: one-year MCLR+ SP +0.25 %
REPAYMENT Maximum period: Not exceeding –5- years (including moratorium period of
three months).
SECURITY Loans up to 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.
SUBSIDY 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.
REFERENCE BCC:BR:107:460 Dated 16.09.2015

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 18. BARODA KISAN GROUP LOAN SCHEME

PURPOSE / The scheme aims at the following objectives.

OBJECTIVES  To augment flow of credit to tenant farmers cultivating land either as oral lessees or
sharecroppers and small farmers who do not have proper title of their land holding
through formation and financing of JLGs.
 To build mutual trust and confidence between banks and tenant farmers
 To extend collateral free loans to target clients through JLG mechanism.
 To minimize the risks in the loan portfolio for the banks through group approach
and credit discipline.
The finance to JLG is expected to be a flexible credit product addressing the credit
requirements of its members, the credit may be extended in the form of BKCC for crop
production, consumption, marketing and other productive purposes.
ELIGIBILITY  Tenant farmers cultivating land either as oral lessees or sharecroppers and small farmers
who do not have proper title of their land holding are eligible for finance through
formation of Joint Liability Groups.
 Small & Marginal farmers.
TYPE OF  Term Loan: Investment line of credit
FACILITY  Working capital: Production line of credit
Note: Both facilities in single or jointly can only be provided in the form of Baroda Kisan Credit
Card (BKCC)
LOAN AMOUNT  For tenant farmer: Maximum Loan of Rs.1,00,000/-
 For JLG: Maximum Loan of Rs.10.00lakhs
 For small & marginal farmers: Maximum loan as per assessment norms for BKCC

CREDIT Branch may conduct a thorough credit appraisal to avoid under or over financing. The finance
APPRAISAL to JLG should cover the credit requirements of its members for crop production, marketing
and investment credit, besides other productive purposes in agriculture and allied activities.
All other norms of financing including rate of interest, margin on security, documentation,
coverage under crop insurance scheme and personal accident insurance, etc. be followed
by the branch as per
norms.

MARGIN As per criteria mentioned above under the chapter

“GENERAL GUIDELINES ON AGRICULTURE FINANCE”
As per RBI/Bank’s guidelines revised from time to time.
INTEREST RATE (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
PROCESSING
CHARGES No Processing charges and Documentation charges.
PERIOD Same as per BKCC Scheme
OTHER GUIDELINES  Personal Accident Insurance Scheme for BKCC holders.
 Crop coverage is available under Pradhan Mantri Fasal Bima Yojana.
 The branch officers are expected to maintain harmonious relations and continuous close
contact and relationship with the JLG leader and other members so as to convert them
into good reliable customers of the Bank. Maintenance of good credit history by the JLGs
will gradually lead to lowering of the bank’s own transaction costs in terms of intensity of
appraisal and
monitoring.
REFERENCE BCC:BR:98:305 dated 10.11.06 Main circular
BCC:BR:102:103 dated 06.04.10 Modification in eligibility norms BCC:BR:102:294 dated
14.10.10 Clarification on interest subvention BCC:BR:107:70 dated13.02.15 Modification
in”Baroda kissan group loan scheme”
BCC:BR:109:67 dated 27.01.17 Financing under JLG scheme

Page 233 of 502

 19. FINANCING SMALL AND MARGINAL FARMERS INCLUDING SHARE CROPPERS AND TENANT
CULTIVATORS FOR PURCHASE OF AGRICULTURAL LAND

PURPOSE a. To finance the share croppers/tenant farmers to purchase land to enable them to
increase income.
b. To finance the farmers to purchase, develop and cultivate agricultural and fallow/waste
land.
c. To finance purchase of land to enable the farmers to diversify into other allied activities.
NOTE: Complete details of the project proposal of the farmers should be obtained
by the branches while considering finance for purchase of land.

ELIGIBILITY  Small and Marginal farmers, those who would own maximum of non- irrigated or
irrigated land (including purchase of land under the scheme) as stipulated by NABARD
 Share croppers/Tenant farmers
 Coverage of women: Ownership rights of land to women would lead to their
empowerment. Hence branches may encourage purchase of land by women, giving
preference to those in distress, widows, SHG members etc. Within
overall eligibility criteria as laid down under the scheme.

TYPE OF Term loan

FACILITY
LOAN AMOUNT  Quantum of loan will depend on the area of the land to be purchased and its valuation
and also development cost.
 Valuation: For the purpose of valuation of the land for fixing the quantum of financial
assistance, the price indicated by the farmer may be cross checked with the last five years’
average registration value available with the Registrar/Sub-Registrar of the area and a
view may be taken by the
branches.
MARGIN No margin is stipulated for loans up to Rs. 50000/-. In case of loans for higher
amount, a minimum of 10% margin will be stipulated.
INTEREST As per RBI/Bank’s guidelines revised from time to time.
RATE (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
PERIOD  Loan may be repaid in a period ranging from 7 to 12 years in half yearly / yearly
installments, including a maximum moratorium period of 24 months. The moratorium
period may be fixed taking into account the gestation period of the project and cash flow.
 The branches should satisfy themselves that the borrower/s would have adequate
surplus income from their production activities on the land being purchased and other
income to repay the bank loan with interest and the
repayment period may be fixed accordingly.

SECURITY The land purchased out of the bank loan and mortgaged in favour of the bank
will form the security for the loan from borrowers.
OTHER  It should be ensured that the land purchased should be used for agricultural purposes
GUIDELINES and the farmers take up the project implementation without delay.
 Whenever farmers avail themselves of loan for purchase of virgin lands, they must be
encouraged to develop the land and put the same land under cultivation without any
delay.
 Wherever land development involves digging of open wells/drilling of bore wells, the
possibility of getting electricity supply on priority basis may also be examined.
 The scheme aims at boosting the production and productivity of land purchased. The
finance provided by the branches should not result in acquisition of land for investment
and encashing on rising prices of the land.
 Project cost may include, besides cost of land, value of stamp duty, registration charges
for sale/mortgage deed and other land development expenses.
 During the period of the loan, the farmer is not expected to sell the land.
REFERENCE Book of Instruction

Page 234 of 502

 20. REDEMPTION OF DEBTS OF FARMERS FROM NON-INSTITUTIONAL LENDERS.

PURPOSE To mitigate acute distress faced by farmers due to heavy burden of debt availed from
non-institutional lenders (money lenders, agro input dealers,
traders in agri produce etc.) by providing loans for such redemption.
ELIGIBILITY  Existing farmer borrowers with regular repayment.
 Farmers whose accounts were rephased due to reasons beyond their control.
 Non-borrower farmers who are heavily indebted to non-institutional lenders within
the area of operation of the branch.
 Agricultural labourers.
 SHGs whose members are indebted to non-institutional lenders.
 Old and chronic debt should not be considered for swapping.

IDENTIFICATION OF  For Loans up to Rs. 25000/- : Self declaration from the applicant will be obtained as
THE ELIGIBLE an evidence of indebtedness. The Branch Manager to ascertain the correctness by
FARMERS making inquiries with the Patwari/ Talathi, VLW/Gram Sevak, President of Farmers
club, NGO, if any.
 For loans above Rs. 25000/- : The Branch Manager can take decision based on the
documents/ evidence submitted by the indebted farmer. The indebtedness to the agro-
input dealers, traders in agricultural commodities
can be verified from their records.

MAXIMUM LOAN  To be assessed within the overall eligibility of the farmer under BKCC scheme i.e.
LIMIT production credit as per the cropping pattern and investment credit @ 75% of the
value of the land or 100 % of other securities as mentioned in the BKCC scheme.
 For tenant farmers: The existing guidelines i.e. Maximum loan amt of Rs. 25000/-
will continue.
 For agril. labourers : The amount of loan will be decided on the basis of repaying
capacity.
 For SHGs : Maximum 10 times of the corpus fund of SHG, subject to a cap of Rs.3
lacs per SHG including other clean credit facility, if any, being
availed by the SHG.

MARGIN NIL
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
DISBURSEMENT  For loans up to Rs.25000/-: The disbursements will be made through BKCC.
 For loans above Rs.25000/- : The disbursement will be made to the non-
institutional lender.

REPAYMENT Maximum up to 10 years depending up on the repaying capacity. The monthly,

PERIOD quarterly, half yearly, yearly installments may be fixed
synchronizing with the income generation of the borrower.
SECURITY  For Farmers: Charge on land.
 For Tenant farmer/Agril. Labourer : Third party guarantee and /or asset charged to
the non-institutional lender.
 The security released by the lender will be taken as security for our loan.
REFERENCE Book of Instruction

Page 235 of 502

 21. FINANCING TO FARMERS FOR CONSTRUCTION OF TOILETS UNDER SWACHH BHARAT ABHIYAN

TYPE OF Term Loan

FACILITY
PURPOSE For construction of individual household toilet
ELIGIBILITY/  Famers, Members of JLGs and SHGs and person belonging to weaker section with a
BENEFICIARY banking relationship with our Bank for a minimum period of 6 months. Branch to
satisfy upon the income and repayment capacity of the applicant.
 Should possess own house without sanitary toilet.

AGE Minimum 18 years - Maximum up to 70 years as on the date of availing facility

(if the age of land holder exceeds 70 years, in such case the legal heir to be made co-
borrowers)
MAXIMUM LOAN Rs.40,000/- subject to project cost
AMOUNT
MARGIN Nil
RATE OF One Year MCLR + Strategic Premium
INTEREST
SECURITY/  DP Note
DOCUMENTATION  Composite hypothecation Agreement for Agri Financing (LDOC28A)
 Letter of Installments with Acceleration Clause (LDOC-57)
MODE OF Payment to be made based on stages of construction directly to the borrower /
PAYMENT supplier (materials of services), as requested
CLASSIFICATION Agriculture
OF ADVANCE
REPAYMENT Repayable in 60 Months ( Monthly / Quarterly /half yearly installments)
PERIOD
OTHER TERMS &  The estimated cost of the project needs to be submitted by means of undertaking or
CONDITIONS
quotation by a service provider.
 The amount of loan disbursed should be used for the purpose for which the
facility is sanctioned.
 Bank will have right to verify the assets out of the facility.
 Branches to obtain bills/payment receipt from the borrowers
 An undertaking may be obtained from the borrowers for crediting of the subsidy to the
loan account, wherever any subsidy is available for construction of toilet from any
Government bodies or its agencies under the Swachh Bharat Abhiyan
 An undertaking on income of the borrower to be obtained
 Any subsidy available is to be adjusted in loan account and repayment needs to be
done for balance amount.
 Inspection of toilet constructed out of bank finance is to be carried out and end use of
the loan to be verified.
 Toilet to be constructed in their own house / backyard

REFERENCE  BCC:BR:110:65 dated 05.02.2018

22. PURCHASE OF SMART PHONE FOR FARMERS

TYPE OF FACILITY Demand Loan

PURPOSE To purchase Smart Phone
ELIGIBILITY/BENEFICIARY All persons engaged in cultivation of crops as owners of land or
permanent Tenant or lease holder and have availed BKCC with us which are
in standard category.
AGE Minimum 18 years
Maximum up to 70 years as on the date of availing facility
Note: If the age of land holder exceeds 70 years, in such case the legal heir
to be made co borrowers
MAXIMUM LOAN AMOUNT Upto Rs.10,000/-
MARGIN Nil

Page 236 of 502

 RATE OF INTEREST One Year MCLR
SECURITY/DOCUMENTATION  DP Note
 Composite hypothecation of machinery and other equipments (LDOC28A)
 Letter of Installments with Acceleration Clause (LDOC-57)

MODE OF PAYMENT Payment to be made directly to the dealer / service provider

REPAYMENT PERIOD Repayable in 24 Months ( half yearly installments)
OTHER TERMS &  The amount of loan disbursed should be used for the purpose for which
CONDITIONS
the facility is sanctioned.
 Interest and other charges have to be serviced as per the guidelines.
 Bank will have to right to verify the assets out of the facility.
 Our Bank’s officials will endeavor to install our mobile app in the Smart
Phone and educate them how to operate it.

REFERENCE BCC:BR:108:576 dated 28.11.2016

23. NSTALLATION OF GOBAR GAS/BIO-GAS PLANTS:

PURPOSE Financing installation of gobar gas/bio-gas plants.

ELIGIBILITY  All persons who are not indebted to any other commercial bank and are staying within
the manageable distance from the branch and whose repaying capacity are satisfactory.
 Borrowers of Co-operative Banks, who do not finance for the said purpose, after taking
into, account their dealings with the concerned banks and their repaying capacity.
 The applicant should own requisite number of cattle needed to feed the gobar-gas plant
of contemplated size and should undertake not to use the dung for any other purpose.
NATURE OF Term Loan.
FACILITY
SECURITY AND As per criteria mentioned above under the chapter
MARGIN “GENERAL GUIDELINES ON AGRICULTURE FINANCE”
REPAYMENT Shall not exceed 7 years in respect of loans for plants of size 2 M 3 to 4M3 and
PERIOD shall not exceed 5 years in respect of loans for plants of size 6 M 3 and above.
OTHER  Branch should, before sanctioning the loan, verify the number of stable bound cattle
CONDITIONS: owned by the applicant. The minimum number of animals the borrower should possess
corresponding to the size of the plant proposed to be installed by him is indicated
below:
 The subsidy available under the scheme, if any, may be treated as margin for the loan.
Branches should approach the authorities concerned for release of subsidy in advance
or immediately after completion of the plant so that interest burden on the borrower is
reduced.
 Payment for cement pipes, burners, holders, cement, steel should as far as possible, be
made direct to the suppliers.
 Branch should obtain a letter from the applicant authorising the sponsoring authority,
if any, to pass on the subsidy for credit of this loan account with the Bank.
 Animals should also be hypothecated to the Bank as additional security for the advance.
It should be ensured that the applicant has no liability against the animals to any other
financial institution.
REFERENCE Book of Instruction

24. FINANCING INSTALLATION OF SOLAR HOME LIGHTING SYSTEMS

PURPOSE To provide finance to farmers for solar energy home lighting system in rural and
semi-urban places for renewable source of energy.
ELIGIBILITY Farmers having sufficient source of income for servicing the loan interest and installment.
However, focus would be on our existing BKCC holders who do not
have reliable source of electricity for domestic purpose.
NATURE OF Term Loan. (As investment credit component under BKCC)
FACILITY

Page 237 of 502

 LIMIT To be decided depending up on repaying capacity of the applicant energy requirement for
domestic use, Invoice price of the unit selected by the applicant.
However, the maximum loan amount will not exceed Rs 50000/-.
SECURITY Hypothecation of solar system.
MARGIN 15% of the project cost. Subsidy received if any will be treated as margin.
REPAYMENT The loan is to be repaid within 5 years by monthly/quarterly/half yearly /yearly installment
depending upon the income generation from the main activity of the
borrower.
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
DISBURSEMENT After installation of the system and after obtaining a letter from the borrower to the effect that
the system is installed to his satisfaction and also authorising the Bank to disburse the loan
amt to the supplier directly, disbursement will be made
to the supplier.
INSURANCE The system should be insured for fire, burglary, theft etc. Service/maintenance
contracts with the manufacturers may also be ensured.
REFERENCE BCC:BR:102:290 dated 12.10.2010

25. FINANCING COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS:

PURPOSE The Scheme covers two components:

1. Establishment of Fruit & Vegetable / Agro waste Compost Production Unit
2. Establishment of Bio-fertilizers and Bio-pesticides production Unit
OBJECTIVES  To promote organic farming in the country by making available the organic inputs such
as Bio-fertilisers, Bio-pesticides and fruit & vegetable market waste compost and thereby
better return for the produce.
 To increase the agricultural productivity while maintaining the soil health and
environmental safety.
 To reduce the total dependence on chemical fertilizers and pesticides by increasing the
availability and improving the quality of Bio-fertilizers, Bio- pesticides and composts in
the country.
 To convert the organic waste in to plant nutrient resources.
 To prevent pollution and environment degradation by proper conversion and utilization
of organic waste.

ELIGIBLITY SN. Scheme Eligibility

1. Bio-fertilizers and Bio- Individuals, group of farmers/growers, proprietary,
pesticides production Unit and partnership firms, Co- operatives, Fertilizer
industry, Companies,
Corporations, NGOs
2. Fruit & Vegetable Waste / APMCs, Municipalities, NGOs and Private
Agro waste Compost entrepreneurs.
Production
Unit
PATTERN OF Particulars Bio-fertilizers and Fruit & Vegetable Waste / Agro
ASSISTANCE Bio-pesticides waste Compost
production Unit Production Unit
Owner’s contribution 25-33% 25-33%
Subsidy from GOI 25% 33%
subject to maximum
ceiling
Bank Loan 42-50% 34-42%
QUANTUM OF The scheme provides credit linked and back-ended capital investment subsidy as
SUBSIDY described below:
SN. Scheme Eligibility
1. Bio-fertilizers and Bio- 25% of total financial outlay subject to the
pesticides production Unit maximum of Rs 40 lakh per unit,
whichever is less.

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 2. Fruit & Vegetable Waste / Agro 33% of total financial outlay subject to the
waste Compost maximum of Rs. 60 lakh per unit,
Production Unit whichever is less.
REFERENCE BCC:BR:108:279 DATED 21.06.2016

26. LOAN / OVERDRAFT AGAINST BANK’S OWN DEPOSIT (LABOD/ODBOD) FOR FARMERS AND
OTHERS ENGAGED IN AGRICULTURE & ALLIED ACTIVITIES

NATURE OF Demand / Term Loan

FACILITY Overdraft
ELIGIBILITY Any individual with self-declaration/Proof that he is engaged in Agriculture Activities / the
proceeds of LABOD/ODBOD will be used for agriculture
purpose.
MARGIN 10% against duly discharged fixed/short deposit Receipts of all tenors.
PURPOSE For agriculture and allied activities.
RATE OF For Public/Senior citizens: 1.00% over Interest Rate on Fixed Deposits on any amount of
INTEREST deposits
Against the securities of third party FDRs: 1.00% over Deposit rate or MCLR +
SP + 0.25% whichever is higher.
PERIOD OF LOAN On or before maturity period of FDR.
REPAYMENT Bullet Payment .No repayment schedule is be stipulated. The borrower may
repay the loan as per his convenience.
AMOUNT OF THE 90% of the Face Value or Book value whichever is higher.
LOAN
MAXIMUM LOAN No maximum limit stipulated.
AMOUNT
SECURITY  LDOC-16A- Letter of Depositing Fixed / Short Deposit
/DOCUMENTATION  Pledge of duly discharged Deposit Receipt
PROCESSING NIL
CHARGES
OTHER  Bank’s lien to be marked on FDR/SDR against which advance has been granted. Lien
CONDITIONS should be noted in the system as well as on the receipt.
 A sanction memo (117C) to be prepared by the branch containing terms and conditions
of sanction and details of FDRs pledged to the bank duly signed by Sanctioning
authority and kept with the documents.
 Such credit decisions need not be reported to controlling authority in the monthly PSR
statements unlike other advance. However sanction of advance by officer of the branch
is subject to PSR noting by the Branch Head.
 No advance should be granted against a term deposit on the same day on which it is
issued.
 No prepayment charges are to be applied.
 The due date of the deposit receipt should be noted in the diary. On maturity the
proceeds of the deposit should be appropriated to liquidate the advance. The balance
amount of deposit, if any should be paid to the depositor by issuing a Banker’s cheque
or crediting to saving / current account. In case of third party deposit, care should be
taken not to repay the balance amount to the borrower.
 Loan should be from the same branch in which FD account is opened.
 FDR accounts, against which LABOD/ODBOD facility is granted, be linked to their
respective LABOD/ODBOD, in FINACLE.
 The total cumulative sanctions under the scheme for a FY will not include the overall
cap for the Branch as per the DLP of the sanctioning authority.
 No loan will be considered against FDR/ SDR in the name of Minor.
 No loan will be considered against any other deposits i.e Recurring Deposit / Yatha
Shakti Jama Joyana etc.
REFERENCE BCC:BR:110:131 dated 19.03.2018

27. PURCHASE OF ESTATES/ORCHARDS GROWING TRADITIONAL PLANTATION CROPS VIZ. COFFEE,

TEA, RUBBER, CARDAMOM, PEPPER, COCONUT AND OTHER PERENNIAL ORCHARD CROPS:

Page 239 of 502

 PURPOSE  For purchase of estates growing traditional plantation crops viz. coffee, tea, rubber,
cardamom, cashew, pepper, coconut and other perennial orchard crops.

Project cost may include:

 The cost of rejuvenation of the Estate proposed to be purchased and any other
development required on the estate may also be financed subject to fulfilment of
margin requirement.
 The stamp duty and registration charges may also be considered.

ELIGIBILITY  The borrower should be engaged in agriculture activity as owner of agriculture land,
tenant farmers, oral leases etc.
 The borrower should preferably have yielding estates and should be in a position to
rejuvenate the Estate proposed to be purchased.
 The intending borrower should qualify the respective State Government norms of being
agriculturist/satisfy the income criteria stipulated by the State Government.
 The intended borrowers should have experience in the line, be financially sound and
should be in a position to bring in margin and service the debt.
 The estate to be purchased should preferably be a neglected one. The Estate should have
potential for realizing higher yields. The Estate should have the potential to absorb
substantial Credit for developmental activities.
 The total land holding of the borrower including the land to be acquired
should be within the land ceiling norms of the respective State.

MARGIN 50%.
However, the same may be relaxed up to 40% by Zonal Head in deserving cases.
If the cost of registration /stamp duty is included in the project cost, the margin
requirement will be 50% without further relaxation.
SECURITY Mortgage of the property to be purchased & hypothecation of plantation crops raised on the
land / Estate.
Collateral security in the shape of mortgage of the landed properties preferably
residential property to be obtained. In any case, the value of the total Security (Primary &
Collateral) should not be less than 200% of the loan amount.
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
REPAYMENT The loan should normally be repayable maximum within 7 years excluding moratorium period.
PERIOD In case of specific cases, depending on the status of the Estate and rejuvenation period
required, it may be extended up to 10 years excluding moratorium period.
(The moratorium period be decided by the sanctioning authority based on
income generation from the project. Maximum moratorium period upto 5 years may be
permitted depending upon the future cash generation from the project).

PRE- Branch Manager/ Officer of the Bank should visit the farm to assess the technical feasibility
SANCTION and economic viability of the proposal. The crop history of the Estates be obtained for 4-5
VISITS years & analysed for viability. It be also ensured by the sanctioning authority that the
market/buyers for that particular agriculture produce is readily available within reasonable
distance from the
estate.
VALUATION Value of estate shall be based on the lowest of (i) Market Value (II) Guidance value / circle
OF ESTATE rate fixed by the State (iii) Purchase consideration of the estate or (iv) Average price
of sale transaction registered during last 5 years in the area.

For the purpose of the valuation of the land to be purchased, price indicated may be cross
checked with the last five years average registration value available with the registrar / sub
registrar of the area and a view be taken for fixing the
quantum of finance.

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 ACTIVITY No activity clearance is required for loan up to Rs 1.00 crores. However, for proposal having
CLEARANCE limit of above Rs 1.00 crores to Rs 5.00 crores, the activity clearance be accorded by the
Regional Head. For proposal above Rs 5.00 crores, the activity clearance be accorded by the
Zonal Head for proposals falling within the discretionary lending power upto Zonal Office
Level Credit
Committee (ZOCC).
OTHERS I. The accounts be opened in LA408 in finacle.
II. Viability of the project should be ascertained from the income generation from the
proposed estate only. In exceptional cases with the prior approval of the Zonal Head,
existing surplus income from other agriculture activities undertaken by the borrower may
be taken into account for viability purpose.
REFERENCE BCC:BR:104:419 dated 03.12.2012

28. SHAHARI BAGWANI YOJNA

ELIGIBILITY Individuals:
 Should possess independent house having 500 sq. ft of open space for gardening. For
raising of roof garden, similar area of open encumbered roof space must be available.
 Should have regular source of income. Salaried person. Professionals and business
men having steady income will be covered under the scheme. Salary certificates of the
employees and income tax assessment orders of others individuals should be obtained
 Tenants staying in privately rented houses should not be financed. However owners
can be financed even if they are not staying in the house.
Institutions:
 Proprietary or partnership firms, trusts and societies can be financed under this
scheme. Privately owned schools, Offices, guest houses, hospitals and hotels having at
least 1000 square feet of open space for gardening are eligible. Parking place and play
areas should be counted as garden space.
 Borrowing institution should have ownership or long-term or lease right (at
least five years) on the property.

QUANTUM OF  A unit cost of Rs. 33,000/- be taken for every 1000 square feet of garden space.
FINANCE  Area measuring 500 to 1000 square feet should be reckoned as 1000 square feet.
Maximum amount of loan is Rs. 3 lacs for individual and Rs.30 lacs for institutions.
 Loans for less than 20000/- should not be considered.
 Take-home pay norm (40 % after all deductions) should be observed for individuals.
For commercial establishments, repayment schedule should be fixed based on cash
flow.

MARGIN Upto Rs. 1.00 lacs – Nil Above

Rs. 1.00 lacs – 15 %

SECURITY Accordingly the security requirements under the scheme are stipulated as under;
Category Primary Security Collateral Security
Size of Loan Criteria
Salaried Hypothecation of Upto Rs. 1.00 Nil
Employees plants/ Crop and lacs
garden equipment. Above Rs. 1.00 Undertaking letter from
lacs upto employer for routing of salary
Rs.3.00 lacs through the branch backed by
standing
instructions.
Other Hypothecation of Upto Rs. 1.00 Nil
individuals plants/ Crop and lacs
garden equipment. Above Rs. 1.00 Third party guarantee of an
lacs upto individual with worth not less
Rs.3.00 lacs than that of the
borrower.
Institutions Hypothecation of Upto Rs. 1.00 Nil
plants/ Crop and lacs

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 garden equipment. Above Rs. 1.00 Collateral Security of at least
lacs upto 50 % of loan amount plus
Rs.3.00 lacs personal guarantee of
partners/ trustees
/promoters.
REPAYMENT 12 to 24 monthly installments for individuals 12 to
36 monthly installments for institutions.
A moratorium maximum upto 3 months may be considered on case to case basis.
APPLICATION As per applicability to the particular case, Salary certificates, Employers Undertaking
letters, standing instructions, trust deed, Bye-law of society, Resolution, Partnership deed,
Income tax return etc., should be taken along with
application form.

RATE OF As per RBI/Bank’s guidelines revised from time to time.

INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
OTHER  The scheme is basically intended to encourage and facilitate kitchen garden or decorative
CONDITIONS horticulture to be undertaken by owners, occupants and housewives.
 The activity need not be commercial.
 There are institutions available in major cities who conduct short term courses for
developing kitchen garden and roof gardens. Rotary club and some NGOs also conduct
summer classes on such subject either free of cost or nominal payments. The potential
borrower may be encouraged to undergo such courses on developing kitchen gardens
and roof gardens.
 The finance made under this scheme will be eligible for classification under Agriculture.
 The garden place should be properly protected by boundary walls or fences or parapet
walls.
 Finance can be extended at all centres (Urban, Metropolitan, Semi- Urban and Rural).
This scheme is only for Horticultural crops in residential sites.
 No internal credit rating is required.

29. PLANTER’S CARD SCHEME: TO MEET THE SHORT TERM CREDIT REQUIREMENTS FOR
CULTIVATION OF CROPS AND INVESTMENT CREDIT/TERM LOAN REQUIREMENT FOR COFFEE, INTER-
CROPS & OTHER PLANTATION CROPS.

OBJECTIVES /  To meet the short term credit requirements for cultivation of coffee, inter- crops & other
PURPOSE plantation crops.
 To meet post-harvest expenses, produce marketing loan, consumption requirements of
planter’s household, working capital for maintenance of farm assets and activities allied
to agriculture like dairy animals, poultry, inland fisheries etc., payment of insurance
premium towards crop / asset / health insurance.
 Investment credit / term loan requirement for agriculture and allied activities like pump-
sets, sprayers, dairy animals etc.,
ELIGIBILITY  All planters/cultivators/tenant farmers engaged in plantation activities.
{Coffee planters to produce original Coffee Registration Certificate (CRC)}. Further,
copies of the Agriculture Income tax assessment order/Income tax/Wealth tax
assessment order/Tax paid receipts/copies of IT/WT/AIT returns or Auditors certificate
giving the tax details are to be obtained wherever applicable.
 Planters aged above 60 years can be joined by spouse/major legal heir(s) as co-
borrowers.
 Companies/Partnership firms/HUFs involved in plantation activities.
 In case of existing borrowers, past track record of repayment is to be taken into
account. For new borrowers, branch must verify their credentials.

ASSESSMENT OF  Fixation of Annual Limit:- As per the scale of finance approved by DLTC. In case planters
LIMIT use modern package of practices involving higher input cost and if DLTC fixed scale of
finance is not adequate to raise / maintain the crop, additional amount upto 25% of scale
of finance, over and above the scale of finance may be considered on merits of individual
case, on the request of the party.
 Post-harvest/other requirements:-Planter’s credit requirement for post- harvest
activities/miscellaneous agricultural expenditure such as repairs and maintenance of
farm machinery/ equipment, purchase of farm tools, working capital needs of
agricultural allied activities, credit needs towards household/consumption
needs/miscellaneous expenses/insurance premium towards PAIS, Crop/Asset

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 insurance, Health insurance etc., shall be considered under this head. This shall not
exceed 40% of the limit assessed for crop production purposes as detailed at item no.
(1)Above.
Sl.no Particulars
1. Coffee bearing area in acres x scale of finance
2. Maintenance requirements for intercrops – as per scale of finance
for each intercrop
3. Total(1+2)
4. 25 % of the above for planters using modern package of practices involving higher
input cost
5. Total Crop production requirement (3+4)
6. 40 % on 5 above for post-harvest activities/consumption
needs/miscellaneous expenses/insurance premium towards PAIS,
Crop/Asset insurance, Health insurance etc to arrive at Annual
Limit
7. Total Annual Limit(5+6)
FIXATION OF Operative Limit for First year: Total Annual limit arrived above as per (7) above. Operative
OVERALL LIMIT Limit for second & subsequent year : The operative limits for second and subsequent years
upto 5th year is arrived at by adding 10% of the previous year’s operative limit towards
cost escalation / increase in scale of finance/ change in cropping pattern etc., :
i) Limit for 2nd year is = (7) above+10% of (7)…………………(B)
rd
ii) Limit for 3 year is = (i) above+10% of (B)………………… (C)
iii) Limit for 4th year is = (ii) above +10% of (C)……………… (D)
iv) Limit for 5th Year is = (iii) above + 10% of (D) ………………(E)

DISBURSAL NORMS General conditions for coffee crop loan disbursement:

 60% of the annual limit for the period up to July/August.
 For post monsoon operations, 20% of the annual limit for the period from September
to November.
 20% of the annual limit from December till the end of the season for picking &
post-harvest operations.
 Disbursal for other crops is as per the seasonal requirements.
 Withdrawal for post-harvest / miscellaneous agricultural expenses is @ 40% of the
total Crop production requirement.
 It is an operative account and borrower can make credits to reduce interest burden
and withdraw according to drawing power.
 Contingency is to take care of increase in scale of finance during subsequent years.
Hence, the contingency portion of the limit should not to be released. In case of such
increase in scale of finance, subsequent annual limits should be enhanced within
the overall limit.

ATM Card is mandatory for all PC (Planters Card) borrowers. Cheque book facility is also
available to planters having good track record.

DUE DATE FOR Due date for payment of coffee crop loans is fixed as 31st July of every year.
REPAYMENT
ANNUAL Though the overall card limit is valid for 5 years, Annual limit should be reviewed by the
REVIEW sanctioning authority before 31 st July. While reviewing the Annual limit, there is no need to
obtain the land records afresh. After expiry of the 5-year period, loan application and land
records should be taken afresh and a new card limit should be sanctioned. Hence, documents
should also be obtained afresh.

In the event of revision of scale of finance for any year exceeding the notional hike of 10%
contemplated while fixing the total five year limit, a revised drawing limit may be fixed and
the Planter to be advised about the same. In case such revisions require the card limit itself
to be enhanced at 4th or 5th year, the same may be done and the Planter be advised.
Necessary documents for the enhanced
limits to be obtained in such cases.

MARGIN A. For crops with notified scale of finance by DLTC: No margin.

B. For crops not under notified scale of finance by DLTC: Estimated cost of cultivation
- Applicable margin.
C. For term loan and also for (B) above:
i) Up to Rs.1,00,000/- : No Margin

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 ii) Above Rs.1,00,000/-: 15 to 25% depending on purpose and quantum of loan.
SECURITY For Operative crop production limits:
Loan Amount Security
i) For loans up to Rs. 1.60 lakh Hypothecation of crops.
ii) For loans above Rs. 1.60 1. Hypothecation of crops.
lakh 2. Mortgage of land / creation of charge on
landed properties in States where Statutes are
available for creation of such charge, as
per legal opinion **

For Term Loan component:

i) For loans Hypothecation of assets created out of loan and hypothecation of crop
upto Rs.
1.60 lakh
ii) For loans 1) Hypothecation of crops and assets created out of loan Mortgage of
above Rs.1.60 land / creation of charge on landed properties in States where Statutes
lakh are available for creation of such charge,
as per legal opinion **
Note: Securities of the Short term limit shall be taken as continuing security
for the Term Loan limit in all cases.
**- Wherever there are genuine difficulties for mortgaging / creation of charge on
the landed properties, suitable third party guarantee or other appropriate security could
be taken , with RO permission.
RATE OF As per RBI/Bank’s guidelines revised from time to time.
INTEREST (Ref Bank’s Circular No: BCC:BR:108:179 dated 21.04.2016)
DISBURSEMENT 1. The PC operative limit is in the nature of revolving cash credit facility. There should not
be any restriction in number of debits and credits. The drawing limit for current season/year
could be allowed to be drawn using any of the following delivery channels:
 Operations through branch.
 Operations through cheque facility.
 Withdrawal through ATM / Rupay enabled Planters Debit cards.
 Operations through Business correspondents and Ultra small branches.
 Operations through PoS available with input dealers.
 Mobile based transfer transactions at the agricultural input dealers and mandies.
2. Drawing Power for short term cash credit should be fixed based on the cropping pattern
and the amount towards other short term components like repairs/ maintenance of farm
assets, working capital for allied activities , consumption etc., may be allowed as per the
convenience of the farmers.

3. The Branch Managers at their discretion issue cheque books to Planters who can sign and
who are aware of the importance of preservation and safety of the cheque books. Declaration
in form no. 4-62 should be obtained to whom cheque books are issued to the effect that they
are aware of the seasonal sub limits fixed based on cropping pattern and they will be
operating the account through cheques only to the extent of their drawing power and bank
is at liberty to return
/ dishonour their cheques, in the event of balance exceeding the DP.

5. Since PC is introduced to ensure hassle free credit line to the planters to meet their entire
fund needs for crop production/post-harvest fund needs/consumption /maintenance of
farm assets/working capital needs of allied activities etc., obtaining of stamped receipts/bills
from the borrowers is not necessary. However, the Branch Manager has to fix the Drawing
Power within the Operative Limit, after looking into system of crop raising like single crop,
two crops, three crops per year, staggered cropping in different plots etc., and also has to
ensure end use through post sanction farm inspection.

6. Term Loan component can be utilized for purchase of land development, minor irrigation,
farm equipment, dairy, poultry, drying yard, sprinkler irrigation, pulping unit, new
plantation/replantation of coffee etc.

For purchase of assets such as Tractor/Power tiller/Pump set etc. the branches may remit
the loan disbursed directly to the Account of the pulping unit supplier/sprinkler dealer of
borrower’s choice by NEFT/RTGS and only on written request by borrower. In respect of
other farm developments/ deepening of wells, constructions etc., amount can be released by
the branch by conducting pre-sanction inspection before the release for assessing the
requirement and

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 based on the request of the party. The assets created / developments carried out to be
verified to ensure end use, by conducting post sanction inspections.
REPAYMENT/V  The card is valid for five years.
ALIDITY/RENE  The repayment period for the operative limits to be fixed for 31st July. However, the
WAL account shall be reviewed every year. At the time of such review, it may be ensured that
the interest applied to the account has been serviced. Further, it is to be ensured that
interest and principal instalment of term loans, if any are also serviced. As all production
needs of the farmer are met through the PC limit, sale proceeds from all the
plantation/agriculture/allied activities need to be routed through the account.
 There is no need for the planter to submit fresh land records during annual review.
 The review may result in continuation, enhancement, curtailment or cancellation of the
limit and compulsorily balance confirmation shall be
obtained every year.
 In the CBS system, the next review date i.e, 31st July should be clearly filled up in the
relevant field.
 Similarly, the Expiry Date (5 years from the date of first disbursement) should be filled
up in the Expiry Date field.
 For term loan component, repayment period may be fixed in convenient
monthly/quarterly/half-yearly/yearly installments based on the repayment
capacity/source of the planter from the existing as well as proposed
investment/activities.
INTEREST ON Savings Bank rate of interest shall be paid to the farmers on the Credit Balance maintained
CREDIT by them in the PC account.
BALANCE
INSURANCE All the notified crops should be covered under PMFBY and crops not notified should be
covered under any available crop insurance scheme.
All assets purchased out of term loan component to be insured covering all possible risks with
Bank clause.

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 MSME BANKING

Page 246 of 502

 7. MSME classification as per ACT
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 manufacturing enterprises and investment in equipment for service enterprises as below with effect from 2 nd
Oct. 2006:

Particulars Micro Enterprises Small Enterprises Medium

Enterprises
Investment in Plant & Machineries in Not Exceeding Above Rs.25 Lakh up to Above Rs.5 Crore to not
case of Manufacturing Enterprises Rs. 25 Lakh Rs.5 Crore exceeding Rs.10 Crore
Investment in Equipment in case of Not Exceeding Above Rs. 10 Lakh up Above Rs.2 Crore to not
Service Sector Enterprises Rs.10 Lakh to Rs.2 Cr exceeding Rs. 5 Crore

10.1.1 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.

10.1.2 Service Sector Enterprises:

Service Sector Enterprise 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 vide its notification No. S.O. 172 (E) dated October5, 2006 (Reference BOI 2019)
are as detailed in above table. All Loans to KVI sector will be covered under Micro enterprises.

Service Enterprises will include Small Road & Water Transport operators, Small Business, Retail Trade, Professional
and Self-Employed persons and all other Service Enterprises which satisfy the above criteria. (Ref: - Master Circular –
MSME - BCC: BR: 108:422 dated 01.09.2016 BCC: BR: 109:452 dated 01.09.20171). To further elaborate any loan given
for income generating purpose under Manufacturing, Services & Retail Trade segments and satisfying the investment
in plant & Machinery/Equipment criteria as per MSMED Act 2006 are eligible for classification under Regulatory
MSME segment.

10.1.3Exceptions to this are Loans given for Agriculture & Agri Allied Activities:
Loans given to Agro & Food processing units where the borrower wise limit from entirebanking system is up to Rs.100
Crores. Accordingly loans sanctioned for business purposes under Retail Lending Schemes are also eligible for
classification as Regulatory MSME under priority Sector subject to fulfilment of conditions of MSMED Act 2006. Please
note that for internal performance evaluationpurpose accounts opened under Retail Lending Schemes will continue to
be treated as RetailLending.

10.1.4Retail Trade (Regulatory MSME under SERVICES segment):

The Definition of Retail Trader is that the trader must be selling the goods to the end user of the product. i.e. Kirana
Shop, Readymade cloth shop, Street side Vegetable VendorsWholesale Trade are not eligible for Regulatory MSME
Classification. The Definition of Wholesale Trader is that the trader must be selling the goods to the RETAILTRADERS
and NOT to the end users of the product. (E.g.) Dealers of FMCG-Goods, Grain Traders(Ref:BCC:BR:111/72
dt.08.02.2019)

1
Master Circular – MSME - BCC: BR: 108:422 dated 01.09.2016, BCC:BR:109:452 dated 01.09.2017

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 SME EXCHANGE

SME exchange is a stock exchange dedicated for trading the shares of small and
medium scale enterprises (SMEs) who, otherwise, find it difficult to get listed in the

main exchanges. The concept originated from the difficulties faced by SMEs in gaining
visibility or attracting sufficient trading volumes when listed along with other stocks

in the main exchanges. World over, trading platforms / exchanges for the shares of

SMEs are known by different names such as Alternate Investment markets or growth
enterprises market, SME Board etc.

“SME exchange” is defined in Chapter XA of the Securities And Exchange Board Of

India (Issue Of Capital And Disclosure Requirements) Regulations as a trading
platform of a recognized stock exchange or a dedicated exchange permitted
by SEBI to list the securities issued in accordance with Chapter XA of SEBI (ICDR)

Regulations and this excludes the Main Board (which is in turn is defined as a
recognized stock exchange having nationwide trading terminals, other than SME

exchange).

To be listed on the SME exchange, the post-issue paid up capital of the company
should not exceed Rs. 25 Crores. This means that the SME exchange is not limited to
the Small and Medium Scale enterprises which are defined under the Micro, Small And
Medium Enterprises Development Act, 2006 as enterprises where the investment in
plant and machinery does not exceed Rs. 10 crores. As of now, to get listed in the

main boards like, National Stock Exchange, the minimum paid up capital required is

Rs. 10 cr and that of Bombay Stock Exchange is Rs. 3 cr. Hence, those companies
with paid up capital between Rs. 10 cr to Rs. 25 cr has the option of migrating to the

Main Board / or to SME exchange. The companies listed on the SME exchange are
allowed to migrate to the Main Board as and when they meet the listing requirements

of the Main Board and there shall be compulsory migration of the SMEs from the SME

exchange, in case the post issue paid up capital is likely to go beyond Rs 25 crore
limit.

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 10.1.5 Regulatory MSME classification is based on the following two fields available in Finacle as
under-

1. "Sector Code” in MIS page under Account profile

2. “ Plant & Machinery” field in customer profile page under HBAIM Menu

Menu HACMLA/HACM/HACMBP/ACMPS:
Others - Account Label- Blank or MSME
MIS – Purpose of advance – Manufacturing, services or retail trade
MIS- Sector code- 40, 50,60,70,90,100,115,170,270 or 280
MIS- Free text code 14- Blank

Menu HBAIM
Borrower’s additional information-modify-customer - General details tab- Investment in plant &
machineries/equipment.

Value Range in “Investment in Machinery” field Sector Description Sector

in HBAIM at Customer Level Code
Upto Rs. 25 lacs Manufacturing – MICRO Enterprises 40
Above Rs. 25 lacs and upto Rs.5 Crores Manufacturing – SMALL Enterprises 50
Above Rs. 5 Crores and upto Rs.10 Crores Manufacturing – MEDIUM Enterprises 170

Regulatory MSME – Services Activities including Retail Trade – Sector Code is based on investment in Equipment

Value Range in “Investment in Equipment” Sector Description Sector

field in HBAIM at Customer level Code
Upto Rs. 5 lacs Services – MICRO Enterprises 90
Above Rs. 5 lacs and upto Rs.2 Crores Services – SMALL Enterprises 100
Above Rs. 2 Crores and upto Rs.5 Crores Services – MEDIUM Enterprises 115

 For “Khadi, Village and Cottage Industry” and “Artisans and Handicrafts” the respective codes of 60 and 70
may be used and in HBAIM Investment in Machinery shall be filled in For “PMMY Micro Enterprises” ->
Scheme Code (CC017, OD020, LA520)

 For Manufacturing, Sector Code shall be 40 and Investment in P&M shall be upto Rs. 25 lacs

 For Services, Sector Code shall be 90 and Investment in Equipment shall be upto Rs. 10 lacs

 For “PMMY Small Enterprises” -> Scheme Code (CC018, OD021, LA521)

 For Manufacturing, Sector Code shall be 50 and Investment in P&M shall be above Rs. 25 lacs and upto Rs.5
Crores

 For Services, Sector Code shall be 100 and Investment in Equipment shall be above Rs. 10 lacs and upto Rs.2
Crores
10.1.6 Computation of value of Plant & Machinery:

Investment under head ‘Plant and Machinery’ should include the original price of every productive item plant &
machinery 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:

 Original cost of Plant and Machinery (price paid by the owner / hirer / lessor).
 Cost of control panels, starters, Electric Motors, other electrical accessories mounted on individual machines.
 Cost of only those testing and quality control equipment, which are, used for/in process testing.
 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

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 Cost of following items should be excluded:

 Equipment such as Tools, Jigs, Dies, Moulds, and Spares for maintenance and cost of Consumable Stores.
 Installation of P & M,
 Research & Development Equipmentand Pollution Control Equipment
 Power Generation Set and extra Transformer installed
 Bank Charges and Service Charges paid to the NSIC or to the State Small Industries Corporation
 Fire Fighting Equipment, Cables, Wires, electrical control panels, circuit breakers etc., which are used for
producing electrical power or for safety measures
 Gas producer Plants, Transportation Charges for indigenous Machineries
 Technical Know-how Fees
 Storage Tanks not linked to manufacturing process but are used for storing of Raw material and Finished
Goods.

In case of imported machinery following should include:

 Import duty(excluding misc. Expenses like transportation from port to the factory, demurrage paid at the
port).
 The shipping charges
 Custom clearance charges
 Sales Tax
Wherever, the value of Gross Block of Plant & Machinery / Equipment is more than 10 Crores / 5 Crores respectively,
as per latest ABS, previous -3- years ABS must be studied and in any of the preceding year if the value (Gross Block) of
Plant & Machinery / Equipment is less than 10 Crores / 5 Crores respectively, that value shall be entered in HBAIM.
Please note that the said value is only for classification purpose.(Ref Circular number BCC:BR:111:72 dated
08.02.2019)
As per RBI guidelines entities continue to enjoy status of MSME upto 3 years after breaching threshold limit of Rs.5
crore/10 crore in case of service or manufacturing segments respectively(Ref:BCC:BR:111/72 dt.08.02.2019).

10.1.7 Documents to be relied upon for classification of MSME

For ascertaining the investment in plant and machinery for classification of an enterprise as Micro, Small and Medium,
the following documents could berelied upon:

 A copy of the invoice of the purchase of plant and machinery; or

 Gross block for investment in plant and machinery as shown in the audited accounts; or
 A certificate issued by a Chartered Accountant regarding purchase price of plant and machinery.

Further, the Ministry has clarified that for the investment in plant and machinery for the purpose of classification of an
enterprise as Micro, Small or Medium, the purchase value of the plant and machinery is to be reckoned and not the
book value (purchase value minus depreciation)

10.2 Our Bank’s 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 as under vide BCC BR 110 290 dated
11.06.18 2:

SME Banking business will thus include the following across the bank:

 Corporate entities (public and private limited companies), partnership firms, sole proprietorships, trusts,
government-owned non-corporate entities etc. having a gross annual turnover of up to Rs.250/-crore as per

2
MSME regulatory definition modified vide BCC BR 110 290 dated 11.06.18

Page 250 of 502

 the last Audited Balance Sheet or Previous Financial Year / any other statutory returns (e.g. GST return) will
be classified as MSME borrowers.
 Corporate entities (public and private limited companies), partnership firms, Limited Liability Partnership
firms, sole proprietorships, trusts, clubs, government-owned non-corporate entities etc. whose original
investment in plant, machinery& equipment meets the Regulatory Definition for MSME borrowers.
 In respect of new project finance, including real estate, where the project cost is up to Rs. 50/-crore and
estimated sales turnover in the first full year of commercial operation does not exceed Rs.250 crore.
 Financing under various Government schemes launched for the MSME Sector.
(Reference: Global Credit Exposure Policy 2019-20 Pg. 13 of 110)

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.

SME Expanded/Non-Regulatory is classified based on the following field in Finacle as under-

1. "Sector Code" in MIS page under Account profile.

2. "Balance Sheet and Turnover” field in customer details page under HBAIM menu.

Menu HACMLA/HACM/HACMBP/ACMPS
Others - Account Label- Blank or MSME
MIS – Purpose of advance – Any income generating activity
MIS- Sector code- 180 or 200
MIS- Free text code 14- 100

Menu HBAIM - Borrower’s additional information-modify-customer-General details tab- Investment in plant

&machineries (mfg.)- if more than Rs. 10 Cr. / Equipment (Services) - if more than Rs. 5 Cr. / Turnover –up to Rs.
250 Cr.
10.3Assessment & Margin

10.3.1 Assessment of Working Capital

As per our Bank’s Global Credit Exposure Management Policy, 2018 following methods are adopted for working capital
limit assessment:

Borrower Type Method of lending for fund based working capital

requirement
Micro & Small Enterprises working capital
Higher of First Method (or) Turnover Method (Min 25%)#
requirement Up to Rs. 5/- Crore
Micro & Small Enterprises working capital
Higher of First Method (or) Turnover Method (Min 20%)
requirement Above Rs. 5/- Crore
Medium Enterprises Higher of First Method (or) Turnover Method (Min 20%)
All other borrowers requiring working capital
Second Method
finance up to Rs. 10/- Crore
All other borrowers requiring working capital
Cash FlowBudgeting Method%
finance above Rs. 10/- Crore
#In case digital sales turnover exceeds 25% of total/assessed turnover, additional 5% of the digital sales turnover

will be added to the total assessment of working capital i.e. 30% of turnover of digital sales and 25% of non-digital
sales added together will be the working capital limit.
% If
cash flow projections etc. are not available then the Second Method may be applied after satisfying that working
capital requirements are based on operating cycle.

10.3.2 MARGIN:

Facility Type of security Minimum Margin

Term Loan
Factory Land & Building 30%

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 Plant, Machinery, Equipment 25%
Second hand imported machinery 40%

Working Capital
Stocks & Receivables 25%
Export Credit Pre- Shipment 10%
Post Shipment Nil

Extra due diligence/ discrete inquiry to be made in case of old machineries and proper valuation of old machineries to
be obtained for ensuring compliance in respect of margin requirement
The next higher authority is authorized to reduce margin maximum by 5 percentage points in deserving cases in respect
of all the above types of securities. If reduction in margin is proposed beyond 5 percentage points but up to a maximum
of 10 percentage points, Executive Director or Managing Director & CEO is authorized to consider it on merit.

(Reference: Global Credit Exposure Policy 2019-20 Pg. 53 of 110)

10.4 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.

 Implementation of Repo Rate Linked Lending Rate for MSE (Micro and Small Enterprises) from 01.10.2019.
(Ref Circular number BCC:BR:111:491 dated 30.09.2019 & BCC:BR:111:490 dated 27.09.2019) and the same
will be implemented as under:

 Loan proposal sanctioned on or after 01.10.2019

 Loan proposal sanctioned on or before 30.09.2019 and pending for 1st disbursement as on 01.10.2019 (Letter
/ undertaking to be obtained as per annexure-1)

 Rate of Interest for Medium and Expanded shall continue to be linked with MCLR.

 In case of existing borrowers in Micro and Small Enterprises are provided with an option to migrate to BRLLR.

 Medium Enterprises Loans are linked to MCLR only for the present.

 For Limits upto Rs 25 lacs, related to (Medium Enterprises and Expanded – Non Regulatory), the rate of
interest is based on limits slab and the segmentation (Micro, Small, and Medium).
 For Limits related to (Expanded – Non Regulatory) the rate of interest is based on the credit rating.
 Tenor premium is not chargeable after introduction of MCLR for new borrowers/facilities. ( Ref :
BCC:BR:108:209 dated 12.05.2016) 3

 To align the rate of interest of SME segment with hard security and CMR rating of borrower, to keep up with
market completion, is has been proposed vide circular no BCC BR 110/304 dated 11.06.2018 4to rationalize
the spreads on ROI aligned with only hard security for loans above Rs.25.00 Lakh to Rs.5.00Crores (FB &
NFB). The circular gives entire matrix of combination of CMR rating of borrower, type of borrower, MSME
Expanded and hard security offered and resultant ROI. For MSME accounts other than those falling in above
criterion (Rs 25 Lakh and above uptoRs. 5 Crore) would continue to be priced as per their CMR Rating.

10.5 Penal Interest

3
BCC:BR:108:209 dated 12.05.2016Introduction to MCLR
4
BCC BR 110/304 dated 11.06.2018New approach to pricing based on CMR & security

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 The Bank may apply penal interest of minimum 2% p.a. each, for delay in submission of financial statement, stock
statements, creation of security, quarterly information, overdues, breach of stipulated 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.

Penal Interest should be charged to deter the borrower from non- compliance of any term and condition including
default of repayment of interest / installment. Penal Interest / Additional interest will be charged on the overdue
amount @ 2% per annum to the term loan / working capital limit accounts defaulting instalment / interest repayment
in respect of loans and advances other than Priority Sector loans up to Rs. 25,000/-, Loans sanctioned under
Government Sponsored Schemes and Retail advances.

In respect of Priority sector loans up to Rs. 25,000/-, ECNOS no penal interest is applicable. ECNOS means Export
Credit Not Otherwise Specified in the interest rate structure which banks are free to decide the rate of interest keeping
in view the MCLR / Base Rate / BPLR spread guidelines.

In respect of Loans sanctioned under Government Sponsored Schemes, and Retail Loans, penal interest @ 2% per
annum will be applicable on OVERDUE portion only and not on the entire outstanding amount.

The Bank shall charge overall penal and additional interest up to 2% p.a. over the applicable/regular interest rate.

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.

(Reference:Global Credit Exposure Management Policy Page 83/84 of 110 )

10.6 Collateral Free Loans

As per Master circular on MSME (Ref:-BCC:BR:109:452 dated 01.09.2017)5, Branches are mandated not to accept
collateral security in the case of loans up to Rs.10.00 lakh extended to units in the MSE sector including loans to units
financed under the PMEGP administered by KVIC up to Rs.10.00 lakhs.

Further, Collateral free loans may be extended (including third party guarantee/ security) up to a limit of Rs. 25.00 lacs
to units under MSME and having satisfactory dealings with the branch for last 3 years and having sound and healthy
financial position.(Ref:- BCC:BR:110/144 dt.22.03.2018)

Branches has been advised to avail of the CGTMSE in all the applicable cases without any omission. In case the
sanctioning authority is not in favour of considering the collateral free loan under CGTMSE scheme, permission from
the next higher authority should be obtained.

Bank‘s guidelines for providing collateral free loans (As per erstwhile Loan Policy-2014) are reproduced as under:
 Collateral free loan up to Rs.10.00 Lakh to Micro & Small Enterprises.
 Collateral free loans (including third party guarantee/ security) up to a limit of Rs. 25.00 Lakh 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 up to a limit of Rs. 25.00 Lakh 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.

5
BCC:BR:109:452 dated 01.09.2017 MSME circular

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 10.7Credit Linked Capital Subsidy Scheme (CLSS):

Government of India, Ministry of MSME has approved continuation of CLSS for Technology Up gradation of Micro and
Small Enterprises from X Plan to XI Plan (2007-12) subject to the following terms and conditions:
 Ceiling on the loan under the scheme is Rs.1 Crore.
 The rate of subsidy is 15% for all units of MSE up to loan ceiling of Rs.1 crore
 Calculation of admissible subsidy will be done with reference to the purchase price of the plant and machinery
instead of term loan disbursed to the beneficiary unit.
 SIDBI and NABARD will continue to be implementing agencies for the scheme.
 Enterprises should mandatorily submit the information with www.msmedatabank.in before the claim is
lodged by the Bank.
(Circulars for reference: BCC:BR:106:200 dt.30.05.2014 6; BCC:BR:108:423 DT.14.09.20167)

Revised guidelines for subsidy are produced as under:

Term Deposit Receipt after receiving the subsidy by the Branches should be made for the duration of three years from
the date of approval of subsidy by PLI/Banks and if there is any delay in release of subsidy by the Ministry of MSME,
the three years' time duration should be taken from the date of commercial production by the unit after purchasing the
approved machineries. Hence in such cases the FDR is to be prepared with maturity falling on 3 years from the date of
commercial production.
In cases where there is conversion of term Loans into Foreign Currency Term loans, the subsidy cannot be converted
into foreign currency and it should be kept in the form of TDR in rupee denomination only. This should be noted that
as per the CLCSS guideline eligible criteria, capital subsidy @15% of the eligible investment in plant and machineries
under the scheme shall be available only for such projects, where term loans have been sanctioned by the eligible PLl.
(Reference: BCC;BR:111/75 dt.04.04.2019 Circular)

10.8 Review with limits up to Rs. 20/-25/- 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 up to Rs. 20/- 25/- lacs pending receipt of
audited financial statements provided the conduct of the account is satisfactory in terms of various parameters:-

1) Satisfactory conduct and turnover in the account

2) Fulfilment of repayment obligations (Interest/ Instalments)
3) Adequacy of securities, drawing power, insurance coverage etc.
4) Rectification of inspection irregularities (other than non-submission of financial statements)
5) Compliance of all terms and conditions of previous sanction.
6) Satisfactory trend in production and /or Sales as per projections
7) Documentations and mortgages in the account being complete, valid and enforceable
8) Prompt payment of bills under LCs, realization of BP/BDs, Guarantee Commission etc.
9) Submission of Income Tax / Sales Tax returns filed with Statutory Authority as per time schedule prescribed,
wherever applicable (which will also indicate about the sales and profitability of the operations).

10.9 New Originations-Priorities & Approval

In addition to laying stress in meeting specific commitments in terms of RBI and Government of India directives, the
focus areas and target markets for the domestic operations of the Bank will be:
 Micro, Small and Medium Enterprises (MSMEs): Likely to grow faster in view of high priority being accorded
to this segment by the Government.
 Retail Finance: To grow further with specific thrust on housing loans.

Looking into the market dynamics and the economic scenario, all the sectors / industries will be categorized in terms
of their future outlook: positive, neutral or negative. The Bank takes into account Industrial Risk Scores provided by

6
BCC:BR:106:200 dt.30.05.2014 CLSS circular
77
; BCC:BR:108:423 DT.14.09.2016 CLSS circular
BCC;BR:111/75 dt.04.04.2019 Circular

Page 254 of 502

 various agencies, demand-supply situation for the products, government policies etc. for this purpose. The Bank’s target
segment/sector approach for different sectors / industries based on their respective outlooks, will be as under:

 Positive outlook sectors / industries –Will be the primary target sector.

 Neutral outlook sectors – Exposure will be moderate
 Negative outlook sectors – Exposure will be limited to the borrowers with external rating of ‘A’ and above for
exposures of above Rs. 50 crore. For food & agro processing units qualifying for priority sector classification,
the sector outlook and rating criteria will not be applicable.

ZOCC-(GM-CC) can approve the proposals falling otherwise within the DLP of upto ZOCC where the industry is having
negative outlook but not meeting the rating criteria.

COCC ED can approve proposals falling otherwise within the DLP of ZOCC (GM-CC), COCC (GM- CC) & COCC ED.
CACB & MCB can approve all other proposals.

Risk Management Department will provide sectoral outlook along with advisory on a monthly basis. The target market
approach, as per the template that has been developed for this purpose, will be prepared at the beginning of every
financial year by respective credit verticals and it will be reviewed once in every quarter. The annual target market
approach and quarterly review thereof will be put up to the Credit Policy Committee and the Risk Management
Committee of the Board for approval.

(Reference: Global Credit Exposure Management Policy Page 17 of 110)

10.10 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 Norms
Micro & Small Enterprises Medium Enterprises Units covered under
under manufacturing sector under manufacturing SME Sector as per
and Service Sector sector and Service expanded definition
falling under regulatory Sector and outside the
guidelines falling under purview of regulatory
regulatory guidelines definition
Current Ratio (Min.) 1.17 1.20 1.33
DER (Max.)(TTL/ATNW*) 3:1 3:1 3:1
DER (Max.) (TOL/ATNW) 4.5:1 4.5:1 4.5:1
FACR (Net FA/ LTL) Not below 1.25 Not below 1.25 Not below 1.25
Average DSCR for Term Loan 1.75 with a condition that in any 1.75 with a condition that 1.75 with a condition that
one year it should not be below in any one year it should in any one year it should
1.00 instead of 1.25 as per extant not be below 1.25 not be below 1.25
guidelines.
* ATNW = Adjusted Tangible Net Worth = Net Worth net of investment in associate/sister concerns.
ATNW =Adjusted TNW , adjusted to investment in/loans & advances to group companies

10.11 Takeover of advance accounts

Following takeover guidelines are stipulated in Global Credit Exposure Management Policy, 2019:

 The specific reasons for shifting the account from Financial Institution / other bank to the Bank should be
ascertained.
 Accounts of profit-making (i.e. net profit before tax) concerns as per last two audited balance sheets should
only be considered

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  Accounts with existing lenders should be under the category of “Standard Assets” and should not have been
classified under SMA-1 / SMA-2 during the last one year as per the latest CRILC report.
 Before taking over, Bank should obtain necessary credit information from the transferor bank as per the
format prescribed on “Lending under Consortium Arrangement/Multiple Banking Arrangements” and / or
Latest statement of account of the existing banks for preceding 6 - 12 months is to be obtained and verified to
assess the quality of operations with the existing bankers.
 Besides obtaining Credit Report from the existing lenders, Branches to make discrete inquiries with people in
the similar line of activity / buyers / suppliers and their view about the prospective borrower's credentials,
financial soundness, integrity, reputation and capability (amount proposed to be taken over) must be
obtained. A confirmation to this effect must form a part of comments in the takeover proposals.
 As a general policy, takeover should be at the existing exposure level only. However, the additional exposure
at the time of takeover can be considered on merit of case.
 External Rating in respect of credit proposal with exposure above Rs.50 Crores 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).
 There should be tangible security available to cover the advances to be taken over and the underlying assets
should be distinctly identifiable.
 Securities to be revalued at the time of takeover of account as per the extant guidelines For Term Loan / Project
Finance, the project should not be in the implementation phase at the time of takeover of the loan. In other
words, it should have commenced commercial production.
 The remaining repayment period shall not be extended beyond the original repayment period permitted by
the erstwhile lender, as it amount to restructuring of account. However, this provision will not be applicable
in respect of refinance of loans as allowed by the RBI

 Take-over accounts are to be rated as under:-

 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.
 As per MSME Credit Rating Model for MSME accounts of exposure Rs.2 lac and above up to Rs. 2.00
crore subject to minimum “MSMEBOB6” rating.

 There should not have been any reschedulement / restructuring in the account during last two years.
 No credit facility should be taken over by the Bank from any other bank where any of the Bank's Executive
Director or Managing Director & CEO 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)

Permitted Deviations:

 Deviations may be permitted in above-mentioned items by the authorities as under:-

 Next higher authority upto COCC – (GM-CC).
 Full power for COCC-ED and above.
 Sanctioning authorities / competent authority from ZOCC- GM and above (ZOCC- GM, ZOCC- GMCC, COCC-
GM CC, COCC-ED, CACB & MCB) will have the discretion to allow departures from them on a case-to-case
basis, depending upon the industry specific, borrower specific situations and with cogent reasons /
justification, recorded in writing, from the point of view of business opportunity, credit risk and return.
 Proposals not meeting the acceptable level mentioned above and otherwise falling within the DLP upto RMCC
will be considered by next sanctioning authority. This will also be applicable in respect of takeover of funded
and non-funded borrowal accounts from other banks/FIs. Further, where any departure from the indicative
benchmark would entail higher credit risk, the same should be reflected in the price.
 For products/schemes approved by PPAC, such as Supply Chain Finance, commercial vehicle finance,
construction equipment finance etc. and credit facilities to NBFC, ship-building, real estate etc. the approved
product / scheme-specific guidelines will be applicable in respect of their indicative benchmark financial
ratios. In case of review / review with decrease, respective sanctioning authorities can consider the proposals
within their DLP subject to incorporating cogent reasons / justifications for the departure from the
aforementioned ratios.
 Based on the local industrial / economic scenario, overseas territories may stipulate indicative benchmark
financial ratios, as above, in their territory-specific loan policies.

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  An upfront fee @ 0.25% is to be charged in respect of all takeover proposals considered with deviations in the
said benchmark ratios.

Authority for takeover

 Proposal for takeover under the powers of Chief Manager and above: -For proposals under the powers of Chief
Manager and above, no prior clearance from next higher authority is required for takeover.

 Delegated authorities under bank’s discretionary lending powers may consider takeover cases within their
powers.

 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.

10.12 Credit rating

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 Bank’s corporate portfolio comprising customers
with aggregate credit exposure equal to or greater than Rs. 25 lakhs is rated under The BOBRAM model is
applicable to MSME accounts having exposure of above Rs. 2 Crore.
 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 Crore. (Excel Sheet)The Credit policy Committee (CPC) in its meeting held on dated
22nd March 2018 has directed that rating of MSME borrowers under the said model should be validated by an
Independent Officer at Regional Office. The paper based scored card has been converted into excel file format
wherein at level -1 appraising officer will initiate the rating and the same (along with documents soft copy/hard
copy) will be sent to level-2 (Regional Risk officer) for validation purpose regional Risk officer will send the
validated file to the branch under copy to Risk Management Department at BCC at email
idteambobram.bcc@bankofbaroda.co.in. (BCC BR 110: 194 dated 17.04.20188.)

As per extant guidelines, periodicity of credit rating in respect of borrowal accounts is on annual basis. 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 abovewith internal rating of BOB 1 to BOB 4 falling under SMA 1 category..

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.

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, India Rating and Research Pvt Ltd
(100% own subsidiary of FITCH), SMERA, Infomerics and Brickworks India in respect of domestic entities and
Moody’s, Fitch and Standard & Poor’s in respect of non Indian corporate borrowers are overseas entities 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.

Private Credit Rating for Corporate Credit Appraisals (Ref: -BCC: BR: 108:499 dated 21.10.20169)
The Rating Agencies have been divided into two Groups as under: -

8
Modification in process of rating validation
9
BCC: BR: 108:499 dated 21.10.2016External credit rating

Page 257 of 502

 Group Rating Agencies Name Work Eligible Borrowers
Allocation
A External Rating Agencies M/s. India Ratings Pvt. Ltd. 50% of the Borrower's Annual Turnover
having annual revenue (H-1) work is up to INR 150 Crores and
up to INR 150 Crore bank's credit exposure is up
M/s. Brickwork Ratings India 30% of the to INR 50 Crores
Pvt. Ltd. - (H-2) work
M/s. SMERA Ratings Limited 20% of the
– (H3) work
B External Rating Agencies M/s. CARE Ltd 50% of the Borrower's Annual Turnover
having annual Revenue work above INR 150 Crores or
above INR 150 Crores M/s. ICRA Ltd 30% of the bank's credit exposure above
work INR 50 Crores
M/s. CRISIL Ltd. 20% of the
M/S INFOMERICS work

We refer to the circular no. BCC/BR/110/590 dated 05/12/2018 in regard to the modification in Global Credit Exposure
Management Policy, wherein it was decided to exempt the Basel complied external rating for MSME borrowers
(including expanded definition) for exposure above Rs. 5.00 crore and upto Rs.50.00 crores, subject to carrying out
MSME rating from any of the Credit rating agency.

Eligibility of MSME borrower based of MSME Credit Rating/Grading (above Rs. 5'00 Crore and Up to Rs. 50 Crore):

To capture quality MSME asset with exposure above Rs. 5.00 crores and up to Rs. 50.00 crores, the following guidelines
are to be followed:

Type of cases SME Rating/ Grading to Sanctioning authority Deviation/ higher

be considered eligible sanctioning authority
Negative sector (as SME 1&2 As per DLP No deviation.
advised time to time) However in very
deserving cases, MCB
may allow deviations.
Takeover SME 1&2 As per DLP COCC-ED may allow
deviation up to SME 3.
Enhancement of existing SME 1,2,3 and 4 As per DLP Next higher authority as
fund based and non-fund Per DLP can sanction for
based facility or any new account having rating /
facility to new enterPrise grading SME 5 only.
(other than negative
sector)
(Reference: BCC:BR:111:185 dt. 12.04.2019)

SME rating / grading has to be conducted in following cases:

 New accounts: New to bank customers, Existing customer with request for any new limit,&greenfield projects
 Review of accounts: Review with increase / reduction of limit / review at same level

SME rating / grading may be exempted for following cases:

 Borrowers with already existing valid BASEL-ll complied external credit rating.
 SME rating/ grading stands exempted in Supply chain Finance accounts of spokes ( Dealer and Vendor
Finance) with exposure above Rs 5 crores to Rs 50 crores in all cases i.e., Fresh , with Reduction or
enhancement , Review of accounts at same level / review with reduction of limit ( BCC:BR:111:521 dated
05.10.2019)

Note:
For borrowers with existing valid BASEL ll complied external credit rating as on the date of sanction/ review, external
credit rating should be initiated one month before the expiry date of existing the BASEL ll complied external credit
rating.
For all Greenfield projects, project report should be submitted to Bank (Ref: BCC: BR: 111/340 dt.19.07.2019)

Page 258 of 502

 10.14 COMMON GUIDELINES

 The simple standardized loan application form for borrowers in MSME Sector circulated by Indian Banks’
Association has been adopted for credit limits up to Rs.100 lakhs.

 Receipt and acknowledgement of application & Maintenance of Register for application received.
 No application to be rejected without referring to next higher authority.
 Our Bank has introduced online application & “Loan Tracker Module” and Our Bank’s 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
 Time norms for disposal of loan application: As per Code of Bank’s Commitment to Micro and Small
Enterprises August 2015 (Para 5.1 j of BCC:BR:107:624 dated 16.12.2015) 10 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.

 Time line as per as per for MSME Loansaspercode of commitment to SMEGlobal credit exposure management
policy:
Loan Limit up to Maximum disposalperiod on receipt of loan
applications complete in all the respects and duly
accompanied by a check list

Up toRs.5 lakhs One week

AboveRs. 5/- lacs and up to Rs.25.00 Lacs 10 working days
above Rs. 25/- lacs 15 working days
At SMELF Within 14 days if no TEV required
21 days if TEV is required

 Most important and common terms and conditions with respect to MSME (as advised by BCSBI) to be
attached with all application forms. (BCC: BR: 108:456 dt.30.09.2016). 11
 Modification in the operations and administrative guidelines regarding procedure for submission of proposals
/processing of proposals by SME Loan factories had been amended vide BCC BR 110 167 dated 04.04.2018
12as under :

 Proposals falling beyond the powers of Head of SMELF/DRM/ RM will be submitted to sanctioned
authorities as under :
 Proposals falling under the powers of Zonal Head – Directly to Zonal head with a copy to Regional Head
 Proposals falling under the powers of BCC- through Zonal head with a copy to Regional head.
 In case of proposals falling under the powers of BCC, on receipt of copy of proposal, Zonal head, should
give his views in max 7 days. In case of information, it will be construed that he has nothing adverse to
report.
 If any adverse features are observed by RM the same has to be informed to ZO within 4 days of receipt of
proposals at RO
 For proposals falling under powers of Zonal committee, the Regional Head should give his views
/comments within max period of 7 days. In case no information is received, it will be construed that he
has nothing adverse to report.

The Discretionary Lending Powers for Integrated SMELF (ISMELF):

The discretionary lending powers for sanctioning various MSME proposals sponsored by head (Credit) will be vested
with Integrated SME Loan Factory committee. However decision on any excess/ Adhoc requirement (A/c in the purview
of Integrated SMELF) may be taken by Head Integrated SME loan factory in his/ her power which shall be reported to
committee in the next meeting.

BCC:BR:107:624 dated 16.12.2015 – time frame of disposal of loan application

10

BCC:BR:108:456 dt.30.09.2016 BCSBI – MSE

11
12
BCC BR 110 167 dated 04.04.2018 Operations & administrative guidelines of MSME

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 Integrated SMELF committee shall have DRMs in the rank of AGM and Head ‘Integrated SME loan factory’ in the rank
of AGM as members. Minimum 3 members required for the committee with Head ‘Integrated SMELF’ being
compulsory.

Committee will exercise its powers appropriate to scale of Head Integrated SME Loan factory only. Head (Credit) shall
not exercise their lending powers. Officials on probation shall not exercise any lending powers. (Reference: BOI 2019
Page 288/289)

Guidelines in respect of Regulatory MSME & SME Expanded accounts With CFS/CB/EC branches are
as under:
 The proposals falling up to the power of ZOCC(GM/GM-CC) shall be submitted to respective Zones for
Review/ RWl/ or for fresh Sanction.
 Proposals beyond ZOCC(GM/GM-CC) power to be submitted to BCC through Zone "(i.e.) Branches to submit
proposals to respective Zonal office and Zonal authority to submit their recommendation along with their view
to BCC for sanction of proposal.The branch may submit advance copy of proposal to MSME Vertical at BCC
directly.
 Any Adhoc/ excess beyond power of Branch Head and up to the power of ZOCC to be dealt by Zonal
Head/ZOCC(GM/GM-CC).

Contact Point verification (CPV)

Contact Point Verification (CPV) agencies empanelled by Retail Banking Department will be utilized for MSME loans
also.

Agencies Empanelled for Contact point Verification:

 PAIMAC Finserve Private Limited
 Riddhi Corporate Services private Limited
 CRUX BPO Services Private limited
 Astute Corporate Services private Limited.

Activities of CPV Agencies:

 CPV agency will undertake following activities:

 Residence Verification
 Office (Place of work) / Business Verification
 Telephone/mobile No. Verification
 Salary slip / Form No.16/ Bank statement Verification
 Verification of Income Tax Return (lTR), GST Returns
 (Verification of property proposed to be mortgaged if any, not to be carried out by CPV Agencies. The same
will be carried out by our Bank officers as per extant guidelines)(BCC:BR:109:639)

10.15Interest Subvention Scheme for MSMEs

This schemes is under of the programmes announced by our honourable prime minister to support MSME sector. RBI
has issued detailed guidelines of the said scheme vide their circular no RBI / 2018 – 19/125 FIDD.CO. MSME. BC.No.
14/06.02.03/2018-19 dt. 21.02.2019.

Salient features of the scheme:

 All borrowal accounts which are eligible to be classified as MSME under MSI\IED Act 2006 and having valid
Udyog Aadhar Number (UAN) and valid GSTN Number shall be eligible for interest subvention under the
Scheme.
 Incremental term loan or fresh term loan or incremental or fresh working capital extended to above said units
w.e.f 2nd November 2018 (Date of Sanction) to 31.03.2020 would be eligible for coverage.
 All working capital or term loan or combination of both would be eligible for coverage to the extent of Rs.100
lakh only (irrespective of the Limit) during the period of the Scheme.

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  MSME exporters availing interest subvention for pre-shipment or post-shipment credit under Department of
Commerce are not eligible under this scheme.
 MSMES already availing interest subvention under any of the Schemes of the State /Central Govt. are not be
eligible under this Scheme.
 The list of accounts found eligible for availing 2% interest subvention as per above criteria in Finacle will be
notified to branches on Half yearly Basis.
 Branches to verify the list and send claim applications only in case of eligible accounts to their respective
Regional Offices after getting the same certified by the Statutory Auditor of the branch.
 Regions shall get the consolidated certificate of the Region certified by Regional Statutory Auditors and the
Zones shall get the consolidated certificate of the Zone certified by the Zonal Auditors.
 Zones shall send the branch wise consolidated report for the Zone as a whole to BCC and BCC will submit the
claim applications to SIDBI for the bank as a whole.
 Branches have to ensure that the ROI charged in the accounts is strictly as per guidelines advised for
Regulatory MSME segment as any error in the same will render the accounts ineligible under the scheme.
( Detailed guidelines ref: BCC:BR:111/102 dt.26.02.2019)

10.16 Concession in MSME accounts

Every sanction letter should contain, applicable ROI as per Banks guidelines and concession allowed there on with
specific period of availability of concession.

Concession in the account shall stand withdrawn, ii any of the below mentioned adverse symptoms observed ln the
account:

 Financial Discipline, including cheque returns (more than 6) in the account due to financial reason.

 In case account moves to SMA- 1 category. ( Concession shall stand withdrawn for the period during which
account remains in SMA category along with additional penal interest being applied as per Bank norms)

 Degradation of External rating / CMR Rating ( if applicable)

 Degradation of Internal rating

 Current account opened with other bank without prior permission of the Bank.

 Turnover in the account is less than 80% from the level of sales. achieved on quarterly basis.

 Sanctioned terms and condition are not complied with.

Concession in interest rate on card rates can be allowed as per revised structure/guidelines conveyed vide circular
no.BCC:BR:111/288 dt.20.06.2019 on DLP.

10.17 ZED CERTIFICATION FOR MSME:

With the objective of supporting the ongoing effort of “ Make in India” campaign and the Hon’ble Prime Minister’s call
for Zero Defect Zero Effect, the ministry of Micro, Small and Medium Enterprises, Govt. of India launched the Financial
Support to MSMEs in ZED Certification scheme on 11.07.2016.

Under this scheme, the main aim is to enhance global competitiveness of MSMEs by providing them financial support
in assessment, rating and handholding. Quality council of India an autonomous body set up by Ministry of commerce
and industry has been appointed as the National Monitoring and Implementing Unit for this scheme.

There are -5- level of rating under the scheme:

 Bronze (Lowest)
 Silver
 Gold
 Diamond
 Platinum (Highest)

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 Based on the rating of a particular MSME unit the Government of India shall provide subsidy towards cost of
certification. Our Bank has also approved the concessional ROI for Gold / Diamond / Platinum category MSMEs.

Our Bank gives concessions to ZED certified MSME Units in processing charges(upto 25%) and in rate of interest upto
(25 bps) subject to certain conditions.

(Ref: circular number BCC:BR:111:454 dated 20.09.2019)

11.0 MSME – PRODUCTS AT A GLANCE

11.1 Government Schemes & Subsidies for MSME

11.1.1 Stand-up India Scheme

The objective of the Stand Up India scheme is to grant loan to SC/ST beneficiaries & women entrepreneurs for gainful
employment through income generation activities (In case of non-individual enterprises at least 51% of the
shareholding and controlling stake should be held by either an SC/ ST or woman entrepreneur).
The major features of the scheme are as under13 (Ref: BCC: BR: 108: 160 dated 02.04.2016):-

Particular Criteria
Limit Min:- More than Rs.10.00 Lakh ; Max :- Rs.100.00 Lakh
Composite loan inclusive of Working Capital component

Coverage Manufacturing, Services or the trading sector for setting up any new enterprise
Target per branch One Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman
borrower per Bank branch

Refinance The entire loan component would be eligible for refinance by SlDBl
Security The loan under Stand Up India scheme would be appropriately secured and backed by a
credit guarantee through a credit guarantee scheme for which National Credit Guarantee
Trustee Company Ltd (NCGTC) would be the operating agency.
The norms in this respect are aligned with existing CGTMSE norms.

11.1.2 DAY-NULM Scheme

Parameters Guidelines
About the scheme  Provides financial assistance to individuals/groups including street
vendors/hawkers of urban poor for setting up gainful self-employment
through Self Employment Program ( SEP ).
 The programme also supports Self Help Groups (SHGs) of urban poor to
access easy credit from Bank and avail interest subsidy on SHG
loans.
 The SEP will also facilitate issuance of credit cards for working capital
requirement of the entrepreneurs.
 The percentage of women beneficiaries under SEP shall not be less than 30
percent.SC/ST must be benefited to the extent of their proportion in the
city/town.
 A special provision of 3% reservation should be made for differently able
person..
 In view of Prime Minister’s 15 point program for the welfare of Minorities, at
least 15% of physical and financial target shall be earmarked for Minority
communities.

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 Selection of  The Community Organizers (COs) and professionals from Urban Local Body
Beneficiary (ULB) will identify the prospective beneficiaries from among the urban poor.
 The community structures formed under Social Mobilization & Institutional
Development (SM&lD) component of DAY- NULM viz. Self Help Groups
(SHGs) and Area Level Federations (ALFs) may also refer prospective
individual and group entrepreneurs for purpose of financial assistance under
SEP to ULB.
 Bank may also identify prospective beneficiaries at their end and forward such
cases directly to ULB.
 Bank may also use their BCs and Business Facilitators (BFs) .
 The Beneficiaries desires of seeking financial assistance for setting up of
enterprise can submit application to concerned ULB officials.
 A Task force constituted at ULB Level will scrutinize the applications based
on experience, skill and viability of activity.
 The chief executive officer /Municipal commissioner of ULB will be
responsible to constitute the task force.
 The Task force will then either recommend or reject case to case basis as per
merit.
 The case duly recommended by Task force will be forwarded by the ULB to
the concerned Bank for further processing.
 Case recommended by the Task Force have to be processed by the concerned
bank within 15 days .
 Banks may also directly accept the loan application of the Urban Poor
beneficiaries as per guidelines of PMMY without the need of having prior
sponsoring from ULP.
 The bank can send details of such loans sanctioned by them to the ULPs for
checking for confirmation of their eligibility for interest subsidy under DAY
NULM.
 On confirmation of the eligibility interest subsidy can be claimed from the
ULBs.
 The subsidy amount will be directly transferred to loan account of DAY-
NULM Beneficiaries.
Educational  No minimum qualification required.
Qualification and  However if the identified activity required some special skill, appropriate
Training Requirement training must be provided to the beneficiary before extending financial
support.
Follow-up  After financing to Individual and Group beneficiaries, the ULB will also
entrepreneurial arrange to conduct follow-up Entrepreneurship Development Programme
support to Individual (EDP) as and when required.
and Group  Such programme should preferably be conducted once in six months for each
Entrepreneurs beneficiary who has been given a loan.

Pattern of Financial Interest subsidy, over and above 7% rate of interest will be available on a bank loan for
Assistance setting up of individual or group enterprises. The difference between 7% p.a. and the
rate of interest charged by the bank will be provided to banks under ‘DAY-NULM'.
Interest subsidy Will be given only in case of timely repayment of loan. Suitable certification from banks
will be obtained by the ULB in this regard.
An additional 3 percent interest subvention will be provided to all Women Self Help
Groups (WSHGs) who repay their loan in time and suitable certification will be
obtained from banks by the ULB.
Procedure for interest After disbursement of loan to the beneficiaries, the concerned branch of the bank will
subsidy to Banks send details of disburse loan cases to ULB along with details of interest subsidy amount.
Procedure 1:
The settlement of claims made by the Banks will be done by the ULB on Quarterly basis.
However the submission of claims should be on monthly basis.
The claims should not be pending more than a quarter. In case the claims of the banks
are not settled for a period of 6 months, SLBC is empowered to stop the scheme
temporarily in selected cities subject to clearance of claims by such ULBs

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 Procedure – ll
Nodal Agency for releasing interest subsidy: A public sector bank may be engaged by
each state as nodal bank in consultation with the convener of the respective State Level
Bankers Committee (SLBC)' All the Banks will consolidate data regarding interest
subsidy from their branches and upload on the portal Nodal Bank. The nodal bank,
after verification, will transfer the interest subsidy to the bank branches.

Individual Enterprises The norms /specification of Individual Micro Enterprise Loans :

(SEP-l)-Loan &  Age: Minimum 18 years at the time of applying for loan.
Subsidy  Project Cost: Maximum Rs.200000.00
 Collateral Guarantee on Bank Loan: No collateral required.
 Repayment: Between 5 to 7 years after initial moratorium of 6-18 months as
per norms of the banks.
 Margin Money:Up to Rs.50000.00 Nil
 For higher amount preferably 5% should be taken Margin Money and it should
in no case be more then 10% of the project cost.
 Type of Loan Facility: Term Loan and working capital through Cash Credit
Facility. Also Composite loan depending upon the requirement of borrower.
Group Enterprises The norms/ specifications for group based micro-enterprise loans are as follow:
(SEP-G)- Loan & Eligibility Criteria :
Subsidy Should have minimum 3 member with a minimum of 70% of members from urban poor
families. More the 1 member from a family should not be included in the same group.
Age: All member should have attained Minimum 18 years at the time of applying for
loan.
Project Cost: Maximum Rs.2.00 Lacs per member or Rs.10.00 lacs per group,
whichever is lower.
Type of Loan Facility:
Term Loan and working capital through Cash Credit Facility. Also Composite loan
depending upon the requirement of borrower.
Margin Money:
Up to Rs.50000.00 Nil
For higher amount preferably 5% should be taken Margin Money and it should in no
case be more then 10% of the project cost.
Repayment: Between 5 to 7 years after initial moratorium of 6-18 months as per norms
of the banks.
Collateral Guarantee on Bank Loan:No collateral required.
Only the assets created would be hypothecated/ mortgaged/ pledged to banks for
advancing loans.

Type of Loan Facility: SHGs can avail Term Loan or Cash Credit Facility or both based on their need.
Additional loan can also be sanctioned in case of need even though the previous loan is
outstanding

11.1.3 Mudra Scheme (PMMY)

The Pradhan Mantri Mudra Yojana or PMMY is a flagship scheme of the Government of India to extend affordable
credit to micro and small enterprises.Mudra loans are designed to bring enterprises into the formal financial system,
or to “fund the unfunded”. Loans under PMMY scheme are available to non-farm micro or small enterprises engaged
in income generation through manufacturing, trading and services. Enterprises involved in allied agricultural activities
can also apply for Mudra loans.

Benefits: The Mudra loan scheme offers credit facilities to micro and small enterprises engaged in income
generation.One of the key benefits of a Mudra loan is that borrowers are not required to provide security or collateral.
Additionally, there are no processing charges on Mudra loans.

The credit facilities extended under the PMMY can be for any type of fund or non-fund based requirements. Hence,
borrowers can use the Mudra loan scheme for a variety of purposes. The credit from Mudra loans can be used for term

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 loans and overdraft facilities, or to apply for letters of credit and bank guarantees.There is no minimum loan amount
for Mudra loans.

There are three types of Mudra loans depending on the loan amount:

Shishu: Loans sanctioned under the PMMY scheme up to Rs.50000

Kishore: Loans sanctioned under the PMMY scheme from Rs.50001 up to Rs.5.00 lakh
Tarun: Loans sanctioned under the PMMY scheme Rs.5,00,001 up to Rs.10.00 lakh
While there is no minimum loan amount under the Mudra loan scheme, the maximum loan amount that can be taken
under the PMMY is Rs.10 lakh.

Borrowers don’t need to pay processing charges or offer collateral if they avail a Mudra loan. As per the PMMY scheme,
the Mudra loan can not only be offered to enterprises in the non-farm sector but also can include those engaged in allied
agricultural activities, such as horticulture and fisheries.The interest rate on Mudra loans is determined by the Marginal
Cost of Lending Rate or MCLR, which is calculated according to the RBI guidelines

Eligibility

All “Non-farm enterprises”under “Micro Enterprises” and “Small Enterprises” segmentengaged in “income generating
activities”/ engaged in “manufacturing, trading and services“ andwhose “credit needs are up to Rs.10.00 lacs”.Now
allied agriculture activities have also been included under PMMY scheme w.e.f. 01.04.2016.

Interest and Charges

Limits Micro Enterprises Small Enterprises

Up to Rs.50000/- MCLR+SP (MCLR+SP)+0.50%

Above Rs.50000/- to Rs.2.00 lacs (MCLR+SP)+0.50% (MCLR+SP)+0.70%

Above Rs.2.00 lacs to Rs.10.00 lacs (MCLR+SP)+0.70% (MCLR+SP)+0.85%

All PMMY account opened under the scheme code LA520, LA521, LA522, CC017,CC018, CC0247, OD020 & OD021 will
be covered under CGTMSE coverage. Only standard account will be accepted for coverage. Note once the account
covered under CGTMSE the account must be standard for at least 6 months after coverage. (BCC:BR:111:270 dt.
10.06.2019)

As per circular no. BCC:BR111:491 dated 30.09.2019, It has been decided to implement Baroda Repo Lending Rate
(BRLLR) from 1sl October 2019 for Micro and Small Enterprises and the same will be applicable as under:

a) Loan proposals sanctioned on or after 01-10-2019, and

b) Loan Proposals sanctioned on or before 30-09-2019 and pending for'1'' disbursement as on 01-10-2019
(letter i Undertaking to be obtained as per annexure-'l)
c) Rate of lnterest for Medium and Expanded shall continue to be linked with MCLR
d) ln case of existing borrowers in Micro and Small Enterprises borrowers are provided with an option to
migrate to BRLLR and detailed guidelines being issued separately.

All units are advised to feed appropriate lending rate in LLPS and select interest table code in Finacle to fetch BRLLR
option. With regard to implementation of external bench mark based lending rate i.e. Baroda repo linked lending rate
(BRLLR) for all new floating rate MICRO and Small Enterprise loans, Bank has also provided circular number
BCC:BR:111:490 dated 27th September 2019 issued by Risk Management Dept.

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 11.2 Credit Guarantee Fund Trust Scheme for Micro & Small Enterprises (CGTMSE)

Eligibility:
New and existing Micro and Small Enterprises engaged in manufacturing or service activity, satisfying the criteria
specified in MSMED Act 2006 with effective ROI on the Credit facility shall not be more than RBI guidelines but
excluding Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions etc.

Credit facilities above Rs.50 lakh and up to Rs.200 lakh will have to be rated internally and should be of investment
grade.

Retail Trade:
1st Year 2% of the guaranteed amount
2nd Year 2% of the outstanding amount

Limit:
 Credit Exposure should be minimum Rs.0.00 and maximum of Rs.100 lakh per MSE borrower.

Guarantee Cover: 50%

Annual Guarantee Fee:Other than Retail Traders:

Limit:
 Maximum Rs.200 lakh per borrower with partial collateral security and without third party guarantees

Not to be regarded as Third Party:

 Proprietorship or Partnership - personal guarantee of Proprietor/partner

 Company - Personal guarantee of Director

Primary security:
 Asset created out of the credit facility or directly associated with the business / project.
 Collateral security: Any other security which is not created out of the credit facility

Hybrid Security:
 Guarantee cover for the portion of credit facility not covered by collateral security up to a maximum of Rs.200
lakh for fresh credit facilities sanctioned on or after April 01, 2018.CGTMSE will, however, have second charge
on the collateral security provided by the borrower for the credit facility.

Tenure:
 Term Loan / Demand Loan: Repayment Period
 Working Capital: 5 years
 Composite Limit: Repayment Period of Term Loan

Mandatory Update on CGTMSE Portal

PAN Number : for Udyog Aadhaar Number Renewal of Application Processing ->Guarantee For ->
Limit above 5 lakh (UAN) Expired WC Renewal of Cover for WC
Enhancement Application Processing -> Guarantee For ->
of Working Enhancement in WC
Capital
Coverage of Application Processing -> Guarantee for ->
Additional Additional Term Loan
Term Loan

For Loan sanctioned on or after 01.04.2018:

Credit Facility Annual Guarantee Fee (AGF) [% p.a.]*

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 Women, Micro Enterprises and Units covered Others
in North East Region

Up to 5 Lakhs 1.00 + Risk Premium as per extant guidelines of the Trust

Above 5 Lakhs 1.35 + Risk Premium as per extant guidelines of 1.50 + Risk Premium as per extant guidelines
and up to 50 the Trust of the Trust
Lakhs
Above 50 1.80 + Risk Premium as per extant guidelines of the Trust
Lakhs and up
to 200 Lakhs
Retail Trade
Rs.10 lacs to 2.00% + Risk Premium as per extant guidelines of the trust.
Rs.100 lacs
*AGF will be charged on the guaranteed amount for the first year and on the outstanding amount for the remaining
tenure of the credit facility.

(1) Risk premium on NPAs in (2) Risk premium on ClaimPayout Ratio

Guaranteed portfolio
NPA Percentage Risk Premium Claim Payout Risk Premium
Percentage
0-5% SR 0-5% SR
>5-10% 10% of SR >5-10% 10% of SR
>10-15% 15% of SR >10-15% 15% of SR
>15-20% 20% of SR >15-20% 20% of SR
>20% 25% of SR >20% 25% of SR
SR–Standard Rate

For Loan sanctioned before 01.04.2018:

Credit Facility Annual Guarantee Fee (AGF) [% p.a.]
Women, Micro Enterprises and units in Others
North East Region (incl. Sikkim)
Upto .5 lakh 0.75 1.00
Above .5 lakh and 0.85 1.00
upto .200 lakh

Entire fees, initial as well as Annual Guarantee fee, to be collected from the borrowers irrespective of the limit, gender
and scheme. (BCC:BR:111:254 dt 01.06.2019)

Process Flow of CGTMSE:

Hence irrespective of whether the borrower is paying or the bank is paying the entire guarantee fee shall be routed
through P/L CGTMSE fee Paid Account (Finacle A/C No. XXXX0054401003) only. Further CGTMSE will raise invoice
only on Bank of Baroda and not on borrowers as we are the clients for CGTMSE and not the borrowers. Hence the

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 payment of fees shall be through VENPAY menu and to the debit of above said P/L Account only (i.e.) even in cases
where the entire fees is borne by the borrower. The detailed process flow is given in BCC BR 110 127 dated 16.03.2018.

Following two risk premiums have been introduced over and above the above mentioned guarantee fee structure:
(1) Risk premium on NPAs in Guaranteed (2) Risk premium on Claim Pay-out Ratio of the
portfolio of the Bank bank
NPA Percentage Risk Premium Claim Pay-out Risk Premium
Percentage
0-5% SR(Standard Rate) 0-5% SR(Standard Rate)
>5-10% 10% of SR >5-10% 10% of SR
>10-15% 15% of SR >10-15% 15% of SR
>15-20% 20% of SR >15-20% 20% of SR
>20% 25% of SR >20% 25% of SR

Lodgement / Settlement of Guarantee Claim:

Guarantee can be invoked (claim can be lodged) with the TRUST for 1stinstalment of guaranteed amount whenDues
covered under CGTMSE classified as Non-Performing Asset

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 15.01.19, Marking with trust be done prior to 30.06.19.
Lock in period is -18- month’s period from Date of Ist premium payment /guarantee start date or last date of
disbursement in case of term loan, whichever is later.

The Trust shall pay 75 per cent of the guaranteed amount on preferring of eligible claim, within 30 days, subject to the
claim being otherwise found in order and complete in all respects.

The Trust shall pay to the lending institution interest on the eligible claim amount at the prevailing Bank Rate for the
period of delay beyond 30 days. For Loans sanctioned after 01/012003, The rest 25 percent will be paid by the Trust
on completion of the recovery proceedings / three years from date of obtention of decree. Whichever earlier.

Bank has developed new menu in Finacle to lodge the details of claims lodged with CGTMSE using CLAIMTRN menu.
(Ref: circular number BCC:BR:111:464 dated 20.09.2019)

Our Bank’s MSME Products

Our bank is having following products MSME sector across the country apart from area specific schemes/products:

Sr. No. NAME OF THE PRODUCT

1. SME SHORT TERM LOAN (ONLY TO EXISTING BORROWERS)-

BCC:BR:109:119 DATED 28.02.2017
2. SME MEDIUM TERM LOAN (ONLY TO EXISTING BORROWERS)-
BCC:BR:109:119 DATED 28.02.2017)
3. BARODA VIDYASTHALI-BCC:BR:111:132 DATED 12/03/2019
4. BARODA AROGYADHAM-BCC:BR:111:131 DATED 12/03/2019
5. BARODA SCHEME FOR PROFESSIONAL-BCC:BR:111:127 DATED 12/03/2019
6. BARODA SME LOAN PACK- BCC:BR:109:119 DATED 28.02.2017
7. MSME CAPEX CARD & CAPEX LOAN
8. BARODA LOAN FOR RESTAURANTS-(BCC:BR:111:135 DATED 12/03/2019)
9. PMEGP LOAN (BCC:BR:108:540 DATED 16/11/2016)
10. BARODA E BUSINESS PACK
11. BARODA CONTRACTOR SCHEME(BCC:BR:111:128 DATED 12/03/2019)
12. BARODA PROPERTY PRIDE-BCC:BR:111:126 DATED 12/03/2019

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 13. BOB LAGHU UDHYAMI CREDIT CARD (ONLY TO EXISTING BORROWERS )- BCC:BR:109:119 DATED
28.02.2017
14. NHFDC REFINANCE-COLLATERAL FREE LOAN FOR SELF EMPLOYMENT WITH DISABILITY
15. SCHEME FOR FINANCING PERSON WITH DISABILITIES- EDUCATION LOAN
16. BARODA GST RECEIVABLE CARD FOR MSME ENTREPRENEURS-
BCC:BR:111:172 DATED 04/04/2019
17. AREA SPECIFIC SCHEME FOR CONTRACTOR – MUMBAI- BCC:BR:111:229 DT 17/05/2019
18. EXTENSION OF SCOPE OF COMMERCIAL VEHICLE FINANCE TO THREE WHEELER SEGMENT
(BCC:BR:111:299 dt 27.06.2019)
19. BARODA SME GOLD CARD SCHEME - BCC:BR:109:119 DATED 28.02.2017
20. BOB ARTISAN CREDIT CARD (ONLY TO EXISTING BORROWERS )-
BCC:BR:109:119 DATED 28.02.2017
21. BOB WEAVERS MUDRA SCHEME- BCC:BR:109:119 DATED 28.02.2017
22. BOB MSE GENERAL CREDIT CARD-BCC:BR:111/136 DATED 12/03/2019
23. SCHEME FOR FINANCING SME BORROWERS FOR PURCHASE OF NEW VEHICLES
24. COMPOSITE LOAN- BCC:BR:109:119 DATED 28.02.2017
25. MSME CAPEX CARD & CAPEX LOAN- BCC:BR:109:119 DATED 28.02.2017
26. BARODA LOAN TO BUSINESS CORRESPONDENTS
(BCC:BR:110:369 DATED 21.07.2018 AND BCC:BR:110:367 DATED 19.07.2018)
27. CPMMERCIAL VEHICLE FINANCE PRODUCT PROGRAMME-
BCC:BR:111:133 DATED 14/03/2019
28. VENDORS BILL DISCOUNTING PRODUCT FOR VENDORS, SUPPLIERS OF LARGE REAL ESTATE
DEVELOPERS'-(BCC:BR: 110:138 DATED 17.03.2018)
29. BILL/ INVOICE DISCOUNTING UNDER VALUE CHAIN –
BCC: BR: 111/172 DATED 04/04/2019.
30. BARODA OVERDRAFT E-COMMERCE PRODUCT TIE UP WITH FLIPKART (BCC:BR:110:373 DATED
24.07.2018)
31. BARODA OVERDRAFT E-COMMERCE PRODUCT –TIE UP WITH AMAZON
(BCC: BR: 110:170 DATED 28.03.2018 AND BCC: BR: 109/125 DATED 09/08/2017.
32. SUPPLY CHAIN FINANCE PRODUCT(BCC:BR:111:05 DATED 02/01/2019)
33. BARODA E-BUSINESS PACK (BCC:BR: 109:346 DATED 12.07.2017)
34. FINANCE TO TEXTILE UNITS (BCC:BR:110:505 DATED 04.10.2018)
35. BARODA BUDGET SMARTZ ( BCC:BR:110:612 DATED 13.12.2018 )
36. BARODA TANKERZ ( BCC:BR: 110:576 DATED 28.12.2018 )
37. BARODA STAYZ (BCC:BR:110:555 DATED 01.11.2018)

BARODA SME SHORT TERM LOAN

TO MEET TEMPORARY LIQUIDITY SHORTFALL/ MISMATCH IN THE LINE OF

BUSINESS ACTIVITY. THIS FACILITY IS NOT TO BE EXTENDED FOR OTHER
PURPOSES LIKE REPAYMENT OF LOANS OF OTHER BANKS OR INSTITUTIONS,
PURPOSE UNSECURED LOANS ETC.

MSMES IN REGULATORY AND EXPANDED.

BORROWER EXCLUSION SECTORS: REAL ESTATE SECTOR, POWER SECTOR, EDUCATION SECTOR
GROUP IT SECTOR.

SATISFACTORY CREDIT RATING (BOB-5 AND ABOVE) WITHOUT CONTINUOUS

DECLINE FOR THE LAST THREE YEARS AND FOR 4 HALF YEARS FOR ACCOUNTS
ELIGIBILITY WHERE CREDIT RATING IS DONE ON HALF YEARLY BASIS.
CRITERIA LATEST FINANCIAL DOCUMENTS WITH SATISFACTORY PERFORMANCE.

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 SATISFACTORY DEALINGS WITH THE BANK FOR AT LEAST THREE YEARS WITHOUT
ANY MAJOR INSPECTION/AUDIT IRREGULARITIES

 MIN. -Rs.10.00 Lakh, MAX. – Rs..250 Lakh

LOAN  NOTE: ADHOC FACILITY AND SHORT TERM LOAN CANNOT BE
AMOUNT CONCURRENT

PERIOD 12 MONTHS INCLUDING MORATORIUM PERIOD.

SME MEDIUM TERM LOAN

Purpose To augment enterprises’ working capital gap and to help in improvement of current ratio
and also for meeting genuine business requirements. The facility will also be available for
repayment of secured and unsecured Loans of other banks or institutions, but not for any
purpose, which is not related to the enterprises activity.

Borrower Group MSMEs in Regulatory and Expanded.

All other entities with their annual sales turnover of Rs. 1/- crore to Rs. 250/- crores. In
case of new projects, where the estimated sales turnover in the first full year of
commercial operation (12) months is up to Rs. 250 crores. For real estate projects, where
project cost is up to Rs. 50 crores.

Eligibility Satisfactory credit rating without continuous decline for the last three years and for 4 half
Criteria years for accounts where credit rating is done on half yearly basis.
Latest financial documents with satisfactory 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 without any major
inspection/audit irregularities.

Min-Rs.25 Lakhs,
Loan amount Max-Rs.500 Lakhs

Period Not exceeding –36- months, to be repaid in equal quarterly or half-yearly instalments.

As per credit rating for the additional Loan to be granted under the Scheme.
Rate of interest Prepayment penalty of 1%, if loan is prepaid within -24- months of draw down.

BARODA VIDYASTHALI LOAN

BCC:BR:111:132 dated 12/03/2019

Target Group Educational institutions, Schools, Colleges and other Note

education bodies running education activities HUF are not eligible.

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 Limit For Term Loan For Overdraft
Minimum Rs.25 lacs, Maximum Rs.15 crores.
Rs.25 crore for Mumbai, Greater Mumbai, Delhi-NCR, Minimum- Rs.25.00 lac
Bangalore, Hyderabad
Maximum-Rs.3.00 Crore (Rs.5.00
Crore for Mumbai, Delhi-NCR,
Bangalore, Hyderabad) or 60 % of the
total expected fees collections,
whichever is less.

Purpose To meet the financial requirements for setting up the Play school Exposure should be
institutions which includes construction of building, limited to Zee School, Euro Kids,
purchase of equipment etc. for the new set up as also Kidzee, World school.
renovation of the existing facilities, purchase of
instruments for imparting education training to the Vehicles Can be financed under the
students scheme for the use of the
institutions(Guidelines as per CV
product)
Security (Any Equitable mortgage of Land & Building (not Personal Guarantees of the Promoters
deviation in agricultural land). of the Institution should be taken.
Collateral
coverage Hypothecation of Instruments & Equipment acquired
condition or out of the loan and other assets of the Educational
waiver of Institution.
personal Credit facilities up to Rs. 5 crore Collateral security level should be at
guarantee will least 60 % by way of immovable
be under securities/Liquid securities
authority of ED When credit facilities exceed Rs. 5.00 Crore Collateral security level should not be
only) less than 40 % by way of immovable
securities/Liquid securities.
Existing schools with more than 5 years establishment Collateral security to be minimum 25
and 1000 students, progressive financials %
Margin 25% of the cost of the project.
Repayment Maximum 84 months including moratorium period of
Period 2 year, depending upon the projected cash flow.

Financial ratio DE ratio(TTL/TNW) 3:1(Max)

DE ratio(TOL/TNW) 4.5:1(Max)
DSCR(for TL) Avg-1.75 and Min-1.25
Rate of Interest Credit facilities up to Rs. 5 crore ROI is linked to CMR

When credit facilities exceed Rs. 5.00 Crore ROI is linked to CR

Activity Up to Rs.1 Crore Regional Head
Clearance Above Rs.1 crore to Rs.5.00 Crore Zonal Head
Above Rs.5.00 Crore ED

Activity Clearance guidelines are not applicable for vehicle finance

BARODA AROGYADHAM
(BCC:BR:111:131 DATED 12/03/2019)

Eligibility All MSMEs in Regulatory and Expanded.

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 Exclusion: Real Estate Projects are not eligible
Promoters /owners should not be HUF.
Note: At-least one of the Promoters/ Director ( non-individual) / Doctors should have requisite
qualification in any branch of medical science.

Setting up/ Purchase of ready possession of new Clinic/Hospital etc.

Expansion/renovation/modernization of existing Hospitals/facility.
Purchase of new medical diagnostic equipment/office equipment’s.
Purpose To meet working capital requirements including stock of medicines.

Nature of
facility Demand / Term Loan, Overdraft, L/C, B/G

Minimum Rs. 0.05 Crores Maximum (Rs. In Crores)

Rural 0.25

Semi Urban 6.00

Urban 12.00

Metro 30.00
Limit

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 I, D & T) not to be below 10% of sales.
Financial  Minimum Interest coverage Ratio should be 2.
Ratios  Current Ratio (excluding TL instalment) minimum 1.00 (only for WC cases)

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

CIBIL condition as per below:
For Individual, score should not be below 700. 0 or -1 can be considered.
For Non-individual, CMR ranking should not be below the rank of CMR -6.
Other
imp. Collateral free loans up to Rs. 200/- lacs are eligible for guarantee cover under CGTMSE.
conditions Credit rating not less than ‘BOB 6’ as per CRISIL model.

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 BARODA SCHEME FOR PROFESSIONAL
BCC:BR:111:127 dated 12/03/2019

Target Group Professionals in any discipline viz The Borrower Should possess a professional
.Doctors, Engineers, Architects, Degree/Diploma in his/her Specialised Field from a
Interior Designers, Photographers, recognised University/Institute
Financial Consultants (CA/ICWA/CS), Minimum ITR-Taxable income of Rs.2.5 lac.
and Advocates, Dentists and specialized Minimum experience-03 year
qualified service providers Minimum Bureau score-700
.Proprietorship/Partnership/Pvt
/public. Ltd. Companies
Nature of Term loan/Demand Loan/Cash Credit/Non Fund based facilities
Facility
Limit Minimum Rs.5.00 lacs(For Rural and Semi Urban Areas) and Rs.10.00 Lacs(For Urban and metro
Branches)
Maximum-Rs.5.00 crore
Purpose Working Capital Requirement
Purchase of Equipment, Expanding/Renovating Business premises.
Non-fund based facilities ( Bank Guarantee and Letter of Credit)
For construction of Office premise on self-owned Land.
Collateral For loans up to Rs. 10.00 lac No collateral Security should be insisted, CGTMSE
security coverage to be obtained.
(Realisable For loan up to Rs.2.00 Crore CGTMSE coverage to be obtained where Collateral is not
value of the sufficient to cover the exposure. CGTMSE fee to be borne
property to be by the borrower.
taken into Credit facilities above Rs. 2 crore Mandatory collateral security should be 40 % of the loan
account.) amount, Where land is not a primary security and where
land is one of the primary security, overall hard security
should be 75 % of the loan amount.

Margin For Cash Credit 25% against stocks & Book Debts up to 90 days only
For Term Loan/Demand Loan 30 % on Land and Building
25% on Plant and Machinery (New)
For non-fund based limits : Cash Margin on guarantee
and L/C facility – 20% minimum.

Repayment Maximum 84 months including moratorium period. interest to be served every month
Period
Method of For working capital facility: As per First Method of Lending or 20% of turnover
Assessment whichever is higher for limits up to Rs.500.00 lacs,
For TL/DL TL/DL for purchase of land & building/Plant and
Machinery taking into consideration margin of 20% for
plant and machinery and 25% for land and building
repayable in 7 years (including moratorium), based on
the cash flow projections.)
Rate of Interest To be linked to CMR ranking circular However additional risk premium of 0.25 % would be
BCC:BR:110/304 dated 11/06/2018 charged over and above the applicable rate based on
CMR based pricing.

Scheme code MSME Baroda Loan to professional LA022

MSME Baroda OD to professional OD040

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 Processing Fees For New Account As per Circular no HO:BR:111/40 dated 18/02/2019

For Review 50 % Concession can be granted in applicable processing

charge in term loan at the time of review of Facilities ,
provided there is timely repayment in the past 12
months(i.e Account not falling under SMA 1 and SMA 2)
Other condition TEV study As per Bank’s guideline

Financial Ratios As per the Global credit exposure Management Policy

BARODA SME LOAN PACK

All Enterprises, i.e. Micro, Small & Medium Enterprises, as defined under MSMED Act, 2006,
and other entities with annual sales turnover up to Rs. 150/- crores exclusively banking with our
Eligibility bank/new borrowers desirous of having sole banking arrangement with our bank.

To provide hassle free credit for working capital (fund based and non-fund based) as also long
term requirements, taking into account nature of business, cyclical trends, cash flow projections,
peak time requirements and any eventuality of unforeseen spurt in the business.
Purpose

4.5 times of borrower tangible net worth as per last audited Balance Sheet, or, Rs. 5.00 Crores,
whichever is lower?
Limit

Margin 25 %

MSME CAPEX CARD & CAPEX LOAN

Eligibility MSME borrowers (Regulatory) and SME (Expanded) rated BOB-5 and above.
The manufacturing/service sector units should have been established in the line of activity for a
minimum period two years, Account running with satisfactory dealings for last one year & above
and No adverse features are reported in conduct of account.

Purpose The loan to be considered for the following capital expenditure related with the regular business
activity
Replacement of old machinery.
Purchase of balancing equipments
Modernization.
Investment in Research and Development.
Installation of captive power plants and Upgradation of technology.
Alteration in lay out of factory/office.
Acquisition of software, hardware, and tools, jigs, fixtures etc. forming part of Plant &
Machinery.
Purchase of cars, passenger cars for staff and other vehicles for use of business purpose.

15% of Plant & Machinery for MSME(Mfg.) and 25%for Services sector outstanding as per last
Audited Balance Sheet or 10% of the working capital whichever is higher based on DSCR and
subject to cap -
Limit Baroda MSME Capex card: Min. 25 lacs and Max Rs. 5.00 Crores.

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 Baroda MSME Capex Loan: Min 25 lacs and Max Rs. 2.00 Crores.
Average Gross DSCR inclusive of the repayment liability under the proposed STL should not be
less than 1.75. In any year it should not be less than 1 for MSE Borrowers and 1.25 for Medium
& SME Expanded Borrowers.
The facility to be made available as Fund Based / or Non-Fund Based Limits (i.e. including
establishment of LCs) ensuring that aggregate exposure does not exceed the overall limit.

Margin Land & Building - 30%

Plant & Machinery - 25%

BARODA LOAN FOR RESTAURANTS

(BCC:BR:111:135 DATED 12/03/2019)
Purpose Acquiring premises & renovation/modernization of existing premises and interior decoration of
restaurant (Non-lodging, non-boarding).
Purchase of Kitchen equipment/Furniture & fixtures.
Meeting working capital needs.
ELIGIBILITY Individuals /Sole Proprietorship/Partnership and company or any other such business entity.

Restaurants under franchisee model may be taken on merits.

Quantum of Term loan
Loan Minimum Limit -: Rs.5.00 Lac
MaximurnLimit -: Semi - Urban Rs 50.00 Lacs, Urban Rs. 100.00 Lacs, Metro Rs.500.00 Lacs.

Working Capital
Minimum Limit - Rs.1 Lac
Maximum Limit - Semi - Urban Rs 5.00 Lacs, Urban Rs 10.00 Lacs Metro Rs 50.00 Lacs
Margin 25% for Kitchen equipment/Furniture & fixtures.

35% for purchase/construction/expansion/renovation/modernization of premises and interior

decoration.
Rate of To be linked to CMR ranking BCC/BR/110/304 dated 11.06.2018. However, additional risk premium
interest of 1.OO% (100 basis points) would be charged over and above the applicable rate based on CMR based
pricing.
Assessment of 20 % of the accepted projected turnover is eligible for working capital limit.
finance 75% of the cost of assets purchased.

65% for purchase/construction/expansion /renovation/modernization of premises.

Repayment Term loan-84 months
period
Working Capital-12 months

PMEGP LOAN (BCC:BR:108:540 DATED 16/11/2016)

Purpose Prime Minister’s Employment Generation Programme (PMEGP) is a credit linked subsidy programme
administered by the Ministry of Micro, Small and Medium Enterprises, Government of India. Khadi
& Village Industries Commission (KVIC), is the nodal agency at national level for implementation of
the scheme. At state level the scheme is implemented through KVIC, KVIB and District Industries
centre.
Eligibility  The scheme is applicable to all viable (technically as well as economically) projects in rural
as well as urban areas, under Micro enterprises sector.
 The maximum cost of the project admissible under manufacturing sector is Rs.25 lakhs and
business/services sector is RS.10 lakhs.
 Only one person from family is eligible for obtaining financial assistance under the scheme.
 Assistance under the Scheme is available only for new projects
 The assistance under the scheme will not be available to activities indicated in the negative
list under the scheme.

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  Any individual, above 18 years of age
 The beneficiaries should have passed at least VIII standard, for setting up of project costing
above Rs.10 lacs in the Manufacturing Sector and above Rs. 5 lacs in the business /Service
Sector,
 Self Help Groups (including those belonging to BPL provided that they have not availed
benefits under any other Scheme).
 Institutions registered under Societies Registration Act,1860
 Production Co-operative Societies
 Charitable Trusts.
Margin Subsidy from KVIC and the bank finance depends on the cost of project as per details given below :

Subsidy from KVIC

Bank Urban Rural Promoter's

finance area area contribution

General Category beneficiary

/ institution 90% 15% 25% 10%

Special category
beneficiary/institution 95% 25% 35% 5%

BARODA E BUSINESS PACK

Eligibility Minimum -02- years in existing business activity/ies with minimum 10% of the total sales of
last 6 months should be by way of digital mode and the Firm / Company must be profit
making (Cash Profit) for the last two years.
Purpose Cater to the needs of finance of firms / companies / undertaking digital as well as non-digital
transactions of MSME Service sector and retail trade units.
Linkage with POS machine / OR Code / UPI based app / payment gateway for digital
transactions.
Type of Facility Overdraft / Demand Loan / Term Loan / Composite Loan for Working capital requirement /
financing capital expenditure to MSME Regulatory.
Limit For working capital and Term Loan Maximum up to Rs.500 Lac (Out of which Term Loan
Limit will be maximum up to Rs.100 Lac)
Period Overdraft: 12 months
Demand loan / Term Loan: Maximum repayment period shall be up to 60 months (including
maximum moratorium period of -06- months)
Margin Working capital: Minimum 6.25% on projected / accepted non-digital turnover and 7.50% of
the portion of turnover which is projected to be digitally transacted.
Demand Loan / Term Loan: 25%
Other Guidelines for No collaterals are to be obtained for limits up to Rs.10.00 lacs and all eligible loans will be
Borrowers under covered with NCGTC guarantee scheme under PMMY loans (Pradhan Mantri Mudra Yojana).
Micro & Small Credit limits above Rs.10.00 Lac to Rs.200.00 Lac to other beneficiaries engaged in the
Segment activities of service sector (other than Retail Traders activity) will be collateral free and
eligible loans will be covered with CGTMSE guarantee scheme.

BARODA CONTRACTOR SCHEME

(BCC:BR:111:128 dated 12.03.2019)

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 Purpose: To provide working capital assistance (fund based / non fund based) in the form of running
limit (overdraft), Inland / Foreign Letter of Credit, Bank Guarantee for meeting working
capital needs to the existing and prospective contractors / sub-contractors.
Eligibility: MSME units engaged in contractor / sub-contractor activity and falling within the meaning
of Micro, Small & Medium Enterprises as per Regulatory definition and all other entities with
annual sales turnover up to Rs. 250/- crores.
Margin: OD: 25% BG / LC: 20%

Limits: Minimum: Rs. 10.00 lacs, Maximum: Rs. 30.00 crores (Including FB and NFB) up to 25 %
Inter-changeability from FBWC limit to BG / LC may be permitted by the sanctioning
authority on merits provided collateral security for FBWC limit does not fall below 100 % of
FBWC limit. (BCC:BR:111:231 dt 22.05.2019)
Rate of Interest Upto Rs 5 00 crores would be linked to CMR Ranking as per circular BCC/BR/110/304 dated
11.06.20'18. However, additional rik premium of 0.50% (50 basis points) would be charged
over and above the applicable rate based on CMR based pricing.
For exposure above Rs.5.00 Crores rate of interest would be applied based on Composite
ratinq (CR).
BARODA PROPERTY PRIDE SCHEME
Target Group Micro, Small and medium Enterprises - as per regulatory
and non - regulatory definition in Manufacturing, Services and trading activity.

HUF as a Proprietor/Partner/LLP & public Limited Companies are not eligible.

(Real Estate projects and educational institutes are outside the purview of the scheme)
Eligibility Minimum Age-20 years. Maximum Age-65 years at the time of end of the tenure of the loan. . The
business units should be profit making for the last 2 years.
Nature Facility Overdraft / Term Loan / Non Fund Facility
Purpose Overdraft: Working capital requirements.
Term Loan;

For Traders –
Development of shop
(Purchase of equipment, Computer, Air-Conditioner, Furniture etc.:. but not for purchase of shop,
subject to a maximum of 25% of the working capital limit sanctioned.

For other units –

Purchase of plant and machinery/ Equipment; repair/renovation of factory land and building;
other incidental CAPEX as per business needs. (Greenfield projects not to be Covered).

Non-fund based facilities (Letter of Credit & Bank

Guarantee):
Limit Minimum
Rs.2.00 Lacs (Rural/ Semi Urban Branches)
Rs.5.00 Lacs (Urban / Metro Branches
Maximum:
- Metro branches : Rs.10.00 Crores
- Urban branches : Rs.5.00 crores
- Semi Urban branches : Rs.3.00 crores
- Rural branches : Rs.1.00 Crores
Rate of Interest Up to Limit of Rs 5.00 Crores.

ROI would be linked to CMR ranking circular BCC/BR/110/304 dated 11.06.2018.

For limit of Rs. 5.00 Crores and above:

The pricing is linked with Internal Risk Rating.

Assessment of Credit limit up to Rs. 5.00 Crore
Working capital Maximum 25 % of accepted projected sales or Advance value of property to be charged whichever
Limit is lower.

Credit Limit above Rs. 5.00 Crore

As per MPBF first Method or Advance value of property to be charged whichever is lower.

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 Term Loan for development of shop:
Need based Finance to be considered as per requirements subject to a maximum of 25% of the
total working capital limit availed including any other WC availed from other Fls.
Repayment Loan Maximum 60 months (depending on Repayment capacity
Period Overdraft: 12 months, subject to annual review.
Security & 40% on Realization Value of Residential or commercial property.
Margin 10 % on bank’s own FDR
15 % on the surrender value of LIC policies if the maturity is within a period of 3 years
20 % on the surrender value of LIC policies if the maturity period is 3 years and above.
15 % on the face value of NSC/KVP/Government Bonds if the residual maturity is within a period
of 3 years
20 % on the face value of NSC/KVP/Government Bonds if the residual maturity period is 3 years
and above.

BARODA LAGHUUDYAMI CREDIT CARD

(BCC:BR:111:129 dated 12.03.2019)
Purpose To meet the credit requirements of Small business units, retail traders, artisans, village
industries, small scale industrial units and tiny units, professionals and self-employed
persons, etc.,.
Eligibility: The scheme is applicable to all existing customers under MSE sectors, who are dealing with
us for the last three years satisfactorily and enjoying loan/operative limit up to Rs.10 lakh are
eligible.
Limit Maximum limit up to Rs.10.00 lacs
Period The limit fixed under the scheme will be valid for a period of -3- years, subject to internal
annual review based on the conduct / operations of the account.
Margin
Limit Margin

Up to Rs. 50,000/- Nil

Rs. 50,001 to Rs. 10,00,000/- 25%

Finacle Scheme Code OD010

Other condition Stock statements are to be submitted Yearly by the BOBLUCC account holders, monitoring
of the account operations should be ensured through quarterly/half yearly inspection.

COLLATERAL FREE LOAN FOR SELF EMPLOYMENT WITH DISABILITY-NHFDC REFINANCE

Purpose To make available the facility of collateral free loan for self-employment with Disabilities (PwDs)
at NHFDC / Bank’s rate of interest under CGTMSE scheme.
Eligibility: Any disabled person having age between 18 and 60 years and any Indian citizen with 40% or
more disability.
Limit Maximum – Rs. 25.00 Lacs
Period The limit fixed under the scheme will be valid for a period of -3- years, subject to internal annual
review based on the conduct / operations of the account.
Margin For Cash Credit: 25% against stocks & Book Debts up to 90 days only
For Term Loan/Demand Loan:
30% on land and building
25% on Plant and Machinery

Scheme for financing person with disabilities Education loan

Scheme for financing person with disabilities Education loan refinance scheme promoted by National Handicapped
Finance and Development Corporation (NHFDC). (BCC:BR:111:173 dt 04.04.2019)
Eligibility Resident Indian with 40 % or more disability.
Purpose Higher education in India or abroad
Limit Study in India Max-10 lacs
Study abroad Max- 20 lacs
Margin Upto 4 lacs: Nil

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 Above 4 lacs for course in India: 5 %
Above 4 lacs for course in abroad: 15 %
Repayment of 7 years after commencement of repayment.
Term Loan
Security Upto 4 lacs: Nil
Above 4 lacs to 7.50 lacs: Collateral security in the form of 3rd party guarantee.
Above 7.50 lacs: Tangible collateral security of suitable value along with the assignment of
future income of the student for payment of instalments.

BARODA GST RECEIVABLES CARD

Purpose To provide additional working capital assistance to customers facing crunch in liquidity
arising out of GST paid on purchases and input tax credit on the same not yet claimed /
eligible for refund.
Eligibility: Existing MSME (Regulatory & Non Regulatory) borrowers enjoying working capital
limits with the Bank with satisfactory conduct.
New MSME (Regulatory & Non Regulatory) customers to whom fund based working
capital limits are being sanctioned.

Quantum ofUp to 80% of:

Loan/Disbursement Input tax credit under GST pending as on date which is to be claimed in future; and / or
quantum: Input tax credit unutilized under GST where refund is to be applied / already applied to
the concerned authority.
As per CA (Statutory Auditor of the firm / company) Certificate to that effect.
Disbursement shall be restricted against input tax credit pertaining to the immediately
preceding quarter only, from the quarter in which request for disbursement is made
(Jan-Mar, Apr-Jun, Jul-Sept., Oct-Dec.). For e.g. for disbursement request made
anytime between 1st April to 30th June 2019, eligible input tax credit should pertain to
January to March 2019 quarter only.
Period Maximum up to -9- months including maximum moratorium period up to -3- months.
AREA SPECIFIC SCHEME FOR CONTRACTOR – MUMBAI (OD039)
Scope of the To meet the credit needs of contractors engaged in execution of civil engineering contract
Scheme works awarded by BMC/Civic Agencies operating in Brihan Mumbai Metropolitan Region
(such as; BMC/MMRDA & or any other similar Civic Agencies)
Constitution wise All categories of the applicants respective of their constitution, engaged in execution of civil
coverage of the engineering contracts, Individuals, Proprietorship firms. Partnership concerns, Limited
Scheme Liability partnership (LLP), Private & Publlc Limited Corporates, Other categories of
applicants which are empowered to carry out commercial operations.
Entry Level Norms Registered contractors of BMC/Civic Agencies operating within the Greater Mumbai
Metropolitan Region. Registration of our Bank Accounts in the records of BMC/Civic Agencies
Loan Quantum Need based credit limit such as OD, BG, and Solvency certificate.
lt shall be in order to extend any other form of financial support as may be required by the
contractors - such as, Counter Indemnity Bond in the case of takeover of BG exposure from
other banks, LC facility for procurement of material or other credit facilities for operations -
within the frame work of financial parameters & guidelines as set out under the Scheme.
Exposure Ceiling Proprietary Concerns & Partnership Firms, Trusts & Societies is stipulated uniformly at Rs
Norms 40.00 crore that can be relaxed by COCC-ED based on collateral security, credit history and
financial discipline of the entity. If relaxation in exposure norms approved, the entity should
furnish a specific time frame & road map for affecting changes in the constitution as corporate
entity within a period of three years.
Mobilization Advance Guarantee shall generally be restricted to 20% of total BG facility in the
normal course. Relaxations n sub ceiling can be considered with the specific approval of COCC-
ED
Purpose and mode OD- Towards day to day WC need. Security deposit (SD) and or Additional security deposits
of utilization of (ASD) by way of DD drawn in favour of BMC/Civic Agencies for bidding new contracts.
loan proceeds BG: Issuance in favour of BMC/Civic Agencies for;
Earnest Money Deposits
Security deposits
Performance Guarantee
Mobilization advance (Advance Payment)
Retention Money Guarantee
Solvency certificate: For participating in tender.

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 Note:
* Utilisation of part of the Overdraft facility for furnishing SD & ASD by way of Demand Drafts
drawn in favour of BMC/civic Agencies towards tendering purpose/bidding contracts shall be
allowed only in respect of those cases where our bank name has been registered with
BMC/Civic Agencies in order to ensure direct remittance of refunds and other contract receipts
under ECS mode directly to the credit of the designated account of the borrower with our bank.
*Name of our bank as a registered banker to the borrower entity shall be necessarily
incorporated in every bid/tender document to be submitted to BMC/civic Agency. Further,
each bid document shall accompany a letter authorizing BMC/Civic Agency to credit the entire
refund amount or any other payment due to the contractor directly to the credit of designated
account with us. Notwithstanding this it shall be the sole responsibility of the borrower entity
to ensure that SD/ASD furnished to BMC/Civic Agencies is credited directly to the designated
accounts maintained with us in the event of not securing the contract, as also completion of
execution of designated contract work awarded.
* Copy of bid document duty acknowledged by BMC/civic Agencies & certified by the borrower
entity shall be submitted to the bank within a period of one week reckoned from disbursal of
each tranche of STL.
*In respect of BG Facility - period of each Bank Guarantee shall be normally for a maximum
period not exceeding 5 years or the period as may be sought by the beneficiary whichever is
shorter. However, BGs for longer period i.e., beyond 5 years but up to 10 years may also be
issued if such time frame is required. Entire commission covering the tenor of BG will have to
be collected upfront unless otherwise specifically permitted by the competent authority.
Overdraft facility shall not be allowed to be utilized for furnishing cash deposit/Demand Drafts
with any other agencies where ECS mode of refund/remittance is not available.
Primary Security Overdraft-Hypothecation
Standard First charge by way of entire current assets both present and future (age of receivables shall
not exceed 120 days)
First charge on the entire fixed assets of the entities (both movable & immovable) to the extent
unencumbered (excluding those assets which are specifically charged to other specific lenders)
both present & future.
Continuing security of other assets charged to other credit facilities.

Bank Guarantee:
Cash Margin: 10-25 %
Counter indemnity
Mortgage of residential property having market value of not lower than 15 % of BG (with the
band width of 15-50 %).
Continuing security of other assets charged to other credit facilities.
Note: 100% cash margin shall be obtained in the case of guarantees covering disputes, court
case and similar other purpose. RH is the competent authority to permit issue of such BG.

Solvency Certificate: Nil

Note:
Sanctioning authority above the rank of GM can relax the cash margin and tangible security
cover by 5% each.
Amount of Solvency Certificates to be issued in favour of BMC/Civic Agencies shall be met
within tangible net worth of the applicant plus unsecured loan contribution by the promoter
family plus personal net means of promoters.
Collateral Security It needs to be noted that, neither the extent of collateral security offered shall be the sole critical
Standard factor for a credit decision, nor the absence/ inadequacy of the same, can be the criteria for
denial of need based credit support under the Scheme, in case the proposal is considered
otherwise support worthy.
In case of existing borrowers, existing collaterals shall not be released.
Margin OD facility: 25 % of chargeable current assets. In respect of receivables from BMC/Civic
agencies covering SD/ ASD shall be minimum of 15 %.
BG: Cash Margin minimum - 10 %
Realisable value of property must cover 15 % of BG facility.
In case of dispute BG must cover 100 % cash margin.
Guarantee Individual, Proprietary firms:
Standard Spouse of the applicant in normal course,
If spouse not present then personal guarantee of major children.

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 If absence of both above, personal guarantee of friends or relative.
Partnership Concerns & LLPS:
All the partners individually, jointly & severally.
Private / Public Limited Companies:
All the promoter director of the company- other than professional directors.
Other type of Constitutions such as Trusts, Societies, etc.:
Managing trustee & other trustees in case of trusts, President, secretary & other office bearers
in case of society.
Note: Personal guarantee of personal must be obtained who has offered his property as
security.
Moratorium Nil
Period
Repayment Facilities shall be renewed yearly, reckoned from the date of sanction.
Terms
Interest Rate Upto Rs. 5.00 crs would be linked to CMR ranking. However additional risk premium of 0.50%
Structure, would be charged over and above the applicable rate based on CMR based pricing.
Commission For exposure above Rs.5.00 crs- rate of interest would be applies based on Composite rating
ON BG, (CR).
Processing Applicable unified PC and commission on BG:
Charges and Nature of BG Charge
Other Performance guarantee 0.20 % Pm
Charges Financial Guarantee 0.25 % Pm
Guarantees secured by 100% cash margin by 25 % of normal charges
way of term deposit
Note: The above mentioned concession will be applicable only when where rating is not below
CMR5 and in composite rating CR-6.
Assessment of risk Minimum internal rating BOB6
rating Minimum external rating BBB.
Borrower Existing account holder of the bank with satisfactory dealing of 6 months.
standard Account holder of other bank with satisfactory dealing of 12 months and want to switch over
in full to our bank.
Newly established entity:
1. Applicant must be registered with BMC and bank name must be registered with BMC/civic
agencies.
2.Must be confirmed by agency that bank name is registered.
3. Applicant under the scheme shall be free to execute contrast awarded by any authorities
under public/private sector in addition to contracts awarded bV BMC/civic agencies.

Financial ratio Current ratio and DE ratio ( not applicable for takeover of account)
Ratio Bench mark RMCC & above upto
Current ratio (Excluding 1.17 1.10
TL)
DE ratio (TTL/TNW) 3.00 5.00
DE ratio (TOL/TNW) 4.50 7.00

Deposits having maturity less than 12 months and considered as margin may be considered as
current assets for current ratio purpose but not for MPBF.
In case current ratio is below defined benchmarks only due to term loan installment (from any
Fl) being considered as current liability, it
Should not be treated as deviation if the projected and accepted DSCR is above 1.25 for next
year i.e. projected cash generation is rnore than
Projectedinstallment of TL and maintaining DSCR of 1.25.

Credit assessment Audited financials along with CMA data and 3CB and 3CD shall be mandatory.
standard Computation of fund based credit facility shall be assessed under Cash Budget Method (CBM).
Assessment of BG facility:
BG requirement shall be assessed as a percentage of value of work on hand and expected work
order plus guarantee for retention money as a percentage of contracts already executed
covering immediate preceding 2-3 years.

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 Solvency Certificate: Solvency certificate shall be issued based on sum total tangible net worth
of the applicant plus unsecured loan contribution by the promoter family plus personal net
means of promoters.

Baroda SME Gold Card

(BCC:BR:109:119 dated 28.02.2017
Purpose To meet urgent requirement and tie up temporary mismatch in liquidity arising out of
delayed payments by buyers, tax payment etc.
Eligibility: All Micro / Small / Medium Enterprises (Regulatory) and SMEs as per expanded
definition are eligible subject to compliance of following:
 Account is standard for last -2- years
 Obligor credit rating of “ BOB-5” & above
 Working capital limit of Rs. 25.00 Lakh and above
 Sole Banking Arrangement with our Bank
 No major inspection irregularity persist in the account
(In case of takeover accounts, they are eligible only one year after takeover of the account
to avail this facility)
Nature of Facility Working capital
Quantum of 10% of the assessed MPBF
Loan/Disbursement
quantum:

Period -12- Months. (The facility to be allowed maximum -4- occasions during a year for a
maximum period of -2- months on each occasion. However, there should be a minimum
gap of -15- days between two drawals.
Security As per stipulations in working capital facility
Baroda Artisans Credit Card
(BCC:BR:109:119 dated 28.02.2017
Purpose To meet out working capital requirements / purchase of tools and equipment of artisans
involved in production/manufacturing process and otherwise eligible for credit facility
to carry out the proposed activity under any of the Bank’s scheme.
Eligibility:  All artisans involved in production / manufacturing activity
 Preference would be given to artisans registered with Development
commissioner (Handicrafts)
 Thrust in financing would be given on clusters of artisans and artisans who
have joined to form SHGs.
 Beneficiaries of other Government Sponsored Schemes will not be eligible for
BACC scheme.
 All existing artisans borrowers of the bank enjoying credit facilities up to Rs.2
lacs and having satisfactory dealings with the bank will be eligible to avail
credit facilities under the scheme
Nature of Facility Working capital (The credit limit is expected to be utilized as a revolving cash credit and
will provide for any number of drawals and repayments within the overall limit.)
However, Bank may fix a repayment schedule for the portion of the loan availed for
purchase of tools and equipment.
Quantum of Credit limit will be assessed on the basis of norms adopted as per Nayak Committee
Loan/Disbursement recommendations.
quantum:
Maximum limit that can be sanctioned is Rs. 2.00 Lakh.
Period Maximum -3- years subject to annual review.
Security Assets financed under the scheme are charged to the bank as security
Margin Limit up to Rs. 25000.00 NIL
Limit above Rs. 25000.00 to Rs. 15% to 25%
200000.00

BOB Weavers Mudra Scheme

(BCC:BR:109:119 dated 28.02.2017
Purpose For purchase of looms and related capital expenditure and need based working capital
requirement,in rural and urban areas.

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 Eligibility: Existing or experienced handloom weavers involved in weaving activity.

Nature of Facility Demand Loan and Working Capital Finance

Quantum of Maximum Limit that can be sanctioned under this scheme is Rs. 5.00 Lakh.
Loan/Disbursement
quantum: Demand Loan: 80% of the total cost of Looms and other accessories / capital
expenditure
Working Capital: As per Nayak committee recommendations
Margin 20% of total project cost (Capital Expenditure and W.C)
(Out of which, margin up to Rs. 10000.00 or 20% whichever is less shall be provided by
the GOI)
Renewal of Limit Renewal of working capital limit will be done annually
Security  Hypo charge on machinery and stock
 Credit guarantee from NCGTC in case of new accounts sanctioned under
PMMY
 Existing account already covered under CGTMSE will continue to be covered
by CGTMSE till the currency of the loan.
Other condition The beneficiaries under the Scheme will be issued a Mudra Card having the daily
withdrawal limit of Rs. 5000.00 Der day.
Subsidy Under this scheme the beneficiary is eligible to get subsidy in following forms:

1. Interest Subsidy – GOI will bear the difference between the actual rate of
interest and 6% interest to be borne by the borrower as interest subsidy. There
is a maximum cap of 7% and the GOI will provide the subsidy for a period of -
3- years from the date of first disbursement and it is to be credited on quarterly
basis.
2. Margin Money assistance: @20% of the project cost subject to a maximum of
Rs. 10000.00 per weaver will be provided
3. Annual Guarantee Fee of CGTMSE: (For -3- years)
Loan up to Rs. 50000.00 Annual Guarantee Fee of 0.25% of
loan amount will be borne by GOI,
rest will be borne by the Bank
Loans above Rs. 50000.00 & up to Entire AGF be borne by GOI
Rs. 500000.00
Scheme code LA 522 / CC024

Baroda MSE General Credit Card

(BCC:BR:111:136 dated 12.03.2019
Purpose Working Capital Requirement / Acquisition of Land / construction of building /
Purchase of P&M
Eligibility: Any individual taking up non farm entrepreneurial activity across the country, who have
not availed any type of credit card such as Baroda Kisan Credit Card, Baroda Artisan
credit card, Baroda Weavers Credit Card, Laghu Udyami Credit Card, any other type of
credit card except the cards for consumption needs.
Nature of Facility Demand Loan / Term Loan / Working Capital / Non fund Based
Limit Minimum : Rs. 25000
Maximum : Rs. 10 lacs
Margin Working Capital / Demand Loan / Term Loan / NFB : 20%
Land & Building : 25%
Period Loans: Maximum 84 months with 12 months moratorium
Working Capital: -12- months subject to annual review
Security Charge on assets created out of Bank’s Finance
Finacle codes LA511 / CC013
Other conditions  KYC to be complied with.
 CGTMSE Coverage in all eligible accounts
 Stock Statement not to be obtained. Monitored through quarterly /half yearly
inspection.

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 Code LA511/ CC013

Scheme for Financing Existing SMEs for purchase of new vehicles

(BCC:BR:109:119 dated 28.02.2017
Purpose For acquiring any type of new vehicle eligible for registration with Regional Transport
Authority
Eligibility: Proprietorship Firm, Registered Partnership firm, Limited Liability Partnership, Private
Limited Company, Limited companies, Trust, 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. 25.00 Lakh.
Nature of Facility Demand Loan / Term Loan
Limit Maximum Rs. 200.00 Lakh

Margin 10% of total cost of vehicle

Period Maximum -60- months, subject to annual review
Security Charge on assets created out of Bank’s Finance

Baroda Loan to Business Correspondents

(BCC:BR:109:119 dated 28.02.2017
Purpose To purchase computer hardware, laptop and peripherals / To meet working capital
requirement for cash management / Purchase of new vehicle (Motor Cycle)
Eligibility: Business correspondents and Kiosk Operators who have valid agreement with service
providers engaged by our Bank for the purpose of providing Banking Services under
Financial Inclusion
Nature of Facility Demand Loan: Purchase of computer hardware , Laptop and peripherals, printers etc.
Term Loan: For purchase of two wheeler
Overdraft: To meet working capital requirement
Limit Area Demand Loan Term Loan Overdraft
Rural / S urban 75000.00 50000.00 25000.00
Urban 115000.00 50000.00 35000.00
Metro 150000.00 50000.00 50000.00
Margin 10% of total amount of loan sanctioned
Period Demand Loan – 36 Months
Term Loan – 60 Months
Overdraft – Repayable on demand subject to annual review
Security Hypo of assets created out of Bank Finance
In case of overdraft clean overdraft to be considered subject to provisions of CGTMSE
scheme

Composite Term Loan Scheme

(BCC:BR:109:119 dated 28.02.2017
Purpose Fixed capital expenditure / Working Capital Requirement

Eligibility: Units eligible to be classified as MSME as per regulatory definition

Nature of Facility Composite Term Loan

Limit Up to Rs. 100.00 Lakh

Margin Loan limit is up to Rs. 25000.00 NIL

Loan limit is above Rs. 25000.00 and up 15-25%
to Rs. 100.00 Lakh
Period Minimum -3- years and maximum of -10- year, with initial holiday of 12 to 18 months,
both for interest and principal.
Security Charge on assets created out of Bank’s finance / Other collateral security on case to case
basis / CGTMSE coverage wherever applicable

Commercial Vehicle Finance Programme

(BCC:BR:111:133 dated 14.03.2019

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 Purpose Funding for purchase of commercial vehicles/ vehicles used for commercial purpose

Security Charge on assets created out of Bank’s finance / Other collateral security on case to case
basis / CGTMSE coverage
Assessment As per LTV chart and Viability sheet / Rating Sheet as per scheme
Rate of Interest Rate of interest based on the rating score as per CVF model
Type of facility Term Loan / Demand Loan /
Finacle Code LA015 / OD033
BRIEF DETAILS OF THE CATEGORIES AVAILABLE
Category Definition Limit (Rs. In Lakh) Tenure (in Moratorium
Segment Months)
First Time Buyer Driver cum Owner: Minimum: 1.00 Minimum: 12
(FTB) Guarantor Backed Maximum: 25.00 Maximum: 60
Small Road 1-2 CV Owner Minimum: 5.00 Minimum: 12
Transport Operator Maximum: 50.00 Maximum: 60
(SRTO) (Preferably 48)
Retail Fleet 3-9 CV Owner Minimum : 5.00 Minimum: 12
Operator Maximum:150.00 Maximum: 60
(Preferably 48)
Large Fleet Operator 10-25 CV Owner Minimum : 10.00 Minimum: 12
Maximum:500.00 Maximum: 60
2 Months (Interest
(Preferably 48)
to be capitalised
Strategic Fleet >25-50 CV Owner Minimum : 10.00 Minimum: 12
during moratorium)
Operator Maximum:1500.00 Maximum: 60
(Preferably 48)
Super Strategic Fleet  50 CV Minimum: 10.00 Minimum: 12
Operators Maximum: 3000.00 Maximum: 60
(Preferably 48)
Captive Customer Captive / Self end Minimum : 5.00 Minimum: 12
use Maximum:1000.00 Maximum: 60
School Bus School Bus Funding Minimum : 5.00 Minimum: 12
Maximum:200.00 Maximum: 60
(Preferably 48)

Segment –I : Three wheeler funding (LA015)

Type of vehicle E-Rickshaws, Quadri–cycle and 3-wheeler (Petrol/diesel/battery/CNG operated)
Eligible borrower Resident Indian Nation as under:
Individual, Proprietorship, Partnership firm, Pvt limited company.
Public limited company, Trust/association, LLP, HUF as proprietor or partner not eligible.
Limit Min.: 0.50 lacs and max.: 10 lacs
Tenure Min: 12 month Max: 48 month
Margin 15 % on road invoice price net off discount.
Repayment method Through EMIs
Method of As per LTV and cash flow derived out of viability sheet.
assessment
Scheme Code LA015

Construction and Mining Equipment Finance Programme

(BCC:BR:111:73 dated 01.02.2019
Purpose Funding for purchase of construction & mining equipment

Eligible Borrower Resident Indian National as under :

Institution  Individual, Proprietor, Partners, LLP, Companies, JV
 Trust, Societies, Associations, HUF, HUF as proprietor/partner are not
eligible.
Security Charge on assets created out of Bank’s finance / Other collateral security on case to case
basis / CGTMSE coverage
Rate of Interest Rate of Interest is based on rating score as per CME model
Assessment As per LTV chart and Viability sheet as per scheme

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 Type of facility Term Loan / Demand Loan / Letter of Credit
Eligible Assets As per the list provided in the Scheme
Finacle code LA019
BRIEF DETAILS OF THE CATEGORIES AVAILABLE
Category Definition Limit (Rs. In Lakh) Tenure (in Maximum
Segment Months) Moratorium
First Time Buyer O CME Owner Minimum: 1.00 Minimum: 12 2 Months (Interest
(FTB) Maximum: 50.00 Maximum: 60 to be capitalised
(Preferably 48) during moratorium)
Small 1 CME Owner Minimum: 10.00 Minimum: 12 2 Months (Interest
Maximum: 100.00 Maximum: 60 to be capitalised
(Preferably 48) during moratorium)
Medium >3 Years in Business Minimum : Nil Minimum: 12
Maximum:500.00 Maximum: 60
(Preferably 48) 3 Months (Interest
to be capitalised
during moratorium)

Large >4 Years in Business Minimum : Nil Minimum: 12 3 Months (Interest

Maximum:1500.00 Maximum: 60 to be capitalised
(Preferably 48) during moratorium)
Strategic >5 Years in Business Minimum : Nil Minimum: 12 3 Months (Interest
Maximum:5000.00 Maximum: 60 to be capitalised
(Preferably 48) during moratorium)

Baroda Overdraft E- Commerce Product Tie up with Flipkart

(BCC:BR:110:373 dated 24.07.2018
Purpose Working Capital requirement for selling online goods over E- Commerce Platform

Eligibility: Individuals, Proprietorship Firm, Registered Partnership firm, Limited Liability

Partnership, Private Limited Company, Limited companies, Trust, Co Operative
Societies etc. (Application will be received directly through Flipkart)
HUF and Public Limited co. not eligible
Nature of Facility Overdraft
Limit Minimum: Rs. 5.00 Lakh
Maximum: Rs. 25.00 Lakh
Margin Nil
Period -12- months, subject to annual review
Security  Hypo of receivables arising out of online E- Commerce Platform
 Hypo of Stocks
 CGTMSE coverage, if applicable
 Locking of Overdraft account with Flipkart for routing entire proceeds
Assessment  (a)20% of annualized net pay out given by Flipkart during last -6- months
based on Bank statement / Flipkart data
 (b)2 times of average net monthly pay out by Flipkart during last -3- months
based on Bank statement / Flipkart data
 (Lower of a & b to be sanctioned)
Finacle Code OD025

Scheme for Financing Textile Units

(BCC:BR:110:505 dated 04.10.2018
Purpose Working Capital Requirement / Financing New Projects

Eligibility: All new and existing units (including taken over from other Banks) engaged in textile
activity including job worker / Traders falling under SME as per regulatory as well as
expanded definition.
Nature of Facility Term Loan / Demand Loan / Cash Credit / Non Fund Based

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 Limit Minimum: Rs. 25.00 Lakh
Maximum: Rs. 2500.00 Lakh
Margin For cash Credit: 25% on Stock and Book Debts (Min)
For Term Loan / Demand Loan:
Factory Land & Building 30%
P& M / Other Fixed Assets 25%
Second Hand P & M (Under TUF) 30%
Second Hand P & M (Imported) 30%
Second Hand P & M (Indigenous 40%
outside TUF)
Period  -12- months, subject to annual review (for working capital)
 Max -9- years for Loan (including moratorium), subject to annual review
Security Facility Security
Primary:
Term Loan 1st charge over entire Fixed Assets and
2nd charge over current assets
Cash Credit 1st charge on current asset and 1st / 2nd
charge over fixed assets
Collateral Security
 If exposure in up to Rs. 1000.00 Lakh, it is to be decided by sanctioning
authority.
 If exposure is above Rs. 1000.00 Lakh. 40% minimum collateral security
other than fixed assets already charged to the Bank.
Assessment As per Bank Guidelines

Baroda Budget Smartz Product Tie up with Lava International Ltd.

(BCC:BR:110:612 dated 13.12.2018
Purpose Working Capital requirement of retailers for procuring mobile phones of Lava
International Ltd for sales
Eligibility: Individual / Proprietorship / Partnership / Private Ltd Co.
(HUF and Public Ltd Co not eligible)
Nature of Facility Cash Credit
Limit Minimum: Rs. 5.00 Lakh
Maximum: Rs. 15.00 Lakh
Margin 25%
Period -12- months, subject to annual review
Security  Hypo of receivables &Hypo of Stocks
 CGTMSE coverage, up to the loan limit of Rs. 10.00 Lakh
 Locking of Overdraft account with Flipkart for routing entire proceeds
Assessment As per extant Guidelines
Other Condition  LAVA will introduce the retailed after due diligence through comfort letter
 LAVA will recommend the retailed and limit based on the need, which will be
indicative limit.
 Stop-supply (from Lava) arrangement in case of default

Baroda Overdraft E- Commerce Product Tie up with Amazon

(BCC:BR:110:170 dated 28.03.2018 & 109:125 dated 09.08.2017
Purpose Working Capital requirement for selling online goods over E- Commerce Platform

Eligibility: Individuals, Proprietorship Firm, Registered Partnership firm, Limited Liability

Partnership, Private Limited Company, Co Operative Societies etc. (Application will be
received directly through Flipkart)
HUF and Public Limited co. not eligible
Nature of Facility Overdraft
Limit Minimum: Rs. 1.00 Lakh
Maximum: Rs. 25.00 Lakh
Margin Nil

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 Period -12- months, subject to annual review
Security  Hypo of receivables arising out of online E- Commerce Platform
 Hypo of Stocks
 CGTMSE coverage, if applicable
 Locking of Overdraft account with Flipkart for routing entire proceeds
Assessment  (a)20% of annualized net pay out given by Amazon during last -6- months
based on Bank statement / Amazon data
 (b)Limit recommended by Amazon based on the vintage / future sales (Lower
of a & b to be sanctioned)
Finacle code OD025

Baroda Tankerz
(BCC:BR:110:576 dated 28.11.2018
Purpose For the purchase of New Tanker Truck for commercial use with Oil Marketing
companies(OMC)
Applications sourced by DICCI in respect of SC/ST entrepreneurs who have secured
tender from OMCs.
Eligibility: Resident Indian National as under:
 Individual / Proprietorship / Partnership / Companies / LLP
 HUF not eligible
Nature of Facility Term Loan / Demand Loan / Clean Overdraft / Bank Guarantee
Limit Above Rs. 10.00 Lakh and maximum Rs. 100.00 Lakh
Overdraft : Maximum Rs. 1.00 Lakh per vehicle
Bank Guarantee : As per the tender documents
(maximum upto 3 trucks per Borrower for commercial use with OMC)
Margin Option I-Minimum 10% ; Option II- Minimum 25% (pricing linked to margin)
Period  Limit to be reduced -36- months, subject to annual review (in case of
Overdraft)
 Max -66- months for Loan (including moratorium of -6- months), subject to
annual review (In case of Loan)
Security Hypothecation of vehicle financed
Assessment As per the viability sheet of the scheme

Baroda Stayz
(BCC:BR:110:555 dated 01.11.2018
Purpose To provide financial assistance to Hotel Owners / Lessee for refurbishment of hotel
rooms / equipment of rooms as per OYO designed specifications
Eligibility:  Individual / Proprietorship / Partnership / Private Ltd Co. engaged in Hotel
business
 (HUF and Public Ltd Co not eligible)
 Business unit should be established for more than -6- months and ‘A’ rated by
OYO
Nature of Facility Term Loan / Demand Loan
Limit Minimum: Rs. 5.00 Lakh
Maximum: Rs. 25.00 Lakh
Margin 25%
Period -60- months, subject to annual review
Security  Charged on assets created out of Loan amount
Assessment As per extant Guidelines
Other Condition  OYO will introduce the retailed after due diligence through letter
 OYO will recommend the retailed and limit based on the need, which will be
indicative limit.
 Cash flows from OYO blocked in designated Current Account maintained with
us.

Baroda E-Business Pack

(BCC:BR:109:346 dated 12.07.2017

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 Purpose Working Capital Requirement / Financing capital expenditure

Eligibility: All units eligible to be covered as MSME Regulatory i.e. Individuals / Self Employed /
Sole Proprietorship / Partnership / LLP / Pvt Ltd. /Public Ltd
(HUF as proprietor / partner not eligible)
Nature of Facility Term Loan / Demand Loan / Overdraft
Limit Maximum: Rs. 500.00 Lakh
(DL/TL component maximum Rs 100 lacs)
Margin Working Capital: Minimum 6.25% (Non Digital Mode) & 7.50% (Digital Mode) of
the accepted projected turnover.
Demand Loan / Term Loan: 25%
Period  -12- months, subject to annual review (for working capital)
 Max -60- months for Loan (including moratorium max of -6- months), subject
to annual review
Security  Credit Limits up to Rs. 10.00 Lakh will be collateral free and eligible loans will
be covered under NCGTC under PMMY.
 Credit Limits from Rs. 10.00 Lakh to Rs. 200.00 Lakh to other beneficiaries
(Service Sector Other than Retail Traders) will be collateral free and covered
under CGTMSE.
 Credit Limits from Rs. 10.00 Lakh to Rs. 500.00 Lakh to general traders
(Retail) other than above will be collaterally secured by security having
realisable value at least 50% of limit.
Assessment As per Bank Guidelines
Finacle code OD027 / LA523 / LA 524

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 NRI DEPOSITS & REMITTANCE
FACILITIES

Page 290 of 502

 8.1 NRI deposits, remittances facilities

NRI business:
NRI customers are very important for Bank for resource mobilization and pitching retail asset products as well as wealth
management products.

Non-Resident Indian (NRI)

NRI for this purpose 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.

Person of Indian Origin (PIO)

A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other than Bangladesh
or Pakistan or such other country as may be specified by the Central Government, satisfying the following conditions:
a) Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);or
b) Who belonged to a territory that became part of India after the 15th day of August, 1947; or
c) Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred to in clause (a)
or (b); or
d) Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person referred to in
clause (a) or (b) or (c)

A PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act,
1955. Such an OCI Card holder should also be a person resident outside India.

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:

1. Indians who go abroad for the purpose of

o Tourism
o Pursuing research
o Undertaking business promotion visits.
o To receive training
o Obtaining medical treatment.
o Participating in sports or cultural activities.
2. Indians or Persons of Indian origin residing in Nepal/Bhutan /Pakistan/Bangladesh.
3. Crew members working for shipping/airlines companies posted in India and those companies whose
registered offices are in India.

Non – Resident (external) account scheme (NRE account)

Deposit plan for NRI’s savings/earnings from abroad

 Features of NRE Deposit in INR:

 Current / Saving / Term Deposit Accounts
 Eligibility: Any NRI/PIO as per guideline

 Transactions:

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  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 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.

 Baroda International Debit card/ATM card available for withdrawal of cash/purchase at Point of Sale with
Merchants/ for online purchases
 Internet Banking facility called Baroda Connect to stay connected anytime, anywhere

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.
 Tax Exemption; Interest income on balances standing to the credit of NRE / FCNR (B) Accounts is exempt from
Income Tax. Likewise, balances held in such accounts are exempt from Wealth Tax.

 There is a Centralized Processing cell for opening NRE/NRO Savings Bank Accounts for applications sponsored by
our UAE, Kenya and Uganda territories.
 Change of resident status of the account holder: NRE accounts should be re-designated as resident accounts or the
funds held in these accounts may be transferred to the RFC accounts (if the account holder is eligible for
maintaining RFC account) at the option of the account holder immediately upon the return of the account holder
to India for taking up employment or for carrying on business or vocation or for any other purpose indicating
intention to stay in India for an uncertain period. Where the account holder is only on a short visit to India, the
account may continue to be treated as NRE account even his stay in India

Baroda Premium NRE SB Account

 A premium saving bank account specially designed for valued NRI customers.
 Average quarterly balance required to be maintained is Rs. 50,000.00
 Free remittance facility if beneficiary maintains account at any of branch in India
 Free DD, BCH, Cheque Book, Baroda Connect, Safe Custody, preferential exchange rate, locker facility ( Only
Preferential allotment of Lockers)
 Interest and principal fully repatriable
 Tax exemption on interest earned
 Joint account with residents: former or survivors

Non Resident (ordinary) Rupee accounts ( NRO accounts)

Deposit plan for your savings/earnings in India.

Feature of NRO A/Cs in INR:

 Current/Saving/Term Deposit Accounts

 Eligibility: Any NRI/PIO as per guideline
 Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh

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 ownership requires prior approval of the Reserve Bank.
 NRO Term Deposit: For period 7 days to 10 years
 Opening of accounts by individual/s of Bangladesh nationality may be allowed by Authorized Dealer or
Authorized 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:

 Proceeds of remittances from outside India through normal banking channels received in any permitted
currency.
 Any foreign currency, which is freely convertible, tendered by the account holder during his temporary visit to
India. Foreign currency exceeding USD 5000 or its equivalent in the form of cash should be supported by
currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds
brought from outside India.
 Transfers from rupee accounts of non-resident banks.
 Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension,
interest, etc.
 Sale proceeds of assets including immovable property acquired out of rupee / foreign currency funds or by
way of legacy /inheritance.
 Resident individual may make a rupee gift to a NRI/PIO who is a close relative of the resident individual [close
relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer. The
amount shall be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and
credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within
the overall limit prescribed under the Liberalized Remittance Scheme (LRS) for a resident individual

Permitted Debits:

 All local payments in rupees including payments for investments in India subject to compliance with the
relevant regulations made by the Reserve Bank
 Remittance outside India of current income like rent, dividend, pension, interest, etc. in India of the account
holder.
 Remittance up to USD one million, per financial year (April- March), by NRI, subject to payment of tax, as
applicable.
 Transfer to NRE account of NRI within the overall ceiling of USD one million per financial year subject to
payment of tax, as applicable

Repatriability:
Repatriable up to 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 as per applicability

LoanAgainst Term Deposit: Permitted without any limit (As per Advance value of the deposit)

Joint Accounts:

Allowed with other NRIs and local residents also. As per the new guidelines of RBI, operational instruction with Local
residents will be Former or Survivor.

Tax:

TDS is levied 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

Deposit plan in Foreign Currency for your savings/earnings from abroad


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. Resident close relative may also become joint account holder
with operational instruction ‘Former or Survivor’

Loan Against Term Deposit: Up to any amount subject to advance value of Term Deposit

No interest will be paid on premature closure within one year

Rupee Linked Foreign Currency Deposit (RLFCD)

FCNR Deposit with Forward Exchange cover for conversion to INR at maturity for improving YIELD by leveraging the
exchange rate difference between INR and foreign currency in Spot and Forward market.

 Currency:
o In any of the six denominated foreign currencies: USD, GBP, EUR, YEN, CAD, AUD

Tenure:
o For period 1 year WITH Forward Exchange Cover booked for conversion to INR at maturity.
o 24 and 36 months slots are available

Minimum amount of deposit is USD 10,000 or its equivalent. Maximum amount of deposit can be up to
any amount

Applicable rate of interest is the same as the rate of interest given under FCNR (B) deposit for the period
of one year/two years/three years 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
saving account or as per depositor instruction. Interest amount will be converted in to INR at the
exchange rate prevailing on maturity date.
 Principal& Interest Fully Exempt from Income tax in India

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.

 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.
 The minimum deposit amount: is USD 10000/- or its equivalent.
 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.

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  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.

Foreign Currency Account Facilities for Residents

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. 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 non-interest 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 travellers
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.

Remittance Products (Inward)

Rapid funds2 India

 In-house online money transfer facility
 Speedy, cost-effective and reliable service
 Instant credit to beneficiary’s account with Bank of Baroda’s over 5000+ CBS enabled branches
 Same day/ within 24 –hour credit to the beneficiary/s account with 110300+ branches of other banks through
RTGS/ NEFT
 Money transfer without any threshold amount
 Neither remitter nor beneficiary needs to have account with us

Baroda Flash remit

 This is a real-time instant account credit facility in partnership with UAE Exchange Centre LLC (UAEECL)
 NRI customer desirous of sending remittance through Baroda Flash Remit visits any of UAEECL location overseas.
Remitter furnishes beneficiaries account no and name details to UAEECL
 UAEECL processes the transaction and beneficiary account is credited on real time basis. The moment the amount
is credited to the beneficiary’s account, an SMS alert is instantly sent to the mobile phones of both the sender and
the receiver by UAEECL
 Maximum Rs. 200,000/- per transaction for non-trade purposes

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  Trade Transactions are not allowed in the scheme

Western Union Money Transfer

Our Inward remittance product under Money Transfer Services Scheme (MTSS) of RBI in tie up with M/s Western
Union Financial Services International USA (WUFSI) is launched across all branches in India.

How does the Remitter send money?

A remitter desirous of remitting funds to India under the scheme, visits any overseas office of Western Union Financial
Services International USA (WUFSI), fills up the form, submits KYC documents, tenders Remittance amount and
provides beneficiary name & address in India. WUFSI processes the payment and provides system generated 10 digits
unique reference number i.e. Money Transfer Control Number (MTCN) to remitter. The remitter conveys MTCN to
the beneficiary in India.

Exchange House Arrangements:

We have tie up arrangement with following Exchange Houses in UAE

 Al Ansari Exchange LLC, Abu Dhabi, UAE
 Lulu International Exchange LLC, Abu Dhabi, UAE
 UAE Exchange Centre LLC, Abu Dhabi, UAE

SWIFT Remittance:

SWIFT is fast and secured mode of funds transfer facility. Facility is available at our all overseas branches. SWIFT Code
(Bank Identification Code) of receiving bank i.e. of our B-category branch as well as our correspondents for respective
currency is required to remit the fund. List of all correspondents of our bank is available with our Bank’s website i.e.
www.bankofbaroda.com

Loan products for NRIs:

Loan against FCNR (B) Deposits in Foreign Currency in India

 Loan up to 95% of the amount.
 As per current RBI guidelines in force, Foreign Currency loans is allowed to depositor / third party without
any ceiling subject to usual margin requirements
 For purposes other than investment in India, repayment shall be made either by adjustment of the deposit or
by fresh inward remittances from outside India through normal banking channels
 Facilities for loans/overdraft will be advanced against FCNR (B) Fixed Deposits in USD, GBP, EUR or YEN
 Margin will be 5% of present value of the deposit.

Loans against FCNR (B) Deposits in Rupees

Loan/overdraft where the depositor himself/herself requests for the advances facilities

 Margin: 10% of present value of the deposit.

 Amount: As per request, up to 90% of the present value of the deposit.
 As per current RBI guidelines in force, Rupee loans are allowed to depositor / third party without any ceiling
subject to usual margin requirements.

Third party loan/overdraft facility where the depositor desires that the advance be availed of by another person,
whether Non-Resident or Resident
Margin: 20%

Foreign Account Tax Compliance Act (FATCA) & Common Reporting Standards (CRS)

What FATCA means to bank?

 The Bank would be required to seek additional personal, tax and beneficial owner information and certain
certifications and documentation from our account holders.

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  Such information may be sought either at the time of account opening or any time subsequently to determine
whether the account holders are a reportable person or not.

 The relevant information would be reported the local tax authorities that, in turn, are required to share such
information with appropriate foreign authorities.

Consequences of being Non Compliant

As may be required by domestic or overseas regulators/ tax authorities, Bank may be constrained to withhold
and pay out any sums from the account or close or suspend or debit/ credit freeze the account(s).

What the customer has to submit?

 FATCA CRS Declaration Form.
 Documents (for permissible documents, please refer to Declaration Form)

How frequently will Bank seek information?

 FATCA /CRS compliance is an ongoing process.
 The Bank shall seek such information for every new on boarding.
 If there are any relevant changes in the customer information.
 The Bank is required to remediate their existing customers on a certain cut-off date (30 June 2014 in case of
FATCA & 31 December 2015 in case of CRS
How to Report?
 Customer has to fill up Annexure 1 available in Branches & our Website.
 Customer has to submit the form and relevant documents to branch via email, post/courier or in person.
 Branch has to carry out due diligence and key in the details in HFATCA Menu in Finacle.

What is CRS ?
Common Reporting standard (CRS) is a global level uniform standard for automatic exchange of financial account
information. CRS, an initiative of G-20 countries and Organisation for Economic Co-operation and Development
(OECD) and is similar to FATCA. Under this standard, jurisdictions would obtain financial information from their
financial institutions and exchange that information with other jurisdictions on an automatic annual basis.

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 RISK
MANAGEMENT

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 9. Risk Management
Risk is present everywhere and the business of banking is no exception to this. Banking Business, basically
a financial intermediation has in it “Risk” as fundamental element. This activity of risk taking implies a
consideration of both profits and the risks associated with banking activities. For a better Risk-Return,
“Risk Management” is quite essential, as otherwise the entity would be in danger.

What is Risk?
Risk is the probability or potential that an action or activity will lead to a loss or an undesirable outcome.
Risk Management is essentially the process of identification, analysis, measurement and either
acceptance or mitigation of such potential loss. Inadequate risk management can result in severe
consequences for the organization.

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.
E.g.
 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’ indicate that risk is an unexpected event or incident, which needs to be identified,
measured, monitored and controlled.
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 = (RAROC).

Managing various types of financial risks is an integral part of the banking business. Our Bank has a robust
and integrated Risk Management system to ensure that the risks assumed by it are within the defined risk
appetites and are adequately compensated. The Risk Management Architecture in the Bank comprises
Risk Management Structure, Risk Management Policies and Risk Management Implementation and
Monitoring Systems.

In banks risks are primarily of three types namely (i) Credit Risk, (ii) Market Risk and (iii) Operational
Risk.

The overall responsibility of setting the Bank’s risk appetite and effective risk management rests with the
Board and apex level management of the Bank. A Sub Committee of the Board on ALM (Asset Liability
Management) and Risk Management to assist the Board on financial risk related issues is in place. The
Bank has set up separate committees, of Top Executives of the Bank to supervise respective risk
management functions as under.

Asset Liability Management Committee (ALCO) is basically responsible for the management of Market
Risk and Balance Sheet Management. It has the responsibility of managing deposit rates, lending rates,
spreads, transfer pricing, etc. in line with the guidelines of Reserve Bank of India. It also plans out
strategies to meet asset-liability mismatches.

Credit Policy Committee (CPC) has the responsibility to formulate and implement various enterprise-wide
credit risk strategies including lending policies and also to monitor Bank’s credit risk management
functions on a regular basis.

Operational Risk Management Committee (ORMC) has the responsibility of mitigation of operational
risk, by creation and maintenance of an explicit operational risk management framework.

10.1. BASEL Guidelines

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 The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities
that was established by the central bank governors of the Group of Ten countries in 1974. It provides a
forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding
of key supervisory issues and improve the quality of banking supervision worldwide. The Committee also
frames guidelines and standards in different areas

10.1.1. BASEL I Guidelines

In 1988, BCBS came out with its recommendations for a set of minimum capital requirements for banks
which came to known as Basel I Accord. The accord focused primarily on Credit Risk. The assets of a bank
were classified into different risk groups which carried different credit risk weights from 0 to 150.

Generally, investments in Govt. Securities carried 0% risk weight, claims on banks attracted 20% risk
weight and loans to others were assigned risk weights depending on the asset category they belong to. In
principle, banks were advised to hold capital equal to 8% of the risk weighted value of the assets. In India,
Reserve Bank of India mandated for banks to maintain minimum capital @ 9% of the risk weighted assets
(RWA).

Market Risk was introduced in 1996. But Operational Risk was not addressed under Basel I accord.

Capital adequacy ratio which denotes the strength and stability of a bank to absorb losses, if any, arising
out of assets financed by the bank was calculated as below:-
Capital Adequacy Ratio (Basel I) = Eligible Total Capital/ {RWA (Credit Risk) + RWA (Market Risk)}

10.1.2. BASEL II Guidelines

Operational Risk, such as system breaking down or people doing wrong things, which was hitherto not
covered under Basel- I got introduced under Basel II. This accord is known as “A Revised Framework on
International Convergence of Capital measurement and Capital Standards”. It came out with the final
version of the Basel II Accord which was published on June 26, 2004.

Basel II aims at
 Ensuring that capital allocation is more risk sensitive
 Enhance disclosure requirements which will allow market participants to assess the capital
adequacy of an institution
 Ensuring that credit risk, operational risk and market risk are quantified based on data and
formal techniques

Our Bank has implemented the New Capital Adequacy framework (NCAF), popularly known as Basel-II
guidelines, w.e.f. 31st March, 2008.

The NCAF BASEL-II consists of three- mutually reinforcing Pillars, The Basel Committee calls these
factors as the Three Pillars to manage risks i.e.

A. Minimum Capital Requirement,

B. Supervisory Review of Capital Adequacy and
C. Market Discipline.

A. Pillar – I – Minimum Capital Requirement

It involves calculation of the total minimum capital requirements for credit, market and operational risk.
The minimum capital requirements are composed of three fundamental elements: a definition of
regulatory capital, risk weighted assets and the minimum ratio of capital to risk weighted assets.

The formula for calculation of CRAR is

“Eligible Total Capital / {RWA (Credit Risk) + RWA (Market Risk) + RWA (Operational
Risk)}”

Under Pillar-1, the framework offers three distinct options for Credit Risk, two options for Market Risk
and three options for computing capital requirement for Operational Risk.

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 The types of approaches are as under: -

Credit Risk -
 Standardized Approach
 Foundation Internal Rating Based Approach (F-IRB)
 Advanced Internal Rating Based Approach (A-IRB)

Market Risk
 Standardized Duration Approach
 Internal Model Approach (IMA)

Operational Risk
 Basic Indicator Approach (BIA)
 The Standardized Approach (TSA)
 Advanced Measurement Approach (AMA)

Our bank has adopted these approaches as under;

 Credit Risk - Standardized Approach,
 Operational Risk - Basic Indicator Approach,
 Market risk - Standardized Duration Approach

Under the new guidelines, the Indian banks were advised to maintain minimum CAR at 9 percent. CAR
is expressed as a percentage of a bank's risk-weighted credit exposures.

CAPITAL:

Capital in banking is of two types (i) Tier I Capital and (ii) Tier II Capital.

Tier I capital (core capital) is the most reliable form of capital. The major components of Tier I capital
are paid up equity share capital and disclosed reserves viz. statutory reserves, general reserves, capital
reserves (other than revaluation reserves) and any other type of instrument notified by the RBI as
and when for inclusion in Tier I capital. Examples of Tier 1 capital are common stock and retained
earnings. At present “Innovative Perpetual Debt Instrument (IPDI)”, a type of hybrid instrument without
any specific maturity date and with certain specific characteristics is part of Tier I Capital; as per RBI
guidelines.

Tier II capital (supplementary capital) is a measure of a bank's financial strength with regard to the
second most reliable form of financial capital. It consists mainly of undisclosed reserves, revaluation
reserves, general provisions, subordinated debt, and hybrid instruments. This capital is less permanent
in nature. Tier II Capital can never be more than Tier I Capital at any point of time.

RISK WEIGHTED ASSETS

Risk-weighted asset is a bank's asset or off-balance sheet exposure, weighted according to risk. This sort
of asset calculation is used in determining the capital requirement or Capital Adequacy Ratio (CAR) for a
financial institution.
Risk weighting adjusts the value of an asset for risk, simply by multiplying it with a factor that reflects its
risk. Low risk assets are multiplied by a low number, high risk assets by a higher number which may go
up to 625% (i.e.6.25 times of the asset amount).

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).
 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.

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  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: It 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.
 Default Risk there is one contract only i.e. between bank and borrower, may be due to
unwillingness or inability of the borrower.

We are following Standardized Approach for credit risk in our Bank, which requires calculation of Risk
Weighted Assets (RWA) by applying prescribed rates to the asset category. Under the Standardized
Approach, bank’s credit portfolio has 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.

Standardized Approach to Credit Risk:

On Balance Sheet netting - It is confined to loans/ advances and deposits, where banks have 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.

Credit Conversion Factor (CCF):

Non-market related off-balance sheet items include contingent items like (i) Letter of Credit, (ii) Bank
Guarantee (iii) Acceptances and (iv) undrawn commitment in fund based facility. The undrawn
commitment to be included in calculating off-balance sheet credit exposure is the unutilized portion of
working capital facilities and unused portion of term loan/ demand loan commitment that could be drawn
during the remaining period of disbursement.

For calculation of risk weight of an off-balance sheet item, the contingent item is first converted into a
credit equivalent amount by multiplying with a specific credit conversion factor (CCF) based on the type
of instrument and then the resulting credit equivalent amount is multiplied by the risk weight applicable
to the borrower or to the purpose for which the bank has sanctioned finance or type of asset, whichever is
higher.

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%.
Assuming capital requirement as per Basel Norms @ 9%, the 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 Risk Mitigation (CRM) Techniques:

While extending credit facilities (fund based and non-fund based) to borrowers, the bank obtains various
types of securities (primary or collateral) to secure its credit. The securities mentioned below only are
recognized as Credit Risk Mitigant (Financial Collaterals) for credit risk.
 Bank’s own deposits,
 NSCs, KVPs, LIC policies, securities issued by Central & State Governments etc.,
 Debt securities rated by approved credit rating agency –with certain conditions.
 Debt securities which are issued by a bank but not rated –with certain conditions.
 Units of Mutual funds.
 Cash margin against Non-Fund based facilities
 Gold and gold Jewellery.

The main types of guarantors against the credit exposure of the bank are Individuals, Corporates, Central
Govt., State Govt., ECGC, DICGCI, and CGTMSE. As per Basel II guidelines, guarantors whose guarantee
are available as Credit Risk Mitigant are Central Govt., State Govt., DICGCI, ECGC, CGTMSE, Banks &
Primary Dealers with a lower risk weight than the borrower and corporates rated AA (-) or better. In such

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 cases the applicable risk weight on an exposure would be as per the risk weight applicable to the guarantor,
for the amount of exposure (net of financial collateral) covered under such guarantee. The remaining
amount of exposure would attract a risk weight applicable to the borrower/ type of exposure/ type of
facility as the case may be.

In respect of Standard Assets Basel-II does not recognize land and building, Plant and Machinery etc. as
Collateral for risk mitigation purposes.
Credit Risk Management Framework
It includes all the components such as policies, procedures, system, tools, models, data, templates,
analysis, study, reports etc. in physical and electronic form. All the components of the framework are an
integral part of Credit Risk Management Policy.

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:
 Proper Credit Assessment
 Uniformity in credit processing through CPCs

Operations in the account

Stock Statements

QIS/QMR

Review of account and financial statements

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

SMA/ CRILC

Internal Audit of branch has been changed to Risk based internal Audit

MARKET RISK:

Market Risk is defined as the risk that the value of a portfolio, either an investment portfolio or a trading
portfolio, will decrease due to the change in value of the market risk factors. The major standard market
risk factors are stock prices, interest rates and foreign exchange rates. The associated market risks are:

 Equity risk - The risk that the change in price of a stock (equity) or indexes of stock exchanges
(e.g. BSE/ NSE) will lead to a loss to the equity portfolio of the Bank.
 Interest rate risk - The risk that the change in interest rates will cause a loss to the investment of
the Bank.
 Currency risk - The risk that fluctuation in foreign exchange rates (e.g. INR/USD, INR/JPY, etc.)
and/or their implied volatility will change adversely causing a loss to the organization.

Liquidity Risk: Potential inability of a bank to meet its repayment obligations in a timely and
cost-effective manner e.g. Mismatch of deposits and assets.
 Commodity Price Risk: The price fluctuation in commodity, which are charged to the bank as
security etc. by way of hypothecation and /or pledge.

Our Bank is following Standardised Duration Approach for calculation of capital charge and
resultant risk weighted assets for Market Risk. Matters related to Market Risk are solely dealt by our
specialised integrated Treasury Branch, Mumbai.

OPERATIONAL RISK:

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 It is a risk relating to direct or indirect losses arising out of inadequate or failed internal processes, people,
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:
(1) People (2) Process (3) Management (4) System (5) Business and (6) External.

Our bank has procured Operational Risk Management System SAS Enterprise Governance Risk and
Compliance (EGRC} for reporting of operational risk losses.

The system will benefit the bank in online collection of operational risk loss data such as accident of banks
vehicle, damage to physical assets due to fire, flood, earthquake, Near-miss events such as attempted
frauds, wrong transaction entries which have been rectified later with no financial loss etc. and its tracking
in terms of recovery, impact of the bank’s profit and loss account. Incidents of short recovery, inspection
charges, documentation charges etc. if they are fully recovered need not be reported.

All the operating units of the bank i.e. all branches, RO, SME, SMS etc. are required to report the
operational risk losses of their respective unit within 15 days of its detection in this system.

This system facilitates online reporting of operational risk loss even, Risk & Control Self Assessment
(RCSA), Key Risk Indicator (KRI), lssue & Action Plan (I&A).

Risk & Control Self Assessment (RCSA):

The system facilitates to identify, assess, monitor and report significant risk in the business function of
the bank after evaluation of the inherent risks and existing controls.

Key Risk Indicator (KRI):

System facilitates to sense the pulse of potential risk on a pro-active basis to enable the bank to take
appropriate action in a timely manner.

Issues and Action Plan (I&A):

System facilitates in chucking out the corrective action plan with an active involvement of concerned
vertical/ functional unit of the bank.

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;

KBIA = [ Σ (GI* α)]/n

Where KBIA = the capital charge under the Basic Indicator Approach
GI = annual gross income, where positive, over the previous three years
α= 15% set by the Basel Committee/ RBI
n = number of the previous three years for which gross income is positive.

B. Pillar – II – Supervisory Review and Evaluation Process

Internal Capital Adequacy Assessment Process (ICAAP):
Pillar 2 or Supervisory Review and Evaluation Process requires that Banks must undertake an Internal
Capital Adequacy Assessment Process (ICAAP), to ensure that: -

 They identify and assess all risks that they are or maybe exposed to (i.e., not only pillar I risks),
 Maintain sufficient capital to face these risks and
 Develop and better use risk management techniques in monitoring and managing these risks.

Supervisors by way of the Supervisory Review Process are responsible for evaluating how banks are
assessing their capital adequacy needs relative to their risks. Supervisors should take supervisory action
if they are not satisfied with the results of this process (i.e. they may ask banks to increase their capital
levels etc.)

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 In conformance with the Pillar II guidelines of RBI under the Basel II framework, the Bank has formulated
Internal Capital Adequacy Assessment Policy (ICAAP), Collateral Management &Credit Risk Mitigation
and Stress Test Policy. In the Policy, the bank has recognized certain material risks (along with the
methods of measuring and managing them) apart from the three Pillar 1 risks. These are as follows: -

 Concentration Risk:
The risk arising from an uneven distribution of counterparties or from a concentration in
business sectors or geographical regions which is capable of generating losses large enough to
jeopardize an institution’s solvency.

 Country Risk:
Country risk refers to the risk of investing in a country, dependent on changes in the business
environment that may adversely affect operating profits or the value of assets in a specific
country. It is 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.

 Interest Rate Risk in banking book:

It is the risk to both earnings (by way of NII) and capital (by way of fall in the Market Value of
Bank’s equity) of the bank, arising from adverse movements in interest rates.

 Liquidity Risk:
Liquidity Risk occurs when an institution is unable to fulfill its financial commitment in time
when it 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.

 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, counterparties, shareholders,
investors, regulator and/ or any other stakeholder. 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.

 Settlement Risk:
Settlement Risk is the risk that a settlement in a transfer system may not take place as expected.
Generally, this may happen because one party may commit default on its clearing obligations to
one or more counterparties.

 Business and Strategic Risk:

The risk of current or prospective impact on a Bank’s earnings, capital, reputation or standing
arising from changes in the environment the Bank operates in and from adverse strategic
decisions, improper implementation of decisions, or lack of responsiveness to industry,
economic or technological changes

 Counterparty Credit Risk:

Counterparty risk is the risk that the counterparty to a transaction could default before the final
settlement of the transaction's cash flows. Counterparty risk has a risk to both parties and should
be considered when evaluating a contract.

Pillar 2 also requires the Bank to carry out stress testing based on sesitivity tests and scenario analysis.
Stress Testing is an integral part of bank’s risk management system and is used to evaluate its potential
vulnerability to certain unlikely but plausible events or movements in the financial variables. The
vulnerability is measured with reference to bank’s profitability and capital adequacy.

One of the important aspects of Pillar 2 is formulation a Risk Based Capital Plan. This is a forward-looking
exercise under which Bank assesses its sufficiency in quality and quantity of capital to sustain the future
business growth under certain stressed situations for next 3 years. Plan is drawn and approved by the
Board of the Bank to augment the Capital base so that CRAR does not fall below 12% mark during the
year.

C. Pillar – III – Market Discipline

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 The purpose of Pillar III - market discipline is to complement the minimum capital requirements (Pillar
1) and the supervisory review process (Pillar 2). It aims to encourage market discipline by developing a
set of disclosure requirements which will allow market participants to assess key pieces of information on
the scope of application, capital, risk exposures, risk assessment processes, and hence the capital adequacy
of the bank.

Disclosing information based on the common reporting format as prescribed by RBI provides a consistent
and understandable disclosure framework that enhances comparability.

ASSET LIABILITY MANAGEMENT

“Asset Liability Management-ALM is a dynamic process of Planning, Organizing & Controlling of Assets
& Liabilities- their volumes, mixes, maturities, yields and costs in order to maintain liquidity and NII (Net
Interest Income).”

Asset Liability Management (ALM) is the practice of managing risks that arise due to the mismatches
between the assets and liabilities of the Bank. Asset Liability Management involves the measurement and
management of Liquidity Risk and Interest Rate Risk. While the former primarily arises due to the
difference in the maturity profile of assets and liabilities, the later arises due to the difference in re-pricing
of the assets and liabilities.

ALM practices include strategic management of the balance sheet of a bank. It includes positioning of all
assets, liabilities and off-balance sheet items of a bank to maintain a balance between their assets and
liabilities. This implies banks should have enough sources with them to payout their liabilities whenever
it becomes due. Risk occurs when there is a mismatch between bank’s assets and liabilities. The main
concern of ALM is to assess the assets and liabilities of bank in various time bands. ALM determines that
bank should have enough assets with it to fulfil the requirement of its liability at any time. Thus, Asset
Liability Management is the management of total balance sheet dynamics with regard to size and equality.
Bank’s ALM philosophy is aimed at accomplishing its mission of profit maximization through efficient
market risk management by ensuring returns commensurate with the level of risk taken. In an
increasingly deregulated market, banks are facing greater exposure to market risks, viz, interest rate risk,
foreign exchange risk, and equity/commodity price risk. Asset Liability Management System provides a
comprehensive and dynamic framework for measuring, monitoring and managing not only these risks but
also liquidity risk.

Significance of ALM: A bank might have enough assets to pay off its liabilities. But what if 50% of the
liabilities are maturing within 1 year but only 10% of the assets are maturing within the same period.
Though the bank has enough assets, it may become temporarily insolvent due to a severe liquidity crisis.
Thus, ALM is required to match the assets and liabilities and minimize liquidity as well as market risk.
Again, even if the assets and liabilities maturing are matched to a large extent, the interest rates can
change during the period thereby affecting the interest income from assets and interest expenses on
liabilities. Depending upon the movement of interest rates the net interest margin may increase or
decrease resulting in corresponding increase or decrease in profit during a certain period.
Asset liability management views the financial institutions as a set of interrelationships that must be
identified, coordinated and managed as an integral system. The primary management goal is the control
of interest income and expenses and the resulting net interest margins on an ongoing basis.

INTERNAL CREDIT RATING MODEL

Credit risk associated with a credit exposure, should be defined as the risk of losses arising from a credit
exposure turning adverse i.e. defaulting or moving towards distress, due to inability or unwillingness of
the borrower to repay. However, we define credit risk as the risk of an obligor (loanee) defaulting on his
obligation towards the bank. A default is considered to have occurred with regard to a particular obligor
when either or both of the two following events have taken place:

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  The bank considers that the obligor is unlikely to pay its credit obligations to the banking group
in full, without recourse by the bank to actions such as realising security (if held).

 The obligor is past due more than 90 days (or internal threshold in terms of number of days past
due, as defined by the bank) on any material credit obligation to the banking group. Overdrafts
will be considered to be past due once the customer has breached an advised limit or been
advised of a limit smaller than current outstanding.
The elements to be taken as indicators of unlikelihood to pay include:

 The bank puts the credit obligation on non-accrued status

 The bank makes a charge-off or account-specific provision resulting from a significant
perceived decline in credit quality subsequent to the bank taking on the exposure
 The bank sells the credit obligation at a material credit-related economic loss
 The bank consents to a distressed restructuring of the credit obligation where this is likely to
result in a diminished financial obligation caused by the material forgiveness, or postponement
of principal, interest or (where relevant) fees
 The bank has filed for the obligor’s bankruptcy or a similar order in respect of the obligor’s credit
obligation to the banking group
 The obligor has sought or has been placed in bankruptcy or similar protection where this would
avoid or delay repayment of the credit obligation to the banking group

Uses of Rating in decision making in Bank

1. Cut off grade for investment (BOB-6 and above for secured advances, BOB-4 for unsecured
advances and GF2 for Green Field Projects)
2. Pricing - based on composite rating.
3. Discretionary Lending Power for sanction / review - based on obligor rating.
4. Sanction of Adhoc/Excess - based on obligor rating.
5. Inspection of securities - based on obligor rating and
6. Rating based exposure ceiling - based on obligor rating.
7. Infrastructure Projects at Build phase stage with annual exposure cap.
8. Calculation of RAROC

BOBRAM:
The BOBRAM Risk Rating Model for Commercial Advances above Rs.25 lacs & exposure of above Rs. 2
Crore in MSME & BTL accounts is 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.
Obligor (Borrower) Rating -for credit worthiness indicating the Probability of Default (PD)
Facility Rating -representing the Loss Given Default (LGD) and
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 called
Rating Risk Silo i.e.
 Company Risk Rating (Weighted Scores)
 Industry Risk
 Business Risk
 Financial Risk
 Management Risk
 Account Conduct Risk
 Project Risk Rating (Minimum of PIR & PPIR Score)
 Project Implementation Risk
 Construction Risk – PIR

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  Funding Risk – PIR
 Post Project Implementation Risk
 Industry Risk
 Business Risk
 Project Financial Risk
 Management Risk – Project

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 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 grade ranges from CR-1 to CR-10.

Cut-Off 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.

Pricing is linked to 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.

Bank has introduced Risk based pricing for Home Loans & Car Loans w.e.f. 01.04.2016 and for Mortgage
Loans and Traders Loan w.e.f. 23.05.2016. (Based on CIBIL score of borrower).

RISK ADJUSTED RETURN ON CAPITAL EMPLOYED (RAROC)

The RAROC framework was introduced in our bank in April 2016. The risk-adjusted return on capital
(RAROC) calculation is based on the trade-off between risk and return, or in other words it is a risk-based
profitability measurement framework for analysing risk-adjusted financial performance and providing a
consistent view of profitability. If RAROC is higher than the hurdle rate then the loan is pointed as value
adding, and bank capital ought to be allocated to the activity.

In its simplest definition, risk-adjusted return is of how much return your investment has made relative
to the amount of risk the investment has taken over a given period of time. If two or more investments
have the same return over a given time period, the one that has the lowest risk will have the better risk-
adjusted return. So, if we summarize all of the above definition, RAROC is basically a framework to
evaluate whether the credit risk asset generates adequate profit to add economic value to shareholders'
funds.

As per Basel II/ Basel III definition of RAROC is defined as the ratio of risk adjusted return to capital
employed. The capital employed may be Regulatory Capital as prescribed by the regulator or Economic
Capital computed by the bank as per its own policy and methodology. However, in our implementation,
regulatory capital is considered as capital employed.

RAROC = Risk Adjusted Net Income/ Capital

Where, the numerator:

Risk Adjusted Net Income = Revenues (Gross Interest Income + Other fees, commission
etc.) - Total Cost - Expected Credit Losses + Ancillary business

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 And, the denominator:

Regulatory capital employed for the credit exposure, for the financial year 2018-19 is 11.50% of
the Risk Weighted Assets as per RBI guidelines.

The RAROC approach requires that the RAROC so computed be compared to a pre-specified hurdle rate,
and credit exposures for which the RAROC exceeds the hurdle rate, only be sanctioned. It is assumed that
credit exposures below the hurdle rate do not add economic value to the shareholders' fund, and rather
causes economic erosion. The Hurdle rate adopted by our bank is 17.00% at present.

In our bank, few exposures are exempted from calculation of RAROC in decision making

 Sanctioned limit towards derivatives exposures.

 Schematic lending irrespective of ticket size, including advances under our retail lending
schemes.
 Credit Risk in respect of exposure under regulatory instance e.g. RIDF funds to NABARD etc.
 Exposures backed by 100% cash collateral (as per Basel II/ Basel III definition of financial
collateral).

BASEL III CAPITAL ACCORD

Reserve Bank of India has issued guidelines on Basel reforms on capital regulation applicable to the Banks
operating in India. Basel-III capital regulation has been implemented from 1st April 2013 and has now
been allowed to be fully implemented as on 31.03.2020.

Minimum total capital requirement under Basel III:

Regulatory Capital As % Of RWA
(Risk Weighted Asset)
(i) Minimum common equity Tier I Ratio 5.50
(ii) Capital conservation Buffer (comprised of common equity) 2.50
(iii) Minimum common equity Tier 1 Ratio plus capital conservation 8.00
buffer (i+ii)
(iv) Additional Tier I capital 1.50
(V) Minimum Tier I capital(i+iv) 7.00
(vi) Tier 2 capital 2.00
(vii) Minimum Total Capital Ratio (MTC){(v)+(vi)} 9.00
(viii) Minimum Total Capital Ratio Plus Capital Conservation 11.50
Buffer[(vii)+(ii)]

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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 CREDIT MONITORING
RECOVERY AND NPA
MANAGEMENT

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 10. 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.

Some Early Warning signals which should alert the bank officials about some wrongdoings
in the loan accounts which may turn out to be fraudulent:

1. Default in payment to the banks/ sundry debtors and other statutory bodies, etc., bouncing of the
high value cheques

2. Raid by Income tax /sales tax/ central excise duty officials

3. Frequent change in the scope of the project to be undertaken by the borrower

4. Under insured or over insured inventory

5. Invoices devoid of TAN and other details

6. Dispute on title of the collateral securities

7. Costing of the project which is in wide variance with standard cost of installation of the project

8. Funds coming from other banks to liquidate the outstanding loan amount

9. Foreign bills remaining outstanding for a long time and tendency for bills to remain overdue

10. Onerous clause in issue of BG/LC/standby letters of credit

11. In merchanting trade, import leg not revealed to the bank

12. Request received from the borrower to postpone the inspection of the godown for flimsy reasons

13. Delay observed in payment of outstanding dues

14. Financing the unit far away from the branch

15. Claims not acknowledged as debt high

16. Frequent invocation of BGs and devolvement of LCs

17. Funding of the interest by sanctioning additional facilities

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 18. Same collateral charged to a number of lenders

19. Concealment of certain vital documents like master agreement, insurance coverage

20. Floating front / associate companies by investing borrowed money

21. Reduction in the stake of promoter / director

22. Resignation of the key personnel and frequent changes in the management

23. Substantial increase in unbilled revenue year after year.

24. Large number of transactions with inter-connected companies and large outstanding from such
companies.

25. Significant movements in inventory, disproportionately higher than the growth in turnover.

26. Significant movements in receivables, disproportionately higher than the growth in turnover and/or
increase in ageing of the receivables.

27. Disproportionate increase in other current assets.

28. Significant increase in working capital borrowing as percentage of turnover.

29. Critical issues highlighted in the stock audit report.

30. Increase in Fixed Assets, without corresponding increase in turnover (when project is implemented).

31. Increase in borrowings, despite huge cash and cash equivalents in the borrower’s balance sheet.

32. Liabilities appearing in ROC search report, not reported by the borrower in its annual report.

33. Substantial related party transactions.

34. Material discrepancies in the annual report.

35. Significant inconsistencies within the annual report (between various sections).

36. Poor disclosure of materially adverse information and no qualification by the statutory auditors.

37. Frequent change in accounting period and/or accounting policies.

38. Frequent request for general purpose loans.

39. Movement of an account from one bank to another.

40. Frequent ad hoc sanctions.

41. Not routing of sales proceeds through bank

42. LCs issued for local trade / related party transactions

43. High value RTGS payment to unrelated parties.

44. Heavy cash withdrawal in loan accounts.

45. Non submission of original bills.;

Revised Framework A. Early identification and reporting of stress

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 Bank will identify incipient stress in loan accounts, immediately on default, by classifying stressed
assets as special mention accounts (SMA) as per the following categories:

SMA Sub-categories Basis for classification – Principal or interest payment or any

other amount wholly or partly overdue between

SMA-0 1-30 DAYS

SMA-1 31-60 DAYS

SMA-2 61-90 DAYS

As per RBI Guidelines , lenders shall report credit information, including classification of an account as
SMA to Central Repository of Information on Large Credits (CRILC) on all borrower entities having
aggregate exposure of Rs. 50 million and above with them. The CRILC-Main Report will now be
required to be submitted on a monthly basis effective April 1, 2018. In addition, the lenders shall report
to CRILC, all borrower entities in default (with aggregate exposure of Rs. 50 million and above), on a
weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens
to be a holiday.

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 (Annexure II).

Reserve Bank of India will provide Bank user ID in order to access XBRL based electronic filing platform
site which BCC will be further providing to all the Zones & CFS Branches in first phase to facilitate Users
to access Data base related to large Borrowers credit history (more than Rs. 5 Crs. from 1st July 2014).
Zones/ CFS Branches should effectively use the data while Processing/ Reviewing Credit proposal.

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 Annex-1

SMA-0 Signs of Stress

Illustrative list of signs of stress for categorizing an account as SMA-0:

1. Delay of 90 days or more in

Submission of stock statement / other stipulated operating control statements or

Credit monitoring or financial statements or 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;

3. 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;
4. or drop in internal risk rating by 2 or more notches in a single review.

5. 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.

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 6. 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.

7. 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.

8. Increase in frequency of overdrafts in current accounts.

9. The borrower reporting stress in the business and financials.

10. Promoter(s) pledging/selling their shares in the borrower company due to financial stress.

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.

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 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:

Utilisation of short-term working capital funds for long-term purposes not in conformity with the terms
of sanction;

Deploying borrowed funds for purposes / activities or creation of assets other than those for which the
facility was sanctioned;

Transferring funds to the subsidiaries / Group companies or other corporates by whatever modalities;

Routing of funds through any bank other than the lender bank or members of consortium without prior
permission of the lender;

Investment in other companies by way of acquiring equities / debt instruments without approval of
lenders;

Shortfall in deployment of funds vis-à-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.

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 Non-Cooperative Borrowers:

Reserve Bank of India has defined a Non-Cooperative Borrower as 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.

The following measures may be adopted 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.

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.

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

An asset, including a leased asset, becomes Non Performing when it ceases to generate
income for the bank. A Non-Performing Asset (NPA) is a loan or an advance where:

Interest and/ or instalment of principal remain overdue for a period of more than 90 days in
respect of a term loan,

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 The account remains ‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC),

The bill remains overdue for a period of more than 90 days in the case of bills purchased and
discounted,

The instalment of principal or interest thereon remains overdue for two crop seasons for short
duration crops,

The instalment of principal or interest thereon remains overdue for one crop season for long
duration crops,

The amount of liquidity facility remains outstanding for more than 90 days, in respect of a
securitisation transaction undertaken in terms of guidelines on securitisation dated February
1, 2006. in respect of derivative transactions, the overdue receivables representing positive
mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days
from the

specified due date for payment.

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. In addition,
an account may also be classified as NPA.

‘Overdue’ any amount due to the bank under any credit facility is ‘overdue’ if it is not paid
on the due date fixed by the bank.

INCOME RECOGNITION (Income Recognition Policy): The policy of income recognition has to
be objective and based on the record of recovery. Internationally income from non-performing assets
(NPA) is not recognised on accrual basis but is booked as income only when it is actually received.
Therefore, the banks should not charge and take to income account interest on any NPA. This will apply
to Government guaranteed accounts also.

However, interest on advances against Term Deposits, National Savings Certificates (NSCs), Indira
Vikas Patras (IVPs), Kisan Vikas Patras (KVPs) and Life policies may be taken to income account on the
due date provided adequate margin is available in the accounts.

Fees and commissions earned by the banks as a result of renegotiations or rescheduling of outstanding
debts should be recognised on an accrual basis over the period of time covered by the renegotiated or
rescheduled extension of credit.

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.

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 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.

Leased Assets: The finance charge component of finance income [as defined in ‘AS 19 Leases’
issued by the Council of the Institute of Chartered Accountants of India (ICAI)] on the leased
asset which has accrued and was credited to income account before the asset became non
performing, and remaining unrealised, should be reversed or provided for in the current
accounting period.

Appropriation of recovery in NPAs: Interest realised on NPAs may be taken to income

account provided the credits in the accounts towards interest are not out of fresh/ additional
credit facilities sanctioned to the borrower concerned.

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 In the absence of a clear agreement between the bank and the borrower for the purpose of appropriation
of recoveries in NPAs (i.e. towards principal or interest due), banks should adopt an accounting principle
and exercise the right of appropriation of recoveries in a uniform and consistent manner.

Interest Application On an account turning NPA, banks should reverse the interest already
charged and not collected by debiting Profit and Loss account, and stop further application of
interest. However, banks may continue to record such accrued interest in a Memorandum
account in their books. For the purpose of computing Gross Advances, interest recorded in the
Memorandum account should not be taken into account.

Computation of NPA levels Banks are advised to compute their Gross Advances, Net
Advances, Gross NPAs and Net NPAs.

Categories of NPAs : Banks are required to classify Non-performing assets further into the following
three categories based on the period for which the asset has remained non performing and the
realisability of the dues:

Substandard Assets

Doubtful Assets

Loss Assets

Substandard Assets : With effect from March 31, 2005, a substandard asset would be one,
which has remained NPA for a period less than or equal to 12 months. Such an asset will have
well defined credit weaknesses that jeopardise the liquidation of the debt and are characterised
by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected.

Doubtful Assets: With effect from March 31, 2005, an asset would be classified as doubtful
if it has remained in the substandard category for a period of 12 months. A loan classified as
doubtful has all the weaknesses inherent in assets that were classified as substandard, with the
added characteristic that the weaknesses make collection or liquidation in full, – on the basis
of currently known facts, conditions and values – highly questionable and improbable.

Loss Assets A loss asset is one where loss has been identified by the bank or internal or external

auditors or the RBI inspection but the amount has not been written off wholly. In other words,
such an asset is considered uncollectible and of such little value that its continuance as a
bankable asset is not warranted although there may be some salvage or recovery value.

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 Guidelines for classification of assets: Broadly speaking, classification of assets into above
categories should be done taking into account the degree of well-defined credit weaknesses and the
extent of dependence on collateral security for realisation of dues. Banks should establish appropriate
internal systems (including technology enabled processes) for proper and timely identification of NPAs,
especially in respect of high value accounts. The banks may fix a minimum cut off point to decide what
would constitute a high value account depending upon their respective business levels. The cut off point
should be valid for the entire accounting year. Responsibility and validation levels for ensuring proper
asset classification may be fixed by the banks. The system should ensure that doubts in asset
classification due to any reason are settled through specified internal channels within one month from
the date on which the account would have been classified as NPA as per extant guidelines.

Availability of security / net worth of borrower/ guarantor: The availability of security or net
worth of borrower/ guarantor should not be taken into account for the purpose of treating an advance
as NPA or otherwise, except to the extent.

Accounts with temporary deficiencies: The classification of an asset as NPA should be based on
the record of recovery. Bank should not classify an advance account as NPA merely due to the existence
of some deficiencies which are temporary in nature such as non-availability of adequate drawing power
based on the latest available stock statement, balance outstanding exceeding the limit temporarily, non-
submission of stock statements and non-renewal of the limits on the due date, etc. In the matter of
classification of accounts with such deficiencies banks may follow the following guidelines:

Banks should ensure that drawings in the working capital accounts are covered by the adequacy of
current assets, since current assets are first appropriated in times of distress. Drawing power is
required to be arrived at based on the stock statement which is current. However, considering the
difficulties of large borrowers, stock statements relied upon by the banks for determining drawing
power should not be older than three months. The outstanding in the account based on drawing
power calculated from stock statements older than three months, would be deemed 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 borrower's
financial position is satisfactory.

Regular and ad hoc credit limits need to be reviewed/ regularised not later than three months from
the due date/date of ad hoc sanction. In case of constraints such as non-availability of financial
statements and other data from the borrowers, the branch should furnish evidence to show that
renewal/ review of credit limits is already on and would be completed soon. In any case, delay
beyond six months is not considered desirable as a general discipline. Hence, 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.

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 Up Gradation 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. With regard to up gradation of a
restructured/ rescheduled account which is classified as NPA contents of this circular will be
applicable.

Accounts regularised near about the balance sheet date: The asset classification of borrowal
accounts where a solitary or a few credits are recorded before the balance sheet date should be handled
with care and without scope for subjectivity. Where the account indicates inherent weakness on the
basis of the data available, the account should be deemed as a NPA. In other genuine cases, the banks
must furnish satisfactory evidence to the Statutory Auditors/Inspecting Officers about the manner of
regularisation of the account to eliminate doubts on their performing status.

Asset Classification to be borrower-wise and not facility-wise

It is difficult to envisage a situation when only one facility to a borrower/one investment

in any of the securities issued by the borrower becomes a problem credit/investment and
not others. Therefore, all the facilities granted by a bank to a borrower and investment in
all the securities issued by the borrower will have to be treated as NPA/NPI and not the
particular facility/investment or part thereof which has become irregular

If the debits arising out of devolvement of letters of credit or invoked guarantees are
parked in a separate account, the balance outstanding in that account also should be
treated as a
part of the borrower’s principal operating account for the purpose of application of
prudential norms on income recognition, asset classification and provisioning.

iii) The bills discounted under LC favouring a borrower may not be classified as a Non-
performing asset (NPA), when any other facility granted to the borrower is classified as
NPA. However, in case documents under LC are not accepted on presentation or the
payment under the LC is not made on the due date by the LC issuing bank for any reason
and the borrower does not immediately make good the amount disbursed as a result of
discounting of concerned bills, the outstanding bills discounted will immediately be
classified as NPA with effect from the date when the other facilities had been classified as
NPA

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 Advances under consortium arrangements: Asset classification of accounts under consortium
should be based on the record of recovery of the individual member banks and other aspects having a
bearing on the recoverability of the advances. Where the remittances by the borrower under consortium
lending arrangements are pooled with one bank and/or where the bank receiving remittances is not
parting with the share of other member banks, the account will be treated as not serviced in the books
of the other member banks and therefore, be treated as NPA. The banks participating in the consortium
should, therefore, arrange to get their share of recovery transferred from the lead bank or get an express
consent from the lead bank for the transfer of their share of recovery, to ensure proper asset classification
in their respective books.

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.

Loans with moratorium for payment of interest

In the case of bank finance given for industrial projects or for agricultural plantations etc. where
moratorium is available for payment of interest, payment of interest becomes 'due' only after the
moratorium or gestation period is over. Therefore, such amounts of interest do not become
overdue and hence do not become NPA, with reference to the date of debit of interest. They
become overdue after due date for payment of interest, if uncollected.

In the case of housing loan or similar advances granted to staff members where interest is payable
after recovery of principal, interest need not be considered as overdue from the first quarter
onwards. Such loans/advances should be classified as NPA only when there is a default in
repayment of instalment of principal or payment of interest on the respective due dates.

Agricultural advances

A loan granted for short duration crops will be treated as NPA, if the instalment of principal or
interest thereon remains overdue for two crop seasons. A loan granted for long duration crops
will be treated as NPA, if the instalment of principal or interest thereon remains overdue for
one crop season. For the purpose of these guidelines, “long duration” crops would be crops
with crop season longer than one year and crops, which are not “long duration” crops, would
be treated as “short duration” crops. The crop season for each crop, which means the period
up to harvesting of the crops raised, would be as determined by the State Level Bankers’

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 Committee in each State. Depending upon the duration of crops raised by an agriculturist,
the above NPA norms would also be made applicable to agricultural term loans availed of by
him.

Where natural calamities impair the repaying capacity of agricultural borrowers for the purposes,
banks may decide on their own as a relief measure conversion of the short-term production
loan into a term loan or re-schedulement of the repayment period; and the sanctioning of
fresh short-term loan, subject to guidelines.

In such cases of conversion or re-schedulement, the term loan as well as fresh short-term loan
may be treated as current dues and need not be classified as NPA. The asset
classification of these loans would thereafter be governed by the revised terms &
conditions and would be treated as NPA if interest and/or instalment of principal
remain overdue for two crop seasons for short duration crops and for one crop season
for long duration crops. For the purpose of these guidelines, "long duration" crops would
be crops with crop season longer than one year and crops, which are not 'long duration"
would be treated as "short duration" crops.

While fixing the repayment schedule in case of rural housing advances granted to agriculturists

under Indira Awas Yojana and Golden Jubilee Rural Housing Finance Scheme, banks

should ensure that the interest/instalment payable on such advances are linked to crop

cycles.

Revised IRAC norms for Agri advance: Revised IRAC norms for Agri advance: IRAC

norms for short term & long term crops are as per the below table:

Sl. Cropping pattern Crop cultivation period Repayment due date(fixed)

No. (Loan disbursement period)

Short Term Crop:

1. Mono Crop (Kharif / 1st April to 30th September(Kharif Maximum 12 months from the first disbursement
Rabi) season) and 1st October to 31st
date in case of new accounts or maximum 12
March(Rabi season)
months from first withdrawal date after renewal of
crop loan in case of renewed accounts (to be
synchronized with harvesting of crop)
2. Double/Multiple Kharif & Rabi seasons Maximum 12 months from the first disbursement
Crops date in case of new accounts or maximum 12
months from the first withdrawal date after renewal
of crop loan in case of renewed accounts. (to be
synchronized with harvesting of crop)

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 3. Single crop for 12 As per crop needs all round the Maximum 12 months from the first disbursement
months year
date in case of new accounts or maximum 12
months from the first withdrawal date after renewal
of crop loan in case of renewed accounts

Long Term Crop:

4. Long term crops All round the year as per crop Maximum 18 months from the first disbursement
(More than 12 needs
date in case of new accounts or maximum 18
months)
months from the first withdrawal date after renewal
of crop loan in case of renewed accounts.

Example: Repayment due date, IRAC norms and Agri interest subvention for different crop seasons /
cropping pattern under BKCC Scheme are given below:

Sr. Particulars Mono crop Double/Multiple Single crop for 12 Long Term Crop
No. Crops months
(Kharif/Rabi)

1 Scheme Code CC028 CC003 CC029 CC025

2 Sanction Date 01.04.2018 01.04.2018 01.04.2018 01.04.2018

3 Repayment 31.03.2019 31.03.2019 31.03.2019 30.09.2019

due date
(Maximum 12 (Maximum 12months (Maximum (Maximum 18months
months from the first from the first 12months from the from the first
disbursement date in disbursement date in first disbursement disbursement date in
case of new accounts case of new accounts date in case of new case of new accounts or
or first withdrawal or first withdrawal accounts or first first withdrawal date
date after renewal of date after renewal of withdrawal date after renewal of crop
crop loan) crop loan) after renewal of loan)
crop loan)

4 Date of 01.04.2019 01.04.2019 01.04.2019 01.10.2019

overdue

5 Date of NPA 31.03.2021 31.03.2021 31.03.2021 31.03.2021

6 Interest At simple interest up At simple interest up At simple interest At simple interest up to

Application to 31.03.2019 and to 31.03.2019 and up to 31.03.2019 30.09.2019 and
thereafter thereafter and thereafter thereafter compounding
compounding at half compounding at half compounding at at half yearly rests, if not
yearly rests ,if not paid yearly rests ,if not paid half yearly rests, if paid before due date
on or before due date before due date not paid before due
date

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 7 Agri interest Up to 31.03.2019 or Up to 31.03.2019 or Up to 31.03.2019 or As per RBI guidelines,
Subvention actual date of actual date of actual date of interest subvention is
payment whichever is payment whichever is payment whichever available for short term
earlier earlier, subject to is earlier subject to crop loans. Hence,
maximum period of 12 maximum period of interest subvention and
months. 12 months. prompt subvention will
not be available under
this category.

8 At Normal From 1st April 2019 From 1st April 2019 From 1st April 2019 From 1st October 2019
lending rate

(*) Agri interest subvention is available only in case of short term crop loans only, subject to maximum
period of 12 months.

CREDIT CARD ACCOUNT: If the account due is unpaid for -90- days.

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

provided debit balance in account is less than the market / surrender value of the securities in all above
cases.

Project Loans:

There are occasions when the completion of projects is delayed for legal and other extraneous reasons
like delays in Government approvals etc.

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 Project Loans for infrastructure sector

Project Loans for Non-infrastructure sector

The revised DCCO falls within the period of two years from the original DCCO stipulated at the time of
financial closure for infrastructure projects (including commercial real estate projects).

The revised DCCO falls within the period of one year from the original DCCO stipulated at the time of
financial closure for Non-infrastructure projects.

Infrastructure Projects involving court cases Up to another two years (beyond the two-year
period i.e., total extension of four years), in case the reason for extension of DCCO.

Infrastructure Projects delayed for other reasons beyond the control of promoters (Other
than Court Cases): Up to another one year (beyond the two-year total extension of three years)

Project Loans for Non-Infrastructure Sector (Other than Commercial Real Estate
Exposures)

Up to another one year (beyond the one year period total extension of two years). The asset classification
benefits provided are not applicable to commercial real estate sector.

It is re-iterated that a loan for a project may be classified as NPA during any time before commencement
of commercial operations as per record of recovery (90 days overdue). Further, Restructuring is subject
to the condition that the application for restructuring should be received before the expiry of period.

NON-FINANCIAL REASONS-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 be deemed 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 borrower‘s
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.

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 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.

Provisioning Norms: The primary responsibility for making adequate provisions for any
diminution in the value of loan assets, investment or other assets is that of the bank managements
and the statutory auditors. The assessment made by the inspecting officer of the RBI is furnished to
the bank to assist the bank management and the statutory auditors in taking a decision in regard to
making adequate and necessary provisions in terms of prudential guidelines.

In conformity with the prudential norms, provisions should be made on the non performing assets
on the basis of classification of assets into prescribed categories as detailed in paragraphs 4 supra.
Taking into account the time lag between an account becoming doubtful of recovery, its recognition
as such, the realisation of the security and the erosion over time in the value of security charged to
the bank, the banks should make provision against substandard assets, doubtful assets and loss
assets as below:

A-Loss assets Loss assets should be written off. If loss assets are permitted to remain in the books
for any reason, 100 percent of the outstanding should be provided for.

Example

A- Book Balance outstanding in the account as on 31.03.2015 after making interest Rs 2,50, 000

reversal, in case of loss assets if any.

B- Less : Amount of DICGC claim received, cover available / claim lodged claim Rs 1,25 000

received or claim received and adjusted say 50% of A

C. Net Balance : A-B Rs 1,25 000

Total Provision required 100% of C Rs 1,25 000

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 -Doubtful assets (i) 100 percent of the extent to which the advance is not covered by the realisable
value of the security to which the bank has a valid recourse and the realisable value is estimated on a
realistic basis.

In regard to the secured portion, provision may be made on the following basis, at the rates ranging
from 25 percent to 100 percent of the secured portion depending upon the period for which the asset
has remained doubtful:

Period for which the advance has remained in ‘doubtful’ category Provision requirement (%)

Up to one year 25 %

One to three years 40%

More than three years 100 %

Note: Valuation of Security for provisioning purposes With a view to bringing down
divergence arising out of difference in assessment of the value of security, in cases of
NPAs with balance of Rs. 5 crore and above stock audit at annual intervals by external
agencies appointed as per the guidelines approved by the Board would be mandatory in
order to enhance the reliability on stock valuation. Collaterals such as immovable
properties charged in favour of the bank should be got valued once in three years by
valuers appointed as per the guidelines approved by the Board of Directors.

Example:

A- Book Balance outstanding in the account as 31.03.2017 (Doubtful-I) Rs 2,50, 000

B-Less : Secured Portion Rs 1,25 000

C-Unsecured Portion Rs 1,25 000

D Total Provision required 100% of C + 25% of B Rs 1,56,250

2.3.2-Substandard assets (i) A general provision of 15 percent on total outstanding should be made
without making any allowance for ECGC guarantee cover and securities available.

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 The ‘unsecured exposures’ which are identified as ‘substandard’ would attract additional provision of
10 per cent, i.e., a total of 25 per cent on the outstanding balance. However, in view of certain safeguards
such as escrow accounts available in respect of infrastructure lending, infrastructure loan accounts
which are classified as sub-standard will attract a provisioning of 20 per cent instead of the aforesaid
prescription of 25 per cent. To avail of this benefit of lower provisioning, the banks should have in place
an appropriate mechanism to escrow the cash flows and also have a clear and legal first claim on these
cash flows. The provisioning requirement for unsecured ‘doubtful’ assets is 100 per cent. Unsecured
exposure is defined as an exposure where the realisable value of the security, as assessed by the
bank/approved valuers/Reserve Bank’s inspecting officers, is not more than 10 percent, ab-initio, of the
outstanding exposure. ‘Exposure’ shall include all funded and non-funded exposures (including
underwriting and similar commitments). ‘Security’ will mean tangible security properly discharged to
the bank and will not include intangible securities like guarantees (including State government
guarantees), comfort letters etc.

2.3.3-Standard assets :(i) The provisioning requirements for all types of standard
assets stands as below. Banks should make general provision for standard assets at the
following rates for the funded outstanding on global loan portfolio basis:

Farm Credit to agricultural activities and Small and Micro

Enterprises (SMEs) sectors at 0.25 per cent;

advances to Commercial Real Estate (CRE) Sector at 1.00 per cent;

advances to Commercial Real Estate – Residential Housing Sector

(CRE - RH) at 0.75 per cent1 (d) housing loans extended at teaser
rates and restructured advances ,all other loans and advances not
included in (a) (b) and (c) above at 0.40 per cent.

The provisions on standard assets should not be reckoned for arriving at net NPAs.

The provisions towards Standard Assets need not be netted from gross advances but
shown separately as 'Contingent Provisions against Standard Assets' under 'Other
Liabilities and Provisions Others' in Schedule 5 of the balance sheet.

It is clarified that the Medium Enterprises will attract 0.40% standard asset
provisioning. CRE-RH would consist of loans to builders/developers for residential
housing projects (except for captive consumption) under CRE segment. Such
projects should ordinarily not include non residential commercial real estate.
However, integrated housing projects comprising of some commercial space (e.g.
shopping complex, school, etc.) can also be classified under CRE-RH, provided that
the commercial area in the residential housing project does not exceed 10% of the
total Floor Space Index (FSI) of the project. In case the FSI of the commercial area
in the predominantly residential housing complex exceeds the ceiling of 10%, the
project loans should be classified as CRE and not CRE-RH.

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 DISPOSAL OF ASSETS IN NPA/TWO/ 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. There may be instances where a third
party may approach the bank to buy the assets charged by the borrower to the bank.

In such cases, Chief Managers (including Dy. Regional Managers scale IV & above) and above can
authorise sale of such assets in accounts, as per norms. 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 bank’s (or other bank’s/ FI’s
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 a 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 Net
Present Value (NPV) of the realizable value of assets being allowed to be disposed off (Fair Market Value
and not the Distress Value) net of the cost of realization in accordance with RBI guidelines.

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 cannot 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.

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:

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 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:

Under reschedulement pattern of debt repayment obligation will be changed from EMI to
ballooning or descending schedule.

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.

All Standard, Sub Standard and doubtful accounts can be considered for reschedulement.

All Senior Branch Managers and Sr. Manager (Credit) can consider for a period of six months in
case of proposal falling under their powers.

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:

Changing existing repayment period of the debt.

Changing outstanding exposure of the bank

Changing the nature and quantum of existing credit facilities

Sanctioning of fresh credit facility or additional facility

Thus restructuring involves, rephasement of loan instalments, waiver of penal interest, considering
FITL, converting irregular portion into WCDL/WCTL, fresh/additional loans, working capital limits.

Lok Adalat:

Lok Adalat is a process of administering justice without resorting to Courts and is established under the
Legal Services Authority Act 1987. Under the provisions of the Act, States have constituted Legal Services

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 Authorities at High Court, District and at Taluka level. Under the Authorities of such Committees
respective Courts are organizing Lok Adalats within the area of jurisdiction.

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:

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.

If no settlement is arrived at, the parties can continue with court proceedings.

The decrees by Lok Adalats are as good as a decree passed by civil court and are binding on the

parties.

No appeal lies against the decree passed by Lok Adalats as the matters are settled through
negotiation and mutual consent of the parties.

Cases of amount involving up to Rs. 20.00 lacs can be referred to Lok Adalats as per Policy. However,
where DRTs organize Lok Adalat for cases pending in DRTs, matters can be referred irrespective of
amount involved.

Prudential Write-off (PWO):

Any asset which is not contributing any income to the bank or its continuation in the Balance Sheet
is deemed to be undesirable may be considered for final write-off.

All advances accounts categorized as "Loss Assets" where 100% provision has been made and where
chances of recovery are bleak and there are no securities available, can be considered for final write-off.

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 Advances classified as 'Doubtful' and where DICGC/CGTMSE/ECGC claims have been received and
where DICGC/CGTMSE/ECGC permission for write-off is not necessary can be considered for final
write-off. This is because in such assets 100% provision for the net adjusted balance would have already
been made.

Any others as may be directed by Corporate Office for write-off may be considered.

Prudential Write off of the following accounts should not be done :–

TODs in current account and BOBCARD TODs and adhoc / one time BP/BD.

Accounts where frauds have been reported.

Quick mortality accounts (NPA within one year of sanction / disbursement)

Staff accounts (if any) and staff related / guaranteed accounts.

Advances accounts such as Cash Credit, Demand Loan, and Term Loan etc. wherein borrower/s are
also having outstanding TOD in current account/ S.B. account, BOBCARD TOD etc.

Takeout Finance: Takeout finance is the product emerging in the context of the funding of long-
term infrastructure projects. Under this arrangement, the institution/the bank financing infrastructure
projects will have an arrangement with any financial institution for transferring to the latter the
outstanding in respect of such financing in their books on a predetermined basis. In view of the time-lag
involved in taking-over, the possibility of a default in the meantime cannot be ruled out. The norms of
asset classification will have to be followed by the concerned bank/financial institution in whose books
the account stands as balance sheet item as on the relevant date. If the lending institution observes that
the asset has turned NPA on the basis of the record of recovery, it should be classified accordingly. The
lending institution should not recognise income on accrual basis and account for the same only when it
is paid by the borrower/ taking over institution (if the arrangement so provides). However, the taking
over institution, on taking over such assets, should make provisions treating the account as NPA from
the actual date of it becoming NPA even though the account was not in its books as on that date.

Right of Recompense:

This is the Right available to the creditor to recover the amount of interest and instalment sacrificed
while accepting a rehabilitation proposal after the unit has been revived fully.

While agreeing to any scheme of rehabilitation otherwise, bank should always insist on its Right of
Recompense in respect of the reliefs/concessions granted by it as part of the rehabilitation scheme. In
other words, the bank would like to reserve its right to recover the amount earlier sacrificed by it as a
part of rehabilitation proposal from the unit after it has effected a turn around.

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 All reliefs and concessions in a rehabilitation / restructuring proposal shall be subject to right of
recompense which shall be duly quantified and incorporated in all proposals for the purpose of recovery
upon the unit restoring health. Normally, right of recompense shall not be exercised within the first 3
years of implementation of the restructuring/rehabilitation.

However, if the borrower prepays the Bank’s dues or pays dividend to share holders this right may
be exercised even within –3- years.

Zonal Managers, Regional Managers and Branch Managers have no power to waive right of
recompense. Any request for waiver by the borrower or any proposal for waiver of right of recompense
by operating agency /CDR Cell shall be referred to Corporate Centre.

Restructuring and Asset Classification of Education Loan Accounts

As per the RBI guidelines, repayment of education loan starts after completion of course period plus one
year. However, if may happen that a borrower fails to get a good income or a job after course completion
if the market has a slow-down. Sometimes the student may not get a job, due to macro-economic
conditions, which may result in default. In such cases, the borrower generally demands the extension of
moratorium period.

As per extant guidelines on prudential norms on IRAC and provisioning pertaining to advances,
accounts that are restructured after April 1, 2015, however, attract higher provisioning and are classified
as NPA. In order address this issue and to encourage banks to provide more education loans, the RBI
has therefore, revised the guidelines on restructuring and asset classification of education loan accounts,
which was advised by IBA. The revised guidelines are:

Additional moratorium period up to 3 spell (not exceeding 6 months each) may be allowed during
life cycle of education loans, taking into account the period of unemployment/underemployment.

The rescheduling of repayment period of such loans due to unemployment/underemployment of

borrower will not be treated as restructured accounts for computing NPAs.

However, bank would be required to maintain a higher provisioning of 5% during the additional
moratorium period and one year thereafter.

The facility of extended repayment period and increased number of moratorium period may be extended
to existing borrowers whose accounts are classified as ‘standard’.

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 Benefits of Additional Moratorium:

To extend the benefit of additional moratorium period, branches need to follow the below steps:

Be in touch with the education loan borrowers, especially in case of Potential NPA
(PNPA), whose accounts are classified as ‘standard’, but show indications of difficulty to
pay the EMI on account of not getting job, job loss, inadequate salary, higher obligation,
and other micro/macro issues or consider the request as per scheme, whenever request
is received from the borrower.
Ascertain the factual position and explore the possibility of covering such accounts for restructuring.

Obtain a written request from the applicants before such restructuring.

Obtain sanction of such additional moratorium from next higher authority.

Follow the steps as enumerated in the job card.

Reschedule the restructured education loan accounts through HLARA menu as per existing
procedure.

Only Rephasement code – 290 has to be entered in HLARA → Payment details tab →
Rescheduling notes field at the time of rescheduling of the account.

Higher provisioning of 5% during the moratorium period will be taken care by ASCROM
cell, BCC, Mumbai.

Obtain an acknowledgement in the prescribed format from applicant/co-applicant and

guarantor. (BCC:BR:110:91 , 20.02.2018)

SARFAESI ACT, 2002

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002 referred to as Act, is basically an act which provides different options to banks and
FIs for resolving their Non – performing Assets and an effective tool in the hands of the bank
to enforce the security interest and recover the dues thereby reducing NPAs/TWOs/PWOs.

The Act deals with following aspects:

Enforcement of Security Interest by secured creditor without the intervention of Court.

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 The action under SARFAESI Act can be initiated for both moveable assets e.g. Vehicles, Plant &
Machinery, stocks, etc. as well as ‘immovable properties except agricultural land. 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 realize the proceeds.

To provide a legal framework for Securitisation of assets.

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.

But, only some of the Sections of the SARFAESI Act, 2002, are necessary for the Bankers to know &
act upon.

Before proceeding for SARFAESI action, it must be ensured as follows:-

The account must have been classified / declared as NPA as per norms.

The contractual dues in the account is more than Rs.1.00 lac.

Outstanding dues as on date of NPA and contractual dues while issuing Demand Notice are
calculated correctly

Security Documents are in order, valid and enforceable

Action to be initiated within the Limitation period.

Mortgaged property has since been registered under CERSAI and certificate to its effect is
available on record

The securities are inspected to ensure its accessibility/marketability, etc.

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.

SARFAESI Action cannot be initiated in the following instances:

A contractual due is below Rs.1 lakh.

Security interest over Agricultural land

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 Any case in which the amount due is less than 20% of the principal amount and interest thereon

Lien on goods, money or security or pledge of movables.

Any rights of unpaid seller under sec.47 of Sale of Goods Act

Security interest over aircraft or ship vessel

Any properties not liable for attachment or sale under section 60 of the Code of Civil Procedure,
1908 such as tools of artisans etc.

Action under SARFAESI – SARFAESI Process

Step-I: Section-13 (2)-Demand Notice:

A Notice U/S 13(2) is first required to be issued to the borrower & guarantor, if any, under the seal &
signature of the Authorized Officer of the Bank, as per the prescribed (new) format of the Bank,
providing -60- days’ time for payment of the dues, either through hand delivery or through Registered
A.D. / Speed Post or courier within 3 days from the date of NPA.

The proof of delivery / acknowledgement card should be kept along with the office copies of the
notice/s.

However, if the Notice is returned undelivered or the Authorized Officer feels that receipt of notice is
being avoided, then the notice should be affixed on the outer door or at such conspicuous place of the
office or residence whichever address is mentioned on the notice and the same shall also be immediately
published in two newspapers having good circulation in that area and care be taken that one of the
newspapers should be of vernacular language.

The branch to complete the above steps within 3 days from the date of return of the original notice or
on getting intimation from postal authorities that the Notice has not been delivered.

Step-II: Section 13(3A)-Right to Representation:

If Borrower on receipt of notice represents to the Bank or raises any objection, the Bank shall reply the
representation within 15 days positively on receipt of such representation/ objection (to be replied by
Authorized Officer only) with the reason for non-acceptance of the objection.

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 Where the Bank (AO) comes to the conclusion that there is need to change the demand notice, it will
send a revised notice or pass such order as deemed necessary. It is suggested to write at the top of Notice
“our demand notice under section13 (2) of SARFAESI Act, 2002 dt..….. Cancelled for technical reason”.

Step-III: Section-13 (4)-Action for Possession of Assets:

Under the Section-13(4), the branch is advised to issue “Notice Demanding Possession”
to the borrower/guarantor/mortgagor within 3 days of completion 60 days’ demand notice
period for taking over the possession of the mortgaged property, If the borrower or the
guarantor fails to deposit the dues to the Bank within the period of demand notice.The action
can be initiated by delivering a Possession Notice on the prescribed (new) format to the
borrower and the guarantor through Registered Post A.D. / Speed Post and also by affixing the
Possession Notice (new format) on the outer door or at such conspicuous place of the property

Since, the borrower/mortgagor/guarantor does not handover the property to the bank, above
action is construed as “Symbolic Possession”. Therefore, the notice must be published in
two leading newspapers within -7- days from the date of possession, one in vernacular
language having sufficient circulation in that locality

Please note that action taken U/S 13(4) is challengeable before DRT only but not before a Civil
Court as DRT is having jurisdiction to deal with cases related to SARFAESI Act not Civil Court.

Action taken under Section -13(2) by the authorized officer is not challengeable before any
court by the borrower.

File Caveat before the concerned DRT [also with the High Court in high value accounts above
Rs.1.00 Crore within 7 days of initiating action under Section-13(4) for possession.

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.

Step-IV: Section-14- File Application for District Magistrate (DM)/ Chief Metropolitan
Magistrate (CMM) permission:

In case party refuses / obstructs in taking physical possession, the DM / CMM application to
be filed, within next 7 days from the date of refusal / obstruction.

Application under Section-14 should be filed before the DM/ CMM, as the case may be, on
Bank’s prescribed format seeking for assistance in taking physical possession of the charged /

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 mortgaged property of the mortgagor(s), where only symbolic possession has been taken by the
Bank.

The CMM/DM has to pass suitable orders for taking possession of the secured assets within a
period of 30 days from the date of the application/ receipt of the affidavit of the Authorized
Officer.

In circumstances beyond the control of the CMM/DM, the time period of thirty days may be
extended to sixty days after recording of the reasons. No further extension beyond sixty days,
in aggregate, is permissible.

Step-V-Other important point to note:

Section 13(8) of the Act, notifies that, If the dues of the secured creditor together with all costs,
charges and expenses incurred by him are tendered to the secured creditor at any time before
the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the
secured creditor, and no further step shall be taken by him for transfer or sale of that secured
asset.

Even after possession, if the borrower/guarantor does not pay the dues, then before effecting
sale of the mortgaged property, the Authorized Officer shall obtain valuation of the charged
assets and on its basis the reserve price shall be fixed and then the secured asset shall be sold
either by obtaining quotations or inviting tenders from the public or holding public auction or
by private treaty.

A clear sale notice of -30- days shall be served upon the borrower/ guarantor for sale/auction
of the charged assets / mortgaged property and it shall be affixed on a conspicuous part of the
property and shall also be published in two leading newspapers, one in English & the other in
vernacular language, having vide circulation in the area where the assets are situated. It may
be noted that no sale shall take place before the expiry of thirty days from the date of
publication.

However, if sale fails and sale is required to be conducted again, then the Authorized Officer
shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any
subsequent sale.

On every sale of charged assets, the purchaser shall immediately (i.e. on the same day or not
later than next working day, as the case may be) pay a deposit of 25% of the amount of the sale
price inclusive of earnest money, if any, where after the sale shall be confirmed to the highest
bidder and in case of default, the property shall be sold again. However, the balance amount of

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 sale price shall be paid by the purchaser on or before 15 th day of confirmation of sale or such
extended period as may be agreed upon in writing between the secured creditor & the purchaser
but it shall not be more than 90 days.

After deposit of the entire sale price within the stipulated period, Sale Certificate shall be issued
to the auction purchaser on the letter head of the concerned Branch as per the prescribed
format.

It may be noted that this Sale Certificate is title deed in itself and is issued only when the sale
becomes absolute. After Sale Certificate, title vests in the purchaser.

It does not compulsorily require registration with the Sub-Registrar. This has already been held
by Supreme Court on 28.05.2007 in Civil Appeal No. 354 of 2002: B. Arvind Kumar V/s
Government of India & others. Even DRAT, Delhi has held so in the case of M/s Ram Murty
Pyarelal & others V/s Central Bank of India, published in 2010(1) Bank CLR 70 (DRAT, Delhi).
However, if any purchaser requests in writing for registration and is ready to bear its expenses
together with his counsel fee and that of Bank’s panel advocate, then the Authorized Officer
may get the original Sale Certificate issued to the purchaser registered, annexing
therewith the original Sale Certificate as part & parcel of the deed. In no case Sale

Deed be executed & registered by the Authorized Officer by writing the contents
of Sale Certificate on stamp papers. If done so, the purchaser will legally have two
title deeds of the same property, one registered sale deed and the other sale
certificate. As such, care of above must be taken to avoid future litigation and
action against Bank / the Authorized Officer, if any) can be removed.

Any borrower / guarantor or any person aggrieved by any action of the Bank U/S 13(4) may file
an Appeal before DRT U/S 17 of the SARFAESI Act and similarly aggrieved by an order of DRT
may file Appeal before DRAT U/S 18 of the Act and so on could subsequently approach High
Court or Supreme Court.

The Allahabad High Court in WRIT C.No. 14755 of 2013, has quashed proceedings initiated
post notice under Section 13(4) of The Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 as the said notice was issued without duly
informing the debtor about the auction of property and subsequent sale.

Justice Mahesh Chandra Tripathi was hearing a petition filed by one Ashok Kumar who sought
quashing of an order by the Debt Recovery Appellate Tribunal(DRAT) dated March 6, 2013
wherein an appeal against the order of the Debt Recovery Tribunal(DRT) was dismissed

Hence, Care must be taken to ensure that all statutory steps required as per the provisions of
the Act and Rules there under are taken properly and the Original Postal Receipts of 13(2)
Demand Notice, 13(4) Possession Notice & Auction Sale Notice must be preserved and kept

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 with its office copy; Photographs or video of affixing Possession Notice & Sale Notice by the
Authorized Officers must be taken & kept on record along with the original newspapers
containing publication of possession notice and auction notice.

However, it must be ensured that sale notice sent through registered post and its publication
must have clear 30 days’ notice from the date of its receipt/publication.

Step-VI-Appropriation of Sale price:

The secured creditor (Bank) upon successful sale of the assets is entitled to apply the money
received, firstly, for payment of all costs, charges and expenses properly incurred by the secured
creditor,

Secondly, for discharging the dues of the secured creditor and the residual money, if any, has
to be paid to the person entitled thereto in accordance with his rights and interests.Right to
recover balance dues: Where dues of the secured creditor are not fully satisfied with the
sale proceeds of the secured assets under SARFAESI, the secured creditor can file an
application to the Debt Recovery Tribunal (DRT) or a competent court, for recovery of the
balance amount from the borrower. (Suit filing to be done within the limitation period).
Things to remember while taking action under SARFAESI Act

Issue of Demand Notice: -

Issue Demand Notice u/s 13(2) of the act to all the borrowers and guarantors within 3 days of
account turning NPA as per format prescribed by the bank (BCC:BR:96:247 dated 08.07.2004
with addition / modification).
Notice must contain total contractual dues upto the date of serving the notice

Notice must contain details of charged assets (movable and/or immovable) over which security
interest is being enforced
Demand to discharge the liability in full within 60 days of the date of notice

Representation, if any, received from the borrower / guarantor after receipt of notice must be
replied within 15 days positively.

Service of Demand Notice: -

Send notice to all the borrowers and guarantors at all their addresses on record (residence /
office / factory etc.).

In case of company, send notice to the registered office of the company as well as branch office.

Service of notice by Registered Post (with AD) is a must.

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 Notice should also be affixed on the gate / door / wall of the secured asset/where the borrowers
are residing and photograph to be taken

Notice should also be serviced by other modes like- Speed Post, hand delivery, fax, e-mail,
courier, simple post

Proof of sending and delivery of notice (AD of Registered Post) must be preserved carefully for
showing it to the court in case of need.

Online report of delivery status of the notice should also be downloaded from the site of
www.indiapost.gov.in and preserved.

If the borrower / guarantor refuses to accept the notice, the courts consider it as served. Hence,
the returned envelope with remarks of postman - “Refused to accept” is considered
valid service of the notice and should be preserved carefully.

If notice returned unserved (undelivered), service shall be effected by way of publication in two
leading newspapers, one of which must be in vernacular language.
At time of issuance of ser

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 Sale of secured assets:

Sale may be done after taking physical possession of the asset.

Sale after symbolic possession may be done after authority from R.O.

Obtain valuation from bank’s panel valuer registered u/s 34 of Wealth Tax act, who is
authorized to do valuation under SARFAESI act

Committee of A.O. and two officials of the branch should fix reserve price (realizable value of
the asset) for sale

E-auction Sale notice should be published giving at-least 30 days’ time between publication
and date of auction (consider time for service of notice also while fixing date).

The sale notice should be sent to the borrowers and guarantors by registered post with AD and
proof of delivery to be preserved.
Sale notice must be published on www.tenders.gov.in for at-least 30 days (with help of R.O.).

Sale notice should also be published on bank’s website ( send mail to administrator at
mail.admin@bankofbaroda.co.in)

In case of failure of auction, reserve price may be reduced by the committee headed by Regional
Head by 10%/20%/25% in following auctions.
Subsequent auction can be done after 15 days’ notice after failure of last auction.

Contents of sale notice- The sale notice must contain following details-

Sale must be on “As is where is and As is Whatever is” basis

Date of notice u/s 13(2)

Date of possession

Names of borrowers and guarantors

Amount of demand notice

Complete details of secured assets put on sale

Reserve price of the asset

Earnest Money to be deposited by the prospective bidder

Date & time of inspection of assets by prospective bidder

Encumbrances over the assets, if any, known to the bank

Date, time and place of e-auction

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 Movable assets can also be sold under private treaty with the consent of the borrower.

Immovable assets can also be sold under private treaty after following due procedure.

Banks can also bid for auction in case of lack of bid.

Confirmation of sale-

Sale must be above the reserve price

Highest bidder to pay 25% (including EMD) within following working day.

Remaining 75% to be paid within 15 days of sale confirmation.

Sale certificate to be issued after receipt of full amount.

Excess amount of sale, if any, to be refunded to the borrower.

Standard Operating Procedure - Enforcement Actions in NPA Accounts - SARFAESI

Issuance of Notice to Borrowers and Guarantors under Sec 13(2) – within 3 days from the date
of NPA

If notice returned undelivered, affixture of notice in conspicuous part of property and paper
publication – within 3 days from the date of return of the original notice.
Reply for any objection in writing from the parties to SARFAESI notice – within 15 days.

Actions to be taken in the 60 days’ notice period (given under 13(2))

Verify the title deeds. Get fresh valuation if existing is more than 1 year

Visit the Mortgage assets, identify and record

Engage Recovery Agencies if necessary

Initiation of Section 13(4) actions for possession of the assets – within 3 days from completion
of 60 day notice period
Publication of Possession Notice in Two News Papers within 7 days of Possession

Filing of caveat before concerned DRT & also High court (above Rs 1crore) – 7 days of initiation
of action under 13(4)

If Physical possession is refused, application for eviction to filed with DM/CMM –within 7 days
of refusal.

After getting physical possession, publication of sale notice – within 7 days (the notice period
is 30 days)
Publicity for sale – During the 30 day sale notice period

If auction successful- Sale certificate issued as per terms of sale/act

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 If first auction/sale failed , next auction –issuing 15 days’ notice

7. Other Important Insights - SARFAESI Act, 2002

1). The Division Bench of the Hon’ble High Court of Madras held in Mrs.Saraspathy Sundararaj

Proprietrix Vs The Authorized Officer and Assistant General Manager, State Bank of India, SARB,

Chennai (CDJ 2010 MHC 5284-W.P.No.15146 of 2010 & M.P.No.1 of 2010) that writ petition

challenging the possession notice after a lapse of six years is not maintainable

2). Bank cannot exercise lien in respect of different loan account for which deceased borrower had

not deposited his title deeds. Bank is not entitled to invoke general lien under section 171 of

Contract Act. The liability of guarantor will be fastened to his estate on his death and creditor

can recover dues from estate of deceased guarantor - State Bank of India vs. Jayanthi & others

[2011(2) CTC 465]

3). Agricultural Property:

Section 31, bars enforcement of security of agricultural land.

The agricultural land is exempted from the Act and not the agricultural loan.

If the agricultural property is mortgaged for non-agricultural purpose, the same could not be proceeded
against.

If the nature of the agricultural land was converted into / used as non-agricultural land, SARFAESI
proceedings can be initiated. However, Conversion Certificate from Revenue
Authority or documents to prove the non-agricultural status of the land must be obtained before
initiating SARFAESI proceedings.

Appropriation of Recoveries in NPA / Written off accounts.

In respect of non-suit filed accounts:

Firstly, towards all costs, commission, charges and expenses paid or incurred and to be paid or
incurred by the Bank;
Secondly, towards interest, additional interest, further interest, penal interest due to the Bank; and

Lastly, towards payment of the principal moneys.

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 In respect of suit filed accounts and decreed accounts:

a. As per the directives of the concerned Court.

b. In the absence of specific directives from the Court, as applicable to non-suit filed accounts.

In respect of decreed accounts, in the following order:

In the order of priority mentioned in the Judgment/Decree/Final Order of the Court/DRT.

Where there is no specific directions given by the Court/DRT: -

i. Towards legal charges/expenses awarded by the Court.

Towards accrued/unapplied interest.

Towards Principal Amount decreed.

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 Bank‘s 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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 COMPROMISE PROPOSAL Total Contractual Dues:

Sum total of balances outstanding in the various accounts of the borrower including outstanding in Term
Loan, Cash Credit, BP, BD, Advance Bill A/c. Bills Past Due A/c, etc.

Plus Amount of Interest reversed from interest suspensePlus Unapplied interest at contractual rate of
interest from date of cessation of interest to date of actual recovery proposed as per compromise
proposal,

Plus Amount of Legal Expenses and security expenses etc. already incurred and debited to P/L a/c, if
any.
Net Book Dues:

Balance outstanding in the various accounts of the borrower

Less amount outstanding in interest suspense account

Minus Margin money (excluding margin against non-crystallized non-funded facilities) etc. kept in
current a/c, Time Deposit a/c or any G/L a/c and the recoveries kept separately in any account or the
retainable portion of claims received from DICGC, ECGC, CGFTI etc.
Except Sums accepted by bank under „No Lien‟.

Securities:

Value of Securities should not be 1 year old at the time of considering Compromise Proposal.

For property/ Assets having individual value of Rs. five crores & above, valuation should be obtained
from two approved Valuers independently.
Fair Market Value only to be Considered not distress value for Compromise.

Application of Interest Rate on Compromise Proposal: Minimum interest that may be

acceptable to the bank is preferred not below 8.50 % p.a. or contractual rate of interest, whichever is
lower from the date of cessation of interest till the date of repayment.

Take-out Finance: Under this arrangement, the institution/the bank financing infrastructure projects
will have an arrangement with any financial institution for transferring to the latter the outstanding in
respect of such financing in their books on a predetermined basis. However, it will not affect IRAC norms
and will be applicable from the date of NPA irrespective of handing over or taking over bank’s balance
sheet.

As per circular no.BCC:BR:111:635 dated 02.12.2019, the modifications are as under:

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Page 349 of 502
 CREATION OF STRESSED ASSETS MANAGEMENT VERTICAL (SAMV) FOR EFFECTING
SPEEDY RECOVERY

The 3 Tier Structure of Stressed Assets Management Vertical (SAMV) :

With a view to have focused attention on the recovery process at all levels, it is decided to create a New
Structure within our bank under the name “Stressed Assets Management Vertical (SAMV)” having
following 3 levels:

Corporate Level
Zonal/Regional Level
Branch Level

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 The main objectives for creation of this structure are:

Focused Attention to the Recovery Process at all Levels;

To enable the branches to concentrate on business growth.

General Guidelines :

The existing ARMBs to be renamed as Zonal Stressed Assets Recovery Branches (ZOSARB) and all NPA A/cs of the
Zone having outstanding balance above Rs.1.00 Crore to be transferred to ZOSARBs.

Each Region has to open one Stressed Assets Recovery Branch called Regional SARB (ROSARB) preferably at the
Center where DRTs are functioning and all NPA A/cs of the Region from Rs.10.00 Lacs to Rs.1.00 Cr. and all
SARFAESI eligible A/cs even below Rs.10.00 Lacs will be transferred to these ROSARBs. To start with, Zones/ Regions
shall find out surplus space available with any of their existing premises for opening of ROSARBs and also provide
necessary infrastructure for the same.

Wherever, it is not feasible to transfer certain NPA A/cs above Rs.1.00 Cr. to ZOSARB due to the constraints of space
or geographical distance or any other compulsion, such A/cs may be transferred to ROSARBs. However, in such cases,
a separate cell within ROSARB would be created for handling high value NPA A/cs i.e. with O/s Balance of above
Rs.1.00 Cr.

As regards, follow up and monitoring of Standard Stressed A/cs /SMA A/cs at Zonal/ Regional/ Branch Level, the
existing set up under the Department of Credit Quality & Portfolio Monitoring will continue.

When a new A/c slips into NPA category, that A/c should be continued with the base branch for one quarter, during
which the base branch will initiate all actions such as examination of wilful default, issuing SARFAESI Notices U/s
13(2) / 13(4) and explore the possibility for upgradation of the A/c. If they fail to get the A/c upgraded within the
quarter, then such A/c shall be transferred to ZOSARB or ROSARB as the case may be. However, the base branch
must ensure that the documents remain valid and enforceable.

All non SARFAESI NPA A/cs below Rs.10.00 Lacs will continue to be handled by the respective branches with the
help of Business Correspondents (BCs) in respect of Agriculture Loan A/cs and Call Centers for agri-loans repayable
in EMIs/Instalments. All Non Agriculture NPA Advances i.e. Retail/ MSME etc. will be handled by branches with the
help of Collection Network of outsourced agencies (IGS&CBSL) including Tele Callers (FTES) & Field Staff (FOS). For
this, additional number of BCs and Tele Callers/ Fleet on Street at respective Call Centers may be taken. This is just
to supplement the efforts of the branches for speedy recovery in this segment but the overall responsibility of
recovery/upgradation of these accounts will continue to be with the branches.

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 Each Zonal and Regional SARB shall be provided with at least one Law Officer.

Zonal/Regional Authorities may consider to transfer the officers to SARBs from respective branches from where the
A/cs are transferred to SARBs. The Branch Heads of SARBs to be selected, by looking into their previous work
experience and qualifications. SARBs will have a good mix of officers having credit background (in relatively medium
and large accounts) as well as officers having recovery related exposure.

BSR Codes, SOL ID and ALPHA Code for the proposed new SARBs to be obtained from the Planning Department by
submitting proposal for the same as per the extant guidelines.

The entire structure will be made fully functional before September 30, 2018 in a phased manner.

ZONAL STRESSED ASSETS RECOVERY BRANCHES:

Recovery and reduction in Non-Performing Assets are vital for profitability of bank’s operations. Many strategies have
been devised and implemented towards this end. It was experienced that the branches find it difficult to devote
required amount of attention to the recoveries in the midst of growing competition, canvassing new business,
updating housekeeping, improving customer service and other operational problems. In addition, all branches do not
have the expertise required for follow up of suit matters, compromises and execution of decrees.

Therefore, to have a focussed attention on recovery and reduction in non-performing assets, Bank’s Board on
22/12/95 authorised to open one Zonal Stressed Recovery Branch (formerly known as Asset Recovery Management
Branch) at Mumbai. Later on 15 ZOSARBs (formerly known as ARMBs) were opened at different places.

The salient features of ZOSARBs are as under:

LOCATION AND PREMISES:

ZOSARB has to attend to only NPA and TWO/ PWO suit filed A/cs transferred to it. Proximity to DRT is best suited
for such branches. Further with a view, to restrict revenue expenditure, SARBs have been established in existing
available premises of the bank.

DISCRETIONARY POWERS:

Discretionary Powers for write off/ waiver and administrative powers as per the substantive rank of the head of the
branch are delegated.

APPOINTMENT OF RECOVERY AGENT:

Appointment of recovery agents for certain cases can accelerate ZOSARBs efforts for speedy recovery and can be done
in accordance with powers delegated as per policy.

LINK BRANCH:

ZOSARBs shall not have running accounts except the eligible NPAs. No cheque book shall be issued by ZOSARB.
However, they may accept cheques drawn on other branches/ banks and present in clearing through a nearby branch
participating in clearing. They may handle only petty cash for routine business. In case recovery is effected in cash,
the transaction may be routed through a nearby Branch.

CO-ORDINATION BETWEEN BASE BRANCH AND ZOSARB:

When functions of lending and that of recovering the money lent are separated and entrusted to different entities,
there is an inherent risk of dilution of lending standards and sense of responsibility. The criteria and procedure for
transfer of NPA accounts to ZOSARB are properly defined and spelt out. It is emphasized that recovery of amounts
lent is a joint responsibility of both the transferor and transferee branches and their roles are complimentary to each
other. The responsibility of base branch does not cease when an account is transferred to ZOSARB. Fullest co-
operation shall be extended to ZOSARB especially in the areas of locating the Borrowers/ Guarantors and
identification of properties of Borrowers/ Guarantors, whether charged to our bank or not.

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 CRITERIA FOR TRANSFERRING NPA ACCOUNTS TO ZOSARB:

Following NPA, PWO & TWO accounts can be transferred to ZOSARBs:

All Suit Filed NPA Accounts, Prudentially/ Technically Written Off Accounts with balance
outstanding Rs.1.00 Crore or more as on the end of immediate preceding Quarter. However, accounts which
were transferred to ZOSARBs pursuant to the Domestic Recovery Policy (Advances), 2016 shall continue at
respective ZOSARBs.

While transferring the account to ZOSARB, present status of “Staff Accountability” be also advised by the base branch
to ZOSARB. Further, the base branch should advise the ZOSARBs, the details of failed compromise settlement (such
as amount of OTS sanctioned, the cutoff date fixed for payment, concessions granted, remittance received pursuant
to each compromise, date of frustration of compromise etc.)

NPA ACCOUNTS REFERRED TO NCLT/ NCLAT:

NPA accounts in respect of which reference are pending before NCLT/ NCLAT shall not be eligible for transfer to
ZOSARBs. In case any account transferred to ZOSARB subsequently becomes NCLT/ NCLAT case, the said account
will continue to be with ZOSARB. Accounts under nursing programme/ rehabilitation/ restructuring also shall not be
transferred to ZOSARBs.

AUTHORITY FOR TRANSFER OF ACCOUNTS TO ZOSARB:

Zonal Managers, in accordance with these guidelines, can authorize transfer of accounts to ZOSARBs after ensuring
that the criteria as mentioned above is fulfilled for transferring the a/c to ZOSARB. ZOSARB will directly report to the
Zone and be monitored directly by the Zonal Manager.

EXEMPTION FROM PAYMENT OF INTEREST ON H.O. BALANCE:

In view of ZOSARBs having assets, which are non-interest bearing, payment of interest on H.O. balance is waived.
Hence, ZOSARBs need not pay interest on H.O. balances.

VERIFICATION OF DOCUMENTS:

The guidelines for verification of documents by panel advocate/Law officer of the bank are as under:

1. Advances accounts with aggregate limit of above Rs. 2 crore (Funded plus Non Funded) would be ve rified by the
Bank’s Law Officer posted in the respective Zone / Region / CFS Branches and the documents relating to Advance
Accounts with aggregate exposure of Rs. 10 lacs and above but up to and inclusive of Rs. 2 crore shall be verified by the
Bank’s id entified Advocate / 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, in respect of following Zones, documents verification
in respect of credit limits between Rs.2 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.

2. Notwithstanding what is mentioned above, all documents pertaining to consortium accounts 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 have to be necessarily got verified from Corporate Legal Dept. / Zonal
Legal Dept. / Law Officer of Baof Bank. It may be noted that the documents shall be verified by the Bank’s identified
panel nk. It may be noted that the documents shall be verified by the Bank’s identified panel Advocate/ Lawyer other
than the one who has given the Title Opinion/NonAdvocate/ Lawyer other than the one who has given the Title
Opinion/Non--Encumbrance Encumbrance Certificate (NEC)/ Report in respect of mortgage(s) in the
account.Certificate (NEC)/ Report in respect of mortgage(s) in the account.

TEV Study:

Broad guidelines for TEV Study are as under:

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  No TEV study may be insisted upon for project cost up to Rs. 25 crore. In case, the authority, at least in the
category of Regional Head, feels that the project needs Techno economic Vi ability study, the same may be
referred to Bank’s technical officer posted in the Zone or empaneled consultant for carrying out TEV study.
 For projects above Rs. 25 crore and upto Rs. 100 crore, the TEV Study should be carried out by the Bank’s
Technical Officer posted in the Zone concerned or by an empanelled consultant.
 The zones are required to keep adequate number of consultants empanelled for this purpose.
 Once the TEV study is carried out by our Bank’s empanelled consultant, vetting of such reports Once the TEV
study is carried out by our Bank’s empanelled consultant, vetting of such reports should not be insisted upon
and sanctioning authority may rely upon consultant’s report.should not be insisted upon and sanctioning
authority may rely upon consultant’s report.
 For projects above Rs. 100.00 crore, the TEV Study should be carried out by the Bank’s For projects above Rs.
100.00 crore, the TEV Study should be carried out by the Bank’s Technical Officer/s posted in Project Finance
Division at BCC.Technical Officer/s posted in Project Finance Division at BCC.
 TEV study of tTEV study of the project costing up to Rs.100.00 crore carried out by other he project costing
up to Rs.100.00 crore carried out by other bbanks can be anks can be accepted, ifaccepted, if-- 1) the bank is
1) the bank is one of the first 30 scheduled commercial bank by the size of assetsone of the first 30 scheduled
commercial bank by the size of assets, , 2) it is taking exposure 2) it is taking exposure for at least for at least
10% of term loan component , 3) In 10% of term loan component , 3) In the projectthe project under under
referencereference, , the the Bank’s exposure shall be less than or equal to the exposure of Bank’s exposure
shall be less than or equal to the exposure of the other bthe other bank. If ank. If project cost is above project
cost is above Rs. Rs. 100.00 crore, it can be accepted100.00 crore, it can be accepted,, subject to vetting by the
Bank’s subject to vetting by the Bank’s Technical Officer/s posted in Project Finance DiTechnical Officer/s
posted in Project Finance Division at BCC. vision at BCC.
 In case, the TEV study of the project with cost of above Rs.100.00 crores has been done by In case, the TEV
study of the project with cost of above Rs.100.00 crores has been done by agencies agencies of repute, of
repute, such as Tata Consultants, Engineers India Limited, KPMG, Deloitte, E&Y such as Tata Consultants,
Engineers India Limited, KPMG, Deloitte, E&Y ,PWC, BDO , Grant Thornton etc. ,PWC, BDO , Grant Thornton
etc. it can it can be accepted by thbe accepted by the Bank, subject to vetting of the TEV e Bank, subject to
vetting of the TEV study by the Bank’s Technical Officer/s posted in Project Finance Team at BCC. In case of
big study by the Bank’s Technical Officer/s posted in Project Finance Team at BCC. In case of big ticket
projects, when DPR (Detailed Project Report) is prepared by one of the agenciesticket projects, when DPR
(Detailed Project Report) is prepared by one of the agencies, as , as above,above, namely Tata Consultants,
Enamely Tata Consultants, Engineers India Limited, KPMG, Deloitte, E&Y, PWC, BDO, ngineers India
Limited, KPMG, Deloitte, E&Y, PWC, BDO, Grant Thornton etc. and the same is vetted by another professional
agencGrant Thornton etc. and the same is vetted by another professional agency of repute, y of repute,
confirming technical and financial viability of the project , the same can be accepted by confirming technical
and financial viability of the project , the same can be accepted by the Bank the Bank for appraisafor appraisall

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 HUMAN RESOURCE
MANAGEMENT

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 11. 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 Mission:

HR Vision
The Bank aims at achieving its strategic objectives through complete employee engagement
and by building capabilities and competencies. Further the Bank also aims to create a
nurturing environment which focuses on Barodians being Smart, Competent,Ethical, Happy
with a desire to serve the internal and external customers of the Bank.
This is clearly articulated by the Bank’s HR Mission Statement and Vision Statement.

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;

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

HR Business Model:

The HR Business Model adopted by Bank of Baroda incorporates its Mission, Vision and
Philosophy and its focus towards attainment of long-term organizational goals. The two vital
HR sub-systems i.e., HR Administration & Operations sub-system and the Strategic HR and
Organizational Development sub-system shapes the very crucial performance environment,
which facilitates development of enabling capabilities of people. People are encouraged
through an open communication medium to collaborate for achieving higher levels of
performance.
A very strong Organizational Leadership at different levels forms the key link in the Model.
These are;
 Strategic Leadership - Corporate level

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

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

Innovation and Driving Change Through Integrated HR Strategy:

Bank of Baroda has implemented an integrated HR strategy to achieve business results

through a focused HR Transformation Program in two phases named as Project Sparsh &
Project Sparsh Plus. Various HR processes, systems and structures have been revisited or
initiated afresh under a composite HR system so as to bring in the desired linkages and inter-
dependencies. Some of the major initiatives undertaken are as under:

 Talent Management & Succession planning : Identification of Top Talent in the

Bank, identify their strengths and development areas, formulate a focused grooming
plan for them and also do succession planning for critical positions. Consists of both
“Talent Pool" Identification and Talent Development.
 Structured On-Boarding of New Hires: Structured programs put in place to ensure
both functional as well as cultural on-boarding, provide new hires a pleasant joining
experience and also to make them work-ready quickly.
 Scientific Manpower Planning – Scientific model developed for assessing
manpower requirements based on activity and transaction levels of various units and
using them for making manpower projections and forecasting with built-in linkages
to recruitment, promotions, transfers and deployment in the Bank.
 Recruitment strategy – Strategies developed for Employer Branding and an
employer value proposition created. Focused career portal created to communicate
the Bank’s value proposition to prospective new hires. We are hiring employees
through lateral recruitment in areas like MSME Credit, Wealth management,
Government business, Fintech, Risk management, Finance, etc. Further, the Bank is
also recruiting through its own customized Baroda Manipal School of Banking, where
the candidates are imparted with necessary knowledge and skills required for our
Bank. The contents are tailor-made to suit our needs.
In view of the various initiatives being undertaken in different functions, Bank is
hiring specialized people, having core competencies & relevant exposure for driving
special assignments / projects. The expertise of such specialized staff not only meets
the project requirements but also adds to strengthening the Bank’s presence in niche
areas. For very specific specialized positions, the Bank is also taking help of the
recruitment agencies for sourcing the profiles. Further, niche positions, contractual
recruitment is also being made.

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  HR Automation – Large scale HR automation carried out through a variety of IT tools
to enable reaching out to a large, geographically dispersed work-force and ensure the
desired effectiveness and impact.
 HR Shared Services CPC :- To bring in desired focus and effectiveness in delivery of
various HR programs, a revised HR structure has been formulated under which an HR
shared services CPC has been created through which various routine HR claims
hitherto being handled by branches, Regional, Zonal Offices have been centralized,
which has the brought about the following benefits:

 Freeing up of HR time for development and engagement activities.

 Uniform interpretation and application of the applicable rules related to reimbursements
etc. across the Bank and thereby removing disparities.
 Faster Turnaround Time for settlement of claims –maintained at 48 hours from the date
of receipt of the claim.

Leadership Training

The Bank firmly believes that it is Leadership at various levels, which ultimately makes the
difference and builds competitive advantage for any organization. Mere operational
knowledge and skill-building programs cannot deliver strategic success if it is not
accompanied by leadership acumen and prowess of the operational leaders.The Bank
ensures imparting best of leadership training to its employees covering diversity issues,
succession planning and future Talent Need Analysis. To build on leadership competencies
at various levels, the Bank has given special emphasis on leadership development of its
business leaders with an eye on preparing leaders for the future as well as honing the
leadership capabilities of the existing leaders.

"Welead" Programme – A Comprehensive Leadership Development Initiative

Our Bank has introduced a comprehensive leadership development initiative named
"WeLead" Program, with the objective of building a robust and sustainable pipeline of
Leaders for our Bank. Under the WeLead program, the following -04- levels of Leadership
programs are being run currently:

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 A comprehensive leadership development strategy based on competencies is very critical
today, given that a large number of experienced senior management will be superannuating
in the next two years. Therefore, there is an urgency to build a leadership pipeline for the
future.
The Bank intends to focus on leadership development with the specific objectives of:
 Building on the individual’s capabilities as a leader.
 Focusing on the collective since collaboration and team work are essential
ingredients for success in the workplace.
 It will be a comprehensive programs addressing individual and group
behavior critical for developing as Leaders.
 Encompasses Leading self, Leading others, Leading Change and Leading
business
 Use internal Leadership to make a difference to the Bank’s transformation
efforts.
 Create the Bank for the future.
These programs are positioned to be hugely aspirational as well as be a defining moment for
the willing and finally selected candidates. It provides the opportunity for individual
development as well as opens further avenues for donning critical leadership positions
which makes this programs very special. At the same time, this is a rigorous programs and
demands a lot of time and effort on their part to challenge themselves and develop their
leadership capabilities through a variety of challenging assignments and projects which are
in addition to their regular assignment.
This programs also brings together a variety of interventions which are designed to develop
the leadership prowess of carefully identified high potential people. This is intended to
develop individuals into more effective leaders and through them, create the future for the
Bank.
We Lead I has been successfully completed and now, Bank is successively conducting “WE
LEAD II”, grooming a new set of future leaders.

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:

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 Various programmes are being run by the Bank for grooming of officers in specialized areas
of Credit, Forex, Treasury / Dealing, Wealth Management, 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, - centralised payroll, payments of various benefits, perks,
welfare schemes, terminal benefits, etc.;
 Employee Self-Service Module.
 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.

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:
 Self Appraisal by the individual employee (This is optional)
 First review by Reviewing Authority (RA)
 Second and Final Review by Final Reviewing Authority (FRA)
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

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

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 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)

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:

 Inauguration of HR shared services back office at Baroda (HRCPC)
 Bank’s career portal
 On-boarding scheme for newly recruited officers
 Employee’s survey
 Baroda Academy

Project Sparsh Plus: (New Performance Management System –BARODA GEMS)

Our MD & CEO Shri P S Jayakumar on 06.05.2017 launched an HR Transformation Project
christened as Project Sparsh Plus for enhancing the Performance Management and Talent
Effectiveness in the Bank. As a result of which a new PMS system is launched known as
BARODA GEMS- Baroda Growth & Empower Management System.

The objectives of introducing Baroda Gems are as under:

 Laying down a more Scientific & Robust Target Setting Process.
 Ensuring greater clarity of roles & expectations
 Better measurement of actual performance based on scientific & data backed
processes
 Empowering the officers through regular developmental feedback
 Strengthening our rewards & recognition programmes
 Ensuring greater transparency & objectivity in the entire process

The four key pillars of the new Baroda Gems are as under:

1-Results Orientation: In order to ensure job clarity to the officers, New KRA’s &
weightages have been defined for all the roles in branches, operating units, administrative
offices etc. .These KRA will be strongly aligned with the actual tasks performed by the
officer and key expectations from the role. In the new Gems a majority of these roles will be

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 categorized as budgetary and measurable so that score can be calculated by the system
automatically, basis the percent achievement on the given targets. Out of total 100 marks
75 marks shall be system driven (including 5 marks for continuous learning and completion
of E-Learning courses on Baroda Gurukul) and remaining marks shall be awarded by the
Reporting Authority depending upon the efforts put in by the officer, team contribution,
other attributes etc. Hence this will ensure that the system becomes more objective and
officers can regularly track & monitor their performance.

2- Objectivity & Rationality: Robust & Scientific targets are the foundation of a
measurable & objective PMS. From FY 2017-18 the targets for branches have been set based
on their last three year historical performance as well as market potential in the area where
branches are situated.

3-Empowerment: The objective of the Baroda Gems is not just to measure the
performance but also to empower you to improve it. The GEMS toll shall enable you to track
your performance against targets every month so that you are aware of the areas requiring
your maximum focus.

4-Recognition of high performance: Baroda Gems will provide a platform to not just
recognize stellar performance at the end of the year but also provide instant recognition to
officers who have demonstrated extraordinary performance while performing their duties.
Job Families and Career Path Scheme:
Our Bank has always believed that employees are the backbone behind its success and has
always maintained focus on the proper development of people through training, exposure
across various functions and role succession. To enhance the existing succession planning
process and design specific career paths for employees at the Bank, 12 key Job Families have
been identified with the following objectives:

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 Baroda Samadhan:
In order to address employees’ concern areas and grievances, Bank has envisioned to
strengthen transparency and fairness in the grievance redressal mechanism, named as
“Baroda Samadhan”, which not only just a machinery to resolve grievances but also enable
to become aware of employees issues and expectations and be sensitive to their needs and
well-being. lt will also facilitate in instilling the faith of the employees in the system and
strengthen in all its dealing, the ethos of integrity, trust and transparency that our Bank
strongly professes in all its dealing.
It will enable a better HR administration and bring in a more transparent system of handling
employee grievances in a time bound manner, which in turn will lead to less number of
issues/ grievances of employees and improve employee satisfaction.

Baroda Sujhav (barodasujhav@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

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 suggestions which are in tune with Bank‘s priorities and concerns, Customer Service and
its effectiveness.
Results are declared on quarterly basis with incentives to winning participants. 1 st
Prize Rs. 10000/-, 2nd prize Rs. 5000/- and 3rd prize Rs. 3000/-

HR-helpline:
Our Bank recognized the need of many of our employees for quick resolution or replies to
their issues /queries and decided to open a central HR helpline for all employees which will
take up any grievances for resolution /issues requiring clarifications /matters requiring
support from Bank’s side expeditiously and inform the Bank’s response immediately. This
HR Helpline would be operative through the email id and thereby open to all employees of
the Bank on continuous basis:

HR.helpline@bankofbaroda.com
An employee can initiate his grievance by sending email to this mail id with his name, ec
number ,designation, telephone number, place of posting, Name of the Region and Zone .
(BCC: BR:108:507 DT 27.10.2016)

Paramarsh:
Our bank’s 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 behavioural 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

SPEED:
With a view to foster professional enhancement and employee development in the Bank, a
comprehensive, broad-based and a development oriented scheme christened as "SPEED"
was launched on 14.05.2015. Under the ambit of this scheme, our Bank endeavours to
encourage our employees to enhance their professional acumen by undertaking various
educational/professional courses (as specified in the scheme) along with the benefits of
reimbursement of fees and payment of incentive on successful completion of the course
undertaken. The objective is to make the scheme more comprehensive by updating it ‘with
the latest and relevant courses from time to time (BCC:BR:107:213 DT 14.05.2015)

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 individual’s thoughts. The feedback
would be collated by Aon Hewitt and will be shared with the Bank’s leadership team on a
consolidated basis.

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 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
information obtained from this study will be used to shape the organization’s HR policies
and programs going forward.

Voice of Barodians -2018:

This is a similar survey that was conducted in 2016 and through this survey, Bank aims at
obtaining feedback for continuous improvement in our existing policies, practices in order
to remain competitive. Employee feedback & suggestion plays a very critical role in the
whole transformation journey of the Bank. This survey started from Saturday, 7th April
2018 and ended on Monday, 30th April 2018.

BARODA GURUKUL:
Baroda Academy has launched new learning management system “ ”.In the
process our existing e-learning platform i.e. “Baroda Net Academy” is now discontinued and
replaced with new system. is designed to provide different user experience,
increased accessibility and optimized utilization. System will facilitate learning through pull
rather than push approach.

provides tools and features to maintain stringent and continual process of

competency gap analysis, training need assessment and impact measurement tools. Virtual
classroom, rapid authoring capabilities, multi lingual support, seamless integration with
third party APIs, these are some robust features which makes Baroda Gurukul a
comprehensive solution for learning.

Salient features of – are as under –

 URL for Web based login - https://barodagurukul.co.in/
 Single sign on for ease of login (Domain ID and password)
 E-Learning Course Launch, Rating and review
 Training calendar for upcoming class room trainings (with facility for self-
nomination)
 Blended learning i.e. combination of e-leaning, video, documents, CLT, etc. forming
one course
 Facility to conduct surveys, Announcement and Online Quiz.
 Mobile app Availability on Android and IOS app with off-line course download
 Competency Mapping of employees
 Leader Board for learning competition
 Micro learning through Video Library
 Virtual Classroom or Webinar

Baroda Gurukul Application

 Baroda Radio (Audio Circular)
 Baroda Radio (Leaders Talk & Success Stories every Friday)
 E-Learning Course
 E-Learning Certification Course

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  Digital Library
 Handbook & Workbook of various Subjects/Domains
 Book Of Instructions
 Baroda Tube (Learning Videos)
 Margdarshak (Online Query)
 Quiz & Competitions

New Initiative:Project Navodaya:

Project Navoday62 -On 20.07.2016 Bank of Baroda has unveiled Project Navoday, a
comprehensive transformation for the Bank across our business strategy, products,
systems and organization that is going to propel us forward in our ambition to be India’s
(Premier) International Bank with a global standing, delivering a differentiated world class
experience to our customers. Under Project Navoday following priority areas are being
undertaken:

 Establish long term and profitable customer relationship across businesses.

 Expand our corporate and international banking businesses through dedicated
Relationship Managers.
 Redesign processes and systems.
 Make our future ready.
 Realignment of structures across the Bank.
 Unleash the potentials of our people.

Bank has established a central Project Management Office (PMO) that will drive the change
and send out regular communication on the progress achieved. Additionally dedicated
Change leaders are being identified. Every Month this office published Navoday times
where in all updates and changes are enshrined and a monthly quiz is also conducted with
announcement of three monthly winners. Circular No. BCC: BR:109:1 dated 02.01.2017
– Project Navoday – Business Transformation Exercise.

Employee Engagement Policy:

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 Employee of the Month:

A special badge and trophy are presented to the identified “Employee of the Month”, by the
Branch Head / Unit Head on rolling basis within the same branch / office, for each month.
Spot Recognition – Capturing ‘WOW’ moments:
Recognition of any distinctive / exemplary achievement of any staff member by capturing the
‘WOW’ Moment on the same day of the occurrence of the event in the form of a token gift /
prize (price ranging between Rs. 200 – Rs.500) along with a bouquet of flowers.
‘ZERO HOUR’ at Branches / Offices:

Fun at work is an essential component to keep an employee happy. Therefore, the Branch /
Office Team will assemble for a fun session over tea/coffee and light snacks, once in a month
where no business discussion takes place in this event.

Compulsory local Community Service / Social Activity by Employees:

One compulsory community service is carried out in the local area involving the collective
effort of all employees of the branch / office, once in six months.

Anubhuti –Connecting Dots Workshop (Employee Connect Workshops):

Anubhuti – Connecting Dots Workshops aim at increasing the employee connect,

collaboration and cohesiveness at ground level. The periodicity of holding such Workshops
will be once in -6- months. HR / Employee Experience Manager / Senior functionary from
RO / ZO / Faculty from Baroda Academy shall facilitate the Workshop. This aims in creating
an environment, where the employees feel at ease to voice out their opinions, ideas and
suggestions. Requisite support for implementation of ideas is also being provided.
Promotion of Sports Activities:
Formation of sports & cultural committees, Revival of sports activities in Zones/Regions
,Celebration of Annual Sports Day in the month of November every year and Various Sports
and Cultural activities to boost Motivation Levels and Team Spirit among our employees.
SPARSH PLUS:

Rewards & Recognition : BRITE Baroda Reward for Individual and Team Excellence:

Objectives:
(i) To promote & encourage employees to accomplish Bank goals while building personal
excellence
(ii) Deeply engrain Bank’s core values in the individuals by rewarding exemplary
demonstration

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 (iii) Instil team building and collaboration in the Bank by rewarding victories achieved by
teams

Overview:
The nature of the Reward & Recognition programs and targeted behaviours are:
(i) Team recognition program: Elite Club to recognize teams for exceptional performance &
achievement as a team.
(ii) Individual recognition program: Core Values Club to recognize individuals for exemplary
demonstration of bank's core values.

FOCUS ON HEALTH AND WELLNESS:

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 to create a fun and happy place to work in. Health and Wellness have a major role to play in
the engagement of employees. A healthy and happy employee can contribute more
productively in an organisation.
We introduce the following activities towards Health and Wellness of our employees
(I) Yoga And Meditation Clubs
(II) Health and Wellness Drives
(III) Work Life Balance

BARODA “SUN RUN” EVENTS:

First such event started in Mumbai on 09.06.2019. We have planned to start similar Sun Run
Events in all major Metros / Zonal Centres as an annual calendar event involving large
participation of employees and their families.
We plan to hold such events periodically across India as an annual event to give a boost to
our brand image and market standing

EMPLOYEE ASSISTANCE PROGRAM:

Bank intends to engage services of a professional agency with proven track record for
providing Employee Assistance Program through professional counsellors which shall
include multiple channels of assistance, such as:
Face-to-face meetings with professional counsellors through appointments,
24 x 7 Helplines (toll-free number),
Online chat rooms,
Virtual Assistant (assistance provided from a remote location),
Interactive apps and online portal for booking appointments.
The employees seeking counselling service as well as their issues shall be kept confidential.

Milestone Stone:
After Completion of 10yrs of Service- Rs. 8000/- to all cadre
After Completion of 25yrs of Service - I-III>>12000/-, IV-VI>>14000, VII>>16000

Life Cycle Concept based training:

Introduction
Our Bank has been pioneer in innovative methods in learning & development. A good
number of initiatives have been launched by the Bank to revamp its products and process
to maintain number one position of the Bank in industry. Training system being the key to
make this transformation journey of the Bank a great success need to be many steps ahead
for bringing innovation in its products and methodology.

Our Managing Director and CEO has keen interest for making training more effective in the
Bank and he has suggested to introduce ‘Life Cycle’ in training that will be a differentiator
for our Bank in industry. We propose to implement the concept in our training programs
from 01st July 2016 on pilot basis. We though plan to have a meeting of all Learning Heads

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 before its launching but the concept is briefly prescribed in this communication for clear
understanding by each faculty members.

Introduction Of Life Cycle Concept (Lcc) Of Training:

Bank has introduced the Life Cycle Concept (LCC) of Training to address capability building
needs of each employee at different stages of his/her career in the Bank. This concept maps
the training requirement based on the job profile of an officer in different grade/scale and
position in branches. This concept of life cycle training includes:
 Identification of Roles: - All possible roles based on LCC of an officer from his initial journey
as a junior officer to attain top positions up to General Manager are captured.
 Training Levels: - Training programs are categorized in 1-5 level, first level being basic
course while 5th level shall be of advanced nature in its input.
 Training Modules- Learning expected to be acquired module wise to ensure systematic
transformation of learning with relevant contents and total understanding by the trainees.
 Learning Heads conclave: - All learning heads of Baroda Academies and Baroda Satellite
Learning Units across the Bank has been conducted to sensitize them about the concept and
design of training courses under the new approach.
 Partnering with HR functionaries:- As the success of the new concept largely depends on
zone/region HR functionaries with respect to identifying right target group for life cycle
based training, therefore, a conclave of HR functionaries was first organized to sensitize
them on various aspects for effective implementation.

Overseas Training:
To provide the executives with international perspective on banking and expand their
strategic thinking, to enhance conceptual understanding of complex issues and equip them
to be effective leaders, a good number of service executives are regularly sent to reputed
overseas institutes such as Kellogg School of Management, James L. Alleb center, Illinois, USA,
Center of Unified Biometrics (CUBS) and Center of Excellence in Information Systems and
Assurance Research and Education (CEISARE), The State of University of New York at
Buffalo, USA, Asian Institute of Management- Executive Education and Lifelong Learning
Center (AIM-EXCELL), Manila and Center of Integrated Rural Development for Asia and the
Pacific (CIRDAP), Dhaka.

The Bank’s Core Values are as under:

 Customer Centricity:Our customers interests lie at the core of all our actions
 Integrity: We are ethical and transparent in our words, actions and dealings with all
stakeholders
 Courage: We are resilient in the face of adversity and having faith in our beliefs.
 Innovation: We create value through new ideas
 Excellence: We strive for continuous improvement in our policies, systems, and
processes
 Passionate Ownership: We display energy, enthusiasm and commitment towards
our Bank and we work together for the Bank

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 Confirmation of Officers in Bank’s Service:

Now the Bank has revised process and adopts -2- step process for confirmation of an
officer’s services in Bank which, is as under:

Benchmark for
Factors Total Marks
Confirmation
Online Written Test 50 (50% cutoff)
70%
Performance & Managerial Effectiveness Report 50 (50% cutoff)
Verification of Character and antecedents Satisfactory Satisfactory

Creation of Centre of Excellence for Persons with Disabilities

-Memorandum of Understanding with SBI Foundation:

Our Bank has signed a Memorandum of Understanding with SBI Foundation {not for-profit
subsidiary of State Bank of India) for partnering with our Bank for creation of an enabling
ecosystem for empowerment of our employees with disabilities.

SBI Foundation, began an 'inclusion of persons with disabilities program' to ensure the
inclusion and empowerment of the employees with disabilities of State Bank of India, the
objective of which was to find suitable jobs and job roles for them and provide them with
an enabling environment through training sensitization of peers and by creating awareness
at senior management level. This intervention is now an ongoing process and has become
an integral part of their training system.

With an objective of helping other organizations to create a similar enabling environment

for their PWD employees, SBI Foundation has extended their services for creating a "Centre
of Excellence for PWDS". The Centre of Excellence managed by SBI Foundation aims to make
a difference in the workplace for persons with disability by bringing new insights to
problems, using innovative, engaging learning methods and workplace solutions while
enabling others to become inclusive and adaptive leaders. (BCC: BR :109:533 DT
16.10.2017)

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 The objectives of the engagement are as under:
 Identifying suitable job roles for persons with disability where they can contribute
effectively
 Providing an enabling work environment to rediscover their potential and thrive
 Creating equal opportunities and level playing field;
 Facilitate employees with physical challenges to demonstrate better performance;
 Including the employees in the team to promote cohesive work culture.

Smart Barodians:
Our Bank has a distinct place in the Indian Banking and we are a well-recognized and
respected global Banking brand in the country. We have built this brand through 111 years
of sweat and toil and this casts a distinct responsibility on all of us to not just maintain this
pre-eminent position but also to build on it further.

Being a "Smart Barodian" is not limited to only a particular cadre or to managers but to
each and every employee, irrespective of cadre on hierarchy. 55 % of another person's
perception of you is based on how you look and the remaining on how you speak and
behave. The emphasis therefore has to be equally on projecting a smart look and pleasing
disposition at work, the above pointers ties in with our Core Value of "Customer centricity.

Some of the conforming behaviors related to the core value of “Customer centricity"
 Service with a smile, treating all customers with respect and courtesy.
 Creating a positive customer experience, responding to requests / queries and
concerns of our customers promptly,
 Active listening and seeking to understand customers needs
 Showing empathy towards our customers
 Proactively providing relevant information useful to customers and educating them
Barodians are the brand ambassadors of the Bank. Therefore, our appearance, behaviour
and language, both in words and body language, convey more than a thousand words. We
need to be mindful of that and project a very pleasing, SMART and customer friendly
disposition to all. In summary,
 Be Professional
 Be Honest
 Be Empathetic
 Be Responsible
 Be Smart
 Be Cheerful ..........and Wear a SMILE always.
Welfare Measure:
 Canteen subsidy Rs. 750/-
 -53- Holiday Homes:
https://www.bankofbaroda.in/writereaddata/Images/pdf/List-of-Holiday-Home-
as-on-11th-Nov-19.pdf
 Scheme for providing special assistance/ scholarships to the parent employees of
mentally handicapped children/ spastic children

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  Scheme for sanction of financial aid to the family members of the employee who
dies in harness
 Scheme for incentive to the employees for promoting small family norms
 Scheme for extending financial assistance to the employees who are on loss of pay on
account of major and special operations.
Notice Board for Existing and Retired Employees:
https://www.bankofbaroda.in/human-resources.htm

For more details on HRM, please visit

Barodapedia Mobile Application

Login >>More >> Book of Instructions>> Human Resources Management

OR

https://intranet.bankofbaroda.co.in
Login >> Documents >> Book of Instructions 2019 >> Human Resources Management

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 RETAIL LOAN PRODUCTS

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 12.1. Baroda Home Loan(Resident Indian/ NRI/PIO/OCI)
Background:
Home loan plays a vital role in retail credit growth. It constitutes 55% of our total retail loans. Our bank has
reviewed and redesigned Home Loan products W.E.F 01.04.2016. Accordingly, separate scheme for Home loan
to NRI/PIOs/OCIs and home loan to staffs under public scheme is discontinued and realigned the schemes with
a single scheme- Baroda Home Loan.

Products covered under Baroda Home loan:

Following Products are covered under ‘Baroda Home Loan’:

1.1. Baroda Home Loan (Resident Indian/ NRI/PIO/OCI)

1.2. Baroda Home Advantage
1.3. Baroda CRE Home Loan
1.4. Baroda Pre approved Home Loan
1.5. Baroda Home Improvement Loan.
1.6. Baroda top up Loan .
1.7. Pradhan Mantri AwasYojana (PMAY)
1.8. Golden Jubilee Rural Housing Finance Scheme (GJRHF)
1.9. Credit Risk Guarantee Fund scheme for Low Income Housing (CRGFS)
1.10 Rural Housing Interest Subsidy Scheme (RHISS)
1.11. Takeover/Balance Transfer of Housing/Top-up loan with relaxed parameters
1.12. Pre- Approved Credit Limit- Home Loan (covered under Pre approved Loan )
1.13 Pre -Approved Top Up Loan facility for our Existing Home Loan borrowers (covered
under Pre approved Loan)

The detailed features of the Baroda Home Loan products are mentioned in the following
Sections.

Baroda Home Loan(Resident Indian/ NRI/PIO/OCI)

12.1.1Target Group:

 Resident Indians
 Non-Resident Indians (NRIs) holding Indian passport or Persons of Indian origin (PIOs) holding foreign
passport or Overseas Citizens of India (OCI).
 Staff members (availing under Public scheme)

12.1.2 Eligibility of Borrower/s:

 Individuals singly or jointly.

 HUFs are not eligible.
 Non Individuals jointly with Individuals (under special variant of takeover only)

Resident Indian:

Applicant / co-applicant/s (whose income are considered for eligibility) should be employed / engaged in business
/ profession for a minimum period of -1- year (for salaried) and/or -2- years (for non-salaried).
(Break in service, if any, can be allowed up to a maximum period of 3 months)

In case of employee of Marine lines/ Navy/ Sailor/ Merchant Navy/as other such services, the employees usually
render their services in sea and also live on land at regular intervals.

The above situation should not be treated as break in service. Further, in such cases, salary of employee differs
during time spent on land and time spent in sea. Therefore, for the purpose of Calculation of emoluments, average
salary (total salary in 12 months/12) to be considered.

If applicant/co-applicant is retired/VRS from defence forces or any other job and thereafter employed / engaged
in business / profession, in this case, pension income may also be considered for eligibility purpose.

NRI/PIO/OCI:

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 a) Applicant/ co-applicant/s (whose income are considered for eligibility) 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.
OR
Should be employed / self-employed or having a business unit and staying abroad at least for -2- years.

b) Applicant / co-applicant/s (whose income is considered for eligibility) should have minimum gross annual
income equivalent to Rs.5.00 Lacs per annum.
(If the applicant / co applicant/s, whose income is considering for eligibility includes
NRI, minimum Gross Annual Income of Rs.5 Lacs (income of applicant / co-applicant together) can be considered
for these criteria.
PERSON OF INDIAN ORIGIN (PIO):
A citizen of any country other than Bangladesh / Pakistan / Sri Lanka / Afghanistan / China / Iran / Nepal & Bhutan 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 of the Citizenship Act 1955, or
c. The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b) above.

OVERSEAS CITIZENS OF INDIA (OCI):

a. A person registered as Overseas Citizen of India (OCI) under section 7 A of the Citizenship Act, 1955.
b. As per the guidelines, an Overseas Citizens of India (OCI) has to be necessarily a Person of India Origin (PIO).

c. A foreign national, who was eligible to become citizen of India on 26.01.1950 or was a citizen of India on or at any
time after 26.01.1950 or belonged to a territory that became part of India after 15.08.1947 and his / her children and
grand children, provided his/ her country of citizenship allows dual citizenship in some form or other under the local
laws, is eligible for
registration as Overseas Citizen of India (OCI). Minor children of such person are also eligible
for OCI. However, if the applicant had ever been a citizen of Pakistan or Bangladesh, he / she
will not be eligible for OCI.

Change in status of the Borrower (in case of Home Loan to NRI/PIO/OCIs) :

In case of change in status of the borrower during the tenure of the loan, the repayment
schedule may be reworked-out keeping in view his revised status / income / repaying capacity,age etc.

Co-Applicants:

The close relatives of the applicant can be added as a co-applicant for higher eligibility. If the applicant wants to add
any person who is not a close relative as a co-applicant same can be considered only if he/ she are the joint owner of
property. In such cases, name of any other close relative, who is not a joint owner of the property, should not be added
as co-applicant for considering higher eligibility. In case, if the income of the owner/co-owner/s of property, is not
considered for eligibility, upper age criteria/ employment criteria will not be applicable for these applicant/co-
applicant/s.
List of Close Relatives:
Spouse, Father, Mother (including Step Mother), Son (including Step Son), Son‟s wife, Daughter (Including Step
Daughter), Daughter’s husband, Brother/sister (Including step brother/sister), Brother’s wife, sister (including step
sister) of spouse, Sister’s husband, Brother (including step brother) of spouse.

12.1.3 Age:
Minimum age: Minimum age of the applicant must be 21 years. However, the minimum age of co- applicant/s
can be 18 years.

Maximum age:
Salaried Persons:
Age of the applicant/co-applicant/s (whose income are considering for eligibility) plus repayment period should
not be beyond retirement age.

However,

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 a) Maximum age can be considered up to70 years without deviation 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.For
the purpose of extending the repayment period upto 70 years, following conditions must be satisfied:

(i) Son/ Daughter/ Spouse who is a legal heir and preferably below 50 years of age,
(ii) If applicant pledges FDRs / NSCs / Govt. Security etc. of adequate value to ensure continuity of income for
repayment of loan instalment with interest if sanctioning authority is satisfied about the same.

b) In case of non-availability of co-applicant/ guarantor/ liquid security as mentioned in point (a) above, the
maximum age can be considered up to 70 years without deviation, if the applicant is covered under any
pension scheme and 40% of the pension amount is sufficient to pay the EMI. In case, at the time of retirement,
the 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

Others (Self-employed/professionals/agriculturists & NRIs etc.):

Age of the applicant/co-applicant/s (whose income are considering for eligibility) plus repayment period should
not exceed -65- years.

However, Maximum age can be considered upto70 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, 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-Applicant/Guarantor OR

(ii) If applicant pledges FDRs / NSCs / Govt. Security etc. of adequate value to ensure continuity of income for
repayment of loan instalment with interest if sanctioning authority is satisfied about the same.

12.1.4 Purpose:

Construction / Purchase of Residential House/ Flat:

 For construction of new dwelling unit or purchasing of new Residential House/ Flat.
 For purchase of old House/ Flat (not more than -25- years old).
 For House/ Flat which is older than 20 years but not more than 25 years, Branch to ascertain structural soundness
of the building by obtaining an approved engineer’s certificate, certifying the structural soundness as well as
residual life of the building which should be at least -5- years more than the repayment period.
 For House/ Flat which are older than 25 years, Regional Head may authorize such cases on selective basis, subject
to, ascertaining structural soundness of the building by obtaining an approved engineer’s certificate, certifying the
structural soundness as well as residual life of the building which should be at least -5- years more than the repayment
period.

 When an application of Home Loan for purchasing Home/Flat and for the expenses of similar nature towards
construction/renovation/enhancement and improvements (like POP/fixed furniture/fixtures/repairing/room
separation etc) is received simultaneously, the same can be considered in one single Home Loan. Additional expenses
as mentioned above may be added to the value of house to arrive the total cost of house while complying with the LTV
norms.

 Please note that, where the request of the loan for above expenses is received separately or subsequent to the
sanctioning of Home Loan, the same may be considered in our existing product Baroda Home Improvement Loan only.
Purchase of Residential Plot of land and Construction of House:

For purchase of Residential Plot of land and Construction of house therein. The total project cost will include
cost of plot of land and cost of construction together.
A reasonable part of the total Home Loan eligibility can be sanctioned for purchase of plot (proportionate to
the overall cost), keeping appropriate margin for purchase of plot of land as well as construction of house.
Construction Plan, Estimate and all other relevant documents related to construction should be available at the
time of sanction. (Construction plan to get approved subsequently after purchase of plot and before disbursement
of funds for construction) Construction of House should be completed within -3- years or up to the period allowed
by Development Authority, whichever is earlier, from the date of purchase of plot, without attracting to Commercial
ROI.

The following conditions will also be applicable:

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 In case the borrower fails to complete the construction of House within a period of -3- years from the availment
of Home Loan, Branch to charge commercial rate of interest [1 year MCLR+ Strategic Premium plus maximum
band or Base Rate plus maximum band (if loan is under base rate system), as the case may be declared by the Bank
for commercial purpose prevailing at the time of default] from the date of, first disbursement.

In case the borrower pre-closes the Home Loan account without starting the construction within a period of -3-
years from the availment of Home Loan, Branch to charge commercial ROI [1 year MCLR+ Strategic Premium
plus maximum band or Base Rate plus maximum band (if loan is under base rate system), as the case may be,
declared by the Bank for commercial purpose prevailing at the time of default] from the date of first disbursement

Branch should obtain a suitable undertaking from the borrower to this effect at the time sanction- as per format
(Annexure-28) given in the master circular BCC/BR/111/97 dated 21.02.2019

In case the borrower could not construct the House within the stipulated period due to Circumstances beyond
his/her control or genuine difficulties, Zonal Authority is authorised to waive / refund the commercial ROI on
case to case basis and strictly on merits

A suitable undertaking to be obtained from the borrow to construct the House within further period of maximum
-2- years without attracting commercial ROI as per format (Annexure-29) given in the master circular
BCC/BR/111/97 dated 21.02.2019.

In case the borrower fails to construct the House within the further stipulated period of maximum -2- years,
Branch to charge commercial rate of interest [1 year MCLR+ Strategic Premium plus maximum band or Base
Rate plus maximum band (if loan is under base rate system), as the case may be, declared by the Bank for
commercial purpose prevailing at the time of default] from the date of first disbursement.

Since the compliance of the undertaking rests with the borrower, Branches should ensure that suitable covenants
have been incorporated in the loan sanction letter, to enable the Bank to charge higher rate of interest, ab-initio,
in the event of noncompliance by the borrower with his undertaking.
Loan exclusively for Purchase of Residential Plot of Land only:

In case, the Applicant is availing Home Loan exclusively for purchase of residential plot of
Land only, same can be considered subject to:
(a) The plot is allotted by a Development Authority/ Govt. Authority for construction of
House / Flat.
(b) A House / Flat will be constructed (completed) thereon within -3 - years or up to the period allowed by
Development Authority, whichever is earlier, from the date of purchase of Plot.
(c) In case the Borrower fails to complete the construction of the house within a period of -3-years from the
availment of Home Loan, commercial rate of interest (1 year MCLR+Strategic Premium plus maximum band as
declared by the Bank for commercial purpose prevailing at the time of default) will be charged from the date of first
disbursement.

(d) In case the borrower pre-closes the Home Loan account without completing the construction within a period of
-3- years from the availment of Home Loan, commercial ROI (1 year MCLR+ Strategic Premium plus maximum
band for commercial purpose prevailing at the time of default) will be charged from the date of first disbursement.

(e) Branch should obtain a suitable undertaking from the Borrower to this effect at the time of sanction. (As per
Annexure-28given in the master circular BCC/BR/111/97 dated 21.02.2019)

(f) Deviation powers in this regard are delegated to Zonal Authority as discussed above.

Person who has been provided accommodation by his / her employer is also eligible for Home Loan, even though
he / she is not in a position to occupy the same in the near future and proposes to let out on rental basis.

Takeover of Home Loans from other Banks/ HFCs/NBFCs/ FIs etc:14

Home Loan accounts from other Banks / HFCs / NBFCs/ FIs etc. can be taken over, observing our Bank’s Home
Loan guidelines in respect of margin, income criteria (income multiplier), repayment capacity (FOIR), margin /

14
Detailed Take over guidelines for Home Loans is available in Master Circular: BCC/BR/111/97 dated 21.02.2019

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 LTV norms, CIBIL score validations etc. After considering income, repayment capacity and age of applicant, fresh
repayment period& EMI may be fixed within our Bank’s Home Loan guidelines.
Extension of the existing House/ Additional Construction:

Extension of existing House and/or additional construction can be considered to our existing Home Loan
borrowers / New Borrowers / Borrowers who have availed Home Loans from other Banks / HFCs / NBFCs/ FIs
etc as per the eligibility of the applicant/s, within the overall limit of Home Loan scheme
Reimbursement of Expenses:

a. Reimbursement of expenses already incurred for Houses / Flats constructed / purchased recently (within 24
months) from own sources can be allowed to good customers on selective basis

b. In case of purchase of ready House/Flat, reimbursement can be allowed for the total expenses incurred
(Registered Value) including cost of plot/land.

c. Reimbursement of cost of plot of land (purchased within 24 months) can be allowed while considering request
for Home Loan for Construction of House. In such cases, the Registered value for plot / land to be considered along
with cost of construction by maintaining applicable margin / LTV.

Reimbursement of expenses as mentioned above to be considered subject to following additional conditions:

 Such Loans are to be considered only to applicants who secure HL-1, HL-2 or HL-3 riskratings under Home
Loan Rating model.
 House/flat should have been constructed / purchased recently (not prior to 24 months)
 Margin on total cost (for reimbursement): 25%
 Valuation Report to be obtained from approved Valuer of the Bank.
 Branch to satisfy that there are no institutional / external borrowings against the house andthe amount already
spent on the House / Flat has come from own sources of thecustomers.
 Branch to verify and keep on record relevant money receipts, bills, documentary proof of
payment/expenditure etc.
 Creation of valid mortgage after obtaining Title Clearance Report from Bank’s Advocate.

For Houses / flats under construction, where some expenses /amount have already been incurred / paid to
builders as advance from own sources by the applicant/s and the applicant is now requesting for Home Loan for
the entire project, in such cases, the same expense /advance paid to builder can be adjusted towards margin or
can be reimbursed, after stipulation of minimum margin requirements. In such cases, general norms of margin
and rating model will be applicable (instead of 25% margin & minimum rating of HL -3). Relevant money receipts,
bills, documentary proof of payment/expenditure etc are to be obtained and verified.

Supplementary Finance:

In the case of individuals who have taken Home Loan for construction / acquisition of House/ Flat from other
Banks / HFCs / NBFCs/ FIs etc and need supplementary finance, loan may be considered to high class borrowers
(HL-1 and HL-2 risk rating) within our scheme guidelines, after obtaining pari-passu or second charge in our
favour over the property mortgaged in favour of other Banks / HFCs / NBFCs/ FIs etc and / or against such other
security as deemed appropriate.

Home Loan for 2ndHouse/ Flat:

Normally, Home Loan is to be considered only for purchase / construction of one House / Flat. However, looking
to the size of the family, income eligibility and repayment capacity of the applicant/s, Home Loan can be considered
for purchase of more than one House/ Flat also.

Home Loan for 3rd dwelling unit onwards:

As per RBI guidelines, Bank’s exposure to 3rddwelling unit onwards to an individual will be treated as CRE
(Commercial Real Estate) exposure. As such, if any individual (Resident /NRI) owns two or more dwelling units
(Houses/ Flats), singly or jointly, then the Home Loan for the third dwelling units onwards (including Home
Loan for purchase of plot), irrespective of the fact that whether the applicant has availed or not any Home Loan

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 from our/other Bank/HFC/NBFCs etc for previous dwelling units, is to be considered under Baroda CRE
Home Loan15Scheme

Inclusion of cost of Roof Top Solar Photo Voltaic (Solar PV system as a part of total cost of project for Home
Loans:

Department of Financial Services, Ministry of Finance, Govt. of India has advised that Hon‟ble Prime Minister
has desired to add 100,000 MW of solar PV installation capacity of which 40,000 MW of Solar PV Rooftop in the
country during next 5 years. In continuation of the overall endeavor, it is advised to encourage the Home Loan/
Home Improvement Loan seekers to install rooftop solar PVs and include the cost of such equipment in home
loan proposals just like non solar lighting, wiring and other such fittings. For details refer to Master Circular
BCC/BR/111/97 dated 21.02.2019.

Other guidelines to be considered on Home Loan requirements are as under:

 Branches should not consider/sanction Home Loan proposals to builders where disbursements are not linked
to various stages of construction of housing project. However, in cases of projects sponsored by Government/
Statutory Authorities, the sanctioning authority is authorized to consider to disburse the loans as per the
payment stages prescribed by such authorities, even where payments sought from house buyers are not linked
to the stages of construction, provided such authorities have no past history of non-completion of projects.
[Details given in Annexure-7 (e) of Master Circular BCC/BR/111/97 dated 21.02.2019.]

 If the car parking place is located in the same building/society/compound, the cost of car parking place or area
can be considered in the cost of house/flat. However, it is to be noted that the car parking area should be
identifiable, specific and be clearly mentioned in the sale agreement/allotment letter.

 Property under litigation and in poor condition should not be considered for financing.

 Requirement of Group Credit Life Insurance Cover - As per existing arrangements, Group Credit Life
Insurance cover for our Home Loan borrowers is available under tie-up arrangement with M/s India First Life
Insurance Company Ltd. Such insurance cost can also be financed under Home Loan (subject to satisfying LTV
norms on the basis of cost of project without insurance Cost) or under Baroda Home Suvidha Personal Loan.
The insurance cover is optional and at the cost of borrower by paying single one-time premium.(Annexure-
1of Master Circular BCC/BR/111/97 dated 21.02.2019.)

12.1.5 Area of Operation:

Home Loan can be sourced/considered by Branch/ Specialized Mortgage Store near to the:


 Place of present/permanent residence of the applicant/s (or)
 Branch maintaining salary /NRE account of the applicant

12.1.6 Maximum Loan Amount (Ticket Size)

Mumbai : Rs. 10 Crores
Other Metros 16 : Rs. 5 Crores
Urban Areas: Rs. 3 Crores
Semi-urban and Rural: Rs. 1 Crore

The above limits will be based on the area where property is proposed to be constructed/ purchased, irrespective
of the classification of the financing branch.

i. The cost of extension / additional construction can be considered within the overall limit of the Home Loan
scheme. (Ceiling on maximum amount for extension of existing House/ additional construction has been
removed w.e.f. 01.04.2016.)

ii. The actual quantum of loan should be arrived at after considering the income criteria, repaying capacity &
LTV/Margin norms

15
CRE home loan dealt in separately in the latter part of handbook
16
Criteria for Home loan Master Circular dated BCC/BR/111/97 dated 21.02.2019 page no.14 and 15

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 iii. All the sanctioning authorities at Branch / SMS level as well as Regional and Zonal Offices shall consider the
Home Loan proposals up to their DLPs and if the proposal falls beyond their DLP, same shall be submitted to
next higher authority for their consideration as hitherto.

12.1.7 Income Criteria (Income Multipliers):

The requirement to calculate income multiplier criteria has been dispensed with w.e.f. 27.08.2018.17

12.1.8 Repaying Capacity (FOIR- Fixed Obligation to Income Ratio):

Salaried persons: (Resident, NRI, PIO)

Gross monthly Income * FOIR [Total Deductions,
including proposed EMI not
to exceed) #
Less than Rs. 20,000/- 50%
Rs.20000 and above but less than 50000 60%
Rs. 50000 and above but less than Rs. 2.00 Lacs 65%
Rs.2.00 Lacs and above but less than Rs.5.00 Lacs 70%
Rs. 5 Lacs and above 75%
*Average of last 3 months GMI (Gross Monthly Income)
#Deductions to be considered from the last month’s GMI

Others (Self-employed/ Professionals / Agriculturists / NRIs etc.):

Gross Annual Income (GAI) * FOIR [Total Deductions, including proposed

EMI not to exceed) #

Upto Rs.6.00 lacs 70%

More than Rs.6.00 lacs 80%
*Average of last 2 Year’s Gross Annual Income
#Deductions to be considered from the last years GAI

Calculation of FOIR (Fixed Obligation to Income Ratio)

FOIR = [All Deductions + EMI for existing loans + EMI for proposed Loan] X 100
/ Gross Monthly Income (appraised)

 Repayment capacity to be calculated taking into consideration the deduction of income tax, other statutory
deductions etc. and other Loans EMI payment, excluding Life Insurance Premiums. The payment of all type
of Life Insurance Premiums (except premiums of Unit Linked Insurance Plan - ULIP) irrespective of Insurance
Company issuing the policy need not be considered for deduction.

 If agriculture/other regular income (exempted/ taxable) is declared in the IT return, the same can be considered
for eligibility.

 Depreciation can be considered for computing income, subject to the following conditions:
-The facility will be confined to Businessmen, Professionals, Self-Employed, Individuals etc who run the
business/activity on proprietorship basis.
- Sanctioning Authority will ensure verification of the fixed assets, over which, depreciation is claimed by the
applicant during pre-sanction inspection and a copy of report to be kept on record.
- Depreciation amount will be ascertained on the basis of last -2- years ‘Audited Balance Sheet’ of Business
activity and the latest Audited Balance Sheet should not be older than -9- months. Where Audit is not
mandatory, latest balance sheet duly certified by Chartered Accountant is to be obtained.
- Depreciation to be allowed and added to the net income will be average depreciation during the last -2- years
or the depreciation during the current year, whichever is lower.

 In Retail Loans, income & repaying capacity are the main criteria for considering loans.

17
Circular No. BCC/BR/110/418 dated 27.08.2018

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 Therefore, critical examination and satisfaction about the employment status of the applicant, his/her/ their
source should be regular, stable, sustainable and of verifiable nature.

 Income from salary/ business/ profession should be in accordance with nature / area of business, qualification,
age, cadre in the organization etc.

 In case the applicant is not maintaining SB account with us, branch should obtain statement of principal account
of the applicant, wherein salary/ business income is being credited and the same be analyzed properly to
ascertain the conduct of account and also to judge applicant’s other liabilities, repaying capacity. Net Salary
credited in account statement may be cross checked through salary slip.

 Independent enquiries from the employer in respect of salaried person about employment status and salary
should be made. It will help in detection of cases of fabricated salary / employment certificates as well as in
ascertaining the actual income of the applicant. A copy of latest salary slip along with Form No. 16 (cross
verification of salary account with last 3 salary slips will help the branch to ascertain the genuineness of the
income properly) should be obtained, duly verified with name and designation of the employer.

 In case of applicants other than salaried persons, the original tax payer’s copy of Challans of tax deposited be
verified to ascertain genuineness of Income Tax Returns. Home Loan proposals of the persons, who have filed
their income tax returns of last three years in one lot or if there is major fluctuation in the amount . the tax
deposited in the current year vis-à-vis previous year should be accorded special attention.

 In case of Agriculturists who are predominantly dependent on agriculture and not required to file income tax
returns, their income may be assessed by obtaining latest income certificate from the local competent revenue
authority. The income mentioned in the certificate must be assessed properly taking in to consideration land
holding of the Agriculturist, area of land actually being cultivated by him, cropping pattern and acre,age under
different crops together with number of crops harvested in a year depending on availability of irrigation facility
etc. The assessment of income so arrived must be properly recorded with justification in the appraisal note.

 In such cases of agriculturists, the latest income as assessed based on the certificate from the competent
authority (instead of average of last -2- years Gross Annual Income) can be considered for the purpose of arriving
FOIR.

 If the income of co applicant/s is accepted along with principal applicant for arriving higher eligible limit,
sustainability of income of co-applicant/s has also to be ensured and assessed in the same line for salaried/non-
salaried/agriculturist etc as the case may be.

 If applicant/co-applicant is retired/VRS from defence forces or any other job and thereafter employed / engaged
in business / profession, in this case, pension income can also be considered for eligibility purpose.

12.1.9 Margin Norms &Loan to Value (LTV) Ratio:

Loan Amount Margin LTV Ratio

Upto Rs.30.00 lacs 10% 90%
Above Rs.30.00 lacs upto 20% 80%
Rs.75.00 lacs
Above Rs.75.00 lacs 25% 75%

GST, Stamp duty, Registration charges, other documentation charges and other expenses like Life Insurance
premium etc. should NOT be included in the cost of house property to calculate margin / LTV ratio, however
where cost of the house/dwelling unit does not exceed Rs.10.00 lacs, branch may add such charges to the cost
of dwelling unit for the purpose of calculation of Margin & LTV Ratio.

For existing Home Loans above Rs.75/- Lacs in case the margin is currently less than the ceiling prescribed for
any reasons, efforts should be made to bring to it within limits.

For NRI borrowers, the margin money should be paid by way of foreign inward remittance through normal
banking channels or out of NRE/FCNR/NRO accounts only.

Premium of Group Credit Life Insurance cover for our Home Loan borrowers can be financed as part of Home
Loan at the request of the borrower, at the time of sanction. However, in such cases, Home Loan/ Home

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 Improvement Loan/ Top-up Loan along with such insurance premium should satisfy the margin norms without
adding such insurance in the value. Further, premium amount can be financed under the scheme as advised vide
circular no. BCC:BR:110/451 dated 05.09.2018.

Advance deposited with the builder is to be treated as margin, only after its genuineness is checked & verified to
the satisfaction of the sanctioning authority.

12.1.10 Repayment Period:

Maximum repayment period is -30-years, including moratorium period. Moratorium shall be 36 months subject
to the following condition:

18- Months moratorium period for Houses and Building under construction, up to 7thfloor, thereafter -6- months
additional moratorium per floor subject to maximum of -36-months.
Or One month after completion of House / taking possession of House / Flat, whichever is earlier.

Repayment:
 Loan to be repaid in Equated Monthly Installments (EMI).
In case of farmers / agriculturists, repayment can be allowed in Half Yearly installments coinciding with
harvesting/marketing of major crops produced.
Recovery of interest for the moratorium period: ‒Interest charged during the moratorium period is to be
recovered as and when debited.
 ECS/ NACH Mandate as per extant guidelines to be obtained.

Adoption of Specific Pre fixed EMI dates for Retail Loans:

As per the guidelines conveyed vide Circular No.BCC:BR:108/404 dated 02.09.2016, & BCC:BR:110:336
dt.30.06.2018 (implementation of NACH), Branches have to adopt prefixed specific dates - 08th or 16th or 25th
as EMI dates( including account with moratorium) for all Retail Loans, out of which the preferable date convenient
to the borrower, considering the salary date/ monthly remittance dates etc.
In any case, even in case of loans with moratorium also, the dates – principal demand date/ interest demand date/
first repayment start date should be uniform for a particular account and should be 01st or 08th or 16th or 25th.
The above guidelines are applicable to all the fresh sanctions of Retail Loans w.e.f. 10.09.2016.

Guidelines on Recovery of EMIs through ECS (Debit) & Security of PDCs 18

Facility of recovery of Retail Loan EMIs through ECS (Debit) Mandate for all our existing as well as prospective
customers has been implemented w.e.f. 10.09.2013 vide CircularNo.BCC: BR:105/385 dated 03.09.2013.
All the Branches/SMSs to take a couple of PDCs (Post Dated Cheques in CTS-2010 standard format) as security in
addition to the ECS mandate for Retail Loans. In existing Loan accounts where only ECS mandate are taken or the
PDCs taken are exhausted/stale, a couple of PDCs in CTS-2010 format to be obtained to protect the interest of the
Bank.

Change in status of the Borrower (in case of Home Loan to NRI/PIO/OCIs)

In case of change in status of the borrower during the tenure of the loan, the repayment schedule may be reworked-
out keeping in view his revised status / income / repaying capacity, age etc. The branch should obtain the request
in writing from the borrower to this effect. The revised repayment schedule / rate of interest / other terms and
conditions should be advised to the borrower in writing and acceptance thereof should be obtained from
borrower/co-borrower/s and guarantor/s.

12.1.11 Rate of Interest

Rate of interest will be applicable as per bank’s existing guidelines, please refer to Bank’s website-
www.bankofbaroda.com for further details.
“To create awareness of taking insurance cover, It has been decided to charge additional Risk
Premium(Presently) @0.05% over and above applicable rate of interest of MCLR+SP+Spread,
wherever applicable on all fresh Home Loan all variants canvassed on and after 15.10.2018,
however, this additional Risk Premium will be waived as an incentive to the borrower who provide
credit insurance cover for the loan for entire tenure of the loan

18
Guidelines on recovery of EMIs- Master Circular BCC/BR/111/97 dated 21.02.2019

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 Bank has introduced repo linked interest rate for all retail loan products W.E.F 01.10.2019. For
details guildeines please refer the circular19

12.1.12 Bureau score validations:

 Cutoff on CIBIL score is stipulated at 725.
 If more than one applicant is there, AVERAGE of CIBIL scores of the applicants (whose income are
considered for eligibility), to be considered for Cut off score for sanction of Loan as well as for Pricing.
In such cases, CIBIL score of applicant/s having (-1) or (0) to be excluded for average calculation.
 However, in such cases of joint applicants, individual CIBIL score of all the applicants (whose scores are
considered for average calculation) should be minimum 675.

It is clarified that if the CIBIL report is generated by our Bank at any level within a period of -1- month,
for applicant/s for the same proposal, the same can be considered for pricing at the time of sanction.

Déviations in Bureau Score validations:20

 Deviations in CIBIL score can be considered for existing as well as new customers with proper justifications
which are to be mentioned in the Appraisal Note.
 Proposals of applicant/s having CIBIL score of (-1) or (0) can be considered by the Sanctioning authority,
without deviations, for existing as well as new customers
 Cut off CIBIL score 675 to 724: Deviation decision with RMCC. (if number of applicants whose income
is considered for eligibility is one.)
 In case of more than one applicant, if average score is 675 to 724 and/or any of the applicant/s score is less
than 675: Deviation decision with RMCC.

 Cut off CIBIL score less than 675: Deviation decision with ZOCC (if number of applicants whose
income is considered for eligibility is one). The applicable ROI will be with maximum spread as per the
product.

 In case of more than one applicant, if average score is less than 675 and/or any of the applicant/s score is
less than 675: Deviation decision with ZOCC. The applicable ROI will be with maximum spread as per the
product.

Note : Please refer to latest revision in DLP for deviation matrix21

Credit Card Default

Cases where credit card account status write-off / settlement involving amount uptoRs.25,000/- (consolidated
amount of default) No deviation is required (in case of fresh, review with increase & takeover proposals)
Cases where credit card account write-off / settlement involving amount aboveRs.25,000/- took place in the
past: Deviation powers rest with the authorities as
Under:

Parameter Authority
For proposals falling up to the powers of RMCC ZOCC
For proposals falling under the powers of ZOCC COGM (BCC)
In case of review of accounts, sanctioning authority may take a view in all such cases without referring for
deviation.

While accepting the credit card account write-off / settlement above Rs.5000/-sanctioning authority to ensure
the following:
 No Due certificate from the Bank / FIs be obtained in respect of credit card account

19
Repo Linked Interest Rate – BCC/BR/111/493 dated 30.09.2019
20
Master Circular – BCC/BR/111/97 dated 21.02.2019 page 24 for Deviation Matrix & Loan to Wilful defaulters
21
Latest deviation powers for retail loans : BCC/BR/111/288

Page 387 of 502

  Borrower is impressed upon for updation of „satisfactory status‟ with the concerned Bank / FIs,
preferably within stipulated period.
 Ensure that Bureau Report of the applicant/s contains no other adverse remarks.

12.1.13 other information:

 Applicants can submit application both online and offline basis.
 Proper scrutiny of the application is to be done by the bank
 KYC of the borrower must be properly verified
 Legal opinion of the document should be based on examination of original title deed only and not on the
basis of the photocopies.

Submission of Home Loan application and preliminary scrutiny:

Submission of Home Loan application may be either through online or by physical mode.

12.1.14 Security22

 Property to be purchased out of home loan should be mortgaged.

 In case borrower is unable /unwilling to offer mortgage of the said property branch can accept, at its discretion,
security of adequate value in the form of Fixed Deposits, Life Insurance Policies, Government Promissory Notes,
Shares and Debentures, Gold ornaments or such other securities including third-party guarantee from
individual/s as may be deemed adequate, with the prior permission of Regional Head. Margin on securities
is to be maintained as per extant guidelines applicable for financing against such securities.
 In case where the borrower is unwilling to offer mortgage of the said property in such instances, borrower must
give a stamped undertaking he will create mortgage of the dwelling units /residential property at a later date if
desired by the Bank, be obtained from borrower.
 In cases where procedure for execution of Sale Deed / Conveyance Deed, forming a Co-operative Society and
issuance of Share Certificate takes a very long time and as such there are practical difficulties in creating Mortgage at the

22
Home loan Master Circular dated BCC/BR/111/97 dated 21.02.2019 page 27-32- Details about creation of
mortgage

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 time of disbursement of Home Loan
for Residential units developed by
Builders / Developers, following
procedure may be adopted.
Updated guidelines on CERSAI
is issued by the bank.23
1.1.15 Risk Rating:
 Credit rating is to be carried out as
per Home Loan Model under Retail
Rating Models.
 Total marks are 168 and the cut-
off is set at 96 (Investment Grade HL-
8).
 If the Home Loan is sanctioned for
reimbursement of expenses incurred
for houses / flats constructed /
purchased recently from own sources,
minimum investment grade should be
HL-3.
 If home loan is sanctioned
as supplementary finance minimum
investment grade should be HL-2.
12.1.16 Documentation:
Following documents are to
be obtained:
i. Term Loan
Agreement – LDOC
– 23A
ii. General Form of Guarantee
(LDOC 33) wherever third
party guarantee is stipulated.
iii. Usual procedure for
creation of Mortgage of the
Residential immovable
property being financed.
iv. Documents required to be
obtained for recovery as per State Recovery Act.
Key points Disbursement of Home loan:
Upon receipt of demand letter, the branch should obtain in writing the name of the Bank and Branch
from the builder / vendor for the purpose of issuing Banker Cheque / Demand Draft pertaining to
the disbursement.
 To obtain request letter from borrower for making the payment to the builder.
 To issue Demand Draft / Bankers Cheque in favour of Bank / Branch, A/c-No.,
 Name of Builders / Vendors / Suppliers along with a letter addressed to the vendor.
 Not to hand over the Demand Draft / Bankers Cheque towards disbursement to the borrower.
In case of extension – Payment can be made directly to the borrower after
Verification of bills/money receipts etc.
 Veracity of demand letter issued by the builder should be independently verified from the
builder
 Every disbursement, wherever disbursement is to be made in stages, should be backed by site
/ spot inspection and relative inspection report should be kept on record.
 Receipt for Banker’s Cheque / Demand Draft and letter for confirmation of Bank’s Lien in
builders book must be obtained & kept on record.
 Post-sanction inspection after final disbursement should be carried out to ensure that borrower
has taken possession of the house / flat (in case of Home loan), besides verification of end
use of funds.
 In case of outright purchase of house / flat ready for possession – Disbursement be
made in one instalment directly to the seller of the house / flat.
 In case of construction of house / flat – In 3 to 4 stages after physical verification,
depending on the progress of construction. Payment can be made either to the builder directly or
to the borrower subject to verification of bills/money receipts/invoices etc. or certificate issued by
approved Valuer / architect certifying the progress of the work and the estimated expenditure
having incurred there for, as the case may be.
 During the course of construction at least once valuation report from Bank’s
approved must be obtained.

Execution of Documents & Operation through Power of Attorney-24

12.1.17 Unified Processing charges –

 Unified processing charges will include:
 Processing Charges
 Documentation charges
 Document Verification/ vetting charges
 Pre- sanction Inspection (Contact Point Vérification-CPV) charges
 One time post inspection charges
 Advocate charges for legal opinion
 Valuer charges for valuation
 Bureau report charges
 CERSAI charges
 ITR Verification charges

23
Updated Guidelines on CERSAI –BCC/BR/111/503 dated
24
Master Circular – BCC/BR/111/97 dated 21.02.2019 – Documents & Operations of Power of Attorney

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  For Home Loans, certain minimum amount of processing charges will be recovered upfront. Balance amount of
processing charges will be recovered at the time of conveying sanction of the loan.
 Further, stamp duty payable on various loan documents/ agreements as well as for equitable mortgage shall be
recovered separately on actual basis.

Note: ‘Mortgage Creation Charges’ as conveyed vide Circular No.HO:BR: 106/51dated 01.03. 2014 and issued by
Operations and Services Dept. and subsequent Circular No.BCC: BR:107/176 dated 31.03.2018 issued by Retail
Banking Department will NOT be applicable to all variants of Housing Loans.

 No charges to be recovered in case of Review of accounts.

12.1.18 Insurance of the House Property & Personal Accident Insurance of the borrower:
Our Bank offers free personal accidental insurance coverage. For Personal insurance coverage, our bank has tie
up arrangement with insurance providers, such group credit life policies are optional.

12.1.19 Prepayment charges:

No prepayment charges shall be levied on foreclosure of Home Loans irrespective of the nature of source of funds
i.e., whether the loan is repaid from the own sources of borrower or by way of takeover by other banks/HFCs or
otherwise w.e.f. 15.12.2011.

12.1.20 Inspection25:
For existing customers, pre-sanction inspection visit for residence is not stipulated, if KYC has been done by
the Branch in the last 2 years. Further, the customer is deemed to be KYC complied if the latest existing address
as per Bank‟s record matches with the Bureau Record/Report. However, employment / business verification and
inspection of property to be mortgaged to be carried out.

12.1.21 Home Loan to Staff Members availing under normal Public Scheme:

Separate scheme of ‘Home Loan to Staff under Public Scheme’ has been discontinued w.e.f. 01.04.2016 and the said
separate scheme guidelines have been realigned with general guidelines of Home Loan / Home Improvement Loan
meant for public w.e.f. 01.04.2016. As such, confirmed staff members, including part time employees can avail
Home Loan meant for public.

However, the rate of interest is not linked to CIBIL score. i.e., applicable rate of interest will be ‘1 year MCLR +
Strategic Premium’.

12.1.22 Discretionary lending Power / Sanctioning Authority:

For DLP related to Financial/ Non-financial deviations please refer to circular No.BCC/BR/108/587 dated
05.12.2016 and revised circular no BCC/BR/111/288 dated 20.06.2019

12.1.23 Approval of Builder/Developer/Promoter/ Projects.

Branches in cities and large towns will recommend the names of reputed/credible builders/developers/ promoters
as also their projects to their respective Regional Authorities, who would be according approval to those conforming
to the criteria. However, in metro cities, since some of the builders/developers may be common for the entire city
across all regions/branches, the approval may be accorded by the respective zonal authorities. Now Bank has
decided to accord the status of approved Builder and their Housing Project as approved for sanctioning of Home
Loans for purchase of flats, while granting credit facilities to such Builders for Housing Projects

Detailed guidelines are given in Annexure-7 (a) of Master Circular BCC: BR:111/97 dated 21.02.2019.

Implementation of the orders of Delhi High Court.

Branches are advised to ensure compliance of the orders of Hon’ble High Court of Delhi, during the hearing of
writ petition in connection with the order of Supreme Court of India to seal all unauthorized business units set up
in residential area in Municipal Corporation of Delhi are given in Annexure -16

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 12.1. 24 Priority Sector Classification:
There has been revision in the Priority Sector classification norms as per RBI circular –RBI/2017-
18/203FIDD.CO.BC:22/04.09.01/2017-18 dated 19.06.2018. The revised guideline is:

 In metropolitan centres with population 10 lacs and above, housing loan limits up to Rs.35.00 lacs, provided the
overall cost of dwelling unit does not exceed Rs.45.00 lacs
 In case of Non metropolitan centres, the housing loan limit up to Rs.25.00 lacs, provided the overall cost of dwelling
unit does not exceed Rs.30.00 lacs.
 For more details please refer to Circular no. BCC/BR/110/317 dated 27.06.2018 and Home loan master circular
no.BCC/BR/111/97 dated 21.02.2019.

Sourcing of Home Loan applications: Empanelment of Direct Selling Agents (DSAs) for sourcing of
Home Loan applications26
1.1.25 Contactless home loan27 : PSB59 minutes: Launch of retail products – contactless housing loan and personal
loan
1.126 Contact Point verification ( CPV)28- Empanelment of contact point verification

12.2 Baroda Home Loan Advantage Scheme

12.2.1 Features –
Facility – Home loan linked with savings account
 The Home Loan sanctioned will be linked with Saving Bank Account.
 The rate of interest applicable on this SB account will be Zero.
 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 borrower will remit the Equated Monthly Instalments (EMIs) into the linked SB account.

12.2.2 Facilities available for linked Savings account:

 Balance in savings account is available for withdrawal on demand.
 Cheque book, 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.

12.2.3 Conversion of Existing Home loan:

 New saving Bank account is to be opened (even if the borrower has existing SB Account) in a separate scheme
code and such account is to be linked to his/her home loan account. Home loan account may continue in existing
scheme code.
 Borrower to submit a letter to the branch to convert his existing home loan to Baroda home loan advantage
scheme.
 Agreement29 for linking savings bank account to home loan account is to be executed.
 Unified Processing charge of Rs.1000+Tax will be levied for conversion from normal home loan to Baroda Home
loan advantage scheme.

26
Souring of Home Loan proposal – BCC/BR/108/207 dated 11.05.2016
27
Contactless housing loan – BCC/BR/111/436 dated 31.08.2019
28
Contact Point verification –BCc/BR/111/388 dated 01.08.2019
29
Annexure 30, Home loan master circular date 21.02.2019

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 12.2.4 Rate of Interest:
Up to Rs.75.00 lacs of loan amount –Rate of interest as applicable to regular home loan shall be applicable. In case of
loan amount above Rs.75.00 lacs, 0.25% over the applicable rate of interest of regular home loan will be charged.

12.2.5 Security documents:

All documents as applicable for regular home loan. Additional document- agreement for linking the home loan
with savings bank account is to be executed

12.2.6 Scheme codes30:

SL.NO Target Group Loan scheme details Linked SB scheme details

Scheme Scheme Scheme code Scheme

Code Description Description
1 Residents LA 183 Baroda Resident Home SB152 Home loan linked SB -
loan advantage residents
LA 209 Take over CRE-Hsg SB152 Home loan linked SB -
Advantage residents
2 Non Residents LA184 Baroda NRI Home loan SB352 Home loan linked SB-
advantage NRO

LA 210 Take over CRE-Hsg SB352 Home loan linked SB-

Advantage NRO

12.2.7 Other Importance points:

 The actual interest debited in the home loan account is to be considered for issuance of interest certificate
for income tax purpose.
 Actual principal credited in the home loan account is to be taken for income tax purpose.
 The balance available in the savings bank account will not be considered for CASA deposit.
 Therefore, the balance of Home Loan account and linked savings SB account will be netted for reporting
purpose.
 All other guidelines for existing home loan will be applicable.

12.3 Baroda CRE Home Loan:

12.3.1 Features –
 As per RBI guidelines, bank’s exposures to third dwelling unit onwards to an individual will be treated as CRE
(Commercial Real Estate) exposure.
 Exposure under CRE exposure will attract risk weight of 100%.
 Home loan for third dwelling to an individual will be treated as CRE advance.
 Baroda CRE home loan are to be sanctioned by Specialised Mortgage Stores (SMSs) only.
 In case the branch considering the proposal is not attached to any SMS, the same should be referred to
Regional Office for sanctioning the Loan by Regional Authority.
 Deviations31 is permitted in CRE advances.
 Rate of interest in case of CRE home loan will be 0.25% over and above the applicable rate of interest in Regular
home loan.
 CRE home loan will be applicable to both resident individual and NRI/PIO/OCI.
 All the guidelines of regular Home Loan scheme, including risk based pricing based on the CIBIL score of the
applicant/s will be applicable.

12.3.2 Credit Rating:

 Rating is to be done as per Home loan rating model under retail loan.

30
Job card for opening Home loan advantage account enclosed in Home loan master circular dated 21.02.2019
7
Deviations are mentioned in Home loan master circular date 21.02.2019

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 12.3.3 Margin/ Promoter’s Contribution:

 As applicable for normal home loan.

12.3.4 Maximum Period:

 As applicable for normal home loan.

12.3.5 Scheme Code

 Separate scheme is advised for Baroda CRE home loan accounts. Savings account is to be linked CRE home
loan account.

12.3.6 Baroda Pre Approved Home Loan :

 The scheme was introduced to provide “In principle Approval” for home loan prior to identification of house/
flat by the prospective borrower.
 Borrower gets ensured of his loan eligibility limit on prior basis.
 It will clearly be specified in the approval letter that the Bank is under no commitment or obligation as the
actual sanction or disbursal would depend all the existing guidelines of home loan.
 The “In principal Approval” shall be valid for period of 4 months from the date of issue, subject to partial
disbursement before expiry of validity.
 In principal approval is to be issued in uniform and specified format32
 All documents related to income and repayment capacity ( excluding property papers) is to be obtained, CIBIL
report to be generated and duly verified before issuing In principal sanction letter.

Unified Processing Charges: Same as per Home Loan Rs. 8,500/- (Rs. 7,500/- upto 31.03.2019) upfront
per property. If the borrower submits the property documents with in the validity period of pre- approval
letter, balance amount of unified processing charges as applicable to Home Loan only will be recovered from
the borrower.

Property papers will be required to be submitted by the applicant/s within the validity of ‘Baroda Pre Approved
Home Loan’, i.e., within -4- months from date of issue. If the applicant/s submits the property documents
within the validity period, balance amount of applicable unified processing
charges only will be recovered from the applicant further on actual sanction of Home Loan, as per the
guidelines/ instructions on processing charges prevailing on the date of actual sanction.

In case sanction under ‘Baroda Pre Approved Home Loan’ is provided during Property Expos/ Shows/ our
Marketing Campaigns etc charges may be waived. Copies of these sanctions with waiver to be put up to next
higher authority for PSR and records are maintained accordingly.

12.4 Baroda Home Improvement Loan:

12.4.1 Target Group:
 All eligible customers as applicable for regular home loan.
12.4.2 Purpose:

 Purchase of furniture / fixtures / furnishing / other gadgets such as fans, geysers, air conditioners, water
filters, air purifiers, heaters, desert coolers, etc.

12.4.3 Maximum loan amount:

 The maximum loan amount is Rs.50.00 lacs.
 There is no sub limit for loan component for furniture, fixtures, water filter and other gadgets.

32
Refer to Home loan master circular dated 21.02.2019- Annexure 32

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 12.4.4 Margin:
 25% of cost of project which includes estimated cost of repairing/ renovation, cost of furniture/fixture etc.

12.4.5 Repayment period &Moratorium:

 Maximum 15 years with moratorium of 6 month or one month after completion of repair, renovation work
whichever is earlier.

12.4.6 Age & Pricing of loan:

 The age and pricing structure is similar to home loan.

12.4.7 Eligibility Norms:

 Repaying capacity (FOIR) will be applicable as per the guidelines for home loans.

12.4.8 Security:
 Mortgage of the property to be repaired/ renovated.
 If mortgage is not feasible or borrower is not willing to offer the property for mortgage branch can accept, at its
discretion, security of adequate value in the form of Fixed Deposits, Life Insurance Policies, Government Promissory
Notes, Shares and Debentures, Gold ornaments or such other securities including third party guarantee from
individual/s as may be deemed adequate, with the prior permission of Regional Head. Margin on securities is
to be maintained as per extant guidelines applicable for financing against such securities
 In case borrower is not willing to offer the property for mortgage, a stamped undertaking that the borrower shall not
create any charge on the said property to any third party and that he will create mortgage of the dwelling units/ housing
property at a later date if desired by the bank, be obtained from the borrower.
 Loans up to Rs.50, 000/- in rural areas and up to Rs.2/- Lacs in other areas can be given on clean basis provided
employers undertaking to recover instalment from salary is made available or third party guarantee of a person whose
worth should be at least double the amount of loan and subject to obtain ECS mandate for recovery of EMIs as per
extant guidelines. However, a stamped undertaking that the borrower shall not create any charge on the said property
to any third party and that he will create mortgage of the dwelling units/ housing property at a later date if desired by
the bank, be obtained from the borrower. Total clean/unsecured exposure (i.e., without collateral security) to the
customer including this loan should not exceed Rs.2/- Lacs.

12.4.9 Disbursement:
 In case of repair/renovation : Directly to the borrower subject to verification of bills/money receipts etc. or
certificate issued by approved valuer/architect certifying the progress of the work and the estimated
expenditure having incurred therefore, as the case may be.
 For furniture/fixtures/furnishing and other gadgets: Directly to the Supplier.

12.4.10 other important parameters:

 No prepayment charge will be levied irrespective of nature of fund used for loan closure.

All other parameters/features - eligibility of applicant/s, addition of co-applicants, age criteria, CIBIL score
validations and guidelines for pre-sanction inspection, post-sanction inspection, Discretionary Lending
Powers, take over guidelines, Free Credit Card, Priority sector classification, Powers of Deviations & Deviation
charges; Preventive Vigilance guidelines etc. are same as Baroda Home Loan scheme.

12.5 Baroda Top up loan

12.5.1 Introduction:-
The Bank wide circular dated110/136 dated 19.03.2018, has changed Baroda Assured Additional Advance to Baroda
Top up loan with certain changes in Parameters in line with the prevailing market situation.

12.5.2 Type of Facility:

Term Loan / Demand Loan (as per total period of loan) and Separate Loan a/c is to be opened.

12.5.3 Purpose of Loan:

Any purpose excluding speculative or illegal purpose.

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 12.5.4 Eligibility33:
Following persons are eligible for Baroda Top up Loan:

 All Existing Home Loan (including Home Improvement 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 satisfactory and the account is classified Standard.
 There is no adverse feature / Auditor's/ Inspecting Officer's remarks in existing Home Loan a/c.
 The facility can also be considered when a Home Loan account is taken over from other banks/HFCs/NBFCs
etc.
 Addition of co-applicants: Guidelines similar to home Loan.

12.5.5 Age:
As applicable for Home loan product.

12.5.6 Loan Limit:

Minimum: Rs 1.00 Lakhs Maximum: Rs. 200.00 Lakhs

12.5.7 Margin:

Outstanding Home Loan+ Proposed top up Revised Norms

loan (Based on Realizable Value)
LTV Ratio (Home Margin
loan+ top up loan)
Upto Rs.30.00 lacs 90% 10%
Above Rs.30.00 lacs & up to Rs.75.00 lacs 80% 20%
Loan above Rs.75.00 lacs 75% 25%
Staff housing loan 90% 10%
For staff members who has availed the Home Loan in public scheme, Top-up Loan to be given by
clubbing the staff Home Loan and public Home Loan both and LTV norms on such Top-up loan will
be applicable at par with Top-up loans to public.

12.5.8 Rate of Interest34:

Risk based pricing has been introduced linked with applicable rate of interest on Home loan i.e. applicable ROI on
Home loan +Strategic premium +0.50%.

12.5.9 Repayment Period:

Top-up loan may be sanctioned for the maximum period up to which the applicant is eligible as per his/ her
age criteria i.e. irrespective of the tenure of linked Home loan applied/availed. In case linked Home Loan
account is closed, the repayment of Top-up loan can be continued up to the sanctioned tenure. However, no
fresh/enhancement of Top-up loan facility will be sanctioned after the closure of linked Home Loan.
Repayment by Equated In case of existing Top-up (Erstwhile AAA) Loan, the same is to be closed within -4-
years after the pre-closure of linked Home Loan account as per existing terms and conditions Monthly
Instalments (EMI). First instalment to fall due one month after first disbursement.

12.5.10 Repayment Capacity:

Top up loan is to be sanctioned considering the following:

 FOIR-Fixed Obligation to Income Ratio (Repayment capacity) to be calculated in same line with Home Loan.
 There should be commensurate increase in take home salary / income of the borrower when Baroda Top Up
loan facility is considered.
 Borrower to submit necessary papers in support of income.

12.5.11 Security:
 Extension of the existing mortgage of the Residential property created to secure the Home Loan.
 Personal guarantee of third party, if the same is stipulated in Home Loan.

33
Reference Circular no:BCC/BR/111/97 dated 21.02.2019
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 Top-up loan can be given only against the completed residential properties, where possession is given to owner
and valid mortgage on the property has been created in Bank’s favour.

12.5.12. Processing35: The account will be opened under following scheme codes LA114: Reg Top up HL – Res LA115:
Reg Top up HL – NRI While opening the account, users are required to punch the Linked Home Loan account number
in “App ID Ref” field in General Tab. This will ensure validation of pricing system of Linked Home Loan and also
automatically fetch the interest rate of linked home loan thereby creating an automated ROI application process on
Top-up Loan.

12.5.13. Other information:

 Following existing guidelines of Baroda Assured Additional Loan will be applicable for Baroda Top up loan also :

 KYC documents requirements remains same.

 Execution of set of documents.
 Guidelines related to valuation of property.
 Maximum number of times loan the loan can be availed by the borrower.
 Insurance of the property.
 Takeover norms.
 Priority sector classification.

12.6. Pradhan Mantri Awas Yojana (PMAY)

12.6.1. Introduction:
 Pradhan Manti Awas Yojana (PMAY) - the Housing for All [Urban] Mission is launched in compliance with
the objective of National Mission Housing providing Housing for All by 2022.
Interest subsidy of 6.50% is available on the housing loans which may be availed of by beneficiaries belonging
to EWS / LIG categories. The subsidy would be provided to the loan component to the extent of Rs.6 Lacs.
12.6.2. Salient Features of “Housing for ALL mission”36
 This mission will provide central assistance to implementing agencies through States and UTs for providing
houses to all eligible families/beneficiaries by 2022.

 A beneficiary family will comprise husband, wife, unmarried sons and/or unmarried daughters. The
beneficiary family should not own a pucca house either in his/her name or in the name of any member of
his/her family in any part of India to be eligible to receive central assistance under the mission.

 There are specific guidelines related to coverage , duration and implementation methodology.

12.6.3 Eligibility:
 Housing loans which may be availed of by beneficiaries belonging to EWS / LIG categories.

o EWS: Annual household income up to Rs. 3 Lacs and house sizes up to 30 sq.m.
o LIG: Annual household income between Rs. 3 to 6 lacs and house sizes up to 60 sq.m.
o MIG-I: Annual household income between Rs. 6,00,001 to Rs. 12,00,000 and house sizes up
to 160 sq.m
o MIG-II: Annual household income between Rs. 12,00,001 to 18,00,000 and house sizes up to
200 sq.m.

12.6.4. Interest subsidy

o EWS & LIG- 6.50% of loan limit of Rs. 6 Lacs for a maximum period of 20 Years and
o MIG-I- 4% on principal subject to maximum loan amount of Rs. 9 Lac for 20 Year/Loan Period
whichever less
o MIG-II-3% on principal subject to max loan amount of Rs. 12 Lac for 20 Year/Loan Period
whichever les
NPV of subsidy will be calculated @ 9%
Schème Code: EWS & LIG- LA191 and MIG- LA213

35
Reference Circular no. BCC/BR/111/97 dated 21.02.2019
36
BCC/BR/111/97 dated 21.02.2019 - scope , coverage and implementation methodology of PMAY

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 12.6.5. Other Details:

Priority Sector Classification37:

 Metro: Home Loans up to Rs. 35 Lac cost of the dwelling unit maximum Rs. 45 Lac
 Other: Home Loans up to Rs.25 lac cost of the dwelling unit maximum Rs. 30 lac
 Family income limit for loans to housing projects exclusively for the purpose of construction of houses for
Economically weaker sections (EWS) and Low income group (LIG) is Rs.3 lacs per annum and Rs.6 lacs per
annum respectively.

Latest development/ changes:

 Government of India has launched Rural Housing Interest subsidy scheme( RHISS) 38under Pradhan Mantri
Awas Yojana Gramin (PMAY-G).
 Beneficiaries seeking housing loan from banks for modification/ constructions of Pucca houses in rural areas
would be eligible for an interest subsidy of 3% , for maximum loan tenure of 20 years , housing loan eligible
amount for interest subsidy will be Rs.2,00,000 .

12.7. Golden Jubilee Rural Housing Finance scheme (GJRHF)

12.7.1 Purpose:
 For construction of new dwelling units, acquisition of dwelling units not older than 20 years
 Repair/renovation/extension of existing house,
 Takeover of loan already availed from any Bank/HFC and
 Construction of dwelling units cum farm house on agriculture land for the purpose of residence and
storage of farm equipment/implements and farm produces.

12.7.2 Eligibility:
Any individual residing in rural area with population not exceeding 50000 as per 1991 census and having
sufficient repayment capacity.

Maximum Limit: Rs. 100.00 Lac and Rs. 1.00 Lac for repair/renovation

Margin: 10%

12.7.3 Security:
EM of house property or any other security like LIC policies/NSCs/KVPs/FDR or Government Guarantee.

12.7.4 Repayment:
As per Regular Home Loan, EMIs or should be fixed in such a way that it synchronizes with income patters of the
borrower i.e., crop cycle.

12.8. Credit Risk Guarantee Fund scheme for Low Income Housing
(CRGFS)

12.8.1 Eligibility:
The Ministry of Housing and Urban Poverty Alleviation established a Credit Risk Guarantee Fund Trust which
guarantees in respect of low-income housing loans

Credit Risk guarantee to the lending institutions against their housing loans up to Rs. 8.00 lakh granted to the
borrowers in the Economically Weaker Section (EWS)/ Lower Income Group (LIG) Categories in urban
area without requiring any collateral security and/or third-party guarantee.
 EWS means households with household income up to Rs. 1,00,000/- per annum

37
BCC:BR:110:317 dated 27.06.2018- revision in Priority Sector Classification Norms
38
BCC/BR/110/318 dated 27.06.2018-Coverage, Eligibility of RHISS

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  LIG: household income between Rs. 1,00,001/- to Rs. 2,00,000/- per annum
 Low Income Housing: 430 Sq. ft. (40 Sq.mt.) carpet area.

12.8.2 Guarantee Cover

 90% of the amount in default of loan amount up to Rs. 2.00 Lakh.
 85% of the amount in default for housing loan above Rs. 2.00 Lakh and up to Rs. 8.00 Lakh.
 Tenure of Guarantee Cover: 25 years or loan termination date, whichever is earlier.
Lock-in period: No claim can be made to the Trust for settlement within the period of 24 months after
last disbursement was made to the borrower or within the period of 24 months from the date of the
guarantee cover coming into force in respect of particular housing loan or two months after the
completion of the house, whichever is later.
 One-time guarantee fee at the rate of 1.00%.
 Zero risk weight for the guaranteed portion, no provision need be made towards the guarantee portion.
 Scheme Code: LA 160.

12.8.3 Invocation of Guarantee39

12.9 . Baroda Home Loan Suvidha personal loan

12.9.1 Overview
Personal Loan scheme for Home Loan borrowers for financing the miscellaneous cost related with the purchase of
home like cost of insurances, registration costs, stamp duty, good & service tax and club membership fee.

12.9.2 Purpose:
Category A: Group Credit Life, Health & Property Insurance Premium of any insurance
Company having tie up with our bank.
Category B: Stamp Duty, Registration, GST & Club Membership Charges at the time of
Purchase of residential property.

12.9.3Maximum Limit/LTV:
Category A: LTV Ratio (Home Loan + Home Suvidha Personal Loan) upto 100% accepted.
Category B: Up toRs 75.00 Lakhs LTV ratio is 88% & Above Rs 75.00 Laks LTV is 85%.

12.9.4 Margin Requirement:

Category A: Nil i.e.100% finance can be availed by the applicants against category A expenses
Category B: 25% Margin on the eligible cost i.e. 75% for category B expenses can be financed.

12.9.5 Repayment Period:

 New borrowers: Maximum Period to be allowed in the same line as applicable Home Loan
sanctioned/proposed to the borrower.
 Existing Home Loan borrowers: Residual period of Home Loan sanctioned.
 Repaying Capacity: Repaying capacity are to be satisfied by clubbing individual loan amount and
instalment of Home Loan and Baroda Suvidha Personal Loan as per the existing guidelines of Home Loan.

Security: Category A: Undertaking to create extension of mortgage to be obtained.

Category B: Extension of Mortgage to be created.

 Rate of Interest: Applicable ROI on Home Loan+0.25%

 Waiver of Processing charges40 : On all variants of home loan and top up loan up to 31.03.2020.
 Introduction of Baroda Repo linked Lending rate 41- A new variant of Home loan having pricing linked
with repo rate w.e.f. 01.09.2019 has been introduced wherein the pricing will be linked with RBI’s repo rate .

 Scheme Code: Resident:LA236& Non-Resident: LA237

39
BCC:BR:111:97 dated 21.02.2019- Invocation of guarantee, Operational Guidelines
40
BCC:BR:111:349 dated 24.07.2019 - Waiver of Processing charges in all home loan and top up variant
41
BCC: BR: 111:424 dated 27.08.2019 –introduction of Baroda Repo linked lending rate.

Page 398 of 502

  Home package policy insurance42 – Cholamandalam MS general insurance co ltd has come up with
“Home package policy” for our customers which covers the home content against burglary, fire, breakdown
of appliances & loss/damage to baggage

12.9.6 Reimbursement:
Reimbursement cost for the purpose mentioned above can be allowed subject to the following :
a. End use of fund to be ensured by the sanctioning/ disbursing authority
b. Reimbursement will be allowed within a period of 12 months from the date of payment of such cost
c. Compliance of scheme related guidelines including creation of mortgage

d. All other terms & condition of sanction will remain same

12.10. Takeover/balance transfer of Housing/top up loans with

relaxed parameters43
Relaxation allowed:

 Waiver of obtaining latest income documents for assessment of repayment capacity subject to

a) Minimum Cibil cut off score must be 725, average score in line with home loan.
b) Moratorium period must have been completed with the existing lender.
c) Minimum 12 EMIS must have been paid (for loan to be takeover (Home/ Top-up loan).
d) Equitable mortgage must have been created with existing lender and property must have been in the
possession of the borrower.
e) No EMI in last 12 months exceeded 30 days past due.
f) Primary security of Home loan is not extended to secure any other credit facility other than the
existing home loan.
g) Proposed EMI home loan & top up loan ( if requested) both should remain up to the extent of EMI
on existing home/ top up loan with existing lender.

 Non individual entities can stand as an applicant/ co-applicant/ guarantor along with the individual
applicants; only under takeover cases where the eligibility criteria as mentioned above and additional
condition as mentioned under is complied. In normal takeover scheme and normal home loans non individual
entities are not allowed to be part of loan structure.

There are additional conditions which must be complied where non Individual will be co-borrowers :
a) Minimum 18 EMI’s have been paid.
b) The firm/ company should be incorporated for atleast 5 years.
c) The firm/ company should be actively engaged in business activities for at least 2 years.
d) The firm/ company must not be engaged in real estate activity.
e) The firm/ company should be earning the cash profits for last 2 years.
f) Net worth of the firm/ company should be positive.
g) The firm/ company should not have slipped into SMA 2 category during the last 12 months.
h) Maximum loan limit to be sanctioned is up to Rs.10.00Crs
i) The CIBIL of the firm/ company should be satisfactory.
j) The name of the firm/ company should not be adversely in RBI defaulter’s list, ECGC Caution list/
SAL, Suit filed/ Non Suit filed CIBIL list CRILIC etc.

42
BCC/BR/111/249 dated 31.05.2019- Launching of Home package policy from Cholamandalam MS General
Insurance
43
BCC: BR: 110:342 dated 05.07.2018- Takoever/ balance transfer of housing / top up loans with relaxed
parameters .

Page 399 of 502

 Baroda Auto Loan
Baroda Auto loan schemes covers Baroda Car loan (including car loan to NRI/ PIO) and Baroda two
wheeler loan

The detailed features of the Baroda Auto loan are given in the following sections:

Baroda Car Loan

Target Group:
 Resident Indians
 NRI/PIOs
 Staff members/Ex- staff Members
 Corporate (Public Ltd Co / Private Ltd Co etc.)/ (Firms i.e. Sole Proprietorship firm/
Partnership/LLP/Trust/Society etc.)

Eligibility:
 Salaried Employees, Businessmen, Professionals, Farmers
 Directors of Private / Public Ltd Co.
 Proprietor of firm, Partners of partnership firm,
 Corporate (Public Ltd Co / Private Ltd Co etc.)/ (Firms i.e. Sole Proprietorship firm/
Partnership/LLP/Trust/Society etc.) with minimum Tangible Net worth of at least -10- times of the Loan
requested.

 NRI/PIO (Job contract / work permit/ employed/ self-employed or having business unit and staying abroad
at least for 2 years) and must have minimum GAI of Rs. 5 Lac.
 NRI/PIO must be physically fit and must possess a driving license or must be in a position to engage a driver.
 If the applicant is NRI/ PIO, close relative of the applicant (who is a resident Indian) should be a guarantor or
co-applicant.
Close Relative of NRI / PIO: Spouse, Parents, Children & their Spouse, Brother/Sister & their spouse, Grand
Children.
Steps allowed: Mother, Children, and Brother/Sister.
 In case of PIO, vehicle to be registered in the name of close relative who stand as co-applicant/ guarantor.

Age:

 Minimum –
 Applicant- 21 Years,
 Co-Applicant- 18 years
 Maximum (applicant/ co-applicant/guarantor+ Repayment Period):70 Years

If Applicant’s Age+ Repayment Period of Salaried>Retirement Age& Non-Salaried >65 years addition of
Family member (i.e. spouse, Parent, Children, Brother, Brother’s wife only) as co-applicant is
required
(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/s.)
Purpose:

For purchase of new passenger Cars, MUVs, SUVs etc. for private use.

Limit: Rs. 100 Lac

FOIR-

Deductions to be considered from the last Month GMI (for salaried persons) or Last Year Annual Income (for
others)
 Salaried:

Page 400 of 502

  GMI <Rs. 50000 :60%of GMI,
 ≥ Rs. 50,000<Rs. 1.50 Lac :70%of GMI,
 ≥ Rs. 1.50 Lac : 80%of GMI,
For Salaried Persons: Average of last 3 months’ GMI (Gross Monthly Income).

 Others/NRI:
 GAI <Rs. 6 Lac : 60%of GAI,
 ≥ Rs. 6 Lac : 80%of GAI
For Others: Average of last 2 years’ GAI (Gross Annual Income) to be considered for FOIR calculation.
Deductions to be considered from the last Month GMI (for salaried persons) or Last year Annual Income (for
others).
Margin:

 10% uniform margin on all car on "On Road Price" for all car Segments and income segments.
 Performa invoice issued by sub dealer/ broker/ agent should not be accepted.
 On Road price' which includes invoice price, Road Tax, cost of Registration and insurance, excluding cost of
accessories.
 Advance deposited with dealers is to be treated as margin only after its genuineness is checked & verified to
the satisfaction of the sanctioning authority.

Rate of Interest Concession:

 Concession of 0.50% in ROI on Car Loans to those applicant/s who offer minimum 50% of Loan limit as liquid
collateral security.
 Concession of 0.25% in ROI on Car Loans to our existing Home Loan borrowers who maintain a good track
record of repayment without any overdue.

If loan considered to corporate /Firm/Society /Trust / LLP etc. and Home loan availed by any
partner/Director/Trustee etc., in that case concession of 0.25% in rate of interest cannot be
given.

 Above concessions are subject to the condition that applicable ROI should not fall below '1 year MCLR+
Strategic Premium' at any instance.

Repayment Period:

84 Months. (Prefixed specific dates - 01st or 08th or 16th or 25th as EMI dates).

Credit Rating:

Minimum Score: 30/55Investment Grade CL-7

CIBIL44

Cut-off CIBIL score is at 725 (If more than one applicants is there, AVERAGE of CIBIL scores, CIBIL score
of applicant/s having (-1) or (0) to be excluded for average calculation but individual CIBIL score of all the
applicants should be minimum 675.

Average Score (Cut-off And /or Deviation

Score) ** Individual/s score of any of applicant/s powers
675 to 724 Less than 675 RMCC
Less than 675 Less than 675 ZOCC
Average Score (Cut-off Score)725 and above; BUT RMCC
Individual/s score of any of applicant/s is less than 675

44
BCC:BR:111:100 dated 21.02.2019 page 11,12- Master circular on Auto Loan

Page 401 of 502

 Average Score (Cut-off Score)725 and above AND No Deviation
Individual score of all applicants are675 &above. required
**Excluding applicants having score of (-1)or 0

 Cases where credit card account status write-off/ settlement involving amount up to
Rs. 25000/- (consolidated) No deviation is required
 Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM (BCC)

 Write-off /settlement above Rs. 5000 ;

 No Due certificate from the Bank/ FIs to be obtained in respect of credit card account,
 Satisfactory status with the concerned Bank / FIs, preferably within stipulated period and
 There should not be any other adverse remarks.

Pre Sanction:

For existing customers, pre- inspection visit for residence is not stipulated if KYC has been done by the Branch in the
last 2 years. In such cases, the customer is deemed to be KYC complied, if the latest existing address as per bank’s record
matches with the Bureau Record/Report.

Where ever MOU entered with the Car Dealer disbursements/ payments can be made through Bankers
Cheque/Demand Draft/RTGS/ NEFT as per quotation/ invoice, in other cases Disbursements/ payments to be made
only through Bankers Cheque/ Demand Draft. Banker's Cheque/ Demand Draft issued by the bank while disbursing
loan should be super scribed "Purpose: Car Loan to Mr./ Mrs. ___________"

Charge (exclusive of GST):

 0.50% of Loan amount, Min Rs. 2500 Max Rs. 10000

 Pre-closure within -6- months of initial sanction: 4%on amortization balance as per repayment schedule
of facilities sanctioned to Non-Individual.

Pay out:

Pay-out to Car Dealers: exclusive of GST

Business generated by them and disbursed

 <Rs. 75 Lacs per month: 1%
 ≥Rs. 75 Lac <Rs. 1.50 Cr per month: 1.50%
 ≥Rs. 1.50 Crore: 2%
10% of the pay-out to be retained till receipt of RC with Bank’s lien.
Service charges to Sales Executive of Car Dealer: Rs. 1500/- per Car Loan
 Branches must obtain photograph of car loan borrower along with financed car jointly with our staff
member. Cost of the photo may be borne by the Bank.

 Facility for verification of RC details/ Bank’s lien via SMS: Government of India under Vahan Sewa has
launched a number 7738299899 for verification by SMS. Type VAHAN <Registration Number>& send
the same to 7738299899 to get registration number, RC expiry, Name of financing institution, tax paid
up to date.

Baroda Two wheeler Loan

Eligibility:

Salaried Employees, Businessmen, Professionals, Farmers , Staff members, Ex-Staff member

Age: Guideline as applicable for car loan

Page 402 of 502

 Purpose: For purchase of new two-wheeler.
Limit: Maximum Rs. 10.00 lacs

Mandatory requirement of credit shield45:

 Credit shield in the form of Term Life Insurance or Group Credit life Insurance for loans above Rs. 3.00 Lakhs
has been introduced.
 Validity of such insurance to be obtained for the minimum sum assured of sanction amount and for valid for
at least sanctioned period of loan.
 The insurance policy will be obtained by the borrowers at their cost, from our tie-up partners or otherwise and
should be duly assigned in Bank’s favour.
FOIR-

Deductions to be considered from the last Month GMI (for salaried persons) or Last Year Annual Income (for
others)

 GMI <Rs. 20T : 50%,

 ≥ Rs. 20T <Rs. 1.00 Lac : 60%,
 ≥ Rs. 1.00 Lac : 70%,

Margin:
10% (Performa invoice issued by sub dealer / broker / agent should not be accepted) for loan up to Rs.3.00 lacs
. In case of loan above Rs.3.00 lacs applicable margin will be 15%46

Repayment Period:

60 Months. (Prefixed specific dates - 01st or 08th or 16th or 25th as EMI dates)
Credit Rating: Same as Car Loan
CIBIL

Cut off CIBIL score is at 760 (except for staff/ ex-staff)

Cut off CIBIL score less than 760 & CIBIL score of -1 /0: Deviation decision with ZOCC

(If more than one applicant is there lowest of Bureau scores of the applicants whose incomes are considered
for eligibility to be considered for this purpose).

Banking Relationship

Minimum -6- months account relationship with our Bank or other Bank is a must for availing two wheeler
loans. Applicants banking relationship either with our bank or other bank should be analyzed /examined by
perusing pass book or statement of account of his main bank account at least for last -6- months to satisfy that
the conduct of account is satisfactory.
Insurance:

Comprehensive Insurance of the Vehicle with Bank’s clause.

Unified Processing Charges (One time)

2% of Loan amount. Minimum Rs.250/- + GST, subject to concession/ waiver allowed by the bank from time to time

Pre closure charges : Nil

Powers of Deviation & Deviation Charges :

Financial / non-Financial Deviations/ Concessions in respect of scheme parameters/ guidelines may be

considered as per Circular No. BCC:BR: 108/587 dated 05.12.2016.
Deviation Charges:
Rs. 3,000/- + GST per deviation with maximum of Rs. 10,000/- + GST.

45 BCC/BR/110/595 dated 06.12.2018- Modification in Scheme Baroda Auto Loan scheme

46
BCC/BR/111/100 dated 21.02.2019 –Baroda Auto Loan- Master Circular

Page 403 of 502

 Security:

Loan Agreement-cum-Instrument of Hypothecation LDOC-17D.

. Documents to be obtained from the customer and Documentation47

Baroda Education Loan

Background:

Following Products are covered under ‘Baroda Education Loan”:

 BARODA VIDYA
 BARODA GYAN
 BARODA EDUCATION LOAN TO STUDENTS OF PREMIER INSTITUTIONS (UNDER BARODA
GYAN SCHEME)
 BARODA SCHOLAR
 EDUCATION LOAN TO STUDENTS OF ASIA PACIFIC FLIGHT TRAINING ACADEMY LTD.
HYDERABAD
 SKILL LOAN SCHEME
 HIGHER EDUCATION AND SKILL DEVELOPMENT GUARANTEE SCHEME‟ FOR PURSUING
HIGHER EDUCATION IN DELHI
 EDUCATION LOAN INTEREST SUBSIDY SCHEME (ELIS)
 PADHO PARDESH
 Dr. AMBEDKAR CENTRAL SECTOR SCHEME OF INTEREST SUBSIDY ON EDUCATIONAL LOAN
FOR OVERSEAS STUDIES FOR OBCS AND EBCS- (ACSISOBCEBC SCHEME

The detailed features of the Baroda Home Loan products are mentioned in the following
Sections.

Baroda Vidya

Eligibility :
Parents of Students pursuing school education from Nursery to Class XII.

Purpose:
Pursuing school education from Nursery to Class XII
Stage I: Nursery to V th STD.
Stage II: VI th to VIII th STD.
Stage III:IXth to XII th STD
Loan is to be considered for the full duration of stage/ course as mentioned here in above with yearly sub limits.
Total amount of loan for all the stages sanctioned should not exceed Rs. 4/- Lakh.

Limit: Maximum Rs. 4.00 Lac

Margin: Nil

FOIR: 60% of Total Income

Repayment Period:
Loan for each yearly sub limit is repayable in 12 equal monthly instalments. First instalment to be due 12 months after
first disbursement of each year’s loan component

47
BCC/BR/111/100 dated 21.02.2019 –Baroda Auto Loan- Master Circular

Page 404 of 502

 Charges: Nil Security: Nil

Interest Concession:
0.50% concession in rate of interest to loans sanctioned for the benefit of girl students.
DLPs of Clean advance must be exercised.

Scheme Code: LA131, LA132

Baroda Gyan
Eligibility:
Resident Indian secured admission in recognized university after completion of HSC (10 plus 2 or equivalent)

Purpose48:
 Graduation, Post-Graduation, Professional courses,
 ICWA/CA/CFA etc.,
 Teachers Training Course/ Nursing Course / BEd which should lead to Degree or Diploma Courses and not to
Certificate Course,
 Computer certificate courses of reputed institutes accredited to Dept. of Electronics or institutes affiliated to
an approved university.

Expenses Covered:
 Fee payable to college / Institution / University / School / Hostel.
 Examination / Library / Laboratory fee.
 Hostel fees / charges.
 Purchase of books / equipment’s / 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, if any opted by the student. . Presently Bank has tie up
arrangement with M/s.IndiaFirst Life Insurance Co & M/s.Kotak Life Insurance co for Group Credit
Life insurance cover to Education Loan borrowers.
 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, fees, as approved by the State Government /
Government approved regulatory body for payment seats will be taken.

Note: The details of expenses for the entire course period to be obtained from college / institution.

Limit:
 Rs. 80Lac for Medical Studies and Aviation
 Rs. 10 Lac for Other Cases

Margin:
Up to Rs. 4.00 lakhs: NIL
Above Rs. 4.00 lakhs: 5%
Scholarship / Assistantship, if any, to be included in the margin
Margin may be brought in on year-to-year basis as and when disbursements are made on a pro rata basis.
Reimbursement of Fees:
For the first year of study, at times institutions insist that the students pay the fees immediately on admission.
Such amount may be reimbursed after obtaining necessary proof of payment. In genuine cases, expenses for
purchase of books etc. may be reimbursed after obtaining necessary proof of purchases and payment.

Repayment:
Up to Rs. 7.50 Lac- Max. 10 Years,
Above Rs. 7.50 Lac – Max. 15 Years
Moratorium Period: Course Period + 1 Year
Extension of time for completion of course may be permitted for a maximum period of -2- years.

48
BCC/BR/111/98 dated 21.02.2019 –Baroda Education Loans- Master Circular

Page 405 of 502

 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.

Processing Charges: Nil

A non refundable Lump sum amount Rs. 7,500/- per property (towards Advocate and Valuer charges) to be
taken upfront in case of all Education Loan accounts, wherever property is mortgaged .

Baroda education Loan to students of Premier Institutes (Under Baroda

Gyan)
Students Eligibility:
Resident Indian & Secured admission in professional / technical courses in India conducted by above mentioned
Institutions.

Courses Eligible:
Full time regular Courses conducted by the Premier Educational Institutions:
Refer List of the institutions (List-AA, A,B & List-C) .
General Manager (Retail Banking), / Head – Mortgages & Other Retail Assests, BCC may approve other insitutions /
courses depending on future prospects / recognition by user institutions.

Expenses Covered:
Same as Baroda Gyan.

Limit:

Category Maximum Loan Limit

No security With tangible 100% collateral
security of full value of the Loan
amount
Institutions– under Rs. 40.00 Lakh Rs.80.00 Lakh
List AA
Institutions– under Rs.20.00 Lakh Rs.80.00 Lakh
List A
Institutions– under Rs.7.50 Lakh Rs.80.00 Lakh
List B
Institutions– under Rs.7.50 Lakh Rs.80.00 Lakh
List C
 Need based finance subject to future repayment capacity based on projected future earning
which should commensurate with past placement records and average packages offered to
the pass outs of the college.

Margin: Nil
Repayment& Moratorium Period:
 For loans up to Rs.7.50 Lac : Moratorium Period + Maximum 120 installments For Loans
 Above Rs. 7.50 Lac : Moratorium Period + Maximum 180 installments .
 The repayment to commence after one year of completion of studies.
 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.
 Moratorium: Course Period+1 Year

Page 406 of 502

 Processing Charge:
NIL for all cases. A non refundable Lump sum amount rs. 7, 500/- per property (towards Advocate and Valuer
charges) to be taken upfront in case of all Education Loan accounts, wherever property is mortgaged.

Mortgage Creation Charges:

No Mortgage creation charges for all types of Education Loans w.e.f. 18.06.2016.

Security, Documentation and Other Conditions49

Scheme Code: LA159

Baroda Education Loan for Executive Development Programmes (Part

Time/Weekend/Online Programmes) being offered by Premier Institutions
in India under “Baroda Education Loan to Students of Premier Institutions”

Courses eligible:
Executive Development Programmes (Part Time /Weekend /Online/ programmes) being offered by Premier
Institutions as listed under List AA,A,B & C of Premier Institutions in India) (Including the programmes
offered using the technology platform of Hughes Global Education, Times Pro etc.)

Student eligibility:
 Should be Resident Indian.
 Secured admission in professional / technical courses in India conducted by Premier Institutions as listed in
List AA,A,B & C.
 Should be gainfully employed and would continue to be in gainful employment during study.

Applicant / co-applicant:
 Single Applicant. Co-obligation of parents / guardian is not required.
 Assignment of existing / future income of the student.

Loan Limit: Maximum 20.00 lacs.

Margin:
Up to Rs. 4.00 Lakh: NIL
Above Rs. 4.00 Lakh: 5%
Security:
Collateral Free Loan up to Rs. 15.00 Lakh.
100 % Collateral Security for Loan above Rs.15.00 Lakh for full value of loan.
Moratorium:
Course period + 3 months

Servicing of Interest:
Servicing of interest during the moratorium period will be compulsory.

Coverage of expenses:
All Expenses as per existing scheme except the Living Expenses, Hostel Charges, Mess Charges, other living expenses
and Cost of external coaching/tuition.

CIBIL Score:
Loan to be granted to only applicants having CIBIL Score above 725, -1 and 0. Loan to Applicants having CIBIL
Score below 725 are not be considered.

Income:

For Salaried
Loan Amount (Rs. In Lakh) Minimum Gross Monthly Income (Rs.)
>15 upto 20 75000

49
BCC/BR/111/98 dated 21.02.2019 –Baroda Education Loans- Master Circular Page 20-25

Page 407 of 502

 >10 upto 15 50000
>5 upto 10 40000
Up to 5.00 30000

For Self Employed

Loan Amount (Rs. In Lakh) Minimum Gross Annual Income (Rs. In Lakh)
>15 upto 20 9.00
>10 upto 15 6.00
>5 upto 10 4.80
Up to 5.00 3.60
In case of Salaried Persons, Salary Slip of Last drawn Salary should be considered.
In case of Self Employed, Latest ITR should be considered

Deviation:
Deviation in the above mentioned parameters can be granted ONLY by an Official not below the rank of General
Manager /In charge of Retail Banking at Corporate Office.

Finacle Code: LA 214

Note: All other parameter/guidelines of the Education Loan to Students of Premier

Institution will be applicable.

Baroda Scholar:

Eligibility:

Resident Indian Students going abroad for Professional / Technical studies.

Purpose and coverage of expenses50:

 Graduation, PG (MCA, MBA, MS etc.), other courses in Abroad in List of premier institutions and others.

 Caution deposit, Building fund/ refundable deposit, subject to condition that the amount does not exceed
10% of the total tuition fees.

Limit:

List of premier institutions : Rs.80 Lac

Other : Rs.60Lac for institutes not specified in List of Premier Institutes

Margin:
 List of premier institutions: Nil
 Other Colleges : Up to Rs.4 Lacs Nil, above Rs. 4.00 Lacs:-10%
 Margin may be brought in on year to year basis as and when disbursements are made on a pro rata basis.
 Scholarship / Assistantship, if any, to be included in the margin.

3.5.5 Security: Same as Baroda Gyan

3.5.6 Repayment & Moratorium Period: Same as Baroda Gyan(Course period + 1 Year)

3.5.7 Disbursement before grant of VISA:

 RMCC – Full Power. (subject to the conditions that the Loan is fully secured by tangible security / equitable
mortgage and the fee is refundable by the institute, in case VISA is not granted to the applicant / student for
any reason whatsoever it may be.)
 These powers have been entrusted with the sole objective of ensuring that Bank does not lose out on such
deserving cases.

50
BCC/BR/111/98 dated 21.02.2019 –Baroda Education Loans- Master Circular Page 37-38

Page 408 of 502

  However it has been observed that in many cases such deviation are not being taken at the time of sanction
and is being left for the Branches to take at the time of Disbursement, which ultimately results in higher TAT
and customer inconvenience.
 Hence it is advised that in cases where it is known upfront that the concerned Institute / College / University
or the Embassy / Consulate requires the money to be deposited before the student applies for VISA, in such
cases the Sanctioning Authority has to obtain the required Deviation at the time of Sanction ONLY and desist
from putting a condition in the sanction to obtain the same at Branch level.

Other Information:

Scheme Code: LA134, LA135

In order to source maximum mortgage backed loan applications for Mortgage backed Education Loan covered
under scheme, “Baroda Scholar Loan" (Loan for study overseas) with loan amount Rs. 7.50 Lakhs and above,
bank has empanel and utilize the services of two Digital DSAs for period of two years
 Senbonzakura Consultancy Pvt. Ltd51.
 BITC loan Services Pvt. Ltd52.

Education Loan to students of Asia Pacific Flight Academy Ltd (APFTAL)

Introduction
Bank has decided to sanction Education Loans to students of Asia Pacific Flight Academy Ltd (APFTAL) as per our
Bank’s laid down Scheme of “Baroda Gyan”

Maximum Limit: Rs. 25 Lac

Margin:
Up to Rs. 4.00 lacs :NIL
>Rs. 4.00 lacs ≤ Rs. 10 Lacs : 5% -10%
>Rs. 10 Lacs : 25%

Security:
Same as Baroda Gyan

Repayment & Moratorium Period:

Same as Baroda Gyan

Interest:
1% concession to girl students.
1% additional concession for servicing interest during moratorium period
Maximum concession in ROI should not exceed 1.50 %

Baroda Education Loans for Executive Development Programmes (Part

Time /Online programmes / Distance Learning) being offered by Premier
Institutions abroad as listed under “Baroda Scholar”.
Courses eligible:
Executive Development Programmes(Part Time /Online programmes/Distance Learning) being offered by Premier
Institutions abroad, as listed under List of Premier Institutions. (Including the programmes offered using the
technology platform of Times Pro/Hughes Global Education or any other partners).

www.gyandhyan.com – Website extract dated 28.08.2018

51

52
www.eduloans.co.in– Website extract dated 28.08.2018

Page 409 of 502

 Student eligibility:
 Should be Resident Indian.
 Secured admission in The Executive Development Programmes (Part Time /Online programmes/ Distant
Learning programmes) being offered by Premier Institutions abroad.
 Should be gainfully employed and would continue to be in gainful employment during study.

Applicant / co-applicant:
 Single Applicant. Co-obligation of parents / guardian is not required
 Assignment of existing / future income of the student.

Loan Limit : Maximum 80.00 lacs.

Margin:

 Up to Rs. 4.00 Lakh: NIL

 Above Rs. 4.00 Lakh: 5%
3.7.6 Security:
Tangible collateral security equal to 100% of the loan amount along with assignment of future /existing income of the
applicant.

Moratorium : Course period + 3 months

Servicing of Interest:

Servicing of interest during the moratorium period will be compulsory.

Coverage of expenses:
All Expenses as per existing scheme.

As part of the Program candidates may be required to travel to the college/Institution once or twice during the
course period. In such cases, travel expenses (to and fro) and living expenses for attending classes in various centers
(India and abroad) would also be considered a part of the total expenses.

CIBIL Score:

Loan to be granted to only applicants having CIBIL Score above 725, -1 and 0 Loan to Applicants having CIBIL
Score below 725 are not be considered.

Income:
For Salaried
Loan Amount (Rs. In Lakh) Minimum Gross Monthly Income (Rs.)
Above 55 250000
>50 upto 55 220000
>45 upto 50 190000
>40 upto 45 170000
>35 upto 40 145000
>30 upto 35 125000
>25 upto 30 105000
>20 upto 25 90000
>15 upto 20 75000
>10 upto 15 50000
>5 upto 10 40000
Up to 5.00 30000

For Self Employed

Loan Amount (Rs. In Lakh) Minimum Gross Annual Income

(Rs. In Lakh)
Above 55 30.00
>50 upto 55 26.40
>45 upto 50 22.80

Page 410 of 502

 >40 upto 45 20.40
>35 upto 40 17.40
>30 upto 35 15.00
>25 upto 30 12.60
>20 upto 25 10.80
>15 upto 20 9.00
>10 upto 15 6.00
>5 upto 10 4.80
Up to 5.00 3.60
In case of Salaried Persons, Salary Slip of Last drawn Salary should be considered.
In case of Self Employed, Latest ITR should be considered.

Deviation:
Deviation in the above mentioned parameters can be granted ONLY by an Official not below the rank of General
Manager /In charge of Retail Banking at Corporate Office.

Deviation in parameters not mentioned above continues to be with various authorities as authorised by CPC and
circulated vide circular no. BCC: BR:108:587 dated 05.12.2016

Finacle Code: LA 224

Note: All other parameter/guidelines of the Baroda Scholar Loan will be applicable

Education Loan Interest Subsidy Scheme (ELIS)

Objective: Interest subsidy during moratorium period on educational loans taken by students from
Economically Weaker Sections under the educational loan scheme of our Bank to pursue Technical /
Professional Education studies in India.

Eligibility:53

 Students, belonging to Economically Weaker Section (not on Social back ground) having parental family
income from all sources not more than Rs. 4.50 Lacs per annum.
 Pursuing any of the approved courses after Class XII in Technical and Professional streams from recognized
institutes in India under the Educational Loan Scheme of IBA.
 Maximum loan limit under this scheme is Rs. 10 Lac. Loan above Rs. 10.00 Lacs would also be eligible for
interest subsidy. But the interest would be calculated on the loan amount up to Rs. 10.00 Lacs irrespective of
higher amount availed.
 Interest subsidy shall be available to the eligible students only once, either for first undergraduate degree
course or the post graduate degrees / diplomas in India.
 Income proof is required to be submitted by the students from designated authorities.

Padho Pradesh
This is a Central Sector Scheme to provide interest subsidy to the student belonging to Minorities

Eligibility:
 The students who belong to Minority Communities viz. Muslims, Christians, Sikhs, Buddhists, Jains and
Parsis
 Should have secured admission in the approved courses at Masters, M.Phil. or Ph.D. levels abroad for the
courses covered under the scheme
 Available to the eligible students only once, either for Masters or Ph.D. levels

 Total income from all sources of the employed candidate or his/ her parents/ guardians in case of
unemployed candidate shall not exceed Rs. 6.00 lakh per annum
 Subsidy is admissible to the limits specified under IBA model scheme i.e., Rs. 20 Lacs only

53
Lodgment of claims – BCC:BR:111:98 dated 21.02.2019 Pg -113-121

Page 411 of 502

 Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational
Loan for Overseas Studies for OBCS & EBCS (ACSISOBCEBC SCHEME)
BCC: BR:110:532 dated 23.10.2018
 Formulated by Ministry of Social Justice and Empowerment, Government of India

 Students enrolled for course at Masters, M.Phil. and Ph.D. level Abroad (only once, either for Masters or
Ph.D. levels)

Income Ceiling:
o Income from all sources of the employed candidate or his/ her parents/guardians in case of
unemployed candidate)
o OBC (Other Backward Classes):Rs. 3.00 Lakh Per Annum
o EBC (Economically Backward Classes): Rs. 1.00 lakh per annum

Common guideline for education loan:

 Credit Rating: Cutoff Score/Investment Grade
 Without Security & Guarantor: 96/ ELA-7
 Without Security & With Guarantor: 126/ELB-7
 With Security & Without Guarantor: 149/ EL-7
 With Security & Guarantor: 176/EL-7

 Priority Sector Classification (Up to Rs. 10.00 Lacs): Outstanding balance up toRs. 10.00 Lakhs
 Servicing of interest during the moratorium period till commencement of repayment is optional for
students except loan given for E-PGP program of IIM-Ahmadabad. The accrued interest during the
repayment holiday period to be added to the principal and repayment in Equated Monthly Instalment
(EMI) be fixed after completion of moratorium period

 Penal interest: Nil for Loan up to Rs. 4 Lakh otherwise 2%

 It is mandatory for all Branches to update the Tracking Checklist for all Education Loans during the
month of August every year as per circular no. BCC:BR:109:393

 No Mortgage creation charges for all types of Education Loans.

 No application should be rejected without the concurrence of the next higher authority.

Joint Borrower:
The joint borrower should normally be parent(s)/guardian of the student borrower. In case of a married
person, joint borrower can be either spouse or the parent(s)/parents-in-law

Disposal Norms:
Loan up to Rs. 7.5 Lac: 7 Days
aboveRs. 7.5 Lac: 15 Days

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.

Skill Loan scheme

Feature:

 The ‘Skill Loan Scheme’ under the Ministry of Skill Development and Entrepreneurship was launched by
Hon’ble Prime Minister on 15.07.2015 with a view to support youth who wish to go through skill training
programs in the country.
 This Skill Loan scheme replaces our Bank’s scheme ‘Baroda Education Loan for Vocational Education &
Training’

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 Eligibility: Resident Indian

Purpose:

Training Institutes/ Courses: Courses run by Industrial Training Institutes (ITIs), Polytechnics, training
partners affiliated to National Skill Development Corporation (NSDC)/ Sector Skill Councils, State Skill
Mission, State Skill Corporation, preferably leading to a certificate/ diploma/ degree issued by such
Organisation as per National Skill Qualification Framework (NSQF) are eligible for a Skilling Loan.

Schools recognised by Central or State Education Boards or Colleges affiliated to recognised university leading
to a certificate / diploma / degree issued by such Organisation as per National Skill Qualification Framework
(NSQF) is eligible for a Skilling Loan.

There is no minimum course duration.

Limit Rs. 5000/- to Rs. 1.50 Lac

Margin: Nil.
Security:

No collateral or third party guarantee will be taken. However, the Parent/ Guardian will execute loan
documents along with the student, as joint borrower (co-borrower). Spouse may be included as co-applicant
wherever applicable, in addition to Parent/ Natural Guardian.

Repayment:

 Loans up to Rs. 50000 - Up to3 years

 Loans between Rs. 50000 to Rs. 1 lakh - Up to5 years
 Loans above Rs. 1 lakh - Up to 7 years

Moratorium Period:

 Courses of duration up to 1 year: up to 6 months from the completion of the course.

 Courses of duration above 1 year: 12 months from the completion of the course.

3.10.9 Interest Concession:

 0.50% concession to Girl Students.
Scheme Code- LA190

Higher Education and skill development guarantee scheme “for pursuing higher education in Delhi”

Eligibility: who have done their class X and class XII from Delhi.

Purpose: For Diploma or Degree or specified skill development course in development courses in Delhi.

Limit: Rs. 10.00 Lac

Margin: Nil

Security: No security (Parents/legal guardians to be joint borrower(s))

Repayment: Repayment of the loan will be in equated monthly installments for a period of 15 years for all categories

No processing charges

Moratorium Period: Course Period + 1 year

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 Interest Concession:
 No concession to Girl Students.
 1% interest concession to be provided (for the entire tenure of the loan), if interest is serviced during the study
period and subsequent moratorium period prior to the commencement of repayment.
 Simple interest to be charged during the study period and up to commencement of repayment.

Detailed Guidelines of the scheme on the basis of guidelines formulated by Directorate of Higher
Education, Govt. of NCT of Delhi is attached as Annexure25 in BCC:BR:111:98 dated 21.02.2019.

Deviations in any parameters under the scheme, on case to case basis to be considered by Committee of General
Managers on Retail Banking & MSME Banking at BCC.

Other Area Specific Schemes - Bihar Student Credit Card Scheme

Government of Bihar has formulated “Bihar Student Credit Card Scheme (BSCCS) for granting Education Loans to
students of Bihar. The Salient features are as under.

Eligibility: Students who are resident of Bihar domicile & passed out 12th std. from Bihar & willing to avail education
loan for Higher Education, will be provided education loan from scheduled Banks. Such Educational Institution must
be located in Bihar.

Courses Eligibility: For any General Education or Professional Education i.e. BA/ BSC/Engineering/MBBS etc.

Age: An applicant should not have completed 25 years of Age on the date of Application.

Quantum of Finance: Maximum Up to Rs. 4.00 Lac.

Margin: Nil

Processing Charges: NIL.

Rate of Interest: MCLR + Strategic Premium + 2 %

Security: No security (Parents/legal guardians to be joint borrower(s).

Procedure: Students will have to apply either through, online portal or through Mobile App, which will be received
by District Registrar and Counselling Centre.

Applicants will have to visit the District Registrar and Counselling Centre. Scrutiny of Application form and
verification of copies of the documents with the original testimonials will be done at the District Registrar and
Counselling Centre. Applications found eligible after scrutiny at District Registrar and Counselling Centre, will be
forwarded online to respective Banks.

Financial Assistance by Government of Bihar to financing Banks: In case of default in the loan by the Borrower,
Banks are expected to do the following two procedures before lodging the claim with Government of Bihar, under the
scheme;

- To declare the Loan Account as NPA and

- To certify that Bank has completed all recovery procedures to recover the dues. State Government would repay to
Banks, 100 % Principal amount of Loan plus Interest charged during Study Period plus Moratorium Period, in case
of default to financing Bank.

Page 414 of 502

 Vidya Lakshmi Portal54
Vidya Lakshmi Portal provides single window for Students to access information and make application for
Educational Loans provided by Banks and Govt Scholarships.

The portal has the following features:

 Information about Educational Loan Schemes of Banks.
 Common Educational Loan Application Form for Students.
 Access for Educational Loans of multiple Banks.
 Facility for Banks to download Students Loan Applications.
 Facility for Banks to upload loan processing status.
 Facility for Students to email grievances/queries relating to Educational Loans to banks.
 Linkage to National Scholarship Portal for information and application for Government Scholarships.

Digital DSA55 :
Krishna consultants has been empanelled as Digital DSA for sourcing education loan application backed by
mortgaged security for studies in India and abroad.

Scheme for financing person with disabilities under the collateral free MSE loans/ education loan refinance schemes
promoted by National Handicapped Finance and Development Corporation (NHFDC)56

The scheme is eligible for any disabled person who fulfils the following criteria – aged between 18-60 years and 2.
Any Indian citizen with 40% or more disability. The loan is given for self employment purpose. Maximum loan limit
under the scheme is Rs.25.00 lac

54
BCC:BR:111:98 dated 21.02.2019 - routing of education loan application compulsorily through Vidya Lakshmi
Portal
55
BCC:BR:111:287 dated 20.06.2019 – appointment of Krishna consultant as digital DSA
56
BCC:BR:111:173 dated 04.04.2019- scheme for financing persons with disabilities

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 Eligibility:
 Individuals Resident & NRI

 Salaried/Professional, Self Employed, Business persons, Agriculturists & Others, (whose income is considered
for eligibility) should be employed /engaged in business/profession for a minimum period of -3- years. (Break
in service can be allowed up to a maximum period of 3 months)
 NRI: 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 past -2- years
 Resident: Minimum GAI Rs. 3 Lacs. (average of last 3 years)
 NRI: Minimum GAI Rs. 5Lacs (average of last 3 years)
 If the applicant / co applicant/s, whose income is considering for eligibility includes both Resident and NRI,
Minimum Gross Annual Income, put together should be Rs. 5 Lacs (inclusive of co-applicant/s’, whose income
is considering for eligibility).
 Proposals from persons engaged in Real Estate Developments, Property Dealers/ Brokers, Share/ Stock
Brokers and persons engaged in any speculative activity, Staff should not be considered.
Non-Individual Entities: -
 Proprietorship Firm, partnership Firm, private Ltd. company, LLP.
 The, Firm/ company should have been established in the line of activity for a minimum period of 3 years.
 Minimum turnover as per last ABS must be Rs. 1.00Crore.
 The Firm/ company must be profit making (cash profit) for the last three years.
 HUF, Trust, society & public limited companies are not eligible.
 The loan to be given for any purpose except speculative.
 Proposals from firms/ companies engaged in Real estate Developments, property dealings/ broking
share/stock broking / any speculative activity should not be considered.

 Co-Applicant for Higher Eligibility only close relative except if he/she is joint owner of property. Number of
co-applicants,57 whose income is considered for eligibility to be restricted up to -3-Close Relative: Spouse,
Parents, Children & their Spouse, Brother/Sister & their spouse, Brother and Sister of Spouse,
Steps allowed: Mother, Children, Brother/Sister, and Brother/Sister of Spouse

 Age: 21 -60 Years,

Applicant’s / Co-applicant’s age + Loan tenure should not exceed retirement age for salaried class and 65 years
for NRIs & others

Limit:

Minimum : Rs. 2.00 Lacs

Maximum:
Metro Branch : Rs. 10 Crores
Urban Branch : Rs. 5Crores
Semi urbanBranch : Rs. 3Crores
Rural Branch : Rs. 25 Lac

Overdraft58: Overdraft limit can be sanctioned only to Individual Borrower only.

Minimum annual turnover in the account should be at least 25% of the limit, Not for NRI

Assessment of Limit

FOIR:
GMI ≤ Rs. 75T : 50%
GMI >Rs. 75T ≤Rs. 3.00 Lacs : 60%
GMI>Rs. 3.00 Lacs : 70%
Deductions:
Salaried: last month’s GMI,
Others: Last year’s Annual Income
(Overdraft, repayment capacity norms should be applied as if a Term Loan is sanctioned for a period of -144- months
or maximum maturity as per the age criteria of the borrower whichever is lower)

57
BCC:BR:109:447 dated 01.09.2017- definition of close relatives
BCC:BR:109:447 dated 01.09.2017- detail about the operation & review of Overdraft limit

Page 416 of 502

 Margin: 40% on Realizable Value of immovable properties

Security59:
Mortgage of Immovable properties
-Residential property (House/flat)
-Commercial property/ land & building
-Plot of non agricultural land
Limit above Rs. 2.00 Crore, 2nd valuation of the property to be obtained (Ref: BCC: BR: 110:346 Dt. 10.07.2018, Global
Credit Exposure Management Policy -2018).

Age of property should not be more than -25- years old,

Property of 20-25 Years old, obtain an Approved Engineer’s certificate of structural soundness and expected residual
life of the building should be at least -5- years more than the repayment period of the loan

CIBIL score60:
Cut off of CIBIL score is at 725 (If more than one applicants is there, AVERAGE of CIBIL scores, CIBIL score of
applicant/s having (-1) or (0) to be excluded for average calculation but individual CIBIL score of all the applicants
should be minimum 675.
**Average Score (Cut-off Score) And /or Deviation powers
** Individual/s score of any of applicant/s
675 to 724 Less than 675 RMCC
Less than 675 Lessthan675 ZOCC
Average Score (Cut-off Score) 725 and above; BUT
Individual/s score of any of applicant/s is less than 675 RMCC
Average Score (Cut-off Score) 725 and above AND
Individual score of all applicants are 675 &above. No Deviation required
**Excluding applicants having score of (-1) or 0
Cases where credit card account status write-off /settlement involving amount up to Rs. 25,000/- No deviation is
required {Deviation: ZOCC up to RMCC& COGM(BCC)}
Write-off /settlement above Rs. 5000/- No Due certificate from the Bank/ FIs be obtained in respect of credit card
account and there should not be any other adverse remarks

Repayment Period:
 TL-Maximum- 180 months 61
Note: It is decided to charge an additional spread @0.25% above card rates on the loans being sanctioned for
a period exceeding 120 months
 Overdrafts: -12- months; subject to annual review; Repayment capacity norms should be applied as if a Term
Loan is sanctioned for a period of -144- months or maximum maturity as per the age criteria of the borrower
whichever is lower.

Pricing (Rate of Interest)62:

 Applicable rate of interest will be linked to CIBIL score of the applicant/ co-applicant
 Baroda mortgage loans for individual & non individual loan limit above Rs.5.00Crs – revision in rate of
interest 63

Processing Charges: excluding GST

 Loan 1.00%. Minimum: Rs. 7500/- (Up front), Maximum Rs. 1.50 Lac
Over Draft:
 Up to Rs. 3.00 Crores: 0.35% of limit with maximum: Rs. 75,000/-
 Above Rs. 3.00 Crores: 0.25% of the limit without any maximum
 Pre-closure within -12- months of initial sanction: 2% of amount as mentioned hereunder of facilities
sanctioned to Non-Individual.
 Overdraft facility: Prepayment charges will be calculated on the sanctioned limit.

59
BCC:BR:111:99 dated 21.02.2019- Detailed guidelines related to security
60
BCC:BR: 111:99 dated 21.02.2019- Deviation related to CIBIL score
61
BCC:BR:110:594 dated 06.12.2018- Modifications in scheme Baroda Mortgage Loan
62
BCC:BR:111:99 dated 21.02.2019- Baroda Mortgage Loan – Master Circular
63
BCC:BR:111:448 dated 07.09.2019-Baroda Mortgage loan –revision in rate of interest

Page 417 of 502

  Term Loan: Prepayment charges to be calculated based on amortization balance as per repayment schedule.
 Commitment Charges: In case quarterly average utilization of sanctioned limit is less than 60%, interest in the
account will be charged on minimum 60% of sanctioned limit on quarterly basis. The same condition will be
applicable to accounts due for review from 01.06.2017 (BCC:BR:109:262 dt 22.05.2017).

 Rating: Cut off Score - 111& Investment Grade - SL 7

 Scheme Code: LA201, NRI-LA202, OD016

Other information:
 Mortgage creation charges will be applicable.
 Commitment charges will be applicable.
 Prepayment charges will be applicable if the loan is prepaid within 12 months.
 Sanctioning authority up to grade/ scale III are authorized to sanction facility up to Rs.25.00 lacs only.
 Sanctioning authority in grade/scale IV and above are authorized to exercise their normal DLP for sanction.
 Activity Clearance is applicable for the activities as mentioned in the Global Loan Policy guidelines or as
advised from time to time.

Note : The bank has merged the Baroda OD against Land & Building scheme with Baroda Traders Loan scheme.
Baroda Traders Loan to commission Agents ( Arthias) and Baroda Traders Gold card scheme under the same
product 64

Baroda Loan For Subscription To Public Issues/Ipo

Eligibility:
 Any adult individual engaged in any gainful activity having regular source of income or is otherwise considered
creditworthy and
 The applicant should have saving account/current account with the branch of our Bank from where the loan
is availed or should open an account with that Branch.
 The applicant should have a Demat account with our Bank. In case the borrower has Demat account with any
other Depository Institution, he/she should authorize the Depository institution for nothing Lien in favour of
our Bank.

Purpose:

To acquire Demat shares under the IPOs/ public issues of PSUs/ banks/ Blue Chip Public companies approved by the
bank.

Limit:

Rs. 10.00 lacs

Margin: 50% of the issue price including premium or Bid price

Period: 90 days

Mode of Payment:
 The loan will be disbursed in the form of Demand Loan for disbursement for each issue.
 The borrower has to bring in the margin money upfront and deposit in the Savings Bank account.

Rate of Interest
MLCR -1 Year + SP + 3.75%

Repayment:

The loan amount along with interest to be recovered:

64
BCC:BR:111: 126 dated 12.03.2019- Baroda Property Pride scheme

Page 418 of 502

 (i) from the amount of refund and/or
(ii) sales proceeds for shares allotted under the IPO/Public Issue
(iii) from the borrower out of his/her own sources

Service charges:
Rs. 500/- + GST

Security:

(i) Pledge of the shares to be allotted.

(ii) Earmarking of the refund to be credited in the saving accounts of the borrower.
(iii) Letter of Authority for noting Lien in our Bank’s favour, whether the Demat account is maintained with our bank
or any other depository.

Scheme Code: LA 171

Restriction:

Financial assistance under this Scheme is not to be allowed to Bank's own staff.

Baroda Personal Loan

Eligibility:
 Employees of Central/ State Govt./ Autonomous Bodies/ Public/ Joint Sector Undertakings, Public Limited Co.
/ MNCs & Educational Institutions, Employees of Proprietorship, Partnership firms, Private Limited
companies, Trust – with minimum continuous service for1 year
 Self Employed Business persons, Self Employed Professionals (Doctor, Engineer, Architect, Interior Designers,
Tech. and Management Consultants, Practicing Company secretaries etc.) -- with minimum 1-year stable
business.
 Insurance Agents- doing business for minimum last -2- years
 Co-applicants not to be allowed
 Staff members are not allowed under the scheme

Age:

 Minimum – 21 Years,
 Maximum:
 Salaried: Age+ Repayment Period ≤Retirement Age or 60 Years(lower)
 Non-Salaried ≤65 years

Purpose: For any purpose other than speculation.

Limit:
M & U – Minimum Rs. 1 Lac– Maximum Rs. 10 Lac
R & SU- Minimum Rs. 0.50 Lac –Maximum Rs. 5 Lac

Limit is stipulated based on the classification of the financing branch

FOIR- % of GMI
For Group A and B65
GMI <Rs. 75T :40%,
GMI ≥ Rs. 75T <Rs. 2.00Lac :50%,
GMI ≥ Rs. 2.00 Lac : 60%,
For Group C66- 60%
Deductions to be considered from the last Month GMI (for salaried persons) or Last year Annual Income (for others)

65
BCC:BR:111:102 dated 21.02.2019

66
BCC:BR:111:102 dated 21.02.2019

Page 419 of 502

 Repayment Period:

( EMI Prefixed specific dates - 01st or 08th or 16th or 25th as EMI dates)

 For Group A and B : Maximum 48 Months

 For Group C (Employees of Central / State Govt. / Autonomous Bodies/ Public / Joint Sector
Undertakings, & Educational Institutions having one year service and having Salary account with our
Bank ) - 60 Months.

Credit Rating:

Minimum Score: 30/55 Investment Grade CL-7

Minimum cut-off on CIBIL score will be 725.

If cut off CIBIL score 675 to 724: Deviation decision with RMCC.
If cut off CIBIL score less than 675: Deviation decision with ZOCC.
The applicable ROI will be with maximum spread as per the product.
Account Relationship67

Scheme Codes :
Personal Loan - Finacle : LA141
Loan for Earnest Money Deposit - Finacle : LA126

Personal Loan –Debit card EMI

Feature:
 Instant approval of Personal loan to the Customers
 Debit Card EMI refers to conversion of transactions in to EMIs using Debit Card account, while performing
online transactions

Eligibility:
The facility will be extended to selected SB account holders having Debit card facility. The selection of the customers is
a backend processes being carried out at Corporate office level and is based on a pre-approved limits assigned through
a weighted average credit Frame work and scoring model

Limit :
Maximum- Rs. 50000
Minimum- Rs. 5000

Repayment Period: 6, 9& 12 Months

Margin- 10% on product value
Scheme Code- LA197

Contactless personal loan68 – PSB59minutes portal.

Branches will be receiving the details of the leads generated in the PSB59 minutes portably SMS/ email. The branch
can access the details of the loan by logging into the PSB 59 minutes loan portal as well.

Loan to Employees of “ Bank of India” under scheme “ Baroda Personal Loan “69

Eligible: Serving employees of Bank of India

67
BCC:BR:111:102 dated 21.02.2019 Page 5-7
68
Contactless personal loan- in PSB59minutes loan portal –BCC:BR:111:435 dated 31.08.2019
69
BCC/BR/111/39 dated 24.01.2019 – Loan to employees of Bank of India under scheme Baroda Personal loan

Page 420 of 502

 Purpose: Any purpose other than speculative

Limit :
Minimum – Rs.50,000/-, Maximum – Rs.5.00 lacs

Assessment of Limit :
Income Multiplier Criteria:
6 times of Gross salary . Gross salary to be taken as average of last 3 months
FOIR Criteria:
Total obligations * ( including proposed EMI of personal loan under the scheme ) must not exceed 65% of the Gross
monthly salary.
Repayment
Repayable in maximum 60 equated monthly instalment commencing from one month after disbursement subject
to remaining service of the applicant.

Baroda Loan to Doctors: (Scheme withdrawn W.E.F 01.04.2019)

Nature of facility
Demand / Term Loan and / or Overdraft

Purpose

 Development of clinic/ Clinic-cum-residence, Nursing Home, Pathological Laboratory.

 Purchase of medical / diagnostic equipment’s.
 Setting up of operation theatre.
 Purchase of car, ambulance, etc.
 Purchase of office equipment’s viz. computers, fax, air-conditioners and furniture etc.
 Expansion/renovation/modernization of existing premises/Clinic/Nursing Home.
 Working Capital requirement including stock of medicines.
 Outright purchase for clinic/ nursing home ready for possession

Limit:
Minimum: Rs. 50.000/-
Maximum:
Rural/Semi-Urban : Rs. 15 lacs (sub limit for W/C Rs. 1 lac)
Urban/Metro : Rs. 50 lacs (sub limit for W/C Rs. 3 lac)
For a loan amount of Rs. 5 lacs and above, the doctor / unit should have been established for a minimum period of 3
years. However, in deserving cases, Zonal Authority can relax this condition.

Eligibility:
 Individuals, Proprietorship / Partnership firms, Private Limited companies engaged in providing medical /
pathological / diagnostic services to the society.
 Applicants / Promoters should have recognized qualification in any branch of medical science like MBBS /
BAMS / BDS or any degree / course in physiotherapy / radiology etc.
 In case of Private Limited Company, the object clause should be verified for having the objective of providing
medical services to the community.

Security & Margin :

 Loans up to Rs. 5 lacs: No collateral and margin is required minimum 25%.
 Loan above Rs. 5 Lac :Tangible collateral Securities in the form of mortgage of land (excluding agricultural
land) and building, AND/ OR Pledge of NSCs, Govt. Bonds, Bank’s FDR /assignment of life insurance
policies etc. and margin of 15% of the cost of project / equipment.
 Working Capital: Nil

Assessment of credit limit:

 Working Capital: 10% of projected gross income.

Page 421 of 502

  While assessing credit requirement, the repaying capacity of the prospective borrower based on expected
income would be considered.

Security Margin:
 50% in case of immovable property.
 15% on value of NSCs/KVPs/Govt. Bonds / RBI Relief Bonds/ surrender value of LIC policies etc.
 10% on Bank’s FDRs.

Period:
Demand Loan / Term Loan: 60 months including moratorium period of 6 months.
DSCR of 1.25 may be accepted for ensuring repayment capacity in case of demand/ term loan.

Baroda Loan to Pensioners

Eligibility:
 Regular Pensioners, Family Pensioners drawing pension through our Bank’s branches.
 Pensioners who are getting their pension disbursed through Treasury/DPDO (Defence Pension
Disbursing Office) directly to the credit of their savings accounts with our branches.
 Pensioners/ Family Pensioners of our Bank.
 Pensioner should be drawing pension through the branch for at least last -3- months and his account
should have been conducted satisfactorily. i.e., no return of cheques for financial reasons.
Age:
• Minimum –21 Years,
• Maximum: 75 Years

Purpose: For any purpose other than speculation.

Limit:
Regular Pensioners:
For age up to 70 years: Rs. 8.00 Lacs
For age above 70 years: Rs. 5.00 Lacs
For Family pensioner:
For age up to 70 years: Rs. 3.00 Lacs
For age above 70 years: Rs. 1.50 Lacs

FOIR- Total monthly deductions including proposed EMI and EMIs of existing loans (if any) should not exceed 60%
of monthly pension.

Repayment Period:
Regular Pensioners/Family Pensioners: For age up to 70 years: 60 months
For age above 70 years: 36months
Credit Rating: Minimum Score: 30/55 Investment Grade CL-7
Scheme Code: LA147
Charge (exclusive of Service tax):
Pensioners / Family Pensioners of our Bank: Nil
Others: Rs. 1,000/-

Rate of Interest: 1-Year MCLR +Strategic Premium + 2.00%

For Retired Employees of Bank of Baroda/ their Family pensioners: 1-Year MCLR+SP.

Baroda Preapproved Home Loan/car Loan/Personal Loan

Eligibility:
The liability customer of our Bank who will qualify for pre-approved limits depend primarily on his / her banking
relationship with the bank and conduct of the account on various customers related as well as transaction related pre-
defined parameters.
Joint Liability customers are not eligible
Co-Applicant:

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 Addition of co-applicant is permitted in case of Home Loan and Car Loan (only if the property is purchased in joint
name / car is purchased in co-applicant name.
Income of co-applicant will not be considered for eligibility.
Personal Loan will be sanctioned in single name only

CIBIL (Version 1.0): Min CIBIL Score: 725 or -1/0

Age: 25 to 50 years

Maximum Limit:
Home Loan: Rs. 1 Crore
Car Loan: Rs. 10 Lakhs
Personal Loan: Rs. 5 Lakhs

Income Multiplier &FOIR-

Income documents, eligibility calculation & details of any existing Loan not required for PALs up to
Home Loan -Rs. 20 Lacs,
Car Loans -Rs. 7.50 Lacs,
Personal Loan -Rs. 3 Lacs
Eligibility will be re-calculated as per the normal Housing Loan scheme based on income documents for all cases of
PALs above Rs. 20 Lacs,
If the difference of Re-calculated limit vis a vis PAL is up to 20%, PAL limit to be sanctioned to the customer
If the difference of Re-calculated limit vis a vis PAL is more than 20%, lower of the Pre-approved / Recalculated limit
to be sanctioned to the customer
Even if the request of the customer is less than the assigned Pre-approved limit, the negative variance (difference) to
be worked out on the Pre-Approved Limit only.

Margin:
Based on the cost of project and purpose and as per exiting guidelines

Repayment Period:
Maximum up to 60 years of age of the applicant

ROI:
As per the CIBIL score of the customer, as per existing guidelines.

Processing Charge:
As per existing guideline, recover unified processing charges upfront i.e. before sanction of the loan application

Scheme Code:
• Home Loan - LA 192
• Car Loan- LA 193
• Personal Loan- LA 194

Other Important Guideline:

• If one of the limits is availed for a particular product, other two limits would stand withdrawn
• The pre-approved limits will be valid for a period of 3 calendar months. The period of availing of Pre-approved
limit will be extended for a period of 15 days for the completion of documentation etc. for customers
• No pre-sanction visit is to be done by Branches, if the respective Saving Account of the customer is KYC
compliant and if the latest existing address as per Bank's record matches with the CIBIL Report. In case of Home Loan
pre-sanction inspection of the proposed properties is to be carried.

Baroda Pre approved Loan against property:

Eligibility:

 Individual/Sole Proprietorship Firm/Partnership firm/ LLP/ Pvt. Ltd. Company only and not to be engaged
in Real Estate Developments, Property Dealers/ Brokers, Share/ Stock brokers.

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  Public Limited Companies, Trust, Societies, HUF, and Government Bodies etc. are not eligible.
 Customer should not have any credit facilities under the same name of the entity with our Bank.
 Maximum inward (drawn by our customers and presented by other banks in collection) cheque bounces
(financial reasons) in the last 12 months should not be more than -2- at the time of sanction of loan application.
 Selected based on period of maintenance of account relationship, minimum transactions per month in the
account, minimum average balance in the account, turnover in the account etc. Customers will be banded in
4 slabs in which multipliers are pre-decided.

Co-Applicant/ Guarantor:

Following individuals have to stand either as co-applicant or as guarantor:

 In case of Partnership Firm all partners of Partnership Firm/LLP Firm.
 In case of Company Promoter Director/s and Share Holders having shareholding 20% and above.
 Close relatives of the proprietor /Partners/promoter Director/director/Share Holder (having shareholding
20% and above), providing immovable property as security.
List of Close Relatives:
 Spouse, Parents, Children & their Spouse, Brother/Sister & their spouse, brother & sister of Spouse,
 Steps allowed: Mother, Children, Brother/Sister, and Brother/Sister of Spouse

Purpose: For any purpose except for financial speculation of any nature

CIBIL (Version 1.0)

 Min CIBIL Score: 725 or -1/0

 For partnership firm, LLP or Private Limited Companies all the partners/ directors should fulfil above CIBIL
score criteria. Commercial CIBIL also to be generated in case of Firm/Co.
 Cases where credit card account status write-off/ settlement involving amount up to Rs.
25000/- (consolidated) No deviation is required
 Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM (BCC)
 Write-off /settlement above Rs. 5000 ;
 No Due certificate from the Bank/ FIs to be obtained in respect of credit card account,
 Satisfactory status with the concerned Bank / FIs, preferably within stipulated period
and
 There should not be any other adverse remarks.
Age:

Maximum: 60 years (Individual/Proprietorship firm (age of the proprietor) the age of primary applicant). In other
cases age criteria is not applicable.

Limit:

Term Loan
 Minimums. 2 Lac
 Maximum:
 Metro Branch: Rs. 50 Lac
 Urban Branch: Rs. 40 Lac
 Semi-urban Branch: Rs. 30 Lac
 Rural Branch: Rs. 20 Lac

Income Multiplier &FOIR- No income documents are required

Margin: 40% on Realizable Value of immovable properties

Repayment Period:

 Minimum- 7 Years
 Maximum- 10 Years

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 ROI: 1 Year MCLR +Strategic Premium+ 1.50% (Pricing is delinked from CIBIL score/ Security). The rate of interest
is subject to change as per bank’s guidelines.

Processing Charge:

0.50% of Loan Amount,

 Minimum: Rs. 7,500/- (upfront)*+ ST

 Charges Maximum: Rs. 15,000/- +ST
*If two or more properties are offered as security, Rs. 7,500/- per additional property would be applicable as upfront
charges in addition to normal charges.
 No pre-closure charges applicable

Scheme Code: LA 219

Pre- Approved Top up loan

Eligibility:
All Existing Home Loan customer
Minimum CIBIL Score 725 at present (Main applicant)
Moratorium period has been completed.
Minimum 12 EMls have been paid.
Valid & enforceable E.M. of the primary security has been created.
Repayment in existing home loan account is regular i.e. there should not be 30+ DPD in last 12 months.
Primary security of linked Home Loan is not extended to secure any other credit facility other that original linked home
loan

Maximum age of the main borrower is 50 years

CIBIL (Version 1.0):

Min CIBIL Score: 725

Age: Maximum 50 years

Limit
Minimum Rs. 0.50 Lac- Maximum Rs.50 Lacs
Category-I: Principal amount repaid by the borrower in linked Home Loan (Same LTV)

Category-II: More Principal amount repaid by the borrower in linked Home Loan but LTV within normal home loan
guideline

Income Multiplier &FOIR-

Category-I: No fresh income proof is required hence no income multiplier/income criteria is applicable
Category-II: obtain latest income documents of the borrower, assess loan eligibility/ FOIR subject to maximum as
applicable for normal housing loan.
Salaried: Average of last three month's salary
Businessmen: Last applicable ITR filed

Margin:
Category-I: Same LTV as per original Home Loan
Category-II:
75% for loan more than Rs. 75.00 lacs,
80% for loan more than Rs. 30.00 lacs and up to Rs. 75.00 lacs and
90% for loan up to Rs. 30.00 lacs

Repayment Period:
10-15 Years Maximum up to 60 years of age of the main applicant

ROI: MCLR+SP+0.50%

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 Processing Charge: 0.25% of loan amount + GST, Minimum Rs. 1000/-

Scheme Code:
 Category -I: LA 198
 Category-II: LA 199
Other Important Procedures:
 For list of eligible case “Go to Intranet -> BCC -> Retail Banking-> Documents-> Resources -> Click on
List of Pre-Approved Home Loan Top Up”
 Customer can avail the top-up loan amount only once during the relevant calendar quarter, if the loan is
prematurely closed
 No pre-sanction visit is to be done by Branches.
 No fresh NEC/Valuation required
 Where proposed top up loan amount is up to Rs. 5.00 lacs and repayment period of loan is up to the
repayment period of original Housing loan: Undertaking from the borrowers/ guarantors to extend
equitable mortgage of existing primary security of Home Loan is required only.
 A copy of all papers and loan documents including undertaking for creation/extension of mortgage
executed by borrower are to be kept along with the loan & mortgage documents of primary home loan file.
 On the attestation memo and on the top of file of PA-Top Up Loan, total limit (HL+Top Up) is to be
mentioned in bold letter and highlighted properly
 In mortgage register in case of Top-Up limit sanctioned up to Rs. 5.00 Lac a noting is to be done as- “an
Undertaking for creation/extension of Mortgage has been obtained for sanctioned limit (mention actual
limit) under pre-approved top up loan facility”
 In case of limit above Rs. 5.00 Lac Extension of EM of existing primary security of HL to be recorded in
register. The pre-approved limits will be valid for a period of 3 calendar months. The period of availing of
Pre-approved limit will be extended for a period of 15 days for the completion of documentation etc. for
customers.

Pre approved Top Up loan for Baroda car loan Borrowers:70

Bank has launched a New scheme for existing car loan borrower, wherein the borrowers can avail pre
approved Top up personal Loan (Parallel loans) and pre approved top up loan for up gradation of car.

Baroda Ashray (reverse Mortgage loan):

Purpose:
To supplement the cash flow stream of senior citizens in order to address their financial needs by way of mortgage of
self-occupied property (house / flat).

Type of facility:
Term Loan

Combination of monthly annuity payments, and Lump sum payments for up-gradation/ renovation/home
improvement/ extension of residential property. Lump sum payments for medical / other emergencies/ exigencies of
the family

Lump sum payment will be subject to maximum 10% of the total Loan limit assessed.

Eligibility:
 Should be Senior Citizen of India, above 60 years of age.
 Married couples will be eligible as joint borrowers provided one of them is above 60 years of age and spouse
is not below 55 years of age at the time of application.
 Should be the owner of a residential property (house or flat) located in India in his/her own name.
 Residential property should be used as permanent primary residence (fully self-occupied property).
 Ex-staff members shall also be eligible to avail loan under the product.

70
BCC:BR:110:415 dated 14.08.2018 Pre approved top up loan to existing car loan borrowers

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 Eligible end use of funds
 Up gradation, renovation and extension of residential property.
 Home improvement, maintenance
 Insurance of residential property.
 Medical, emergency expenditure for maintenance of family.
 For supplementing pension / other income.
 Repayment of an existing loan taken for the residential property to be mortgaged.
 Any other genuine need.
 8Loan amount will not be used for speculative, trading purposes.

Maximum Amount:
 The maximum loan amount including interest for entire life shall be restricted to Rs. 1 crore, subject to
the margin of 20% on present market value of the property.
 As an exigency arrangement, the borrowers may be counseled to keep 5 % of limit assessed for medical /
any other unforeseen financial requirements in entire life span. In case of any lump sum payment, the
annuity needs to be recomputed after giving effect of the interest on such amount.
 However, annuity will be computed considering the life expectancy of 80 years (treating the loan tenure
of 20 years), but initially payments shall be made for 15 years and if any of the borrowers survives, the
loan may further be extended for next 5 years and accordingly, annuity may be disbursed for next 5 years.

Right to Recession
 The borrower(s) shall be given 7 business days to cancel the transaction, the right of rescission. If the
borrower(s) does not intend to avail the loan, processing charges may be waived.
 However, if loan amount has been disbursed, the entire loan amount will need to be repaid along with
applicable interest.

Disbursement/ tenor of Loan

 The amount will be directly disbursed to the borrower/s in monthly / quarterly / half-yearly / annual
installments.
 If loan is also considered for repayment of existing loan raised on the security of the property from any
institution, the payment of such amount shall be directly paid to the Bank / FI concerned.
 Directly pay the property tax or hazard insurance Premium.
 Lump-sum payment to the borrower/s directly on account of illness of the borrower / family member, home
improvement, maintenance, up-gradation of house and any other exigency requirements.

Option to adjust payments:

The Bank shall have the option to revise periodic / lump sum amount at the interval of every 5 years based on valuation
of the property.

Borrower shall be provided with an option to accept such revised terms and conditions for furtherance of the loan.

Repayment of Loan
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.

The loan will, as such, become due for recovery and payable after death of the last surviving spouse.

Settlement of loan, along with accumulated interest, to be met by the proceeds received out of sale of residential
property.

The borrower(s) or his/her/their estate shall be provided with the first right to settle the loan along with accumulated
interest, without sale of property. A reasonable period of 2 months may be provided when repayment is triggered, for
house to be sold.

Surplus if any, remaining after settlement of the loan with accrued interest, shall be passed on to the estate of the
borrower.

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 Foreclosure:
The loan shall be liable for foreclosure due to occurrence of the following events of default.
1. If the borrower has not stayed in the property for a continuous period of one year.
2. If the borrower fails to pay property taxes or maintain and repair the residential property or fails to keep the
home insured, the Bank reserves the right to insist on repayment of loan bringing the residential property to sale and
utilizing the sale proceeds to meet the outstanding balance of principal and interest.
3. If borrower(s) declare/s him / her / themselves bankrupt.
4. If the residential property so mortgaged to the Bank is donated or abandoned by the borrower(s).
5. If the borrower(s) effect changes in the residential property that affect the security of the loan for the Bank viz.
renting out part or all of the house; adding a new owner to the house’s title; changing the house’s zoning classification;
or creating further encumbrance on the property either by way taking out new debt against the residential property or
alienating the interest by way of a gift or will.
6. Due to perpetration of fraud or misrepresentation by the borrower(s).
7. If the government under statutory provisions, seeks to acquiring the residential property for public use.
8. If the government condemns the residential property (for example, for health or safety reasons).

Security:
Simple / Equitable mortgage of the Residential property. Commercial property will not be taken as a security under the
product.

Tenure:
15 years. The tenure may further be extended till survival of the borrower/s subject to the advance value of the property.

Processing charges:

0.20% subject to maximum of Rs. 10,000/- (one time) + applicable GST.

Upfront Charges :Rs.7500/- + GST

Valuation of Property:
The property is to be valued by Banks / Government approved valuer as per extant guidelines, at the time of considering
the facility. Subsequently, the property to be revalued at the interval of every five years.

Age of Building to be mortgaged

 The age of building should not exceed 40 years.
 Building more than 40 years old may be accepted as security, subject to approval of Regional Head, who
will ascertain structural soundness of the building by obtaining opinion and certificate from approved
engineer, about structural soundness of the building and its residual life.

Baroda Loan against Securities: Loan against NSC

Eligibility:
Must be an Indian resident Age - 21 years and above

Limit:
Minimum Amount: Demand Loan – Rs. 3000/- , Overdraft-Rs. 20000/-
Maximum Amount: For Public- No ceiling, For Staff - 5 times of gross salary

Margin:
Public:

15 % of face value of NSC, if residual maturity period is less than 3 years.

20 % of face value of NSC, if residual maturity period is 3 years and above.
Staff: 10 % of face value

Repayment Period:
Loan:

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 Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever is less.

Option II – Repayment of principal with interest, at the time of maturity out of proceeds of the instrument subject to a
provision that in such cases the margin would be minimum 20%

Overdraft:

Till maturity of the security. In case of overdraft, if the credit turnover in the account in the preceding month is not
adequate to cover the interest debited, and then interest debited in the account is to be recovered separately.

Subject to review annually.

Advance to third party is not permitted.

Scheme Codes: Finacle: LA170-EMI, LA169 -non EMI, OD004 –OD.

Loan against KVP:

Eligibility:
Must be an Indian resident Age - 21 years and above

Limit:
Minimum Amount: Demand Loan – Rs. 3,000/-, Overdraft-Rs. 20,000/-
Maximum Amount: Up to Rs. 1.00 lac by Branch Head & aboveRs. 1.00 lac by Regional Head.

Margin
15 % of face value of KVP, if residual maturity period is less than 3 years.
20 % of face value of KVP, if residual maturity period is 3 years and above.

Processing charges
Rs. 500/- flat + GST.

For Staff Members: NIL

Repayment Period:
Loan:

 Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever is less.
 Option II – Repayment of principal with interest, at the time of maturity out of proceeds of the instrument
subject to a provision that in such cases the margin would be minimum 20 %.
Overdraft:

Till maturity of the security. In case of overdraft, if the credit turnover in the account in the preceding month is not
adequate to cover the interest debited, and then interest debited in the account is to be recovered separately.

Advance to third party is not permitted.

Loan against Life Insurance policies

Eligibility
Must be an Indian resident, Age - 21 years and above

Limit:
Minimum Amount: Demand Loan – Rs. 3,000/- , Overdraft - Rs. 20,000/-

Maximum Amount: No ceiling

Margin:
 15 % of surrender value, if the insurance policy is maturing within a period of less than 3 years.
 20 % of surrender value, if the residual maturity period is 3 years and above.
Processing Charges
Rs. 500/- flat + GST, Nil for staff

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 Repayment Period
Loan: Repayment in maximum of 60 EMIs or within the maturity period whichever is less subject to availability of
stipulated margin.

Overdraft : Till maturity of the security. In case of overdraft, if the credit turnover in the account in the preceding
month is not adequate to cover the interest debited, and then interest debited in the account is to be recovered
separately.

Subject to review annually.

Security
 Assignment of Life Insurance Policy, in force for more than 3 years, in Bank’s favour.
 Standing instructions from the borrower to pay the premium on the policy, as and when they fall due to the
debit of his savings bank / current / overdraft A/C.
 The branch to obtain last premium paid receipt and keep on record.
 Policies which restrict its assignment should not be accepted.
 Life Insurance Policies issued by private insurance companies can also be accepted as security for considering
advances under this scheme.

Advance to third party is not permitted.

Endowment policies are preferred. Age of the policy holder should have been admitted in the body of the policy. Policy
should be in force for more than three years.

Policies which are not to be accepted for advance:

 -Whole Life Policies.

 -Policies issued under Married Women’s Property Act, 1874, wherein nomination will be automatically
cancelled by a subsequent transfer or assignment.
 -Policies assigned to a minor.

Scheme Codes : Finacle: LA168 (OD- OD004).

Loan against relief/ Govt Bonds

Eligibility:
Must be a Indian resident, Age- 21 years and above

Limit:
Minimum Amount: Demand Loan – Rs. 3,000/-, Overdraft - Rs. 20,000/-

Maximum Amount: No ceiling

Margin:
15 % of face value, if residual maturity period of Bond is less than 3 years.
20 % of face value, if the residual maturity period of Bond is 3 years and above.

Processing charges:
Rs. 500/- flat + GST, staff - Nil

Repayment Period:
Loan:
Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever is less.
Option II – Repayment of principal with interest, at the time of maturity out of proceeds of the instrument subject to
a provision that in such cases the margin would be minimum 20%.

Overdraft:
Till maturity of the security. In case of overdraft, if the credit turnover in the account in the preceding month is not
adequate to cover the interest debited, and then interest debited in the account is to be recovered separately.
12 months subject to annual review.

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 Security:
Pledge of relief bond. Blank transfer deed.
Notice to the Public Debt Office of RBI / Designated bank who issues Bonds.

Other Conditions:
 Facility may be sanctioned by the sanctioning authority up to fund based lending powers for sanctioning
advances against pledge of Govt. securities on merits, taking into account the purpose of advance and
repayment capacity of the borrower.
 Advance to third party is not permitted.
 Advances should be made against Bonds which are eligible for bank finances, & not restricted from
availing bank finance such as 6.5% RBI Bond 2003, 7% savings Bond 2002 etc.

Loan against Bank’s own deposits/LABOD

Eligibility:
All Deposit Holders of Short, Fixed, Recurring &Yatha Shakti JamaYojna

Limit:
Max. 95% of Book Value, subject to DLP.

Margin: 5%

Discretionary Lending Powers:- (Rs in Lacs)

AGM CM S.Mgr. Mgr.

DGM Officer
SMGS- SMGS- MMGS-- MMGS--
Particulars SMGS-VI JMGS-I
V IV III II

Advance against Bank’s own Full Full 250 200 62.50 25.00

Deposits Powers Powers

A new scheme “ Loan/ overdraft against Bank’s own deposit (LABOB/ODBOD) 71for farmers and others engaged in
Agriculture & allied activities is introduced for agriculture and allied activities wherein loan can be given to any
individual with self-declaration/ proof that he is engaged in agriculture activities/ the process of LABOD/ODBOD will
be used for agriculture purpose.

Baroda Advance against gold ornaments/ jewellery/ gold coins72

Branches authorized to consider the loan –

Selected branches indentified / selected by Zonal heads on the recommendation of respective Regional Heads

Type of facility: Demand Loan

Eligibility: All individuals being the true owner of the gold ornaments/ Jewellery/ specially minted gold coins sold by
the banks. The weights of specially minted gold coins should not exceed 50 grams per customer. (No deviation can be
allowed by any authority for exceeding the weight of special minted gold coins beyond 50 grams per borrower) - The
applicant must be local resident & must have a saving account with the Branch. If the applicant doesn’t have savings

71
BCC/BR/110/131 dated 19.03.2018- approval of new scheme “LABOD/ODBOD for agriculture & allied activities
72
BCC/BR/111/102 dated 21.02.2019 page no.27

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 bank account, saving account be first opened before extending the loan under this scheme. KYC norms should be duly
complied invariably in all the cases & necessary proofs should be kept on branch records. Loan under the scheme can
be considered to staff members, Ex-staff members also. In cases of facility to staff members: Sanction authority will be
Regional Head. No Loan to be granted to third party (i.e. atleast one- borrower and owner must be same).-

Limit :
Rs. 25 Lakhs per borrower
(There is no restriction on number of gold loans per borrower
subject to the maximum ceiling as above)

Margin :
25% of value as appraised by Bank’s approved assayer subject to advance value conveyed by Treasury Department.
(Any authority to allow margin can sanction no deviation below 25%)

Period :
12 months (No deviation can be allowed by any authority for extending the tenure beyond 12 months). If borrower
wishes to avail facility beyond 12 months, the existing facility must be adjusted and fresh facility may be sanctioned
after compliance
of all scheme norms applicable as on the date of sanction.

Repayment of loan :
Monthly/quarterly/ half yearly / yearly installments or bullet repayment as per the repayment capacity of the
borrower.

Security:
The loan shall be secured by way of pledge of minimum 22 carat/ Hallmark Gold Jewellery / Gold coins ( specially
minted and sold by banks )

Gold ornaments containing Gens & stones will not be accepted as security

The weight of Gold coin(s) does not exceed 50 grams per customer

Valuation of Gold
Gold ornaments/ Jewellery / Gold coins shall be valued by Bank’s approved gold valuer/ Assayer in the branch
premises in presence of branch manager / officer and the borrower concerned and a certificate of valuation along
with complete details of quality and quantity of securities of Gold ornaments/ jewellery shall be kept on record.is

Introduction to LLPS
Loan Lifecycle Processing System (LLPS) is an Omni flow based credit processing system which supports in end-to-
end Credit Management. In true sense it is digitization of Credit Process.
LLPS, in integration with other credit process enablers (like Internal rating, spreadsheet applications, Bureau score
solution, Business Rule Management System, Core Banking solution, negative databases & more) minimizes
Turnaround time (TAT), manual efforts & interventions in credit processing. At the same time helps in error
minimization thus yielding better efficiencies and improved compliance.

Key features of LLPS are as follows:

• Improving efficiency and increasing the processing volume.

• Seamless credit processing
• Give visibility over process controls.
• End to end tracking of the proposal
• Enhance customer experience.
• Improve customer engagement through mobility.
• Improve adaptability to changing regulatory requirements.

It enables users to execute workflow operations. Work item is a unique work entity assigned to a user. The user works
on a particular work item, performs data entry, specific operations and the work item is routed through different stages
by validating the conditions as defined in the Process Modeller in the Server process. This section aims at explaining
basic features of the product Omni flow, on which the Loan Origination System Process is based on.

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 Work flow:

Log-in Screen:
To Invoke the LLPS (Omniflow) process, specify the URL for "Web Desktop" and press "Enter"

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 URL: http://172.17.11.108:6501/webdesktop

The login screen as shown below will open up.

1. The user needs to enter his login credentials as below.

2. Specify the "User Name"(HRnesID).
3. Specify the "Password" (HRnesPassword)
4. Specify the name of the "Cabinet" from drop down list.(default boblms for UAT, boblmsprod for live scenario)
5. User may Select the option, Remember my User Name and Cabinet

Note: Once user selects the option, Remember my User Id and Cabinet, the Login dialog box has the username
already typed in, from the next time onwards.

6. Click the "Login" button to log on to the Cabinet.

Note: If the user does not provide the correct logon information then he/she will receive an error
message “Invalid User Name or Password”. Image below shows a sample error message that is
displayed when the user provide incorrect Login information

Home Screen:
On providing correct login information, LLPS Process Window home page appears.

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 On left side of this screen the user can see a list of queues that he /she has rights to. On clicking a queue the following
screen opens up

Search Parameter:
There is a Search text box on the top left of the page. User enters the search value here in this field.
Depending upon the search parameter the identifier is selected from the “On” dropdown and the process is
selected from the Select Process dropdown.

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 For an instance, in the above scenario, the criteria for search is on “Registration No”. “Select
Process"dropdown is for selecting a Process from a list of different processes configured on the same Cabinet.
Processes namely Lead, Retail etc.
12.6 Queue List:
This is a list of all Queues that a User has access to. In the figure, "Queue List" appears on the left side of the
page.

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 Work step
Work step is an activity where some work has to be done either by a fully automated program or by an
interactive program where people act, enter/ change data, set decision variables etc.

Work item:
Work item are the basic unit or basic components on which work or operations are done in the workflow. A
process instance available on a work step, when available to a user for processing is termed as a work item.
The basic entity that flows in a Business Process from one work step to another is called a Work item.

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 Work item List:
This is a list of all the Work items pertaining to a particular Queue that a user has access to. The Work item
List appears on the right side of the screen. The "Registration No" column is the unique identifier for a work
item and is often called "Work item No".

Queue Variables:
In the below figure, the headers of the Work item List table are queue variables. For e.g., “Registration No"
and “Work step Name", "Checklist Complete" etc. are all queue variables for the queue” ".

12.11.New:
In the above figure, "New" button appears on the top right side of the screen. User clicks on the lead capture
and then clicks on New button. The new window is opened as follows.

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 When user clicks on the Registration No. link, he/ she is directed to LLPS (Omniflow) page of the solution
called as Workdesk.

Opening Work items (lead or loan) in Work desk

To invoke the work item:
Select the Queue from the Queue List.
In the LLPS(Omni Flow) Process Window, list of Work items associated with the Queue appears
In the LLPS (Omni flow) Process Window, click the “Registration Number” link of the work item.
The work item is opened in the Work desk.
There are two standard interfaces, which can be displayed as windows in the work desk. The page is separated by the
Vermillion bar, to its left is the Form and to its right is the Document side.

Form Document

Logout
To logout from LLPS (Omni flow) Process Client, click the Logout link in the main toolbar. After
logging out, the user will get back to the login screen.

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 INSPECTION AND AUDIT

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 13. Inspection & Audit
Audit is an objective examination and evaluation of the financial statements of an organization to make
sure that the records are a fair and accurate representation of the transactions represented to be as
claimed. It can be done internally by employees of the organization (Internal Audit) or externally by an
outside firm (External Audit). Auditing is a continuous ongoing search for compliance.

1. Central Internal Audit Division (CIAD)

Central Internal Audit Division (CIAD), is an independent vertical in the Bank’s structure and is responsible for proper
functioning of the Bank’s Internal Audit System (RBIA) and for formulating the Audit Policy of the Bank. The Risk
Based Internal Audit Policy document clearly enunciates the policies of the Bank in respect of Internal Audit functions.
Audit Policy conforms to the guidelines issued by the Reserve Bank of India, Government of India, Board and Audit
Committee of the Board on Internal Audit from time to time and best practices adopted in the financial industry.

The policy sets out the principles, standards and approach for Internal Audit at the Bank. It puts in
place a comprehensive framework to ensure that the internal audit function will independently
assess the effectiveness of the Internal control, Risk Management, Governance systems and
processes set by the Bank.

CIAD ensures that the systems, policies and procedures of the Bank are adhered to by the operating units and standards
of control are not diluted while pursuing desired level of growth.

A sound internal audit function plays an important role in contributing to the effectiveness of the internal control
system. The audit function should provide high quality counsel to management on the effectiveness of risk management
and internal controls including regulatory compliance by the bank. The Bank has implemented a Risk Based Internal
Audit (RBIA) System in line with the guidelines issued by Reserve Bank of India.

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

1. The first line of defence being the Operations / Business Units themselves who have the responsibility
to prevent the risk at the source.
2. The second line of defence being the Compliance and Risk Management Function of the Bank.
3. Audit being third line of defence plays the vital role in the Bank in terms of safeguarding the Bank against risks
and assessing the risk profile of the Bank itself.

1 The objectives of audit

 To provide independent assurance to the board of directors & senior management on the quality and
effectiveness of a bank’s internal control, risk management, governance systems and processes, thereby
helping the board & senior management in safeguarding the Bank and its reputation.
 To remain independent of the audited activities, which requires the internal audit function to have
sufficient standing and authority within the bank, thereby enabling internal auditors to carry out their
assignments with objectivity.
 To ensure appropriate professional competence, including the knowledge and experience of each
internal auditor and of internal auditors collectively, for the effectiveness of the bank’s internal audit
function.
 To define, design and implement a suitable risk based internal audit strategy commensurate with the
underlying risks, organizational structure.
 To undertake an independent risk assessment for the purpose of formulating the risk-based audit
plan keeping in view the inherent business risks of an activity / business profile and the effectiveness
of the control systems for monitoring the inherent risks of the business activity.
 To enable risk identification, prioritisation of audit areas and allocation of audit resources in
accordance with risk assessment.
 To ensure every activity (including outsourced activities and risk management function) and every entity
of the bank should fall within the overall scope of the internal audit function.
 To ensure adequate coverage of matters of regulatory interest within the audit plan.
 To enable offering of suggestions for mitigating current risks.
 To anticipate areas of potential risks and play an important role in protecting bank from various risks.
 To lay greater emphasis on internal auditor’s role in mitigating risks.

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  To have effective internal audit as a deterrent and preventive mechanism for frauds.
 To follow up for rectification of irregularities pointed out in the Audit Reports for corrective action and
get confirmations from Controllers regarding rectification of irregularities.
 To assess the effectiveness of internal control and report the level of compliance in respect of internal
instructions, regulatory and statutory compliance to the Management.
(To have access to all information, records, personnel of the Bank to carry out the above objectives.)

Risk Based Internal Audit

2.1 Audit system in the banks has been concentrating on
 Transaction testing on sample basis, accuracy and reliability of accounting records and financial reports.
 Testing the integrity, reliability and timeliness of control reports
 Review of quality of assets, and
 Adherence to legal and regulatory requirements.

2.2 The scope of internal audit will broadly cover

 Examination and evaluation of the adequacy and effectiveness of the internal control system and the
functioning of the specific internal control procedures.
 Preparation of Risk Audit Matrix based on intensity / magnitude and frequency of risk.
 Review of the application and effectiveness of the risk management procedures and risk assessment
methodologies.
 Review of management and financial information systems including electronic information systems and
electronic Banking services.
 Review of the system established to ensure compliance with legal and regulatory requirement, code of
conduct and the implementation of policies and procedures.
 Testing of reliability and timeliness of the regulatory reporting.
 Furnishing appropriate feedback to Controller(s) regarding the health of the auditee units.
 Internal audit shall encompass the examination and evaluation of the adequacy and effectiveness of the
Bank’s system of internal control and the quality of performance in carrying out assigned responsibilities
 While ensuring the coverage of every activity under audit, adequate coverage of embedded compliance and
control as prescribed by the regulatory / statutory/ GOI authorities also to be taken care of.
 The Internal Audit will have right to access bank’s records, information and personnel for conduct of internal
audit.

2.3 Risk Based Internal Audit Process

The overall RBIA process is divided into following activities:

1. Audit Planning
2. Pre-Audit Preparation / Planning
3. Audit Execution & Risk Assessment
4. Submission of Audit Report
5. Audit Rectification Process - Follow up and closure

2. Risk Assessment:
Identification of risk is a process wherein each product, process is evaluated for risk. The risk identification
process includes an assessment of inherent business risk in various activities and an evaluation of the
effectiveness of control system for monitoring the business risk. For this purpose, Central Internal Audit
Division has devised a risk profile document applicable for branches in which risk profile templates (RPT)
have been standardized with a view to determine the level of risk to which a branch is exposed.

The Risks are broadly divided into two types of Risks viz. Business Risk & Control Risk.

The Business Risk inter alia includes:

i. Credit Risk
ii. Operational Risk
iii. Earnings Risk
iv. Strategy and Business Environment Risk
v. Liquidity Risk

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 The Control Risk covers:

i. Operational Control Risk

ii. Credit Control Risk
iii. Compliance Risk
iv. IT Risk

Risk Assessment Methodology & Risk Trend Movement

While arriving at Risk Assessment under Business and Control Risks as "Low", "Medium" and "High", a view is also
taken whether the corresponding risk is showing a stable, increasing or decreasing trend. The trend in a particular risk
category indicates the audit attention required while preparing the future audit plan of the Branch. The criteria for
arriving at Risk Assessments and Risk Trend Movement are given in the table below.

Risk Perception Ratings

Score Range

< 50% High

>= 50% <= 70% Medium

> 70% Low

Movement of Risk

Previous Rating Current Rating

High High Deteriorating or Stable as any improvement in scores without

change in this Risk band cannot qualify an Improvement tag.
High Medium or Low Improving.

Medium Low Improving

Medium Medium Improving if score change is >= 5%, Stable if score change is <
+5% or -5%
Deteriorating if score change is <= 5%.

Medium High Deteriorating

Low Low Improving if score change is >= 5%, Stable if score change is <
+5% or -5%
Deteriorating if score change is <= 5%.
Low Medium or High Deteriorating

Based on the risk assessment, the periodicity of risk based audit will be as under
Particulars Periodicity
I. Regular Branch Audit
1. Low Risk branches not covered under Concurrent Audit 12 to 15 months
2. Low Risk branches covered under concurrent audit 15 to 18 months
3. All Branches having credit outstanding of Rs.100 crores (As before 12 months
per last Financial Year figures) Within 6 months
4. Newly opened Branches.

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 5. Medium risk branches 1. 12 months
6. High Risk Branches 2. 9 to 12 months
7. Very High / Extremely High Risk Branches 3. 9 months

3. Audit Committee of the Board:

Audit committee would provide a medium to the Board of Directors through which the Board can exercise
better control over accounts, finance and audit functions. The main functions of the Audit Committee relating
to Internal Audit are:

a. Reviewing adequacy of internal audit function including structure of the Internal Audit Function, staffing,
reporting structure, coverage and frequency of internal audit.
b. Approval of Internal Audit Policies and other initiatives.
c. Periodical reviewing of all the internal audit functions - audit findings under various audits and guide in
developing effective control in Internal Audit function of the Bank.
d. Reviewing the findings of any special audits / spot audits by the Internal Auditors into the matter where
there is suspected fraud or irregularity or a failure of internal control / systems of a material nature and
reporting the matter to the Board.

4. Corrective Action Plan:

In case the Audit Report arrives at a Medium or Low Audit rating and or the trend of movement of Risk is very
adverse, the concerned Zonal Office may consider taking actions.

Based on the findings during Risk Based Internal Audit of the Branches / Auditee Units, the Bank may take
one or more of the following steps as corrective action plan:

a) Change in the Auditee Unit Leadership.

b) Withholding the Delegated powers.
c) Visits by the Controlling Authorities for monitoring the compliance.
d) Introduction of Concurrent Audit wherever necessary.
e) Any other steps that may be deemed fit and considered necessary.

5. Centralized Exception Monitoring Unit (CEMU)

With the aim of strengthening Internal Audit function and increasing the scope and coverage of audit, as well as
optimizing resources (in terms of cost, staff, time etc.) used for auditing, the Bank has introduced Centralized Exception
Monitoring Unit (CEMU). CEMU is a key enabler in transformation of the audit function involving deployment of a
system to monitor breaches, generate alerts, conduct data analytics, act as an early warning system and enable an offsite
audit mechanism. CEMU fits with internal systems, offering security and convenience, with pre-defined logic and
enables tracking of adherence to multiple regulatory / internal control norms on a real time basis.
CEMU will on a regular basis review various transactions and identify exceptions based on pre-defined logic. The
branches will on a regular basis report compliance with these exceptions with in-built escalation matrix to Regional
Office/ Zonal Office.
Operating Model
Automated Tool is developed to track and report exceptions to various users through IT Workflow. The operating model
for CEMU from Internal Audit perspective is given below:
 Centralized Exception Monitoring Unit (CEMU) will on a regular basis review various transactions and
identify exceptions based on pre-defined logic.
 These exceptions will be communicated to Offsite Audit Execution Team who will in turn share these,
with corresponding branches, their Concurrent Auditors and the internal auditors
 The branches will on a regular basis report compliance with these exceptions. Internal Auditors during
on-site audits, will check the quality of compliance with these exception alerts on sample basis.

6. Checking of Compliance:
Checking of Compliances on Audit Findings can contribute to improving the efficacy of the Audit process. A
system of Checking of Compliances has been proposed from the next Audit Cycle i.e. 2018-19. The procedure
to be followed for Compliance Checking will be as follows:

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 a) Every year 10% of Branches (which are under High & Medium Risk) Audited in the previous year will be
taken up for Compliance checking.
b) The selection of branches will be from mix of locations at Metro / Urban/ Semi-urban/ Rural.
c) Such Checks will be spread uniformly across the year.
d) Findings of such compliance checking reports be discussed in Zonal Audit Committee.

Formalization / Exit Meeting on conclusion of RBIA

The Formalization / Exit meeting of Risk Based Internal Audit of the branch is a very critical and essential requirement
wherein major findings of the RBIA are being discussed by the Internal Auditors with the branch. Presently this meeting
is being conducted by the IAs with the Branch Head on the last day of the RBIA.

Thus, all Internal Auditors are under obligation to hold 'EXIT' or 'Formalization' meeting with the
Head of the branch/office before the conclusion of Audit in the presence of Regional Office
representative. This is a very healthy practice and provides an opportunity for useful interaction between the Internal
Auditors and the Branch Managers pertaining to spot regularization of immediately rectifiable lapses / inconsistencies/
deviations observed by Internal Auditors during the course of the Audit thereby increasing the effectiveness of the basic
purpose of the Audit. Guidelines regarding attending 'EXIT' or 'Formalization' meeting by ZIAD officials are as under-

a. ZIAD Head shall attend the formalization in respect of all local Branches headed by Assistant General Manager
and above regardless of Risk Categorization. ZIAD Head will also attend the formalization of outstation
Branches headed by the Assistant General Manager and above, depending upon the serious nature of
irregularities reported by IA during the Internal Audit.
b. In respect of Branches headed by Chief Manager, the formalization is to be attended by SDO (Chief Manager)
if the branch is falling under High-Risk category.
c. ZIAD Head shall attend the formalization of Internal Audit of Regional/ Zonal Offices.
d. ZIAD-Head / SDO (Station deputation officer, Chief Manager) shall attend the formalization meeting of local
SMELF/SMS/ CBO. He will also attend the formalization of outstation SMELF/SMS/CBO, depending upon
the serious nature of irregularities reported by IA during the Internal Audit.

Guidelines regarding attending 'EXIT' or 'Formalization' meeting by concerned RO officials are as

under-

1. In respect of Branches/SMELF/SMS/Offices, headed by the Asst. General Manager

2. & above, the formalization shall be attended by Regional Head / Dy. Regional Head.
3. In respect of Branches /SMELF/SMS/ Offices, headed by the Chief Manager the formalization is to be attended
by Dy. Regional Head.
4. In respect of Branches headed up to Senior Manager, the formalization is to be attended by Dy. Regional Head
/ Sr. Manager (Regional Office). In case the branch is proposed to be categorized as low risk, Region may opt
not to send its representative. However, presence of RO representative put desire emphasis on accelerating
the rectification process.

7. Submission of Audit Reports:

Internal Auditor will submit the Complete Audit Reports viz. Formalization cum Synopsis and Risk Based Internal
Audit Report with all the annexure to ZIAD with “Strategy Paper” (where the risk of the branch is degraded or where
the same has remained as “Medium” or “High” during -2- consecutive audits) at the earliest but in any case not
beyond -3- working days from the date of conclusion of the Audit. The report will be subjected to due vetting by
ZIAD. After vetting, ZIAD will send a letter to Regional/ Controlling Authority, mentioning therein the serious nature
of irregularities, attracting their preferred attention, for initiating steps immediately to rectify the irregularities before
the receipt of complete reports. Thereafter, submission of the complete reports will be carried out as under:-

1. All the reports will be sent direct to the Branches / offices with a copy of the report to the Regional Authority/
Controlling Authority as hitherto. However, only copy of Formalization cum synopsis sheet with “Strategy
Paper”, if applicable with a copy of letter sent by ZIAD to controlling authorities, bearing the details of serious
nature of irregularities, will be sent to respective Zonal office & Central Internal Audit Division (CIAD),
Baroda.
2. The reports on CFS Branches will be sent direct to the concerned Branch/ Office with a copy
to respective Zonal Office. However, copy of Formalization cum synopsis sheet with “Strategy Paper”, if

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 applicable, will be sent to Large Corporate Department, Corporate Centre & Central Internal Audit Division
(CIAD), Baroda.
3. The reports of Regional/Zonal offices, departments of Baroda Corporate Centre and Head Office will be sent
direct to the concerned Office with a copy to the Functional- Head at BCC / Head Office and Central Internal
Audit Division, Baroda.

2.16 Special Observation Letters (SOLs)

Safeguarding of Bank's image and interests particularly when the amounts involved are large
should be the prime concern of every Auditor when he is carrying out audit of a branch. Irregularities
of serious nature are sometimes noticed by an Auditor during the course of regular audit. Many times the bank's
financial interests involved in such serious irregularities run into several lacs / crores of rupees giving rise to anxiety
and grave concern. Apart from this, at times transactions of fraudulent nature or actual frauds are noticed by Auditors
during audit. Likewise irregular transaction or even transactions appearing as confide involve vigilance aspects. In
addition, to this there could be certain other situations which though may not immediately endanger bank's interests
but have potential or possibility of jeopardizing bank's interests if remedial measures are not immediately resorted to.
As per standing instructions such type of irregularities which are considered very serious in nature from the point of
view of safety of bank's funds are required to be reported immediately by way of a letter in confidence to the ZIAD Head.
2.17 Special Letter (SL)
Though there may be instances where irregularities are of serious nature but already brought to the notice of higher
authorities and/or where these are of procedural nature and the quantum of likely loss is not very large, ZIAD Head
may take up the matter with the RO/ZO by way of special letter. RO/ZO shall follow up for immediate rectification
within a maximum period of 60 days and submit point wise status to ZIAD. ZIAD Head shall examine the action taken
and will recommend for closure of the special letter to CIAD. Such letters shall also be discussed and monitored at ZAC
meetings.

8. Stock & Book-Debt Audit:

Stock audit is confirmation of accuracy, value, quantity existence and ownership of stock in manufacturing
industries, where raw-material is purchased & converted into finished stock.

It is one of the important tools for Credit monitoring in case of Working Capital Finance. The Bank has
adopted the practice of conducting Stock Audit and Book Debt verification by branch officials and random
inspection by independent auditors/ panel of Chartered Accountants / C.A. firms.

i. Stock / Book Debts Audit is to be carried out mandatorily in all accounts having fund-based
and non- fund based working capital facilities of Rs. 1.00 crore and above with our Bank.
ii. The frequency will be bi-annual in respect of working capital exposures of Rs. 5.00 crore and
above and annual for working capital exposure of Rs. 1.00 crore and above up to Rs. 5.00 crore
iii. Stock / Book Debts Audit will not be applicable where no working capital facilities are
sanctioned / or working capital limits are below Rs. 1.00 crore
iv. The borrowal accounts where concurrent audit has been assigned, may not be subjected to
Stock / Book Debts Audit
v. Stock Audit carried out through other Banks (in case of Consortium / Multiple Banking) shall
also be acceptable.
vi. Stock Auditors while commencing/ conducting the audit, must adhere to the element of
surprise.

{UPDATE in terms of Global Credit Exposure Policy 2018 and modification to it vide circular
BCC:BR:110: 590 dated 05.12. 2018]

Stock & Book-Debt Audit is to be carried out mandatorily in all accounts having fund-based and non-
fund based working capital facilities of Rs. 1.00 crore and above with our bank.

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 a. No Stock and Book-debt verification for borrowers in overseas territories.
b. Baroda Traders Loan is exempted from the requirement of Stock/ Book-Debt Audit.

Credit Audit
4.1 Introduction:
Credit Audit is an independent audit and risk review function, aimed at providing assurance to the stake holders against
Credit Risks of high value advances and investments. In line with RBI guidelines on Credit Risk Management, the Bank
initiated system of Credit Audit in the Bank. Credit Audit aims at achieving continuous improvement in Credit Portfolio
and examines probability of default, identifies risks and suggests risk mitigation measures.
Objective:
The basic objectives of Credit Audit Policy are as below:
1. Review sanctions process & compliance status of large loans.
2. Independent Review of Credit Risk Assessment.
3. Feedback on regulatory compliance.
4. Pick up early warning signals & suggest remedial measures.
5. Recommend corrective action to improve Credit Quality, Credit Administration and Credit Skill of Staff.
6. Improvement in the quality of Credit portfolio.
4.2 Extent of coverage of Credit Audit:
All fresh Sanctions/Existing accounts including Retail Loans and Restructured Accounts with aggregate exposure of
Rs.10/- crores and above (Fund based + Non fund based)
1. 5% of borrowal accounts randomly selected from the rest of the portfolio as under
2. Fresh Accounts sanctioned with exposure of Rs. Rs.1/- crore & above but below Rs.10/- crores (Fund based +
Non fund based).
3. Accounts reviewed with increase with aggregate exposure of Rs.1/- crore above but below
Rs.10/- crores (Fund based + Non fund based).
4. Fresh sanction and reviewed with increase account of Sister Concerns / Group/ Associates concerns of above
accounts, with threshold limit of Rs. 1 crore & above (Fund based + Non fund based).
5. All the mandatory guidelines contained in RBI circulars be complied with.

1.3 Exclusion from coverage of Credit Audit ( Both for Main Concern and its associate concerns).
a. All the self-liquidating advances granted against the security of Bank’s own deposits, 100% cash margin, Govt.
Securities like NSC/KVP/IVP etc. either granted to the main eligible account and or its associates.
b. All short term clean loan.
c. All Short reviews.
d. All Non Performing Advances.
4.3.1 Periodicity:
All fresh proposals and proposals for renewal of limits to be subjected to Credit Audit within a period of 3 to 6 months
from the date of sanction, however, it should be ensured that before undertaking the credit audit exercise the
disbursement has taken place in the subject account however within the overall limit of 6 months.
In the event sanction has elapsed due to non-availment or due to any other valid reason the period of 3 to 6 months will
run in that eventuality from the date of revalidation of the sanction by the competent authority.

Onsite Credit Audit

Credit Auditor will visit the branches on a half yearly basis as part of the regular onsite credit audit.
Onsite Credit auditor is required to access all the three audit reports viz. LRM Audit, Loan
Documentation Audit, Credit Disbursement audit and will review the following
1. Verify LRM, Loan Documentation and Credit Disbursement audit reports and observations
highlighted thereon.
2. Verify the rectification certificates submitted by the Branches/ CPC for the observations highlighted in
all audits.
3. Review all pending checkpoints which have not been rated by the LRM/ In-house legal officer and the Credit
Disbursement auditor and complete their scoring.
4. Check whether all closures as enlisted in the compliance certificate have been submitted by the branches to
CIAD back office
5. Evidence compliance of the rectifications as submitted by the branch / CPC
6. Verify the Open audit points and obtain clarifications for the closure / pendency of the same.

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 7. Close or Reopen the observations based on evidences verified at the branch along with Mandatory remarks for
the same.
8. Allocation of overall rating to the account and closure of the yearly credit audit activity for the account.

9. Statutory Audit (LFAR):

Statutory Audit is a type of audit which is mandated by Law or a Statute to ensure the books of accounts
presented to the regulators and public are true and fair. It is mandatory as per the criteria met by the
business. It is performed by qualified Chartered Accountant who is independent of the business.

This audit is prescribed by the different statute like Reserve Bank of India, Income Tax, Companies Act, etc.
The designated Chartered Accountant needs to conduct these audits under different prescribed statutes.

Statutory Audit of banks is mandatory. Statutory Auditors are appointed by RBI in association with ICAI.
Every year after the end of the previous financial year, in every branch of the banks, very rigorous statutory
audit is conducted.

10. Long Form Audit Report (LFAR)

Besides the normal audit report as per the statutory requirements, the terms of the Public, Private & Foreign
Sector Banks requires the auditors to furnish an LFAR. The matters which the banks want the auditors to
check have been prescribed by RBI.

The time limit for submission of LFAR is 30th June. An auditor should plan the audit for timely submission
of LFAR. An auditor also gives an executive summary of the LFAR.

Concurrent Audit
3.1 Introduction
Concurrent Audit is a systematic examination of working of the branch / unit on a continuous basis to ensure accuracy,
authenticity and due compliance with the internal systems, procedures and guidelines of the bank / other statutory and
regulatory guidelines as issued from time to time.
The main role of concurrent audit is to supplement the efforts of the bank in carrying out simultaneous internal check
of the transactions and other verifications and compliance with the procedures laid down. The activities of the
concurrent audit are governed by the Concurrent Audit policy of the bank.
The Concurrent Audit provides an additional support to the branches, help in adherence to the prescribed systems
and procedures and prevention and timely detection of lapses / irregularities at branches.
The broad objectives of Concurrent Audit are as follows:
1. Systematic examination of working of any branch or other operational unit/s on a continuous basis to ensure
accuracy, authenticity and due compliance with the internal systems, procedures and guidelines of the bank /
other statutory and regulatory guidelines as issued from time to time.
2. Act as a management tool to assist in establishment of sound internal accounting functions and effective
control to minimize the time lag between occurrence / incidence and detection of serious errors and fraudulent
manipulations.
3. Provide an administrative support to the branches to ensure adherence to prescribed systems and procedures.
4. Prevention and timely detection of lapses / irregularities at branches and their rectification.
5. Report any deviations in the set rules and regulations which, in his opinion, might develop into irregularities
at a later stage.
6. To keep all transactions of the branch under continuous check so as to supplement Bank’s efforts to ensure a
robust internal control system at the branch.
7. To ensure that violation, if any, in the system and procedures of the bank are brought to the notice of the
management immediately so that timely corrective and remedial steps can be taken to avoid repetition.
8. To pick up and report early warning signals.
9. To report serious irregularities / fraudulent activities noticed at the branch.
10. To report on the quality of credit portfolio with due focus on credit appraisal, sanction, disbursement,
monitoring, and recovery aspects etc.

3.2 Concurrent Audit Framework:

Under the current concurrent audit framework the Bank has appointed Chartered Accountancy firms
as concurrent auditors at Zonal level for each zone. These appointed concurrent auditors have been allocated

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 a set of branches from the particular zone. These auditors are to submit the Concurrent Audit Report to the particular
Zonal Internal Audit Division (ZIAD).

11. BC Audit:
Branches to audit all their respective BC points once in every quarter and to take remedial steps in case any
irregularity is found. A copy of the same is to forwarded to the Regional Officer for their record and for action
if warranted.

Regional Offices on its own will audit 10% of the BC of the region randomly every quarter in addition to
branch audit and initiate necessary action. The same set of BC should not be audited in the subsequent
quarter. In other words, BC points need to be audited on rotation basis.

The internal auditors from ZIAD concerned will visit a few BC points randomly during their regular
inspection of the Branch.

12. Legal Audit:

Periodical Legal Audit of title documents and other related loan documents in respect of large value loan
accounts having exposure of Rs. 5.00 crore and above was introduced by RBI.

It is applicable where our bank is sole banker or leader of the consortium/ joint lending arrangement. In
case our bank is a member of the consortium/ joint lending arrangements, a confirmation is to be obtained
from the leader bank with regard to compliance of RBI guidelines. The guidelines are applicable to new as
well as existing accounts.

In accordance with the existing practice “Non-Encumbrance Certificate (NEC)/ Title Opinion Report” with
other related documents on the property to be mortgaged are obtained before disbursement from the
empanelled advocate. The documents are then vetted by the legal department. In addition to this, re-
verification of title deeds as to their genuineness with relevant authorities along with verification other loan
documents will be carried out within a period of 5 years from the date of such first verification and for every
block of 5 years thereafter till the loan is settled in full.

Revised Risk Assessment and Rating model are given below:

The Branches are categories based on their Credit Exposure (Both Fund Based and Non- Fund Based) as on date of
Audit as mentioned below:

Category Credit Portfolio

I Branches having Credit Exposure more than INR 200 Crores

II Branches having Credit Exposure more than INR 50 Crores and up to INR 200 Crores

III Branches having Credit Exposure up to INR 50 Crores

(Note: Category of Branch will be determined based on O/s Balance of Term loan, Exposure in Non
Fund Business and Sanction Limit in CC / OD Accounts)

Based on the Business and Control Risks scores arrived the branch risk profile will be created to arrive at the frequency
at which a branch needs to be audited except on exceptional cases as per Dynamic Risk Assessment.. This will be done
as per the below table.
Business Risk Score Obtained by the Branch Branch Business Risk Rating
500 – 351 Low
350 – 250 Medium
249 and Below High

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 Control Risk Score Obtained by the Branch Branch Control Risk Rating
500 – 351 Low
350 – 250 Medium
249 and Below High
risks

High A B C
High Risk Very High Risk Extremely High Risk
Medium D E F
Medium Risk High Risk Very High Risk
(Business
(Score- )

Low G H I
Low Risk Medium Risk High Risk
Low Medium High
Control Risk (Score-)

In the overall risk assessment, both the inherent Business and Control risks are factored in. The composite risk
assessment of the Branch will be under -5- categories namely 'Low' (G), 'Medium' (D & H), 'High' (A, E & I), 'Very High'
(B & F) and 'Extremely High' (C).This risk assessment as reflected in each cell of the Risk Matrix is explained below

Zero Tolerance Area

In order to have focused attention bank has identified certain critical parameters which are required to be treated under
zero tolerance, which are not only there to reflect improved compliance level, averting frauds, but are also helpful in
getting good rating. These are as under:

1 Noncompliance of KYC norms in newly opened accounts

2 Non-compliance of guidelines in handling of PINs and Debit Cards, Internet Banking
3 Status of signature scanning
4 All security forms including Personalised Returned Cheque Book to be entered in Finacle ( Ref Circular No
HO:BR:109:232 dated 20.12.2017)
5 Generation, checking and filing of Exceptional Transaction Reports.
6 Generation, checking and filing of Inter SOL Transaction Reports. (Cir no. HO: BR: 106/122 & 124 dated 08.07.2014
& 09.07.2014)
7 Generation of OFFSOL Txn. Report (Cir no. HO: BR: 106/151 dated 06.08.2014)
8 PSR submission by the branch Advances
Controllable Expenses
9 Display of BCSBI code in the branch premises
10 Generation of CIBIL report before any advance’s sanction
11 Registration of Bank’s Charges For Mortgage Property (Both EM and
through CERSAI Registered Mortgage)/TPA/
For Movable Assets
12 Availability of Ultra Violet Ray machine
The same is in working condition
It is being used as per extant guidelines
13 Generation, checking and Signing of Change of Mobile Number Report from BOBMENU (Refer Circular No
HO:BR:110:10 Dated 15.01.2018)
14 Adherence to four eye principal
1-In Finacle Tractions
2-In advances a/c
15 Attending and Rectification of CEMU alerts by the Branches

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 Treasury & Forex

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 14. Treasury & Forex
FOREIGN EXCHANGE means, exchange of currency of one country into the currency of another country.
Foreign Trade means movement of goods and services across the national boundaries.

Exchange Control and Trade Control. Exchange Control means a Government imposed control on free conversion
of local currency into a foreign currency and a vice versa.

Foreign Exchange is earned/ acquired from the exports of goods and services and the same is utilized to make
payments in foreign currency for imports of goods and services from different countries. There is an
“Internationalism of trade but Nationalism of currencies” and therefore, there is need for conversion of local currency
into foreign currency and vice versa.

Under Foreign Exchange business, at present following two types of transactions are covered :
1. Current Account transactions-Imports and Exports of goods and services like Banking, Insurance, Travel etc. and
2. Capital Account Transactions, which alter the assets or liabilities including contingent liability outside India of
persons of resident in India OR assets or liabilities in India of persons resident outside India are called Capital
Account Transactions viz. Borrowings and Investments, etc.

The Current Account Convertibility means absence of exchange control for any trade related payments i.e., Current
commercial and financial transactions. India has achieved current account convertibility. Capital A/c Convertibility
means absence of any exchange control for transactions of capital nature.

Under FEMA, current account transactions have been classified in following three Schedules:

Schedule I Prohibition on drawal of foreign exchange (Rule - 3)

Schedule II Prior approval of Government of India (Rule - 4)
Schedule III Prior approval of Reserve Bank of India (Rule - 5)

THE TRANSACTIONS REGULATED UNDER FEMA:

1. Purchase and sale of and other dealings in foreign exchange and maintenance of balances at foreign centers.
2. Realization of proceeds of exports and payments for imports.
3. Payments to non - residents or to their accounts in India.
4. Transfer of securities between residents and non - residents and acquisition and holding of foreign securities.
5. Foreign travel with exchange.
6. Export and import of currency, cheques, drafts, travelers‟ cheques and other financial instruments, securities,
etc.
7. Activities in India of branches of foreign firms and companies and foreign nationals.
8. Foreign direct investment and portfolio investment in India including investment by non - resident Indian
nationals/persons of Indian origin and corporate bodies predominantly owned by such persons.
9. Appointment of non - residents and foreign nationals and foreign companies as agents in India.
10. Setting up of joint ventures/subsidiaries outside India by Indian companies
11. Acquisition, holding and disposal of immovable property in India by foreign nationals and foreign companies.
12. Acquisition, holding and disposal of immovable property outside India by Indian nationals residents in India.

Foreign Exchange Reserves means country’s reserves of foreign currencies. Commonly known as “quick cash”,
that can be used immediately to finance imports and other foreign payments.

Foreign portfolio investment means an investment into financial instruments such as stocks and bonds in which
the objective is not to engage in business but to merely generate dividend income and capital gains. The larger portion
of international investment flows in the world today is FPIs.

Globalization means a process of corporate enterprise that involves the procurement of resources from the best
available source worldwide and the production and sale of goods and services in the widest possible markets.

“Repatriation outside India ‟ means the buying or drawing of foreign exchange from an authorized dealer in India

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 and remitting it outside India through normal banking channels or crediting it to an account denominated in foreign
currency or to an account in Indian currency maintained with an authorized dealer from which it can be converted
in foreign currency.

FUNCTIONS COVERED UNDER FOREIGN EXCHANGE BUSINESS:

1. Exports - Export Financing, Advising Export L/Cs and confirming, Export Bills on collection FOBCs ,
crystallization, guarantees, etc.
2. Imports - Import financing, Import L/Cs and Amendments, ABs, Crystallization and Guarantees, Trade
Credits
3. Remittances - MT / TT / DD / TCs, Currency Notes (Foreign Inward & Outward Remittances)
4. Exchange Dealings - Card Rates, Forward Contracts and Position maintenance, etc.,
5. Non - Resident Accounts - NR(O) , NR (E) , FCNR , RLFCD, FCLRD, RFC.
6. Resident‟s Accounts - RFC (Domestic) A/C‟s., EEFC A/c‟s., DD A/c etc.,
7. Statements and Returns, Reconciliation, Issue of Certificates
8. Overseas Funds – ECB, Trade Credits, Investments, FDI, FII, ODI
a. Miscellaneous - Agency Arrangements

ROLE OF INDIAN ORGANISATIONS CONNECTED WITH FOREIGN BUSINESS:

1. Government of India – Ministry of Finance
a) Financial Policies
b) Export Credit Policy
c) Customs, Excise Duty, etc.
d) Stamp Duty
e) Import Surcharge
f) Interest Tax
g) Over all control of Revenue and Expenditure connected with Foreign Trade

2. Government of India - Ministry of Commerce

a) Commercial Policies and Procedures
b) Foreign Trade Policy ( EXIM Policy - Import - Export Policy)
c) Setting up of Free Trade Zones / Special Zones
d) Co - ordination and Control over Export Promotion Councils
e) Export Promotion Schemes
f) Deemed Export Policy

3. Reserve Bank of India

a) Foreign Exchange Department FEMA Provisions
b) Industrial and Export Credit Department
c) Import - Export Credit
d) Non Resident Accounts
e) External Investments and Operations
f) Sale and Purchase of Currencies
g) Control, Supervision and follow up of Advances Customer Services, etc.

4. Foreign Exchange Dealers‟ Association of India (FEDAI)

a) Frames rules and Regulations Relating to Foreign Exchange Business, viz.
b) Exchange Rates
c) Forward Contracts
d) Risk Management
e) Crystallization of Bills

5. Export Promotion Councils and Exporters‟ Organizations

6. Export - Import Bank of India [EXIM Bank]

7. ECGC Ltd (Erstwhile Export Credit Guarantee Corporation of India Ltd.)

8. General Insurance Corporation of India, etc.

FOREX OPERATIONS:

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 Foreign Currency – which is not local currency – Commodity for Bankers.

Foreign Security – Securities denominated in Foreign Currency. ADR/GDR etc

Foreign Trade – Sale / Purchase of Commodities, Services, Performances etc

Balance of Payment – Exports Receivables + Inward Remittances other than Exports minus Import payments + Outward
Remittance other than Import

Countries health – BOP (+/-) + Forex Res. + Gold + SDRs + Fgn. Curr. assets held abroad.

Forex Reserve – Gold, SDRs with IMF, Foreign Currency Assets abroad

Forex Markets – No formal place, Ongoing, Opening New Zealand early morning, Closing Dubai late night, US$ is most
traded currency 2 to 3 trillion $ in a day, Players are RBI, Banks, Exchange Houses, Investment Funds, FIs etc. Currencies
most traded in India are US$, GBP, EURO, YEN, Australian $, Canadian $, Dirham(UAE), Dinar(Kuwait), Riyal(Saudi
Arab)

DEPARTMENTS IN AD BRANCH CATEGORY ‘B” :

Deposits
NRE/NRO/FCNR/RLFCD (FCNR with conversion factor for Principal Amt)/ FCLR (Reverse of RLFCD concept)/
EEFC/ RFC/ RFC-D (Fgn Cur kept in this a/c to be converted in 6 months)

Advances
Export - PC/PCFC/PSCFC/PSDL/FBP/FBD/FCBP/FCBD/Advance against DDB/Advance against Undrawn
Balances.
Import – LC/BG, Trade Credits(Buyers/Sellers Credit) Hedging & Derivatives - Forward Contracts, Advising
LC/BG/Buyers Credit etc Statements- XOS,BEF,CRMS,FCRA, Trade Credit Statements, Remittances-
DD/MT/TT/TC/SWIFT- Rapid Fund(CBS Platform)/Flash Remit etc.

Rollout of the foreign exchange platform for retail participants-FX Retail

RBI Dated 06.06.2019 announced the introduction of an electronic trading platform for buying/ selling foreign
exchange by retail customers of banks.

Key features FX Retail Trading platform:

 Target group include individuals, corporates, sole proprietors, partnership firms, NRIs ,
Cooperative societies.
 Target group would have access to interbank USD/INR spot levels and would be able to cover
exchange rate for value delivery today, tom, and spot.
 Trading by the customers will be facilitated by their banks by fixing a trading limit based on
relationship with the customer , conduct of the account, annual forex turnover of the customer
etc.
 Trading limit will be valid up to the date fixed by the category (B) Branch subject to a maximum
period of one year which is to be reviewed by branch from time to time.
 Platform would enable bank to approve customer registration, limit setting, trading branch
mapping, customer exchange margin and swap rates through admin CCIL Portal.
 Trading session to be within current USD/INR Market timings.
Regulatory Authorities for Forex business:
a) Min of Fin/Min of Commerce-policies,
b) DGFT
c) RBI (FEMA, Master Circulars AP (Dir) series),
d) FEDAI-8 rules-Member Banks 92,
e) Bank own policies, procedures, and guidelines.

RBI- (FEMA, Master Circulars AP(Dir) series), Authorized Persons- having license from RBI & Member of FEDAI - to deal in
Foreign Exchange – AD Banks, FFMC (Full Fledge Money Changers) & RMC(Restricted Money Changers), OBU- Offshore Banking
Unit - Operating within the country but regulations not applied. Not to deal in local currency, only can deal in foreign currency, No
CRR/SLR requirements. Our Banks OBU at Nassau, Singapore, Dubai.

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 FEDAI GUIDELINES

Reserve Bank of India directed the banks authorized to deal in foreign exchange business to execute an undertaking
to the effect that they would abide by the rates fixed by FEDAI and other terms and conditions prescribed by FEDAI
for transacting foreign exchange business.

FEDAI Guidelines
a) Formulating uniform Rules and guidelines for ADs ensuring a level playing field for the participants and
harmonizing the interests of ADs.
b) Promoting growth of India‟s external sector in association with RBI and administer a fillip to India‟s
export & Import trade along with various export promotion councils / chambers.
c) Articulating India‟s view point in revisions in the ground rules applicable to International Trade financing,
like Documentary Credits, Collections, etc, by associating with ICC, Paris.
d) Providing training etc., to bank officers in the field of foreign exchange operations, improving in the
process, the quality of customer service.
e) Granting accreditation to brokers and monitoring the broking activity in the inter bank market.
f) Providing guidance, information and issuing guidelines on various aspects of foreign exchange business
matters.
g) FEDAI has issued RULE BOOK - Seventh Edition, effective from 01-05-2012.

IMPORTANT IMPORT DOCUMENTS & THEIR FEATURES:

COMMON DOCUMENTS
A. Bills of Lading:
a) Should indicate the name of the carrier, consignor, consignee, notify party.
b) If issued to order, endorsements is required.
c) Description of goods should not differ from other documents.
d) Must be signed in accordance with the requirements of UCP.
e) Clause “shipped on board”, “on board ” must be there with date and sign.
f) Full set of B/L to be presented as per requirement of the contract/LC.
B. Air Way Bill:
a) To be signed as Carrier or as agent of named carrier.
b) Consigned to the related party.
c) Description should match with other documents.
C. Insurance:
a) Risk covered should appear on face of the policy document.
b) To be issued for minimum 110% of the value of the consignment.
c) To be issued in the same currency specified under the LC
D. Invoice:
a) Shipping terms should be clearly mentioned.
b) To be signed when L/C calls for signed invoices.
c) Goods description (or part thereof) should match as detailed in the credit.
d) Amount should match to that on the bill of exchange.
e) Shipping marks to match with B/L or AWB.
E. Draft
a) Drawn on Bank if under L/C or on the drawee with endorsement in Bank’s favour.
b) Amount in words and figures should tally
c) Drawn at tenor as mentioned in the L/C

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 TYPES OF DOCUMENTARY CREDIT
IRREVOCABLE LETTER OF CREDIT: Once issued the terms and conditions cannot be amended or cancelled
without the agreement of all the parties to the credit. If a credit is silent, the credit is automatically deemed to be
irrevocable. This constitutes the issuing banks
undertaking to effect payment upon production of conforming document.

REVOCABLE LETTER OF CREDIT: This type of credit may be amended or cancelled by the applicant, at any
time, without reference to or consent of the beneficiary. It conveys no engagement to pay the beneficiary and merely
establishes the terms under which the shipment is to take place and the documents required. Banks do not entertain
such Letter of Credits.

UNCONFIRMED LETTER OF CREDIT: Unconfirmed Letter of Credit constitutes undertaking on the part of
Issuing Bank to effect payment to the beneficiary against credit conforming documents. Advising Bank has no
engagement or responsibility as regard payment, even if conforming documents are presented. The Advising Bank
will make a decision on their ability to effect payment at the time of presentation of documents.

CONFIRMED LETTER OF CREDIT: The confirmation constitutes the undertaking of the confirming bank, in
addition to that of the issuing bank, to effect payment, upon presentation at its counters, of credit conforming
documents. The confirming bank undertakes to effect payment to the beneficiary as prescribed in the credit terms on
presentation of credit confirming documents. For this undertaking the beneficiary or the applicant will be required
to pay the “confirmation fee‟ which is, in essence a premium to reflect the extra liability incurred by the confirming
Bank.

REVOLVING LETTER OF CREDIT: Revolving credits are used when the buyer and seller deal with each other
on a regular basis and can be structured to mirror workflow such as production runs or growth seasons. They save
time and effort in not having to apply for a new credit each time one is required. The issuing bank would be expected
to record the maximum liability, which, in the case of a revolving credit, is usually the multiple of its face amount.
Such credits can revolve either by time or by amount In the case of a credit, which revolves by time (which is more
common), a stated amount is available in a given period.

The full amount is than automatically available again when a new period is entered. A credit, which revolves by
amount, is usually expressed as being available up to a fixed amount for any one drawing. If the credit revolves
automatically, the amount drawn immediately becomes available again on the conditions specified in the credit. For
credits, which do not revolve automatically, each installment can only be re-instated by way of an amendment to the
credit. This option gives the importer more control over the operation of the credit. A further variant is a cumulative
revolving credit, which revolves by time, allows undrawn amounts in a particular time period to be carried forward
to a subsequent period. A noncumulative credit means that any undrawn portion cannot be carried forward in this
way.

STANDBY LETTER OF CREDIT: A standby letter of credit performs a similar function to a bank guarantee but is
issued in a format corresponding to that of a documentary credit. Its prime function is to provide a financial remedy
to the seller in the event of non-payment /nonperformance by the buyer.

Like a bank guarantee, a standby credit is payable on first demand, usually against the beneficiary’s simple
declaration on non-payment/non-performance accompanied by minimal supporting documentation. This offers the
beneficiary maximum control over the claims process.

TRANSFERABLE LETTER OF CREDIT: Transferable credits are required when the seller is acting as an agent
in an export order. Part or all of their rights and obligations under the credit are transferred to the actual supplier of
the goods. The credit must be specifically designated as „Transferable”. Unless the credit terms state otherwise, It
may only be transferred once, although, if partial shipments are allowed, portions of the credit may be transferred to
more than one-second beneficiary. The terms of the transferred credit will be the same as the original credit except
that the beneficiary may request the following be reduced or curtailed:
a) Amount
b) Unit price (if any)
c) Latest presentation date
d) Period of shipment

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 BACK TO BACK LETTER OF CREDIT
Under Letter of Credit transactions there are occasions when the beneficiary of the Letter of Credit is not in possession
of the actual material required to be supplied under the Letter of Credit. He has, therefore to procure such material
either from the manufacturer of from another trader. In such a case, it will be necessary for him to open an another
Letter of Credit locally at his end in favour of the concerned manufacturer or trader for supply of goods to himself for
the purpose of shipment under the original Credit. The local Letters of Credit must contain such terms and conditions
which are in conformity with those in the original Letter of Credit so that the documents under the original Letter of
Credit can be negotiated well within the expiry date. Therefore, such Letters of Credit are known as Back to Back
Letters of Credit.

RED CLAUSE AND GREEN CLAUSE LETTER OF CREDIT

Red Clause Letter of Credit is the one which provides for advance payment to the exporter for the purpose of procuring
shipment material and arranging for its actual shipment. The advance given to the exporter in this manner, will be
repaid while tendering export documents at the counters of the Bank which gives advance to the exporter at the
instance of the Letter of Credit opening Bank.
If the Letter of Credit provides for further advance to facilitate temporary storage of goods at the exporters end, the
Letter of Credit will be known as Green Clause Letter of Credit which is only an extension of Red Clause Letter of
Credit.

These Letters of Credit are rarely in vogue in India now a days in view of the existence of Packing Credit facilities
easily available at concessional interest rates to the exporters against lodgement of Letter of Credit or firm orders.
These Letters of Credit are also known as Anticipatory Letters of Credit.

UCP 600

a) Documentary Credit to expressly state that it is subject to UCP 600 and is binding on all the parties to the
credit
b) Bank to handle LC and documents in accordance with the applicable UCP 600
c) Banking Day - Day on which a Bank is regularly open for performance of an act subject to the rules
d) Banker to discourage including contract as integral part of LC as Credit is separate from sale or other contracts.
e) Standard for examination of documents drawn under LC – Bankers have 5 Banking Days following the day of
presentation to determine if presentation is complying
f) When Issuing Bank determines that a presentation does not comply it may at its sole judgment approach the
applicant for waiver of the discrepancies within the time limit of five banking days
g) Banks decide to refuse to honour or negotiate must give a single notice stating refusal, advise list of
discrepancies and that they are holding the documents pending instructions from presenter or that the bank
is returning the documents

IMPORTANT ARTICLES
Art 1
Credit expressly states – it is subject to these rules – it can be either under UCP 600. Credit binding all the parties
unless excluded by the credit
Art 4
Credit v/s. Contract Should discourage any attempt to include contract as integral part – L/C is a separate transaction
from the underlying contract.
Article 5: Documents v/s. Goods, Services or Performance
Banks deal with documents and not with goods, services, performance to which the documents may relate.
Art 9
Advising of Credits and Amendments - By advising an L/C the advising Bank signifies:-
(i) it has satisfied itself as to the apparent authenticity
(ii) the advise accurately reflects the L/C‟s terms and conditions and
(iii) An advising bank may utilize the services of another bank to advise credit – Second advising bank

Art 14
Reasonable Time examination of documents - Maximum 5 Banking days following day of presentation

Art 16 Discrepant Documents: Waiver & Notice

The issuing bank is to decide of its own whether to accept/reject the documents within the period permitted.
Bank may refuse Non complying presentation.
Banks may approach the applicant for waiver (care :- This does not extend the period under
Article 14).

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 If decides to refuse, must give a single notice of refusal to the presenter.
Notice must state
- Refusal to honour or negotiate and
- State each discrepancy and that bank is holding documents pending further instructions or holding documents until
receipt of waiver from applicant and agrees to accept or receive further
instructions from presenter prior to agreeing to accept waiver or Bank is returning the documents or Bank is acting
as per instructions previously received from the presenter.
Notice by telecommunication (if not possible) by other expeditious means not later than the
close of fifth banking day following the date of receipt of documents.
Failure to comply shall preclude from claiming non complying presentations and documents shall be treated as
accepted.
Can claim refund with interest if reimbursement already made.

Article 27: Clean Transport Document

A bank will only accept a clean transport document.
Clean means : bears no clause or notation expressly declaring defective condition of the goods or their packaging. The
Word “clean” need not appear even if credit calls “clean on board”.

ISBP

a) Compliance to be determined by “International Standard of Banking Practice” (ISBP) as reflected in the UCP
Articles.
b) Use of generally accepted abbreviations will not make a document discrepant
c) Corrections and alternations in the documents issued by the beneficiary himself, except draft, which have not
been legalized, need not be authenticated.
d) Corrections and alterations in documents, other than documents created by the beneficiary, must appear to
be authenticated by the party who has issued the document or by a party authorized by the issuer to do so
e) Drafts/transport documents/Insurance document must be dated even if the Credit does not expressly require
so
f) A document indicating a date of preparation and later date of signing, is deemed to have been issued on the
date of signing

General Principles:
Use of generally accepted abbreviations: Use of generally accepted abbreviations should not make a document
discrepant. e.g. ‘Intl.’ instead of ‘International’. Using slash marks (“/”) may have different meaning. Unless apparent
in the context used, slash marks should not be used as a substitute for a word.

Corrections and alterations in the document issued by the beneficiary himself, except draft, which have not been
legalized, need not be authenticated. Corrections and alterations
in documents, other than documents created by the beneficiary, must appear to be authenticated by the party who
has issued the documents or by a party authorized by the issuer to do so. Use of multiple font size / style /
handwritings in the same document does not by itself, signify a correction or alteration.

Dates: Drafts/transport document/Insurance document must be dated even if the credit does not expressly require
so. Any document, including a certificate of analysis, inspection certificate and pre-shipment inspection certificate
may be dated after the date of shipment. However, if a credit requires a document evidencing a pre-shipment event,
the document must, whether by its title or content, indicate the event (inspection) took place prior to or on the date
of shipment. A requirement of inspection certificate does not constitute a requirement to evidence pre-shipment
event. A document indicating a date of preparation and later date of signing is deemed to have been issued on the
date of signing.

Expressions not defined in UCP: There are certain expressions frequently used in documentary credit
transactions, which are not defined in UCP. Some of the expressions are since defined under ISBP:
a) Shipping document: All documents, except draft, required in the credit would be treated
shipping document.
b) Stale documents acceptable: If this term appears in the credit it means that documents presented later than
21 days after the date of shipment are acceptable as long as they are presented within the validity of the credit.
c) Third party documents: All documents excluding drafts but including invoices may be issued by a party other
than the beneficiary. If the issuing bank‟s intent is that the transport documents may show a shipper other than the
beneficiary, the clause is not necessary because it is already permitted in UCP

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 d) Exporting country: Where beneficiary is domiciled and/or the country of origin of the goods and/or the country
of receipt by the carrier and/or the country from which shipment or dispatch is made.
e) Misspelling or typing errors: Any misspelling or typing errors which do not affect the meaning of a word or
the sentence, in which it occurs, do not make a document discrepant. For example, description of merchandise spelt
as “Modle 160A” instead of “Model 160A” will not be treated as discrepancy. However the description “Model 106A”
would not be regarded as typing error and would constitute a discrepancy.
f) Originals and copies: Documents issued in more than one original may be marked “Original”, “Duplicate”,
“Triplicate” or “First Original”. “Second original”, etc. None of these markings disqualify a document as an original.
Each required document must be presented in at least one original, unless the credit allows for presentation of
documents as copies. Where an original would not be accepted in lieu of a copy, the credit must prohibit an original.
E.g. “Original documents not acceptable in lieu of photocopy.”
g) Shipping marks: Containerized goods will sometimes only show the container number under heading of
shipping marks. Other documents that show a detailed marking will not be considered to be inconsistent for that
reason.
h) Signatures: Even if not stated in the credit, drafts, certificates and declarations by their nature requires
signatures. Transport document, Insurance document must be signed in accordance with the provision of UCP.
Certain documents having a signature box do not mean that it requires signature.
Signature need not be handwritten. Facsimile signatures, perforated signatures, stamps, symbols (such as chops) or
any electronic or mechanical means of authentication are sufficient. However a photocopy of a signed documents
does not qualify as the signed original document, nor does a signed document transmitted through a fax machine
absent in original signature.

Title of the document and combined documents: Contents of the document must appear to fulfill the function
of the required document. For example, a credit requiring “Freight Certificate” can be satisfied by a document
containing freight details titled as “Freight Invoice.” If the credit calls for two different documents such as Packing
List, Weight List, such requirement will be satisfied by presentation of two separate documents or by presentation of
two originals of combined “Packing and Weight List” provided such document states both Packing and Weight details.
With the clarifications provided by ICC, Paris, on examination of documents on the basis of practices adopted by
banks it is expected that rejection of documents on certain unspecified issues will be considerably reduced.

INCOTERMS 2020

INCOTERMS means International Commercial Terms, the latest one being 2020. It will come in to effect from 01 st
January 2020. There are total 11 Incometerms in 2020 version.

The expanded form of the 11 INCOTERMS 2020 are:

Applicable for all Modes of Transport
EXW: Ex Works
FCA: Free Carrier
CPT: Carriage Paid To
CIP: Carriage and Insurance Paid
DAP: Delivered At Place
DPU: Delivered at place unloaded.
DDP: Delivered Duty Paid

Only applicable for Sea and Inland Waterway Transport

FAS: Free Alongside Ship
FOB: Free on Board
CFR: Cost and Freight
CIF: Cost, Insurance and Freight

Changes vis a vis Incoterms 2010: DAT (Delivered at Terminal) Incoterm has been removed and DPU (Delivered
at place unloaded) has been added.

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 goods prior to shipment / working
capital expenses towards rendering of services on the basis of letter of credit opened in his favour or in favour of some
other person, by an overseas buyer or a confirmed and irrevocable order for the export of goods/services from India
or any other evidence of an order for export from India having been placed on the exporter or some other person,
unless lodgement of export orders or letter of credit with the bank has been waived.

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 Period of Advance
The period for which a packing credit advance may be given by a bank will depend 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 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.
RBI would provide refinance only for a period not exceeding 180 days.

Disbursement of Packing Credit

a) Ordinarily, each packing credit disbursement should be maintained as separate account for the purpose of
monitoring period of sanction and end-use of funds.
b) Banks may release the packing credit in one lump sum or in stages as per the requirement for executing the
orders/LC.
c) Banks may also maintain different accounts at various stages of processing, manufacturing, etc. depending
on the types of goods/services to be exported, e.g. hypothecation, pledge, etc., accounts and may ensure that
the outstanding balance in accounts are adjusted by transfer from one account to the other and finally
liquidated by proceeds of relative export documents on purchase, discount, etc.
d) Banks should continue to keep a close watch on the end-use of the funds and ensure that credit at lower
rates of interest is used for genuine requirements of exports.
e) Banks should also monitor the progress made by the exporters in timely fulfillment of export orders.
f) For disbursement of Packing Credit facility only RPCTM menu under FINACLE should be used and proper
interest table should be defined for the concessional / sanction period and for overdue period of PC.

Liquidation of Packing Credit

The packing credit/pre-shipment credit granted to an exporter may be liquidated out of proceeds of bills drawn for
the exported commodities on its purchase, discount, etc., thereby converting preshipment credit into post-shipment
credit. 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 A/c (EEFC A/c.) as also from rupee resources of the exporter to
the extent exports have actually taken place. If not so liquidated/repaid, banks are free to decide the rate of interest.

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 from the date of extending credit after shipment of goods/rendering of services to the date
of realisation of export proceeds and includes any loan or advance granted to an exporter, in consideration of, or on
the security of any duty drawback allowed by the Government from time to time. As per the current RBI guidelines,
the period prescribed for realization of export proceeds is 9 months from the date of shipment for all category of
exporters except those having warehouse facility abroad.

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. (PSDL)
(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) as also from proceeds
of any other unfinanced (collection) bills. Such adjusted export bills should however continue to be followed up for
realization of the export proceeds and will continue to be reported in the XOS statement.
In order to reduce the cost to exporters (i.e. interest cost on overdue export bills), exporters with overdue export bills
may also extinguish their overdue post shipment rupee export credit from their rupee resources. However, the
corresponding EDF form will remain outstanding and the amount will be shown outstanding in XOS statement. The
exporter’s liability for realization would continue till the export bill is realized.

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 Deemed Exports
PCFC may be allowed only for ‘deemed exports’ for supplies to projects financed by Multilateral /bilateral
agencies/funds. PCFC released for ‘deemed exports’ should be liquidated by grant of foreign currency loan at post-
supply stage, for a maximum period of 30 days or up to the date of payment by the project authorities, whichever is
earlier. PCFC may also be repaid/ prepaid out of balances in EEFC A/c. as also from rupee resources of the exporter
to the extent supplies have actually been made.
73Deemed Exports are further not covered under Interest Equalisation scheme declared by Government of India.

Other Aspects
a) The applicable benefits such as credit of eligible percentage of export proceeds to EEFC Account etc., to the
exporters will accrue only after realisation of the export bills and not at the stage of conversion of pre-
shipment credit to post-shipment credit (except when bills are discounted / rediscounted 'without
recourse'). Surplus of export proceeds available after adjusting relative export finance and credit to EEFC
account should not be allowed for setting-off of import bills.
b) ECGC cover will be available in rupees only, whereas PCFC is in foreign currency.
c) For the purpose of reckoning banks' performance in extending export credit, the rupee equivalent of the
PCFC may be taken into account.

Interest Rates on Export Credit in Foreign Currency

Banks are free to determine the interest rates on export credit in foreign currency with effect from May 5, 2012. Vide
circular No. BCC:WB:DFB:103/94 dated 16.11.2011 Bank has advised the rate of interest to be charged on Export
Credit in Foreign Currency. Rate of Interest on Export credit in Foreign Currency (Pre shipment & Post Shipment)
i.e. PCFC / PSCFC has been revised from time to time.

With a view to enable the branches to canvass more business at competitive pricing, the existing rate of interest on
PCFC / PSCFC to MSME exporters for pre shipment and post shipment finance vide agenda no A-3 of Credit Policy
Meeting dated 19.10.2019 has been revised. The revised rates will be applicable to fresh disbursements of
PCFC/PSCFC.

Interest Equalisation Scheme on Pre & Post Shipment Rupee Export Credit with effect from 1st April,
2015 for five years

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given
its approval for Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on Pre & Post Shipment
Rupee Export Credit with effect from 1st April, 2015 for five years. The scheme will be evaluated after three years.

The following are the features of the Interest Equalisation Scheme:

(i) The rate of interest equalisation would be 5 percent. The scheme would be available to all exports of MSME

and 416 tariff lines. Scheme would also be available to merchant exporters but the rate of interest

equalisation applicable to them would be 3 percent.

(ii) The duration of the scheme would be five years with effect from 1.4.2015.

(iii) The scheme would be funded from the funds available with Department of Commerce under non-plan during

2015-16 and the restructured scheme would be funded from plan side from 2016-17 onwards,

73
BCC:CIC:DFB:110/460 Dated 14.09.2018

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 (iv) Ministry of Commerce & Industry may place funds in advance with RBI for requirement of one month and

reimbursement can be made on a monthly basis through a revolving fund system,

(v) On completion of three years of operation of the scheme, Department of Commerce may initiate a study on

impact of the scheme on export promotion and its further continuation. The study may be done through one

of the IIMs.

The scheme will help the identified export sectors to be internationally competitive and achieve higher level
of export performance.

The scheme covers mostly labour intensive and employment generating

sectors like processed agriculture/food items, handicrafts, handmade carpet (including silk), handloom
products, coir and coir manufactures, jute raw and yarn and other jute manufactures, readymade garments and made
ups covered under Chapter 61-63, fabrics of all types, toys, sports goods, paper and stationary, Cosmetics and Toiletries,
Leather Goods and footwear, Ceramics and Allied Products, Glass and Glassware, Medical and Scientific Instruments,
Optical Frames, Lenses, Sunglasses Etc., Auto Components/Parts, Bicycle & Parts, Articles of Iron or Steel (Notified
lines), Misc. Articles of base metals (Notified lines), Industrial Machinery, Electrical and Engineering items, 1C Engine,
Machine tools, Parts (Notified lines), Electrical Machinery and Equipment (Notified lines), Telecom Instruments
(Notified lines) and all items manufactured by SMEs other than those covered above.

7475It
has been decided by the Government of India to increase w.e.f. November 02, 2018 Interest Equalisation
rate from 3% to 5% in respect of exports by the Micro, Small & Medium Enterprises (MSME) sector manufacturers
under the Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit.

76Further it has been decided by government of India to include merchant exporters also, w.e.f. Jan 2, 2019,

under the ongoing Interest Equalisation scheme for Pre and Post shipment Rupee Export Credit and allow them
Equalisation at the rate of 3% on credit for export of products covered under 416 tariff lines identified under the scheme.

ECGC COVER FOR EXPORT FINANCE

Our Bank has renewed the Export Credit Insurance Cover with ECGC Ltd as under:
a) Whole Turnover - Packing Credit i.e. ECIB (WT-PC) under Guarantee NO. 5037 dated 19.10.2019 and
b) Whole Turnover –Post Shipment i.e. ECIB (WT-PS) under Guarantee No. 120 dated 19.10.2019.
Both policies are valid for the period from 01.07.2019 to 30.06.2020.
(Bank Renews Policy every year, hence, latest circular of the bank to be referred for updated details
– latest circular is BCC:BR:111/564 dated 29.10.2019 as on date)

Salient features of the ECIB:

The salient features of the guarantee scheme are as under:
1. Advances Covered and Excluded:
a. Pre Shipment advances
i) Advances Covered:
All Pre-shipment advances granted by all branches in India whether called Packing Credit,
pre-shipment credit, shipping loan or by any other name as per RBI guidelines are covered under
the policy for all exporters other than the excluded advances.
ii) Advances excluded:
a. Advances granted for exports made on deferred terms of payment, turnkey projects,
construction works and service contracts.

74
RBI/2018-19/81 Dated 29.11.2018
75
BCC:BR:110:579 Dated 30.11.2018
76
BCC: BR: 111/29 Dated 14.01.2019

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 b. Advances granted by OBU.
c. Advances granted to exporters against their export entitlements like Duty Draw back, Cash
compensatory support (CCS) etc., at Pre-shipment stage.
d. Advances granted to Government Companies*
e. Advances granted to any exporter in the Specific Approval List (SAL) or any of the exporting
units in which any of the persons (Proprietor / Partner/Director/Guarantor) contained in the
list are connected, will not be covered under policy unless prior approval of ECGC has been
obtained.
f. Advance to exporter in respect of exports where payments are to be received from Restricted
Cover Countries (RCC) will not be covered under policy unless prior approval of ECGC
has been obtained.
g. Fresh limits or enhancement in limits sanctioned to exporter dealing in Gems, Jewellery &
Diamonds (GJD) on or after 01.03.2014 are excluded from cover under ECIB –WTPC (*
Government company means any company in which not less than 51% of the paid up share
capital is held by the Central or by any State Government or Governments or partly by the
Central Government and partly by one or more State Government and includes a company
which is a subsidiary of a Government company.)
It is however open for branches to obtain Export Credit Insurance for Banks (Individual Packing Credit) i.e. ECIB (IN-
PC) separately for each account falling under the above mentioned excluded categories of advances.

b. Post-Shipment Advances:
i) Advances Covered:
All Post-shipment advances granted by all branches in India as per RBI guidelines, by way of
purchase/discount/negotiation of export documents or advances granted against documents sent
on collection basis are covered under the policy other than the excluded advances.
ii) Advances excluded:
a) Advances granted against exports under Letters of Credit.
b) Advances granted for exports made on deferred terms of payments, turnkey projects,
construction work and service contracts.
c) Advances granted by Off shore Banking Units. {OBU means a branch of a bank in India located
in the Special Economic Zone and holds an authorization issued under clause (a) of sub-section
(1) of Section 23 of the Banking Regulation Act 1949}
d) Advances granted to exporters against their export entitlements like CCS (Cash Compensatory
Support), DDB (Duty Draw Back).
e) Advances granted to Government Companies.
f) Advances granted to any exporter in the Specific Approval List (SAL) or any of the exporting
units in which any of the persons (Proprietor/Partner/Director/Guarantor) contained in the list
are connected, will not be covered under policy unless prior approval of ECGC has been obtained.
g) Advance to exporter in respect of exports where payments are to be received from Restricted
Cover Countries (RCC) will not be covered under policy unless prior approval of ECGC has
been obtained.
h) Fresh limits or enhancement in limits sanctioned to exporter dealing in Gems, Jewellery &
Diamonds (GJD) on or after 01.03.2014 are excluded from cover under ECIB –WTPC It is
however; open for the branch to obtain Export Credit Insurance for Banks (Individual Post
shipment) separately for each account falling under the above excluded categories of advances.
For excluded categories except advances granted to Government Companies, premium rate will
be as applicable to ECIB (INPS). In respect of Government Companies, branch can opt for Export
Credit Insurance for Banks (Export Finance) ECIB (EF) for an exporter but the benefit of cover
and premium rate as applicable to ECIB (WT PS) will be available under the ECIB (EF).

Maximum Liability:-
The maximum liability up to which claims will be paid by ECGC Ltd to Bank of Baroda for Packing Credit Advances
granted during the ECIB cover period of one year is Rs.1650 Crores (Rupees One thousand Six Hundred and Fifty
Crores) and for Post Shipment Advances granted during the period is Rs.1320 Crores (Rupees One thousand three
hundred and Twenty Crores).

4. Cover for new accounts and Discretionary Limit:

All new exporter customers under Pre & Post Shipment Export Credit limits not exceeding Rs.300 lakhs sanctioned
by the bank, in accordance with its rules and procedures in this regard, will be eligible for cover under the policy by
ECGC without any specific application (except a notification of such limits in prescribed format to be filed
within 30 days of sanction) subject to the terms and conditions of ECIB.

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 For any limit, above the discretionary limit of Rs. 300 lacs, sanctioned to new exporter customer, prior
approval of ECGC is necessary. However, accounts of exporters classified as standard assets as per RBI norms do
not require prior approval of ECGC , if the exposure of the bank against PC/ Post-Shipment limits of the bank under
sole banking or of all banks under consortium / multiple banking arrangement sanctioned to the exporter and its group
concerns is less than Rs.200 crores. These accounts should be notified to the ECGC’s nearest office within 30 days from
the date of sanction / enhancement of limit. Accounts classified as standard assets where bank’s exposure on the
exporter or exporter’s group is Rs 200 crores or more and assets classified as sub-standard, bad & doubtful require the
prior approval of ECGC irrespective of the limit.

Pre-shipment accounts which are in default (NPA) as on the date of commencement of ECIB [applicable
for fresh ECIB (WT-PC)] will not be covered under ECIB (WT-PC) but will continue to be covered under
ECIB (IN-PC), if branch has obtained such ECIB. Once these accounts become regular they can be
covered under ECIB (WT-PC).Please note that the accounts which are in specific approval list(SAL) of
the corporation as on the date of commencement of cover or those that are placed in SAL during the
cover period, will not be covered under ECIB-WTPC, unless prior specific approval is obtained from
ECGC.

Post shipment accounts which are in default (NPA) and bills which are remaining overdue as on the date of
commencement of the ECIB cover [applicable for fresh ECIB (WT-PS)] will not be covered under ECIB (WT-PS) but
will continue to be covered under ECIB (IN-PS), if branch has obtained such ECIB. Once these accounts become regular
and the advances against overdue bills are liquidated, they can be covered under ECIB (WT-PS), Please note that the
accounts which are in Specific Approval List (SAL) of the corporation as on the date of commencement of cover or those
that are placed in SAL during the cover period, will not be covered under ECIBWTPS, unless prior specific approval is
obtained from ECGC.

The guarantee will come up for renewal on 01.07.2020.

Branches are also advised to ensure that limits of all the borrowers are notified / approved by ECGC.
77ECGC Coverage on Pakistan has been withdrawn with immediate effect from 09.08.2019.
78Following countries are categorized by ECGC as countries in “Restricted Cover-Group II” where specific approval
will be given on a case to case basis. with D Rating representing Very High Risk.

Sudan, South Sudan, North Korea, Palestine, Syria, Venezuela, Western Sahara, Zimbabwe.

Export credit insurance for banks (ECGC cover) –

Do’s
a) Comply with all Bank sanction terms and conditions before disbursement of advances.
b) Obtain necessary approvals from competent authority for any deviations/dilutions in sanction terms.
c) Verify whether exporter or its partners/directors/sister concerns etc are not in ECGC‟s Specific Approval List
/ RBI caution list etc, prior to disbursement of advances. Obtain prior approval of ECGC LTD if the exporter
and /or its partners/directors /guarantors/sister concerns are in SAL before granting the advances
d) Ensure to obtain ECGC approval for any limits sanctioned to an account which is classified Doubtful /Loss
Asset.
e) Obtain ECGC approval for any limits sanctioned to an account, if the account is “NEW” to the Bank and the
sanctioned limit exceeds the Discretionary Limit (currently Rs.300 Lacs)
f) Obtain ECIB individual covers for fresh/ enhancement in limits sanctioned on or after 01.03.2014 to exporters
dealing in Gem Jewellery & Diamond (GJD) as cover is not available under ECIB-WTPC/WTPS for such
accounts. However limits sanctioned prior to 01.03.2014 may be covered under WTPC/WTPS.
g) Ensure to obtain 20% collateral security /additional collateral security for the fresh / incremental limits
sanctioned on or after 01.07.2013 for the exporters dealing in GJD.
h) Sanction and intimate to ECGC LTD specific Pre- Shipment limits, not to be combined with Cash Credit limits
(even if combined in their sanction, Bank to intimate ECGC LTD of the exact PC limits). Banks may approve
combined limits only in exceptional cases, where there is a dire need for such kind of fungibility, for
operational convenience. Where banks do not indicate the exact PC limit, obtain prior approval of ECGC LTD,
in case the component of PC limits (out of CC) exceeds Rs 25/- crores or 25% of the combined limit (CC+PC),
in respect of exporters dealing in any commodity.
i) Obtain prior approval of ECGC LTD irrespective of the Asset Classification, where the exporter has diversified
into unrelated business activities, wherein the share of unrelated business activity is equal to or more than
10% of the Export Turnover. This shall be applicable only for exporters whose export turnover is equal to or

77
BCC:BR:111/438 Dated 03.09.2019
78
BCC:BR:111/617 Dated 22.11.2019

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 more than Rs.500 crores (The term “Unrelated business activities” is clarified as a shift from the exporter‟s
normal /traditional business activity (in terms of commodities), as defined by Indian trade Classification
based on Harmonised System [ITC (HS)] which is followed by Indian Customs and allied agencies and adopted
for all Import /Export operations. Merchant Exporters would be kept out of the purview of the above
requirement.
j) Obtain prior approval of ECGC LTD irrespective of the Asset Classification of the account, where per Buyer
limit / exposure exceeds Rs.100 crores (Rs.50 crores each under PC & PS) per Buyer. (The limit of Rs.50/-
crores is 100% interchangeable).
k) Notify any change in asset classification already covered under ECIB.
l) Notify sanction/change in limits to ECGC before disbursement of advances within the prescribed time.
m) Ensure to submit monthly declaration of advance along with due premium, within prescribed time. Submit
NIL declaration for any account, if no premium is due.
n) Notify any irregularity in the account in time to ECGC.
o) Seek approval of ECGC for extension of due date of overdue advances as per guidelines.
p) In the case of running account facilities, ensure to route all the Bills through PC account.
q) Ensure availability of stocks for the outstanding advances, validity of orders/LCs and that there are no
overdues before adjusting the proceeds against bills on collection , in case of “order to order” accounting
r) Obtain periodical stock statement, order copies and conduct stock inspection/stock audit as per sanction
terms.
s) Ensure Drawing Power at the time of release of PC
t) Ensure end use of funds.
u) Obtain ECGC LTD approval before sanctioning post shipment advances against bills drawn on buyers in
restricted cover countries of ECGC LTD, unless the exporter has obtained such approval under the credit
insurance policy issued to them.
v) Verify the Buyer Specific Approval List (BSAL) of ECGC (Electronically through ECGC Web site) and ensure
that the buyers on whom bills are drawn do not figure in the BSAL, prior to granting advances at post shipment
stage.
w) Obtain satisfactory ,(satisfactory credit report means a credit report to be satisfactory by the internal
guidelines and practices, in observation of due care, prudence and due diligence , authorized by bank‟s
Management /Board) recent credit reports (not more than one year old) on overseas buyers from reputed
Credit Information Agencies , prior to extending credit against bills drawn on overseas buyers, under Post-
shipment (PS).
x) Ensure that the Exporter, who had obtained ECGC insurance policy covers, comply with policy conditions with
regard to obtention of credit limits on buyers, timely submission of declaration with premium and timely
reporting of non payments from buyers.
y) Obtain ECGC prior approval for nursing/re-structuring the accounts.
z) Submit report of default in time.

DON’Ts
a) Don’t disburse advances without proper approvals/delegation.
b) Don’t give further advances when earlier advances are overdue, without proper justification and approvals
from competent authorities.
c) Don’t give advances when firm/proprietor/partner/director/guarantor/ sister concerns are in our SAL
without ECGC approval.
d) Don’t grant Post Shipment advance if the buyer‟s name is appearing in the Buyer Specific Approval List
(BSAL) without prior approval of the corporation.
e) Don’t exclude any account in the monthly declaration (except those that are specifically agreed to be excluded
at the time of obtention/renewal of cover)
f) Don’t give advances for other than export purposes.
g) Don’t enter into OTS/CDR etc without the concurrence of ECGC
h) Don’t give PC/PS advances for adjusting other liabilities.
i) Don’t discount/purchase/negotiate bills on buyers whose earlier bills are outstanding and overdue
j) Don’t grant Post Shipment advances without obtaining recent and satisfactory credit opinion report on the
overseas buyer from reputed credit information agencies.
k) Don’t deviate from sanction terms.
l) Don’t fail to obtain prior approval of limits , wherever required.

EXCHANGE RATE MECHANISM

Exchange Rate is the price of a unit of one currency expressed in terms of another currency. Exchange rates are quoted
in two ways - Direct Rates and Indirect Rates.

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 Reserve Bank of India does not deal directly with the customers (Customer includes importers, exporters, remitters,
beneficiaries of remittances etc. popularly known as merchants). It has appointed Authorized Dealers' to deal in Foreign
Exchange on behalf of these merchants. Rules and regulations related to exchange rates are framed by FEDAI. The
exchange rates quoted to these merchants are known as Merchant Rates.

a. Direct Quotations:
Under a system of Direct Quotations, the exchange rates are quoted where the unit(s) of foreign currency remains
constant, and the home currency units fluctuate : i.e. US $ 1 = Rs. 55.10

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/- = US $ 1.8150

In India, we follow the direct method of quoting exchange rates since August 1993.

Base Rate:
It is to be applied for arriving at Merchant Rates and is calculated from the ongoing spot Market Rates for each of the
currencies. Merchant Spot TT Sale and TT Purchase rates are calculated based on the "Base Rates". Banks are free to
load exchange margins as per their policies for the transactions.

1. TT Selling Rate: Base Rate + Exchange Margin

2. Bill Selling Rate: Base Rate + Exchange Margin +Handling Charges
3. TT Buying Rate: Base Rate - Exchange Margin
4. Bill Buying Rate: Base Rate +/- Forward Premium/Discount depending upon transit period, tenor of bill -
Exchange Margin
5. Forward Selling Rate: Base Rate +/- Premium/Discount depending upon transaction and delivery period +
Exchange Margin
6. Forward Buying Rate: Base Rate +/- Premium/Discount depending upon transaction and delivery period -
Exchange Margin

DERIVATIVES

Derivatives are fundamentally contingent contracts whose values are derived from some underlying financial
instruments like currency, bonds, stock indices, interest rates, commodities, etc. Generally, derivatives can be devised
upon any underlying asset whose future price movements are uncertain. Derivatives have the characteristic of
Leverage or Gearing. With a small initial outlay of funds (a small percentage of the entire contract value) one can deal
in big volumes.

Functions of Derivatives :
i. Derivatives shift the risk from the buyer of the derivative product to the seller and as such are very effective
risk management tools.
ii. Derivatives improve the liquidity of the underlying instrument.
iii. Derivatives perform an important economic function viz. price discovery.
iv. They provide better avenues for raising money.
v. They contribute substantially to increasing the depth of the markets.

Types of Derivatives :
Derivatives based on the principle of locking a particular price are termed Linear Derivatives. Example - Forward
Contracts, Forward Rate Agreements, Financial Futures and Interest Rate Swaps.
Options are non-linear derivatives as there is no linear relation in its payoffs.
Derivatives are financial instruments whose value depends upon the value of an underlying. In contrast with equities,
derivative instruments have a pre-determined finite life at the end of which they expire, and usually involve an
exchange of payments, which is small in comparison with the notional underlying value of transactions. They are
essentially financial abstractions whose value is derived mathematically from the changes in the value of the
underlying. The underlying can be interest rates, commodities, stocks, stock portfolio or index or basket of currencies
and literally anything.

Origins of Derivatives
The origin of derivatives can be traced to early 1970s when the Brettonwoods system failed resulting in inflation,
volatile interest rates and currency turmoil. During the Brettonwoods era, there was relative currency stability in as
much as most of the currencies had fixed parity. But break down of the system and the announcement of President

Page 466 of 502

 Nixon that $ would no longer be converted into gold in August 1971, effectively marked the end of the Brettonwoods
system. Consequently, in large multi-nationals i.e. the banks and corporations were required to hedge themselves
against volatile interest and currency rate movements in the international markets. This desire has laid the seeds for
the development of derivatives.

Today, the dealing in derivatives exceed an amount of US $ 1 trillion per day, which is astronomical considering the
fact that the industry is hardly 25 years old. There are several factors that have contributed to the explosive growth
in derivatives some of which are world-wide inter-linking of trade and capital flows, progress in communication and
technology, tremendous advancement in computer technology and increasing professionalization among market-
makers. In this context, it is to be appreciated that the use of science and mathematics has helped to break down the
risks to their elemental parts and measure the same. This has led to the birth of the financial engineering profession.

Consequently, the techniques for measuring and monitoring of risks are getting more sophisticated by the day
enabling the hedge seekers to hedge individual risks separately. In fact, the financial engineering profession has been
linked to “nuclear finance” and is said to be as demanding as astro-physics.

Types of Derivatives: Derivatives can be broadly classified into two types.

a) Exchange Traded products and
b) Over-the-counter (OTC) products.

Exchange traded products are those which are traded under the rules and regulations of a centralized market place.
Consequentially, these are highly standardized in terms of various characteristics like amount, maturity, etc.

OTC products are those which are traded over-the-counter and normally settled by bilateral agreements on an
individually negotiated basis. In other words, OTC instruments are contracts negotiated between two principals away
from an organized exchange although a broker may act as an intermediary. These are essentially products, which are
tailor made for the specific needs of the individual customers. In other words, they are customized derivative products
specially designed by the financial engineers to counter the specific risks faced by individual customers.

There are basically five types of derivatives, instruments.

a) FORWARDS
b) FRAs
c) SWAPS
d) FUTURES
e) OPTIONS

While Futures are exchange traded products, options and swaps are essentially OTC products.
FUTURES contract is an agreement to buy or sell on the exchange, a standard quantity of foreign currency/any
underlying asset at a future date at a price agreed to between the parties to the contract.

SWAP is a contractual agreement in which two parties called counter parties agree to make (exchange) periodic
payments to each other. Swaps are the most versatile among the derivatives products and there are literally
innumerable types thereof. The most common type of Swap is “Fixed-For-Floating Swap”, popularly known as Plain
Vanilla Swap.

OPTIONS, simply speaking, represent a right without an obligation. More precisely, a buyer of an option has a right
without an obligation. Options are traded both on exchanges (listed options) and Over-the-Counter (OTC Options)

Options:
An Option contract is essentially a contract between two parties wherein one party buys the right to sell or buys a
given underlying at a future date at a pre-agreed price and the other sells this right. This means options are basically
forward contracts on rights. In other words, they are simply insurance products against adverse movements in the
market prices.

The right to buy an underlying is called a Call Option and the right to sell the underlying is called the Put option.

The option which can be exercised by the buyer only on the date of maturity is called an European Option. It can be
exercised only on expiry date.

American Option is the Option which can be exercised on any working day before the maturity or on the maturity
date. It can be exercised any time before the expiry date.

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 Call Option – gives right to a holder to buy an underlying product at pre-fixed rates on a specified future date

Put Option – gives a similar right to the holder to sell at a pre-fixed rate on a specified future date or during a specified
period Pre-fixed rate is known as Strike price Specified time is known as expiry date.

Currency Option – gives the right to the holder of the option to buy or sell a currency at strike price on expiry date.
Put Option – right to sell the currency at strike price. Call Option – right to purchase the currency at strike price
Options are exercisable on expiry 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. It may be noted here that a CAP is nothing but a series of Call options on interest Rate.

Types of Rates:
a) Cash / Ready: When the deal is entered into and its settlement is done on the very same day (T + 0)
b) TOM: When the deal is entered into but the settlement is done on the next working day
c) “TOM.” (T + 1)
d) SPOT RATE: Where the cash settlement is to take place after two working days from the date of contract. (T
+ 2)
e) FORWARD RATES: All exchange rates quoted where the cash settlement is to take place beyond 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".
Premium: Premium is a value of exchange in excess of spot rate. In relation to forward contract 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 contract 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. A similar procedure is followed when working out the Forward Rates
for quoting to customers who desire to enter into Forward Sale/Purchase contracts with the bank. The
forward premium/discount for each currency is taken into account and the rate for the required
forward period is arrived at.

Forward exchange contracts by authorized branch can be entered into only through SITB, Mumbai.

Share of Exchange: Treasury Branch passes on the share of profit on exchange transaction done by Authorised
Branches to respective authorised 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.

Cross Rate: The rate of exchange between two currencies which are foreign to the local centre is called "Cross Rate".
Rates against US Dollars are not normally regarded as cross rates by dealers, as all other rates are based on these
quotations.

Liberalised Remittance Scheme (LRS) of USD 2, 50,000 for resident individuals

1. 79Under the Liberalised Remittance Scheme, Authorised Dealers may freely allow remittances by resident
individuals up to USD 2, 50,000 per Financial Year (April-March) for any permitted current or capital account
transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts,
etc.
2. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions. During
the period from February 4, 2004 till date, the LRS limit has been revised as under:

Amount in USD)

79
BCC:LCB:DFB:107/45 Dated 02.06.2015

Page 468 of 502

 Feb 4, Dec 20, May 8, Sep 26, Aug 14, Jun 3, May 26,

Date

2004 2006 2007 2007 2013 2014 2015

LRS

limit 25,000 50,000 1,00,000 2,00,000 75,000 1,25,000 2,50,000

(USD)

3. The Scheme is available to all resident individuals including minors. In case of

remitter being a minor, the Form A2 must be countersigned by the minor’s natural guardian.

4. Remittances under the Scheme can be consolidated in respect of family members subject to individual family
members complying with its terms and conditions. However, clubbing is not permitted by other family members
for capital account transactions such as opening a bank account/investment/purchase of property, if they are not
the co-owners/co-partners of the overseas bank account/ investment/property. Further, a resident cannot gift to
another resident, in foreign currency, for the credit of the latter’s foreign currency account held abroad under
LRS.

5. All other transactions which are otherwise not permissible under FEMA and those in the nature of remittance
for margins or margin calls to overseas exchanges/ overseas counterparty are not allowed under the Scheme.
6. The permissible capital account transactions by an 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; 5acquisition of qualification shares of an overseas company
for holding the post of Director; acquisition of shares of a foreign company towards professional services
rendered or in lieu of Director’s remuneration; 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, 20136.

7. The limit of USD 2,50,000 per Financial Year (FY) under the Scheme also includes/subsumes remittances for
current account transactions (viz. private visit; gift/donation; going abroad on employment; emigration;

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 maintenance of close relatives abroad; business trip; medical treatment abroad; studies abroad) available to
resident individuals under Para 1 of Schedule III to Foreign Exchange Management (Current Account
Transactions) Amendment Rules, 2015 dated May 26, 2015. Release of foreign exchange exceeding USD
2,50,000 requires prior permission from the Reserve Bank of India.

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 15. Finacle Menus –
Sr No. Menu option Flow
Customer ID related menus
1 CRLC Creation of retail customer id
2 VRC Verification of retail customer id
3 MRCR Modification in retail customer id
4 VRCM Verification of modification done in customer id
5 CCCR Creation of corporate customer id
6 VCCR Verification of corporate customer id
7 MCEC Modification in corporate customer id
8 VCCM Verification of modification done in customer id
Important Reports
1 BOBMENU Collection of various reports
2 HEXCPRPT Exceptional Report-financial, non-financial , By a Sol id, on a sol id
3 JOTRPT Report to generate Signature pending to be scanned
4 HCHGIR Report on charges collected
5 HMSGOIRP Outstanding entries in Sensitive accounts
6 HBCREPRT Bankers cheque reconciliation report
7 HDDP DD printing report
8 HDDIR DD issue report – Not paid option
9 HISRA Inventory status report – All Inventory in Finacle
10 HSVALRPT Report to view pending task before day end
Common Operation menus
1. HACLINQ Details of accounts along with balance
2. HCUACC Closed accounts details
3. HCUSUM Customer Summary
4. HABI Average balances in account
5. HGCHRG Collection of charges in account
6. HACXFRSC Transfer-scheme code of account
7. HINTTM Modify in ROI in FDR accounts
8. HACXFSOL Transfer the accounts to another branch
9. MBKXFSOL Transfer the accounts to another branch initiated through Mobile banking
10. DORACTR Report on dormant to active accounts for last 3 months
11. DOBVER Entering of date of birth for customers
12. CUSTMOD Modification in customer constitution
13. HDEPMOD Deposit modelling
14. HCCA Change of Customer ID for an account
15. HCUSBALP Customer ID, A/c No. , from to date

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 16. HPSP Pass Sheet Printing of Savings ,Current Account for a customer
17. HACLPOA Printing of transaction details for office accounts
18. HTDTAX TDs deducted in FDR account
19. HACSP OUTSTANDING Balance IN SENSITIVE ACCOUNTS
20. HAFSM A/c. Freeze Status Maintenance
21. FORM60 FORM 60 DECLARATION – Choose purpose
22. CFFDPSP Flexi Fixed Deposit Pass Sheet Print
23. FINDCUST Find Customer Details
24. HTDREN Term Deposit Renewal
25. HTDEXT Term Deposit Extension
26. COEXST Transaction in A/c of Amalgamated Bank
27. TDSCON TDS CONCESSION
28. HTDSCALC Tax Deducted at Source Calculation
29. HINTCERT Interest Certificate Print
30. HCAACTD Account Closure - Deposit Accounts
31. HOPNACCT QUICK CIF AND ACCOUNT CREATION
32. HPORDM Maintain Payment Order
33. HSSIM Standing Instruction Maintenance
34. MTSSA Maintain Transactions for Special Savings Accounts
35. DCARDBLK Blocking of Debit Card
36. HACM Customer A/cs Maintenance
37. CA118 CBDT e-Tax Payment Module
38. ASBATRAN ASBA Application Maintenance
39. CDLSM DBTL Consumer Id Status Maintenance
40. SSPBP Self-Passbook printing
41. APY Atal Pension Yojana
42. HCHBM Chequebook maintenance – Destroy, Caution
43. HICHB Issue cheque Book (Suggested – for emp code)
44. HSVALRPT Check EOD Validations -Pending entries before day end
45. HSPP Stop Payment Process
46. PMY Social Security Schemes Insurance Enrolment
J- Jeevan Jyoti S – Suraksha Bima
47. KVPNSC e-KVP/e-NSC ACCOUNT OPENING/CLOSURE
48. OSSA Open Special Savings Account – SB155 – Sukanya Samriddhi
Menu Description
49. HLINTTM For change of Interest Rate in Loan Accounts (LAA )
50. HINTTM For change of Interest Rate in CC/OD Accounts
51. HLASPAY For Crediting Loan Accounts .Function-Payment from operative A/c.
52. HLAUPAY Loans Unscheduled Payment
53. CAACLA For closure of Loan Accounts LAA Type.

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 54. HCRV For viewing any type of particulars of CC/OD/LAA Accounts.
55. HCLL For finding Collateral Id …Collateral Look Up
56. HCLM For lodgement, Substitute, Modify of Stocks, Book debts etc., in CC Accounts.
57. HSCLM For linking, Unlinking of Collateral Id to/from CC/LABOD/ODBOD Accounts.
58. HGCHRG For collection of Other charges in Loan Accounts from Operative Accounts.
59. GSTTM Incidental charges – Income Heads
60. CCXLGST Reversal of charges
61. HLAFACR For assessment of Processing Charges in loan Accounts.
62. CGENUPL For collecting charges viz., Insurance, Valuation, Legal etc., from NPA
Accounts.
63. EDULOANM Fin 7 Menu-ELIS is replaced by EDULOANM.
64. HACMLA For Modification in Loan Accounts
65. HLPAYH Payment History
66. HLRPSI Loan Repayment Schedule
67. HLAOPI Loans Overdue Position Inquiry
68. HPAYOFF Loan Pay Off Process
69. HLARSH Loans Repayment Schedule Report
70. HLAMOD Loan Modelling
71. HLADISB Loan Disbursement
72. HASSCR Asset Classification Report
73. NPARPT NPA Report
74. UPGACC Upgradation of A/c report
75. NPATM Transactions in NPA account
76. NPATMRV Reversal of transaction in NPA A/cs
77. BSASCL BSASCL – For upgradation of A/cs
78. WOFF Write Off
79. HCULI Customer Unutilized Limit Inquiry
80. HACTODM Account TOD Maintenance
81. INTCERHE Housing Loan interest
82. HACDMTR A/Cs Due For Mid Term Review
83. HLARA Loan Amendment and Rescheduling
84. OGM Outward Guarantee master maintenance
85. HBGLIMIT Guarantee Limit
86. HSMM SFMS msg maintenance
87. HLNM Limit Node Maintenance
88. HLTL Limit Tree Lookup
89. HCULI Customer Unutilized Limit Inquiry
90. CGPAN CGTMSE – Capturing data in Finacle - BCC/BR/110/449 03.09.18
91. UFTI Verification of unverified entries of previous days - HO/BR/111/55 07.03.19
92. HBAIM Insurance - BCC/BR/110/196 17.04.18

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 93. HBAIM Sarfaesi - BCC/BR/110/289 07.06.18
94. CCMSTM Adhoc Statement - HO/BR/110/233 28.11.18
95. HPLNPA Charges collection in NPA A/c - BCC/BR/111/462 19.09.2019
96. HDDBP Demand Draft(DD) Printing
97. HDDLOST DD lost reporting
98. HDDSM DD Status Maintenance
99. DCISS Debit Card Reissuance
100. FASSET Fixed Asset Menu
101. VENPAY Vendor Payment
102. UNCHQ Undelivered Cheque Book

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 GOVERNMENT BUSINESS

Page 475 of 502

 16. Government Business

What is Government Business?

RBI's role with regard to conduct of Government's banking transaction

In terms of Section 20 of the RBI Act 1934, RBI has the obligation to undertake the receipts and payments of the Central
Government and to carry out the exchange, remittance and other banking operations, including the management of the
public debt of the Union. Further, as per Section 21 of the said Act, RBI has the right to transact Government business of
the Union in India.
State Government transactions are carried out by RBI in terms of the agreement entered into with the State Governments
in terms of section 21 A of the Act. As of now, such agreements exist between RBI and all the State Governments except
Government of Sikkim.

Reserve Bank of India discharging its statutory obligation of being 'Banker to Government’

Reserve Bank of India maintains the Principal Accounts of Central as well as State Governments at its Central Accounts
Section, Nagpur. It has put in place a well-structured arrangement for revenue collection as well as payments on behalf of
Government across the country. A network comprising the Public Accounts Departments of RBI and branches of Agency
Banks appointed under Section 45 of the RBI Act carry out the Govt. transactions. At present all the public-sector banks
and three private sector banks viz. ICICI Bank Ltd., HDFC Bank Ltd. and Axis Bank Ltd. act as RBI's agents. Only
authorized branches of Agency banks can conduct Govt. business.
The Reserve Bank of India carries out the general banking business of the Central and State Governments through its own
offices and through the offices of the agency banks appointed under Section 45 of the RBI Act, 1934, by mutual agreement.
RBI pays agency commission (also called turnover commission) to the agency banks for the government business handled
by them.

Necessity to increase Govt Business

Agency Commission paid to banks80

The Reserve Bank discharges the function of banker to the government through a large network of agency bank branches 81
that serve as retail outlets for government transactions. The Reserve Bank pays commission to these agency banks at
prescribed rates which were revised with effect from July 01, 2012. The agency commission paid to these banks on account
of Government business for the year 2013-14 was Rs.27.81 billion as compared with Rs.27.26 billion for the year 2012-13,
an increase of 2.02 percent reflects the growth in the volume of government business.

(`In Crore)
Item Agency Commission distributed by RBI

2009- 10 2010- 11 2011- 12 2012- 13 2013- 14 2014-15 2015-16 2016-17 2017-18

1 2 3 4 5 6 7 8 9 10

Agency com 2855 3012 3351 2807 2781 2963 4693 3970 3760

Agency banks compensated for conduct of Central/State Government business

The accredited banks are paid remuneration by RBI for conduct of State/Central Government transactions. Such
remuneration is called Agency Commission, the rates of agency commission applicable at present (from July 1, 2019) are
as under:

80
HO:BR/103/11 dated 13.01.2011 Revision of system of sharing Revenue
from Government business amongst Branches
81
BCC: BR: 110:348: dated 09-07-2018: Master circular –Disbursement of govt pension by Agency Banks

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 Sr No Type of Transaction Unit Rate

1 (i) Receipts – Physical mode Per transaction Rs.40

(ii) Receipts – e-mode Per transaction Rs.9

2 Pension Payments Per transaction Rs.75

3 Payments other than Pension Per Rs. 100 turnovers Rs0.065

Benefits of increasing Government Business

a) Enhancement in CASA deposit

b) Enhancement in Fee Based Income
c) Float Income
d) Opportunity for cross selling of bank’s various products

Physical Channel of Tax Collection (CBDT/Direct Taxes)

For physical collection total -565- branches were authorized till Dec 2018.. The office of Principal Chief Controller of
Accounts, Central Board of Direct Taxes, New Delhi has De-Authorized our 15 Branches for NIL collection of Direct Taxes
as per Circular No. BCC:BR: 111:32 dated 18.01.2019. and have Authorized 38 new Branches for Direct Tax Collection as
per circular No. BCC:BR:111:104 dated 25.02.2019 . At present total No. of Authorized Branches are 588.

At these branches the Tax Payer tenders duly filled in Physical Challan along with Tax amount. The GBM Module has the
provision of entering the Challan and Payment details. As such there is repetition in filling of the Forms.

Functions of Branch to collect taxes

For physical collection Branch is required to verify that the Challan is properly filled in and completed in all respects by
the customer. Most Important- Valid PAN/TAN should be mentioned in the challan.

Check whether, main portion of the challan and the taxpayer’s counterfoil form & the amount and major head of account
to which the amount is to be accounted /credited is filled in correctly.

The provisions are made in GBM for validation of all the mandatory fields as per specification from CBDT authorities. Our
master data for PAN/TAN is being updated for the tax payers whose data is captured through our GBM. It is therefore
important that each PAN/TAN is verified through photocopy of PAN Card/ letter if the data is not in our Master.

The tax payer may be advised to provide the contact number on challan, so that Bank can contact, if required.

In GBM the Collecting Branch has to capture only the challan data in the GBM module.

After scrutinizing the challan on the above issues, accept the challan and issue a paper token to the tenderer to facilitate
delivery of the counterfoil receipt to him.

Challan tendered with cash, to be accepted and stamped “Cash Received”

The challan should be marked with 20-digit CIN, which is generated by the system (BSR Code – 7 digit, date of deposit
(DDMMYYYY) – 8 digit & unique serial no. of the challan – 5 digit)

The computerized taxpayer’s counterfoil generated from the system to be delivered to the tenderer and the main copy of
the challan to be scrolled in the receipt scroll for submission to the Nodal Branch.

The challan deposited with cheque / DD drawn on other bank branches to be accepted, counter foil to be issued only on
realization of the amount. These challans will contain double date i.e. the date of acceptance and the date of realization.
The computerized counterfoil shall be generated on the date of realization. The CIN shall bear the date of tender of the
instrument.

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 All challans should be entered in GBM > CBDT module. Such entries are credited in G/L CBDT Collection account. At the
end of day on Module completion process (MCP) / EOD system will automatically generate transaction. This transaction
would debit G/L CBDT collection account and credit the IBTA account (On our Link Cell, Dharmapeth Branch i.e.
‘DHARAM’). Branch also requires verifying such system generated transactions through “TM” menu option in Finacle.

At the end of customer banking hours, generate a scroll containing all the challan data for which payments have been
realized for that day (cash and cheque/DD realized). A running scroll serial number extending through a financial year (1st
April to 31st March) will be given to the records relating to each type of tax (major head) which are transmitted on a
particular day. Through GBM print scrolls and summary based on the type of tax (major head wise) attach challans
arranged in the same order as per scroll

Next day the above documents to be forwarded to the Nodal Branch for onward transmission to ZAO (Zonal Accounting
Office)

OLTAS – Online Tax Accounting System

The URL http://taxes.bankofbaroda.co.in is available on Finacle PC

Collecting Branch is required to print the collection scrolls and “O” schedule from the GBM and one set as per prescribed
procedure is to be submitted to the respective Nodal Point Branch.

“O” schedules are drawn on our Dharampeth, Nagpur branch, since funds are to be settled with RBI at Nagpur. However,
these should be forwarded to respective Nodal Point Branch for their verification and record. As at Nagpur the “O”
schedules are centrally responded from the OLTAS data (Not from the physical “O” schedules.). Fund settlement with RBI
(payment of the amount collected) is done directly at Link Cell, Dharampeth, and Nagpur from the OLTAS data.

Once the data is available in the centralized server, the collecting branches, Nodal branches and the Link branch officer
will be able to download the required information at their center.

User ID and password to operate OLTAS by collecting branches can be add / modify / delete by the concerned Nodal
branch.

User id and password for Nodal branch and Link Cell can be added / modified / deleted by the Government Business
Department, New Delhi Baroda and IT Dept., BCC, Mumbai respectively.

Regional office is expected to monitor from OLTAS online module. The user id and password for Regional Office staff can
be added/modified/deleted by the Government Business Department, New Delhi.

Interest on Delayed remittance

All collections effected by the branches is to be credited to the Government Account by T+3 i.e. by three working days for
all public-sector banks except private sector banks (for them it is T+3 days and not working days) for any delayed
remittance beyond the period indicated will invite penal interest by the CBDT. Generally, the Rate is Prevailing Bank Rate
+ 2% or as decided by RBI in consultation with CGA (Controller General of Accounts, CBDT, New Delhi)

E- Channel
Voluntary -Any Direct Tax payer can make e-payment
Mandatory- With effect from 1st April, 2008 the following category of direct tax payers shall have to compulsorily pay their
taxes through e-payment mode:-
All Companies - All taxpayers whose cases are covered under provisions of Section 44AB of the Income Tax Act. The
provision of Section 44AB mainly cover every person whose total sales, turn over or gross receipt from business exceeds
Rs. 40 lakhs in a previous year.

Any customer of the Bank having Baroda Connect facility, with Transaction Password can pay the Tax on line. On
successful completion of remittance system will generate and display Counterfoil along with CIN. Customer can either
save the soft copy or can print the same for his record.
Customer can also re-generate counterfoil for any remittance made during the month. For earlier period, customer can
contact the base branch with a written request. Branch to take up the issue with Govt Business Dept., New Delhi with full
details.
Customer can view the status of his remittance after three or four days on the website https://tin-nsdl.com. OR

Option 1: Register for viewing Form 26AS by registering for e-filing on https://incometaxindiaefiling.gov.in/.
Registration is immediate, without any cost and does not obligate e-filing,
After logging in click on My Account tab

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 There will be an option View Your Tax Credit Statement (Form 26AS)
It will take you to DOB verification page
In the next step it will ask your permission to be redirected to the NSDL site where you have to press the confirm button
Customer will be re-directed to his Form 26AS and he can select the assessment year in the top right corner for which he
wants to see the details.
Please remember that Assessment year is 1 year ahead of the financial year. For example, for FY 2011 – 12, the Assessment
Year is 2012 –13

Option 2: Through net banking facility of 19 authorized banks. Login to your net banking account and check if this
facility is provided.

Option 3: Through registration with NSDL

In case his tax deduction is not reflected correctly in your Form 26AS, he can approach the branch for seeking necessary
clarification.
Branch can request the Link Cell Nagpur / Govt Business Dept., New Delhi to ascertain the status of the challan remitted
through the website: https://tin.tin.nsdl.com/oltas/servlet/QueryTaxpayer.

CA118 - GEN TAX REMI CORP CA

Bank has developed a menu CA118, branch can remit taxes of the non-customers as well as the customers who do not have
net banking facility. This facility should be used by the branches which are not authorized to accept physical challan from
customers.
Additionally, branch should also remit its own due direct tax through this menu.
A Current Account under the special scheme code "CA118: - GEN TAX REMI CORP CA" shall be opened at each CBS
Branch for the specific purpose of payment of taxes through e-Mode. The account may be titled as "General Tax
Remittance Account- (Name of the Branch)".
The branch will have to obtain the "Baroda Connect facility" for the account with transaction password, restricted only for
Tax Payment.
The CBS internet shall not allow e-payment transaction; hence such remittance of taxes through e-payment mode is to be
made at a PC having internet connection. A printer must be attached to the captioned PC to print the cyber receipt
Fresh customer-IDs in respect of at least four officers (including the Manager) should be created. The existing customer
ID must not be used in any circumstances. Where number of officers is less, at least two officers' customer ID be created.
In branches where there is only one officer, head cashier of the branch can be registered as user for this account.
The Branch Head would authorize officers working at the branch to be the users of this account. The Regional Head / Dy.
Regional Head would authorize Branch Head to become the user of this account.
After opening current account as mentioned above, the names of the officers for whom specific customer IDs are created
should be mentioned as "related party".
It should be ensured that the concept of “Initiator and Approver “is followed without fail.
In case of transfer of an officer who was one of the users the Branch Head should inform the BCOT to discontinue him as
user and request to include incoming officer as user. Every time the officer joins new branch and is to be made a user fresh
customer - ID should be created.
The details guidelines available on intranet vide our circular No. HO: BR: 103:181 dated 20/08/2011.

Banks own TDS payment

a) The TDS amount deducted should be transferred to this special Current Account.
b) After such transfer, the authorized officer should log in to our home page i.e. www.bankofbaroda.com
c) Select the option "online taxes" and then the option Income Tax.
d) Select challan number 281 (Old) or 17 (New). Fill in all details and proceed for making payments.
e) Select corporate user, key in corporate ID with user ID and password of the dealing officer.
f) The details of the account will be displayed, complete the details in respect of amount and proceed for making
payment.
g) User ID will be asked along with transaction password. In the case of CBDT any one of the user can affect the
payment.
h) After successful completion of the transaction, tax paid counterfoil will be generated which is to be kept as record.

Goods and Service Tax (An Overview)

Under Central Level the following taxes are subsumed:

a) Central Excise Duty
b) Additional Excise Duty
c) Service Tax
d) Additional Customs Duty commonly known as Countervailing Duty

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 e) Special Additional Duty of Customs

At the State Level:

a) State Value Added Tax / Sales Tax
b) Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and
collected by the States)
c) Octroi and Entry Tax
d) Purchase Tax
e) Luxury Tax
f) Taxes on lottery, betting and gambling

Details of GST Major Heads – IGST, CGST, SGST

The GST to be levied by the Centre on intra State supply of goods and / or services is CGST (Central GST) and that by the
States is SGST (State GST).
On inter-state supply of goods and services, IGST (Integrated GST) will be collected by Centre. IGST will also apply on
imports.
Role, Responsibility and Liability of our Bank:
Tax collection from the customers
Remittance of Tax to RBI
Providing reports / scrolls to RBI as well as concerned departments as per their requirements.
Modes of Transactions:
ONLINE DIRECTLY BY THE CUSTOMER:
Customer will open the GST website – (https://services.gst.gov.in/services/login) and feed his user id and password.
Customer feeds necessary details in the challan available on the portal
Then feeds the payment option – (he has two options 1. E-mode and 2. Over the Counter)
Under E-mode (Electronic Mode)
a. E-banking
b. IPG (Internet Payment Gateway)
Under both the above cases, customer directly makes payment online.

OVER THE COUNTER:

While, if the customer decides to make payment over the counter, he has to mention the name of the bank through which
he wishes to make payment, before printing the challan. The customer has to make payment through the concerned bank
branch within 15 days of generating the challan. – Amount of payment of GST over the counter is Rs. 10,000 - if the
customer wants to remit through OTC above Rs. 10,000/- he can use multiple challans – Branch /Bank earns Rs. 50 as
commission for each physical challan accepted over the counter.

COLLECTION OF GST THROUGH CLEARING OPTION:

Branch other than Service Branch –If DD /Cheque is submitted by the customer of other bank, branch to use payment
type as “Clearing” while entering details in GST Menu. - Cheque should be in favour of “Yourself for GST” – Request the
customer to mention CPIN, GSTIN No, Mobile NO and his Debit Account No, so that the charges could be deducted in
case of return of cheque / DD – Branch to write Credit Account No. GST – CBS 04170015181570 on the bank of the cheque.
– Then cheque to be forwarded for clearing as per procedure.
For Service Branch: - to feed account No. as GST-CBS 04170015151870 in the system for cheques/DDs collected for GST.

GST PAYMENT THROUGH NEFT/RTGS:

Branch to use HNEFT/HRTGS menu in Finacle for collection of GST from customers, where mode of payment is
mentioned as NEFT / RTGS in the challan submitted by the customer. – Enter CPIN details in “Beneficiary Account No.”
field. – Use the IFSC code given in the challan i.e. IFSC of RBI. We have identified 34 branches all over the country as GST
helpdesk for GST Roll-out82. Nodal officers and Nodal GST Cell details are provided in the circular.
Sir P M Road Branch Mumbai is designated as the e-FPB (Electronic Focal Point Branch) to handle all backend operations
of GST receipts including operation of 39 tax accounts, data collection, reporting and reconciliation with RBI/GSTN /
Account Authorities.
Role and responsibilities of Nodal Officers identified for GST Helpdesk and nodal GST Cell are as follows:
Handling all the GST related queries
1) Guiding branches about the GST
2) Grievance Handling

Three Government Pool account for GST:

82
BCC/BR/109/319 dated 29.06.2017-Collection of GST(Goods & Service Tax in our Bank)

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 1. Government Pool account GST – e mode
2. Government Pool account GST – CBS
3. Government Pool account GST – IPG
For each transaction the customer account is debited and respective (any of the above) Pool account is credited.

Similarly, for State / UT / Central GST, 39 accounts are opened at Sir P M Road Branch, the list of all the accounts is
provided in the above circular.
After 7.45 pm GST menu will not be available to the branches. At EOD, Govt Pool account will be debited and 39 GST
accounts will be credited.
GST REFUND PROCEDURE:
The Department of Revenue, Ministry of Finance has taken a decision to make the payments of refund to IGST on Exports
to the entitled exporters, branches are requested to follow procedure mentioned here below:
On receipt of the cheque of consolidated amount and the list of exporters with the bank details and refund amount payable
to each of the exporter, the dealing branch of the bank authorized for refund payments, will honour the cheque issued by
the departmental officer and make payments to the exporters through NEFT/RTGS on the same day;
After making payment to the beneficiaries, the branch will scroll the amount of all payments made on T+1 day and put
through the same RBI.
The payment scroll for GST Refund payment will be issued separately with Major Head 0008 and shall not be clubbed
with the Payment Scroll for Customs/Central Excise Refunds. Necessary provisions are required to be made in their
system.

COLLECTION OF GST AMOUNT IN CASH ABOVE RS. 10000/-

For collecting GST from the customers where mode of payment is mentioned as NEFT/RTGS, branch to use HPORDM
Menu in Finacle 10.
Over the Counter payment through authorized banks for deposits up to ten thousand rupees per challan per tax period,
by cash, cheque or demand draft:
Though normally, restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter payment
is applicable, but shall not apply to deposit to be made by
(a) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in
this behalf;
(b) Proper officer or any other officer authorized to recover outstanding dues from any person, whether registered or
not, including recovery made through attachment or sale of movable or immovable properties;
(c) Proper officer or any other officer authorized for the amounts collected by way of cash, cheque or demand draft
during any investigation or enforcement activity or any ad hoc deposit.83

Vide our Bank’s circular No. BCC:BR:110/417 dated 17.08.2018 and as per Proviso to Rule 87 (3) further provides that
the restrictions for deposits up to Rs. 10,000/- per challan in case of an over the counter payment shall not apply to
the deposits to be made:
a) Internet Banking through Authorized Banks
b) Credit Card or Debit Card through Authorized Banks NEFT or RTGS from any Bank
c) Over the Counter payment through Authorized Banks for deposits up to Rs. 10000/- per challan per tax
period by Cash, Cheque or Demand Draft.

E-BIZ

E-Biz84 is one –stop-shop of convenient and efficient online Government-to-Business (G2B) services. Through a single
website of e-Biz, Customer/Businessmen/entrepreneurs will be able to apply and manage licenses, Clearances,
registrations and regulatory filings. E-Biz is a collaborative effort involving Government at the Central, State and Municipal
levels. E-Biz portal offers the following services.
Obtain information about the various licenses, clearances and registration required to establish a new business in India.
Apply online for new or renewal of licenses, permissions, approvals, clearances and registrations. File tax returns and other
regulatory reports. Make electronic payment towards statutory processing fees, stamp duties, taxes, service fee etc.
Tracking of status of the applications online. Receive alerts via email and SMS on the progress of submitted application.
Interact online with the various Government departments such as responding to queries/clarifications. Submit additional
artefacts. Obtain electronic copies of approved licenses, registration certificates and other clearance letters.

83
BCC: BR: 110/200 dated 18.04.2018-Collection of GST for Payment mode as NEFT/RTGS, through
Demand Draft/Cheque only.
84
BCC:BR:106:491dated 13.12.2014-Launch of E-Biz

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 The Salient features of the portal are as under:
Industrial / information based services and online transaction based services will be offered through the portal.
Project will be completed in 10 years covering Central Govt., Depts., States and Municipal Corporations.
For online services offered through e Biz portal, customer has a choice to pay online through the participating banks
Participating Bank will provide a list of successful transaction at EOD to the (DIPP) Department of Industrial Promotion.
Funds will be settlement will be done on T+1 basis through RBI and scrolls would be sent to e-PAO, DIPP pertaining to
services related to all Central Ministries and Depts.
Online payment has two parts i.e. statutory fee levied by the Govt. and transaction fee varying from Rs. 23/- to 30/-
Five PSU Banks are integrated with this project i.e. our Bank, Canara Bank, Bank of India, Central Bank of India & Punjab
National Bank.
Initially following services were offered through this portal:
1) Industrial License.
2) Industrial Entrepreneur Memorandum.
3) Employee Registration with ESIC.
4) Issue of Permanent Account Number – UTIITSL

WEF 19.02.2015, Government of India launched -11- additional services under eBiz85. The details of additional services
launched are as under:-

S. No. Ministry/ Dept. Name Service Name

1 Ministry of Corporate Affairs Name Availability

2 Ministry of Corporate Affairs Director Identification Number

3 Ministry of Corporate Affairs Certificate of Incorporation

4 Ministry of Corporate Affairs Commencement of Business

5 Central Board of Direct Taxes Issue of Permanent Account Number (PAN)

6 Central Board of Direct Taxes Issue of Tax Deduction Account Number (TAN)

7 Reserve Bank of India Advanced Foreign Remittance (AFR)

8 Reserve Bank of India Foreign Collaboration-General Permission Route (FC-

GPR)

9 Employees' Provident Fund Org. Employer Registration

10 Petroleum & Explosives Safety Org. Issue of Explosive License

11 Directorate General of Foreign Trade Importer Exporter Code License

The above services can be availed by the customers in online as well as in offline mode.

Case-I: Online Mode

In online mode, the customer is expected to go to e-Biz portal (https://www.ebiz.gov.in) - fill up all required details online
- attach necessary documents and make online payment using Internet Payment facility/Debit card/Credit card - generate
receipt of the payment. The money would be paid directly into the Government accounts and service will be provided by
concerned Govt. department/Ministry to the customer without any intervention of Bank. The Bank’s Nodal branch would
remit the money collected to RBI/State Govt. as applicable and submit e-scrolls/challans to e-PAO and RBI86.

Case-II: Offline Mode

85
BCC:BR:107:80 dated 20.02.2015 E-BIZ- Indias G2B Portal –Launch of Additional New 11 services by
MOC
86
BCC:BR:107:434 dated 04.09.2015 Master Circular for G2B portal-E-Biz

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 a) Firstly, the customer will go to the e-Biz portal website (https://www.ebiz.gov.in) and fill up the required details
in the challan available on the portal. This challan data would automatically get uploaded in Bank’s database.
b) The customer will take out the print of this challan and would visit the nearest Bank’s branch. (Please note that
the challan is valid upto-07- days from the date of entry done by the customer on e-Biz portal thereafter it may
be visible to branch but its verification/deletion would not be allowed at branch)
c) The customer has an option to have the transaction done either in cash/transfer.
d) Customer’s cash/transfer cheque would be accepted at the branch and branch would do necessary entries in
Finacle using “EBIZ” menu which has maker and checker facility.
e) When the branch would enter customer’s “e-biz transaction reference no.” in “EBIZ” menu, the data would get
automatically populated87.
f) Once the transaction is verified, the branch would take a print of the counterfoil and provide it to the customer
as a proof of successful transaction.
g) At the EOD activity, the Nodal Branch would take out e-scrolls/challans and submit them to e-PAO/RBI as
applicable and would remit money to RBI/as per process88.

TREASURY
We are presently handling Non-Banking Sub Treasury operation (NBSTO) business at various branches in following States
as sub agents of SBI / RBI:
1. Rajasthan
2. Uttar Pradesh
3. Uttarakhand
4. Maharashtra
5. Chhattisgarh
6. Tamil Nadu

We are authorized for entire treasury operations in the 32 branches of Gujarat.

Base Branch Functions:

All the -69- designated branches are authorized for collecting revenue on behalf of state treasury as well as payment of
cheques drawn by DDA (Drawing & Disbursing Authority) on behalf of the State treasury.
The amount collected through receipts at the base branch level is credited in the specific G/L Government Collection A/c-
treasury.
The authorized officials (DDAs) of the state treasury are drawing the cheques on our base branches. Such cheques are paid
by the base branch debiting specific G/L Government Collection A/c- treasury. Opened for the Treasury.

Nodal Branch Functions:

Responsible to report & communicate with the Regional office of RBI and state level authorities such as Director of
treasuries, Accountant General etc. for all the authorized branches in the state.
Receive consolidated “O” schedules or “M” schedules from all the base Branches respond the schedules on the same day
and report the consolidated figure to RBI for fund settlement and settle funds with RBI. Reconcile with RBI and Director
of treasuries of the state every month.

Business Development Aspects:

The Regional Office of the RBI can be contacted for undertaking this business:
The fund transferred for plan expenditure lie with the Bank for reasonable time giving the benefit of the float.
In the state of Rajasthan and Uttar Pradesh our Bank can make efforts to become additional accredited Bank
Each receipt earns Rs. 40 The Disbursals earn @ 6.50 paisa per hundred rupees.
Such Business on the line of Gujarat can be canvassed in other states, since this is a good remunerative business due to
heavy transactions.

E-STAMPING
E Stamping is a Government of India initiative. Major Shareholders are IDBI Bank Ltd, IFCI Ltd, SUUTI, LIC, GIC and
Others.
E-Stamping is a secured way of paying non-judicial stamp duty to the State Government, which replaces the stamp paper
and is highly secure and tamper proof. The Government of India appointed SHCIL as the sole Central Record keeping
Agency for e-Stamping.

87
BCC: BR: 107:518 dated 21.10.2015 new services under G2B Portal.
88
BCC:BR:108:428 dated 26.08.2016 Launch of new services under E-Biz

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 E Stamping is essential; to prevent paper and process related fraudulent practices. Provides secure and reliable collection
mechanism. Stop the leakage of government revenues. Stores information in electronic form. Central data repository is
created, to facilitate easy verification and also helps in generation of MIS reports
Constituents of e-Stamping are Central Record-keeping Agency (CRA), Authorized Collection Centres (ACC), Sub-
Registrar, and Revenue Department
CRA, appointments ACCs in consultation with State Governments, manages imprest balance, trains users, Issues User ids
and passwords, provides technical support & troubleshooting, provides MIS reports to the State Government, Remits
stamp duty payment to the State Government.
ACC, pays Imprest to the CRA, collects money and generates e-stamps, verifies e-stamp (if required by client), generates
additional stamp duty (if required by client)
SUB REGISTER verifies e-stamp for registrable articles, Locks e-stamp for registrable articles.
REVENUE DEPT downloads MIS reports, Reconciles stamp duty collection, if needed Cancels and refunds e-stamps
amount.
Our Bank has entered Pan-India MOU with Stock Holding Corporation of India Ltd (SHCIL) for conducting e-Stamping
business89. Presently, we are conducting e-stamping business in the states of Delhi, Rajasthan, Gujarat, Himachal Pradesh,
UP & Uttarakhand and Jharkhand.
The purchaser of property pays stamp duty to State Govt. on circle rates. The user gets the purchaser registered with
SHCIL after paying the registration fee. The identified branch accepts the stamp duty and issues a printed receipt on
specified printers meant for the purpose.
Bank earns 15 paise / Rs.100/- on each transaction. Volumes are very high. Entire revenue earned by the branch will be
credited to the branch PL account. Minimum float of the stamp amount collected is available for one day in current
account. The foot fall could be used for cross selling of various products of the Bank.
In the State of Madhya Pradesh, the State Government has its own stamping system named as e Panjiyan. Our MP zone
has entered into an MOU with the state government for conducting e stamping business in the state.

INTRODUCTION OF THE SCHEME90

PPF Act, 1968 introduced on 16.05.1968
PPF Scheme introduced in Nationalized Banks with effect from 01.01.1988

PPF IS AN IDEAL SCHEME

For Every Section of the Society E.g. Businessman, Doctors, Govt. Servants, Other Employed Persons, Agriculturists etc.
For making pension like provision as per their needs in the advanced age
For using it as a child gift plan

WHO CAN OPEN THE ACCOUNT?

An individual
An individual on behalf of a minor of whom he/ she is the guardian
NRIs cannot open the account with effect from 25.07.200391
HUFs cannot open the account with effect from 13.05.200592.
Accounts opened by NRIs and HUFs prior to above mentioned dates will continue till maturity

WHERE TO OPEN THE ACCOUNT

State Bank of India and its subsidiary banks
GPO, HPOs and selected SPOs
Nationalized banks
Selected Private Banks
SUBSCRIPTION TO THE ACCOUNT
Minimum of Rs.500/- is to be deposited every financial year.
Maximum of Rs. 1.50 lac can be deposited in a financial year from FY 2015-16 Onwards, previously it was only Rs.1.00 lac.
Deposits can be made in the multiple of Rs.5/-
Deposits can be made in one lump sum or convenient 12 instalment in a year
Deposits can be made in cash or by crossed cheque/ bank draft/ pay order
Date of realization of amount of local cheque is to be treated as date of deposit in the account (amended w.e.f. 10.02.2010)

89
BCC:BR:105:486 dated 02.11.2013 Canvassing E-stamp business from state governments
90
BCC;BR:106:312 dated 20.08.2014 PF Schemes-1968
91
BCC;BR:109:568 dated 01.11.2017 Amendment In PPF scheme-NRI
92
BCC;BR:107:32 dated 16.01.2015 Closure of PPF scheme for HUF

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 Date of encashment of outstation cheque is to be treated as the date of deposit in the account. Collection charges at
prescribed rate is payable along with deposit

DEFAULT IN SUBSCRIPTION
If there is no deposit in the previous financial year, is called a default in the subscription.
It can be condoned by depositing Rs.500 (subscription amount) and Rs.50 (default Fee) for each financial year of default.

LOAN FROM THE ACCOUNT

Loan can be taken from the 3rd financial year e.g. if the account is opened in the Year 2007-08, 1st loan can be taken in the
year 2009-10
Loan amount cannot exceed 25% of the balance at the credit at the end of 2nd Preceding year e.g. in the above case 25% of
the balance as on 31.03.2008
Subsequent loan can be taken only when the previous loan is fully paid with interest
Loan can be taken up to the end of 6th financial year
Only two loans are permissible
Repayment of the loan can be made in one lump sum or in monthly instalments Within 36 months from the 1 st day of the
month following in which the loan is Sanctioned After the principle of the loan is fully paid, interest thereon can be paid
in not More than 2 monthly instalments. Interest is to be paid @ 2% of the principle if repayment is made within 36
Months, otherwise interest is to be paid @ 6% of the outstanding loan amount Subsequent loan cannot be taken in same
financial year even if the 1st loan is fully repaid. If the interest on the loan is not paid, it may be debited to the subscriber
account If the principle amount has already been repaid.

WITHDRAWAL FROM THE ACCOUNT

Withdrawal can be taken from the 7th financial year e.g. if the account has been opened in the year 2007-08, 1st withdrawal
can be taken in the year 2013-14.
Only one withdrawal can be taken in a financial year up to maturity.
No reason is to be given for making withdrawal.
Withdrawal amount cannot exceed 50% of the balance at the credit at the end of4 th preceding year or immediately
preceding year, whichever is less e.g. in the above case 50% of the balance
Any unpaid loan amount is to be deducted from the amount of withdrawal.
The subscriber cannot make any withdrawal from the account if there is any default in subscription to the account.

INTEREST
฀ Rate of interest is declared every quarter by the government. Interest for the current quarter i.e. w.e.f. 1st Oct 2019
is 7.9 % p.a. (vide circular NO. BCC:BR:111/496 dated 01.10.2019).

฀ Interest is calculated on the lowest balance between 5th and last day of the month
฀ Interest for the whole year is to be credited by the financial institution where the account stands as on 31st March
of the financial year.

TAX BENEFIT
฀ Subscription in PPF account qualify for tax rebate under section 80-C of Income Tax Act
฀ Interest accrued on PPF account and withdrawals thereof are fully exempted Under sec. 10(11) of Income Tax Act
฀ Balances held in PPF account is also exempted from wealth tax.

TRANSFER OF THE ACCOUNT

฀ From one post office to another post office
฀ From one post office to any branch of bank and vice versa
฀ From one branch of bank to other branch of the bank
฀ From one bank to another bank

TERM OF THE ACCOUNT

The term of the account is 15 financial years, excluding the financial year in which the amount was opened.

EXTENTION OF THE ACCOUNT

฀ After maturity of the account, the account holder has three options:
฀ First, the account can be closed immediately
฀ Second, the account can be continued without deposits for any period
฀ Third, the account can be continued with deposits by exercising the option in form
฀ H to extend the account for a block of 5 years

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 ฀ The account can be extended for any no. of blocks of five years
฀ The option to extend the account is to be exercised before the expiry of first
฀ Financial year of the block of five years
฀ One withdrawal in a financial year can be made during the extended period also
฀ Withdrawal during the extended period is restricted to 60% of the balance at the
฀ Commencement of the block
฀ At the end of each block, the account holder again has the three options as
฀ Explained above.
฀ If the account holder has made any deposits in the account without exercising the
฀ Option in writing to extend the account within the stipulated period that deposit
฀ Will be treated as irregular and will not earn any interest
฀ A PPF account which has completed 15 years and is extended for a further period of 5 years and then the customer
wishes to close the account prematurely i.e. before the completion of the tenure of 5 years, in such a scenario, the
reduction in the rate of interest by 1 % point shall be applicable from the date of the commencement of the current
5-year block period and not from the date of initial opening of the account.

NOMINATION
฀ May nominate one or more persons to receive the amount standing to his /her Credit in the event of his/her
death93
฀ In the event of death of the subscriber the account can be repaid to his/her nominee/ legal heir – even before the
maturity
฀ Nominee can’t continue the account of the deceased subscriber.

ATTACHMENT OF COURT
● Not attachable to any order or decree of court in respect of any debt or liability Incurred by the subscriber
● But a subscriber’s account can be attached by state duty officials for recovery of State duty to be levied or can be
attached under any order from income tax Authorities.
●
ACCPTANCE OF MULTIPLE NOMINATIONS:
• “Rule 12 of PPF Scheme, 1968 allows for having multiple nominees in a PPF Account”

BUSINESS OPPORTUNITIES:
• By and large our bank is having the authorized branches at all the Metro as well as urban centres for opening and
maintaining the PPF/SCSS accounts. 1077 branches are authorized to conduct PPF business
• The PPF account once opened will be continued at least for 15 years, thus there will be long relationship with the
respective customer which may be useful for cross selling.
• The earning of receipts as well as payments is similar to those of CBDT/ CBEC.
• The branches can promote opening of new accounts.
฀ The rate of interest for PPF is @7.9% and SCSS have higher rate of interest @ 8.60% w.e.f. 01/10/2019. Interest
for the current i.e. w.e.f. 1st Oct 2019 is 7.9 % p.a. (vide circular NO. BCC:BR:111/496 dated 01.10.2019).
• The government has decided to allow for premature closure of PPF accounts 94 in cases such as that of serious
ailment, higher education of children, this shall be permitted with a penalty of 1% reduction in interest payable on the
whole deposit and only for the accounts having completed five years from the date of opening, it said.

Introduction of NEFT Facility for making contribution under PPF:

Bank vide its circular dated BCC:BR:111:78 dated 11.02.2019 bank have introduced a facility for depositing in PPF account
through NEFT from other Banks in addition to online deposits in existing PPF accounts through Baroda connect Circular
for reference:

Last Financial Year under PPF we canvased 140586 accounts

93
BCC;BR:109:92 dated 11.02.2017 Acceptance of multiple nomination
94
BCC; BR: 109:383 dated 02.08.2017 clarification regarding Pre-closure of PPF Accounts.

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 Sukanya Samridhi Yojana

PAN India All the branches are authorized to open SSA account95. Job Card is also attached with the circular.
฀ Prime Minister Narendra Modi launched Sukanya Samriddhi Yojana under Beti Bachao
campaign on 22nd January, 2015 for the benefit of small deposit scheme for girl child, which
would fetch an interest rate of 8.4 per cent (w.e.f. 01.04.2017) and provide income tax rebate96.
Interest for the current quarter i.e. w.e.f. 1st Oct 2019 is 8.4 % p.a. (vide circular NO. BCC:BR:111/496 dated
01.10.2019).

A legal Guardian/Natural Guardian can open account in the name of Girl Child.
A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different
Girl children. Provided that more than two accounts may be opened for girl children in a family if such children are born
in the first and / or in the second order of birth, on production of a certificate to this effect from the competent medical
authority regarding the birth of such multiple girl children in the first two order of birth in a family. Provided further, that
the above proviso shall not apply to girl children of the second order of birth if the first order of birth in a particular family
results in two or more surviving girl children. (As per SSA Rules 2016)

Account can be opened by guardian in the name of a beneficiary who has not attained the age of 10 years as on the date of
opening of the Account. For initial operations of Scheme, one-year grace was given. With the grace, Girl child who is born
between 02.12.2003 & 01.12.2004 can open account up to 01.12.2015.

Birth certificate of the girl child in whose name the account is opened shall be submitted by the guardian at the time of
opening of the account along with other documents relating to identity and residence proof of the depositor. Vide our
Bank’s circular No. BCC:BR:110/386 dated 02.08.2018 it is clarified that the Aadhaar card of the beneficiary girl child
is to be obtained at the time of opening of the SSA. However, the process of e-KYC may be completed with Aadhaar of
the parent who open/operated the account on behalf of the minor beneficiary.

Vide circular No. BCC:BR:110/606 dated 13.12.18 – it is not mandatory to take Aadhaar Card for opening account under
SSA, other OVDs can also be accepted as proof of identity for the purpose of opening a SSA account

The account can be opened with a minimum deposit of Rs 1000/- in a financial year97. The minimum initial contribution
in any financial year is Rs 1000. Thereafter the contributions can be in multiples of one hundred rupees. Customer can
deposit 1,490 times. The maximum amount of deposit in a F Y is Rs.1,50,000/-. Vide our Bank’s Circular No.
BCC:BR:110/370 dtd 21.07.2018 a SSA account can be opened with an initial subscription of Rs.250/- and the account
could be kept regular with a minimum contribution of Rs. 250/- per annum instead of Rs. 1000/-
If a minimum deposit of Rs. 1000/- is not deposited, the account will become irregular and can be regularized with a
penalty of Rs 50/- per year along with minimum specified subscription for the year(s) of default any time till the account
completes fourteen (fifteen years w.e.f. 2016 amendments) years. Deposit in the account can be made till completion of
15 years, from the date of opening of the account.

Interest at the rate notified by the Govt, compounded yearly shall be credited to the account till the account completes
fifteen years. In case the account holder opts for monthly interest, the same shall be calculated on the balance in the
account on completed thousands, in the balance which shall be paid to the account holder and the remaining amount in
fraction of thousand will continue to earn interest at the prevailing rate. The interest shall be calculated for the calendar
month on the lowest balance in an account on the deposits made between the close of the tenth day and the end of the
month.

The account shall be opened and operated by the natural / legal guardian of a girl child till the girl child in whose name
the account has been opened, attain the age of ten years. Thereafter, the account holder i.e. the girl child may herself
operate the account; however, deposit in the account may be deposited by the guardian.
Deposit in the account can be made till completion of 15 years, from the date of opening of the account.
Interest rate notified by the Govt, compounded yearly shall be credited to the account till the account completes fifteen
years. In case the account holder opts for monthly interest, the same shall be calculated on the balance in the account on

95
BCC:BR:110:111 dated 06.03.2018 –Authorization of Branches to open SSA.
96
BCC;BR:107:433 dated 04.09.2015-Master circular on SSA
97
BCC;BR:108:234 dated 23.05.2016 Opening of SSA account

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 completed thousands, in the balance which shall be paid to the account holder and the remaining amount in fraction of
thousand will continue to earn interest at the prevailing rate.
The interest shall be calculated for the calendar month on the lowest balance in an account on the deposits made between
the close of the tenth day and the end of the month.

The account shall be opened and operated by the natural / legal guardian of a girl child till the girl child in whose name
the account has been opened, attain the age of ten years. Thereafter, the account holder i.e. the girl child may herself
operate the account; however, deposit in the account may be deposited by the guardian98.

Premature closure of the Account:

In the event of death of the account holder, the account shall be closed immediately on production of death certificate
issued by the competent authority, and the balance at the credit of the account shall be paid along with interest till the
month preceding, the month of premature closure of the account, to the guardian of the account holder.
If, after the opening of an account, the account holder becomes a non-citizen or non-resident of India, intimation to this
effect shall be given by the guardian or the account holder to the post office or the bank concerned, as the case may be,
within a period of one month from the date of such status of the account holder’s citizenship or resident status.

In the event of change of status of the account holder’s citizenship or residential status, no interest shall be deemed to
accrue to the account from the change of such status and the account shall be deemed to be closed prematurely from that
date.

The balance at the credit of an account on the date of deemed closure shall be returned, along with interest due, to the
account holder and if the account holder is not alive, then to the guardian.

In case, interest was credited to the account after the change of resident status or citizenship of the account holder, should
be reverted to the Government account by the post office or the Bank concerned, immediately on being informed of such
change in the status of the account holder.

Where the Bank is satisfied that operation or continuation of the account is causing undue hardship to the account holder,
it may, by order, for reasons to be recorded in writing, allow premature closure of the account only in cases of extreme
compassionate grounds such as medical support in life-threatening diseases, death etc.
The account may be transferred anywhere in India, free of cost on furnishing of proof of shifting of residence of either the
guardian or the account holder and otherwise, on payment of a fees of one hundred rupees to the bank to which the transfer
is made.

Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after
Account holder’s attaining age of 18 years to meet the financial requirements of the account holder for the purpose of
higher education and marriage.

Provided that such withdrawal shall not be allowed unless the account holder attains the age of 18 years or has passed
tenth standard, whichever is earlier.
The application for withdrawal as above for education purpose shall be accompanied by a documentary proof in the form
of a confirmed offer of admission of the account holder in an educational intuition or a fee slip form such institution
clarifying such financial requirement.

The withdrawal as above i.e. 50% shall be restricted to the actual demand of fee and other charges required at the time of
admission as shown in the offer of admission or the relevant fee slip issued by the educational institution.

Premature closure of an account may be permitted, any time after the completion of five years of the opening of such
account.

Provided further that premature closure of an account may be permitted, any time after the opening of an account for any
reason other than provided under this sub-rule, and in which case the whole deposit shall be eligible only for the interest
rate prescribed for the Post Office Savings Bank.

The SSA account under default may be regularized on payment of a penalty of fifty rupees per year along with the minimum
specified amount for the year or years of default.

98
BCC;BR:108:424 dated 09.09.2016-Clarification under SSA from GOI.

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 If in case of any account, the default is not regularized within 15 years of the opening of the account, then the whole deposit,
including the deposits made prior to the date of default, shall be eligible only for interest rate prescribed for Post Office
Savings Bank at the time of its maturity and any amount credited wrongly by way of interest into the account under default
shall be reverted to the Government Account as soon as it comes to then office of the Bank or the post office concerned.
The above rule shall not apply if the default occurred because of the death of the guardian of the account holder who
opened the account and in such cases, the account shall be eligible for interest.

The account shall mature on completion of 21 years from the date of opening of the account. Provided that the final closure
of the account may be permitted before completion of such period of 21 years, if the account holder, on an application
makes a request for such premature closure for reasons of intended marriage of the account holder and on furnishing of
age proof confirming that the applicant will not be less than 18 years of age on the date of marriage. No such premature
closure shall be made before one month preceding the date of the marriage or after three months from the date of such
marriage.
On maturity, the balance including interest outstanding in the account shall be payable to the account holder, on an
application by the account holder for closure of the account, and on furnishing documentary proof of her identity, residence
and citizenship.

No interest shall be payable once the account completes 21 years from the date of its opening.

Our Bank has developed software in Finacle for capturing the details of the account opened under SSA. The Menu is
“SSA”, the depositor shall be given a passbook bearing the date of birth of the girl child, date of opening of account,
account number, name and address of the account holder and the amount deposited.

The funds collected under the scheme get transferred to Link Cell during the day end. Next day Link Cell remits the funds
collected to RBI. 1077 branches which are authorized to open PPF accounts are also authorized to open SSA accounts.
Other branches can canvass the account and forward the application to the nearby authorized branch to open such
accounts.
Nominations: Multiple nomination facility is available99.

LAUNCH OF INTERSOL FACILITY FOR DEPOSITING SUBSCRIPTION:

Facility for intersol deposit100 of subscription for SSA is possible through Finacle Menu SSATXN.
Launch of Baroda Connect facility for SSA 2014:

Now customers can register for SSA, deposit subscriptions in their linked account, view the account statement and delink
their account, through Baroda Connect. Job Card available in circular no. BCC/BR/109/232 dated 5th May, 2017

Transfer in facility for SSA 2014:

Customers can transfer their SSA account within our Bank from one branch to other branch or from other bank branch /
Post Office. Job Card available in circular No. BCC/BR/109/280 dated 1st June, 2017.

Last Financial Year we had canvased 76601 accounts under SSA.

Senior Citizen Savings Scheme (SCSS)

Additional 199 branches are authorized101 to open SCSS account in addition to 1072 branches, which were already
authorized to open SCSS Account (Please note that the branches which are authorized to open PPF account are also
authorized to open SCSS Account). A list mentioning the names of these 199 branches are attached with the above circular.
Job Card is also attached with the circular.
Vide circular No. BCC:BR:110/328 dated 30.06.2018
All the branches of Bank are authorised to receive subscription under Senior Citizen Savings Scheme. Therefore, all the
branches are advised to publicize by verbally informing the customers about the authorization and also by putting Banners
/ Standee and other publicity material at the prominent places inside as well as outside Branch premises.
The utility for opening, maintaining & payment of SCSS accounts has already been enabled in the newly authorised
branches by GBM Data centre. Detailed job card is also attached to the above circular.

99
BCC;BR:109:92 dated 11.02.2017 Acceptance of multiple nomination
100
BCC;BR:109:114 dated 01.03.2017 Launch of intersol facility for depositing subscription under SSA
101
BCC:BR:110/111 dated 06.03.2018 Branches authorized to open SCSS

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 Job Card is also attached with the circular.
The “Senior Citizen Savings Scheme” is a deposit scheme specially meant for elderly citizens.
Features of the (SCSS)
The investment can be made only by people of 60 years of age and above
An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can
also open account subject to the condition that the account is opened within one month of receipt of retirement benefits
and amount should not exceed the amount of retirement benefits. The source of fund should be only from the retirement
benefit. This restriction is not there for the individuals who have crossed the age of 60.
People retiring from defence services are eligible to invest in the scheme of age of 50 Years and above, but there are some
additional conditions applicable.
The SCSS account can be opened only by individuals. It cannot be opened by Non-Resident Indians (NRI), Persons of
Indian Origin (PIO) and Hindu Undivided Families (HUF)
The SCSS has tenure of 5 years, which can be extendable by 3 years. Such extension should be applied within one year of
the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of
one year of extension without any deduction.
The investment could be a minimum of Rs. 1000/- and a maximum of Rs. 15 lacs. No. of accounts may be more than one,
but the overall limit of investment under the scheme is Rs.15 lacs. Account can be opened by cash for the amount below
INR 1 lac and for INR 1 Lac and above by cheque only. In case of cheque, the date of realization of cheque shall be date of
opening of account.
The Account can be opened in single name or jointly only with spouse. There is no age limit applicable to the joint account
holder. In case of the death of the primary account holder, the spouse can continue the account, subject to the condition
that the total investment in SCSS should not exceed Rs. 15 lacs.
Interest is decided by RBI every year before the start of the financial year. Now it’s is decided every quarter. Interest for
the current quarter i.e. w.e.f. 1st Oct 2019 is 8.6% p.a. (vide circular NO. BCC:BR:111/498 dated 01.10.2019). Interest is
paid / credited every quarter which means SCSS can provide a steady and periodic income.

Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007. Interest
earned under the scheme is fully taxable. The interest income over Rs.10000/-- is deductible at source. The eligible
investor can submit Form 15H or 115G, to avoid tax deduction at source

The investment can be withdrawn before the maturity date, provided deposit is at least 1 year old. Premature withdrawal
carries a penalty as follows:

Account age between 1 to 2 years a penalty of 1.5% of the deposit amount

Account age over 2 years a penalty of 1.0% of the deposit amount.

Account can be transferred from one post office to another

SCSS deposit cannot be pledged and hence a loan cannot be availed against SCSS account.
Nomination facility is available for SCSS scheme. Names of one or more persons can be specified as nominees. Nomination
can be done even after opening of the account. The nomination can also be changed later. Nomination can also be done
in case of joint accounts. In such cases, the joint holder is entitled to the amount in case of death of the primary account
holder. The nominee(s) would have a claim only after the death of both the joint holders.
The SCSS is backed by the Government of India, and thus, carries a sovereign guarantee for principal and interest
payments. Therefore, it is among the safest investment avenues available in India.
Vide Circular No. BCC:BR:110/573 dated 27.11.2018 – Previously as per the norms of SCSS, customer was not allowed to
open more than one account at the same deposit office during a calendar month, which stands omitted. Now, customer
can open more than one SCSS account in a calendar month provided the deposits in all accounts taken together shall not
exceed the maximum of Rs. 15.00 lacs.
Vide circular NO. BCC:BR:110/607 dated 13.12.18 – necessary modifications are made in the Government Business
Module (GBM) in view of the above norms, therefore, now a subscriber can open any number of SCSS account during a
calendar month up to a combined maximum limit of Rs. 15.00 lacs.

INSPECTION:
Irregularities in opening of Accounts under various Small Savings Schemes like PPF, SSA, SCSS & e-KVP:
Vide circular No: BCC:BR/110/27 dated 14.01.2019
It is observed that, branches are opening accounts & fund the accounts (i.e. PPF/SSA/SCSS & e-KVP) by debiting the
customers without obtaining authority from the concerned customers. As per the Government guidelines the accounts
under the above schemes can be opened by taking proper KYC documents as per the laid down procedures from the
customers.

Last Financial year we had canvassed 36320 SCSS Accounts.

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 BOND

To tap the funds from general public on behalf of the Central Government, Reserve Bank of India is floating the Relief
Bonds/Savings Bonds.
At present in the following Relief Bonds/Savings Bonds our branches are having outstanding balances.
9% Relief Bonds, 1999
8.5% Relief Bonds, 2001
8% Relief Bonds, 2002
8% Relief (Taxable) Bonds, 2003 (collection continued)
7% Savings Bond, 2002
6.5% Savings Bond, 2003
Our 135 branches are authorized to undertake the RBI Bond business.
The Main Issue with this Business was delay in reimbursement of funds for the paid Bonds, which was as long as -6-
months.
Following steps are taken to reduce the delay period.
The Certificate from Concurrent Auditor/Inspector required for obtaining reimbursement of paid Bonds is now done away.
Now the Branch Manager is authorized to sign the certificate and on the basis of certificate from Branch Manager, the
consolidated certificate is issued at Nagpur by our Internal Inspector.
Software with complete data base is provided to the Link Cell, Dharampeth, and Nagpur and also to the authorized
branches for processing all the receipt payment claims.
The awareness at Branch level in respect of revenue loss due to negative float is to be developed.

Authorized Branch Functions

In RBI Savings/Relief Bond scheme, the shadow accounts are opened & maintained for Individual Depositor, at the
authorized branches, as per the procedure and directives of the Government of India and Reserve Bank of India, The
amount collected in the individual account or paid from the same is remitted to or claimed from the Nodal Branch i.e.
Link Cell, Dharampeth, Nagpur.

Nodal Branch Functions:

Responsible to report & communicate with the Reserve Bank of India for all the authorised branches for undertaking RBI
Bond business in the country.
Settle funds with RBI. Reconcile put-through statement with RBI

Earning Potential from RBI bonds

For Each Bond of Rs 10,000 the Earnings are:

1/16of 1% = Rs. 6.25

Transaction Commission: = Rs. 40.00
Repayment with Interest :( approx.) = Rs.7.9
TOTAL : = Rs 54.15

Business Development Aspects:

Such Depositors are normally high net worth individuals and trusts / institutions, hence cross selling of our other deposit
schemes can be made to these segments of customers.
The Small Savings Agents / Brokers / Financial advisor may be contacted for canvassing such deposit accounts by our
authorized branches.
The earning of receipts as well as payments are similar to those of CBDT/ CBEC.
The Branch (1/6 of 1% + 40 per transaction) and agent (1%) both get commission on mobilizing funds for these Bonds.
The Bank also earns when the payments are made. As such on both occasions there is earning for the Bank. As soon a new
series is announced the agents should be briefed suitably and issuance of bonds facilitated so that our Bank gets more
funds.
Recently Govt of India issued a notification, advising amendments in 7.75% Savings (Taxable) Bonds102. The amendments
are in the following areas:
● Point No 4-Tax Treatment: Interest on the Bonds will be taxable under the Income Tax Act, 1961 as applicable
according to the relevant tax status of the Bond holders.

102
BCC:BR:110:31 dated 10.01.2018- Amendments in the scheme .

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 ● Point No 9-Application: 9(i) Applications for the Bonds, either in physical form or electronic form, may be made
in the Revised Form A, attached with the above circular or in any other form as near as thereto stating clearly the
amount, name and full address of the applicant/s.
● (iii) Applications who have obtained exemption from Income Tax under the relevant provisions of the Income
Tax Act, 1961, shall make a declaration to that effect in the application (in Revised Form A) and submit a true
copy of the certificate from Income Tax Authorities.
● Point No-17- Brokerage: Brokerage at the rate of 0.5% of the amount mobilized will be paid to the brokers,
registered with the Receiving Offices, on the application tendered by them and bearing their stamp, on behalf of
their clients.

7.75% Savings (Taxable) Bonds, 2018:

BASIC FEATURES:

Eligibility:
• All individual either individually / jointly / either or survivor basis
• On behalf of minor as father / mother / legal guardian
• HUF

Amount:
• Minimum Rs.1000/- and in multiple thereof, maximum no limit

Tenure:
• 7years

Subscription:
• Cash / DD / Cheque drawn in favour of the Bank branch

Interest:
• Option – Cumulative & non-cumulative
Cumulative
• Interest compounded half yearly and payable on maturity along with the principal
Non-cumulative:
• Interest payable at half yearly interval from the date of issue
• Interest will be paid on August 1 and February 1
• Interest amount will be credited to the bondholder’s bank account electronically

Proof of Investment:
• Certificate of holding is given to the investor as proof of investment

Nomination:
• Nomination of more than one person is allowed
• Nomination can be cancelled / amended
• For each investment there could be separate nomination
• In case nominee is minor, a guardian can be appointed

Redemption:
• Early exit possible
• Lock-in-period from the date of issue:
• For age group 60-70 its 6 years
• For age group 70-80 its 5 years
• For age group above 80 years its 4 years In case of joint holders or more than two holders, the above lock in
period will be applicable even if one of the holder fulfills above condition

BENEFITS TO CUSTOMER:

For lower income group - Conservative:

• Higher return than bank deposit
• Lock in period of 7 years
• Govt guarantee and safety of capital and interest
• Could be invested for specific goal
• For High Income Group - Conservative:

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 • Higher return than bank deposit
• After exhausting limits in deposits such as PPF, this is the best option
• No upper limit for investment
• Guaranteed by Govt for principal and interest
• HUF are also eligible to invest

For Senior Citizens – Conservative:

• Higher return than bank deposit
• No limit on investment when compared to SCSS
• Half yearly interest payable
• Could be redeemed in case of need
• Guaranteed by Govt for principal and interest

BENEFIT TO BANK / BRANCH

• Brokerage @ 1% on subscription
• 1/16th of 1% as handling charges
• On redemption 0.065 paise per Rs.100/-

CUSTOMER TO KNOW BEFORE HE INVESTS:

• Applicant to fill in the form in all respect
• Application submitted by POA holder, Original POA required for verification along with attested copy for
record
• Application on behalf of minor, original birth certificate from school / municipal authorities required for
verification along with attested copy for record
• Please notify change of address to the bank branch
• You will receive an advice of payment of interest one month in advance from the due date
• You will receive maturity intimation advice one month before the due date of the bond.
• You will get a nomination registration certificate
• On redemption you will get the proceeds within 5 clear working days
• In case of delay in getting the proceeds you are entitled to get compensation at the rate decided by RBI vide
their circulars issued from time to time.
• You can transfer the bond interbank or intra bank
• Certificate of holding will be issued within 5 days of tender of application
• Non-residents are not eligible to invest
• Nomination not allowed, if the bond is in the name of a minor
• Not eligible as collateral for availing loan from banks, FI, NBFCs
• These bonds cannot be traded in the secondary market
• These bonds will be issued only in demat form
• These bonds are taxable
• Tax will be deducted at source on payment of interest in the case of non-cumulative & at the time of maturity
in the case of cumulative
• Premature exit can be made only at half yearly intervals i.e. on August 1 and February 1 every year
• On the date of premature encashment, 50% of the interest due and payable for the last six months of the
holding period will be recovered, both in case of cumulative and non-cumulative
• Post maturity interest not payable, hence obtain redemption proceeds on due date
Vide our Bank’s circular No. BCC:BR:111/56 dated 01.02.2019 customer will have an option to change his/her Bonds
from cumulative to non-cumulative in respect of 7.75% Savings (Taxable) Bonds, 2018 on a case to case basis.

Sovereign Gold Bond, 2015

Gold Bond Scheme103: Innovative savings instrument for all sections. Attractive substitute for purchase of physical
gold as a mode of savings”. Government is developing the Sovereign Gold Bond 104, as a measure to contain demand
for the metal in physical form. It is proposed that redemption on of sovereign gold bonds by an individual be exempt
from capital gains tax105. The bonds is sold through banks, Stock Holding Corporation of India, designated post
offices and recognized stock exchanges. The government received subscriptions of Rs. 726 crore for
2,790 kg gold under the second tranche of the scheme in January, while the first tranche launched in November had
received a subscription for 915.95 kg of gold worth Rs. 246 crore. In March, the third edition of the scheme, a

103
BCC;BR:107:525 dated 28.10.2015-Launch of Sovereign Gold Bond
104
BCC;BR:107:533 dated 04.11.2015 Soverign Gold Bond Fund-Revised
105
BCC;BR:107:543 dated 05.11.2015 Sovereign Gold Bond Fund-operational guidelines & Job card

Page 493 of 502

 component of the government's market borrowing programme, received a poorer response getting subscription of
1,128 kg gold, amounting to Rs. 329 crore.

The gold bonds106 are issued in denominations of minimum of 1 gram and a maximum of 4 kg for individuals and
20kg for Trust/Universities/Charitable Institution, for a term of eight years with a rate of interest to be calculated on
the metal's value at the time of investment.

106
BCC:BR:107:530 dated 28.10.2015 Gold Monetization Scheme

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 1. What is Sovereign Gold Bond (SGB)? Who is the issuer?
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors
have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve
Bank on behalf of Government of India.

2. Why should I buy SGB rather than physical gold? What are the benefits?
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of
redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks
and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and
periodical interest.
SGB is free from issues like making charges and purity in the case of gold in jewelry form. The bonds are held in the
books of the RBI or in demat form eliminating risk of loss of scrip etc.

3. Are there any risks in investing in SGBs?

There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of
the units of gold which he has paid for.

4. Who is eligible to invest in the SGBs?

Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB.
Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.

5. Whether joint holding will be allowed?

Yes, joint holding is allowed.

6. Can a Minor invest in SGB?

Yes. The application on behalf of the minor has to be made by his/her guardian.

7. Where can investors get the application form?

The application form will be provided by the issuing banks/SHCIL offices/designated Post Offices/agents. It can also
be downloaded from the RBI’s website. Banks may also provide online application facility.

8. What are the Know-Your-Customer (KYC) norms?

Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to the investor(s).

9. Can an investor hold more than one investor ID for subscribing to the Sovereign Gold Bond?
No. An investor can have only one unique investor Id linked to any of the prescribed identification documents. The
unique investor ID is to be used for all the subsequent investments in the scheme. For holding securities in
dematerialized form, quoting of PAN in the application form is mandatory.

10. What is the minimum and maximum limit for investment?

The Bonds are issued in denominations of one gram of gold and in multiples thereof. Minimum investment in the Bond
shall be one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF)
and 20 kg for trusts and similar entities notified by the government from time to time per fiscal year (April – March).
In case of joint holding, the limit applies to the first applicant. The annual ceiling will include bonds subscribed under
different tranches during initial issuance by Government and those purchased from the secondary market. The ceiling
on investment will not include the holdings as collateral by banks and other Financial Institutions

11. Can each member of my family buy 4Kg in their own name?
Yes, each family member can buy the bonds in his/her own name if they satisfy the eligibility criteria as defined at Q
No.4.

12. Can an investor/trust buy 4 Kg/20 Kg worth of SGB every year?

Yes. An investor/trust can buy 4 Kg/20 Kg worth of gold every year as the ceiling has been fixed on a fiscal year (April-
March) basis.

13. Is the maximum limit of 4 Kg applicable in case of joint holding?

The maximum limit will be applicable to the first applicant in case of a joint holding for that specific application.

14. What is the rate of interest and how will the interest be paid?

Page 495 of 502

 The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment. Interest
will be credited semi-annually to the bank account of the investor and the last interest will be payable on maturity along
with the principal.

15. Who are the authorized agencies selling the SGBs?

Bonds are sold through offices or branches of Nationalized Banks, Scheduled Private Banks, Scheduled Foreign Banks,
designated Post Offices, Stock Holding Corporation of India Ltd. (SHCIL) and the authorized stock exchanges either
directly or through their agents.

16. If I apply, am I assured of allotment?

If the customer meets the eligibility criteria, produces a valid identification document and remits the application money
on time, he/she will receive the allotment.

17. When will the customers be issued Holding Certificate?

The customers will be issued Certificate of Holding on the date of issuance of the SGB. Certificate of Holding can be
collected from the issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents or obtained directly
from RBI on email, if email address is provided in the application form.

18. Can I apply online?

Yes. A customer can apply online through the website of the listed scheduled commercial banks. The issue price of the
Gold Bonds will be ₹ 50 per gram less than the nominal value to those investors applying online and the payment
against the application is made through digital mode.

19. At what price the bonds are sold?

The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of closing price of gold
of 999 purity, published by the India Bullion and Jewellers Association Limited, for the last 3 business days of the week
preceding the subscription period.

20. Will RBI publish the rate of gold applicable every day?
The price of gold for the relevant tranche will be published on RBI website two days before the issue opens.

21. What will I get on redemption?

On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple
average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the
India Bullion and Jewellers Association Limited.

22. How will I get the redemption amount?

Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of
buying the bond.

23. What are the procedures involved during redemption?

The investor will be advised one month before maturity regarding the ensuing maturity of the bond. On the date of
maturity, the maturity proceeds will be credited to the bank account as per the details on record. In case there are
changes in any details, such as, account number, email ids, then the investor must intimate the bank/SHCIL/PO
promptly.

24. Can I encash the bond anytime I want? Is premature redemption allowed?
Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after fifth year from the
date of issue on coupon payment dates. The bond will be tradable on Exchanges, if held in demat form. It can also be
transferred to any other eligible investor.

25. What do I have to do if I want to exit my investment?

In case of premature redemption, investors can approach the concerned bank/SHCIL offices/Post Office/agent thirty
days before the coupon payment date. Request for premature redemption can only be entertained if the investor
approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be
credited to the customer’s bank account provided at the time of applying for the bond.

26. Can I gift the bonds to a relative or friend on some occasion?

The bond can be gifted/transferable to a relative/friend/anybody who fulfills the eligibility criteria (as mentioned at
Q.no. 4). The Bonds shall be transferable in accordance with the provisions of the Government Securities Act 2006 and
the Government Securities Regulations 2007 before maturity by execution of an instrument of transfer which is
available with the issuing agents.

Page 496 of 502

 27. Can I use these securities as collateral for loans?
Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking
Financial Companies (NBFC). The Loan to Value ratio will be the same as applicable to ordinary gold loan prescribed
by RBI from time to time. Granting loan against SGBs would be subject to decision of the bank/financing agency, and
cannot be inferred as a matter of right.

28. What are the tax implications on i) interest and ii) capital gain?
Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). The capital gains
tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long
terms capital gains arising to any person on transfer of bond.

29. Is tax deducted at source (TDS) applicable on the bond?

TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws.

30. Who will provide other customer services to the investors after issuance of the bonds?
The issuing banks/SHCIL offices/Post Offices/Designated stock exchanges/agents through which these securities have
been purchased will provide other customer services such as change of address, early redemption, nomination,
grievance redressal, transfer applications etc.

31. What are the payment options for investing in the Sovereign Gold Bonds?
Payment can be made through cash (up to ₹ 20000)/cheques/demand draft/electronic fund transfer.

32. Whether nomination facility is available for these investments?

Yes, nomination facility is available as per the provisions of the Government Securities Act 2006 and Government
Securities Regulations, 2007. A nomination form is available along with Application form. An individual Non - resident
Indian may get the security transferred in his name on account of his being a nominee of a deceased investor provided
that:
i. the Non-Resident investor shall need to hold the security till early redemption or till maturity; and
ii. The interest and maturity proceeds of the investment shall not be repatriable.

33. Can I get the bonds in demat form?

Yes. The bonds can be held in demat account. A specific request for the same must be made in the application form
itself. Till the process of dematerialization is completed, the bonds will be held in RBI’s books. The facility for
conversion to demat will also be available subsequent to allotment of the bond.

34. Can I trade these bonds?

The bonds are tradable from a date to be notified by RBI. (It may be noted that only bonds held in de-mat form with
depositories can be traded in stock exchanges) The bonds can also be sold and transferred as per provisions of
Government Securities Act, 2006. Partial transfer of bonds is also possible.

35. What is the procedure to be followed in the eventuality of death of an investor?

The nominee/nominees to the bond may approach the respective Receiving Office with their claim. The claim of the
nominee/nominees will be recognized in terms of the provision of the Government Securities Act, 2006 read with
Chapter III of Government Securities Regulation, 2007. In the absence of nomination, claim of the executors or
administrators of the deceased holder or claim of the holder of the succession certificate (issued under Part X of Indian
Succession Act) may be submitted to the Receiving Offices/Depository. It may be noted that the above provisions are
applicable in the case of a deceased minor investor also. The title of the bond in such cases too will pass to the person
fulfilling the criteria laid down in Government Securities Act, 2006 and not necessarily to the Natural Guardian.

36. Can I get part repayment of these bonds at the time of exercising put option?
Yes, part holdings can be redeemed in multiples of one gm.

37. How do I contact RBI to address my queries regarding Sovereign Gold Bond?
A dedicated email has been created by the Reserve Bank of India to receive queries from members of public on
Sovereign Gold Bonds. Investors can mail their queries to this email id.

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 EPFO ( Employee Provident Fund Organization)

On 05.07.2017 our Bank has entered into an MOU with Employee Provident Fund Organization for acceptance of direct
online collection and payment business of EPFO.
EPFO has opened current account with our Bhikaji-Cama Place, New Delhi Branch (Nodal Branch) wherein the online
collection will be deposited by the customers through net banking facility 107.
Benefits to the Bank:
1. Our Bank will get a day’s float, i.e. the funds are required to be settled on T+1 basis.
2. An amount of Rs. 10/- per transaction will be recovered from the customers using Baroda Connect.
Branches:
To be in regular touch with the Local EPFO officials and try to bring in maximum number of accounts in our fold.

eKVP
As per reference to the Gazette Notification No- G.S.R-705(E) dated 23.09.2014 and G.S.R-29 (E) dated 01.01.2018
issued by Department of Economic Affairs, Ministry of Finance, Government of India and RBI circular No - RBI/2014-
15/463 MD(DGBA).CDD.No.3484/15.02.001/2014-15 dated 09.02.2015 regarding Kisan Vikas Patra,2014, The terms
and conditions of issue of Kisan Vikas Patra,2014 are followed. Our bank has also launched the scheme 108.

Denomination for KVP

Rs. 1000 and in multiple of Rs. 1000 without any maximum limit.

Purchase of Certificate
Any number of certificates can be purchased.
i)A certificate may be transferred from a Post Office or Bank at which it stands registered, to any other Post Office or
Bank to the holder making an application in Form B either at Post Office or Bank.
ii) Every such application shall be signed by the holder or holders of the certificate: Provided that in the case of Joint
“A” type Certificate or Joint ”B” type Certificate, the application may be signed by one of the joint holders if the other
is dead.(Branch should ensure due diligence while transferring the certificate)

Transfer of Certificate from one person to another

1) A Certificate may be transferred from one person to another with the consent in writing to an officer of the Branch
as specified in the Table Below(hereinafter referred to in these rules as authorized Bank officer):-
Case in which transfer can be sanctioned Designation of the Officer competent to

grant permission for transfer

(1)

(a)(i)From the name of a deceased holder to his heir officer of the branch, where the Certificates stands
registered.
(ii) From a holder to a court of Law or to any other
person under the orders of courts of law. Bank officer of the branch, where the Certificates
stands registered.
(iii) Form a single holder to the names of Joint
holders of whom the transferee shall be one.

(iv)From Joint holders to the name of one of the Joint officer of the branch, where the Certificates stands
holders. registered.

(b) From Single or Joint holders to another person.

officer of the branch, where the Certificates stands

registered.

107
BCC:BR:109:400 dated 08.08.2017-Engagement of our bank for direct online collection and payment
business of EPFO.
108
BCC;BR:110:402 dated 10.08.2018-Master circular on e-Kisan Vikas Patra Scheme 2014

Page 498 of 502

 officer of the branch, where the Certificates stands
registered.

Nominations-
No nomination shall be made in respect of a Certificate applied for and held by or on behalf of a minor.
A nomination made by the holder or holders of a Certificate under this rule may be cancelled or varied by submitting an
application in Form D.
Separate application for nomination, cancellation of nomination or variation of nomination shall be made in respect of
Certificates registered on different dates. The nomination or cancellation of a nomination or variation shall be effective
from the date it is registered in the Bank, which shall be noted on the certificate. No fee shall be charged for the nomination
made for the first time, but a fee of Rs.20/- per subsequent nomination or cancellation shall be charged by the Bank.

Post Maturity Interest

Where repayment of the amount ,inclusive of interest, under the rule 16 has become due but has not been
made ,interest shall be allowed on the amount due on the date of repayment of the amount subject to the
following conditions namely:-
i) the interest shall be simple and shall be calculated at the rate applicable from time to time to Post Office Savings
Account of the type of single or joint account.
ii) for the purpose of payment of interest, any part of the period which is less than one month shall be ignored.
iii) The interest shall be paid to the depositor in lump sum at the time of repayment of the amount due.

Replacement of Lost or destroyed Certificates

If a certificate is lost, stolen, destroyed, mutilated, the person entitled thereto may apply for the issue of a duplicate
Certificate to the Branch of Issue if the Bank Officer of the branch of issue is satisfied as to the loss, theft, destruction,
mutilation or defacement of the Certificate, he shall issue a duplicate Certificate on the applicant’s furnishing an indemnity
bone in the form laid down by the Bank with two sureties or with a bank’s guarantee.
At EOD, the whole amount pertaining to e-KVP will be debited to G/L of the Branch and will be credited to our Link Cell,
Nagpur by the system and Link Cell, Nagpur will further credit the amount to CAS, Nagpur (RBI) on nest day.
Branches to ensure strict compliance of KYC Norms at the time of opening of e-KVP Accounts for customers and
reconciliation of the KVP Accounts on daily basis at EOD.

Branches to ensure strict compliance of KYC Norms as the time of opening of e-KVP Accounts for customers and
reconciliation of the KYP Accounts on daily basis as EOD.

Vide circular no. Circular No. BCC:BR:110/458 dtd 07.09.2018

• E-KVP customers can now view their e-KVP certificate by logging to their Baroda Connect Account
• Job card for the above activity along with the table showing premature encashment value of Certificates is
enclosed.
• On demand of a printout of certificate, branch to sign in blue ink.
• A photocopy of the printout to be kept in file, for cross verifying at the time of transfer/ encashment
• System will allow generation of KYP Certificate only once.
• The facility of transfer of KVP from Post Office to Bank and vice-versa & Transfer of certificate from one person
to another person is presently under development and will be available soon in our Finacle system

Vide Circular No. BCC:BR:111/496 dated 01.10.2019, rate of interest for KVP is 7.6% i.e. will mature in 113 months.
Compounding interest is on Annual basis.

Turnover commission

Vide Circular No. BCC:BR:111/378 dated 03.08.2019 we are eligible for agency commission against following Govt
transactions:
a. Revenue receipts and payments on behalf of the Central / State Government
b. Pension payments in respect of Central / State Governments
c. Public Provident Fund (PPF) Scheme, 1968
d. Special Deposit Scheme (SDS), 1975
e. National Savings Certificates (VIII Issue) Scheme, 1989
f. Senior Citizen Savings Scheme (SCSS), 2004
g. Kisan Vikas Patra, 2014
h. Sukanya Samriddhi Account
i. Any other item of work specifically advised by Reserve Bank as eligible for agency commission (viz. Relief

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 Bonds/Savings Bonds etc. transactions)
j. Central Pension

TOC is paid by RBI to agency Banks for the Government Business done by them. At present RBI is paying Agency
Commission at following rate informed vide their circular No. DGBA.GBD.No.H.3144/31.02.007/2018-19 dated June 20,
2019.

Sr. No. Type of Transaction Unit Rate

1.(i) Receipts-Physical mode Per transaction 40/-

(ii) Receipts- e-mode Per transaction 09/-

2 Pension Payments Per transaction 75/-

3 Payments other than Pension Per Rs.100 turnover 6.5 paise

Since the commission in respect of receipts is based on no. of transactions, the nodal branches should
ensure that the transactions reported to Link Cell on daily basis are correct. Any discrepancy found in
no. of transactions already reported to Link Cell must be informed promptly before TOC claim so as to
rectify the claim. It is also advised to the branches authorized for Physical mode, not to route the
collection received through e-mode.
RBI vide its letter no. RBI/2016-17/322 DGBAGBD.No. 3262/31.02.007/2016-17 dated 15.6.17 have
reviewed time period allowed to Agency Banks to furnish their claim on agency commission to RBI from
two quarters to 90 days from the end of the quarter in which the transaction has been conducted.
The TOC claim settled by RBI is sent to CPPC Gift City (Earlier New Delhi) along with TOC register for
distribution to branches.
RBI vide its letter no. RBI/2019-20/69 DGBAGBD.No. 648/31.02.007/2019-20 dated 25.09.2019 related
to claiming of agency commission – Furnishing reconciliation certificate. Agency bank while claiming
agency commission may submit the certificate Annex B certify by chartered Accountants or By Cost
Accountants. There is no change in Annex A and other usual certificate from ED/CGM (in charge of
Government Business)

Procedure of Remitting TOC (collected) to CPPC

The mode of remitting the Turnover Commission received by the:-
Nodal Branch
Link branch
By means of ‘O’ schedule drawn on HO sol id 3244 (CPPC) for the credit of Account No.32440015181228
entitled “Revenue Pool Account Government Business”. Along with schedule, a list giving the branch-wise details
of the transactions by each branch on whose behalf the turnover commission has been claimed and received should be
given. The information should be given as far as possible in soft form written on a CD/ by email.
Procedure of Crediting the TOC to each branch
The CPPC would credit each branch through the Finacle. The TOC arrived at for the individual branch is credited
through TTUM in the branch P/L account “Commission earned on Govt. Business” A/c. No.
“XXXX0042101009”.
However, in respect of GBRS 3 – State Taxes , GBRS 5- State Treasury , the Turnover Commission is claimed by the Nodal
branches in respect of e-tax payments and by the Link Branches for physical payments and also for various pension
payments other than those mentioned above (viz. Central Civil, Defence, Railway, Postal, Telecom & Central Freedom
Fighters) the branches should ensure that the Turnover Commission is claimed timely and transferred to
CPPC/Government Business Department for the functioning of transfer mechanism as also to ensure that there are no
revenue leakage .
It may be noted that the revised System seeks to incentivize each branch for undertaking Government Business and
therefore the role of Link Cell, Nodal Branch is of crucial significance.

The important features of the new sharing pattern are as follows

1) The branch which has undertaken the Business shall get revenue equivalent to 100% of the Turn over Commission (TOC)
received by the Bank.
2) The Nodal/Focal Point Branches shall get 10% of the revenue earned by the Bank for the business routed through them,
as incentive under the Transfer Price Mechanism (as an incentive under HO Interest System).
3) The Link Cell, Nagpur, is now under the administrative control of the Government Business Department And therefore
Dharampeth, Nagpur branch shall receive subsidy on the lines similar to those applicable for the Lead Bank Cells/Currency
Chests etc.

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 4) Each branch shall be given credit of income from CPPC/Government Business Department directly.

The sharing pattern is aimed at

a) Encourage the branches to increase the revenue from Government Business.
b) Avoid leakage of income.
PENALTY:
For delayed remittance of Government Collection by the branches, invites Penal Interest from the concerned Government
Depts., the Penal Interest is levied at the rate of Bank Rate + 2% for the delayed remittance of Government receipts into
Government Accounts.
CGA (Controller General of Accounts) has observed that the Penal Interest on Banks are not being remitted to the
Government in time. Therefore, RBI has decided to directly debit Penal Interest from the Agency Bank’s accounts as and
when considered necessary. RBI has decided to take an “Authorizations-cum-undertaking” from all the Agency Banks to
debit the current account towards penalty levied and facilitate the payment of same to the Govt. of India.

Our Executive Director has advised all the Government Business handling branches to:
1. Ensure timeliness of remittance of Penalty/Penal Interest
2. Concerned officials will be personally held responsible for delay if any or the consequential Penalty/Penal Interest
levied.

GOVERNMENT ACCOUNTS
Circular No. HO: BR: 109:167 dated 21.09.2017
1. All New Savings Bank and Current Accounts of Government Department are invariably to be opened and activated
at the RBOs after ensuring KYC compliance.
2. Exception from (1) above may be considered on merit/exceptional circumstances with the due permission from
Regional authorities.
3. When request is received from the Government organization for opening a new account, Branch Head should visit
office of the Government organization immediately and meet the Officials concerned before opening the account.
Format to be filled in is attached herewith. Branch should submit the duly filled in format to RBO along with Account
Opening Form. In case of exigency, if account is required to be opened at branch, Branch to fill the form and submit
the same to Regional Office. Regional Office should satisfy upon the same and give their authorization to branch to
open the account through R-menu and return the said form to the branch which should be kept with Account opening
form by the branch. Regional office should keep copy of form with them. In case of existing accounts of Government
Departments, it is observed that branches have not obtained KYC documents properly. Account opening Forms are
also not filled in completely. Branches are therefore advised to follow guidelines given in Circular HO:BR:109:153 dated
01.09.2017 regarding Master Circular: Know your Customer (KYC) norms /Anti Money Laundering (AML)
standards/Combating of Financing of Terrorism (CFT)/Obligation of Bank under PMLA, 2002 ,para 3.3.2 ( C ) v page
no. 19 which reads as under:

Quote:
V) For opening accounts of juridical persons, not specifically covered in earlier part such as Government or its
Department, Societies, Universities and Local bodies like village panchayats, a certified copy of following documents
shall be obtained.
I. Document showing name of the person authorized to act on behalf of the entity.
II. “Officially Valid documents” for proof of identity and address in respect of person holding a power of attorney to
transact on its behalf and
III. Such documents as may be required by the Bank to establish the legal existence of such an entity/judicial person.
Unquote:
Branches are advised to obtain applicable KYC documents in existing accounts also, if not obtained earlier. In case of
Savings Bank account of Government Departments, (except Government Bodies depending upon Budgetary allocation
for performance of their functions as per RBI directives Saving Bank account can also be opened in the name of
Government departments/bodies/agencies in respect of grants/subsidies released for implementation of various
programs/ schemes sponsored by Central/State Government on production of an authorization to the bank from
competent authority of respective department certifying that the concerned Govt. Deptt. or body has been permitted to
open SB a/c. Bank should also keep on their record a copy of the authorization issued by the respective Government
Departments.
In order to monitor transactions in accounts of Government Departments, following alerts are
generated in FRMS w.e.f. 27.12.2017:-

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 Sr.no. Transaction Particulars Alerts generation at

1 Transactions in Accounts of Government Departments up to ` 25 lacs Branch Level

2 Transactions in Accounts of Government Regional Office Level

Departments for above ` 25 lacs and up to` 1 crore

3 Transactions in Accounts of Government Zonal Office Level

Departments for above ` 1 crore

If it is noticed by the branch, that in case of accounts of certain Government Departments, above alerts
are not generated, they should inform their higher authorities.
Branches, Regions and Zones are requested to attend these alerts and close the same after verifying genuineness of
transactions immediately.
Branches are also advised as follows:-

• Mobile number of the Nodal officer (authorized signatory) should be obtained after due concurrence of
Government Organisation so that “SMS alerts” of the transactions can be sent on the registered mobile
number.
• Along with Mobile Number, email id of Government Department should also be registered in the account so
that email alerts can also be sent.
• Account statement through email will also be sent through system on the registered Email Id of the account.
• Branches should also arrange to deliver hard copy of the statement of account, to Government Department
against clear acknowledgement at regular intervals and Balance confirmation certificate should also be sent to
the department on monthly basis.
• Government Departments should be invariably advised to obtain at least viewing rights of internet banking to
enable them to view and monitor the transactions of their accounts.
• Zonal Heads and Regional Heads, during their review meetings with Branch Heads, and also during their
branch visits to lay stress on compliance of KYC/AML/CFT norms and advise branches to exercise due
diligence while screening and accepting customers before commencing a business relationship especially from
Government Departments.
• During the currency of account, the account should be monitored on regular basis. Branch Head/Officials of
the branch should regularly visit Government Department and meet their authorized officials.

Vide Circular No. BCC: BR: 110/85 dated 21.02.2018 our Bank has started sending account statements on the available
email id of the Govt Accounts. It is observed that in some cases the emails are returned / undelivered. In such cases,
branches should immediately contact the concerned Govt Dept and arrange to get the correct email ID and update the
same in the FINALE, so that such mails are not returned / undelivered.

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