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Bank of Baroda.

BSE: 532134 Sector: Financials
BSE 00:00 | 24 Apr Bank of Baroda
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OPEN 47.80
VOLUME 1207774
52-Week high 143.60
52-Week low 46.15
Mkt Cap.(Rs cr) 21,439
Buy Price 46.40
Buy Qty 50.00
Sell Price 46.40
Sell Qty 45.00
OPEN 47.80
CLOSE 48.45
VOLUME 1207774
52-Week high 143.60
52-Week low 46.15
Mkt Cap.(Rs cr) 21,439
Buy Price 46.40
Buy Qty 50.00
Sell Price 46.40
Sell Qty 45.00

Bank of Baroda. (BANKBARODA) - Director Report

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Company director report


Your Directors have pleasure in presenting the One Hundred and Eleventh Annual Report of your Bank with the audited Balance Sheet Profit & Loss Account and the Report on Business and Operations for the year ended March 31 2019 (FY 2019).

Financial Performance

A snapshot of the Bank's financial performance is as below:

Rs. in crore
of which- Domestic
International Deposits124341.0120723.2(2.9%)
Domestic Deposits466973.8517966.610.9%
of which- Current
Account Deposits31193.134327.610.1%
Savings Bank Deposits161130.0174076.28.0%
CASA Deposits192323.1208403.88.4%
Domestic CASA to



Domestic Deposits (%)
of which- Domestic
International Advances103193.398633.8(4.4%)
Total Assets719999.8780987.48.5%
Net Interest Income
Other Income6657.26090.9(8.5%)
of which-Fee Income3249.73576.110.0%
Forex Income909.2693.2(23.8%)
Trading Gains1877.6989.5(47.3%)
Recovery from PWO620.7832.034.0%
NII + Other Income22179.024774.711.7%
Operating Expenses10173.411288.011.0%
Operating Profit12005.613486.812.3%
of which-
Provisions for NPAs &14211.712192.4(14.2%)
Bad debts written off
Profit Before Tax(2790.7)698.2
Provision for Tax(358.9)264.6
Net Profit(2431.8)433.5
Appropriations/ Transfers
Statutory Reserve0108.4
Capital Reserve0210.4
Revenue and Other
I) General Reserve (2431.8)0
II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 19610182.1
Proposed Dividend00
Rs. in crore
Key Performance Indicators31.03.1831.03.19
Average Cost of Funds (%)4.564.83
Average Yield (%)6.847.28
Average Interest Earning Assets637987.0686743.0
Average Interest Bearing
Net Interest Margin (%)2.432.72
Cost-Income Ratio (%)45.8745.56
Return on Average Assets
(ROAA) (%)
Return on Equity (%)(7.64)1.18
Book Value per Share (Rs.)120.28138.42
Basic EPS (Rs.)(10.53)1.64

The benefit of structural changes undertaken by the Government and Reserve Bank of India (RBI) finally bore fruit in FY 2019. The implementation of the Insolvency and Bankruptcy Code (IBC) has led to improvement in cash recovery in the banking system. In addition the ratio of non-performing loans to advances for Scheduled Commercial banks (SCBs) has also started to come down and now stands at 10.8% as on September 2018 from 11.5% as on March 2018. The steady uptick in credit growth during the year in conjunction with decline in non-performing loans implies underlying improvement in the operating performance of the banking system. However deposit growth continues to remain a challenge. Banks have raised interest rates on deposits to mobilise them and this will lead to higher inflow of resources to the banking system. Domestic deposits of the Bank increased by 10.9% in FY 2019 compared with an increase of 6.1% in FY 2018. Domestic credit growth was above industry growth at 14.2% which led to a 20.4% increase in net interest income (NII). Both domestic as well as international margins expanded. The net interest margin (NIM) improved from 2.43% to 2.72% in FY 2019. The cost to income ratio decreased marginally to 45.56%.

The Bank posted an operating profit of Rs. 13486.8 crore registering an increase of 12.3%. Total provisions (other than tax) and contingencies decreased by 13.6% and provisions for NPAs reduced by 14.2%. The Bank posted a net profit of Rs. 433.5 crore.

Capital Adequacy Ratio (CAR)

Ratios in %
Capital Adequacy Ratio -
Basel III
Tier - I10.4611.55
Tier - II1.671.87

The Capital Adequacy Ratio (CAR) and CET-1 of the Bank stood at 13.42% and 10.38% respectively as on March 31 2019. The consolidated group capital adequacy ratio was higher at 14.52%. The Bank's net worth as of March 31 2019 was Rs. 36620 crore comprising of paid-up equity capital of Rs. 530 crore reserves of Rs. 31047 crore (excluding revaluation reserves foreign currency translation reserves and other intangible assets) and share application money pending allotment worth Rs. 5042 crore. The book value of the share (FV Rs. 2) was Rs. 138.42.


Bank is not eligible to pay dividend for the financial year 2018-19 on account of not meeting the eligibility criteria stipulated by RBI for this purpose.

Management Discussion and Analysis Global Economy

The global economy slowed down to 3.6% in Calendar Year (CY) 2018 after growing at 3.8% in CY17. The slowdown was markedly visible in the second half of the calendar year. According to IMF global growth is likely to slip further to 3.3% in CY19 before picking up to 3.6% in CY20. The dip in global growth was largely on account of a slowdown in growth in Europe and China. The US housing sector has also seen some deceleration after yields increased as a result of successive rate hikes by US Federal Reserve. Other factors that have contributed to the global slowdown are Brexit imposition of tariffs by US and China and run-off of US fiscal stimulus. According to IMF growth is likely to pick-up in H2CY19 on the back of accommodative monetary policies by major central banks prospects of a positive US-China trade deal and China's fiscal stimulus to boost domestic consumption. Growth in Emerging Market and Developing Economies (EMDEs) is expected to rebound to 4.8% in CY20 from 4.5% in CY18 and 4.4% in CY19. Advanced Economies (AEs) will continue to witness modest growth which is expected to level at 1.7% in CY20 versus 2.2% in CY18 and 1.8% in CY19. Downside risks to global growth may emerge from escalating trade tension between US and other countries a no-deal Brexit and geopolitical risks driving oil prices higher.

Indian Economy

The Indian economy witnessed a growth of 7% in FY 2019 down from 7.2% in FY 2018. This is the slowest pace of growth in over 5 years. The drop is primarily on the back of a slowdown in the agriculture sector which is expected to clock only 2.7% growth in FY 2019 much lower than the 5% growth in FY 2018. The area sown under both Kharif and Rabi declined due to spatially distributed and below normal rainfall. Manufacturing which was hitherto driving growth in the larger part of the year is also seeing a slowdown now as both external and domestic demand seems to have slowed down. Construction is the only bright spot on the back of higher spending by state governments.

With growth coming off retail inflation has also fallen to 3.4% in FY 2019 as compared to 3.6% in FY 2018. This was led by benign food inflation at around 0.2% in FY 2019 compared to 1.8% in FY 2018. Core inflation on the other hand remained elevated at 5.8% in FY 2019 as against 4.6% in the previous year. Higher oil prices in H1FY 2019 and stickiness in the health and education components drove the core CPI higher. However core inflation has been steadily coming off towards the end of the year. Domestic consumption has seen a cyclical slowdown with drop in auto sales and non-oil-non-gold and electronic imports. However the announcement of measures such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and expected upturn in government spending in the next quarters may provide the requisite boost to the economy. In addition the government's effort towards providing affordable housing and building infrastructure are also likely to support investment demand in the economy in the near term.

Developments in Indian Banking

With growth and inflation coming-off RBI has reduced policy rates. The anticipation of change in stance and reduction in policy rates did lead to decline in 10-year government bond yields which had increased substantially in H1FY 2019 and had peaked at 8.18%. This was driven by increasing liquidity deficit on the back of FPI outflows. Higher oil prices and NBFC liquidity woes also contributed to upward pressure on yields. As a result the RBI undertook durable liquidity infusion in the form of Open Market Operation (OMO) purchases of Rs. 2.99 lakh crore and US$ swap. These measures coupled with the slowdown in global growth and the dovish outlook by major global central banks led to decline in yields in the latter half of FY 2019. Credit growth of the banking system continued to improve in the year from 10.0% as on March 31 2018 to 13.2% as on March 31 2019. Deposit growth that was lagging behind also showed an improvement to 10.0% as in March 2019 compared with 5.8% as in March 2018. This has been possible due to higher interest rates offered by banks.

The increase in credit growth is driven by government's recapitalisation to the extent of Rs. 1.06 lakh crore in Public Sector Banks (PSBs) in FY 2019. The structural reforms undertaken by the government and RBI are also visible in underlying improvement in stressed assets of the banking system. RBI has projected that the gross NPA ratio for the SCBs would fall to around 10.3% in March 2019 from 11.5% in March 2018. The slippage ratio has declined from 7.6% in March 2018 to 4.1% in September 2018. The Provision Coverage Ratio (PCR) has also increased significantly from the levels in March 2018. All these indicators point to a much stronger recovery in the banking system in the coming years.

Another significant reform in the year was further consolidation of the banking system which a number of Committees have recommended in the past from Narsimham Committee to Nayak Committee. The Government moved in this direction by way of a three-way merger between Bank of Baroda and Dena Bank and Vijaya Bank. With this amalgamation Bank of Baroda has now become the second largest PSB in the country.

In view of the reforms undertaken by the government and RBI not only for resolution and recovery of non-performing assets but also a digital driven lending push and consolidation the banking system is likely to see underlying improvement in profitability in the medium-term.

Business Performance

The highlights of business performance of the Bank are as below:

Resource Mobilisation and Credit Expansion

Rs. in crore

of which- Domestic
International Deposits124341.0120723.2(2.9%)
Domestic Deposits466973.8517966.610.9%
of which- Current
Account Deposits31193.134327.6
Savings Bank 161130.0174076.2
CASA Deposits192323.1208403.88.4%
Domestic CASA
Deposits (%)
of which- Domestic
International Advances103193.398633.8(4.4%)
Total Assets719999.8780987.48.5%

Domestic CASA balances registered a growth of 8.4% over the previous year. The CASA Ratio was maintained well above 40.0% for the financial year. Term Deposits posted a growth of 12.7% which is almost twice as much as the previous year. In order to augment the CASA portfolio the Bank has opened 9452510 new CASA accounts during FY 2019. The Bank has taken several steps to improve its processes and strengthen the product proposition to meet the increasing requirements of customers. The account opening process for savings account has been digitised through tablets leading to a turnaround time of a few minutes. More than 70% accounts (Non FI) are opened digitally through tablets. The Bank has also initiated issuance of non-personalised debit cards. The Bank is planning to commence opening of current accounts through tablets. The Bank also introduced new segmented offerings for women senior citizens expats and the salaried class to augment deposits. These schemes have received a encouraging response from our customers. Bank of Baroda has also rolled out Doorstep Banking Service for retail customers on a pilot basis. The Bank has launched online opening of Demat and Trading Account this year and has become a pioneer among other scheduled Banks to extend such facility to the customers. In Application Supported by Blocked Amount (ASBA) the Bank was awarded by the Bombay Stock Exchange (BSE) for being a top performer in the primary market segment of IPO/FPO bids for FY 2018 .

Credit Expansion:

During FY 2019 the Bank continued to gain market share with a well-diversified credit portfolio. Domestic advances of the Bank increased by 14.2% during the year compared with an industry growth of 13.2%. The growth was led by retail and was well spread across other business verticals. Retail loan growth was 24.2% led by home and auto loans at 22.2% and 49.4% respectively while corporate loan growth was 15.6%. The ratio of retail loans to total domestic loans increased from 19.6% to 21.5% during the year. The international loan book declined by 4.4% on account of continued focus of the Bank on re-balancing of assets and decline of Buyers' Credit book.

The total assets of the Bank increased by 8.5% from Rs. 719999.8 crore on March 31 2018 to Rs. 780987.4 crore as on March 31 2019.

Operating Performance:

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

( Rs. in crore)
Interest Earned43648.549974.114.5%
Interest Expended28126.831290.311.2%
Net Interest Income (NII)15521.818683.820.4%
Other Income6657.26090.9(8.5%)
of which- Fee Income3249.73576.110.0%
Forex Income909.2693.2(23.8%)
Trading Gains1877.6989.5(47.3%)
Recovery from PWO620.7832.034.0%
Operating Income22179.024774.711.7%
(NII + Other Income)
Operating Expenses10173.411287.911.0%
Employee Expenses4606.95039.19.4%
Other Operating Expenses5566.56248.912.3%
Operating Profit12005.613486.812.3%
of which-14211.712192.4(14.2%)
Provisions for NPAs & Bad debts written off
Provision for Standard(369.0)(35.49)
Provision for Depreciation on768.2138.5(82.0%)
Other Provisions185.5493.3166.1%
Profit Before Tax(2790.7)698.2
Provision for Tax(358.9)264.6
Net Profit(2431.8)433.5


Key Performance Indicators31.03.1831.03.19
Cost of Deposits - Global (%)4.504.68
Cost of Deposits - Domestic (%)5.485.33
Cost of Deposits - International (%)1.331.89
Yield on Advances - Global (%)7.137.65
Yield on Advances (Domestic) (%)8.878.67
Yield on Advances (International) (%)2.704.12
Net Interest Margin - Global (%)2.432.72
Net Interest Margin - Domestic (%)2.882.93
Net Interest Margin - International (%)1.101.71
Cost-Income Ratio (%)45.8745.56
Return on Average Assets (ROAA) (%)(0.34)0.06
Return on Equity (%)(7.64)1.18

The interest income of the Bank increased by 14.5% from

Rs. 43648.5 crore in FY 2018 to Rs. 49974.1 crore in FY 2019. The yield on advances increased to 7.65% from 7.13%. The yield on domestic advances was 8.67% during FY 2019 against 8.87% during FY 2018. The reduction was on account of underlying change in credit mix to high quality borrowers. The yield on international loan book increased reflecting the run-off of low margin products such as Buyers' Credit. Total interest expenses stood at Rs. 31290.3 crore in FY 2019 as against Rs. 28126.8 crore in FY 2018. The domestic cost of deposits decreased to 5.33% in FY 2019 from 5.48% in FY 2018. The cost of deposits in the international book increased from 1.33% to 1.89% in line with the global interest rate environment. NII of the Bank increased by 20.4% from Rs. 15521.8 crore during FY 2018 to a level of Rs. 18683.8 crore during FY 2019. The NIM improved from 2.43% to 2.72% during FY 2019. The domestic and international NIM improved from 2.88% to 2.93% and 1.10% to 1.71% respectively. Other income of the Bank decreased by 8.5% to Rs. 6090.8 crore on account of decline in treasury gains by 47.3% to Rs. 989.5 crore. Recovery from written-off accounts was higher at Rs. 832 crore registering an increase of 34%. Operating expenses increased by 11.0% to Rs. 11287.8 crore in FY 2019. Employee cost increased by 9.4% during the year to Rs. 5039.1 crore and other operating expenses increased by 12.3% to Rs. 6248.9 crore. The operating profit of the Bank grew by 12.3% to Rs. 13486.8 crore during FY 2019. Total provisions (other than tax) and contingencies decreased by 13.6% to Rs. 12788.7 crore while provision for NPAs decreased by 14.2% to Rs. 12192.4 crore in FY 2019. As a result the Bank posted a net profit of Rs. 433.5 crore in FY 2019 against a net loss of Rs. 2431.8 crore in FY 2018.

Medium and Long-Term Strategy of the Bank

The Bank continues to pursue a multi-pronged strategy to build a future-ready world class banking institution. The Bank believes in the power of data digitisation and technology to transform banking. Bank of Baroda continues to invest in not only enhancing its IT backbone but also in creating cutting-edge digital platforms and partnering with leading technology players and/or fintech startups to provide the next generation of products and experience to customers. The Bank has established two state-of-the-art Centres of Excellence for Analytics and IT to help in rapidly scaling its capabilities in these areas. The Bank aims to build platforms wherein customers can do a range of transactions online and have access to information at their fingertips. Bank of Baroda is creating a learning organisation and investing in enhancing the skills of its workforce. The Bank also emphasises on centralisation and digitisation of operations to ensure that employees become more focused on customer facing roles.

Project Navoday - The Bank's Transformation Journey Thus Far

For achieving medium and long-term strategic goals the Project Management Office (PMO) of Project Navoday tracks all multidimensional initiatives undertaken across Business Units and Support Functions such as IT HR Operations & Services. As part of the transformation journey in addition to the strategic initiatives taken under various businesses a pivotal role is being played out by Shared Services Centre in terms of centralisation and digitisation which eventually leads to better customer experience in the form of lower turnaround time for customers. The Bank is making a paradigm shift in facilitating the operating units to shift focus towards a `Sales and Service' model. Deposit accounts are opened with Tablets in digital mode and processing of loans is being done in Centralised Processing Centres. Back-office work has moved away from branches which opens up time for branches to focus on more productive activities such as sales and marketing. The Bank benefits in the form of higher productivity and a better control environment. Strategic tie-ups with market players in the field of agriculture E-commerce and Fintech are enabling the Bank to augment its business besides improving market share. Strategic rationalisation of International Operations along with fungible credit limits have paved the way for more profitable operations across overseas territories. A revamped Rewards Recognition and Employee engagement framework reinforces the philosophy of ensuring that employees grow with the Bank. The Bank has put in place customer segmentation with a focus on hyper personalisation to cross-sell products. Centres of Excellence in IT and Analytics are driving technological adoption and cutting-edge tools to improve business performance. The Bank is leveraging the impetus gained to widen the spectrum of these initiatives in the backdrop of the amalgamation w.e.f. 1st April 2019.

Corporate Credit

Corporate credit in the bank is serviced through 10 Corporate Financial Services (CFS) branches and 4 Emerging Corporate Branches which manage about 80% of the total corporate credit portfolio of the bank. The corporate credit portfolio of the Bank increased by 15.6% during FY 2019 to Rs. 185943 crore. During the year under review the corporate credit portfolio reaped the benefits of transformation initiated in preceding years. With this revamp in approach towards corporate credit delivery the risk profile of the portfolio further improved during the FY 2019 as observed in the rating distribution of domestic credit portfolio as below:

Rating Distribution*
A & above39.27%52.37%60.21%
Below BBB21.80%19.72%15.86%

*External rating distribution of advances above Rs. 5 crore.

Target Market approach: FY 2020

During the year the target market approach has been further sharpened based on the objectives of improving credit performance ensuring profitable deployment of capital optimising overall yield and profitability and increasing bank's market share in the performing and growing sectors. The structural framework adopted for the same is as follows:

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

Sector-wise business plan for target market lending based on exposure caps existing exposures and further appetite for fresh acquisitions for the current financial year.

Identification of corporates with defined pre-selection criteria such as ratings financial parameters i.e. revenue profit after tax (PAT) net worth gross capital financial ratios viz. leverage ratio (debt-equity ratio Net Debt / EBITDA profitability ratio (Net profit/Sales gross profit/Sales) operating profit margin cash accrual / debt etc. and due diligence.

Precise Account Planning with structured calling plans for meetings identifying business opportunities approval and closure.

Execution of the business plan under target market approach through dedicated relationship managers across the Bank. Under the above approach adopted by the Bank nine sectors with 476 corporates were identified and 121 leads were generated out of which 87 leads amounting to Rs. 33127 crore were converted into business. Moving ahead with this strategy 809 corporates (including mid-corporate clients) have been listed as target in FY 2020.

With a view to provide enhanced customer experience for International Trade Customers and also to ensure seamless transactions management from initiation of requests to successful execution the Bank launched a fully digitised and integrated trade system - BarodaINSTA (Baroda Integrated Solution for Trade Finance Access) which is compliant with SWIFT. BarodaINSTA provides secure online access via a front-end portal to clients for initiating transaction requests resulting in operational consistency and better governance with enhanced security and validations. It is a user-friendly application with attractive and convenient dashboards providing real time tracking of transactions for customers with multiple features like comprehensive MIS reports courier tracking calendar (for due date maintenance) etc.

MSME Credit

The Bank targets the MSME sector through 42 dedicated SME Processing Cells named `SME loan factories' and a wide network of branches servicing the MSME segment with a target market approach. Supporting the Government's efforts under MUDRA scheme on employment generation the Bank lent Rs. 6023 crore to the sector. The Bank has also extended credit of Rs. 1154 crore to SC ST and women entrepreneurs under the Stand-up India programme since the launch of the scheme. The MSME credit portfolio of the Bank increased to Rs. 55455 crore as on March 31 2019 from Rs. 51730 crore as on March 31 2018. The Bank has added 93994 new MSME customers to its base in FY 2019. To provide access to working capital to MSMEs at competitive rates on Trade Receivables electronic Discount System (TReDS) the Bank has onboarded itself on all the three TReDS platforms. As on March 31 2019 the TReDS business accounted for Rs. 223 crore. In support of the Government's initiative to augment MSME units by speedy sanction of MSME loans through the `PSBloansin59minutes' portal the Bank was ranked first out of all PSBs as on March 31 2019. To ease working capital constraints of MSME arising out of GST implementation the Bank has devised a special product for financing against GST receivables for the MSME segment. The supply chain business has an outstanding book of Rs. 452 crore as on March 31 2019 and is backed by a fully digitised supply chain financing product which has provided a new vehicle for sourcing of MSME customers specifically vendors and suppliers of anchor corporates. In addition the Bank has 6 Area Specific Schemes for financing SME clusters. The total number of products increased to 26 including specialised products to cater to MSME units during the last financial year denoting the thrust of the Bank on this segment. We have also adopted a new pricing strategy named CIBIL MSME Rank (CMR) based pricing for MSME enterprises with credit exposure above Rs. 25 lakh and up to Rs. 5 crore which enables MSME businesses to have access to bank finance at competitive rates starting from as low as MCLR plus 0.05%. To reach out to newer business segments and to deliver the benefit of lower interest rates in comparison to NBFCs the Bank is co-originating with different NBFCs and entered into co-origination arrangements with certain NBFCs.

The Bank has commissioned a dedicated team for financing commercial vehicles and construction and mining equipment for the MSME segment. For this purpose Bank has entered into a strategic alliance with Tata Motor Finance Ltd. for capturing new business in the commercial vehicles segment. Further the Bank has on-boarded clients under a new scheme `Value Chain Finance' which is specifically designed for customers with maximum turnover of up to Rs. 2000 crore. To ensure better reach to MSME market segments the Bank has established a separate specialised team dedicated to sales and loan processing deployed at SME Loan Factories. To ensure consistency in underwriting faster turnaround time and timely collections the Bank has implemented centralisation of MSME loan processing through Integrated SME Loan Factory (ISMELF) at 2 centres viz. Mumbai and New Delhi. The Bank is also participating in MSME schemes such as `One District One Product' promoted by the Uttar Pradesh Government to ensure higher penetration. Government Schemes Processing Cells (GSPC) have been set up across India to enable seamless processing of Pradhan Mantri Mudra Yojana Standup India Pradhan Mantri Employment Generation Programme National Urban Livelihoods Mission and State-specific Government sponsored schemes. Under the Support & Outreach Campaign for MSMEs a GoI initiative launched on November 2018 the Bank was assigned 100 districts and 100 days with key deliverables.

Retail Credit

The Bank has been undertaking a number of transformational initiatives to improve its market share in retail segment. Foreseeing the importance of retail lending in the economy the Bank adopted a focused approach in the retail lending space since April 2016 and considerably increased the retail book from Rs. 68765 crore in March 2018 to Rs. 85390 crore as on March 31 2019.

The initiatives include redesigning of products and processes to enhance the customer satisfaction by allowing higher eligibilities lower pricing and standardised processing. Some of the steps undertaken by the Bank are as mentioned below.

 Risk Based Pricing

 Setting up of Centralised Processing Cell at Gandhinagar and Hyderabad

 Empanelment of Direct Selling Agents (DSAs)

 Empanelment of Contact Point Verification (CPV) agencies

 Implementation of Loan Lifecycle Processing Systems

 Focused and strategic approach on takeovers

 Implementation of a pre-approved credit programme

Setting up of a dedicated call centre for collections The Home Loan book has grown by 22.2% to Rs. 54612 crore as on March 31 2019. The continued efforts on increasing Auto Loans has resulted in a growth of 49.4% with an increase in market share from less than 1% to approximately 3%. The disbursement of Auto Loans has also grown by 169.2%. Fresh sanctions for Education Loans have grown by 106.8%. The target given by the Ministry for Education Loans has been surpassed by 48%. In case of mortgage loans the book has grown by 74.3%.

Rural and Agricultural Lending

The Bank has a network of 1845 branches in rural and 1546 branches in semi-urban areas which are leveraged for priority sector and agriculture lending. During FY 2019 the Bank opened 22 new rural and semi-urban branches. The Bank's agriculture advances grew by 14.2% from Rs. 49583 crore as on March 31 2018 to Rs. 56623 crore as on March 31 2019. The Bank achieved all mandatory targets under Agriculture Priority Sector Small and Marginal Farmers (S&MF) Micro Enterprises Loans to Non-corporate Farmers and weaker sections of the society during FY 2019 and earned a net commission of Rs. 33.0 crore by selling net Priority Sector Lending Certificates (PSLC) worth Rs. 7700 crore.

The Bank is the Convener of State Level Bankers' Committee (SLBC) in the states of Uttar Pradesh and Rajasthan and shoulders the Lead Bank responsibility in 48 districts across the country.

The Bank continues to be a leader in lending to the agriculture sector which received an impetus with the Government's target of doubling the income of the farmers by FY 2022. The Bank has moved beyond granting simple farm credit to a more diversified rural lending strategy by focusing on new products across rural customer segments like farm mechanisation horticulture loans warehouse receipt financing food and agro-processing and adopting a community-based lending model for the small farmers and communities.

During the year Bank issued 2.29 lakh Kisan Credit Cards. Baroda Kisan RuPay Card an ATM enabled smart card was issued to 13.46 lakh farmers. As a part of its microfinance initiatives the Bank linked 26630 Self Help Groups (SHGs) by granting loans amounting to Rs. 482.69 crore. To facilitate credit linkages of Farmer Producer Organisations (FPOs) the Bank tied up with the Small Farmers' Agribusiness Consortium (SFAC) for providing Credit Guarantee for collateral free loans and also as a preferred bank for the state of Maharashtra. The total Agricultural Advances as on March 31 2019 were well above the regulatory requirements.

The Bank's agriculture and rural strategy continues to focus on developing an ecosystem of alliances and partnerships with multiple players with the objective of increasing farm productivity; enhancing the income of farmers and serving the rural economy. The Bank is developing an agri-digital platform - `Baroda Kisan'. The platform in partnership with strategic players aims to become a one-stop shop to cater to all major needs of a farmer ranging from notifications weather forecast information crop health soil moisture pest infection information mandi prices crop specific advisory input buying (like seeds fertilizers pesticides) equipment renting advisory services and innovative financing options for sale of agriculture produce.

Bank of Baroda observed a Kisan Pakhawada' from October 1 2018 to October 16 2018 and celebrated the last day of the fortnight as Baroda Kisan Diwas to coincide with the International Food Day. In FY 2019 a total of 8018 choupals were covered with participation of 238974 farmers through 1621 Kisan Melas 339 Health Camps (soil / animal / farmer) 4884 farmer meetings and 310 financial literacy camps. The Bank has been awarded the Inclusive Finance India Award for Innovation and Inclusiveness in Priority Sector Lending by Bank (Public Sector) for 2018 by Access Assist. The Bank also received 4 awards including the Runner up in Overall Best Social Bank under the Large Banks category during the 14th ASSOCHAM Annual Banking Summit cum Social Banking Excellence Awards - 2018.

Priority Sector Lending

Priority sector advances of the Bank stood at Rs.147109 crore as of March 31 2019. The Bank was well above the mandated levels of priority sector advances and its other sub-components.

Advances to SC/ST Communities

The outstanding advances to SC/ST communities went up from

Rs. 5765 crore as of March 31 2018 to Rs. 7212 crore as of March 31 2019. The SC/ST communities accounted for 18.31% share in total advances granted to weaker sections by the Bank. Furthermore special thrust is laid by the Bank in financing SC/ ST communities under various Government sponsored schemes such as National Rural Livelihood Mission (NRLM) MUDRA Loan Start-up India and Stand-up India. During this year the Bank entered into various tie-ups with State Rural Livelihood Missions (SRLMs) in Tamil Nadu Odisha Chhattisgarh Punjab and Uttar Pradesh for providing finance to women SHGs to further the mission of women empowerment. The Bank also tied up with SEWA for financing solar units for women salt workers (members of SEWA) in the Rann of Kutch Gujarat.

Financial Inclusion (FI)

The Bank has increased the FI coverage by deploying 15356 BC agents catering to 21895 villages and other semi-urban and urban areas and also through 583 Branches in under-banked areas across the country. Total number of Basic Savings Bank Deposit (BSBD) accounts under financial inclusion stand at 372.6 lakh with an aggregate balance of Rs.12690 crore as on March 31 2019. The number of zero balance accounts have reduced from 11.53% in the previous year to 9.21% this year. The Bank has taken a number of initiatives to harness the power of digitisation to deepen financial inclusion in the year.

Digitised instant account opening through eKYC authentication and Aadhaar seeding with PIN generation through tablets account opening kiosks and business correspondent (BC) outlets with instant enrollment under Micro Insurance and debit card issuance.

Deployed micro and table-top ATMs in rural areas through BCs and expanded the Business Correspondent using Information and Communication (BC-ICT) model by adding 700 agents during the year.

Enabled increased utilisation of bank accounts expansive cash-in cash-out network comprising 15356 BCs who use 8823 PINPAD and 1882 portable Micro ATM devices.

Provision of 185 VSATs to BC agents functioning in grey areas across the country.

FY 2019 Performance Highlights under Financial Inclusion

101.2% of target achieved in respect of total BC outlets.

91.3% and 132.4% of targets achieved for BSBD account opening and amount under the same through branches respectively

The Bank achieved 233.9% and 284.6% of the target set for FY 2019 for BSBD account opening and amount under the same through BC points respectively.

Highlights of Performance under Pradhan Mantri Jan Dhan Yojana (PMJDY)

The Bank had 300.83 lakh accounts under PMJDY as on March 31 2019 as against 239.29 lakh at the end of previous year an increase of 25.7%. The Bank's market share in incremental PMJDY accounts and outstanding deposits was 10.7% and 11.9% respectively. Outstanding balance in PMJDY accounts was Rs. 9312 crore as of March 31 2019 as against Rs. 6595 crore at the end of previous year an increase of 41.2%. RuPay debit Cards issued under PMJDY accounts increased to 276.62 lakh from 221.50 lakh. Aadhaar seeding in PMJDY accounts increased to 88.0% during the year from 83.9% last year.

Coverage through Social Security Schemes

The position of enrollment under social security schemes of the Government as on March 31 2019 is as under:

Pradhan Mantri Suraksha59.5290.37
Bima Yojana (in lakh)
Pradhan Mantri Jeevan Jyoti18.1425.30
Bima Yojana (in lakh)

Setting up Aadhaar Enrollment Centres

Banks vide Gazette notification dated July 14 2017 of Government of India have been mandated to set up Aadhaar enrollment and update centres inside the branch premises with at least one centre in every 10 branches. Accordingly the Bank has set up 608 Aadhaar enrollment centres as of March 31 2019.

Performance of RRBs Sponsored by Bank of Baroda

The Bank has sponsored three Regional Rural Banks (RRBs): Baroda Uttar Pradesh Gramin Bank Baroda Rajasthan Kshetriya Gramin Bank and Baroda Gujarat Gramin Bank. The aggregate business of these three RRBs rose to Rs. 62298 crore as of March 31 2019 from Rs.55063 crore as of March 31 2018 registering a growth of 13.1%. The three RRBs together posted a net profit of Rs. 208.61 crore during FY 2019 against Rs. 208.55 crore in the previous year. The net worth of these RRBs put together improved from Rs. 2401.78 crore as of March 31 2018 to Rs. 2620.57 crore as of March 31 2019.

International Operations

The Bank has 100 overseas branches/offices across 21 countries comprising of 45 overseas branches in 13 countries 54 branches of the Bank's eight overseas subsidiaries and one International Banking Unit (IBU) in GIFT City (SEZ) Gandhinagar Gujarat India which deals exclusively in foreign currency. In addition the Bank has one Joint Venture viz. India International Bank (Malaysia) Bhd. in Malaysia and one associate bank viz. Indo Zambia Bank Ltd. in Zambia with 30 branches. During FY 2018 and FY 2019 the Bank has undertaken strategic rationalisation of its overseas presence based on a comprehensive evaluation framework. During the year Bank closed down its Offshore Banking Unit at Bahamas wholesale banking unit in Bahrain and surrendered banking license of subsidiary at Ghana which had three branches. Further Muttrah branch at Oman was merged with the Greater Muttrah branch and Durban branch was merged with Johannesburg branch in South Africa. The rationalisation of operations based on the strategic review is continuing. The Bank has presence in the world's major financial centres of New York London Singapore Brussels and Dubai. In the international arena our Bank pursues a strategy of driving growth and value by meeting the international banking requirements of Indian corporates; catering to India linked cross-border trade flows for Indian and locally incorporated companies or firms and being the preferred Bank for NRIs/ Persons of Indian Origin. The Bank is continuously consolidating and reorganising its International Operations in line with the new global environment and focused on rebalancing the portfolio with a view to manage risks shed low-yield assets and increase profitability. As of March 31 2019 the Bank's total business from international branches was Rs. 219356 crore and constituted 19.8% of the global business. Total deposits were at Rs. 120723 crore while net advances were Rs. 98633 crore. It was a year of consolidation for the international operations. The total deposits were lower by 2.9% whereas total advances fell by 4.4%. The reduction in business is mainly on account of rationalisation of the Bank's overseas centres UK subsidiarisation and run-off of Buyers' Credit.

Incorporation of Subsidiary in UK

The Bank's wholly owned new retail subsidiary at UK viz. Bank of Baroda (UK) Ltd. has been operationalised with effect from 17.12.2018. The retail business of the UK operations has shifted to the new subsidiary and wholesale business is retained under branch mode. The UK operations now comprise of 1 branch of the Bank and 10 branches of subsidiary.

Treasury Operations

The Bank operates its Treasury operations from a state-of-the-art dealing room at its Corporate Office in Mumbai. The Treasury is a prominent player in various markets e.g. Foreign Exchange Interest rates Fixed Income Money Market Derivative Equity Currency and Interest rate Futures and other alternate asset classes. The Bank is offering various services like interest rate swaps currency swaps and currency options forward contracts through authorised branches dealing in foreign exchange across India.

The treasury is responsible for managing the funds position of the Bank and ensuring safety liquidity and optimal yield on these funds. It maintains Statutory Reserve Requirements and invests in corporate bonds commercial papers equity venture capital mutual funds etc. as a part of the fund management operations. The total size of the Bank's Domestic Investment Book as of March 31 2019 stood at Rs. 172412 crore. The share of SLR securities in total investments was 85.89%. The percentage of SLR securities (unencumbered) to NDTL at March 31 2019 was at 27.98%.

The Bank demonstrated its capabilities in effectively dealing with extreme adverse circumstances in the market. The Bank has been able to capitalise on the opportunities offered by yield movements. The Bank managed its portfolio efficiently and maintained average yields on interest bearing investment for FY 2019 at 8.13% (including profit on sale). During FY 2019 the profit on Sale of Investment and Foreign exchange earnings are Rs. 994 crore and Rs. 445 crore respectively.

Government Business

The Government Business is an important part of the Bank's strategy. It caters to the banking requirements of Central/ State Government and PSUs across India. The Bank is authorised to collect direct taxes through its designated branches and is an accredited banker to the Ministry of Health and Family Welfare.

The Bank is partnering with various departments at the Central and State levels in developing e-solutions in-line with the digital initiatives of the Government of India leading to transparency and efficiency. MOUs with EPFO Employees' State Insurance Corporation IRCTC National Agriculture Market Government e-Marketplace and Inland Waterways Authority of India have been signed to enhance fresh business opportunities.

During the year Bank has developed customised software for the e-LC solution for Ministry of Defence. Bank of Baroda is the only Public Sector Bank to launch e-KVP utility through banks. The Bank has integrated itself on the e-PCS portal of Indian Port Association for all the 3 major ports across India. An MOU with the Kandla Port has been signed.

The Bank has been recognised by Pension Fund Regulatory

Development Authority for the Achievement of the Targets under APY.

Wealth Management

During the year the Wealth Management Department has been at the forefront in providing investment and insurance services to our customers. The Bank's flagship programme `Baroda Radiance' continues to cater to the requirements of High Net Worth Individuals through a dedicated structure of relationship managers. The Bank aims at providing best-in-class solutions and services to its customers for which it is building digital solutions. Some of the initiatives taken during the year are:

'Baroda Wealth Solution' a digital platform is implemented to enable seamless distribution of investment and insurance products to all customers. This platform will also be available to Bank's customers in Mobile Banking and Internet Banking.

Bank extended the coverage of the product 'Group Credit Life' and 'Group Criti Care' to its retail borrowers covering the credit risk in case of eventuality (life or critical illness).

Bank launched five health insurance products with portability and continuity benefits. This enables customers to migrate their health insurance policies to an insurer of their choice.

Stressed Asset Management

With an increase in non-performing loans over the years the Bank has revamped its strategy to augment recoveries and reduce slippages. For this the Bank has created a `Stressed Assets Management Vertical' where all major and medium sized NPA accounts of Rs. 10 lakh and above and all SARFAESI eligible accounts are handled by specialised units called Stressed Assets Recovery Branches (SARB) set up at Zonal and Regional level. The remaining accounts i.e. accounts below Rs. 10 lakh are handled by respective branches with the help of Business Correspondents and outsourced Call Centres. Non-performing loans continued to decline for the Bank with gross NPA ratio declining to 9.61% as on March 31 2019 from 12.26% as on March 31 2018. Similarly Net NPA ratio improved to 3.33% in March 2019 as compared to 5.49% in March 2018.

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

(Rs. in crore)
Particulars 31.03.201831.03.2019
Gross NPA5648048233
Gross NPA (%)12.269.61
Net NPA2348315609
Net NPA (%)5.493.33
Additions to NPAs2423913614
Recovery/ Upgradations55308759
Write offs including TWOs494813102
Recoveries in written off accounts621832
Provision Coverage Ratio (including TWO) (%)67.2178.68
Provision Coverage Ratio (excluding TWO) (%)58.4267.64

As per asset classification the bifurcation of loan book is as given below:

( Rs. in crore)
Asset Category31.03.201831.03.2019
Standard advances404264453473
Gross NPA5648048233
Total Gross Advances460744501706
Gross NPAs comprising of
Total Gross NPA5648048233

In order to address a large number of small NPA accounts the Bank launched OTS schemes viz. Lakshya I and II (Lakshya Agriculture Retail & MSME) during FY 2019. The Bank settled 109327 accounts under these schemes with an aggregate settlement amount of Rs. 639 crore and recovery and upgradation of Rs. 543 crore. An application called One Time Settlement Tracking System has been implemented wherein customers can initiate settlement proceedings online. The Bank has also set up a legal war-room for real-time tracking of recovery proceedings and to aid accelerated decision making (378 high value suit-filed accounts were being monitored by the War Room).

The Bank has set up a solution provider cell to augment recoveries to ensure minimal slippages and to provide resolution strategies for large NPA accounts with exposure above Rs. 30 crore. For timely collections from retail and SME customers a 350-member call centre with multi-lingual support has been set up. This is supported by feet-on-street staff to drive on-ground collections. A special taskforce of about 800 officials of the Bank has been deployed for recovery of small NPA and potential NPA accounts. Business Correspondents are incentivised for collections in crop loans.

The Bank has strengthened its NPA management with daily dashboards like Days Past Due (DPD) Report NPA Movement Chart and Mock Runs for forecasting degradations to ensure reduction in slippages and improvement in collections. Further the Bank is in the process of developing a mobile application which would enable the collection agents on the field to collect the amount based on data fed from the system and also update recovery details.

The Bank is in the process of implementing an Integrated Litigation Management system (ILMS) a pilot run of which has been completed. With this system all the cases filed in DRT suit filed cases with other courts and the status of action initiated by Bank under SARFAESI Act etc. can be monitored on a real time basis.

In addition the Bank has put in place the following measures on an ongoing basis to facilitate recovery of non-performing assets:

Assigning Nodal Officers at each DRT for follow-up of legal cases on a daily basis so as to minimise the delay in obtaining decrees and execution and to maximise recoveries.

Taking assistance from Advocates/Consultants to liaise with Official Liquidators (OL) to get the recoveries realised by OLs.

Liasoning with Official Liquidators organising Recovery Camps across branches close monitoring of stressed accounts and recovery agents at all levels and monthly e-auctions especially in DRT suit filed NPA accounts.

Number of Wilful Defaulters declared during the current FY 2019 is 399 increasing the aggregate numbers substantially to 750. This number stood at 303 as on March 31 2018.

Information Technology (IT)

The Bank is constantly evolving its products systems and structure to meet the growing aspirations of the customers. Digitisation of banking services is driving continuous upgradation of the IT infrastructure. Some of the major initiatives during the year include:

The Bank has upgraded its erstwhile Loan Management System (LMS) with a new Loan Lifecycle Processing System. This new system streamlines loan origination and tracking processes to enable faster loan disbursals and end-to-end processing of loan proposals using image-based workflow and Business Process Management (BPM) tool to improve Turn Around Time (TAT).

The Bank is implementing a Decision Management System which provides business policy owners with the ability to author test execute and maintain score models strategies and rules integrated with the LMS. This will substantially improve decision quality consistency and efficiency of operations.

The Bank is in the process of upgrading the existing Internet Banking (Baroda Connect) with an advanced version an enhanced user interface and a basket of new functionalities.

The Bank is in the process of implementing Oracle CRM for Branches Contact Centres (CCs) Retail Loan Factories (RLFs) Small Medium Enterprise Loan Factories (SMELFs) City Sales Offices (CSOs) and Regional Offices.

In order to handle large volumes the Bank upgraded to Unified Payments Interface (UPI) version 2.0. It aims to simplify and provide a single interface across all NPCI systems besides creating interoperability and providing superior customer experience.

The Bank has implemented a Centralised Communication Management (CCM) solution which facilitates automation of various communication/e-communication to customers on a monthly basis.

The Bank is in the process of implementing an API Banking platform to accelerate digital transformation and build capabilities to unlock the true value of digital assets create business agility and promote innovation and collaboration.

The Bank has implemented an automated reconciliation platform called Universal Transaction Reconciliation System (UTRS). This platform offers the capability to quickly configure two-way or multi-way reconciliation thereby reducing risk and increasing compliance.

The Bank has embarked upon the journey of cloud adoption. The Bank has implemented e-mail e-learning Management services and collaboration technology solutions on the public/ community cloud. The Bank has also implemented archival solution for email communication to strengthen compliance.

The Bank is in the process of implementing a Mobile Device Management solution (MDM) which will enable employees to securely access various banking applications using corporate-owned and employee-owned (BYOD) mobile devices from remote locations thus increasing productivity and efficiency. This will also help the Bank in reducing cost of operations and business risks.

The Bank has best-in-class technology infrastructure for Data Centre conforming to Uptime Institute Tier-3 standards. The Bank has also built a Disaster Recovery Site in different seismic zones with redundancy built in every single point of failure to ensure uninterrupted service delivery to our customers. Bank of Baroda has additionally built Near Disaster Recovery Centre for Core Banking (Domestic & International) System and Treasury system to ensure zero data loss as part of its Business Continuity Planning and Disaster Recovery strategy.

The Bank has implemented state-of-the-art Data Centre tools for Network Management at its Data Centre and branches/offices. In addition the Bank has also implemented application performance management for synthetic monitoring of internet banking and core banking applications. The Bank has set up two centres of excellence to build a future ready organisation.

IT Centre of Excellence (ITCoE)

The Bank has setup an ITCoE which works closely with business units to identify and implement related technologies for driving revenues and gaining efficiencies. The ITCoE aims to develop differentiated market-leading technology solutions while driving business outcomes. ITCoE is bringing together a wide variety of cutting-edge skills such as design thinking mobility DevOps Business Process Management and emerging technologies like Robotics Process Automation API & Platform banking to execute on the twin mandates of improving business efficiency and taking new use-cases to market at speed.

Analytics and Artificial Intelligence Centre of Excellence (A&AICoE)

Under the ACoE the Bank has established an enterprise-wide data and analytics technology platform with petabyte scale - the Big Data Lake. Powered by leading data technologies and techniques like Data Lake Machine Learning and IT the ACoE aims at helping the Bank in traversing the journey from Data to Insights and from Actions to Results. ACoE is working with multiple lines of businesses to identify and realise new value-creation opportunities and to build the Bank's capability in leveraging analytics to increase revenue reduce costs and improve risk profiling.

Cyber Security

Over the years the Bank has built a strong foundation for cyber security comprising of a comprehensive set of information security measures to counter cyber-attacks. The Bank has a well-defined cyber security governance framework in place that is operated through a combination of management structure policy framework and operational controls.

In order to detect and prevent cyber incidents the Bank has upgraded its Captive Security Operations Centre to Cyber Security Operations Centre (C-SOC) which operates on a 24x7 basis. During the year the Bank has further added new technologies to C-SOC to identify manage respond and resolve cyber security incidents quickly and more efficiently. Further the Bank has placed the following controls to enhance cyber security:

Data Centre and Disaster Recovery operations are ISO 27001:2013 certified - (set of international best practices related to Information Security).

 Implemented multi-layered security architecture to protect IT Assets.

Periodic audits of applications and infrastructure to identify weaknesses in the existing system and to take steps to rectify deficiencies.

Phishing sites rouge mobile apps and social media sites are monitored for malicious activities/contents and the same are taken down on detection through anti-phishing and brand protection services.

Advanced security solution implemented to detect and prevent Bank's critical infrastructure from persistent threats and zero-day attacks.

Data Leakage Prevention solution to detect and prevent unauthorised usage or misuse of business sensitive information.

Technology for detection of anomaly in network traffic and its behaviour to detect network level attacks.

Implemented technology to protect the systems from Distributed Denial of Service (DDoS) and obtained clean pipe to ensure uninterrupted customer service.

The Bank has also taken various initiatives for educating customers through various channels such as SMS ATM slips ATM screens Digital Displays Website etc. Employees are sensitised in the field of cyber security through circulars mandatory E-Learning courses quarterly IS awareness magazine Cyber Chunks and Audio Visual Film among others. The Bank participates in the cyber security drills conducted by agencies such as IDRBT CERT-In to test its capabilities and further strengthen defence against cyber-attacks. The Bank has an emergency response team and cyber crisis management plan in place and their effectiveness is periodically tested through drills.

Digital Transformation

The Bank is committed to digitisation and continuously strives to migrate transactions to digital channels which lead to better customer experience. As against a target of 50 crore digital Transactions allotted to the Bank for FY 2019 by the Ministry of Electronics and Information Technology (MeitY) the Bank achieved 107.6% of its target in February 2019.

The major focus of Digital Banking is to make our products available to customers through digital and mobile channels such as Mobile banking Unified Payment Interface BHIM Aadhaar Multi-Function Kiosk Self Service Passbook Printers etc. The progress on digital initiatives is as follows:

Mobile Banking: The Bank's new Mobile banking application MConnectPlus is available in 13 languages and has been extended to NRI customers. The user base has grown by 116% with 108% increase in transactions. Overall transaction amount increased by 120% to Rs. 42162 crore.

Unified Payment Interface (UPI): The Bank has extended its UPI application to all its RRBs .The Bank has tied up with

TrueCaller app for providing UPI facility in September 2018. To increase customer convenience the Bank went live on UPI 2.0 as an issuer on 20.03.2019. Overall transactions increased to Rs. 122408 crore.

Baroda Pay Point: During the year the Bank launched Baroda Pay Point - a mobile/web-based fee collection portal for the payment and administrative needs of educational institutes and to help in canvassing additional CASA business and revenue income.

Debit Cards: The Bank offers a wide range of chip-based Debit Cards with customised offers to meet the changing lifestyles of the customers. The Bank has issued more than 72 million debit cards (including 44 million Rupay cards). The Bank launched RuPay qSPARC card - the National Common Mobility Card (NCMC) to enable customers to have a single card instead of a Debit and a Prepaid card separately.

Bharat Bill Payment System (BBPS): The BBPS System of the Bank has been certified both as a Customer Operating Unit (COU) and a Biller Operating Unit (BOU) by NPCI. The Bank is providing BBPS services in Mobile Banking BHIM UPI Net Banking and UMANG application through Net banking. The volume and value of transactions under BBPS increased by 296% and 261% during the year respectively.

Baroda FASTag (National E Toll Collection - NETC): The Bank has implemented and launched NETC on 12.07.2018 and branded it as Baroda FASTag.

ATMs: The Bank has 8166 ATMs and 1406 Cash Recyclers in India and with an availability of 95%. Our multi-function ATMs are focused on making banking a smooth experience.

Hi-Tech Digital Branch: The Bank has evolved an innovative concept by setting up Hi-tech Digital branches equipped with advanced gadgets like Artificial Intelligence Robot named Baroda Brainy and Digital Lab with free Wi-Fi services. In addition the digital branches have self-service kiosks and an expert area which is equipped with Remote Tellers (Video Assistants) to assist the customers in a more interactive manner.

NACH eMandate: Bank of Baroda went live for eMandate Internet Banking on March 21 2018. The Bank also went live with API Mandate (Internet Banking) as a destination bank on February 6 2019.

Baroda Prepaid Card: The Bank offers three types of Prepaid cards to its customers. a. Baroda Gift Card: A perfect gifting option which can be used to make purchases or payments across the country. b. Baroda TravelEasy Card: A prepaid international currency card which is available in three currencies i.e. US Dollars (USD) Euro Sterling Pound (GBP). It is a reloadable and competitively priced card and can be issued to resident customers travelling abroad. c. Baroda Reloadable Card: A prefunded card that is ideal for recurring overheads like pocket money travel allowances daily/monthly wages meal allowances etc.

Cashless Villages: The Bank has transformed 281 villages into cashless villages by providing various digital products like Debit card Mobile Banking Internet Banking UPI BHIM QR BHIM Aadhaar POS machines etc.

Digitisation of Records: As a step towards moving to paperless banking and freeing space at branches to make way for customer friendly lay out digitisation of records has been undertaken by setting up a Document Management System (DMS). This is an ambitious project of the Bank under which around 22 crore papers have already been scanned covering over 3200 branches. Over 2 lakh sq. ft. of space has been unlocked in the identified Branches.


The Bank is cognisant of the transformational impact of FinTech on financial services industry. The Bank has played a pioneering role in collaborating with these players by becoming the first PSB to establish a dedicated FinTech vertical in 2016. As of March 2019 the Bank had 40+ partnerships with diverse FinTech startups working across lending payments and innovative services. Some of our major initiatives during the year included:

Payments: The Bank became the first PSB to go live on Truecaller Pay for enabling digital payments using BHIM Baroda Pay UPI services. This tie-up gives us access to over 60 million tech-savvy customers across the country. The Bank generated transactions of Rs. 166 crore in first 6 months of going live.

BoB Innovation Centre: The Bank signed an MOU for setting up the BoB Innovation Centre (BoBIC) in collaboration with IIT Mumbai at their campus. BoBIC is a first of its kind BFSI- Academia partnership which is powered by a strong ecosystem and aims to promote a culture of innovation and entrepreneurship in India.

Shared Services

The Bank has set-up a wholly owned subsidiary Baroda Global Shared Services Ltd. (BGSS) to focus on four core areas: `customer service efficiency speed & managing risk'. The Bank's digitisation and centralisation strategy is embedded with shared services. A number of processes have moved to back-office operations at the state-of-the-art Shared Services Centre (SSC) in GIFT City Gandhinagar and Hyderabad. Centralisation has not only reduced the cost of transactions but enhanced risk management controls and compliance practices.

During the year the SSC made significant progress on centralisation of back office processes and enhancing risk management framework for the Bank. The centralisation of following functions has been undertaken at SSC:

1. Migration of all deposit account opening trade and forex transactions (foreign) and retail mortgage loans processing.

2. Pension operations.

3. Digital Banking and Credit Card Operations.

4. Call centre for customers.

A pilot for agriculture operations domestic trade other branch transactions (FD account maintenance etc.) and MSME Operations with selective branches/ region is underway. The SSC has more than 800 full time employees (FTEs) in non-voice (transaction processing) and ~ 750 FTEs in its call centre at GIFT City with Business Continuity Planning (BCP) presence in Mumbai and Hyderabad centralising more than 65% of identified processes and activities.

During FY 2019 SSC has started a state of the art 24X7 facility serving customers with focus on digital processing

There has been an improvement in turnaround time (TAT) along with reduction in error rates with specialisation of roles and enforcement of improved `First Time Right' (FTR).' Time and motion studies have been conducted of each transaction/ product in order to help in continuously improving the utilisation and productivity.

Operational Highlights:

1. BGSS is operational round the clock and ISO Certified.

2. Focus on automation of repeated tasks for better productivity across segments and setting up of express channels for priority processing. SSC is working on Robotics AI and machine learning based applications in conjunction with the IT team.

3. More than 650 Bank staff were released to the branches for sales and other services.

4. Automation of cheque book welcome kit email/ SMS alerts has been activated for trade & forex customers.

SSC also enhances the risk management framework of the Bank by instituting stronger controls at every stage of a transaction/ process.


The Bank has adopted an integrated marketing strategy across products and services that spans multiple customer touch points. We create narratives that emphasise on services rendered by us and help in engaging with our customers to strengthen their relationship with the brand. During FY 2019 Bank was present across all mediums of communication including print digital out-of-home (OOH) television and radio with a host of both brand and product led campaigns to increase both aided and unaided recall for the brand. The Bank continues to create awareness by showcasing real life inspirational stories of its beneficiaries on two sponsored shows - `Hunnarbaaz' on DD National and Hum Hain Hunnarbaaz - Koshish Hamari Safalta Aapki on CNBC Awaaz. Our brand ambassadors P. V. Sindhu and K. Srikanth helped us in reaching out to diverse audiences.

During the year the Bank conceptualised and executed an extremely well received campaign with the themes - ``Behtar Se Behtareen and Power of Three to announce the tripartite amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda. The creative execution with children as protagonists is not only endearing but also stresses on the shared heritage of the three brands which enhance brand recall.

In line with our focus on digitisation and the large base of Gen Y customers the department continues to leverage the digital marketing ecosystem to put up the building blocks for data-led and metric-driven digital marketing. The Bank ran 50+ digital campaigns through the year with the objective of establishing Bank of Baroda as an aspirational brand which engages empowers and educates digital audiences by providing relevant content and fulfills banking needs by constantly analysing measuring and improving experience response and capabilities. The Bank is focussed on both Search Engine Optimisation and organic growth on social media channels to cover netizens and engage with them. The Bank's Social Media Presence is summarised below:

No of likes / Followers as on
Social Media Channels
Facebook Likes1052000+
Twitter Followers68000+
YouTube Subscribers24300+
LinkedIn Followers48000+
Instagram Followers49200+

Branch Network

As of March 31 2019 the branch network of the Bank is as under:

Number of Branches% Share in TotalNumber of Branches% Share in Total
Branches/ Offices
(including branches of overseas subsidiaries)

The Bank opened 92 new domestic branches and merged six of them with existing branches.

Currency Chests

The number of currency chests with the Bank increased from 98 to 100 with the addition of two currency chests at Vadakara (Kerala) and Kennedy Avenue (Amritsar) during the year. These chests support effective cash management in the Bank as well as vaulting cash on behalf of RBI. All the currency chests as well as branches are provided Note Sorting Machines (NSMs). Moreover these currency chests have also helped the Bank in efficient management of cash at branches.

Corporate Social Responsibility (CSR)

The Bank has a long legacy and tradition of contributing actively to the social and economic development of the communities through various developmental activities. The Bank as a responsible corporate citizen continuously strives to contribute to the welfare of the society particularly the upliftment of the underprivileged sections of the society to make sustainable social changes in their lives. Skill development through training for gainful employment human welfare and other social activities for women and farmers continue to remain the Bank's key focus areas. The Bank is helping different organisations engaged in various community development and socio-economic welfare activities for the benefit of weaker sections and rural citizens.

The Bank has established 49 Baroda Swarojgar Vikas Sansthan (BSVS) and RSETI centres in seven states of the country. These centres impart skill development programmes to youth from rural and semi-urban areas for generating self-employment. Till date these centres have conducted 12990 training programmes and imparted training to 364995 youth out of which 237507 have already secured employment or setup their own ventures. The settlement ratio is at 65%. Our 25 BSVS centres have been graded as AA/A (outstanding) based on the overall performance/functioning of the RSETIs during FY 2018. 20 Baroda RSETIs operate from the Bank's own premises. The Bank has set up 51 Financial Literacy and Credit Counseling Centres (FLCCs) in eight states which provide financial counseling services and education to the people in rural and urban areas about various financial products and services available from the formal financial sector. These centres also take up activities that promote financial literacy awareness about banking services digital banking financial planning and amelioration of debt-related distress of an individual.

Risk Governance and Internal Controls

The increased focus on risk and the supporting governance framework includes identifying the responsibilities of different parts of the Bank for addressing and managing risk. Often referred to as the `three lines of defence' each of the three lines has an important role to play. These are:

i. First line of defence - This comprises of all the Bank's employees as they are required to own and ensure the effective management of risk and compliance with regulations the Bank's policies and guidelines.

ii. Second line of defence - This comprises of the risk control owners the risk management function and the compliance function. It is responsible for identifying measuring monitoring and reporting risk on an enterprise-wide basis independently from the first line of defence.

iii. Third line of defence - An independent assurance is provided by the internal audit function by conducting internal risk-based and other audits. The reviews provide assurance to the Board that the overall governance framework including the risk governance framework is effective and that policies and processes are in place and consistently applied. The role of the audit function is defined and overseen by the Audit Committee of the Board.

Risk Management and Compliance

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

The Bank has a comprehensive Internal Capital Adequacy Assessment Process and stress test policy. The Pillar 2 risks such as Liquidity Risk Interest Rate Risk Concentration Risk and Capital Adequacy under both normal and stressed conditions are assessed as per the extant policies. A brief outline of the mechanism for identifying evaluating and managing various risks within the Bank is as follows.

Enterprise Risk Management and Risk Appetite Statement

The diversity of our lines of business requires a comprehensive Enterprise Risk Management approach to promote a bank-wide strong risk management culture to help in the early identification assessment measurement aggregation and management of all risks and to facilitate capital allocation among various lines of business. All risks are approved within the overarching Risk Management Framework and are adequately hedged. The Bank is constantly endeavouring to create a strong risk awareness culture by imparting trainings to the employees at all levels.

Credit Risk

Credit Risk is managed through a Board approved framework that sets out policies procedures and reporting which is inline with international best practices. Adequate attention is given to the independence of the risk evaluators and business functions for establishing a sound credit culture and a well-structured credit approval process. Credit risk measurement models are validated by independent model validators for their discriminatory power accuracy and stability. The Bank's experience in internal ratings over the years has enabled the Bank to obtain the regulator's approval for running the Foundation Internal Rating (F-IRB) approach of credit risk under Basel II guidelines from March 31 2013. Under the IRB approach the banks develop their own empirical model to quantify required capital for credit risk. The Bank has put in place prudential caps across industries sectors and borrowers to manage credit concentration risk. The portfolio review cell carries out detailed reviews on sectoral exposure credit concentration rating distributions and migration. The Bank has also implemented the Risk Adjusted Return on Capital (RARoC) framework for corporate credit exposures for evaluating credit risk exposures from the point of `economic value addition' to the shareholders.

Market Risk

Market Risk implies the risk of loss of earnings or economic value due to adverse changes in market rates or prices of trading portfolio. The change in economic value of different market products is largely a function of change in factors such as interest rates exchange rates economic growth and business confidence. The Bank has well defined policies to control and monitor its treasury functions which undertake Market Risk positions. The Bank measures and monitors interest rate risk in its trading book through duration modified duration PV01 and Value at Risk (VaR) on a daily basis. The foreign exchange risk is measured and monitored in terms of net overnight open position limits (NOOPL) VaR limits Aggregate Gap Limits (AGL) Individual Gap Limits (IGL) on a daily basis. Equity price risk is measured and monitored through VaR limits and portfolio size limits etc. At a transaction level stop loss limits and dealer-wise limits have been prescribed and implemented. Under its stress testing framework the Bank conducts comprehensive stress tests of its trading book portfolio on a quarterly basis.

Asset Liability Management

Liquidity Risk is the inability to meet expected and unexpected cash and collateral obligations at reasonable cost. At the Bank the liquidity risk is measured and monitored through Flow Approach and Stock Approach and other prudential stipulations as per RBI's extant guidelines. The Bank has implemented the Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR) Liquidity Risk Monitoring Tools and LCR Disclosure Standards. The LCR Standard aims to ensure that banks maintain an adequate level of unencumbered High - Quality Liquid Assets that can be converted into cash to meet liquidity needs for a 30-calendar days' time horizon under a significantly severe liquidity stress scenario specified by supervisors. The Bank has always been well above the stipulated level of LCR on a solo basis as well as on a consolidated basis. Interest Rate Risk in the Banking Book (IRRBB) arises due to mismatch between rate sensitive assets and liabilities which may adversely impact the earnings/economic value of equity of the Bank with the change in interest rates. The Bank uses risk management tools such as Traditional Gap Analysis Earning at Risk and Modified Duration of Equity for the measurement and monitoring of Interest rate risk in the banking book. The short-term impact of interest rate movements on Net Interest Income [NII] is calculated through the `Earnings at Risk' approach by taking into consideration parallel shift in yield curve yield curve risk basis risk and embedded options risk. The long-term impact of interest rate movements is measured and monitored through change in Market Value of Equity (MVE).

Operational Risk

The Bank has implemented a web-based Operational Risk Management system called SAS Enterprise Governance Risk and Compliance (EGRC) for systemic and integrated management of Operational Risk. To mitigate and control operational risk at a transaction level Bank of Baroda has established a Centralised Transaction Monitoring Unit for monitoring of all domestic transactions from the KYC/ AML/ CFT perspective. The Bank has segregated customer interface (front office) from the execution of transactions (back office) by centralising a number of back office functions. The Centralised Trade Finance Back Office (TFBO) for forex transactions has been set up to minimise operational risk in forex transactions. Roll out of Key Risk Indicators Programme (KRI) Risk Control and Self-Assessment Programme (RCSA) and root-cause analysis has further strengthened the control environment. For improved fraud risk management the Bank has completed the implementation of the first phase of Enterprise Fraud Risk Monitoring Solution (EFRMS) and the second phase is under implementation.

Basel III Implementation

The Basel III capital regulations have been implemented by Indian banks with effect from April 1 2013. This implementation requires enhanced quality and quantity of capital on one side and enhanced disclosures on the other. For augmenting and improving the core capital of Banks new measures for the inclusion of FCTR DTA and Revaluation Reserves were introduced by RBI in March 2016. The Bank has started maintaining Capital Conservation Buffer (CCB) from March 2016 onwards and will reach the minimum prescribed level of 2.5% by FY 2020.

The Bank also maintains the regulatory mandated liquidity coverage ratio (LCR) as per the transitional arrangements prescribed by RBI.


The compliance function is one of the key elements in the Bank's corporate governance structure. The Bank has put in place a robust compliance system including a well-documented Compliance Policy outlining the compliance philosophy of the bank role and set up of the Compliance Department composition of its staff and their specific responsibilities. The compliance function advises senior management and the Board on the Bank's compliance with applicable laws rules and global standards and keeps them informed of developments in the area. It also educates employees about compliance issues by conducting periodic trainings and workshops for business staff and designated compliance officers. Knowledge management tools for this purpose have also been uploaded on the Bank's site. The Bank has implemented a web-based compliance management solution for certification and monitoring of various regulatory statutory and internal guidelines at each level in the Bank for further strengthening the compliance function.

KYC/ AML Compliance

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

The Bank has established a Central Transaction Monitoring Unit (CTMU) and put in place an AML Solution for monitoring and detection of unusual transaction patterns in customers' accounts and generation of system-based transaction alerts on the basis of predefined alert parameters in the system. System-based risk categorization of customers' accounts is done on half yearly basis. Re-KYC of High Risk Customers is being done on half yearly basis after carrying out Money Laundering Risk Categorization Exercise as per extant guidelines of the RBI. For this purpose Bank has developed automated process flow for identification and generation of Notices for such customers to notify them for submission of requisite KYC Documents. The Bank has also implemented Aadhar based e-KYC in collaboration with UIDAI on voluntary declaration of customers for e-KYC authentication. The Bank is in the process of allotting Unique Customer Identification Code (UCIC) to all its existing customers as per the RBI guidelines and has implemented a Central KYC Registry for allotment of CKYC Numbers to individual customers as per prescribed RBI guidelines. The guidelines in respect of beneficial owners are scrupulously followed.

Internal Audit

The Bank's Central Internal Audit Division (CIAD) is responsible for internal audit. CIAD administers various streams of audits besides Risk Based Internal Audit (RBIA) of branches and offices. The Audit Committee of the Board oversees overall internal audit function and guides in developing effective internal audit concurrent audit IS Audit and all other audit functions of the Bank. The committee monitors the functioning of the Audit Committee of executives and internal audit department in the Bank. CIAD operates through thirteen Zonal Internal Audit Divisions to carry out internal audit of branches/offices as per the periodicity decided by the Risk Based Internal Audit Policy. All branches of the Bank are covered under Risk Based Internal Audit. Out of the 4881 branches audited during FY 2019 4151 branches (85.0%) were in Low Risk 627 branches (12.9%) were in Medium Risk 101 branches (2.1%) were in High Risk and 2 branches (0.04%) were in Very High-Risk category. The Bank had engaged an independent firm as a knowledge partner for comprehensive review of the Audit function in-line with the processes focusing on centralisation of activities by use of technology imaging solutions and digitisation. The audit transformation process was completed and audits under the revised approach commenced during the financial year.

Customer Service

The Bank is focused towards providing excellent customer experiences. It has been our constant endeavour to set industry benchmarks and pioneer innovations across products processes and service delivery that are imperative to providing seamless experiences to our customers. We have been actively engaged in understanding and identifying gaps between customer needs and expectations through the Voice of the customers and employees embedding customer experience goals in the organisation's goals building a Client First Culture and redesigning experiences (product design systems and processes) for enhanced customer delight. This year the focus has been on EASE of Banking to improve experiences across every customer touch point. Several initiatives were undertaken round the year to ensure EASE - Enhanced Access and Service Excellence. The Bank has secured the second place among public sector banks in the `EASE of Banking Index a strategic initiative undertaken by Government of India to imbibe best practices and provide superior customer experiences in Public sector Banks. Some of the steps taken in this direction by the Bank are:

The Bank has a wide array of financial services including Insurance and Investments and provides one-stop shop access to customers. The Bank has customised the service and marketing strategy for select customer segments in order to meet their expectations. Baroda Radiance has been launched across all major cities and investment and wealth management services are now available to all our customers. Bank has on-boarded best-in-class investment advisors and relationship managers. A dedicated phone banking team also is now available for assisting Baroda Radiance customers.

 Banking from home and mobile has been made more comfortable with the addition of multiple frequently used options and functionalities (nomination registration request for account transfer closure of term deposits new one glance account statement across relationships) to the Bank's popular mobile banking application. The internet and various other digital applications are being enhanced with new functionalities to provide better user experience.

 Bank's Contact Centre supports six regional languages in addition to English & Hindi. It is available 24*7 to handle emergencies (card blocking reissuance stop payments) enquiries or grievances. We also support four overseas locations - Mauritius Botswana Oman and Uganda.

 The Bank has undertaken an end-to-end revamp of the grievance machinery with more convenience for customers. Some of the features include a comprehensive and well- established policy real-time complaint status tracking time bound auto escalation options to attach documents option to provide feedback on resolution quality and also an option to reopen a complaint.

At the apex level the Bank has formed the Customer Service Committee a sub-committee of the Board which addresses the issues relating to the formulation of policies and assessment of their compliance with the aim of consistent improvement in the quality of customer service. The Bank has also set up a Standing Committee on Procedures and Performance Audit of Customer Service. Its members include two eminent public personalities all Executive Directors and the seven Functional Heads of the Bank. This Committee reviews practices and procedures prevalent and takes timely and effective compliance of the RBI instructions on Customer service. In addition there are Branch Level Customer Service Committees for directly getting feedback from customers.

While the Bank is focused on enhancing the convenience of banking from home the Bank is also monitoring the service levels across the network of branches through mystery shopping/service audits. The Bank is ensuring better ambience more seating area and better basic amenities to all customers with special focus on EASE for senior citizens and the differently abled. Some of the flagship branches are undergoing a facelift and are being deliberately designed to provide a competitive edge while enhancing customer experience.

The Bank is driving hassle-free banking through alternate delivery channels (apart from ATMs and cash re-cyclers)- self-service pass books multi-functional kiosks tab banking Baroda Pay Point tie ups with BHIM Aadhar enhanced UPI app and other initiatives of national importance such as Bharat Bill Payment System.

 The Bank has transformed 281 villages into cashless villages by providing various digital products like Debit Cards Mobile Banking Internet Banking UPI BHIM QR BHIM Aadhaar and POS machines.

 As mentioned earlier the Bank is continuously upgrading its IT infrastructure and driving digitisation in its processes. The Bank has launched a new loan processing system making end-to-end tracking of applications and loan disbursals faster. An enterprise wide CRM will also be rolled out shortly to improve quality of interactions and experiences at every touch point.

The Bank has an ongoing `Client-First' drive and continuous feedback is sought from customers and employees on experiences delivered at various touch points. The Bank publishes a Client-First Newsletter Pratham which discusses best practices in the service industry and features stories on Barodians living the client-first values.

A customer's journey with a bank involves multiple stages from queries about the Bank's offerings to delivery of products and services. The Bank endeavours to meet the customer's expectations at each stage of the journey and to ensure customer wow. The Bank secured the 4th position in Forrester's India CX Index 2018 Rankings of Indian Banks. The Forrester's CX Index score measures how successfully a company delivers customer experiences that create and sustain loyalty.


The vigilance function in the Bank aims at proactively supporting bona fide decisions and simultaneously acting as a deterrent for ensuring that no wrongdoing takes place. The thrust remains on identifying leakages within the organisation that may lead to financial losses and taking corrective and preventive action to plug them. Regular vigilance audits are undertaken for sensitive branches and employees are sensitized on preventive aspects of vigilance through newsletters circulars meetings etc. The number of staff accountability cases has been brought down by ensuring speedy disposal of vigilance matters. An exclusive portal `BoB e-Vigil' incorporating online vigilance clearance disciplinary proceedings status and complaint management system has been operationalised.

Human Resources

The Bank has a rich talent pool with over 55000+ employees on its rolls. The Bank continuously undertakes multiples initiatives for strengthening and developing its human resources viz. recruitment addressing training needs of employees employee engagement and capability building.

The second `Voice of Barodians' Survey witnessed 87% employee participation where the Bank's workforce expressed their perceptions views and suggestions on a wide range of aspects impacting them. As a result of various HR interventions initiated by the Bank the overall employee engagement level has increased from 55% in the last survey to 63%. The Bank has been awarded among the Best 50 PCI (People Capital Index) Companies by Jombay. The following initiatives have been taken during the year which have direct and significant impact on Bank's performance:

Manpower Planning and Recruitment

The Bank has built a new scientific manpower planning model designed to estimate skill-based manpower needs at various levels. This would help the Bank in taking key strategic decisions viz. recruitment deployment promotions trainings etc. The Bank recruited 1281 Officers and 1617 in Clerical Cadre as Business Associates through direct recruitment during FY 2019. The Bank also hired specialised staff with expertise in niche and key focus areas to strengthen its capabilities and bench strength.

Baroda GEMS Growth and Empowerment Management System The Bank has introduced a scientifically measurable Performance Management System (PMS) for all officers on a digital platform - Baroda GEMS (Growth and Empowerment Management System) to establish a transparent and performance driven culture. The role perquisites for Branch Heads are also linked with Baroda GEMS to enable accurate measurement of achievement of KRAs.

Job Family

During the year the concept of allocating employees to job families has been introduced in the Bank to enable well-rounded grooming of the employees and to provide them with better career opportunities through flexibility of movements across roles which are mapped out for each job family and ensure structured and timely deployment exposure and development.

Baroda Rewards for Individual & Team Excellence - BRITE

The Bank has always been a front-runner in acknowledging employees' contribution and believes that employees are strategic partners in quest for excellence. To instill the spirit of the core values and cover multiple dimensions of employee performance and motivation a comprehensive suite of rewards and recognition programmes named as `Baroda Rewards for Individual & Team Excellence- BRITE' has been institutionalised during the year to recognise both outstanding individual and team performance.

Baroda Anubhuti Programme

It is an employee engagement programme designed to foster the spirit of team bonding and collaboration and creating a happy and fun workplace. Various initiatives like employee of the month spot recognition -capturing `WoW' moments fun hour at all branches/offices local community service/ social activities are undertaken to enhance the overall employee engagement levels. Mandatory community service programmes are carried out through all branches/offices once in six months.

Under the banner of Baroda Anubhuti the Bank has been also conducting Annual Sports Day on the 4th Saturday in November and six Inter Zonal Sports & Cultural Tournaments in various disciplines across the country.

Wellness and Fitness Drives

The Bank has launched many initiatives for managing employee health and well-being which include a mandatory health checkup scheme for employees and their spouses. During the year through a Group Term Insurance cover the Bank offered all permanent employees with the Life Insurance cover of Rs 20 lakh. The medical treatment needs of employees are met through a Group Medical Insurance Policy. The Bank regularly conducts Health checkup camps fitness drives yoga sessions etc. to promote the health and well-being of our employees.

Crche facility

During the year as part of its employee friendly welfare measures the Bank set up a state-of-the-art onsite crche facility at its Corporate Office in Mumbai in order to provide day care facilities for small children of employees. The Bank plans to extend this facility at the Head Office Baroda and other select centres.

Learning and Development

The Bank's approach to training identifies the functional mandatory and behavioral training needs for employees at different levels of career development and addresses these requirements in a systematic manner. Mandatory training has been aligned to specific and critical job roles. The Bank also runs mandatory certification programs that are necessary before deployment in critical roles. The Bank is also investing in sharpening soft skills of its employees. The Bank has undertaken various initiatives to build a learning environment through various innovative and digital channels like Baroda Gurukul Baroda Margdarshak Baroda Radio Barodapedia Baroda YouTube a digital library and weekly quizzes for knowledge updation. Our e-learning platform hosts more than 280 modules and more than 8 lakh courses were completed by employees during FY 2019.

`We Lead' - Comprehensive Leadership Development Programme

The Bank has identified over 2700 potential leaders to take over leadership positions in future through four distinctive programmes:

 Baroda Senior Leadership Programme- for officers in Scales VI & VII

 Baroda Emerging Leaders Programme- for officers in Scales IV

 Baroda Rising Stars Programme- for officers in Scales IV

 Sayaji Rao Gaekwad Scholars Programme - for Officers in Scales I II & II

The first phase of the comprehensive leadership development programme - `We Lead' has been completed and actions have been initiated for the next phase to extend the coverage of the programme.

Baroda Alok Chandra Bravery Award

During the year the Bank instituted the `Baroda Alok Chandra Bravery Award' to recognise exemplary acts of bravery beyond the call of duty by displaying courage for furthering safeguarding and protecting the interests of the Bank. The Award is named in the memory of Late Shri Alok Chandra who during the year laid down his life while protecting Bank's interests while posted in Arwal Branch Patna Region.

Career Progression

Concerted efforts have been taken by Bank for fostering career progression of employees for rewarding them for their performance and motivating them. Horizontal movement of Officers across different functions is encouraged to provide them with wider exposure. During the FY 2019 promotion exercises were completed and 3564 employees promoted in all scales and cadres.

HR policies and systems

The Bank is constantly updating its policies and systems to make them `Best in Class'. During FY 2019 various policies viz. Transfer Promotion policy on Equal Opportunities were put in place / updated to keep up with the changing times. Under the aegis of Staff Welfare Fund the Bank has standardised the facilities at the Bank's Holiday Homes and also opened five more Holiday Homes during the year in Munnar Panchmarhi Shillong Dharmshala and Baroda. The total number of Holiday Homes now stand at 50. The Bank's Human Resource Centralised Processing Cell (HRCPC) department processes all staff loan applications and other online TA/DA claims on the same day of receiving the applications maintaining the TAT and contributing to employee satisfaction.

The Bank has continuously improved its HR technology platform Human Resources Network for Employee Services (HRNes). In order to address employees' concerns and grievances Bank has also put in place an online employee grievance redressal mechanism named as Baroda Samadhan.

Thrust on Diversity

The Bank follows a non-discriminatory and equal opportunity policy for all its employees. The Bank is transparent in all issues relating to promotion career path transfer policy and employee benefit / welfare schemes. The Bank has also introduced `Job Roles' for visually impaired employees. Further the Bank has been increasing its recruitment of women employees. The percentage of women in the overall staff composition has increased to 23.7% in FY 2019 from 23.0% in FY 2018 and 22.7% in FY 2017.

In order to retain women employees at all levels and in recognition of the concomitant responsibilities of women the Bank has also put in place various facilities to support women employees such as sabbatical leave and health check-up programmes for women employees among other initiatives. Besides a day-care crche facility has been operationalised as mentioned earlier.

Reservation Cell

An exclusive Reservation Cell has been set up to monitor the reservation and other enabling provisions for SC/ST/PWD/ Ex-Serviceman and OBC employees. Executives in the rank of General Manager are appointed as Chief Liaison Officers for SC/ST/PWD and ex-serviceman employees and OBC employees respectively who ensure compliance of various guidelines pertaining to them. With effect from February 1 2019 reservation of 10% for Economically Weaker Sections (EWSs) in all exercises for direct recruitment in the Bank is implemented. The Bank provides reservations for Persons with Disabilities (PWDs) at the rate of 4% of the total vacancies arising in Officer (identified posts) Clerical and Sub-Staff Cadre in a year as per Government guidelines.

Caste Category wise Count as on 31.03.2019
Grand Total103944903148082696
% to Total18.98.927.04.9

Periodical Meetings: The Bank holds Quarterly Meetings with the representatives of All India Bank of Baroda SC/ST Employees' Welfare Association and half yearly meeting with the representatives of All India Bank of Baroda OBC Employees' Welfare Association as per the Government Guidelines.

Workshops & Training Programmes:

Bank conducts following training programmes every year for members of AIBOBSCST Employees' Welfare Association and AIBOBOBC Employees' Welfare Association and Liaison Officers of SC/ STs and OBCs at Apex Academy Gandhinagar:

Pre-Promotion Training for SC/ST candidates

Workshop on Reservation Policy

Training programme on Disciplinary proceedings The Standing Committee on Social Justice and Empowerment met our Bank's representatives on 15th January 2019 at Jamnagar on priority sector lending to SCs STs OBCs Minorities and Persons with Disabilities.

Premises Re-engineering

In an effort to improve the ambience of customer touch points 360 identified branches across the country are being refurbished with special emphasis on maintaining a uniform look and feel in all branches. An Ambience Manual has been issued to standardise the ambience of branch premises keeping in view the ease of banking operations use of new technology and customer convenience. The Bank has also undertaken a number of green initiatives during the year and successfully completed the construction of the new Regional office at Udaipur and a Disaster Recovery centre at Hyderabad. Bank in an attempt to reduce carbon footprint uses energy efficient equipment solar energy and LED light fixtures in its branches. Use of recycled waste water and production of bio gas from solid waste are also explored in Bank's major commercial buildings.

Implementation of Official Language (OL) Policy

The Bank continued to make exemplary progress in the implementation of the Official Language Policy of the Government of India and fulfilled all the assurances given to the Committee of Parliament on Official Language. Use of Hindi and other Indian languages for business growth as well as for providing digital products to the customers is a significant characteristic of the language policy adopted by our Bank. This has been appreciated by regulatory authorities.

Our initiatives included organising an All India seminar for banking faculties on `Opportunities for Credit Flow to Agriculture Sector' publishing e-books/ books on various topics like Agricultural Best Practices Baroda Kisan Diwas related literature as well as active participation in the 11th Vishwa Hindi Sammelan held at Mauritius.

This year the Bank instituted one more award namely Maharaja Sayajirao Lok Bhasha Samman for honouring an eminent personality from other than the Hindi speaking community for contributing in the promotion and preservation of Hindi/Regional/Tribal languages in addition to the Maharaja Sayajirao Bhasha Samman scheme of the Bank. During the year the Bank was awarded the First Prize by the Government of India under linguistic region `B'. Similarly TOLIC Varanasi was awarded with First Prize. Besides this our Faizabad Regional Office Zonal Office Lucknow TOLIC Jaipur TOLIC Baroda and TOLIC Rajkot also received awards from Government of India through its Regional Implementation Offices. The Bank's House Journal `BoBMaitri' and Hindi Patrika `Akshayyam' received awards from Association of Business Communicators of India (ABCI) during the year in three different categories.

Domestic Subsidiaries and Joint Ventures

BOB Financial Solutions Ltd.

BOB Financial Solutions Limited (BFSL) formerly known as Bobcards Limited is a wholly owned subsidiary of the Bank. It is a non-banking financial company and its primary business lines include credit cards personal loans and merchant acquiring. During the year it revamped its business strategy. BFSL's credit cards base grew 84% YoY helped largely by a 1200 strong field force deployed across 1700+ branches of the Bank. BFSL introduced value added features in the form of rewards points and various schemes through marketing partnerships with leading consumer brands which resulted in a 37% increase in spends on credit cards in H2 vs H1 (FY 2019). BFSL entered into a tripartite agreement with the Bank and TransUnion-CIBIL for launching `Project Nirmaan' - an initiative to pre-approve Bank's customers for credit cards. More than 66000 credit cards were issued under this programme. Further a personal loan product was piloted for the BFSL employees and a select set of pre-approved credit card customers during FY 2019. A plethora of technology initiatives were taken by the company to improve customer experience (like EMI on Card Green Pin Chabot lending solution revamped website and customer service portal) to reduce customer service turnaround times (robotics based solution customer originations platform) and to enhance employee experience (HR Platform centralised Help Desk).

BOB Capital Markets Ltd.

BOB Capital Markets Ltd. (BOBCAPS) a wholly owned subsidiary is the investment banking arm of the Bank. It is a SEBI registered Category-I merchant banker. BOBCAPS offers the entire spectrum of financial services that include Initial Public Offerings Private Placement of Debt Corporate Restructuring Business Valuation Mergers & Acquisitions Project Appraisal and Loan Syndication. BOBCAPS also undertakes advisory services on Securitisation and Structuring of Debts. It has five lines of businesses viz. Investment Banking - Equity; Investment Banking

- Debt; Institutional Broking Retail Broking and Wealth


During FY 2019 BOBCAPS completed five debt syndication transactions amounting to Rs.4196 crore while the Stressed Asset Resolution team executed 5 transactions. The Company has secured 10 mandates for IPOs / FPOs

/ OFS PE fund raise and M&A transaction resulting in a robust deal pipeline in equities. Institutional broking has ramped up its new client empanelments and revenue run rate during the year. It has recently commenced coverage of foreign institutional investors based outside India. In retail broking rise in client acquisitions and business volumes are being driven by enhanced products and services like 3-in-1 Demat Trading and Bank Account Prepaid brokerage online account opening platform and quality research. The Company's investment advisory team supports the Wealth Management vertical of the Bank.

The Nainital Bank Ltd.

The Nainital Bank Limited (NBL) originally promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and others in 1922 became a subsidiary of Bank of Bank of Baroda in the year 1973.The Bank's holding in Nainital Bank Ltd. is 98.57%. The total business of NBL increased to Rs. 10931 crore on March 31 2019 from Rs. 10772.10 crore as on March 31 2018. The net profit of the Bank was Rs. 26.89 crore in FY 2019 against a profit of Rs. 48.90 crore during the previous year. The Bank opened 2 new branches during FY 2019. During the year NBL was ranked 3rd in the category of the Best Performing Private Bank in terms of average Aadhar generation and update by UIDAI for The Aadhaar Excellence Awards 2018.

Baroda Global Shared Services Ltd.

Established during FY 2017 Baroda Global Shared Services Ltd. (BGSS) a wholly owned subsidiary of the Bank commenced its operations during last financial year. BGSS's strategy is to focus on four core sectors - customer service efficiency speed & managing risk. It is providing services to the Bank by helping it in digitising and centralising its back-office operations at the state-of-the-art Shared Services Centre (SSC) GIFT City Gandhinagar and at a second centre at Hyderabad. Centralisation has not only reduced the cost of transactions but enhanced risk management controls and compliance practices.

Baroda Asset Management India Ltd.

Baroda Asset Management India Limited (Baroda AMC) became a wholly owned subsidiary of the Bank with effect from September 28 2018 after buying out the 51% stake by the bank from its joint venture partner UniCredit S.p.A. (the parent company of Pioneer Global Asset Management S.p.A.). The Baroda AMC acts as the investment manager to Baroda Mutual Fund (Baroda MF) a mutual fund registered with the Securities and Exchange Board of India. The Average Assets under Management (AUM) of Baroda MF for FY 2019 were Rs. 12345 crore registering an annual growth of 7%. Growth in average AUM under equity schemes was over 40%. Baroda AMC continues to expand its third-party distribution network with particular focus on IFAs. The AUM from this segment has been growing steadily. With the completion of rationalisation and the scheme categorisation exercise and the regulatory changes around Total Expense Ratio Baroda AMC will be better positioned to compete in the market.

IndiaFirst Life Insurance Company Ltd.

Headquartered in Mumbai IndiaFirst Life Insurance is one of the country's youngest life insurance companies with a paid-up share capital of Rs. 625 crore. The company is promoted by two of India's largest public-sector banks - Bank of Baroda and Andhra Bank which hold 44% and 30% stake in the company respectively. During the year IndiaFirst Life's erstwhile founding partner Legal and General UK divested the 26% stake it held in the company. This stake was acquired by Carmel Point Investments India Private Limited incorporated by Carmel Point Investment Ltd a body corporate incorporated under the laws of Mauritius and owned by private equity funds managed by Warburg Pincus LLC. The company's is currently ranked 12th in Individual New Business (Annual Premium Equivalent) among the private players with Assets under Management (AUM) at Rs. 15039 crore as on March 31 2019.

IndiaFirst Life was named the Most Innovative Life Insurer of The Year (2018) - International by Life Insurance International UK a body dedicated to offering benchmark intelligence centered exclusively on the global life insurance fraternity besides being recognised among the Best Brands 2018 by the Economic Times and being certified as a Great Place to Work.

India Infradebt Ltd.

India lnfradebt is the first Infrastructure Debt Fund (IDF) - NBFC and was sponsored by Bank of Baroda along with ICICI Bank. Citicorp Finance (India) Limited and LIC of India are other shareholders. It has been rated AAA by CRISIL ICRA and India Ratings since its inception. It finances the relatively safe completed infrastructure projects which have achieved one year of commercial operations and enjoys 100% income-tax exemption. The synergy with the Bank arises from its focus on lending to strong stable infrastructure projects - mainly NHAI road projects and renewable energy projects. The company has delivered healthy growth in its first full five years of operations. Its loan book as on March 31 2019 was Rs. 9809.5 crore and net profit for FY 2019 was Rs. 223.7 crore.

Barodasun Technologies Ltd.

Barodasun Technologies Ltd. is a wholly owned IT subsidiary incorporated on 05.07.2017. The Bank has set-up a Centre of Excellence (CoE) to identify new emerging trends and provide technology differentiation. The CoE would provide design thinking skills process design architectural skills and core development capacity in current and future technologies to help businesses in leveraging technology for realising business outcomes.

A brief summary of domestic subsidiaries and Joint Ventures is as below:

(Rs. in crore)
Entity (with date of registration)Owned fundsTotal assetsNet profitOfficesStaff
BOB Financial Solutions Ltd247.7441.64.138446
BOB Capital Markets Ltd.153.8161.33(2.92)1114
The Nainital Bank Ltd.624.08101.826.94916
Baroda Global Shared Services Ltd. locations (Gift City Gandhi- nagar/ Hyderabad / Mumbai)424
Baroda Asset Management India Ltd.
Baroda Trustee India Pvt. Ltd.
IndiaFirst Life Insurance Company Ltd.663.515626.361.6292101
India Infradebt Ltd.1636.610403.4189.9121

Awards and Accolades

DateAwards 2018-19
17.03.2019Best Banking & Finance Legal Team of the Year award at the 8th Annual Indian Legal Era Awards 2018-19.
08.03.2019Business Today Jury award for best Fintech Engagements.
Multiple honours at the IBA Banking Technology 2019 Awards:
Winner - Most Customer Centric Bank Using Technology
Runners Up - Best Payment Initiatives
Baroda Rajasthan Gramin Bank adjudged `Best Technology Bank of the Year'
18.02.2019CSR Excellence Award - TV9.
30.01.2019Ms. Nikita Raut Chief Manager HR and Head Mumbai Academy topped Jombay's Top 40 under 40 award for HR Professionals
25.01.2019Finnoviti Award for `Fintech Initiatives' at the Banking Frontiers' Finnoviti Conference 2019.
28.01.2019Leadership Capital and Out Performers awards at Atal Pension Yojana Awards 2018-19.
18.01.20195 honours at the 58th Association of Business Communicators of India (ABCI) Awards in the following categories - Indian Language Publications Features (English) Features (Language) Headlines and Corporate Film.
11.01.2019`Best Home Loan Products 2018' at FE Best Banks Award 2018.
11.12.2018`Inclusive Finance India Award-Best Bank in Priory Sector Lending' for innovation & inclusiveness in PSBs category at Inclusive Finance Summit 2018.
08.12.2018`Best Bank in Supply Chain Finance in the 4th edition of Asian Supply Chain Thought Leadership Summit & Awards -2018 held by the Institute of Supply Chain Management.
10.11.2018Best PSU Bank under MSME & Best Bank Agriculture' finance at Divya Bhaskar Eminence Awards 2018.
19.11.2018Fiji Territory received the Business Excellence Award 2018 from President of Fiji.
16.11.2018APY Rise Above Rest Campaign Award and APY Best Performing Bank Award for the campaign Maker of Excellence - PFRDA Government Of India.
04.10.2018Best Performing Bank at the UIDAI's Aaadhar Excellence Awards 2018.
14.09.2018Kirti Award - First Prize for official language implementation for the year 2017-18.
28.06.2018Shri P. S.Jayakumar MD & CEO was conferred with CEO of the Year and the Bank bagged the Retail Bank of the Year at India Banking Summit & Awards 2018.
27.06.2018The bilingual in-house journal `BoBMaitri' and Hindi Magazine `Akshayyam' were awarded with First and Special prizes respectively under All India House Journal Competition organised by RBI.
29.05.2018Apex India CSR Excellence Award 2017 for CSR Activities for BSVS (RSETI) Project.
11.05.2018Recipient of National Award for Best Performance in SHG- Bank Linkages 2017-18 Public Sector Banks by Deendayal Antodaya Yojana National Rural Livelihoods Mission.
14.05.2018Appreciation & Honour from the World Trade Centre for launching Digitised Supply Chain Finance at 7th Global Economic Summit 2018.
13.04.2018Winner of Litigation Dept of the Year 2018 and First Runners Up - In House Dept of the Year at the 7th Edition of IDEX Legal Awards.

Dividend Distribution Policy

As required under Regulation 43A of the SEBI (listing Obligations and Disclosure Requirements) 2015 the Bank has a dividend distribution policy in place which sets out the parameters and circumstances that will be taken into account by Board in determining distribution of dividend to its shareholders. The policy is given in this Annual Report and is also available on the Bank's website at

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

Shri Debasish Panda was nominated as Government Nominee Director w.e.f. 5th April 2018 by the Central Government u/s 9 (3) (b) of The Banking Companies Acquisition and Transfer of Undertakings) Act 1970 to hold the post until further orders.

Shri Shanti Lal Jain was appointed as Executive Director w.e.f. 20th September 2018 by the Central Government u/s 9 (3) (a) of The Banking Companies Acquisition and Transfer of Undertakings) Act 1970 for a period of -3- years i.e. up to 19th September 2021.

Shri Vikramaditya Singh Khichi was appointed as Executive Director w.e.f. 1st October 2018 by the Central Government u/s 9 (3) (a) of The Banking Companies Acquisition and Transfer of Undertakings) Act 1970 for a period of -3- years i.e. upto 30th September 2021.

Shri P.S. Jayakumar continues to be the Managing Director & CEO on extension of the term of his office w.e.f. 13th October 2018 for a period of -1- year i.e. till 12th October 2019. Shri Srinivasan Sridhar was elected as Shareholder Director under section 9 (3) (i) of The Banking Companies Acquisition and Transfer of Undertakings) Act 1970 for a period of -3- years from 12th December 2018 to 11th December 2021 Dr. Hasmukh Adhia was appointed as Non-Executive Chairman w.e.f. 1st March 2019 by the Central Government u/s 9 (3) (h) of The Banking Companies Acquisition and Transfer of Undertakings) Act 1970 for a period of -3- years.


Shri Lok Ranjan ceased to be a Government Nominee Director w.e.f. 5th April 2018 on the appointment of Shri Debasish Panda in his place.

Shri Ashok Kumar Garg ceased to be Executive Director w.e.f. 30th June 2018 upon attaining the age of superannuation. Shri Ravi Venkatesan ceased to be Non-Executive Chairman w.e.f. 14th August 2018 on completion of his tenure of 3 years.

Shri Mayank K. Mehta ceased to be Executive Director w.e.f. 30th September 2018 upon attaining the age of superannuation.

Smt. Usha A. Narayanan Director ceased to be a Shareholders Director w.e.f. 12th December 2018 on completion of her tenure of 3 years.

Board Evaluation

With the objective to continuously improve Board governance an evaluation of the Board's performance; performance of its committees and individual directors including independent directors is being conducted by an external consulting firm. The parameters of evaluation have been aligned with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and new SEBI Guidance Note on Board Evaluation dated January 5 2017.

Auditors' Compliance Certificate on Corporate Governance:

The Auditors' Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2018-19 is annexed with this report pursuant to Part E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Business Responsibility Report

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

Directors' Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31 2019: a) The applicable accounting standards had been followed along with proper explanation relating to material departures if any;

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

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

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

e) The directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by RBI in this regard and that such internal financial controls are adequate and were operating effectively.

Explanation: For the purposes of this clause the term internal financial controls means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business including adherence to Bank's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information;

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


The Directors place on record their appreciation for the contributions made by the outgoing Chairman and Non-Executive Director Shri Ravi Venkatesan and other outgoing Directors viz. Shri Lok Ranjan Shri Ashok Kumar Garg Shri Mayank K. Mehta and Smt. Usha A. Narayanan.

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

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

The Directors acknowledge with deep appreciation the cooperation extended by all shareholders banks and financial institutions rating agencies stock exchanges and all well-wishers in India and abroad. The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of the Bank.

For and on behalf of the Board of Directors

P. S. Jayakumar

Managing Director & CEO