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BCC:BR:98:182 2006 CIRCULAR TO ALL BRANCHES AND OFFICES IN INDIA Sub.

File Deposit 1 ISSUED BY RETAIL BANKING DEPARTMENT Dear Sir,

July 10,

Re: Retail Banking: Introduction of BARODA SALARY ADVANTAGE SAVINGS ACCOUNT a Savings Bank product with an in built feature of granting overdraft facility to the salaried persons. At present Bank has a product known as Baroda Personal Loan for meeting various medium term financial needs of individuals. The product has received very good response due to its hassle free and customer friendly nature. However, many a times, salaried persons need small amounts for the short period (i.e. up to payment of next salary to them) to tide over their emergent unexpected expenses viz. sudden illness of any family member, school payments etc. Therefore, a need was felt for introducing a new Savings Bank product with provision of allowing overdraft to the employees in their account to bridge the time gap till payment of salary for current / next month. Accordingly, a new Savings Bank product has been developed containing these features. You may be aware that Bank had a product known as Family Budget Plan which was having a provision of granting overdraft equivalent to one month salary in savings bank

account of employees of Central / State Govts. However, in those days, most of the employees were getting salary in cash from their employees. Hence, follow up with employees for crediting salary every month in the account was one of the major problems encountered by branches. Learning from our past experience, it has been specified that product shall be offered to those employees only who are maintaining satisfactorily conducted salary accounts with the branch for at least last three months. The detailed product profile is as per Annexure I. Due to introduction of cash transaction tax, now all the corporations, companies, other business entities have started paying salary to the employees by credit in their accounts with concerned Banks. Similarly most of the Central / State Govt. employees are also getting salary through the credits in their accounts. Therefore, branches may contact salary-disbursing authorities in various government departments / Corporations / Companies/ Institutions operating in their area and mobilize the salary accounts of their employees.

OTHER ISSUES: CBS, BIBAS and BOBLAN Systems support the product while such features are not available in ISBS system, therefore, branches under CBS, BIBAS and BOBLAN

shall only be able to offer this product to their customers. With a view to simplify the sanction procedure, a simplified application cum sanction memo (Annexure II) has been devised, which may be used for considering proposals received under the product. The branches may get typed / cyclostyled or printed the Application Cum Sanction memo as per their local requirement. Form No. 117-A on borrower/ guarantor need not be prepared. This is basically a Savings Bank product, hence, all other rules governing the Savings Bank accounts will be applicable to such accounts, mutatis mutandis. All overdrafts in such savings bank accounts shall be reported in the Weekly Form No.153 along with balances in other overdraft accounts, as being done in case of ODs / TODs in current accounts / other savings bank accounts. The CBS, BIBAS and BOBLAN branches should aggressively sell this product to eligible employees in their operational area. Progress achieved under the product should be reported by incorporating the same in monthly statement of Retail Banking to their Regional Office who in turn will submit us consolidated data regularly on monthly basis. Yours faithfully, (Ajai Kumar) Dy. General Manager (Retail Banking) Encl. As above. ANNEXURE - I PRODUCT NATURE :

This is basically a Savings Bank Deposit product having an in built feature of overdraft facility to the salaried persons as per eligibility criteria. TARGET GROUP : The product is targeted to mobilize salary accounts of employees. MINIMUM AMOUNT & BALANCE : All branches irrespective of area classification can open accounts with zero balance. There is no minimum balance requirement in the account and as such no service charges shall be levied towards this. MAXIMUM AMOUNT : There shall be no ceiling on the amount to be deposited and credit balance in the account. Special Features of the product: The branch SHALL offer Overdraft facility (Clean/unsecured) to employees who fulfill the eligibility criteria mentioned hereunder to meet out their emergent short-term family needs, on following terms and conditions: ELIGIBILITY CRITERIA : Regular Employees of State / Central Government, Public Sector Undertakings, Semi government Organization, State / Central Govt. Corporations, Urban Development Authorities, Educational Institutions, Universities, MNCs, reputed Public Ltd Companies with minimum one year service with the organization Employees of Private Limited Companies may be considered by Regional Authorities on

selective basis after ascertaining their standing and banking relationship with us, if any. Minimum age of 21 years. Minimum take home Salary should not be less than Rs. 5000/-. Maintaining satisfactorily conducted salary account with the Bank at least for three months. Overdraft Limit: 90% of net salary of average of last three months subject to Maximum of Rs.1 lac. Interest Rate & Procedure for Application: On Credit Balance : The customer shall earn interest on credit balance in the account as per savings bank account rules viz. relating to periodicity, rate and system of application of interest, computation of eligible balances etc. On Debit balance : In case of overdraft in the account, interest shall be charged @ 1.5% above BPLR i.e. 12.5% p.a. with monthly rests. A Minimum interest of Rs. 10/shall be charged during a month if OD is availed. Processing & Documentation Charges: 0.50% of limit sanctioned / reviewed subject to minimum of Rs. 100/- + service tax as applicable. Period : 12 months, subject to annual review. Baroda Salary Advantage Savings Account Security: Third party guarantee shall be obtained. Cross guarantee may be accepted. Documents:

D. P. Note. A single document shall be obtained from the customer (Annexure - III). General form of Guarantee. Documents to be submitted by applicant: Application Form as per Annexure - II. Employers Certificate as per Annexure - II. (Form No. 135 and 117 - A are dispensed with). Liquidation of Overdraft: The account is to be brought into credit once in 60 days. Other conditions: The facility is to be offered to the employees of such organizations, which are financially sound and paying the salary to its employees regularly. The Conduct of the salary account and other loan accounts, is to be satisfactory. Employee should not be under suspension. After sanction of facility, the Branch to monitor the accounts by verifying the credit of salary in the accounts each month. All overdrafts in such savings bank account shall be reported in the weekly Form 153 along with balance in other overdraft accounts, as being done in the case of TODs/ODs in current accounts. Discretionary Lending Powers: The branches may consider the proposals falling within their lending powers for unsecured advance as per grade/scale of the Branch Head. Any proposal beyond their power shall be referred to next authority.

Sanction of facility: The branch should scan salary savings bank accounts wherever the salary is being credited since last three months and the conduct of the account is satisfactory. The Branch Manager should satisfy himself about the financial soundness of the employer before considering the facility. No detailed sanction of the proposal is required to be prepared. Form. No. 117-A on borrower / guarantor need not be prepared. Simplified sanction memo as per Annexure-II is to be used. Reporting for PSR purposes to be done as usual. OTHER SALIENT FEATURES : Other rules governing the Savings Bank a/c will also be applicable to such account mutatis mutandis. Cheque-books shall be issued free of charges for routine requirement. However, in case of bulk requirements such as giving PDCs for loans availed / to be availed from other banks/ institutions / Finance Companies, normal cheque book charges shall be levied. Staff members shall not be eligible to avail facility under the product. RETAIL BANKING DEPTT. BARODA CORPORATE CENTRE MUMBAI. Annexure II APPLICATION FORM FOR BARODA SALARY ADVANTAGE SAVINGS ACCOUNT The Branch Manager,

Bank of Baroda __________________ __________________ Dear Sir, I am having a SB Account No. hereby with your branch since . I

request you to sanction me an Overdraft Limit of Rs._______ (Rs.______________________________) for meeting my emergent family needs. I shall abide by the terms and conditions stipulated by the Bank in this regard. I submit my brief particulars hereunder: 1. Full Name: Fathers Name:

2. Name and address of the present employer:______________________________ _________________________________________________________________ 3. Employee Code No 4. Date of Birth Designation Date of Joining

5. Nature of Employment: Regular / Temporary /On contract 6. Whether the job is transferable :Yes / No 7. Gross Emoluments (for month of ) :Rs.

Deductions :Rs. Net Emoluments :Rs.____________________

8. Present residential address___________________________________________ ________________________________________________________________ Phone No.(R)_____________(O)____________MobileNo.___________ e-mail___________ 9. Permanent Address_________________________________________________ __________________________________________________

10. Name & Address of the proposed Guarantor: ______________________________________________________________________ ______________________________________________________________________

11. Details of guarantors occupation :________________________________ Phone No. (O)_______________(Res.)___________________SB A/c No.__________ Place: Applicant) (Signature of

(The information already available with the branch about applicant shall be filled in by branch itself.) CERTIFICATE TO BE ISSUED BY EMPLOYER This is to certify that Shri / Mrs. / Ms. ________________________________________ is a regular employee of our organization / institution. The aforesaid information provided by the applicant is true and correct as per our records. Signature Place: Authority) Date: Designation : Official stamp: ______________________________________________________________________ FOR OFFICE USE (PROCESSING CUM SANCTION MEMO) A/c Mr. SB A/c No. (Head of the Dept. / Salary Disbursing Name:

1. Month from which salary is disbursed through above account:

_______________ 2. Amount of Salary for the month of , 200.. credited in the account: Rs._______ 3. Conduct of SB Account and other Loan accounts, if any: Satisfactory/unsatisfactory/ _______ 4. Overdraft Limit: Rs.

5. Rate of Interest: ----%above BPLR Min. _____ p.a. with monthly rest. Minimum amount of interest if overdraft is taken during a month: Rs.10/6. Personal guarantee of Mr.:_____________________________________________ ____________________________________________________________________ (name & address of the guarantor) 7. Period : 12 Months. 8. Documents: D. P. Note. Stamped undertaking to be singed by the borrower. General Form of Guarantee. Recommended Incharge, Savings Bank Dept. Date: _________________ Annexure - III _______________________ Sanctioned Chief / Senior / Branch Manager

Stamp as an Agreement The Branch Manager Dated:

Bank of Baroda ________ Branch Dear Sir, In consideration of your having agreed to my request to open Baroda Salary Advantage Savings Account (with Over Draft facility) in my name, I hereby irrovocably undertake, assure and declare: 1. I have read and understood the rules of the said scheme; I fulfill the eligibility criteria therein specified and I shall abide by the same.

2. I am a Savings Bank Account Holder of your branch bearing Account No.______ for the past __________ months/years. 3. I am a confirmed employee of ____________________ which is a (State / Central Government / Public Sector Undertaking / Semi Government Organization, State / Central Government Corporation, Urban Development Authorities / Educational Institutions / University / MNCs / Public Ltd. Company). 4. I hereby agree to pay the documentation and processing charges as may be applicable from time to time together with service tax as applicable. 5. I am working in the aforesaid organisation for the past ________ years. My salary account is maintained with your branch for the past ______ years, wherein the current minimum take home salary is Rs.________ (Rupees ______________only). 6. That with reference to the Demand Promissory Note for Rs._________ (Rupees _____________________ only) executed by me in favour of the Bank and

handed over to you to be held against the account in the name of _______ , I hereby place on record the fact that the said Demand Promissory Note is to be treated as Continuing Security for the balance, interest and other charges from time to time due to the Bank and the said Baroda Salary Advantage Savings Account (Over Draft facility) is not to be considered as closed for the purpose of this security and the security is not to be considered exhausted by reason of the said Baroda Salary Advantage Savings Account (Over Draft facility) being brought to credit at any time or from time to time. 7. I confirm that the balance at the debit of my account is repayable on demand. I further agree and confirm that you may without any notice to me, increase the rate of interest specified in the said Demand Promissory Note as and when the Benchmark Prime Lending Rate (BPLR) undergoes any change. 8. I agree that upon availing the said facility I shall bring the account into credit periodically i.e. at least once in every sixty (60) days and route all the transactions through the account only. DRAFT UNDERTAKING9. I further agree and confirm that I shall bear and pay interest at the rate of _____ % over Benchmark Prime Lending Rate of the Bank per annum with monthly rests or at such rate or rates as the Bank may specify to me in writing in accordance with the Banks Benchmark prime lending rate from time to time. However, in case, overdraft is availed by me in any month, I agree to pay a minimum interest of Rs.10/- (Rupees Ten only) per calendar month. In case of credit balance I shall earn interest on credit balance in the account as per savings bank account rules viz. relating to periodicity, rate and system of

application of interest, computation of eligible balances, etc. 10. I further place on record the fact that there is no mortgage or lien of any kind whatsoever created on my properties and that I undertake not to create any mortgage or lien of whatsoever kind or nature over the same; nor to sell or alienate any of my immovable properties or assets of capital nature until all the debts due by me to Bank of Baroda are fully paid. I know that it is on the faith, the representations and undertakings contained herein the Bank has agreed to open the said account. 11. I hereby agree as a condition of such Over Draft facility extended to me by you that in case I commit default in the repayment of such Over Draft facility or in the payment of interest thereon or in case of persistent irregularity, you and/or Reserve Bank of India will have an unqualified right to disclose or publish my name as defaulter in such manner and through such medium as you or Reserve Bank of India in your/their absolute discretion may think fit. 12. The said account will be operated by me and the indebtedness caused by such drawings from time to time will be of mine. I shall operate the said account at all times within the overdraft limit of Rs.___________ fixed by you w.e.f._________. 13. I further confirm that in the event of the advance remaining outstanding for a longer period than 60 days at a time, I shall adjust the said overdraft account immediately with interest, additional interest and penal interest if any, fixed by you from time to time.

14. I further confirm that this facility allowed to me as per my request is in your absolute discretion and may be discontinued by you at any time without any previous intimation to me. 15. I understand that it is on the faith of this irrevocable undertaking that you have agreed to grant the facility as aforesaid.

Yours faithfully

(Signature) Name : A/c. No : Address: