A Reference Study Material

for
Promotion Exercise
(JMG/S-I to MMG/S-II & MMG/S-II to MMG/S-III)
2017-18

Baroda Academy
Bank of Baroda

(For internal circulation only)

 INDEX

Sr. No. Topics Page No.

01. Awareness about the Bank 03-18

02. Emerging Trend In Banking 19-31

03. Legal & Statutory Provisions 32-46

04. Retail Banking & Third Party Products 47-63

05. Role of Technology 64-97

06. Rural & Agri Banking 98-147

07 MSME Banking 148-184

08 Large Corporate Banking 185-243

09 NRI 244-266

10 Risk Management 267-281

11 Credit Monitoring 282-306

12 Human Resource Management 307-320

13 Retail Loan Products 321-359

14 Inspection & Audit 360-366

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AWARENESS ABOUT THE BANK

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 1. AWARENESS ABOUT THE BANK

Quick Bites
 Bank of Baroda was established on 20th July, 1908 at Baroda by ruler of erstwhile Baroda
State, His Excellency Maharaja Sayajirao Gaekwad-III.
 Ten banks have since been merged with BOB.
 Logo, the ‘Baroda Sun’ reflects our corporate brand identity.

Founder:
Bank of Baroda made a humble beginning on 20th July 1908 as “Bank of Baroda Limited”
founded by the Ruler of erstwhile Baroda State, His Excellency Maharaja Sayajirao
Gaekwad-III.

Mission Statement

“To be a top ranking National bank of International Standards committed to augmenting

stake holder’s value through concern, care and competence”.

A saga of vision and enterprise:

It has been a long and eventful journey of almost a century across 23 countries. Starting
in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate
Centre in Mumbai is a saga of vision, enterprise, financial prudence and corporate
governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted in private
capital, princely patronage and state ownership. It is a story of ordinary bankers and their
extraordinary contribution in the ascent of Bank of Baroda to the formidable heights of
corporate glory. It is a story that needs to be shared with all those millions of people -
customers, stakeholders, employees & the public at large - who in ample measure, have
contributed to the making of an institution.

Our Logo:

Our logo is a unique representation of a universal symbol. It comprises dual ‘B’ letter
forms that hold the rays of the rising sun. We call this the Baroda Sun. The sun is an
excellent representation of what our bank stands for. It is the single most powerful source
of light and energy – its far reaching rays dispel darkness to illuminate everything is
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 touched. At Bank of Baroda, we seek to be the sources that will help all our stakeholders
realize their goals. To our customers, we seek to be a one-stop, reliable partner who will
help them address different financial needs. To our employees, we offer rewarding
careers and to our investors and business partners, maximum return on their investment.
The single-color, compelling vermillion palette has been carefully chosen, for its
distinctiveness as it stands for hope and energy.

We also recognize that our bank is characterized by diversity. Our network of branches
spans geographical and cultural boundaries and rural-urban divides. Our customers come
from a wide spectrum of industries and backgrounds. The Baroda Sun is a fitting face for
our brand because it is a universal symbol of dynamism and optimism – it is meaningful
for our many audiences and easily decoded by all.
Our new corporate brand identity is much more than a cosmetic change. It is a signal that
we recognize and are prepared for new business paradigms in a globalised world. At the
same time, we will always stay in touch with our heritage and enduring relationships on
which our bank is founded. By adopting a symbol as simple and powerful as the Baroda
Sun, we hope to communicate both.
Brand Endorsement announced with ace Indian Badminton Players – Ms. P. V. Sindhu and
Mr. K. Srikanth for three years.

Our Core Values:

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

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

Heritage:
It all started with a visionary Maharaja's uncanny foresight into the future of trade and
enterprising in his country. On 20th July 1908, under the Companies Act of 1897, and with
a paid up capital of Rs 10 Lacs started the legend that has now translated into a strong,
trustworthy financial body, BANK OF BARODA.
It has been a wisely orchestrated growth, involving corporate wisdom, social pride and
the vision of helping others grow, and growing itself in turn.

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 The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a bank of
this nature will prove a beneficial agency for lending, transmission, and deposit of money
and will be a powerful factor in the development of art, industries and commerce of the
State and adjoining territories."

Ethics:
Between 1913 and 1917, as many as 87 banks failed in India. Bank of Baroda survived the
crisis, mainly due to its honest and prudent leadership. This financial integrity, business
prudence, caution and an abiding care and concern for the hard earned savings of hard
working people, were to become the central philosophy around which business decisions
would be effected. This cardinal philosophy was over years of its existence, to become its
biggest asset.
It ensured that the Bank survived the Great War years. It ensured survival during the
Great Depression. Even while big names were dragged into the Stock Market scam and
the Capital Market scam, the Bank of Baroda continued its triumphant march along the
best ethical practices.

Initiatives:
Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking
sector. Bank is amongst first in the industry to complete an all-inclusive rebranding
exercise wherein various novel customer centric initiatives were undertaken along with
the change of logo.
The initiatives include setting up of specialized NRI Branches, Gen-Next Branches and
Retail Loan Factories/ SME Loan Factories with an assembly line approach of processing
loans, Specialized Mortgage Store (SMS) for speedy disbursal of loans. Pension payment
has been centralized to minimize errors in pension payments. Further, processing of
retail loans has been nationally centralized through CPC in Baroda.
The major initiatives of the Bank are detailed below:
Business Process Re-engineering (Project Navnirmaan):

This project touched all aspects of Bank‘s processes, structures and systems with an
objective to simplify processes, improve branch productivity and provide best in-class
service to the customers.
The most important initiatives planned under this project include:
 Conversion of all metro and urban branches into modern centers known as Baroda
Next branches.
 Creation of Automated and Leaner Back Offices like City Back Office (for automated
cheque processing etc), Regional Back Office (for faster account opening etc),
Establishment of two Call Centers, Creation of Academy of Excellence, Introduction of
Frontline Automation at select branches for customer convenience and
Organizational Restructuring.

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People Initiatives:
Bank is endowed with a competent and motivated employee base which is engaged in
handling the extensive business operations of the Bank across the globe. Strategic HR
interventions like, according cross border and cross cultural work exposure to its
managers, hiring diverse functional specialists to support line functionaries and
complementing the technical competencies of its people by imparting conceptual,
managerial and leadership skills, gave the Bank competitive advantage. People initiatives
were blended with IR initiatives to create an effectively harmonious workplace, where
everyone prospered. Dedicated HR helpline has been launched to address the grievances
/ issues of the employees.

New Technology Platform:

Bank has made substantial progress in its end-to-end business and IT strategy project
covering the Bank’s domestic, overseas and subsidiary operations. All Branches,
Extension Counters, overseas business and sponsored Regional Rural Banks are on the
Core Banking Solution (CBS) platform.
Bank has been providing to its customers Internet Banking, viz., Baroda Connect and
other facilities such as online payment of direct and indirect taxes, State Government
taxes, utility bills, rail tickets, online shopping, donation to temples and institutional fee
payment. Bank has a wide network of ATMs across the country and has also launched
mobile ATMs. Mobile based apps such as Updated version of M Connect i.e. M Connect
Plus Mobile app Chillr and Mobile Wallet M Clip, UPI based M Pay, Baroda Rewardz
have been launched by the bank for bill payments and online shopping. Bank also
launched M-Point Business App for all business entities /shopkeepers in India for
smoothening less cash transactions in our economy. E-Lobby has been set up at branches
for customer’s convenience.
Bank has implemented the Global Treasury Solution in its key territories like UK, UAE,
Bahamas, Bahrain, Hong Kong, Singapore and Belgium. Bank has taken various
technological initiatives in overseas operations such as implementation of Centralized
SWIFT activity through Data Centre in Mumbai, Payment Messaging System with Anti
Money Laundering check, Anti Money laundering Compliance and Online List Matching
solution. While Bank implemented Transaction-based Internet Banking facility for its
customers in Uganda, Botswana, UAE, New Zealand, Kenya, Mauritius and Seychelles, a
View based e-banking facility was made available in Fiji, Oman, Tanzania and UK.

Marketing Initiatives:
Bank focused on promotion of Brand and various products and services through a variety
of marketing initiatives with dual focus for a robust business growth and deepening of
relationships. Marketing initiatives involved effective utilization of different media
vehicles such as print, electronic (TV / Radio), digital and out of home (OOH) to support
the below-the-line (BTL) activities undertaken at the Zonal / Regional level.

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 In order to augment the Brand connect with its diverse stakeholders, Bank has signed up
for FIFA U-17 World Cup India 2017 as National Supporter of the event so that Brand
recall can be increased amongst its customers.
Social Media for engaging customers: Bank has been regularly posting engaging content in the
Social Media platforms and undertook various campaigns to serve different objectives e.g. online
brand building, awareness with defined target segments, business acquisition, promote Alternate
Delivery Channels to reduce cost of customer service etc. to engage with the desired target
audience.

Corporate Offices & Head Office

Head Office Corporate Centre, Bank Of Baroda, Baroda
Suraj Plaza 1, Sayaji Ganj, Corporate Centre, Plot No. C-26, Block G, Bandra
Baroda 390005 Kurla Complex,
Bandra (East), Mumbai 400051
Branch Network (as of 30.06.2017)
Area No. of Branches
Metro 1161
Urban 925
Semi-Urban 1531
Rural 1817
Total (Indian) 5434
Foreign (Overseas) 107
Total (Global) 5541
Controlling Offices
Zonal Offices 13
Regional Offices 75

Subsidiaries & Joint Ventures

Domestic Overseas
Subsidiary Subsidiary
BOBCARDS Ltd. Bank of Baroda (Botswana) Ltd.
BOB Capital Markets Ltd. Bank of Baroda (Kenya) Ltd.
Nainital Bank Ltd. Bank of Baroda (Uganda) Ltd.
Baroda Global Shared Services Limited Bank of Baroda (Guyana) Ltd.
Bank of Baroda (New Zealand) Ltd
Bank of Baroda (Tanzania) Ltd
Bank of Baroda (Trinidad & Tobago) Ltd.
Bank of Baroda (Ghana) Ltd.
Joint Venture Company (J.V.) Representative Offices
India First Life Insurance Company Limited Bank of Baroda (Thailand)
M/s India Infradebt Ltd.
Associate Associate

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 Baroda Pioneer Asset Management Indo-Zambia Bank Ltd. (Lusaka).
Company Ltd. India International Bank Malaysia Berhad.
Baroda Uttar Pradesh Gramin Bank.
Baroda Rajasthan Gramin Bank.
Baroda Gujarat Gramin Bank.

State Level Bankers Committee (SLBC) Convenorship

Rajasthan
Uttar Pradesh
Banks Lead Districts – 44
State No. of Lead Districts
Gujarat 12
Uttar Pradesh 14
Uttaranchal 2
Rajasthan 12
Madhya Pradesh 2
Bihar 2

Banks merged with Bank of Baroda

As many as 10 banks have been merged with Bank of Baroda during its journey so far:
 Hind Bank Ltd (1958)
 New Citizen Bank of India Ltd (1961)
 Surat Banking Corporation (1963)
 Tamil Nadu Central Bank (1964)
 Umbergaon People Bank (1964)
 Traders Bank Limited (1988)
 Bareilly Corporation Bank Ltd (1998)
 Benares State Bank Ltd (2002)
 South Gujarat Local Area Bank Ltd (2004)
 Memon Cooperative Bank Limited (2011)

Board of Directors
The constitution of the Board of Directors is as follows:
1. Mr. Ravi Venkatesan Non-Executive Chairman
2. Mr. P S Jayakumar Managing Director & CEO
3. Ms Papia Sengupta Executive Director
4. Mr. Mayank K. Mehta Executive Director
5. Mr. Ashok Kumar Garg Executive Director
6. Mr. Lok Ranjan Director
7. Mr. Ajay Kumar Director
8. Mr. Gopal Krishan Agarwal Director
9. Prof. Biju Varkkey Director
10. Dr. R Narayanswamy Director
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 11. Mr. Bharatkumar Dhirubhai Dangar Director
12. Ms Usha A Narayanan Director

Bank’s Administrative and Functional Set Up

Indian Operations

1. Head Office, Baroda

2. Corporate Office (BCC) Mumbai
3. Zonal Offices
4. Regional Offices
5. Branches (Metro/ Urban/ Semi-Urban/ Rural)

Project NAVNIRMAAN:
A comprehensive transformation programme called ―Project NAVNIRMAAN was launched by
our Bank for its domestic operations on 22 June 2009. It is centered on our customers and our
employees. Under project Navnirman following initiatives were taken up :

1. Account Opening and Maintenance Lean Service Factory- Regional Back Office
There are 13 Regional Back Office as on 31.10.2017
This will accomplish following activities:
 Account opening and enrichment – Savings and Current Account.
 Generation of debit card request file & i-track number file for internet banking.
 Personalised cheque book issuance.
 Printing of customer statements and other intimations.
 CRM data entry.
 Changes in customer account details.
 Account closure.
 Account opening, renewal and printing of term deposits.

2. Payment Processing Centre –City Back Office

More automation is proposed to be carried out at the existing City Back Offices so that
productivity of processing of cheques can be enhanced.

3. Credit Processing Centres – SMELF / SMS

As part of business segmentation and to expedite our delivery mechanism, Bank has
established -45- SME Loan Factories as on 31.10.2017 and -73- SMS which work on
assembly line principal as on 31.10.2017

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4. Business Intelligence Unit –Data Warehouse
Business Intelligence Unit will undertake following activities:
 Generation of all MIS from CBS and ASCROM.
 Analysis of MIS.
 Communication of MIS to Branches, Regions, Zones and Corporate office.

5. Contact Centre:
Bank has set up Contact Centre to fast address the customer queries & grievances.
The service timing has been increased to 6 am to 10 pm (from earlier 8 am to
8 pm)for better customer convenience.

6. Launch of Signature Tune and mascot

Bank has introduced Brand in Sonic Medium by launching a “Signature Tune” on the
occasion of its Foundation Day in the year 2011. The prime purpose was to highlight the
spirit of the Bank as a vibrant and energetic organization complementing the Logo.

Project Navoday – Selection of change leaders

On 20.07.2016 Bank of Baroda has unveiled Project Navoday, a comprehensive transformation

for the Bank across our business strategy, products, systems and organization that is going to
propel us forward in our ambition to be India’s ( Premier) International Bank with a global
standing, delivering a differentiated world class experience to our customers. Under Project
Navoday following priority areas are being undertaken:
1. Establish long term and profitable customer relationship across businesses.
2. Expand our corporate and international banking businesses through dedicated
Relationship Managers.
3. Redesign processes and systems.
4. Make our future ready.
5. Realignment of structures across the Bank.
6. Unleash the potentials of our people.
Bank has established a central Project Management Office (PMO) that will drive the change and
send out regular communication on the progress achieved. Additionally dedicated Change leaders
are being identified. Every Month this office published Navoday times where in all updates and
changes are enshrined and a monthly quiz is also conducted with announcement of three monthly
winners .

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

Scale Leadership interventions

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 I, II and III Sayaji Rao Gaekwad Scholars Program
IV Baroda Rising Stars Program
V Baroda Emerging Leadership Program
VI and VII Baroda Senior Leadership Program

Project Sparsh Plus

On 06.05.2017 Bank of Baroda has unveiled HR transformation project christened as Project

Sparsh Plus, for enhancing the Performance Management & Talent Effectiveness in our Bank.
Hence a new digital PMS (Performance Management System) is launched as GEMS: BARODA
GROWTH & EMPOWERMENT MANAGEMENT SYSTEM. New PMS system will be more scientific
than existing APAR system & key benefits of GEMS are:
1-Result Oriented
2-Objectivity & Rationality
3-Empowerment
4-Recognition of High Performance

Gen-Next Branches
To respond to the needs of the changing demographic profile of the country, the bank has been
endeavouring to customize delivery channels especially for youth segment. As a part of these
efforts, the bank has set up innovative ―Gen- Next branches dedicated to youth and young IT
professionals at certain places. There are 9 Baroda Gen-Next Branches as on 31.10.2017
 The branch will have youth specific products and will function as a model for fusion of
―Hi-tech and High-touch Banking.
 The Branch is offering following liabilities and assets products to the customers:

Gen-Next Junior (Saving Account)

 Target group : Children upto 18 years of age
 Minimum amount & balance : Quarterly Average balance (QAB) Rs 500/-
 Non-maintenance of minimum QAB : Charges Rs 50/- +GST per quarter

1. Gen-Next Lifestyle (Term Loan - Combo Pack) Minimum Monthly Income

Rs. 2.50 Lacs ,
Age group 21-45 Years
Maximum Loan Amount (Rs 8.00 lac). Subject to maximum of:
 Furniture & Fixture / New Consumer Durables : Rs 2 lac (Margin: 20%)
 New Vehicle (Four Wheeler) : Rs 6 lac (Margin: 15%)
 New Vehicle (Two Wheeler) : Rs 1 lac (Margin: 15%)
 Old Four Wheeler (Not more than 3 years old) : Rs 4 lac (Margin: 40%)
 New modern gadget/s : Rs 1 lac (Margin: 20%)

Gen-Next Power (OD Facility)

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This is a special Savings Deposit product having an in built feature of overdraft facility (No
Minimum Balance Requirement), Amount: 5 times of net take home monthly salary (Minimum Rs
10000) subject to:
 Min Rs 50,000/-
 Max Rs 2 lac
 Maximum Age 45 Years

E-Lobbies:
Total e-Lobbies (Including Express E lobbies) as on 30.06.2017 are 958. These lobbies
operate 24X7 providing facilities for cash withdrawal, cash deposit, cheque deposit, pass
book printing, internet banking and phone banking. This facility is known as Baroda Non
Stop 24*7

Baroda Anubhuti Programme- Enhancing Employee Experience

Based upon the findings of Employee Engagement Survey “Voice of Barodians”, Bank is taking
many initiatives. Baroda Anubhuti Programme is a key initiative to improve Employee Experience
of working in the Bank. Under this umbrella in initial stage Bank has started following five
initiatives-
1. Employee of the month
2. Spot Recognition – Creating Wow moments
3. Zero Hour ( Fun Hour) at Branches/Offices
4. Compulsory local community service / Social Activities by employees
5. Anubhuti Workshop

Baroda Academy
Implementation of BPR and OR will require
learning of new skill sets for the employees. To
train the employees on new desired skills,
entire training system of the Bank under the
aegis of Baroda Apex Academy, Gandhinagar
has been converted into Baroda Academy

Baroda Academy App

Baroda Academy has developed unique application named as "Baroda Academy" which enables
Barodians to access one stop Application for all Learning & Development Activities.

Features: Baroda Academy application contains many features but at present -6-Features are
active.

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1. Quiz: - It is expected that Barodians remain updated about our products and initiatives. Baroda
Academy used to have regular quiz competition through Baroda Gyani. It is now providing same feature
in this mobile application. It will periodically have quiz competition for different class of employees and
they will also be suitably rewarded. This will facilitate learning with fun.
2. Marg Darshak:-Employees need support/handholding in their day to day operations, hence now
Employee can ask their Banking operations queries and will get solution within reasonable time.
3-Baroda Radio: Baroda Radio is now made part of this new application and many more features has
been incorporated in Radio.
4-Baroda Tube: In this section important video clips are available and employee can update their
knowledge and learn many more through this feature.
5-Baroda Net Academy:-Our Elearning platform "Baroda Net academy" can be accessed through the
menu option Net Academy. The Menu redirects net academy courses. You can use the application by your
credential.
6-Knowledge Base: -Important journals/magazines and reference material like The Indian Banker, Gist
of circulars etc. are available with this option. Employee can read the journals/magazine online
anytime anywhere,

Major technology Initiatives:

 Baroda Rewardz – Bank’s Loyalty Program
 Online Loan Application – Educational Loan, Home Loan, Car Loan
 Balance enquiry through Miss Call
 Introduction of m-passbook
 New app M-connect+
 Baroda connect – online registration
 New Debit Cards - RuPay Platinum & MasterCard Platinum Chip Debit Card
 Baroda MUDRA Card
 Baroda M Invest
 Baroda Flash N Move+ Contactless Debit Card
 EMV Chip Debit card
 Baroda Travel Easy Card
 Baroda Non-Stop – 24x7 banking
 M Clip
 Baroda Radio
 Chillr app
 Baroda Rewardz
 M Point Business Solution
 M Pay_ For Making Payment under the UPI

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

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

Corporate Social Responsibility:

Bank of Baroda has been in the forefront for social commitment with its innovative approaches
and products viz.
1. Baroda Swarojgar Vikas Sansthan
2. Baroda Grameen Paramarsh Kendras
3. Financial Literacy and Credit Counseling Centers (FLCC)

1. Baroda Swarojgar Vikas Sansthan ( Total 47)

Baroda Swarojgar Vikas Sansthans have been set up with following purpose:
 To train youth and impart them the knowledge and skill for taking up self employment
ventures.
 To train youth to develop the attitude for working in rural areas, in rural development
projects.
 To assist trained youth, in self employment as far as possible, in obtaining credit facilities
from bank / other financial institution and to assist them in setting up their venture
successfully.
 To conduct various training programmes (either independent or in-collaboration with
other organization connected with rural technology, rural development and
entrepreneurship development)
 To provide counseling and consultancy guidance with all possible help to the youth in the
field of Self Employment and Rural Development.

2. Baroda Grameen Paramarsh Kendras (Total 52)

The bank has established Baroda Grameen Paramarsh Kendras where following activities are
carried out:
 Financial Education and Financial Inclusion
 Information sharing and problem solving on technical issues
 Credit counseling
 Synergy and liaison with other organizations and development activities

3. Financial Literacy and Credit Counseling Centers (FLCC):(Total 45)

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

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 The Sayaiirao Gaekwad Fellowship Program instituted by our Bank seeks to promote
Entrepreneurs in diverse fields of Fintech, Agritech, E- Commerce etc. in support of Standup
India and Startup India initiatives.

Bank’s HR Initiatives

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

 E-learning course - Code of Conduct for Officers aimed to familiarize all officers with
various guidelines of code of conduct policy for officers of our Bank.
 Launch of dedicated helpline for redressal of grievances / issues of employees.

Baroda Manipal School of Banking:

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

Wealth Management Services

Bank as part of customer centric measure initiated Wealth Management Services for our HNI and
affluent customers, a complete financial solution at one stop. The service has enabled our
customers to buy various investment products through our branches and is positioning our Bank
as ―One Stop Financial Super Market
 Bank is offering Wealth Management Services to our customers with a view of providing
various financial services, apart from the regular banking activities which includes Life
Insurance, Non-Life Insurance, Health Insurance, etc.
 Mutual Funds, Online trading account etc are offered to the customers through various
tie-up partners.
Life Insurance India First Life Insurance Co. Ltd.
General Insurance National Insurance Company Limited
Cholamandalam MS General Insurance Company Limited
TATA AIG General Insurance Company Limited
Mediclaim Insurance Baroda Health
Max Bupa Health Insurance company Limited
Star Health and Allied Insurance company limited
ASBA Application Supported by Blocked Account
Mutual Fund UTI Mutual Fund
Birla Sunlife Mutual Fund
Reliance Mutual Fund
Sundaram Mutual Fund
Franklin Templeton Investments
Baroda Pioneer Asset Management Co.
Kotak Mahindra Mutual Fund
IDFC Mutual Fund
 Under Wealth Management Services currently we are offering 3rd party products in
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e-Broking Baroda e Trade 3-in-1 Online Trading
Bancassurance, Mutual Fund, e-Trading etc. under tie up arrangement with various
partners.

Tie Ups/MOUs:
Name of the Company Category
AMAZON Micro Loans o sellers
Switch ME Home loan

M/s Edelweiss Agri Value Chain Limited Agri Products

Credit Mantri Algorithmic credit assessment services
Technology to lower the cost of MSME loan
Funds tiger application processing
Probe42 ROC, defaulter’s lists, public filing
Power2SME Buying club’ for SMEs
Credit underwriting, analytics and lending
India lends marketplace
KredX Invoice discounting platform
Fisdom Personal wealth management app
M/s EM3 Agri Services Pvt Limited (MOU) Farm Machinery
M/s Access Livelihood Consulting India Limited Farmer Producer Company
Agri-lending through WH Receipt (Supply
M/s All Fresh Supply Management P Limited Chain Management)
M/s Universal Collateral Management P Ltd Agri-lending through WH Receipt
M/s Khyeti Tech Private Limited (MOU) Green House Units
Small Farmer Agri Business Consortium (MOU) Equity Grant & CGF
M/s FInolex Plassion Industries P Ltd (MOU)
M/s Jain Irrigation System Limited Drip/Sprinkler Irrigation
Piaggio Vehicles (ALL MOU)
Atul Auto Ltd
Bajaj Auto Ltd
TVS Motors
VE Commercial Vehicles
Volvo Group India Ltd
Ashok Leyland Small Road Transport

Audited Financial Results (Rs. In crore)

Parameter 31-03-2017 30-06-2017 30.09.2017
Total Global Business 984934 948215 970514
Terminal-601675 Terminal – 570608 Terminal – 583212
Total Global Deposit Average-575645 Average – 580764 Average – 573124
Terminal- 383259 Terminal – 377607 Terminal – 387302
Total Global Advances Average-380659 Average- 401324 Average- 409009
Net Profit (5396) 203 355
Gross NPA (%) 10.46 11.40 11.16
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 Net NPA 18080 19519 19573
CRAR(Basel iii) 12.24 11.81 11.64
Global NIM (%) 1.18 2.12 2.31
 Bank's present BPLR 13.45 % (w.e.f 01.10.2017)
 Base Rate: 9.15% (w.e.f 01.10.2017)
 MCLR: 8.30% (I year MCLR w.e.f 07.10..2017), Strategic Premium is 0.35% over and above
MCLR

Shower of Awards & Accolades on Bank of Baroda

 The Government of India awarded Bank with the 1st Prize in the Rajbhasha Kirti Puraskar n in
Region ‘B’ for implementation of official Language for the year 2016-17 . Further, Bank was
awarded first & second prize in the Rajbhasha Kirti Puraskar for “A” & ' B' Region under TOLIC
category for the year 2016-17.
 Our Bank Executives Dr. Ramjas Yadav (RH Agra) & Dr. Dinesh Kumar (CM, ZO Lucknow)
also made us proud by bagging Third Prize Pan India under Rajbhasha Gaurav Puraskar
for the year 2016-17 for their exemplary book jointly on Inclusive Banking.
 Best Bank Award Rank- II under Public Sector Category 2013-14 by Financial Express.
 Bank of Baroda Ranked 21st amongst Best Indian Brands 2016 in Brand Equity – The
Economic Times.
 Best Public Sector Bank Award under the category of Global Business at the Dun & Bradstreet
Banking Awards 2015.
 BML Munjal award in Public Sector Category for Business Excellence Through Learning &
Development – 2015.
 Excellence in Banking (PSU Sector) at the 5th My FM Stars of the Industry Awards recently held
in Mumbai on 30.01.2015
 National Prize – First Rank in Innovative Training Practices for the year 2014 from “Indian
Society for Training and Development” (ISTD).
 Golden Peacock National Training Award for the year 2014 under the aegis of Institute of
Directors, New Delhi.
 Champion of Champions Award at the 54th annual ABCI Awards 2015, for 6 Categories- Indian
Language Publication – Bronze; Exhibition Collateral – Gold; Wall Calendar 2014 – Silver;
Environmental Communication – Silver; E-Zine – Bronze; Corporate Film – Gold.
 3 Awards at the IBA Banking Technology Awards 2014 – 15, Winner in Best Financial Inclusion
Initiative; First Runner up in Training & Human Resources, E - learning Initiatives; First Runner
up in “Best Use of Data”.
 Best Bank - Global Business Development (Public Sector) & Best Bank – Overall (Public Sector)
Award in Dun & Bradstreet – Polaris Financial Technology Banking Awards 2014.
 Skoch Order of Merit in India’s Best 2014Financial Inclusion & Deepening Awards 2014.
 ASSOCHAM Social Banking Excellence Award under Public Sector Banks category, in recognition
of the significant initiatives being undertaken by the Bank in social banking sphere.
 The Most Efficient Public Sector Bank’ for the year 2014 by Dalal Street Investment Journal in the
‘Best PSU’s of India Awards’.

18
EMERGING TRENDS IN
BANKING

19
 2. EMERGING TRENDS IN BANKING AND UPDATED GUIDELINES BY REGULATOR

Highlights of Budget 2017-2018 - Financial Sector Reforms:

 A big infrastructure spending push, the boost to affordable housing and a fiscal deficit
target of 3.2% of gross domestic product announced in the Union budget came as a big
boost to banks. A tax concession on provisions for bad loans also came as a relief for
Indian banks which are struggling with gross non-performing assets of around Rs. 6.7
trillion.
 New Bankruptcy Bill for Financial Firms.
 The finance minister announced setting up of a Computer Emergency Response Team to
strengthen security of the financial sector. This will work in close coordination with all
financial sector regulators and other stakeholders. Setting up of CERT-Fin at a time when
India is promoting digital economy would ensure cyber security that is critical for
safeguarding the integrity and stability of our financial sector.
 Recapitalization of Banks: The government has provided Rs. 10000 Crore for
recapitalization of banks in 2017-18 in line with the ‘Indradhanush’ roadmap.
 The government has planned to increase the lending targets to Rs. 2.44 Lakh crore from
Rs. 1.22 Lakh crore under Pradhan Mantri Mudra Yojana. This scheme has immensely
contributed in providing funds to the unfunded and increasing lending targets would enable
small business owners to meet their funding needs adequately.
 Promotion to Digital Economy
 Government proposes to create a Payments Regulatory Board in the Reserve Bank of India
by replacing the existing Board for Regulation and Supervision of Payment and Settlement
Systems

RBI
 Highlights from the 3rd Bi-monthly monetary policy 2017-18
The third Bi-monthly monetary policy was announced by RBI on August 2, 2017. The
following were the key highlights of the monetary policy:
 Key policy rate reduced by 0.25% from 6.25% to 6%.
 Reverse repo rate cut by 0.25% from 6% to 5.75%.
 Marginal Standing Facility (MSF) rate and Bank Rate fixed at 6.25%

 PCA measures made more stringent for stressed banks

RBI has made its Prompt Corrective Action (PCA) measures more stringent for banks in
stress.
 These measures include sacking of management and superseding the Board of
Directors if the Tier 1 capital falls below 3.625%, against the stipulated minimum
of 6.75%.
 Infusion of capital has been made compulsory for promoters and parent companies
of foreign banks when banks face negative ROA (Return on Assets) for two
consecutive years.
 The PCA framework will apply to all banks operating in India, including small finance
banks and foreign banks operating through branches or subsidiaries.
 A bank will be placed under the PCA framework based on the audited annual
financial results and the supervisory assessment made by RBI.

20
  The provisions of the revised framework are effective from April 1, 2017 based
on the financials of the banks for the year ended March 31, 2017. The framework
would be reviewed after three years.

 RBI extends ‘rest period’ for auditors to 6 years

According to extant rules, a statutory auditor has to be appointed for a period of four
years and then, there should be a rest of two years. Now, the central bank has extended
the rest period to at least 6 years. In order to make the banks follow the policy in letter
and spirit, the central bank said an auditor, after completion of its four years tenure at a
bank ‘will not be eligible for appointment as SCA (Statutory Central Auditor) of the same
bank for a period of 6 years.

 RBI relaxes rating requirement on CP issuance

With effect from October 1, 2017, RBI has mandated commercial paper (CP) issuances to
come with two ratings, while relaxing the minimum size of issuance to Rs. 5 lakhs from Rs.
10 lakhs earlier. Eligible issuers, whose total CP issuance during a calendar year is Rs. 1,000
crores or more, shall obtain credit rating from at least two credit rating agencies
registered with SEBI and shall adopt the lower of the two ratings

 RBI Relaxes Norms to IFSC Banking Units (IBUs)

RBI while issuing guidelines relating to setting up of financial institutions in the
International Financial Services Centres (IFSC) restricted the IFSC Banking Units (IBUs)
from few activities which have been now reviewed. While the IBUs were not allowed to
open any current or savings accounts, now the regulator has decided that the IBUs can
open foreign currency current accounts of units operating in IFSCs and of non-resident
institutional investors to facilitate their investment transactions.

 Norms for Financial Literacy Centers (FLCS) Revised

In view of the considerable progress made in the area of Financial Inclusion and to
concentrate the efforts of the FLCs on keeping the already opened accounts active, RBI
has issued revised guidelines for FLCs of lead banks and the operational guidelines for the
conduct of camps by FLCs and rural branches of banks.

 RBI to customers: Report fraud in three days to avoid losses

RBI has issued revised directions on Customer Protection – Limiting Liability of Customers
in Un-authorised Electronic Banking Transactions'. Customers have been asked to report
unauthorized banking transactions to their banks, within three days of the occurrence.
The amount involved will be credited in the accounts concerned within 10 days, thus
sparing losses to the customer.
In case third-party fraud is reported with a delay of four to seven working days, a
customer will face liability of up to Rs. 25,000. However, if the loss happens due to
negligence by the account-holder (such as sharing of payment credentials), the customer
will bear the entire loss until the unauthorized transaction is reported to the bank.
Any loss occurring after reporting of the unauthorized transaction will be borne by the
bank. Furthermore, there will be “zero liability of a customer” in case of third-party
breach where the deficiency lies ‘neither with the bank nor with the customer but
elsewhere in the system'.

21
 Zero liability will also apply to a customer where the unauthorized transaction occurs due
to contributory fraud/negligence/deficiency on the part of the bank (irrespective of
whether or not the transaction is reported by the customer). If the fraud is reported
after seven days, the customer liability will be determined as per the bank’s board-
approved policy. The maximum liability of a savings bank account customer will be Rs.
10,000 in such cases.

 Payments Banks can act as BCs of other lenders

RBI has allowed payments banks to act as business correspondents (BCs) of other banks.
This will not give payments banks the rights to operate or have real-time access to funds
available in the customer's account at the other bank. However, they will be allowed to
facilitate withdrawals and transfers by the customer from their accounts with banks for
whom they are a BC. However, this can be done only with the customer's prior consent and
is applicable only in cases where the balance in the payments bank account does not exceed
Rs.1 lakh or a lower amount as specified by the customer.

 RBI to banks: Record PPO numbers

RBI has advised all agency banks to record the Pension Payment Order (PPO) numbers on
the passbook of pensioners’/ family pensioners. The move is aimed at alleviating the
difficulties reported by pensioners to get duplicate PPO in case the original goes missing,
transfer of pension account, and commencement of family pension to spouse or dependent
children after the death of the pensioner, among others.

 RBI increases scope of Banking Ombudsman

From July 1 onwards, RBI has widened the scope of its Banking Ombudsman platform by
including issues regarding mis-selling of third-party products, and customer grievances
related to mobile banking and electronic banking. The deficiencies arising out of sale of
insurance, mutual fund and other third-party products will also be looked into. Further,
banks would now have to provide after-sales service on third-party products. Banking
ombudsmen have been empowered with the RBI expanding their pecuniary jurisdiction to
pass an award from the existing Rs.10 lakhs to Rs.20 lakhs. Ombudsmen can direct banks
to pay compensation up to Rs.1 lakh to the complainant for loss of time, expenses incurred
as also, harassment and mental anguish suffered.

 ARCs must have minimum net corpus of Rs. 100 crores by March 2019
The government and RBI envisage a greater role for Asset Reconstruction Companies
(ARCs) in resolving stressed assets, considering they are in the business of buying bad
loans from banks to turn them around. In order to resolve this issue better, RBI has
stipulated that all the existing ARCs must have a minimum net owned corpus of Rs.100
crore by March 2019.

 RBI issues norms for opening mini bank branches

Banks have got a new freedom since RBI has started permitting mini branches with limited
working hours and staff for all commercial banks, boosting the prospects for the newly
formed small and payment banks. A branch will be considered a mini branch only if it is a
fixed-point service delivery unit manned by bank staff or business correspondents,
providing acceptance of deposits, encashment of cheques, withdrawal or lending of money.
A mini branch will have to be open for at least four hours a day for five days in a week;

22
 failing which, it will be considered as a part-time banking outlet with restricted
functioning.

 RBI curbs NBFCs’ cash loans against gold

RBI has sharply brought down the threshold above which NBFCs can disburse loans against
gold only by cheque. In line with the regulations of Income Tax Act, such loans amounting
to Rs. 20,000 and above can be disbursed only by cheque as against the earlier threshold
of Rs.1 lakh and above.

 RBI caps banks’ exposure to a Corporate at 20%

RBI has capped banks’ exposure limit to a single corporate entity to 20%, and to a business
group at 25%. Currently, a bank’s exposure to a single borrower and a borrower group is
restricted to 15% and 40% of capital funds, respectively.

 Inter Bank Participation Certificates

Inter Bank Participation Certificates (IBPCs) bought by banks, on a risk sharing basis, are
eligible for classification under respective categories of priority sector, provided the
underlying assets are eligible to be categorized under the respective categories of
priority sector and the banks fulfil the Reserve Bank of India guidelines on IBPCs.

 Priority Sector Lending Certificates

The outstanding priority sector lending certificates (after the guidelines are issued in
this regard by the Reserve Bank of India) bought by the banks will be eligible for
classification under respective categories of priority sector provided the assets are
originated by banks, and are eligible to be classified as priority sector advances and fulfil
the Reserve Bank of India guidelines on priority sector lending certificates.
SEBI

 SEBI to accept e-PAN card for KYC purpose

An electronic PAN card aka e-PAN card issued by CBDT to foreign portfolio investors
(FPIs) will now be acceptable to SEBI for KYC purposes. CBDT introduced the e-PAN card
facility in April this year. The norms were issued to rationalize various FPI routes and
simplify procedures to attract more foreign funds.

 SEBI issues new norm for green bonds

To help companies raise funds through green bonds for investment in renewable energy
space, the Securities and Exchange Board of India (SEBI) has put out disclosure norms
for issuance and listing of such bonds. The move aims to help meet the huge financing
requirements worth $2.5 trillion for climate change actions in India by 2030. SEBI has
stipulated that a debt security will be considered a green bond if the funds raised through
it will be used for renewable and sustainable energy including wind and solar. The issuer
of a green bond will have to make disclosure about environmental objectives of the issue
of such securities in the offer documents.
Green Bonds
A green bond is a debt instrument issued by an entity for raising funds from investors.
What differentiates a green bond from other bonds is that the proceeds of a green bond
offering are ‘ear-marked’ for use towards financing green projects.

 Alternate Investment Fund (AIF)

23
 Any fund established or incorporated in India which is a privately pooled investment
vehicle which collects funds from sophisticated investors, whether Indian or foreign, for
investing it in accordance with a defined investment policy for the benefit of its investors.

 SEBI eases norms for debt MF investment in HFCs

SEBI has allowed debt mutual funds (MFs) to now invest up to 15% (as against the earlier
10%) of their total net assets in housing finance companies (HFCs), in order to help
channelize more funds towards affordable housing activities. The change is accompanied
by certain riders. For instance, the MFs would need to ensure that the additional exposure
to the securities issued by HFCs have high investment grade rating. Besides, the entities
should be registered with the National Housing Bank (NHB).

 Registered FPIs can run IFSC operations: SEBI

SEBI has now allowed registered Foreign Portfolio Investors (FPIs) to set up operations
in international financial services centres (IFSCs) without additional documentation. FPIs
desirous of participating in IFSCs will be required to ensure clear segregation of funds
and securities. Custodians will have to monitor compliance with this provision for their
respective FPI clients. In turn, the FPIs will have to keep their respective custodians
informed of their participation in the IFSC.
UPDATES:
 e-Kuber
e-Kuber is one of the foremost central bank oriented Core Banking Systems in the world.
The provision of a single current account for each bank across the country, decentralized
access to this account from anywhere anytime using the portal based services in a safe
manner and ease of operations are some of the features of the e-Kuber. The system also
has a host of offerings for the Government users as well. Some of the facilities offered
include the provision of portal based access which allows Government departments to
access on anywhereanytime basis, view their balances – of all types including the Ways and
Means Advances, drawings, funds positions and the like – all in a consolidated manner
through the e-Kuber so as to help them in better funds management.

 GYAN SANGAM:
Gyan Sangam is a forum where the highest officials from public sector banks, the
government and the Reserve Bank of India, meet to discuss issues facing by the Banking
Sector. The interaction of ministry officials, RBI Governor and heads of PSBs in an
informal setting is a novel idea. As a management tool, a meeting away from the pressures
of day-to-day work is meant to unfreeze the established behavior bpatterns and enable
the divergent shareholders i.e. the government, owner, regulators and the banks
themselves to open a healthy dialogue.

 P.J. Nayak committee on banking sector reforms

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

24
 Indradhanush – A Mission launched by Govt. of India to revamp PSU banks
As per the brain child of P J Nayak committee, Ministry of Finance under the Department
of Financial Services has launched Mission Indradhanush that aimed to revamp the
functioning of public sector banks so that PSBs can compete with the Private Sector
Banks. The mission is regarded as one of the big steps after the nationalization of banks
in 1970s.
The mission includes the seven key reforms of appointments, which is also known as A2G
for PS Banks.
1. Appointments
2. Bank Board Bureau
 Taking the first step towards a holding company structure for public
sector banks (PSBs), the government has setup of a Bank’s Board Bureau
(BBB). It will recommend appointment of directors in PSBs and advice on
ways of raising funds and dealing with issues of stressed assets. Former
Comptroller & Auditor General of India Mr Vinod Rai has been named the
first chairman.
3. Capitalization
4. De-stressing PSBs
5. Empowerment
6. Framework of Accountability
7. Governance Reforms

 RBI Guidelines to Banks on Implementation of Ind AS

RBI has released guidelines for banks on complying with the new norms under Companies
(Indian Accounting Standards – Ind AS) Rules, 2015. Banks are required to comply with
Ind AS for financial statements for accounting periods beginning from April 1, 2018
onwards.

 Fraud Reporting and Monitoring - Operationalisation of Central Fraud Registry by RBI

During his Fourth Bi-monthly Monetary Policy Statement, 2014-15, Governor of RBI
announced, “Along with early detection mechanisms for frauds, a Central Fraud Registry
is also proposed to be created simultaneously as a searchable centralized database for
use by banks.”

Accordingly, RBI has operationalized the Central Fraud Registry – a searchable

centralized database for use by banks with effect from 20 th January 2016. This is in line
with the various initiatives of RBI for early detection and minimization of loan related
frauds.
 Marginal Cost of Funds Methodology for Interest Rate on Advances (MCLR):
RBI has finalized and released the guidelines under Marginal Cost of Funds Methodology
for Interest Rate on Advances. The new internal benchmark rate to which all rupee loans
sanctioned and credit limits renewed wef April 01, 2016 will be reference rate and has
been christened as Marginal Cost of Funds based Lending rate (MCLR). It will replace
‘Base Rate’ and will be the internal benchmark for such purposes.

The MCLR shall comprise of:

25
 1. Marginal cost of funds
2. Negative carry on account of CRR
3. Operating costs
4. Tenor premium

 Liquidity Coverage Ratio (LCR)

Any amount borrowed under the call money route is automatically calculated under the
total net cash outflows over the next 30 days (the denominator in the ratio). As a result,
greater the LCR requirement, harder it is for banks to use inter-bank funds to manage
LCR requirement on a daily basis. When the LCR was introduced in 2015, banks had to
maintain the LCR at 60%. LCR increases by 10% every year till it reaches 100% in 2019.
As of now, it stands at 80%.

 Tri-party repo contracts

Tri-party repo is a contract where a third entity (apart from the borrower and lender)
called a tri-party agent acts as an intermediary between the two parties. They cover
activities such as collateral selection, payment and settlement, custody and management
during the life of the transaction. As per the new rules, an entity will need to have a
minimum equity capital of Rs.25 crore and RBI's approval to work as a tri-party agent.

 Aadhaar Payment Bridge System (APBS)

A centralised electronic benefit transfer system to undertake direct mandates from
respective sponsor or accredited bank attached to various government departments for
the purpose of disbursing entitlements using Aadhaar numbers.

 Callable bonds
Bonds which give the issuer right to buy back the bonds before its maturity are called
callable bonds. Callable bonds usually come with an initial lock‐ in period. Since investing
in such bonds exposes the investor to the additional risk of buyback they usually offer a
higher rate of interest as compared to bonds without such options

 White Label ATM

ATMs set up, owned and operated by non-banks are called White Label ATMs. Non-bank
ATM operators are authorized under Payment & Settlement Systems Act, 2007 by the
Reserve Bank of India.

 RuPay Card
RuPay, a card payment scheme launched by the National Payments Corporation of India
(NPCI), offers a domestic, open-loop, multilateral system which allows all Indian banks and
financial institutions in India to participate in electronic payments. “RuPay” is the coinage
of two terms Rupee and Payment. The RuPay Visual Identity is a modern and dynamic
unit.The orange and green arrows indicate a nation on the move and a service that matches
its pace. The color blue stands for the feeling of tranquility and the bold and unique
typeface grants solidity and symbolizes a stable entity.

 Crowd funding:
It is the practice of funding a project or venture by raising monetary contributions from

26
 a large number of people, typically via the internet / social media. Usually Social / Cultural
projects and start-ups are using this informal source of finance. Crowd funding is a form
of alternative finance, which has emerged outside of the traditional financial system.

 Peer-to-Peer (P2P) lending:

The practices of lending money to individuals or businesses through online services that
match lenders directly with borrowers. i.e. Lending Club. It is an online investment
platform to enable borrowers to attract lenders and investors to identify and purchase
loans that meet their investment criteria

 Payments Bank:
The RBI on 19.08.2015 granted ‘in principle’ approval for payment banks to 11 entities.
Payments banks are new stripped-down type of banks, which are expected to reach
customers mainly through their mobile phones rather than traditional bank branches. They
can’t offer loans but can raise deposits and pay interest on these balances.
Payments banks can accept deposits up to Rs.1 lakh per account from individuals and small
businesses. They are set up as differentiated banks and will confine their activities to
acceptance of demand deposits, remittance services, Internet banking and other
specified services.
They can enable transfers and remittances through a mobile phone. The list of approved
Payments Bank includes:
1. Aditya Birla Nuvo Limited
2. Airtel M Commerce Services Limited
3. Cholamandalam Distribution Services Limited
4. Department of Posts
5. Fino PayTech Limited
6. National Securities Depository Limited
7. Reliance Industries Limited
8. Shri Dilip Shantilal Shanghvi
9. Shri Vijay Shekhar Sharma
10. Tech Mahindra Limited
11. Vodafone m-pesa Limited

Out of these, three have surrendered their licenses. First one being "Cholamandalam
Distribution Services", then "Sun Pharmaceuticals" and the latest, "Tech Mahindra". The
"in-principle" license was valid for 18 months within which the entities had to fulfil the
requirements. They were not allowed to engage in banking activities within that period.
The RBI has considered grant full licenses under Section 22 of the Banking Regulation
Act, 1949, after it is satisfied that the conditions have been fulfilled to the following;

1. India Post Payments Bank Ltd.

2. Airtel Payments Bank Ltd.

Additionally, there are four Payments Banks viz. Paytm Payments Bank Ltd., Jio Payments
Bank Ltd., NSDL Payments Bank Ltd., & FINO Payments Bank Ltd. and one Small Finance
Bank i.e AU Small Finance Bank which have been granted licence and are yet to commence
operations.

27
 India Post Payments Bank (IPPB) has rolled out its pilot services in Raipur and Ranchi. It
will offer an interest rate of 4.5% on deposits up to Rs. 25,000 and 5% on deposits of Rs.
25,000 – Rs. 50,000 – Rs.1 lakh. IPPB and India Post will work in tandem to deliver benefits
of government schemes and financial services that are not easily available in rural areas,
and to the marginalized population in urban area. Set up us a 100% government-owned
public limited company under the Department of Posts, it will open around 650 branches
in district headquarter locations by September. All 1.55 lakh post offices, including the
1.30 lakh rural post offices, will be mapped to the IPPB branch at the district headquarter
and function as access points. 1,000 ATMs of India Post will be transferred to IPPB.

 Foreign Account Tax Compliance Act:

The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA)
became law in March 2010. FATCA targets tax non-compliance by U.S. taxpayers with
foreign accounts and focuses on reporting:
 By U.S. taxpayers about certain foreign financial accounts and offshore assets
 By foreign financial institutions about financial accounts held by U.S. taxpayers or
foreign entities in which U.S. taxpayers hold a substantial ownership interest
 The objective of FATCA is the reporting of foreign financial assets; withholding
is the cost of not reporting.

 Companies Act 2013

After getting approval of both the houses of Parliament, the long-awaited Companies Bill
2013 obtained the assent of the President of India on 29 August 2013 and became
Companies Act, 2013 (2013 Act).
The 2013 Act has introduced several new concepts and has also tried to streamline many
of the requirements by introducing new definitions. The changes in the 2013 Act have far-
reaching implications that are set to significantly change the manner in which corporate
operate in India. Further it has been amended in 2015 where some significant changes
have been made.

The 2013 Act has introduced several new concepts and tried to streamline many of the
requirements by introducing new definitions.
1. Immediate Changes in letterhead, bills or other official communications, as if full name,
address of its registered office, Corporate Identity Number (21-digit number allotted by
Government), Telephone number, fax number, email ID, website address if any.
2. One Person Company (OPC): It's a Private Company having only one Member and at least
One Director. No compulsion to hold AGM. Conversion of existing private Companies with
paid-up capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into OPC is permitted.
3. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100
Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at
least one-Woman Director.
4. Resident Director: Every Company must have a director who stayed in India for a total
period of 182 days or more in previous calendar year.
5. Accounting Year/ Financial year- Under the new Act, all companies have to follow a
uniform Financial Year i.e. from 1st April to 31st March. Those companies which follow a

28
 different financial year have to align their accounting year to 1st April to 31st March
within 2 years. It is desirable to do the same as early as possible since most of the
compliances are on financial year basis under the new Companies Act.
6. Loans to director – The Company CANNOT advance any kind of loan / guarantee / security
to any director, Director of holding company, his partner, his relative, Firm in which he or
his relative is partner, private limited in which he is director or member or any bodies
corporate whose 25% or more of total voting power or board of Directors is controlled by
him.
7. Articles of Association- In the next General Meeting, it is desirable to adopt Table F as
standard set of Articles of Association of the Company with relevant changes to suite the
requirements of the company. Further, every copy of Memorandum and Articles issued to
members should contain a copy of all resolutions / agreements that are required to be
filed with the Registrar.
8. Disqualification of director- All existing directors must have Directors Identification
Number (DIN) allotted by central government. Directors who already have DIN need not
take any action. Directors not having DIN should initiate the process of getting DIN
allotted to him and inform companies. The Company, in turn, has to inform registrar.
9. Appointment of Statutory Auditors- Every Listed Company can appoint an individual
auditor for 5 years and a firm of auditors for 10 years. This period of 5 / 10 years
commences from the date of their appointment. Therefore, those companies have
reappointed their statutory auditors for more than 5 / 10 years; have to appoint another
auditor in Annual General Meeting for year 2014.

 Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions,

2016:
The provisions of these Directions shall apply to every Scheduled Commercial Bank
{including Regional Rural Banks(RRBs)} licensed to operate in India by Reserve Bank of
India. These directions shall not be applicable to operations of foreign branches of Indian
banks.

Bulk Deposit:
1. Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial
Banks other than Regional Rural banks
2. Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs.

Interest Rate framework

1. The rates shall be uniform across all branches and for all customers and there shall
be no discrimination in the matter of interest paid on the deposits, between one
deposit and another of similar amount, accepted on the same date, at any of its
offices.
2. The rates shall not be subject to negotiation between the depositors and the bank.
3. No interest shall be paid on deposits held in current accounts.
4. Differential interest rate shall be offered only on bulk (term) deposit

29
 5. The additional interest may be paid on deposits after obtaining a declaration from the
depositor concerned, that the monies deposited or which may be deposited from time
to time into such account belong to the depositor:
 member or a retired member of the bank’s staff, either singly or jointly with
any member or members of his/her family; or
 the spouse of a deceased member or a deceased retired member of the bank’s
staff; and
 an Association or a fund, members of which are members of the bank’s staff;
6. Scheduled Commercial Banks shall, at their discretion, formulate term deposit
schemes specifically for resident Indian senior citizens, offering higher and fixed
rates of interest as compared to normal deposits of any size.
7. Scheduled Commercial Banks shall, at their discretion, give their resident Indian
retired staffs, who are senior citizens, the benefit of additional interest rates as
admissible to senior citizens over and above the additional interest payable to them
by virtue of their being retired members of the banks’ staff.
8. Scheduled commercial banks shall not pay any remuneration or fees or commission or
brokerage or incentives on deposits in any form or manner to any individual, firm,
company, association, institution or any other person except commission paid to agents
employed to collect door-to-door deposits under a special scheme, commission paid to
Direct Selling agents/ Direct Marketing Agents as part of the outsourcing
arrangements and remuneration paid to Business facilitators or Business
Correspondents.

REGULATORY RATIO AT A GLANCE:

 Bank Rate Policy:

Section 49 defines it as “The Standard Rate at which it (the bank) is prepared to buy or
rediscount bills of exchange or other commercial paper eligible for purchase under this
Act”.

By varying the bank rate, the RBI can to a certain extent regulate the commercial bank
credit and the general credit situation of the country. The impact of this tool has not
been very great because of the fact that the RBI does not have a mechanism to control
the unorganized sector. Further the money market in our financial system is not fully
developed, so that the Bank rate policy will have if desired impact on the financial system.
The present bank rate is 6.25%

 Statutory Liquidity Ratio (SLR):

According to Section 24 (2-a) of the Banking Regulation Act, every banking company in
India whether scheduled or non- scheduled, is required to maintain in India in Cash, Gold
or unencumbered, approved securities an amount of which is not less than a certain
percentage of the total of its demand and time liabilities in India. This is known as

30
 Statutory Liquidity Ratio (SLR). The ratio keeps on changing time to time. At present SLR
is 19.50% w.e.f 14-10-2017

 The Reserve Bank is empowered to increase/ decrease this ratio. For calculating the SLR,
the following liquid assets are taken into account.
 Cash in hand in India.
 Balances in current account with the State Bank of India and its associates.
 Balance maintained with the RBI in excess of the minimum CRR requirements.
 Investments in Government Securities, Treasury Bills and other approved securities
in India.
However, the approved securities must be valued at a price not exceeding the current
market price.

 Cash Reserve Ratio:

Section 42 defines the Cash reserves of scheduled bank to be kept with RBI. Every
scheduled bank has to maintain with RBI an average daily balance the amount of which
shall not be less than 3% of the total demand and time liabilities and shall not exceed 15%.
Presently the CRR is 4.00% (wef 09-02-2017).

 Policy Repo Rate:

Repo (Repurchase) rate also known as the benchmark interest rate is the rate at which
the RBI lends money to the banks for a short term. When the repo rate increases,
borrowing from RBI becomes more expensive. If RBI wants to make it more expensive for
the banks to borrow money, it increases the repo rate similarly, if it wants to make it
cheaper for banks to borrow money it reduces the repo rate.
Repo Rate wef 04-08-2017 is 6.00%.

 Reverse Repo Rate:

Reverse Repo rate is the short-term borrowing rate at which RBI borrows money from
banks. The Reserve bank uses this tool when it feels there is too much money floating in
the banking system. An increase in the reverse repo rate means that the banks will get a
higher rate of interest from RBI. As a result, banks prefer to lend their money to RBI
which is always safe instead of lending it others (people, companies etc) which is always
risky.
Reverse Repo Rate is 5.75% w.e.f 04-08-2017.

 Marginal Standing Facility Rate:

MSF is a special window for banks to borrow from RBI against approved government
securities in an emergency situation like an acute cash shortage. MSF rate is higher than
Repo rate.
MSF Rate is 6.25%

31
LEGAL AND STATUTORY
PROVISIONS

32
 1. LEGAL AND STATUTORY PROVISIONS /REGULATORY COMPLIANCE

Various legal Provisions governing Indian Banking System in India

 Banking Regulation Act-1949
 RBI Act-1934
 Negotiable Instruments Act-1881
 Indian Contract Act-1872
 Indian Partnership Act-1932
 Limited Liability Partnership Act-2008
 Companies Act-2013
 Sarfaesi Act-2006
 FEMA-1999
 GST act 2016
Banking Regulators and compliance
 Reserve Bank of India
 Central Registry
 Banking Ombudsman

Background:
Banking in India is governed by various laws and legal provisions, requirements,
restrictions and guidelines. This is required in order to maintain transparency between
banking institutions and customers with whom they conduct business.

The following are the important laws whose statutory provisions the Banks have to comply
with.

The Banking Regulation Act, 1949

The main statute governing the banks in India is the Banking Regulation Act 1949.
By virtue of the powers conferred by the Act, The Reserve Bank of India and the
Government of India exercise control over banks right from the opening of the Branches
to their winding up. The purpose of enactment of this Act was to consolidate the banking
system and suitably amend the laws relating to banking sector and to regulate the
Banking Companies including co-operative banks. This Act is not applicable to primary
agriculture societies, and cooperative land development banks.

Section 22 of the Act regulates the entry of a company into banking business by licensing
as provided. It also put restrictions on share holding, directorship, voting powers and
other aspects of banking companies. There are several provisions in the act regulating the
business of banking such as restrictions on loans and advances, provisions relating to rate
of interest, requirements as to cash reserve ratio, provisions regarding audit and
inspection and submission of balance sheet and accounts. The act also provides for
control over the management of banking companies.

33
Reserve Bank of India Act, 1934: This Act was enacted on 6th March, 1934 to constitute the
Reserve Bank of India with the following objectives:
 To issue of Bank Notes.
 For keeping reserves for securing monitory stability in India and,
 To operate the currency and credit system of the country to its advantage.

The Act deals with the following:

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

 Central banking functions like Issue of Bank Notes, monetary control, acting as banker to
the Government and Banks, lender of last resort etc.
 Collection and furnishing credit information.
 Acceptance of deposits by Non Banking Financial Institution (NBFI).
 Handling Reserve Fund, Credit funds, publication of bank rate, audit and accounts etc.
 Penalties for violation of the provision of the act or direction issued there under.
 The Government of India has adopted a committee based approach for formulating policy
on maintaining price stability while keeping the objective of growth in mind. The
committee will conduct four meetings in a year and shall publicize its decisions after each
meeting. The committee has come into force from 27.06.2016.

Important Provisions:

Definition of a Scheduled Bank –

According to Section 2(e), Scheduled Bank means a bank whose name is written in the
2nd schedule of RBI Act, 1934 and which satisfies the conditions laid down in Section
42(6), - Paid up capital and reserves of not less than Rs. 5 lac, satisfaction of RBI that the
affairs will not be conducted by the bank in a way to jeopardize the interests of the
depositor.
It may be a State Co-operative Bank, a company defined in Companies Act, 1956, an
institution notified by Central Government for the purpose and a corporation or a
company incorporated by or under any law in force, in any place outside India. Any bank
that is not included in the 2nd Schedule of RBI is called Non-Scheduled Bank.
Section 49 defines Bank Rate as
The Standard Rate at which it (the bank) is prepared to buy or rediscount bills of exchange
or other commercial paper eligible for purchase under this Act‖. By varying the bank rate,
the RBI can to a certain extent regulate the commercial bank credit and the general credit
situation of the country.
The impact of this tool has not been very great because of the fact that the RBI does not
have a mechanism to control the unorganized sector. Further the money market in our
financial system is not fully developed, so that the Bank rate policy will have if desired
impact on the financial system.
The present bank rate is 6.25% (w.e.f. 02.08.2017)
Section 24 (2-a) of the Banking Regulation Act deals in detail about the SLR i.e.
34
Statutory Liquidity Ratio (SLR) .

Every banking company in India whether scheduled or non scheduled, is required to

maintain in India in Cash, Gold or unencumbered, approved securities an amount of which
is not less than a certain percentage of the total of its demand and time liabilities in India.
This is known as Statutory Liquidity Ratio (SLR). The ratio keeps on changing time to time.
At present SLR is 19.50% (w.e.f 04.10.2017). The Reserve Bank is empowered to
increase/ decrease this ratio. For calculating the SLR, the following liquid assets are taken
into account.
Cash in hand in India.
Balances in current account with the State Bank of India and its associates.
Balance maintained with the RBI in excess of the minimum CRR requirements.
Investments in Government Securities, Treasury Bills and other approved securities in
India.
However, the approved securities must be valued at a price not exceeding the current
market price.

Cash Reserve Ratio

 It is defined in section 42 of the Banking Regulation Act 1949.
 Cash reserves of scheduled bank is to be kept with RBI.
 Every scheduled bank has to maintain with RBI an average daily balance the amount of
which shall not be less than 3% of the total demand and time liabilities and shall not
exceed 15%. Presently the CRR is 4.00% (w.e.f 09-02-2017).

Policy of RBI on Other Important Rates:

Repo (Repurchase) rate:

This is the benchmark interest rate at which the RBI lends money to the banks for a short
term. When the repo rate increases, borrowing from RBI becomes more expensive for the
banks. If RBI wants to make it more expensive for the banks to borrow money, it increases
the repo rate. On the contrary, if the RBI wants to make the availability of funds at cheaper
rate for banks to borrow money it reduces the repo rate. Repo Rate w.e.f 02.08.2017 is
6.00%.

Reverse Repo Rate:

Reverse Repo rate is the short term borrowing rate at which RBI borrows money from
banks. The Reserve bank uses this tool when it feels there is too much money floating in
the banking system. This will suck the excess circulation of money from the system.
Moreover an increase in the reverse repo rate means that the banks will get a higher rate
of interest from RBI. As a result, banks prefer to lend their money to RBI which is always
safe instead of lending it others (people, companies etc) which is always risky. Reverse
Repo Rate w.e.f 02.08.2017 is 5.75%.

Marginal Standing Facility Rate:

MSF is a special window for banks to borrow from RBI against approved government
securities in an emergency situation like an acute cash shortage. MSF rate is higher than
35
 Repo rate. This window was created for commercial banks to borrow from RBI in certain
emergency conditions when inter-bank liquidity dries up completely and there is
volatility in the overnight interest rates.
To curb this volatility, RBI allowed them to pledge G-secs and get more funds from RBI at
a rate higher than the repo rate. Thus, overall idea behind the MSF is to contain volatility
in the overnight inter-bank rates. MSF Rate w.e.f 02.08.2017 is 6.25%

Supervisory role of the RBI:

Inspection of Banks:
The most significant supervisory function exercised by the RBI is the inspection of Banks. The
basic objectives of inspection of banks are to safeguard the interests of the depositors and to build
up and maintain a sound banking system in conformity with the banking laws and regulations as
well as the country‘s socio-economic objectives.
Accordingly, inspections serve as a tool for overall appraisal of the financial and managerial
systems and performance of the banks, toning up of their procedures and methods of operation
and prevention of serious irregularities. RBI has now adopted `Risk Based Supervision‘ system
which focuses on:
a) Evaluating both present and future risks
b) Identifying incipient problem
c) Facilitating prompt intervention / early corrective action
d) Replacing present compliance based /transaction based approach (CAMEL).
e) Periodicity depends on risk rather than volume of business.
The RBI‘s powers to conduct inspections are contained in various provisions of the Banking
Regulation Act, the most important being Section 35. This apart, inspections may be necessary
under the provisions of Section 23, 37, 38, 44, 44A, 44B and 45 of the Act.

Audit of Annual Accounts of Banks:

Banks have to close their books of accounts every year as at March 31st and prepare a
Balance Sheet and Profit and Loss account as prescribed in the III schedule of the Banking
Regulation Act.
These annual accounts are required to be audited by auditors appointed by the Bank each
year with the prior approval of the Reserve Bank of India, as per Section 30(1A) of the
Banking Regulation Act, in respect of private sector banks. Section 10(1) of the Banking
Companies [Acquisition and Transfer of Undertakings] Act, 1970 / 1980 provides for
audit of annual accounts of banks in the case of nationalized banks.

Negotiable Instrument Act, 1881:

The NI Act, 1881 defines the cheque, Bill of Exchange, DP Note, Drawer, Drawee, Maker, Payee,
and also lays down the laws relating to payment of the customers cheques by a banker and also
protection available to a banker.

36
The relationship between banker and customer being debtor – creditor relationship, the bank is
bound to pay the cheques drawn by his customers. This duty on the part of Bank to honor its
customer‘s mandate is laid down in section 31 of the NI Act. Section 10, 85, 89 and 128 of the NI
Act grants protection to a paying banker.

Indian Contract Act, 1872:

Banking involves interaction between a banker and customer. A customer of a bank may
be a depositor, borrower or any other person merely utilizing one of the various services
provided by the banker. The relation between the Banker and the customer will vary
according to the transaction carried out.
The relationship may be Debtor- Creditor, Creditor- Debtor, Bailor-bailee, etc.
The interaction of a bank with its customer creates certain obligations and gives certain
rights to both the bank and the customer. All Agreements are contracts, if they are made
by parties competent to contract, for a lawful consideration and with a lawful object, and
are not expressly declared to be void.‖ All Banking transactions are therefore, separate
contracts.
Contract of indemnity-
A contract by which one party promises to save the other from loss caused to him by the
contract of the promisor himself, or by the conduct of any other person, is called a contract
of indemnity. There are two parties to the contract of Indemnity-i.e. the indemnifier and
the indemnified. This is defined in Section124 of the Indian Contract Act.

Contract of Guarantee: The contract of guarantee is defined in Section126. There are three
parties to the contract of guarantee. They are:

Surety, Principal debtor and creditor.

A contract of guarantee is a contract to perform the promise, or discharge the liability, of

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

Bailment.
A bailment is the delivery of goods by one person to another for some purpose, upon a
contract that they shall, when the purpose is accomplished, be returned or otherwise
disposed of according to the directions of the person delivering them. The person
delivering the goods is called the bailor‘. The person to whom they are delivered is called
the bailee‘. (Section148).

Pledge.

37
 The bailment of goods as security for payment of a debt or performance of a promise is
called pledge. The bailor is in this case called pawnor. The bailee is called Pawnee.
(Section172)

Agent and Principal:

An agent is a person employed to do any act for another, or to represent another in dealing
with third persons. The person for whom such act is done, or who is so represented, is
called the principal. When the bank collects the cheque on behalf of the customer the
Bank is the agent and the customer is the Principal.-(Section182).

Indian Partnership Act, 1932-

Partnership is the relationship between persons who have agreed to share the profit of a
business carried out by all or any of them, acting for all. The relationship between
partners is governed by Partnership Deed. Firm is not the legal entity but governed by
Indian Partnership Act, 1932.
Any person capable to enter into the contract can be a partner in the firm. Max partners:
Non banking business=10, other=20 The act provides for registration of partnership and
it is necessary that a banker dealing with partnership firm should verify as to whether the
firm is registered or not.
This would help him to know all the names of the partners and their relationship. The act
of the partner shall be binding on the firm if done:
(a) In the usual business of the partnership.
(b) In the usual way of business.
(c) As a partner, i.e. on behalf of the firm and not solely on his own behalf.
(d) An unregistered firm cannot sue but can be sued

Limited Liability Partnership Act, 2008:

LLP is a body Corporate having separate legal existence having mixed characteristics of
Partnership Firm & Companies
As per the need of the day, the Parliament enacted the Limited Liability Partnership Act,
2008 which received the assent of the President on 7th January, 2009.
The Limited Liability Partnership (LLP) is viewed as an alternative corporate business
vehicle that provides the benefits of limited liability but allows its members the flexibility
of organizing their internal structure as a partnership based on a mutually arrived
agreement.
The LLP form would enable entrepreneurs, professionals and enterprises providing
services of any kind or engaged in scientific and technical disciplines, to form
commercially efficient vehicles suited to their requirements. Owing to flexibility in its
structure and operation, the LLP would also be a suitable vehicle for small enterprises
and for investment by venture capital.
 Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be
any upper limit on number of partners in an LLP.
38
  Partners are not personally liable rather will be liable up to the extent of his share
as LLP agreement.
 For all purposes of taxation, an LLP is treated like any other partnership firm
 It is separate from its Partners. It can sue and be sued.
Indian Companies Act, 1956:
A company is a juristic person created by law, having a perpetual succession and common
seal distinct from its members.
In India, companies are governed by Companies Act, 1956.
All the companies are required to be registered under Companies Act, 1956. Section 11 of
the Companies Act provides that an Association or Partnership consisting of more than
10 in the case of Banking Business and more than 20 in the case of other business shall be
registered under the companies act. If not registered, the said association or partnership
will be illegal. The business and the objects of a company and the rules and regulations
governing its management are known by two important documents called Memorandum
of Association and Article of Association.
 Company is juristic person created by law, having a perpetual succession and
common seal distinct from its members.
 Company is owned jointly by a group of persons. It has a legal existence separate
from that of owners.
 Properties of company are owned by company and not jointly by owners who are
called shareholders.
 Unlike partners, shareholders are not personally liable for the debts of the
company. They cannot participate in day to day management of company. It is
managed by its directors.

Amendments made in the Indian Companies Act, 2013:

The amendments to the Companies Act 1956 in 2013 Act has introduced several new
concepts and has also tried to streamline many of the requirements by introducing new
definitions.
After getting approval of both the houses of Parliament, the long-awaited Companies Bill
2013 obtained the assent of the President of India on 29 August 2013 and became
Companies Act, 2013 (2013 Act).
The changes in the 2013 Act have far-reaching implications that are set to significantly
change the manner in which corporates operate in India.

Highlights of Companies Act 2013:

1. Immediate Changes in letterhead, bills or other official communications, as if full name,

address of its registered office, Corporate Identity Number (21 digit number
allotted by Government), Telephone number, fax number, email ID, website address
if any.

39
 2. One Person Company (OPC): It's a Private Company having only one Member and at least
One Director. No compulsion to hold AGM. Conversion of existing private
Companies with paid-up capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into
OPC is permitted.
3. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100
Crores or more / Public Company with turnover of Rs 300 Crores or more shall have
at least one Woman Director.
4. Resident Director: Every Company must have a director who stayed in India for a total
period of 182 days or more in previous calendar year.
5. Accounting Year: Every company shall follow uniform accounting year i.e. 1 st April -31st
March.
6. Loans to director – The Company CANNOT advance any kind of loan / guarantee / security
to any director, Director of holding company, his partner, his relative, Firm in which
he or his relative is partner, private limited in which he is director or member or
any bodies corporate whose 25% or more of total voting power or board of
Directors is controlled by him.
7. Articles of Association- In the next General Meeting, it is desirable to adopt Table F as
standard set of Articles of Association of the Company with relevant changes to suite
the requirements of the company. Further, every copy of Memorandum and Articles
issued to members should contain a copy of all resolutions / agreements that are
required to be filed with the Registrar.
8. Disqualification of director- All existing directors must have Directors Identification
Number (DIN) allotted by central government. Directors who already have DIN
need not take any action. Directors not having DIN should initiate the process of
getting DIN allotted to him and inform companies. The Company, in turn, has to
inform registrar.
9. Financial year- Under the new Act, all companies have to follow a uniform Financial Year
i.e. from 1st April to 31st March. Those companies which follow a different financial
year have to align their accounting year to 1st April to 31st March within 2 years. It
is desirable to do the same as early as possible since most of the compliances are on
financial year basis under the new Companies Act.
10. Appointment of Statutory Auditors- Every Listed Company can appoint an individual
auditor for 5 years and a firm of auditors for 10 years. This period of 5 / 10 years
commences from the date of their appointment. Therefore, those companies have
reappointed their statutory auditors for more than 5 / 10 years; have to appoint
another auditor in Annual General Meeting for year 2014.

Foreign Exchange Management Act (FEMA):

Foreign Exchange Management Act (Also known as FEMA) was enacted in 1999.
It came into effect from 1st of June 2000. FEMA has made considerable improvement over
FERA which was supposed be very stringent and draconian.
This Act aims to consolidate and amend the law relating to foreign exchange with the
objective of facilitating external trade and payments and for promoting the orderly
development and maintenance of foreign exchange market in India.

40
Goods & Service Tax Act 2016.:

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

Other Important Legal and statutory provisions affecting bankers are:

 Transfer of Property Act,

 Information Technology Act, 2000
 Code of Civil Procedure Act, 1908
 Recovery of Debts due to Banks and Financial Institutions Act, 1993 (DRT)
 Stamps Act
 Right to Information Act
 Foreign Exchange Management, Act, 1999
 Bankers Book Evidence Act, 1891
 Consumer Protection Act 1986

Regulators and Regulatory compliance:

The Reserve Bank of India:

The Banks in India are required to comply with the guidelines issued by the RBI from time
to time. The most important of them is the strict adherence to the norms laid down in
respect of KYC and AML.

41
 The RBI has laid down specific guidelines in respect of documents to be obtained while
opening of bank accounts. These documents are called Officially Valid Documents (OVD).

The OVD are:

Passport/ Driving License with photo, Aadhar card issued by the UIDAI, Voter ID issued
by the Election commission of India, job card under NREGA issued by the State
Governments, PAN card (Only for ID proof).
Registration certificate of the firm issued by the Municipal corporation under the Shops
and establishment Act, Certificate of incorporation in case of companies, Sales Tax/ IT
returns, in case of corporate a/cs.
List of ‘Officially Valid KYC Documents’ for Account Opening must be obtained from the
customers to verify the identity and address of the customers. It must be noted that only
the documents mentioned in the list provided by the RBI would be accepted by the
branches while opening of any new account. Branches would not have the discretion to
accept any other document for this purpose.
The RBI also enforces the compliance of stipulated norms in respect of Forex transactions
by the banks.

The regulatory functions of the RBI:

RBI controls the monitory policy of the country.
It keeps vigil on the functioning of the banks in the country and ensures that, they
maintain various rates such as CRR, SLR in accordance with the formulated policies .
The RBI conducts inspection of the branches of various banks to monitor the proper
implementation of the guidelines.
It also calls for Various reports such as CTR/STR ( Through FIU-Ind) in respect of
domestic transactions and R reports in respect of Forex transactions, being carried out
by the Banks in India.
It wields power to levy penalties on the erring banks who flout the guidelines issued by
the RBI in respect of KYC/AML or FOREX matters.
Registrar of Companies (ROC):
Registrars of Companies (ROC) appointed under Section 609 of the Companies Act,
covering the various States and Union Territories are vested with the primary duty of
registering companies and LLPs floated in the respective states and the Union Territories
and ensuring that such companies and LLPs comply with statutory requirements under
the Act. These offices function as registry of records, relating to the companies registered
with them, which are available for inspection by members of public on payment of the
prescribed fee. The Central Government exercises administrative control over these
offices through the respective Regional Directors.
42
 The charge of the financing Institutions on the assets of the company are required to be
registered with the ROC within 30 days from the date of creation of charge. If the charge
has remained to be created within the stipulated time of 30 days, then also the charge can
be created by paying the additional fee by way of penalty.

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

SARFAESI ACT 2002: This Act gives powers of “seize and desist” to banks. Banks can give a notice
in writing (By Authorised officer) to the defaulting borrower requiring it to discharge its liabilities
within 60 days (Section 13 (2)). If the borrower fails to comply with the notice, the Bank may take
recourse to one or more of the following measures (Section 13 (4) :
A-take possession of the security for the loan
B-Sale or lease or assign the right over the security
C-Manage the same or appoint any person to manage the same.

This act also provides for establishment of Asset Reconstruction Companies (ARCs) regulated by
RBI to acquire assets from Banks and Financial Institutions. The Act provides for sale of financial
assets by Banks and Financial Institutions to Asset Reconstruction Companies. RBI has issued
guidelines to Banks on the process to be followed for sale of financial assets to ARCs.

THE INSOLVENCY AND BANKRUPTCY CODE, 2016: This act was passed by Parliament on
16.05.2016 to consolidate and amend the laws relating to reorganization and insolvency
resolution of corporate persons, partnership firms and individuals in a time bound manner for
maximization of value of assets of such persons, to promote entrepreneurship, availability of
credit and balance the interests of all the stakeholders. This act proposes to establish
INSOLVENCY & BANKRUPTCY BOARD to make a paradigm shift from the existing ‘Debtor in
possession’ to a ‘Creditor in control’ regime. National Company Law Tribunal will be the
adjudicating authority under the aforesaid. This ACT envisages a “creditor in control” regime with
financial creditors exercising control through IPs in the event of a single default in repayment of
any loan or interest. This can be affected without any notice and the law is very stringent as
compared to the SARFAESI Act, 2002.

43
Key points:

A-Corporate insolvency resolution process

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

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

Order of priority for distribution of assets

• Insolvency related costs

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

Banking Codes and Standard Boards of India (BCSBI)

 It is an autonomous body established on 18.02.2006 with an aim to monitor and assess

the compliance with codes and minimum standards of service to Individual customers to
which the banks agree to.
 The main function of the Board is to ensure adherence to the "Code of Bank's Commitment
to Customers".
 It sets minimum standards of banking practices for banks to follow dealing with
individual customers in their day-to-day operations.

44
  It provides protection to customers and explains how banks are expected to deal with
customers in their day-to-day operations.
 The BCSBI ensures that the commitment of the member banks are implemented for the
benefit of the customers.

Banking operation related issues:

Settlement of accounts of deceased account holders, Remittances, Safe Deposit Lockers.
Deposit Accounts. Internet banking. Privacy and confidentiality of the information
relating to the customer. To treat all personal information as private and confidential.
Norms governing advertisements, marketing and sales by banks. To Publicize the code.

Matters relating to financial issues:

Loans and advances and guarantees. Tariff schedule/ Interest rates. Compensation for
loss, if any, to the customer due to the acts of omission or commission on the part of the
bank. Foreign exchange services.

Standardized Public Grievances Redressal System (SPGRS):

This is a Standardized system for addressing public grievances.

It has been launched on 11.01.2013, under the directives of Government of India.
1) Complaint Redressal committee Chaired by the Managing Director.
2) Evaluate feedback from the customers on quality of service received by them
3) To review the implementation of codes of commitment under BCSBI.
4) Submit the report on its performance to the customer service committee on quarterly
basis.
5) Icon provided on the Bank’s website “Online complaints (SPGRS)”.
6) Tracker ID is generated to know the status of the complaint.
7) Complaint escalates to next higher authority after the stipulated no of days, if the
complaint remains unaddressed at a particular level.
9) Non customers also can lodge complaints through Toll free numbers/online.
10) Public Grievance portal introduced by the Govt. of India (www.pgportal.gov.in)

CHEQUE TRUNCATION SYSTEM: CTS 2010:

Truncation is the process of stopping the flow of the physical cheque issued by a drawer
to the drawee branch. The physical instrument will be truncated at some point en-route
to the drawee branch and an electronic image of the cheque would be sent to the drawee
branch along with the relevant information like the MICR fields, date of presentation,
presenting banks etc.
The images captured at the presenting bank level would be transmitted to the Clearing
House and then to the drawee branches with digital signatures of the presenting bank.
Thus each image would carry the digital signature, apart from the physical endorsement
of the presenting bank, in a prescribed manner. The physical instruments are required to
be stored for a statutory period. It would be obligatory for presenting bank to warehouse
45
 the physical instruments for that statutory period. In case a customer desires to get a
paper instrument back, the instrument can be sourced from the presenting bank through
the drawee bank.

Banking Ombudsman
Banking Ombudsman is a quasi judicial authority functioning under India’s Banking
Ombudsman Scheme 2006 and the authority was created pursuant to a decision made by
the Government of India to enable resolution of complaints of customers of banks relating
to certain services rendered by the banks. The Banking Ombudsman Scheme was first
introduced in India in 1995, and was revised in 2002. The current scheme became
operative from 1 January 2006, and replaced and superseded the banking Ombudsman
Scheme 2002. From 2002 until 2006,
The type and scope of the complaints which may be considered by a Banking Ombudsman
is very comprehensive, and it has been empowered to receive and consider complaints
pertaining to the following operational issues
 Non-payment or inordinate delay in the payment or collection of cheques, drafts,
bills inward remittances
 Failure to issue or delay in issue, of drafts, pay orders or bankers’ cheques;
 Non-adherence to prescribed working hours;
 Delays, non-credit of proceeds to parties' accounts, non-payment of deposit or
non-observance of the Reserve Bank directives, if any, applicable to rate of
interest on deposits in any savings, current or other account maintained with a
bank
 Forced closure of deposit accounts without due notice or without sufficient
reason;
 Failure to honour guarantee or letter of credit commitments;
 Failure to provide or delay in providing a banking facility (other
than loans and advances) promised in writing by a bank or its direct selling
agents;
 Delays in receipt of export proceeds, handling of export bills, collection of bills
etc., for exporters provided the said complaints pertain to the bank's operations
in India; Financial loss incurred to customer due to wrong information given by
bank official.
 Any other matter relating to the violation of the directives issued by the Reserve
Bank in relation to banking or other services.
 complaints from Non-Resident Indians having accounts in India in relation to
their remittances from abroad, deposits and other bank-related matters;
 Non-adherence to the fair practices code as adopted by the bank; and
 Vide their Circular No.CSD.BOS.4638/13.01.01/2006-07 dated May 24, 2007, the
Reserve Bank of India has amended their Banking Ombudsman Scheme, 2006 and
the scheme shall be operative with amended effect.

46
 RETAIL BANKING
&
THIRD PARTY PRODUCTS

47
 RETAIL BANKING & THIRD-PARTY PRODUCTS
1 - RETAIL LIABILITY PRODUCTS- CURRENT ACCOUNT

Baroda Advantage Baroda Premium Baroda Premium Baroda Small Business

Name of the Current Account Current Account Current Account Current Account (BSBCA)
Product (BPCA) Privilege (BPCAP)
“Pay as You Use”

Eligibility Individual (14 Yrs & Individual/ Non- Individual/ Non- Individuals, Proprietorship &
Above)/ Non- Individual Except Individual Except Partnership Concerns Only
Individual NRIs/ OCBs, Minors, NRIs/ OCBs, Minors,
Banks and Financial Banks and Financial
Institutions Institutions

Area of All Branches Metro /Urban Branches

Operation

Auto/ Reverse Not Applicable First Sweep out for Rs. 25,000 will happen
Sweep only when account balance reaches Rs.
5,25,000. Upon receipt of customer’s
request, the threshold amount of Rs
5,00,000/- can be increased preferably in
multiples of Rs 1,000

(e.g. Rs 5.01, Rs 5.02 lacs and so on)

If customer desires, the Sweep out amount

of Rs 25,000/- can be increased in multiples
of Rs 25,000 (e.g. Rs 50,000, Rs 75,000 and
so on).

Sweep will be carried out every Monday (at

the end of the day)

Minimum M/U- Rs. 10000/- Rs. 75000/- Rs. 250000/- Rs. 2500/-
Quaterly Average
Balance SU/R- Rs. 2000/-

Min. Balance Urban/Metro: Rs. 625 Non-maintenance of Non-maintenance 300/ + GST per quarter
Charges + GST per quarter QAB-600/- + GST of QAB-1000/- +
GST
Rural/Semi Urban: Rs.
350 + GST per quarter

Maximum No Upper Limit Annual Turnover is limited to

Balance Rs. 20 lakhs only

No. of No Limit No Limit No Limit 5 non- ADC transaction are

Transactions free per month,

Transaction charges of Rs. 10

per transaction for all non-

48
 ADC transactions if turnover
in account is up to Rs. 20 Lac.

Transaction charges of Rs. 15

per transaction for all non-
ADC transactions if turnover
in account is above Rs. 20
Lac.

There will not be any

transaction charges for all
ADC transactions (without
any limit)

Internet Free
Banking/ M-
Connect+

Folio Charges Rs. 125/- per 25 Nil Nil As per CA101

entries.
Rs. 125/- per 25 entries.
Free folio allowed p.a.
based on Average Free folio allowed p.a. based
Credit balance as on Average Credit balance as
follows: follows:

Av.Cr. Bal Up to Rs. 1 Av. Cr. Bal Up to Rs. 1 lac – 2

lac – 2 Free folios Free folios

Above Rs. 1 lac - All Above Rs. 1 lac - All Free

Free

Cheque Book First cheque book of 50 Free Unlimited Free Unlimited First cheque book of 50
leaves will be issued leaves will be issued free.
free. Additional Additional cheque @ Rs. 5 +
cheque @ Rs. 5 + GST GST per leaf
per leaf

Bank Statement Once Free (Monthly) Free Two Times in A Month One statement (Hard Copy)
free in a month

Free e-statement on
registered e-mail provided
minimum 4 transactions per
month are there in the
account

Balance Free Once in a Year Free --

Certificate

Signature Free Once in 3 Months Free --

Verification

49
Concession on No concession 50% concession 100% concession No concession
Remittance (DD/
BC) & On OCC

Locker No concession 20% Rebate/ Discount on locker Rent to No concession

proprietor/ partners/ directors if locker rent
is paid in advance for three years and above
in lump sum

Complementry No First year free of charge, limited to two No

Credit Card partners, two directors, up to two persons
(BOBCARD) of other bodies authorized to operate the
account

Personal -- Free Personal Accident Insurance with --

Accident Credit Card
Insurance

Immediate Upto 20000/- Rs. 50000 Rs. 150000 Nil

Credit of
Outstation
Cheques

Cash Deposit Cash Deposit Up to Rs. 50000/- Or Up to 10 packets i.e. 1000 pieces of Cash Deposit Up to Rs.
notes of any denominations taken together, whichever is higher - free 50000/- Or Up to 10 packets
Base & Local of charge per day. i.e. 1000 pieces of notes of
Non-Base any denominations taken
Branch together, whichever is higher
- free of charge per day
Above that charges @ Rs.10/- per packet (Min Rs.10/- & Max.
(system will not charge Rs
Rs.1000/-) + Taxes as applicable will be charged.
10/ as transaction charges
upto 5 transactions per
month).

Above that charges @

Rs.10/- per packet (Min
Rs.10/- & Max. Rs.1000/-) +
Taxes as applicable will be
charged.

Cash Deposit Cash deposit of Rs For amount up to Rs. 100000/- per day per Cash deposit of Rs 25000/ -
25000/ -per day per account free of charges. per day per account free of
account free of charges. (system will not
charges. charge Rs. 10 as transaction
Outstation
charges upto 5 transactions
Branch Cash deposited in excess of Rs. 100000/-,
per month),
service charges will be levied at Rs.2.50 plus
Thereafter in excess of Taxes per thousand or part thereof Thereafter in excess of Rs
Rs. 25000/-, service 25000/- Cash handling
charges will be levied charges will be @Rs 2/- per
at Rs. 2.50 plus Taxes thousand + GST or part
per thousand or part thereof.
thereof.

50
 Cash withdrawal Free

Base & Local (system will not charge Rs

non-base Branch 10/ as transaction charges
Free upto 5 transactions per
month).

Cash withdrawal Free Free

Outstation & (Maximum withdrawal is allowed up to Rs.50000/-and to self only. No (Allowed up to 50000 to self
Non- Base third-party withdrawal is allowed) only) (system will not charge
Branch Rs 10/ as transaction charges
upto 5 transactions per
month)

Circular No. BCC_BR_98_323 BCC_BR_98_160 BCC_BR_105_470 BCC: BR: 108:563

Scheme BCC_BR_108_549 BCC_BR_108_496 BCC_BR_108_496

paramters and
services is
subject to
change, please
refer latest
circular of the
schemes and
BOI.

Scheme Code CA101 CA108 CA107 CA124

Illiterates, Minors below 14 years of age (singly) can not open current account. Minors below 14 years of age jointly with
guardians
Every current and cash credit accountholder should be supplied with statement of accounts every month free of cost and SB
account holders a pass book.

2 - RETAIL LIABILITY PRODUCTS- SAVING BANK (1)

Name of The Baroda Advantage Baroda Super Saving A/C Baroda Shubh Baroda Centenary Saving Baroda Pension
Product Saving A/C (Metro/ Urban) Saving A/C (SU/R) A/C Saving A/C

(SB133)

Eligibility Resident Individuals Resident Individuals Resident Resident Individuals (Above Pensioners
(Above 10 Yrs/ Single/ Individuals (Above 10 Yrs/ Single/ Joint)
(Above 10 Years/ Joint), 10 Yrs/ Single/
Single/ Joint) Joint), Farmers’ Clubs – Vikas
Volunteer Vahini, Primary (BOB Pensioners
(NRI/ Trusts & Other Co Op. Credit Socities, also)
Institutions Not Eligible) Agriculture Produce
(Nri/ Trusts & Marketing Committees,
Other Institutions SHGs, Government
Not Eligible) Departments, which are
authorized to open SB A/c,
Trusts and Institutions,
51
 whose entire income is
exempted from payment of
income tax under Income
Tax Act, 1961 and
otherwise eligible to open
Savings bank account

(Not for NRE Deposit)

Auto / Reverse NA Multiples Of 10000/- NA Multiples Of 5000/- Above Multiples Of

Sweep Above Threshold Limit Threshold Limit 10000/- 1000/- above
50000/- (For 181 Days) (For 180 Days) Threshold Limit
3000/- (For 180
Upon Customers Request Days)
Branch Can Increase the
Threshold Limit of
Rs.50000/- Preferably in
Multiples of Rs.1000/-, If
Customer Desires Brabch
Can Increase the Sweep
Amount Rs.10000/- In
Multiples of Rs.10000/-

Minimum QAB QAB 20000/- QAB 15000/- QAB-10000/- Nil

Balance
(M/U)- 1000/- (SU/R) - A/C can be
500/- Opened with Rs
5/-

Minimum R/SU- Rs. 100/- per Rs. 1000/- + GST Per Rs. 1000/- + GST Rs 100/- + GST Per Month Nil
Balance quarter Quarter per Quarter
Charges
U/M- Rs. 200 per
quarter.

Charges will be levied

as under

R/SU if QAB is in the

range

250- 499 - 50%

100-249 - 80%

Below 100 - 100%

M/U if QAB is in the

range

Rs. 500- 999 - 50%

Rs. 250- 499 - 80%

52
 < Rs. 250 - 100%

Maximum Rs. 1 Lac for Minor (10-14 Yrs) No Limit

Balance

Number of 50 Withdrawl Per Half Year is Free 20 Withdrawl Per Month 50 Withdrawl Per
Transactions Half Year is Free
Rs. 15/- per debit exceeding 50 debits in HY be charged. Above that Rs. 10/- +GST
per withdrawal Rs. 15/- per debit
exceeding 50
debits in HY be
charged.

Internet Free
Banking / M-
Connect+

Cheque Book 30 Leaves Free in FY Free Unlimited Free Unlimited Free Unlimited Free Unlimited
afterwards Rs. 5 Per
Cheque Leaf

Immediate Upto 20000/- Upto 25000/- Upto 25000/- Upto 25000/- Upto 25000/-
Credit of OCC
(*T & C)

Concession on No Concession Free Free Only OCC Free Free DD/ BC Upto
Remittance 100000/- Per
(DD/BC) and Month, OCC-Free
on OCC

Discount of -- 25% Discount of annual --- -- 25% Discount of

Demat Services custody/ maintainance Demat Services
charges of Demat Services

Credit Card -- Free Credit Card (For Ist -- -- Free Silver Credit
(BOBCARD) Year) Card (For Ist Year)

Overdraft NA NA NA Max Of 2 Months

Facility Pension amount
(net credit to SB
a/c last month), if
any other credit
facility is not being
availed by the
pensioner

Personal Free Personal Accident Free Personal

Accident Insurance with Credit Card Accident
Insurance During First Year Insurance Of 1 Lac
with Credit Card

Circular No.** BCC_BR_98_333 BCC_BR_96_45 BCC_BR_95_151 BCC_BR_99_221 BCC_BR_103_11

BCC_BR_97_156 BCC_BR_97_267 BCC_BR_104_207

53
 BCC_BR_97_267 HO_BR_102_67

BCC_BR_108_496

Scheme Code SB101 SB117 SB119 SB125 SB 133

54
2 - RETAIL LIABILITY PRODUCTS- SAVING BANK (2)

Name of The Baroda Bachat Mitra Baroda Salary Advantage Baroda Basic Saving Baroda Zero
Product Saving A/C Saving A/C Bank Deposit A/C Balance Saving A/C

Eligibility Individuals - Single/ Regular Employees of State/  No Frill Account Salaried

Joint Central Government, PSUs, Employees,
Semi government
Organization, State/ Central  All Resident
Individuals
Govt. Corporations, Urban
(Having Attained Age LIC/ GIC Agents,
Development Authorities,
of 18 Years)
Educational Institutions,  Not For NRI/
Universities, MNCs, reputed Trusts/ Societies
Public Ltd Companies with Students,
minimum one-year service
with the organization

Employees of Private Limited Persons Getting

Companies may be Compensation
considered by Regional from government
Authorities on selective basis
after ascertaining their
standing and banking
relationship with us, if any

 Minimum age of 21 years

 Minimum take home Salary
- Rs. 5000/-
 Maintaining satisfactorily
conducted salary a/c with
the Bank at least for 3
months
(Not for Bob Staff)

Auto Sweep NA

Minimum Bal No Minimum Balance No Minimum Balance No Minimum Balance No Minimum

Balance
Fixed Deposit:
Minimum amount of
deposit would be Rs.
10000/- and
thereafter in
multiples of Rs.
1000/- with a
minimum period of
12 months and
maximum period of
120 months.

Minimum Balance Nil

Charges

Maximum Balance No Limit Rs. 1.00 Lac for Minor (10-14 Yrs)

55
No. Of 50 Debits Per HY 4 Withdrawals in a 50 Debits Per HY
Transactions Month including
ATM transaction

Internet Banking / Free

M-Connect+

Cheque Book 30 Leaves Free in FY
afterwards Rs. 5 Per
Cheque Leaf
Free Unlimited Free 50 Leaves in a 30 Leaves Free in
Year FY afterwards Rs. 5
In case of bulk requirements Per Cheque Leaf
such as giving PDCs for loans
availed / to be availed from
other banks/ institutions /
Finance Companies, normal
cheque book charges shall be
levied

Processing Nil for OD Facility only 0.50% Min-100/-+ GST for OD Nil for OD Facility No Concession
Charges Facility only

Overdraft Facility 80% of Fixed Deposit
with a
minimum limit of Rs.
8000/- and maximum
of Rs. 100000/-
90% of net salary of average
of last three months subject
to Maximum of Rs.1 lac
Third party guarantee shall be
obtained. Cross guarantee
may be accepted.A/C to Be in
Credit Once In 60 Days
Maximum-Rs. 5000/-
Subject to, 4-Times
of Avg Monthly
Balance Or 50% Of
Credit Summation of
6-Months or Rs
5000/- Whichever is
Lower

Circular BCC: BR: 100:268 BCC_BR_108_14 BCC_BR_105_106,

Number** BCC_BR_105_469
BCC_BR_98_182
BCC_BR_107_123

BCC_BR_107_473

Scheme Code SB128 SB 124- with KYC SB115

SB 136- Small A/c

2 - RETAIL LIABILITY PRODUCTS- SAVING BANK (3)

Name of The Product Baroda IFFCO Krisshi SB Baroda Champ SB Account Baroda Jeevan Suraksha
account Saving A/C
"Attract Tomorrow's Customer
Today"

Eligibility Resident Indian Member
farmers (major only) of IFFCO
on single name only
Youngsters between age group Resident Individuals 18-70
10 -18 years Yrs
(Jointly with Partents/Guardian (Single/ Joint-Max Two)
is allowed)

Aadhar is Compulsory
Aadhar is Compulsory
(With Life Insurance Cover of
sum insured minimum Rs. 1

56
 Lakh and maximum upto Rs
5.00 Lac with IFLIC)

Auto Sweep NA Optional

In Multiples Of 5000/- Above

Threshold Limit 5000/- (For
180 Days)

Minimum Bal Nil Rs. 1000/- 1000/- On Daily Basis

Can be opened with initial

funding of Rs 100/- only.

Minimum Balance Nil Rs. 100+GST per Quarter 100/- + GST per Quarter
Charges

Maximum Balance No Limit Rs. 1.00 Lakh No Limit

No. Of Transactions Cash withdrawal at branch
allowed upto the credit
balance in account to a
maximum of Rs 50,000 per
day.
Overall transaction limit of Rs 50 Withdrawl Per Half Year
5,000/- per day and is Free
combined transaction limit of Rs Rs. 15/- per debit exceeding
3,000/- per day for POS/ATM 50 debits in HY be charged.

Internet Banking / M- Free

Connect+

Debit Card Free
(for first year) issuance of
non-personalized co-branded
IFFCO RUPAY Debit Card
Issued free- FIFA U-17 World Cup Charges as per guideline
logo Visa debit card
Non-personalized debit card at
branch level through NPDCIS
menu option. Renewal Charges
150+GST

Cheque Book 30 Leaves Free in FY Free 20 Leaves in a Half Year

afterwards Rs. 5 Per Cheque
Leaf

Immediate Credit of -- -- Upto 15000/-

OCC (*T & C)

Concession on Nil One DD/BC/NEFT (upto Rs 1 Nil

Remittance (DD/BC) lakh) free per month for fee
and on OCC payment.

Overdraft Facility Per farmer Rs. 2500/- only No No

(for every 180 days)

Overdraft is allowed only for

commodity purchase through

57
 cobranded debit card
transaction on IFFCO POS

One time -30- day interest

free period for every 180 days
on OD component.

Circular Number** BCC_BR_109_257 BCC_BR_109_421 BCC_BR_103_16

BCC:BR:105:119

BCC_BR_109_69

Scheme Code SB 157 SB 156 SB 134

3- RETAIL LIABILITY PRODUCTS–TERM DEPOSITS

Name of The Product Eligibility Amount Period Other Feature

Baroda Short Term An individual in his own Minimum Rs. 7 Days to Less than --
Deposit name. 1000/- and in 12 Months
Multiples of 100/- (7-14 Days for Amt
More than one individual in 15 Lac & Above)
joint name.
RIRD – Baroda Regular Minimum Rs. Minimum-12 --
Income Cum Recurring Minor of age 10 and above 1000/- and in Months
Deposit on terms laid down by the Multiples of 100/- Maximum-120
bank. Accounts can also be Months
TD 101 opened in the name of
minor with their
Baroda Regular Income Minimum Rs. Minimum-12 Interest will be paid
Plan- MIP/QIP Father/ Mother, as 1000/- and in Months on monthly in MIP
guardian. Multiples of 100/- Maximum-120 and Quarterly in QIP
TD 102/103 Months basis at discounted
Clubs, associations, rate
Educational Institutions,
Partnerships and joint
stock companies, provided
they are registered and

bank is satisfied that the

account is opened for
genuine savings purpose

58
Baroda Tax Saving Term Minimum Rs. Minimum-60 -No credit facility
Deposit 100/- and in Months against these
(RIRD/ MIP / QIP Individuals (Single or Joint- Multiples of Rs. Maximum-120 deposits.
Scheme) Maximum Two Adults) and 100/- Months
HUF only -No Premature
TD 131/132/133 Closure before 5
Years except in case
Maximum- No of death of depositor
limit Upto Rs.
150000/- rebate in -Relief Under Sec 80-
80’C’ C of Income Tax

Baroda Advantage Individual (Single or Joint Minimum Rs. Minimum-12 No Premature

Fixed Deposits (Non- Name) of age above 14 15.01 Lac Months withdrawal allowed
Callable Fixed Deposit) years Maximum-120 for any reason
Months whatsoever

Maximum Rs. 10
RIRD- TD 166, TD466 Clubs, associations, Crore
Educational Institutions,
MIP- TD 167, TD 467 Partnerships and joint
stock companies and any
QIP- TD 168, TD 468 ( More than 15 lacs
other institutions, which
in the multiples of
are eligible to open a Term
1000)
Deposit, account as per
Bank rules

Baroda Special Order For accepting deposits As ordered by the Minimum- 7 Days -Can’t be pledged for
Term Deposit under court orders/ court/Govt. No any FB/NFB Facility
Tribunal/ Government minimum and Maximum -240
RIRD- TD 175 bodies maximum ceiling Months -Loan /OD should be
considered only if
MIP- TD 174 permitted by

QIP- TD 173 court/Govt order up

to 85% of outstanding
balance

-Premature closure
strictly to be done as
per court order
/mandate

Baroda Flexible Fixed Resident Individuals 5000/- Minimum-12

Deposit Scheme BOB including minors in single (In Multiples Of Months
SUVIDHA or joint names, HUFs, sole 1000/-) Maximum-60
proprietorship and Months
TD106 partnership firms, public/
private limited companies,
associations, clubs, trusts
and registered societies

59
Flexi Deposit Scheme High Networth, High Value 5 Crore Minimum-7 Days Notice of withdrawal
for High Value Customers (In Multiples Of 1 Maximum-12 and/or premature
Customers Crore) Months payment: One
Business Day

Fast Access Deposit Individuals (Including 10000/- Minimum-12 The depositor would
Scheme (Under Rird Minors), Non-Individual (In Multiples Of Months also open a current
Scheme) 1000/-) Maximum-120 account (overdraft
Months account)
TD105 simultaneously. An
overdraft facility up
to 95% of the amount
of deposit is
immediately made
available to the
depositor as per
guidelines. The staff
members are also
eligible.

Where a deposit is in
the name of a minor,
jointly with parents/
natural guardian, the
overdraft facility is
restricted to Rs.
10,000/-

Senior Citizens Savings -60 Yrs, (55 Yrs in VRS) In Multiples Of 5 Years Premature
Scheme - 2004 1000/- Maximum (Extendable for 3 withdrawal after one
Rs 15 Lac Years only once) year of holding with
penalty
-Retired Defence
Personnel (Excluding
Civilian Employees)
Irrespective of Age

-NRI, PIO and HUF are not

eligible

Baroda Recurring Individuals & Non- R/SU- Rs. 50/- Minimum-6 Term of RD can be for
Deposits- General Individual eligible to open U/M – Rs. 100/- Months 6,9,12,15,18,21,24…
Scheme (Monthly) such accounts as per (In Multiples Of Maximum-120 ………120 months
guideline 50/- & 100/- Months
TD113 Respectively)

Baroda Samradhi By an individual in his own 500/- Minimum-36

Quarterly Recurring name. (In Multiples Of Months
Deposits 100/- Maximum-120
-By more than one Respectively) Months
individuals in joint name. -

60
 Baroda Samradhi Half By a minor of age 10 and 1000/- Minimum-36
Yearly Recurring above on terms laid down (In Multiples Of Months
Deposits by the bank. Accounts can 100/- Maximum-120
also be opened in the name Respectively) Months
of minor with their
Baroda Flexible father/mother, as Minimum Core Minimum-12 Interest is HY
Recurring Deposits guardian. Instalment 100/- Months Compounding.
Account (YSJY) & In Multiples Of Maximum-120
-In the names of Clubs, 100/- Months.
associations, Educational (Maximum 3
Institutions, Partnerships Times of Core
and joint stock companies, Instalment Upto
provided they are 10000/- Per
registered and bank is Month)
satisfied that the account is
opened for genuine savings
purpose

The product is not available

for NRE deposits.

Baroda Holiday Saving Resident Individual Minimum Rs 100/- 12 Months Association with M/s
Recurring deposits per month & Thomas Cook (India)
TD171 further in Ltd
multiples of Rs 100

Baroda Capital Gain All branches except rural -- --- Investment to be

Account Scheme – branches are authorised to made within 2 yrs for
1968 accept deposits under the purchase & 3 yrs for
scheme. construction Tax
TD 121 exemptions under
capital gain available

 An additional interest @ 0.50% for Senior Citizens against their deposits upto Rs. 1.00 Crore unless any particular scheme
has no provision for this.

 Premature Withdrawal: No penalty for premature payment will be levied in case of premature payment of deposits upto
Rs. 5 lacs provided it remained with the bank for a minimum period of 12 months and premature withdrawal is allowed
as per scheme.
 Recurring Deposit: In case of delay in payment of any installment a penalty shall be charged Rs. 1.50 for every Rs. 100/-
p.m. for deposits of five years and less and Rs. 2.00 for every Rs. 100/- p.m. for deposits of over five years, fraction of a
month being treated as full month for purpose of calculating such penalty

Methodology for interest calculation:

ALCO in its meeting dated 29.08.2017 approved the method of calculation of interest as under.
a) Deposit placed for period less than one quarter / 3 months, interest will be calculated for the actual number of days
on the basis of 365/366 days in a year.
b) Deposit placed for more than one quarter / 3 months to less than or equal to 181 days /6 months interest will be
calculated first for completed quarter and thereafter for actual number of days if terminal quarter is incomplete
reckoning the year at 365/366 days. While calculating interest for days the interest calculated for quarter will be
added to principal amount for calculating interest for remaining days of terminal quarter.
61
 c) Deposit placed for more than two quarters / six months but less than one year interest will be calculated first for
completed quarters and for terminal incomplete quarter, actual number of days reckoning the year at 365/366 days.
Interest will be calculated and compounded at quarterly rests.

Public Provident Fund 1968 Scheme:

Eligibility: Any adult in his / her name or in minor's name in the capacity of guardian of the minor. HUF and NRIs cannot open
PPF account. Online subscription facility Existing customers having PPF account with Bank of Baroda can deposit online in PPF
account from Bank of Baroda savings account.

Minimum amount: Rs. 500/- per annum is required to be deposited thereafter in the multiples of Rs 5/-. The accounts in which
deposits are not made for any reason are treated as discontinued accounts and such accounts cannot be closed before
maturity. The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of
Rs.50/- for each defaulted year.

Maximum amount: Rs. 1.5 Lacs per annum. The depositor has flexibility and freedom for depositing any amount in a maximum
of 12 installments in a financial year.

Maturity period: 15 years. An Account, on the expiry of fifteen years, can be extended for a further period of five years at a
time.

Interest Rate: The interest is paid as per the rates declared by the Government from time to time on quarterly basis. As per
latest rates wef 01.10.2017, ROI for PPF account is 7.80%.The interest for the month is calculated on the minimum balance
available in the account from 5th of a month to the last date of the month.

Withdrawal facility: A depositor can make partial withdrawals, once every year from his PPF account after expiry of five years,
from the end of Financial Year, in which the initial deposit was made. The amount of withdrawal is restricted to 50% of the
credit balance at the end of the fourth year immediately preceding the year of withdrawal or the year immediately preceding
the year of withdrawal, whichever is lower.
Premature Encashment: Premature closure of a PPF Account is not permissible except in the case of death of the depositor.
Ref: BCC:BR:107/424, BCC:BR:109:383 and other exceptions mentioned in circular no BCC:BR:108:330

Sukanya Samriddhi Account (SSA):

Eligibility: A Natural/ Legal Guardian can open account in the name of the girl child from the birth of the girl child till she attains
the age of ten years.

Minimum amount: Rs. 1000/- per annum is required to be deposited.

Maximum amount: Rs. 1.5 Lac can be deposited in a financial year. The amount can be deposited in multiples of hundred on a
single occasion or on multiple occasions but should not exceed the maximum limit.

Maturity period: The account shall mature on completion of 21 years.

Income Tax benefit: Deposits under ‘Sukanya Samriddhi Account’ scheme are eligible for Income tax deduction under 80C of
Income-tax Act, 1961.

Interest Rate: The interest is paid as per the rate declared by Government of India from time to time.

Other features: Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be
taken after Account holder’s attaining age of 18 years to meet the financial requirements of the account holder for the purpose
of higher education and marriage.

If account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.
Normal premature closure will be allowed after completion of 18 years of age of account holder, provided that girl is married.

Treasury/Sub-Treasury business:
Bank of Baroda undertakes State Governments Treasury-sub-treasury business at its select branches, in the States of Gujarat,
Rajasthan, Chhattisgarh and Tamil Nadu.
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e-Stamping:
Bank of Baroda is authorized to undertake e-stamping business in 8 States and provides the facility of generation of e-stamps
through its designated branches. It is a secured way of paying non-judicial stamp duty to State Govt. Present system of physical
stamp paper is being replaced by e-stamps gradually by the State Governments. It prevents paper and process related
fraudulent practices.

e-Biz:
Bank of Baroda is authorized by Department of Industrial Policy and Promotion (DIPP) as one of the accredited Bank for
collection of fees/ charges through e-Biz Portal.
There are two modes of collection of e-Biz receipts:
1. Offline Mode – By any of our branch across India
2. Online Mode – Customer using their net banking facility can pay through online mode
Fee pertaining to the services like, Industrial License, Industries Entrepreneur Memorandum, and Employer Registration
Service etc. can be done through e-Biz

Atal Pension Yojana (APY):

Atal Pension Yojana is a Social Security Scheme introduced by Govt. of India, aimed at providing a steady stream of income
after the age of 60 to all citizens of India. It is based on National Pension Scheme (NPS) frame work. Permanent Retirement
Account Number (PRAN) will be provided to the subscriber immediately by the Branch.

Under APY the subscribers have a choice to get Fixed Monthly Pension amount from Rs. 1000/-, Rs.2000/-, Rs. 3000/-, Rs.
4000/- and Rs. 5000/- by paying monthly/quarterly/half yearly subscription as per the table.

After the death of the subscriber, pension will continue for spouse and if both are dead, Corpus after maturity will be given to
the nominee.

Government contribution of Rs. 1000 or 50% of the subscription contribution (whichever is lower) for 5 years.
Voluntary Exit is available.
Individuals between the age of 18 to 40 can visit our nearest Branch with ID proof, Address Proof and Age Proof to fill the form
for registration under the scheme. Saving Bank account is mandatory for subscribing under the scheme which will be linked
to pension.

ASBA (Applications Supported by Blocked Amount):

It is a supplementary process of applying in initial public offers (IPO), right issues and follow on public offers (FPO) made
through book building route and co-exists with the current process of using cheque as a mode of payment and submitting
applications.
ASBA means "Application Supported by Blocked Amount", enables investors to apply for IPOs / FPOs and rights issues without
making a payment. Instead, the amount is blocked in investors' own account and only an amount proportionates to the shares
allotted goes out when allotment is finalized.

"Baroda Health" (Mediclaim Insurance Policy)

It is Medical Insurance Scheme, available only to account holders of our Bank, which takes care of the hospitalization expenses
incurred by the customer up to the amount of sum insured, in respect of the following eventualities that required the minimum
hospitalization for 24 hours. The same is being provided by National Insurance. Bank has also had a Standalone tie up with two
other Insurance Companies (BCC:BR:108/231 Dt.20.05.2016)
 Max Bupa Health Insurance Company Limited
 Star Health & Allied Insurance Company Limited

Bank has also entered in tie up arrange for other general insuranace companies

 Cholamandalam MS General Insuranmce Company Limited

 TATA AIG General Insurance Company Limited

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ROLE OF TECHNOLOGY
IN BANK

64
 2. ROLE OF TECHNOLOGY IN BANK

1. Recent initiatives by our Bank

2. Cash Recycler Machines (Cash Deposit + ATM Functions)
3. Multi Function Kiosks
4. Self Service Passbook Printer (SSPBP) – Self mapping of subsequent passbooks.
5. DSS
6. Contact Centre
7. Missed call facility – Balance Inquiry
8. SMS Banking
9. Debit Cards (Including Baroda Reloadable Card & Baroda Deposit Card)
10. Credit Cards
11. Baroda Gift Card
12. Baroda Travel Easy Cards
13. Baroda Connect
14. Mobile Banking
15. M-Clip
16. Account Opening Kiosk
17. Baroda E Gateway
18. Baroda Demat Services
19. Baroda e-Trade (OLT)
20. Baroda Cash Management System
21. Recent development in Digital Space

1. Some Recent Initiatives by the bank

1. New Products / Services
 Chillr app
 Express Lobbies (Includes Cash Recycler, ATM, Self Service Passbook printer)
 Launch of Loyalty program for Debit Card Customers – Baroda Rewardz
 Master Card Platinum Chip Debit Card (enhanced transaction limits )
 Master Card Classic Chip Debit Card
 Baroda Flash n Move+ (VISA) Contactless Debit Card
 Card to Card Fund Transfer through ATM
 Cheque book request through ATM
 Baroda e-trade now available on mobile devices (Android and IOS) through app
 Online purchase through Debit card and ATM PIN
 Account opening in 10 min through account opening Kiosk
 Baroda Rewardz App
 Baroda M Clip App
 Baroda BHIM Pay App
 BHIM AADHAR PAY
 Baroda M Invest App
 Baroda M Passbook App
 BBPS & Bharat QR Code through M connect +

b. New Customer Oriented functionalities in our Digital Banking products

 Baroda Connect (Retail):
 Online Self Registration by Customer by using Debit Card and Registered Mobile
Number
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  Online Retrieval of USERID
 Online resetting of Transaction Password
 Mobile OTP – Generation of OTP on Smart Phone
 Password now being sent in Activated Mode
 Self mapping of new passbook in Self Service Passbook Printer
 USSD Direct Access Code to minimise the steps involved in USSD based mobile
transaction e.g. for mini statement *99*48*2#
 Baroda M-Connect – Instant Registration through Branch and Interoperability
 24X7 Debit Card Hot listing and Web chat services through Contact Centre
 Debit Card Blocking through SMS
 Bank has launched its presence on social media platforms viz; Face book Twitter and
You Tube.

c. Simplification / Changes in processes:

 Branch retail customer relationship management (CRM) for 360° view of the customer
(through BRCRM option in Finacle). Following details of customer will be available on
the user screen -
 Accounts
 Transaction analysis
 Customer Analytics
 Personal details
 Organization
 Address/phone
 Relationship
 Issuance of NPDC (Non-Personalized Debit Card) discontinued w.e.f. 01.02.16
 Migration of ECS Outward Services from RECS to NACH platform
 New Menu options such as DCISS (Debit card reissuance, regeneration of PIN, multiple
account linking / delinking and card blocking) DCARDBLK (For f\blocking of Debit
card through branch), new portal of BOBCARDS for Debit Card CRM (complaint
resolution module)

1. Cash Recycler Machines (Cash Deposit + ATM Functions):

Salient functionalities available in Cash Recyclers are as follows:

Cash Deposit with Card Transaction:

 Daily transaction limit for account without PAN (Permanent Account Number) registered
in CBS is Rs. 49,999/-. There is no restriction on number of transactions of cash deposit
till daily limit of Rs. 49,999/- is reached. This limit also includes the cash deposited over
the counter at the branches.
 Daily transaction limit with PAN registered in CBS is Rs. 2,00,000/- without any
restriction on number of transactions. This limit also includes the cash deposited over the
counter at the branches.’

Cash Deposit without Card Transaction:

 Cash Recycler machine facilitates customer to deposit the Cash in Savings / Current / Cash
Credit / Overdraft account by giving the account number (Card-less Transaction), where
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 per transaction & per day limit is of Rs. 20,000/- subject to daily transaction limit without
PAN (Permanent Account Number) registered in CBS of Rs. 49,999/-.

Cash Withdrawal:
This facility is exactly like ATM operations and available with Debit / ATM Card only. The Cash
Recycler dispenses cash deposited by customers using Cash Acceptor facility.
 Other Bank customers having Debit / ATM Card can also use Cash Recycler for Cash
Withdrawal only.
 Maximum cash withdrawal limit per transaction for our Customer is Rs. 15000/-,
however per day Cash withdrawal limit is as per the variant of Debit Card.

2. Multi Function Kiosk (MFK):

Benefit to customers
 Cheque deposit beyond the branch timings Cheque deposit facility with the help of
Cheque Truncation System (CTS) and UV scanning facility- Integration with CTS server to
paste the images in CTS server on frequently basis to reduce the process time.
 Internet Banking with limited functions ( Icon based / Web based)
 Balance enquiry, Mini statement

 Fund transfer –Within bank / outside bank using NEFT of Internet banking
 Bill payment facility for utility bills (Post paid, mobile ,telephone, electricity,
water
 Recharge / top up of Mobile, DTH)
 Bill payment can be through debit card or net banking with provision for screen based
entry-Integration with Switch for payment with debit card.
 Non-financial transaction (Balance enquiry, Mini statement etc.) execution using debit
card authentication
 Informational services like IFSC code, Branch locator, product Information with
capturing the detail of the customer and integration with bank’s CMS to generate
outbound services through CSOs etc.
Benefits to Bank:
 Reduced branch visits of customers
 Machine utilization is increased as one machine provides the facilities that were earlier
provided through multiple machines
 Automation of the process of depositing a cheque Cheque clearing process is automated,
no need of manual data entry at branch level

3. Self Service Passbook Printer (SSPBP) – Introduction of new feature for “Self mapping
of subsequent passbook”:
To improve customer convenience and to reduce workload of staff to map subsequent
passbooks, “Self mapping of subsequent passbook” feature is now enabled in SSPBP.
Details of this facility are as under:
a) Customer is issued the first SSPBP passbook from the branch counters after
mapping the passbook serial number with account number by branch staff (no
change in current process).
b) Thereafter, customer prints passbook using Self Service Passbook Kiosks. On

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 completion of the passbook, system prompts customer to collect fresh passbook
from branch for continuation. System will provide 45 seconds to insert new
passbook for auto mapping.
c) If customer inserts new blank passbook within 45 seconds, system automatically
maps the serial number of the blank passbook with customer’s account and
deactivates the old passbook.
d) If customer is not able to insert the blank passbook within 45 seconds (primarily
when he/she has to collect blank passbook from branch) then the system returns
to home screen. In that case, for mapping of subsequent passbook, customer is
required to first insert the old passbook. System will prompt him/her to insert the
new blank passbook and machine completes the mapping.

4. DSS:
Digital Signage Systems will help in promoting and increasing awareness of bank’s
products. These systems will include a LED screen and media player which will be
installed at high footfall branches and e-lobbies. The content for these LEDs would be
distributed electronically from a server installed at our Data Centre. Currently we would
be installing these systems at 400 locations across India.
The content which will be pushed centrally would include –
 Latest product information and offers
 Regional content on select occasions
 Statutory content/important notices for customer information
 DO’s & DONT’s related to transaction security for customers
 Interest rates of term deposits / loan products

The content will be in the form of images, short videos, tickers, etc.

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5. Contact Centre:
Bank has established Contact centre at GIFT City Gandhinagar.
Contact Centre Numbers
 Toll Free Number 1800 22 33 44 or 1800 102 44 55 from anywhere in the
country and services available in Six Indian languages viz. kannada (Code-3),
Tamil( Code-4), Telugu(Code-5), Malayalam (Code-6), Hindi (Code-2) & English
(Code-1 )
 The dedicated toll free number for providing contact centre services for Financial
Inclusion / Pradhan Mantri Jan Dhan Yojana (PMJDY) customers is 1800 102 77
88

Availability of Contact Centre Services:

Services through IVR by using TPIN Round the Clock
Services through Agent
 Hot listing of Debit Card Round the Clock
 Web-chat facility Round the Clock
 All other services except others 6 a.m. to 10 p.m.

Services Provided:
1. Through Agents:
 Account Enquiry of linked Accounts
 Balance Enquiry
 Statement
 Transaction Status
 Cheque Services in operative Accounts
 Stop Payment
 Status Enquiry
 Cheque Book request

 Debit Card Services

 Blocking of Card
 Request for regeneration of PIN
 Request for reissuance of Debit Card
 Complaint of Debit Card Failed transaction
 Baroda Connect
 Help Desk
 Activation of Password
 Regeneration of password
 Complaint on failed transaction
 Mobile Banking
 Registration of Mobile Banking Services
 General Queries
 Resend link / PIN

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  General Enquiry
 Products & Services
 Branch & ATM Location
 Interest Rate and Forex rates
 Lead creation
 Wealth Management Product

2. Through IVR (Interactive Voice Response):

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

3. Through web-chat:
 This service is only for general queries and any information which requires disclosure
of any personal / account information is not provided through this service.
 Presently this service is available in English only.

6. Missed Call facility for ―Balance Inquiry:

Customers, who have registered their mobile number, can get balance of their accounts by
just giving a missed call from their registered mobile number to mobile number 8468 00
1111 for Account Balance & 8468 00 1122 for Mini Statement .

Salient features of the facility are as under:-

 This facility is available 24X7.
 Balances of account under Saving, Current, Cash Credit and Overdraft schemes are
provided through this facility.
 Customer may have more than one account with same mobile number. In that case
SMS of maximum length of 320 characters (2 SMSs) will be sent to customers. For
remaining accounts, customer can avail the ―SMS Banking Services or our Contact
Centre services.
 Customer can use this facility maximum ―5 times in a day, system will not respond
thereafter.
 This service is available only for resident accounts i.e. accounts with domestic
mobile
 Customers do not have to pay any charges as the call would be disconnected after a
ring and customer would get the balance via SMS

7. SMS Banking:
A SMS to be sent from their registered mobile number to 8422009988

70
 Services offered are
 Balance Enquiry
 Mini Statement
 Cheque Status

Customer has to send a SMS text as under:

1 For Balance enquiry - BAL <space> last 4 digit of account number
2 For Mini statement - MINI <space> last 4 digit of account number
3 For Cheque status - CHEQ <space> last 4 digit of a/c no <space> cheque no.
4 For Aadhar seeding - 12 digit aadhar number <space> last 4 digit of a/c no
For Registration of
5 preferred account REG <space> last 4 digit of a/c no <space> cheque no.
BLOCK<space>C<space> Last Four Digit of Card Number or
6 Debit Card Blocking BLOCK<space>A<space> Last Four Digit of Account Number
7 Subscribe or Unsubscribe ACT/DEACT<space> Last Four Digit of Account Number
8 PMJDY OD Request ODREQ <space> Y
PMJJBY /PMSBY
9 Enrollment PMJJBY/PMSBY <space> Nominee Name <space> Y

8. Debit Cards and it’s Variants:

Bank of Baroda International Debit Card enables you to access over 9,000 Bank of Baroda
Interconnected ATMs spread across major centers in the country, 1, 18,000+ ATMs of member
banks of National Financial Switch in India and multimillion ATMs worldwide. These cards also
provide you convenience of usage at literally all major merchant outlets in India and abroad.
Enjoy the convenience of cash-less purchasing power without the fear of overdrawing your
account.

We offer wide range of chip based debit cards to suit growing requirements and lifestyle
71
 Baroda Visa Electron Debit Card
Eligibility:
 All customers who are eligible to operate the account individually
Feature:
 ATM Cash withdrawal Limit : Rs.25,000/-
 Purchase limit at POS : Rs.50,000/-

Baroda Visa platinum International Debit Card:

Eligibility:
 All customers who are eligible to operate the account individually
Feature :
 ATM Cash withdrawal Limit: Rs.1,00,000/-
 Purchase limit at POS: Rs.2,00,000/-

Baroda Master Card Classic Debit Card:

Eligibility:
 All customers who are eligible to operate the account individually
Feature:
 ATM Cash withdrawal Limit : Rs.25,000/-
 Purchase limit at POS : Rs.50,000/-

Baroda Master Platinum International Debit Card:

Eligibility:
 All customers who are eligible to operate the account individually
Feature:
 ATM Cash withdrawal Limit: Rs.50,000/-
 Purchase limit at POS: Rs.1,00,000/-

Baroda Rupay classic Debit Card:

Eligibility:
 All customers who are eligible to operate the account individually
Feature:
 ATM Cash withdrawal Limit : Rs.25,000/-
 Purchase limit at POS : Rs.50,000/-

Baroda Rupay Platinum International Debit card

Eligibility:
 All customers who are eligible to operate the account individually
Feature:
 ATM Cash withdrawal Limit: Rs.50,000/-
 Purchase limit at POS: Rs.1,00,000/-

Key Benefits and Features of Debit Card:

72
  Merchant shops, it can also serve as your electronic purse, and money gets debited
instantly from your account, as you pay.
 The Card allows you to get mini-statements from Bank of Baroda ATMs, or to check the
balance in your account, avoiding visits to even our nearest branches.
 The Card is accepted at over 3,50,000 Point-of-Sales (POS) in India and around 29
million globally, which display the VISA/ Master / Rupay sign Depending upon card
variant.
 In the event of loss or theft of your Bank of Baroda International Debit Card or for any
kind of assistance, please take advantage of our 24-hour help line by calling us at Toll
Free No. 1800-220-400,1800-102-44-55, 1800 22 33 44.
 For more information visit http://www.bankofbaroda.com/pfs/atm_debitcards.asp

Launch of MasterCard Platinum Chip Debit Card:

1. Higher limits of Cash Withdrawal up to Rs 50,000/- per day from ATM and Purchases up
to Rs 1,00,000/- per day at POS/e-commerce merchants wherever Master Cards are
accepted in India and Abroad.
2. Validity of card is Five years from the month of issuance.
3. Maximum number of ATM cash withdrawals allowed per day is 10.
4. Secured with PIN and CVV2 for online transactions.
5. Ready for international usage on millions of MasterCard ATMs/Terminals.
6. Targeted for HNI, overseas travelers and privileged customers.

Launch of Baroda Flash N Move+ Contactless Debit Card:

Bank has launched Baroda Flash n Move+ Contactless Debit Card in co-ordination with
VISA. The card is based on Near Field Communication (NFC) technology where in the
debit card need not to be dipped or swiped at the POS. Instead, the cardholder simply taps
the card over special POS terminals (enabled for accepting contactless cards) for making
purchases at POS.

Key features of the card are as follows:

 It is a Platinum variant of Visa debit card with higher limits of ATM Cash Withdrawal
and POS/e-commerce transactions.
 Can be used for domestic as well as international transactions
 Same Card can be used for making payment through both Contactless modes (by
tapping/bringing the card near to POS terminal within a radius up to 4 cms) or
Contact based mode (either by swiping the card through Magnetic Stripe or dipping
the Card through Chip).
 Can be used at ATMs to withdraw Cash or avail any other value added service.
 Make online purchases through Internet.
 For convenient shopping, travelling, dining out at many locations wherever
contactless debit cards are accepted
 As per RBI guidelines, Contactless transaction up to a maximum of Rs 2000/- can be
done without PIN at POS. If amount is more than Rs 2000/-, Customer has to

73
 mandatorily enter the PIN. However, Customer also has choice of using PIN on
purchase at POS for an amount less than Rs 2000/- by opting for Contact based mode.

Card limits:

A. ATM:
 Maximum per day limit Rs 1,00,000
 Maximum per transaction limit on our ATM Rs 25,000 (Except Mudra Card)
 Maximum per transaction limit on other Bank’s ATM Rs 10,000
 Maximum no of cash withdrawals allowed per day 10

B. POS:
 Maximum per day limits at POS (Inclusive of NFC & e-commerce transactions): Rs
2,00,000
 Maximum per transaction limit using Contactless mode: Rs 2,000
 Total Count of purchases at POS in a day using: Contactless mode (NFC i.e. Near Field
 Communication): 5
 Due to limited availability of contactless enabled POS terminals in India, presently Flash
N Move+ is being launched in 3 Regions of Greater Mumbai Zone viz MMSR,MMCR and
MMNR

Discontinuation of magnetic stripe only debit cards

 RBI has advised to discontinue the issuance of magnetic stripe only debit cards, from 1st
February 2016, except debit cards issued under government schemes.
 In view of compliance, branches are to discontinue the issuance of Non Personalized Debit
Card lying unused in the branches.
 Further, bank is in the process of introducing Chip Based Non Personalized Debit Card as
replacement of Magnetic Stripe Non Personalized Debit Card.

Summary of Debit Card variants effective from 01/02/2016:

Name Acceptance Per day limit at Per day limit at
ATM POS
Visa Electron Domestic only Rs 25,000/ Rs 50,000/
MasterCard Classic Domestic only Rs 25,000/ Rs 50,000/
RuPay Classic Domestic only Rs 25,000/ Rs 50,000/
Visa Platinum Domestic International Rs 1,00,000/- Rs 2,00,000/-
MasterCard Platinum Domestic & International Rs 50,000/- Rs 1,00,000/-
RuPay Platinum Domestic & International Rs 50,000/- Rs 1,00,000/-
RuPay PMJDY Domestic only Rs 25,000/- Rs 50,000/-
RuPay BKCC Domestic only Rs 25,000/- Rs 50,000/-
RuPay MUDRA Domestic only Rs 5,000/- Rs 5,000/-

 Baroda Deposit Card: Our Bank has introduced Baroda Deposit Card for our corporate
customers maintaining Current account, Cash Credit , Overdraft accounts to deposit cash

74
 through Cash Recyclers . The corporate customer can utilize the cash deposit facility using
Cash recycler’s machines with this card.

Eligibility: Only CA, CC and OD accounts (other than individual and sole proprietorship
accounts are eligible.

Limits:
1- Withdrawal: Card will be having Zero Cash withdrawal/purchase limit through POS & E
commerce.
2- Cash Deposit: Maximum Cash that can be deposited in a day is Rs 500000 per account
which can be enhanced as per Business Requirement.
3- No of Add on Cards: Maximum 10 Baroda Deposit Card can be issued for an account .

Usage: Card can be used only at Bank of Baroda Cash recyclers for Pin change & Cash deposit
facility .
Charges: Annual Charges (Rs. 150 +18% GST)per card shall be recovered from card holder in
line with other existing debit card variants.

 Baroda Reloadable Card: Our Bank has issued Baroda Reloadable Card which is available in
INR currency and can be reloaded multiple number of times. Salient features of this card are
as follows :

 This EMV chip card variant is issued in Indian Rupees with minimum amount of Rs.
100and maximum amount of Rs. 50000 in multiple of Rs. 1.
 Activation within 24 hours of purchase
 Card are valid for maximum period of 36 months from the date of issuance or date of
expiry mentioned on card whichever is earlier.
 The card can be reloaded multiple number of times (within the maximum limit )
 Fully compliant with LKYC, AML/CFT requirements as per RBI guidelines.
 Cash withdrawal at ATM is allowed.
 Usable at Visa card accepting merchant outlets/websites across the country.
 No balance transfer from one card to another is permissible.
 SMS alert facility will be made available to notify activation & expiry etc
 Card holder will have access to 24X7 customer care team as well as secured online portal
for viewing their card balance and transaction details .
 Transaction alerts will be sent for all transactions.
 Accounting reconciliation and customer support shall be provided by the operations
team at Digital Banking Department BCC in collaboration with service provider

a) launching of Baroda MUDRA Card:

Bank has launched Baroda Mudra Card on 02.01.2016 in pursuit to offer better banking
facilities to borrowers who avail Working Capital facilities under Pradhan Mantri MUDRA
Yojana (PMMY). The card is envisaged to meet the requirements of MUDRA customers to
75
 use alternate delivery channels like ATMs for cash withdrawal and also POS usage.
At present the Card can be used at ATM and POS only with a provision for allowing Online
purchases to be considered at a later date. This will ensure availability of funds 24x7 to
borrowers any time as per their needs, without visiting the branches.

Profile of Baroda MUDRA Card:

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

NEFT Funds Transfer through ATM

 This facility will be available on Bank of Baroda ATM‘s.

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

b) Usage of ATMs - Rationalization of number of free transactions on other Bank’s ATMS.

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

c) Issuance of RuPay PMJDY Debit Card to Minors

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

d) Debit card Hot listing/Blocking

The different options for hot listing of debit cards are

 Cardholder calls at Bank’s Contact Centre at 1800 22 33 44/ 1800 102 44 55 and gets the
card blocked. This facility is available round the clock.
 Cardholder calls at BOBCARDS Toll Free No. 1800 220 400 for card blocking. This facility
is available 24 x 7.
 Through Branch by using menu “DCARDBLK” has been provided in CBS/Finacle to block
the debit card
 by the cardholder himself by sending an SMS in a certain prescribed format from
registered mobile to < 8422009988 >
 An SMS alert will be sent as a token of confirmation to the Debit card holder on their
registered mobile number, whenever a debit card is hot listed/blocked.

e) Debit Card Dispute Management System:

BOBCARDS has introduced new portal for branches and contact centers. New portal shall be
used for following activities:
 Lodging the debit card related complaints for the failed/fraud transactions.
 Viewing the status of card/ PIN processed and dispatch.

f) Baroda Rewardz - Bank’s Loyalty Program (Now available in App):

In order to increase the usage of our various ADC products, bank has embarked upon
implementing a comprehensive loyalty program - Baroda Rewardz. This loyalty
program will cover Debit Cards, Mobile Banking, Internet banking, Mobile wallet and
other digital products launched from time to time.

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 As a first program under Baroda Rewardz, bank has launched the loyalty program for our
debit card customer’s wef 03rd December 2015. This program is aimed at encouraging our
customers for usage of debit card on POS and e-commerce transactions for all debit card
variants. The program detail is as follows:

g) Card to Card Fund Transfer:

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

9. Credit Cards:
Some of the type of credit cards being offered by our Subsidiary BOBCARDS Ltd :
 BOBCARD Signature (Visa)
 BOBCARD Platinum (Visa, Master & Assure)
 BOBCARD Titanium (Master)
 BOBCARD Bombay Bullion (Visa)
 BOBCARD Assure (VISA ) (Against FDR; Credit limit = 80% of FD amount ; Cash
withdrawal Limit:100% of Credit Limit)
 BOBCARD Corporate Premium (Visa)

10. Baroda Gift Card:

Baroda Gift Card is ideal gifting solution for marriage, engagement, birthday, Diwali, Holi,
Raksha Bandhan, Christmas, EID and can be used for corporate incentivization etc.
 It facilitates the recipient to buy items as per their requirement from their preferred
outlet. Baroda Gift card is issued in association with VISA International and the card will
be usable at all VISA identified merchants establishments within India.
 Baroda Gift Card is a prepaid “VERIFIED BY VISA” enabled prefunded card that opens a
distinct proposition to individuals and corporate with its instant availability, ease of
handling, longer shelf life and extended shopping options for the beneficiary.

Features of Gift Card:

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  Card can be loaded with any amount between Rs 500/- to Rs 50,000/- in multiple of Rs
1/-
 Attractively packaged/ready to gift
 Card is valid for a period of one year from the date of purchase
 Easy and convenient to use at shops and malls
 Hot listing can be done by anybody but re-issue at the request of purchaser only
 24 hour toll free number available-1800 102 5627
 No ATM usage permitted
 Can be used only in India
 Can be purchased online by Retail Users having transaction rights.

Baroda Gift Card – In Brief:

 Prepaid card require funds to be loaded before making purchases.
 Card can be used till available balance.
 These cards can be used to make purchases at merchant outlets and online stores, which
accept Visa cards.
 The card looks just like any normal credit or debit card, with card number, signature strip
and CVV2.
 However, it is not a ATM, debit or credit card. It can only be used till amount is available
on the card. For cashless purchase within India.

Prepaid card can be issued to anybody with a

 Valid Bank of Baroda account
 Non customer – For purchase of card up to Rs.5, 000/- having a valid Government issued
photo ID
 Non customer – For amount higher than Rs.5, 000/- and regular KYC

Baroda Gift Card –Important Information:

 Activation For convenience the card will be activated within 24 hours from the time of
purchase and will be ready for use at merchant outlets.
 Pin Mailer personal Identification Number is given in sealed mailer.
 Available at 600+ identified branches. For details, please visit our website
http://www.bankofbaroda.com prepaid section.
 For Corporate/bulk requirement, you may call BCC office on 022 6698 1567/1590/3261
 e-mail at cards.digital@bankofbaroda.com

11. Baroda Travel Easy Card (Foreign Currency Card):

Features -
 Issued in foreign currencies USD EURO, GBP ,SGD and AUD
 Card available at 150+ authorized foreign exchange branches in India
 Card valid for a period of Three years from the date of issue or date printed on the card
whichever is earlier. Card is reloadable

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  Cardholder can check available balance and/or transaction details online or by calling
customer care number
 ATM withdrawal is permitted abroad
 Easy to carry and safer than cash
 No worry of exchange rates fluctuations, as card is issued in foreign currency
 Worldwide accepted at Visa network
 Competitively priced (almost best in the business)
 Global Customer Assistance Service (GCAS) of VISA available to all cardholders
 Card not valid for use in India, Nepal and Bhutan.
 Minimum load value – USD $200/EURO € 150/ GBP £150/ AUD 150/ SGD 150
 Maximum load value - As per FEMA guidelines based on the purpose of visit

12. Baroda Connect:

a. Services offered to Retail Customers
 Balance enquiry in Operative account, Deposit accounts and Loan accounts.
 Stop payments of cheques
 Tax Deduction Enquiry
 Account summary – summary of all operative, deposit and loan accounts
 Fund transfer to Self / linked account and Third party fund transfer.
 Fund transfer and NEFT can be scheduled for a future date.
 Request for cheque book, fixed deposit renewal, Switch Mailing address, account
opening for CBS and e-banking.
 Profile – customer can change his profile and change his password.
 Activity history – Customer can get details of all the activities carried out by bank.
 Modeling – Customer can model deposit / loan schemes of the bank and know about
likely maturity value, if he invests or likely EMI if he takes loan, etc.
 Application Supported by Blocked Amount (ASBA) facility
 School Fee options
 Bill payment option
 Facility of IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect
 (This facility is available only to mobile banking customers) .
 Online Fixed Deposit opening facility
 Online RD account opening facility (Standing Instruction is MANDATORY and is
automatically noted)
 Online Gift card request facility
 Aadhar number linking with operative accounts
 Our customers can link their PPF account (Maintained in our Bank) with their existing
Bank account through Baroda connect facility. Once linked, they can also credit fund in
the PPF Account through Baroda connect.
 Online payment of India First Life Insurance Policy premium payment
 Transfer in Sukanya Samriddhi Account

b. Special Services offered to Corporate Customers

 Approvals – For corporate customers, there can be involvement of multiple users for
transfer of funds / payment of bills, etc and Baroda connect allows multiple users to log
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 in and initiate / approve the transactions, as per powers delegated by the corporate to
their users.
 Trade Finance queries relating to– Import/Export, Inland Trade, B.G., Forward Contract.
 Direct Salary uploads facility.

c. Limit for transactions:

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

(Amount in Rupees)
Financial Transaction Limit for Financial Transaction Limit for
Retail Customers Corporate Customers
Third Party /
Self linked Third Party / shopping Self linked fund Online
Online NEFT/RTGS shopping Mall/Bill
accounts Mall/Bill payment transfer NEFT/RTGS
payment

Per Unlimited 2,00,000 5,00,000 Unlimited 5,00,000 10,00,000

transaction
Daily limit Unlimited 4,00,000 10,00,000 Unlimited 15,00,000 50,00,000
Weekly limit Unlimited 12,00,000 30,00,000 Unlimited 45,00,000 2,00,00,000
Monthly limit Unlimited 30,00,000 50,00,000 Unlimited 1,00,00,000 5,00,00,000
Yearly limit Unlimited 1,50,00,000 4,00,00,000 Unlimited 6,00,00,000 30,00,00,00
d. IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect:

 IMPS (Immediate Payment Service) to facilitate instant Inter/ Intra Bank fund transfer for
our Baroda m- Connect users on 24 x 7 basis. This facility will be available only to Retail
users, having mobile banking facility. Funds can be transferred within India by debit to
any available operative account in the net banking account
 This facility can be availed by users having Transaction right and who have
registered themselves for our Mobile Banking Services (M-Connect) giving mobile
Number registered with Baroda Connect facility.
 IMPS fund transfer through MMID: Both remitter and beneficiary are required to be
mobile banking registered customers of their respective banks and need to have MMID
(Mobile Money Identifier) mapped to mobile number. MMID is a unique -7- digits number
which is provided to the customers as part of mobile banking service Under this option,
user can transfer funds to the beneficiary account by keying in Mobile No. and MMID
(Mobile Money Identifier) of the beneficiary. User can select the desired account number
to be debited from the drop down. This facility can be availed for transfer of funds to Bank
of Baroda account holders also.
 IMPS fund transfer through IFSC: In this mode of funds transfer, the remitter is required
to be mobile banking customer. However, the beneficiary need not be mobile banking
customer and can specify only the IFS code and Account no. User can transfer funds by
giving IFS code and account number of the beneficiary. User can select the desired account
number to be debited from the drop down. This facility can be availed for transfer of funds
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 to Bank of Baroda account holders also.
 One time beneficiary registration with beneficiary MMID / Beneficiary IFSC is required.
 Only -2- beneficiaries can be registered in a day and fund can be remitted after 24 hours
of registration. Limit Per transaction and Limit Per Day both are Rs .200000/-
 Details of the IMPS transactions and its‘status for any date can be viewed through Status
Inquiry.

e. Digital signature based Authentication facility in Baroda connect for corporate users:
In order to provide personalized security feature for our Baroda connect corporate users
and also as mandate by RBI, our IT team has built infrastructure for extending the option
of ―Digital signature certificate (DSC) based authentication‖ facility to our corporate
users.

f. Mobile OTP Application (M-OTP)

 In compliance with regulatory guidelines, as also to enhance security features of Baroda
Connect, two factor authentications were implemented in our Net Banking Portal since
June, 2012. Authentication by way of OTP through SMS is one part of security process,
which is triggered by the system to validate the user/other credentials, if the system
suspects unusual activity/ behavior or non-registered PC.
 To obviate the issue of delivery of SMS, our IT team has enabled OTP application on
mobile handset supporting Apple, Android, Windows and blackberry.
 Activation of this application will involve two steps as under:
 Downloading of Mobile OTP application “ARCOT OTP” on handsets
 Users are required to download the application from respective app stores. However
this requires subsequent activation through their Net banking portals.

 Activation of Mobile OTP

 Users can themselves activate M-OTP facility through Baroda Connect. After logging-
in, users are required to click “Mobile OTP Application” link under “Services” tab at
home page.
 Key features of this new functionality are as follows:
1. This will help the users to manually generate the OTP on their mobile handset
without using GPRS/internet service.
2. Generation of manual OTP will be protected by PIN set by the user.
3. If User wishes to deactivate this facility, then the same can be done by clicking on
the 'Mobile OTP deactivation' link in the “services” Tab of Baroda Connect and
will start receiving the OTP by SMS on registered mobile number.
4. It will enable all the users to get the OTP generated within the time frame, without
any delay.
5. This functionality will be specifically beneficial to NRIs/ Customers frequently
visiting overseas, facing issue of OTP over SMS.

g. Self Registration Process for ‘Baroda Connect’ - Retail Users:

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

Pre-requisites for using this facility are:

 User should be customer of any domestic Branch with valid BANK OF BARODA debit card
and PIN.
 User should have mode of operation as – SELF, EITHER OR SURVIVOR, ANY ONE OR
SURVIVORS OR SURVIVOR, and MINOR NATURAL GUARDIAN OPERATION BY
GUARDIAN.
 User should have valid mobile number registered with bank.
 Should have high speed internet connection.
 Debit Card should have been activated at ATM (for first time).

h. Online resetting of Transaction Password By retail users:

 The customer can reset his password anytime if he has a valid Debit card in Active Mode.
 The link isprovided on retail user home page
 On entering valid details an OTO will be sent on customers Registered Mobile Number

13. Mobile Banking:

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

a. Baroda M-Connect+ –New Application

This new application has following major advantages:

 Modern look of the application is appealing and thus, would encourage the users to
regularly use the system.
 Customer is not required to pay SMS charges on every login. In Android / iOS / Windows
phones, new app works on GPRS mode. It is mandatory to activate Mobile internet (GPRS)
while using M Connect+.
 Icon based menu would make the application language agnostic.
 For mobile recharge, the improved search string option, provided to locate mobile
operator, reduces the current hassle of multiple entry by the customer.

b.SERVICES AVAILABLE:

 FINANCIAL SERVICES
o Fund transfer within bank > self linked accounts
o Fund transfer within bank > Third party accounts
o IMPS
o NEFT
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 o Mobile recharge
o DTH recharge
o Utility Bill payment
o Cash on Mobile (card less cash withdrawal through BOB ATM)
 Generate OTP through your M-Connect plus application
 Amount must be in multiples of 100; (min. Rs.100 and max. Rs.5,000)
 Visit any Bank of Baroda ATM and press the key dedicated for cash on
mobile facility
 enter the OTP generated and the amount and collect the cash and receipt
o BOB card payment

 NON-FINANCIAL SERVICES
o Balance Enquiry
o Mini statement: Statement of last 10 transactions
o View account details
o Cheque book request
o Stop Cheque
o Cheque status enquiry
o Aadhar seeding
o Transaction history
o Reset application Password
o Change mPIN
o Complaints & Feedback
o Branch / ATM Locator

 TRANSACTION LIMITS:

Transaction Per txn Per day Per week Per month Min. per No. of txns
txn per day

Fund transfer 25,000 50,000 2,00,000 5,00,000 5 100

BOB card 25,000 50,000 2,00,000 5,00,000 5 5

payment

Recharge, Bill 25,000 50,000 50,000 2,50,000 5 5

payment

Cash on mobile 2,000 2,000 100

b. Direct Access Code in USSD Mobile Banking:

 USSD stands for Unstructured Supplementary Service Data
 To increase the convenience of the users, a new update has been brought in USSD Mobile
Banking, wherein customers can dial multi mode codes (direct access codes) to access
different menus.
 Login- Main menu of Bank of Baroda Mobile Banking- *99*48# (‘48’ is short code for Bank
of Baroda)
 Direct action Menu options are as under:
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  Salient features are, no need to internet/ GPRS connections to access Mobile Banking
through USSD and no need of Smart phones, works even on low end handsets.
c. Transaction limit –
 The daily upper ceiling per customer shall be Rs.50,000 for fund transfer, bill payment
and merchant payment within an overall calendar month limit of Rs.2,50,000 when the
service is used over the application/ WAP.
 Through National Unified USSD Platform (NUUP)
IMPS
Transfers
Per Transaction Rs.5,000/-
Per Day Rs.5,000/-
Per Week Rs.20,000/-
Per Month Rs.50,000/-
No. of txn per day 5 (Five)

d. Launching of “Chillr Mobile App”:

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

 Main Features of the product are as under:

 Customers can send money through Chillr mobile app to both partner and non-partner
bank customers. Currently our Bank and HDFC bank are partner banks. Non-partner
Bank customers can only receive funds.
 Only the mobile number of the beneficiary in the remitter's phonebook is needed.
 Application enables customers to send money to any registered Chillr user on phone
contact list.
 Scenarios where the application can be used:
 Person to person (P2P) money transfer
 Split bills amongst friends
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  Check account balance
 View transaction history
 Request money from friend
 Pay at stores & to online merchants through Near Me.
 Mobile recharge and bill payment
 At one time, only one instance of the Chillr Application related to a particular mobile no.
and device no. can be used. The IMEI device no. will be stored by Chillr. No passwords
are stored on the phone locally.
 Transactions cannot be made without mPIN which is assigned through Bank.
 The minimum amount that can transferred is Rs. 10. The maximum amount that can be
transferred is Rs. 1000 per transaction to other Bank customers.
 The daily limit is set at Rs. 5000
 The app is now available on iOS, Windows and Android mobile platform.
 Utilities bill payment in all three platform is available

e. Baroda M-passbook:
 App is available in both Hindi and English Languages
 Transaction and account details stored on the mobile arranged in the chronological
order for all the accounts linked to the registered mobile number with the Bank.
 Customer can set his MPIN after OTP verification
 Customer can select the period of months for which the data can be stored in the app.
 Search transaction history by transaction date, transaction amount
 Personalise / add remarks of choice to the transactions, which can be used to track the
transactions on later date.
 Now this facility is enabled for all types of accounts and the App is made available in
Android platform.
 To avail this service, customer is required to download the app from the Google play
store and install the same.

14. M-Clip:
Features

 Person to Person (P2P) fund transfer through mobile number and email.
 Prepaid and Postpaid mobile recharge. Data card & DTH recharge facility. Buying
Grocery through Wallet for selected area based on their PIN code.
 M-VISA facility (Over 50000 Merchant Stores) which enables users to pay at merchant
sites by scanning QR code displayed at merchant’s side.
 Users can link their VISA and MasterCard debit/credit card to wallet and can use them
directly for payments.
 A virtual card gets created in wallet when user funds the wallet. This virtual card has all
the credentials of a prepaid card and these credentials can be used at any e-commerce
site for transaction. VBV or MasterCard secure will be entered separately by user. Thus
essential security is ensured.
 User can load money in the wallet through debit, credit and prepaid card of any bank.
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  Bus booking facility is available.
 Gift card of various brands can be purchased and gifted to others. Discount vouchers
and Restaurant Coupons are also available .
 User can shop at various identified merchants through wallet. Users can do single click
payment. No customer account is linked to the wallet.

15. Account Opening Kiosk & Debit Card Dispensing Kiosk:

 Account opening kiosk enables digitisation of account opening process in bank’s
application standard format. Saving account can be opened by providing AADHAR and
biometric.
 The account is opened instantly (Scheme code SB124- without Pan and With Pan
Scheme Code SB 101) and customer is provided account number and customer is issued
a Non Personalised debit card with Green PIN. SB 112 scheme code account can also be
opened but EC number is mandatory.
 Balance enquiry and mini statement can be done.
 Bill payment facility is available and BRANCH/ATM Locator is also available .

16. Baroda E-Payment Gateway:

Product profile:
Our bank has obtained state of the art technology to maintain an efficient Payment Gateway
infrastructure viz. “Baroda e Gateway”. Customized software will be installed at the merchant’s
site which will enable the merchant to track all e-commerce transactions made through their
website. The settlement of funds will happen on daily basis and merchant can generate various
transaction/MIS reports at their end.

Internet Payment Gateway (IPG) is a payment and settlement infrastructure which a merchant
uses to collect payment from their customer for online sale of products or services. IPG shields
the business unit from complex technical infrastructure required for e-commerce business. It
provides necessary access to payment system including Interchange agencies like Master/Visa,
card issuing bank, settlement bank etc.

Internet Payment Gateway is essential for retailers, who have an online presence and are
interested in selling their products over Internet. IPG is safe & ensures encryption of sensitive
card information during secured transmission between customer, merchant and payment
processors.
Security Features:
 Utilizes strong industry standard 128 bit SSL encryption
 3-D Secure: Additional password compliant with Visa and MasterCard protocol
specifications and Reserve Bank of India guidelines (reduces chances of fraud to almost
negligible)
 McAfee Secure: To prevent from Internet worms and credit card thefts, we are using
McAfee Secure certified system. It continuously scan messages coming to the server and
send alerts to administrator.
 The data transmission is encrypted and storage is under strict data centre environment.
 Benefits of Internet Payment Gateway (Baroda E-Gateway)
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  Owned infrastructure of hardware, software and dedicated support system for Baroda
e-Gateway. Hosted from Bank’s tier-3 data centre providing 24x7x365 Global support.
 Best available technology and time bound support in integration and operations at
competitive rates.
 Dedicated operations team to provide assistance in configuration, day-to-day
processing, settlement and associated reconciliation.
 Merchants get credit as early as next working day for INR, though Bank receives
settlement subsequently after 1-2 days.
 Merchant is shielded from installing and maintaining complex technology and
interacting with various agencies.
 Payment is received in stipulated timeframe even though Bank receives the amount
subsequently.
 Merchant can themselves view/print transactions carried out from their website.
 Simple interface with Bank’s system. Dedicated support is provided to configure and
test the setup.
 Cardholder is assured of the safety of their card details/usage. In addition, they get
convenience of purchasing goods/services from the comfort of their home/office.
 Round the clock hassle free service.

Target Customers:
 Merchants who have their website and are in the business of selling products/services
through Internet.
 Customers who are interested in expanding their existing business using Internet
technology.
 Educational institution – for collection of tuition fees, Online collection of forms fees etc.
 Government Departments like state electricity board, Telecom departments, RTO
Department and other utility payments can also be done online.
 Insurance Sector Could also be targeted as a prospected customer.

Benefits of Baroda e-Gateway for customers:

 Merchant is shielded from installing and maintaining complex payment gateway
technology and interacting with payment systems.
 Payment is received on the next working day in merchant designated account.
 Merchant can view/print their transactions.
 Simple interface with bank‘s system. If needed, support would be provided to configure
the access.
 Consumer is assured of safety of their card details/usage. In addition, they get
convenience of purchasing goods/services from the comfort of their home/office.
 Round the clock, hassle free service. Create a tech savvy image for merchant.
Opportunities:
 Fast and emerging market in India, so branches should generate max. leads.
 Few numbers of entrants in the payment gateway sector.
 Flexible price structure that can be improved on the basis of transaction volume and
business association.
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  Ability to move into new market segments that offer better profits.

17. Baroda Demat Services:

Presently, there are only two depositories functioning in India and they are:-
1. National Securities Depository Limited (NSDL)
2. Central Depository Services (India) Limited (CDSL).
Financial Institutions, banks, custodians and stockbrokers complying with the requirements
prescribed by Securities & Exchange Board of India (SEBI) can be registered as a Depository
Participant (DP).
For trading in the equity market in India we need to have a demat account.

Benefits which encourage us to have a demat account:

 We can buy and sell shares and stock of any company listed on the stock exchange of
India i.e. NSE and BSE
 Make on line investment in mutual fund.
 Apply in IPO
 Trade in Futures and Options
 No threat of loss of shares due to faulty/bogus/forged delivery.
 Dividend and issuance of bonus shares are directly credited into linked accounts and
demat accounts respectively.
 No share transfer fees or stamp duty.
 Application can be made vide facility of ASBA (Application Supported by Blocked
Amount) wherein amount does not get debited into the account and is remitted only
when shares are allotted.
A DP ("Depository Participant") is an agent of the Depository (NSDL or CDSL) who is authorized
to offer depository services to investors. Thus to open a Demat account of an investor, a bank or
its branch has to get registered as a DP of a depository i.e. NSDL or CDSL or both. Bank of Baroda
is a DP of both the depository i.e. CDSL and NSDL.
An individual is eligible to have only one Basic Services Demat Account (BSDA)
Individuals shall be eligible to opt for BSDA subject to the following conditions –
 All individuals who have or propose to have only one demat account where they are the
sole or first holder.
 Individuals having any other demat account/s where they are not the first holder shall
be eligible for BSDA in respect of the single demat account where they are sole or first
holder
 The individual shall have only one BSDA in his/her name across all depositories.
 Value of securities held in the demat account shall not exceed Rupees Two Lakhs at any
point of time.
18. Baroda eTrade (OLT):
 Our bank has launched ―Baroda e-trade an on-line trading facility in July 2012 in
association with BOBCAPS Ltd. our subsidiary. OLT is the state-of-the-art on-line
securities trading platform for the Bank‘s customers. The on-line trading platform
 Baroda e-trade‘ is powered by a robust trading engine coupled with a comprehensive
suite of products and services. Since it comes with an in-built configuration with
proactive approach towards customer service, we aim to provide a constantly delightful
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 trading experience to our customers through this product.
 Any customer or non-customer, who wants to avail of OLT would be required to
have/open the following 3 accounts.
 Bank account, i.e., Savings Bank/Current Account with any of the branches of the Bank,
 Demat account with any of the Depository designated branches of the Bank, and
 Trading Account with BOBCAPS LTD.

Salient Features:
 Seamless (3-in-1) trading experience (Savings bank/current, Demat and online trading
accounts) Savings bank/current and Demat accounts with Bank of Baroda and trading
(OLT/Broking) account with BOBCAPS ltd.
 Account opening form for trading account, to be submitted to Demat designated
branches for onward submission to BOBCAPS LTD.
 Instant fund/share transfer facility through lien marking.
 Multiple market watch facility with streaming quotes( Live markets rates)
 Customization of screen to show critical market information such as market depth, Most
active scripts, Top Gainers/Losers.
 Works with low internet bandwidth. Customers could review their margin status,
Holding report, order and trade Book on a real time basis.
 Single window order entry with instant order confirmation. 128-bit encryption security
certified by entrust SSL.
 Telephonic assistance through centralized Helpdesk Telephone No.022-6133 9800/
61389300 (9am to 5pm).

Baroda e-trade – Upgraded new Online Trading Platform:

BOBCAPS has come out with a new online trading platform (upgraded Baroda e-trade
portal) with much convenient user interface. This will help our bank in marketing this
product, which in turn will give us CASA float and fee income. This product will give long
term benefit as well as customer acquisition/retention.
The mobile application (Mobile App) Barodaetrade can be downloaded from the Google
play store for android mobile phones and the same can also be accessed using the chrome
browser on android and apple mobile phones.
There are NIL stamp charges for opening the demat account while Rs 500/- is the franking
charges for e-trade account.

19. Baroda Cash Management System (BCMS):

“Baroda Cash Management Services” (BCMS) specially designed to facilitate Corporate
customer to manage their funds in the most efficient manner. In today’s increasingly
complex business arena, effective Funds Flow Management is vital. All other things being
equal, how well an organization manages its collections, payments and liquidity has a
direct bearing on its profitability.
Effective Management of funds would mean optimizing a company’s collection and
payment methods so as to maximize cash flow efficiency. Cash Management has become
the prime focus area of companies, who demand swifter methods of transfer of funds.
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 Baroda Cash Management Services consist of three functional modules:
1. Collections
2. Payment Services
3. Liquidity Management

1) Collection Module: The Collection Module handles all inflow of funds in customer’s accounts,
which can be by way of:
 Cash Deposit
 Proceeds of local cheques
 Proceeds of outstation Cheques
 Collection of Direct Debit Instruction (DDI)

Benefit to the Corporate:

The Corporate will be provided on a daily basis the following MIS output files by the Bank:
 Debit transactions successfully executed for the day.
 Debit transactions failed for the day along with the facility to view the credits to its
account through the internet.
 The Bank shall ensure that the said MIS are received by the Corporate on a daily
basis/transaction cycle date.
 Credit in Corporate a/c on T+0 basis, whereas credit is effected on 3rd day in case of
ECS or paper based instruments.
2) Payment Module: This module handles the outflow of funds. It supports multiple channels,
such as, electronic mode or paper based instruments like personalized cheques, demand drafts,
dividend and interest warrants. There is an Access through Internet is provided to the customer
which enables the customer to process payments from their end.

Benefit to the Corporate/Customers:

 The Corporate/Customers will be provided with MIS Report by the Bank containing
Bounced/Paid status of the transaction having UTR number(in NEFT/RTGS cases).
 Payment can be done by IFT, NEFT, RTGS in Bulk.
 The corporate can have MIS , through Front end, provided to them.
 The Corporate may also get MIS, on their registered Mail Id.

3) Liquidity Management Module:

 The key feature incorporated in Cash@Will is the Liquidity Management Module. This
module facilitates sweeping of funds from various accounts of the customers and
pooling them in a single account called ‘Concentration Account’. The funds available in
this account help the customers in online decision making.
 The Liquidity Management Module also facilitates funding of various accounts as per
the requirement of the customers out of the balance available in the Concentration
account. With this facility, customer can pre-determine the balance in various accounts
at start of day, intra day or end of day (known as target balance).
 The Liquidity Management Module facilitates both sweep-in and sweep-out from the
Concentration account. The sweep-in and sweep-out facility will enable the target

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 balance to be maintained in the contributing account.

20. National Automated Clearing House (Nach)

Features of NACH:
 NACH will allow its participating banks to design their products for their corporate
needs.
 This NACH will provide high secure standards to enable quick and reliable transactions.
 NACH has well set management system.
 Payment settlement will be done within the same day.
 Main feature of NACH is it avoids high interchange fees of credit card fees.
 NACH is mandatory and will replace any other ECS format namely Local ECS,
Regional ECS and National ECS.( ECS outward services now using NACH platform.)

The benefits of NACH are as follows:

It allows corporations and consumers to reduce or eliminate the use of paper checks to make
routine payments.
 It has best in class security features, cost efficiency & payment performance (STP)
coupled with multi-level data validation facility accessible to all participants across the
country.
 NACH would allow transctions to be cleared in real-time mode rather than batch mode.
 Reduction in registration time to just 10 days as against the current registration time of
30 days in ECS.
 This system provides a positive confirmation from customers' bank about registration
acceptance or non-acceptance, unlike ECS.
 Realization of funds from the customers’ account happens on T day which help
customers track their payments on time.

21. Recent Developments in Digital Space:

a. Social Media Policy for Employees:

 Bank has launched its presence on social media platforms viz; Facebook ,Twitter and YOU
TUBE /Whats app today. The presence on other social media platforms shall be done
subsequently.
 The presence on social media platforms also warrants Bank to put in place a
comprehensive social media strategy and policy framework to ensure consistent, reliable
content creation, data governance and regulatory compliance. The above policy shall be
applicable to employees, contractors and vendors.
 Having clear guidelines regarding use of social media would be beneficial for the Bank
and shall provide an understanding on how to use social media for achieving business
goals.

b. Bharat Bill Payment System (BBPS):

 RBI, in November 2015, granted an in-principle approval to NPCI to be the Bharat Bill
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 Payment Central Unit under BBPS
 RBI had received applications banks and non-bank entities for operating as Operating
Units BBPS is an integrated bill payment system which will offer interoperable bill
payment service to customers online as well as through a network of agents on the
ground.
 The scope of BBPS will cover repetitive payments for everyday utility services such as
electricity, water, gas, telephone and Direct-to-Home (DTH). Gradually, the scope would
be expanded to include other types of repetitive payments, like school / university fees,
municipal taxes etc.
 Its free for all Customers using BBPS through our products (ON US )Baroda Connect, M
Connect +, M Clip,Multi function kiosk , Debit or Credit Card where as Customers using
other Bank’s (OFF US ) Debit or Credit Card will be charged Rs. 5 for transaction from Rs
0 to Rs 1000, Rs. 15 for transaction above Rs. 1000 up to Rs 2000 and Rs. 25 for
transactions above Rs. 2000 .( Rs. 25 being the maximum charge )
c. Bharat QR Code :

With the initiative of Government of India , RBI and payment networks such as Visa etc a major
step has been taken towards brining the country under one umbrella i.e. Bharat QR Payment.
Bharat QR code will enable he merchants to accept digital payments without POS machines and
it will allow customers of any Bank to use their smart phone app to make payment using their
debit card account .The payment will directly be credited in merchants account once the
transaction gets completed and both will get the notification about the transaction. M connect +
has been enabled under SCAN N PAY utility to make payments through BHARAT QR code.

d. Baroda M Invest App: Baroda m-invest is an online wealth manager, delivered through a
mobile app. This product simplifies all aspects of personal investing -completely paperless KYC,
goal based investing, research based recommendation, jargon free tracking, straight through
processing of transactions. The bank has partnered with leading robo advisory firm Fin wizard
Technology Pvt. Ltd. for the roll out of product.

Our customer can now download the app and invest in the partner mutual funds of Bank of
Baroda in a completely digital way and track their money grow. Clients who had invested in
mutual funds through Bank of Baroda before the app was launched can also now register on the
app and track their investments.
e. BHIM Baroda Pay : BHIM Baroda Pay – A Unified Payments Interface (UPI) application that
lets you transfer funds from any bank account using a Virtual Payment Address (VPA). No need
to remember beneficiary details like account number, IFSC, Mobile Number, MMID etc. Send or
Collect money using a Virtual Payment Address. A Virtual Payment Address (VPA) is a unique
identifier that you set and link to your bank account. (Example: yourname@barodampay )
Once linked, just quote your VPA instead of account number and IFSC to make or receive
payments. Unified Payments Interface (UPI) is payment system by NPCI that allows transfer of
funds between accounts in convenient manner.

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Features:
One ne App for multiple bank Account
Send and receive money instantly
Safe and Secure
24*7 Availability
Instant Payment of any transaction
Secrecy of account and card details by using Virtual ID and Aadhar no
One App for all Payments
Easy access to Complaint module
Scan and Pay
Generate Static and Dynamic QR Code

f. BHIM AADHAR PAY: BHIM Aadhaar Baroda Pay is a digital payment acceptance solution from
Bank of Baroda. It is a merchant mobile application using an Android smart phone and biometric
device meant for merchants to receive digital payments from customers over the counter through
Aadhaar authentication. Customer performs transaction by providing his Aadhaar number and
biometric. The transaction will be interoperable in nature allowing any bank customer to transact
on BHIM Aadhaar Baroda Pay. The merchant funds will be credited real time to the merchant
account linked at the time of registration after successful completion of the transaction. The per
transaction limit is Rs. 2000/- BHIM Aadhaar Baroda Pay is different from BHIM (NPCI UPI’s
Product).
Requirements for the merchant to start using BHIM Aadhaar Baroda Pay

Aadhaar seeded account with Bank of Baroda.

STQC Certified Biometric Reader with Micro USB / USB C-Type connector.
Android Smartphone with Android version 4.2 or higher with internet connectivity and
OTG support for connecting biometric device.
Phone should be able to power the biometric reader.
Process Flow of BHIM Aadhaar Baroda Pay
Merchant Login

Install Aadhar Payment Application in the smart phone. The icon will appear on phone
screen after successful installation. Click on the Application Icon to launch the application.
Enter Aadhar Number of the Merchant and click on “Proceed”Application will redirect to
fingerprint capturing page. Capture Fingerprints of the Merchant for UID based
authentication.
g. DIGITAL PORTABLE BRANCH : Digital Portable Branch is a pre-fabricated branch equipped
with following self service machines to provide round the clock common retail banking services
like account opening, cash withdrawal, passbook updation, balance inquiry, fund transfer, bill
payment etc. to customers without any manual intervention
Account Opening Kiosk (AOK)
Cash Dispenser (ATM)
Self Service Passbook Printer (SSPBP)

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Benefit to customer

24X7 availability of services

Self Service - no manual intervention required
Immediate service through self service machines
h. In-Principle Approval to 11 payment Banks
In line with the Nachiket Mor Committee (2014) recommendation regarding
Differentiated Banks RBI has granted “in-principle” approval to 11 applicants to set up
payments banks
Those who have received approval include
 Ecommerce company - Pay TM
 Four Major Telecom Companies – Vodafone, Airtel, Idea and Reliance
 Two Technology companies – Tech Mahindra and Fino pyatech
 Two Financial Services Companies – NSDL and Cholamandalam
 Postal Department
 Sun Pharma

 Objective: To further financial inclusion

 Scope of activities :
 Acceptance of demand deposits restricted to a maximum balance of Rs. 100,000
per individual customer.
 Issuance of ATM/debit cards.
 Payments and remittance services through various channels.
 BC of another bank, subject to the Reserve Bank guidelines on BCs.
 Distribution of non-risk sharing simple financial products like mutual fund units
and insurance products, etc.
 Restrictions:
 Payments banks, however, cannot issue credit cards.
 The payments bank cannot undertake lending activities.
 They will be required to invest minimum 75 per cent of its "demand deposit balances"
in Statutory Liquidity Ratio(SLR)
 They will have to hold a maximum 25 per cent in Current A/c / Term Deposit A/c with
other scheduled commercial banks for operational purposes and liquidity
management.

i. eBiz – India’s G2B Portal:

 Our bank is one of the accredited bank and branches are suthorised to accept challans
pertaining to eBiz portal
 eBiz is one of the integrated services projects under the National E-Governance Plan
(NEGP) of the Government of India and is being implemented by Infosys
 The focus of eBiz is to improve the business environment in the country by enabling
fast and efficient access to Government-to-Business (G2B) services through an online
portal. This will help in reducing unnecessary delays in various regulatory processes
required to start and run businesses.

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j. Digital India:
 Promotion of e-Governance through a centralised initiative to ensure citizen centric
service orientation, interoperability of various e-Governance applications and
optimal utilisation of ICT infrastructure/ resources, while adopting a decentralised
implementation model with respect to various ministries / departments of the
government

k. UPI: Unified Payment Interface:

The Unified Payment Interface is allows payments to be initiated by the payer, or by the
payee. In the basic payee initiated flow, the payment request is routed by the initiating
application through NPCI switch to the payer for approval. However in certain instances,
where it is possible to connect with the payer immediately, it is preferred that the payee
sends a payment request to the payer, who can then initiate the payment with his
credentials.
This leads to a significantly smoother payment experience. Some examples of these
include in-app payment- where the merchant app, may send the request to the PSP app
on the same device, instead of a collect request via the PSP network. Another example
may be proximity payments, where the payer and payee are using different devices, but
are close enough for the information to be transmitted locally.
Example: DTH Payment from Home
a. Sunil subscribes to DTH in his house and wants to make a payment for on demand
subscription.
b. Sunil selects the channel and clicks “Buy Now”.
c. DTH shows the details along with a QR Code for UPI payment.
d. Sunil opens his UPI application on his mobile and scans the QR code on the TV
screen.
e. UPI application takes him straight to pay screen with all values pre-populated from
the QR code which contained the standard UPI link.
f. He verifies the info on screen and click pay to complete the payment.
g. He gets a confirmation on his mobile and the TV channel is automatically turned for
him to view.

Bank has initiated implementation of different solutions to provide new products to the
Customers and digitizing the core operating processes:-

 Supply chain finance solution to provide integrated commercial and financial solutions
to the supply and distribution channels of corporates.
 Loan Management System to streamline loan origination and tracking process. The
solution will enable end to end processing of loan proposals using image based workfow
and Business Process Management (BPM) to digitize the processes and improve TAT.
 Fraud Risk Management System (FRMS) solution which will provide enterprise wide
fraud detection and prevention covering the risks associated with indicative list of
channels and applications under online and/ or offline mode.

96
 Early Warning Signals System (EWS) solution which would receive data from Bank’s
internal systems viz. core banking system, risk rating system as well as external sources
like internet, social Media, Information from credit bureaus, rating agencies and other
external sources to provide early warning signals for monitoring of credit and taking
timey remedial actions.
 Bank is also creating analytics center of excellence to reap benefits of analytics
capabilities across various line of businesses such as marketing, planning, retail business,
risk, fraud, security and compliance.
 Bank has embarked upon the journey of cloud adoption. In this direction Bank has
implemented public and hybrid cloud services for many communication and
collaboration technology solutions. Bank has also implemented archival solution for
email communication to strengthen the compliance.

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 RURAL AND
AGRICULTURE BANKING

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 6. RURAL AND AGRICULTURE BANKING

Agriculture occupies a very important place in the Indian Economy. Bank of Baroda is contributing significantly in
accelerating the pace of rural development by providing finance to farmers by way of various agriculture products.
We are having a very specific business segment ―Rural & Agriculture under which, we plan, execute & monitor
the progress of various agricultural schemes, Government. Sponsored schemes, CSR activities and also activities
under Financial Inclusion.

Now a day, agriculture supports various sectors of the country by providing food grains to the growing population,
supplies raw material to industries, generates purchasing power and demand for consumer goods in rural areas
and also plays a significant role in exports. Demand for credit to meet requirements of agriculture has increased
considerably owing to use of modern technology, increase in use of fertilizers, insecticides and pesticides, increase
in irrigation facilities, and increase in coverage under high yielding varieties programme.

Besides, it is also necessary to encourage activities allied to agriculture for increasing the income of poor farmers
and providing full employment to them. In view of high importance of agriculture in Indian economy, efforts are
being made by Reserve Bank of India, NABARD, Banks and Government Agencies to increase the flow of bank
credit to agriculture.

Seasonality & Timing: Since, agriculture is having clear cut seasons & activities are highly dependent on that, so,
at the time of receipt of any application for agri. advance one should take the decision at the earliest, otherwise,
the best suitable season for the same may go off.

CATEGORIES OF AGRICULTURAL BORROWERS:

Agri. Labourers: Agricultural laborers are those who derive more than 50% of their income from
agricultural wages and do not hold any land.

Marginal Farmers: Farmers with landholding up to 1 hectare.

Small Farmers: Farmers with landholding of more than 1 hectare but less than 2 hectares.

Share Croppers: Cultivating land on income sharing basis with landowner.

Tenant Farmers: Cultivating land on lease basis and Oral Leases.
Other Farmers: Remaining farmers will fall under this category.

APPLICATIONS FOR CREDIT FACILITIES:

Application forms for agricultural loans have been simplified to elicit only minimum essential information.
Subsequent to Baldev Singh Committee/ R.V. Gupta Committee recommended for simplifying application cum
appraisal form. Accordingly, subcommittee of RBI formulated ―Application Cum Appraisal form.

The R.V. Gupta Committee has recommended a simple application form for the agricultural loans. However, with
the recent commercialization of certain Agricultural Activities, the proposals/projects are received from
Corporate Sector and such requests may not be put in one prescribed format meant for small and medium loans.
In such big volume and hi-tech projects branches should make use of composite loan application form, meant for
commercial advances along with requisite project report.

Time Limit observed by Bank – Priority Sector

Up to Rs. 25000 2 WEEKS

Above Rs. 25000 Branch 4 Weeks

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 RO/ZO Level 45 Days

BCC Level 90 Days

 Bank shall exercise due care to see that the credit facilities are not denied to the legitimate applicants. In
order to ensure this, it shall follow the following procedure for rejection of loan applications:
 The loan application of general category of borrowers may be rejected on genuine grounds by the respective
sanctioning authorities. However, the next higher authority would satisfy upon the reasons for rejection.
 In case of loan applications of beneficiaries belonging to SC & ST communities, the sanctioning authorities
shall obtain prior concurrence of their next higher authority for rejection of loan applications.
 Applications of BSVS trainees should not be rejected without obtaining prior concurrence of the Regional
authority

REGISTER OF APPLICATION RECEIVED:

Register should be maintained at branch wherein the date of receipt, sanction, and rejection with reasons thereof,
etc. should be recorded. The register should be made available to all inspecting agencies and higher authorities.

NO DUES CERTIFICATE:
Dispensing with ‘No Due Certificate’ for Agri. Loan applications (BCC:BR:107/74 dated 16/02/2015):
It has been decided to dispense with obtaining ‘No Dues Certificate’ for individual loan applicants/ borrowers
(including JLGs and SHGs) for agriculture loan proposals in our rural and semi-urban Branches and to adopt the
following procedure for due diligence:

For all loan amounts up to Rs. 1 lac
For all loan amounts more than Rs.1 lac
and up to Rs 5 lacs
For loans above Rs.5 lacs
Self Declaration/Affidavit by the applicant
Credit history check/obtaining credit report from credit information
companies like CIBIL/ Equifax/Experian/Highmark etc. with whom
Bank has/will tie-up.
In addition to credit history check as mentioned above, information
search by writing to all other Banks operating in the center where
our branch is functioning and the applicant’s residence/village, with
an auto deadline (Maximum 7 days). The branch should send the
letter by Regd. Post.

TAKE OVER OF AGRICULTURE FINANCE TO INDIVIDUAL FARMERS:

In case of take-over of agriculture finance to individual farmers with aggregate limit of Rs. 5 lacs, no prior approval
from next higher authority i.e. Regional Authority is required subject to compliance of Non-Financial aspects such
as
 Accounts with existing lenders should be under the category of ―Standard Assets
 There should not have been any reschedulement / restructuring in the account during last two years.
 All other existing norms, guidelines as applicable to agricultural borrowal accounts are to be
scrupulously followed.
 Satisfactory report from existing banker/FI and /or satisfactory conduct of account as per latest
statement of accounts.

PENAL INTEREST & ADDITIONAL INTEREST:

Penal Interest of 2% is charged over and above the regular/applicable interest rate for reasons such as default in
repayment, non-submission of financial statements, etc. No penal interest should be charged by banks for:

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  Loans under priority sector up to Rs. 25000/-
 Direct Agriculture Advances to small & marginal farmer,
 Advances to DRI beneficiary
A clause enabling recovery of penal interest should be included in the documents executed by the borrower and
should also be stipulated in the letter of sanction given to the borrower.

Unified Processing charges, Up-front charges & documentation charges:

 No processing charges for Agricultural Advances up to Rs.10 lacs.
 No Inspection Charges for Agricultural advances up to Rs. 10.00 Lac. No Inspection Charges for Crop loan.

MARGIN AND SECURITY NORMS FOR AGRICULTURE ADVANCES: (BCC:BR:102/183 Dated 06.07.2010)

Category: Margin Required:

1. Crops Loans/Short Term Loans
(a) Loan limit up to Rs. 100,000 NIL
(b) Above Rs. 100,000 15%
2. Term Loans
(a) Loan limit up to Rs. 100,000 NIL
(b) Loan limit above Rs. 100,000 Tractor and heavy agri. Machinery 10%*
(c) Other loans 15%*
Note: * For small/marginal farmers, agriculture labourers and other specified categories, no margin by
borrowers are required, where subsidy is available under Govt. Sponsored Programmes.
* For borrowers mentioned above where subsidy is not available. 5% margin by borrower is required (NABARD
requirements may be borne in mind).

SECURITY NORMS

Crop Loans/Short Term Loans

Up to Rs. 100,000 D.P. Note
Hypo. of crops
Above Rs. 100,000 D.P. Note, Hypo. of crops
Mortgage of land or third party guarantee etc.
Investment loans wherever moveable assets are created
Up to the cost of economic unit (wherever applicable) or  D.P. Note
Rs. 1 lac whichever is lower  Hypo. of Assets
For loans above Rs. 1 lac  D.P. Note
 Hypothecation of assets.
#For loans above Rs. 2 lakhs, mortgage of land is to be  Mortgage of land (#) or 3rd party Guarantee.
created. However, sanctioning authority on merit may
waive mortgage of land if creating mortgage is not
possible owing to genuine difficulties for loan limit up to
Rs. 3 lakhs
For Agri clinic - Agri business
up to Rs. 5 lacs  D.P. Note
 Hypo. of Assets
Above Rs. 5 lacs  D.P. Note
 Hypo. of Assets
 Mortgage of land or third-party guarantee.
Investment loans where moveable assets are not created (i.e. dug well, land dev. Etc.)
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 Investment loans - up to Rs. 10,000/-  DP Note
Loans above Rs. 10,000/-  DP Note
(*) Where there are genuine difficulties in creating  Mortgage of Land (*)
mortgage/charge on land, Regional Authorities may
authorize branches to take third party guarantee and
other collaterals for limit up to Rs.100000/-

Note: In states where legislation on the lines suggested by the Talwar Committee has been passed, a simple
declaration creating a charge on the land offered as security will be sufficient, in such cases, mortgage of land
may not be necessary.

REVISED GUIDELINES FOR PRIORITY SECTOR CLASSIFICATION: (Circular no. - BCC:BR:107/353 25.07.2015)

Major segments of Priority Sectors are

1. Agriculture,
2. Micro, Small and Medium Enterprises (MSME),
3. Export Credit,
4. Education,
5. Housing,
6. Social Infrastructure,
7. Renewable Energy
8. Others

Within the overall priority sector lending target of 40 per cent of Adjusted Net Bank Credit (ANBC) or equivalent
amount of Off-Balance sheet exposure, it should be ensured that:

Target & Sub-Target for Priority Sector

Categories Domestic scheduled commercial banks and Foreign banks with Foreign banks with less
20 branches and above than 20 branches

Total Priority 40 percent of Adjusted Net Bank Credit or Credit Equivalent 40 percent of Adjusted
Amount of Off-Balance Sheet Exposure, whichever is higher. Net Bank Credit or Credit
Sector Equivalent Amount of
Off- Balance Sheet
Exposure, whichever is
Foreign banks with 20 branches and above have to achieve the
higher; to be achieved in
Total Priority Sector Target within a maximum period of five
a phased manner by
years starting from April 1, 2013 and ending on March 31, 2018
2020.
as per the action plans submitted by them and approved by RBI
2015-16 32%

2016-17 34%

2017-18 36%

2018-19 38%

2019-20 40%

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 Agriculture 18 percent of ANBC or Credit Equivalent Amount of Off-Balance Not applicable
Sheet Exposure, whichever is higher.

Within the 18 percent target for agriculture, a target of 8

percent of ANBC or Credit Equivalent Amount of Off-Balance
Sheet Exposure, whichever is higher is prescribed for Small and
Marginal Farmers.

Foreign banks with 20 branches and above have to achieve the

Agriculture Target within a maximum period of five years
starting from April 1, 2013 and ending on March 31, 2018. The
sub-target for Small and Marginal farmers would be made
applicable post 2018 after a review in 2017.

Micro 7.5 percent of ANBC or Credit Equivalent Amount of Off- Not Applicable
Balance Sheet Exposure, whichever is higher
Enterprises
The sub-target for Micro Enterprises for foreign banks with 20
branches and above would be made applicable post 2018 after
a review in 2017

Advances to 10 percent of ANBC or Credit Equivalent Amount of Off-Balance Not Applicable

Sheet Exposure, whichever is higher.
Weaker
Sections

Foreign banks with 20 branches and above have to achieve the

Weaker Sections Target within a maximum period of five years
starting from April 1, 2013 and ending on March 31, 2018 as per
the action plans submitted by them and approved by RBI.

Micro, Small and Medium Enterprises (MSMEs)-

The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as notified
by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006 are as under: -

Manufacturing Sector
Enterprises Investment in plant and machinery
Micro Enterprises Does not exceed twenty-five lakh rupees
Small Enterprises More than twenty-five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees

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Eligibility for classification under priority sector:
 The MSMEs engaged in the manufacture or production of goods to any industry specified in the first
schedule to the Industries (Development and Regulation) Act, 1951 and as notified by the Government
from time to time and
 Bank loans up to Rs. 5 crores per unit to Micro and Small Enterprises and Rs. 10 crores to Medium
Enterprises engaged in providing or rendering of services and defined in terms of investment in
equipment under MSMED Act, 2006 are eligible for classification under priority sector.
 Factoring transactions on ‘with recourse’ basis by banks which carry out the business of factoring
departmentally, wherever the ‘assignor’ is a Micro, Small or Medium Enterprise, subject to the corresponding
limits for investment in plant and machinery/ equipment and other extant guidelines for priority sector
classification. Such outstanding factoring portfolios may be classified by banks under MSME category on the
reporting dates
 All loans to units in the KVI sector will be eligible for classification under the sub-target of 7.5 percent
prescribed for Micro Enterprises under priority sector
 Loans to entities involved in assisting the decentralized sector in the supply of inputs to and marketing of
outputs of artisans, village and cottage industries.
 Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries.
 Loans sanctioned by banks to MFIs for on-lending to MSME sector as per the conditions specified in
paragraph 19 of these Master Directions.
 Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card, Swarojgar
Credit Card, and Weaver’s Card etc. in existence and catering to the non-farm entrepreneurial credit needs
of individuals).
 Overdrafts extended by banks after April 8, 2015 up to Rs. 5,000/- under Pradhan Mantri Jan Dhan Yojana
(PMJDY) accounts provided the borrower’s household annual income does not exceed Rs. 100,000/- for rural
areas and Rs. 160000/- for non-rural areas. These overdrafts will qualify as achievement of the target for
lending to Micro Enterprises.
 Outstanding deposits with SIDBI and MUDRA Ltd. on account of priority sector shortfall.

To ensure that MSMEs do not remain small and medium units merely to remain eligible for priority sector status,
the MSME units will continue to enjoy the priority sector lending status up to three years after they grow out of
the MSME category concerned

Export Credit: The Export Credit extended as per the details below will be classified as priority sector.

Domestic banks
Incremental export credit over
corresponding date of the
preceding year, up to 2 percent of
ANBC or Credit Equivalent Amount
of Off-Balance Sheet Exposure,
whichever is higher, effective from
April 1, 2015 subject to a sanctioned
limit of up to Rs.25 crores per
borrower to units having turnover
of up to Rs.100 crores.
Foreign banks with 20 branches and Foreign banks with less than 20
above branches
Incremental export credit over Export credit will be allowed up to
corresponding date of the 32 percent of ANBC or Credit
preceding year, up to 2 percent of Equivalent Amount of Off-Balance
ANBC or Credit Equivalent Amount Sheet Exposure, whichever is
of Off-Balance Sheet Exposure, higher.
whichever is higher, effective from
April 1, 2017 (As per their approved
plans, foreign banks with 20
branches and above are allowed to
count certain percentage of export
credit limit as priority sector till
March 2017).

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

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Housing Loans –
 Considered under priority sector if Loans to individuals up to Rs. 28 lakhs in metropolitan centres (with
population of ten lakh and above) and loans up to Rs. 20 lakhs in other centres for purchase/construction
of a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre and
at other centres should not exceed Rs. 35 lakhs and Rs. 25 lakhs respectively.
 Loans for repairs to damaged dwelling units of families up to Rs.5 lakhs in metropolitan centres and up
to Rs.2 lakhs in other centres
 Bank loans to any governmental agency for construction of dwelling units or for slum clearance and
rehabilitation of slum dwellers subject to a ceiling of Rs.10 lakh per dwelling unit
 The loans sanctioned by banks for housing projects exclusively for the purpose of construction of houses
for economically weaker sections and low-income groups, the total cost of which does not exceed Rs.10
lakhs per dwelling unit. For the purpose of identifying the economically weaker sections and low-income
groups, the family income limit of Rs.2 lakh per annum, irrespective of the location, is prescribed.
 Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending
for the purpose of purchase/construction/reconstruction of individual dwelling units or for slum
clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of Rs.10 lakh per
borrower.
 The eligibility under priority sector loans to HFCs is restricted to five percent of the individual bank’s total
priority sector lending, on an ongoing basis. The maturity of bank loans should be co-terminus with
average maturity of loans extended by HFCs. Banks should maintain necessary borrower-wise details of
the underlying portfolio.
 Outstanding deposits with NHB on account of priority sector shortfall.

Social infrastructure:
 Bank loans up to a limit of Rs. 5 crores per borrower for building social infrastructure for activities namely
schools, health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.
 Bank credit to Micro Finance Institutions (MFIs) extended for on-lending to individuals and also to
members of SHGs/JLGs for water and sanitation facilities will be eligible for categorization as priority
sector under ‘Social Infrastructure’,

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

Others:
 Loans not exceeding Rs. 50,000/- per borrower provided directly by banks to individuals and their
SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed
Rs. 100,000/- and for non-rural areas it does not exceed Rs. 1,60,000/-.
 Loans to distressed persons (other than farmers) not exceeding Rs. 100,000/- per borrower to prepay
their debt to non-institutional lenders.
 Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the
specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the
beneficiaries of these organisations.

Weaker section:
In order to ensure proper attention in the matter of allocation of credit to following preferred sector, known as
WEAKER SECTION, RBI has stipulated mandatory target of 10 % of ANBC / Credit equivalent of Off-balance sheet
exposure whichever is higher.

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Following types of finance are included under Weaker Section finance:
No. Category
1. Small and Marginal Farmers
2. Artisans, village and cottage industries where individual credit limits do not exceed Rs. 1 lakh
3. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods Mission
(NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of
Manual Scavengers (SRMS)
4. Scheduled Castes and Scheduled Tribes
5. Beneficiaries of Differential Rate of Interest (DRI) scheme*
6. Self Help Groups
7. Distressed farmers indebted to non-institutional lenders
8. Distressed persons other than farmers, with loan amount not exceeding Rs. 1 lakh per borrower to
prepay their debt to non-institutional lenders
9. Individual women beneficiaries up to Rs. 1 lakh per borrower
10. Persons with disabilities
11. Overdrafts up to Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts, provided the
borrowers’ household annual income does not exceed Rs. 100,000/- for rural areas and Rs. 1,60,000/-
for non-rural areas
12. Minority communities as may be notified by Government of India from time to time

* DRI Advances:

The scheme is introduced in July 1972 with a view to give benefit of bank finance to weaker sections of the society.
Eligibility:

An individual who is engaged in agriculture and /or allied activities collect or process forest products, collect
fodder to be sold to farmers, SC/ST, etc. and whose family income from all sources should not exceed Rs. 24000/-
p.a. in Urban /Semi urban area and Rs. 18000/- p.a. in Rural.

He/She should not hold land more than one-acre irrigated land and 2.5 acres in case of non-irrigated land, (this
does not apply to SC/ST Cases), should not employ workers on regular basis, SHG members who fulfil above
criteria can be considered under DRI Scheme, any handicapped person.

Limit: - Maximum limit for

Productive Purpose: Rs. 15000/-
Housing Loan- Rs.20000/-

Margin: NIL.
Rate of Interest: 4% p.a.
Repayment: For acquisition of fixed asset shall not exceed 5 years including a grace period not exceeding 2 years
on the repayment of principal.

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 AGRICULTURAL FINANCE SCHEME NO. 1 to 10

AGRICULTURAL FINANCE SCHEME NO. 1

PURCHASE OF AGRICULTURAL IMPLEMENTS

Purpose

 Purchase of agricultural implements such as indigenous wooden implements, improved iron implements,
agricultural equipment’s such as sprayers, dusters etc., hand tools such as khurpi, sickles, secateurs, etc.
for farm use, threshers, winnowers, seed-cum-fertilizer drills, etc.
 Purchase of bullocks or camel and/or animal drawn cart. Only healthy animals’ of 3/4 years of age should
be purchased by a committee comprising of a representative of the bank, qualified veterinary
Assistant/Surgeon, an official from DRDA and the beneficiary
Eligibility

 Persons engaged in cultivation of crops as owners of land or as permanent tenants or as leaseholders (for
reasonably long period.
Repayment Period:

 Maximum period -7- years. Repayment period to be fixed on quarterly/half yearly or annual basis based
on income generation of the beneficiary

AGRICULTURAL FINANCE SCHEME NO. 2

PURCHASE OF TRACTORS AND OTHER HEAVY AGRICULTURAL MACHINES

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 PURPOSE:
Purchase of new tractors tractor drawn implements, power tiller and other agricultural machines.

ELIGIBILITY:

 Persons engaged in cultivation of crops as owners of land or as permanent tenants or as lease-holders

(for reasonably longer period) and
 Who can utilise the tractor/machinery economically to the minimum extent of 50% (40% in case of
Eastern States) on their own holdings so that the incremental income generated from the proposed
change in the cropping pattern should suffice to a large extent to repay the loan amount.
 Each beneficiary/group of beneficiaries of a tractor loan should possess minimum of four acres of
irrigated land and above or corresponding acreage as prescribed for different categories of land under
the State Land Ceiling Act (with conditions mentioned in BOI), for tractors with horse power up to 35 HP.
 Finance for tractors with horse power above 35 HP will be considered to farmers with land holding of 6
acres and above of irrigated land.
 Second loan for tractor should be granted only after 3 years from the date of granting first loan provided
the first loan is fully repaid.

TYPE OF FACILITY: Term Loan

LOAN AMOUNT: Cost of vehicle including implements minus margin.
MARGIN: 10% of cost
REPAYMENT PERIOD:
For tractors maximum 9 years and power-tillers -7- years to be decided depending upon the repaying capacity
on half yearly and annual basis based on surplus generation from crop

Land holding in acres (Irrigated land or corresponding Maximum repayment period of 9 years with minimum
acreages of un-irrigated lands) repayment period as follows subject to generation of
sufficient income
Up to –6- acres irrigated lands -8- years (8 to 9 Years)
Above –6- acres but less than 10 acres -7- years (7 to 9 years)
irrigated lands
Above 10 acres of irrigated lands -6- years (6 to 9 years)

Repayment Period of Bank loan

Sr. No Type of the Machinery Maximum period (years)

1 Tractor 9
2 Trailer without tractor (Only in the States of Punjab, Orissa and 5
Madhya Pradesh & Rajasthan)
3 Trailer / Two trailers in sugarcane growing areas. 5
4 Renovation/repairs/replacement of spare parts of tractor: 5*
5 Power Thresher and sprayers 5
6 Combine Harvester 5
7 Power tiller 7

* The repayment period for loans towards repairs/renovation may be fixed on a case to case basis with maximum
of 5 years, subject to the remaining economic life of the tractor and wherever original loan availed for purchase
of the tractor, this may run concurrently with the original loan.

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SECURITY:
Following documents/undertaking should be obtained from the borrower/s / guarantors:
1. D P Note
2. Composite Hypothecation Agreement for Agriculture Finance, LDOC-28A
OR
 Hypothecation of Agricultural Machinery
 Stamped Undertaking
 Letter of instalment with Acceleration Clause (LDOC 57)
 Letter of Authority to make direct payment to the dealer (LDOC 72)
 Letter of Authority to disclose information (unstamped) F-136-A
3. General Form of Guarantee (LDOC-33) or Legal/ Equitable mortgage of land or ekrarnama/ declaration.
4. Two blank TTO forms duly signed by the borrower
5. Irrevocable power of attorney (subsequent to disbursement).

SCHEME FOR FINANCING SECOND HAND/ USED TRACTORS

PURPOSE:

 To provide opportunity to interested farmers in dry land farming or having a small land holding who
cannot afford to purchase a new tractor.
 It also aims at enhancing level of farm mechanisation for timely agricultural operations which are
essential for diversification and commercialisation of farm sector.
 To enable farmers who already own one tractor and may need to buy one more tractor for
supplementary uses with limiting his investment.

ELIGIBILITY:
 All agriculturists having minimum land holding of 2 acres of perennially irrigated land or corresponding
acreage prescribed for different categories of land under State Land Ceiling Act either owned individually
or jointly with other family members who will be co-borrowers.
 Borrowers of other agriculture lending schemes viz. Dairy, Poultry, Fisheries are also eligible to undertake
the transportation of their production as well as haulage work

TYPE OF FACILITY: Term Loan

LOAN AMOUNT: Maximum Rs. 2 lacs assessed as under

80% of Value assessed,

Or
Depreciated value after 12% per year depreciation on straight-line method on current purchase price of same
model of same manufacturers, whichever is lower
Plus
Repair expenses not exceeding Rs. 50000/- as per estimates.
Plus
Equipment’s cost (depreciated) if not considered in valuation mentioned above.

(Valuation: Through Approved Surveyors / loss assessors on panel of non-life Insurance companies or Authorised
Chartered Engineer / authorised Government Approved Valuers for the purpose.

MARGIN: 20% of value assessed by the Government valuer / dealer approved surveyor of General Insurance
Company.

REPAYMENT PERIOD:

109
 Percentage of standard performance* Nos. of years of repayment
More than 85% 5 years
More than 70% but below 85% 4 years
More than 40% but below 70% 3 years
* As mentioned in fitness certificate / valuation report.

SECURITY: As per norms applicable for tractor financing / revised BKCC scheme.

Fitness Certificate/ valuation report Obtained from the approved dealer of tractor manufacturing companies or
the approved machinery valuer as specified in point above for this purpose. The valuation report must state the
percentage of standard performance. It should not be less than 40% of standard performance and first purchase/
manufacturing of the said tractor should be within a period of 6 years on the date of loan application. Tractor
must be in satisfactory working condition.

Note: As per bank’s circular no BCC: BR: 102/52 dated 20.02.2010, two major changes were advised in tractor
financing:

22. Regions were advised to introduce a system for having prior activity clearance for financing for purchase of
tractors for the branches having high NPA in tractor loan portfolio.

23. Disbursement of tractor loan to be made in two phases: (i) 95% of disbursable amount initially (ii) Rest 5%
after having received proof of RTO registration.

AGRICULTURAL FINANCE SCHEME NO. - 3

LOANS FOR CULTIVATION OF CROPS (EXCLUDING PLANTATION AND HORTICULTURAL CROPS)

Purpose:

 Purchase of agricultural inputs such as seeds, fertilisers, pesticides, etc. and for payment of labour
charges, irrigation cess, etc.
 A farmer whether he had availed the loan for raising the crop or not, can also be granted post-harvest
finance i.e. extension of crop loan for a maximum period of twelve months against pledge/hypothecation
of produce or pledge of warehouse receipt covering his farm produce in case such farmer also owes crop
loan to the Bank, the out standings in the crop loan account should be adjusted from the post-harvest
advance. This type of advance can be granted under a separate scheme i.e. farm produce market loan
scheme up to Rs. 10 lacs.
Eligibility: Persons engaged in cultivation of crops as owners of land or as permanent tenants or as lease-holders
(for a reasonably long period) or sharecroppers.

Nature of facility: Demand Loan or Cash Credit

Repayment Period: From the first disbursement date in case of new accounts or first withdrawal date after
renewal of crop loan

 Mono Crop (Kharif/Rabi) - Maximum 10 Months

 Double/Multiple Crop- Maximum 15 Months
 Single Crop for 12 months Crop- Maximum 12 Months
 Long Term Crop- Maximum 18 Months
Refer circular no.

 BCC_BR_109_399,
 BCC_BR_109_462,
 BCC_BR_109_469,

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  BCC_BR_109_487,
 BCC_BR_109_501

AGRICULTURAL FINANCE SCHEME NO. 4

DEVELOPMENT OF IRRIGATION POTENTIAL:

Purpose: Loan facilities may be considered for
 Construction of surface well
 Deepening/renovation of existing wells
 Purchase of oil engine/electric motor and pump set (centrifugal/turbine/submersible)
 Construction of shallow and deep tube wells
 Layout of field channels (open as well as underground),
 Levelling of land for irrigation
 Construction of bandharas
 Lift irrigation from river basins, tanks, bandharas and other catchments
 Installation expenses of oil engines/electric motor/pump sets
 Construction of pump house
 Sprinkler irrigation
 Drip irrigation and windmills.
 Facility may also be considered for boring alone of the well.
 Construction of water storage tanks, farm ponds, water harvesting structures etc.

Eligibility: All persons engaged in cultivation of crops as owners of land or permanent tenants or lease-holders (for
a reasonably long period).
For installation of tube well no minimum land holding is stipulated. If necessary loan can be sanctioned to a group
of farmers in their joint names provided they have contiguous plots of land.

Nature of Facility: Term Loan

Disbursement: In two or three instalments after verification of progress of the work.
Repayment Period: Maximum period 9 years depending upon purpose of investment and economic life of asset.

AGRICULTURAL FINANCE SCHEME NO. 5

DISTRIBUTION OF AGRICULTURAL INPUTS SUCH AS SEEDS FERTILISERS, INSECTICIDES, ETC.

Purpose:
 For maintaining stocks of agricultural inputs like seeds, fertilisers and pesticides, etc. which could be
hypothecated or pledged to Bank.
 Dealers/distributors of cattle/poultry feeds up to Rs. 40 lacs.
 Dealers in tools required for Horticulture/Poultry, etc.
 Sprinklers/Drip Irrigation/Agricultural Machineries up to Rs. 30 Lacs.
 Fishing Nets
 Spare parts for oil engines/tractors/fishing boat engines
 Petrol diesel pump run by Co-op. Sugar Factory, Agricultural Produce Marketing Society, Fishermen Co-
op. Society at Fisheries Jetty, etc.
 Advances against high yielding/hybrid seeds produced under contract with the National Seeds
Corporation Ltd. or State Government or which bear the certification of the said Corporation or as the
case may be, the concerned State Government or any certification agencies authorised under the Seeds
Act, 1966 and at present completely exempted from all provisions of the directives of the Selective Credit
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 Control

Eligibility: Any trader, firm or company or any institution or co-operative society engaged in distribution of
agricultural inputs is eligible under this scheme to the extent of the credit needs related only to the distribution
function (individual farmers are not eligible under this scheme).

Nature of Facility: Cash Credit/BP/BD/LC/Guarantee, etc.

Security: Pledge/hypothecation of stock of agricultural inputs. Wherever feasible collateral security in the form of
land and building.
Margin: 15 %
Repayment Period: 12 months

AGRICULTURAL FINANCE SCHEME NO. 6

FINANCING AGENCIES PROVIDING CUSTOM SERVICES TO FARMERS

Purpose: Credit facilities may be considered for

 Purchase of tractor, bulldozer

 Purchase of fixed wing aircrafts and helicopters together with the accessories for aerial spraying
 Purchase of drilling rig for boring wells/drilling of tube wells
 Purchase of equipment for construction of wells and /or execution of lift irrigation scheme for water
supply service
 Purchase of combine harvesters, threshers, etc. For hiring on custom basis,
 Establishment of cold storage units for providing cold storage facilities to farmers on rental basis
 Construction of godowns, stores, warehouses for providing storage facilities to farmers on rental basis
 Purchase of truck and trailer units to be hired to farmers for transporting farm produce from farms to
processing factories or market yards.
 Purchase of bullock cart
 Establishing curing barns for tobacco
 Providing canning and processing facilities to farmers on custom basis and
 Financing capital expenditure and working capital requirements of organizations or institutions carrying
out farming operations on contract basis
 Purchase of combine harvesters for wheat
 Purchase of (JCB) excavator for earth work and
 Acquiring tankers engaged in transportation of milk.
 Acquiring specialized trucks for transportation of poultry birds
 Providing processing/grading facilities at market yards on hire basis

Eligibility:
All individuals, entrepreneurs, organizations, institutions, corporations such as Agro Industries Corporations,
market yards or authorised licensee in market yards, warehouses, panchayats and agro service centres who are
capable of carrying out such activities and have viable schemes for providing custom services to farmers.

Nature of Facility:
 Term Loan (for capital expenditure requirement)
 Cash Credit (for working capital requirement)

Margin: 15 %

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Security
Term Loan
 Hypothecation of machinery purchased out of bank finance
 Mortgage of land/building and/or third-party guarantee where the limit exceeds Rs. 1 Lac
Cash Credit
 Pledge/hypothecation of stock-in-charge
 Wherever feasible collateral security in the form of land and building,
 Where the borrower is sanctioned term loan facility, extension of charge on the assets created should
be insisted upon.

Repayment Period
 Term Loan: Maximum 7 years on monthly/quarterly/ half yearly annual instalments based on income
generation.
 Cash Credit: 12 months.

AGRICULTURAL FINANCE SCHEME NO. 7

FINANCING CONSTRUCTION OF FARM BUILDINGS AND STRUCTURES

Purpose:
 For construction of “farm structures viz; bullock shed, implement shed, tractor and truck shed, farm
store, godowns and farm silos, dutch barn, water trough for farm animals, threshing yard, “Gur” making
shed and fencing
 For construction of farm house cum dwelling unit (with one or more farm structures as above) on own
farm.
 For reimbursement of expenses incurred for farm house cum dwelling unit constructed recently from
own sources to good clients selectively, subject to additional terms and conditions. It should have been
constructed / purchased recently (not prior to 24 months)

Eligibility/ Beneficiary:
 All persons engaged in cultivation of crops as owners of land or as permanent tenants or as lease-holders
(for a reasonably long period) and who have adequate productive utility of proposed construction.
 For construction of farmhouse cum dwelling unit: All farmers having own land having sufficient income
to repay the instalments.

Margin: 15% (25% for reimbursement)

Repayment:
For Farmhouse cum dwelling unit Maximum 15 years.
For others maximum 7-10 years depending upon the project undertaken.
 Loan repayment will be synchronized with the income generation from the farm activities.
 The due dates to be fixed taking in to account the time taken for receipt of sale proceeds of the crop.
 The instalments may be fixed on half yearly/ yearly basis based on cropping pattern.

Security:
 D.P. Note.
 General form of Guarantee, if stipulated.
 Mortgage of land and house/ Declaration as per Talwar committee norms as applicable.
 Insurance Comprehensive insurance of the house with Bank’s clause.

AGRICULTURAL FINANCE SCHEME NO. 8

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DEVELOPMENT OF HORTICULTURE INCLUDING RAISING FRUIT (ORCHARD) GARDEN, PLANTATION AND NURSERY
CROPS:

Purpose:
For establishing new or for maintenance of existing orchards, gardens, plantations and nurseries. All capital costs
for development of orchards, gardens, plantations (including purchase and installation of machinery, construction
of processing houses etc.) and maintenance costs (such as cost of plants, seedlings, grafts, fertilizers, insecticides,
pesticides etc., wages and salaries of permanent employees such as supervisors, Malies etc. can be financed under
the scheme.

Eligibility:
All persons engaged in raising fruit gardens, plantations and nursery crops as owners of land or as permanent
tenants or as lease-holders (for a reasonably long period)

Nature of Facility:
 Term Loan (for capital expenditure)
 Cash credit (for working capital).

Repayment Period
Term Loan: Maximum period of repayment 5 to 7 years excluding gestation period when only interest should be
recovered.

AGRICULTURAL FINANCE SCHEME NO. 9

LAND DEVELOPMENT:

Purpose: Credit facility may be considered for bunding, terracing, levelling, Kyari preparation, drainage lay outs
and reclamation of saline, alkaline and ravine lands.

Eligibility: All persons engaged in cultivation of crops as owners of land or as permanent tenants or as lease-
holders (for reasonably long period)

Nature of Facility: Term Loan

Disbursement: 25% of the sanctioned amount should be disbursed on execution of documents and the balance
amount in 2-3 instalments depending upon the progress.

Repayment Period:
Small & marginal farmer: Yearly instalment 9-15 Years and gestation period up to 23 Months
Other Farmer: Maximum 7 years. One-year holiday / moratorium may be given.

 Plans and estimates of land development work should be obtained from an officer of the Soil
Conservation/Agriculture/Irrigation Department or from a qualified engineer.
 Pre-development/post development photographs of the area to be kept on records as an evidence of
the development work.

AGRICULTURAL FINANCE SCHEME NO. 10

DEVELOPMENT OF DAIRY, POULTRY, PIGGERY, DUCK REARING, FISHERY SERICULTURE AND APICULTURE
Purpose

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To meet capital expenditure and working capital requirements of units engaged in dairy, piggery, poultry, fishery,
sericulture, agriculture and rearing of sheep, goat and camel, for construction of animal sheds, pig houses, poultry
sheds, etc. for purchase of milch animal such as cows, buffaloes, breeding pig, one-day old chicks, layers,
equipment/machinery, transport vehicles for purchase of feed and for meeting other expenses such as labour,
marketing etc.

Eligibility:
All persons including small and marginal farmers and agricultural labourers engaged in agriculture and allied
activities.

Nature of facility:
 Term Loan: for capital expenditure
 Cash Credit: for working capital

Disbursement
 Loan should be disbursed as and when purchases are made.
 In respect of construction work, 25% of the sanctioned amount should be disbursed on execution of
documents and the balance amount in 2-3 instalments depending upon the progress of the work.

Repayment Period
Term Loan:
 For purchase of Cross Breed Cow - 4 years.
 For Pond Fish Culture – 5-8 Years; Piggery – 4-5 Years; Sericulture: 3 to 7 years depending upon the
economic viability of the scheme but not less than 36 months.
Cash Credit: 12 months.

Branches have to sanction dairy loan to the farmers as per the bank’s scheme of “Financing Mini Dairy Units” for
purchasing up to 10 animals as per the unit cost given in that circular. For purchase of more than 10 animals use
our existing Agriculture Finance Scheme No. X.

Recently bank has entered in various tie up for increasing our dairy loan portfolio with
1. Kwality Limited (KL)
2. M/s Heritage Foods Limited (Heritage)

SCHEME FOR FINANCING FARMERS: FOR PURCHASE OF LAND FOR AGRICULTURE PURPOSE

Scheme for Financing Small and Marginal Farmers Including Share Croppers and Tenant Cultivators for Purchase
of Agricultural Lands as Well As Fallow and Wasteland for Agriculture Purpose.

Purpose:
 To finance the share croppers/tenant farmers to purchase land to enable them to increase income.
 To finance the farmers to purchase, develop and cultivate agricultural and fallow/waste land.
 To finance purchase of land to enable the farmers to diversify into other allied activities.
 Project cost may include, besides cost of land, value of stamp duty, registration charges for
sale/mortgage deed and other land development expenses.

Eligibility:
Small and Marginal farmers i.e. those who would own maximum of non-irrigated or irrigated land (including
purchase of land under the scheme) as stipulated by NABARD
Share croppers/Tenant farmers

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Coverage of women: Ownership rights of land to women would lead to their empowerment. Hence branches may
encourage purchase of land by women, giving preference to those in distress, widows, SHG members etc. Within
overall eligibility criteria as laid down under the scheme.

Type of Facility: Term loan

Loan amount:
Quantum of loan will depend on the area of the land to be purchased and its valuation and also development
cost.

Valuation:
For the purpose of valuation of the land for fixing the quantum of financial assistance, the price indicated by the
farmer may be cross checked with the last five years’ average registration value available with the Registrar/Sub-
Registrar of the area and a view may be taken by the branches.

Margin:
Loan amount up to 50000- No margin
Loan Amount above 50000- 10%.

Period: 7 to 12 years in half yearly / yearly instalments, including a maximum moratorium period of 24 months.

Security: The land purchased out of the bank loan and mortgaged in favour of the bank will form the security for
the loan from borrowers.

SCHEME FOR FINANCING SETTING UP OF AGRICLINICS AND AGRIBUSINESS CENTRES BY AGRICULTURAL GRADUATES

PURPOSE:
For setting up of Agriclinics and Agribusiness Centres in order to supplement efforts of public extension by
necessarily providing extension and other services to the farmers on payment basis or free of cost as per business
model of agricultural entrepreneur (agri-preneurs), local needs and affordability of target group of farmers.

Agriclinics:
Agri-Clinics are envisaged to provide expert advice and services to farmers on various technologies including soil
health, cropping practices, plant protection, crop insurance, post-harvest technology and clinical services for
animals, feed and fodder management, prices of various crops in the market etc. which would enhance
productivity of crops/animals and ensure increased income to farmers.

Agribusiness Centres:
Agri-Business Centres are commercial units of agri-ventures established by trained agriculture professionals. Such
ventures may include maintenance and custom hiring of farm equipment, sale of inputs and other services in
agriculture and allied areas, including post-harvest management and market linkages for income generation and
entrepreneurship development.

ELIGIBILITY:
The scheme is open to: --
 Graduates in Agriculture and Allied subjects from Universities recognized by ICAR/UGC, SAUs and of
other Agencies approved by DAC&FW, MOA&FW, Gol.
 Biological Science Graduates with Post-Graduation in Agriculture & Allied subjects.
 Degree course recognized by UGC having more than 60% of the course in Agriculture and Allied subjects.
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  Diploma /Post Graduate Diploma course with more than 60% of course content in Agriculture and Allied
subjects, after B.Sc. with Biological Sciences from recognized colleges and Universities.
 Agricultural Intermediate (i.e. plus two) with at least 55% marks

Type of Facility:
Fixed capital cost component - Term Loan and working capital for one operating cycle.

LOAN AMOUNT:
 Project cost & coverage: - The outer ceiling for the project by individual would be Rs. 20 lakhs (Rs. 25 lacs
in case of extremely successful individual projects) and for group project,
 The banks may, nevertheless, subject to their own satisfaction, finance groups formed by 2 or more
trained persons under the Scheme within the TFO ceiling of Rs.20 lacs per trained person and overall
ceiling of Rs.100 lacs, whichever is less, for the purpose of subsidy. However, the actual credit sanctioned
by the banks for a venture established under the Scheme could be higher depending on the financial
viability and technical feasibility. Thus, for instance, if an individual is granted a loan for TFO of Rs.35 lacs,
subsidy shall be reckoned only on TFO of Rs.20 lacs.it would be Rs.100 lakh (minimum of five individuals).
At least 10% value of the Total Financial Outlay (TFO) of the project should be in capital form

MARGIN:
 For loans up to Rs 5 lakh – Nil
 For loans above Rs 5 lakh – 15%

Time limit for completion of the project

Time limit for completion of the project would be as envisaged under the project, subject to maximum of 6 months
period from the date of disbursement of the first instalment of loan by financial institution, which may be
extended by a further period of 6 months, if reasons for such delay are considered justifiable by the financial
institution concerned.
If the project is not completed within the stipulated period, benefit of subsidy shall not be available and advance
subsidy placed with the participating bank, if any, will have to be refunded forthwith to NABARD

Subsidy: -
Subsidy pattern has been revised from “capital and interest subsidy” to “Composite Subsidy” which will be back-
ended in nature. It will be 44% of project cost for women, SC/ST & all categories of candidates from NE and Hill
states and 36% of project cost for all others. In all new cases, subsidy will be released as Composite Subsidy.

SECURITY:
 For loans up to Rs 5 lakh – Hypo of assets (No collateral security)
 For loans above Rs 5 lakh – Hypo of assets and Mortgage of land or third-party guarantee.

REPAYMENT PERIOD: 5 to 10 years and maximum grace period of 2 years

Training of Agriculture graduates by MANAGE

National Institute of Agricultural Extension Management (MANAGE) will organises training programmes for the
prospective Agri-entrepreneurs nodal training institutions located at state level, throughout the country.

BARODA KISAN CREDIT CARD:

BKCC scheme is one of the flagship product and it contributes 47.38% of total agriculture portfolio of our bank.

Purpose:

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The Kisan Credit Card scheme aims at providing adequate and timely credit support from the banking system
under a single window with flexible and simplified procedure to the farmers for their cultivation and other needs
as indicated below:
 To meet the short-term credit requirements for cultivation of crops;
 Post-harvest expenses;
 Produce marketing loan;
 Consumption requirements of farmer household;
 Working capital for maintenance of farm assets and activities allied to agriculture;
 Investment credit requirement for agriculture and allied activities.

Eligibility:
 Farmers - individual/joint borrowers who are owner cultivators;
 Tenant farmers, oral lessees & share croppers,
 Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, share
croppers etc.

 All individual agriculturists (including proprietorship) with good track record of repayment who are
eligible for sanction of credit limit of Rs. 1000/- and above irrespective of their period of dealing with our
branch or a fresh applicant having good reputation/ report.

 Recorded/ registered Share croppers and tenant farmers who are cultivating crops for a period not less
than 5 years in order to meet the production credit needs are also eligible. However, the individual
tenant farmers/ share croppers cultivating crops on oral lease basis who are resident of the village at
least for a period of 3 years continuously and cultivating lands and raising crops for a reasonably long
period but not less than 3 years could also be issued BKCC with a farm credit limit up to Rs. 10000/- in
general and in exceptional cases not exceeding Rs. 25000/- as approved by our Board and circulated to
branches vide our circular no. BCC:BR: 95/36 dated 04.02.2003. Joint Liability Groups (JLGs) of such
farmers are also eligible as approved by our Board and circulated to branches vide our Circular
No.BCC:BR:98:305 dated 10.11.2006

Various categories:

 BKCC Green: New & existing agricultural Borrowers dealing with us since last 3 years
 BKCC Silver: Agriculture. Borrowers having satisfactory conducted borrowal account relationship with us for
more than 3 years and up to 5 years
 BKCC Gold: Regular agril. Borrowers dealing and maintaining satisfactory account with us for the period
exceeding 5 years having excellent repayment record.

QUANTUM OF FINANCE

1. Production Credit Limits

i. Crop Production Limit: Farmer’s need for cultivation expenses based upon the cropping pattern decided
by him at the rate of scale of finance for respective crops

ii. Farm Maintenance Limit: Other short-term requirements like maintenance of tractor/ farm implements,
allied activities like dairy, poultry, annual repairs, fuel, cost of feed, etc. to the extent of 25% of the crop
production expenses limit.

iii. Consumption Need for family maintained:

 25% of crop production limit maximum Rs. 1 Lakh for Green & Silver category customers.
 35% of crop production limit maximum Rs. 1 Lakh for Gold category customers.

iv. Allied Activities and Non-Farm Sector Activity -W/C portion: To be fixed adhering bank's usual guidelines
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 for working capital of non-farm sector activity
v. Finance against storage receipts/produce marketing loans (against his own farm produce only) subject
to maximum of Rs. 10/- lacs per farmer.

Investment Line of Credit:

 Extending credit facilities for horticulture crops, investment on farm developments such as development
of land/ irrigation facility, purchase of tractor, farm machineries and equipment’s, farm structures &
buildings, draught animals/carts, milch cattle, transport vehicles, pre/post harvesting processing
equipment’s and practicing modern/ hi-tech agriculture with need-based project/ farm infrastructures,
plantation activities etc.
 Extending facilities for setting up units of allied activities like dairy, poultry, fisheries, Piggery, sericulture,
etc. to supplement farm income/ activities and also to ensure optimum utilisation of available resources.
 Extending loans for off-farm activities/needs of the farmer like personal loans including purchase of
consumer durables, Mobile Phone, House repair, etc. subject to a maximum of Rs. 1/- lac.
 Loans for redemption of loan availed by farmers from non-institutional lenders, as adopted vide our
circular no. BCC:BR:96/277 dated 30.7.2004.
 Special Projects with large financial outlay to be considered independently after fully satisfying on
techno-economic viability aspects on merit

Quantum of finance for investment credit may be decided as per the needs expressed by the farmer for various
investment and other purposes mentioned above subject to following:

Farm Income
A. 6 times of Net Annual Income (Profit) OR
3 times of Annual Farm Receipts I.e. Gross Value of crops ((Anticipated from the farm, taking into
consideration the type of crops, area under cultivation, etc.)

PLUS

Other Income (3 times of annual net income) (B+C+D)

B. From Allied Activities
C. Non-Farm Activities
D. Salary (Permanent Employment, if any)

Value of Securities (E+F)

E. 75% of Value of Land Mortgaged
F. 100% of Value of Other Securities

Maximum permissible limit for investment credit limits: Whichever is lower amongst Farm Income and Value of
Securities.

Line of Credit / Notional Limit under our existing Baroda Kisan Credit Card (BKCC) Scheme

It is observed that the farmers and branches are generally averse to increase the limit due to the workload / cost
involved in execution of fresh documents, preparation of fresh proposals etc. This is ultimately adversely affecting
the increased off take and thereby the growth in outstanding level of crop loans. This also ends up in providing
inadequate crop loan to farmers.

To overcome this problem, bank provides the facility of the Line of Credit / Notional limit wherein the farmer’s
actual requirement worked out on the basis of cropping pattern and land area, can be increased by maximum
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50% at the time of sanction of the facility. Though this limit will be valid for a 5 years period, the drawing
power/eligible limit for each year shall be arrived based on the area of cultivation and scale of finance for the
proposed cropping pattern for that year.

The farmer shall be advised on his eligibility under line of credit/notional limit and will execute the documents for
this amount. It will be mentioned in the sanction letter that the limit within this line of credit/notional limit for a
particular year will be arrived at based on the cropping pattern adopted by him during the particular year and the
scale of finance approved by the Bank for the crops raised by him for the year and he will in no way be eligible for
the amount higher than the limit so arrived or the amount of line of credit/notional limit approved.

Every year the farmer will be required to submit an application for sanction of the drawing power limit within the
line of credit/notional limit, giving the details of the cropping pattern, he is going to adopt during the year. Based
on these details, the branch will work out the eligible drawing power limit for that particular year, will sanction
and advise such drawing power limit to the farmer against his acknowledgement.

In no way the execution of documents for higher amount will automatically make the farmer eligible for the
increased limit every year. The applicable limit for the concerned year will be decided by the branches based on
the approved Scale of Finance and cropping pattern proposed by the farmer in his application for the concerned
year.

 A concession in rate of interest on investment line of credit at the rate of 0.25% and 0.50% can be considered
to agriculture borrowers who is dealing with us for a period of above 3 and up to 5 years (BKCC Silver card
holder) and more than 5 years (BKCC Gold card holder) respectively with good track record. No concession
to new as well as existing borrowers having less than 3 years dealing (BKCC Green card holder) with us. But
this concession in rate of interest will not be clubbed with any other concession including subvention.
 Total limit under BKCC can be granted as per DLP of concerned authority.
 Credit balance under BKCC will fetch interest rate as applicable to Savings bank deposit.
 Personal accident insurance for Rs. 50000/- to one borrower per account. (Detailed in next section)
Margin:
For regular production line of credit, no margin to be fixed if it is on the basis of scale of finance and crop
production pattern for crop cultivation and other requirements as specified earlier. On investment line of credit,
the margin is as per our individual scheme as prescribed and it can be reduced to 10% by the sanctioning authority
in deserving cases with due justification.

BARODA KISAN RUPAY CARD

Our Bank has introduced Baroda Kisan RuPay Card in pursuit to facilities to farmers who avail production credit
under Baroda Kisan Credit Card from our Bank. The card meets the requirements of BKCC customers to use
channels like ATMs for cash withdrawal and also POS at merchant of Agriculture Inputs such as seeds, fertilizers
and pesticides etc.

The National Payments Corporation of India, the administrator of RuPay Cards, has introduced insurance coverage
of Kisan RuPay Card holders, as a value-added feature. They have tied up with The New India Assurance Co. Ltd
for the same.

Salient features of the Rupay Insurance Programme are as under:

1. Personal Accident Insurance is open to all RuPay cardholders above 5 years of age subject to terms and
conditions of the policy
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 2. Insurance cover of Rs.1 lac per card to Baroda Kisan RuPay Card holders (accidental death and permanent
disablement only) is available.
3. The insurance premium is to be borne by NPCI.
4. Claim intimation should be made to the Insurance Company within ninety (90) days from the date of
accident and All supporting documents relating to the claim must be submitted to the insurance
company within sixty (60) days from the date of claim intimation
5. Sum insured of Rs 1 lakh for RuPay Non-Premium cardholders and of Rs 2 lakh for RuPay Premium
cardholders
6. Benefits of Insurance will be available to RuPay Debit Cardholders who have performed minimum one
successful financial or Non-financial transaction at any ATM/Micro ATM/POS/e-com/Business
Correspondent of Bank:
• Within 45 days prior to date of accident including accident date for Premium Cardholder i.e.
RuPay Platinum.
• Within 90 days prior to date of accident including accident date for Non-Premium Cardholders
i.e. RuPay Classic, RuPay PMJDY, RuPay Samagra, RuPay Bhamashah, RuPay BKCC, RuPay
MUDRA etc.
7. This insurance programme will be an additional insurance cover over any existing insurance cover, viz.,
free Personal Accident Insurance Scheme (PAIS) cover up to Rs.50000/- for BKCC holders in our Bank.

Interest Subvention Scheme

 As per Government of India guidelines, interest subvention of 2 % per annum is available for short term
crop loan up to Rs. 3.00 lacs per farmer. The 2 % interest subvention will be calculated on the crop loan
amount from the date of its disbursement/drawl up to the date of actual repayment of the crop loan by
the farmer or up to the due date of the loans fixed by the bank, whichever is, earlier, subject to a
maximum period of one year.
 An additional interest subvention of 3 % per annum will be available to the prompt payee farmers from
the date of disbursement of the crop loan up to the actual date of repayment by farmers or up to the
due date fixed by the bank for repayment of crop loan, whichever is earlier, subject to a maximum period
of one year from the date of disbursement

It implies that the farmers paying promptly would get short term crop loans @ 4 % per annum during the year
2017-1 8. However, if the Aadhar is not linked with the crop loan account then the farmer will not get the benefit
of 4% interest rate.

PERSONAL ACCIDENT INSURANCE SCHEME (PAIS) FOR OUR BARODA KISAN CREDIT CARD (BKCC) HOLDERS WITH
THE NEW INDIA ASSURANCE COMPANY LTD. (Circular No. HO:BR:109:94)

Eligibility:
 All the BKCC holders (existing and new) between the age of 18 to 70.
 In case of joint accounts, Insurance policy will be taken in the name of the person authorized to hold the
BKCC and operate the joint account.

Payment of Premium:
The entire premium payable on the policy will be borne by the Bank and will be paid by Head Office and will not
be debited to the a/c of the beneficiary/BKCC holder

Risk coverage:
The following risks are covered under the policy:

 Accidental death -Rs. 50,000/-

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  Permanent total disability- Rs. 50,000/-
 Loss of two limbs or one limb and one eye -Rs. 50,000/-
 Loss of one limb or one eye- Rs. 25,000/-

BARODA KISAN TATKAL LOAN

Purpose:
 An instant credit for farming community to meet the emergent funds requirements for Agriculture and
domestic purposes during off season such as purchase of bullock, implements, storage/packing material,
storage structures, onion sheds, purchase of pump sets, pipes for irrigation etc.
 Domestic requirements for various religious ceremonies, festivals, emergent medical expenses and other
emergency expenses etc.

Eligibility: Individual Farmers/Joint borrowers who are existing Baroda Kisan Card (BKCC) Holders.

Type of Loan: Term Loan repayable in 3-5 years or Overdraft facility for a period of 12 months.

Maximum Loan amount: Limit may be fixed as under:

BKCC Limit up to Maximum Tatkal Limit

Up to Rs.5.00 Lacs 50% of BKCC limit subject to max of Rs.1.00 lacs
More than Rs.5 Lacs but up to Rs.10.00 lacs Rs.2.00 lacs
More than Rs.10 Lacs but up to Rs.20.00 lacs Rs.3.00 lacs
More than Rs.20 lacs Rs.5.00 lacs

This is subject to the condition that the Tatkal limit now being sanctioned should be within the eligible limit under
Investment Line of Credit in BKCC.

Security:
 Existing security under BKCC to be extended
 The existing norms of no collateral security up to Rs.1 lac to be followed if combined limit is within Rs.1
lac.

Repayment (For term Loan):

In half yearly/yearly instalments depending upon the income generation and cropping pattern.

Finacle Codes:
The accounts are to be opened in the relevant scheme codes in Finacle as given below:
For Term Loans: LA420
For Overdraft Accounts: OD022

SCHEME FOR FINANCING TO FARMERS FOR PURCHASE OF FOUR-WHEELER

Parameter Prescribed Norms

Type of Facility Term Loan
Purpose For purchase of new/used four-wheeler including jeep, SUV, station wagon etc. for
using in their farm management activities. Used vehicle should not be more than 3
years old.
Eligibility/ Beneficiary  Farmer including those engaged in Allied activities having family income
sufficient to repay the loan.
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 If the main source of income of the farmer is from land based activities.
 Farmers with minimum land holding of 4 acres perennially irrigated land or 8
acres of seasonally irrigated lands.
 The Regional Head is authorized to reduce the land holding criteria by 50% i.e.
up to 2 acres for perennially irrigated lands and 4 acres of seasonally irrigated
lands, on merits, provided the crops grown by the farmers is generating
sufficient income to insure repayment.
 In case the main source of income is from Allied activities income certificate
from Revenue authorities/ IT returns etc to be obtained. (Ref. BCC/BR/106/338
dt-05-09-2014)
Age Minimum – 21 years
Maximum–Up to 65 years as on the date of availment of facility.
If the age of landholder exceeds 60 years, in such case the son to be made co-
borrower.
Maximum Loan New Vehicle: Rs.15.00 lac.
Amount Old Vehicle: Rs. 10.00 lac.
*Limit in case New vehicle–Zonal Head is authorized to increase the limit up to 50%
i.e. for New vehicle –Maximum loan amount –Rs 22.50 lacs. (Ref. BCC/BR/106/338
dt. 05.09.2014)
Within the eligibility worked out as below:
Farm Income 4 times of net annual income
OR
2 times of total annual farm receipts/value of crops,
whichever is lower
Plus/OR
Other income/income 3 times of net anticipated annual income/profit from
from allied activities economic activities/ allied activities (existing and
and salary income if any proposed to be undertaken)/ salary income if any
Margin New vehicles: 15%
Used vehicle: 40%
Repayment New vehicles: 7 years
Second hand vehicles: 4 Years
Loan repayment will be synchronized with the income generation from the farm
activities. The due date to be fixed taking in to account the time taken for receipt of
sale proceeds of the crop. The instalments may be fixed on half yearly/ yearly basis
based on cropping pattern.

SCHEME FOR FINANCING TWO-WHEELER (MOTORCYCLE /SCOOTER) LOANS TO FAMERS

The salient Feature of the Modified scheme are as under (Ref.BCC/BR/106/360 dt-15.09.2014)

Parameters Prescribed Norms

Types of Facility Term Loan
Purpose Purchase of new Two Wheelers (Motorcycle/scooters)
Eligibility/ Beneficiary All new and existing farmers engaged in Agriculture and/or allied activities/
others sources.
Age Minimum -21 years
Maximum-up to 65 years as on date of availment of facilities.

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 If the age of farmers exceeds 60 years, in such case the son to be made co-
borrower.
Maximum Loan Amount Rs.1.00 Lakh
It will compromise of:
1. Cost of vehicle i.e. invoice price.
2. One-time vehicle tax and registration charges.
3.Comprehensive insurance for first years
Note-cost of accessories not to be included.
Farm Income 6 times of net annual income
OR
3 times of total annual farm receipt/
values of crop, which is lower
PLUS/OR
Other incomes/incomes from 3 time of Net anticipated annual
allied activities and salary income/profit from economic
income if any activities /allied activities (existing
and proposed to be under taken)
salary if any
Margin 10 %
Rate of interest As applicable to invest loans under direct agriculture finance from time to
time (presently at 1-year MCLR+SP) (BCC:BR;108:179 dated. 21.04.2016)
Repayment Repayment Schedule to coincide with harvesting season. (As per Banks
Norms). Maximum period – Not exceeding –5- years.

Loan repayment will be synchronized with the income generation from the
farming & allied activities.

The due dates to be fixed taking in to account the time taken for receipt of
sale proceeds of the crop.
The instalments may be fixed on monthly / quarterly / half yearly/ yearly basis
depending upon cropping pattern/ allied activities / other source of income.

Capital Subsidy Schemes for promoting solar photovoltaic water pumping systems for irrigation purpose- Decisions
conveyed by MNRE BCC: BR: 108/354 04.08.2016
 The advance parking of funds with banks has been increased from Rs. 1 crore to Rs. 3 crores based on
the justification provided by the concerned bank and at the discretion of NABARD.
 Solar Pumps higher than 5 HP and up to 10 HP will be eligible for 5 HP subsidy. However, total subsidy
will not exceed the subsidy admissible for 5 HP system.
 Any farmer, who has more than one pump in his / her field/s, but the total capacity of all the pumps does
not exceed 10 HP, he/she will be eligible for subsidy equivalent to 5 HP
 Farmer Producer companies are eligible to receive subsidy under the scheme. If required more than one
pump set would be made eligible for such companies.
 Bulk loaning by bank to Dairy Cooperative Societies is also eligible for subsidy provided banks provide
data and information to NABARD as stipulated under the scheme.
 Solar Pump sets used for all purpose relating to agricultural allied activities like dairy, poultry etc. as also
for manufacturing of salt are covered under the programme.
 Solar Pump sets of Drinking water societies are allowed for subsidy.
 All solar companies empanelled by MNRE can operate in any state provided they have VAT registration
in the operating state. However, all the units installed by the empanelled companies for which loans are
sanctioned by banks from 3 November 2014 onwards only shall be eligible for subsidy.
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FINANCE AGAINST WAREHOUSE / STORAGE RECEIPT

Types of Warehouse/storage receipts eligible to be financed:

1. Warehouse Receipts issued by State/Central Warehouses up to the limits prescribed under the Scheme.
2. Warehouse/Storage Receipts under tie up arrangement with Collateral Managers up to the limit
prescribed under the scheme.
3. Warehouse Receipts issued by private registered Warehouses approved by concerned Zonal Head up to
individual limits of Rs. 50.00 lakhs per farmer.
4. Negotiable Warehouse Receipts issued by Warehouses approved by Warehousing Development and
Regulatory Authority (WDRA) up to the limits prescribed under the scheme.

Collateral Managers approved by our Bank.

1. M/s National Bulk Handling Corporation Ltd (NBHC),

2. M/s Star Agri Warehousing and Collateral Management Ltd. (STARAGRl),
3. M/s Edelweiss Agri Value Chain Ltd (EAVCL),
4. M/s Shree Shubham Logistics Limited,
5. CNX Corporation Limited and
6. Arya Collateral Warehousing Services Pvt. Ltd.
7. Universal Collateral Management Pvt. Ltd

As per circular no. BCC/BR/108/110 dated 11.03.2016, Bank has discontinued the financing against warehouse /
storage receipt issued by NCMSL, until further instruction.

Eligibility:
Farmers, Food grain traders, Millers who store their agri produce in warehouse owned, leased, franchised by the
Collateral Managers (CM)

Loan Amount:
For farmers: Maximum Rs.50.00 lakhs
For Others: Maximum Rs.5.00 crores. (However, for private Godowns approved by WDRA, the maximum loan
amount of Rs.2.00 crores only be considered by the Branches subject to the discretionary lending power of the
sanctioning authority. For limit above Rs. 2.00 crores up to Rs. 5.00 crores, activity clearance from the Regional
Head be obtained)

Margin:
Minimum of 25%,
In case of tie up arrangement with Collateral Managers: 25% or as prescribed by Collateral Managers, whichever
is higher. (The margin should be increased if there is volatility of price for a particular commodity). The valuations
of the commodity will be the indicative price as advised by the CM or the market price, whichever is lower.

Nature of Facility:

 In case of Farmers: Demand Loan.

 For others: Cash Credit (Pledge)
Tenor: Maximum 12 months.

Finacle Code:
 LA426- For Demand loan to farmer against WR/SR issued by CM
 CC007- For Cash Credit against WR/SR issued by CM

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Classification of Loans:

 For individual and other farmers, loans up to Rs 50 lacs will qualify for Agriculture advances category as
per extant guidelines of RBI regarding classification of Priority sector advances.
 Loans up to Rs 5 Crores per unit to Micro & Small Enterprises (Services) and up to Rs10 crores to Medium
enterprises(Services) fulfilling criteria of Micro, Small & Medium Enterprises under MSMED Act 2006,
should be classified as “Loans to Service Enterprises” under MSME of Priority Sector.
 In case of Food processing units, storing the commodity in warehouses till processing can be considered
under Food processing up to Rs. 100 Crores, which has to be classified under agriculture e.g. Dal, Rice
etc.

SCHEME FOR FINANCING MINI DAIRY UNITS

In order to support famers to increase their household income through adoption of improved dairy farming and
also to tap the business potential available in the segment, a special Scheme formulated on Dairy on pan India
basis.

Parameter Approved Norms

Type of Facility Term Loan
Purpose To establish new small dairy units with -2- to -10- milch animals
Eligibility Individuals, farmers, members of NGOs/SGHs/JLGs.
Age Minimum: -21- years
Maximum: up to -65- years, as on the date of availment of facility
Loan Amount Rs. 60,000/- per animal, subject to maximum of Rs.6,00,000/-
No. of animals to be financed under the Scheme:
Minimum: Two & Maximum: Ten

Buffaloes producing more than -7- litres of milk per day and cows producing
more than -8- litres of milk per day ONLY, preferably of the following breeds,
are to be financed under the Scheme:
Cross breed: Jersey cross, Holstein Friesian cross
Buffalo: Murrah breed, Graded Murrah, Mehsana, Jaffarabadi, Godavari,
Bhadawari, Surti
Indigenous breed of cows: Sahiwal, Tharparkar and Red Sindhi
Margin 10%
Rate of Interest Limit up to Rs.3 lacs: @ one-year MCLR+SP (BCC:BR:108:179 dated.
21.04.2016)
Limit above Rs.3 lacs & up to Rs.6 lacs: one-year MCLR+ SP +0.25 %
(BCC:BR:108:179 dated. 21.04.2016)
Repayment Maximum period: Not exceeding –5- years (including moratorium period of
three months).
Security Loans up to Rs.1 Lac:
Hypothecation of livestock

Loans above Rs.1 Lac and up to Rs.2 lacs:

1. Hypothecation of live stocks.
2. Mortgage of land or third-party guarantee.

Loans above Rs.2 Lacs:

1. Hypothecation of live stocks.

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 2. Mortgage of land
3 Third party guarantee, if stipulated.
Documentation D.P. Note.
Composite Hypothecation Agreement for Agriculture Finance (LDOC-28A)
General Form of guarantee, if third party guarantee is stipulated
Authority to make direct payment to dealer
Processing Charges/ Nil (As applicable to Agriculture advances up to Rs.10 lacs) Nil (As applicable to
Documentation charges Agriculture advances up to Rs.10 lacs)
Subsidy NABARD is providing subsidy @25% of the outlay (33.33% for SC/ST) as back
ended capital subsidy subject to a ceiling of Rs.1.25 lac for a unit of -10- animals
(Rs.1.67 lacs for SC/ST). Maximum permissible capital subsidy is Rs. 25,000/-
(Rs. 33,300/- for SC/ST) for a two-animal unit. Subsidy is restricted on a pro-
rata basis depending on the unit size.
Finacle Code LA428: for TL/DL Mini dairy units

DAIRY ENTREPRENEURSHIP DEVELOPMENT SCHEME (DEDS)

The main objective of the scheme was to extend assistance for setting up small dairy farms and other components
to bring structural changes in the dairy sector.

Eligibility
 Farmers, individual entrepreneurs, NGOs, companies, groups of unorganized and organized sector etc.
Groups of organized sectors include self-help groups, dairy cooperative societies, milk unions, milk
federations etc.
 An individual will be eligible to avail assistance for all the components under the scheme but only once
for each component
 More than one member of a family can be assisted under the scheme provided they set up separate
units with separate infrastructure at different locations. The distance between the boundaries of two
such farms should be at least 500m.

Funding pattern
 Entrepreneur contribution (margin) for loans beyond 1 Lakh- 10 % of the outlay (minimum)
 Back ended capital subsidy - 25% of the outlay for General Category, 33.33 % for SC/ ST farmers. The
capital subsidy will be back ended with minimum lock-in period of 3 years.

Repayment
Repayment Period will depend on the nature of activity and cash flow and will vary between 3- 7 years. Grace
period may range from 3 to 6 months in case of dairy farms to 3 years for calf rearing units.

Time limit for Completion of the project

 Time limit for completion of the project (except for calf rearing units where disbursements are expected
to continue till two years) would be as envisaged under the project, subject to maximum of 9 months
period from the date of disbursement of the first instalment of loan which may be extended by a further
period of 3 months, if reasons for delay are considered justified by the financial institution concerned.
 If the project is not completed within the stipulated period, benefit of subsidy shall not be available and
advance subsidy placed with the participating bank, if any, will have to be refunded forthwith to NABARD

FOOD & AGRO BASED SCHEMES

Scheme for Financing Units Engaged in Processing Activities Of:

1) Oil Mill/ Solvent Extraction

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 2) Rice/ Dal/ Flour Mill
3) Seed Processing/ Agro Processing
4) Food Processing
5) Cotton Ginning and Pressing Mills and Cotton Seed Oil Extraction (Comprehensive Units)

Purpose:

 Working capital requirements

 Financing new project i.e. acquisition/construction of land & Building and Plant & Machinery based on
the project cost including takeover of existing units.
 Non-Fund based facilities (i.e. Bank Guarantee and Letter of Credit)
Eligibility:

 All Advances to new/existing (including take over from other banks) Food and Agro based processing
units under "Agriculture" (i.e. having an aggregate sanctioned limit up to Rs. 100 Crores per borrower
from the Banking system) having sanctioned limits up to Rs.50.00 Crores with our Bank (provided the
aggregate sanctioned limit per borrower from the Banking system not to exceed Rs. 100 Crores),
irrespective of internal classification and turnover of the unit.
 Individual, Proprietorship, Partnership concerns, Private Limited Companies, Public Limited Companies
and Limited Liability Partnership Concerns
 If trading activities are also undertaken by the unit, the ratio of trading sales in total sales should not be
more than 49% in a financial year. Otherwise, the benefits available under the scheme will not be
admissible.
Limit:

 Up to Rs.50.00 Crores with our Bank (However, the aggregate sanctioned limit per borrower from the
Banking system not to exceed Rs.100 Crores)
Nature of facility:
Term Loan/Demand Loan/Cash Credit/Cash Credit against Warehouse Receipt/ Bank Guarantee/ Letter of
Credit/BP/BD, Export Credit preshipment and post-shipment
 LA429: for TL/DL Food & Agro based,
 CC021: for CC Food & Agro based,
Repayment:
 12 months for working capital
 Up to -84- months for term loan (including up to -12- months moratorium period), subject to annual
Review

LENDING TO AGRICULTURE AND OTHER PRIORITY SECTOR ADVANCES AGAINST THE SECURITY OF GOLD
ORNAMENTS/JEWELLERY”

The scheme will cover the Branches identified/selected by the Regional Authority

Parameter Detail
Purpose Any purpose covered under Priority Sector

Type of Facility Cash Credit and Demand Loan

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 Eligibility  All individuals, excluding staff, being the true owner of the gold
ornaments/jewellery/specially minted gold coins sold by the banks of
minimum 18 Carat /silver jewellery/ornaments.
 The weights of specially minted gold coins sold by banks do not exceed 50
grams per customer.
 The applicant must be local resident & must have a saving account with the
Branch.
 If the applicant doesn’t have savings bank account, saving account be first
opened before extending the gold loan.
 No third-party loan to be granted.
Limit Maximum limit under the scheme is Rs. 10 lakhs per borrower against the pledge
of gold ornaments and Rs 3 lakhs against the pledge of silver ornaments.

However, credit limit should be

 Advance value of gold or silver or
 75 % of the appraised value of the gold ornaments or
 50% of the appraised value of the silver ornaments by the assayer
Whichever is lower among the three

The loan may be allowed as working capital limit or demand loan as per
requirement.

There is no restriction on number of gold loans per borrower. However, per

borrower ceiling of Rs. 10.00 lacs for the gold loan has to be adhered to.

For advances above Rs 2.00 lacs, the pledged Gold ornaments/ Jewellery needs to
be apprised by another assayer/assayer of another Branch within -02- days of
sanction of the loan.
Margin 25% on value of gold ornaments/jewellery/specially minted gold coins and 50% on
value of Silver jewellery as appraised by bank’s approved assayer subject to
advance value conveyed by corporate office from time to time.
Period Maximum 12 months
Review of the Limit No review of the limit be done. The gold loan should be adjusted on the due date.
Scheme Code CC008 (Eligible for interest subvention) and
LA411 (Not eligible for interest subvention)

FINANCING OF JOINT LIABILITY GROUPS (JLGS) OF SMALL & MARGINAL FARMERS/ TENANT FARMERS/ORAL LESSEES
AND SHARE CROPPERS

This scheme is to augment flow of credit to farmers, especially small, Marginal, tenant farmers, oral lessees, share
croppers / Individual taking up farm activities.

The scheme was formulated on the direction of the Government of India/RBI and intended to open a separate
window for Joint Liability groups of tenant farmers, oral lessees, share croppers and ensuring that a certain
production of the extended to them. NABARD will provide 100% refinance assistance in respect of their lending
to JLGs.

General Features:
4-10 individuals coming together for purpose of availing bank loan on individual basis or through group mechanism
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against mutual guarantee.

Criteria of Membership
Members should belong to similar socio-economic status and same village/area/neighbourhood. More than one
person from the same family should not be included in same JLG.
The JLG members are to engage in similar type of activities like crop production and must trust each other.
The members should be engaged in agricultural activity for a continuous period of not less than 1 year in the area
of operation of the branch.

Group Approach
The JLG should hold regular meetings under effective leader of group to discuss issues of mutual interests.
Bank branches, Business Facilitators, NGOs, Farmers Clubs, Farmers Associations, Panchayat Raj Institutions
(PRIs), Krishi Vikas Kendras (KVKs), State Agriculture Universities (SAUs), Agriculture Technology Management
Agency (ATMA), PACS, other cooperatives, Govt. Depts., Individuals, Input dealers, and Document writers (in
cooperative banks), MFIs /MFOs, etc. can form JLG.

Bank may open saving account by the JLG/ Individual members of JLG.

JLG Model:
Model A- Financing Individual in the JLG.
Model B- Financing the JLG as a group

Loan Limit:
For Individual members and JLGs: The maximum loan limit will be need based, to be assessed as per the BKCC
norms.
Maximum Loan for Individual: Rs. 100,000/-
Maximum Loan amount to a JLG: Rs. 10,00,000/-

Incentive for promotion of JLGs

To facilitate promotion of JLGs, Banks are eligible for grant assistance from NABARD. Grant assistance will be
extended to Banks for formation, nurturing and financing of JLGs over a period of 3 years @ Rs.2000/- per JLG.
Other institutions promoting JLGs will be eligible for grant assistance of Rs.2000/- per JLG over a period of three
years. The first instalment of Rs.1000/- would be released to the Bank/other Institutions after sanction of loan by
the Bank. The 2nd & 3rd instalment would be released, based on certification from the banks about prompt
repayment by all members of the group.

PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)

Coverage of Farmers:
All farmers including sharecroppers and tenant farmers growing notified crops in notified areas are eligible for
coverage

Coverage of Crops:
 Food crops (Cereals, Millets and Pulses),
 Oilseeds
 Annual Commercial / Annual Horticultural crops
However, it is subject to change time to time.

Coverage of Risks and Exclusions

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Following stages of the crop and risks leading to crop loss are covered under the scheme.
 Prevented Sowing/ Planting Risk
 Standing Crop
 Post-Harvest Losses
 Localized Calamities

General Exclusions: Losses arising out of war and nuclear risks, malicious damage and other preventable risks shall
be excluded

Sum Insured /Coverage Limit:

Sum Insured per hectare for both loanee and non-loanee farmers will be same and not more than the Scale of
Finance as decided by the District Level Technical Committee (DLTC).

FINANCIAL INCLUSION PLAN

The bank has implemented Financial Inclusion Plan for providing banking services in the un-banked / under-
banked 20,000 villages having population of 2,000 and above during the first phase. The banking services have
been provided to these villages through information and communication technology based models like smart
cards, micro ATMs, mobile vans and brick & mortar branches, wherever feasible.

Moreover, under Roadmap for provision of banking outlets in villages with population less than 2000, our bank
has advised all the Financial Inclusion link branches to ask concerned BCs and KIOSK operators/VLEs to visit
periodically to their allotted sub service area villages on pre-announced days and time to cover 100% Service Area
villages.

The basic approach of financial Inclusion is based on the fundamental principle of 5A‘s of ensuring Adequacy and
Availability of financial services to all sections of the society through the formal financial system covering savings,
credit, remittance, insurance, etc. and, at the same time, increasing Awareness of such services and ensuring
Affordability and Accessibility of the appropriate financial products through a combination of conventional and
alternative delivery channels and technology enabled services and processes.

Importance & Scope of FIP:

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

Various initiatives were taken up by RBI / GOI in order to ensure financial inclusion. These include like
Nationalization of Banks, Expansion of Banks branch network, Establishment & expansion of Cooperative and
RRBs, Introduction of PS lending, Lead Bank Scheme, Formation of SHGs and State specific approach for Govt
sponsored schemes to be evolved by SLBC. During 2005-2006, RBI advised Banks to align their polices with the
objective of financial Inclusion. Further, in order to ensure greater financial inclusion and increasing the outreach
of the banking sector, it was decided to use the services of NGOs/SHGs, MFIs and other Civil Society Organizations
as intermediaries in providing financial and banking services through use of “Business Facilitator and Business
Correspondent Model”.

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BOB- Kiosks Model under financial inclusion:
Presently we are covering financial inclusion villages through three models such as POS based BC model, Mobile
Van model and Brick & Mortar branch model. All these models have unique features and own merits. As a part of
continual development in financial inclusion, our bank has introduced one more model ―Kiosk Banking which is
web based application that can be accessed through desktop or laptop. This is card less solution so that time
period required for printing and distribution of smart card can be eliminated and customer can start operating
the account immediately from date of opening of account. Transactions processing is based on centralized
biometric authentication on real time basis. This model is very useful to increase our reach into the villages as
well as implementation of Urban Financial Inclusion at urban and semi-urban locations.

Bank has already entered into an agreement with the CSC e-Governance India Services Ltd., which is SPV for the
purpose launched by Department of Information and Tech., Government of India to appoint their Common
Services Centers (CSCs) as Business Correspondents.

Business Facilitator Model Business Correspondent model

 BF should be used to provide only non-financial support 
services.
The following services can be provided by the Business
Facilitators to the bank: 1.
 Identification of borrowers as per KYC norms and 2.
fitment of activities. However, the branches are 3.
ultimately responsible for adherence to the KYC norms. 4.
Hence, they have to ensure that KYC norms are
scrupulously followed while opening loan accounts.
 Collection & preliminary processing of loan applications 5.
including verification of primary information/data.
 Creating awareness about loans and liability products.
 Education and advice on managing money and debt 
counselling.
 Processing and Submission Of applications to banks.
Promotion and nurturing of Self Help Groups/ Joint
Liability Groups Post-sanction monitoring.
 Monitoring and handholding of Self Help Groups/Joint
Liability Groups/ Credit Groups/ Others  In View to Provide Flexibility to the Banks and
 Follow-up for recovery
In addition to activities listed under the business
facilitator model, the scope of activities to be
undertaken by the business correspondents will
include
Disbursal of Small Value Credit,
Recovery of Principal / Collection of Interest
Collection of Small Value Deposits
Sale of Micro Insurance/ Mutual Fund Products/
Pension Products/ Other Third-Party Products
And
Receipt and Delivery of Small Value
Remittances/ Other Payment Instruments
The activities to be undertaken by the BC Would
be within the normal course of the bank’s
banking business, but conducted through the
entities indicated above at places other than the
bank premises.
Technological Development in the Banking
Sector, The RBI has decided to remove the
earlier Distance Criteria (Distance Between the
Place of Business of a B.C./ B.F. and the Base
Branch) for the Operation of The Business
Correspondent (BC)for Rural, SU and Urban
Areas of 30 Kms and 5 Kms in Metropolitian
centre has removed. Now there is no such any
distance criteria.

Business Correspondent (BC) Model

BCs are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM.
Banks are required to take full responsibility for the acts of omission & commission of the BCs that they engage &
have, therefore, to ensure thorough due diligence & additional safeguards for minimizing the agency risk.

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Basically, BCs enable a bank to expand its outreach & offer limited range of banking services at low cost, as setting
up a brick & mortar branch may not be viable in all cases. BCs, thus, are an integral part of a business strategy for
achieving greater financial inclusion.

Corporate BCs
Corporate BCs are providing front end BC Services to our Bank in 22064 allotted villages grouped into 6829 Sub
Service Area (SSA) across the country and also in urban area as well (as on 30-03-2017).

1. M/s Tata Consultancy Services (TCS).

2. M/s HCL Info System (HCL).
3. M/s Vakrangee Finserve Limited (Vakrangee).
4. M/s NICT (Network for Information and Computer Technology).
5. M/s FIA Technology Services Private Ltd.
6. M/s CSC e-governance India Ltd.
7. M/s SAHAJ E-Villages Ltd.
8. M/s CMS Computer Ltd.
9. M/s Sollet Soft Solution Ltd.
10. M/s AISECT Ltd.
11. M/s Appan Dukan Marketing & Service Pvt. Ltd.
12. M/s Drishtee Development & Communication Ltd.
13. M/s Fourth Dimension Solutions Ltd.
14. M/s Mahamritunjay Trade & Technologies Pvt. Ltd.
15. M/s E- Cartes Technology Pvt. Ltd.
16. M/s Silvertouch Technologies Ltd.
17. M/s Roinet Solution Pvt. Ltd.
18. Twinstar Industries Ltd.
19. Shri Ram Prasad Singh Social Foundation.
20. BASIX Sub-K iTransactions Limited.
21. Kalyan Rural Empowerment Development.
22. Achariya Technologies.
23. Gujarat Infotech Limited.
24. V K venture Pvt. Ltd.
25. Visionindia software Exports.
26. Santosh Finlease Pvt. Ltd.
27. BASIX Krishi Samruddhi
28. Alankit Ltd.
29. M/s. Osiris Infotech Pvt. Ltd.
30. M/s. Sarna Infocom Pvt. Ltd

Bank Sakhi Approach:

The primary objective is to appoint quality BCs to provide continuous banking service in the area and to support
branches in qualitative business development, especially in mobilization of deposit and asset management.
Eligibility criteria
 The SHG member who is to be referred to work as BC should be performing, active, educated, sociable,
trustworthy preferably an office bearer of the SHG.
 The person should be at least 10th pass
 He/ she should be residing in the locality
 He/ she should have good credentials and is willing to work for people in the village and can move door to
door.

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Appointment of Retired bank officers as Business Correspondents for the bank

The selection will be held through an interview process by a committee headed by Regional Head/ORM. The
concerned Regional Head/ORM and the Officer in-charge of Financial Inclusion in the region will be the committee
members.

Eligibility
 Retired clericals/officers (including voluntarily retired) from any bank including RRBs.
 Should not have exceeded 65 years provided he is physically fit at the time of appointment and continue
to work as BC till 70 years.

Products and Services Offered at our BC Points

 Savings Account Opening
 Instant Account Opening
 E-KYC Account Opening
 Card Based Transactions
 RD/ FD opening
 Enrolment under PMJJBY/ PMSBY / APY
 Cash deposit/ withdrawal /remittances and fund transfer
 AEPS Transactions (On-Us and Off-Us)
 Zero balance funding
 Aadhaar Seeding
 Mobile Seeding
 RuPay cards Activation
 CASA Mobilization
 Lead generation
 Recovery in standard/ NPA/ Written off loan accounts.
 IMPS (immediate Payment Services)
 Payment and Utility Services
 Enrolment of Atal Pension Yojana
 Passbook Printing
 NEFT
 IMT (lnstant Money Transfer)
 Balance Enquiry

Instant Account Opening at BC points

SB150 scheme code is only meant for opening of Saving Bank Accounts at our Business Correspondent (BC) points.

Aadhaar enabled payment system (AEPS) BCC: BR: 107:130:

AEPS is interoperable system through which any customer of our bank and other bank who has Aadhaar linked
bank account can avail banking services such as cash deposit, cash withdrawal, Balance inquiry, and fund transfer
at any of our BC location.
The transaction in AEPS is Aadhar based and as such transaction is based on biometric authentication and
therefore, account should be Aadhaar seeded.
Currently, our customers have the following modes for Aadhaar seeding into their account:
 Branch
 ATM
 lnternet Banking
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  SMS 5616150

Opening of Term Deposit and Recurring Deposit Accounts at BC points:

As a new initiative our Bank has started opening of FD & RD accounts at BC points. The following customers are
eligible to open FD and RD accounts at BC points
i) Customers who have opened their saving bank accounts through BC points.
ii) Customers whose saving bank accounts have been Aadhaar seeded.

Provision for doing card based ON-US transaction at BC point through RuPay, Master & VISA domestic cards (BCC:
BR: 108:223)
It has been extended to our customers holding domestic variant of Master and VISA debit card. Hence any
customer holding domestic variant of RuPay, Master or VISA debit card can visit any of our BC point and do cash
withdrawal and balance inquiry through the PIN PAD device or micro ATM devices available at our BC points.

RuPay Card and Pin based transactions for other Bank Customers at our BC points (BCC: BR: 108:269)
Customer of any other Bank can visit our BC points and can do financial (Cash Withdrawal) and non-financial
(Balance Enquiry) transactions using their RuPay card and Pin through the PIN PAD devices or micro ATM devices
provided to our BCs by their Corporate Agencies.

Service Charges on cash withdrawal and balance enquiry using RuPay Card & Pin conducted at ATMs, Micro ATMs
(BC Points) of other:
As per guidelines issued by Reserve Bank of India, RuPay card and pin based transactions conducted at our BC
points shall be subject to RBI guidelines on ATM usage.
 The first 5 RuPay card and pin based transactions per month conducted by our customers at ATMs and / or
Micro ATMs (BC points) of other Banks shall be free of service charges.
 For transactions beyond 5 in a month conducted by our customers at ATMs and /or Micro ATMs (BC points)
of other Banks, our customers will be charged the following service charges:
 For cash withdrawal – Rs. 20 plus applicable taxes per transaction
 For balance enquiry - Rs.10 plus applicable tax per transaction
 The number of transactions count will include both financial and non-financial transactions and also
transactions conducted at ATMs as well as Micro ATMs (BC points) of other Banks. Above charges shall be
recovered automatically by the system from the account of our customer.

REMUNERATION TO BCS:
In case of BCs operating under Corporate BCs, the remuneration net of TDS is shared in the ratio of 80 to 20
between the field level BC and corporate BC. In case of Direct BCs, the remuneration net of TDs is paid fully to
them by corporate office.

Incentives for Business Facilitation by BCs are paid at branch level to the debit of P/L head ‘incentives paid to BCs’,
account number XXXX0052201006 of respective branch subject to TDS.

Service Incentive

Cash Deposit Other than AEPS 0.40% of the Amount (Min Re 1/-, Max of Rs 20/- per transaction

Maximum Limit-49000/-per A/c per

day

Cash Deposit (AEPS on-us) 0.40% of the Amount (Min Re 1/-, Max of Rs 25/- per transactions)

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Maximum Limit- Rs. 49000/-

Cash Deposit (Using Ru Pay Card and 0.40% of the amount a minimum Re 1/- per transactions to BC
AEPS off-us)

Maximum Limit Rs. 10000

Cash withdrawal other than AEPS 0.40% of the Amount (Min Re 1/-, Max of Rs 20/- per transactions)

Maximum Limit-10000/-

Cash withdrawal using AEPS on-us & 0.40% of the Amount (Min Re 1/-, Max of Rs 25/- per transactions)
RuPay Card on-us
Maximum Limit- Rs. 20000/-

Cash withdrawal using AEPS off-us & 0.40% of the Amount (Min Re 1/-, Max of Rs 20/- per transactions)
RuPay Card off-us
Maximum Limit-10000/-

Remittance/Fund transfer through, 0.4% of the Amount Min Re 1/-, Max of Rs 20/- per transactions)
NEFT etc.
Maximum Limit-10000/-

0.4% of the Amount Min Re 1/-, Max of Rs 20/- per transactions)

IMPS Txn (Cash) Maximum Limit-10000/-

0.4% of the Amount Min Re 1/-, Max of Rs 10/- per transactions)

IMPS Txn (Transfer) Maximum Limit-10000/-

Deposit in Loan Accounts Cash Deposit - 0.40% of the amount (Min Re 1/-, Max Rs 20/- per
Transaction)

Max limit per A/c per day for Cash deposit is Rs. 10000/-

Fund Transfer from own a/c to Loan a/c – Rs. 1,00,000/-

Opening of Fixed Deposit account 0.40% of deposit amount; Max of Rs.20/- per account
(Max 1 lakh per a/c through transfer
only)

Opening of Recurring Deposit Rs.10/- per account

account (Max 10000 per a/c through
transfer only)

Pass Book Printing Rs.1 /- per occasion

Incentives payable for business

facilitation

Canvassing fresh Gold Loan accounts 0.2% of the Loan amount (Minimum of Rs.25.00 & maximum of
Rs.250.00) per account

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 Lead generation/ Canvassing of For Kiosk Model:
Retails Loans/ KCC/ GCC
0.5% of loan amount sanctioned subject to a minimum of Rs.25/- and
(other than OD sanctioned under maximum Rs. 5000/-.
BSBD Accounts)
The incentive shall be payable on the accounts sanctioned for Rs.5000
and above.

50% of. the amount payable shall be paid after first disbursement of
the loan and rest 50% shall be payable one year thereafter (one year
should be counted after completion of moratorium if any) if the
account continues to be standard asset till then

For POS Model:

0.50% of loan amount subject to maximum of Rs. 500 per case.

3rd party financial products (India For Kiosk Model

First Life Insurance)
25% of the commission earned by the bank

For POS Model

 For sum insured up to Rs. 15,000/- per policy Rs.5/-.

For formation I promotion including
credit linkage
 For sum insured above Rs. 15,000 and up to Rs. 25,000 per
policy Rs. 10/-.
 For sum insured above Rs. 25,000/- per policy Rs. 20/-.
Not exceeding Rs.1000 per SHG/JLG formed and credit linked with
the bank in stages as under

 For stationery & overhead expenses after saving linkage of SHG:

Rs.300/-
 4 months after saving linkage of the SHG: Rs.300/-
 Immediately after credit linkage of the SHG: Rs.400

Incentive linked schemes for BCs for Mobilizing deposits in SB accounts opened by them
This is applicable when at least 90% of accounts opened by BCs are funded and BC maintains at least 1000 accounts.
The incentive in % term is as under:
 Average balance up to 25 lacs – NIL
 Average balance above 25 lacs and up to 40 lacs – 0.5%
 Average balance above 40 lacs and up to 60 lacs - 1%
 Average balance above 60 lacs – 1.5 %
The maximum balance in the accounts for incentive purpose is capped at Rs. 1 lakh. If the account is having balance
more than 1 lakh, the balance will be taken as 1 lakh

Management of Asset quality: Incentive for follow up & recovery in loan accounts and maintaining asset quality
Incentive is 1% of the Amount of loan account assigned to BC for follow up and recovery where the account is
standard and regular at the end of the year i.e. after 12 months.
 The incentive amount will be paid only after the completion of one year.
 The incentive will be payable only when 90% of the accounts assigned to the BCs are regular.

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

Account opening
Opening of savings bank accounts of customers happen at BC points under two modes:
1) Instant account opening mode and
2) eKYC mode, where Aadhaar seeding happens simultaneously along with opening of account.

In order to incentivize opening of account under eKYC mode at BC point, it has been decided to revise the
remuneration structure of opening of accounts at BC points as under:

Process Remuneration payable

Existing Revised

Instant Account Opening Rs. 20/-per account Rs.5/- per account if not funded
immediately; Rs. 10/- per account
(Non eKYC) if funded immediately

Opening account under e-KYC Rs. 25/- per account Rs. 25/- per account

Opening of Settlement accounts (OD124) tor BC Operation

Bank has reiterated the modalities for opening of BC settlement account.

Branch should open settlement account of BCs under Scheme Code OD124 only and the account can be
opened with zero balance.

The Overdraft facility should be granted to the business correspondent against collateral security on
usual commercial terms and conditions as per bank's extant guidelines. Branch has to monitor overdraft
account of the BC on daily basis.

Quarterly Inspection/Audit of BC points (BCC: BR: 107:491 dated 03-10-2015):

 Bank has decided to conduct inspection/ audit of BC points at regular interval. In this regard, Bank
advised Branches, Regional Offices and inspection division to audit BC Points in their respective area of
operation in the following manner.
 Branches to audit all their respective BC points once in every quarter and take appropriate remedial
action in case of any irregularity is found and same copy should send to RO for their record and action if
warranted.
 RO on its own will audit 10% of the BCs of the region randomly every quarter (rotation basis) in addition
to branch audit and initiate necessary action.
 The internal Auditors from ZIAD concerned will visit a few BC points randomly during their regular
inspection of the Branch.

Precautions to be taken by Branches to prevent frauds at BC points (BCC:BR:108:123 dated 17-03-2016):

BC must be local preferably from same village or adjacent villages. BC must not use any stationery such as Pay-in-
slip, withdrawal slip, blank passbook etc. of the bank. They must issue system generated receipts for all type of
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transactions. The branch along with BC must organize meetings/camps/financial literacy programs in villages;
schools at least once in a month and the system followed by BC should be well explained. The customers should
be convinced to seed their mobile numbers in their accounts to receive alerts or SMS for all credit and debit
transactions in their accounts.

Ultra-Small Branches
 Ultra-Small Branches have established by the bank for effective coverage under Financial Inclusion.
 It can be established between the base branch and BC locations so as to support to about 8-10 BC units
at a reasonable distance of 3-4 Km.
 USB is brick & mortar unit of floor area of 100-200 sq.ft., from where banking facilities will be provided
to people and nearest branch from which it will be attached, officer of link branch will visit once in a
week to the USB just like earlier concept of Satellite Branch.

Pradhan Mantri Jan DhanYojana (PMJDY):

Pradhan Mantri Jan Dhan Yojana is a scheme for comprehensive financial inclusion launched by the Prime Minister
of India, Narendra Modi on 28 August 2014. He had announced this scheme on his first Independence Day speech
on 15 August 2014.
Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore (15 million) bank
accounts were opened under this scheme. By 28 January 2015, 12.58 crore accounts were opened, with around
Rs. 10590 crores (US$1.7 billion) were deposited under the scheme, which also has an option for opening new
bank accounts with zero balance.
The scheme has been started with a target to provide 'universal access to banking facilities' starting with "Basic
Banking Accounts" with overdraft facility of Rs.5000 after six months and RuPay Debit card with inbuilt accident
insurance cover of Rs. 1 lakh and RuPay Kisan Card. In next phase, micro insurance & pension etc. will also be
added.

Under the scheme:

1. Account holders will be provided zero-balance bank account with RuPay debit card, in addition to accidental
insurance cover of Rs 1 lakh if card is used for financial and non-financial purpose in last 90 days of accident.
2. After Six months of opening of the bank account, holders can avail max Rs. 5,000 overdrafts from the bank.
3. With the introduction of new technology introduced by National Payments Corporation of India (NPCI), a
person can transfer funds, check balance through a normal phone which was earlier limited only to smart phones
so far.
4. Mobile banking for the poor would be available through National Unified USSD Platform (NUUP) for which all
banks and mobile companies have come together.

Pradhan Mantri Jan Dhan Yojana(PMJDY)-Overdraft:

Under Financial inclusion after implementation of PradhanMantri Jan dhan yojana it has been decided by the
government of India to devise a uniform SBOD across the industry under PMJDY. General purpose loan to provide
hassle free credit to low income group/underprivileged customer to meet their exigencies without insistence on
security, purpose or end use of credit.

Eligibility-
 Individuals having BSBD accounts, which are operated satisfactorily for at least six months. OD to be
granted to the earning member of family, preferably women of the house.
 There should be regular credits under DBT/DBTL scheme/ other verifiable source.
 For avoiding duplicate benefit, account may be seeded with Aadhaar.
 Age of applicant between 18 years to 60 years.

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  Not eligible: minors, KCC/GCC borrowers, more than one member of the same family.

Period of sanction- 36 months to annual review of accounts

Loan Amount-
 4 times of Average monthly balance or
 50 % of credit summations in accounts during the preceding 6months or
 Rs 5000/- whichever is lower.

Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY) and Pradhan Mantri Suraksha Bima Yojna (PMSBY)
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojna (PMSBY) are the
flagship schemes under ambitious social security schemes captioned "JAN DHAN SE JAN SURAKSHA" launched by
Government of India on 1st of June 2015. ln absence of any formal social security system in India, Government
had envisioned to cover a larger set of population through the Banking channel.

Particulars Pradhan Mantri Jeevan Jyoti Bima Yojna Pradhan Mantri Suraksha Bima Yojna
Type of Insurance Life Insurance Accidental Insurance
Eligibility All saving Bank account holders within All saving Bank account holders within the
the age group given below. age group given below.
The insurance premium amount will be The insurance premium amount will be
directly debited to their account. directly debited to their account.
Sum Insured Rs. 2 lacs Rs.2 lac
Period 1 Year 1 Year
Age limit 18-50 Years 18-70 Years
Cover Rs. 2 lacs payable on death due to any  Accidental death & full disability Rs.
reason. 2 lakhs
 Partial disability Rs. 1 lac
Yearly premium Rs.330 + Service Tax Rs.12 + Service Tax
Commission to Bank Rs. 30 to BC & Rs.11 to Bank + tax Rs.1 to BC & Rs.1 to Bank + tax
from premium amount

The insurance cover shall be for one-year period starting from 1st June to 31st May for which premium will be
required to be paid from account of the customer by 31st May every year.

Wef 01.06.2016 lien clause will be implemented in the rules of PMJJBY i.e. the risk cover will commence only after
the completion of 45 days from the date of enrolment into the scheme by the member. However, the death due
to accident is exempted from the lien clause.

Atal Pension Yojana (APY)

A pension scheme for citizens of India, is focused on the unorganised sector workers. APY is being administered
by the Pension Fund Regulatory and Development Authority (PFRDA) under the overall administrative and
institutional architecture of the National Pension System (NPS). Under the APY, guaranteed minimum pension of
Rs. 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will be given at the age of 60 years depending on
the contributions by the subscribers.
Any Citizen of India can join APY scheme. The following are the eligibility criteria: -
(i) The age of the subscriber should be between 18- 40 years.
(ii) He / She should have a savings bank account.

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The prospective applicant may provide Aadhar and mobile number to the bank during registration to facilitate
receipt of periodic updates on APY account. However, Aadhar is not mandatory for enrolment.

The contributions can be made at monthly/ quarterly/ half yearly intervals through auto debit facility from savings
bank account of the subscriber. The subscribers are required to contribute the prescribed contribution amount
from the age of joining APY till age 60. The details of age-wise, pension-wise and contribution-frequency-wise
prescribed contribution amount and the indicative pension wealth available for the nominee has been given in
the scheme.
The co-contribution of the Government of India is available for 5 years, i.e., from the Financial Year 2015-16 to
2019-20 for the subscribers, who join the scheme during the period from 1st June, 2015 to 31st December, 2015
and who are not covered by any Statutory Social Security Schemes and are not income tax payers.

Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing the
guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher than the
guaranteed returns embedded in APY. The same amount of monthly pension is payable to spouse (default
nominee) upon death of subscriber. Nominee will be eligible for return of pension wealth accumulated till age 60
of the subscriber upon death of both the subscriber and spouse.

SELF HELP GROUPS

Self Help Groups fulfilling the following criteria would broadly be eligible:
 The Group should be in existence for at least six months
 The Group should have actively promoted the savings habit
 Groups could be formal (registered) or informal (unregistered)
 Membership of the group could be between 10 to 20 persons
 If membership exceeds 20, the SHG should be registered

The sanction Savings-cum-overdraft limit is sanctioned for the amount, which a group will be entitled to have in
the ratio maximum up to 1:10 for the projected savings of ensuing five years. However, disbursement (Drawing
Power/DP) would be permitted after six months, based on actual corpus fund including SHGs savings as above
and thereafter reviewed each year in the ratio of corpus fund including savings as prescribed above and
accordingly DP be fixed time to time.

Margin and Security Norms: As per operational guidelines issued by NABARD, SHGs may be sanctioned savings
linked loans by banks (varying from a saving to loan ratio of 1:1 to 1:4). However, in case of matured SHGs, loans
may be given beyond the limit of four times the savings as per the discretion of the bank

Discretionary Lending Powers- Revised vide circular no. BCC:BR:109:526

The finance to SHGs is considered as a clean loan facility and the Branch Managers are considering the facility
under their powers for granting such facilities in order to ensure quick disposal of application for credit linkage of
SHGs at Branch level itself. Enhanced lending powers of Branch Managers as under:

Scale of Branch Manager Revised powers for SHG – Bank linkage (Rs in Lacs)
JMG Scale - I 5.00
MMG Scale- II 5.00
MMG Scale-III 10.00

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Procedure for opening an S.B. account of SHG with the Bank
 Resolution from the SHG.
 Copy of the rules and regulations of the SHG.
 Authorisation from the SHG (Operating Instructions.
 KYC norms.

Processes for Credit-linkage of SHG by the Bank

 Opening of S/B Account for the SHG Resolution from the SHG Authorisation from the SHG
 Copy of the rules and regulations of the SHG
 Conduct of internal lending by the SHG
 Assessment of SHGs
 Sanction of Credit Facility to the SHG

Corpus / savings of the group includes following:

 Group’s balance in the SB A/c.
 Amount held as cash with the authorized persons. Amount internally lent amongst the members.
Amount received as interest on the loans.
 Any other contributions received by the group like grants, donation, etc.

What are the advantages to the banks for banking with SHGs?
Advantages to the banks for banking with SHGs are following:
 Transaction costs are reduced
 Increase in the deposit base
 Very little cost for appraisal and monitoring of the loan
 Increase in the social base in rural area
 Financial Services at door steps
 NPA Reducing
 Social Agenda / Corporate Social Responsibility
 No subsidy Dependence Syndrome

Simplifying KYC norms for Self Help Groups (SHGs)

KYC verification of all the members of SHG need not be done while opening the savings bank account of the SHG
and KYC verification of all the office bearers would suffice. As regards KYC verification at the time of credit linking
of SHGs, it is clarified that since KYC would have already been verified while opening the savings bank account
and the account continues to be in operation and is to be used for credit linkage, no separate KYC verification of
the members or the office bearers is necessary.

Unified Processing Charges for Women SHGs (BCC:BR:107:379):

According to Central Level Coordination Committee of NRLM, Bank has been decided to waive processing charges
for loans granted to all women SHGs irrespective of the activity and limit sanctioned. Loan to SHGs may be
classified as Agriculture & other priority sector, based on the activity undertaken by the group.

Credit information reporting in respect of Self Help Group (SHG) members (BCC: BR: 108:105)
Underscoring the importance of credit information reporting in respect of the SHG members for financial
inclusion, credit decision of banks and Micro Finance Institutions (MFIs) and credit quality of the SHG loan
portfolios, the working group has emphasized the need for putting in place the credit information reporting for
SHG members sooner than later.

However, the group has suggested a phased approach to the implementation of the RBI directions so as to ensure
that the data quality is not compromised.

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None of the data requirements specified in this circular should be made a precondition for extending loans to the
SHGs, though branches must make sincere efforts to comply with these requirements.

DAY-NRLM (DEENDAYAL ANTYODAYA YOJANA - NATIONAL RURAL LIVELIHOODS MISSION)

The Ministry of Rural Development, Government of lndia, renamed NRLM as DAYNRLM (Deendayal Antyodaya
Yojana - National Rural Livelihoods Mission) w e f. March 29, 2016 and is the flagship program for promoting
poverty reduction through building strong institutions of the poor, particularly women, and enabling these
institutions to access a range of financial services and livelihoods services.

NRLM was introduced by restructuring Swaranjayanti Gram Swarojgar Yojana (SGSY) replacing the existing SGSY
scheme, effective from April 1, 2013.
 The support from DAY-NRLM includes all round capacity building of the SHGs ensuring that the group
functions effectively on all issues concerning their members, financial management, providing them with
initial fund support to address vulnerabilities and high cost indebtedness, formation and nurturing of
SHG federations, making the federations evolve as strong support organizations, making livelihoods of
the poor sustainable, formation and nurturing of livelihoods organizations, skill development of the rural
youth to start their own enterprises or take up jobs in organized sector, enabling these institutions to
access their entitlements from the key line departments, etc.
 Women SHGs under DAY-NRLM consist of 10-20 persons. In case of special SHGs i.e. groups in the
difficult areas, groups with disabled persons, and groups formed in remote tribal areas, this number may
be a minimum of 5 persons.
 DAY-NRLM promotes affinity based women Self-help groups.
 Only for groups to be formed with Persons with disabilities, and other special categories like elders,
transgenders, DAY-NRLM will have both men and women in the self-help groups"

Financial Assistance to the SHGs:

Revolving Fund (RF): DAY-NRLM would provide Revolving Fund (RF) support to SHGs in existence for a minimum
period of 3/6 month and follow the norms of good SHGs, i.e. they follow 'Panchasutra'-
1. Regular meetings,
2. Regular savings,
3. Regular internal lending,
4. Regular recoveries and
5. Maintenance of proper books of accounts.

Only such SHGs that have not received any RF earlier will be provided with RF, as corpus, with a minimum of Rs.
10,000 and up to a maximum of Rs. 15,000 per SHG. The purpose of RF is to strengthen their institutional and
financial management capacity and build a good credit history within the group.

Capital Subsidy has been discontinued under DAY-NRLM:

No capital subsidy will be sanctioned to any SHG from the date of implementation of DAY-NRLM.

Community Investment Support Fund (CIF):

CIF will be provided to the SHGs in the intensive blocks, routed through the Village level/ Cluster level Federations,
to be maintained in perpetuity by the Federations. The CIF will be used, by the Federations, to advance loans to
the SHGs and/or to undertake the common/collective socio-economic activities.

Introduction of Interest subvention:

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DAY-NRLM has a provision for interest subvention, to cover the difference between the Lending Rate of the banks
and 7%, on all credit from the banks/ financial institutions availed by women SHGs, for a maximum of Rs. 3,00,000
per SHG. This will be available across the country in two ways:
1. In 250 identified districts, banks will lend to the women SHGs @7% up to an aggregated loan amount of
Rs. 3,00,000. The SHGs will also get additional interest subvention of 3% on prompt payment, reducing
the effective rate of interest to 4%.
2. In the remaining districts also, all women SHGs under DAY-NRLM are eligible for interest subvention to
the extent of difference between the lending rates and 7% for the loan up to Rs. 3,00,000, subjected to
the norms prescribed by the respective SRLMs. This part of the scheme will be operationalized by SRLMS.

Lending Norms:
The eligibility criteria for the SHGs to avail loans:
 SHG should be in active existence at least since the last 6 months as per the books of account of SHGs
and not from the date of opening of S/B account.
 SHG should be practicing' Panchasutras' i.e. Regular meetings; regular savings; regular inter loaning;
Timely repayment; and Up-to-date books of accounts.
 Qualified as per grading norms fixed by NABARD. As and when the federations of the SHGs come to
existence, the grading exercise can be done by the Federations to support the Banks.
 The existing defunct SHGs are also eligible for credit if they are revived and continue to be active for a
minimum period of 3 months.

Loan amount:

Emphasis is laid on the multiple doses of assistance under DAY-NRLM. This would mean assisting an SHG over a
period of time, through repeat doses of credit, to enable them to access higher amounts of credit for taking up
sustainable livelihoods and improve on the quality of life.

SHGs can avail either Term Loan (TL) or a Cash Credit Limit (CCL) loan or both based on the need. In case of need,
additional loan can be sanctioned even though the previous loan is outstanding.

The amount of credit under different facilities should be as follows:

Cash Credit Limit (CCL): In case of CCL, banks are advised to sanction minimum loan of Rs. 5 lakhs to each eligible
SHGs for a period of 5 years with a yearly drawing power (DP). The drawing power may be enhanced annually
based on the repayment performance of the SHG. The drawing power may be calculated as follows:

 DP for First Year: 6 times of the existing corpus or minimum of Rs. 1 lakh whichever is higher.

 DP for Second Year: 8 times of the corpus at the time review/enhancement or minimum of Rs. 2 lakhs,
whichever is higher

 DP for Third Year: Minimum of Rs. 3 lakhs based on the Micro credit plan prepared by SHG and appraised
by the Federations /Support agency and the previous credit History.

 DP for Fourth Year onwards: Minimum of Rs. 5 lakhs based on the Micro credit plan prepared by SHG and
appraised by the Federations /Support agency and the previous credit History.

Term Loan:
In case of Term Loan, banks are advised to sanction loan amount in doses as mentioned below:
 First Dose: 6 times of the existing corpus or minimum of Rs. 1 lakh whichever is higher.

 Second Dose: 8 times of the existing corpus or minimum of Rs. 2 lakh whichever is higher

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  Third Dose: Minimum of Rs. 3 lakhs based on the Micro credit plan prepared by the SHGs and appraised
by the Federations /support agency and the previous credit History

 Fourth Dose: Minimum of Rs. 5 lakhs based on the Micro credit plan prepared by the SHGs and appraised
by the Federations/Support agency and the previous credit History

Purpose:
The loan amount will be distributed among members based on the Micro Credit Plan prepared by the SHGs. The
loans may be used by members for meeting social needs, high cost debt swapping, construction or repair of house,
construction of toilets and taking up sustainable livelihoods by the individual members within the SHGs or to
finance any viable common activity started by the SHGs.

Repayment schedule:
 The First year/ first dose of loan will be repaid in 6-12 months in monthly/ quarterly instalments

 The second year/ Second dose of loan will be repaid in 12-24 months in monthly/ quarterly instalments

 The Third year/ Third dose of loan will be repaid in 24-36 months in monthly/ quarterly instalments

 The loan from Fourth year/ Fourth dose onwards has to be repaid between 3-6 years based on the cash
flow in monthly/ quarterly instalments.

Security and Margin:

 No collateral and no margin will be charged up to Rs. 10.00 lakhs limit to the SHGs.
 No lien should be marked against savings bank account of SHGs and
 No deposits should be insisted upon while sanctioning loans.

CONTRACT FARMING

Cultivation of crops by the farmers under a buyback arrangement with an agency engaged in trading and/or
processing.
Types:
1. Procurement contract
2. Partial contract
3. Total contract

Advantages for farmers:

1. Even Small farmers can grow high value crops
2. Can avail benefit of high tech support
3. Less production credit will require
4. Least post-harvest loss
5. Price & Marketing risks are minimised

Advantages to Firms:
1. Can get produce as per specific requirement
2. Assured and uninterrupted supply
3. Time saving
4. Less marketing investments

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Advantages for Banks:
1. Better recovery
2. Cross selling of products
3. Deposits from farmers

BARODA GRAMEEN PARAMARSH KENDRA

It is an innovative idea towards Corporate Social Responsibility, showing Bank ‘s passion for agriculture and rural
development and to serve the common man.

In the past, the Bank has taken a number of initiatives such as opening of specialized outlets of Gram Vikash
Kendra’s (GVKs) and Multi Service Agencies (MSAs).

Baroda Swarojgar Vikas Sansthan (BSVS) is another initiative for capacity building by providing appropriate training
for skill upgradation to unemployed youth and women for their gainful employment.

For the rural community, especially for the farmers, there is a big ―Knowledge Gap in financial literacy, better
farming practices, technology adoption, diversification of opportunities, market linked prices, value addition
services offered by various institutions, women empowerment and also for employment opportunities for rural
youth. In addition to this, the deficiencies/ ignorance about credit related repayment during distress situations
call for credit counselling.

With a view to assist the rural community, the Bank has conceptualised ―Baroda Grameen Paramarsh Kendra
(BGPK) and its implementation by the dedicated team, which would build the confidence of the rural people.
Activities to be covered:
 Financial Education and Financial Inclusion
 Information sharing and problem solving on technical issues
 Credit counselling
 Synergy and liaison with other organizations and development activities

FARMERS CLUB PROGRAMME

Farmers Clubs have been organised by our bank in the Service Area Villages with the sole objective of improving
the recovery climate for rural lending and creating better awareness about loan and deposit products with the
ultimate aim of building a Rural Credit Portfolio on a sound scale. Farmers Club are intended to basically propagate
the following five principles of ―Development through Credit.
 Credit must be used in accordance with the most suitable methods of science and technology.
 The terms and conditions of credit must be fully respected.
 Work must be done with skill so as to increase production and productivity.
 A part of the additional income created by credit, must be saved.
 Loan instalments must be repaid in time and regularly so as to recycle credit.

Benefits to the Branch:


The formation of Farmers Club lead to better Banker-Borrower relationship in the area.

Mobilisation of deposits.

Increase in the credit flow and diversification of lending.

Generation of new business avenues.

Increase in loan recovery rate and decline in non-performing assets.

Reduction in transaction costs of financial institutions/Banks.

Socio Economic Development of the village.

A win-win situation both for the Banker and the borrower.
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The Farmers Club has also been instrumental in certain social welfare measures like arranging free eye check-up
camp. Animal Health Care Camp, Mass vaccination camp, community works like roads, check-dams, afforestation
etc.

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MSME BANKING

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 7.MSME BANKING

Micro Small and Medium Enterprises(MSME) : An Overview

MSMED Act was operationalized with effect from 2nd October 2006, which defines an “enterprise”
instead of an “industry” to give recognition to service sector and also defines a “medium
enterprise” to facilitate technology up gradation and graduation.
Section 7 of the Act protects the sector by restricting the investment in Plant & Machinery in case
of Industries and investment in equipments for service enterprises as below with effect from 2 nd
Oct. 2006:
Particulars Micro Small Medium Enterprises
Enterprises Enterprises
Investment in Plant & Not Exceeding Above Rs.25lakh Above Rs.5cr to not
Machineries in case of Rs.25lakh up to Rs.5cr exceeding Rs.10cr
Manufacturing
Enterprises
Investment in Not Exceeding Above Rs10lakh Above Rs.2cr to not
Equipment in case of Rs.10lakh up to Rs.2cr exceeding Rs.5cr
Service Sector
Enterprises

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

preservation of goods and whose investment in plant and machinery (original cost excluding land
and building and the items specified by the Ministry of Small Scale Industries) does not exceed as
mentioned in above table.
Service Sector Enterprises: engaged in providing or rendering services whose investments in
equipment (original cost excluding land & Building and Furniture, Fittings and other items not
directly related to the service rendered or as may be notified under MSMED Act, 2006) are as
detailed in above table. All Loans to KVI sector will be covered under Micro enterprises.
Service Enterprises will include Small Road & Water Transport operators, Small Business, Retail
Trade, Professional and Self Employed persons and all other Service Enterprises which satisfy the
above criteria. (Ref:- Master Circular – MSME - BCC: BR: 108:422 dated 01.09.2016)

Regulatory MSME classification is based on the following two fields available in Finacle as
under-

1. "Sector Code” in MIS page under Account profile

2. "PIant & Machinery" fleld in customer profile page under HASCROM menu

Computation of value of Plant & Machinery:

Investment under head ‘Plant and Machinery’ should include the original price of every
productive item irrespective of whether new or second hand, acquired and proposed to be
acquired, whether on lease or hire purchase or on ownership basis by the industrial undertaking,
irrespective of the manner in which the cost has been shown in its books.
For computing the value of the investment in Plant and Machinery, cost of the following
items should be included:
1) Original cost of Plant and Machinery (price paid by the owner / hirer / lessor).

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2) Cost of control panels, starters, Electric Motors, other electrical accessories mounted on
individual machines.
3) Cost of only those testing and quality control equipments, which are, used for/in process
testing.
4) The investment in establishing of Wind Mills to generate electricity for captive
consumption or partly for captive consumption and remaining power to sell to Electricity
Boards/others
Cost of following items should be excluded:
a. Equipments such as Tools, Jigs, Dies, Moulds, and Spares for maintenance and cost of
Consumable Stores.
b. Installation of P & M,
c. Research & Development Equipments and Pollution Control Equipments
d. Power Generation Set and extra Transformer installed
e. Bank Charges and Service Charges paid to the NSIC or to the State Small Industries
Corporation
f. Fire Fighting Equipments, Cables, Wires , electrical control panels, circuit breakersetc.,
which are used for producing electrical power or for safety measures
g. Gas producer Plants, Transportation Charges for indigenous Machineries
h. Technical Know-how Fees
i. Storage Tanks not linked to manufacturing process but are used for storing of Raw
material and Finished Goods.
j. The investment in establishing of wind mills to generate electricity for captive
consumption or partly for captive consumption and remaining power to sell to Electricity Boards
/ Others.
In case of Imported machinery following should included:
i- Import duty.
ii- The shipping charges.
iii- Custom clearance charges.
iv- Sales Tax.

Documents to be relied upon for classification of MSME: For ascertaining the investment in
plant and machinery for classification of an enterprjse as lvlicro, Small and Medium, the following
documents could be
relied upon:

(i) A copy ofthe invoice ofthe purchase of plant and machinery; or

(ii) Gross block for investment in plant and machinery as shown in the audited accounts;
or
(iii) A cedificate issued by a Chartered Accountant regading purchase price of plant and
machinery.

Further, the Ministry has clarified that for the investment in plant and machinery for the purpose
of classification of an enterprise as Micro, Small or Medium, the purchase value of the plant and
machinery is to be reckoned and not the book value (purchase value minus depreciation)

Our Bank’s approach - MSME sector for internal purpose:Our Bank considering vital role
being played by such organizations in Economic development of the Nation and in order to

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capture the business, has expanded the coverage of MSMEs well beyond the Regulatory definition
as under:
Our bank has therefore for internal purposes given focused attention to finance all Commercial
enterprises i.e. enterprises which may be outside the purview of regulatory definition of MSME
but having assessed turnover up to Rs.150.00 crores.
SME Banking business will thus include the following across the bank:
- Micro, Small and Medium Enterprises – as per regulatory definition irrespective
geographical location, i.e. rural, semi-urban, urban, metro areas.
- All other entities with their assessed annual sales turnover up to Rs. 150/- crores and real
estate projects, where the project cost is up to Rs. 50/- crores. Other than Real Estate projects,
where project cost is up to Rs.50.00 Crores.
- SMEs which are Associate/sister concerns of Large Corporate Banking customers.
- Clubs, Trusts, etc. (other than NBFCs, Financial Institutions & Banks)
- Financing under various Government schemes launched for MSME Sector.
The new/extended definition will only be used internally for promotion of business across these
segments. All the proposals falling beyond the ambit of regulatory definition shall be covered by
the Loan Policy Document and will attract all provisions of C & I sector, if not specified otherwise.
However, such Units, which are outside the purview of regulatory definition will not form part of
Priority Sector lending.

SME Expanded/Non Regulatory is classified based on the following field in Finacle as under-

1. "Sector Code" in MIS page uncler Account profile.

2. "Balance Sheet and Turnover” field in customer details page under HASCROM menu.

Classification under Priority Sector:

Bank loans to Micro, Small and Medium Enterprises, for both manufacturing and service sectors
are eligible to be classified under the priority sector as per the following norms:
Manufacturing Enterprises: The Micro, Small and Medium Enterprises engaged in the
manufacture or production of goods to any industry specified in the first schedule to the
Industries (Development and Regulation) Act, 1951 and as notified by the Government from time
to time. The Manufacturing Enterprises are defined in terms of investment in plant and
machinery.
Service Enterprises: Bank loans up to Rs.5.00crore per unit to Micro and Small Enterprises and
Rs.10.00crore to Medium Enterprises engaged in providing or rendering of services and defined
in terms of investment in equipment under MSMED Act, 2006.
Other Finance to MSMEs
i. Loans to entities involved in assisting the decentralized sector in the supply of inputs to and
marketing of outputs of artisans, village and cottage industries.
ii. Loans to co-operatives of producers in the decentralized sector viz. artisans, village and
cottage industries.
iii. Loans sanctioned by banks to MFIs for on-lending to MSME sector.
iv. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu
Udyami Card, Swarojgar Credit Card, and Weaver’s Card etc. in existence and catering to the non-
farm entrepreneurial credit needs of individuals).

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 v. Overdrafts extended by banks after April 8, 2015 upto Rs.5,000/-under PMJDY, provided
the borrower’s household annual income does not exceed Rs.1,00,000/- for rural areas and
Rs.1,60,000/-for non-rural areas. These overdrafts will qualify as achievement of the target for
lending to Micro Enterprises.
vi. Outstanding deposits with SIDBI and MUDRA Ltd on account of priority sector shortfall.
vii. Priority Sector Guidelines for MSME sector:
viii. Bank Loans to MSMEs are eligible to be classified under Priority sector as per following
norms:
Classification as Manufacturing Sector Services Sector
per MSMED Act
2006
Micro Enterprises Entire Exposure irrespective of Bank loans upto Rs.5 crore per
Limit borrower/unit
Small Enterprises Entire Exposure irrespective of Bank loans upto Rs.5 crore per
Limit borrower/unit
Medium Entire Exposure irrespective of Bank loans upto Rs. 10 crore per
Enterprises Limit borrower/unit

Retail Trade (such borrower satisfy the criteria on investment in Equipments as per MSMED Act
and direct service to consumers) :-
Limit Sector Classification

Upto Rs.5.00 crore MSME Priority Sector

Above Rs.5.00 crore MSME Non Priority Sector

To ensure that MSMEs do not remain small and medium units merely to remain eligible for
priority sector status, the MSME units will continue to enjoy the priority sector lending status up
to three years after they grow out of the MSME category concerned.

The targets and sub-targets set under priority sector lending for Domestic scheduled
commercial banks and Foreign banks and above operating in India are furnished below:
• Advances to MSME sector shall be reckoned in computing achievement under overall
Priority Sector Target of 40% of Adjusted Net Bank Credit (ANBC) or credit equivalent amount of
Off-Balance Sheet Exposure, whichever is higher.
 Domestic Commercial Banks are to achieve 7.5 percent of ANBC (Adjusted Net Bank
Credit) or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, for
lending to Micro Enterprises.
 The sub-target for Micro Enterprises for foreign banks with 20 branches and above would
be made applicable post 2018 after a review in 2017.
 In terms of recommendations of the Prime Minister’s Task Force on MSMEs, Banks are
advised to achieve :
o 20% Y-O-Y growth in credit to micro and small enterprises
o 10% annual growth in the number of micro enterprise accounts and
o 60% of total lending to MSE sector as on preceding March 31st to Micro enterprises.

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Credit rating:
(i) Internal Credit Rating System: The internal comprehensive credit rating system under
BOBRAM (CRISIL) Model has been approved by the bank and is already in place as advised to all
branches. The BOBRAM model is applicable to MSME accounts having exposure of above Rs. 2
Crores.
Bank has approved adoption of New Scoring Card type of Model for rating MSME accounts with
exposure of Rs.2.00 Lacs to Rs.2.00 Crores.
As per extant guidelines, periodicity of credit rating in respect of borrowal accounts is on annual
basis. In case of adverse features in the account, the rating has to be reviewed immediately in all
such accounts with exposure (FB+NFB) of Rs.5 crores and above.

(ii) External Credit Rating System (not eligible under BASEL-II norms of capital adequacy)
SME borrowers are rated by few external credit rating agencies. In case of MEs, some of the
borrowers are getting their accounts rated by external credit agency like CRISIL etc.
Our Bank has entered into MOU with credit rating agencies viz: CRISIL, ICRA, CARE, and
BRICKWORK INDIA to get our SME borrowers rated.

(iii) External Credit Rating System (under Basel-II norms of Capital Adequacy)
External Credit Rating should be carried out in all SME loan accounts with credit limits of above
Rs 5 crores by any one of the RBI approved external credit rating agencies. Presently ICRA, CARE,
CRISIL, India Rating and Research Pvt Ltd (100% own subsidiary of FITCH), SMERA and
Brickworks India in respect of domestic entities and Moody‟s and Standard & Poor‟s in respect
of overseas entities are the only Reserve Bank of India approved external credit rating agencies
in India. The exposure to SME borrower rated by any of these rating agencies will be recognized
as rated exposure for the purpose of computation of Risk Weighted Assets under Standardized
Approach of credit risk under Basel-II guidelines.
Pricing be continued to be linked to our internal credit rating system. However due weightage
will be given for the external credit rating by the external rating agency. Detailed guidelines on
credit rating are covered under Loan Policy.

Private Credit Ratinq for Corporate Credit Appraisals (Ref:-BCC: BR: 108:\499 dated
21.10.2016)
The Rating Agencies have been divided into two Groups as unde:-
Grou Rating Agencies Name Work Eligible Borrowerws
p Allocation
A External Rating M/s. lndia Ratings 50% of the work Borrower's Annual
Agencies having Pvt. Ltd. (H-1) Turnover is up to INR
annual revenue up to M/s. Brickwork 30% of the work 150 Crores and bank's
INR 150 Crore Ratings India Pvt. Ltd. credit exposure is up to
- (H-2) INR 50 Crores
M/s. SMERA Ratings 20% of the work
Limited – (H3)
B M/s. CARE Ltd 50% of the work

153
 External Rating M/s. ICRA Ltd 30% of the work Borrower's Annual
Agencies having Mls. GRISIL Ltd. 20% of the work Turnover above INR
annual Revenue above 150 Crores or bank's
INR 150 Crores credit exposure above
INR 50 Crores

COMMON GUIDELINES
1. The simple standardized loan application form for borrowers in MSME Sector circulated
by Indian Banks’ Association has been adopted for credit limits up to Rs.100 lakhs.
2. Receipt and acknowledgement of application & Maintenance of Register for application
received.
3. No application to be rejected without referring to next higher authority.
4. Our Bank has introduced online application & “Loan Tracker Module” and Our Bank’s
website provides such facility to MSME customer through which the credit application submitted
by MSME customers would be reaching our Loan Track system and accordingly, application
tracking facility is provided to the MSME customers
5. Time norms for disposal of loan application: As per Code of Bank’s Commitment to
Micro and Small Enterprises August 2015 (Para 5.1 j of BCC:BR:107:624 dated 16.12.2015)
Disposal of application for a credit limit or enhancement in existing credit limit up to Rs.5 lakh
should be within two weeks provided application is complete in all respects and is accompanied
by documents as per ‘check list’ provided.
Time line as per as per code of commitment to SME:
Loan Limit upto Maximum period on receipt of loan applications
complete in all the respects and duly accompanied by a
check list
Rs.5 lakhs Two weeks
Rs. 5/- lacs and up to Rs.25.00 Lacs Four weeks
above Rs. 25/- lacs Four weeks

At SMELF Within 14 days if no TEV required

21 days if TEV is required

6. Most important and common terms and conditions with respect to MSME (as advised by
BCSBI) to be attached with all application forms. (BCC:BR:108:456 dt.30.09.2016)
7. Financials for TAKE OVER of advance accounts:
Ratio Norms
Micro & Small Medium Enterprises Others
Enterprises
CR Min. 1.17 & above Min. 1.20 & above Min. 1.33 & above
DER (TTL/TNW) Max.3:1 Max.3:1 Max.3:1
DER (TOL/TNW) Max.4.5:1 Max.4.5:1 Max.4.5:1
Average DSCR 1.75 (anyone yr. should 1.75 (anyone yr. 1.75 (anyone yr.
not be below 1.25) should not be below should not be below
1.25) 1.25)

154
NON-FINANCIAL NORMS FOR TAKEOVER OF ADVANCE ACCOUNTS:
a) Profit-making (i.e. net profit before tax) concerns only as per last audited Balance Sheet
b) Accounts be rated internally as per the new credit rating model (BOBRAM) subject to
‘minimum BOB 6. In case of take over of accounts for Rs.25 lakhs and above and up to Rs.2 Crores
, the accounts are to be rated as per New MSME Credit rating model subject to a minimum of
MSME BOB 6.
c) No reschedulement / restructuring in the existing a/c. during last -2- years {in a, b & c
deviation can be allowed by ZOCC for accounts with exposure up to Rs.3 cr.; in other cases –
COGM-MSME for proposals up to powers of RMCC; COCC-ED for proposals up to powers of ZOCC
and COCC – ED/ COCC- CMD in all other cases}
d) Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as
per latest statement of accounts.
e) “STANDARD ASSET” with existing banker
f) All other existing norms , guidelines to be scrupulously followed
a. {Deviation can be allowed by the COCC-ED/COCC-CMD in respect of d,e,& f}
g) External rating in respect of credit proposal with exposure above Rs.5.00Crores by an
approved credit rating agencies should not be below BBB & equivalent.

1. Assessment of Working Capital:

 Limits for MSME under Regulatory Definition (i.e. Micro, Small & Medium
Enterprises):
The credit requirements of village industries, Micro Enterprises, Small Enterprises and Medium
Enterprises will be computed on the basis of a minimum of 20 % of their acceptable projected
annual turnover or First Method of Lending, whichever is higher, for new as well as existing units.
 Limits up to Rs. 5.00 Crores : As per GOI advisory our Bank has implemented
computation of MPBF for all woring capital limits up to Rs. 5.00 Crore based on First Method of
Lending or as per revised criterion under Turnover Method ; whichever s higher ::-
To increase the workjng capilal credit limit from minimum 20% of accepted projected
turn ovef to 25%. (Margin to be kept 6.25% )
To consider separate assessment for Woftng captal requ rements up to a minimum of 30%
of the portion of the assessed projected tufnover of the entity expected to be carried out
through d;gital mode. (Margin to be kept 7.50%)
 Limits under Non regulatory (SME Expanded) definition: The assessment of working
capital credit limits should be done based on second method of lending as per Tandon committee
guidelines.

2. MARGIN:
(a) For Term Loan
 In case of factory land & building, overall margin of 30%
 In case of Plant & Machineries and Equipment margin is proposed at 25%
 In exceptional cases, finance may be made available against second hand imported
machinery, with a minimum margin of 40% at the discretion of sanctioning authority, keeping in
view the extant guidelines for financing against second hand machinery.
(b) For Working Capital
 25% uniform margin is proposed on stocks and receivables. For export credit margin may
be stipulated @ 10 %.
155
 The next higher authority is authorized to reduce margin maximum by 5% in deserving
cases in respect of Land & Building & Plant & Machineries & Equipments/Current Assets. If
deviation is proposed beyond 5 %, Executive Director / Chairman & Managing Director
is authorized for the same.

3. Rate of interest:
If accounts are falling under SME category as per, regulatory definition, rates as applicable to
Micro, Small & Medium Enterprises to be applied. However, if accounts are falling under SME
category based on expanded coverage i.e. they are outside the purview of regulatory definition,
interest to be applied as per separate guidelines being issued from time to time.
 Implementation of MCLR in MSME accounts: All new borrowers are to be covered under
MCLR w.e.f.01.04.2016.
 For Limits below Rs.25 lacs (Regulatory), the rate of interest is based on limits slab and
the segmentation (Micro, Small, Medium).
 For Limits above Rs.25 lacs (Regulatory and Non Regulatory) the rate of interest is based
on the credit rating. However the band differs for regulatory and non regulatory.
 Tenor premium is not chargeable after introduction of MCLR for new
borrowers/facilities.
( Ref : BCC:BR:108:209 dated 12.05.2016)

4. Penal Interest: Penal Interest @ 1% to 2% to be charged for the period of default in

repayment, non-submission of financial statement, non-compliance of terms and conditions etc.
as per extant guidelines of Bank.

5. Collateral Free Loans:

As per Master circular on MSME (Ref:-BCC:BR:109:452 dated 01.09.2017)
 Branches are mandated not to accept collateral security in the case of loans upto Rs.10.00
lakh extended to units in the MSE sector including loans to units financed under the PMEGP
administered by KVIC upto Rs.10.00 lakhs.
 Branches may, on the basis of good track record and financial position of the MSE units,
dispense with the collateral requirements for loans upto Rs.25.00 lakh (with the approval of the
appropriate authority).
 Branches has been advised to avail of the CGTMSE in all the applicable cases without any
omission. In case the sanctioning authority is not in favour of considering the collateral free loan
under CGTMSE scheme, permission from the next higher authority should be obtained.

Presently, Bank‘s guidelines for providing collateral free loans (As per Loan Policy) are as
under:
 Collateral free loan upto Rs.10.00 Lacs to Micro & Small Enterprises.
 Collateral free loans (including third party guarantee/ security) upto a limit of Rs. 25.00
lacs to units having satisfactory dealings with the branch for last 3 years and having sound and
healthy financial position.
 It is already decided to dispense with collateral security including third party guarantee

156
for loans to Medium Enterprises upto a limit of Rs. 25.00 lacs as in case of loans to Micro & Small
Enterprises in manufacturing activities subject to satisfying the following criteria in case of
existing borrower as also takeover accounts:
 Consistent growth in sales for last 3 years.
 Continuous profit for last 3 years.
 Credit rating of ―A or equivalent and above and no slippage in credit rating during last 3
years.
 The units‘ assets (fixed as also current) are charged to the bank and promoters / directors
personal guarantee are available
 Asset coverage ratio of more than 1.5
 Other take over norms are complied with.
For the existing borrowers enjoying limits up to Rs.25.00 lacs and fulfilling the above criteria, the
release of collateral securities obtained if any, at the time of previous sanction / review, is can
also to be released at the specific request of the borrower by PSR noting authority.

Credit Linked Capital Subsidy Scheme (CLSS)

Government of India, Ministry of MSME has approved continuation of CLSS for Technology Up
gradation of Micro and Small Enterprises from X Plan to XI Plan (2007-12) subject to the following
terms and conditions:
• Ceiling on the loan under the scheme is Rs.1 crore.
• The rate of subsidy is 15% for all units of MSE upto loan ceiling of Rs.1 crore
• Calculation of admissible subsidy will be done with reference to the purchase price of the
plant and machinery instead of term loan disbursed to the beneficiary unit.
• SIDBI and NABARD will continue to be implementing agencies for the scheme.
• Enterprises should mandatorily submit the information with www.msmedatabank.in
before the claim is lodged by the Bank.
(Circulars for reference: BCC:BR:106:200 dt.30.05.2014 ; BCC:BR:108:423 DT.14.09.2016)

Other Government Schemes:

Standup India Scheme –
The objective of the Stand Up India scheme is to grant loan to SC/ST beneficiaries & women
entrepreneurs for gainful employment through income generation activities (In case of non-
individual enterprises at least 51% of the shareholding and controlling stake should be held by
either an SC/ ST or woman entrepreneur).
The major features of the scheme are as under (Ref: BCC: BR: 108: 160 dated 02.04.2016) :-
Particular Criteria
Limit Min:- Rs.10.00 Lakh ; Max :- Rs.100.00 Lakh
Composite loan inclusive of Working Capital component
Coverage Manufacturing, Services or the trading sector for setting up any new
enterprise
Target per branch One Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one
woman borrower per Bank branch
Refinance The entire loan component would be eligible for refinance by SlDBl

157
 Security The loan under Stand Up India scheme would be appropriately secured and
backed by a credit guarantee through a credit guarantee scheme for which
National Credit Guarantee Trustee Company Ltd (NCGTC) would be the
operating agency.
The norms in this respect are aligned with existing CGTMSE norms.

DAY-NULM Scheme - -
The objective of Deen Dayal Antyodaya Yojana- National Urban Livelihoods Mission is to facilitate
Self Employment Programme through financial assistance to Individual /Groups (SEP-I)of urban
poor for setting up self employment ventures and micro enterprises and though formation of Self
Help Group (SEP-G) for gainful self employment under this scheme. (Ref:BCC:BR:109:514
dt.03.10.2017)
Major features of the scheme:-
Particular Criteria
Coverage Individual, Groups (SEP-I) and Self Help Group (SEP-G)
Unit project cost Individual Self Help Group (SEP-G)
(Maximum) Rs.2.00 Lakh Rs.10.00 Lakh
Minimum Age 18 Years Minimum 5 members above the age of 18
years; with a minimum of 70% belonging to
urban poor
Applicable Interest Rate 7.00%
as per Scheme
Interest Subsidy Difference between applicable ROI as Apart from interest subsidy,
available per Bank norms and prevailing rate of Women SHG will be eligible for
interest as per scheme. 3% additional subsidy subject to
timely repayment
*No margin money should be taken for a loan up to Rs. 50,000 and for higher amount loans,
preferably 5% should be taken as margin money and it should in no case be more than 10% of the
project cost.
** Repayment: Repayment schedule would range between 5 to 7 Years after initial moratorium of
6-18 months as per the norms of the banks

Mudra Scheme (PMMY)

Pradhan Mantri Mudra Yojana (PPMY) was launched with an aim to fund the unfunded. Eligible
loans under this scheme will consist of all non farm enterprises under Micro and Small
enterprises segment under MSME and engaged in income generating activities in manufacturing
trading and services whose credits needs are up to Rs. 10.00 Lacs. Mudra scheme is covered under
CGTMSE scheme (Collateral Free Loans) for all three categories viz. Shishu ( Up to Rs. 50000),
Kishore ( Between Rs. 50001 to Rs. 500000) and Tarun (Between Rs. 500001 to Rs. 1000000).
The overdraft amount of Rs. 5000 sanctioned under PMJDY may also be classified as Mudra Loans
under PMMY. (Ref: BCC: BR: 107:239 dated 27.05.2015) , Our Bank has, on 04.10.2017,
entered into MoU with M/s. Glocal Healthcare Systems Pvt. Ltd. for financing to individuals
for the capital expenditure of Digital Dispensaries under PMMY.(BCC:BR:109:540 DT
13.10.2017).

158
Coverage of Allied Activities to Agriculture under PMMY: Activities allied to Agriculture e.g
Pissiculture, Beekeeping,Poultry, Live stock rearing , grading,sorting,dairyagri clinics, agri
business centres,fihery and agro processing units and services supporting these services shall
also be covered under PMMY w.e.f 01.04.2016. (BCC:BR: 108:469 DT 04.10.2016)

Credit Guarantee Fund Trust Scheme for Micro & Small Enterprises (CGTMSE):
All the collateral free loans up to Rs.200 lacs sanctioned to Micro & Small Enterprises in
manufacturing and service sector as defined under MSMED Act, 2006, PMEGP scheme are eligible
for cover under the Scheme.
Detailed guidelines of Scheme are as under:
What is CGTMSE: It is a Trust established by Govt of India and SIDBI on 01st August 2008 in the
ratio of 20:80.
Eligibility: Following are eligible for coverage under CGTMSE scheme:
 Credit facilities (Fund based and/or Non fund based) extended:
 To a single eligible borrower in the Micro and Small Enterprises sector (New or
Existing both)
 Not exceeding Rs.200 Lakh.
 Without any collateral security and\or third party guarantees.

Quantum of Guarantee :-
Maximum Guarantee Cover, where credit facility is
Borrower Above Rs.5
Category Above Rs.50 lakh upto Rs.200
Upto Rs.5 lakh lakh upto
lakh
Rs.50 lakh

75% of
85% of Amount in Rs.37.50 lakh plus 50% of amount
Micro Amount in
Default / Rs.4.25 in default above Rs.50 lakh /
Enterprises Default
lakh maximum Rs. 100.00 lakh
/ Rs.37.50 lakh

Women
Entrepreneurs
Rs.40 lakh plus 50% of amount in
/ Units located 80% of Amount in Default
default above Rs.50 lakh /
in North East / Rs.40 lakh
maximum Rs.100.00 lakh
Region (incl.
Sikkim)

All other Rs.37.50 lakh plus 50% of amount

75% of Amount in Default / Rs.37.50
category of in default above Rs.50 lakh /
lakh
borrowers maximum Rs. 100.00 lakh

Composite Annual Guarantee Fees (AGF):_

Credit Facility Women, Micro Enterprises and units in Others
North East Region (incl. Sikkim)

159
 Up to Rs.5 lakh 0.75 % 1.00 %

Above Rs.5 lakh and up to 0.85% 1.00%

Rs.100 lakh

+ GST

Lodgment / Settlement of Guarantee Claim:

Guarantee can be invoked (claim can be lodged) with the TRUST for Ist installment of guaranteed
amount when

Dues covered under CGTMSE classified as Non-performing Asset

Marking of NPA date be done with Trust before end of subsequent quarter of
classification of NPA i.e. If account turned to NPA on 15.01.15, Marking with trust
be done prior to 30.06.15.
Lock in period is -18- month’s period from dt of Ist premium payment date or last
date of disbursement, whichever is later.

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

6. Review with limits up to Rs. 20/- lacs pending receipt of audited financial
statements
Branches have been authorized to review advance accounts of borrowers in trading activities,
Micro & Small Enterprises, borrowers in rural area, borrowers having only term loan accounts,
financed under government sponsored programme, borrowers enjoying only guarantee facility,
etc, with limits upto Rs. 20/- lacs pending receipt of audited financial statements provided the
conduct of the account is satisfactory in terms of various parameters
1) Satisfactory conduct and turnover in the account
2) Fulfilment of repayment obligations (Interest/ Instalments)
3) Adequacy of securities, drawing power, insurance coverage etc.
4) Rectification of inspection irregularities (other than non submission of financial statements)
5) Compliance of all terms and conditions of previous sanction.
6) Satisfactory trend in production and /or Sales as per projections
7) Documentations and mortgages in the account being complete, valid and enforceable
8) Prompt payment of bills under L/cs, realization of BP/BDs, Guarantee Commission etc.
9) Submission of Income Tax / Sales Tax returns filed with Statutory Authority as per
timeschedule prescribed, wherever applicable (which will also indicate about the sales
andprofitability of the operations).

7. New Originations-Priorities & Approval

160
 Bank has approved strategy to take fresh exposure including review with increase and other
ancillary business for corporate and clients. Pursuant to the approval, bank has advised as under
(i) Bank will prefer to take fresh exposure/ review with increase in following sectors:
i. Drugs & Pharmaceutical
ii. Engineering
iii. Defence Equipment Manufacturing
iv. Automobile
v. Renewable Energy
vi. IT and IT enabled services
vii. Financial Services (NBFCs, MFIs)
Bank has also advised to focus on channel financing, Trade Financing, CMS, financing of investee
companies of large Private Equity Funds, extending advisory Services as new avenues of Business
opportunity.

Financial Ratios for Credit Appraisal (Not Applicable in case of takeover of accounts)
Following ratios can be accepted for granting credit facilities to SME units failing as per regulatory
guidelines or SME as per expanded coverage.

Ratio Norms
Micro & Small Enterprises Medium Enterprises Units covered under SME
under manufacturing under manufacturing Sector as per expanded
sector and Service Sector sector and Service definition and outside the
falling under regulatory Sector purview of regulatory
guidelines falling under regulatory definition
guidelines
Current Ratio (Min.) 1.17 1.20 1.33
DER(Max.)(TTL/TNW) 3:1 3:1 3:1
FACR (Net FA/ LTL) Not below 1.25 Not below 1.25 Not below 1.25
Average DSCR for Term 1.75 with a condition 1.75 with a condition 1.75 with a condition that
Loan that in any one year it that in any one year it in any one year it should
should not be below should not be below not be below 1.25
1.00 instead of 1.25 as 1.25
per extant guidelines.

SME Products: Our bank is having following products MSME sector across the country
apart from area specific schemes/products:
Sr Name of The product
Numbe
r
1 S ME Short Term Loan (Only to Existing Borrowers)
2 SME Medium Term Loan (Only to Existing Borrowers)
3 Baroda Vidhyasthali
4 Baroda Arogyadham
5 Baroda Overdraft Against Land & Building
6 Scheme for Professional
7 SME Loan Pack
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 8 Baroda SME Gold Card
9 BOB Laghu Udhyami Credit Card (Only to Existing Borrowers )
10 BOB Artisan Credit Card (Only to Existing Borrowers )
11 Bob Weavers Mudra Scheme
12 BOB MSE General Credit Card
13 Scheme for financing SME borrowers for purchase of New Vehicles
14 Baroda Loan to BusinessCorrespondents
15 Composite Loan
16 MSME Capex Card & Capex Loan
17 Working Capital Top UP Loan
18 Scheme for Financing Small Road Transport Operators- BCC:BR:107:598 Dt
30.11.2015

SME SHORT TERM LOANS

SNo Parameter Guidelines
1. Purpose To meet temporary shortfall/mismatch in liquidity, for meeting
genuine business requirements only.
The facility is not to be made available for other purposes like
repayment of loans of other banks or institutions, unsecured loans
etc. or for any purpose not related to the borrower’s activity.
2. Borrower Group SMEs as per Regulatory/ expanded definition given below:
 Micro, Small and Medium Enterprises – as per regulatory
definition irrespective of geographical location, i.e. rural, semi-urban,
urban, metro areas.
 All other entities with their annual sales turnover up to Rs.
150/- crores.
 However borrowers falling under Real Estate sector, Power
Sector, Educationsector lT sector are not elioible.
3 Eligibility Criteria Satisfactory credit rating for the last three years (BOB-5 and above)
and for 4 half years in case of accounts where credit rating is done on
half yearly basis. Accounts with continuous decline in credit rating
will not be considered eligible.
 Latest Balance Sheet etc. should be available.
 Satisfactory financial performance in terms of sales / turnover
and profits. Negative variance, if any, should not be more than 10%.
 Satisfactory dealings with the Bank for at least three years.
 No major inspection/audit irregularities

4 Loan Amount
5 Period
Up to 25% of the existing Fund based Working capital limits in case of
BOB-1, BOB-2 and BOB-3 rated accounts, 20% in case of BOB-4, BOB-
5 rated accounts, subject to
Minimum -- Rs. 10 lakhs and Maximum -- Rs. 250 lakhs.
To be repaid in 12 months including moratorium period. Interest to
be served as and when charged.

162
 6 Powers to sanction Sanctioning powers vested with Regional Manager and above only
provided
there is ng Ad Hoc excess is allowed in the account and conduct of the
account
is satisfactory.
Notes:
1. Proposals for Short Term Loan need not be referred through SME
Loan
Factory.
2. The sanction to be reported to next higher authority for PSR noting.
3. Authority for disbursement to be sought from the competent
authority in termsof extant guidelines as under:

A-Branch Head in Scale lll - DRM or Regional Head(where DRM is

not
posied)
B-Branch Head in Scale IV - DRM in the rank ofAGM or Regional
Head in the
rank ofAGM& above otherwise Zonal Head
C-Branch Head Scale V - Regional Head in the rank of DGM &
above
otherwise Zonal Head
6 Time Limit for Maximum 10 Days
sanction
7 Rate of Interest No product specific interest rates. As per the general interest rates
applicable to MSME Regulatory and SME Expanded categories
8 Unified Processing 25% concession in the app licable char
Charges ,Upfornt &
Documentaion
CHarges

SME Medium Term Loans

SNo Parameter Guidelines
1. Purpose  To augment enterprise’s working capital gap and to help in
improvement of current ratio and also for meeting genuine business
requirements.
 The facility will also be available for repayment of secured and
unsecured Loans of other banks or institutions, but not for any purpose,
which is not related to the enterprises activity.
2. Borrower Group SMEs as per Regulatory/ expanded definition given below:
 Micro, Small and Medium Enterprises – as per regulatory
definition irrespective of geographical location, i.e. rural, semi-urban,
urban, metro areas.
 All other entities with their annual sales tufnover of Rs. 1/- crore
to Rs. 150/-crores and new infrastructure and real estate projects,
where the project costis up to Rs. 50/- crores

163
 3 Eligibility  Satisfactory credit rating for the last three years BOB4 and above
Criteria and for 4 hald years in case of accounts where credit rating is done on
half yearly basis. Accounts with continuous decline in credit rating will
not be considered eligilble .
 Latest Balance Sheet etc. should be available.
 Satisfactory financial performance in terms of Sales / turnover
and profits. Negative variance, if any, should not be more than 10 %.
 TTL /TNW not more than 3:1 TOL/TNW not more than 4.5:1
and average DSCR should be not less than 1.75:1.
 Satisfactory dealings with the Bank for at least Three years.
 No major inspection irregularity
4 Loan Amount Limit BOB 1,2,3 25% of Existing working capital limit
Limit BOB4 20% of Existing working capital limit MPBF
Min 25 lacs
Max 500 lacs

5 Period Not exceeding –36- months, to be repaid in equal quarterly or half-

yearly installments
6 SECURITY First charge / Equitable mortgage of fixed assets of the Company / firm
or extension of existing first charge / equitable mortgage of fixed assets,
ensuring that there is a minimum asset cover of 1.25
7 RATE OF As per credit rating for the additional loan to be granted under the
INTEREST scheme .

Prepayment penalty of 1 %, if loan is prepaid within -24- months of

drawdown.
8 Power to At SMELF centre : Factory Head Scale IV – Upto Rs. Rs. 62.50 Lacs
sanction Facory Head Scale V –Upto Rs. 250 Lacs
At Branches ( Where SMELF is not available )
BH Scale III- Upto Rs. 25.00 Lacs
BH Scale IV – Upto Rs. 62.50 Lacs
BH /Executives i.e DRm,RM In scale V – Upto Rs 250 Lacs
Branch Head/ Executives, i,e.Regional Heads, Zonal Heads in Scale Vl-
upto Rs. 375 Lacs
Zonal Heads/GM (Corporate Office)- Upto Rs. 500 Lacs
9 Time Limit With in Branch powers : Maximum 5 Working Days
Beyond Branch powers : Maximum 10 Working Days

Baroda Vidhyasathali
SNo Parameter Guidelines
1. Target Group Educational Institute
2. Eligibility Criteria Educational institutions, Schools, Colleges and other education bodies
running education activities set up by Firms, company, Trusts, Society
etc. (HUF are not eligible).

164
3 Purpose Construction of building including expansion, modernization &
renovation activities of the education institution for the
purpose of education.
Purchase of instruments
Purchase of land alone is not permissible. However, if the land
cost is included in the total cost of project, the same can be
financed.
Overdraft for meeting short term fund requirements based on
Cash budget provided the institution is profit making and does
not have any other Bank liability..
Vehicles can be financed under the scheme for the use of the
institutions.
Activity clearance guidelines are applicable for vehicles
finance also under the scheme
4 Loan Amount Minimum: Rs.25.00 lacs Maximum: Rs. 15.00 crores
5 Margin Overall minimum margin of 25% of cost of Project.
6 Repayment Period Maximum 84 months (including maximum moratorium up to 2 years)
subject to annual review. Repayment period to be decided based on the
project cash flow.
7 Security  Equitable mortgage of Land & Building of educational institute
 Hypothecation of Instruments & Equipment
 Personal guarantees of the Promoters of the Institution.
 When credit facilities exceed Rs.10.00 Crores, Collateral
security level should not be less than 30% by way of Land & Building
other than college/school property i.e. personal property be obtained
8 Assessment of Limit  OD Limit to be allowed only to existing profit making
institutions without any bank liability for meeting short term
requirement against fee receivable for one semester with 25 % margin
and security of mortgage of assets in the name of the institution or
promoters of the institution as the case may be.
 Assessment on cash budget system.
 OD to be liquidated in maximum period of 6 months out of fee
collection and may be allowed max. 2 times a year.
9 Financials Current Ratio Regulatory MSE – 1.17 Medium Ent.
– 1.20 SME expanded – 1.33
DE Ratio(TTL/TNW) 3:1
DE Ratio (TOL/TNW) 4.50:1
DSCR 1.75 Average & should not go below
1.25 in any year
10 Rate of Interest Rate of interest as under or as per credit rating whichever is lower
Up to Rs,5,00 Crores (MCLR+SP) + 0.75%
Above Rs,5.00 Crores & up to (MCLR+SP) + 1.25%
Rs,1.0,00 Crores
Above Rs.10,00 Crores & up (MCLR+SP) + 2.00%
to Rs,15,00 Crores

165
 11 Security Equitable mortgage of Land & Building of educational institute
(not agricultural land). Where land & building of an educational
institution cannot be mortgaged due to restriction from AICTE,
Local Govt. Laws/guidelines alternate collateral security (land
& building - not agricultural land) in ihe name of the institution
or promoters of the institution of at least equivalent valuto be
obtained. However, an undertaking io be obtained from the
borrower that no charge will be created on the property
belonging to the educational institution and ihe same to be kept
under negative lien.
Equitable mortgage of Land standing in the name of the
promoters and leased out to school /college, equitable
mortgage of leasehold rights of the school/college on the
building may be permitted subject to clear title of the property
by the Zonal Legal Dept./Empanelled Advocate as applicable.
The lease period shouldnot be less than 30 years.
Hypothecation of Instruments & Equipment acquired out of the
loan and other assets ofthe Educational lnstitution. .
Personal guarantees of the Promoters of the Institution. lf
personal guarantee of some promoters is to be waived, Regional
authority's clearance be obtained.
When credit facilities exceed Rs.10.00 Crores, Collaleral
security level should not be less than 30% by way of Land &
Building other than college/school property i.e, personal
property be obtained. Any deviation in this condition will be
under authority of ED/CMD only.
Valuation:
Branch to obtain a valuation report on the property from Bank
approvedvaluer. Further, the valuation is to be done once in
three years. Valuation fee is to be borne by the applicant.
Title clearance report ; It should be obtained from the aoDroved
advocate of the bank before creation of the equitable mortgage.
Note: As regards valuation of property and obtaining of title
clearance report, bank's guidelines from time to time to be
complied with.

BARODA AROGYADHAM LOAN

SNo Particulars Guidelines
1 Eligibility SMEs as per regulatory/ expanded definition given below:
- Micro, Small and Medium Enterprises – as per regulatory definition
irrespective of geographical location, i.e. rural, semi-urban, urban, metro
areas and irrespective of Borrower’s Constitution i.e., Individuals ,
partnership, Trust, Pvt. Ltd., Public Ltd.etc.,
Note:
1) Real Estate Projects are not eligible
2) Promoters /owners should not be HUF.
Note: The main Promoters should have requisite qualification in any branch
of medical science from a recognized University and should have minimum
2 years of work experience.

166
 The powers to waive this condition may be exercised by Regional Head on
case to case basis wiih a condition that unit should employ qualified
professionals/ Doctors to run the Hospital/Nursing Home / Pathological
/Diagnostic Centers who should have requisite qualification in any branch
of medical science from a recognized university and should have minimum
2 years of experience

2 Purpose - Setting up of new Nursing Home/Hospital/Pathological

Laboratory/Diagnostic Centres.
- Expansion/renovation/modernization of existing Nursing Home/
Hospital /Pathological Laboratory/Diagnostic Centers.
- Purchase of medical diagnostic equipments as also office
equipments, viz. computers, air conditioners, office furniture, etc.
- Purchase of ambulance
- To meet working capital requirements.
- Construction of rest house, staff quarters

Note: In case of the account of Trust permission of local govt.

authorities may be
Obtained before disbursements.
3 Limit Rural: 0.50Crore
Semi-Urban: 6.00Crore
Urban: 12.00Crore
Metro: 15.00Crore
 Need based Working Capital limits may be considered upto 10% of
the annual sale or gross income, subject to 20% of the above ceiling limit in
case of borrowers requiring both Term Loan and working capital facilities.
 In case of only working capital requirements, limit to be restricted
to 20% of the above ceiling limit.
 Working capital limit to be allowed by way of Overdraft.
4 Margin Uniform margin of 25% on the chargeable assets as per Project details.
Higher mrgin may be stipulated if collaterals are inadequate .
5 Assessment of Demand Loan/Term Loan: 75% of the cost of chargeable, movable,
Limit immovable assets as per Project details.
Working Capital: Need based upto 10% of the annual sale or gross
income, subject to 20% of the overall limit approved for the
Institution.
6 Period Demand Loan/Term Loan 35 months to 84 months including moratorium,
subject to annual review.
Note :Repayment period to be decided based on projected cash flow

167
7 Financial DE Ratio - TTL/TNW - 3:1
Ratios TOL/TNW - 4.5:1
DSCR - Average - 1.75
 DSCR should not go below the level of 1.25 in any particular year.
 Operating Profit Margin (before Interest, Depreciation & Tax) not to
be below 10%.
 Minimum Interest coverage ratio should be 2.
8 TEV Study TEV study to be carried out as per bank‟s extant guidelines.
9 Other Audited Balance Sheet and Profit & Loss or income – expenditure
Conditions statement for the last 3 years in case of existing Institution. Project
reportin case of new project.
Credit rating of the account to be carried out as per bank’s extant
guidelines and the borrowers with credit rating not less than „BOB
6‟ as per CRISIL model only to be financed under the Scheme.
All other terms and conditions as per bank‟s Domestic Loan Policy,
2014 and SME Policy.
Stock/Book Debts statement to be obtained once in a year.
For takeover of the accounts, all extant take over norms to be
complied in full
For advances to Registered Trusts, approval of Charity
Commissioner for creaiion of equitable mortgage of the trust
properties as well as guarantees of thetrustees as per extant
guidelines, etc, are to be obtained; .
Report of CIBIL to be accessed on the
promoters/pariners/directors/trustees from consumer data;
Credit report on promoters or their existing hospitals, etc be
obtained. .
Collateral free loans upto Rs. 200/- lacs are eligible for guarantee
cover underCGTMSE. The provisions of the scheme will be
applicable for these advances
10 Rate of Interest Rating is mandatory under BOBRAM model and Rate of interest as under or
as per credit rating whichever is lower
Up to Rs,3,00 Crores (MCLR+SP) + 1.35%

Above Rs.3,00 Crores &. up to (MCLR+SP) + 1.75%

Rs,10,00 Crores
Above Rs.1.0,00 Crores 8r up to (MCLR+SP) + 2.75%
Rs,15,00 Crsres

11 Classification The advance under the Scheme to be classified as Small Enterprise

or Medium Enterprise as per ihe regulatory definition, depending
upon the investment inequipment (in case of investment up to Rs.
5/- crores).

ln case of investment exceeding Rs. 5/- crores but turnover/income

being less than Rs. 150/- crores, account will be classified as SME
(expanded) as per bank's internal definition.

168
12 Processing 75% of the applicable charges.
Charges

BARODA SME LOAN PACK

Sr Parameter Guidelines
No
1 Eligibility SMEs as per Regulatory/expanded definition given below: Micro, Small and Medium
Enterprises {Manufacturing and Service Sector (other than retail trade)]- as per
regulatory definition irrespective of geographical location, i.e. rural, semi-urban,
urban, meiro areas. .
All other entities with their annual sales turnover up to Rs. 150/- crores and non real
estate projecis where the project cost is up to Rs.100 Crores and real estate projects,
where the project cost is up toRs. 50/-crores.
(As per Domestic Loan Policy guidelines issued from time to time) Borrower to
exclusivelv to deal with BOB
2 Purpose To provide hassle free credit for working capital (fund based and non-fund based) as
also capital expenditure related to the business of the borrower within the overall
composite limit sanctioned to the borrower.
3 Composite 4.5 times of borrower’s tangible net worth as per last audited Balance Sheet, or, Rs.
Limit 10.00 crores, whichever is lower.
4 Margin 25% on all the facilities
5 Security  Exclusive charge on the assets of the enterprise.
 Personal Guarantees of all promoter Directors/partners.
 Charge on the unencumbered personal properties of the partners, promoter
Directors, wherever applicable. (Will not be applicable in cases covered under
CGTMSE scheme)
 Third party guarantee in case of credit line above Rs. 100.00 lacs in case of
Micro and Small Enterprises as per regulatory definition.
 Any other collateral for the credit line above Rs. 25.00 lacs for SMEs as per
expanded definition (i.e. based on Turnover criteria and Medium Enterprises) to
maintain asset coverage ratio above 1.25
6 Financial Current Ratio 1.20
Ratios DE Ratio(TTL/TNW) 3:1
DE Ratio(TOL/TNW) 4.50:1
Asset Coverage Ratio 1.25
DSCR Minimum average DSCR of 1.75 for term loan
and in no year it should be beiow '1.25
7 Other Stock/Book Debts statement to be obtained every month/as per credit rating. Book
Conditions debts statement to be certified by Chartered Accountant on quarterly basis
8 RATE OF As per Credit rating
INTEREST
9 Period for Maximum period upto 7 years
Term Loan
10 Other The provislons of CGTI/SE would be applicable for credit lines up to
Conditions Rs.200.00 lacs in case of MSE units.
169
 Credit rating applicability would be as per Domestic Loan poticy issue from
iime to time.
StocuBook Debts statemeni to be obtained every month/as per credii rating.
Book debts statement to be certified bv Chartered Accountant on quarterly
basis.
Pre sanction inspection to be carried out and report to be kept on record.
Thereafter inspeciion to be canied out on annual basis.
In case of Both MSME (Regulatory) & SME Expanded accounts, Minimum
collateral of 25 % ol loan amount if account is not covered under CGTMSE.
This is in case of new accounts and review with increase.

BARODA OVERDRAFT AGAINST LAND & BUILDING

Sr No Particulars Guidelines
1 Eligibility  SMEs as per expanded definition established in the line of
business for a minimum period of 2 years and financed/proposed to be
financed under sole banking arrangement.
Notes:
 The Manufacturing/Service sector units (other than Retail Trade)
should have been established in the line of activity for a minimum period
of 2 years.
 In case of new Manufacturing/Service sector units(other than
Retail Trade), facility may be considered if unit is established by our
existing customers having satisfactory track record and the same is set up
from their own sources.
 Manufacturing and Service Sector units (other than Retail
Trade)having less than two years establishment may be considered with
the prior approval of one authority higher than the Sanctioning authority
under whose powers the proposal falls.
 Units with credit rating of BOB-6 and above as per CRISIL Module.
ln case of takeover of accounts in addition to the Product norms. the
normsprescribed in Domesiic Loan Policy 20'14/SME Policy 2014 should
be complied wrth.
2 Purpose To meet Fund based Working capital requirements.
3 Limit Minimum Limit –Above Rs.10.00 Lacs
Maximum Limit
Rural Semi-Urban Urban & Metro
100.00Lacs 500.00Lacs 1000.00Lacs
4 Margin 40% of the distressed value of property mortgaged. Regional
Head is authorized to reduce the margin up to 35% in deserving
cases.
2 valuations for cases where the valuation is more than Rs. 5
crores 0ower of the 2 values to be taken).The above modifications
will be applicable to new as well as review with increase
proposals, for review oithe credit facility, existing guidelines will
continue
5 Assessment of As per guidelines applicable to MSMEs
Limit

170
 Note : Drawal for Working Capital (Fund based and Non-Fund based)
shoutd not exceed advance value of Land & Building/sanctioned limit,
whichever is lower
6 Period 12 Months
7 Financial Current Ratio:
Ratios Small Enterprises Medium Enterprises SME(Expanded)
1.17 1.20 1.33
DE Ratio (TTL/TNW): 3:1
DE Ratio(TOL/TNW): 4.50:1
Asset Coverage Ratio: 1.50
9 Other Stock/ Book Debts statement to be obtained on yearly basis, i.e.
Conditions February every year. This being a collateral security, certification by
Chartered Accountant is not mandatory.
10 Rate of Rating is mandatory under BOBRAM model and Rate of interest as under
Interest or as per credit rating whichever is lower
Micro Enterprises (MCLR+SP) + 1.75%
Small Enterprises (MCLR+SP) + 2.00%
Medium Enterprises (MCLR+SP) + 2.25%
SME Expanded (MCLR+SP) + 3.00%

BARODA SME GOLD CARD:

Sr No Parameter Guidelines
1 Eligibility All MSME Enterprises – As per regulatory definition irrespective of
geographical location, i.e. rural, semi-urban, urban, metro areas and SMEs
as per expanded definition viz;. entities with their annual sales turnover up
to Rs. 150/- crores fulfilling following criteria:- In case of existing accounts-
1. A/c in Standard Category for last 2 years
2. Obligor credit rating of “BOB-5” and above
3. Working capital limits of Rs. 25/- lacs and above.
In case of Take Over accounts:-
1. Obligor credit rating of “BOB-5” and above
2. No deviation allowed in Take over norms while taking over account
3. Working capital limits of Rs. 25/- lacs and above.
4.Eligibility only one year after takeover of the account
2 Purpose To meet emergent requirements and tie up temporary mismatch in liquidity
arising out of delayed payment by buyers, tax payment etc.
3 Limit 10% of the assessed MPBF
4 Period 12 months – to be allowed on 4 occasions during the year for a maximum
period of 2 months on each occasion. However, there should be a minimum
gap of 15 days between two drawals.
5 RATE OF As per Credit rating
INTEREST

BARODA LAGHU UDYAMI CREDIT CARD:

171
Sr No Particulars Guidelines

1 Eligibility The scheme is applicable to all existing customers in the categories

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

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

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

3 Limit Maximum limit up to Rs. 10/- lacs.

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

6 Assessment of  For small business, retail traders, etc., 20% of the annual
Limit turnover declared for tax purposes or last 12 months turnover in the
operative account, whichever is higher.
 In respect of parties with good track record, where sales tax
returns are not available, the credit limits may be decided taking into
consideration the actual turnover in the account during the last two
years.
 For professionals and self-employed persons, 50% of their
gross annual income as per IT return shall be considered as the limit
for issuing the BOBLUCC.
 For Small Scale industrial Units including tiny sector units,
the assessment norms in vogue as per the Nayak Committee
recommendations would continue.
7 RATE OF As applicable to Micro & Small Enterprises.
INTEREST

8 Operations BOBLUCC holder would also be issued Cheque book specially

marked "BOBLUCC Account" and ihe limit sanctioned would be
allowed as anoverdraft limit..Statement of account/pass book be
issued by the branches to the BOBLUCC holder as aoDlicable to
normal accounts.
9 Other All existing customers who meet the eligibility criteria may
operational be brought under the BOBLUCC Scheme. . The bonower
aspects under the scheme would be-issued a photo card (BOBLUCC)
indicating sanctioned limit and validity period of credit
172
 facility, . Cost of photo for issue of card be borne by the Bank.
.
BOBLUCC Account holder would not be required to' submit
periodicstatement or flnancial statements for renewal of
limit. .
Request for enhancement would be considered within the
ceiling of Rs,10/- Lacs based on conduct and review of
operations in the account,
NPA norms as applicable to normal overdraft account would
apply for BOBLUCC accounts also.

Baroda Scheme for Professionals (Ref Circular no. BCC: BR: 109/119 28.02.2017):

Sr Particulars Guidelines
No
1 Eligibility Professionals in any discipline viz. Engineers, Architects, lnterior Designers,
Photographers, Financial Consultants (CA,/ICWAJCS), Advocates and
specialized qualified service providers. Proprietorship Partnership / Pvt. /
Public. Ltd. Companies with
Minimum ITR - taxable income of 1 lakh .
Minimum experience oi 3 years in their respective fields.
Minimum bureau score of 760
Note :In respect of existing loans to individual Doctors,/ Dentists under Baroda
Professionals scheme, if any, can be continued upto the end of the existing
repayment schedule, in case of TLs and in case of Overdraft limits , they need to be
brought underBaroda Doctors loan of Retail lending schemes
2 Purpose  Working Capital
 Purchase of Equipments, expanding/renovating
 NFB Facilities
 (TL/DL/CC/NFB Facilities)
3 Limit Min. Rs. 10 lacs Max. Rs. 5 Crores
4 Period Max. 84 months incl. moratorium. Interest servicing every month.
5 Margin  Cash credit: 25% against stock & book debts upto 90 days only.
 TL/DL: 20% of Plant & Machinery; 25% on Land & Bldg. and 35% on Second
Hand Plant & Machinery.
CASH MARGIN: For LC &BG facility- 20% minimum
6 Assessment For working capital facility: As per First Method of Lending or 20% of
of Limit turnover whichever is higherfor limits up to Rs.500.00 lacs,
TL/DL for purchase of land & building/Plant and Machinery taking into
consideration margin oi 20% for plant and machinery and 25% for land and
building repayable in 7 years (including moratorium), based on the cash flow
projections.
Average DSCR for term loan is to be 1.75.
7 RATE OF Above Rs,10.00 Lacs to less than Rs,25,00 As per standard applicable rates
INTEREST Lacs Mlcro & Small Enterprise

Rs.25.00 Lacs & above to & inclusive of Rs5.00 Crores

Sector Rate of Interest

173
 Micro Enterprises (MCLR+SP) + 1.35%
Small Enterprises (MCLR+SP) + 1.50%
Medium Enterprises (MCLR+SP) + 1.75%
Rating is mandatory under BOBRAM model and Rate of interest applicable is as
above or as per credit rating whichever is lower.
8 Collateral For loan amount above 2 crores, mandatory collateral security should be 25%. .
Security Distressed value of the property io be taken in to account Above security /
Modifications are applicable to new as well as review wiih increase proposals only,
for review of the credit facility, existing guidelines will continue.

Working Capital- Top-Up Facility (Ref Circular No. BCC: BR: 105:196 14.05 2013):
Sr No Particulars Guidelines
1 Eligibility  Sales, TNW, PAT, CR & DER are in line with estimates for 9
months concluded.
 Sales for the concluded year are as per estimates submitted at
previous assessment 80% minimum.
 Period: 06 months
 Limit: 50% of the increased portion of assessed & approved
working capital limits (Fund & Non-fund Based) for the next financial
year can be availed in the beginning of that year.
 Security : Extension on Existing Security
2 Purpose To meet the additional working capital funds required for achieving the
estimated business levels.
3 Coverage All existing accounts with present aggregate working capital limit of Rs
1.00 Cr & above
4 Other  External rating min. BBB and Internal rating min. BOB-6.
Condition  Conduct of the account is satisfactory.
 Documentation, Creation/Registration of charge is complete in
all respects.
 No excess/adhoc over and above the top up facility

Scheme for financing existing Borrowers under SME Segment for Purchase of New
Vehicles:
Sr No Particulars Guidelines
1 Eligibility Proprietorship firms, Registered Partnership concerns, Limited Liability
partnership firms, Private Limited Companies, Limited Companies,
Trusts, Co-operative Societies (Except individuals) under SME Segment
with Internal credit rating up to BOB-6 in CRISIL model in case of
borrowers enjoying credit limits over Rs.25 lacs and Internal and
Credit rating up to “BBB” in old model (Scoring Type)

The scheme will be applicable for takeover of existing vehicle loans avaited
by ourexisting SME borrowers with credii raiing up to BOB 6 subject to
following:
‘There are no overdues with the existing lender. .
174
 Vehicle is not more than 3 years old. .
AII other norms of the scheme are complied with along with
takeover norms.
2 Purpose For acquiring any type of new vehicle eligible for Registration with
Regional Transport Authority.
3 Limit Maximum Rs. 200/- lacs
4 Margin 10 % of total cost of transport vehicle i.e. inclusive of initial insurance
premium, RTO Tax, Octroi, body building charges & other incidental
charges in case of new vehicle.
5 Period Maximum 60 months subject to review every year. The facility to be
included in the regular review proposal.
6 DLP - In cases where the proposal for regular facilities as also for
purchase of vehicles fall under the powers of Branch Head, the same to be
considered by Branch Head with the relaxed norms as per the Scheme.
- Acs falling beyond DLP of Br Heads & Upto Zonal Head: DRM/RM
is empowered to sanction
- Acs falling beyond DLP of Zonal Head: Zonal; Head
7 Rate of Applicable ROI is as advised irom time to time. Presently ROI is as under.
Interest Rating js mandatory under BOBRAM model and Rate of interest appticable
is as under or as per credit ratinq whichever is lower.: MCLR+SP +1.50%

Capex Loan/Capex Card ( Ref Cir BCC/BR/105/185 April 16, 2013):

Sr No Particulars Guidelines
1 Eligibility  MSME borrowers (Regulatory) and SME (Expanded) rated BOB-5
and above
 The manufacturing/service sector units should have been
established in the line of activity for a minimum period two years.
 Account running with satisfactory dealings for last one year &
above & no adverse features are reported in the account .
2 Purpose Loan for capital expenditure related with regular business activity like :
 Replacement of old machinery,
 Purchasing of balancing equipment,
 Modernisation/ Investment in R & D,
 Purchase of cars and other vehicles for business purpose,
 Investment in captive power plants and upgradation of technology,
Alteration in layout of factory/office, acquisition of software/hardware and
tools/jigs forming part of plant & machinery
3 Limit 25% of gross Block of Plant & Machinery for MSME(Mig.) as per last
Audited Balance Sheet or 10% of the working capital for service
sector based on DSCR and subject to cap -
 Baroda MSME Capex card: lvlin.25 lacs and Max RS.5.OO Crore.
 Baroda MSME Capex Loan: Min 25lacs and lvlax Rs. 2.00 Crore.
Average Gross DSCR inclusive of the repayment iiabitity under the
proposed STL should not be less than '1.75. In any year it should noi
be less than '1 for MSE Borrowers and 1.25 for Medium & SME
Expanded Borrowers.

175
 The facility to be made available as Fund Based / or Non-Fund
Based Limits (i.e. including establishment of LCs) ensuring that
aggregate exposure does not exceed the overall limit

4 Margin Land & Building-30%, Plant & Machinery-25%

The next higher authority not less than Regional lvlanger is authorized to
reduce the Margin by 5% in deserving cases.
5 Period 3 to 7 years including moratorium period
6 Ratio Average DSCR including the repayment of proposed STL not less than 1.75
and Min DSCR not less than 1/1.25 for MSE /Medium & SME Expanded
respectively.
8 RATE OF No product specific interest rates. As per the general interest rates
INTEREST applicable to MSME Regulatory and SME Expanded categories.

Operational Issues:
CAPEX CARD CAPEX LOAN

When to At the time of Sanction/Renewal Where Capex card limit has not been
sanction considered (and not re.iected) at the time of
Regular sanction - instantly as per need.
Competent Having financial powers to Having financial powers to sanction the
Auth. sanction aggregate of the regular credit limits and
the aqqreqate of the reoular the proposed CAPEX Card
credit limits and the proposed
Capex Card
Assessment/ No separate assessment / At the time of sanction
Justification special justification is required
for TL for sanction along with
regular facilities However
proper justification may be
obtained before disbursement.
Frequency The facility may be sanctioned at As per need, not exceeding prescribed
the time of each revie /renewal limits
of working capital limits, based
on a fresh assessment.
Security- First charge on assets created First charge on assets created.
Primary out of Bank finance

Collateral As per sanction Guarantee/extn of charge on existing

securities

Documentation The Security documenis/ The Security documents/ extension of

extension of charge/E.M. to be charge/E.M. to be obtained before the
obtained before the disbursement of Actual Term Loan

176
 disbursement ofActual Term
Loan.
OR
.
lf so requested with regular
documents/ extension of charge
under guidance of Legal cell.

Composite Term Loan Scheme

Sr No Particulars Guidelines

1 Eligibility Units eligible to be classified as MSME-- per MSMED Act 2OOO

(Regulatory MSME)
2 Purpose Fixed capital investment and / or working-apital requirenrer|t
3 Type of Facility Composite Term Loan

4 Amount of Loan Rs. 100.00 Lacs

5 Margin
6 Security
7 Period of Minimum 3 years and maximum of 10 years, with initial holiday of
Payment
8 Miscellenous
Nil in case of composite loan upto Rs.25,000/-. ii) 15%- 25% in
case ofcomposite loans above Rs. 25OOO/- andup to Rs. 100/- lacs.
Charge on assets created out of loan amount
(a) Collateral Security / third party guarantee should not be taken
inrespect of accounts eligible to be covered under CGTMSE scheme.
(b) Charge on assets created out of loan amount and other
collateralsecurities as determined on the merits of each case
12
months to '18 months, boih for interest and principat.
The quantum of loan to be sanctioned in eacn case should be
needbased. Requirement of one operating cycle should be
liberally assessed and a contingency o,f 10 to 2oo/o should
be added to it. Such contingency portion should be disbursed
in case of unforeseen contingency due to operational
botfleneck or some consumption requirement.
Repayment programme should be sufficienfly long keeping
in viewlow profitability and sustenance needs of the
borrowers. lt should be so drawn up that ihe instalment
amount in respect of principal isnot normally more ihan 10lo
per month ofthe principal.
Moratorium period should be -18- months in the case ofthe
newunits. lt could be reduced upto -12- months in the case
of artisans /other small units who are already reasonably
well established andwho are expected to have sufficient
viability to commencerepayment somewhat earlier. (d) No
collateral security/third party guarantee be taken.
Working Capital loan should be availed within one vearfrom
thedate of commencement of production. The unit should
open a current account with us and the amount ofworking
capital of the Ioan will be credited as and when disbursed.

177

Baroda Loan to Business Correspondents
Sr No Particulars Guidelines
1 Eligibility
2 Purpose
3 Total Limit
4 Margin
5 Rate of As per extent guidelines. Present rates are as underi
Interest
6 Processing
Charges
7 Type of
facility
8 Repayment
period
The unit should route its entire transaction of the
businessincluding all the receipts and payments through this
account only.
The unit should provide monihly stock statemeni showing
theposition of inventory level.
1- The product is specially designed for Business and Kiosk Operators
who have valid agreement engaged by our bank for the purpose of
providing financial inclusion.
2. Age: '18 to 60 Years
1- To purchase computer hardware, laptop & peripherals,
including printers, biometric scanners etc, furniture and setting
up or renovation of office.
2- To meet working capital requirement for cash management
and processing of day to day transactions through settlement
account.
3- Purchase of new vehicle(motor cycle)for visits to villages to
perform BC activities.
Demand Loan Overdraft Working capital) Term Loan(vehicle
loan) Total
Rural & semi 75000/- 25000/- 50000/-
150000/-
Urban
Urban 115000/- 35000/- 50000L
200000/-
Metro 150000/- 50000/- 50000/-
250000/-
Note: At the time of sanction of loan branch should asses the BC wise
requirement after considering the repayment capacity of the BC. Branches
may consider any one/ any two/all three above said facilities as
perrequirement of the BC, wiihin specified limits.
10% of total amount of loan sanctioned
1. Up to Rs.50000/- MCLR+SP
2. AboveRs.50000/-up to Rs. 2 lacs- MCLR +SP +0.507o.
3. Above Rs.2lacs- MCLR + SP + 0.70%
As per Banks extent guidelines
'Demand Loan: To purchase computer hardware, lapiop &
peripherals, Including printers, biometric scanners etc,
furniture and setting up or renovation of office.
Overdraft: To meet Working Capital requirement i.e. cash
management requirement for processing of day to day Fl
transactions through seiflement account of BC.
Term Loan: For purchase of new brand vehicle (motor cycle
Demand Loan: Repayable in maximum 36 equated monthly
insia ments commencing from one month after date of
disbursement of loan.
Overdraft: Repayable on demand subject to annual review.
178

9 Preventive
Vigilance
Baroda MSE General Credit Card
Sr No Particulars Guidelines
1 Nature of Demand/Term LoanMorking Capital/Non Fund Based Facilities
Facility
2 Purpose
3 Total Limit
4 Eligibility
Term Loan (Vehicle): Repayable in maximum 60 equated
monthly installments commencing from one month after date of
disbursement of toan.
He/she should be Business Correspondent working for our
Bank
KYC guidelines should be meticulously and stricty complied
with, which
include proper verification / cross checking of iniormation
submitted by the applicants for their jdentity. Documents
submitted for identity and proof of residence i.e. copy of ration
card/ photo-identjty card/ pAN card/ driving license should be
properly scrutinized and atso verified with the originats.Noting
for having verified with the originats should be made on relative
documenis and report kept on record
CIBIL data in respect of applicant shoutd be meticutously
verified leaving no scope for non-detection of identity ofthe
applicanis
Pre-sanction inspection including visit to the place of residence
and work must be canied out independently, preferably without
givjng prior information to the applicant and report to be kept
on record.
Bank's board indicating hypothecation charge should be
displayed prominently at the place of business.
The link branch has to monitor day to day transactions
processed by the BC and ensure that no other transaction than
Fl transactions should be allowed in the settlement account to
ensure end use of the funds. ln case BC leave the job the entire
credii balance avajlable in the settlement account should be
transferred to the loan accounts and gets the accounts settled.
In case of requirement of more funds to settl e the loan account
BC has to arrange for required funds to setfle the entire loan
accounts. ln case BC is willing to continue with DL/TL with
regular repayment after leaving the job it may be considered by
the link branch on merits.
Working Capital Requirement. Financing new project, i.e., acquisition of
land/ construction of buitding, plant and machinery based on project
cost/expansion project. . Non-fund based facilities ( Bank cuarantee and
Letter of Credit)
Minimum Rs.1000/-
Maximum Rs. 1.00 lacs
Any individual taking up non-farm entrepreneurial activity across the
country However Individuals will not be eligible for "Baroda MSE
General Credit Card" if he/she has been issued any type of credit card
179
 such as BKCC, BACC, BWCC, LUCC, BOBCARD, Any other type of credit
card etc. except the Cards for consumDtion needs.
The extant guidelines under Know Your Customers (KYC) norms have
to be sirictly followed for identification oi beneficiaries and sanction of
facility under BGCC (MSE) scheme.
6 Margin For Working Capital/Term Loan/Demand Loan/Non Fund Based :20%

Land & Building:25 %

7 Rate of Limit Micro Enterprises Small

Interest Enterprises
Up to Rs. 50000 MCLR+SP MCLR+SP
+ 0.50%
Above Rs. 50000/to 2.00 lacs MCLR+SP+0.50%
MCLR+SP+0.70%
8 Period Term /Demand Loan: lvlaximum 84 months with -12- months
moraiorium
Working Capital: For'l2months subject to annual review
The borower should have all approvals forthe activiiy
requirement..
Inspection to be carried out as per extant guidelines and
inspection report to be kept on record.
Stock statement not to be obtained and the account to be
monitored via Quarterly / Half Yearly Inspections.
Land & Building financed for the activity should be in the name
of borrower and will be treated as primary security.
No collateral security to be obtained and all eligible accounts are
to be covered under CGTMSE. End use of funds to be ensured
KYC norms to be complied with.
All eligible accounts to be covered under CGTMSE The card
should be used by the Card holder and should not be allowed to
be used by any other person on his behalf nor ihe card be
handed over or transferred to anyone.
The damaged cards shall be replaced by Bank on receipt oi
intimation from cardholder and after obtaining a fee of Rs.100/-
for issuing fresh card.
In case of loss of card, the same procedures to be followed as
applicable for BOBCARD such as reporting in police station,
immediate intimation to the issuing authority. Bank shall not be
liable for misuse of card in case of loss of the card not reported
in time.
The Bank reserves the right to cancel the card at any time
without notice/assigning any reasons or refuse to
reissue/renewreplace the card.
The sanctjoned limit will expire on the death or insolvency of
hecardholder and bank will be entitled to recover entire
outstanding amount against the cardholder on the death or
insolvency of the Cardholder.
The legal heirs/assignees of the cardholder will remain liable to
the Bank for the amount due on the cardholder's account in case
of death of the cardholder. The cardholder may at any time opt
out of the scheme by surrendering the card to the Bank.
180

Baroda Artisan Credit Card
Sr No Particulars
1 Eligibility
2 Issue of Cards
3 Fixation of Credit
However the cardholder will remain liable for thetransactions
made by him till the surrender of the card.
The bank will have a right to set off all the monies which the
bank hold in the name of the cardholder under any account with
any of the Branches ofthe Bank against the dues under the
scheme. The bank is entitled to add/alter and amend these rules
as deemed fit in its absolute discretion without assigning any
reasons whatsoever and the same shall be binding on the
cardholder.. The card will be issued in the Bank's discretion and
the bank will have a right to reject any application without
assigning any reason whatsoever.
All other General terms & conditions for working capital/Term
to be complied with.
Guidelines
All artisans involved in production/manufacturing process
and otherwise eligible for credit facility for carrying out the
proposed activiiies under any of the existing bank's schemes
would be eligible.
Preference would be given io artisans registered with
Development Commissioner (Handicrafts) .
Thrust in financing would be on clusters of artisans and
artisans who have jojned to form Self Help Groups (SHGS).
Beneficiaries of other Government sponsored loan schemes
will not be eligible for coverage under BACC scheme.
All existing artisans borrowers of the bank enjoying credit
facilities up to Rs.2 lacs and having satisfactory deatings with
the bank will be eligible to avail credit facilities under the
scheme. This would enable them to get limit sanctioned for a
three year period as also benefit from simplified procedures
stipulated for availment of credii.
The beneficiaries under the scheme will be issued with a photo card
indicating sanctioned limit and validity period of credit facility. He
would also be issued a passbook or a credit cum passbook
incorporating name, address, borrowing limit, validity period etc.
While the photo card would serve as an identity card, the passbook
would facilitate recording of transactions on an ongoing basis.
The credit limit would be fixed based on assessment of working
capital equirements as well as cost of tools and equipments required
for carrying out manufacturing process.
For evaluaiing working capital requirements, the norms adopted as
per Nayak Committee recommendations (20% of anticipated
turnover) are to be followed. The maximum limitto be sanctioned
under the scheme would be Rs_2/- lacs.
The limit is expected to be uiilized as a revolving cash credit and will
provide for any number of drawals and repaymentswithin the limit.
181
 Bank may, however, fix a repayment schedule for the portion of loan
availed for purchase of tools and equipments.
As the limit sanctioned would normally have a validity of three years,
the need to accommodate incremental working capital requirements
may be kept inview.
4 Period Maximum 3 years period subject to annual review
5 Margin As per RBI guidelines from time to time or the bank's policy in this
regard.
At present
Up to Rs.25000/- No
Margin
Above Rs.25000/- up to Rs.2/- Lacs 15%
to 25%
6 Validity/Renewal The Credit Card should normally be valid for 3 years subject to
of Limits annual review.
The review may result in continuation of the enhancement of the
limit or cancellation of the f,facility, depending upon the
performance of ihe borrower.
For the purpose of annual review the borrower would not be
required to submit any financial statement.

As a measure of incentive for card holders with good performance,

7 Security
the bank may consider the enhancement of the limit at the time of
renewal within the ceiling of Rs. 2/- lacs. No fees will be charged at
the time of reviewrenewal of card
Assets financed under the scheme are charged to the bank as
secunty

8 Rate of Interest Up to Rs.50000/- MCLR+SP

Above Rs.500001 up to Rs.200000/-
MCLR+SP+0.50%
The rate of interesi is subject to change as per Bank's guidelines as
advised rom time to time.

BOB Weaver Mudra Scheme

Sr No Particulars Guidelines

1 Eligibility Existing or experienced Handloom Weavers involved in weaving

activity
2 Purpose The scheme aims at providing adequate and timely assistance from the
Bank to the weavers io meet their credit requirement i.e- for
investments need as well as for Working Capital in a flexible and cost
effective manner. The scheme will be implemented both in rural and
urban areas.
3 Nature of Demand loan & Working capital finance
Facility
4 Maximum Rs.5.00 Lacs (lnclusive of Demand Loan and W.C. finance)
Limit
5 Rate of Rate of interest as per prevailing rate applicable to MSME segment as
under:
Interest

182
 Limits Micro Small
Medium
Up to Rs.50000/- MCLR+SP MCLR+SP+0.50%
MCLR+SP+1.20%
Above Rs.50000/- to Rs.2.00 Lakhs MCLR+SP+0.50% MCLR+SP+0.70%
MCLR+sP+1.20%
Above Rs.2.00 Lakhs to Rs.5.00 Lakhs MCLR+SP+0.70% MCLR+SP+0.85%
MCLR+SP+1.20%
Charging of Interest:
For example: if, MCLR+SP+o.70 i.e.10.35 at present, subject to revision
in MCLR from time to time as per guidelines ofthe Bank. To be charged
from Borrowers: 10.35% nterest subsidy to be claimed from GOI:
Difference amount i.e. 4.35% at
present subject to change in MCLR shall be calculated and adjusted in
the account on quarterly basis. PL note that interest subsidv will be
available only up to -3- vears from the date of first disbursementl

6 Margin 20 % of total project cost (Capital Expenditure & W.C) Margin up to

Rs.10000,/- or 20% whichever is less shall be provided by
GOl.

7 Assessment Demand Loan: 80% of cost of Looms and other accessories / capital
of Limit expenditure
Working Capital limit: Bank finance will be 20% of estimated /
projected turnover less margin
8 Subsidy to be Interest subsidy- To provide working capital loans at itre interest rate
provided by of 6% to handloom sector the quantum of interest subsidy to be borne
the by the Govt of India will be limited to the difference between the actual
rate of interest as applicable/charged by the Banks and 6%interest to
government
be borne by the borrower. The maximum interest subsidy would be
capped at 7% Interest subsidy as applicable will be provided for
maximum 3 years from the date of first disbursement. Interest subsidy
will be credited io the account of ihe borrower on quarterly basis.
and
b) Margin Money assistance: @20% ot the project cost subject to a
maximum of Rs.1O0OO/- per weaver will be provided. Margin money
subsidy will be credited to the account of borrower after sanction of
the loan.
and
c) Annual Guarantee Fee (A.G.F,) of CGTMSE (all accounts should be
covered under CGTMSE)
(i) For loans up to Rs.50000/- : Annual Guarantee fee (A.G.F.) of
0.25% of loan amount will be borne by GOl. In excess of 0.25% will be
borne by Bank.
(ii) For loan above Rs, 50000/- & upto Rs. 5 lakh: Entire CGTMSE
fees be borne by Govi of India for a maximum period of3 years.
9 Renewal Renewal/Review of Working Capiiat timit will be done annually. Please
/Review of Note that
Working that interest subsidv shall be available only up to three vears from the
date of first disbursement as GOI will provide interest subsidy
Capital Limit
maximum up to three years only .Thus a written consent to this effect
be obtained from he borrower at the time of documentation and to be
kept on record.
183
Technology Upgradation Fund Scheme (TUFS) For Textile And Jute Industries:
 To provide encouragement to textile industrial units for taking up technology up-gradation
and to modernize their production facilities. The scheme envisages 5% interest
reimbursement (4 percentage for spinning industry) of the normal interest charged by the
bank on the loans availed by the units from the bank for undertaking technology up-
gradation/modernization.
 New units set up with technology as per guidelines of the scheme would also be eligible for the
above benefit, or, 15% Credit Linked Capital Subsidy for Small Scale Sector and 20% for
Power-loom Sector, or, 5% interest reimbursement plus 10% capital subsidy for specified
processing machinery, technical textiles machinery, garmenting machinery and for CAD, CAM,
Design Studio, etc.
 The scheme also provides 25% capital subsidy on purchase of new machinery and equipments
for the pre-loom and post-loom operations, handlooms/up-gradations of handlooms and
testing and quality control equipments for handloom production units
 For Detail Ref Circular No. BCC:BR: 98:206 DATED 08.07.2006 , bcc: br:98:179 dated
08.07.2006 and BCC: BR:107:385:12.08.2015, BCC:BR:109:375 DT 29.07.2017
 Technology and Quality up gradation support to MSME – TEQUP – ( Ref circular no.
BCC:BR:107:345 DATED 20.11.2015) This scheme is being implemented by GOI through
variousNodal Agencies for providing capital Subsidy to MSME for Technology and Quality up
gradation support.

RBI came forward with “Trade Receivables Discounting System” (TReDS) as the institutional
mechanism to enable discounting of invoices/ Bills of Exchange of MSME sellers against large
corporates, including government departments and public sector undertakings, through an
auction mechanism to ensure prompt realization of trade receivables at competitive market rates,
without recourse on MSME sellers. Our Bank has approved a product for invoice / bill discounting
of MSME sellers on RBI approved TReDS platform. (BCC:BR:109:602 dated 16.11.2017).

184
WHOLESALE BANKING

185
 8. LARGE CORPORATE / WHOLESALE BANKING

Wholesale Banking Business:

As a part of Business Transformation initiatives, the bank is repositioning as ―Multi Specialist
Bank. Wholesale Banking Business Segment will include
All Banking business (Assets & Liabilities) across the Bank at Metro, Urban, Semi-
Urban & Rural branches with
 Entities (including Private Sector , PSU & Foreign) with their annual sales/income turnover of
over Rs.150/- crore
 Following types of customers irrespective of their annual turnover

Financial Institutions ,including banks and all type of NBFCs (excluding RRB sponsored
by our Bank)

Central and State Governments

Associate/Sister Concerns of Wholesale Banking Customers.
(Reference BCC:BR/99/343 dated 14.11.2007)

Wholesale Banking Segment is further defined by our Bank in following two parts:
1. Large Corporate: The Companies with annual sales turnover of above Rs. 500 crore.
2. Emerging Corporate: Companies with annual sales turnover of over Rs. 150 crore and up to
Rs. 500 crore.
These segmentations facilitated to bring new large corporate whose sales turn-over is very high
but do not have any limits or are enjoying very small limits with the bank. Existing CFS branches
are functioning as Wholesale Banking Branch where the large/mid corporate accounts of other
branches in the city are being parked.
Advantages:
1. To increase the existing client base by canvassing new corporate accounts and to get
optimum share.
2. To increase the penetration by increasing the number of products used by clients.
3. To increase fee based income business.
4. To have a special focused attention over Large and Emerging-Corporate customers.

Emerging Corporate Branch:

Objectives:
1. To set up dedicated Emerging Corporate Branches in important cities/centres in the
country to tap the potential that this sector offers.
2. To set up a Emerging Corporate Banking segment within the Wholesale Banking Group at
Corporate Office to provide the necessary drive support to achieve the above objectives.

BANK‘S INTERNAL EXPOSURE CLASSIFICATION

Definition:
1. All entities i.e. Corporate, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc.,
having a Gross Turnover (Sales) of over Rs 500/- Crores as per the last Audited Balance
Sheet or Previous Financial Year would be classified as Large Corporate Borrowers.
2. All entities i.e. Corporate, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc.
186
 having a Gross Turnover of over Rs 150/- crores and up to Rs 500/- crores as per the last
Audited Balance Sheet or Previous Financial Year would be classified as Emerging
Corporate Borrowers.
3. All entities i.e. Corporates, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc.
having a Gross Turnover of up to Rs 150/- Crores as per the last Audited Balance Sheet or
Previous Financial Year would be classified as SME borrowers.
4. All entities i.e. Corporates, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc.
that satisfy the Investment in Plant and Machinery criteria as per Regulatory Definition
would also be classified as MSME borrowers.(Reference: BCC/BR/107/425 dated
27.08.2015)
5. Note: Entities that have Gross Sales of less than Rs 450/- Crores as per Last Audited
Balance Sheet but have a Projected Gross Sales of over Rs 600/- Crores for the current
year shall be classified as Emerging Corporate only. The status will be reviewed after
reviewing the Actual Gross Sales for the projected year based on Audited Financials.
Similar situation would prevail in respect of MSME borrowers also i.e. borrowers with
Actual Gross Sales of Rs. 125 Crores and projected gross sales of Rs.200 Crores will be
classified as MSME only and will be reviewed based on Actual Sales on receipt of Audited
Balance Sheet for projected period.
6. In respect of New Projects whether Manufacturing, Services, Infrastructure etc. Total
Project Cost would determine the Classification as under:(Ref: Chapter 8.0, Page No. 58 of
Domestic Loan Policy 2014 & BCC/BR/106/454 dated 24.11.2014)
i) Other than Real Estate Projects
a. Project Cost <= Rs. 50cr. – SME
b. Project Cost >Rs.50cr. but <Rs.500cr. – Emerging Corporate
c. Project Cost =>Rs.500 cr. – Large Corporate
ii) Real Estate Projects
a. Project Cost = Rs. 50 Crs – SME (As per BCC:BR:106:454 dated 24.11.2014)
b. Project Cost >Rs.50 cr but <Rs.250 Crs.– Emerging Corporate
c. Project Cost =>Rs.250 cr – Large Corporate
7. The Classification of borrower would be Entity wise and not Group wise. So different
entities in the same Group can be classified as SME, Mid Corp or Large Corp depending on
the Gross Turnover criteria as above.
8. All agriculture accounts shall be classified under Rural & Agriculture Banking Business
Segment and be dealt at Rural & Agri Banking Deptt at BCC.
9. Notwithstanding the above if there is any doubt about the classification of any borrower
entity, it shall be decided mutually by GM (Large Corporate Banking), GM (Mid Corporate)
and GM (SME) based on sound reasoning and justification. However in case of difference
of opinion, it will be decided by the Executive Director.

Loans & Advances- Domestic Loan Policy 2014

1. No additional credit facility to be granted to Wilful Defaulters (Refer to Recovery Policy
2014) of our Bank/Other Banks/Financial Institutions.
2. In terms of Section 20(1) of Banking Regulation Act 1949, no loan against the security of
Bank‘s own shares.
187
3. Section 20(1) of the Banking Regulation Act, 1949 lays down restrictions on loans and
advances to the directors and the concerns in which they hold substantial interest.
Without prior approval of the Board or without the knowledge of the Board, no loans and
advances should be granted to Directors (including Chairman & Managing Director) and relatives
of directors of our Bank, other banks, Scheduled Cooperative Banks, Subsidiaries/Trustees of
Mutual Funds/ Venture Capital Funds set up by the Bank/ Other Banks subject to the following: -
a) Loans & advances aggregating to Rs. 25 Lacs and above are to be sanctioned by the MCB.
b) The proposals for credit facilities of an amount less than Rs. 25 Lacs to these borrowers
may be sanctioned by the appropriate authority under powers vested in such authority, subject
to reporting to the Board.
Every borrower should furnish a declaration to the bank to the effect that:-
He is not a director or specified near relation of director of a banking company.
a) None of the partners is a director or specified near relation of a director of a banking
company; and
b) None of its directors is a director or specified near relation of a director of a banking
company. No loan to be granted against partly paid shares.]
4. No loan to be granted against partly paid shares. No loan to be granted to
Partnership/Proprietorship concerns against the primary security of shares and debentures. (Ref
Point 3.9 page no. 31 of Domestic Loan Policy 2014)
5. Bank will not grant advance against FDR or deposits of other Bank.
6. Restrictions under Selective Credit Control (SCC): Presently the following commodities
are covered under Selective Credit Control (SCC): -
 Buffer Stock of sugar with sugar mills.
 Unreleased stocks of sugar with sugar mills representing levy sugar and free sale sugar.
7. Term Loan is granted for a period of 3 years and above but not exceeding 15 years except
in case of scheme specific advance i.e. Housing Loan, where repayment period of more than 15
years is permitted. However, generally a repayment period of 3 to 7 years is considered taking
into account the repayment capacity of the borrower, cash generation etc. In addition,
Infrastructure finance is also made available for a period of more than 15 years on case-to-case
basis on merits, in conformity with regulatory guidelines. In case of restructured term loan
accounts the tenor of the loan will be considered on merits of each case. However, exposure to
Term Loans (Domestic) in terms of residual maturity of more than –3-years should not
exceed 35% of the last quarter domestic credit.
8. Commercial lending proposals for Rs. 25 Lacs and above (FB+NFB), for which BOBRAM
Rating Models are available, must be rated as per extant guidelines. Minimum investment grade
/ acceptable for obligor (borrower) rating at entry point is BOB -6. In case of green-field project
the acceptable investment grade is BOBGF2 (BOB-6). Accounts rated BOB 7 and below are
considered as non-investment grades. No authority less than MCB will have the power to sanction
any credit facility at the entry level/review cum enhancement for accounts rated BOB 7 and
below. However, accounts rated BOB 7 & below in case of DR/Restructured/ Review/Review with
188
decrease may be considered by the next level of sanctioning authority/committee. But in the case
of proposals falling under the power of CACB, COCC-MD & CEO and COCC-ED the proposals may
be considered by the respective sanctioning authorities only.
9. In case of commercial lending below Rs. 25 Lacs (which are not covered under BOBRAM
Rating Models) the existing guidelines issued by SME department and Retail Banking department
will continue.
10. As per RBI guidelines, all credit exposures need to be rated. However in case, models for
rating of any kind of exposure to be taken up are not available, the exposure may be considered
as unrated. While taking up such unrated exposure bank‘s extant guidelines including financial,
non-financial parameters etc. are to be followed.
11. With effect from 1st April 2014, the Credit Rating Validation function of all borrowal
accounts with credit limit Rs.5 crores and above has been centralized at Risk Management
Department, BCC, Mumbai irrespective of the location of the sanctioning authority. (Ref. Circular
No. BCC: BR: 106/26 dated 25.03.2014). However, for accounts with credit limit up to Rs.5 crores
existing guidelines will continue.
12. Exposure to unsecured guarantees and unsecured advances: Unsecured Exposure is
defined as an outstanding exposure where the realizable value of the security, as assessed by the
Bank/approved valuers / Reserve Bank‘s inspecting officers, is not more than 10%, ab-initio, of
the outstanding exposure. „Outstanding Exposure shall include all funded (excluding
investments) and non-funded outstanding exposures (including guarantees, Derivatives (LeR),
underwriting & similar commitments).
Security will mean tangible security properly charged to the Bank and will not include intangible
securities like guarantees & comfort letters, and rights, licenses, authorizations etc. charged to
the Bank as collateral in case of infrastructure projects. However, annuities under “Built Operate
and Transfer” model in respect of road/highway projects and toll collection rights where there
are provisions to compensate the project sponsor, if a certain level of traffic is not achieved, shall
be considered as tangible security, if the Bank’s right to receive annuities and toll collection is
legally enforceable and irrevocable.
13. RBI has further advised that for determining the amount of unsecured advances for
reflecting in Schedule 9 of the published balance sheet, the rights, licenses, authorizations, etc.,
charged to the banks as collateral in respect of projects (including infrastructure projects )
financed should not be reckoned as tangible security. The total amount of advances for which
intangible securities such as charge over the rights, licenses, authority, etc. has been taken as also
the estimated value of such intangible collateral should also be disclosed.
14. The domestic outstanding unsecured guarantee plus the total of domestic outstanding
unsecured advances in terms of definition of ‗unsecured exposure‘ of RBI as stated above should
not exceed 30 percent of total domestic outstanding advances. The cap of 30% may be exceeded
by additional 10% provided the additional exposure is on account of financing to infrastructure
projects for which intangible securities such as charge over the rights, licenses, authority, etc. only
is available.
15. Short term loans (STL): The STLs may be on secured or unsecured basis depending upon
merits of proposal. Total unsecured Short Term Loans shall not exceed 10% of the total domestic

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credit as of previous quarter. However, COCC-MD & CEO/COCC-EDs is empowered to exceed the
cap, subject to reporting to Board. Unsecured exposures will be considered only on clients
having investment grade or higher rating.
16. Advances to accounts where HUF is a partner
i. No credit facility to be granted to a firm where the HUF is a partner.
ii. In case of existing accounts where one or more HUF is/are partners, branches shall obtain
letters of consent from the major members of the HUF declaring themselves as partners of the
firm and also to ensure than total number of partners in that firm not to exceed-20.
iii. Alternatively partnership firm can also decide to carry out reconstitution of the firm by
inducting one or more adult members of HUF as partners.
iv. Any of the above changes taking place must be brought to the notice of the guarantor.
v. While doing so, fresh set of documents shall be obtained from all the partners and
guarantors.
vi. LAD confirming the previous date balance by the existing partners and guarantors
vii. No HUF property shall be obtained as security for any facilities given to any other
individual person, partnership firm and/or any corporate accounts unless and otherwise the
Karta and/all major co-parceners of HUF shall claim that offering of such joint family property is
only for the benefits of the HUF and that the guardians of minor co-parceners shall also indicate
the same.
As per guidelines (Circular No. BCC: BR: 98 / 203 dated 01.07.2006) providing any credit
facilities where HUF is shown as a partner in a partnership firm, should not be considered
at all. Further, as regards HUF, in one of the judgments the Supreme Court has expressed
that HUF cannot enter into a contract due to floating nature of the organization as its
composition changes by births, deaths, marriages & divorces.. Bank should desist from
accepting HUF as borrower (proprietor/ partner) or guarantor.

17. Issuance of NO Objection Certificate:

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

Activity Clearance & Agreement in Principle:

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Looking to the increasing trend of stressed assets , Board of our Bank has directed to adopt
cautious approach in taking fresh exposure/additional exposure/ ad-hoc limit in few sectors and
introduce the system of obtaining Activity clearance prior to regular sanction irrespective of the
quantum of exposure.
The activity clearance will be required from respective Functional Head (SME, Mid Corporate,
Large Corporate) at Baroda Corporate centre.
Therefore prior activity clearance will be a pre-requisite before fresh sanction/ review with
increase /ad-hoc of credit facility in cases summarized as under:
(Reference: BCC:BR:107:171 Dated 16.04.2015)
a) Activity Clearance from Baroda Corporate Centre
S. Industry/Activity Authori Remarks
No ty
1. Leasing and Hire purchase Non- BCC For fresh /RWI/ Ad-hoc-Irrespective of
Banking Finance companies amount ( Sanctioning authority rests
(other than Central /state Govt. with MD-CEO/COCC-ED only within
NBFC) their delegated power
2. Capital Market ( other than BCC For Fresh/RWI/Ad-hoc irrespective of
advances against shares to amount
individuals) stock Brokers
market makers
3. Financing of film Making BCC For fresh /RWI/ Ad-hoc-Irrespective of
amount ( Sanctioning authority rests
with MD-CEO/COCC-ED only within
their delegated power
4. Bridge Loan BCC For Fresh/RWI/Ad-hoc irrespective of
amount
5. Financing of Education BCC With Limit of Rs.5.00 Crore and above
Institution
6. Aviation BCC For Fresh/RWI/Ad-hoc irrespective of
amount
7. Infrastructure-Power BCC For Fresh/RWI/Ad-hoc irrespective of
amount
8. Infrastructure-Road BCC For Fresh/RWI/Ad-hoc irrespective of
amount
9. Infrastructure-Telecom BCC For Fresh/RWI/Ad-hoc irrespective of
amount
10. Securitization through deed of BCC For Fresh/RWI/Ad-hoc irrespective of
assignment amount
11. Gems and Jewellery and BCC For Fresh/RWI/Ad-hoc irrespective of
Diamond Industry amount
12. A. Commercial Real Estate for BCC For Fresh/RWI/Ad-hoc irrespective of
Malls amount
B. Real estate for Commercial BCC For Fresh/RWI/Ad-hoc irrespective of

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 activities amount

13. Advances to Cooperative Bank BCC An exceptionally meritorious cases.

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

b) Activity Clearance from Zonal Heads

S. No Industry/Activity Authority Remarks
1. Plantation (excluding tea coffee and Zonal Heads For proposals falling up to the
Rubber plantations common power of ROCC-RM
horticulture crops jatropha spices
medicinal plants essential
oils/Aromatic plants)
2. Manufacturing and trading of Liquor Zonal Heads For proposals falling up to the
power of ROCC-RM
3. Vegetable Oil Vanaspati Zonal Heads For proposals falling up to the
power of ROCC-RM
4. Cinema Halls, Zonal Heads For proposals falling up to the
Theatres/Auditoriums/Amusement power of ROCC-RM
parks, Marriage Halls
(Kalyanamandapams)
5. Educational Institutions (Existing Zonal Heads For proposal up to rs.5.00
Fresh) Crore
6. Advances to Hotels & Resorts Zonal Heads For proposals falling up to the
power of ROCC-RM
7. IT & ITES Zonal Heads For proposals falling up to the
power of ROCC-RM
8. Real estate (Other than Malls) for Zonal Heads For proposals falling up to the
commercial activities but excluding power of ROCC-RM
retail loans, priority sector advances

c) Activity Clearance based on DLP

S. No Industry/Activity Authority Remarks

1. All other cases falling under the power of BCC For Proposals falling
ZOCC and above for the above mentioned beyond the power of ROCC-
activities are to be put up to Baroda RM please see the guidelines
Corporate Centre below**

i. **For proposals falling under the power of Zonal head and the functional head at BCC activity
clearance to be given by the functional head at BCC
ii. **For proposals falling under the power if COCC-ED activity clearance to be given by the
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Executive Director
iii. **For any other proposal not covered above for the said activities the activity clearance will
be given by the Managing Director & CEO
Applicability of AGREMENT IN PRINCIPLE : AIP is required in proposals falling beyond
the Zonal Office Credit Comittee powersunder following conditions :
1-Any Fresh Exposure
2-In existing accounts if aggregate increase is more than Rs 50.00 Crores or enhancement is
more than 25% whichever is lower
3-If more than 10%enhancement in exposure is proposed in case of sub investement grade
(Below BBB)advances as per internal/external credit rating
4- If borrower/promoters name appears in any of the Bank’s negative database i.e.
CIBIL/SMA2/RBI/ECGC defaulter list
5- In case if a Zone/Region has specifically issued guidelines for a specific sector with the
concurrence of the respective Vertical Head of Baroda Corporate Centre for which AIP is o be
approved by respective Zone /Region .
(BCC:BR:109:93 DT 13.02.2017)

d) Activities NOT encouraged by the Bank:

S. Activities
No
1. Financing for exports to countries for which Export Credit Guarantee Corporation
Limited (ECGC) does not extend Guarantee cover

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

any other category as may be specifically decided by the Bank on account of Bank`s
unsatisfactory experience
3. Bank will not encourage financing for setting up new sugar factories in co-operative
sector and/or sugar factories of capacity less than 5000 TCD (Tonnes of Crushing per
day) of sugar cane. Bank may however meet the working capital request from the sugar
factory if requested under pledge & subject to guidelines of RBI under Selective Credit
control.

e) Restrictions on loans & advances to industries producing/Consuming Ozone depleting

substances (ODS)
S. No Sector Type of substance
1. Foam Products Chlorofluoro Carbon-11 (CFC-11
2. Refrigerators and Air conditioners CFC-12
3. Aerosol Products Mixtures of CFC-11 & CFC-12
4. Solvents in cleaning applications CFC-113 Carbon Tetrachloride Methyl
Chloroform
5. Fire Extinguishers Halons-1211, 1301,2402

Bank will prefer to take fresh exposure /review with increase in the following sectors:-
 Pharmaceuticals
 Engineering
 Defence Equipment Manufacturing
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 Automobile
 Renewable Energy
 IT and IT enabled services
 Financial Services (NBFCs MFIs)
(Reference BCC:BR:108:103 Dated 03.03.2016)
Fresh/review with increases proposals in these segment can be considered as per extant
guidelines of the Bank subject to Activity Clearance (Circular letter no BCC: BR:70:171 dated
16.04.2015-Wherever applicable)
Board has also advised to focus on Channel Financing Trade Financing Cash Management Service
financing if investee Companies of Large Private Equity Funds , extending Advisory Services as
new avenues of business opportunities.
Bank will take cautious and selective approach in taking fresh exposure in the following sectors:-
 Power Generation
 Road Projects
 EPC
 Iron and Steel
 Ship Breaking
 Gems and Jewellery
 Coal Mining
 Edible Oil & Vanaspati Manufacturing
 Textiles
 Large Trade Accounts (Wholesale Trading)
(Reference BCC:BR:108:103 Dated 03.03.2016)
This circular has further advice that fresh/review with increase proposals involving a limit of Rs
5.00 crores and above, coming under the purview of these sectors mentioned here in above
should be referred to the respective credit verticals at BCC through respective Regional Offices
for approval before putting up to the Sanctioning Authority CFS Branches and select Large
Branches will directly refer the proposals to BCC as mentioned in letter no BCC/LCB/105/2220
dated 26.07.2013.
A Committee of General Managers (COGM) at BCC will examine the proposal from viability and
risk angle. COGM will also simultaneously look into the aspect of Activity Clearance (wherever
applicable) as mentioned in our circular no: BCC:BR:70:171 dated 16.04.2015

Fair Practices Code for Lenders:

RBI has advised all Banks and Financial Institutions to adopt the Fair Practices Code duly
approved by their respective Boards. The Fair Practices code applies to the following areas:
a. Applications for loans and their processing.
b. Loan appraisal and terms / conditions
c. Disbursement of loans including changes in terms and conditions
d. Post disbursement supervision
e. Other general provisions.

Applications for loans and their processing

 Standard schedule of fee / charges relating to the loan application depending on the
segment, to which the accounts belong, will be made available to all the prospective borrowers in
a transparent manner, along with the loan application, irrespective of the loan amount. Likewise,
194
amount of fee refundable in the event of non-acceptance of the application, prepayment options
and any other matter which affects the interest of the borrower will also be made known to the
borrower at the time of application.
 Receipt of completed application forms will be duly acknowledged.
 The acknowledgment would also include the approximate date by which the applicant
should call on the Bank for preliminary discussions, if deemed necessary.
 All loan applications will be disposed of within a period of 4 weeks from the date of receipt
of duly completed loan applications i.e. with all the requisite information/papers.

Time Limit observed by Bank (maximum time-limit for disposal of application as under)
Type of Advance Time Frame for disposal of loan applications
Priority Sector
Up to Rs.25000 Up to Rs.25000 Within 2 weeks
Up to Rs.5.00 Lacs Branch Level 4 weeks
Above Rs.25000 RO/ZO Level 45 days
Above Rs.5.00 Lacs
BCC Level 90 days
Export Credit
Branch Level 4 weeks
Export Credit RO/ZO Level 45 days
BCC Level 90 days
SME
Up to Rs.2.00 Lacs 2 weeks
Above Rs.2.00 Lacs 4 weeks
 within 14 days if no TEV required &
At SME Factories
 21-days if TEV study is required
As prescribed at product level but not beyond 4
Retail Loans weeks/45 days/90 days at Branch, RO/ZO and
BCC level respectively
Other than Priority sector / Retail / SME Lending
Branch Within 10 days
RMCC/DRMCC 7 days from receipt from branch
ZOCC(Zonal office Level Credit Committee) 7 days from receipt from branch
COCC-GM 15 days from receipt from respective levels
COCC-ED(Corporate office Level Credit
7 days from Receipt
Committee-ED)
COCC-MD& CEO 7 days from Receipt
CACB(Credit Approval Committee of the Board) Next Meeting subject to Agenda scheduling
MCB Next Meeting subject to Agenda scheduling

CFS/IFS branches will have to forward their proposal directly to BCC with a copy to Zonal
Office and Zonal office will have to offer their views/comments within 15 days to BCC.
Rejection of proposals: Credit Proposals falling beyond the discretionary lending powers of
Branch Managers shall not be rejected at the level of Branches. The authority empowered to
sanction a credit proposal may reject such proposal. Branches shall at monthly intervals submit
195
a consolidated statement to the Regional Office, in respect of proposals falling under their powers
and rejected by them, giving the details of the applicant viz., name, activity, facility sought etc.,
along with reasons for rejection of the proposal for their perusal and comments. However,
proposals of CACB/MCB powers may be rejected by COCC-MD& CEO.
The rejection of credit proposal pertaining to SC / ST beneficiaries and Export Credit shall be done
by the next higher authority. The existing guidelines about reporting of rejection of Export Credit
proposals to CMD through concerned department at Corporate Centre to continue.
In case of rejection of loan application, irrespective of category of loans or threshold limits, the
same would be conveyed in writing along with the main reason(s), which led to rejection of the
loan application. The time frame for conveying the reason/s of rejection will be as per Schedule
given below:
Priority Sector Non Priority Sector
Up to Rs.25000 Within 2 weeks Export Credit Within 45 working days
Above Rs.25000 and Within 4 weeks Others Within 46 working
up to Rs.5.00 lac days*
Above Rs.5.00 lac Within 8-9 weeks
*The time frame is for the sanction up to the level of COCC-MD& CEO. In case of proposals falling
within the powers of the Management Committee of Board, the proposals are to be submitted at
the next meeting scheduled to be held after the clearance by the Chairman and Managing Director.

The above time frame for disposal of applications is from the date of receipt of loan
application, which is complete in all respects.
Discretionary Lending Powers:
In line with the Ministry of Finance guidelines the bank has constituted the credit committee
structure for different levels in the bank. Credit decisions including the compromise and write-
off are to be considered by the Credit Committees at respective levels. Executive/Officer other
than at Branches shall not have any discretionary powers separately.
Before putting up the credit /compromise /write-off proposal to the Regional/Zonal /Corporate
level committees, Bank shall have scrutiny/approval from the CREC (Credit Risk Evaluation
Committee, for proposals of Rs. 5 crore & above) /SACs (Settlement Advisory Committees) at
respective levels.
1. At corporate level there will be following credit committees:
i. Management Committee of the Board (MCB).
ii. Credit Approval Committee of the Board (CACB) – Headed by the MD & CEO
iii. Corporate Office Level Credit Committee headed by the MD & CEO (COCC-MD & CEO)
iv. Corporate Office Level Credit Committee headed by respective EDs, in-charge of respective
Corporate Credit Function (COCC–ED).
v. Corporate Office Level Credit Committee for International Division headed by the CGM/GM
(Intl Div) (COCC–GM Intl Div)).

2. Zonal Office Level Credit Committee headed by Zonal Head i.e. ZOCC

3. Regional Office Level - Two credit committees:

i. Regional Office Level Credit Committee headed by Regional Manager (RMCC)

196
 ii. Regional Office Level Credit Committee headed by Dy. Regional Manager (DRMCC)
The Quorum of members in CACB- 3 in which MD & one ED is compulsory, COCC-CMD-4 including
CMD & ED , COCC-ED-4 including ED, COCC-GM (Int‘ll)-3 including GM & DGM (Intl) and ZOCC/
RMCC/DRMCC-3 each..
 The powers of the credit committees shall be at the same level as hitherto exercised by the
Executive who will be heading the respective Credit Committee.
 The Officers/ Executives at Branches shall continue to exercise Grade/Scale wise powers
hitherto delegated by the Board.
 Sanctions at SME /Retail Loan Factories: The SME/Retail Loan Factories for the purpose of
sanctions/credit decisions shall be considered as Branches only, in respect of SME/Retail
proposals. The respective SME/Retail Factory Head shall exercise powers within their delegated
powers at substantive Grade/Scale, as hitherto.
 The present guidelines on delegated powers up to the level of RMCC provided for exercising
powers of next higher authority for the purpose of review of existing credit facilities would
continue subject to the conditions :–
i. No change in terms & conditions;
ii. No downgrading in credit rating during the review period;
iii. Latest rating is minimum BOB-6 as per new credit rating system
ZOCC is now enabled to exercise powers of COCC-ED for review.(As per BCC:BR:108:87 dated
18.02.2016)
 For exercising DLP the tangible security (Primary and Collateral) charged to the bank, is to be
taken into account to decide secured and unsecured advances.
 For Export Finance, the authorities up to the level of General Manager are empowered to
exercise their discretionary lending powers up to 125% of their normal powers provided total
limits sanctioned exclusively for export business such as packing credit, post shipment credit etc.
amount to at least 25% of the delegated powers as hitherto.
 Other than export credit proposal, all authorities up to the level of DGM shall have discretionary
powers as under ,based on credit rating of the borrowers):
1. Latest Credit rating as per CRISIL models (not more than one year old) BOB-1, BOB-2,
and BOB-3, the DLP will be 125 % of the normal powers.
2. Latest Credit rating as per CRISIL models (not more than one year old), BOB-4, BOB-5,
& BOB-6, the DLP will be 100 % of the normal powers.
3. Latest Credit rating as per CRISIL models (not more than one year old) BOB-7, BOB-8,
BOB-9 & BOB-10; the DLP will be 75 % of the normal powers.
 The lending powers of the General Managers shall be irrespective of the credit rating of the
borrower- customers.
 For new borrowers approaching first time, to be treated as BOB-6 for the purpose of
sanctioning powers.
 As regard accounts under old rating models (i.e. exposure less than Rs. 25 Lacs) the DLP will
197
be 100% of normal powers for A+, A & B+ rated accounts and 75% of normal powers for accounts
rated below B+.
 The officers/ executives who are second in line and those in-charge of credit department in all
branches are authorized to grant advances against ―Zero-Risk Assets, such as bank‘s own
deposits, NSC, LIC Policies, IVPs, KVIPs, Government Securities etc. up to the lending powers
subject to reporting to branch manager under PSR system
 Authorities below the level of Chief Managers may exercise delegated lending powers to
consider credit facility against hypothecation of book debts, provided the constituents offer
sufficient tangible collateral security, the value of which being at least 75 % of the advance, by
way of mortgage of immoveable property and/ or other securities. In case no collateral securities
are offered/ available, the proposals are to be referred to Higher Authorities as hitherto.
Annual Cap ―for discretionary lending power:
Cap on Discretionary Lending Powers per year of various authorities are as follows: - (For fresh
and increase in existing limits)
Sr. No. DGM & AGM CM & SMGS IV & III Mgr.& Officer JMGS-II
SMGS VI & V JMGS-I
30 times of 25 times of 20 times of
Group Limit Group Limit
1 Group Limit Group Limit

Per Party Limit 30 times of Per 25 times of Per 20 times of Per

2 Party Limit Party Limit Party Limit

Following advances are excluded from the annual cap limit:

i. Advances to staff members under the specific schemes for the bank‘s staff only.
ii. Advances against our own deposits and securities such as NSCs / KVPs / LIC Policies / Relief
Bond/ IVPs etc.
iii. Advances under Govt. Sponsored programme and to weaker sections
iv. Review (including review with decrease in limit) of accounts at the existing level.
v. In case of review with increase only existing limit is excluded whereas increased portion will
be counted for cap limit.
vi. Sanction of retail loans to the Proprietor/Partners/Directors of a firm/ company stands de-
linked from per party/group discretionary lending powers.
vii. As per circular No. BCC:BR:106:192 dated 26.05.2014 sanction of Agriculture Loans to the
individual director/Partner/Proprietor of a company/ firm is delinked from per party/Group
discretionary lending powers.
This provision of annual cap will not be applicable to GMs, the in-charge and second line
officers of Central Processing Cells (CPCs) of Retail Lending / Urban Retail Loan Factory
and SME Loan Factory.
Depending upon business needs the sanctioning authority may be authorized to exceed the
annual ceilings by the next authority not below the level of Asst. General Manager, by considering
198
suitable increase in the ceiling.
Ratio at a glance:
RATIO FORMULA Interpretation and benchmark
Current Ratio Current Assets/ Current Ability to meet current liabilities
Liabilities (1.33is Higher the ratio better the liquidity.
desirable) Short fall may indicate diversion of
short term fund.
Debt-Equity Ratio TOL/TNW Coverage of outside liabilities to own
TTL/TNW fund. Lower the ratio highe rthe safety.
As per loan
policy,TTL/TNWmax3:1&TOL/TNW
max4.5:1,
FACR Net Block of Fixed Assets Extent
(Fixed Assets Coverage Ratio Term Liability towhichFAscoverTermLiabilities.
Morethan1isdesirable.
Debt-Service Coverage Ratio (PAT+ D e p . + I n t t on Debt Servicing Ability.
Loan)/ (Instalment of To work out repayment capacity.
T L + I n t rest on Loan) Minimum must be 1.25 (Except 1.00
in case of Micro & Small SME) in and
Average should be atleast
1.75.Total of numerators to be divided
by total of all denominators to
calculate average DSCR. In case of real
estate DSCR is not relevant since there
payment is made out of sale of assets
which is proposed to be financed.
Inventory holding period (Total Closing Stock x Efficiency of Inventory Management
(No. of days) 365)/Cost of Sales Holding Period of Inventory.
Raw material holding (Closing RM X365)/
period (days) Raw Material Consumed
SIP holding period (days) (Closing SIP X365)/Cost of
Production
Fin. Goods holding period (days) (Closing FG X365)/Cost of
Sales
Debtor turnover Ratio (No of (Closing Debtors x 365)/ Credit policy of the unit/ firm.
Days) Gross Credit Sales Average Period of the
credit extended to customers.
Creditor (Closing Creditors x 365)/ Ability to get goods on credit.
Turnover Ratio (No.of days) Credit Purchases Ability to repay
Operating Profit Margin (PBDIT –Other income X Operating Profitability
100)/Net Sales Efficiency of Production and Pricing.
Net profit (Profit After tax X 100) Net Profit margin on business.
Margin /Net Sales Overall efficiency of the unit.
Earning left for Dividend.
Return on Capital (PBIT-OI X 100)/( Measures efficiency of

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Employed CE +TL(<1yr)+ BB-FIOB) capital employed in the
business
Interest Coverage Ratio (PBDIT X 100)/ Interest It measures the ability to pay
interest-due from the operating
cash flows of the firm.
Break Even analysis BEP in Qty.= (Fixed BEP of the Unit. High BEP is risky
Cost)/(Contribution per Contribution of Profit to meet
unit) Fixed cost of the Unit.
Sales Means net Sales.
Contribution means SP
per unit minus VC per unit In our bank, BEP to be calculated
in all proposal including TL of
BEP Sales = BEP in units X Rs. 20 crores and above.
SP per unit
Margin of Safety MOS (Sales Value - BEP % of variance sustainable by the unit.
Sales)/Actual Sales Cushion available in case of variance.

8.7 Pricing of the loan

 Pricing of Loans is quite crucial for bank‘s business. Bank follows a transparent pricing
policy and is also guided by RBI on Government directed/ sponsored lending.
 The credit rating/scoring in respect of the borrower enjoying credit facilities above Rs.2
Lacs but less than Rs.25 Lacs shall continue, even-though the pricing is de-linked, for determining
the credit risk perception
 For loans of Rs.25 Lacs and above pricing continues to be determined by the rating of the
borrower with appropriate spread.

Existing Base Rate Framework:

Reserve Bank of India vide its circular no.: RBI/ 2009 - 10/ 390 DBOD. No. Dir. BC 88/13.03.00/
2009-10 dated 9th April, 2010 had issued guidelines on introduction of Base Rate System w.e.f.
1st July, 2010 in place of Benchmark Prime Lending Rate System. Accordingly, our bank had
issued a circular BCC:BR:102:178, dated 30th June, 2010 on the Base Rate Framework. In addition
to Base Rate tenor premium was also applicable in term loan accounts as under:
Period Tenor premium
Above 1 year to three years 0.05%
Above three years to 10years 0.20%
Above 10 years 1.00%

Reserve Bank of India vide its circular no. RBI/2015-16/273 DBR.No.Dir.BC.67/13.03.00/2015-

16 dated 17th December 2015 has issued guidelines on introduction of Marginal Cost of Funds
based Lending Rate (MCLR) for Domestic Advances. The guidelines came into effect from April 1,
2016 in place of Base Rate Framework.
All the loans/facilities based on Base Rate framework may run with the existing base rate
structure till their maturity /review

Marginal Cost of Funds Based Lending Rate (MCLR) Framework

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As per the guidelines issued by Reserve Bank of India on MCLR, it is advised as under:
1. Marginal Cost of Funds Based Lending Rate (MCLR) shall be new internal benchmark lending
rate for all new sanctions and disbursements w.e.f. 1st April 2016.
2. Actual lending rates will be determined by adding the components of spread to the MCLR.
Tenor premium shall not be charged over and above MCLR as it is already built in the
respective tenor specific MCLR.
3. The reference benchmark rate used for pricing the loans should form part of the loan contract.
4. Existing loans and credit limits linked to the Base Rate may continue till repayment or renewal,
as the case may be. Existing borrowers will also have the option to move to the MCLR linked loan
at mutually acceptable terms without being treated as a foreclosure of existing facility. The
borrowers willing to opt to MCLR from BPLR or Base Rate will have to sign the documents as
enclosed in Annexure 2.
5. There shall be seven benchmark rates for different tenure or time periods ranging as under:
 Overnight MCLR,
 One-month MCLR,
 Three-month MCLR,
 Six month MCLR, and
 One year MCLR.
 Three year MCLR
 Five year MCLR

6. The MCLR shall be reviewed monthly and will be declared on 10th of every month.
7. Following items shall be exempted from the purview of MCLR:
i. Loans under Government schemes.
ii. Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL), etc. granted as part of
the rectification/restructuring package.
iii. Loans under various Governments refinance schemes or any Government undertakings.
However, Interest rate charged on the part not covered under refinance should adhere to the
MCLR guidelines.
iv. Advances to Staff, Retired Staff, Bank’s CEO, Bank’s Whole Time Director, LABOD, Loans linked
to Market Benchmark & Fixed Rate Loans granted by Bank. However, in case of hybrid loans
where interest rates are partly fixed and partly floating, interest rate on the floating portion
should adhere to the MCLR guidelines.
8. Rate of Interest shall be reset on annual basis. It means that if the rate quoted to a borrower is
MCLR of 9.50% on 5th April 2016 +2% of credit risk premium, his MCLR of 9.50% will not change,
even if in May 2016 the MCLR changes to 9.40% or 9.60% .However on 5th April 2017 (the annual
date when his rate was fixed), if the MCLR prevailing on that date say is 9.25%, this will be the
applicable benchmark rate for the borrower. The credit risk premium will change as per extant
guidelines.

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9. Quoting of MCLR to the borrower: In our Bank, we have adopted the reset of MCLR after 1 year.
The MCLR of longer tenor should not be stipulated for shorter tenor facilities. However the MCLR
of shorter tenor (minimum 1 year MCLR) may be quoted for longer tenor facilities subject to
credit review at minimum one year intervals
(Reference: Circular No. BCC:BR:108:133 28th March, 2016, BCC/BR/108/209 dated 09.05.2016,
BCC/BR/108/260 dated 10.06.2016)
MCLR to be reviewed every month and the new MCLRs shall be declared effective from 7th of the
month.(BCC:BR:108:166 dated 06th April,2016.)

Penal interest & additional interest:

Bank may apply penal interest of maximum 2% p.a. each, for delay in submission of financial
statement, stock statements, creation of security, quarterly information, overdues, breach of
covenants etc. without any explicit approval /concurrence of appropriate authority. Penal
interest would be exclusive of the existing pricing of the asset and additional to any other charge
for excess ad-hoc limits.
The bank shall charge overall penal and additional interest up to 2% p.a. over the
applicable/regular interest rate.

Verification of documents:
Advances accounts with aggregate limit of above Rs. 2.00 crore (Funded plus Non-Funded) would
be verified by the Bank‘s Law Officer posted in the respective Zone/ Region and the documents
relating to Advance Accounts with aggregate of Rs. 10 Lacs and above but up to and inclusive of
Rs. 2.00 crore shall be verified by the Bank‘s identified Advocate /Lawyer other than the one who
has given the Title Opinion / Non-Encumbrance Certificate (NEC) / Report in respect of
mortgage(s) in the account.
Further, as per Circular No. BCC:WB:POL:F30:99/4511 dated 11th August 2007, it has been
approved by our higher authorities that in respect of following seven Zones, documents
verification in respect of credit limits between Rs.1 crore and Rs.5 crore can be got done from
empanelled advocate/s of the bank, provided original documents at some stage have been vetted
by Zonal Legal Dept./Law officer of the bank.
1) North Zone 2) Greater Mumbai Zone 3) Southern Zone 4) Eastern Zone 5) Gujarat Operations
6) Mah. & Goa Zone and 7) Rajasthan Zone.
Notwithstanding what is mentioned above, all documents pertaining to consortium accounts
have to be necessarily got verified from Corporate Legal Dept./Zonal Legal Dept./Law Officer of
Bank.

It may be noted that the documents shall be verified by the Bank‘s identified panel
Advocate/ Lawyer other than the one who has given the Title Opinion/Non-Encumbrance
Certificate (NEC)/ Report in respect of mortgage(s) in the account.
Legal Audit of Title Documents
In response to RBI guidelines, a system of periodical ―Legal audit of title deeds and other loan

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documents in respect of all credit exposure of Rs.5.00 Crore & above is introduced for all existing
as well as new accounts.
In addition to existing practice of verification of documents, Re-verification of title deed as to their
genuineness with relevant authorities along with verification of other loan documents will be
carried out within a period of 05years from the date of such first verification of title deeds/
documents and for every block of five years thereafter till the loan is settled in full.
The re-verification will be carried out by the Bank‘s empanelled advocate.

Review
i. Regular Review
Credit facilities sanctioned to borrowers are subjected to annual review (except LABOD, staff
loans and the accounts where facilities sanctioned are for a period less than one year etc.) as per
the prevailing guidelines.
However in case of borrowal accounts enjoying credit facilities of Rs.10 Crores and above, where
the credit rating is BOB-7 or below, the account should be reviewed on half-yearly basis. The
accounts are required to be reviewed on or before the due date.
Branches have been advised vide Circular No. BCC: BR: 100:14 dated 14.01.2008 to review
advances accounts with limit up to Rs. 20 Lacs for facilities enjoyed by borrowers in trading
activities, Micro & Small Enterprises, borrowers in rural area, borrowers having only term loan
accounts, financed under government sponsored programme, borrowers enjoying only
guarantee facility, etc., pending receipt of audited financial statements, provided the conduct of
the account is satisfactory in terms of various parameters stated below:
1) Satisfactory conduct and turnover in the account
2) Fulfilment of repayment obligations (Interest/ Instalments)
3) Adequacy of securities, drawing power, insurance coverage etc.
4) Rectification of inspection irregularities (other than non-submission of financial
statements)
5) Compliance of all terms and conditions of previous sanction.
6) Satisfactory trend in production and /or Sales as per projections
7) Documentations and mortgages in the account being complete, valid and enforceable
8) Prompt payment of bills under LCs, realization of BP/BDs, Guarantee Commission etc.
9) Submission of Income Tax / Sales Tax returns filed with Statutory Authority as per time
schedule prescribed, wherever applicable (which will also indicate about the sales and
profitability of the operations).
The financial statements should, however, be obtained within 9 months from the close of the
financial year and satisfied upon by the sanctioning authority on financial parameters emerging
out of the Balance Sheet/ Profit and Loss Account submitted by the borrowers at a later date. If
the financial parameters emerging from the submitted Balance Sheet are not found satisfactory,
appropriate actions, as may be warranted, should be initiated.
The review on above lines will not be applicable to:
 Irregular accounts
 Accounts under restructuring / rephasement or rehabilitation
 Retail loans

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 NPA accounts
 Suit filed accounts
 Staff Loans
 Loan against Shares
 Loan granted against scheme under “Future Rent Receivables”.

The account should not be reviewed without financial statements for two consecutive
years.
The above procedure has been adopted to ensure timely review of small sized advance accounts
and to reduce the number of un-reviewed accounts.

SMA status should be part of the credit proposal. In every proposal e.g.Review/RWI/Review
with decrease the SMA status must be incorporated as Point No 5.10 of the credit proposal .In
concession/Modification proposals also SMA status should be given.

ii. Short Review / Status Note:

The bank has also the practice of Short Review / Status Note, which is done when it is not possible
to carry out a comprehensive Regular Review of the account within the stipulated period pending
receipt of certain particulars/ information or where the account is placed under special
monitoring, etc.
Consecutive Short Reviews shall be restricted to two with a maximum period of six months for
each short review. But in exceptional cases, status review can be done in respect of accounts
marked for strict monitoring or for recovery. Relaxation is also provided to restructured accounts
and accounts under rehabilitation where for a variety of reasons only, Short Reviews may have
to be done till such time the unit/account becomes normal and healthy.
Where there is impairment of borrower‘s quality indicated through various adverse features like
default, diminution in value of security etc., suitable communication and if need be a Short Review
/ Status Note should be placed before competent authority for perusal, direction and necessary
action.
8.11 Inspection of Securities:
Periodicity of the inspection of securities to be carried out is as under: -
 Prime securities charges for working capital as per BOBRAM rating:
 Latest Credit Rating for BOB–1, BOB–2, BOB–3 (A+ as per old rating model)-Half-yearly basis.
 Latest Credit Rating of BOB -4 and BOB – 5 (A as per old rating model)-Quarterly basis.
 Latest Credit Rating BOB – 6 & Below (B+ & below as per old rating model)-Bi-monthly.
 Fixed Assets (Charged against Demand/Term Loan/DPG)-Half-yearly i.e. as of January
and July.
 Under consortium arrangement (Exchange of inspection reports / information –with
other banks to be ensured)-As per periodicity fixed by the consortium.
 Inspection of Collateral Securities
The inspection of collateral securities to be carried out preferably on annual basis for all types of
facilities i.e. funded as well as Non-Funded.

Bridge Loans
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Bridge loans may be sanctioned to companies against the expected equity flows/ issues, for a
maximum period of one year. Such loans (fund-based & non-fund based) would be included in
the overall ceiling of 40 % of the Bank's TNW as on March 31 of the previous year prescribed for
capital market exposure (both Fund based and non-fund based).
Banks may also extend bridge loans against the expected proceeds of Non-Convertible
Debentures, External Commercial Borrowings, Global Depository Receipts and/or funds in the
nature of Foreign Direct Investments, provided the banks are satisfied that the borrowing
company has already made firm arrangements for raising the aforesaid resources/funds.
Keeping in view the RBI guidelines, Bank has devised the following guidelines:
 Such loans to be considered only at our Corporate Centre, for Corporates who are banking with
us with satisfactory track records.
 Such Bridge Lending should be used for the purpose for which the issue
(debenture/ECB/Equity etc.,) is proposed and not for any other purpose.
 The amount of individual Bridge Loan shall not exceed 75% of the amount called-up on the
shares minus any other similar bridge lending, interim finance availed or to be availed.
 Repayment period up to a maximum of one year.

Credit Risk Rating/Scoring

Credit Risk Rating is a method of systematically classifying credit proposals according to their
Quality and inherent risk characteristics. Rating is an important single-point indicator of credit
quality to the Bank as also to outsiders (viz. regulators, analysts, auditors, etc.). All credit
proposals would need to be rated in an internal credit rating model except for under mentioned
i.e. Rating Exception

1. MSME proposals up to 2 crore, which need to be rated in MSME scoring model;

2. Product specific proposals to be rated in respective product scoring models;
3. Retail products to be rated in LAPS using Retail credit scoring model.
4. Proposals for Bill Discounted under Letter of Credit and assistance backed by SBLC/BG on
standalone basis, where the rating of the respective banks may be used;
5. Portfolio acquired under Interbank Participation Certificate (IBPC) on risk sharing basis;
6. Exposure to foreign banks, where the external rating of the respective banks may be used; and
7. Proposals backed by 100% cash collateral.
8. Borrowers availing Loan against Banks own Deposit (LABOD) Facility
9. Exposures to Urban Municipal Bodies (on account of non-availability of financial results) who
can generate revenue through taxation
10. Facility having 100% Central or State Government guarantee
11. Home country sovereign

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12. Foreign country sovereign (External rating is used)
13. Accounts turned NPA, after the date of NPA
14. Advances to Central/State Govt. Departments. Undertaking/ Establishments, which are not
running on commercial basis (e.g. Industrial/Agricultural/Rural Development Boards of various
State Govt.)
15. Borrowers who are availing only those loans/limits where full powers have been granted as
per loaning power chart e.g. purchase of cheques drawn by Central & State Govts and drafts of
public sector banks, ILCs/FLCs where full cover is held by way of deposits till maturity, etc.
16. Advances against clearing instruments/ bills/ clean overdrafts permitted within the vested
loaning powers at various levels where the client is not availing any other loan/limit for which
risk rating is applicable as per guidelines.
The Bank continues to have different rating models for Green field / Brown field Projects, Large
Corporate, SME, Traders, MSE segment, NBFCs, Banks,
Credit Score Card Model for Retail Loan hosted on LAPS
1. HL: Housing Loan
2. CL: Clean Loan
3. SL: Secured Loan
4. EL : Education Loan
5. BTL: Traders Loan (For credit facilities under Baroda Traders Loan up to Rs.200 Lacs)

Credit Rating Models

Model for Corporate entities, BOBRAM Credit Rating Application
 Model for MSME rating having exposure of Rs.2 Lacs and above and up to Rs.2 crores.
 All Traders Loans proposals of above Rs. 200/- Lacs continue to be rated under Traders Model
of BOBRAM under CRISIL provided annual turnover/income does not exceed Rs.500.00 lac. In
case of Traders Loan of More than Rs.200 Lac, no loan to be sanctioned to the proposal rated
below BOB-6 (Obligor Rating for BOBRAM Model) in web based BOBRAM model.

Use of Ratings: The rating assigned at the time of credit approval process shall form the basis for
taking following decisions:
 Acceptance criteria : cut-off grade for investment - based on obligor rating (BOB-6 and
above and GF2 for Green Field Projects)
 Risk based Pricing - based on composite rating
 Discretionary lending power for sanction / review - based on obligor rating
 Sanction of ad-hoc / excess / DAUE - based on obligor rating
 Inspection of securities - based on obligor rating
 Rating based exposure ceiling - based on obligor rating

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Risk Assessment Model (BOBRAM)
Management of Credit Risk determines the asset quality of the Bank. An effective way to mitigate
credit risk is to have robust credit rating system in place.
Bank has introduced Basel II compliant credit risk rating models of M/s CRISIL. The rating models
are based on two-dimensional rating methodologies specified under Basel II requirements
wherein 4 types of risks viz. industry risk, business risk, financial risk and management quality
risk are assessed pertaining to characteristics on an obligor(borrower) while facilities
proposed/sanctioned to a borrower are assessed separately under second dimension of rating
i.e. Facility Rating.
The Credit rating can (i) Identify potential risk in a particular asset.(ii) Allow a bank to maintain
healthy Asset Quality (iii) Impart flexibility in pricing assets to meet the required risk return
parameters as per the bank‘s strategy and credit policy.
Risk Rating Models for Credit Risk rating of all commercial advances i.e. existing as well as new
with exposure of Rs.25 Lacs and above (FB+NFB) for implementation have been introduced by
our Bank.

These Models involves three types of ratings-

 Obligor Rating(PD)
 Facility Risk Rating(LGD)
 Composite Rating(EL)
Obligor (borrower) Rating for credit worthiness indicating the Probability of Default (PD).
The obligor rating is indicative of creditworthiness of an obligor or the Probability of
Default (PD) and it is based on the assessment of past; and projected cash flows of the
company. Obligor rating grades range from BOB 1 to BOB 10.
Facility Rating:-It involves assessment of the security coverage for a given facility and
indicates the Loss Given Default (LGD) for a particular facility. Facility Rating is dependent
upon the type of facility and securities charged to the bank against the facility.

Facility rating grade ranges from FR 1 to FR 8

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

Periodicity of Credit Rating:

Bank has decided to carry out the credit rating on BOBRAM models based on annual
audited financials in all eligible commercial advance accounts. Only in case of any adverse
situation faced by the relevant industry/ company/ management which may come to the
notice of the Bank, either by the borrower or from any other source, rating may be

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 reviewed immediately in all such accounts with exposure (fund based +Non fund based)
of Rs. 5 Crore and above. In respect of accounts having exposure (fund based +Non fund
based) below Rs. 5 Crore, existing guidelines will continue.

Methods of Lending
Working capital assessment of SSI/SMEs units
As per BCC:BR:107/12 dated January 5, 2015 ,our Bank dispensed away with the quantum of
limits for assessment of WC limits of MSME & hence assessment of WC limits of MSME may be
done on the basis of in respect of units under
1. Non-Regulatory segment- Second method of lending adopted.NWC is to be higher of actual
amount or 25% of Total Current Assets.
2. Regulatory definition- by “Turnover method‟ or “First method of lending‟, whichever is
higher.
3- Regulaory upto Rs 5.00 Crores: By First Method of Lending or Turn over Method ( Based on
Digital ( 7.50% Margin & 30 % MPBF) & Non Digital Mode (6.25% Margin & 25 % MPBF))

(E) PERMISSIBLE BANK FINANCE (PBF) SYSTEM:

i. BACKGROUND:
a. Reserve Bank of India has directed that Working capital credit may be determined by banks
according to their perception of the borrower and the credit needs. Banks should lay down,
through their boards, transparent policy and guidelines for credit dispensation in respect of each
broad category of economic activity.
b. In the above said context, our Bank has decided to replace the system of assessment of working
capital finance, based on MPBF-computations, i.e. the Tandon Committee recommendations by
a new system of assessment of working capital finance called Permissible Bank Finance (PBF)
System.
c. As a consequence of the withdrawal of the existing system of working capital finance based
on "MPBF-system", a large leeway is available to the bank to adopt a new method/system. The
PBF system has retained, with appropriate modifications, the strengths, and removed the
weaknesses, of existing MPBF-system simultaneously doing away with its rigidities as regards
computation of working capital bank finance, and supervision & monitoring of the credit
dispensed by the banks thus, the new system ensures faster credit delivery with INHERENT need
& merit based flexibilities.
ii. CASH REQUIREMENT LENDING (Cash Budgeting Method)
a. By projecting future cash receipts & disbursements, the cash budget enables the
corporate to determine its cash needs. We, therefore, shift emphasis from the "Security Obsessed
Lending to the "CASH REQUIREMENT LENDING" which is envisaged to be a need based lending.
Cash flow financing, thus, conceives self-liquidating finance during various time-zones unlike the
present MPBF system.
b. THE CASH REQUIREMENT LENDING is aimed at to perceive the borrower's requirement,
rather than to monotonously assess with arithmetical rigidities, after the necessary risk-analysis
and risk-perceptions on case to case basis with perusal of the acceptability of the borrower's
estimated Cash Flow-position as per his overall financial status, projected level of liquidity &

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activity, market reports, industry/activity profile and the economic strata which a particular
borrower belongs to.
c. This information is readily available in the financial newspapers & periodicals, for
example, “CMIE” and “Capitalole” industry - analysis software. In case of need, the branch
manager /other authorities may take assistance /guidance from higher authorities. Cash
requirement financing imposes its own discipline, such as, sound resource planning, receivables
management, purchase planning and management of inventory. Working Capital finance on the
basis of future cash flows facilitates a more holistic view of the company’s earning capacity rather
than on the basis of its capacity to maintain a particular asset holding level.
d. If there is Cash Deficits under all the three Heads, viz., from trading operations, from non-
trading operations and from Balance Sheet items; then, the Working Capital finance shall be
eligible only up to the extent of Cash Deficit from Trading Operations. However, at the same time,
the borrower shall be required to explain as to how the deficits in other two Heads shall be taken
care off.
APPLICABILITY:
The PBF system shall be applicable for all borrowers engaged in legally permitted economic /
financial activities. Following categories of borrowers shall not be covered under PBF system
excepting the following:-
1. NBFCs (Non banking Finance Companies)
2. Construction Companies/Contractors
3. Tea Companies Working Capital finance
4. Ship breaking companies
5. Diamond Industry
6. Sugar, Gur & Khandsari Companies
7. Software Companies (Existing separately set out guidelines to be in force)
8. Other specific industries: Industry specific guidelines, if provided, to apply.
Generally, current ratio of any borrowing unit should improve over the years and it should not
deteriorate below 1.33:1.
However borrowers who are in the first method of lending stage (i.e. whose contribution from
the long term sources of funds is less than 25% of the current assets) should not normally be
allowed to expand their activities without bringing in additional equity or raising term loans, so
as to ensure that their financial structure is not weakened as a result of expansion. However, in
exceptional cases, relaxation may be permitted for temporary period in regard to the units which
can reasonably be expected to make good, the gap out of cash generation within a short period
The methodology, followed under the IInd method of lending Asset basis, emphasizes, inter-alia,
that the current ratio of the borrowing unit should not be less than 1.33:1 or the actual current
ratio whichever is higher. This benchmarking of current ratio at 1.33:1 ensures the borrower‘s
stake at a minimum of 25%. However, the actual current ratio, wherever higher than 1.33:1, may
be allowed to slip-back up to 1.33:1 in the following circumstances
(a) Without the bank‘s concurrence / consent:
i. Temporary transport bottlenecks deterring sales;
ii Cancellation of purchase orders (leading to piling up of stock but necessitating
retirement of liabilities on raw material purchased on credit);
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iii Prudent bulk or economic size procurement of stock-in-trade on credit;
iv Abnormal rise in purchase price of stock-in-trade.

(b) With the bank‘s concurrence / consent:

i. Diversification, expansion, modernization, take-over, acquisitions, merger etc.
ii Rehabilitation of sick units.

Penal Interest and Additional Interest:

Bank may apply penal interest of maximum 2% p.a. each, for delay in submission of
financial statement, stock statements, creation of security, quarterly information,
overdues , breach of covenants etc. without any explicit approval /concurrence of
appropriate authority. Penal interest would be exclusive of the existing pricing of the
asset and additional to any other charge for excess ad-hoc limits.
 The bank shall charge overall penal and additional interest up to 2% p.a. over the
applicable/regular interest rate and any additional interest for Adhoc/Excess.
 Export facilities are exempted from the purview of penal and additional interest.
 Priority sector lending up to Rs. 25000/-is also exempted from the guidelines of
penal and additional interest. DRI advances.
 Waiver/ relaxation of penal interest for non-compliance of terms and conditions
other than default of Interest / instalment payments, Zonal head and other executive not
below the rank of GMs are authorised to waive / relax levy of penal / additional interest
on case to case basis strictly on merits.

Compliance of terms and conditions and disbursement of credit facilities:

Any sanction if not availed of with in three months in case of working capital limits
(Funded & Non Funded ) & Six months in case of Term Loan from the date of sanction ,
would lapse and would require revaliation by the appropriate authority .
In Case both Working capital and Term loan are sanctioned time limit applicable to Term
Loan will prevail
In case if sancrtion is accepted unconditionally by the borrowers & guarantors,
documents have been executed with in the above permissible period ( 3 Months in case
of Working Capital 6 Months in case of term Loan ) and 50 % processing charges have
been recovered , sanction will remain valid for a period of nine months from the date of
sanction . These clausesare valid for enhancement in existing facilities also and
revalidation of sanction will not extend the date of original /latest sanctionfor calculation
of due date of review / renewal. (BCC :BR:109:450 DT 29.08.2017)

Personal Guarantee of Promoters/Directors:

1. In case of all new advances to Pvt Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors (other than nominee and professional directors) are to be obtained.

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2. In case of all new advances to Public Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors who are exercising control or having significant influence and hold
equity share of the company in sole or joint name or in associate concern, group etc. are to be
preferably obtained as it has been decided to left out this matter to the sanctioning authority.
3. However in case of consortium/multiple advance where all other member banks are not
insisting on personal guarantee of promoters and Directors, our bank may also not insist on such
guarantee considering large business interests.

Invoking Personal Guarantee in case Borrower Company defaults (BCC:BR:108:159 dated

04.04.2016)
While sanctioning credit facilities to Companies, it is a standard practice to obtain
personal guarantees from promoter directors holding controlling shares in the company
in addition to any other individual or corporate guarantees. In the event of default in
repayment or the loan by the borrower company, all the guarantors are liable to repay
the guaranteed loan with interest as the liability of the guarantor is co-extensive with the
principal-debtor (borrower).The action can be taken against guarantor even without
suing the principal debtor for recovery and even if the decreed amount is covered by
mortgaged decree.

Requirements before disbursements

i) In case of advances accounts falling within the discretionary Lending Powers of
the Branch Manager:
The Branch Manager has to make necessary arrangements to ensure compliance of the
following aspects before making any disbursement under fresh / increase credit facilities
and the proper record inthis respect has to be kept by the Branches for perusal of higher
authorities / inspecting officers /auditors:
a. Full compliance of the stipulated terms and conditions (unless specifically exempted
by the competent authority)
b. Getting the documents duly vetted (wherever required) as per Bank‘s extant
guidelines.
c. Ascertaining that the Borrower has obtained necessary licence, permission, clearance,
approvals required for running the business.
d. Pre-disbursement inspection / site/unit(s) visit.
e. Creation of charge over Security
1. Filling of Charges with ROC in case of Limited Company
2. Registration with CERSAI in respect of all the mortgages/immovables.

ii) In case of advances accounts falling beyond Branch Manager‘s powers:

The Branch Manager has to personally verify and confirm in writing to the concerned
competent authority that the aspects mentioned in (i) a to d are fully complied with and
obtain the prior approval from the designated authorities in writing before making any
disbursement under fresh / increased credit facilities. The authorities from whom the
clearance for disbursement is to be obtained by the branches are as under:

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Clearance to be given by:
For Branch headed by Officers up to MMG/SS–III- Deputy Regional Manager or
RegionalHead (where DRM is not posted)
For Branch headed by Chief Manager (i) Deputy Regional Manager in the rank of AGM
or Regional Head in the Rank of AGM and above, otherwise (ii) Zonal Head
For Branch headed by Assistant General Manager - Regional Head in the rank of Deputy
General Manager or Zonal Head (where Regional Head is in the rank of AGM)
For Branch headed by Deputy General Manager -Zonal Head
For Branch headed by Corporate Financial Service branches -GM/DGM at Zonal Office
can authorize the disbursement.

Note:
1. Disbursement permission of all sanctions made by SMELF/RLFs head will be given by
respective factory heads unless the sanction is made by some next higher Authorities‖
2. For Loan sanctioned by Sr. Manager (SME-Processing) or CM (SME) and parked in AGM
Headed branch, the disbursement authority should vest with AGM Branch Head instead of
sending it to SME Loan factory, subject to the compliance of existing process of disbursement.

GUIDELINES FOR TAKE OVER OF THE LOAN ACCOUNT FROM OTHER BANK:
Bank provides the operating units to take over accounts from other FI s/Banks keeping in view
the foremost objective of canvassing only good quality accounts. The following financial and Non-
financial aspects are however to be followed:

Non-Financial:
a) Accounts of profit-making (i.e. net profit before tax) concerns only as per last audited
balance sheet.
b) Accounts with existing lenders should be under the category of ―Standard Assets‖
c) Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as
per latest statement of accounts.
d) External Rating in respect of credit proposal with exposure above Rs.5 Crore by an
approved credit rating agencies should not be below BBB & equivalent. The concessionary
facilities to ‘ taken over Accounts’ should be extended only in extremely deserving cases
with specific reasons recorded in writing. (MOF Directives).
e) No credit facility should be taken over by a Bank from other Bank where any of its
Executive Director or Chairman & Managing Director has worked earlier. In case any such
account is proposed to be taken over, the proposal will required to be put up to the Board
of the Bank with specific reasons justifying the need for taking over the account. (MOF-
Directives)
f) The WC facilities against the pledge of sugar stock to sugar factories under collateral
management services are outside the purview of Takeover norms with regard to external

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 credit rating of below BBB.
g) Take-over accounts are to be rated as under:-
(i) As per the BOBRAM credit rating model, minimum ―BOB6‖ obligor rating grade for all
exposures of Rs. 25 Lac and above, other than MSME exposures. For MSME exposures, this
rating model is applicable for accounts having exposure of above Rs. 2 Crore.
(ii) As per MSME Credit rating Model for MSME accounts of Rs. 25 Lac and above up to Rs. 2
Crore subject to minimum ―MSMEBOB6‖ rating. (Refer circular No. BCC:BR:101:194
dated13.07.2009)
Accounts, which are not covered under above categories may be considered under
permitted deviations.
h) Take-over accounts (retails) are to be rated as per the applicable scoring model subject to
minimum grade as per the scoring model.
i) There should not have been any re-schedulement / restructuring in the account during last
two years.
j) All other existing norms, guidelines as applicable to borrowal accounts are to be
scrupulously followed.

Financial Norms: Mentioned under Head “Revision in Certain Benchmark Financial

parameters for credit appraisal” in this booklet ( BCC:BR:108:172 dated 07.04.2016)

Authority for Take-over

1. Proposal for takeover under the powers of Chief Manager and above: -
 Proposals under the powers of Chief Manager and above no prior clearance from next higher
authority is required for takeover.
 Delegated authorities under bank‘s discretionary lending powers may consider takeover
cases within their powers.
2. Proposal for takeover under the powers of below Chief Manager: -
 Prior approval of next higher authority i.e. Regional Manager is required for takeover.
 After obtaining prior clearance as above, delegated authorities may consider the proposals as
per their discretionary lending powers.
In case of take-over of retail loan, approval from Regional Manager/Zonal Manager is not
required.
Validity of sanction for Credit facilities:
1. Branches to ensure that credit facility is disbursed within the stipulated time frame fixed
for the same. The facility should not be allowed without referring to the sanctioning authority
giving full reasons/justifications and confirming that there is no adverse changes have been taken
place in the means of the party, financials and line of the business during the intervening period.
2. Guidelines for validity of the sanction:

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i. Priority sector advances – maximum six months
ii. All other advances- Maximum six months ( In case of Term Loan )

Release of existing security/ Guarantee in advances account:

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

Commitment Charges:
To monitor borrowers to utilize sanctioned fund based working capital facilities and Non-Fund
Based Credit facilities and for effective deployment of resources, the bank has decided to levy
commitment charges in case of non-utilisation/ underutilization of fund based working capital
limits and Non-Fund Based Credit facilities for advances accounts with limits of Rs. 1 Crore (One
Crore) and above. Commitment charges are to be levied on quarterly basis at following rates:-

a) Where average utilization is up to 60% of the limit or as indicated in QIS statement, no

commitment charges to be recovered separately.
b) In case of fund based working capital limits, if the average utilization is below 60% of the limit
or as indicated in QIS statement, commitment charges to be recovered @ 0.50% p.a. for the
unutilized portion

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c) In case of non-utilization/underutilization of NFB credit facilities of Rs. 100 lac & above @
0.25% p.a. for unutilized portion. (Ref: BCC:BR:107:132 dated 23.03.2015)
d) Further a letter from the borrower must obtained in all existing and future credit facilites
(Fund based as well as Non Fund Based). The fact that the said document has been obtained
should be recorded in the Finnacle system as under:
1. Click HASCROM menu used to enrich customer related data in Centralized Ascrom System.
2. Go to Modify option for customers.
3. Click "YES" against the field "Letter of Unconditional Cancellation Obtained" in the General
Details Tab.
4. Save the Input.
5. Get the input verified by another user.
e) The above will facilitate the Bank not to allocate capital against undrawn commitments in Fund
Based and Non Fund Based Credit facilities. (BCC:BR:108:203 DT 10.05.2016)

Companies ACT 2013

Changes in company law:
 Ministry of Corporate Affairs, Govt. of India has issued few notifications related to
changes in the Companies Act, 2013. There are changes in existing provisions of Law
inter-alia relating to borrowing powers by the Companies:
 Term ―Undertaking and ―Substantially whole of the undertaking have been defined
under the New Act. ―Undertaking shall mean an undertaking in which the investment of
the Company exceeds 20% of its net worth as per the audited balance sheet of the
preceding financial year or an undertaking which generates 20% of the total income of
the company during the previous financial year.
 Substantially whole of the Undertaking in any financial year shall mean 20% or more of
the value of the undertaking as per the audited balance sheet of the preceding financial
year.
 In case the total borrowings of any company, whether private or public, exceeds the
aggregate of its paid up share capital and free reserves, apart from temporary loans , for
sale, lease, disposal of its undertaking, including mortgage, Company shall be required to
pass Special Resolution u/s 180 of 2013 Act.
 Copies of the special Resolution passed by the company, certified true by the Director
/ Company Secretary, should be obtained and kept on recordbesides certificate
from Statutory Auditor of the company that total borrowings by the company, including
present borrowings, are within the limit specified in the said special Resolution.
 Requirement of minimum paid up share capital (section 2(68) & 2(71): The requirement
of minimum paid uo share capital a company has been done away with. Hence, going
forward, a private or public limited companycan be incorporated without the need for
minimum paid up share capital of Rupees One Lakh or Rupees Five Lakh respectively.

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  Common seal made opitional (Section 9,12,22,46 and 223): The requirement for having a
common seal has been made opitional, and as a consequences, changes have been made
with regards to authorization of documents.
 Commencement of business (Omission of Section 11): Hitherto , before commencement
of business or exercising of any borrowing powers, the directors of a Company having
share capital was required to file with ROC a declaration that every subscriber of the
Memorandum has paid the value of the share committed by him or her and that the paid
up share capital of the company is not less than the amount prescribed.
 Declaration of dividend (Section 123 (1)
 No Company shall declare dividend unless carried over past losses or depreciation in
previous year/s are set off profit of the Company for the current year.Statutory limit of
borrowing Powers of the Companies (BCC: BR: 105/514 dated 18th November, 2013)
(Provisions effective from 12.09.2013)

Provisions effective 01.04.2014 (Circular no. BCC:BR:166 dated 29.04.2014)

W.e.f. 1st day of April 2014, Section 186 (which deals with Loans and Investments by
company) , Section 77, (Registration of Charges) The Companies (Meeting of Board and
its Powers) Rules 2014 and The Companies (Registration of Charges) Rules 2014 are also
notified to come into force.

Section 186 - Loans & Investments by Company.

Apart from other provisions as per section 186 (2) of the Companies Act, 2013, no
company shall directly or indirectly
a) give any loan to any person or other body corporate
b) give any guarantee or provide security in connection with a loan to any
other body corporate or person
c) acquire by way of subscription, purchase or otherwise, the securities of any other
body corporate
exceeding sixty per cent, of its paid-up share capital, free reserves and securities
premium account or one hundred per cent, of its free reserves and securities
premium account, whichever is more.
Section 186 (3)stipulates that where the giving of any loan or guarantee or providing any
security or the acquisition under sub-section (2-) exceeds the limits specified in that sub-
section, prior approval by means of a special resolution passed at a general meeting shall
be necessary.

No investment shall be made or loan or guarantee or security shall be given by a company

unless the resolution sanctioning it is passed at a meeting of the Board with the consent
of all the directors present at the meeting and the prior approval of the public financial
institution concerned where any term loan is subsisting, is obtained.

Provided that prior approval of a public financial institution shall not be required where
the aggregate of the loans and investments so far made, the amount for which guarantee
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 or security so far provided to or in all other, bodies corporate, along with the investments,
loans, guarantee or security proposed to be made or given does not exceed the limit as
specified in sub-section (2), and there is no default in repayment of loan instalments or
payment of interest thereon as per the terms and conditions of such loan to the public
financial institution.

No company which is in default in the repayment of any deposits accepted before or after
the commencement of this Act or in payment of interest thereon, shall give any loan or
give any guarantee or provide any security or make an acquisition till such default is
subsisting.

Branches/concerned authorities to examine and confirm that corporate guarantees

issued by companies forthwith are not hit by the limits provided in section 186 (2). In
case the limits so specified are exceeded by the company, a special resolution as
contemplated in the provision is required.

However, Rule 11 of Companies (Meetings of Board and its powers) Rules 2014 stipulates
the circumstances where subsection (3) of section 186 (passing of special resolution etc.)
shall not apply - i.e. where a loan or guarantee is given or security or the acquisition on under
sub-section (2) has been provided by a company to its wholly owned subsidiary company or a
joint venture company or where acquisition is made by a holding company by way of
subscription, purchase or otherwise of securities of wholly owned subsidiary company. This is
subject to company disclosing the details of such loans or guarantees or security or acquisition in
the financial statement as provided under section 186(4) of 2013 Act.
Section 186 except sub-section (1) does not apply in cases of following:
a) Banking company, insurance company, housing finance company in the ordinary course
of its business or a company engaged in the business financing of companies or of providing
infrastructural facilities etc.
b) Any company whose main business of acquisition of shares or securities etc.
The intention of sub section 11 is that if the companies are involved in the area of banking,
insurance, funding, facilitating of loan etc., in that cases, this section is not applicable.

Section 185 - Loans to Directors etc.

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

Rule 10 of Companies (Meetings of Board and its powers) Rules 2014 exempts from the
requirements of section 185 for any guarantee given or security provided by a holding
company in respect of loan made by any bank or financial institution to its subsidiary
company provided that such loan is utilized by the subsidiary company for its principal
business activities.
Hence before accepting/ entertaining proposal for corporate guarantee branches should
ascertain whether same is permissive/ exempted under section 185 and 186 of the Act and
rules made there under, subject to the restriction if any stipulated therein.

Section 77 - Duty to register charges, etc.

Every company creating a charge on its property or assets or any of its undertakings (whether
tangible or otherwise) shall register the particulars of charge, signed by the company and the
charge-holder together with the instruments creating such charge, with the Registrar within 30
days of its creation. This shall be applicable irrespective of charge being created within or
outside India or whether the property is situated in or outside India.
In case the charge is not created within 30 days, the Registrar may, on application by the company
allow such registration to be made within a period of three hundred days of such creation on
payment of such additional fees as may be prescribed:
Provided further that if registration is not made within a period of Three Hundred days of such
creation, the Company seek extension of time in accordance with section 87

Any subsequent registration of a charge shall not prejudice any right acquired in respect of any
property before the charge is actually registered.
It is clarified that now charge in respect of Pledge is also required to be registered with the
Registrar of Companies.Branches to insure to have Certificate of Compliance of the provisions of
the Companies Act 2013 from the Director / Company Secretary and Statutory Auditors of the
Company besides practicing Company Secretary/ Chartered Accountants (wherever empanelled)
on our panel, be also obtained & kept on record, to protect the interest of our Bank. Also an
undertaking that no default is subsisting in the repayment of any deposits accepted or in payment
of interest thereon, before or after the commencement of this Act to be taken by the company
giving guarantee or providing security.(Ref: Circular no BCC: BR: 106:284 dated 04-08-2014).

The securities/ corporate guarantees obtained to secure the loans before the provisions of
Companies Act, 2013 came into effect need not be disturbed and can be continued to cover the
facility granted. Branches should take care not to release securities/ guarantees taken in facilities
already extended prior to this act, since our facilities would be rendered unsecured. However,
such guarantees should be kept alive by obtaining LAD within a period of limitation, as per extant
guidelines.

Corporate guarantee/ security so obtained prior to the new Act coming into force cannot be
extended to cover increased/ additional facilities (after the new Act came into force). The same
218
can be extended to cover enhanced facilities only if it is not hit by the provisions of sections and
will be subject to provisions of 186 of the new Act.
Filing of charge with Registrar of Companies is not mandatory w.r.t. corporate guarantee.
Following are the circumstances where Bank can obtain/ stipulate corporate guarantee/ security
from a company (which is also illustrated by way of an example) in fresh sanctions/
enhancements.-
 Where a guarantee is given by the company (public or private) in the ordinary course of
its business.
 Where a holding company gives guarantee for a loan given to its subsidiary provided the
loan is utilized by the subsidiary for its principal business activity.(exemption provided under
Rule 10 (2) to section 185, which came into effect on 01.04.2014).
 Though guarantee by a subsidiary company for a loan taken by its holding company is not
specifically mentioned, the same can be considered if the same is not otherwise hit by section 185.
 Where guarantee is given by a company (whether public or private) for a loan taken by a
public company even if the Director of the guarantor company is a Director or Member of the
borrower company (provided it is not otherwise hit under any of the other Explanations (a), (d)
or (e) of section 185).
 Where guarantee is given by a company (whether public or private) for a loan taken by a
private company where director of the guarantor company is not a Director or member of the
borrower company, provided it is not hit by section 185 (e).
 Where guarantee is not otherwise hit by section 185.

The same principles need to be applied while taking security provided by Guarantor Company. In
all above cases guarantee issued by company will be subject to provisions of section 186 (3) of
the Companies Act (requirement of special resolution if the amount involved in giving of
guarantee or providing security exceeds 60 % of its paid-up share capital, free reserves and
securities premium account or 100 % of its free reserves and securities premium account
whichever is more).However, in case of a guarantee given or a security provided by a Holding
company for a loan given to its wholly owned subsidiary or a joint venture company, the
requirement of passing a special resolution as stated above shall not apply (Rule 11 to section
186).

If the guarantee is obtained/ security provided in contravention of provisions of the Companies

Act, 2013, the company would be subject to penal provisions. At the same time, the Bank’s
interests may also be jeopardized at the time of enforcement of such guarantee/ securities.

Purchase and Discounting of Bills (Invoice Discounting): Bank considers working capital
finance to meet the post sale requirements of borrowers through Bill finance either by purchasing
or discounting them.

Bills Purchase (Clean Bills or Cheques): Bill purchase facility is extended against clean demand
bills like Cheques/ drafts / bills of exchange/ hundies and demand documentary bills.
Branches should note the following points while purchasing clean bills / Cheques: -
1. Bills / Cheques should be purchased from account holders.
2. Cheques drawn on scheduled and other first class banks should only be purchased.
3. Stale Cheques and post dated Cheques should not be purchased.
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4. Cheques drawn by the borrowers on themselves, on their branches and associate concerns and/
or on their close relatives should not be purchased.
5. Where clean bills are drawn in respect of goods already supplied, the Branches should satisfy
about the bonafides of the transaction. Branches should ensure that no finance is made against
‘accommodation bills’ or ‘kite flying’.

Demand Documentary Bills

Bank provides finance against the usance bills by way of discounting of bills which are payable by
the drawee at the end of the specified period.

Types of usance bills discounted:

a) Unaccepted usance bill accompanied with documents of title to goods to be delivered against
acceptance.
b) Accepted usance bill (without any documents)
c) Usance Bills co-accepted by other banks*.
d) Bills discounted under other bank’s L/Cs
* ‘Other Banks’ in this context denotes – State Bank of India, Public Sector Banks, Private Sector
Banks and Foreign Banks.

Purchase/Discount/Negotiation of Bills under Letter of Credit:

As per the revised guidelines of the Reserve Bank of India, of their borrower constituents who
have been sanctioned regular credit facility by the banks.
Bank shall not extend funded or non-funded facilities to non-constituent borrowers.
Bank shall open Letters of Credit and purchase/discount/negotiate bills under LCs only
in respect of genuine commercial and trade transactions of borrower constituents who
enjoy regular credit facilities.
In cases where negotiation of bills drawn under LC is restricted to a particular bank, and
the beneficiary of the LC is not a constituent of that bank, the bank concerned may
negotiate such an LC, subject to the condition that the proceeds will be remitted to the
regular banker of the beneficiary. However, the prohibition regarding negotiation of
unrestricted LCs of non-constituents will continue to be in force.
The bank may negotiate bills drawn under LCs, on “with recourse” or “without recourse”
basis, as per their discretion and based on their perception about the credit worthiness of
the LC issuing bank. However, the restriction on purchase/ discount of other bills (the
bills drawn otherwise than under LC) on 'without recourse' basis will continue to be in
force.
Bills purchased/discounted/negotiated under LC (where the payment to the beneficiary
is not made “under reserve”) will be treated as an exposure on the LC issuing bank and
not on the borrower for the capital adequacy purpose. All clean negotiations as indicated
above will be assigned the risk weight as applicable to interbank exposure, for capital
adequacy purposes. In Documentary Bill purchased/discounted/negotiated under Prime
Bank LC, which has been accepted for payment by the LC issuing Bank/Drawee Bank and
confirmation of due date of the bill has been received, would not be reckoned as exposure
on borrower. Such exposure will be treated as exposure on LC issuing Bank/Drawee Bank
and branches have to ensure that such exposure is noted in the exposure limit on such
bank fixed as per ―POLICY ON EXPOSURE LIMITS ON COUNTERPARTY BANKS.
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 Bank shall rediscount only usance bills of other banks. However bank shall not re-
discount bills discounted by NBFCs except those arising from sale of light commercial
vehicles and two/three wheelers.
The Bank shall scrupulously follow the other stipulations of RBI regarding safe custody of
LC forms, discounting of bills of Services Sector (to be treated as unsecured advance) etc.

Loans and Advances against Share debentures etc.

1. No loan to be granted against partly paid shares.
2. No loan to be granted to partnership/proprietorship against primary security of shares and
debentures. Advances to individuals against shares will be considered for genuine investors and
should not support collusive action by set of individuals, belonging to one group of interconnected
entities enabling them to obtain multiple advances in order to support particular scrip or stock-
broking activities of company/ies for their financial benefits.
3. Loans against security of shares, convertible bonds, convertible debentures and units of
equity oriented mutual funds to individuals would not exceed the limit of Rs.10 lakh per
individual from banking system if the securities are held in physical form and Rs. 20 lakh per
individual from banking system if the securities are held in DEMAT form.
4. A uniform margin of 50% shall generally be maintained on advances against shares. A
minimum cash margin of 25% (within the overall margin 50%) shall be maintained in respect of
guarantees issued by the bank for capital market operations.
5. As per section 19(2) of the Banking Regulation Act –1949, no banking company shall hold
share in any company whether as pledgee or mortgagee or absolute owner, of an amount
exceeding 30% of the paid up share capital of that company or 30% of its own paid up share
capital and reserves, whichever is less.
6. This limit is to be observed while granting any advances against shares, underwriting an issue
of shares or acquiring any shares for investment or even in lieu of debt of any company.
7. Bank and their subsidy should not undertake financing of ― Badla transactions
8. List of approved shares & debentures will be advised periodically by CO For any addition
following criteria will be adopted
(a) quoted in major stock exchange
(b) company must have declared dividend for last 3 years
(c) market price should not have fallen below face value any time during last 3 yrs.
9. The aggregate exposure of a bank to the capital markets in all forms (both fund based and non-
fund based) would not exceed 40 per cent of its Net Worth as on March 31 of the previous year.

Safety Net Scheme:

1.Often merchant banker assume large exposures by way of commitments to buy the relative
securities from the original investors at any time during a stipulated period at a price determined
at the time of issue irrespective of the market price.
2.In some cases such schemes were offered without any request from the company whose issues
are supported under the schemes.
3. Banks/their subsidiaries have therefore been advised by RBI that they should refrain from
offering such ‘Safety Net’ facilities by whatever name called.

PSR (Post Sanction Reporting):

Bank follows a Post Sanction Reporting System replacing the erstwhile Post Sanction Scrutiny.
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The features are:
 Covers all sanctions and credit decisions viz., Fresh / Increase / Renewal / Rejection /
Adhoc / Excess / Modifications / Waivers / restructuring / rescheduling etc., excluding sanction
of staff advances, LABOD (i.e. post sanction reporting of LABOD and staff loans is not required).
 Broad parameters relating to sanction are only examined by the PSR authority whereas
the sanctioning authority shall take care of all procedural details on credit appraisal, adequacy of
security, documentation etc.,
 Observations of PSR authority are to be attended immediately, which shall also serve as
guide to the sanctioning authority for future.
 Disbursement of credit facility/ies is not to be withheld merely for want of observations
of the competent authority on PSR.
A. PSR reporting is required to be submitted on monthly basis to PSR Authority
Where PSR reporting is required to be submitted on monthly basis to PSR Authority
Branches in Area Sanction Threshold (FB+NFB) Other Retail
than Retail,Excluding LABOD & Staff
Loan
Metro & Urban Rs.25 Lakhs Rs. 5 Lakhs
Semi Urban & Rural Rs.10 Lakhs Rs.5 Lakhs

B. Where Copies of Credit Proposals are to be submitted PSR authority within 3 days of
sanction along with Appraisal Note, latest financials with necessary comments by the
sanctioning authority, latest credit rating sheet, gist of major adverse features and
noncompliance of stipulated terms and conditions and the sanctioning authority‘s
comments thereon.
Branches in Area Sanction Threshold (FB+NFB) Other Retail
than Retail, Excluding LABOD & Staff
Loan
Metro & Urban Rs.25 Lakhs Rs. 5 Lakhs
Semi Urban & Rural Rs.10 Lakhs Rs.5 Lakhs
The PSR authority is required to clear the proposal from PSR angle within a period of –30-days
from the date of receipt of proposal. If the PSR authority has not made any observation within the
said period, it will be presumed that the PSR authority has no observation to make and the
proposal is cleared from PSR angle. The PSR authority for General Managers heading Zone shall
be General Managers at Corporate Office.

COMMERCIAL PAPERS
1. Commercial paper is introduced in India in the year 1990 by RBI as per the recommendations
Voghul Committee to enable high rated corporate customers to diversify their source of short
term finance.
2. Commercial paper is a short term money market instrument issued as a usance unsecured
promissory note which is freely negotiable through endorsement and delivery. It is privately
placed at a discounted rate to face value as decided by the issuing company.
3. Any company whose
a) tangible net worth is not less than Rs. 4 crores as per latest audited balance sheet,

222
b) has been sanctioned funded working capital finance by the bank or all India financial
institutions.
c) account/ has been classified as standard. In case of consortium lending, the assets
classification with all the member banks should be standard.
d) Minimum credit rating as per CRISIL - P2, ICRA - A-2, or equivalent rating by other agency.
4. Minimum maturity period 07 days and maximum up to one year.
5. Minimum amount of the CP would be Rs. 25 Lacs and in multiple of Rs. 5 Lacs maximum up
to 100% of funded working capital finance including bill finance.
6. The total amount should be raised within a period of two weeks from the date of issue open.
7. Can be issued to any individuals, corporate bodies and also to NRIs on non repatriable and
non-transferable basis.
8. Banks and FIs have the flexibility to provide for rollover of the working capital limit at their
individual judgment and discretion.
9. Every issue of CP is to be reported to IECD of RBI within 3 days from the closure of the issue.

10. After implementation of Base rate system, a many big corporates including banks / FIs are
raising short-term funds by issuing CPs, hence, interest rate under CP has increased considerably.

Yield on advances
1. Yield on advances means the amount of total income received by the bank/branch out of
the total operations of the borrower with the branch as compared to fund based limit utilized.
2. Yield = (Interest Recd. + Exchange, Commissions and other income + Notional income of
deposit) / Avg. Fund Based limit utilised
3. Notional income means interest at notional rate of interest as advised by the bank on all
the deposits of the borrower. The present guidelines is that interest @ 8% on 50% of the average
deposits maintained by the borrower during the year is to be considered.
4. It has further decided that whenever borrower enjoys FCNR Loans the same should be
ignored for the purpose of computation of yield. The calculation of yield should be based only on
deployment of Rupee funds and interest received thereon. However, amount of interest received
on FCNR loans by the branches must be mentioned as foot note in the yield sheet.
(Ref: BCC:BR:98:238 dated 25.08.2006)

8.22 Guidelines for TOD

 TODs to be granted only on rare occasions to meet temporary and unforeseen
contingencies
 No TOD to be allowed in accounts other than current accounts of the Customer .
 Branches headed by officer in JMG Scale-I and MMG Scale-II are not allowed to grant TODs.
 Rural branches are prohibited from allowing any TOD to customers but Rural Branches
headed by officer in MMG Scale-III and above are authorised to allow TOD.
 No TOD to be allowed during first 6 months of operation of the account. However Bank
may also consider sanction of TOD after 3 months of operation, if the account is Premium
/ Premium Privilege current accounts.
 TODs not to be granted in accounts where cheques have been returned for financial
reasons, where cheques deposited by customers are returned frequently, minimum balance
is not maintained, turnover is not satisfactory and/or TODs granted in the past, were not
223
adjusted in time (Cheques return for financial reasons will be such cheques which were
issued by the account holder and returned on presentation (Inward cheques) and not cheques
deposited by account holder for collection/transfer (Outward cheques).
 In a newly opened account belonging to Group having satisfactory dealing with us for
the past one year, TOD can be allowed during first 6 months.
 Accounts where penalty for not maintaining minimum balance for a period of 3
months in a financial year are charged, TOD should be considered by next higher authority
 25% average monthly turnover to be allowed as TOD in place of present average half
yearly balance
 TOD may be sanctioned 10 times within a financial year and twice a month subject
to maximum period of 15 days altogether.
 Need based TOD can be allowed to group accounts. TOD granted to account holder not
to be utilized for paying back our Bank’s debt of the company or group companies. The power
to allow TOD in group account shall be limited to double the power of individual account.
 TOD should not be granted in anticipation of sanction of regular limits and should not be
converted into demand loans or any other credit facilities.
 Granting of TOD in one account for the purpose of adjusting an advance
outstanding in another related account is prohibited.
 TODs should not be granted to the parties enjoying separate cash credit facility also
from the branch
Ref: Circular No.BCC:BR:105:199 dated 14.05.2013

8.23 DAUE (Drawing AgainstUncleared Effects)

Drawing against uncleared effects:-
1. No DAUE is to be allowed/sanctioned in newly opened accounts for first -6- months.
2. Not more than 25 % of the amount of instruments or discretionary lending powers
whichever is lower.
3. The facility should be considered/ recommended depending upon the relationship with the
customers, yield on advances, average credit balance in the account etc.
4. Operations in the account must be satisfactory no instances of return of inward or outward
cheque.

Other Guidelines:
1. No adhoc to be considered in the newly opened account for a period of -12- months by the
branch head
2. Request for adhoc/ excess may be considered only in reviewed accounts with credit rating not
less than BBB, B+, BOB6 . In all other cases reference should be made to R.O.
3. Delegated authority may grant secured non-fund based limit in excess of lending powers for
NFB against proportionate reduction in fund based limit.

LINE OF CREDIT:
Line of Credit system offers flexibility to clients to switch over between the various
working capital facilities sanctioned with relative ease as per their needs compared to the
prevalent system of restricting the usage of funds within the maximum limits available

224
 within the facility only. This system will essentially facilitate medium/large business units
in efficient management of their borrowing requirements within the sanctioned Line of
Credit facility.
Bank of Baroda is a first runner in introduction of this novel product called Line of Credit.
Under this LOC borrower has been sanctioned an outer limit within which he has full
flexibility to switch over from fund based to non-fund based limit and vice a versa for
procurement of current assets.
1. This is to be implemented for all borrowers where the bank‘s exposure by way of working
capital finance (Funded and non-Funded) is of Rs. 1 crore and above. The conduct of the
account must be satisfactory and there is no major adverse features.
2. Under LOC, instead of separate limit for CC stock, Book Debt and DA letter of credit, a
combined limit for CC (Stock) & (Book Debt) - Cum- DA L/C may be considered with a sub
limit for DA L/C facility.
3. Margin will be decided separately on case to case basis / facility to facility basis.
4. While calculating the drawing power for Cash Credit facility, deduct the value of accepted
bills under DA L/C from the stock value. On retirement of Advance bill by debiting CC
account the drawing power reinstated i.e. overall DP will cover the outstanding under CC
facilities and DA L/C.

5. Following facilities are not covered by LOC:

(a) DP L/C for procurement of raw materials.
(b) DP & DA L/C for procurement of capital goods
(c) Performance guarantee and guarantee issued in connection with fulfilment of export
obligations.
(d) Financial Guarantees issued in lieu of security deposit and earnest money deposit.
The Line of Credit as a product is innovative and the branches should make every effort
to canvass and make it the Unique Selling Proposition (USP) of the bank.

PARKING OF LIMITS / SUB-LIMITS AT THE BRANCHES

1. Review of the account to be done by base branch.
2. Drawing power will be advised by the base branch to transferee branch on regular basis.
3. Advising position to the base branch by the transferee branch on last Friday of the month.
4. Advising base branch immediately about irregularities in the conduct of the account with
transferee branch. Turnover in the account also to the base branch.
5. Responsibility is cast on the transferee branch to advice the details of the account on monthly
basis to base branch, it will be the responsibility of the transferee branch to have up dated
information also.
6. Carrying out periodic inspections and reporting thereof to the base branch wherever
applicable,
7. Advising base branch immediately about irregularities in the conduct of the account with the
transferee branch.

LOAN SYNDICATION:

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 1. In the year 1993 the Shetty Committee had recommended the syndication of credit as
an alternative to consortium lending.
2. Syndication of credit is an agreement between two or more bankers/lending institutes
to provide credit facility/ies to a single borrower using one common loan documents.
3. The borrower who intend to raise long term resources through this method give a
mandate to lead manager to arrange for the credit on his behalf. The memorandum spells
out the terms of the proposed credit.
4. On the basis of the memorandum, the lead manager will offer an opportunity to lenders
to lend to prospective borrower as per the terms of memorandum.
5. If the proposal is acceptable to the banks/ lending institute, they will convey their
acceptance. On receipt of acceptance/ offer from the lenders, the lead manager will
negotiate the terms of syndication such as, cost burden, sharing pattern of debt, recovery,
other income and other business etc.
6. Thereafter, loan agreement is signed by all the participating lenders.
Vide Circular No BCC: BR:105:249 dated 17-06-2013 Loan Syndication Desk has been
merged with BOB Capital Market Ltd.

SECURITISATION OF LOAN:

Securitisation is a process by which the future income or receivables (loans) of an

organization are converted into debt instrument say bond and then sold.
Under securitisation lending institutes transfer the loans granted by them to investor s/
purchaser of the loans through an intermediary by packaging them in the form of securities
which are usually termed as ―pass through certificate.
The SPV (Special Purpose Vehicle) raises the fund from the investor and pass on to the
originator. On due date the payment by SPV to the investors are funded by the cash flow from
the underlying assets during the life of the transaction. The assets themselves will be the
security for investments but will be managed by the originator.
The securitisation may be backed by movable assets or by mortgages backed assets. The PTC
will be backed by assets or backed by mortgage.
The PTC will have slight lower rate of interest than the loan granted and that will be the profit
of PTC issuer.
Securitisation can be against movable assets which is known as “ backed by assets” and
against immovable assets known as ‘backed by mortgage”
By securitisation lender can liquidate its assets before its maturity.
The PTC will be traded in security market.
Securitisation helps to financing bank/ lenders in following ways
Transfer its credit risk or other risk associated with the assets.
Create liquidity and room for fresh financing.
For example: The lender who has financed for long term projects and want to improve
immediate cash flow position and get liquid funds against the above security. The lender will
sell the above pool of loans to an institute called the SPV. The SPV now converts the above
pool of assets into small bundles that are called PTC (pass through certificate). These PTCs
are collaterised / backed by the above underlying security.

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FACTORING:
1. In India the concept of factoring is introduced during 1991 as per the recommendation of
Shri Kalyansundram committee.
2. Factoring is a continuous arrangement in which receivables created out of sale of goods
or services are sold to an agency known as factor‘. This arrangement is called factoring‘.
3. The factoring is an arrangement for management of receivable, maintaining the sales or
receivables ledgers, submitting sales accounts, collection of debt etc. This will be with
recourse or without recourse, but in India without recourse is not permitted.
4. Under this arrangement, as soon as the invoice is submitted to the factor, the factor will
pay say 85% of invoice to the seller. In turn factor will collects dues on due date from the
customer, purchaser. The balance payment will be paid to the seller on recovering from
the purchaser.
5. The factor will recover finance charges for funds prepaid to the seller against the invoice.
They are also recovering service charges for management of receivable also.
6. The advantages of factoring are that practically sales become cash sales and liquidity of
the seller will be maintained resulting into efficient management of working capital
finance.
7. There are various types of factoring, Recourse factoring, Full service non-recourse,
maturity factoring
8. Advantages: Manufacturer or seller will relieved from the responsibility of credit
collection, recovery, administration etc. and can focused on selling and marketing
9. The liquidity position will be improved and will give better current ratio
Factoring is thus a financial package of credit, debt collection and sales ledger
administration resulting in regular cash flows to companies whose credit sales comprise
a significant portion of the total sales. The main drawback with factoring is that it is
usually very expensive.

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

VENTURE CAPITAL FUND:

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

Sensitivity Analysis:
1. While considering project finance a credit officer should carry out future risk inherent due to
some adverse circumstances which may affect the profitability or cash inflow and out flow
during the life of the project. Thus, sensitivity analysis means an examination of the effect on
the project profitability estimates due to variations in the forecast of cash flow predictions /
projections.
2. Mainly four factors; Sales, cost of raw material, cost of Power and Fuel and interest are to be
considered. As per bank‘s guidelines 10% negative variance in sales and simultaneously, 5%
positive variance on all cost aspects are to be considered to know the sensitivity of the project.
3. After doing the sensitivity analysis, revised DSCR and cash flow DSCR are to be worked out to
derive conclusion about the sensitivity analysis.
4. The concept of margin on safety is also a part of sensitivity analysis where in variance in sales
as compared to BEP sale is studied.
5. Sensitivity analysis can be taken-up for comparison of different projects (assuming mutually
exclusive and looking apparently worthwhile in terms of return in the basic workings)

Infrastructure Finance:
1. Any credit facility provided to a borrower company engaged in; developing or operating and
maintaining or developing, operating and maintaining any infrastructure facility is falling under
the definition of infrastructure lending.
2. As per RBI, definition of infrastructure would include sectors, such as, power, roads, highways,
bridges, ports, airports, rail system, water supply, irrigation, sanitation and sewerage system,
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 telecommunication, housing, industrial park or any other public facility of a similar nature as
may be notified by CBDT in the Gazette from time to time. The relaxation in "group exposure"
norm would be available only in respect of four sectors, viz., roads, power, telecommunication
and ports.
3. There are two types of financing options: (a)Private sponsor participation and (b) Structured
financing operations
4. The participation of private sponsors in infrastructure development at progressively
diminishinglevels is depicted as under:
BOO = Build-Own and Operate,
BOOT = Build – Own – Operates and Transfer,
BOT = Build - Operate and Transfer,
BOLT = Build - Operate Lease and Transfer,
DBO = Develop - Build- Operate

Structured Financing Option:

This is a concept relating to Infrastructure lending. The structuring of debt and equity is
a crucial aspect in funding of any infrastructure project. Generally, the project sponsor
may not like other shareholders to have recourse to the assets of the project. Besides this
the companies setting up infrastructure projects have only the prospect of a future
earnings stream to collateralize their borrowings. A key issues while structuring
appropriate financing instruments do not yield the expected returns. The structured
financing options assume two forms:

Non-recourse financing:
Under this option the debt instrument is secured by the cash-flows generated by the
project or the collateral value of the specified assets financed by the instrument under
consideration. In case of default the debt holder‘s recourse would be limited to the
underlying assets only and not extend to general reserves and assets of the company.

Limited recourse financing:

Under this variant, in addition to project assets, the parent company attaches other
assets/ revenue stream for servicing the instrument to improve its credit worthiness.
Securitisation is one of the method.

Take-out financing:

1. Take-out financing is a method of providing finance for longer duration projects say 15 years
or more by banks, particularly in infrastructure lending.
2. Take out financing structure is designed to avoid maturity mismatch of assets and liability due
to the infrastructure financing/ longer duration projects.
3. Under the arrangement, banks financing to the infrastructure project will have an arrangement
with IDFC (Infrastructure Finance development Corporation) or any other financial institution
for transferring to the latter the outstanding in their books on pre-determined fixed
period/pricing.
4. It allows bankers to lend for infrastructure with the freedom to decide the lending period and
risk profile. When the period end the bank can exit and IDFC will take out the obligation and
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charge a fee as per the commitment at the point of sanction, to take out the entire outstanding
loan or part of the loan to the bank after an agreed period say five years. The credit risk on the
project will be appraised by the bank concerned and not by the IDFC.
5. IDFC and SBI have devised different take out financing structures to suit the requirements of
various banks, addressing issues such as liquidity assets-liability mismatches, limited availability
of project appraisal skills etc. They have also developed a Model Agreement that can be
considered for use as a document for the purpose.

Trust and Retention Agreement (TRA):

1. TRA mechanism is a common feature of infrastructure financing. It seeks to protect the project
lenders against the credit risk of default by insulating the cash flows of the project company.
2. This is done through shifting the control over future cash flows from the hands of the
borrowers to an independent agent called TRA agent duly mandated by the lenders. This is then
allocated in a predetermined manner to various requirements including debt service obligation.
After meeting all the requirement residual cash flow will be available to the project company.
Thus, the lender will have a security of cash flow in addition to the assets of the company.
3. Under this arrangement the lenders, the borrower and the TRA agent enter into a tri-partite
agreement directed to deposit all cash inflow in a single designated account with TRA agent.
4. The lenders in consultation with the borrowers draw up a detailed mandate for the TRA agent
as to periodical transfer and utilization of funds available with TRA agent. For example it spell out
appropriation as under:
(a) All operation and maintenance expenses of the project,
(b) Monthly dues/accruals of net principal and interest to lenders,
(c) A debt service reserve equal to say, six month‘s dues which could also be backed
by a letter of credit to be arranged by the sponsors of the project company,
(d) A cash reserve equal to four months operating expenses,

5. After meeting all above either through cash flow or through L/C the residual funds if any,
would be available to the company by the TRA. TRA is thus a version of No Lien account on which
the lending bank does not exercise right of Lien.

FIXED, FLOATING CHARGE & PARI-PASU CHARGE

1. A Fixed charge is one which is created on some specific property of the company like land and
building etc. against which the finance is extended. The owner cannot deal with this property
without the consent of the lending institution
2. Floating charge: A charge on all the property of the company which is continuously changing.
However, despite charge thereon, company can sell or otherwise dispose off the property. The
floating charge can be converted into fixed charge and all the assets existing as on the date of
crystallisation will be covered by this charge.
3. Pari-passu Charge: When a company has availed credit facilities from more than one bank on
the same security / ies with a condition that the charge on the security will be on equal footing
(right basis) in proportion to the amount they have advanced, such charge is called pari-passu
charge. In case of consortium finance or multiple banking facilities, a charge on the same security
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is given to more than one lender this is called the pari-passu charge.

SECOND CHARGE
1. Second charge means the assets on which we want to create our charge are already charged to
other financing institutions. The financing institution will have first charge on the same assets
and in case of default after making payment of dues of the FI, the residual amount will be made
available to the bank who is holding the charge.
2. Generally second charge is created on fixed assets of the company such as land building, plant
and machinery.
3. Generally bank do not prefer to have second charge.
4. The procedure for creation of second charge is under:
a. No Objection Certificate from the institute having first charge is to be obtained.
b. Our second charge in case of company is to be registered with the ROC.
c. However, it is to be noted that when we are holding the first charge on the assets authority
to create second charge by other lending institution does not fall under the power of the branch.

INTERNAL RATE OF RETURN:

It is a discounted rate where projected cost and projected benefits are equal to zero. Uses
of IRR:-
(a) A project is acceptable when the IRR > the expected rate of return or market rate
of return
(b) A project is acceptable when the IRR > the cost of capital.
(c) Higher the IRR, better the project.

ADVANCE BILL AND BILLS PAST DUE ACCOUNTS

Advance Bill account:
 When documents received under Letter of Credit issued by our branch is presented for
payment/ reimbursement by the negotiating bank, L/C issuing branch is supposed to make
payment/ reimbursement if terms and conditions are strictly complied with.
 The payment will always be made through debit of G/L Advance Bill account even though
balance in the customer account permits debit. Subsequently this entry is to be reversed.
 In case of Import Bill under L/C, the party is supposed to retire the bill within 10 days
otherwise the bill will be treated as overdue and fetch higher rate of interest of 2% over the
applicable rate as above.

Bill Past Due Account:

 In case of Guarantee issued by our branch, beneficiary has a right to invoke the guarantee
as and when default is committed. The issuing bank/ branch will make immediate payment to the
beneficiary by debiting G/L Bill past due account.
 Even in case of Bills purchased remains overdue for a longer period, the entry is to be
reversed to the debit of this bills past due account with permission of RO.
 The amount then to be recovered from customer as mentioned in case of A.B.

FUND FLOW STATEMENT:

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 1. Fund Flow statement depicts the various sources of the fund and their uses. It is a
statement of inflow and outflow of the fund during a specific period.
2. Inflow and out flow of the fund can be noticed by increase or decrease in assets and
liabilities. If assets are increasing it is an application and if it is decreasing it is source of
fund. Likewise, if liabilities are decreasing it is an application and if it is increasing it is
source of fund.
3. To carry out fund flow analysis one should have an idea about the long term sources and
short term sources as well as uses of the fund.
Liabilities are the sources of the fund and assets are the uses of the fund.
4. From financing bankers point of view it is always advisable that
LTS - LTU = +Ve
STS - STU = - Ve

CASH FLOW STATEMENT

1. Cash Flow is a statement which depicts changes in cash position from one period to another
period as against the changes in total funds. This indicates how much cash is generated at the
end of financial year. This will give an idea about the increase/decrease in liquid position of
the borrower.
2. The cash flow is prepared as per AS-3 of ICAI. For listed Companies and other borrowers where
the annual turnover is exceeding Rs. 50crore it is a statutory requirement.
3. The sources of cash are PAT, Depreciation, and sale of assets, gains from sale of fixed assets,
increase in capital or other liabilities, decrease in assets. The uses of cash are loss, decrease in
liabilities, dividend payment personal drawing etc.
4. Cash flow statement helps the management for short term liquidity planning.
5. Cash flow statement is prepared in following groups- (a) Net operating activities cash flow, (b)
Cash flow from investment activities, (c) Cash flow from financing activities.

DEBT SERVICE COVERAGE RATIO:

1. While granting loans banker to satisfy about the repaying capacity of the applicant
2. The DSCR indicates repayment capacity and adequacy of repayment period.
3. The acceptable DSCR is 1.75 but it is not necessary that DSCR of each year should be 1.5 to 2
but to work out average DSCR for the entire term loan repayment period, which should be within
the stipulated ceiling.
4. DSCR is helpful to work out the repayment period and initial moratorium. Larger DSCR
indicates unit’s ability to pay more than its commitments. Repayment period may be curtailed or
vise a versa

BEP = Break Even Point:

BEP indicates ―No Profit and No Loss situation i.e. Sales of the Unit is equal to Cost of Unit sold.
1. BEP means, Sales Revenue = Cost of Units Sold.
2. Therefore, Profit = Sales > BEP and Loss = Sales < BEP
3. BEP in Rupees: = (Fixed Cost / Contribution) X sales. Here, Contribution means sales value -
Variable cost.
4. Cash BEP = {(FC - Depreciation & non-cash charges) / Contribution } x sales
5. BEP decides the level of production in order to achieve desired profit
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6. BEP analysis is useful to know the Viability Study of Sick Units.
7. The BEP concept has certain limitations also.
a. It is assumed that Variable Cost and Sales vary proportionately. This may not true all the time.
b. In long run, fixed cost may not be fixed. It is true in short term.

Margin of Safety:

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

FINANCIAL GUARANTEE:
Many times Bank issue guarantee in respect of constituents financial liabilities wherein
purely monitoring obligation of the customers are involved. In lieu of such financial
commitment, Bank issues guarantee which is known as "Financial Guarantee".
Following are the some of financial guarantee.
 Guarantee in lieu of Sales tax, custom duty, Excise duty, Earnest money deposit, tender
money deposit, favouring court authorities etc.
 Advance Payment or mobilisation of advances. In case of contract work, contractors have
been provided with advance money or raw materials etc. To perform the Contracts this is
called mobilisation advance. In case of default in repayment of advance/ cost of raw
materials due to non-performance of the contract, the beneficiary can invoke the
guarantee.
 Bid Bond Guarantee, this is in case of export in a global tender, Guarantee issued in lieu of
tender/earnest money deposit to be submitted with the tender/ bid is known as Bid Bond
Guarantee.
 Retention Money Guarantee: In case of contracts, there is a clause of retains certain
percentage of contract value for specific period to ensure proper performance of the
work. In lieu of which Bank guarantee is also issued and retention money is released by
the dept.
 However it is to be noted that guarantee for export obligation is not a financial guarantee.

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

DEFERRED PAYMENT GUARANTEE:

1. The guarantee is issued at the request of customers for purchase of capital equipment on long
term credit from the supplier.
2. This guarantee, guaranteed the payment of due instalment and interest in deferred manner
over a specific period of time. So guarantee amount should inclusive of principal and interest
thereon.
3. DPG is a non-fund based facility. However for the purpose of sanctioning/ processing etc. the
guarantee is to be treated as Fund based only. It is to be issued by the Branch Manager as per
Discretionary Lending Power of fund base facilities
4. This guarantee should be considered in line with guidelines for Term Loan.

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

Real Estate Sector:

1. Real Estate Sector includes (1) Residential Mortgage (2) Commercial Real Estate and (3)
Investment in Mortgage Backed Securities (MBS) and other securities exposures.
2. Residential Mortgage means finance against the mortgage of residential property which
is occupied by the borrower or is rented.
3. Commercial real Estate means lending secured by mortgage on real estates (office
buildings, retail space, multi-purpose commercial premises, multi- family residential building,
multi-tenanted commercial premises, individual or warehouse space, hotels, land acquisition,
development and construction etc.) This also includes Non-Fund Based Exposure also.
4. Investment in Mortgaged Based securities and other securities exposures in Residential
and commercial real estate sector.
5. Fund based and non-fund based exposures on National Housing Bank and Housing
Finance Companies (HFCs) which is considered as Indirect Exposure..

Disclosure of Mortgage details in all sanction for financing to Real Estate:

All sanctions for financing to Real Estate ,particularly Housing Projects must include the following
stipulations:
1. Company to give an undertaking:
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- To adhere to National Building Code guidelines. (NBCs guidelines can be accessed from website
of Bureau of Indian Standards).
To adopt the National Disaster Management Authority(NDMA) guidelines to ensure safety of
buildings especially against natural disasters
- To comply with provisions of use of fly ash / fly ash based products(i.e. fly ash bricks, blocks or
tiles or aggregate of these) as prescribed in the notification issued by MOEF, GOI from time to
time in this regard

2. The builder Company to ensure to,

a) disclose in the pamphlets/brochures etc the name of our bank and that the property is
mortgaged to Bank of Baroda
b) Append the information relating to mortgage of property to us while publishing advertisement
of a particular scheme in news papers/ magazines
c) Indicate in their pamphlets/ brochures that they would provide NOC/permission of the
mortgagee bank for sale of flats/property if required
RBI in the context, has reiterated the importance and need for stipulating such conditions in the
sanctions and adherence of the same by the promoters /builders stating that non-disclosure of
such information by promoters/ builders would mislead the purchasers of flats/ properties
besides giving them defective /diluted title to the property in case they fail to repay loan availed
from the Bank whereby bank would have first charge over the mortgaged property.
RBI has therefore once again advised the banks for strict adherence of the aforesaid guidelines
and also to ensure adequate publicity of the charge over such projects. RBI has also desired for
reporting of the Non-compliance of the guidelines to the Board of Directors on a quarterly basis.

MCA21:
Project of Ministry of Company Affairs for e-governance
- Online Filing of Charges by companies through e-Forms. The Ministry of Company Affairs,
Government of India is implementing a major e-Governance initiative known as MCA21. This
project envisages introduction of secure electronic filing (e-Filing) for all services provided by the
Registrar of Companies including incorporation of a company, annual filing, registration of
charges and other event-based filings.

“Corporate Loan” Facility:

Companies across Mid Corporate & Large Corporate segment, at times have liquiditymismatch.
Such mismatch arises when actual cash flow deviates adversely from estimated cash flow.
This unexpected cash flow mismatch occurs for reasons sometimes beyond their control and
depends on the nature of business, seasonality of operations, production cycle, economic and
market environment.
In addition, companies also require long term funds towards unplanned CAPEX for capacity
expansion, R & D expenses, additional expenditure in the form of up gradation, replacement,
maintenance of plants etc.
Keeping such corporate requirements in view, our Bank has decided to introduce anew
credit product viz. “Corporate Loan”.

Nature of facility- Term Loan

Eligibility:
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 Existing Borrowers with 3 years satisfactory track record with our Bank.
 Existing Borrowers with Internal Credit rating of BOB -5 & above and External Credit
rating of ‘BBB’ and above. (BB & below rated borrows are not eligible) External Credit Rating
is mandatory.
 New Borrowers with existing (and satisfactory) group relationship are also eligible
provided the internal credit rating is BOB-4 & above and external credit rating of “A” and
above.
 The account should not have been restructured in the last -3- years

Loans can be considered only for the following specific activities :

 Shoring up the net working capital (NWC) (Where Loan is for shoring up NWC, then loan
amount should come down commensurate with the building up of NWC, within the permitted
period.)
 Long term working capital requirements.
 Ongoing capital expenditure such as replacement of parts of machineries, upgradation,
renovation etc.
 Research and Development expenditure.

Quantum of Finance:Minimum Rs 10 crore (In principle approval to be obtained from BCC for
extending any corporate loan.)
Repayment period not to exceed 10 years or the useful life of the fixed assets under cover,
whichever is earlier. The repayment schedule may be flexible (quarterly/half yearly), Uneven
or bullet repayments also be permitted, if the cash accruals so justify
(Ref: BCC:BR:105:195 dated 14.05.2013).

Supply Chain Finance :

Supply Chain Finance (SCF) is one of the options for extending short term working capital finance
to dealers/suppliers (“Spokes”) who have business relationships with large corporates
(“Anchors”). In this type of financing, bank structures facilities on digital platform to finance the
suppliers (vendors) and buyers (dealers) of a large corporate (Anchor), wherein each financial
transaction is linked to a base document i.e. “Invoices/Purchase Orders” between the Anchor and
the Spoke. Financing can also be made to the Anchor itself against its purchases from vendors.

In any business set-up, the supplier would like to be paid instantaneously towards goods
supplied, whereas the buyer would want to have extended credit periods towards goods
purchased.

Supply Chain Finance attempts to bridge the gap of supplying goods and receiving proceeds there
against, by enabling both the parties to get hassle-free Working Capital to carry out sale and
purchase transactions in a much relaxed manner on the terms & conditions agreed upon by them.
This helps the spokes and Anchor in sustaining a seamless business flow and avoid working
capital related difficulties.
Our ‘Supply Chain Finance’ consists of following products:
a. Vendor Finance: Vendor Finance is a mechanism through which Bank provides Overdraft
Limit to the Vendors. Each disbursement in the OD Account will be against invoice raised by the
Vendor on the Anchor and shall have a fixed tenor with distinct repayment dates for each of the
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invoices. The facility is in the form of Overdraft to provide a running account facility to the
customer. Disbursement is made only- to the credit of Vendor’s account against valid invoices
raised by the Vendor on the Anchor (for goods supplied to the Anchor) which are duly accepted
by the Anchor. Limits are on the Vendor i.e. our obligor / borrower is the Vendor.
b. Payable Finance: Payable Finance is a mechanism through which Bank provides Overdraft
Limit to the Anchor. Each disbursement in the OD Account will be against invoice raised by the
Vendor on the Anchor and shall have a fixed tenor with distinct repayment dates for each of the
invoices. The facility is in the form of Overdraft to provide a running account facility to the
customer. Disbursement is made to the credit of Vendor’s account against valid invoices raised
by the Vendor on the Anchor (for goods supplied to the Anchor) which are duly accepted by the
Anchor. Limits are on the Anchor i.e. our obligor / borrower is the Anchor.
c. Dealer Finance: Dealer Finance: Dealer Finance is a mechanism through which Bank provides
Overdraft Limit to the Dealers. Each disbursement in the OD account will be against invoice raised
by the Anchor on dealer and shall have a fixed tenor with distinct repayment dates for each of the
invoices. The facility is in the form of Overdraft to provide a running account facility to the
customer. Disbursement is made only to the credit of Anchor’s account against valid invoices
raised by the Anchor (for goods supplied to the dealer) which are duly accepted by the Dealer.
Limits are on the dealer i.e. our obligor / borrower is the dealer.

TEV STUDY GUIDELINES

Project Cost Applicable Guidelines

Up to Rs. 10crore No TEV Study may be insisted upon.
Incase,the authority, atleast in the category of Regional Head,feels that the
project needsTechno-economic Viability study, the same may be referred
to Bank’s technical officer posted in the zone or empanelled consultant for
carrying out TEV study.
Above Rs.10 crore and TheTEV Study should be carried out by Bank’s Technical Officer
upto Rs.30 crore posted in the zone or empanelled consultant.
The zones are also advised to keep suitable consultants
empanelled(guidelines regarding empanelment are also given in the
instant note).The ZOCC may allot the TEV study work(for projects having
cost up to Rs.30crore) to the empanelled consultants insituations like
non-availability of the technical officer at the zonal level, urgency for
gettingTEV studycarriedout,nature of project etc.
If technical officer posted in the zone is in category of scale I / II, he/she
will be carrying out TEV study for projects having cost up to Rs. 30 crore.
Once the TEV study is carried out by our Bank’s empanelled consultant,
vetting of such reports should not be insisted upon and sanctioning
authority may rely upon consultant’s report.

It may also be ensured that…

•The TEV study report is submitted by the
consultant as per bank’s format
•The fees of consultant are borne by the company.
•The mandate to carry out the work is given to the consultant by the bank.
237
 From Rs. 30.00 crores to For all the zones, where bank’s technical officers are not available or are in
Rs.300.00crores scale I/II, such zones should refer the entire proposal shaving project cost
over Rs.30 crore to BOB Capital Markets Limited (BOBCAPS) for carrying
out TEV study.
If the technical officer posted in zone is in the category of ScaleIII/IV, he/she
can carry out TEV study up toRs.200.00 crore.
In such zones, projects with cost over Rs.200 crore and above, should be
referred to BOBCapital Markets Limited for carrying out TEV study.

In select cases, General Manager (LargeCorporateBanking), BCC can

authorize the technical officer posted in the zone to carry out TEV
study of the project, beyond amounts mentioned above.
If any other bank has carried out TEV Study and if it meets the criteria
stipulated vide3.0 in the instant note (mentioned below), the same can be
accepted by our Bank. Vetting of TEV study by BOB Capital Markets
Limited is not necessary in such cases.
Above Rs. 300.00 crores In case of such large projects, the TEV study may generally be done by our
BOB Capital Markets Limited. In case, the TEV study of the project has been
done by some other Bank/ FI subject to conditions/ stipulations as per
point no.3.0,the same may be accepted by our Bank, subject to vetting of
the TEV study by BOBCAPS.
BOBCAPS can seek help of external consultants, approved by our
Bank, while carrying out TEV Study of such big projects if a need for
the same is felt.

RAROC:
Evaluation of Risk Adjusted Return on Capital (RAROC) is required in appraisal of all credit
proposals with aggregate credit exposures of Rs. 5 Cr and above.
RAROC is defined as the ratio of risk adjusted return to capital employed. The capital employed
may be Regulatory Capital as prescribed by the regulator or Economic Capital computed by the
bank as per its own policy and methodology. However in our implementation, we have considered
minimum regulatory capital as capital employed.

RAROC = Risk Adjusted Net Income/ Capital

Where, the numerator:

Risk Adjusted Net Income = Revenues (Gross Interest Income +Other fees, processing charges,
commission etc.) + Income from Capital Funds - Cost of Deposits (adjusted for negative carry of
statutory pre-emption (CRR and SLR)) - Operating expenses - Expected Credit Losses
And, the denominator:
Regulatory capital employed for the credit exposure at 10.8750% of the Risk Weighted Assets as
per RBI Master circular on Basel III guidelines (BCC: BR: 109:171 DT 03.04.2017).
The RAROC approach requires that the RAROC so computed be compared to a pre specified
hurdle rate, and credit exposures for which the RAROC exceeds the hurdle rate may be considered
positively. It is assumed that credit exposures below the hurdle rate do not add economic value
to the shareholders’ fund, and rather causes economic erosion.
238
RAROC is basically a framework to evaluate whether the credit risk asset generates adequate
profit to add economic value to shareholders’ funds.

The Hurdle rate adopted by our Bank is 16.25%.

Exclusions to RAROC:
RAROC calculation shall not be applicable to the following categories at the branch level:
 Sanctioned limit towards derivatives exposures.
 Schematic lending irrespective of ticket size, including advances under our retail lending
schemes.
 Credit Risk in respect of exposure under regulatory instance e.g. RIDF funds to NABARD
etc. will be kept outside the ambit of RAROC framework.
 Exposures backed by 100% cash collateral (as per Basel II/Basel III definition of financial
collateral).
 Rupee Export Credit.
Implementation: For every credit proposal, the actual RAROC of the past one year based on factual
data and for the next one year based on the cost of credit risk prescribed by the sanctioning
authority shall be mentioned. RAROC will form important input in credit decision by the
sanctioning authority.

Issuance of LOC /SBLC for facilitating Buyers Credit: (BCC: BR: 108 / 23 15.01.2016)
It has been decided that in case of all borrowers wherever the concession has been approved in
charges for BG /LOC /SBLC facility, LoC /SBLC shall be issued for facilitating availment of buyers’
credit only in favour of our overseas branches. In no such case, branches shall issue LoC /SBLC in
favour of other overseas banks for facilitating buyers’ credit irrespective of the existing sanction
not having any such specific stipulation.
In case, a borrower seeks to have the LOC /LOU /SBLC issued in favour of other overseas banks,
the LOC /LOU /SBLC shall be issued at normal charges /commission as per bank’s extant
guidelines. No concession to be extended even though approved under sanctioned facilities in
such cases.
In exceptional cases, reference may be made to the respective Corporate Office Functional Head
who may authorize on case to case basis on merits.
At the time of fresh sanction/ review of such credit facilities, wherever concession in charges is
proposed, it should be mandatorily stipulated that concessional charges are subject to condition
that LOC /LOU /SBLC for buyers credit shall be issued only in favor of our own overseas branches.
No concession shall be allowed for LOC/LOU /SBLC issued in favour of other overseas banks.

Credit Facilities to overseas Step-down subsidiaries of Indian Corporate

(Ref: BCC:BR:108:163 dated 06-04-2016)
RBI has reviewed and modified the guidelines on extension of credit facilities to step down
subsidiaries of Indian Companies-as mentioned below-

239
 i. Credit facilities may be extended (funded and/or non-funded) to the step-down subsidiaries
of Indian companies including to those beyond the first level, to finance the projects undertaken
abroad.
ii. The immediate overseas subsidiary of the Indian company must be directly controlled by the
Indian parent company through any of the modes of control recognized under the Indian
Accounting Standards.
As per the Indian accounting standards, control has been defined as (a) the ownership, directly
or indirectly, through subsidiary(ies), of more than one-half of the voting power of an enterprise;
or (b) control of the composition of the board of directors in the case of a company or of the
composition of the corresponding governing body in case of any other enterprise so as to obtain
economic benefit from its activities. In addition the Indian parent company must directly hold the
minimum 51% of its shareholding.
iii. All the step-down subsidiaries, including the intermediate one, must be wholly owned
subsidiary of the immediate parent company or its entire shares shall be jointly held by the
immediate parent company and the Indian parent company and/or its wholly owned subsidiary.
The immediate parent should, wholly or jointly with Indian parent company and/or its wholly
owned subsidiary, have control over the step down subsidiary.
Apart from the modifications, enumerated here in above, It is required to ensure compliance with
the existing RBI guidelines as listed hereunder:-

Before granting the facility, branches should ensure the following:-

 The setup of the step-down subsidiary should be such that the Bank’s can effectively
monitor the facilities granted by them
 Proper systems for management of credit and interest rate risk arising out of such cross
border lending are in place.
 Section 25 of the banking regulation act, 1949 is complied with
 The resource base for such lending should be the funds held in foreign currency such as
FCNR(B), EEFC, RFC, etc. In respect of which the banks have to manage exchange risk.
 Maturity mismatches arising out of such transactions are within the overall gap limits
approved by RBI.
 All existing safeguards and prudential guidelines relating to capital adequacy, exposure
norms etc applicable to domestic funded/non-funded exposure are adhered to
 Grant of such facilities is to be based on proper appraisal and commercial viability of the
project and the countries where the step down subsidiary is located.
 There should be no restriction in the countries where the step-down subsidiaries are
located in regard to (a) the companies obtaining foreign currency loans and on repatriation or
repayment thereof and (b) non-resident banks to have a legal charge on securities /assets in the
country as well as right of disposal, in case of need
 The aggregate(limit) of sanctioned credit facilities (FB plus NFB) to overseas WOS/Step-
Down Subsidiaries will be restricted to 20% of unimpaired capital of the bank
 The above, measures were intended to assist Indian companies in their overseas business.

240
However, it has been observer by RBI that a few banks are extending non-fund based credit
facilities like guarantees/ stand-by letter of credits/ letter of comfort etc. on behalf of
JV/WOS/WoSDS for purpose which are not connected with their business, rather, in certain cases,
used to avail foreign currency loans for repayment of Rupees loans in India.
Accordingly, RBI has advised that, banks, including overseas branches/subsidiaries of Indian
banks, shall not issue standby letter of credit/guarantee/letter of comfort etc on behalf of
overseas JV/WOS/WoSDS of Indian companies for the purpose of raising loans/advances of any
kind from other entity except in connection with the ordinary course of overseas business.
While extending fund/non fund credit based facilities to overseas JV/OWS/WoSDS of Indian
companies in connection with their businesses, either by our branches in India or by our
branches/subsidiaries abroad, they should ensure effective monitoring of the end use of such
facilities and it is conformity with the business need of such entities.

Caps on domestic Credit and investment exposure (Ref: BCC:BR:108:380 dated 30-08-2016):
The exposure as per RBI guidelines, covers credit exposure(funded and non-funded credit limits),
credit exposure of derivative products and investment exposure(including underwriting and
similar commitments). For this purpose, sanctioned limit or outstanding balance whichever is
higher, is to be reckoned to arrive at the exposure. However, in case of fully drawn term loans,
where there is no scope for re-drawl of any portion of the sanctioned limit, the outstanding
balance has to be reckoned as the exposure.
As a prudential measure aimed at better risk management and avoidance of concentration of
credit risks, banks are required to fix limits on their exposure to specific industry or sectors in
compliance with the regulatory guideline.

Exposure to NBFC:
Exposure (both lending and investment including off balance sheet exposure) of a bank to a single
NBFC/NBFC-AFC (Asset Financing Companies) should not exceed 10 %/15% respectively of the
bank’s capital funds as per its last ABS.
Bank may however, assume exposure on such a single NBFC/NBFC-AFC up to 15%/20%
respectively of their capital funds provided the exposure in excess of 10%/15% respectively is
on account of funds on-lent by the NBFC/NBFC-AFC to the infrastructure sector.
Further, exposure of a bank to infrastructure finance companies (IFCs) should not exceed 15% of
its capital funds as per its last ABS, with a provision to increase it to 20% if the same is on account
of funds on-lent by the IFCs to the infrastructure sector.
Accordingly, the cap for single NBFC’s/NBFC-AFC’s and NBFC-IFC’s at our bank have been
approved by the board as mentioned in annexure-II of BCC: BR: 109:490 dated 07.09.2017, along
with the caps for exposure on real estate, capital market, infrastructure and film financing.
The following authority can permit deviations within the regulatory caps wherever applicable, as
mentioned below,

241
 COCC-ED permitted to exceed the stipulated cap by 10% both where cap is fixed in terms
of percentage and/or absolute amount
 COCC-MD & CEO and/or CACB permitted to exceed the stipulated cap by 20% both where
cap is fixed in terms of percentage and/or absolute amount
 MCB permitted to exceed the stipulated cap by 50% in relation to cap in absolute amount
and/or in relation to cap in terms of percentage of domestic exposure.

DEVIATION POWERS AGAINST BENCHMARK RATIOS : (BCC:BR:108/172

07.04.2016)

Parameter/ Bench Permitted deviation level up to Remarks

Ratio Mark ZO COCC COCC- CACB MCB
CC - MD&CE
Current Ratio ED O

New/ RWI/ Except GoI, State Govt,

Take Over/ Government of
Infrastructure/ 1.33 1.17 1.0 0.85 0.75 No cap Indi
others in 0 a undertaking or
General guaranteed by GoI, State
Govt, Accounts under
CDR, CAP or
rehabilitation package or
where product/ scheme
specific guidelines
provided) #
Debt Equity Ratio (TTL /TNW)
Except GoI, State Govt,
Government of
New/ RWI/ Indi
Take Over/ 3.0 3.5 4. 4.5 5. No cap a undertaking or
Infrastructure 0 0 guaranteed by GoI, State
/ others in Govt, Accounts under
General CDR, CAP or
rehabilitation package or
where product/ scheme
Debt Equity Ratio (TOL /TNW) specific guidelines
Except
provided)GoI,
# State Govt,
New/ RWI/
Government of
Take Over/
No Indi
Infrastructure/
4.50 devia 5.0 5.5 6.0 No cap a undertaking or
others in
ti on guaranteed by GoI, State
General
Govt, Accounts under
including
CDR, CAP or
Micro/ rehabilitation package or
SME/ where product/ scheme
Average DSCR M specific guidelines
SME provided) #
accounts Financial Bench Mark Ratios for following Specific Industries (BCC:BR:108/172
Important
07.04.2016)

242
 New/ RWI/
Take
Over/  DSCR not to be
Infrastructure/ 1.75 1.6 1.50 1.40 1.30 No cap applicable for NBFC,
others in 0 Real Estate.
General
including
Micro/
Minimum DSCR
SME/
New/ RWI/ M
Take Over/
SME  DSCR not to be
Infrastructure/ 1.25 1.25 1.2 1.15 1.10 No cap applicable for NBFC,
accountsin
0 Real Estate.
other
Gener
al Accounts
FACR (Applicable for Term Loans)
New/ RWI/
Take Over/
Infrastructure/ 1.0 0.90 0.8 0.70 0.60 No cap
in 0
other
Gener
al Accounts DE DE Ratio DSCR
Indus Benchm Current DSCR
try ark Ratio Ratio (TTL/TN (Average)
Textile Min/
Ratio Min (TOL/
Max 5.00 W) 3.50 Min 1.00 Min 1.25
Iron & Steel Max
Min/ 0.75
Min TNW)
Max 5.50 4.00 Min 1.00 Min 1.25
Cement ratios
Max
Min/ 0.75
Min Max 5.50 4.00 Min 1.00 Min1.25
Automobile ratios
Max
Min/ 0.75
Min Max 5.00 3.50 Min 1.00 Min 1.25
Gems & ratios
Max
Min/ 0.75
Min Max 4.50 3.50 Min 1.00 Min 1.25
Jewellery
Pharmaceut ratios
Max
Min/ 1.15
Min Max 4.50 3.50 Min 1.00 Min 1.25
icals
Power ratios
Max
Min/ 0.80
Min Max 6.00 4.00 Min 1.00 Min 1.25
Engineering ratios
Max
Min/ 0.75
Min Max 4.50 3.00 Min 1.00 Min 1.25
Wholesale ratios
Max
Min/ 0.80
Min Max 5.00 3.00 N.A. N.A
Trading
NBFC ratios
Max
Min/ 1.10
N.A Max 7.00 6.00 N.A. N.A
ratios
 NBFCs should maintain minimum Capital Adequacy Ratio of -15%- or as per regulatory
Max
guidelines. ratios
 NBFC (Housing Finance) are eligible to borrow upto 16 times of NoF as per NHB
guidelines.
 DSCR to be not applicable for Real Estate Sector.
 The Net NPA Ratio of NBFCs should preferably be up to or below 3%.

Deviation Deviations from benchmark ratios will be referred to CACB in respect of proposals
falling upto the lending power of CACB. Beyond CACB power, authority for deviation
will rest with MCB.

243
NRI DEPOSITS & REMITTANCE
FACILITIES

244
 9. NRI DEPOSITS, REMITTANCES FACILITIES

NRI BUSINESS:
NRI customers are very important for Bank for resource mobilization and pitchingretail asset products
as well as wealth management products.

Non-Resident Indian (NRI)

NRI for this purpose is defined in Regulation 2 of Notification No. FEMA 5/ 2000- RB dated May 3, 2000.
In terms of this Notification, an NRI means a person resident outside India who is a citizen of
India or is a person of Indian origin.

Person of Indian Origin (PIO)

A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other
than Bangladesh or Pakistan or such other country as may be specified by the Central Government,
satisfying the following conditions:
a) Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955
(57 of 1955);or
b) Who belonged to a territory that became part of India after the 15th day of August, 1947; or
c) Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred
to in clause (a) or (b); or
d) Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person
referred to in clause (a) or (b) or (c)

A PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the
Citizenship Act, 1955. Such an OCI Card holder should also be a person resident outside India.

Indian Students studying abroad

In terms of FEMA regulations Indian students studying abroad can be treated as Non-Resident Indians
having regard to the circumstances stated as under
i) their stay abroad for more than 182 days in the preceding financial year and
ii) their intention to stay outside India for an uncertain period when they go abroad fortheir
studies. Accordingly, students going abroad for studies are treated as Non - Resident Indians and are
eligible for all the facilities available to NRI under FEMA.
For the purpose of Investment in India in immovable property, a person of Indian origin means an
Individual of Indian origin other than a citizen of Bangladesh, Pakistan and Sri Lanka.

Persons of following categories will not be considered as NRI:

1. Indians who go abroad for the purpose of

o Tourism
o Pursuing research
o Undertaking business promotion visits.
o To receive training
o Obtaining medical treatment.
o Participating in sports or cultural activities.
2. Indians or Persons of Indian origin residing in Nepal/Bhutan /Pakistan/Bangladesh.
3. Crew members working for shipping/airlines companies posted in India and those companies
whose registered offices are in India.

NON-RESIDENT (EXTERNAL) ACCOUNT SCHEME (NRE ACCOUNT)

Deposit plan for NRI’s savings/earnings from abroad

 Features of NRE Deposit in INR:

 Current / Saving / Term Deposit Accounts
245
  Eligibility: Any NRI/PIO as per guideline

 Transactions:
 Eligible Credits: Proceeds of remittance from Overseas to India/From other NRE,FCNR
(B). Transfer from NRO A/C (USD one million per financial year subject to deduction of
applicable tax)

 Permitted Debits: Local Payments, Remittances outside India, Transfer to NRE /

FCNR(B)Accounts of the account holder or any other person eligible to maintain such
account, Investment in Shares / Securities of an Indian Company or for purchase of
Immovable Property in India provided such investment / purchase is covered by the
regulations made, or the general / special permission granted, by the RBI, any other
transaction if covered under general or special permission granted by RBI.

 Baroda International Debit card/ATM card available for withdrawal of cash/purchaseat Point of Sale
with Merchants/ for online purchases
 Internet Banking facility called Baroda Connect to stay connected anytime, anywhere

NRE RUPEE FD:

 Tenure of Time Deposit: Min. 1 Year; Max. 10 Year

 Repatriability: Fully Repatriable(Principal plus interest amount)

 Joint Accounts: Allowed with other NRI. Resident close relative may also become joint account
holder with operational instructions Former or Survivor.

 Loan against Term Deposit:Up to any amount subject to advance value of Term Deposit.
 Tax Exemption;Interest income on balances standing to the credit of NRE / FCNR (B) Accounts
is exempt from Income Tax. Likewise, balances held in such accounts are exempt from Wealth Tax.

 There is a Centralized Processing cell for opening NRE/NRO Savings Bank Accounts for applications
sponsored by our UAE, Kenya and Uganda territories.
 Change of resident status of the account holder: NRE accounts should be re-designated as resident
accounts or the funds held in these accounts may be transferred to the RFC accounts (if the account
holder is eligible for maintaining RFC account) at the option of the account holder immediately upon
the return of the account holder to India for taking up employment or for carrying on business or
vocation or for any other purpose indicating intention to stay in India for an uncertain period. Where
the account holder is only on a short visit to India, the account may continue to be treated as NRE
account even his stay in India

BARODA PREMIUM NRE SB ACCOUNT

 A premium saving bank account specially designed for valued NRI customers.
 Average quarterly balance required to be maintained is Rs. 50,000.00
 Free remittance facility if beneficiary maintains account at any of branch in India
 Free DD, BCH, Cheque Book, Baroda Connect, Safe Custody, preferential exchange rate, locker
facility ( Only Preferential allotment of Lockers)
 Interest and principal fully repatriable
 Tax exemption on interest earned
 Joint account with residents: former or survivors

NON-RESIDENT (ORDINARY) RUPEE ACCOUNTS (NRO ACCOUNTS)

Deposit plan for your savings/earnings in India.

246
 Feature of NRO A/Cs in INR:
 Current/Saving/Term Deposit Accounts
 Eligibility: Any NRI/PIO as per guideline
 Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of
Bangladesh ownership requires prior approval of the Reserve Bank.
 NRO Term Deposit: For period 7 days to 10 years
 Opening of accounts by individual/s of Bangladesh nationality may be allowed by Authorized
Dealer or Authorized Bank, subject to satisfying itself that the individual/ s hold a valid visa and
valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional
Registration Office (FRRO) concerned.

 Eligible Credits:
 Proceeds of remittances from outside India through normal banking channels received in any
permitted currency.
 Any foreign currency, which is freely convertible, tendered by the account holder during his
temporary visit to India. Foreign currency exceeding USD 5000 or its equivalent in the form of
cash should be supported by currency declaration form. Rupee funds should be supported by
encashment certificate, if they represent funds brought from outside India.
 Transfers from rupee accounts of non-resident banks.
 Legitimate dues in India of the account holder. This includes current income like rent, dividend,
pension, interest, etc.
 Sale proceeds of assets including immovable property acquired out of rupee / foreign currency
funds or by way of legacy /inheritance.
 Resident individual may make a rupee gift to a NRI/PIO who is a close relative of the resident
individual [close relative as defined in Section 6 of the Companies Act, 1956] by way of crossed
cheque /electronic transfer. The amount shall be credited to the Non-Resident (Ordinary) Rupee
Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible
credit to NRO a/c. The gift amount would be within the overall limit prescribed under the
Liberalized Remittance Scheme (LRS) for a resident individual.

 Permitted Debits:
 All local payments in rupees including payments for investments in India subject to compliance
with the relevant regulations made by the Reserve Bank
 Remittance outside India of current income like rent, dividend, pension, interest, etc. in India
of the account holder.
 Remittance up to USD one million, per financial year (April- March), by NRI, subject to payment
of tax, as applicable.
 Transfer to NRE account of NRI within the overall ceiling of USD one million per financial year
subject to payment of tax, as applicable

 Repatriability:Rapatriable upto USD 1 million per financial year out of balance held in A/c. subject
to payments of tax and production of C.A. certificate i.e. Form 15CA and Form 15 CB as per
applicability

 Loan Against Term Deposit: Permitted without any limit (As per Advance value of the deposit)
 Joint Accounts: Allowed with other NRIs and local residents also. As per the new guidelines of
RBI, operational instruction with Local residents will be Former or Survivor.

 Tax: TDS is levied on interest earned, Concession if any is subject to double tax avoidance
agreement (DTAA)with certain countries.
 Other Facilities: International Debit Card, Internet Banking (Baroda Connect), Account operation
allowed for local payments through Power of Attorney.

FCNR (B) TIME DEPOSIT

247
Deposit plan in Foreign Currency for your savings/earnings from abroad
 Term Deposit accounts in USD, GBP, EUR, JPY, CAD, AUD.
 Eligibility: Any NRI (except Bangladesh/Pakistan nationality which requires RBI prior
approval)
 Eligible Credits: Proceeds of remittance from overseas to India in foreign currency, transfer
from NRE a/c and conversion in foreign currency.
 Tenure of Deposit: Min. 1 Year to Max. 5 Years
 Repatriability: Fully Repatriable
 Joint Accounts: Allowed with other NRI. Resident close relative may also become joint
account holder with operational instruction ‘Former or Survivor’
 Loan Against Term Deposit: Up to any amount subject to advance value of Term Deposit

RUPEE LINKED FOREIGN CURRENCY DEPOSIT (RLFCD)

FCNR Deposit with Forward Exchange cover for conversion to INR at maturity for improving YIELD by
leveraging the exchange rate difference between INR and foreign currency in Spot and Forward market.

 Currency:
o In any of the six denominated foreign currencies: USD, GBP, EUR, YEN, CAD, AUD
 Tenure:
o For period 1 year WITH Forward Exchange Cover booked for conversion to INR at
maturity.
 Minimum amount of deposit is USD 10,000 or its equivalent. Maximum amount of deposit can
be up to any amount
 Period of deposit is one year fixed
 Applicable rate of interest is the same as the rate of interest given under FCNR (B) deposit for
the period of one year in respective currency
 A forward contract of one year is booked at the time of opening the deposit account on the
principal amount to enhance the yield out of the forward premium in order to protect the
depositors from exchange risk
 On maturity, the deposit will be converted in to INR at the contracted rate and will be credited
to NRE saving account or as per depositor instruction. Interest amount will be converted in to
INR at the exchange rate prevailing on maturity date.
 Principal& Interest Fully Exempt from Income tax in India

FOREIGN CURRENCY LINKED RUPEE DEPOSITS (FCLR) SCHEME:

This deposit plan offers the dual advantage and benefits of both NRE Rupee Deposits and FCNR
Deposits. Moreover, since the maturity value is determined in foreign currency at the time of application,
the risk of losing money due to a fall in the exchange rate is eliminated.

 Option to keep the deposit receipt free of cost in Bank’s safe custody.
 Acceptance and execution of Standing Instructions.
 Addition and Deletion of name of account holders is permitted.
 The minimum deposit amount: is USD 10000/- or its equivalent.
 The remittance received from abroad is converted into Rupees and placed in NRE Rupee
Deposit for 12 months. The customer is required to book forward contract for the maturity
amount on the date of deposit itself.
 The effective yield to the customer will be the difference between the Rate of Interest on NRE
Rupee deposits and the Forward Premium prevailing on the date of effecting the transaction.
 The deposit is subject to the Rules framed by the Reserve Bank of India. Deposit Receipts are
not transferable by endorsement.
 Deposit Receipts will, when so required, be issued in the names of two or more persons and
be made payable to any one or more of them or to any one or more of the survivors of them
or the last survivor. However, all the persons must be Indians resident abroad or persons of
Indian origin, resident abroad.
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  Deposit will be accepted for period of 12 months only. In case of premature withdrawal of the
deposit receipt, the receipt needs to be signed by all the depositors irrespective of the
operational instructions "Either or Survivor", or "Anyone or Survivors/Survivor".
 Interest on deposits will be paid on maturity along with the principal. No interest will be payable
for deposits run for less than twelve months.

Resident Foreign Currency Account - for NRIs returning to India for settling in IndiaOur Bank offers
remunerative deposits for NRIs returning to India with the intention of permanently settling down. NRIs
can also open RFC account with the ASSETS brought by them on return as well as their foreign assets
held abroad at any future date in case they desire so. Their present NRI accounts will be re classified
and called RFC accounts while the continuity of the deposit will be maintained till maturity date of the
deposit.

Foreign Currency Accounts for Residents:

Exchange Earners’ Foreign Currency (EEFC) Accounts: -

1. All categories of foreign exchange earners are allowed to open and to credit up to 100 per cent of
their foreign exchange earnings to their EEFC Accounts with authorized dealers in India subject to the
condition that the sum total of the accruals in the account during a calendar month should be converted
into rupees on or before the last day of the succeeding calendar month. This account shall be
maintained only in the form of non-interest bearing current account. No credit facilities, either fund-
based or non-fund based, shall be permitted against the security of balances held in EEFC accounts by
the AD Category – I banks
2. Funds held in EEFC account can be utilized for all permissible current account transactions and also
for approved capital account transactions as specified by the extant Rules/Regulations/ Notifications/
Directives issued by the Government/RBI from time to time.

RFC (Domestic) Account:

1. A person resident in India can open, hold and maintain with an authorized dealer in India, a
Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of
currency notes, Bank notes and travellers cheques from any of the sources like, payment for services
rendered abroad, as honorarium, gift, services rendered in settlement of any lawful obligation from any
person not resident in India proceeds of export of goods and/or services, royalty, honorarium, etc.,
gifts received from close relatives (as defined in the Companies Act) and repatriated to India through
normal banking channels by resident individuals. Also, the unspent portion of foreign exchange availed
for travelling purpose can be credited in this account for use in subsequent travels abroad.
2. The account shall be maintained in the form of Current Account and shall not bear any interest.
There is no ceiling on the balances in the account.

REMITTANCE PRODUCTS (INWARD):

Rapid Funds 2 India:

 In-house online money transfer facility
 Speedy, cost-effective and reliable service
 Instant credit to beneficiary’s account with Bank of Baroda’s over 5000+ CBS enabled branches
 Same day/ within 24 –hour credit to the beneficiary/s account with 110300+ branches of other
banks through RTGS/ NEFT
 Money transfer without any threshold amount
 Neither remitter nor beneficiary needs to have account with us

Baroda Flash Remit:

 This is a real-time instant account credit facility in partnership with UAE Exchange Centre LLC
(UAEECL)
 NRI customer desirous of sending remittance through Baroda Flash Remit visits any of UAEECL
location overseas. Remitter furnishes beneficiaries account no and name details to UAEECL
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 UAEECL processes the transaction and beneficiary account is credited on real time basis. The
moment the amount is credited to the beneficiary’s account, an SMS alert is instantly sent to the
mobile phones of both the sender and the receiver by UAEECL
 Maximum Rs. 200,000/- per transaction for non-trade purposes
 Trade Transactions are not allowed in the scheme

WESTERN UNION MONEY TRANSFER

Our Inward remittance product under Money Transfer Services Scheme (MTSS) of RBI in tie up with
M/s Western Union Financial Services International USA (WUFSI) is launched across all branches in
India.

How does the Remitter send money?

A remitter desirous of remitting funds to India under the scheme, visits any overseas office of Western
Union Financial Services International USA (WUFSI), fills up the form, submits KYC documents, tenders
Remittance amount and provides beneficiary name & address in India. WUFSI processes the payment
and provides system generated 10 digits unique reference number i.e. Money Transfer Control Number
(MTCN) to remitter. The remitter conveys MTCN to the beneficiary in India.

Exchange House Arrangements:

We have tie up arrangement with following Exchange Houses in UAE
 Al Ansari Exchange LLC, Abu Dhabi, UAE
 Lulu International Exchange LLC, Abu Dhabi, UAE
 UAE Exchange Centre LLC, Abu Dhabi, UAE

SWIFT Remittance:
SWIFT is fast and secured mode of funds transfer facility. Facility is available at our all overseas
branches. SWIFT Code (Bank Identification Code) of receiving bank i.e. of our B-category branch as
well as our correspondents for respective currency is required to remit the fund. List of all
correspondents of our bank is available with our Bank’s website i.e. www.bankofbaroda.com

LOAN PRODUCTS FOR NRIs:

Loan against FCNR (B) Deposits in Foreign Currency in India

 Loan up to 95% of the amount.

 As per current RBI guidelines in force, Foreign Currency loans is allowed to depositor / third
party without any ceiling subject to usual margin requirements
 For purposes other than investment in India, repayment shall be made either by adjustment of
the deposit or by fresh inward remittances from outside India through normal banking channels
 Facilities for loans/overdraft will be advanced against FCNR (B) Fixed Deposits in USD, GBP,
EUR or YEN
 Margin will be 5% of present value of the deposit.

Loans against FCNR (B) Deposits in Rupees

Loan/overdraft where the depositor himself/herself requests for the advances facilities

 Margin: 10% of present value of the deposit.

 Amount: As per request, up to 90% of the present value of the deposit.
 As per current RBI guidelines in force, Rupee loans are allowed to depositor / third party without
any ceiling subject to usual margin requirements.

Third party loan/overdraft facility where the depositor desires that the advance be availed of by another
person, whether Non-Resident or Resident
Margin: 20%
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Foreign Exchange Facilities for Resident Indians under Liberalized Remittance Scheme
(LRS):
Foreign Exchange can be released under Liberalized Remittance Scheme for maximum amount of USD
2,50,000/- per financial year to undertake a range of miscellaneous non-trade current account
transactions for the following activities:
 Private Visits: For one or more private visits to any country (except Nepal & Bhutan)
 Business Visits and travel for international conference/seminar/ training
 Employment abroad
 Emigration to other country
 Medical treatment
 Education abroad
 Gift/Donations
 Maintenance of close relatives abroad

The permissible capital account transactions by a Resident individual under LRS are:
 opening of foreign currency account abroad with a bank,
 purchase of property abroad;
 making investments abroad- acquisition and holding shares of both listed and unlisted overseas
company or debt instruments; acquisition of ESOPs (the Scheme is in addition to acquisition of
ESOPs linked to ADR / GDR and acquisition of qualification shares); investment in units of
Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes;
 setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013)
outside India for bonafide business subject to the terms & conditions stipulated in Notification
No FEMA.263/RB-2013 dated March 5, 2013;
 Extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are
relatives as defined in Companies Act, 2013.

Notes:
 Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign
currency notes and coins may be sold up to the limit indicated below:
 Travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian
Federation and other Republics of Commonwealth of Independent States - not exceeding USD
3000 or its equivalent.
 Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its equivalent
 Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republics of
Commonwealth of Independent States - full exchange may be released.
 Documents for releasing Foreign Exchange
 Passport &VISA, Form A-2 as per prescribed format and Application-cum-Declaration for
 Purchase of foreign exchange under LRS as per format, PAN card.
 Period of surrender of foreign exchange:
 General permission is available to any resident individual to surrender received / realised /
unspent / unused foreign exchange to an Authorized Person within a period of 180 days from
the date of receipt / realization / purchase / acquisition / date of return of the traveller, as the
case may be.
 However, a returning traveller is permitted to retain with him, foreign currency traveller’s
cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins without
any ceiling beyond 180 days.

Highlights of the scheme:

 Remittance under this scheme is on a gross basis.
 The facility is available to all the resident individuals including minors.
 Remittances under the facility can be consolidated in respect of family members subject to the
individual family members complying with the terms and conditions of the Scheme.
 Remittances under the Scheme can be used for purchasing objects of art subject to the
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 provisions of other applicable laws such as the extant Foreign Trade Policy of the Government
of India.
 Remittance against gifts and donations cannot be made separately and have to be made under
the LRS Scheme only and therefore no separate limits for gift and donation are available.
 The Scheme can also be used for remittance of funds for acquisition of ESOPs in addition to
acquisition of ESOPs linked to ADR/GDR and acquisition of qualification shares.
 A resident individual can invest in units of Mutual Funds, Venture Funds, un rated debt
securities, promissory notes, etc under this Scheme. Further, the resident can invest in such
securities out of the bank account opened abroad under the Scheme.
 It is mandatory to have PAN number to make remittances under the Scheme andthe A/c Should
be 6 months old. Separate Application cum declaration Form has been devised for this
remittance scheme.

Import of foreign exchange into India

A person on arrival in India, has to make a declaration to the Custom Authorities at the Airport in the
Currency Declaration Form (CDF) where the aggregate value of the foreign exchange in the form of
currency notes, bank notes or travellers cheques exceed USD 10,000 (US Dollars ten thousand) or its
equivalent and/or the aggregate value of foreign currency notes (cash portion) exceed USD 5,000 (US
Dollars five thousand) or its equivalent.

Import of Indian Currency and Currency Notes:

Any person resident in India who had gone out of India on a temporary visit, may bring into India at
the time of his return from any place outside India (other than from Nepal and Bhutan), currency notes
of Government of India and Reserve Bank notes up to an amount not exceeding Rs 25000/- per person.
 A person may take or send out of India to Nepal or Bhutan,
 currency notes of Government of India and Reserve Bank of India notes (other than notes of
denominations of above Rs.100 in either case) provided that an individual travelling from India
to Nepal or Bhutan can carry Reserve Bank of India currency notes of denomination Rs.500/-
and/or Rs.1000/- up to a limit of Rs. 25,000/-;
 bring into India from Nepal or Bhutan, currency notes of Government of India andReserve Bank
of India notes (other than notes of denominations of above Rs.100 ineither case);
 Take out of India to Nepal or Bhutan, or bring into India from Nepal or Bhutan, currency notes
being the currency of Nepal or Bhutan.

Export of Foreign Exchange and Currency Notes

i. An authorised person may send out of India foreign currency acquired in normal courseof
business,
ii. any person may take or send out of India, - a. Cheques drawn on foreign currency account
maintained in accordance with Foreign Exchange Management (Foreign Currency Accounts by
a person resident in India) Regulations, 2000;
a. foreign exchange obtained by him by drawal from an authorised person in accordance with
the provisions of the Act or the rules or regulations or directions made or issued thereunder;
b. currency in the safes of vessels or aircrafts which has been brought into India or which has
been taken on board a vessel or aircraft with the permission of the Reserve Bank;
iii. any person may take out of India, -
a. foreign exchange possessed by him in accordance with the Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations,2000;
b. unspent foreign exchange brought back by him to India while returning from travel abroad and
retained in accordance with the Foreign Exchange Management (Possession and Retention of
Foreign Currency) Regulations,2000;
iv. any person resident outside India may take out of India unspent foreign exchange not
exceeding the amount brought in by him and declared in Currency Declaration Form (CDF).

Baroda TravelEasy Card:

 Our Bank has launched a foreign currency pre-paid card viz. BarodaTravel EasyCard.
 These cards have to be issued to resident Indians and are usable abroad for ATM cash
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 withdrawal and making merchant payments at physical/online stores from the loaded currency.

Salient features of Baroda Travel Easy Card:

 Issued in USD, EUR,GBP, ( as per website available in only 3 Currencies)

 Minimum load value - USD $200, EUR 150,GBP 150,
 Maximum load value - as per extant FEMA guidelines based on the purpose of visit
 Activation within 24 hours of purchase
 Travelers are relieved of the risk of carrying cash &traveller’s cheque during foreign visits
Fees/charges are lower than applicable charges on domestic debit/credit cards used abroad
Cards are valid for -3- years from the date of activation or the date printed on card, whichever
is earlier. In this period, the card can be reloaded any number of times.
 In this period, the card can be reloaded
 Cardholder will have access to 24x7 Customer Care team as well as secured online portal for
viewing their card balance and transaction details Accounting, reconciliation and customer
support shall be provided by the Operations team, based at e-Business Department, in
collaboration with the service provider
 KYC, AML/CFT requirement are as per RBI guidelines
 Cards cannot be used in India, Nepal & Bhutan

FEMA – (Foreign Exchange Management Act-1999):

 All transactions in foreign exchange are governed by Foreign Exchange Management Act-1999.
 FEMA came into effect from 1st June 2000 replacing the stringent and draconian FERA of 1973
(Revised in 1993).
 The object of FERA was to conserve the foreign exchange resources. The objective of
enactment of FEMA, on the other hand, is to manage foreign exchange resources and facilitate external
trade and payments for promoting the orderly development of foreign exchange market in India.
The difference between FERA and FEMA can be summarized as under: -
Feature FERA FEMA
1 No. of Sections 81 sections 49 sections
2 Features Presumptions of Mens Rea and Presumptions of Mens Rea and
Abatements Abatements excluded
3 Definition of Terms Capital/Current Transaction Person, Service These transactions/terms are well defined
etc. not defined Banks
4 Concept of Authorised Concept of authorized persons was limited Authorized moneychangers, andoff shore-
Person to ADs and AMCs banking Units
5 Definition of Resident Resident/Non-Resident definition different This definitionis in harmony with Income
from in Income Tax Act Tax Act
6 Nature of Offence Violations are criminal offences punishable Violations are civil offences punishable with
with imprisonment monetary penalties
7 Provision of Arrest Sweeping powers to officer of ED to arrest Powers to arrest and imprisonment Is
a person alleged to have committed offence restricted and prescribed only when one
under the contract fails to pay monetary penalty
8 Amt. of Monetary Could be as much as five times the amount Decreased to three times the amount
Penalty involved involved in the transaction
9 Right of Impeded Impeded person did not have the right to Impeded person has a right to take legal
Person to take take legal assistance of Lawyer or assistance of Lawyer or Chartered
assistance Chartered Accountant Accountant
10 Power of Police Sweeping powers Restricted powers
Officers / ED

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Under Foreign Exchange Business, at present following two types of transactions are
covered:
Current Account Transactions – Imports and Exports of goods and services like Banking, Insurance,
Travel etc.
Further, Current Account Transactions:means a transaction other than capital account transaction and
includes:
 Payments due in connection with foreign trade, other current business, services and short-term
banking and credit facilities in the ordinary course of business,
 Payments due as interest on loans and as net income from investment,
 Remittances for living expenses of parents, spouse and children residing abroad, and
 Expenses in connection with foreign travel, education and medical care of parents, spouse and
children

Capital Account Transactions – Transactions, which alters the assets or liabilities including
contingent liability outside India of persons of resident in India OR assets or liabilities in India of persons
resident outside India, are called Capital Account Transactions Viz. Borrowings and investments etc.

 Current Account Convertibility means absence of exchange control restriction for any trade
related payments i.e., Current, Commercial and Financial transactions. India has achieved
Current Account convertibility.

 Capital A/c. Convertibility means absence of any exchange control restrictions for
transactions of Capital nature.

The Transactions regulated under FEMA:

 Purchase and sale of and other dealings in foreign exchange and maintenance of balances at
foreign centres.
 Realization of proceeds of exports & payments for imports.
 Payments to non – residents or to their accounts in India.
 Transfer of securities between residents and non – residents and acquisition and holding of
foreign securities.
 Foreign travel with exchange.
 Export and import of currency, cheques, drafts, traveller’s cheques and other financial
instruments, securities, etc.
 Activities in India of branches of foreign firms and companies and foreign nationals.
 Foreign direct investment and portfolio investment in India including investment by non –
resident Indian national/persons of Indian origin and corporate bodies predominantly owned
by such persons.
 Appointment of non – residents and foreign nationals and foreign companies as agents in India.
 Setting up of joint ventures/subsidiaries outside India by Indian companies
 Acquisition, holding and disposal of immovable property in India by foreign nationals and
foreign companies.
 Acquisition, holding and disposal of immovable property outside India by Indian national
residents in India.
 However, wherever FEMA is silent, relevant FERA regulations shall be applicable.

PRE-SHIPMENT EXPORT CREDIT:

Pre-shipment / Packing Credit’ means any loan or advance granted or any other credit provided by a
bank to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to
shipment / working capital expenses towards rendering of services on the basis of irrevocable letter of
credit opened in his favour by an overseas buyer or a confirmed order for the export of goods / services
or any other evidence of an order for export having been placed on the exporter.

Period of Advance:
(i) The period for which a packing credit advance may be given by a bank will be operating cycle or
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maximum period of 360 days and depending upon the circumstances of the individual case, such as
the time required for procuring, manufacturing or processing (where necessary) and shipping the
relative goods / rendering of services.
(ii) However, the benefit of concessional rate of interest on Pre-Shipment Export Finance will be
granted for the maximum period of 270 days only. It is primarily for the banks to decide the period for
which a packing credit advance may be given, having regard to the various relevant factors so that the
period is sufficient to enable the exporter to ship the goods / render the services.
(iii) If pre-shipment advances are not adjusted by submission of export documents within 360 days
from the date of advance, the advances will cease to qualify for concessive rate of interest to the
exporter ab initio.

Disbursement of Packing Credit should be made on FOB value of LC/Export Order.

Liquidation of Pre-shipment Credit:

Pre-shipment credit is to be liquidated by the purchase / discount of export bills received from Exporter
in respect of Goods / Services exported. Further, subject to mutual agreement between the exporter
and the banker, it can also be repaid out of balances in Exchange Earners Foreign Currency Account
(EEFC A/C) representing Export proceeds, as also from proceeds of any other unfinanced Export
(collection) bills or lastly from Rupee resources if no export takes place.

POST-SHIPMENT EXPORT CREDIT:

‘Post-shipment Credit’ means any loan or advance granted or any other credit provided by a bank to
an exporter of goods / services from India after shipment of goods / rendering of services.
Types of Post-Shipment Credits:
Post-shipment advance can mainly take the form of -
 Export bills purchased/discounted/negotiated.
 Advances against bills for collection.
 Advances against duty drawback receivable from Government.
 Advances against Undrawn Balances / Retention Money

Liquidation of Post-Shipment Credit:

Post-shipment credit is to be liquidated by the proceeds of export bills received from abroad in respect
of goods exported / services rendered. Further, subject to mutual agreement between the exporter and
the banker it can also be repaid / prepaid out of balances in Exchange Earners Foreign Currency Account
(EEFC A/C) representing Export proceeds, as also from proceeds of any other unfinanced (collection)
bills. However, such adjusted export bills should continue to be followed up for realization of the export
proceeds and will continue to be reported in the XOS statement.

Normal Transit Period:

Export Bills in Foreign Currencies (Demand / Sight Bill)–25 days
Crystallization: Overdue Export Bills, which are purchased/discounted/negotiated by the Bank, will
be crystallized on 30th day after expiry of Normal Transit Period / Notional / Actual Due Date of the
Export Bill.
For crystallization into Rupee liability, the Authorized Dealer shall apply its TT selling rate of exchange.
The amount recoverable, thereafter, shall be the crystallized Rupee amount along with interest and
charges, if any.
The outstanding Export Bill which is crystallized will be treated on collection basis and will be realized
at TT Buying rate when an actual realization proceeds is coming.

GOLD CARD SCHEME FOR EXPORTERS

Eligibility:
1. All exporters, including those in small and medium sectors, having a good track record and credit
worthiness as per credit rating of the bank.
2. The account should be ‘Standard‘continuously for three years and should not be in the caution list
of ECGC or RBI.
3. Export firms making losses for the past three years or having overdue export bills in excess of 10%

255
of the current years’ turnover are not eligible for Gold Card.
Limits:
1. Gold card to the Exporter is issued for a period of three years subject to annual review.
2. A stand by limit of 20 percent of the sanctioned limit may be additionally granted for facilitating
urgent credit needs of Gold Card Holder Exporter for executing sudden orders.
3. Norms for inventory may be relaxed in case of unanticipated export orders, taking into account the
size and nature of the export order.
Concession in Rate of Interest:
0.25 % concession on applicable Interest Rate for Export Credit to the Gold Card Holder Exporter
Concession in Other Charges:
10% concession will be given to the cardholders in commission and exchange.
Tenor:
The Gold Card will be issued for a period of three years and will be renewed unless any adverse/
irregularities are noticed, subject to annual review of the account.

Other Features:
 Preference will be given for grant of PCFC.
 Premium on ECGC policy for Pre-Shipment Finance will be borne by the Bank and not recovered
from the
Gold Card Holder Exporter.
 The loan application of such export clients will be processed expeditiously

Diamond Dollar Account:

Firms and companies dealing in purchase/sale of rough or cut and polished diamonds are permitted to
open and transact their business through Diamond Dollar Accounts provided, they have a satisfactory
track record of at least three years in import / export of diamonds have an average annual turnover of
Rs. 3 crores or above during preceding three licensing years (licensing year is from April to March).
Eligible firms and companies may be allowed to open not more than 5 Diamond Dollar Accounts with
their Bank.

EXPORT DECLARATION FORM (EDF):

RBI has simplified the existing GR/PP forms used for declaration of exports of Goods and a common
form called ―Export Declaration Form‖ (EDF) has been devised to declare all types of export of goods
from Non-EDI ports. The EDF will replace the existing GR/PP form used for declaration of export of
Goods.

Deemed Exports:
Projects aided by bilateral or multilateral agencies/funds (world bank, IBRD, IDA). Under deemed export
goods will not cross the boundary of the India but will be supplied to Govt. aided projects and the
remittance in the form of foreign exchange will be received into the India. Export Finance to such
projects can also be considered by way of pre-shipment/post shipment credit.

Interest Equalisation Scheme on Pre & Post shipment Rupee Export Credit
1. Eligible Exporters:
The scheme will be available to Pre & Post shipment Rupee Export credit of all exportersunder 416 tariff
lines {at ITC (HS) code of 4 digits} as per Annexure C and exports made byMicro, Small & Medium
Enterprises (MSMEs) across all ITC (HS) codes.

Please note that the scheme will not be available to Merchant Exporters.
2. Validity of the Scheme:
Scheme would be applicable w.e.f 01.04.2015 for 5 years. Government however, reservesthe right to
modify/amend the scheme at any time.

3. Quantum of Interest Equalisation:

The rate of interest equalization is @ 3 % per annum. The benefit of interest equalization, asapplicable,
to the eligible exporters is required to be passed on upfront.

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Imports:
Methods of Payment for Import Settlement
In sales and purchases within the same country, payment is usually made in same currency either by
cash, or by cheques, or by a credit card or by such other means of payment acceptable to the buyer
as well as the seller. Both the buyer and the seller are subject to the same laws and the same courts.
On the other hand, in an international trade, the buyers and the sellers are concerned about the
completion of the deal at their end.
The buyer wants to be sure that having contracted with the seller he gets the goods of the quality and
quantity demanded. The seller, on the other hand, is eager to see that once the supplies have been
made, he gets payment for the goods in time and in the acceptable or desired currency.
Letters of Credits are a tested method of settlement of international payment and Advance Payment,
Collection, and Open Account system, are other methods.

Advance Payment
When the buyer makes payment before the goods are shipped, such payments are called as Advance
Payments.

Bills for Collection

Collections are of two types: Clean (Financial Document alone) and Documentary (Commercial
Documents with or without a Financial Document). In a Documentary Collection, the exporter draws a
Draft or bill of exchange directly on the importer and presents this Draft with shipping documents
attached to the Bank for Collection.
Unlike under advance payment or open account trading where the role of banks is confined more or
less to being agents in the payment and receipt of money, in collection there is a greater involvement
of banks.
For collections to succeed as an effective method of payment, the seller through his bank initiates the
detailed terms and arrangements.
The advantage to the seller under this arrangement of collections, over open account trading, is that
the seller’s bank acts as his agent and the bank in the buyer’s country that the sellers bank selects acts
as the agent of the seller’s bank.

Open Account:
Under Open Account method, payment to the seller in one country for goods sent to the buyer in
another country is settled at the end of an agreed period as per terms of contract. The goods are
consigned directly to the buyer or to his order and the documents etc. covering the goods such as
invoices, insurance certificates and bill of lading are also sent to the buyer enabling him to take delivery
of the goods.
Such a pattern of trading requires a high degree of trust between buyer and seller, and a regular /
continuous business relationship between those parties.

Import of Goods into India – Evidence of Import

1. An importer has to submit as evidence of import,
 The exchange control copy of the Bill of Entry for home consumption;
 The exchange control copy of the Bill of Entry for warehousing, in the case of 100%Export
Oriented Units (EOUs); or
 Customs Assessment Certificate or Postal Appraisal Form as declared by theimporter to the
Customs Authorities.
2. With the establishment of Free Trade Warehousing Zones / SEZ Unit warehouses,imported
goods can be stored therein, for re-export / re-selling purposes for whichCustoms Authorities issue Ex-
Bond Bill of Entry. Reserve Bank of India vide theircircular No A.P. (DIR Series) 29 dated 26.11.2015
has advised AD Banks to considerthe Bill of Entry issued by Customs Authorities named as Ex-Bond Bill
of Entry or byany other similar nomenclature, as evidence for physical import of goods.
3. Further, RBI vide above circular has advised AD Banks that in cases where goodshave been
imported through couriers, the Courier Bill of Entry, as declared by thecourier companies to the Customs
Authorities, may also be considered as evidence ofimport of goods.

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Documentary Credit/Letter of Credit:
 Letter of Credit is a definite undertaking issued by a bank, on behalf of the buyers (importer),
to the seller (exporter), to pay for goods and/or services, provided that the seller presents documents
which comply fully with the terms and conditions of the documentary credit.
 There are three formal contractual relationships in the use of documentary credits as means of
payment and these are: -

The contractual relationship between the buyer and seller as evidenced by the terms of the
sale contract.

The contractual relationship between the buyer and the buyer’s bank, which agrees to issue
the documentary credit on behalf of the buyer.

The contractual relationship between the buyer’s bank and the beneficiary of the documentary
credit who is the seller/exporter of the goods.

PARTIES TO A DOCUMENTARY CREDIT:

 APPLICANT: He is also known as the Importer or Buyer of the goods.
 ISSUING BANK: Usually the applicant’s banker, which issues a letterof credit. Issuing
Bank is ultimately responsible for payment under the letter of credit.
 ADVISING BANK:A correspondent of the issuing bank who is able to authenticatethe LC
message before advising the same to the beneficiary. The advice to the beneficiary is
without any undertaking or liability on the part of the advising bank.
 CONFIRMING BANK: The confirming bank provides an undertaking to the beneficiary
that, notwithstanding any occurrence (bankruptcy of the Issuing Bank etc.), they will pay,
accept or negotiate documents presented in conformity with the terms and conditions of
letter of credit.
 BENEFICIARY:He is an exporter or seller of the goods.

REVOLVING LETTER OF CREDIT:

A Letter of Credit issued for a specific amount within which series of BP or BN are purchased/
negotiated. The limit will be automatically reinstated on retirement of earlier bill purchased or
negotiated, is called Revolving Letter of Credit. Bank should recover the commission on each
reinstatement. In case of Revolving L/C’s aggregate turnover of bills under the L/C within the validity
period of L/C in addition to a suitable limit for single transaction should be specified.

RED CLAUSE AND GREEN CLAUSE LETTER OF CREDIT:

Red clause Letter of credit which authorize the bank to provides finance to exporter at the pre-shipment
stage which is known as packing credit finance. The credit facility granted under such letter of credit is
to be liquidated by purchase or negotiation of Bills under the L/C.
Green Clause letter of Credit is one which authorize the bank to grant further finance to exporter for
storage of goods in the name of bank, payment of dockyard, port and insurance charges etc. Before
the shipment is taking place. Green Clause L/C is only an extension of Red Clause Letter of Credit.

STAND - BY LETTER OF CREDIT:

In certain countries where issuance of guarantee is prohibited, banks are issuing stand by L/C. This L/C
guaranteed the payment in the event of failure of the opener to perform the contractual obligations.
Stand-by credit is one which provides for tendering of documents relating to transactions between the
buyer and seller at the counter of the issuing bank for settlement of transactions in case of failure of
the buyer. The stand by L/C also provides for availing finance by the seller or exporter from the bank,
before the transactions are settled.

BACK TO BACK LETTER OF CREDIT:

On many occasion, it may happen that the beneficiary of letter of credit has to procure raw materials
or finished goods etc. from various suppliers. He will request his banker to issue letter of credit in favour
of these suppliers on the basis of letter of credit he is having.
The letter of credit issued in favour of the local or other suppliers as above is called back to back letter
of credit. The terms and conditions of such back to back L/C should be in conformity with the original
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letter of credit.

TRANSFERABLE CREDIT:
When a letter of credit authorises to transfer the credit to the second beneficiary at the request of first
beneficiary to the extent of amount and quantity of goods. This is called transferable credit. This credit
can be transferred once only. This means that second beneficiary cannot transfer the portion allotted
to him to next supplier.
Uniform Customs & Practices for Documentary Credits (UCPDC):
These are universally recognized set of rules governing Letter of Credits. The rules are published in the
form of Brochure by the International Chamber of Commerce. These rules are binding on all parties.

INCOTERMS 2010:
INCOTERMS mean International Commercial Terms. These are trade terms commonly used in
commercial contracts. INCOTERMS are now separated into 2 Groups. Group 1 terms applicable to all
modes of transport and Group 2 terms only applicable to sea and inland waterway transport.
In all there are a total of 11 INCOTERMS. The expanded form of the same are as under:
Applicable for all modes of transport:
EXW : Ex Works
FCA : Free Carrier
CPT : Carriage Paid To
CIP : Carriage and Insurance Paid
DAT : Delivered at Terminal
DAP : Delivered at Place
DDP : Delivered Duty Paid
Only applicable for sea and inland waterway transport:
FAS : Free Alongside Ship
FOB : Free on Board
CFR : Cost and Freight
CIF : Cost, Insurance and Freight

External Commercial Borrowings:

ECB are commercial loans in Foreign Currency and INR raised by eligible resident entities from
recognized non-resident entities and should conform to parameters such as minimum maturity,
permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.
External Commercial Borrowings (ECB) refer to commercial loans availed from non-resident lenders in
Foreign Currency with a minimum average maturity of 3 years in the form of
i. Loans including bank loans;
ii. Securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible,
optionally convertible or partially convertible preference shares / debentures);
iii. Buyers’ credit;
iv. Suppliers’ credit;
v. Foreign Currency Convertible Bonds (FCCBs);
vi. Financial Lease; and
vii. Foreign Currency Exchangeable Bonds (FCEBs) (under approval route only)

Eligible borrowers:
Corporates in manufacturing and software development sector, Infrastructure, SIDBI, EXIM
Bank, SEZ units, are eligible to raise ECB in Foreign Currency. However, NBFCs, NGOs in
microfinance, trusts, cooperative societies, companies in miscellaneous services etc are eligible
to raise ECB in rupees only.

Recognized lenders are as under:

i. International banks.
ii. International capital markets.
iii. Multilateral financial institutions (such as, IFC, ADB, etc.) / regional financial institutions and
Government owned (either wholly or partially) financial institutions.

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 iv. Export credit agencies.
v. Suppliers of equipment.
vi. Foreign equity holders.
vii. Overseas long-term investors such as:
a. Prudentially regulated financial entities;
b. Pension funds;
c. Insurance companies;
d. Sovereign Wealth Funds;
e. Financial institutions located in International Financial Services Centres in India
viii. Overseas branches / subsidiaries of Indian banks

Permitted uses:
 ECB proceeds can be utilized for capital expenditure like Import of capital goods, Local sourcing
of capital goods, New project, Modernization /expansion of existing units, Overseas investment
in Joint ventures (JV)/ Wholly owned subsidiaries (WOS), Acquisition of shares of public sector
undertakings at any stage of disinvestment process, Refinancing of existing trade credit
 Units of SEZs can raise ECB only for their own requirements
 For on lending by NBFCs / NGOs in microfinance, SIDBI, Exim Bank etc

Two routes for raising ECB:

(a) Automatic Route: ECB under Automatic Route do not require approval of Govern. ofIndia / RBI.
(b) Approval Route:Cases falling outside the purview of Automatic route and cases specified by RBI
for approval route.
The framework for raising loans through ECB comprises the following three tracks:

Track-I: Medium term foreign currency denominated ECB with minimum average maturity of 3/5
years. The all-in-cost ceiling for track 1 is prescribed through a spread over the benchmark as under:
a. For ECB with minimum average maturity period of 3 to 5 years - 300 basis points per annum over 6-
month LIBOR or applicable bench mark for the respective currency.
b. For ECB with average maturity period of more than 5 years – 450 basis points per annum over 6-
month LIBOR or applicable bench mark for the respective currency.
c. Penal interest, if any, for default or breach of covenants should not be more than 2 per cent over
and above the contracted rate of interest.

Track-II: Long term foreign currency denominated ECB with minimum average maturity of 10 years.
The all-in-cost ceiling for track 2 is prescribed through a maximum spread over the benchmark will be
500 basis points per annum. Remaining conditions will be as given under Track-I

Track-III: Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.The
all-in-cost for track III, (i.e. ECB in INR) should be in line with the market conditions.

All-in-cost includes: -
Rate of interest, other fees and expenses in foreign currency except commitment fee, pre- payment
fee, and fees payable in Indian Rupees. Moreover, the payment of withholding tax in Indian Rupees is
excluded for calculating the all-in-cost.

Amount wise Individual Limits:

The individual limits refer to the amount of ECB which can be raised in a financial year under the
automatic route.
i. The individual limits of ECB that can be raised by eligible entities under the automatic route per
financial year for all the three tracks are set out as under:
 Up to USD 750 million or equivalent for the companies in infrastructure and manufacturing
sectors;
 Up to USD 200 million or equivalent for companies in software development sector;
 Up to USD 100 million or equivalent for entities engaged in micro finance activities; and
 Up to 500 million or equivalent for remaining entities.
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ii. ECB proposals beyond aforesaid limits will come under the approval route. For computation of
individual limits under Track III, exchange rate prevailing on the date of agreement should be taken
into account.

Issuance of Guarantee:
Issuance of Guarantee, standby letter of credit, letter of undertaking or letter of comfort by Indian
banks, All India Financial Institutions and NBFCs relating to ECB is not permitted. Further, financial
intermediaries (viz. Indian banks, All India Financial Institutions, or NBFCs) shall not invest in FCCBs in
any manner whatsoever.

End use not permitted:

The proceeds of the ECB borrowing cannot be used for the following purposes:
i. Real estate activities other than development of integrated township/affordable housingProjects;
ii. Investing in capital market and using the proceeds for equity investment domestically;
iii. Activities prohibited as per the foreign direct investment guidelines;
iv. On-lending to other entities for any of the above purposes; and
v. Purchase of Land

Foreign Currency Convertible Bonds (FCCBs):

The issuance of FCCBs was brought under the ECB guidelines in August 2005. Issuance of FCCBs shall
conform to the Foreign Direct Investment guidelines including sectoral cap. In addition to the
requirements of
 minimum maturity of 5 years,
 the call & put option, if any, shall not be exercisable prior to 5 years,
 issuance without any warrants attached, (iv) the issue related expenses not exceeding 4 per
cent of issue size and in case of private placement, not exceeding 2 per cent of the issue size,
etc. as required in terms of provisions contained in Regulation 21 of the Foreign Exchange
Management (Transfer or Issue of any Foreign Security) Regulations, 2000 read with Schedule
I to the Regulations, FCCBs are also subject to all the regulations which are applicable to ECBs.

Foreign Currency Exchangeable Bonds (FCEBs):

FCEBs can be issued only under the approval route and shall have minimum maturity of 5 years. The
bonds are exchangeable into equity share of another company, to be called the Offered Company, in
any manner, either wholly, or partly or on the basis of any equity related warrants attached to debt
instruments. Issuance of FCEBs shall conform to the provisions contained in Regulation 21 of the
Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000 read with
Schedule IV to the Regulations which contain eligibilities in respect of the issuer, offered company,
subscriber, permitted end-uses, etc. The all-in-cost of FCEBs should be within the ceiling specified by
RBI for ECB.

Buyer’s Credit:
Buyer’s Credit is a financing arrangement under which a lending bank outside India lends directly to
the buyer or to Buyer’s bank in the buyer’s country to enable the buyer to make payments against
Imports.

Benefits to the Bank:


Good Income and self liquidating

Higher returns with greater safety

Better risk coverage

Better utilization of our resources overseas

Visibility and image creation

Relationship building and customer satisfaction

Benefits to Corporates:

Extremely competitive pricing & Service

Interest rate linked with LIBOR increases stability
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
Need not to go overseas market as our bank arranges for everything through Overseas
presence

No payment of withholding tax, if availed from our foreign branches (Foreign Banks are subject
to
withholding tax)

Better risk coverage by various hedging options

Less formalities

Supplier’s Credit:
Supplier’s credit is a financing arrangement under which a supplier agrees to accept deferred payment
terms from the buyer. Supplier avails funds by discounting or selling the bills of exchange or promissory
notes so created with the bank in its own country.

FCNR(B) LOANS:
The foreign currency denominated loans in India are granted against the foreign currency funds
accumulated by the Bank by way of FCNR (B) Deposit The loans given from this FCNR deposit funds
are commonly known as FCNR (B) loans.
BOB with a wide global presence has a large base of NRI customers / depositors. Therefore, BOB has
a large resource base of FCNR (B) deposits and is in a position to offer the Foreign Currency Loans in
India under FCNR (B) Loan Scheme at very competitive rates.

Advantages of FCNR (B) loans:

At times, it may entail lesser interest cost vis-à-vis Rupee borrowings. The borrower is not required to
go to the International market for raising the funds as foreign currency funds are made available in
India reducing the cost of raising such funds.

Features:
Corporate can raise FCNR (B) loans from the Banks who are authorized dealers. BOB grants FCNR (B)
Loans through its Position Maintaining Offices at Mumbai, i.e. SITB Mumbai
The Indian corporate are allowed to raise the funds through FCNR (B) Loans at the selected Indian
branches within the prevailing policy guidelines of the Bank/ RBI. The period of FCNR (B) loan is 6
month which can be rolled over further. The spread of 350 bps over LIBOR will be taken for Rate of
Interest on FCNR(B) loans.

Purpose:
Corporate is allowed to obtain foreign currency denominated loans in India under the above scheme
for the following purposes: -
i. For meeting working capital requirements in Indian Rupees.
ii. By way of pre-shipment advances/post shipment advances to the exporters.
iii. Import of raw materials.
iv. Import of capital goods.
v. Purchase of indigenous machinery.
vi. Repayment of the existing Rupee Term Loan.
vii. Repayment of any existing ECBs with the permission from RBI, Govt. of India.
The loan can be granted after proper assessment and sanction of working capital requirements/
Maximum Permissible Bank Finance (MPBF). The borrowers should have natural hedge to cover
themselves from exchange risk, which are required to be borne by them. The exporters can avail this
facility by way of pre-shipment credit as well as post shipment credit in foreign currency. All other terms
applicable to such type of Rupee advances shall also be applicable to foreign currency advances.

Exchange Rate Mechanism:

a. Direct quotations:
Under a system of Direct Quotations, the exchange rates are quoted where the unit(s) of foreign
currency remains constant, whereas the home currency units fluctuate: i.e.USD 1 = Rs. 66.65

b. Indirect Quotations:

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

Types of Rates:
(i) Cash / Ready: When the deal is entered into and its settlement is done on the verysame day
then it is known as Cash / Ready Rate(T + 0)
(II) TOM: When the deal is entered into but the settlement is done on the next workingday then it is
known as TOM(T + 1)
(iii) Spot Rate: Where the settlement is to take place after two working days fromthe date of
contract. It is termed as "SPOT RATE." (T + 2)
(iv) FORWARD RATES:All exchange rates quoted, where the settlement is to takeplace after the
spot rate are termed as "FORWARD RATES" (T + > 2). Forward Rates are generally quoted as a margin
against the spot rate for currency concerned. The margin may represent either "PREMIUM" or
"DISCOUNT". There is a facility of settlement of forward contract either on a fixed date or with an
option of settlement within a period agreed which can be maximum one month’s period.

Premium:
Premium is a value of exchange in excess of spot rate. In relation to forwardexchange rate, it means
that the currency is dearer for future delivery than for the spot delivery i.e. currency is dearer for
forward purchase than the spot purchase.

Discount:
Discount is a value of exchange below spot rate. In relation to forward exchangerate, it means that the
currency is cheaper for future delivery than for the spot delivery i.e. cheaper for forward purchase than
the spot purchase.

LIBOR (London Inter-Bank Offered Rate):

LIBOR is a daily reference rate based on the interest rates at which banks offer to lend funds to other
banks in the London inter-bank market. LIBOR is published by the British Bankers Association (BBA) at
11:00 A.M London time, every day, and is a filtered average of inter-bank deposit rates offered by
designated contributor banks, for maturities ranging from overnight to one year.

SWIFT
Society for Worldwide Interbank Financial Telecommunication is a co-operative societycreated under
Belgian law and having its corporate office at Brussels. It operates computer – guided communication
system for transmission of international payment transfers messages in a secured system driven
environment. Only authorized officials can access and decode the data / information / message.

Categories of AD branches:

Category A:
Offices and branches maintaining independent foreign currencyaccounts (NOSTRO A/C) with overseas
correspondents / branches in their own names. Specialized Integrated Treasury Branch (SITB) Mumbai
is the only Category A Branch of Bank of Baroda.

Category B:
Offices and branches not maintaining independent foreign currencyaccounts but having powers of
operating on the accounts maintained abroad by their A category branch.

Category C:
All other offices and branches handling foreign exchange businessthrough other category B Branches,
but not having powers to operate on the Foreign Currency accounts maintained by their Bank.

ACCOUNTING ARRANGEMENTS:
 NOSTRO ACCOUNT (OUR ACCOUNT):means our account in foreign currency with a bank

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 or branch abroad.They are the current accounts of the bank with their correspondents /
branches in foreign centres in their currencies.
 VOSTRO ACCOUNT (YOUR ACCOUNT):means foreign bank’s or branch’s account withus in
Indian Rupees.
 LORO ACCOUNT: Entries passed to the account of a third bank are said to be forLORO
account, e.g., a remittance made by one bank to another for account of a thirdbank may be
sent by the remitter for credit of a LORO a/c (bank), meaning their account with you.

What do you understand by Derivatives?

It is a financial contract value (spot rate) of which is derived from another financial products/commodity
called underlying (that may be stock, foreign currency, commodity etc.) Forward contract in forex
business is a best example of derivatives.
The basic object of the derivative is to hedge the risk. Future, forwards, options, swaps are the common
instruments of derivatives.
A derivative is an instrument / contract whose value depends on the values of other underlying
instrument / contract.
These variables may be:
 Stock Prices
 Exchange rates
 Interest rates

Functions of Derivatives:

Derivatives shift the risk from the buyer of the derivative product to the seller and as such are very
effective risk management tools.

Derivatives improve the liquidity of the underlying instrument. Derivatives perform an important
economic function viz. price discovery. They provide better avenues for raising money.

They contribute substantially to increasing the depth of the markets.

Share of Exchange Profit:

Treasury Branch passes share of profit on exchange transaction done by Authorized Branches on half
yearly basis i.e. March to August and September to February. This is passed on to the branches during
first fortnight of September and March every year.

FORWARD CONTRACT:
A forward foreign exchange contract is one which is booked today at a rate agreed today but settlement
takes place at an agreed future date.
The contract is negotiated directly by the buyer and seller. It is an OTC (over the counter) product
No money exchanges between the parties when it is contracted and the actual conversion / settlement
takes place at agreed rates at future maturity date.
Both the parties are obliged to fulfil their contractual terms.

Cancellation of Forward Contract:

Cancellation of forward contracts before the maturity date may be at the discretion of bank.
Purchase contracts shall be cancelled at T.T. selling rate Sale contracts shall be cancelled at T.T. buying
rate
In the absence of anyinstructions from the customer a contract which has matured shall be cancelled
by the bank on the 3rd working day after the maturity date.

Fixed Forward Contract and Option Forward Contract:

In a fixed forward contract, the transaction will have to be completed on the specified future date.
In Option Forward Contract, the option period of delivery in future should be specified and should not
exceed a period of one calendar month.

Forward Rate Agreements (An interest rate derivative):

i. A Forward Rate Agreement is a contract between two parties by which they agree to settle
between them the interest differential on a notional principal on a future settlement date for a
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 specified future period.
ii. Further, as the commitment is only to settle the interest differential, the credit risk with the
counter party is minimal.
iii. FRAs can be used effectively to lock in interest rates and thus manage the gaps between rate
sensitive assets and liabilities of the balance sheet. Thus, they are very useful in Asset Liability
Management.
iv. FRAs could easily replicate cash market transactions with a lower capital requirement and can
also improve the liquidity of the underlying cash markets.

Interest Rate Swaps:

An Interest Rate Swap is invariably an over the counter contract. It is a contact between two parties
who agree to exchange interest payments on a notional principal at pre -agreed intervals of time for a
given maturity. Mostly, Interest payments are based on a fixed rate on the one side and a floating rate
on the other.

Options:
i. An Option contract is essentially a contract between two parties wherein one party buys the
right to sell or buy a given underlying at a future date at a pre-agreed price and the other sells
this right. Obviously, this means options are basically forward contracts on rights. In other
words, they are simply insurance products against adverse movements in the market prices.
ii. The right to buy an underlying is called a Call Option and the right to sell the underlying is
called the Put option.
iii. The option which can be exercised by the buyer only on the date of maturity is called a
European Option.
iv. American Option is the Option which can be exercised on any working day before the maturity
or on the maturity date.

Interest Rate Options:

Interest Rate Options are fundamentally of two types, the Cap and the Floor. A Cap is an interest rate
option in which, the buyer of the option, with the intention of locking himself to a ceiling in interest
costs for his borrowing, reserves the right to receive the difference in interest rate on a notional principal
in case the interest rate on the underlying borrowing goes higher than the ceiling he has chosen at pre-
agreed periodic intervals for a given time maturity.

LAF - REPO and Reverse REPO:

i. RBI gives LAF Liquidity Adjustment facility as recommended by Narasimhan Committee. The
purpose of LAF is to provide short-term liquidity support to Banks in India. The rate for LAF is
REPO (Repurchase Option) for injection of liquidity and Reverse REPO for absorption of
liquidity.
ii. A financing arrangement used primarily in the Govt. security markets whereby a dealer or other
holder of the security sells the securities to a lender and agrees to repurchase the same at an
agreed future date at an agreed price is called Repo transaction when viewed from the seller’s
perception. It is reverse repo for the suppliers of fund who are purchasing such security.

MARKET INTEREST RATE

The interest rate, or discount rate, or yield to maturity is an interest rate which changes constantly
depending on various factors like demand/supply of the Financial asset, future economic outlook etc.

FACE VALUE
The principal value of the Bond, which is printed on the bond and which is fixed throughout the bond’s
life.

YIELD TO MATURITY
This term popularly known as YTM connotes redemption yield and is very useful for Treasury Managers
whose investment horizon is long term. YTM can be interpreted as the bond’s average compounded
rate of return if the bond is bought at the current asked price and held until it matures and the face

265
value is repaid. That is, YTM can be defined as the discount rate that equates present value of all cash
flows to the present market price of the Bond. Future cash flows include interest and capital gain/loss.

MARK TO MARKET (REVALUATION):

i. RBI has directed all the banks in India in valuing their investment portfolio at market rates.
Valuation of securities at market rates is known as marking to market.
ii. This process of valuation of the portfolio exposes the Bank to the market risk and forces the
treasury to take suitable steps to hedge such risk. For example, if the value of the securities
in the portfolio have depreciated, as per the prevailing market rates, the profitability and
thereby the net worth of the bank also gets adversely affected.
iii. Conversely, if there is an appreciation, which are unrealized gains, cannot be taken to profits
of the Bank. However, RBI issues guidelines on valuation norms from time to time.
iv. This portion of portfolio which is marked to market is termed as ‘Current category while the
remaining portion which is not marked to market is termed as Permanent category.
v. This will ensure that Bank’s Capital base could withstand any eventuality of high volatility in
the value of its portfolio at a later date, say when the Capital account convertibility comes.

Terms for money market:

i. HTM = Held to maturity, securities which are not meant for sale and shall be kept till maturity
date
ii. HFT = Held for trading, securities acquired with the intention to trade by taking advantage of
the short-term price/interest rate movement are classified as HFT.
iii. AFS= Available for sale: The securities which do not fall under the above two categories will
be under this category.
iv. Coupon rate = The rate which is displayed on the instrument and fixed at the time of issuance.

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 RISK
MANAGEMENT

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 10. RISK MANAGEMENT

Risk is present everywhere and the business of banking is no exception to this. Banking Business,
basically a financial intermediation has in it “Risk” as fundamental element. This activity of risk taking
implies a consideration of both profits and the risks associated with banking activities. For a better Risk-
Return, “Risk Management” is quite essential, as otherwise the entity would be in danger.

What is Risk?
Risk is the probability or potential that an action or activity will lead to a loss or an undesirable outcome.
Risk Management is essentially the process of identification, analysis, measurement and either
acceptance or mitigation of such potential loss. Inadequate risk management can result in severe
consequences for the organization.

Risk is a probability of loss, may be direct or indirect. Direct loss may be relating to loss of capital or
earning whereas indirect loss may be loss of business. Thus, risk means probability of loss of earning,
capital or business.
E.g.
 In case of non-payment of dues bank will suffer a loss, in case of compromise loss of earning
(waiver) or loss of capital in case of write off.
 Frauds committed by either employees or outsiders results into loss of business.

What is Risk Management?

The four letters ‘RISK’ indicates that risk is an unexpected event or incident, which needs to be
identified, measured monitored and control.
R = Rare (Unexpected)
I = Incident (Outcome)
S = Selection (Identification)
K = Knocking (measuring, monitoring, controlling)
Thus, the risk management is a sum of (1) Risk identification (2) Risk measurement (3) Risk monitoring
and (4) Risk control with a view to maximize Risk Adjusted Return on Capital Employed = (RAROCE).

Managing various types of financial risks is an integral part of the banking business. Our Bank has a
robust and integrated Risk Management system to ensure that the risks assumed by it are within the
defined risk appetites and are adequately compensated. The Risk Management Architecture in the Bank
comprises Risk Management Structure, Risk Management Polices and Risk Management
Implementation and Monitoring Systems.

In banks risks are primarily of three types namely (i) Credit Risk, (ii) Market Risk and (iii) Operational
Risk.

The overall responsibility of setting the Bank’s risk appetite and effective risk management rests with
the Board and apex level management of the Bank. A Sub Committee of the Board on ALM (Asset
Liability Management) and Risk Management to assist the Board on financial risk related issues is in
place. The Bank has set up separate committees, of Top Executives of the Bank to supervise respective
risk management functions as under.

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Asset Liability Management Committee (ALCO) is basically responsible for the management of Market
Risk and Balance Sheet Management. It has the responsibility of managing deposit rates, lending rates,
spreads, transfer pricing, etc. in line with the guidelines of Reserve Bank of India. It also plans out
strategies to meet asset-liability mismatches.

Credit Policy Committee (CPC) has the responsibility to formulate and implement various enterprise-
wide credit risk strategies including lending policies and also to monitor Bank’s credit risk management
functions on a regular basis.

Operational Risk Management Committee (ORMC) has the responsibility of mitigation of operational
risk by creation and maintenance of an explicit operational risk management

BASEL GUIDELINES

The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities
that was established by the central bank governors of the Group of Ten countries in 1974. It provides a
forum for regular cooperation on banking supervisory matters. Its objective is to enhance
understanding of key supervisory issues and improve the quality of banking supervision worldwide. The
Committee also frames guidelines and standards in different areas

BASEL I GUIDELINES

In 1988, BCBS came out with its recommendations for a set of minimum capital requirements for banks
which came to known as Basel I Accord. The accord focused primarily on Credit Risk. The assets of a
bank were classified into different risk groups which carried different credit risk weights from 0 to 150.

Generally, investments in Govt. Securities carried 0% risk weight, claims on banks attracted 20% risk
weight and loans to others were assigned risk weights depending on the asset category they belong to.
In principle banks were advised to hold capital equal to 8% of the risk weighted value of the assets. In
India Reserve Bank of India mandated for banks to maintain minimum capital @ 9% of the risk weighted
assets (RWA).

Market Risk was introduced in 1996. But Operational Risk was not addressed under Basel I accord.

Capital adequacy ratio which denotes the strength and stability of a bank to absorb losses, if any, arising
out of assets financed by the bank is calculated as below.
Capital Adequacy Ratio (Basel I) = Eligible Total Capital/ {RWA (Credit Risk) + RWA (Market Risk)}

BASEL II GUIDELINES

Operational Risk, such as system breaking down or people doing wrong things, which was hitherto not
covered under Basel- I got introduced under Basel II. This accord is known as “A Revised Framework on
International Convergence of Capital measurement and Capital Standards”. It came out with the final
version of the Basel II Accord which was published on June 26, 2004.

Basel II aims at
 Ensuring that capital allocation is more risk sensitive

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  Enhance disclosure requirements which will allow market participants to assess the capital
adequacy of an institution
 Ensuring that credit risk, operational risk and market risk are quantified based on data and
formal techniques

Our Bank has implemented the New Capital Adequacy framework (NCAF), popularly known as Basel-II
guidelines, w.e.f. 31st March, 2008.

The NCAF BASEL-II consists of three- mutually reinforcing Pillars, The Basel Committee calls these
factors as the Three Pillars to manage risks i.e.

1. Minimum Capital Requirement,

2. Supervisory Review of Capital Adequacy and
3. Market Discipline.

PILLAR – I: MINIMUM CAPITAL REQUIREMENT

It involves calculation of the total minimum capital requirements for credit, market and operational
risk. The minimum capital requirements are composed of three fundamental elements: a definition of
regulatory capital, risk weighted assets and the minimum ratio of capital to risk weighted assets.

The formula for calculation of CRAR is

“Eligible Total Capital / {RWA (Credit Risk) + RWA (Market Risk) + RWA (Operational Risk)}”

Under Pillar-1, the framework offers three distinct options for Credit Risk, two options for Market Risk
and three options for computing capital requirement for Operational Risk.
The types of approaches are as under: -

Credit Risk -
 Standardized Approach
 Foundation Internal Rating Based Approach (F-IRB)
 Advanced Internal Rating Based Approach (A-IRB)

Market Risk
 Standardized Duration Approach
 Internal Model Approach (IMA)

Operational Risk
 Basic Indicator Approach (BIA)
 The Standardized Approach (TSA)
 Advanced Measurement Approach (AMA)

Our bank has adopted these approach as under;

 Credit Risk - Standardized Approach,
 Operational Risk - Basic Indicator Approach,
 Market risk - Standardized Duration Approach

Under the new guidelines Indian banks were advised to maintain minimum CAR at 9 percent. CAR is
expressed as a percentage of a bank's risk-weighted credit exposures.

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CAPITAL:

Capital in banking is of two types (i) Tier I Capital and (ii) Tier II Capital.

Tier I capital (core capital) is the most reliable form of capital. The major components of Tier I capital
are paid up equity share capital and disclosed reserves viz. statutory reserves, general reserves, capital
reserves (other than revaluation reserves) and any other type of instrument notified by the RBI as and
when for inclusion in Tier I capital. Examples of Tier 1 capital are common stock and retained earnings.
At present “Innovative Perpetual Debt Instrument (IPDI)”, a type of hybrid instrument without any
specific maturity date and with certain specific characteristics is part of Tier I Capital as per RBI
guidelines.

Tier II capital (supplementary capital) is a measure of a bank's financial strength with regard to the
second most reliable forms of financial capital. It consists mainly of undisclosed reserves, revaluation
reserves, general provisions, subordinated debt, and hybrid instruments. This capital is less permanent
in nature. Tier II Capital can never be more than Tier I Capital at any point of time.

RISK WEIGHTED ASSETS

Risk-weighted asset is a bank's assets or off-balance sheet exposures, weighted according to risk. This
sort of asset calculation is used in determining the capital requirement or Capital Adequacy Ratio (CAR)
for a financial institution.
Risk weighting adjusts the value of an asset for risk, simply by multiplying it with a factor that reflects
its risk. Low risk assets are multiplied by a low number, high risk assets by a higher number which may
go up to 625% (i.e.6.25 times of the asset amount).

CREDIT RISK

Credit risk is a risk of potential loss arising out of inability or un-willingness of a customer or counter
party to meet its commitments in relation to lending, Hedging, settlement and other financial
transactions. Thus, credit risk may be relating to;
 Direct lending: Default risk, (non-payment of instalment and interest by the loanee).
 Off Balance Sheet items: Counter party risk-Invocation of Guarantee or crystallization of L/C
liability for which dues have not been paid or denied by the counter party.
 Treasury Operations: Forward Contract obligations, Credit Derivatives etc. On due date the
party is refusing/ denying the payment/ delivery.
 Security transaction: The counter party may not affect fund settlement/ security settlement.
 Counter Party Risk: When there are two or more contracts entered into and liabilities are
depending upon happening of certain events and the party on whose behalf we have taken
exposure express his inability to pay out is called counter party risk.
 Portfolio Risk: It is also called Credit Concentration Risk. This arises due to failure of particular
segment/activity where the bank is having substantial exposure. To mitigate such risk there are
sectoral exposure, single /group exposure ceiling, activity ceiling etc.
 Defaulter Risk there is one contract only i.e. between bank and borrower, may be due to
unwillingness or inability of the borrower.

We are following Standardized Approach for credit risk in our Bank, which requires calculation of Risk
Weighted Assets (RWA) by applying prescribed rates to the asset category. Under the Standardized

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Approach, bank’s credit portfolio has been grouped into various class types like Domestic and Foreign
Sovereign, Banks, Corporate, Public Sector entities, Regulatory Retail portfolio etc.
The bank will allocate risk weight to fund and non-fund based assets, depending on the quality of assets
as reflected in the risk rating secured by the borrower from External Credit rating institutions.

Standardized Approach to Credit Risk:

On Balance Sheet netting - It is confined to loans/ advances and deposits, where banks have legally
enforceable netting arrangement, involving specific lien with proof documentation. Loans and advances
are treated as exposure and deposits as collateral. Exposure may be offset against eligible collateral
credit.

Credit Conversion Factor (CCF):

Non-market related off-balance sheet items include contingent items like (i) Letter of Credit, (ii) Bank
Guarantee (iii) Acceptances etc. and (iv) undrawn commitment in fund based facility. The undrawn
commitment to be included in calculating off-balance sheet credit exposure is the unutilized portion of
working capital facilities and unused portion of term loan/ demand loan commitment that could be
drawn during the remaining period of disbursement.

For calculation of risk weight of an off-balance sheet item, the contingent item is first converted into a
credit equivalent amount by multiplying with a specific credit conversion factor (CCF) based on the type
of instrument and then the resulting credit equivalent amount is multiplied by the risk weight applicable
to the borrower or to the purpose for which the bank has sanctioned finance or type of asset, whichever
is higher.

For example: AAA rated account will have risk weight of 20%, while the A rated accounts will have risk
weight of 50%, BBB rated account will have risk weight of 100% and so on. Off Balance Sheet items will
be converted to credit risk exposure by multiplying with Credit Conversion Factor from 0% to 100%.
Risk weight of 100% may entail a capital charge of 9%, risk weight of 50% may entail a capital charge of
4.5% and a risk weight of 20% may entail a capital charge of 1.8% etc.

Credit Risk Mitigation (CRM) Techniques:

While extending facilities (fund based and non-fund based) to borrower’s bank obtains various types of
securities (primary or collateral) to secure its credit. The securities mentioned below only are
recognized as Credit Risk Mitigant (Financial Collaterals) for credit risk.
 Bank’s own deposits,
 NSCs, KVPs, LIC policies, securities issued by Central & State Governments etc.,
 Debt securities rated by approved credit rating agency –with certain conditions.
 Debt securities which are issued by a bank but not rated –with certain conditions.
 Units of Mutual funds.
 Cash margin against Non-Fund based facilities
 Gold and gold Jewellery.

The main types of guarantors against the credit exposure of the bank are Individuals, Corporates,
Central Govt., State Govt., ECGC, DICGCI, and CGTMSE. As per Basel II guidelines, guarantors whose
guarantee are available as Credit Risk Mitigant are Central Govt., State Govt., DICGCI, ECGC, CGTMSE,
Banks & Primary Dealers with a lower risk weight than the borrower and corporates rated AA (-) or
better. In such cases the applicable risk weight on an exposure would be as per the risk weight
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applicable to the guarantor, for the amount of exposure (net of financial collateral) covered under such
guarantee. The remaining amount of exposure would attract a risk weight applicable to the borrower/
type of exposure/ type of facility as the case may be.

In respect of Standard Assets Basel-II does not recognize land and building, Plant and Machinery etc. as
Collateral for risk mitigation purposes.
Credit Risk Management Framework
It includes all the components such as policies, procedures, system, tools, models, data, templates,
analysis, study, reports etc. in physical and electronic form. All the components of the framework are
an integral part of Credit Risk Management Policy.

Tools for credit risk management:

Credit is considered as core business activity of banking which results into profit. Therefore, it is
necessary to increase the credit portfolio and also to mitigate the risk relating to credit. Following are
the tools available for risk assessment and monitoring:
 Proper Credit Assessment
 Uniformity in credit processing through CPCs

Operations in the account

Stock Statements

QIS/QMR

Review of account and financial statements

ASCROM and PSR

Audit & inspections: concurrent audit, annual audit, Stock audit, periodical inspection, ZIC
inspection, etc.

Discretionary Lending power and ‗Cap‖

Exposure ceiling- Single, Group, and activity exposure.

Insurance and Credit rating

Secured & unsecured

SMA

Internal Audit of branch has now been changed to Risk based internal Audit

MARKET RISK:

Market Risk is defined as the risk that the value of a portfolio, either an investment portfolio or a trading
portfolio, will decrease due to the change in value of the market risk factors. The major standard market
risk factors are stock prices, interest rates and foreign exchange rates. The associated market risks are:

 Equity risk - The risk that the change in price of a stock (equity) or indexes of stock exchanges
(e.g. BSE/ NSE) will lead to a loss to the equity portfolio of the Bank.
 Interest rate risk - The risk that the change in interest rates will cause a loss to the investment
of the Bank.
 Currency risk - The risk that fluctuation in foreign exchange rates (e.g. INR/USD, INR/JPY, etc.)
and/or their implied volatility will change adversely causing a loss to the organization.

Liquidity Risk: Potential inability of a bank to meet its repayment obligations in a timely and
cost-effective manner e.g. Mismatch of deposits and assets.

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

Our Bank is following Standardised Duration Approach for calculation of capital charge and resultant risk
weighted assets for Market Risk. Matters related to Market Risk are solely dealt by our specialised
integrated Treasury Branch, Mumbai.

OPERATION RISK:

It is a risk relating to direct or indirect losses arising out of inadequate or failed internal processes,
people, system, business, management and/or external factors. Generally, any risk not categorized as
market or credit risk is called operational risk.
Broadly speaking operational risk covers following:
(1) People (2) Process (3) Management (4) System (5) Business and (6) External.

Our bank has procured Operational Risk Management System SAS Enterprise Governance Risk and
Compliance (EGRC} for reporting of operational risk losses.

The system will benefit the bank in online collection of operational risk loss data such as accident of
banks vehicle, damage to physical assets due to fire, flood, earthquake, Near-miss events such as
attempted frauds, wrong transaction entries which have been rectified later with no financial loss etc.
and its tracking in terms of recovery, impact of the bank’s profit and loss account. Incidents of short
recovery, inspection charges, documentation charges etc. if they are fully recovered need not be
reported.

All the operating units of the bank i.e. all branches, RO, SME, RLF etc. are required to report the
operational risk losses of their respective unit within 15 days of its detection in this system. The
structure of the reporting and all other related issues are described in annexure I of the above circular.

This system facilitates online reporting of operational risk loss even, Risk & Control Self Assessment
(RCSA), Key
Risk Indicator (KRI), lssue & Action Plan (I&A).

Risk & Control Self Assessment (RCSA):

The system facilitates to identify, assess, monitor and report significant risk in the business function of
the bank after evaluation of the inherent risks and existing controls.

Key Risk Indicator (KRI):

System facilitate to sense the pulse of potential risk on a pro-active basis to enable the bank to take
appropriate action in a timely manner.

Issues and Action Plan (I&A):

System facilitate in chucking out the corrective action plan with an active involvement of concerned
vertical/ functional unit of the bank.

Basic Indicator Approach (BIA):

Under this approach, banks must hold capital for operational risk equal to the average over the previous
three years of a fixed percentage (denoted alpha, in the formula below) of positive annual gross income.
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If annual gross income is negative or zero, it should be excluded while calculating the average. It can be
expressed as below;

KBIA = [ Σ (GI* α)]/n

Where KBIA = the capital charge under the Basic Indicator Approach
GI = annual gross income, where positive, over the previous three years
α= 15% set by the Basel Committee/ RBI
n = number of the previous three years for which gross income is positive.

PILLAR -II: SUPERVISORY REVIEW AND EVALUATION PROCESS

Internal Capital Adequacy Assessment Process (ICAAP):

Pillar 2 or Supervisory Review and Evaluation Process requires that Banks must undertake an Internal
Capital Adequacy Assessment Process (ICAAP), to ensure that: -

 They identify and assess all risks that they are or maybe exposed to (i.e., not only pillar I risks),
 Maintain sufficient capital to face these risks and
 Develop and better use risk management techniques in monitoring and managing these risks.

Supervisors by way of the Supervisory Review Process are responsible for evaluating how banks are
assessing their capital adequacy needs relative to their risks. Supervisors should take supervisory action
if they are not satisfied with the results of this process (i.e. they may ask banks to increase their capital
levels etc.)

In conformance with the Pillar II guidelines of RBI under the Basel II framework, the Bank has formulated
Internal Capital Adequacy Assessment Policy (ICAAP), Collateral Management & Credit Risk Mitigation
and Stress Test Policy. In the Policy, the bank has recognized certain material risks (along with the
methods of measuring and managing them) apart from the three Pillar 1 risks. These are as follows: -

 Concentration Risk:
The risk arising from an uneven distribution of counterparties or from a concentration in
business sectors or geographical regions which is capable of generating losses large enough to
jeopardize an institution’s solvency.

 Country Risk:
Country risk refers to the risk of investing in a country, dependent on changes in the business
environment that may adversely affect operating profits or the value of assets in a specific
country. It is the exposure to various countries are in terms of rating categories as specified by
the ECGC guidelines on Country Risk Management in terms of percentage to Tier 1 and Tier 2
Capital.

 Interest Rate Risk in banking book:

It is the risk to both earnings (by way of NII) and capital (by way of fall in the Market Value of
Bank’s equity) of the bank, arising from adverse movements in interest rates.

 Liquidity Risk:
Liquidity Risk occurs when an institution is unable to fulfill its financial commitment in time
when it falls due. The liquidity risk for the bank will be monitored and measured as per the ALM
Policy. It is not mandatory to maintain capital for liquidity risk.

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  Reputation Risk:
Reputation Risk is the current or prospective indirect risk to earnings and capital from adverse
perception of the image of the bank on the part of customers, counterparties, shareholders,
investors, regulator and/ or any other stakeholder. Reputation risk may originate in lack of
compliance with industry service standards and regulatory standards, failure to deliver on
commitments, lack of customer friendly service and fair market practices, a service style that
does not harmonize with customer expectation.

 Settlement Risk:
Settlement Risk is the risk that a settlement in a transfer system may not take place as expected.
Generally, this may happen because one party may commit default on its clearing obligations
to one or more counterparties.

 Business and Strategic Risk:

The risk of current or prospective impact on a Bank’s earnings, capital, reputation or standing
arising from changes in the environment the Bank operates in and from adverse strategic
decisions, improper implementation of decisions, or lack of responsiveness to industry,
economic or technological changes

 Counterparty Credit Risk:

The risk to each party of a contract that the counterparty will not live up to its contractual
obligations. Counterparty risk as a risk to both parties and should be considered when
evaluating a contract.

Pillar 2 also requires the Bank to carry out stress testing based on sensitivity tests and scenario analysis.
Stress Testing is an integral part of bank’s risk management system and is used to evaluate its potential
vulnerability to certain unlikely but plausible events or movements in the financial variables. The
vulnerability is measured with reference to bank’s profitability and capital adequacy.

One of the important aspects of Pillar 2 is formulation a Risk Based Capital Plan. This is a forward-looking
exercise under which Bank assesses its sufficiency in quality and quantity of capital to sustain the future
business growth under certain stressed situations for next 3 years. Plan is drawn and approved by the
Board of the Bank to augment the Capital base so that CRAR does not fall below 12% mark during the
year.

PILLAR –III- MARKET DISCIPLINE

The purpose of Pillar III - market discipline is to complement the minimum capital requirements (Pillar
1) and the supervisory review process (Pillar 2). It aims to encourage market discipline by developing a
set of disclosure requirements which will allow market participants to assess key pieces of information
on the scope of application, capital, risk exposures, risk assessment processes, and hence the capital
adequacy of the bank.

Disclosing information based on the common reporting format as prescribed by RBI provides a
consistent and understandable disclosure framework that enhances comparability.

ASSET LIABILITY MANAGEMENT

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“Asset Liability Management-ALM is a dynamic process of Planning, Organizing & Controlling of Assets
& Liabilities- their volumes, mixes, maturities, yields and costs in order to maintain liquidity and NII (Net
Interest Income).”

Asset Liability Management (ALM) is the practice of managing risks that arise due to the mismatches
between the assets and liabilities of the Bank. Asset Liability Management involves the measurement
and management of Liquidity Risk and Interest Rate Risk. While the former primarily arises due to the
difference in the maturity profile of assets and liabilities, the later arises due to the difference in re-
pricing of the assets and liabilities.

ALM practices include strategic management of the balance sheet of a bank. It includes positioning of
all assets, liabilities and off-balance sheet items of a bank to maintain a balance between their assets
and liabilities. This implies banks should have enough sources with them to payout their liabilities
whenever it becomes due. Risk occurs when there is a mismatch between bank’s assets and liabilities.
The main concern of ALM is to assess the assets and liabilities of bank in various time bands. ALM
determines that bank should have enough assets with it to fulfil the requirement of its liability at any
time. Thus, Asset Liability Management is the management of total balance sheet dynamics with regard
to size and equality.
Bank’s ALM philosophy is aimed at accomplishing its mission of profit maximization through efficient
market risk management by ensuring returns commensurate with the level of risk taken. In an
increasingly deregulated market, banks are facing greater exposure to market risks, viz, interest rate
risk, foreign exchange risk, and equity/commodity price risk. Asset Liability Management System
provides a comprehensive and dynamic framework for measuring, monitoring and managing not only
these risks but also liquidity risk.

Significance of ALM: A bank might have enough assets to pay off its liabilities. But what if 50% of the
liabilities are maturing within 1 year but only 10% of the assets are maturing within the same period.
Though the bank has enough assets, it may become temporarily insolvent due to a severe liquidity crisis.
Thus, ALM is required to match the assets and liabilities and minimize liquidity as well as market risk.
Again, even if the assets and liabilities maturing are matched to a large extent, the interest rates can
change during the period thereby affecting the interest income from assets and interest expenses on
liabilities. Depending upon the movement of interest rates the net interest margin may increase or
decrease resulting in corresponding increase or decrease in profit during a certain period.
Asset liability management views the financial institutions as a set of interrelationships that must be
identified, coordinated and managed as an integral system. The primary management goal is the
control of interest income and expenses and the resulting net interest margins on an ongoing basis.

INTERNAL CREDIT RATING MODEL

Credit risk associated with a credit exposure should be defined as the risk of losses arising from a credit
exposure turning adverse i.e. defaulting or moving towards distress, due to inability or unwillingness of
the borrower to repay. However, we define credit risk as the risk of an obligor (loanee) defaulting on

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his obligation towards the bank. A default is considered to have occurred with regard to a particular
obligor when either or both of the two following events have taken place:
 The bank considers that the obligor is unlikely to pay its credit obligations to the banking group
in full, without recourse by the bank to actions such as realising security (if held).
 The obligor is past due more than 90 days (or internal threshold in terms of number of days
past due, as defined by the bank) on any material credit obligation to the banking group.
Overdrafts will be considered to be past due once the customer has breached an advised limit
or been advised of a limit smaller than current outstanding.
The elements to be taken as indicators of unlikelihood to pay include:

 The bank puts the credit obligation on non-accrued status

 The bank makes a charge-off or account-specific provision resulting from a significant
perceived decline in credit quality subsequent to the bank taking on the exposure
 The bank sells the credit obligation at a material credit-related economic loss
 The bank consents to a distressed restructuring of the credit obligation where this is likely to
result in a diminished financial obligation caused by the material forgiveness, or postponement
of principal, interest or (where relevant) fees
 The bank has filed for the obligor’s bankruptcy or a similar order in respect of the obligor’s
credit obligation to the banking group
 The obligor has sought or has been placed in bankruptcy or similar protection where this
would avoid or delay repayment of the credit obligation to the banking group

Uses of Rating in decision making in Bank

1. Cut off grade for investment (BOB-6 and above and GF2 for Green Field Projects)
2. Pricing - based on composite rating.
3. Discretionary Lending Power for sanction / review - based on obligor rating.
4. Sanction of Adhoc/Excess/DAUE - based on obligor rating.
5. Inspection of securities - based on obligor rating and
6. Rating based exposure ceiling - based on obligor rating.
7. Infrastructure Projects at Build phase stage with annual exposure cap.
8. Calculation of RAROC

Rating /Credit Scoring Model available at Bank

 BOBRAM Credit Rating Application

 MSME exposure upto Rs. 2 cr hosted on LAPS
 Baroda Traders Loan Upto Rs. 2 cr to be hosted on LAPS
 All retail exposures hosted on LAPS (HL, EL, SL, CL)
 Agriculture exposure to be hosted on LAPS

BOBRAM:
The BOBRAM Risk Rating Model for Commercial Advances above Rs.25 lacs & exposure of above Rs. 2
Crore in MSME & BTL accounts is based on two-dimensional rating methodology specified under Basel
-II Accord requirements. The credit risk rating process as per BOBRAM Rating Models involves three
types of ratings for each credit facility.
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Obligor (Borrower) Rating -for credit worthiness indicating the Probability of Default (PD)
Facility Rating -representing the Loss Given Default (LGD) and
Composite Rating -which is indicative of the Expected Loss (EL)
Obligor (Borrower) Rating
The obligor (Borrower) rating is indicative of creditworthiness of an obligor or the Probability of Default
(PD) and it is based on the assessment of past and projected cash flows of the company.
For assessment of an obligor, the rating structure consists of evaluation by way of four modules called
Rating Risk Silo i.e.
 Company Risk Rating (Weighted Scores)
 Industry Risk
 Business Risk
 Financial Risk
 Management Risk
 Account Conduct Risk
 Project Risk Rating (Minimum of PIR & PPIR Score)
 Project Implementation Risk
 Construction Risk – PIR
 Funding Risk – PIR
 Post Project Implementation Risk
 Industry Risk
 Business Risk
 Project Financial Risk
 Management Risk – Project

Obligor Rating Grades range from BOB-1 to BOB-10. However, depending upon the model used, the
rating grades ranging from BOB-1 to BOB-10 or BOB-3 to BOB-10 or BOB-6 to BOB –10.

Facility Rating
Facility Rating involves assessment of the security coverage for a given facility and indicates the Loss
Given Default (LGD) for a particular facility. Facilities proposed/ sanctioned to a company are assessed
separately under this dimension of rating.
Facility Rating grades range from FR-1 to FR-8.

Composite Rating
The Composite Rating (CR) – which is the matrix or the combination of PD and LGD; indicates the
Expected Loss in case the facility is defaulted. The Composite Rating is worked out automatically by the
software based on the matrix of Obligor (Borrower) Grade (BOB Rating) and Facility Rating Grade (FR).
Composite rating grade ranges from CR-1 to CR-10.

Cut-Off Grade for Acceptance

Bank has accepted BOB-6 as the cut-off point for the acceptance of an obligor (borrower) based on
Obligor (Borrower) rating carried out as per the applicable model.

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Pricing is linked to the composite Rating or the Combined Rating (CR- 1 to CR-10) is computed on the
basis of matrix of Obligor Rating for credit worthiness and the Facility Rating representing the expected
loss in case of default.

Bank has introduced Risk based pricing for Home Loons & Car Loons w.e.f 01.04.2016 and for Mortgage
Loans and Traders Loan w.e.f 23.05.2016. (Based on CIBIL score of borrower).

RISK ADJUSTED RETURN ON CAPITAL EMPLOYED (RAROC)

The RAROC framework was introduced in our bank in April 2016. The risk-adjusted return on capital
(RAROC) calculation is based on the trade-off between risk and return, or in other words it is a risk-
based profitability measurement framework for analysing risk-adjusted financial performance and
providing a consistent view of profitability. If RAROC is higher than the hurdle rate then the loan is
pointed as value adding, and bank capital ought to be allocated to the activity.

In its simplest definition, risk-adjusted return is of how much return your investment has made relative
to the amount of risk the investment has taken over a given period of time. If two or more investments
have the same return over a given time period, the one that has the lowest risk will have the better
risk-adjusted return. So if we summarize all of the above definition, RAROC is basically a framework to
evaluate whether the credit risk asset generates adequate profit to add economic value to
shareholders' funds.

As per Basel II/ Basel III definition of RAROC is defined as the ratio of risk adjusted return to capital
employed. The capital employed may be Regulatory Capital as prescribed by the regulator or Economic
Capital computed by the bank as per its own policy and methodology. However, in our implementation,
regulatory capital is considered as capital employed.

RAROC = Risk Adjusted Net Income/ Capital

Where, the numerator:

Risk Adjusted Net Income = Revenues (Gross Interest Income +Other fees, commission etc.) - Fund
Transfer Pricing Cost - Expected Credit Losses

And, the denominator:

Regulatory capital employed for the credit exposure, for the financial year 2017-18 is 10.875% of the
Risk Weighted Assets as per Master circular on Basel III capital regulations

The RAROC approach requires that the RAROC so computed be compared to a pre-specified hurdle
rate, and credit exposures for which the RAROC exceeds the hurdle rate, only be sanctioned. It is
assumed that credit exposures below the hurdle rate do not add economic value to the shareholders'
fund, and rather causes economic erosion. The Hurdle rate adopted by our bank is 16.25% at present.

In our bank few exposures are exempted from calculation of RAROC in decision making

 Sanctioned limit towards derivatives exposures.

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  Schematic lending irrespective of ticket size, including advances under our retail lending
schemes.
 Credit Risk in respect of exposure under regulatory instance e.g. RIDF funds to NABARD etc.
 Exposures backed by 100% cash collateral (as per Basel II/ Basel III definition of financial
collateral).

BASEL III CAPITAL ACCORD

Reserve Bank of India has issued guidelines based on Basel II reforms on capital regulation applicable
to banks operating in India. The Basel III capital regulation has been implemented from 1st April 2013 in
India phases and it will be fully implemented as on 31.03.2019.

Minimum total capital requirement under Basel III:

Regulatory Capital As % Of RWA

(Risk Weighted Asset)
(i) Minimum common equity Tier I Ratio 5.50
(ii) Capital conservation Buffer (comprised of common equity) 2.50
(iii) Minimum common equity Tier 1 Ratio plus capital conservation buffer 8.00
(i+ii)
(iv) Additional Tier I capital 1.50
(V) Minimum Tier I capital(i+iv) 7.00
(vi) Tier 2 capital 2.00
(vii) Minimum Total Capital Ratio (MTC){(v)+(vi)} 9.00
(viii) Minimum Total Capital Ratio Plus Capital Conservation Buffer[(vii)+(ii)] 11.50

There has not been much change in Calculation of RWA under Basel II and Basel III, other than that for
claims on Bank Assets Class, where Risk Weight of Indian Banks and banks operating in India would be
calculated on Minimum Common Equity Capital and Capital Conservation Buffer ratio prescribed by
RBI, rather than on Total CRAR under Basel II guidelines.

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CREDIT MONITORING
RECOVERY AND
NPA MANAGEMENT

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 11. CREDIT MONITORING, RECOVERY & NPA MANAGEMENT

Bank has laid down following guidelines on credit monitoring & its reporting:

Early Warning Signals:

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

FRAMEWORK FOR REVITALIZING DISTRESSED ASSETS IN THE ECONOMY-CENTRAL

REPOSITORY INFORMATION ON LARGE CREDITS (CRILC) – SMA:

Reserve Bank of India (RBI) has set up a Central Repository of Information on Large Credits
(CRILC) to collect, store and disseminate credit data to lenders.
Banks are required to identify incipient stress in the account by creating three sub-categories
under Special Mention Account (SMA) category
SMA sub categories Basis for classification.
SMA-0 Principal or interest payment not overdue for more than 30 days but
account showing signs of incipient stress. ( Annex-1)
SMA-1 Principal or interest payment overdue between 31-60 days.
SMA-2 Principal or interest payment overdue between 61-90 days.

Joint Lenders Forum (JLF) – {Applicable for lending under Consortium and Multiple Banking
Arrangements (MBA)}
As soon as an account is reported by any of the lenders as SMA-2, they should mandatorily form
a committee to be called Joint Lenders Forum (JLF) if the aggregate exposure (AE) [FB and NFB
taken together] in the account is Rs. 100 Crore and above.
Lenders also have the option of forming a JLF even when the AE in an account is less than Rs. 100
Crore and / or when the account is reported as SMA-0 or SMA-1.
Borrower may request the lender/s, with substantiated grounds, for formation of a JLF on account
of imminent stress.

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All the lenders should formulate and sign an agreement incorporating the broad rules for the
functioning of the JLF. The JLF should explore the possibility of the borrower setting right the
irregularities / weaknesses in the account.
Corrective Action Plan (CAP) by JLF:
The JLF may explore various options to resolve the stress in the account and to arrive at an early
and feasible solution to preserve the economic value of the underlying assets as well as the
lenders loans.

(a) Rectification: Obtaining a specific commitment from the borrower to regularize the account.
The commitment should be supported with identifiable cash flows within the required time
period and without involving any loss or sacrifice on the part of the existing lenders.

(b) Restructuring:
Consider the possibility of restructuring the account if it is prima facie viable and the borrower is
not a wilful defaulter.

(c) Recovery:
Once the first two options are seen as not feasible, due recovery process may be resorted to. The
JLF may decide the best recovery process to be followed among the various legal and other
recovery options available with a view to optimizing the efforts and results.

Restructuring process
If the JLF decides to restructure an account independent of the CDR mechanism, the JLF
should carry out the detailed Techno-Economic Viability (TEV) study.
For accounts with AE of less than Rs. 500 Crore the restructuring package should be
approved by the JLF and conveyed by the lenders to the borrowers within the next 15
days for implementation.
For accounts with AE of Rs.500 crore and above the TEV study and restructuring package
will have to be subjected to an evaluation by an Independent Evaluation Committee (IEC)
of experts.
Asset classification benefit as applicable under the extant guidelines will accrue to such
restructured accounts as if they were restructured under CDR mechanism.
Restructuring cases will be taken up by the JLF only in respect of assets reported as
Standard, SMA or sub-standard by one or more lenders of the JLF.
Wilful defaulters will normally not be eligible for restructuring.
The viability of the account should be determined by the JLF based on acceptable viability
benchmarks determined by them.

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

Annex-1

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SMA-0 Signs of Stress
Illustrative list of signs of stress for categorising an account as SMA-0:
1. Delay of 90 days or more in
(a) Submission of stock statement / other stipulated operating control statements or
(b) Credit monitoring or financial statements or
(c) Non-renewal of facilities based on audited financials.
2. Actual sales / operating profits falling short of projections accepted for loan sanction by 40%
or more;
or a single event of non-cooperation / prevention from conduct of stock audits by banks;
or reduction of Drawing Power (DP) by 20% or more after a stock audit;
or evidence of diversion of funds for unapproved purpose;
or drop in internal risk rating by 2 or more notches in a single review.
3. Return of 3 or more cheques (or electronic debit instructions) issued by borrowers in 30 days
on grounds of non-availability of balance / DP in the account or return of 3 or more bills / cheques
discounted or sent under collection by the borrower.
4. Devolvement of Deferred Payment Guarantee (DPG) instalments or Letters of Credit (LCs) or
invocation of Bank Guarantees (BGs) and its non-payment within 30 days.
5. Third request for extension of time either for creation or perfection of securities as against
time specified in original sanction terms or for compliance with any other terms and conditions
of sanction.
6. Increase in frequency of overdrafts in current accounts.
7. The borrower reporting stress in the business and financials.
8. Promoter(s) pledging/selling their shares in the borrower company due to financial stress.

Joint Lenders’ Forum Empowered Group (JLF – EG):

1. Sometimes Boards of the banks find it difficult to approve the decisions taken by JLF as the
JLFs do not have senior level representations from the participating lenders.
In this regard, RBI clarified that, although RBI has not explicitly prescribed the level of
representation in its guidelines, banks are expected to depute sufficiently empowered senior
level officials for deliberations and decisions in the meetings of JLF.
2. Nevertheless, JLF will finalise the CAP and the same will be placed before an Empowered
Group (EG) of lenders, which will be tasked to approve the rectification/restructuring packages
under CAPs. The JLF-EG shall have the following composition:
 A representative each of SBI and ICICI Bank as standing members;
 A representative each of the top three lenders to the borrower. If SBI or ICICI Bank is
among the top three lenders to the borrower, then a representative of the fourth largest or a
representative each of the fourth and the fifth largest lenders as the case may be;
 A representative each of the two largest banks in terms of advances who do not have
any exposure to the borrower; and
 The participation in the JLF-EG shall not be less than the rank of an Executive Director
in a PSB or equivalent.
The JLF convening bank will convene the JLF-EG and provide the secretarial support to it.

Strategic Debt Restructuring scheme (BCC:BR:107:295 dated 18-06-2015):

In accordance with the general principle of restructuring and as directed by RBI , the shareholders
should bear the first loss instead of the debt holders. To ensue more involvement and ownership
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of the promoters in the business /project, JLFs CDR cell may consider following options at the
time of restructuring of the loans.
 Possibility of transferring equity of the company by promoters to the lenders to compensate for
their sacrifices.
 Promoters infusing more equity into their companies
 Transfer of the promoters holding to a security trustee or an escrow arrangement till
turnaround of company. This will enable a change in management control, should lenders favour
it.
Branches/Regions/Zones are advised to take note of the guidelines given in the circular and
which have been issued by RBI in order to further empower the lenders to curb the rising NPA
menace in the banking industry. Staff at all levels should endeavor to make best use of guidelines
and keep a close watch on accounts/JLFs/CDRs where Bank may invoke such provisions and
initiate prompt action for appropriate decisions an implementations.

Prudential Norms on change in ownership of borrowing entities (outside strategic Debt

Restructuring Scheme) (BCC:BR:107:579 dated 24-11-2015):
In order to further enhance banks’ ability to bring in a change in ownership of borrowing entities
which are under stress primarily due to operational/ managerial inefficiencies despite
substantial sacrifices made by the bank, RBI has permitted allow banks upgrade credit facilities
extended to borrowing entities whose ownership has been changed outside SDR, to Standard
category upon Such change in ownership, subject to certain guidelines which are detailed in the
circular.

Mandatory time lines for restructuring of Advance A/cs as per the revised restructuring
framework of RBI (BCC:BR:107:493 dated 05-10-2015):
In the respect of NON – CDR restructuring cases, the time for approving the restructuring package
by the JLF would stand as 15 days only instead of 30 days.
Therefore, the total time for CDR cases is:
 For aggregate Exposure (AE) above Rs. 500 crore and above – 307 days
 For aggregate Exposure (AE) upto Rs. 500 crore – 255 days
For Non CDR cases:
 For aggregate Exposure (AE) above Rs. 500 crore and above – 285 days
For aggregate Exposure (AE) upto Rs. 500 crore – 240 days

Definition of Lender
The term “lender “covers all banks/FIs to which any amount is due, provided it is arising on
account of any banking transaction, including off balance sheet transactions such as derivatives,
guarantees and letter of credit.

Definition of Unit
The term “unit “includes individuals, juristic persons and all other form of business enterprises,
whether incorporated or not. In case of business enterprises (other than companies), bank /FIs
may also report the names of those persons who are in charge and responsible for management
of affairs of the business enterprises.

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Wilful Defaulter
Considering the concerns over the persistence of wilful default in the financial system, Reserve
Bank of India has put in place a system to disseminate credit information pertaining to wilful
defaulters for cautioning banks and financial institutions so as to ensure that further bank finance
is not made available to them. Enforcing such provisions also help the Bank in credit discipline
and creating a Recovery climate.
Though the guidelines inter alia the penal measures as indicated herein above normally are
applicable to all the borrowers identified as wilful defaulters.
The system of reporting with the cut-off limits of Rs. 25 lac and above has been introduced. The
present guidelines are as follows:

Definition of wilful default

The term “wilful default” has been redefined in supersession of the earlier definition as under:
A “wilful default” would be deemed to have occurred if any of the following events is noted:-
 The unit has defaulted in meeting its payment / repayment obligations to the lender even
when it has the capacity to honour the said obligations.
 The unit has defaulted in meeting its payment / repayment obligations to the lender and
has not utilised the finance from the lender for the specific purposes for which finance was availed
of but has diverted the funds for other purposes.
 The unit has defaulted in meeting its payment / repayment obligations to the lender and
has siphoned off the funds so that the funds have not been utilised for the specific purpose for
which finance was availed of, nor are the funds available with the unit in the form of other assets.
 The unit has defaulted in meeting its payment / repayment obligations to the lender and
has also disposed off or removed the movable assets or immovable property given by him or it
for the purpose of securing the facility/ies without the knowledge of the bank/ lender.
Diversion and siphoning of funds:
The terms “diversion of funds” and “siphoning of funds” should construe to mean the following:-
Diversion of funds would be construed to include any one of the undernoted occurrences:
a. Utilisation of short-term working capital funds for long-term purposes not in conformity
with the terms of sanction;
b. Deploying borrowed funds for purposes / activities or creation of assets other than those
for which the facility was sanctioned;
c. Transferring funds to the subsidiaries / Group companies or other corporates by
whatever modalities;
d. Routing of funds through any bank other than the lender bank or members of consortium
without prior permission of the lender;
e. Investment in other companies by way of acquiring equities / debt instruments without
approval of lenders;
f. Shortfall in deployment of funds vis-à-vis the amounts disbursed / drawn and the
difference not being accounted for.

Siphoning of funds would be construed to occur if any funds borrowed from banks / FIs are
utilised for purposes un-related to the operations of the borrower, to the detriment of the
financial health of the entity or of the lender. The decision as to whether a particular instance
amounts to siphoning of funds would have to be a judgment of the lenders based on objective
facts and circumstances of the case.
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Non-Cooperative Borrowers:
1) Reserve Bank of India has defined a Non-Cooperative Borrower as one:
a) Who does not engage constructively with his Lender by defaulting in timely repayment
of dues while having ability to pay,
b) Thwarting Lenders’ efforts for recovery of their dues by not providing necessary
information sought,
c) Denying access to assets financed / collateral securities, obstructing sale of securities, etc.
2) The following measures may be adopted in classifying/declassifying a Borrower as Non-
Cooperative Borrower and reporting information on such Borrowers to Central Repository of
Information on Large Credits (CRILC):
a) The cut off limit for classifying Borrowers as Non-Cooperative would be those Borrowers
having aggregate fund-based and non-fund based facilities of Rs. 50 Million.
b) A Non-Cooperative Borrower in case of a Company will include, besides the Company, its
Promoters and Directors (excluding independent Directors and Directors nominated by the
Government and the Lending institutions). In case of business enterprises (other than
Companies), Non-Cooperative Borrowers would include persons who are in-charge and
responsible for the management of the affairs of the business enterprise.
c) This is a prudential measure since the expected losses on exposures to such non-
cooperative borrowers are likely to be higher.

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

NPA – DEFINITION

When any asset ceases to generate income for the bank

A ‗non-performing asset‘(NPA) is defined as a credit facility in respect of which the
interest and / or instalment of principal has remained ‘overdue‘ or, ’out of order‘ for a specified
period of time i.e. 90 days.
CLASSIFICATION OF ADVANCE

Loan

Cash Credit / Overdraft

Bills Purchased / Discounted

Other Accounts

IDENTIFICATION OF NPA:
LOAN:
A Loan account [term loan/DL] is to be classified as NPA when interest and/or installment of
principal remain overdue for a period of more than 90 days.
For example, a loan account will not be classified as NPA on 31st March 2017, if the interest and
installment on principal have been fully serviced up to 31st December, 2016.
A loan account where the interest has been serviced but the installment has remained unpaid will
also be classified as NPA.
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CASH CREDIT / OVERDRAFT:
A cash credit or overdraft account is to be classified as NPA when it remains out of order as on
date of Balance Sheet for reasons as given below:
If the outstanding balance remains continuously in excess of the sanctioned limit / drawing
power for 90 days, OR
where the outstanding balance in the principal operating account is less than the sanctioned
limit/drawing power, but there are no credits for 90 days as on the date of Balance Sheet, OR
Credits are not enough to cover the interest debited during the same period;
Example
As on 31.03.2017, if we find that the outstanding balance in a cash credit account has remained
continuously in excess of the sanctioned limit / drawing power during the March 2013 quarter,
it should be classified as NPA.
If as on 31st March 2017, we find that in a cash credit account the outstanding balance in the
account is less than the DP / sanctioned limit and there has been no credit to the account during
March 2013 quarter, the account has to be classified as NPA.
Further if as on 31st March 2017, we find that in a cash credit account the outstanding balance in
the account is less than the DP / sanctioned limit and the total of all credits made during March
2013 quarter is less than the interest debited in this quarter, the account has to be classified as
NPA.

BILLS PURCHASED / DISCOUNTED:

A bill purchased / bill discounted account will be classified as NPA if the bill remains overdue for
a period ofmore than 90 days from the due date.

OTHER FACILITIES:
In case of interest payments, banks should, classify an account as NPA only if the interest due and
charged during any quarter is not serviced fully within 90 days from the end of the quarter.

Agricultural advances:
A crop loan account for short duration crop will be classified as NPA if the installment of principal or
interest thereon remains overdue for two crop seasons subject to maximum 12 months. [i.e. remains
unpaid for two crop seasons beyond due date.

A crop loan account for long duration crops will be classified as NPA if the installment of principal or
interest thereon remains overdue for one crop season, subject to maximum 12 months .[Long
duration crops means crops with crop season longer than one year.

RBI has directed that the repayment schedule of the rural housing advances to agriculturists under
Indira Awas Yojana and Golden Jubilee Rural Housing Finance Scheme should be linked to crop
cycles.In case of term loans given to non-agriculturists the account becomes NPA on the basis of 90
days delinquency norms as applicable to non-agriculture finance.

Banks should, classify an account as NPA only if the interest due and charged during any quarter is
not serviced fully within 90 days from the end of the Quarter.

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CREDIT CARD ACCOUNT: If the account due is unpaid for -90- days.

GOVERNMENT GUARANTEED ADVANCES:

Guarantee of the Central Government though overdue may be treated as NPA only when the
Central Government repudiates its guarantee when invoked. However, not applicable for income
recognition.
State Government guaranteed advances will become NPA, if interest and / or instalment of
principal or any other amount due to the bank remains overdue for more than 90 days.

EXEMPTED CATEGORY:
Treated as performing even though interest or instalments in following accounts have not been
paid for more than 90 days:

Advances against banks own term deposits, NSCs, IVP, KVP, Surrender value of LIC policies
provided debit balance in account is less than the market / surrender value of the securities in all
above cases.

Project Loans:
There are occasions when the completion of projects is delayed for legal and other extraneous
reasons like delays in Government approvals etc.
 Project Loans for infrastructure sector
 Project Loans for Non-infrastructure sector
The revised DCCO falls within the period of two years from the original DCCO stipulated at the
time of financial closure for infrastructure projects (including commercial real estate
projects).
The revised DCCO falls within the period of one year from the original DCCO stipulated at the
time of financial closure for Non-infrastructure projects.
Infrastructure Projects involving court cases Up to another two years (beyond the two year
period i.e., total extension of four years), in case the reason for extension of DCCO.
Infrastructure Projects delayed for other reasons beyond the control of promoters (Other
than Court Cases): Up to another one year (beyond the two year total extension of three years)
Project Loans for Non-Infrastructure Sector (Other than Commercial Real Estate
Exposures) Up to another one year (beyond the one year period total extension of two years).
The asset classification benefits provided are not applicable to commercial real estate sector.
It is re-iterated that a loan for a project may be classified as NPA during any time before
commencement of commercial operations as per record of recovery (90 days overdue). Further,
Restructuring is subject to the condition that the application for restructuring should be received
before the expiry of period.

NON FINANCIAL REASONS-NPA due to temporary deficiencies in Accounts:

In case of cash credit accounts, where the stock statement has not been obtained for a continuous
period of more than three months and the outstanding in the account is based on drawing power
calculated from stock statements which is older than -3- months would bedeemed as irregular.
A working capital borrowal account will become NPA if such irregular drawings are permitted in
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the account for a continuous period of -90- days even though the unit may be working or the
borrower‘s financial position is satisfactory.
An account where the regular/ ad hoc credit limits have not been reviewed/ renewed within 180
days from the due date/ date of ad hoc sanction will be treated as NPA.

Other points on NPA classification:

Consortium advances:
In case of consortium advances, the account will be classified as NPA by a member bank
depending on the record of recovery in its own books irrespective of the recovery status with the
lead bank or any other member bank.

NPA classification borrower wise and not facility wise:

In case any one of the facilities sanctioned to a borrower is classified as NPA, all other credit
facilities availed by him and also the investments made by the bank in all securities issued by him
will also be classified as NPA.

Reversal of income:
If any advance, including bills purchased and discounted, becomes NPA, the entire interest
accrued and credited to income account in the past periods, should be reversed if the same is not
realised. This will apply to Government guaranteed accounts also. In respect of NPAs, fees,
commission and similar income that have accrued should cease to accrue in the current period
and should be reversed with respect to past periods, if uncollected.

Up gradation of loan accounts classified as NPAs:

If arrears of interest and principal are paid by the borrower in the case of loan accounts classified
as NPAs, the account should no longer be treated as non-performing and may be classified as
standard accounts.

ASSET CLASSIFICATION:
Standard Assets-
Standard assets are those, which are regular in payment of interest and Installments due as per
sanction.
Nonperforming assets:
Banks are required to classify nonperforming assets further into the following three categories
based on the period for which the asset has remained nonperforming and the realisability of the
dues:
i. Substandard Assets ii. Doubtful Assets iii. Loss Assets

SUB-STANDARD:
A sub standard asset is one, which has been classified as an NPA for a period not exceeding 12
months

DOUBTFUL:
A doubtful asset is one which has remained NPA for a period exceeding 12 months.
In case of accounts where there is a significant erosion in the value of security i.e. if the realizable
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 value of the security is less than 50% of the value of security assessed in the last year by the bank
/ RBI inspectors or where the borrower has provided fraudulent security, the account can be
straight away classified as doubtful.

LOSS ASSETS:
Assets which are classified as Loss by the Bank‘s Internal/External Auditors or where securities,
personal worth etc. are practically zero or less than 10% of the outstanding amount.
Where the realizable value of the security is less than 10 % of the outstanding of the borrowal
account, the existence of the security should be ignored and the account should straight away be
classified as loss asset
PROVISIONING NORMS:
NPA Category Secured portion of loan
outstanding Unsecured portion of loan
(General Provision on O/S ) outstanding
Sub Standard 15% 25%
Doubtful:
DB-I- Up to one year 25% 100%
DB-II-One to three years 40% 100%
DB-III More than three years 100% 100%
Loss assets 100% 100%

However ―unsecured exposures‖ in respect of Infrastructure Loan accounts classified as sub-

standard, in case of which certain safeguards such as escrow accounts are available will attract
an additional provision of 5% only. i.e a total of 20% as against the existing 25%.
Provisioning Requirement on Standard Assets
 Agriculture & SME where it is 0.25%
 Commercial Real estate(CRE) 1.00%,
 Commercial Real Estate – Residential Housing Sector (CRE – RH) 0.75%
 Teaser home loans 2%
 Povision required on all other standard advances except above: 0.40%

DISPOSAL OF ASSETS IN NPA/TWO/ PWO ACCOUNTS:

Many times, borrowers approach the Bank to allow them to sell the assets charged to the bank
and deposit the proceeds in the borrowal accounts with the bank. Another bank or Financial
Institution may also approach for sale of assets commonly charged to them and us. There may be
instances where a third party may approach the bank to buy the assets charged by the borrower
to the bank.
In such cases, Chief Managers (including Dy. Regional Managers scale IV & above) and above can
authorise sale of such assets in accounts, as per norms. Before authorizing sale of current assets,
a fair value of such assets should be ascertained.
In respect of fixed assets, valuation of such assets should be conducted by bank’s (or other
bank’s/ FI’s Valuer) approved valuer. In respect of movable machinery, fair market value should
be ascertained or valuation should be done before authorising sale of assets (valuation of the
lending FI may be considered for approval if done by a Government/ Wealth tax approved valuer).
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 The sanctioning authorities should ensure that the amount to be deposited in the borrowal
accounts consequent upon such authorization of sale of assets should generally not be lower/less
than the Net Present Value (NPV) of the realizable value of assets being allowed to be disposed
off (Fair Market Value and not the Distress Value) net of the cost of realization in accordance with
RBI guidelines.

Floating Provision: If any institution makes additional provision, over and above the level
prescribed in IRAC norms of RBI, it is termed as Floating Provision. Floating provisions means,
provision not against any particular account but on the entire portfolio of advances or
investments. Floating provisions can be treated as a part of the Tier II capital within the overall
ceiling of 1.25 % of the total risk weighted assets. Alternatively it can be netted from the gross
npas to reach at disclosure of Net NPAs. Floating provisions once made can not be reversed back
to Profit & Loss Account.

Provision Coverage Ratio:

Provision coverage ratio is the ratio of provisions to gross NPA and indicates the extent of funds,
a lender keeps aside to cover loan losses. It is also called as ―Loan Loss Coverage Ratio‘, which is
mandatory as per RBI to maintain at least 70% of its Gross NPA. This ceiling has been withdrawn
now.

Recovery in Fraud Accounts:

Bank has framed a policy for Recovery in Fraud accounts (Advances) pursuant to the instructions
from the Govt. of India. Accordingly policy for Recovery in Fraud accounts has been approved by
our Board of Directors in the meeting held on 21.10.2012.
The silent features of the above policy are, as under:

I. Committee at Zonal/ Regional Level:

In compliance with the Govt. of India guidelines it is envisaged that fraud accounts will be
monitored by a separate committee at the Zonal and Regional level for the purpose of maximizing
the recovery in shortest period and reducing the loss to the Bank.

II. Amount involved:

The fraud cases involving amount up to Rs.50 lacs will be monitored by the Regional Committee
& above Rs.50 lacs by the Zonal Committee.

Reschedulement:
1. Under reschedulement pattern of debt repayment obligation will be changed from EMI to
ballooning or descending schedule.
2. In reschedulement no change in repayment period, no increase in our exposure, no change in
the nature of credit facility/ies, no sanction of additional /fresh limit even within the existing
exposure.
3. All Standard, Sub Standard and doubtful accounts can be considered for reschedulement.
4. All Senior Branch Managers and Sr. Manager (Credit) can consider for a period of six months
in case of proposal falling under their powers.
5. This is to be considered by the Regional Authority after satisfying the needs for

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reschedulement.

Rephasement: Rescheduling with increase in repayment period.

Restructuring: Restructuring can be considered in following ways:

(1) Changing existing repayment period of the debt.
(2) Changing outstanding exposure of the bank
(3) Changing the nature and quantum of existing credit facilities
(4) Sanctioning of fresh credit facility or additional facility
Thus restructuring involves, rephasement of loan installments, waiver of penal interest,
considering FITL, converting irregular portion into WCDL/WCTL, fresh/additional loans,
working capital limits.

Corporate Debt Restructuring:

Objective:
The objective of CDR is to ensure timely and transparent mechanism for restructuring the
corporate debts of viable entities facing problems, outside purview of BIFR/DRT/other legal
proceedings, for the benefit of all concerned.

Three tier structure:

CDR is a non-statutory mechanism consisting three tiers viz:-

CDR Standing forum and its core group

CDR Empowered Group

CDR Cell

CDR Core Group is carved out of the CDR Standing Forum to assist the Standing Forum in
convening the meetings and taking decisions relating to policy, on behalf of Standing Forum.

CDR Standing Forum and the CDR Empowered Group are assisted by a CDR Cell in all their
functions. The CDR Cell makes the initial scrutiny of the proposals received from
borrowers/lenders, by calling for proposed rehabilitation plan and other information and puts
up the matter before the CDR Empowered Group, etc. within the ambit of guidelines.

Eligibility:-
 Covers only Multiple banking/syndication/consortium accounts with outstanding
exposure Rs. 10 crore and above with Banks/FIs

Should not be willful defaulter and No fraud in the account

Standard and Sub-Standard Accounts – If the accounts is classified as Standard or Sub-
Standard by 90% of the lenders in their books, the same could be treated as Standard or Sub-
Standard to become eligible for CDR

Doubtful Accounts – Consent by minimum of 75% of the creditors (by value) and 60%
creditors (by number) for such restructuring is required.
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
Suit filed cases – Consent by minimum of 75% of the creditors (by value) and 60%
creditors (by number) for such restructuring is required.

BIFR cases can also be considered on case – to – case basis after obtaining approval of
BFIR before implementation of CDR package.

Non Eligibility:-
 The borrower indulging in frauds and malfeasance will continue to remain ineligible for
restructuring.
 Willful defaulters are not eligible.
 No account will be taken up for restructuring by the banks unless the financial viability is
established.
 Commitment from promoters for extending their personal guarantees along with their
net worth statement supported by copies of legal titles to assets may be obtained along with a
declaration that they would not undertake any transaction that would alienate assets without the
permission of the Joint Lenders Forum. Any deviation from the commitment by the borrowers
affecting the security/recoverability of the loans may be treated as a valid factor for initiating
recovery process.
 Lenders in the JLF may sign an Inter Creditor Agreement (ICA) and also require the
borrower to sign the Debtor Creditor Agreement (DCA) which would provide the legal basis for
any restructuring process
 A ‘stand still’ clause could be stipulated in the DCA to enable a smooth process of
restructuring. The ‘stand-still’ clause does not mean that the borrower is precluded from making
payments to the lenders

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

Revised Guidelines on Corporate Debt Restructuring:

Based on the recommendations made by the Special Group constituted in September 2004 to
review the corporate debt restructuring (CDR) scheme and also the feedback received on the
revised draft guidelines circulated amongst banks for comments, the scheme has been modified
as below:

The coverage of the scheme has been extended to include entities with outstanding
exposure of Rs.10 crore or more.

With a view to making, decision making more equitable, the support of 60 per cent of
creditors by number in addition to the support of 75 per cent of creditors by value, is required.

The core group to be given the discretion in dealing with willful defaulters in cases, other
than those involving frauds or diversion of funds with malafide intentions.

Restoration of asset classification prevailing on the date of reference to the CDR Cell to be
linked to implementation of the CDR package within four months from the date of approval of the
package.

Regulatory concession in asset classification and provisioning to be restricted to the first
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restructuring where the package also has to meet norms relating to turn-around period and
minimum sacrifice and funds infusion by promoters.

Convergence in the methodology for computation of economic sacrifice among banks and
financial institutions (FIs).

Reserve Bank‘s role limited to providing broad guidelines for CDR mechanism.

Disclosures in the balance sheet to be enhanced for providing greater transparency.

Additional finance requirement by both term lenders and working capital lenders, to be
shared on pro-rata basis.

One time settlement to be allowed as a part of the CDR mechanism to make the exit option
more flexible.

Non-SLR instruments acquired while funding interest or in lieu of outstanding principal
to be subjected to regulatory treatment and valuation.

Discount rate for computing present value of Future Cash flow (BCC:BR:107:328 dated 07-
07-2015):
On review, it has been decided by RBI that a rate equal to the actual interest rate charged to the
borrower before restructuring may be used to discount the future cash flows for the purpose of
determining the diminution in fair value of loans on restructuring. In cases where the existing
credit facilities to a borrower carry different rates of interest the weighted average interest rate
may be used as discounting rate. This discount rate may be used to discount both the pre-
structuring cash flows as well as post restructuring cash flows. It is also clarified that this
instruction will be applicable to all projects where changes in amortization schedule have been
carried out under the above circular

Lok Adalat:
Lok Adalat is a process of administering justice without resorting to Courts and is established
under the Legal Services Authority Act 1987. Under the provisions of the Act, States have
constituted Legal Services Authorities at High Court, District and at Taluka level. Under the
Authorities of such Committees respective Courts are organizing Lok Adalats within the area of
jurisdiction.
It is a loan recovery redressal mechanism where the banks organize a camp for recovery in one
place under the aegis of Civil Court and DRT as well. A spot settlement of recovery is made after
hearing the case of bank and borrower and the underlying securities. It is the version of a small
court set up to settle the recovery disputes of borrowers. It is a cheap method of enforcing
recovery.

Lok Adalat can:

1. Take evidence.
2. Call for any Public Documents from any Public office or court.

Advantages of Lok Adalats:

1. There is no court fee involved when fresh disputes are referred to it.

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2. It can take cognizance of any existing suit in the court as well as look into and adjudicate
upon fresh disputes.
3. If no settlement is arrived at, the parties can continue with court proceedings.
4. The decrees by Lok Adalats are as good as a decree passed by civil court and are binding
on the parties.
5. No appeal lies against the decree passed by Lok Adalats as the matters are settled through
negotiation and mutual consent of the parties.
Cases of amount involving up to Rs. 20.00 lacs can be referred to Lok Adalats as per Policy.
However, where DRTs organize Lok Adalat for cases pending in DRTs, matters can be referred
irrespective of amount involved.

Prudential Write-off (PWO):

(i) Any asset which is not contributing any income to the bank or its continuation in the
Balance Sheet is deemed to be undesirable may be considered for final write-off.
(ii) All advances accounts categorised as "Loss Assets" where 100% provision has been
made and where chances of recovery are bleak and there are no securities available, can be
considered for final write-off.
(iii) Advances classified as 'Doubtful' and where DICGC/CGTMSE/ECGC claims have been
received and where DICGC/CGTMSE/ECGC permission for write-off is not necessary can be
considered for final write-off. This is because in such assets 100% provision for the net adjusted
balance would have already been made.
(iv) Any others as may be directed by Corporate Office for write-off may be considered.

Prudential Write off of the following accounts should not be done :–

1. TODs in current account and BOBCARD TODs and adhoc / one time BP/BD.
2. Accounts where frauds have been reported.
3. Quick mortality accounts (NPA within one year of sanction / disbursement)
4. Staff accounts (if any) and staff related / guaranteed accounts.
5. Advances accounts such as Cash Credit, Demand Loan, and Term Loan etc. wherein borrower/s
are also having outstanding TOD in current account/ S.B. account, BOBCARD TOD etc.

Cut Back Arrangement:

a) A borrower‘s account may have become NPA due to un-serviced interest, L.C.
devolvement, excess allowed to meet statutory dues, wages, insurance premium etc. Or reduction
in drawing power. Any credit coming into the account will be appropriated completely towards
the over-dues.
b) The borrower under such circumstances opens a current account with another bank and
routes all sales proceeds through that account. As a consequence the bank not only fails to recover
its legitimate dues but also faces the problem of erosion of security. Under this circumstance, the
bank can consider allowing operations, on merits, till a revival package is prepared and
sanctioned or an acceptable compromise proposal is submitted by the borrower, up to sanctioned
amount or outstanding with a suitable cut-back, say, ranging from 5 to 10% (or more) of the
credits in the account to reduce/wipe-out the excess/overdues in the account.
c) Therefore, Branch Managers are allowed to permit operations in such accounts falling
under their Discretionary Lending Power with a cut back arrangements for a period up to 3
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months subject to confirmation of their action by Regional Head/Zonal Head from the date of such
cut back arrangement permitted by them and for further period/ restructuring etc. suitable
proposal be submitted to competent authority.

Hand Holding:
a) Under hand holding operations the small units will be permitted to draw funds from their
cash credit account upto the amount equal to the amount of sale proceeds deposited in the
account. This will facilitate the smooth running of the business.
b) Once the implementation of rehabilitation package is finalized during the first six months
such hand holding operations are stiupulated/permitted.

Right of Recompense:
a) This is the Right available to the creditor to recover the amount of interest and instalment
sacrificed while accepting a rehabilitation proposal after the unit has been revived fully.
b) While agreeing to any scheme of rehabilitation whether under BIFR or otherwise, bank
should always insist on its Right of Recompense in respect of the reliefs/concessions granted by
it as part of the rehabilitation scheme. In other words, the bank would like to reserve its right to
recover the amount earlier sacrificed by it as apart of rehabilitation proposal from the unit after
it has effected a turn around.
c) All reliefs and concessions in a rehabilitation / restructuring proposal shall be subject to
right of recompense which shall be duly quantified and incorporated in all proposals for the
purpose of recovery upon the unit restoring health. Normally, right of recompense shall not be
exercised within the first 3 years of implementation of the restructuring/rehabilitation.
d) However, if the borrower prepays the Bank’s dues or pays dividend to share holders this
right may be exercised even within –3- years.
e) Zonal Managers, Regional Managers and Branch Managers have no power to waive right
of recompense. Any request for waiver by the borrower or any proposal for waiver of right of
recompense by operating agency /CDR Cell shall be referred to Corporate Centre.

ASSET RECOVERY MANAGEMENT BRANCHES:

Recoveries and reduction in Non-Performing Assets is vital for profitability of bank’s operations.
Many strategies have been devised and implemented towards this end. It was experienced that
the branches find it difficult to devote required amount of attention to the recoveries in the midst
of growing competition, canvassing new business, updating house keeping and improving
customer service and other operational problems. In addition, all branches do not have the
expertise required for follow up of suit matters, compromises and execution of decrees.
Therefore, to have a focused attention on recovery and reduction in non-performing assets, our
Board on 22.12.1995 authorised to open one Asset Recovery Management Branch at Mumbai.
Later on more ARMBs at Banglore, Ahmedabad, Chennai, New Delhi, Kolkatta, Hyderabad,
Allahabad, Chandigarh, Cuttack, Jaipur, Jabalpur, Pune and Lucknow were opened.

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Criteria for transferring NPA Accounts to ARMB:
Following NPA Accounts can be transferred to ARMBs:All NPA Accounts, including
Prudentially/ Technically Written Off Accounts, with balance outstanding Rs. 1.00 Cr. or more as
on the end of immediate preceding Quarter. However, the accounts which were transferred to
ARMBs pursuant to the Domestic Recovery Policy (Advances), 2016, shall continue at the
respective ARMBs. (BCC:BR:109:153 DT 27.03.2017)

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 (SARFAESI ACT-2002):

Consent of Secured Lenders: Either our Bank must be the sole banker to the borrower
i.e. 100% lending is done by us or in case of consortium lending consent of secured lenders
representing not less than 60% of the amount outstanding in value is obtained.
 Prefer suit filing where documents are getting time barred. To make clear that initiating
of SARFAESI action does not provide limitation to the security documents and suit filing is to be
done if documents are getting time barred and renewal of documents (obtaining LAD) is not
possible for particular account.

When SARFAESI Notice can be given–


To cover consortium a/cs wherever we are leader in consortium, notice must contain
dues and details of Secured Assets. For consortium advances the notice must contain dues of all
Banks and details of secured assets charged to Other Lenders.
 To cover Restructured Accounts. Restructuring, if any, is failed and / or account is
withdrawn from the purview of Corporate Debt Restructuring (CDR).
 To cover BIFR accounts where borrower is a Company and reference to BIFR is made by
them, notice under SARFAESI may be given followed with information to BIFR seeking abatement
of their reference.

Incorporate filing of caveat:


Bank has right to lodge caveat against the borrowers / guarantors after initiating action
under SARFAESI, where an application or an appeal is expected to be made or has been made by
the borrower / guarantor against the Bank‘s SARFAESI action under the provisions of SARFAESI
Act.
Validity period of caveat application filed with DRT / Civil Court / High Court is -90-days, as such
Bank has to proceed for taking possession of the secured assets keeping in mind the validity time
of the caveat.

Reply to representation of borrower / guarantor:


If Borrowers/guarantors raise any objection, the Bank shall reply the representation
within 15 days positively of receipt of such representation / objection (to be replied by
authorized officer) with the reason for non acceptance of the objection.

Adjudication of tenancy rights of lessee

In SARFAESI Before filing the prescribed affidavit with DM/CMM seeking permission to take
physical possession, Authorised Officer has to visit the property to ascertain whether it is

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tenanted or not. This is an important determining fact because if valid lease is created before the
mortgage in accordance with the requirements of Section 65A of the Transfer of Property Act and
that the lease has not been determined in accordance with the provisions of section 111 of
Transfer of Property Act DM/CMM cannot pass an order for delivering possession of the secured
asset to the Secured Creditor.

Banks and financial institution can accept immovable property to settle their claims:
Now the banks are empowered to accept any immovable property in realization of a claim from
a defaulted borrower, as the banks were not able to find appropriate buyers to buy for these
secured assets. If the sale of such asset is postponed due to lack of a bid at the reserve price, the
secured creditor (including banks) may bid for the asset at a subsequent sale and make
appropriate adjustments of the amount due to the Bank. This change enables the banks to secure
the asset(s) in part fulfillment or full and final fulfillment of the defaulted loan. Branches should
take prior permission from controlling offices before bidding for such immovable property.

Other mode of recovery / settlement of account under the provisions of SARFAESI Act
2002:
 Banks and financial institution can accept immovable property to settle their
claims:
Now the banks are empowered to accept any immovable property in realization of a claim from
a defaulted borrower, as the banks were not able to find appropriate buyers to buy for these
secured assets. If the sale of such asset is postponed due to lack of a bid at the reserve price, the
secured creditor (including banks) may bid for the asset at a subsequent sale and make
appropriate adjustments of the amount due to the Bank. This change enables the banks to secure
the asset(s) in part fulfillment or full and final fulfillment of the defaulted loan. Branches should
take prior permission from controlling offices before bidding for such immovable property.

 Conversion of debt into equity:

Earlier, the SARFAESI Act would not allow securitization or reconstruction companies to convert
the debt of the borrower company into equity. However, the Act allows for converting any part of
debt into equity shares of a borrower company, and such conversion shall always be deemed as
valid. The change ensures ARCs with more legal protection while restructuring loans and
supporting weak units.
Corporate Legal Department has come out with a Booklet – Handbook on SARFAESI, DRT & LOK
ADALAT process- vide circular no. BCC:BR:109:201 dated 15.04.2017, which is a useful Ready
Referencer to all Branches.
Invocation of personal guarantee in case of Borrower Company Default:

Govt. of India, Ministry of Financial Services, vide letter no.2/5/2016-Recovery advised that there
are a less number of cases where action has been taken for recovery against guarantors for
attachment of assets owned by guarantors and sell the same for recovery of defaulted loan.

a. While sanctioning the credit facilities to companies, it is standard practice to obtain personal
guarantees from promoter directors holding controlling shares in the company in addition to any
other individual or corporate guarantees. In the event of default in repayment or the loan by the
borrower company, all the guarantors are liable to repay the guaranteed loan with interest as the
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liability of the guarantor is co-extensive with the principal-debtor (borrower). The action can be
taken against guarantor even without suing the principal debtor for recovery and even if the
decreed amount is covered by mortgaged decree.
b. It is the prevailing practice to obtain full particulars of assets owned by the guarantors to assess
the net worth of the guarantors and such particulars are kept updated while review/ renewal of
credit facilities of the company is undertaken.
c. Therefore, it would be prudent to take steps against guarantors immediately when no sign of
revival is visible:
 If any guarantor has created security interest over any property/ assets owned by him,
the steps should be taken under section 13 of SARFAESI Act, 2002 for enforcement of security
against the guarantors.
 If the guarantor has given any pledge of shares held by him, the steps should be taken to
sell the pledged shares, under section 176 of the Indian Contract Act 1872.
 If the guarantor has not created any security interest over his property but owns property
and other assets in the application for recovery filed before the debt Recovery Tribunal, the bank
should move application before DRT for attachment and sale of such property assets under
section 19(12) of the RDDB & FI Act 1993.

 Usually, as part of the working capital limits sanctioned by the banks, book debts and
receivables of goods and services, are charged and hypothecated to the bank. Such book debts
therefore constitute secured assets which can be enforced under Section 13(4) (d) of SARFAESI
Act. The Branches should keep a watch on periodical statement of Book-debts and receivables
submitted by the borrower and the steps should be taken by the branches for attachment and
recovery of such book-debts under section 13(4) of the SARFAESI Act wherever necessary.
Appoint Recovery / Enforcement Agent:
Powers for appointment of Enforcement/Recovery Agents based on the amount involved are as
under:

Amount of NPA/TWO/PWO inclusive of Authority to appoint Recovery/

suit filed & decreed a/cs Enforcement Agent (irrespective of Asset
Classification and Age of NPA)
i. Upto Rs. 100 lacs Chief Manager
ii. Above Rs. 100 lacs upto Rs. 300 lacs Asstt. General Manager
iii. Above Rs. 300 lacs upto Rs. 900 lacs Dy. General Manager
iv. Over Rs. 900 lacs General Manager/ Zonal Head (G/S VII)

Modification in the guidelines given in the Recovery Policy for appointment of

Enforcement/ recovery Agency for the purpose of Repossession/ Seizing the vehicles in
Retail Vehicle Loan (BCC:BR:108:20 dated 12-01-2016):
Bank has approved the modification in the guidelines given in the Recovery Policy so as to cover
Repossession/ Seizing the vehicles in Retail Vehicle Loan even before the account become NPA
by appointment Enforcement/ recovery Agency. For detailed Guidelines refer to BCC:BR:108:20
dated 12-01-2016.

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SARFAESI Act – Sale of Secured Assets with symbolic possession (BCC: BR: 108:74 dated
15-02-2016:
It has been experienced that branches resort to symbolic possession which may in some cases
lead to compromises but in case of need such possession cannot be enforced as the AO cannot
handover the possession of the secured asset to the buyer, if any. Moreover, sale on the basis “As
is Where is and As is What is Basis” after taking symbolic possession may not fetch the true
value as buyer would like to discount for not having possession. As such branches should take
physical possession for realisation from the secured assets.
However, with the prior Authority of the Regional Manager, Authorised Officers may consider
sale with symbolic possession on selective basis. In such cases it should be ensured that the Sale
Notice contains clauses to the effect that sale/auction is proposed on the basis of “Symbolic
Possession”, on “As is Where is and As is What is Basis” and the buyer should ascertain the status
of the statutory dues and other encumbrances, if any.

Decision of the Supreme Court of India on SARFAESI proceedings:

SA/ Appeal under Section 17 of the SARFAESI Act is available to the borrower/Guarantor only
after losing the possession of the secured Assets – Standard Chartered Bank Vs. Nobel Kumar &
others (BCC:BR:107:413 dated 27-08-2015: Banks has advised to ROs/Branches may scan the
SA/Appeals pending u/s 17 of the SARFAESI Act and if any case is falling under above category,
then appropriate application may be filed in consultation with dealing advocate, at the earliest,
by quoting the captioned judgment given by the Hon’ble Supreme Court, with a prayer for
rejection/dismissal of the SA/Appeal for the above reason.

Constitutional validity of Section 2 (1) (o) of SARFAESI Act, 2002 – upheld by Hon’ble
Supreme Court (BCC:BR:107/85 dated 21/02/2015):
Section 2(1) (o) of the SARFAESI Act, which defines Non-Performing Asset (NPA) was amended
by Act 30 of 2004
It has been observed that several borrowers (of our Bank as well) have filed Writ Petitions in
various High Courts challenging the constitutionality of the amended section 2 (1) (o) of the
SARFAESI Act, 2002. In this regard, while the Hon’ble High Court of Gujarat has taken a stand that
the amended section 2 (1) (o) is unconstitutional, the Hon’ble High Court of Madras rejected the
challenge.
It is the constitutionality of the amended section 2 (1) (o) which was the subject matter of dispute
before the Hon’ble Surpeme Court of India in Re Keshavlal Khemchand & Sons v. Union of India &
Ors., wherein the Hon’ble Supreme Court upheld the constitutionality of the amended section 2
(1) (o).
All the writ petitions and the appeals are disposed of declaring that the amended definition of the
expression “NPA” under Section 2(1)(o) of the Act is constitutionally valid. In the result, all the
writ petitions either filed before this Court or filed before the Madras and Gujarat High Courts
and the appeals of the borrowers stand dismissed.
The appeals of the CREDITORS are allowed. Each of the writ petitioners/borrowers shall pay
costs to the respective CREDITORS calculated at 1% of the amount outstanding on the date of the
notice under Section 13(2) of the Act in each of the cases.”

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All the branches are advised to bring to the notice of our panel Advocates the judgment of the
Hon’ble Supreme Court upholding the validity of the amended section 2 (1) (o) of Securitization
and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Reduction of reserve Price – Sale of Secured Assets under SARFAESI Act (BCC: BR:108:78
dated 16-02-2016):
To expedite the recovery process under SARFAESI Act, 2002 and to maximize recovery by
describing the procedure for reduction of Reserve Price, Bank has authorized adoption of the
following procedure-
1. For movable secured assets the Authorized Officer to obtain the estimated value and fix
the Reserve Price. A Committee consisting of the Authorized Officer and Two officers of the
concerned Branch may fix the Reserve Price.
2. For immovable secured assets the authorized officer to obtain valuation from an
Approved Valuer and fix the Reserve price, based on the Realizable Value. A committee consisting
of authorized officer and two officers may fix the Reserve Price.
3. In respect of Secured Assets, value of which is more than Rs. 5 crore, 2 valuation report
from approved valuers to be obtained and average of 2 valuation to be taken into consideration
to arrive at Reserve Price. In case variation in 2 valuation is more than 25%, fresh valuation from
3rd Approved valuer to be obtained and Reserve Price to be fixed accordingly by the below
mentioned committee.
4. If bids are not received at Reserved Price fixed in 1st auction, then the committee headed
by the Regional Manager and consisting of the Deputy Regional Manager, official attached to
Regional Recovery Dept. and authorized officer may reduce the Reserve Price as per table here:
Number of Auctions I II III
Percentage of reduction vis-à-vis the last auction Reserve Price 10 20 25

5. However, the reserve price should not be below the distress value.In case of consortium
accounts where we are the leader/ sale is undertaken by our Bank the Authorized Officer to fix
the Reserve Price in consultation with the Consortium Members. This procedure to be followed
in the matter of reduction of Reserve Price also.

RECOVERIES RECEIVED IN NPA - LOAN ACCOUNTS:

For effecting recovery received in NPA LOAN accounts, Branch should use only the menu
―HNPATM at the time of recovery.
Further if recovery is received by way of clearing cheque, for direct credit to loan account, then
the proceeds should be first credited to either operative (SB/CA/CC/OD) or GL Intermediary
account and thereafter credited to respective loan account by using ―NPATM‖ menu.
For NPA CC/OD accounts etc., Branches should continue to use the existing options i.e. TM,
HCASHDEP, HXFER etc. The reversal of unrealized interest if any will be handled through monthly
batch job and Branches need not do any such reversal manually.
Appropriation of Recoveries in NPA / Written off accounts.

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In respect of non-suit filed accounts:

(a) Firstly, towards all costs, commission, charges and expenses paid or incurred and to be paid or
incurred by the Bank;

(b) Secondly, towards interest, additional interest, further interest, penal interest due to the Bank;
and

(c) Lastly, towards payment of the principal moneys.

In respect of suit filed accounts and decreed accounts:

a. As per the directives of the concerned Court.

b. In the absence of specific directives from the Court, as applicable to non-suit filed accounts.

In respect of decreed accounts, in the following order:

a) In the order of priority mentioned in the Judgment/Decree/Final Order of the Court/DRT.
b) Where there is no specific directions given by the Court/DRT: -
i. Towards legal charges/expenses awarded by the Court.
ii. Towards accrued/unapplied interest.
iii. Towards Principal Amount decreed.

Record of Unapplied Interest /charges:

Branch shall maintain a record of unapplied interest and other charges at contracted rate and
update the same at periodical intervals.

Insurance Charges, Assets Valuation charges, Stock Audit Charges, Security Charges etc.
In respect of NPA accounts, which are not operated, the above mentioned charges shall not be
debited to the accounts. The expenses incurred shall be debited to the Bank‘s Profit and Loss
account and record of the same shall be maintained.

Appropriation of Fixed Deposits of NPA Borrowers (free from margin) to the concerned
NPA loan accounts (BCC: BR: 108:68 dated 06-02-2016):
Bank has advised to all branches to appropriate fixed deposits of NPA borrowers (free from
margin) to the concerned NPA Loan accounts.

Recording follow up status for NPA and PNPA accounts in Finacle:

With a view to record follow up made by field staff for recovery in NPA and PNPA accounts our
data centre has provided the functionally to record follow up actions with menu id ‘RECVFLW’.

COMPROMISE PROPOSAL Total Contractual Dues:

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 Sum total of balances outstanding in the various accounts of the borrower including
outstanding in Term Loan, Cash Credit, BP, BD, Advance Bill A/c. Bills Past Due A/c, etc.
 Plus Amount of Interest reversed from interest suspense
 Plus Unapplied interest at contractual rate of interest from date of cessation of interest
to date of actual recovery proposed as per compromise proposal,
 Plus Amount of Legal Expenses and security expenses etc. already incurred and debited
to P/L a/c, if any.

Net Book Dues:

 Balance outstanding in the various accounts of the borrower
 Less amount outstanding in interest suspense account
 Minus Margin money (excluding margin against non-crystallized non-funded facilities)
etc. kept in current a/c, Time Deposit a/c or any G/L a/c and the recoveries kept separately in
any account or the retainable portion of claims received from DICGC, ECGC, CGFTI etc.
 Except Sums accepted by bank under „No Lien‟.

Securities:
 Value of Securities should not be 1 year old at the time of considering Compromise
Proposal.
 For property/ Assets having individual value of Rs. five crores & above, valuation should
be obtained from two approved Valuers independently.
 Fair Market Value only to be Considered not distress value for Compromise.
Net Present Value for Compromise Proposal: For calculation of NPV discount rate at 12% p.a.
should be applied.
Application of Interest Rate on Compromise Proposal: Minimum interest that may be
acceptable to the bank is preferred not below 12% p.a., from the date of cessation of interest till
the date of repayment.

Take-out Finance: Under this arrangement, the institution/the bank financing infrastructure
projects will have an arrangement with any financial institution for transferring to the latter the
outstanding in respect of such financing in their books on a predetermined basis. However, it will
not affect IRAC norms and will be applicable from the date of NPA irrespective of handing over or
taking over bank‟s balance sheet.

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 .HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE
MANAGEMENT

307
Bank of Baroda has the tradition of continuous enrichment of its human assets so that they
deliver value to the business.
In the ongoing Business Transformation Programme, our people play a vital role and are one of
the key business enablers. Under its plan of organizational transformation through people
processes and systems, the Bank has launched various innovative employee centric initiatives
and has also undertaken revamp of key systems and practices.
HR Mission:

HR Objectives :
To initiate & institutionalize globally competitive HR practices in the Bank in our pursuit
to become a Bank of international standards and to become an employer of preferred
choice:
To put in place relevant HRD strategies and use modern methodologies to undertake
organizational renewal; identify and nurture talent, bring about marked changes in the
mindset of employees at all levels so as to enhance HR Quality;
To create a performance-driven culture and an exciting workplace for the employees
To create a pool of entrepreneurial managers and business leaders for future;
To inculcate a strong and effective sales and service culture across levels in the
organization in order to generate strong stakeholder affiliation;
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 To create a learning organization for employees’ intellectual growth and creativity; and
to re-skill the workforce to operate in digitally enabled modern core banking
environment.

HR Business Model:

The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission and
Philosophy and is focused towards attainment of long-term organizational goals.
A very strong Organizational Leadership at different levels forms the key link in the Model. These
are:
 Strategic Leadership - Corporate level
 Business Leadership - Zonal & Regional level
 Operational Leadership - Business unit level i.e. Branch
The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-System &
Competency Based HRD Sub-System shape the very crucial Performance Environment within the
Bank which facilitates development of enabling capabilities of people.
Through proper developmental inputs, Positive Attitude & Right Mindset is created among
people.
Through proper Communication Medium and an Organizational Culture of sharing, openness,
collaboration & confrontation, autonomy etc., people in the organization are facilitated to give
their best output (performance).
The Model is adequately supported by a suitable Learning Platform, which imparts proper
Knowledge and enhances Learning among people (functional, behavioral etc) so that their
Competence increases and their potential could be properly leveraged for greater Individual and
Organizational Effectiveness.
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These create proper Employee Motivation, which ultimately facilitates Goal Achievement.

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

Talent identification & grooming programmes:

Various programmes are being run by the Bank for grooming of officers in specialized areas of
Credit, Forex, Treasury / Dealing, Wealth Management, for grooming of Branch heads, etc.

HRNes (Human Resource Network for Employee Services):

To take full advantage of technology for enhancing operational efficiency in HR Processes, Bank
has introduced a comprehensive web-enabled Human Resources Management System called
‘HRnes’ (Human Resource Network for Employee Services).

Objectives:
 To facilitate bringing technology in HR and thereby brining benefits of technology such as
reduction in cost and time by eliminating routine tasks and improving operational efficiency of
HR Processes by creating central database and online applications.
 Ensure complete control, Mgmt & monitoring of HR data on near real time basis;
 Providing employee Self Service/manager Self Service/Facility for online
communications
 Bring about transparency in HR operations across the organization;
 Cost effective HR administration;
 To plug the revenue leakage;
 Harnessing the power of workflow to speed up HR processes
"HRNes" covers the entire gamut of human resources management function in the Bank currently
being performed and also includes many new sub-functions. It comprises of four broad modules
encompassing different functions:
 Oracle Core HR Module, covering all current HR processes in the Bank;
 Fluous Payroll Module, - centralized payroll, payments of various benefits, perks, welfare
schemes, terminal benefits, etc.;
 Employee Self-Service Module.
 Oracle Learning Management Module which includes training administration & e-
learning;
Various E-Learning modules are gradually being put on the system for employees to avail of and
undergo these courses.

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APAR (Annual Performance Appraisal Review):
In terms of Ministry of Finance, Govt. of India advice, Bank has adopted the revised Annual
Performance Appraisal Report (APAR) for different categories of officers with a view to bring in
uniformity in the performance assessment of officers at various levels in all PSBs, especially with
regard to evaluation of different parameters and marking systems.
Following Annual Performance Appraisal Report (APAR) formats have now been mandated for
the performance assessment of the officers:
1. APAR for officers in S-I to S-VI (Budgetary)
2. APAR for officers in S-I to S-VI (Non-budgetary)
3. APAR for officers in S-VII (General Managers)

APAR envisage a -3-tier system of Review:

 Reporting authority (minimum one Scale higher than the Appraisee)
 Reviewing Authority (minimum one Scale higher than the Reporting Authority)
 Accepting Authority (one grade above the reviewing Authority)

PASAS (Performance Appraisal System for Award Staff):

`Performance Evaluation' and `Performance Recognition' have been the focus of various HR
initiatives taken by the Bank. Keeping in view its importance and criticality to various employee
development initiatives, Bank devised a Performance Appraisal System for Award Staff (PASAS).
It is 3 tiered performance appraisal system:
1. Self Appraisal by the individual employee (This is optional)
2. First review by Reviewing Authority (RA)
3. Second and Final Review by Final Reviewing Authority (FRA)
The Broad Objectives of the Performance appraisal system are:
To promote a performance oriented culture
To identify good performers and talent amongst employees
To improve upon strengths
To identify employees for proper placements
To match job roles of individuals during job rotation exercise for effective utilization of
aptitude and potential.
To identify Training needs
Uses and Advantages of Performance Appraisal System for Award Staff:
To generate a performance oriented culture.
To identify factors that hinders performance and reduces them as far as possible.
To identify training and developmental needs.
To identify exceptional talents for special assignments.
To identify high performers and groom them for higher order roles.
To facilitate comprehensive data base on information about award staff.
To provide feedback to the employee to help achieve better performance in future.

The Performance Appraisal System for Award Staff shall cover:

 All clerical staff (including those having combined designations and also all those drawing
any Special Pay)
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 All full-time subordinate staff (including staff having combined designations or drawing
any Special Pay)

The performance appraisal shall be 3-tiered:

 Self Appraisal by the individual employee (This is optional)
 First review by Reviewing Authority (RA)
 Second and Final Review by Final Reviewing Authority (FRA)

Project Sparsh- Human Touch for Business Excellence:

Project SPARSH a focused HR project, has been undertaken by Bank engaging services of ―The
Boston Consulting Group (BCG) to revamp our HR processes, structures and policies and to create
an integrated HR framework.
Under Project SPARSH, bank has covered:
 Manpower
 Training and development
 Incentives to staff
 Talent management and
 Performance management.

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

 Inauguration of HR shared services pilot back office at Baroda (HRCPC)
 Bank’s career portal
 On-boarding scheme for newly recruited officers
 Employee’s survey
 Baroda Academy

Project Sparsh Plus: (Launch of New Performance Management System –BARODA

GEMS)

Our MD & CEO Shri P S Jayakumar on 06.05.2017 launched an HR Transformation Project

christened as Project Sparsh Plus for enhancing the Performance Management and Talent
Effectiveness in the Bank. As a result of which a new PMS system is launched known as BARODA
GEMS- Baroda Growth & Empower Management System. The objectives of introducing Baroda
Gems are as under:
1- Laying down a more Scientific & Robust Target Setting Process.
2- Ensuring greater clarity of roles & expectations
3- Better measurement of actual performance based on scientific & data backed processes
4- Empowering the officers through regular developmental feedback
5- Strengthening our rewards & recognition programmes
6- Ensuring greater transparency & objectivity in the entire process

The four key pillars of the new Baroda Gems are as under:

1-Results Orientation: In order to ensure job clarity to the officers,New KRA’s & weightages have
been defined for all the roles in branches, operating units , administrative offices etc .These KRA
will be strongly aligned with the actual tasks performed by the officer and key expectations from
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the role . In the new Gems a majority of these roles will be categorized as budegtary and
measurable so that score can be calculated by the system automatically, basis the percent
achievement on the given targets. Out of total 100 marks 70 marks shall be system driven and
remaining marks shall be awarded by the Reporting Authority depending upon the efforts put in
by the officer, team contribution, other attributes etc. Hence this will ensure that the system
becomes more objective and officers can regulary track & monitor their performance.

2- Objectivity & Rationality: Robust & Scientific targets are the foundation of a measurable &
objective PMS. Form FY 2017-18 the targets for branches have been set based on their last three
year historical performance as well as market potential in the area where branches are situated.

3-Empowerment: The objective of the Baroda Gems is not just to measure the performance but
also to empower you to improve it. The GEMS toll shall enable you to track yous performance
against targets every month so that you are aware of the areas requiring your maximum focus.

4-Recognition of high performance: Baroda Gems will provide a platform to not just recognize
stellar performance at the end of the year but also provide instant recognition to officers who
have demonstrated extraordinary performance while performing their duties.

Baroda Sujhav (barodasujhav@bankofbaroda.com:

Idea channels for eliciting new ideas from employees with structured rewards provisions for the
best ideas.
In the context of technology driven business, Staff Suggestion Scheme has been titled as Baroda
Sujhav. The Scheme is applicable to all employees. The objective of the Scheme is to encourage
the ideation process amongst staff members to offer innovative suggestions which are in tune
with
Bank‘s priorities and concerns, Customer Service and its effectiveness.
Results are declared on quarterly basis with incentives to winning participants. 1st Prize
Rs. 10000/-, 2nd prize Rs. 5000/- and 3rd prize Rs. 3000/-

HR-helpline: Our Bank recognized the need of many of our employees for quick resolution or
replies to their issues /queries and decided to open a central HR helpline for all employees which
will take up any grievances for resolution /issues requiring clarifications /matters requiring
support from Bank’s side expeditiously and inform the Bank’s response immediately. This HR
Helpline would be operative through the email id and thereby open to all employeesof the Bank
on continuos basis:

HR.helpline@bankofbaroda.com

An employee can intitiate his grievance by sending email to this mail id with his name, ec number
, designation,telephone number,place of posting, Name of the Region and Zone . (BCC: BR:108:507
DT 27.10.2016)

Paramarsh:
Our bank’s vision envisages providing not only a healthy work-life but also a satisfying personal
and social life to our employees. With this objective in mind, Paramarsh Centre at BCC have
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started personal counseling for employees for providing psychological assistance and guidance
to overcome their stress, complexities and conflicts in order to lead a better life.
It is a progressive, far sighted and proactive step taken by bank to ensure that our employees can
lead happy and satisfied work life through personal counseling for psychological care from
trained and experienced clinical psychologist.

Streamlined Induction schedule for all new joinees:

Bank has put in place a well-defined and properly structured induction programme, phase-wise
for different batches of directly recruited officers, campus recruitees and newly recruited clerks,
which is imparted through a mix of classroom and on-the-job training.

Role-change programmes and executive development programmes:

Executive Development programmes are being regularly conducted for newly promoted senior
and top management people in conjunction with leading Business schools like ISB, Hyderabad,
MDl, Gurgaon, National Institute of Bank Management, Pune, etc.
Role change programmes are being conducted for newly promoted employees at Bank's internal
training establishments which give them inputs on behavioral issues, soft skills, team work,
leadership, etc. besides ways on how to cope with the challenges of the new role better.

Grooming and etiquettes programmes:

Grooming and etiquettes programmes are being conducted for front-line employees and also for
employees selected for overseas posting in order to improve their service levels and qualitative
interaction with customers and various stakeholders better.
SEED (Self Efficiency and Effectiveness Development) programme being run for frontline staff of
the Bank in order to improve their service skills and servicing efficiency.

Employees Group Health Insurance:

Bank has two separate Employees Group Health Insurance policies with United India Insurance
Company Ltd. for existing as well as for retired Bank of Baroda employees:
 Insurance policy for existing employees
 Insurance policy for retired employees

Baroda Manipal School of Banking:

Bank of Baroda has entered into an MOU with Manipal Education and opened “Baroda Manipal
School of Banking”. It conducts a dedicated one year diploma program for training students in
various areas of Banking and Finance.
On successful completion of the course, the students are awarded a post graduate diploma in
Banking and Finance from Manipal University and are absorbed in the Bank as Probationary
Officers, fully trained and ready to deliver from the first day itself.
The thrust of the training is to impart functional as well as specialized knowledge on Banking and
related subjects. Participants are put through on- campus curriculum spread over 9 months
(divided into 3 semesters of 3 months each). Training at the school is supplemented with practical
training at branches of Bank of Baroda through a focused 3 - month’s internship. The campus is
at Bangalore.
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Speed: With a view to foster professional enhancement and employee development in the Bank,
a comprehensive, broad-based and a development oriented scheme christened as "SPEED" was
launched on 14.05.2015. Under the ambit of this scheme, our Bank endeavours to encourage our
employees to enhance their professional acumen by undertaking various
educational/professional courses (as specified in the scheme) along with the beneflts of
reimbursement of fees and payment of incentive on successful completion of the course
undetaken.The objective is to make the scherne more conrprehensive by updating it'with the
latest and relevant courses from time to time (BCC:BR:107:213 DT 14.05.2015)

VOICE OF BARODIANS:
“Employee Engagement Survey-2016” was launched on 22.02.2016.
Message of MD & CEO on the subject:
“As we march forward to realize our aspirations and dreams to take our Bank to further heights,
it is imperative that our team is truly energized and fully engaged. Each member of the Barodian
family makes a difference and plays a unique role in our quest to achieve business excellence and
customer delight.
Towards this endeavor, the Bank seeks to understand your perspective, thoughts, perceptions
and opinions on a wide range of matters that impact you such as Job Role, Rewards, Recognition,
Working Conditions, Performance Appraisal, etc., which will help us, define the HR
transformation journey for the Bank. The Bank has partnered with Aon Hewitt, a global leader in
human resource consulting solutions, for conducting Employee Engagement Survey 2016.”
The survey was through online link in HRnes-HRMS under the Employee Self Service.
The survey was for the purpose of identity authentication. Response to the questionnaire was
directly sent to Aon Hewitt with full anonymity and it was assured that responses would remain
completely confidential to feel free to air individual’s thoughts. The feedback would be collated
by Aon Hewitt and will be shared with the Bank’s leadership team on a consolidated basis.
It was reiterated that the views and feedback are very important as bank strongly believes that
the ideas play a key role in helping strengthening our organization. And also that the information
obtained from this study will be used to shape the organization’s HR policies and programs going
forward.

E-learning course - “Code of Conduct for Officers”, Whistle blower policy and counterfeit
notes:
Baroda Net-Academy launched a course on ‘Code of Conduct for Officers’. The course aimed to
familiarize all officers with various guidelines of code of conduct policy for officers of our Bank.
Salient features of the course:
 Duration of the course - 45 minutes approx
 The course might be stopped at any time in between and learner could start it again from
that point
 It got quizzes during the course and self assessment of 10 MCQs at the end
 Learner has to score 100% in the self assessment to complete the course.
 Facility of printing a Certificate on completion of the course.
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New Initiative:
1. Project Navodaya:
Bank has embarked on various initiatives and the activities envisaqed are being rolled out under
Project Navoday in a phased manner.In order to facilitate implementation of these initiatives and
build enthusiasm amongst staff and create awareness about the new products and processes, it
is necessary that a game-changer alias a Change Leader be identified across all the Regions and
Zones of the Bank

2. Baroda Anubhuti:
The initiative taken by our MD & CEO for enhancing employees energy, passion and engagement
in the quest to achieve excellence and customer delight, the programme viz. “Baroda Anubhuti”
is launched. Under the scheme, various employee engagement initiatives are rolled out with an
aim to improve employee experience in the Bank and foster the spirit of team bonding so as to
create a happy workplace.

There are -5- basic concepts of Anubhuti Programme.:

1. Employee of the month
2. Spot Recognition
3. Zero Hour
4. Compulsary Local Community
5. Anubhutii Workshop

Life Cycle Concept based training:

Introduction
Our Bank has been pioneer in innovative methods in learning & development. A good number of
initiatives have been launched by the Bank to revamp its products and process to maintain
number one position of the Bank in industry. Training system being the key to make this
transformation journey of the Bank a great success need to be many steps ahead for bringing
innovation in its products and methodology.

Our Managing Director and CEO has keen interest for making training more effective in the Bank
and he has suggested to introduce ‘Life Cycle’ in training that will be a differentiator for our Bank
in industry. We propose to implement the concept in our training programs from 01 st July 2016
on pilot basis. We though plan to have a meeting of all Learning Heads before its launching but
the concept is briefly prescribed in this communication for clear understanding by each faculty
members.

What is Life Cycle in Training?

Bank has system in place to impart training to employees nominated by controlling offices as per
defined target groups for various training programs. In earlier system, focus was more on

316
quantity rather quality and relevance of training to end users. This led to poor and improper
nomination at pre-training phase and under utilization of the trained staff in post training stage.

The need was thus felt to introduce the life cycle concept which, identify the functional,
mandatory and behavioral training needs for an executive and / or an officer in the Bank from
scale I to Scale VII. This concept maps the training requirement based on the job profile of an
officer in different grade / scale and position in branches. All possible positions have been
considered in a life cycle of an officer assuming his cycle based on fast track promotion in the
Bank.

Why Life Cycle requires in training

Training being an investment by any organization to enhance employees productivity efficiency,
it needs to be aligned with requirement of job profile and position of the employee which not only
ensures higher return on investment (ROI) in training but also mitigate operations risks arising
from failure of processes and peoples.

Of late, it was observed that employees were exposed to specialized and leading positions like
credit, forex, branch head etc. without equipping them required minimum skills for the position
that led to frauds and systemic failure. Life cycle approach is considered to be relevant to address
these problems and thus minimum required training relating to functional, behavioral and
mandatory are forecasted to perform in a particular job role or positions from junior management
to top executive positions in the Bank.

An HR helpline for employees – HR.helpline@bankofbaroda.com

Confirmation of officers in Bank’s Service:

317
Now the Bank has decided to adopt -4- step process for confirmation of an officer’s services in
Bank which, is as under:

Creation of Centre of Excellenco for Persons with Disabilities - Memorandum of

Understandinq with SBI Foundation:
Our Bank has signed a Memorandum of Undersianding wiih SBI Foundation {not for-profit
subsidiary of State Bank of Indla) for partnering with our Bank for creation of an enabling
ecosystem for empowermnent of our employees wilh disabilities.
SBI Foundation, began an 'inclusion of persons with disabillties program' io ensure the lnclusion
and empowerment of the employees with disabilities of State Bank of India, the objecUve of whlch
was to find suitable jobs and job roles for them and provide ihem wlth an enabling environrnent
through training sensitization of peers and by creating awareness at senior management level.
This intervention is now an ongoing process and has become an integral part of their training
system.

With an objective of helping other organizaiions to create a similar enabling environment for their
PWD employees, SBI Foundation has extended their services for creat ng a "Centre of Excellence
fof PWDS".The Centre of Excellence managed by SBI Foundation aims to make a difference in the
workplace for persons with disabiliiy by bringing new insights to problems, using innovative,
engaging learning methods and workplace solutions while enabllng oihers to become inclusive
and adaptive leaders. (BCC: BR :109:533 DT 16.10.2017)

The oblectives of the engagement are as under:

318
1-Identifying suitable job roles for persons with disability where they can contribute effeciively
2-. Providing an enabling work environment to rediscover their potential and thrive
3-Creating equal opportunities and level playing field;
4-Facilitate employees with physical challenges to demonslrate better performance;
5-Including the employees in the team to prornote cohesive work culiure.

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Tie-up arrangements with School chains for facilitating admissions for children of our
Bank employees on transfer etc: Our Bank has entered into tie up arrangement with Narayana
Group of Educational Institutions which is one of the largest and fastest expanding educational
conglomerates in India. Salient features of this tie up arrangements are:

10% concession in tution feees and extending the same for all consecutive agreement

years.

A flat 10% off or discount on the Admission feesif applicable on transfer to a new school

Facilitate inter branch transfers through out the year as per Board norms of the respective
states.

Where the tution fees have already been paid in the previous schooland in the event of
transfer during mid sessionthe prorate fee will only be chargedand theremaining
transferred to new Branch school i.e. the tution fees will be charged on prorata basis.

In case of a transfer of child of from one of its schools at one state /centre to any other
state /centre the parent has to pay the diffirence of the fee . If the fee structure at the
school proposed to be joined on transfer is higher than the feel already paid, the
institution .Like wise if the fee paid already is more than the fee charged at the transferee
school the institution will refund the excess fee to the parent.

The wards of the Bank employees will be admitted in Narayana Schools on their
transfersfrom once centre to another through out the yearas per availability of seats and
as per the norms of the concered state Boards. (BCC:BR:109:488 DT 14.09.2017)

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RETAIL LOAN PRODUCTS

321
 13. RETAIL LOAN PRODUCTS

BARODA HOME LOAN

Products covered under Baroda Home Loan

 3 additional variants under Baroda Home Loan:

 Baroda Home Loan Advantage,
 Baroda CRE Home Loan,
 Baroda Pre-Approved Home Loan
 Sub Products:
 Baroda Home Improvement Loan,
 Baroda Additional Assured Advance (AAA),
 As per Government Guideline:
 Golden Jubilee Rural Housing Finance,
 Pradhan Mantri Awas Yojana (PMAY)

 Eligibility:
 Individual Singly/ Jointly
(Min. Period of Employment/Business/Profession Salaried-1 Year, Non-Salaried-2 Year)
(Break in service, if any, allowed up to a maximum period of 3 months)
 NRI/PIO/OCI (Should be having job contract / work permit /employed / self-employed or
having a business unit and staying abroad at for the minimum past -2- years) with minimum
GAI of Rs.5 Lac.
 HUFs are not eligible.

 Co-Applicant for Higher Eligibility: Only close relative allowed except if he/she is joint owner of
property but then no close relative allowed who is not a joint owner of the property for considering
higher eligibility.
Close Relative: Spouse, Parents, Children & their Spouse, Brother/Sister & Their Spouse, Brother &
Sister of Spouse,
Steps allowed: Mother, Children, Brother/Sister, and Brother/Sister of Spouse
In case, if the income of the owner/co-owner/s of property, is not considered for eligibility, upper
age criteria/ employment criteria will not be applicable for these applicant/co-applicant/s.

 Age:
Minimum -21 Years,
Maximum: Age+ Repayment Period of Salaried Person - Retirement Age & of Non-Salaried 65 years

Maximum age can be considered up to 70 years subject to availability of sufficient regular and
continuous source of income for servicing the loan. Son/ Daughter/ Spouse who is a legal heir and
preferably below 50 years of age, with sufficient income for servicing the loan repayment joins as
Co-Applicant/Guarantor or pledges FDRs / NSCs / Govt. Security etc. of adequate value

 Purpose:
 Construction / Purchase of Residential House/ Flat Not More Than 25-Year-old.

House older than 20 years and less than 25 Years- branch to ascertain structural soundness
of the building by obtaining an approved engineer’s certificate, certifying the structural

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 soundness as well as residual life of the building should be at least -5- years more than the
repayment period.

 Purchase of Residential Plot of land AND Construction of House (Construction should be

completed within 3 Years or allowed by Development Authority, whichever is earlier,
without attracting to Commercial ROI.)

 Loan exclusively for Purchase of Residential Plot of Land only (Allotted by Development
Authority)

 Extension of the existing House/ Additional Construction

 Reimbursement of Expenses (expenses already incurred for Houses/ Flats constructed/

purchased within 24 months from own sources) who secure HL-1, HL-2 or HL-3 risk ratings
with 25% margin

 Supplementary Finance who secure HL-1, HL-2 risk ratings (pari-passu or second charge)

 Home Loan for 2nd House/ Flat

 Takeover of Home Loans from other Banks/ HFCs/NBFCs/ FIs etc. (additional Fund may be
considered, foreclosure & stamp duty for creation of EM may be considered)

 Home Loan for 3rd dwelling unit onwards (Baroda CRE Home Loan) Baroda CRE Home Loans
are to be sanctioned by SMSs/RO only. Only one Home Loan (by our Bank) under CRE
category should be sanctioned by the competent authority. More than one CRE Home Loan
will be considered by COCC (ED)

 Inclusion of cost of Roof Top Solar Photo Voltaic (Solar PV system as a part of total cost of
project for Home Loans (Ministry of New and Renewable Energy)

When an application of home loan for purchasing Home/Flat and for the expenses of similar nature
towards construction/renovation/ enhancement and improvements (like Fall-sealing/ POP/ room
separations/ fixed furniture, etc.) is received simultaneously, thesame can be considered in one single
Home Loan. Additional expenses as mentioned above may be added to the value of house to arrive the
total cost of house while complying with the LTV norms.

 Limit: based on the area where property is situated (as per 2011 Census)
 Mumbai: Rs. 10 Crores
 Other Metros: Rs. 5 Crores (45 Cities)
 Urban Areas: Rs. 3 Crores
 Semi-urban and Rural: Rs. 1 Crore

 Income Multiplier:
 Salaried: (Avg. Last 3 Months Salary)
 GMI < Rs.50T: 48 times of GMI,
 GMI ≥ Rs.50T < 1 Lac: 54 times of GMI,
 GMI ≥ Rs.1Lac: 60 Times of GMI

 Others/NRI: (Average Last 2 Years)

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  GAI < Rs.2 Lac :4 times of GAI
 GAI ≥ Rs.2 Lac : 6 Times of GAI

Depreciation: Depreciation can be considered for computing income, net income will be average
depreciation during the last -3- years or the depreciation during the current year, whichever is
lower. Latest ABS should not be older than -9- months.

 FOIR- Fixed Obligation to Income Ratio: FOIR = {(All Deductions + Other EMIs + EMI for proposed
Loan) X 100}/ Gross Monthly Income (appraised)

 Salaried:
 GMI < Rs.20T :50%,
 GMI ≥ Rs.20T < 50 T : 60%,
 GMI ≥ Rs.50T < Rs.2 Lac : 65%,
 GMI ≥ Rs.2 Lac < Rs.5Lac : 70%,
 GMI ≥ Rs.5 Lac :75%

 Others/NRI:
 GAI ≤ Rs.6 Lac : 70%,
 GAI > Rs.6 Lac :80%

 Margin (LTV Ratio):

 Loan ≤ Rs.30 Lac : 10 % (90%),

 Loan > Rs.30 ≤ Rs.75Lac : 20 % (80%),
 Loan > Rs.75 Lac : 25 % (75%),
 Reimbursement : 25%

If cost of the House does not exceed Rs.10 Lacs, may be added Stamp duty, Registration and other
documentation charges to the cost of the House for the purpose of calculating margin & LTV Ratio.

 Repayment Period:
Maximum- 30 Years including Maximum Moratorium 36 Months
Moratorium: 18 months’ moratorium under construction, up to 7th floor, thereafter -6- months’
additional moratorium per floor subject to maximum of -36- months.

 Prefixed specific dates - 08th or 16th or 25th as EMI dates

 In case of Farmers Half Yearly Installment

 Credit Rating:
Minimum Score: 96/168
Investment Grades: HL-8, Reimbursement-HL3, Supplementary Finance- HL-2

 Cutoff CIBIL score is at 725

(If more than one applicants are there, AVERAGE of CIBIL scores, CIBIL score of applicant/s having
(-1) or (0) to be excluded for average calculation but individual CIBIL score of all the applicants
should be minimum 675)
Deviation:

Average Score (Cutoff And /or Deviation

Score) ** Individual/s score of any of applicant/s powers
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 675to724 Lessthan675 RMCC
Lessthan675 Lessthan675 ZOCC
Average Score (Cut-off Score)725andabove; BUT RMCC
Individual/s score of any of applicant/s is less than 675
Average Score (Cut-off Score)725andabove AND No Deviation
Individual score of allapplicantsare675&above. required
**Excluding applicants having score of (-1)or 0

 Cases where credit card account status write-off/ settlement involving amount up to Rs.
25000/- (consolidated) No deviation is required
{Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM (BCC)}

 Write-off /settlement above Rs.5000 ;

 No Due certificate from the Bank/ FIs to be obtained in respect of credit card account,
 Satisfactory status with the concerned Bank / FIs, preferably within stipulated period
and
 There should not be any other adverse remarks.

BARODA HOME LOAN ADVANTAGE

 Feature:
 Home Loan sanctioned will be linked with Saving Bank Account
 Rate of interest applicable on this SB account will be Zero
 Any credit available in the linked SB a/c at the end of the day will be counted for credit in
linked Home Loan account. Consequently, the borrower will get the benefit of interest
amount reduction in the Home Loan account to the extent of daily outstanding credit
balance in the Savings Bank account.

 Rate of Interest:
 up to Rs.75 Lacs: Same as regular Home Loan
 Above Rs.75 Lacs: 0.25% over the ROI as applicable to regular Home Loan.

 Scheme Code:
 Residents: LA183/SB152
 Non-Residents: LA184/NRE-SB252, NRO-SB352

BARODA CRE HOME LOAN

 CRE exposure to the extent secured by Commercial Real Estate attracts risk weight of 100%.
 Risk weight for regular Home Loan is – Up to Rs.75 Lacs- 50%; above Rs.75 Lacs-75%.
 Provision on standard CRE Home Loans to be made at 1% instead of 0.40% for regular Home Loans

 ROI: 0.25% over applicable rate on normal Home Loans

 Scheme Code:
o Resident - LA117
o NRE- LA187
o Advantage–Resident -LA188
o Advantage – NRI- LA189

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 BARODA PRE-APPROVED HOME LOAN

 In-principle approval shall be valid for 4 months from the date of issue
 Age: 25-50 Years
 Limit: Maximum- Rs. 1 Cr.
 Repayment Age: 60 Years
 Eligibility/Repayment Calculation & Income Document waived up Rs.20 Lac

BARODA HOME IMPROVEMENT LOAN

 Target Group: same as Home Loan scheme

 Purpose:
 For repairs / renovation / improvement of existing House/ Flat.
 Purchase of furniture/ fixtures/ furnishing/ other gadgets such as fans, geysers, air
conditioners, water filters, air purifiers, heaters, desert coolers, etc.
 Limit: Rs. 50 Lac
 Margin- 25 % of Project Cost
 Repayment Period- 15 Years including moratorium period maximum up to 6 Months or 1 month
after completion of repair
 FOIR, Income Multiplier, Age, ROI, Charges: Same as regular Home Loan

BARODA ADDITIONAL ASSURED ADVANCE (AAA)

 Eligibility:
All Existing Home Loan (including Home Improvement Loan) Borrowers including NRIs /PIOs, Staff
and Ex-staff Members (availed Home Loan under Public scheme as well as Staff Housing Loans)
whose conduct of the account is satisfactory and the account is classified Standard.
 AAA facility is granted maximum of 5 times during the entire tenure of Home Loan.

 Limit:
o Rs. 1 Lac - Rs. 2 Cr or
o 75% of Residual Realizable Value of Residential property after deducting 150% of
outstanding amount of Existing Home Loan, whichever is lower (i.e. Margin 25 %)

 Repayment Period: Should not be more than the remaining period of Home Loan subject to
reapying capacity and request of the borrower.

 If Home Loan a/c is foreclosed, then the repayment period of AAA loan account is to be rescheduled
in such a way that the loan (AAA) is liquidated maximum within a period not exceeding 4 years.

 Charge: 0.25% Min-Rs.5000, Maximum-Rs.12500

 FOIR: Same as Regular Home Loan

GOLDEN JUBILEE RURAL HOUSING FINANCE SCHEME (GJRHF)

 Purpose:
 For construction of new dwelling units, acquisition of dwelling units not older than 20 years
 Repair/renovation/extension of existing house,
 Takeover of loan already availed from any Bank/HFC and
 Construction of dwelling units cum farm house on agriculture land for the purpose of
residence and storage of farm equipment/implements and farm produces.

 Eligibility: Any individual residing in rural area

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 Maximum Limit: Rs.100.00 Lac and Rs.1.00 Lac for repair/renovation

 Margin: 10%

 Security: EM of house property or any other security like LIC policies/NSCs/KVPs/FDR or

Government Guarantee

 Repayment: as per Regular Home Loan, EMIs or should be fixed in such a way that it synchronizes
with income patters of the borrower i.e., crop cycle

CREDIT RISK GUARANTEE FUND SCHEME FOR LOW INCOME HOUSING (CRGFS)

 The Ministry of Housing and Urban Poverty Alleviation established a Credit Risk Guarantee Fund
Trust which guarantees in respect of low-income housing loans

 Credit Risk guarantee to the lending institutions against their housing loans up to Rs.5.00 lakh
granted to the borrowers in the Economically Weaker Section (EWS)/ Lower Income Group (LIG)
Categories in urban area without requiring any collateral security and/or third-party guarantee.
 EWS means households with household income up to Rs.1,00,000/- per annum
 LIG: household income between Rs.1,00,001/- to Rs.2,00,000/- per annum
 Low Income Housing: 430 Sq. ft. (40 Sq.mt.) carpet area.

 Guarantee Cover
 90% of the amount in default of loan amount up to Rs. 2.00 Lakh
 85% of the amount in default for housing loan above Rs.2.00 Lakh and up to Rs. 5.00 Lakh

 One-time guarantee fee at the rate of 1.00%

 Zero risk weight for the guaranteed portion, no provision need be made towards the
guarantee portion
 Scheme Code: LA 160

BARODA HOME LOAN SURAKSHA PERSONAL LOAN

 Personal Loan scheme for Home Loan borrowers for funding Life insurance premium of Group
Credit Life Insurance.

 Repayment Period:
 New borrowers: Maximum Period up to ½ of the repayment period under Home Loan
sanctioned.
 Existing Home Loan borrowers: Residual period of Home Loan sanctioned or ½ of the original
repayment period under Home Loan sanctioned, whichever is lower

 Scheme Code: Resident:LA185& Non-Resident: LA186

PRADHAN MANTRI AWAS YOJANA (PMAY)

 Housing loans which may be availed of by beneficiaries belonging to EWS / LIG categories.
 EWS: Annual household income up to Rs.3 Lacs and house sizes up to 30 sq.m.
 LIG: Annual household income between Rs. 3 to 6 lacs and house sizes up to 60 sq.m
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  MIG-I: Annual household income between Rs. 6 to 12 lacs and house sizes up to 90 sq.m
 MIG-II: Annual household income between Rs. 12 to 18 lacs and house sizes up to 110
sq.m.

 Interest subsidy
 EWS & LIG - 6.50% of loan limit of Rs.6 Lacs for a maximum period of 15 Years and
 MIG-I- 4% on principal subject to maximum Rs. 9 Lac for 20 Year/Loan Period whichever
less
 MIG-II-3% on principal subject to max Rs. 12 Lac for 20 Year/Loan Period whichever less

 NPV of subsidy will be calculated @ 9%

 Scheme Code: EWS & LIG- LA191 and MIG- LA213

Other Details:

 Priority Sector Classification:

 Metro: Home Loans up to Rs.28 Lac cost of the dwelling unit maximum Rs.35 Lac , Repair: Rs.5
Lac
 Other: Home Loans up to Rs.20 Lac cost of the dwelling unit maximum Rs. 25 Lac, Repair: Rs.2
Lac
 Loan for Housing projects, for per dwelling unit cost 10 Lac for EWS & LIG (income limit of Rs.2
Lac per annum) or
 Loan to Housing Finance Companies (HFCs) for on-lending for purpose of
purchase/construction/reconstruction individual dwelling unit or Slum
Clearance/rehabilitation: Rs. 10 Lac per borrower
 AAA loans are to be classified under priority/non-priority classification based on the purpose
(activity) for which the loan is utilized

 Credit Card
 Home Loan borrowers BOBCARD - Joining fee waived for the first year
 Minimum CIBIL Score: 725

 Limit:
Maximum of 5% of loan sanction value subject to
Metro Branch: Max Rs.5 Lac,
U/ SU Branch: Max Rs.2 Lac
For applicants having CIBIL score -1 or 0: Minimum: Rs.25000 Maximum: Rs.50000/-

 Type of Card:
>Rs.10 Lac - Platinum Visa (Max Rs.0.75 Lac),
>Rs.10 Lac < Rs.50 Lac - Platinum Master (Max Rs.1 Lac),
>Rs. 50 Lacs - Signature (Max Rs.5 Lac)

Limits under all Home Loan variants (Home Improvement Loan, Top up Loan, AAA) sanctioned to
the same applicant can be considered.

 POA: The Regional Head not below the rank of Deputy General Managers may authorize the
branches for execution of the documents through POA.

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 The unified processing charges will include: Processing Charges & Documentation charges,
Document Verification/ vetting charges, Pre- sanction Inspection (Contact Point Verification-CPV)
charges, One-time post inspection charges, Advocate charges for legal opinion & Valuer charges for
valuation, Bureau report charges, CERSAI charges, ITR Verification charges

 Pre-sanction inspection is to be carried out: for New customers and Non-KYC complied accounts
For existing customers, pre-sanction inspection visit for residence is not stipulated, if KYC has been
done by the Branch in the last 2 years. However, employment / business verification and inspection
of property to be mortgaged to be carried out

 After completion of the house/dwelling unit, inspection be carried out at least once in 3 years if the
account is regular

 Free Personal Accidental Insurance cover to our borrowers (including Co-borrowers) of Home Loans
(including additional/top-up loans) sanctioned from 10.09.2012 is provided.

 PIO: A citizen of any country other than Bangladesh/ Pakistan/ Sri Lanka/ Afghanistan/China/ Iran/
Nepal & Bhutan if
a) he at any time held Indian passport or
b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the
constitution of India of the Citizenship Act 1955, or
c) The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b) above

 OCI: A person registered as Overseas Citizen of India (OCI) under section 7 A of the Citizenship Act,
1955.A person who migrated from India and acquired citizenship of a foreign country, other than
Pakistan and Bangladesh, are eligible to be granted an OCI as long as their home countries allow
dual citizenship in some form or the other under their local laws

BARODA AUTO LOAN

 Eligibility:

 Salaried Employees, Businessmen, Professionals, Farmers

 Min. Period of Employment/ Business/ Profession Salaried-1 Year, Non-Salaried-2
Year
 Break in service, if any, allowed up to a maximum period of 3 months

 Director’s o f Private 1 Public Ltd Co., Proprietor of firms, Partners of partnership firm
Corporate (Partnership firms, Pvt. / Public Ltd Cos., LLPs, Trust etc.) with minimum Tangible
Net worth of at least 10 times of the Loan requested. Car should NOT be registered as
commercial vehicle

 NRI/PIO (Job contract / work permit/ employed/ self-employed or having business unit and
staying abroad at least for 2 years) and must have minimum GAI of Rs.5 Lac.
 NRI/PIO must be physically fit ond must possess a driving license or must be in a
position to engage a driver.
 If the applicant is NRI/ PIO, close relative of the applicant (who is a resident Indian)
should be a guarantor or co-applicant.
Close Relative of NRI / PIO: Spouse, Parents, Children & their Spouse, Brother/Sister
& their spouse, Grand Children
Steps allowed: Mother, Children, and Brother/ Sister
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 Age:
 Minimum –
 Applicant- 21 Years,
 Co-Applicant- 18 years
 Maximum (applicant/ co-applicant/guarantor+ Repayment Period): 70 Years

If Applicant’s Age+ Repayment Period of Salaried > Retirement Age & Non-Salaried > 65 years
addition of Family member (i.e. spouse, Parent, Children, Brother, Brother’s wife only) as co-
applicant is required
(However, if income of the co-applicant is not considered for assessment of eligible amount of loan,
the above stipulation of maximum age is not applicable for co-applicant/s.)

 Purpose: For purchase of new passenger Cars, MUVs, SUVs etc. for private use.

 Limit:Rs. 100 Lac

 Income Multiplier:

 Salaried Person: (Average of last 3 months GMI)

 GMI < Rs.50T : 24 Times of GMI
 ≥ 50T < Rs. 1.5 Lac : 30 Times of GMI
 ≥ Rs.1.5 Lac : 36 times of GMI

 Others: (average of 2 years Annual Income)

 4 times of Gross Annual Income (GAI)

 FOIR-
Deductions to be considered from the last Month GMI (for salaried persons) or Last Year Annual
Income (for others)
 Salaried:
 GMI < Rs.50T :60% of GMI,
 ≥ Rs.50T < Rs.1.50 Lac :70% of GMI,
 ≥ Rs.1.50 Lac : 80% of GMI,

 Others/NRI:
 GAI < Rs.6 Lac : 60% of GAI,
 ≥ Rs.6 Lac : 80% of GAI

 Margin:
 10% uniform margin on all car on "On Road Price" for all car Segments and income
segments
 Performa invoice issued by sub dealer/ broker/ agent should not be accepted.
 On Road price' which includes invoice price, Road Tax, cost of Registration and
insurance, excluding cost of accessories.
 Advance deposited with dealers is to be trea ted as margin only after its
genuineness is checked & verified to the satisfaction of the sanctionina authority

 Rate of Interest Concession:

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  Concession of 0.50% in ROI on Car Loans to those applicant/s who offer minimum 50%
of Loan limit as liquid collateral security
 Concession o f 0.25% in ROI on Car Loans to our existing Home Loan borrowers who
maintain a good track record of repayment without any overdue.
 Above concessions are subject to the condition that applicable ROI should not fall
below '1 year MCLR+ Slra teaic Premium' at any instance.

 Repayment Period: 84 Months. (Prefixed specific dates - 08th or 16th or 25th as EMI dates)

 Credit Rating: Minimum Score: 30/55 Investment Grade CL-7

 Cutoff CIBIL score is at 725 (If more than one applicants is there, AVERAGE of CIBIL scores, CIBIL
score of applicant/s having (-1) or (0) to be excluded for average calculation but individual CIBIL
score of all the applicants should be minimum 675.

Average Score (Cutoff And /or Deviation

Score) ** Individual/s score of any of applicant/s powers
675 to 724 Less than 675 RMCC
Less than 675 Less than 675 ZOCC
Average Score (Cut-off Score)725 and above; BUT RMCC
Individual/s score of any of applicant/s is less than 675
Average Score (Cut-off Score)725 and above AND No Deviation
Individual score of all applicants are675 & above. required
**Excluding applicants having score of (-1)or 0

 Cases where credit card account status write-off/ settlement involving amount up to Rs.
25000/- (consolidated) No deviation is required
 Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM (BCC)

 Write-off /settlement above Rs.5000 ;

 No Due certificate from the Bank/ FIs to be obtained in respect of credit card account,
 Satisfactory status with the concerned Bank / FIs, preferably within stipulated period
and
 There should not be any other adverse remarks.

 Pre Sanction: For existing customers, pre- inspection visit for residence is not stipulated if KYC has
been done by the Branch in the last 2 years. In such cases, the customer is deemed to be KYC
complied, if the latest existing address as per bank’s record matches with the Bureau
Record/Report.

 Where ever MOU entered with the Car Dealer disbursements/ payments can be made through
Bankers Cheque/Demand Drafi/RTGS/ NEFT as per quotation/ invoice, in other cases
Disbursements/ payments to be made only through Bankers Cheque/ Demand Draft. Banker's
Cheque/ Demond Draft issued by the bank while disbvrsing cor loon should be super scribed
"Purpose: Car Loan to Mr./ Mrs. ___________"

 Charge (exclusive of GST):

 0.50% of Loan amount, Min Rs.2500 Max Rs. 10000
 Pre-closure within -6- months of initial sanction: 4% on amortization balance as per
repayment schedule of facilities sanctioned to Non-Individual

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 Payout to Car Dealers: exclusive of GST
 <Rs.75 Lacs per month: 1%
 ≥Rs.75 Lac <Rs.1.50 Cr per month: 1.50%
 ≥Rs.1.50 Crore: 2%
10% of the payout to be retained till receipt of RC with Bank’s lien.
Service charges to Sales Executive of Car Dealer: Rs. 1500/- per Car Loan

 Branches must obtain photograph of car loan borrower along with financed car jointly with our
staff member. Cost of the photo may be borne by the Bank.

BARODA TWO-WHEELER LOAN

 Eligibility: Salaried Employees, Businessmen, Professionals, Farmers , Staff members, Ex-Staff

members
 Age: Same as Car Loan
 Purpose: For purchase of new two-wheeler.

 Limit:Rs. 1 Lac
 Income Multiplier: 5- times of GMI (Salaried Last 3 Months Average and Other Last 2 Years average)
 FOIR- Deductions to be considered from the last Month GMI (for salaried persons) or Last Year
Annual Income (for others)
 GMI < Rs.20T : 50%,
 ≥ Rs.20T < Rs.1.00 Lac : 60%,
 ≥ Rs.1.00 Lac : 70%,

 Margin: 10% (Performa invoice issued by sub dealer / broker / agent should not be accepted)
 Repayment Period: 60 Months. (Prefixed specific dates - 08th or 16th or 25th as EMI dates)
 Credit Rating: Same as Car Loan

 Cutoff CIBIL score is at 760 (If more than one applicant is there lowest of Bureau scores of the
applicants whose incomes are considered for eligibility to be considered for this purpose).

 Charge (exclusive of GST):

 2% of Loan amount, Min Rs.250
 Pre-closure within -6- months of initial sanction: 4%

BARODA EDUCATION LOAN

BARODA VIDYA

 Eligibility:
 Parents of Students pursuing school education from Nursery to Class XII.

 Purpose: Pursuing school education from Nursery to Class XII

 Stage I: Nursery to V th STD.
 Stage II: VI th to VIII th STD.
 Stage III:IX th to XII th STD
Loan is to be considered for the full duration of stage/ course as mentioned hereinabove with yearly
sub limits. Total amount of loan for all the stages sanctioned should not exceed Rs.4/- Lakh.

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 Limit: Maximum Rs. 4.00 Lac
 Margin : Nil
 FOIR: 60% of Total Income

 Repayment Period: Loan for each yearly sub limit is repayable in 12 equal monthly installments.
First installment to be due 12 months after first disbursement of each year’s loan component

 Charges: Nil
 Security: Nil

 Interest Concession: 0.50% concession in rate of interest to loans sanctioned for the benefit of girl
students.

 Scheme Code: LA131, LA132

BARODA GYAN

 Eligibility: Resident Indian secured admission in recognized university after completion of HSC (10
plus 2 or equivalent)

 Purpose:
 Graduation, Post-Graduation, Professional courses,
 ICWA/CA/CFA etc.,
 Teachers Training Course/ Nursing Course / Bed which should lead to Degree or Diploma
Courses and not to Certificate Course,
 Computer certificate courses of reputed institutes accredited to Dept. of Electronics or
institutes affiliated to an approved university.

 Expenses Covered:
 Fee payable to college / Institution / University / School / Hostel.
 Examination / Library / Laboratory fee.
 Hostel fees / charges.
 Purchase of books / equipments / instruments / uniforms.
 Caution deposit, Building fund / refundable deposit supported by institution bills / receipts,
subject to condition that the amount does not exceed 10% of the total tuition fees for the
entire course.
 Purchase of Personal Computer / Laptop - essential for completion of the course.
 Insurance premium for student borrower, if any opted by the student.

 Limit:
 Rs. 25 Lac for Medical Studies and
 Rs.10 Lac for Other Cases

 Margin:
 Up to Rs. 4.00 lakhs: NIL
 Above Rs. 4.00 lakhs: 5%
 Scholarship / Assistantship, if any, to be included in the margin

 Reimbursement of Fees: For the first year of study

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 Repayment:
 Up toRs.7.50 Lac- 10 Years,
 above Rs.7.50 Lac – 15 Years
 Moratorium Period: Course Period + 1 Year or 6 Months after getting the Job whichever
earlier.
 Extension of time for completion of course may be permitted for a maximum period of -2-
years

 Processing Charges: Nil

 Security:
 Up to Rs.4 Lac: Co-obligation of Parent, No Security
 Above Rs.4 Lac Up to Rs.7.50 Lac: Collateral in the form of a suitable third-party guarantee
along with assignment of future income
 Above Rs.7.50 Lac: Tangible collateral security equal to 100% of the loan amount

 Interest Concession:
 0.50 % Concession in rate of interest to loans sanctioned for the benefit of girl students.

 Scheme Code: LA130, LA133

BARODA EDUCATION LOAN TO STUDENTS OF PREMIER INSTITUTIONS

(UNDER BARODA GYAN SCHEME)
 Eligibility: Resident Indian
 Purpose:
 Full time regular Courses in given Institution
 IIM – Ahmadabad, Kolkata, Bangalore, XLRI – Jamshedpur
 List A & B (as given in Circular)
 E-Post Graduate Program (e-PGP) two-year post-graduate diploma program at IIM-
Ahmadabad/ Hughes Global Education through e-mode
 Executive Development Programmes /Part Time/ Weekend /Online eligible courses/
programmes being offered by Premier Institutions as listed under List A of Premier
Institutions in India

 Expenses Covered:
 Full time regular Courses: Same as Baroda Gyan,
 For E-PGP Program & EDP/ Part Time/ Weekend/ Online Programmes :
 All Expenses as per existing scheme except the Living Expenses, Hostel Charges,
Mess Charges, other living expenses and Cost of external coaching/ tution

 Limit:
 Rs.30 Lac for Full time Regular Course and
 Rs. 20 Lac for E-PGP at IIM-A, & EDP/ Part Time/ Weekend/ Online Programmes

 Collateral Security:
 Full time Regular Course
 IIM A, K, B, XLRI-J: Nil

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  List A: Loan up to Rs.15 Lac with Nil Security and above 15 Lac up to Rs.30 Lac With
tangible collateral security of full value of the Loan amount
 List B: Loan up to Rs.7.50 Lac with Nil Security and above 15 Lac up to Rs.30 Lac
With tangible collateral security of full value of the Loan amount
 E-PGP at IIMA & EDP/ Part Time/ Weekend/ Online Programmes: Loan Up to Rs. 15 Lac
with Nil Security and above 15 Lac up to Rs.20 Lac With tangible collateral security of full
value of the Loan amount.

Above Rs.15.00 Lacks to IIMs (Ahmadabad, Kolkata & Bangalore) & XLRI – Jamshedpur, the tangible
net worth of the parent/s / Guardian who stand as co-applicant / guarantor (together)should be not
less than the Loan amount sanctioned

 Margin:
 Nil for All Full time Regular Course
 5% in E-PGP Program & EDP/ Part Time/ Weekend/ Online Programmes

 Repayment & Moratorium Period:

 Regular Courses: Same as Baroda Gyan,
 For E-PGP Program & EDP/ Part Time/ Weekend/ Online Programmes.
 Moratorium: Course Period+3 Months &
 Servicing of Interest during moratorium is compulsory in loan given

 Processing Charge: Nil

 Interest Concession: No special concession for girl students under this scheme.

 Scheme Code:
 LA159- Full time Regular Course
 LA 214- E-PGP Program & EDP/ Part Time/ Weekend/ Online Programmes.

 Other condition for E-Post Graduate Program (e-PGP) program at IIM-Ahmadabad through e-mode
& EDP/ Part Time/ Weekend/ Online Programmes

 Loan to be granted to only applicants having CIBIL Score above 725, -1 & 0

 Income
Salaried
Loan Amount Minimum GMI (Salary Slip of Last drawn Salary should be
considered)
> 15 Lac < 20 Lac 75000
> 10 Lac < 15 Lac 50000
> 5 Lac < 10 Lac 40000
< 5 Lac 30000

Self Employed
Loan Amount Minimum GAI (Latest ITR should be considered)
> 15 Lac < 20 Lac 9 Lac
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 > 10 Lac < 15 Lac 6 Lac
> 5 Lac < 10 Lac 4.80 Lac
< 5 Lac 3.60 Lac

BARODA SCHOLAR
 Eligibility: Resident Indian Students going abroad for Professional / Technical studies

 Purpose:
 Graduation, PG (MCA, MBA, MS etc.), Other courses in Abroad in List A, B & Other Colleges
 List A : only for Full time MBA courses
 List B : only for MS degree in Technology/ Engineering field
 Caution deposit, Building fund/ refundable deposit, subject to condition that the amount
does not exceed 10% of the total tuition fees
 Limit:
 List A& B: Rs.60 Lac
 Other: Rs.40 Lac

 Margin: Scholarship / Assistantship, if any, to be included in the margin

 List A & B College: Nil
 Other College: 10%

 Security: Same as Baroda Gyan

 Repayment & Moratorium Period: Same as Baroda Gyan

 Credit Rating: Cut-off Score/Investment Grade

 Without Security: 96/ EL-7
 With Security: 149/ EL-7

 Interest Concession:0.50 % Concession in rate of interest to loans sanctioned for the benefit of girl
students

 Disbursement before grant of VISA: Loan sanctioned to students pursuing courses in Australia &
New Zealand only. Subject to the conditions that the Loan is fully secured by tangible security /
equitable mortgage and the fee is refundable by the institute.

 Scheme Code: LA130, LA133

 In order to source maximum mortgage backed loan applications for Mortgage backed Education
Loan covered under scheme, “Baroda Scholar Loan" (Loan for study overseas) with loan amount
Rs. 7.50 Lakhs and above, bank has empanel and utilize the services of two Digital DSAs for period
of two years
 Senbonzakura Consultancy Pvt. Ltd. (www.gyandhyan.com)
 BITC loan Services Pvt. Ltd. (www.eduloans.co.in)

EDUCATION LOAN TO STUDENTS OF ASIA PACIFIC FLIGHT TRAINING ACADEMY LTD. HYDERABAD

 Limit: Rs. 25 Lac

 Margin:
 Up to Rs. 4.00 lacs :NIL
 > Rs.4.00 lacs ≤ Rs. 10 Lacs :5% -10%
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  > Rs.10 Lacs : 25%

 Security: Same as Baroda Gyan

 Repayment & Moratorium Period: Same as Baroda Gyan

 Interest:
 1% concession to girl students.
 1% additional concession for servicing interest during moratorium period

SKILL LOAN SCHEME

 Eligibility: Resident Indian

 Purpose: Training Courses: Courses run by Training Institutes aligned to National Skill Qualification
Framework (NSQF)

 Limit: Rs. 5000/- to Rs.1.50 Lac

 Margin: Not any specific, Down payment and the amount paid as Interest during the course
together should not exceed 10% of the total course amount

 Security: Nil
 National Credit Guarantee Trust Company Ltd (NCGTC) for credit guarantee maximum of
75% of the outstanding loan amount (including interest, if any)

 Repayment:
 Loans up toRs. 50000 - Up to3 years
 Loans between Rs. 50000 to Rs. 1 lakh - Up to5 years
 Loans above Rs. 1 lakh - Up to 7 years

 Moratorium Period:
 Courses of duration up to 1 year up to6 months from the completion of the course
 Courses of duration above 1 year, 12 months from the completion of the course

 Interest Concession:
 0.50% concession to Girl Students.
 1% concession for servicing interest during moratorium period
 Scheme Code- LA190

HIGHER EDUCATION AND SKILL DEVELOPMENT GUARANTEE SCHEME‟ FOR PURSUING HIGHER
EDUCATION IN DELHI

 Eligibility: Students have done their class X and class XII from Delhi
 Purpose: diploma or degree or specified skill development course in development courses in Delhi

 Limit: Rs. 10.00 Lac

 Margin: Nil
 Security: No security (Parents/legal guardians to be joint borrower(s))
 Repayment: 15 Years

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 Moratorium Period: Course Period + 1 year

 Interest Concession:
 No concession to Girl Students.
 1% additional concession for servicing interest during moratorium period

EDUCATION LOAN INTEREST SUBSIDY SCHEME (ELIS)

 Objective: Interest subsidy during moratorium period

 Eligibility:
 Students, belonging to Economically Weaker Section (not on Social back ground) having
parental family income from all sources not more than Rs.4.50 Lacs per annum
 Pursuing any of the approved courses after Class XII in Technical and Professional streams
from recognized institutes in India under the Educational Loan Scheme of IBA
 Maximum loan limit under this scheme is Rs.10 Lac. Loan above Rs.10.00 Lacs would also
be eligible for interest subsidy. But the interest would be calculated on the loan amount up
to Rs.10.00 Lacs irrespective of higher amount availed.
 Interest subsidy shall be available to the eligible students only once, either for first undergraduate
degree course or the post graduate degrees / diplomas in India
 Income proof is required to be submitted by the students from designated authorities

PADHO PARDESH

 This is a Central Sector Scheme to provide interest subsidy to the student belonging to Minorities

 Eligibility:
 The students who belong to Minority Communities viz. Muslims, Christians, Sikhs,
Buddhists, Jains and Parsis

 Should have secured admission in the approved courses at Masters, M.Phil. or Ph.D. levels
abroad for the courses covered under the scheme
 Available to the eligible students only once, either for Masters or Ph.D. levels

 Total income from all sources of the employed candidate or his/ her parents/ guardians in
case of unemployed candidate shall not exceed Rs. 6.00 lakh per annum
 Subsidy is admissible to the limits specified under IBA model scheme i.e., Rs.20 Lacs only

Dr. AMBEDKAR CENTRAL SECTOR SCHEME OF INTEREST SUBSIDY ON EDUCATIONAL LOAN FOR
OVERSEAS STUDIES FOR OBCS AND EBCS- (ACSISOBCEBC SCHEME)

 Formulated by Ministry of Social Justice and Empowerment, Government of India

 Students enrolled for course at Masters, M.Phil. and Ph.D. level Abroad (only once, either for
Masters or Ph.D. levels)

 Income Ceiling:(Income from all sources of the employed candidate or his/ her parents/guardians
in case of unemployed candidate)
o OBC (Other Backward Classes):Rs.3.00 Lakh Per Annum
o EBC (Economically Backward Classes) : Rs. 1.00Lakh Per Annum

COMMON GUIDELINE FOR EDUCATION LOAN:

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 Credit Rating: Cutoff Score/Investment Grade
 Without Security & Guarantor: 96/ ELA-7
 Without Security & With Guarantor: 126/ELB-7
 With Security & Without Guarantor: 149/ EL-7
 With Security & Guarantor: 176/EL-7

 Priority Sector Classification (Up to Rs. 10.00 Lacs): Outstanding balance up to Rs.10.00 Lakhs

 Servicing of interest during the moratorium period till commencement of repayment is optional for
students except loan given for E-PGP program of IIM-Ahmadabad. The accrued interest during the
repayment holiday period to be added to the principal and repayment in Equated Monthly
Installment (EMI) be fixed after completion of moratorium period

 Penal interest: Nil for Loan up to Rs.4 Lakh otherwise 2%

 It is mandatory for all Branches to update the Tracking Checklist for all Education Loans during the
month of August every year as per circula no. BCC:BR:109:393

 No Mortgage creation charges for all types of Education Loans.

 No application should be rejected without the concurrence of the next higher authority.

 Joint Borrower: The joint borrower should normally be parent(s)/guardian of the student borrower.
In case of a married person, joint borrower can be either spouse or the parent(s)/parents-in-law

 Disposal Norms:
 Loan up toRs.7.5 Lac: 7 Days
 Above Rs.7.5 Lac: 15 Days

BARODA MORTGAGE LOAN

 Eligibility:
Individuals Resident & NRI
 Employed/ engaged in business/ profession for a minimum period of -3- years (Break in
service can be allowed up to a maximum period of 3 months)
 NRI: Must be holding a valid job contract / work permit for minimum past -2- years or
employed / self-employed or having a business unit and staying abroad at least for past -2-
years
 Resident: Minimum GAI Rs. 3 Lacs. (average of last 3 years)
 NRI: Minimum GAI Rs.5Lacs (average of last 3 years)
 If the applicant / co applicant/s, whose income is considering for eligibility includes both
Resident and NRI, Minimum Gross Annual Income, put together should be Rs.5 Lacs
(inclusive of co-applicant/s’, whose income is considering for eligibility)
 Proposals from persons engaged in Real Estate Developments, Property Dealers/ Brokers,
Share/ Stock Brokers and persons engaged in any speculative activity, Staff should not be
considered

Non-Individual Entities: -
 Proprietorship Firm, partnership Firm, private Ltd. company, LLP–
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  The, Firm/ company should have been established in the line of activity for a minimum
period of 3 years.
 Minimum turnover as per last ABS must beRs.1.00Crore
 The Firm/ company must be profit making (cash profit) for the last three years.
 HUF, Trust, society & public limited companies are not eligible

 Co-Applicant for Higher Eligibility only close relative except if he/she is joint owner of property.
Number of co-applicants, whose income is considered for eligibility to be restricted up to -3-
Close Relative: Spouse, Parents, Children & their Spouse, Brother/Sister & their spouse, Brother and
Sister of Spouse,
Steps allowed: Mother, Children, Brother/Sister, and Brother/Sister of Spouse

 Age: 21 - 60 Years,
Applicant’s / Co-applicant’s age + Loan tenure should not exceed retirement age for salaried class
and 65 years for NRIs & others

 Limit:
 Minimum : Rs.2.00 Lacs
 Maximum:
 M Branch : Rs.10 Crores
 U Branch : Rs.5Crores
 SU Branch : Rs.3Crores
 R Branch : Rs. 25 Lac

Overdraft: Overdraft limit can be sanctioned only to Individual Borrower only.

Minimum annual turnover in the account should be at least 25% of the limit, Not for NRI

 Income Multiplier:
 Salaried: (Avg. Last 3 Months Salary)
 GMI ≤ Rs.75T : 30 Times,
 GMI > Rs.75T to ≤Rs.3 Lac : 48 Times,
 GMI > Rs.3Lac : 60 Times of GMI

 Others/NRI: (Average Last 3 Years)

 GAI ≤ Rs.5 Lac : 5 times
 GAI> Rs.5 Lac ≤ Rs.8 Lac : 6 times
 GAI> Rs.8 Lac : 8 Times
Agriculturists: latest income as assessed, based on the certificate from the competent authority
(instead of average of last 3 years Gross Annual Income)

 FOIR:
 GMI ≤ Rs.75T : 50%
 GMI > Rs.75T ≤Rs.3.00 Lacs : 60%
 GMI> Rs.3.00 Lacs : 70%
Deductions:
Salaried: last month’s GMI,
Others: Last year’s Annual Income
(Overdraft, repayment capacity norms should be applied as if a Term Loan is sanctioned for a period of
-144- months or maximum maturity as per the age criteria of the borrower whichever is lower)

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 Margin : 40% on Realizable Value of immovable properties
 Limit above Rs.1.00 Crore, 2nd valuation of the property to be obtained.
 Age of property should not be more than -25- years old,
 Property of 20-25 Years old, obtain an Approved Engineer’s certificate of structural
soundness and expected residual life of the building should be at least -5- years more than
the repayment period of the loan
 Cut-off CIBIL score is at 725 (If more than one applicants is there, AVERAGE of CIBIL scores, CIBIL
score of applicant/s having (-1) or (0) to be excluded for average calculation but individual CIBIL
score of all the applicants should be minimum 675.

**Average Score (Cut-off And /or Deviation

Score) ** Individual/s score of any of applicant/s powers
675 to 724 Less than 675 RMCC
Less than 675 Lessthan675 ZOCC
Average Score (Cut-off Score)725 and above; BUT RMCC
Individual/s score of any of applicant/s is less than 675
Average Score (Cut-off Score) 725 and above AND No Deviation
Individual score of all applicants are 675 & above. required
**Excluding applicants having score of (-1)or 0

 Cases where credit card account status write-off /settlement involving amount up to
Rs.25,000/- No deviation is required {Deviation: ZOCC up to RMCC& COGM(BCC)}
 Write-off /settlement above Rs.5000/- No Due certificate from the Bank/ FIs be obtained
in respect of credit card account and there should not be any other adverse remarks

 Repayment Period:
 TL-Maximum- 10 Years including Maximum Moratorium 3 Months
 Overdrafts: -12- months; subject to annual review; Repayment capacity norms should be
applied as if a Term Loan is sanctioned for a period of -144- months or maximum maturity
as per the age criteria of the borrower whichever is lower.

 Processing Charges: excluding GST

o Loan 1.00%. Minimum: Rs.7500/- (Upfront), Maximum Rs.1.50 Lac
o Over Draft:
o Up to Rs.3.00 Crores: 0.35% of limit with maximum: Rs.75,000/-
o Above Rs.3.00 Crores: 0.25% of the limit without any maximum

o Pre-closure within -12- months of initial sanction: 2% of amount as mentioned hereunder

of facilities sanctioned to Non-Individual
o Overdraft facility: Prepayment charges will be calculated on the sanctioned limit.
o Term Loan: Prepayment charges to be calculated based on amortization balance
as per repayment schedule.

o Commitment Charges: In case quarterly average utilization of sanctioned limit is less than
60%, interest in the account will be charged on minimum 60% of sanctioned limit on
quarterly basis.

 Rating: Cut off Score - 111& Investment Grade - SL 7

 Scheme Code: LA201, NRI-LA202, OD016

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 BARODA TRADERS LOAN

 Eligibility:
 Individuals, Proprietorship & Partnership Firms, Private Limited Companies and Registered
Co-operative societies,
 HUF & Public Limited Companies are not eligible
 Dealers in Silver/ Gold Jewelry, not to traders dealing in bullion / raw gold.
 The business units should be established in the line of business for a minimum period of -
2- years profit making as per last -2- years ABS
 Trading units established by our existing Current Account or Advance Account customers
with satisfactory dealings for the last -1- year or their close relatives can be considered,
even if these are established for less than -2- years.

 Purpose:
 Overdraft: Working capital requirements
 Term Loan: Development of shop (Purchase of equipment, Computer, Air-Conditioner,
Furniture etc.; but not for purchase of shop, maximum of 25% of the WC limit sanctioned.
 Non-fund based facilities (LC & BG)

 Limit:
 Minimum: (for fresh exposure w.e.f. 23.05.2016)
 R& SU Branch : Rs.2.00 Lacs
 U & M Branch : Rs.5.00 Lacs
 Maximum:
 M Branch : Rs.10.00 Crores
 U Branch : Rs.5.00 Crores
 SU Branch : Rs.3.00 Crores
 R Branch : Rs.1.00 Crores

 Working Capital: 20% of the accepted projected Sales; OR Advance Value of collateral assets
to be charged, whichever is lower.
 TL: 25% of the WC limit sanctioned (within overall limit assessed based on value of security)

 Security & Margin :

 40% on Realizable Value of immovable properties {(Residential Property (House / Flat)
Commercial property (Building / land & Building) & Plot of Land (not agricultural land)}
 Limit above Rs.1.00 Crore, 2nd valuation of the property to be obtained.
 In case of property valued at Rs.5.00 Cr and above, two valuation reports are to be
obtained.
 Age of property should not be more than -25- years old,
 Property of 20-25 Years old, obtain an Approved Engineer’s certificate of structural
soundness and expected residual life of the building should be at least -5- years
more than the repayment period of the loan
 10% on Bank’s own FDRs
 15% on the surrender value of Life Insurance Policies and face value of NSCs, Government
Bonds etc.

 CIBIL
 Cut Off on CIBIL score will be at 725 all the partners / Directors, and (-1) or (0).
 Deviation:

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  Score 675 to less than 725: Deviation decision with RMCC.
 Less than 675: Deviation decision with ZOCC.
 Cases where credit card account status write-off/ settlement involving amount up to Rs.
25000/- (consolidated) No deviation is required
o Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM
(BCC)
 Write-off /settlement above Rs.5000 ;
o No Due certificate from the Bank/ FIs to be obtained in respect of credit card
account,
o Satisfactory status with the concerned Bank / FIs, preferably within stipulated
period and
o There should not be any other adverse remarks.

 Rating:
Retail Rating Model- BTL Model: up to Rs. 2.00 Crores
BOBRAM Model- Exposure above Rs. 2.00 Crores
Cutoff Rating: BTL6/BOB-6

 Repayment Period: Loan- 60 Months on Prefixed specific dates –08/16/25 as EMI dates

 Processing Charges:
 0.35% of limit. Minimum: Rs.7500/- (Upfront),
 Review: 0.35% of OD Limit, not for loan.

 Pre-closure within -12- months of initial sanction : 2% of amount as mentioned hereunder of

facilities sanctioned to Non-Individual
 Overdraft facility: Prepayment charges will be calculated on the sanctioned limit.
 Term Loan: Prepayment charges to be calculated based on amortization balance as per
repayment schedule.

 Commitment Charges: In case quarterly average utilization of sanctioned limit is less than 60%,
interest in the account will be charged on minimum 60% of sanctioned limit on quarterly basis.

 Takeover Norms:
 Current Ratio : Minimum 1.17:1
 Debt Equity Ratio : Maximum 6:1

 If the business unit is not under the requirement of VAT return / Service Tax return / Audited
Balance Sheet, minimum 60% turnover as reported in the last Balance Sheet must have been routed
through operative account.
 Scheme Code:LA162, OD006, OD017

BARODA TRADERS LOAN TO COMMISSION AGENTS (ARTHIAS)

 Eligibility:
 Arthias is to sell the food grains/fruits/vegetables etc on commission basis and are the link
between the farmers / growers and the distributors/ wholesalers/ retailers.
 Extending credit to farmers, for supplying of inputs as also for buying the output from the
individual farmers/ SHGs/ JLFs

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  New Arthias (during first year of operation) will also be eligible provided they have
minimum 2 years of working experience / family background in this line of activity.

 Limit:
 Minimum:Rs.25000
 Maximum:
 M Branch : Rs.2.00 Crores
 R/SU/U Branch : Rs.1.00 Crores
 8- times of commission/ brokerage/ Aarath received /earned as per last ABS or 8 times of
such average income for last three years, whichever is less (assuming 2.50%commission X
8 times = 20% of Sales
 60% on Realizable Value (RV)of immovable properties to be charged or 90% value of FDR
or 85% value of NSCs / surrender value of LIC policies/ Government bonds etc., whichever
is lower

 Scheme Code: OD023

BARODA TRADERS GOLD CARD SCHEME

 Eligibility: Existing account in Standard Asset Category for last 2 years having BTL Limit of above
Rs.25 lac

 Rating: Credit Rating: Min BTL-4/BOB-4

 Purpose: To meet the emergent working capital requirement arising due to peak season
requirements, delayed payments by debtors, for tax payment, etc.

 Limit: whichever is lower

 20% of the sanctioned Baroda Traders Loan Limit
 70% of realizable value of immovable property including realizable value set aside for
sanctioning of regular Baroda Traders Limit
 The residual portion of the value of securities (In case of other securities like FDRs, Life
insurance policies, NSCs, Government Bonds etc.) after keeping sufficient margin as under
for the overall limit,

 Period: 12 Months - to be allowed on 3 occasions in a year for a maximum period of 2 months on

each occasion. However, there should be gap of 1 month between two drawls.

Notes:
 ABS need to be obtained from traders having total sales, turnover or gross receipt in business for
the previous year relevant to the assessment year exceeds Rs.1Crore.
 Baroda Traders Loan being a business loan per party/group discretionary lending powers will be
applicable.

BARODA PERSONAL LOAN

 Eligibility:
 Employees of Central/ State Govt./ Autonomous Bodies/ Public/ Joint Sector Undertakings,
Public Limited Co. / MNCs & Educational Institutions, Employees of Proprietorship, Partnership
firms, Private Limited companies, Trust – with minimum continuous service for1 year
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  Self Employed Business persons, Self Employed Professionals (Doctor, Engineer, Architect,
Interior Designers, Tech. and Management Consultants, Practicing Company secretaries etc.) --
with minimum 1-year stable business.
 Insurance Agents- doing business for minimum last -2- years
 Co-applicants not to be allowed

 Age:
 Minimum – 21 Years,
 Maximum:
 Salaried: Age+ Repayment Period ≤Retirement Age or 60 Years(lower)
 Non-Salaried ≤65 years
 Purpose: For any purpose other than speculation.

 Limit:
 M & U – Minimum Rs.1 Lac– Maximum Rs.10 Lac
 R & SU- Minimum Rs. 0.50 Lac -MaximumRs. 5 Lac

 Income Multiplier:(GMI Considered here is Average of last 3 months GMI)

 Employees of Central/State Government, Autonomous Bodies, Public/Joint Sector Undertakings
& Educational institutions-with minimum continuous service for 1 year and having salary
account with our Bank: 12 Times of GMI
 Others: not satisfying the above condition
 GMI < Rs.75 T : 6Times
 GMI ≥ Rs. 75T : 8Times of GMI

 FOIR- % of GMI
 Employees of Central/ State Govt., Autonomous Bodies, Public/Joint Sector Undertakings &
Educational institutions-with minimum continuous service for 1 year and having salary account
with our Bank : 60%
 Others not satisfying the above condition
 GMI < Rs.75T :40%,
 GMI ≥ Rs.75T < Rs.2.00Lac :50%,
 GMI ≥ Rs.2.00 Lac : 60%,

Deductions to be considered from the last Month GMI (for salaried persons) or Last year Annual Income
(for others)

 Repayment Period:(EMI Prefixed specific dates - 08th or 16th or 25th as EMI dates)
 Employees of Central/ State Govt., Autonomous Bodies, Public/Joint Sector Undertakings
& Educational institutions-with minimum continuous service for 1 year and having salary
account with our Bank : Maximum 60 Months
 Others: Maximum 48 Months.

 Credit Rating: Minimum Score: 30/55 Investment Grade CL-7

 Cutoff CIBIL score is at 725.

 Account Relationship:

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  Loan amount up to Rs. 2.00 Lac: Satisfactory account relationship with our Bank or any other
Bank for at least -6- months.
 Loan amount above Rs.2.00 Lac: Satisfactory account relationship with our Bank for at least -
6- months.
 In case of Employees of Proprietorship, Partnership firms, Private Limited companies, Trust –
Salary account of the employee should be maintained with our Bank for the last -6- months.
 In case of Insurance Agents – The Commission for the minimum last -6- months to be credited
to the account with us.

 Charge (exclusive of Service tax):

 2% of Loan amount, Min Rs.1000, Max Rs. 10000

BARODA LOAN TOPENSIONERS

 Eligibility:
 Regular Pensioners, Family Pensioners drawing pension through our Bank’s branches
 Pensioners who are getting their pension disbursed through Treasury/DPDO (Defence
Pension Disbursing Office) directly to the credit of their savings accounts with our branches
 Pensioner should be drawing pension through the branch for at least last -3- months and
his account should have been conducted satisfactorily. i.e., no return of cheques for
financial reasons
 Age:
 Minimum –21 Years,
 Maximum: 75 Years

 Purpose: For any purpose other than speculation.

 Limit:
 Regular Pensioners:
 For age up to 70 years : Rs.8.00 Lacs
 For age above 70 years: Rs.5.00 Lacs
 For Family pensioner:
 For age up to 70 years : Rs.3.00 Lacs
 For age above 70 years : Rs.1.50 Lacs

 Income Multiplier:
 18 times of monthly pension

 FOIR- 60%

 Repayment Period:
 Regular Pensioners/Family Pensioners: For age up to 70 years : 60 months
 For age above 70 years : 36months

 Credit Rating: Minimum Score: 30/55 Investment Grade CL-7

 Scheme Code: LA147

 Charge (exclusive of Service tax):

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  Pensioners / Family Pensioners of our Bank : Nil
 Others : Rs.1,000/-

PRE-APPROVED HOME/CAR/PERSONAL LOAN

 Eligibility:
 The liability customer of our Bonk who will qualify for pre-approved limits depend primarily
on his / her bonking relationship with the bank and conduct of the account on various
customer related as well as transaction related pre-defined parameters.
 Joint Liability customers are not eligible
 Co-Applicant:
 Addition of co-applicant is permitted in case of Home Loan and Car Loan (only if the
property is purchased in joint name / car is purchased in co-applicant name.
 Income of co-applicant will not be considered for eligibility.
 Personal Loan will be sanctioned in single name only

 CIBIL (Version 1.0): Min CIBIL Score: 725 or -1/0

 Age: 25 to 50 years

 Maximum Limit:
 Home Loan: Rs. 1 Crore
 Car Loan: Rs. 10 Lakhs
 Personal Loan: Rs. 5 Lakhs

 Income Multiplier & FOIR-

 Income documents, eligibility calculation & details of any existing Loan not required for
PALs up to
 Home Loan - Rs. 20 Lacs,
 Car Loans - Rs. 7.50 Lacs,
 Personal Loan - Rs. 3 Lacs
 Eligibility will be re-calculated as per the normal Housing Loan scheme based on income
documents for all cases of PALs above Rs. 20 Lacs,
 If the difference of Re-calculated limit vis a vis PAL is up to 20%, PAL limit to be sanctioned
to the customer
 If the difference of Re-calculated limit vis a vis PAL is more than 20%, lower of the Pre-
approved / Recalculated limit to be sanctioned to the customer
 Even if the request of the customer is less than the assigned Pre-approved limit, the
negative variance (difference) to be worked out on the Pre-Approved Limit only.

 Margin:
 Housing Loan: based on the cost of project and purpose and as per exiting guidelines
 Car Loan up to Rs. 7.50 Lacs:
 Segment A1& A2: 5%
 Segment A3: 10%
 Segment A4 & B1: 15%
 Car Loan Loans above Rs. 7.50 Lacs: as per exiting guidelines

 Repayment Period: Maximum up to 60 years of age of the applicant

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 ROI: as per the CIBIL score of the customer, as per existing guidelines.

 Processing Charge: as per existing guideline, recover unified processing charges upfront i.e. before
sanction of the loan application

 Scheme Code:
 Home Loan - LA 192
 Car Loan- LA 193
 Personal Loan- LA 194

 Other Important Guideline:

 If one of the limits is availed for a particular product, other two limits would stand withdrawn
 The pre-approved limits will be valid for a period of 3 calendar months. The period of availing
of Pre-approved limit will be extended for a period of 15 days for the completion of
documentation etc. for customers
 No pre-sanction visit is to be done by Branches, if the respective Saving Account of the
customer is KYC compliant and if the latest existing address as per Bank's record matches
with the CIBIL Report. In case of Home Loan pre-sanction inspection of the proposed
properties is to be carried.

PRE-APPROVED LOAN AGAINST PROPERTY

 Eligibility:
 Individual/Sole Proprietorship Firm/Partnership firm/ LLP/ Pvt. Ltd. Company only and not to be
engaged in Real Estate Developments, Property Dealers/ Brokers, Share/ Stock brokers.
 Public Limited Companies, Trust, Societies, HUF, and Government Bodies etc. are not eligible.
 Customer should not have any credit facilities under the same name of the entity with our Bank.
 Maximum inward (drawn by our customers and presented by other banks in collection) cheque
bounces (financial reasons) in the last 12 months should not be more than -2- at the time of
sanction of loan application.
 Selected based on period of maintenance of account relationship, minimum transactions per
month in the account, minimum average balance in the account, turnover in the account etc.
Customers will be banded in 4 slabs in which multipliers are pre-decided.

 Co-Applicant/ Guarantor: Following individuals have to stand either as co-applicant or as guarantor:

 In case of Partnership Firm all partners of Partnership Firm/LLP Firm.
 In case of Company Promoter Director/s and Share Holders having shareholding 20% and above.
 Close relatives of the proprietor /Partners/promoter Director/director/Share Holder (having
shareholding 20% and above), providing immovable property as security.
List of Close Relatives:
 Spouse, Parents, Children & their Spouse, Brother/Sister & their spouse, brother & sister
of Spouse,
 Steps allowed: Mother, Children, Brother/Sister, and Brother/Sister of Spouse

 Purpose: For any purpose except for financial speculation of any nature

 CIBIL (Version 1.0):

 Min CIBIL Score: 725 or -1/0

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  For partnership firm, LLP or Private Limited Companies all the partners/ directors should fulfil
above CIBIL score criteria. Commercial CIBIL also to be generated in case of Firm/Co.
 Cases where credit card account status write-off/ settlement involving amount up
to Rs. 25000/- (consolidated) No deviation is required
 Deviation: ZOCC For proposals falling up to the powers of RMCC otherwise COGM
(BCC)
 Write-off /settlement above Rs.5000 ;
 No Due certificate from the Bank/ FIs to be obtained in respect of credit
card account,
 Satisfactory status with the concerned Bank / FIs, preferably within
stipulated period and
 There should not be any other adverse remarks.

 Age: Maximum: 60 years (Individual/Proprietorship firm (age of the proprietor) the age of primary
applicant)
 Limit: Term Loan
 Minimum: Rs. 2 Lac
 Maximum:
 Metro Branch: Rs. 50 Lac
 Urban Branch: Rs. 40 Lac
 Semi-urban Branch: Rs. 30 Lac
 Rural Branch: Rs. 20 Lac

 Income Multiplier & FOIR- No income documents are required

 Margin: 40% on Realizable Value of immovable properties

 Repayment Period:
 Minimum- 7 Years
 Maximum- 10 Years

 ROI: 1 Year MCLR +Strategic Premium+ 1.50% (Pricing is delinked from CIBIL score/ Security)

 Processing Charge: 0.50% of Loan Amount,

 Minimum: Rs. 7,500/- (upfront)*+ ST
 Charges Maximum: Rs. 15,000/- +ST
*If two or more properties are offered as security, Rs. 7,500/- per additional property would be
applicable as upfront charges in addition to normal charges.
 No pre-closure charges applicable

 Scheme Code: LA 219

PRE-APPROVED TOP-UP LOAN

 Eligibility: All Existing Home Loan customer,

1. Minimum CIBIL Score 725 at present (Main applicant)
2. Moratorium period has been completed.
3. Minimum 12 EMls have been paid.
4. Valid & enforceable E.M. of the primary security has been created.
5. Repayment in existing home loan account, is regular i.e. there should not be 30+ DPD in
last 12 months.
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 6. Primary security of linked Home Loan is not extended to secure any other credit facility
other that original linked home loan.
7. Maximum age of the main borrower is 50 years

 CIBIL (Version 1.0): Min CIBIL Score: 725

 Age: Maximum 50 years

 Limit: Rs. 0.50 Lac- Rs. 50 Lac

 Category-I: Principal amount repaid by the borrower in linked Home Loan (Same LTV)
 Category-II: More Principal amount repaid by the borrower in linked Home Loan but LTV
within normal home loan guideline

 Income Multiplier & FOIR-

 Category-I: No fresh income proof is required hence no income multiplier/income criteria
is applicable
 Category-II: obtain latest income documents of the borrower, assess loan eligibility/ FOIR
subject to maximum as applicable for normal housing loan.
 Salaried: Average of last three month's salary
 Businessmen: Last applicable ITR filed
 Margin:
 Category-I: Same LTV as per original Home Loan
 Category-II:
 75% for loan more than Rs.75.00 lacs,
 80% for loan more than Rs.30.00 lacs and up to Rs.75.00 lacs and
 90% for loan up to Rs.30.00 lacs
 Repayment Period: 10-15 Years Maximum up to 60 years of age of the main applicant

 ROI: MCLR+SP+0.50%
 Processing Charge: 0.25% of loan amount + GST, Minimum Rs. 1000/-

 Scheme Code:
 Category -I: LA 198
 Category-II: LA 199

 Other Important Procedures:

 For list of eligible case “Go to Intranet -> BCC -> Retail Banking-> Documents-> Resources -
> Click on List of Pre-Approved Home Loan Top Up”
 Customer can avail the top-up loan amount only once during the relevant calendar quarter,
if the loan is prematurely closed
 No pre-sanction visit is to be done by Branches.
 No fresh NEC/Valuation required
 Where proposed top up loan amount is up to Rs.5.00 lacs and repayment period of loan is
up to the repayment period of original Housing loan: Undertaking from the borrowers/
guarantors to extend equitable mortgage of existing primary security of Home Loan is
required only.
 A copy of all papers and loan documents including undertaking for creation/extension of
mortgage executed by borrower are to be kept along with the loan & mortgage documents
of primary home loan file.
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  On the attestation memo and on the top of file of PA-Top Up Loan, total limit (HL+ Top Up)
is to be mentioned in bold letter and highlighted properly
 In mortgage register in case of Top-Up limit sanctioned up to Rs. 5.00 Lac a noting is to be
done as- “an Undertaking for creation/extension of Mortgage has been obtained for
sanctioned limit (mention actual limit) under pre-approved top up loan facility”
 In case of limit above Rs. 5.00 Lac Extension of EM of existing primary security of HL to be
recorded in register. The pre-approved limits will be valid for a period of 3 calendar months.
The period of availing of Pre-approved limit will be extended for a period of 15 days for the
completion of documentation etc. for customers.

PERSONAL LOAN- DEBIT CARD EMI

 Feature:
o Instant approval of Personal loan to the Customers
o Debit Card EMI refers io conversion of transactions in to EMIs using Debit Card account,
while performing online transactions

 Eligibility:
The facility will be extended to selected SB account holders having Debit card facility. The
selection of the customers is a backend processes being carried out at Corporote office level
and is based on a pre approved limits assigned through a weighted average credit Frome work
and scoring model

 Limit:
 Maximum- Rs.50000
 Minimum- Rs.5000

 Repayment Period: 6,9 & 12 Months

 Margin- 10% on product value
 Scheme Code- LA197

BARODA ASHRAY (REVERSE MORTGAGE LOAN):

PURPOSE:
To supplement the cash flow stream of senior citizens in order to address their financial needs by way
of mortgage of self-occupied property (house / flat).

TYPE OF FACILITY: Term Loan

Combination of monthly annuity payments, and Lump sum payments for up-gradation/
renovation/home improvement/ extension of residential property. Lump sum payments for medical /
other emergencies/ exigencies of the family Lump sum payment will be subject to maximum 10% of
the total Loan limit assessed.

ELIGIBILITY:
1. Should be Senior Citizen of India, above 60 years of age.
2. Married couples will be eligible as joint borrowers provided one of them is above 60 years of
age and spouse is not below 55 years of age at the time of application.

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 3. Should be the owner of a residential property (house or flat) located in India in his/her own
name.
4. Residential property should be used as permanent primary residence (fully self occupied
property).
5. Ex-staff members shall also be eligible to avail loan under the product.

ELIGIBLE END USE OF FUNDS:

1. Upgradation, renovation and extension of residential property.
2. Home improvement, maintenance
3. Insurance of residential property.
4. Medical, emergency expenditure for maintenance of family.
5. for supplementing pension / other income.
6. Repayment of an existing loan taken for the residential property to be mortgaged.
7. Any other genuine need.
Loan amount will not be used for speculative, trading purposes.

 MAXIMUM AMOUNT:
o The maximum loan amount including interest for entire life shall be restricted to Rs. 1 crore,
subject to the margin of 20% on present market value of the property.
o As an exigency arrangement, the borrowers may be counseled to keep 5 % of limit assessed
for medical / any other unforeseen financial requirements in entire life span. In case of any
lump sum payment, the annuity needs to be recomputed after giving effect of the interest
on such amount.
o However, annuity will be computed considering the life expectancy of 80 years (treating
the loan tenure of 20 years), but initially payments shall be made for 15 years and if any of
the borrowers survives, the loan may further be extended for next 5 years and accordingly,
annuity may be disbursed for next 5 years.

 RIGHT TO RESCISSION:
o The borrower(s) shall be given 7 business days to cancel the transaction, the right of
rescission. If the borrower(s) does not intend to avail the loan, processing charges may be
waived.
o However, if loan amount has been disbursed, the entire loan amount will need to be repaid
along with applicable interest.

 DISBURSEMENT / TENOR OF LOAN:

 The amount will be directly disbursed to the borrower/s in monthly / quarterly / half-yearly /
annual installments.
 If loan is also considered for repayment of existing loan raised on the security of the property
from any institution, the payment of such amount shall be directly paid to the Bank / FI
concerned.
 Directly pay the property tax or hazard insurance Premium.
 Lump-sum payment to the borrower/s directly on account of illness of the borrower / family
member, home improvement, maintenance, up-gradation of house and any other exigency
requirements.

OPTION TO ADJUST PAYMENTS:

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 The Bank shall have the option to revise periodic / lump sum amount at the interval of every 5 years
based on valuation of the property.
Borrower shall be provided with an option to accept such revised terms and conditions for
furtherance of the loan.

REPAYMENT OF LOAN:
 The loan shall become due and payable only when the last surviving borrower dies or would
like to sell the home/ permanently moves out of the home for aged care to an institution or
relatives.
 The loan will, as such, become due for recovery and payable after death of the last surviving
spouse.
 Settlement of loan, along with accumulated interest, to be met by the proceeds received out
of sale of residential property.
 The borrower(s) or his/her/their estate shall be provided with the first right to settle the loan
along with accumulated interest, without sale of property. A reasonable period of 2 months
may be provided when repayment is triggered, for house to be sold.
 Surplus if any, remaining after settlement of the loan with accrued interest, shall be passed on
to the estate of the borrower.

FORECLOSURE:
The loan shall be liable for foreclosure due to occurrence of the following events of default.
1. If the borrower has not stayed in the property for a continuous period of one year.
2. If the borrower fails to pay property taxes or maintain and repair the residential property or
fails to keep the home insured, the Bank reserves the right to insist on repayment of loan
bringing the residential property to sale and utilizing the sale proceeds to meet the outstanding
balance of principal and interest.
3. If borrower(s) declare/s him / her / themselves bankrupt.
4. If the residential property so mortgaged to the Bank is donated or abandoned by the
borrower(s).
5. If the borrower(s) effect changes in the residential property that affect the security of the loan
for the Bank viz. renting out part or all of the house; adding a new owner to the house’s title;
changing the house’s zoning classification; or creating further encumbrance on the property
either by way taking out new debt against the residential property or alienating the interest by
way of a gift or will.
6. Due to perpetration of fraud or misrepresentation by the borrower(s).
7. If the government under statutory provisions, seeks to acquiring the residential property for
public use.
8. If the government condemns the residential property (for example, for health or safety
reasons).

SECURITY: Simple / Equitable mortgage of the Residential property. Commercial property will not be
taken as a security under the product.

TENURE: 15 years. The tenure may further be extended till survival of the borrower/s subject to the
advance value of the property.

PROCESSING CHARGES: 0.20% subject to maximum of Rs. 10,000/- (one time) + applicable GST.

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VALUATION OF PROPERTY: The property is to be valued by Banks / Government approved valuer as per
extant guidelines, at the time of considering the facility. Subsequently, the property to be revalued at
the interval of every five years.

AGE OF BUILDING TO BE MORTGAGED:

 The age of building should not exceed 40 years.
 Building more than 40 years old may be accepted as security, subject to approval of Regional
Head, who will ascertain structural soundness of the building by obtaining opinion and
certificate from approved engineer, about structural soundness of the building and its residual
life

BARODA LOAN TO DOCTORS

NATURE OF FACILITY: Demand / Term Loan and / or Overdraft

PURPOSE:

 Development of clinic/ Clinic-cum-residence, Nursing Home, Pathological Laboratory.

 Purchase of medical / diagnostic equipments.
 Setting up of operation theatre.
 Purchase of car, ambulance, etc.
 Purchase of office equipments viz. computers, fax, air-conditioners and furniture etc.
 Expansion/renovation/modernization of existing premises/Clinic/Nursing Home.
 Working Capital requirement including stock of medicines.

LIMIT:

Minimum: Rs. 50.000/-

Maximum:
 Rural/Semi-Urban : Rs. 15 lacs (sub limit for W/C Rs. 1 lac)
 Urban/Metro : Rs. 50 lacs (sub limit for W/C Rs. 3 lac)

For a loan amount of Rs. 5 lacs and above, the doctor / unit should have been established for a
minimum period of 3 years. However, in deserving cases, Zonal Authority can relax this condition.

ELIGIBILITY:

 Individuals, Proprietorship / Partnership firms, Private Limited companies engaged in

providing medical / pathological / diagnostic services to the society.
 Applicants / Promoters should have recognized qualification in any branch of medical
science like MBBS / BAMS / BDS or any degree / course in physiotherapy / radiology
etc.
 In case of Private Limited Company, the object clause should be verified for having the
objective of providing medical services to the community.

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SECURITY & MARGIN:
 Loans up to Rs. 5 lacs: No collateral and margin is required minimum 25%.
 Loan above Rs. 5 Lac : Tangible collateral Securities in the form of mortgage of land
(excluding agricultural land) and building, AND/ OR Pledge of NSCs, Govt. Bonds,
Bank’s FDR /assignment of life insurance policies etc. and margin of 15% of the cost of
project / equipment.
 Working Capital: NIL

ASSESSMENT OF CREDIT LIMIT:

 Working Capital: 10% of projected gross income.

 While assessing credit requirement, the repaying capacity of the prospective
borrower based on expected income would be considered.

SECURITY MARGIN:
 40% in case of immovable property.
 15% on value of NSCs/KVPs/Govt. Bonds / RBI Relief Bonds/ surrender value of LIC
policies etc.
 10% on Bank’s FDRs.

PERIOD:
Demand Loan / Term Loan: 60 months including moratorium period of 6 months.

DSCR of 1.25 may be accepted for ensuring repayment capacity in case of demand/ term loan.

BARODA LOAN AGAINST SECURITIES

LOAN AGAINST NSC:

ELIGIBILITY: Must be an Indian resident Age - 21 years and above

LIMIT:

 Minimum Amount: Demand Loan – Rs. 3000/- , Overdraft-Rs. 20000/-

 Maximum Amount: For Public- No ceiling, For Staff - 5 times of gross salary

MARGIN:
Public:
 15 % of face value of NSC, if residual maturity period is less than 3 years.
 20 % of face value of NSC, if residual maturity period is 3 years and above.

Staff: 10 % of face value

PROCESSING CHARGES: Rs. 100/- flat + out of pocket expenses and actual conveyance charges + GST,
Nil for staff.

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REPAYMENT PERIOD:
Loan:
 Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever
is less.
 Option II – Repayment of principal with interest, at the time of maturity out of
proceeds of the instrument subject to a provision that in such cases the margin would
be minimum 20%.

Overdraft:
 Till maturity of the security. In case of overdraft, if the credit turnover in the account
in the preceding month is not adequate to cover the interest debited, and then
interest debited in the account is to be recovered separately. Subject to review
annually

Advance to third party is not permitted

LOAN AGAINST KVP:

ELIGIBILITY: Must be an Indian resident Age - 21 years and above

LIMIT:
 Minimum Amount: Demand Loan – Rs. 3,000/-, Overdraft-Rs. 20,000/-
 Maximum Amount: Up to Rs. 1.00 lac by Branch Head & above Rs. 1.00 lac by
Regional Head.

MARGIN:

Public:
 15 % of face value of KVP, if residual maturity period is less than 3 years.
 20 % of face value of KVP, if residual maturity period is 3 years and above.

PROCESSING CHARGES: Rs. 100/- flat + out of pocket expenses and actual conveyance charges + GST.

REPAYMENT PERIOD:

Loan:
 Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever
is less.
 Option II – Repayment of principal with interest, at the time of maturity out of
proceeds of the instrument subject to a provision that in such cases the margin would
be minimum 20 %.
Overdraft:
 Till maturity of the security. In case of overdraft, if the credit turnover in the account
in the preceding month is not adequate to cover the interest debited, and then
interest debited in the account is to be recovered separately.

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Advance to third party is not permitted

LOAN AGAINST LIFE INSURANCE POLICIES:

ELIGIBILITY: Must be an Indian resident, Age - 21 years and above

LIMIT:

Minimum Amount: Demand Loan – Rs. 3,000/- , Overdraft - Rs. 20,000/-

Maximum Amount: No ceiling

MARGIN:

 15 % of surrender value, if the insurance policy is maturing within a period of less

than 3 years.
 20 % of surrender value, if the residual maturity period is 3 years and above.

PROCESSING CHARGES: Rs. 100/- flat + out of pocket expenses and actual conveyance charges + GST,
Nil for staff

REPAYMENT PERIOD:

 LOAN: Repayment in maximum of 60 EMIs or within the maturity period whichever is

less subject to availability of stipulated margin.
 OVERDRAFT : Till maturity of the security. In case of overdraft, if the credit turnover
in the account in the preceding month is not adequate to cover the interest debited,
and then interest debited in the account is to be recovered separately. Reviewed
annually.

SECURITY:

 Assignment of Life Insurance Policy, in force for more than 3 years, in Bank’s favour.
 Standing instructions from the borrower to pay the premium on the policy, as and
when they fall due to the debit of his savings bank / current / overdraft A/C.
 The branch to obtain last premium paid receipt and keep on record.
 Policies which restrict its assignment should not be accepted.

 Life Insurance Policies issued by private insurance companies can also be accepted as
security for considering advances under this scheme.
 Advance to third party is not permitted.
 Endowment policies are preferred.Age of the policy holder should have been
admitted in the body of the policy.Policy should be in force for more than three years.

Policies which are not to be accepted for advance:

 Whole Life Policies.

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  Policies issued under Married Women’s Property Act, 1874, wherein nomination will
be automatically cancelled by a subsequent transfer or assignment.
 Policies assigned to a minor.

LOAN AGAINST RELIEF / GOVT. BONDS:

ELIGIBILITY: Must be a Indian resident, Age - 21 years and above

LIMIT:
 Minimum Amount : Demand Loan – Rs. 3,000/-,Overdraft - Rs. 20,000/-
 Maximum Amount : No ceiling

MARGIN:
 15 % of face value, if residual maturity period of Bond is less than 3 years.
 20 % of face value, if the residual maturity period of Bond is 3 years and above.

PROCESSING CHARGES: Rs. 100/- flat + out of pocket expenses and actual conveyance charges + GST,
staff - Nil

REPAYMENT PERIOD:
Loan:
 Option I – Repayment in maximum 35 EMIs or within the maturity period, whichever
is less.
 Option II – Repayment of principal with interest, at the time of maturity out of
proceeds of the instrument subject to a provision that in such cases the margin would
be minimum 20%.
Overdraft:
 Till maturity of the security. In case of overdraft, if the credit turnover in the account
in the preceding month is not adequate to cover the interest debited, and then
interest debited in the account is to be recovered separately. Reviewed annually

SECURITY:
 Pledge of relief bond.Blank transfer deed.
 Notice to the Public Debt Office of RBI / Designated bank who issues Bonds.

OTHER CONDITIONS:
 Facility may be sanctioned by the sanctioning authority up to fund based lending
powers for sanctioning advances against pledge of Govt. securities on merits, taking
into account the purpose of advance and repayment capacity of the borrower.
 Advance to third party is not permitted.
 Advances should be made against Bonds which are eligible for bank finances, & not
restricted from availing bank finance such as 6.5% RBI Bond 2003, 7% savings Bond
2002 etc.

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 LOAN AGAINST BANK’S OWN DEPOSITS/ ODBOD/LABOD
ELIGIBILITY: All Deposit Holders of Short, Fixed, Recurring & Yatha Shakti Jama Yojna

LIMIT: Max. 95% of Book Value, subject to DLP.

MARGIN: 5 %

DISCRETIONARY LENDING POWERS: -

CM S.Mgr. Mgr.
DGM AGM Officer
SMGS- MMGS-- MMGS--
Particulars SMGS-VI SMGS-V JMGS-I
IV III II

Advance against Bank’s own Full Full 250 200 62.50 25.00
Deposits Powers Powers

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INSPECTION AND AUDIT

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 14. INSPECTION AND AUDIT

- An audit is an objective examination and evaluation of the financial statements of an

organization to make sure that the records are a fair and accurate representation of the
transactions they claim to represent. It can be done internally by employees of the
organization, or externally by an outside firm.
- Auditing is also described as a continuous search for compliance.
The Bank has a well established Central Inspection & Audit Division (CIAD) that verifieses the
adherence to systems, policies and procedures of the Bank by the branches.
CIAD functions independently and is situated at Head Office, Baroda and operates through Zonal
Inspection Centres located at Zonal head quarters. CIAD reports the progress of its various
activities to Executive Director and Audit Committee of the Board periodically and coordinates
with functional heads and controlling offices for submission of compliance and RC in respect of
Annual Financial Inspection of RBI and LFAR
All the branches are covered under Risk Based Internal Audit (RBIA). The assessment of level of
risk and its direction is as per the Risk Matrix prescribed by the Reserve Bank of India which helps
the Management in identifying areas of high risk requiring attention on priority basis.
The position of the risk categorization of the branches is reviewed by Audit Committee of the
Board on quarterly basis. Besides Regular Inspection of Branches, various other inspections are
also carried out in the Bank such as, Information & Systems Audit, Inspection of Subsidiaries,
Associates, Functional Departments at Corporate, Head Office, Training Centres, Administrative
Offices, Management Audit of the Controlling Offices of the Bank, its Subsidiaries and Regional
Rural Banks (RRBs).
Apart from RBIA, CIAD also oversees the Credit Audit function and the Concurrent Audit of
branches.

Types of Audit & Inspection:

1. Risk based Internal Audit (RBIA)
2. Stock Audit
3. Credit Audit
4. Concurrent Audit
5. Statutory Audit
6. Information System Audit
7. BC Audit
8. Legal Audit

1. Risk Based Internal Audit:

Internal auditing is an independent, objective assurance and consulting activity designed
to add value and improve an organization's operations. It helps an organization
accomplish its objectives by bringing a systematic, disciplined approach to evaluate and
improve the effectiveness of risk management, control, and management processes.

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 Internal auditing is a catalyst for improving an organization's governance, risk
management and management controls by providing insight and recommendations based
on analyses and assessments of data and business processes.

Risk rating & Composite Branch’s rating (CBR):

The CBR provides an independent source for the management to assess the overall
performance of a branch as examined during the course of Audit.

Under CBR, the scoring of a branch under risk / performance parameters is done on the
following parameters:
a) Business Risk 500 Marks
b) Control Risk 500 Marks
c) Business Performance 500 Marks

There is a provision of awarding Bonus of up to 125 Marks in the area of Business Performance
which are to be awarded for an excellent performance in various areas. Similarly Negative
marking is to be made in various parameters of Business Risk and Control Risk.

Based on the marks obtained, the branches are classified as under:

Score Description Composite Rating
1201-1500 Efficiently Run Branch A+
976-1200 Well Run Branch A
751- 975 Average Run Branch B
601- 750 Below Average Run Branch C
1- 600 Poorly Run Branch D

Note: The branches where Special Observation Letters are issued due to irregularities in
advances / fraud etc. are to be categorised in High risk category irrespective of the marks
obtained by them and to be classified compulsorily as Below Average run branches, attracting the
periodicity of 9-12 months for the next inspection. Similarly where frauds have occurred in
branches during review period, the matter is required to be referred to GM, CIAD separately and
on recommendations of ZIC Head, a view for downgrading is taken by CIAD.

Formalization / Exit Meeting before conclusion of RBIA:

The Formalization / Exit meeting of Risk Based Internal Audit of the branch is a very critical and
essential requirement wherein major findings of the RBIA are discussed with the branch
preferably on the last day.
This provides an opportunity for interaction between the Internal Auditors and the Branch
Managers pertaining to spot regularization of immediately rectifiable lapses / inconsistencies/
deviations/irregularities observed by Internal Auditors during the course of the Audit thereby
increasing the effectiveness of the basic purpose of the Audit.

Periodicity of Internal Audit: As per annexure-I

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Submission of Inspection Reports:
Zonal Inspection Centres ensure that Inspection Reports are forwarded to the branches within
a maximum period of 10 days from the date of conclusion of the inspection in respect of Rural/
Semi Urban and 15 days in respect of Urban/Metropolitan Branches.
The modus operandi for submission of the reports will be as under:-
1. All the reports other than stated against item (2) below will be sent directly
to the branches / offices with a copy of the report to the Regional Authority
/ Controlling Authority. However, only synopsis sheet of the report will be
sent to Central Inspection & Audit Division and to Zonal Authorities.
(2) The reports of CBB/IFB branches, Regional/Zonal offices, departments of
Central and Head Office will be sent direct to the concerned branch / office
with a copy to the Functional Head at Central / Head Office and Central
Inspection & Audit Division, Vadodara.

Rectification of irregularities:
As per the extant guidelines for Audit, metropolitan and urban branches and other
administrative offices will be required to complete the entire process of rectification and
submission of rectification certificate within 90 days from receipt of audit report. For
rural and semi-urban branches, this period will be 60 days.

2. Stock & book-debt Audit:

Stock audit is confirmation of accuracy, value, quantity existence and ownership of stock in
manufacturing industries, where Raw-material is purchased & converted into finished
stock.
It is one of the important tools for Credit monitoring in case of Working capital finance. The
Bank has adopted the practice of conducting stock inspections and book debts verification
by branch officials and random inspection by independent auditors/ panel of Chartered
Accountants / C.A. firms. (The zonal authorities empanel the stock auditors)
 Annual Stock/Book Debt Audit (i.e. covering the period 1st April to 31st March every
year) is to be carried out compulsorily in all accounts having fund- based and non fund
based working capital limits (including DA LC limit) of over Rs. 5.00 Crores with our Bank.
preferably once in a half year
 Stock /Book-Debts audit in respect of borrowal accounts having exposure (FB+NFB
including DA LC) of Rs. 1 Crores and above but less than Rs.5 Crores from our Bank, shall
be carried out once in a financial year.
 The Stock Audit/Book Debt Audit may be conducted at more frequent intervals (i.e. more
than once in a year) if deemed necessary by the Bank.
 Initially, this stock audit to be restricted to sole banking accounts, accounts under multiple
banking and consortium accounts where our Bank is the leader of the consortium.
 Stock audit is applicable to all accounts including accounts under multiple banking or
consortium with leadership of other banks. However for this purpose, stock audit carried
out through other banks (under multiple/ consortium) shall also be acceptable.
 The fee payable for the accounts having credit limits Rs.1 crore & above and upto Rs. 5
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 crores, shall be Rs.10,000/- i.e. same as for accounts having credits from Rs.5crs to upto
Rs.10 crs.
 Wherever stock audit is required to be carried out once in a year, its period could be
January to March and if twice year then it could be first January to March and second June
to July preferably.
 (BCC:LCB:107/626 dated:17.12.2015) & (BCC:BR:107/639, dated: 29.12.2015)
Note:
- Stock /Book-Debt audit will not be applicable for borrowal accounts having no Working
Capital facilities. As such Stock /Book- Debt Audit is not be applicable for facilities
sanctioned under Baroda Traders Loan scheme. (BCC:BR:108/162, dated: 04.04.2016)
- The borrowal accounts, where concurrent audit has been assigned, may not be subjected to
stock/book debt audit

3. Credit Audit:
As per the guidelines issued by Reserve Bank of India, Bank introduced Credit-Audit as
another tool of credit monitoring to examine compliance of extant sanction and post-
sanction processes/procedures.
On 29th August 2003, Bank has established a Credit Audit Cell which is attached to the
Central Inspection
& Audit Division. The objectives of Credit Audit are:
 Improvement in quality of credit portfolio
 Review of Sanction process and compliance status of large loans
 Feedback on regulatory compliance
 Independent Review of Credit Risk Assessment
 Pick-up early warning signals and suggest remedial measures
 Recommend corrective action to improve credit quality, credit administration and
credit skills of staff etc.,
The major features of Credit Audit are:

 Following accounts are covered under Credit Audit:-

a. All fresh accounts sanctioned with aggregate exposure of Rs.5.00 crores and
above (Fund based + Non fund based)
b. All accounts reviewed with increase with aggregate exposure (Fund based + Non
fund based) of Rs.10.00 crores and above.
c. 5% of borrowal accounts randomly selected from the rest of the portfolio as
under

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 i) Accounts reviewed with increase with aggregate exposure of Rs. Rs.1.00 crore
above but below Rs.10/- crores (Fund based + Non fund based).
ii) Fresh accounts sanctioned with exposure of Rs. Rs.1.00 crore above but
below Rs.5/- crores (Fund based + Non fund based).
d. Fresh sanction and reviewed with increase account of Sister Concerns / Group/
Associates concerns of above accounts, with threshold limit of Rs. one crore &
above (Fund based + Non fund based).
 Credit audit should be conducted within 3 to 6 months of sanction/ review Credit Audit
of eligible accounts of one Region is to be carried out by ZIAD officers
 Accounts of CFS / Specialized branches to be treated accounts of the region to which
these branches are reporting for administrative purposes.
 Identified Credit Auditors shall submit the Credit Audit Report in the prescribed format
within a period of 15 days to Credit Audit Department with a copy to Branch & Regional
Office.
Exclusion from coverage of Credit Audit (Both for Main Concern and its associate
concerns).
a. All the self liquidating advances granted against the security of Bank’s own
deposits, Govt. Securities like NSC/KVP/IVP etc. either granted to the main
eligible account and or its associates.
b. All advances sanctioned under Bank’s Retail Lending Schemes.
c. All short term clean loan
d. All reviewed accounts and reviewed with decrease accounts irrespective of
exposure.
e. All Short reviews
f. All Non Performing Advances.

Important Notes:
 Credit Auditor is not required to visit the borrower’s factory / office premises
 Credit Auditor is required to discuss the findings with the Branch Head.
 Credit Audit for existing account is to be commenced only after review process is over and
Credit Auditor is informed by the concerned Branch / Region of the same.

4. Statutory Audit:
A statutory audit is a legally required review of the accuracy of a Bank’s financial records.
The purpose of a statutory audit is the same as the purpose of any other type of audit: to
determine whether Bank is providing a fair and accurate representation of its financial
position by examining information, bookkeeping records and various transactions.

5. Concurrent Audit:
Concurrent Audit is also prevalent in the Bank, as an additional support system, which
takes care of reporting to the higher management directly on various areas that are to be
reported as per the terms of services for which engaged, including revenue leakage,
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 confirmation of credit rating, documentation, other relevant observations etc. pertaining
to borrowal accounts.
Concurrent Audit at a Branch is a systematic examination of all financial transactions on
a continuous basis to ensure accuracy, authenticity and due compliance with the internal
systems, procedures and guidelines of the bank as issued from time to time and
simultaneous rectification as the name denotes.

6- BC Audit: Brnaches to audit all their respective BC points once in every quarter and to take
remedial steps in case any irregularity is found. A copy of the same is to forwarded to the regional
officer for their record and for action if warranted.
Regional offices on its own will audit 10% of the BC of the region randomly every quarter in
addition to branch audit and initiate necessary action . The same set of BC should not be audited
in the subsequent quarter . In other words BC points need to be audited on rotation basis.
The internal auditors from ZIAD concerned will visit a few BC points randomly during their
regular inspection of the Branch .

7- Legal Audit : Legal audit is done for all credit exposures of Rs. 5.00 Crores & above where in
reverification of title deed as to their genuineness with relevant authorities along with
verification of other loan documents will be carried out with in a period of of five years from the
date of such verification of title deeds/documents and for every block of five years thereafter till
the loan amount is settled in full . The reverification will be carried out by the Bank’s empanelled
advocate and it will be ensured that same advocate does not perform reverification who has done
it earlier.

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