Promotion Study Material - 2016
Promotion Study Material - 2016
Promotion Study Material - 2016
Compilation
by
Bank of Baroda
Ahmedabad
INDEX
Sl. No.
Subject
Page No.
21
33
42
56
RURAL/AGRI. BANKING
80
MSME BANKING
120
WHOLESALE BANKING
137
10
RISK MANAGEMENT
213
11
221
12
245
13
254
Disclaimer: Though all efforts have been made to incorporate latest and correct information of
the related topics but in case of any doubt please refer book of instructions, reference books
and circulars of the bank. This booklet is focusing mainly the written promotion exam. within
the bank looking the previous trends and should not be considered as instruction manual.
Mission Statement
1|Page
Our Logo
Our logo is a unique representation of a universal symbol. It comprises dual B letter forms that hold
the rays of the rising sun. We call this the Baroda Sun.
The sun is an excellent representation of what our bank stands for. It is the single most powerful source
of light and energy its far reaching rays dispel darkness to illuminate everything is touched. At Bank of
Baroda, we seek to be the sources that will help all our stakeholders realize their goals. To our
customers, we seek to be a one-stop, reliable partner who will help them address different financial
needs. To our employees, we offer rewarding careers and to our investors and business partners,
maximum return on their investment.
The single-color, compelling vermillion palette has been carefully chosen, for its distinctiveness as it
stands for hope and energy.
We also recognize that our bank is characterized by diversity. Our network of branches spans
geographical and cultural boundaries and rural-urban divides. Our customers come from a wide
spectrum of industries and backgrounds. The Baroda Sun is a fitting face for our brand because it is a
universal symbol of dynamism and optimism it is meaningful for our many audiences and easily
decoded by all.
Our new corporate brand identity is much more than a cosmetic change. It is a signal that we recognize
and are prepared for new business paradigms in a globalised world. At the same time, we will always
stay in touch with our heritage and enduring relationships on which our bank is founded. By adopting a
symbol as simple and powerful as the Baroda Sun, we hope to communicate both.
Heritage
It all started with a visionary Maharaja's uncanny foresight into the future of trade and enterprising in
his country. On 20th July 1908, under the Companies Act of 1897, and with a paid up capital of Rs 10
Lacs started the legend that has now translated into a strong, trustworthy financial body, BANK OF
BARODA.
It has been a wisely orchestrated growth, involving corporate wisdom, social pride and the vision of
2|Page
Initiatives
Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking sector. Bank is
amongst first in the industry to complete an all-inclusive rebranding exercise wherein various novel
customer centric initiatives were undertaken along with the change of logo. The initiatives include
setting up of specialized NRI Branches, Gen-Next Branches and Retail Loan Factories/ SME Loan
Factories with an assembly line approach of processing loans for speedy disbursal of loans.
The major ongoing initiatives of the Bank are detailed below:
Business Process Re-engineering (Project Navnirmaan)
This project touched all aspects of Banks processes, structures and systems with an objective to
simplify processes, improve branch productivity and provide best in-class service to the customers.
The most important initiatives planned under this project include:
Conversion of all metro and urban branches into modern centers known as Baroda Next
branches.
Creation of Automated and Leaner Back Offices like City Back Office (for automated cheque
processing etc), Regional Back Office (for faster account opening etc), Establishment of two Call
Centres, Creation of Academy of Excellence, Introduction of Frontline Automation at select
branches for customer convenience and Organizational Restructuring.
People Initiatives
Bank is endowed with a competent and motivated employee base which is engaged in handling the
extensive business operations of the Bank across the globe. Strategic HR interventions like, according
cross border and cross cultural work exposure to its managers, hiring diverse functional specialists to
3|Page
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.
Marketing Initiatives
Bank focused on promotion of Brand and various products and services through a variety of marketing
initiatives with dual focus for a robust business growth and deepening of relationships. Marketing
initiatives involved effective utilization of different media vehicles such as print, electronic (TV / Radio),
digital and out of home (OOH) to support the below-the-line (BTL) activities undertaken at the Zonal /
Regional level.
In order to augment the Brand connect with its diverse stakeholders, Bank also participated in various
events such as FICCI-IBA Banking Conference 2014, Pravasi Bhartiya Diwas 2015, MINT Annual Banking
Conclave 2015, World Ranking Snooker Tournament Indian Leg, IL&FS BKC Run 2015 and Standard
Chartered Mumbai Marathon 2015, India - West Indies & India- Sri Lanka Cricket Series 2014, Dun &
Bradstreet Indian Exporters Excellence Awards 2015, SMAASH Entertainment Zone among many others
events thereby increasing visibility and Brand recall value.
Corporate Offices & Head Office
Head Office
Suraj Plaza 1, Sayaji Ganj,
Baroda 390005
Corporate Centre
Bank Of Baroda
Baroda Corporate Centre,
Plot No. C-26, Block G,
Bandra Kurla Complex,
Bandra (East),
Mumbai 400051
4|Page
No. of Branches
Metro
1002
Urban
927
Semi-Urban
1419
Rural
1953
Total (Indian)
5301
Foreign (Overseas)
105
Total (Global)
5406
Controlling Offices
Zonal Offices
13
Regional Offices
70
Domestic
Overseas
Subsidiary
Subsidiary
BOBCARDS Ltd.
BOB Capital Markets Ltd.
Nainital Bank Ltd.
Bank
Bank
Bank
Bank
Bank
Bank
Bank
Bank
of
of
of
of
of
of
of
of
Baroda
Baroda
Baroda
Baroda
Baroda
Baroda
Baroda
Baroda
(Botswana) Ltd.
(Kenya) Ltd.
(Uganda) Ltd.
(Guyana) Ltd.
(New Zealand) Ltd
(Tanzania) Ltd
(Trinidad & Tobago) Ltd.
(Ghana) Ltd.
5|Page
Representative Offices
Associate
Associate
Baroda
Baroda
Baroda
Baroda
Gujarat
14
Uttar Pradesh
15
Uttaranchal
Rajasthan
2
12
Madhya Pradesh
Bihar
Delhi
6|Page
Board of Directors
The constitution of the Board of Directors is as follows:
1.
Mr Ravi Venkatesan
Chairman
2.
Mr P S Jayakumar
3.
Mr Bhuwanchandra B Joshi
Executive Director
4.
Mr Mayank K. Mehta
Executive Director
5.
Mr Mohammad Mustafa
Director
6.
Ms Surekha Marandi
Director
7.
Director
8.
Dr. R. Narayanaswamy
Director
9.
Director
10.
Ms Usha A Narayanan
Director
7|Page
1.
2.
3.
4.
5.
Project NAVNIRMAAN:
A comprehensive transformation programme called Project NAVNIRMAAN was launched by our Bank
for its domestic operations on 22 June 2009. It is centered on our customers and our employees.
NAVNIRMAAN is a comprehensive change programme that seeks to rebuild the Bank for the future. This
change programme shall touch all aspects of the Banks processes, structures and systems with an
objective to simplify processes improve branch productivity and provide best-in-class service to our
customers. This is a change programme which seeks to create the Baroda Next, the brand promise that
we are making to our customers at large. Our Bank has partnered with well known consultants M/s
Mckinsey & Company to take this project forward.
8|Page
9|Page
Analysis of MIS.
Communication of MIS to Branches, Regions, Zones and Corporate office.
5. Contact Centre
Bank has set up two Contact Centres in Lucknow & Baroda to fast address the
customer queries & grievances. The service timing has been increased to 6 am to
10 pm (from earlier 8 am to 8 pm) for better customer convenience.
Launch of Signature Tune and mascot
Bank has introduced Brand in Sonic Medium by launching a Signature Tune on
the occasion of its Foundation Day in the year 2011. The prime purpose was to
highlight the spirit of the Bank as a vibrant and energetic organization
complementing the Logo.
Gen-Next Branches
To respond to the needs of the changing demographic profile of the country, the bank has been
endeavouring to customize delivery channels especially for youth segment. As a part of these efforts,
the bank has set up innovative Gen- Next branches dedicated to youth and young IT professionals at
certain places. There are 9 Baroda Gen-Next Branches as on 31.12.2015
The branch will have youth specific products and will function as a model for fusion of Hi-tech
and High-touch Banking.
The Branch is offering following liabilities and assets products to the customers:
1. Gen-Next Junior (Saving Account)
Target group
Minimum amount & balance
Non-maintenance of minimum QAB
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Max Rs 2 lac
Some Other Important Initiative under NAVNIRMAAN:
Branch Front end Automation: The Queue Management System (QMS) & Cheque Deposit
Machine (CDS) machines and Personalized Pass Book Printers are installed in 98, 93 and 2,300
branches, respectively.
Mid Corporate Vertical: Separate Mid-corporate vertical has been created and 17 Mid-corporate
branches have been opened as on 31.12.2015
Roll out of enterprise-wide Sales Accountability Model Sales Operating Mode
e-Lobbies: Total independent e-Lobbies as on 31.12.2015 is 230. These lobbies operate 24X7
providing facilities for cash withdrawal, cash deposit, cheque deposit, pass book printing,
internet banking and phone banking.
This facility is known as Non Stop Banking
Chillr Mobile App
In continuation of endeavour to provide simple and smart solutions to customers, Bank has tied up with
Chillr to launch Chillr Mobile app. Using the Chillr app, Bank of Baroda customers can send and receive
money instantly to registered Chillr users added in customers phonebook.
Customers can send money through Chillr mobile app to both partner and non-partner bank customers.
Currently our Bank and HDFC bank are partner banks. Non-partner bank customers can only receive
funds.
Only the mobile number of the beneficiary in the remitter's phonebook is needed. Application enables
customers to send money to any registered Chillr user on phone contact list.
Baroda Academy
Implementation of BPR and OR will
require learning of new skill sets for the
employees. To train the employees on
new desired skills, entire training
system of the Bank under the aegis of
Baroda Apex Academy, Ahmedabad has
been converted into Baroda Academy
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Bank as part of customer centric measure initiated Wealth Management Services for our HNI and
affluent customers, a complete financial solution at one stop. The service has enabled our
customers to buy various investment products through our branches and is positioning our Bank
as One Stop Financial Super Market
Bank is offering Wealth Management Services to our customers with a view of providing various
financial services, apart from the regular banking activities which includes Life Insurance, NonLife Insurance, Health Insurance, etc.
Mutual Funds, Online trading account etc are offered to the customers through various tie-up
partners.
Under Wealth Management Services currently we are offering 3rd party products in Bancassurance,
Mutual Fund, e-Trading etc. under tie up arrangement with various partners.
Insurance
Mediclaim Insurance
Baroda Health
ASBA
Mutual Fund
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Baroda e - Trade
Baroda e-Trading
Audited Financial Results for the Quarter/Year ended 31st December, 2015 (Rs. In crore)
Parameter
31-03-2015
31-12-2015
1045625
973959
617560
589687
428065
384272
Net Profit
3398
(3342)
3.71
9.68
Net NPA
1.89
5.67
ROAA
0.49
-1.91
13.33
12.95
CAR(Basel iii)
12.60
12.18
2.31
1.72
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Best Public Sector Bank Award under the category of Global Business at the Dun & Bradstreet Banking
Awards 2015.
The Government of India awarded Bank with the 1st Prize in the Indira Gandhi Rajbhasha Shield
Competition in Region B. on Hindi Diwas 2014. Further, Bank was awarded first prize for ' B' Region
and second prizes for Region 'A' and 'B' by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield
Competition.
BML Munjal award in Public Sector Category for Business Excellence Through Learning & Development
2015.
Excellence in Banking (PSU Sector) at the 5th My FM Stars of the Industry Awards recently held in
Mumbai on 30.01.2015
National Prize First Rank in Innovative Training Practices for the year 2014 from Indian Society for
Training and Development (ISTD).
Golden Peacock National Training Award for the year 2014 under the aegis of Institute of Directors, New
Delhi.
Champion of Champions Award at the 54th annual ABCI Awards 2015, for 6 Categories- Indian
Language Publication Bronze; Exhibition Collateral Gold; Wall Calendar 2014 Silver; Environmental
Communication Silver; E-Zine Bronze; Corporate Film Gold.
3 Awards at the IBA Banking Technology Awards 2014 15, Winner in Best Financial Inclusion
Initiative; First Runner up in Training & Human Resources, E - learning Initiatives; First Runner up in
Best Use of Data.
Best Bank - Global Business Development (Public Sector) & Best Bank Overall (Public Sector) Award in
Dun & Bradstreet Polaris Financial Technology Banking Awards 2014.
Skoch Order of Merit in Indias Best 2014Financial Inclusion & Deepening Awards 2014.
ASSOCHAM Social Banking Excellence Award under Public Sector Banks category, in recognition of the
significant initiatives being undertaken by the Bank in social banking sphere.
The Most Efficient Public Sector Bank for the year 2014 by Dalal Street Investment Journal in the Best
PSUs of India Awards.
Business Policy Guidelines for 2015-16 (Domestic Operations)
Corporate Motto
Keeping in mind the goal of improved profitability, the motto of previous year Race Ahead is retained for
current year also with addition Good to Great.
RACE ahead stands for:
R- Retail Leaning
A- Asset Quality
C- Capacity Building
E- Earnings Focus
Business Strategies and Action Points:
1. Resource Mobilization
2. Resource Deployment
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3.
4.
5.
6.
7.
8.
9.
a. Retail Lending
b. MSME Advances
c. Rural & Agricultural lending
d. Large Corporate & Mid Corporate Banking
Financial Inclusion
Human Resource
Government Business
Customer Orientation
Branch Expansion
Information Technology
Risk Management
Core Values
Our values determine our thoughts and actions. Values act as internal compass and therefore provide
direction. When common values are chosen and owned by an Individual or a team, it creates a powerful
emotional connect. Individuals/teams following core values are dynamic and can achieve miraculous
results.
As we grow, our processes and strategies may change, but our values should always remain the same.
Our core values should always be the framework within which we make all of our decisions.
Bank of Baroda is practicing the following core values:
Customer centricity-Taking Ownership of Customer Service
The ownership of excellent customer service lies with each and every employee irrespective of the role
assigned. Bank has made it a practice of quick responsiveness as far as customer needs are concerned.
Bank of Baroda wants to create a new benchmark in the dissemination of customer service,
demonstrating care and concern that can catapult the standard of our service to create better value for
its customers. Inculcating the culture of sales/ cross sales and providing personal service has made us a
great differentiator in the market.
This may be possible with Trust, Transparency and Togetherness
Bank of Baroda strongly believes in to augment the value of its stake holders i.e. Customers,
Employees, Shareholders and Regulators are in tune with these values. Bank keeps transparency in all
dealings. It adopts collaborative approach, Encourage and complements each other, Maintain Team
spirit. Bank of Baroda wants to create an environment that is friendly, warm and exciting. It encourages
diversity in ideas, opinions and points of view.
Many of the Banks best ideas have been the direct result of informal interactions outside of the office.
Bank of Baroda is more than just a team, it is a family. Each one cares for another and goes beyond.
DEW
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a) 22 Jun-2009
b) 31 Dec-2008
c) 01 Oct-2010
d) 19 Jul-2011
e) 15 Aug-2012
3. Our banks present base rate is
a) 9.50
b) 9.65
c) 9.75
d) 10.50
e) 10.00
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the customers?
a) Gen Next Junior
b) Gen Next Senior
c) Gen-Next Lifestyle
d) Gen Next Power
9. In how many countries Banks network of overseas branches is expended
a) 20
b) 24
c) 25
d) 26
e) 27
10. Where the Head Office of our Bank is situated.
a)
b)
c)
d)
e)
Baroda
Bombay
Delhi
Hyderabad
Ahmedabad
10
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Appointments
Bank Board Bureau
Capitalization
De-stressing PSBs
Empowerment
Framework of Accountability
Governance Reforms
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In view of the considerable progress made in the area of Financial Inclusion and to concentrate the
efforts of the FLCs on keeping the already opened accounts active, RBI has issued revised guidelines
for FLCs of lead banks and the operational guidelines for the conduct of camps by FLCs and rural
branches of banks.
Brick and Mortar Branches in Villages with Population more than 5000 without a Bank
Branch of SCB
The heads of SLBC convener banks have been asked by RBI to identify villages with population above
5000 without a bank branch of a Scheduled Commercial Bank (SCB) in their state. The villages thus
identified may be allotted among SCBs (including Regional Rural Banks) for opening of branches. It
has been asked to complete the opening of bank branches under this roadmap by March 31, 2017.
SEBI Releases a Concept Note on Green Bonds
Market regulator SEBI has released Consultation Paper on Issuance of Green Bonds. A Green Bond is
like any other bond where a debt instrument is issued by an entity for raising funds from investors
but what differentiates it from other bonds is that the proceeds of a Green Bond offering are earmarked for use towards financing green projects.
Pradhan Mantri Fasal Bima Yojana:
Government of India has recently approved Pradhan Mantri Fasal Bima Yojana (PMFBY) which would
replace the existing schemes of National Agricultural Insurance Scheme (NAIS) & Modified National
Agricultural Insurance Scheme (MNAIS) from Kharif 2016. PMFBY would be available to the farmers
at very low rates of premium which would be maximum upto 1.5% for Rabi and upto 2% for Kharif
for Food crops, Pulses and Oilseeds and upto 5% for Annual Horticulture/ Commercial Crops. This
scheme would provide insurance cover for all stages of the crop cycle including post-harvest risks in
specified instances.
Sovereign Gold Bond Scheme 2016
The Sovereign Gold Bond Scheme 2016 opened for subscription from 18th January to 22nd January
2016. The issuance of bonds for this second tranche of Sovereign Gold Bonds happened in February
2016 where the bonds are issued by RBI on behalf of Government of India. The bonds are sold
through banks, SHCIL and designated post offices.
National Investment and Infrastructure Fund (NIIF)
International pension funds and sovereign funds from countries such as Russia, Singapore and UAE
have evinced interest in participating in Indias INR 40000 crore NIIF. The NIIF is meant to fund
development of infrastructure projects, including reviving stalled ones.
RBI Announces Marginal Cost of Funds Methodology for Interest Rate on Advances
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(MCLR):
RBI has finalized and released the guidelines under Marginal Cost of Funds Methodology for Interest
Rate on Advances. The new internal benchmark rate to which all rupee loans sanctioned and credit
limits renewed wef April 01, 2016 will be reference rate and has been christened as Marginal Cost of
Funds based Lending rate (MCLR). It will replace Base Rate and will be the internal benchmark for
such purposes.
The MCLR shall comprise of:
a. Marginal cost of funds
b. Negative carry on account of CRR
c. Operating costs
d. Tenor premium
Financial Engineering:
Financial engineering is about the development and creative application of financial technology for
solving financial problems, exploiting financial opportunities, and for otherwise adding value. Some of
trends and examples are E-Banking, Internet Banking, Mobile & SMS Banking, ATM expansion,
volumes of Debit & Credit Card, RTGS and NEFT.
Crowd funding
It is the practice of funding a project or venture by raising monetary contributions from a large
number of people, typically via the internet / social media. Usually Social / Cultural projects and startups are using this informal source of finance. Crowd funding is a form of alternative finance, which
has emerged outside of the traditional financial system.
Peer-to-Peer (P2P) lending
The practices of lending money to individuals or businesses through online services that match
lenders directly with borrowers. i.e. Lending Club. It is an online investment platform to enable
borrowers to attract lenders and investors to identify and purchase loans that meet their investment
criteria
5 / 25 Scheme of Reserve Bank of India
Reserve Bank of India launched the 5/25 scheme (officially called the Flexible Structuring of Long
Term Project Loans to Infrastructure and Core Sector Industries) and subsequently extended it to
existing project loans in addition to new loans there may have been a collective sigh of relief from
bankers and corporate. The 5/25 moniker summarily refers to the feature that the loan will be
repaid over a maximum period of 25 years. However, the banks will have to refinance the loan every
5 year
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IBA Approach Paper on IT-Enabled Financial Inclusion: Financial Inclusion is the delivery of
financial services to all the people in a fair, transparent and equitable manner at affordable cost.
Financial Inclusion has the potential to improve the standards of life of the poor and the disadvantaged.
Financial services permit individuals and households to manage the risk and uncertainties to save risk
free, borrow on better terms, to invest in a business venture or property and to cope with unforeseen
expenses.
IBA Sub-committee on Flow of Credit to Agriculture Sector: In the context of predominance of
agriculture as the largest employer of the countrys population and the financial exclusion as one of the
crucial obstacles in ensuring equitable agricultural growth of the nation, measures have been suggested
to increase the flow of credit to agriculture sector in general and especially to tenant farmers,
agricultural laborers and share croppers, and on Policy Support and State interventions that can
facilitate enhanced Agri Credit Flow minimizing Legal intervention encouraging contract farming and
Tenant farming.
IBA Approach Paper on Agro-Business as a Commercial Activity: The lack of investment into
agriculture sector has restricted the adoption of modern agricultural practices. The use of technology
has been inadequate and hampered by the lack of awareness of such (modern) practices, high costs
and impracticality especially in the case of small land holdings.
Considering ground realities and existing gaps viz-a-viz huge opportunity for processing of foods and
exports, it has suggested ways of harnessing the potential in agriculture and agri-business:
i.
ii.
iii.
iv.
v.
vi.
vii.
Modernization of existing Agri-infrastructure and creation of new capacities for handling and
storage of agricultural produce
Risk mitigation / de-risking of agriculture by extending insurance coverage
Reducing high cost of credit delivery to the agriculture/ rural sector and looking for linkages
(cost of credit is to be lowered by the use of technology (use of IT) and new form of banking
structures like - business correspondent, outsourced partners & facilitators)
Incentivizing commercial banks to increase credit flow to agriculture sector as well as rural
India and creating an enabling environment for contract farming
Removing legislative problems by introducing policy level initiatives
Export competitiveness is affected due to high international cargo freight and lack of focus
on Food Processing (FP) sector the number of drawbacks available from APEDA and other
Government departments should be made seamless and brought out in a single window
format for the horticulture and food processing industry which will save time and increase
efficiency
Small and marginal farmer is always distressed on the viability of his initiative- the fact is
farmer is stressed more on the viability of the project and not the debt, formation of SHGs/
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JLGs helping the farmer to bring in economies of scale, alternate occupation for the small
and marginal farmers in terms of dairy, poultry and piggery and restricting use of fertile land
having multiple crops for agricultural purposes only whereas barren land should be
encouraged for industrial development
viii.
Reduction in probability of adverse selection- a scoring/ rating model to address the issue of
reducing the probability of default may be of immense use to the banks and to the farming
community at large.
Bandhan Bank Limited: (Inaugurated on 23 August 2015 in Kolkata)
Bandhan Bank Limited was incorporated on 23rd December 2014 as a wholly-owned subsidiary of
Bandhan Financial Holdings Limited. Bandhan received the in-principle approval of the Reserve Bank of
India (RBI) for setting up a universal bank in April 2014; the banking regulator gave its final nod in June
2015. Incidentally, Kolkata-headquartered Bandhan is the first bank set up in eastern part of India after
Independence.
IDFC Bank Limited: The Reserve Bank of India granted a universal banking license to IDFC Limited on
July 23, 2015. IDFC Ltd. demerged on October 1, 2015, transferring all assets and liabilities of its
lending business (Financing Undertaking) to IDFC Bank Limited. IDFC Bank Ltd. is a subsidiary of the
IDFC Ltd., and was inaugurated on October 19, 2015 in New Delhi. It is head quartered in Mumbai.
Payments Bank: The RBI on 19.08.2015 granted in principle approval for payment banks to 11
entities. Payments banks are new stripped-down type of banks, which are expected to reach customers
mainly through their mobile phones rather than traditional bank branches. They cant offer loans but can
raise deposits and pay interest on these balances. They can enable transfers and remittances through a
mobile phone. The list of approved Payments Bank includes:
1. Aditya Birla Nuvo Limited
2. Airtel M Commerce Services Limited
3. Cholamandalam Distribution Services Limited
4. Department of Posts
5. Fino PayTech Limited
6. National Securities Depository Limited
7. Reliance Industries Limited
8. Shri Dilip Shantilal Shanghvi
9. Shri Vijay Shekhar Sharma
10. Tech Mahindra Limited
11. Vodafone m-pesa Limited
The in-principle approval granted will be valid for a period of 18 months, during which time the
applicants have to comply with the requirements under the Guidelines and fulfill the other conditions as
may be stipulated by the Reserve Bank.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part
of in-principle approval, the Reserve Bank would consider granting to them a license for
commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a
regular license is issued, the applicants cannot undertake any banking business.
No need of reporting fixed deposits in pre-existing accounts: The Indian government has
clarified that the implementation of the Foreign Account Tax Compliance Act (FATCA) and Common
Reporting Standards (CRS) will not entail reporting of all fixed deposits and auto sweep facilities in preexisting savings bank accounts. It is informed that in such cases, no additional documentation is
26 | P a g e
obtained for these fixed deposits accounts as they are intrinsically related to existing saving bank
account and all KYC documents are available for the existing saving bank account, the Central Board of
Direct Taxes said on their website.
Foreign Account Tax Compliance Act: The provisions commonly known as the Foreign Account Tax
Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts and focuses on reporting:
By U.S. taxpayers about certain foreign financial accounts and offshore assets
By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities
in which U.S. taxpayers hold a substantial ownership interest
The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not
reporting.
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same as early as possible since most of the compliances are on financial year basis under the
new Companies Act.
10. Appointment of Statutory Auditors- Every Listed Company can appoint an individual
auditor for 5 years and a firm of auditors for 10 years. This period of 5 / 10 years commences
from the date of their appointment. Therefore, those companies have reappointed their
statutory auditors for more than 5 / 10 years; have to appoint another auditor in Annual
General Meeting for year 2014.
Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016: The
provisions of these Directions shall apply to every Scheduled Commercial Bank {including Regional Rural
Banks(RRBs)} licensed to operate in India by Reserve Bank of India. These directions shall not be
applicable to operations of foreign branches of Indian banks.
Bulk Deposit:
1. Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial Banks
other than Regional Rural banks
2. Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs.
Interest Rate framework
1. The rates shall be uniform across all branches and for all customers and there shall be no
discrimination in the matter of interest paid on the deposits, between one deposit and
another of similar amount, accepted on the same date, at any of its offices.
2. The rates shall not be subject to negotiation between the depositors and the bank.
3. No interest shall be paid on deposits held in current accounts.
4. Differential interest rate shall be offered only on bulk (term) deposit
5. The additional interest may be paid on deposits after obtaining a declaration from the
depositor concerned, that the monies deposited or which may be deposited from time to
time into such account belong to the depositor:
member or a retired member of the banks staff, either singly or jointly with any member
or members of his/her family; or
the spouse of a deceased member or a deceased retired member of the banks staff; and
an Association or a fund, members of which are members of the banks staff;
6. Scheduled Commercial Banks shall, at their discretion, formulate term deposit schemes
specifically for resident Indian senior citizens, offering higher and fixed rates of interest as
compared to normal deposits of any size.
7. Scheduled Commercial Banks shall, at their discretion, give their resident Indian retired
staffs, who are senior citizens, the benefit of additional interest rates as admissible to senior
citizens over and above the additional interest payable to them by virtue of their being
retired members of the banks staff.
Scheduled commercial banks shall not pay any remuneration or fees or commission or brokerage or
incentives on deposits in any form or manner to any individual, firm, company, association, institution or
any other person except commission paid to agents employed to collect door-to-door deposits under a
special scheme, commission paid to Direct Selling agents/ Direct Marketing Agents as part of the
outsourcing arrangements and remuneration paid to Business facilitators or Business Correspondents.
28 | P a g e
Master Direction - Know Your Customer (KYC) Direction, 2016: In terms of the provisions of
Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering (Maintenance of
Records) Rules, 2005, Regulated Entities (REs) are required to follow customer identification procedure
while undertaking a transaction either by establishing an account based relationship or otherwise and
monitor their transactions.
There shall be a Know Your Customer (KYC) policy duly approved by the Board of Directors of REs
(Regulated Entities) or any committee of the Board to which power has been delegated. The KYC policy
shall include following four key elements:
(a) Customer Acceptance Policy;
(b) Risk Management;
(c) Customer Identification Procedures (CIP); and
(d) Monitoring of Transactions
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises
(MSMEs):
In order to provide a simpler and faster mechanism to address the stress in the accounts of MSMEs and
to facilitate the promotion and development of MSMEs, the Ministry of Micro, Small and Medium
Enterprises, Government of India, vide their Gazette Notification dated May 29, 2015 had notified a
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises.
Thereafter, certain changes in the captioned framework have been carried out in order to make it
compatible with the existing regulatory guidelines on Income Recognition, Asset Classification and
provisioning pertaining to Advances.
Accordingly, a revised Framework along with operating instructions has been furnished by RBI on
17.03.2016 to operationalize the Framework by the banks (not later than June 30, 2016).
Recovery of excess payments made to pensioners: The following uniform procedure may be
strictly adhered to while effecting recovery of excess/wrong pension payments made to pensioners:
1. As soon as the excess/ wrong payment made to a pensioner comes to the notice of the paying
branch, the branch should adjust the same against the amount standing to the credit of the
pensioners account to the extent possible including lump sum arrears payment.
2. If the entire amount of over payment cannot be adjusted from the account, the pensioner may
be asked to pay forthwith the balance amount of over payment.
3. In case the pensioner expresses his inability to pay the amount, the same may be adjusted from
the future pension payments to be made to the pensioners. For recovering the over-payment
made to pensioner from his future pension payment in installments 1/3rd of net (pension +
relief) payable each month may be recovered unless the pensioner concerned gives consent in
writing to pay a higher installment amount.
4. If the over payment cannot be recovered from the pensioner due to his death or discontinuance
of pension then action has to be taken as per the letter of undertaking given by the pensioner
under the scheme.
5. The pensioner may also be advised about the details of overpayment/ wrong payment and mode
of its recovery.
Performance of Indian Banking Sector in FY-2015:
29 | P a g e
Growth in aggregate deposits and gross bank credit decelerated to 10.7 per cent and 9.8 per
cent respectively in March 2015 from 13.9 per cent and 13.8 per cent, respectively a year ago.
The above deceleration was broad based and observed across all population groups except
Rural. Growth in gross bank credit increased to 14.7 per cent for Rural in March 2015 from
14.0 a year ago
Metropolitan branches constituting around 52.9 per cent of aggregate deposits and 64.4 per cent
of gross bank credit, recorded the highest credit-deposit (C-D) ratio at 94.2 per cent. For other
population groups, C-D ratio was lower than the all-India ratio of 77.4 per cent.
Arranged according to size of total business (aggregate deposits + gross bank credit) of SCBs,
seven states, viz., Maharashtra, NCT of Delhi, Tamil Nadu, Karnataka, Uttar Pradesh, West
Bengal, and Gujarat accounted for 68.8 per cent of the total business. Maharashtra alone
contributed 26.1 per cent of the total business. These states together accounted for 66.4 per
cent of aggregate deposits and 71.9 per cent of gross bank credit.
The C-D ratio was the highest in March 2015 for Tamil Nadu (119.5 per cent) followed by
Chandigarh (106.2 per cent), Andhra Pradesh (105.7 per cent), NCT of Delhi (103.6 per cent)
and Telangana (102.4 per cent).
SBI and associates, private sector banks, and RRBs could maintain accelerated growth in
aggregate deposits in March 2015 as compared to their levels a year ago. As regards credit, only
private sector banks improved their growth rate in March 2015 compared to its level a year ago.
Public sector banks accounted for the largest share of 72.9 per cent in aggregate deposits and
71.6 per cent in gross bank credit followed by private sector banks (19.7 per cent and 20.9 per
cent, respectively) as on March 31, 2015.
ADDITIONAL FEATURES
Regulatory Ratio at a Glance:
Bank Rate Policy
Section 49 defines it as The Standard Rate at which it (the bank) is prepared to buy or rediscount
bills of exchange or other commercial paper eligible for purchase under this Act.
By varying the bank rate, the RBI can to a certain extent regulate the commercial bank credit and the
general credit situation of the country. The impact of this tool has not been very great because of the
fact that the RBI does not have a mechanism to control the unorganized sector. Further the money
market in our financial system is not fully developed, so that the Bank rate policy will have if desired
impact on the financial system. The present bank rate is 7.75% (wef 29.09.2015)
Statutory Liquidity Ratio (SLR)
According to Section 24 (2-a) of the Banking Regulation Act, every banking company in India
whether scheduled or non scheduled, is required to maintain in India in Cash, Gold or
unencumbered, approved securities an amount of which is not less than a certain percentage of the
total of its demand and time liabilities in India. This is known as Statutory Liquidity Ratio (SLR). The
ratio keeps on changing time to time. At present SLR is 21.50% (wef 07.02.2015).
30 | P a g e
The Reserve Bank is empowered to increase/ decrease this ratio. For calculating the SLR, the
following liquid assets are taken into account.
However, the approved securities must be valued at a price not exceeding the current market price.
Cash Reserve Ratio
Section 42 defines the Cash reserves of scheduled bank to be kept with RBI. Every scheduled bank
has to maintain with RBI an average daily balance the amount of which shall not be less than 3% of
the total demand and time liabilities and shall not exceed 15%. Presently the CRR is 4.00% (wef
09-02-2013).
Policy Repo Rate: Repo (Repurchase) rate also known as the benchmark interest rate is the rate at
which the RBI lends money to the banks for a short term. When the repo rate increases, borrowing
from RBI becomes more expensive. If RBI wants to make it more expensive for the banks to borrow
money, it increases the repo rate similarly, if it wants to make it cheaper for banks to borrow money
it reduces the repo rate.
Repo Rate wef 29.09.15 is 6.75%.
Reverse Repo Rate: Reverse Repo rate is the short term borrowing rate at which RBI borrows
money from banks. The Reserve bank uses this tool when it feels there is too much money floating in
the banking system. An increase in the reverse repo rate means that the banks will get a higher rate
of interest from RBI. As a result, banks prefer to lend their money to RBI which is always safe instead
of lending it others (people, companies etc) which is always risky.
Reverse Repo Rate wef 29.09.15 is 5.75%.
Marginal Standing Facility Rate: MSF is a special window for banks to borrow from RBI against
approved government securities in an emergency situation like an acute cash shortage. MSF rate is
higher than Repo rate.
MSF Rate wef 29.09.2015 is 7.75%
Indian Companies Act, 2013: After getting approval of both the houses of Parliament, the longawaited Companies Bill 2013 obtained the assent of the President of India on 29 August 2013 and
became Companies Act, 2013 (2013 Act).
The 2013 Act has introduced several new concepts and has also tried to streamline many of the
requirements by introducing new definitions. The changes in the 2013 Act have far-reaching
implications that are set to significantly change the manner in which corporate operate in India.
31 | P a g e
2%
3%
4%
5%
7.5%
20%
21.50%
22%
24%
26%
Q.3 P.J. Nayak committee on banking sector reforms was set up by:
a.
b.
c.
d.
e.
RBI
GOI
SBI
World Bank
IMF
13
15
14
11
10
Q. 5. MCLR is:
a.
b.
c.
d.
e.
Marginal
Marginal
Marginal
Marginal
Marginal
32 | P a g e
Must ensure that explicit guidelines are in place on the following aspects of customer relationship in the
bank:
No account is opened in anonymous or fictitious/benami name Customer are categorized as low,
medium and high risk based on clearly defined parameters Required documents and other information
must be collected relating to different types of customers in line with the perceived risk. Necessary
checks before opening a new account profile for each new customer based on risk categorization.
(1) Customer Identification Banks to obtain all necessary information to establish the identity of
each new customer based on disclosures by customers themselves. The easy means would be
documents such as passport, driving license, Armed Forces ID cards, Income Tax PAN card,
Aadhaar Card, ID card issued by Government of India, State Government accompanied by
33 | P a g e
signature verification and photographs would help to establish the identity of the person opening
the account. Towards this, the following additional details need to be collected while opening the
account.
Employment details such as job specifications, name and address of the employer, length of
service etc.
Provide details about source of income and annual income.
Details of assets owned such as house, vehicle etc.
Finance ministry has recognized the Aadhar number issued by UIDAI as an officially valid document to
satisfy the KYC norms for opening of accounts. Recently, bank has also issued a circular that at the time
of opening of accounts the requirement of introduction may be waived.
Bank has introduced a new menu option FINDCUST for identification of multiple customer IDs for
limination and merger to single customer ID (UCIC)
Acceptance of e-KYC as a Valid Process for KYC Verification
Bank has decided to accept e-KYC service launched by UIDAI as a valid process for KYC verification in
consultation with Unique Identification Authority of India (UIDAI). The information authenticated and
transferred by UIDAI containing demographic details and photograph as a result of e-KYC process shall
be treated as sufficient proof of Identify and Address of the client.
Unincorporated Associations or body of individuals
(HO: BR: 107: 70 dated 12th May 2015)
Bank has shortlisted the list of documents to collectively establish the legal existence of Unincorporated
Associations or body of individuals i.e. unregistered entities (e.g. partnership firms, trusts, foundations
etc.) while opening of accounts, as below:
Certificate/ license issued by the municipal authorities under Shop & Establishment Act
CST / VAT certificates
Certificate / registration document issued by Sales Tax / Service Tax / Professional Tax
authorities
License issued by Professional bodies established under any statute/ Registering authorities, like
certificate of Practice issued by Indian Institute of Chartered Accountants of India, Institute of
Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council,
Food and Drug Control Authorities, etc.
The complete Income Tax return (not just the acknowledgement) in the name of the Firm where
the Firms income is reflected, duly Authenticated/ Acknowledged by the Income Tax Authorities.
Utility bills such as electricity, water, and landline telephone bills in the name of the firm.
RBOs/ Branches are to obtain any one of the above documents to collectively establish the
legal existence of such unregistered entities while opening of accounts of such entities to
comply with the extant guidelines of the RBI.
Obligation of Banks under PMLA 2002- "Beneficial Owner" - Declaration Form
(HO:BR:107: 83, dated June 17. 2015)
34 | P a g e
As per extant guidelines of Reserve Bank of India, the Bank is required to identify and maintain the
details of the Beneficial Owner" in all Non- Individual Accounts (other than Proprietorship). Branches
are, therefore, to obtain a common Declaration form of the "Beneficial Owner" from the prospective
customers while establishing the relationship:
To attach the declaration form for Beneficial Owners" to each account opening form for opening
of new accounts for Non-Individuals
Ensure obtaining the details of "Beneficial Owner" mandatorily in declaration form duly filled in
by the prospective customers.
While forwarding the account opening form to respective RBO, retain a copy of the account
opening form of Non- Individuals customers within the branch.
After activation of the newly opened accounts through RBO, enrich the 'Beneficial Owner' details
in the related fields through menu ACM function 'M' option 'A' under Relation Code field by
selecting "BO-Beneficial Owner" from the list in the CBS system.
For all existing Non- Individual accounts In the branch, mandatorily obtain the details of
"Beneficial Owner" from the customers and fill up the same in CBS through menu ACM function
'M' option 'A' under Relation Code field by selecting "BO-Beneficial Owner" from the list.
As per Bank's Customer Acceptance Policy (CAP), branches should undertake reasonable measures to
identify the beneficial owner(s) and verify his/her/their identity.
Anti Money Laundering
It is conversion of money, which is illegally obtained, so as to make it appear to originate from a
legitimate source. The main objective of the Act is:
1. To prevent, combat and control money laundering.
2. To confiscate and seize the property obtained from the laundered money.
3. To deal with any other issue connected with money laundering in India.
There are three independent steps or stages in Money Laundering -- Placement, Layering and
Integration
A) Placement - physical disposal of bulk cash proceeds derived from illegal activity
B) Layering - process of separation of illicit proceeds from their source by creating complex layers of
financial transactions it conceals the audit trail.
C) Integration re-injection of laundered proceeds back to the economy
Punishment: Whoever commits the offence of money laundering shall be punished with the rigorous
punishment for a term not less than 3 years but which may extend to 7 yrs and shall also
liable to fine, which may extend to Rs.5 lacs.
Vide HO:BR:107:33 dated 10/02/2015, revised policy on KYC/AML/PMLA policy Norms for furnishing
proof of address have been relaxed to allow submitting only one documentary proof of address ( either
current or permanent) while opening a Bank account or while undergoing periodic updation. In case
the proof of address where the customer is currently residing , the bank may take a declaration of the
local address. No proof is required to be submitted for such address for correspondence/ local address.
Amendment to Prevention of Money Laundering (Maintenance of Records) Rules, 2013
(Revised list of KYC Documents In CBS system)
35 | P a g e
36 | P a g e
4. All Commercial banks, RRBs and Schedule Primary Cooperative Banks are covered.
5. The appeal against the Award can be filed within 30 days to the Appellate Authority (DGM RBI).
Consumer Protection Act (COPRA) 1986
1. COPRA was initially enacted during 1986 and implemented w.e.f. 15.4.1987. The purpose of this act
was to enable the consumers to enforce his right as a consumer through simple legal procedures.
Further, on 17th December 2002, an amendment Act 2002 has been passed and implemented w.e.f.
15th March2003, the consumer day.
2. The act covers, all goods services including banking, insurance, transportation, electricity, processing
etc.
3. Any consumer individually or jointly, consumer organisation can file complaint within -2-years from
the date of cause of action preferably within 3 months.
4. Legal heirs/ can continue as complaints of unfair trade practice or restrictive trade practices against
servive provider and charging of prices for the goods in excess of the prices displayed.
5. Definition of complaint amended to include complaints of unfair trade practices or restrictive trade
practices against service provider, failure to disclose final results of scheme of gifts & prizes amt.
Prescribed fee payable on every complaint as court fees - no fees earlier
6. A person availing services for commercial purpose will not be a consumer under the act.
Note:
The Consumer Protection Bill, 2015, has since been introduced in Lok Sabha on August 10, 2015 by
the Minister of Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan.
The Bill will replace the Consumer Protection Act, 1986.
Banking code and Standards Boards of India (BCSBI):
A comprehensive Bankers Fair Practice Code prepared by Indian bank Association has been used, as a
bench mark standard by the BCSBI. The code provides protection to the customers on day-to-day basis
on banking operations.
This is a voluntary code, which sets minimum standards of Banking practices to be followed by banks
when attending to customers. It has the following objectives
1. Promote good and fair banking practices by setting minimum standards,
2. Increase transparency
3. To encourage financial institutions to achieve higher operating standards,
4. Promote cordial and fair relationship between bank and customer,
5. Bring confidence in the banking system,
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act 2002 (SARFAESI Act 2002):
In India the enactment of SARFAESI Act 2002 enabled lending agencies (secured creditors) to foreclose
and sell underlying assets without court intervention to recover the secured debt. For the purpose of
the Act, Minimum Scale IV officer is designated as
Authorized Officer for the purpose of enforcement of security interest under the Act to realize /
recover banks dues in case of a NPA-account.
37 | P a g e
38 | P a g e
39 | P a g e
In order to bring in customer centricity in banking services and to improve the image of banks for
providing expeditious, redress of grievances to bank customers, ministry of finance has advised all
public sector banks to develop a SPGRS.
As advised by ministry of finance, Govt. of India, our bank has implemented a standardized public
Grievance redress system (SPGRS), an online complaint lodgment facility for the
customers/noncustomers w.e.f. 11/01/2013. An icon for online complaint registration has been provided
on banks home page: www.bankofbaroda.com
40 | P a g e
41 | P a g e
BARODA ADVANTAGE
PRODUCT
CURRENT A/C
ADVANTAGE
BUSINESS BANKING
MAKES EAZY
ELIGIBILITY
BARODA PREMIUM
INDIVIDUALS (NOT
ABOVE)
MINOR/NRI/OCB/BANKS/FI)
BUSINESS
BUSINESS ESTABLISHMENTS/
ESTABLISHMENTS/ CLUB/
SOCIETIES
CLUB/ SOCIETIES
CORPORATES/ COMPANIES/
CORPORATES/ COMPANIES/
HUF/ TRUSTS/
TRUSTS/ ASSOCIATIONS
GOVT ESTABLISHMENTS/
GOVT ESTABLISHMENTS/
TRUSTS/ BANKS
BANKS
TRUSTS/ BANKS
M/ U/ SU/ R
M/ U/ SU/ R
M/ U/ SU/ R
NA
QAB 75000/-
QAB 250000/-
NON-MAINTENANCE OF QAB-600/- +
NON-MAINTENANCE OF QAB-
ST
1000/- + StT
NO UPPER LIMIT
NO UPPER LIMIT
NO UPPER LIMIT
NOMINATION
YES
YES
YES
NO. OF
NO LIMIT
NO LIMIT
NO LIMIT
FREE
FREE
FREE
ONCE IN A YEAR
FREE
FREE
ONCE IN 3 MONTHS
FREE
FREE
No concession
50% concession
100% concession
CREDIT CARD
(BOBCARD)
MAXIMUM TO 2 PARTNERS /
YEAR) MAXIMUM TO 2
DIRECTORS
PARTNERS / DIRECTORS
SOCIETIES
ASSOCIATIONS
AREA OF
OPERATION
AUTO / REVERSE
SWEEP
MINIMUM BAL
MIN. BALANCE
CHARGES
MAXIMUM
BALANCE
TRANSACTIONS
INTERNET
BANKING/ ATM/MCONNECT
FREE BALANCE
CERTIFICATE
FREE SIGNATURE
VERIFICATION
CONCESSION ON
REMITTANCE
(DD/BC) & ON OCC
42 | P a g e
PERSONAL
ACCIDENT
INSURANCE
CARD
DISCOUNT OF
DEMAT SERVICES
PROCESSING
CHARGES ON CAR
COMPANY
FIRM/ COMPANY
LOAN
INTER SOL
CHARGES
PER DAY
payments to third
PER DAY
parties is totally
withdrawn
of ` 50000 /- is fixed
NON-BASE BRANCH
BANK STATEMENT
BY E-MAIL
BY E-MAIL
BY E-MAIL
UPTO 20000/-
UPTO 50000/-
UPTO 150000/-
NO CHARGES IF AV.
FREE UNLIMITED
FREE UNLIMITED
IMMEDIATE
Rs 10 per packet
43 | P a g e
BARODA
BARODA SUPER
BARODA SHUBH
BARODA
BARODA PENSION
PRODUCT
ADVANTAGE
SAVING A/C
CENTENARY
SAVING A/C
SAVING A/C
(METRO/ URBAN)
URBAN/ RURAL)
SAVING A/C
RESIDENT
RESIDENT
RESIDENT
RESIDENT
PENSIONERS (BOB
INDIVIDUALS
INDIVIDUALS (ABOVE
INDIVIDUALS
INDIVIDUALS
PENSIONERS ALSO)
(ABOVE 10 YRS/
10 YRS/ SINGLE/
(ABOVE 10 YRS/
(ABOVE 10 YRS/
SINGLE/ JOINT)
JOINT),
SINGLE/ JOINT),
SINGLE/ JOINT)
AUTHORISED
GOVT DEPTT/
INSTITUTIONS NOT
OTHER INSTITUTIONS
TRUSTS/
ELIGIBLE)
NOT ELIGIBLE)
INSTITUTIONS
ELIGIBILITY
FARMER'S CLUB,
VVV, SOCIETIES,
SHG ETC. STAFF &
SR CITIZENS
(NOT FOR NRIs)
AUTO / REVERSE
NA
SWEEP
MINIMUM BAL
FREE IN MULTIPLES
FREE IN
FREE IN
OF 10000/- ABOVE
MULTIPLES OF
MULTIPLES OF
THRESHOLD LIMIT
5000/- ABOVE
1000/- ABOVE
THRESHOLD LIMIT
THRESHOLD LIMIT
DAYS)
DAYS)
QAB-10000/-
3000/- ON DAILY
QAB 20000/-
QAB 15000/-
(SU/R) 500/-
MIN. BALANCE
QUARTERLY (M/U)
NON-MAINTENANCE
NON-MAINTENANCE
MONTHLY Rs 100/-
100/- + ST/
CHARGES
OF QAB-1000/- + ST
OF QAB-750/- + ST
+ ST
QUARTER
NO LIMIT
ST
MAXIMUM
BALANCE
(10-14 YRS)
14 YRS)
(10-14 YRS)
(10-14 YRS)
INTEREST
4% P.A.
4% P.A. (QUARTERLY
4% P.A.
4% P.A.
4% P.A.
(HALFYEARLY ON
ON DAILY PRODUCT)
(HALFYEARLY ON
(QUARTERLY ON
(HALFYEARLY ON
DAILY PRODUCT)
DAILY PRODUCT)
DAILY PRODUCT)
DAILY PRODUCT)
NOMINATION
YES
YES
YES
YES
YES
NO. OF
100 WITHDRAWL
20 WITHDRAWL
100 WITHDRAWL
TRANSACTIONS
HALF YEAR
HALF YEAR
PER MONTH
INTERNET
FREE
FREE
FREE
FREE
FREE
UPTO 15000/-
UPTO 25000/-
UPTO 25000/-
UPTO 25000/-
UPTO 25000/-
FREE UNLIMITED
FREE UNLIMITED
FREE UNLIMITED
FREE UNLIMITED
BANKING/
ATM/MCONNECT
IMMEDIATE
CREDIT OF OCC
(*T & C)
CHEQUE BOOK
44 | P a g e
CONCESSION ON
No concession
REMITTANCE
OCC
OCC
(DD/BC) & ON
MONTH, OCC-FREE
OCC
DISCOUNT OF
25% DISCOUNT OF
25% DISCOUNT OF
DEMAT
DEMAT SERVICES
DEMAT SERVICES
CREDIT CARD
FREE SILVER
(BOBCARD)
SERVICES
Ist YEAR)
PROCESSING
NO - ON RETAIL
CHARGES
LOANS
OD FACILITY
MAX OF 2 MONTHS
PENSION (ROIBR+5.50%)
PERSONAL
FREE PERSONAL
FREE PERSONAL
ACCIDENT
ACCIDENT
ACCIDENT
INSURANCE
INSURANCE WITH
INSURANCE OF 1
FIRST YEAR
CARD
BARODA BACHAT
BARODA SALARY
BARODA BASIC
BARODA ZERO
BARODA JEEVAN
PRODUCT
MITRA SAVING
ADVANTAGE SAVING
SAVING A/C
BALANCE SAVING
SURAKSHA
A/C
A/C
A/C
SAVING A/C
INDIVIDUALS -
REGULAR EMPLOYEES
NO FRILL ACCOUNT,
SALARY ACCOUNT
RESIDENT
OF STATE/ CENTRAL
ALL RESIDENT
OF EMPLOYEES,
INDIVIDUALS
GOVT, PSU,
INDIVIDUALS,
(WITH LIFE
EDUCATIONAL
COMMON PEOPLE,
STUDENTS,
INSURANCE
INSTITUTIONS,
PERSONS GETTING
COVER UPTO Rs
INCOME GROUP,
COMPENSATION
HOUSE WIVES.
IFLIC, LOW
YR SERVICE
PREMIUM)
TRUSTS/ SOCIETIES
INDIVIDUALS
ELIGIBILITY
MINIMUM BAL
(SINGLE/ JOINT-
SALARY 5000/-
YRS
NO MINIMUM
NO MINIMUM
NO MINIMUM
NO MINIMUM
1000/- ON DAILY
BALANCE
BALANCE
BALANCE
BALANCE
BASIS
MIN. BALANCE
100/- + ST/
CHARGES
QUARTER
AUTO SWEEP
FREE IN
MULTIPLES OF
5000/- ABOVE
THRESHOLD LIMIT
5000/- (FOR 180
DAYS)
45 | P a g e
MAXIMUM
NO LIMIT
NO LIMIT
BALANCE
INTEREST
NO LIMIT
NO LIMIT
(10-14 YRS)
4% P.A.
4% P.A. (HALFYEARLY
4% P.A.
4% P.A.
4% P.A.
(HALFYEARLY ON
ON DAILY PRODUCT)
(HALFYEARLY ON
(HALFYEARLY ON
(HALFYEARLY ON
DAILY PRODUCT)
DAILY PRODUCT)
DAILY PRODUCT)
YES
YES
YES
DAILY PRODUCT)
NOMINATION
YES
YES
NO. OF
4 WITHDRAWALS IN
100 WITHDRAWALS
TRANSACTIONS
A MONTH
PER HY
INTERNET
FREE
FREE
FREE
FREE
FREE
BANKING/
ATM/M-CONNECT
IMMEDIATE
UPTO 15000/-
CREDIT OF OCC
(*T & C)
CHEQUE BOOK
YES
FREE UNLIMITED
FREE 50 LEAVES IN A
YEAR
PROCESSING
NO
0.50% MIN-100/-
NIL
BUILT IN OD
CUSTOMERS HAVE
*MAXIMUM 100000
Maximum OD of Rs
FACILITY
OPTION TO GET OD
(SUBJECT TO 90% OF
FACILITY AGAINST
FDR IN SB A/C.
SALARY)
or 50% of credit
MINIMUM AMT OF
*THIRD PARTY
summation of 6-months
GUARANTEE
or Rs 5000/- whichever is
MONTHS/ OD UPTO
*ROI-BR+5.50%
lower
80% OF FD VALUE
*A/C TO BE IN CREDIT
ONCE IN 60 DAYS
YES
FREE 20 LEAVES IN
A HALF YEAR
CHARGES
46 | P a g e
ELIGIBILITY
THE
MINIMUM
PERIOD
ROI
AMOUNT
PREMATU
TDS
RE
PRODUCT
LABOD/
ODBOD
PAYMENT
BARODA
INDIVIDUALS ABOVE
1000/-
7 DAYS TO LESS
AS PER
APPLI
95%
SHORT
(IN MULTIPLES OF
THAN 12 MONTHS
MATURITY (Paid
ALLOWED
CABL
(DEPOSIT
TERM
SOCIETIES
100/-)
on
AMOUNT)
DEPOSIT
TRADERS, TRUST,
Maturity/withdrawal)
BANKS,
ABOVE)
APPLI
95%
CORPORATES,
ASSOCIATIONS
RIRD -
INDIVIDUALS ABOVE
1000/-
MINIMUM-12
AS PER
ALLOWED
BARODA
(IN MULTIPLES OF
MONTHS
MATURITY (Paid
CABL
(PRESENT
REGULAR
SOCIETIES
100/-)
MAXIMUM-120
Half yearly,
VALUE)
INCOME cum
TRADERS, TRUST,
MONTHS
compunded
RECURRING
BANKS,
DEPOSIT
CORPORATES,
quarterly)
ASSOCIATIONS
MIP& QIP -
INDIVIDUALS ABOVE
1000/-
MINIMUM-12
AS PER
APPLI
95%
BARODA
(IN MULTIPLES OF
MONTHS
MATURITY
ALLOWED
CABL
(PRESENT
REGULAR
SOCIETIES
100/-)
MAXIMUM-120
(DISCOUNTED
VALUE)
INCOME
TRADERS, TRUST,
MONTHS
INTERETST
PLAN
BANKS,
SIMPLE IN QIP)
IS TO BE
CORPORATES,
TRANSFER
ASSOCIATIONS
RED TO
LOAN A/C
BARODA
INDIVIDUALS
100/-
MINIMUM-60
AS PER
NOT
APPLI
NO LOAN
TAX
(SINGLE OR JOINT-
(IN MULTIPLES OF
MONTHS
MATURITY (AS
ALLOWED
CABL
ALLOWED
SAVING
MAXIMUM TWO
100/-)
MAXIMUM-120
BEFORE 60
UPTO 60
TERM
ADULTS)
MAXIMUM-UPTO
MONTHS
DEPOSIT
150000/-
(RELIEF
OF KARTA)
MONTHS
MONTHS
NOT TO BE
PLEDGED
UNDER SEC
AS
80-C OF
COLLATER
INCOME
AL
TAX)
(UNDER
RIRD/ MIP /
QIP
SCHEME)
BARODA
INDIVIDUALS ABOVE
5000/-
MINIMUM-12
AS PER
PART
APPLI
95%
FLEXIBLE
(IN MULTIPLES OF
MONTHS
MATURITY
PAYMENT
CABL
(PRESENT
FIXED
SOCIETIES
1000/-)
MAXIMUM-120
IN UNITS
VALUE)
DEPOSIT
TRADERS, TRUST,
MONTHS
OF 1000/-
SCHEME
BANKS,
CORPORATES,
ASSOCIATIONS
47 | P a g e
BARODA
INDIVIDUALS ABOVE
R/ SU 50/-
MINIMUM-6
AS PER
RECURRING
U/ M 100/-
MONTHS
MATURITY
DEPOSITS-
SOCIETIES
(IN MULTIPLES OF
MAXIMUM-120
GENERAL
TRADERS, TRUST,
MONTHS
SCHEME
BANKS,
RESPECTIVELY)
(MONTHLY)
CORPORATES,
ALLOWED
APPLI
95%
CABL
(PRESENT
VALUE)
APPLI
95%
ASSOCIATIONS
BARODA
INDIVIDUALS ABOVE
MINIMUM CORE
MINIMUM-12
AS PER
ALLOWED
FLEXIBLE
INSTALMENT 100/-
MONTHS
MATURITY
CABL
(PRESENT
RECURRING
SOCIETIES
& IN MULTIPLES
MAXIMUM-36
(COMPOUNDED
VALUE)
DEPOSITS
TRADERS, TRUST,
OF 100/-
MONTHS
HALF YEARLY)
ACCOUNT
BANKS,
(MAXIMUM 3
(YSJY)
CORPORATES,
TIMES OF CORE
ASSOCIATIONS
INSTALMENT upto
10000/- PER
MONTH)
INTEREST
QUARTERLY
PREMATURE
NOT
PAYMENT
COMPOUNDING
CHARGES (1%)
APPLICABLE IF
DEPOSIT IS UPTO
Rs 5 lacs & RUN
OVER 12
MONTHS
ROI FOR SR
+0.50%
TDS
CITIZEN
IF TOTAL
INTEREST
PAYABLE IS
ABOVE 10000 PER
YEAR
ROI FOR
+1.00%
BOB STAFF
ROI ON LABOD/
ODBOD
FDR
IIIrd PARTY- @
+1.00% OVER FDR
OR BR+0.25%,
WHICHEVER IS
HIGHER
ROI FOR
+1.50%
NOMINATION
AVAILABLE
BOB STAFF
(SR
CITIZEN)
ELIGIBILITY
PRODUCT
MINIMUM
PERIOD
ROI
AMOUNT
PREMATU
TDS
RE
LABOD/
ODBOD
PAYMENT
BARODA SPECIAL
FOR CLAIMANTS
AS PER COURT
AS PER COURT
AS PER
TERM DEPOSIT
OF MOTOR
ORDER
ORDER-
PREVAILING
SCHEME FOR
ACCIDENT
(DUPLICATE FDR
CARD RATE
CLAIMANTS OF
VICTIMS
IS NOT ISSUED)
MOTOR ACCIDENT
NA
APPLICA
NO LOAN
BLE
ALLOWE
D/ NOT
TO BE
PLEDGED
48 | P a g e
VICTIMS
AS
COLLATE
RAL
FLEXI DEPOSIT
HIGH
5 CRORE
MINIMUM-7 DAYS
AS
AS PER
APPLICA
NETWORTH,
(IN MULTIPLES OF
MAXIMUM-12
APPLICABLE
PREPAYME
BLE
VALUE CUSTOMERS
HIGH VALUE
1 CRORE)
MONTHS
FOR BULK
NT
DEPOSIT (NO
CLAUSE
CUSTOMERS
ADDITIONAL
SR CITIZEN,
STAFF RATE)
FAST ACCESS
INDIVIDUALS
10000/-
MINIMUM-12
AS PER
DEPOSIT SCHEME
(INCLUDING
(IN MULTIPLES OF
MONTHS
MATURITY
ALLOWED
APPLICA
95%
BLE
(PRESENT
(UNDER RIRD
MINORS),
1000/-)
MAXIMUM-120
VALUE)
SCHEME)
TRADERS
MONTHS
TO OPEN
A
CURRENT
A/C
BARODA SAMRADHI
INDIVIDUALS
500/-
MINIMUM-36
AS PER
QUARTERLY
(MINORS ABOVE
(IN MULTIPLES OF
MONTHS
MATURITY
RECURRING
10 YR), CLUB,
100/-
MAXIMUM-120
DEPOSITS
SOCIETIES (NOT
RESPECTIVELY)
MONTHS
ALLOWED
APPLICA
95%
BLE
(PRESENT
VALUE)
FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA SAMRADHI
INDIVIDUALS
500/-
MINIMUM-36
AS PER
QUARTERLY
(MINORS ABOVE
(IN MULTIPLES OF
MONTHS
MATURITY
RECURRING
10 YR), CLUB,
100/-
MAXIMUM-120
DEPOSITS
SOCIETIES (NOT
RESPECTIVELY)
MONTHS
ALLOWED
APPLICA
95%
BLE
(PRESENT
VALUE)
FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA SAMRADHI
INDIVIDUALS
1000/-
MINIMUM-36
AS PER
HALF YEARLY
(MINORS ABOVE
(IN MULTIPLES OF
MONTHS
MATURITY
RECURRING
10 YR), CLUB,
100/-
MAXIMUM-120
DEPOSITS
SOCIETIES (NOT
RESPECTIVELY)
MONTHS
ALLOWED
APPLICA
95%
BLE
(PRESENT
VALUE)
FOR NRE)
TRADERS,
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
BARODA DOUBLE
INDIVIDUALS
5000/-
AS PER
DHAMAKA FIXED
(MINORS ABOVE
(IN MULTIPLES OF
MATURITY
DEPOSIT SCHEME
10 YR), CLUB,
1000/-)
SOCIETIES
MAXIMUM- LESS
ALLOWED
APPLICA
95%
BLE
(PRESENT
VALUE)
49 | P a g e
TRADERS,
THAN Rs 1 CRORE
TRUST, BANKS,
CORPORATES,
ASSOCIATIONS
SENIOR CITIZENS
IN MULTIPLES OF
5 YEARS
AS ADVISED
AFTER
APPLICA
SAVINGS SCHEME -
VRS), Retired
1000/- MAXIMUM
(EXTENDABLE BY
BY RBI,
ONE YR
BLE
2004
Defence personnel
Rs 15 LAC
3 YRS)
Presently
(WITH
(Excluding civilian
@9.30%,
PENALTY)
employees)
compounded
irrespective of Age
quarterly
NA
BARODA CONNECT
BARODA CONNECT USERS WITH FULL TRANSACTION RIGHT CAN OPEN FIXED DEPOSIT ACCOUNT ONLINE
ONLINE FIXED
DEPOSIT THROUGH
NET BANKING
BARODA CAPITAL
INVESTMENT TO BE MADE WITHIN 2 YRS FOR PURCHASE & 3 YRS FOR CONSTRUCTION
GAIN ACCOUNT
SCHEME - 1968
INTEREST PAYMENT
QUARTERLY
PREMATURE
NOT
COMPOUNDING
CHARGES (1%)
APPLICABLE
IF DEPOSIT IS
UPTO Rs 5 lacs
& RUN OVER
12 MONTHS
+0.50%
TDS
IF TOTAL
INTEREST
PAYABLE IS
ABOVE 10000
PER YEAR
+1.00%
ROI ON LABOD/
SELF- @
ODBOD
+1.00% OVER
FDR
IIIrd PARTY@ +1.00%
OVER FDR
OR BR+0.25%,
WHICHEVER
IS HIGHER
+1.50%
NOMINATION
AVAILABLE
(SR CITIZEN)
50 | P a g e
Eligibility: Any adult in his / her name or in minor's name in the capacity of guardian of the minor. HUF
and
NRIs
cannot
open
PPF
account.
Online
subscription
facility
Existing customers having PPF account with Bank of Baroda can deposit online in PPF account from
Bank of Baroda savings account.
Minimum amount: Rs. 500/- per annum is required to be deposited. The accounts in which deposits
are not made for any reason are treated as discontinued accounts and such accounts cannot be closed
before maturity. The discontinued account can be activated by payment of the minimum deposit of
Rs.500/- with default fee of Rs.50/- for each defaulted year.
Maximum amount: Rs. 1.5 Lacs per annum (FY 2014-15). The depositor has flexibility and freedom
for depositing any amount in a maximum of 12 installments in a financial year.
Maturity period: 15 years. An Account, on the expiry of fifteen years, can be extended for a further
period of five years at a time.
Interest Rate: The interest is paid as per the rates declared by the Government from time to time.
The interest for the month is calculated on the minimum balance available in the account from 5th of a
month to the last date of the month.
Withdrawal facility: A depositor can make partial withdrawals, once every year from his PPF account
after expiry of five years, from the end of Financial Year, in which the initial deposit was made. The
amount of withdrawal is restricted to 50% of the credit balance at the end of the fourth year
immediately preceding the year of withdrawal or the year immediately preceding the year of withdrawal,
whichever is lower.
Premature Encashment: Premature closure of a PPF Account is not permissible except in the case of
death of the depositor.
Senior Citizens Savings Scheme 2004
Tenure of the scheme: 5 years, this can be extended by 3 more years;
Rate of interest: The rate of interest for every financial year will be notified by RBI. Rate of interest
remains unchanged for the entire duration of the investment till maturity irrespective of the revision in
subsequent years.
Frequency of computing interest: Quarterly
Investment to be in multiples of: Rs. 1000/Maximum investment limit: Rs. 15 lakh
51 | P a g e
Minimum eligible age for investment: 60 years (55 years for those who have retired on
superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence
Services (excluding Civilian Defence Employees) shall be eligible to invest irrespective of the age limits
subject to the fulfilment of other specified conditions
Premature withdrawal facility :Available after one year of holding but with penalty
Applicability to NRI, PIO and HUFs: Non resident Indians, Persons of Indian Origin and Hindu
Undivided Family are not eligible to open an account under the scheme.
Sukanya Samriddhi Account (SSA)
Eligibility: A Natural/ Legal Guardian can open account in the name of the girl child from the birth of
the girl child till she attains the age of ten years.
Minimum amount: Rs. 1000/- per annum is required to be deposited.
Maximum amount: Rs. 1.5 Lac can be deposited in a financial year. The amount can be deposited in
multiples of hundred on a single occasion or on multiple occasions but should not exceed the maximum
limit.
Maturity
period:
The
account
shall
mature
on
completion
of
21
years.
Income Tax benefit: Deposits under Sukanya Samriddhi Account scheme are eligible for Income tax
deduction under 80C of Income-tax Act, 1961.
Interest Rate: The interest is paid as per the rate declared by Government of India from time to time.
Other features: Partial withdrawal, maximum up to 50% of balance standing at the end of the
preceding financial year can be taken after Account holders attaining age of 18 years to meet the
financial requirements of the account holder for the purpose of higher education and marriage.
If account is not closed after maturity, balance will continue to earn interest as specified for the scheme
from time to time.Normal premature closure will be allowed after completion of 18 years of age of
account holder, provided that girl is married.
Government of India 8% Savings Bonds 2003 (Taxable)
Key Benefits
Bonds can be issued to resident Indian, in individual or joint names/on behalf of a minor as
father/mother/legal guardian, Hindu Undivided Family, Charitable Institution and University.
Bonds bear interest @ 8% p.a. No interest would accrue after the maturity of Bonds.
Bonds (Non-Cumulative) -Interest will be payable at half yearly intervals up to 31st July and 31st
January by crediting holder's a/cs or issuing cheque.
The bond shall be repayable on the expiry of -6- years from the date of the issue.
52 | P a g e
Investment can be made with minimum Rs.1000/- and in multiple thereof with no maximum
limit.
Collection of Central/State Taxes
Bank of Baroda, provides the facility of collection of various types of direct taxes viz. Corporate Tax,
Income Tax, Hotel Tax, Wealth Tax, Gift Tax, & Expenditure Tax, through its network
Collection of Indirect Taxes (CBEC)
Bank of Baroda provides the facility of collection of various types of Indirect taxes viz. Excise duty,
Customs & Service Tax through its network of select branches in the States of Gujarat, Rajasthan,
Maharashtra (Mumbai), Delhi, Haryana, & Western UP. The Custom duties are collected by branches in
Gujarat State only
Collection of State Sales/Professional Taxes (ST/PT)
The facility of collection of State Sales Tax/Professional Tax through its select branches, in the States of
Gujarat, Maharashtra, Uttar Pradesh, Delhi & W. Bengal.
Treasury/Sub-Treasury business
Bank of Baroda undertakes State Governments Treasury-sub-treasury business at its select branches, in
the States of Gujarat, Rajasthan, Chhattisgarh and Tamil Nadu.
e-Stamping
Bank of Baroda is authorized to undertake e-stamping business in 8 States and provides the facility of
generation of e-stamps through its designated branches. It is a secured way of paying non-judicial
stamp duty to State Govt. Present system of physical stamp paper is being replaced by e-stamps
gradually by the State Governments. It prevents paper and process related fraudulent practices.
e-Biz
Bank of Baroda is authorized by Department of Industrial Policy and Promotion (DIPP) as one of the
accredited Bank for collection of fees/ charges through e-Biz Portal.
There are two modes of collection of e-Biz receipts:
1. Offline Mode By any of our branch across India
2. Online Mode Customer using their net banking facility can pay through online mode
Fee pertaining to the services like, Industrial License, Industries Entrepreneur Memorandum, and
Employer Registration Service etc. can be done through e-Biz
53 | P a g e
Any surgery that is required in respect of any disease or accident that has arisen during the
policy period
Salient features:
Health insurance cover is available to family of -4- (self, spouse and 2 dependent children) up to
the amount insured without any additional premium.
Premium paid is eligible for Income Tax exemption under Section 80 D as per Income Tax Rules.
54 | P a g e
Pre-existing diseases also get coverage after 3 continuous claim-free policy years
Upper age limit of primary member (first named person) is allowed up to 80 years, if insurance
cover availed before completion of 65 years.
The scheme is administered through Third Party Administrators (TPAs) for settlement of
Hospitalization Claims under the insurance cover.
55 | P a g e
Chillr app
Express Lobbies (Includes Cash Recycler, ATM, Self Service Passbook printer)
Baroda e-trade now available on mobile devices (Android and ios) through mobile
app
b. New Customer Oriented functionalities in our Digital Banking products
Online Self Registration by Customer by using Debit Card and Registered Mobile
Number
USSD Direct Access Code to minimise the steps involved in USSD based mobile
transaction e.g. for mini statement *99*48*2#
56 | P a g e
24X7 Debit Card Hotlisting and Webchat services through Contact Centre
Debit Card Blocking through SMS
Bank has launched its presence on social media platforms viz; Facebook and
Twitter
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
New Menu options such as DCISS (Debit card reissuance, regeneration of PIN,
multiple account linking / delinking and card blocking) DCARDBLK (For f\blocking of
Debit card through branch), new portal of BOBCARDS for Debit Card CRM (complaint
resolution module)
2. Cash Recycler Machines (Cash Deposit + ATM Functions)
Salient functionalities available in Cash Recyclers are as follows
Cash Deposit with Card Transaction
Daily transaction limit for account without PAN (Permanent Account Number) registered in CBS
is Rs. 49,900/-. There is no restriction on number of transactions of cash deposit till daily limit
of Rs. 49,900/- is reached. This limit also includes the cash deposited over the counter at the
branches.
Daily transaction limit with PAN registered in CBS is Rs. 2,00,000/- without any restriction on
number of transactions. This limit also includes the cash deposited over the counter at the
branches.
Cash Deposit without Card Transaction
Cash Recycler machine facilitates customer to deposit the Cash in Savings / Current / Cash Credit /
Overdraft account by giving the account number (Card-less Transaction), where per transaction &
per day limit is of Rs. 20,000/- subject to daily transaction limit without PAN (Permanent Account
Number) registered in CBS of Rs. 49,900/-.
Cash Withdrawal
This facility is exactly like ATM operations and available with Debit / ATM Card only. The Cash Recycler
dispenses cash deposited by customers using Cash Acceptor facility.
57 | P a g e
Other Bank customers having Debit / ATM Card can also use Cash Recycler for Cash Withdrawal
only.
Maximum cash withdrawal limit per transaction for our Customer is Rs. 15000/-, however per
day Cash withdrawal limit is as per the variant of Debit Card.
Benefit to Bank
4. Self Service Passbook Printer (SSPBP) Introduction of new feature for Self mapping
of subsequent passbook
To improve customer convenience and to reduce workload of staff to map subsequent passbooks, Self
mapping of subsequent passbook feature is now enabled in SSPBP. Details of this facility are as under:
1. Customer is issued the first SSPBP passbook from the branch counters after mapping the passbook
serial number with account number by branch staff (no change in current process).
2. Thereafter, customer prints passbook using Self Service Passbook Kiosks. On completion of the
passbook, system prompts customer to collect fresh passbook from branch for continuation. System
will provide 45 seconds to insert new passbook for auto mapping.
3. If customer inserts new blank passbook within 45 seconds, system automatically maps the serial
number of the blank passbook with customers account and deactivates the old passbook.
4. If customer is not able to insert the blank passbook within 45 seconds (primarily when he/she has to
collect blank passbook from branch) then the system returns to home screen. In that case, for
mapping of subsequent passbook, customer is required to first insert the old passbook. System will
prompt him/her to insert the new blank passbook and machine completes the mapping.
5. Contact Centre
Bank has established Two Contact Centres at Baroda and Lucknow.
Contact Centre Numbers
Toll Free Number 1800 22 33 44 or 1800 102 44 55 from anywhere in the country
The dedicated toll free number for providing contact centre services for Financial Inclusion /
Pradhan Mantri Jan Dhan Yojana (PMJDY) customers is 1800 102 77 88
58 | P a g e
Web-chat facility
6 a.m. to 10 p.m.
Services Provided
1. Through Agents
Status Enquiry
Cheque Book request
Regeneration of password
Complaint on failed transaction
Mobile Banking
General Queries
General Enquiry
Products & Services
Lead creation
Wealth Management Product
59 | P a g e
3. Through web-chat
This service is only for general queries and any information which requires disclosure of any
personal / account information is not provided through this service.
Presently this service is available in English only.
4. Missed Call facility for Balance Inquiry
Customers, who have registered their mobile number, can get balance of their accounts by just giving a
missed call from their registered mobile number to mobile number 09223011311.
Salient features of the facility are as under: This facility is available 24X7.
Balances of account under Saving, Current, Cash Credit and Overdraft schemes are
provided through this facility.
Customer may have more than one account with same mobile number. In that
Case SMS of maximum length of 320 characters (2 SMSs) will be sent to customers. For
remaining accounts, customer can avail the SMS Banking Services or our Contact Centre
services.
Customer can use this facility maximum 5 times in a day, system will not respond
thereafter.
mobile
This service is available only for resident accounts i.e. accounts with domestic
number only. In other words, customer with overseas country code /mobile number will not be
sent any SMS.
Customers do not have to pay any charges as the call would be disconnected after a ring
and customer would get the balance via SMS
5. SMS Banking
A SMS to be sent from their registered mobile number to 5616150 or 9176612303.
Services oferred are
Balance Enquiry
Mini Statement
Cheque Status
Customer has to send a SMS text as under
o
o
cheque no
60 | P a g e
6. Debit Cards
a) Launch of MasterCard Platinum Chip Debit Card
1. Higher limits of Cash Withdrawal up to Rs 50,000/- per day from ATM and Purchases up to Rs
1,00,000/- per day at POS/e-commerce merchants wherever Master Cards are accepted in India and
Abroad.
2. Validity of card is Five years from the month of issuance.
3. Maximum number of ATM cash withdrawals allowed per day is 10.
4. Secured with PIN and CVV2 for online transactions.
5. Ready for international usage on millions of MasterCard ATMs/Terminals.
6. Targeted for HNI, overseas travelers and privileged customers.
a) Launch of Baroda Flash N Move+ Contactless Debit Card
Bank has launched Baroda Flash n Move+ Contactless Debit Card in co-ordination with VISA. The card is
based on Near Field Communication (NFC) technology where in the debit card need not to be dipped or
swiped at the POS. Instead, the cardholder simply taps the card over special POS terminals (enabled for
accepting contactless cards) for making purchases at POS.
Key features of the card are as follows:
It is a Platinum variant of Visa debit card with higher limits of ATM Cash Withdrawal and POS/ecommerce transactions.
Can be used for domestic as well as international transactions
Same Card can be used for making payment through both Contactless modes (by
tapping/bringing the card near to POS terminal within a radius up to 4 cms) or Contact based
mode (either by swiping the card through Magnetic Stripe or dipping the Card through Chip).
Can be used at ATMs to withdraw Cash or avail any other value added service.
Make online purchases through Internet.
For convenient shopping, travelling, dining out at many locations wherever contactless debit
cards are accepted
As per RBI guidelines, Contactless transaction up to a maximum of Rs 2000/- can be done
without PIN at POS. If amount is more than Rs 2000/-, Customer has to mandatorily enter the
PIN. However, Customer also has choice of using PIN on purchase at POS for an amount less
than Rs 2000/- by opting for Contact based mode.
Card limits:
A. ATM:
Maximum per day limit Rs 1,00,000
Maximum per transaction limit on our ATM Rs 15,000
Maximum per transaction limit on other Banks ATM Rs 10,000
Maximum no of cash withdrawals allowed per day 10
B. POS
Maximum per day limits at POS (Inclusive of NFC & e-commerce transactions): Rs 2,00,000
Maximum per transaction limit using Contactless mode: Rs 2,000
Total Count of purchases at POS in a day using: Contactless mode (NFC i.e. Near Field
Communication): 5
Due to limited availability of contactless enabled POS terminals in India, presently Flash N
Move+ is being launched in 3 Regions of Greater Mumbai Zone viz MMSR,MMCR and MMNR,
61 | P a g e
Domestic only
Rs 25,000/
Rs 50,000/
MasterCard Classic
Domestic only
Rs 25,000/
Rs 50,000/
RuPay Classic
Domestic only
Rs 25,000/
Rs 50,000/
Name
Acceptance
Visa Platinum
Domestic
International
& Rs 1,00,000/-
Rs 2,00,000/-
MasterCard
Domestic
International
& Rs 50,000/-
Rs 1,00,000/-
RuPay Platinum
Domestic
International
& Rs 50,000/-
Rs 1,00,000/-
Name
Acceptance
RuPay PMJDY
Domestic only
Rs 25,000/-
Rs 50,000/-
RuPay BKCC
Domestic only
Rs 25,000/-
Rs 50,000/-
RuPay MUDRA
Domestic only
Rs 5,000/-
Rs 5,000/-
Platinum
62 | P a g e
Card can also be used at selected RuPay enabled POS outlets (as identified by NPCI).
This card is EMV chip card which can be operated through PIN at ATMs and POS.
Card can be issued to PMMY customers, on request, who will be availing Working
Capital facilities.
Withdrawal through Baroda MUDRA Card is restricted up to Drawing Power within the overall
operating limit as per the extant guidelines applicable under PMMY scheme,
Further, withdrawal through Baroda MUDRA Card is restricted up to Rs.5000/- per day with
maximum 4 number of withdrawal from our Bank's ATM and from other Bank's ATM and for
purchases up to Rs.5000/- per day at POS. (subject to balance available in the account).
Number of mandatory free ATM transactions for savings bank account customers at other banks
ATMs is reduced from the present five to three transactions per month (inclusive of both
financial and non-financial transactions) for transactions done at the ATMs located in the six
metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
Except the six metros mentioned above there will be five free transactions per month (financial
or non-financial) at all other centres for Savings Bank customers, as existing.
There is no restriction for using our bank ATM by our customers upto permissible number of
transactions as per card variant
The charges that shall be levied to the Savings Bank Account Customer after permissible free
transactions on other Banks ATMs are as under:
a) Rs 20/- plus service tax per transaction for Financial Transaction.
b) Rs.10/- plus service tax per transaction for Non Financial Transaction.
For current/ Overdraft account holder: Rs 20/- plus Service Tax for every Financial transaction
and Rs.10/- plus service tax per transaction for Non Financial Transaction;
No transactions are free for these account holders for usage of Debit Card on other Banks ATMs.
Accounts opened under Financial Inclusion Scheme: Minors above the age of 10 years opening
Savings Bank Account under Financial Inclusion Scheme in his individual name with operational
instruction as Self (not through father & natural guardian) can be issued a RuPay PMJDY
debit card.
Accounts opened in Scheme other than Financial Inclusion Scheme:
Existing criteria of 15 years of age and above remains unchanged for issuance of debit
63 | P a g e
card (any variant) to Minors maintaining Saving Bank Account in his individual name with
operational instruction as Self (not through father & natural guardian).
h) Debit card Hotlisting/Blocking
The different options for hot listing of debit cards are
Cardholder calls at Banks Contact Centre at 1800 22 33 44/ 1800 102 44 55 and gets the card
blocked. This facility is available round the clock.
Cardholder calls at BOBCARDS Toll Free No. 1800 220 400 for card blocking. This facility is
available 24 x 7.
Through Branch by using menu DCARDBLK has been provided in CBS/Finacle to block
the debit card
by the cardholder himself by sending an SMS in a certain prescribed format from registered
mobile to <5616150>
An SMS alert will be sent as a token of confirmation to the Debit card holder on their registered
mobile number, whenever a debit card is hot listed/blocked.
i) Debit Card Dispute Management System
BOBCARDS has introduced new portal for branches and contact centers. New portal shall be used for
following activities:
1. Lodging the debit card related complaints for the failed/fraud transactions.
2. Viewing the status of card/ PIN processed and dispatch.
j) DCISS
A new menu in CBS/Finacle DCISS has been developed/ implemented for various card related
activities as under:i.
Debit Card Re-issuance
ii.
PIN Regeneration
iii.
Multiple A/c Linking or De-linking
iv.
Card De-blocking
Four eye principal/ Maker & Checker has been implemented for all these 4 activities. Hence
branches have to immediately verify the entries.
Multiple Account linking/ de-linking and Card de-blocking through DCISS will not be instant. It will
happen only after the request is processed by BOBCARDS within 1 working day.
k) Baroda Rewardz - Banks Loyalty Program
In order to increase the usage of our various ADC products, bank has embarked upon implementing a
comprehensive loyalty program - Baroda Rewardz. This loyalty program will cover Debit Cards, Mobile
Banking, Internet banking, Mobile wallet and other digital products launched from time to time.
As a first program under Baroda Rewardz, bank has launched the loyalty program for our debit card
customers wef 03rd December 2015. This program is aimed at encouraging our customers for usage of
debit card on POS and e-commerce transactions for all debit card variants. The program detail is as
follows:
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l)
7. Credit Cards
Some of the type of credit cards being oferred by our Subsidiary BOBCARDS Ltd :
BOBCARD Signature (Visa)
BOBCARD Platinum (Visa, Master & Assure)
BOBCARD Titanium (Master)
BOBCARD Bombay Bullion (Visa)
BOBCARD Assure (VISA ) (Against FDR; Credit limit = 80% of FD amount ; Cash withdrawal
Limit: 80% of Credit Limit)
8. Baroda Gift card
Baroda Gift Card is a prepaid VERIFIED BY VISA enabled pre funded card that opens a
distinct proposition to individuals and corporates with its instant availability, ease of handling,
longer shelf life and extended shopping options for the beneficiary.
Card can be loaded with any amount between Rs 500 to Rs 50,000 in multiple of Rs 1
Cardholder can check balance & transaction history online through the URL
https://bobprepaid.enstage.com/prepaid/cms/customer/index.jsp or by calling at customer care
Toll free number -18001025627- or through ATM using the PIN number provided along with the
Gift card
Not reloadable-once the balance is exhausted or the card expires, card becomes a
souvenir
No ATM usage permitted
Can be used only in India
Card is valid till 1 year from the date of purchase or expiry date printed on the card whichever is
earlier
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Residual balance claim will be entertained only if balance amount is equal to or more than Rs.
100/- and claim is lodged within 3 months of card expiry.
Across counter availability
Competitively priced (almost best in the market)
Can be purchased by any customer through Baroda connect with an additional postage fee
irrespective of card availability at his base branch
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Trade Finance queries relating to Import/Export, Inland Trade, B.G., Forward Contract.
Per
transaction
Daily limit
Weekly limit
Monthly limit
Yearly limit
(Amt. in Rs.)
Limit for
Financial Transaction
Retail Customers
Limit for
Financial
Transaction
Corporate Customers
Self
Third
Online
Self
Third
Online
linked
party/Sh
NEFT/
linked
party/Sh
NEFT/
A/c
opping
payment
2,00,000
RTGS
opping
payment
5,00,000
RTGS
5,00,000
fund
transfer
Unlimited
4,00,000
12,00,000
30,00,000
1,50,00,00
0
10,00,000
30,00,000
50,00,000
4,00,00,000
Unlimited
Unlimited
Unlimited
Unlimited
15,00,000
45,00,000
1,00,00,000
6,00,00,000
50,00,000
2,00,00,000
5,00,00,000
30,00,00,00
0
Unlimited
Unlimited
Unlimited
Unlimited
Unlimited
10,00,000
d. IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect
IMPS (Immediate Payment Service) to facilitate instant Inter/ Intra Bank fund transfer for our
Baroda m- Connect users on 24 x 7 basis. This facility will be available only to Retail users,
having mobile banking facility. Funds can be transferred within India by debit to any available
operative account in the net banking account
This facility can be availed by users having Transaction right and who have
registered themselves for our Mobile Banking Services (M-Connect) giving mobile
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User should be customer of any domestic Branch with valid BANK OF BARODA debit card and
PIN.
User should have mode of operation as SELF, EITHER OR SURVIVOR, ANY ONE OR
SURVIVORS OR SURVIVOR, and MINOR NATURAL GUARDIAN OPERATION BY GUARDIAN.
User should have valid mobile number registered with bank.
Should have high speed internet connection.
Debit Card should have been activated at ATM (for first time).
h. Online resetting of Transaction Password By retail users
The customer can reset his password anytime if he has a valid Debit card in Active Mode.
The link isprovided on retail user home page
On entering valid details an OTO will be sent on customers Registered Mobile Number
a. Online resetting of Transaction Password By retail users
Customers has to enter details like Account number, Registered Mobile Number (RMN) and
email ID
After verification of Credentials an OTP is sent to Customers RMN
After authentication of OTP system would senf USER ID to registered email ID.
Our bank offers Baroda M Connect, the mobile banking facility to its customers.
Customer can also link -5- more accounts held in the Bank and transact business on them. Much
beyond banking, customer will also be able to do transactions like bills payment, recharging the
mobile phones, NEFT fund transfer, IMPS fund transfer etc.
Mobile Banking services can be performed through a software or by dialing *99# (NUUP)
Customers can start using Baroda M-Connect facility in three simple steps:
1.
Registration either through ATM or through Base Branch or through Baroda Connect
2.
Downloading of an Application Software for M-Connect or dialing *99#
3.
Activation of M-Connect (creating login pw & changing mPIN for software based service
or changing mPIN only for NUUP service)
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2. Customer is not required to pay SMS charges on every login. In Android / iOS / Windows
phones, new app works on GPRS mode. It is mandatory to activate Mobile internet (GPRS) while
using M Connect.
In case of Java phone users, there are options of running the application on GPRS or SMS mode.
In the later case, the customer would continue to pay for the SMS generated by the application.
3. Icon based menu would make the application language agnostic.
4. For mobile recharge, the improved search string option, provided to locate mobile operator,
reduces the current hassle of multiple entry by the customer.
Services:
Mobile banking registration option will appear automatically on HOPNACCT, OAAC and SAO menus
which are used to open a new account
Default option for Mobile Banking registration will be YES in these menus
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When the account is opened, customer is also registered for Mobile banking and the password
(mPIN) is generated at the same time (instantly)
With this, new customers can be on boarded instantly and can also be activated. Main advantage of
this implementation is, as mPIN will be delivered instantly, customers can be provided handholding by
branch staff to activate the mobile banking in branch itself. M-Connect for existing accounts: FINACLE menu for Mobile banking is HDCR
Now, with automation of the menu, Mobile banking registration / de registration / mPIN
generation will be effective immediately, within no time
As soon as the checker verifies the registration / de registration / mPIN generation request,
customer will receive the corresponding message / mPIN immediately.
Now there is no waiting period of 24 hrs
Branch can now regenerate mPIN of any customer who walks in with a problem regarding his / her
mPIN, and the problem can be resolved without any waiting time.
Interoperability
There are 3 modes of M Connect registration, viz., ATM, Branch and Net banking. Now all these 3
channels are interoperable and mPIN generation / de registration can be done through any of the three
channels irrespective of the channel of registration.
d. Direct Access Code in USSD Mobile Banking
Salient features are, no need to internet/ GPRS connections to access Mobile Banking through
USSD and no need of Smart phones, works even on low end handsets.
e. Transaction limit
The daily upper ceiling per customer shall be Rs.50,000 for fund transfer, bill payment and
merchant payment within an overall calendar month limit of Rs.2,50,000 when the service is
used over the application/ WAP
Through National Unified USSD Platform (NUUP)
IMPS
transfers
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Per Transaction
Rs.5,000
Per Day
Rs.5,000
Per Week
Rs.20,000
Per Month
Rs.50,000
The minimum amount that can transferred is Rs. 10. The maximum amount that can
transferred is Rs. 1000 per transaction to other Bank customers. The daily limit is set
at Rs. 5000
The app is now available on iOS, Windows and Android mobile platform.
Utilities bill payment in all three platform is available
g. Baroda M-passbook
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Customer can select the period of months for which the data can be stored in the app.
Search transaction history by transaction date, transaction amount
Personalise / add remarks of choice to the transactions, which can be used to track the
transactions on later date.
Presently this facility is enabled for Savings and Current account holders and the App is made
available in Android platform.
To avail this service, customer is required to download the app from the Google play store and
install the same.
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Salient Features:
Seamless (3-in-1) trading experience (Savings bank/current, Demat and online trading accounts)
Savings bank/current and Demat accounts with Bank of Baroda and trading (OLT/Broking)
account with BOBCAPS ltd.
Account opening form for trading account, to be submitted to Demat designated branches for
onward submission to BOBCAPS LTD.
Instant fund/share transfer facility through lien marking.
Multiple market watch facility with streaming quotes( Live markets rates)
Customization of screen to show critical market information such as market depth, Most active
scripts, Top Gainers/Losers.
Works with low internet bandwidth.
Customers could review their margin status, Holding report, order and trade Book on a real time
basis.
Single window order entry with instant order confirmation.
128-bit encryption security certified by entrust SSL.
Telephonic assistance through centralized Helpdesk Telephone No.022-61389300 (9am to
5pm).
a. Baroda e-trade Upgraded new Online Trading Platform
BOBCAPS has come out with a new online trading platform (upgraded Baroda e-trade portal) with much
convenient user interface. This will help our bank in marketing this product, which in turn will give us
CASA float and fee income. This product will give long term benefit as well as customer
acquisition/retention.
The mobile application (Mobile App) Barodaetrade can be downloaded from the
Google play store for android mobile phones and the same can also be accessed using the chrome
browser on android and apple mobile phones.
There are NIL stamp charges for opening the demat account while Rs 500/- is the franking charges for
e-trade account.
15. Baroda Cash Management System (BCMS)
Cash Management Services is a software application (Cash@Will) that facilitates management of
customer funds, particularly, of corporate customers. Corporate customers with large volumes of
transactions are the target group for BCMS. Baroda Cash Management Services also facilitates Internet
Based Transactions.
Operational Model of BCMS is consisting of 3 tiers as listed below:Data Centre
1. Central Operational Hub (COH)
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Three entities (NSE&SIDBI, Axis Bank Ltd and Mynd Solutions Pvt Ltd) have been granted Inprinciple Approval from RBI in Novemeber 2015
The TReDS will facilitate the discounting of both invoices as well as bills of exchange
Objective:
Conceptual Understanding
Improving flow of funds to MSME sector by reducing the receivables realisation cycles
Greater discipline on corporates to pay their dues on time
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eBiz is one of the integrated services projects under the National E-Governance Plan (NEGP) of
the Government of India and is being implemented by Infosys
The focus of eBiz is to improve the business environment in the country by enabling fast and
efficient access to Government-to-Business (G2B) services through an online portal. This will
help in reducing unnecessary delays in various regulatory processes required to start and run
businesses.
f. Digital India
Promotion of e-Governance through a centralised initiative to ensure citizen centric service
orientation, interoperability of various e-Governance applications and optimal utilisation of ICT
infrastructure/ resources, while adopting a decentralised implementation model with respect to
various ministries / departments of the government
ATM
Baroda Connect
Phone banking
Call Centre
Mobile Banking
2. MMID is related to
a) ATM
b) Baroda Connect
c) Mobile banking
d) Contact Centre
e) BCMS
3. In online RTGS through Baroda connect maximum amount per transaction for a Retail customer
is
a) Rs. 5,00,000/b) Rs. 1,00,000/c) Rs. 2,00,000/d) Rs. 10,00,000/e) Rs 20,00,000/4. Pre requisite for RTGS transactions are
a) Beneficiary name
b)Beneficiary account number
c) IFSC code
d) All of the above
e) None of these
5. IFSC code comprises of a) 13 characters
b) 14 characters c) 11 characters d) 16 characters e) 20 characters
6. Call Centre of our bank has been christened as
a) Contact Centre
b) Help Desk centre
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1
Q
A
1
b
2
c
3
a
4
d
5
c
6
a
7
c
8
b
9
d
0
c
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Creating awareness
liability products
Processing
and
applications to banks
Post-sanction monitoring
Monitoring and handholding of Self Help
Groups / Joint Liability Groups / Credit
Groups /Others
Submission
of
Other
Payment
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Our bank has devised an incentive scheme for BCs for canvassing business.
Instant Account Opening at BC points: This facility has been launched since 10.12.2015 where the
customer will get the account number instantly and can deposit money in his account simultaneously.
This has been designed to prevent opening of zero balance accounts which has been a cause of concern
in PMJDY.
Though customer can get the account number instantly and can deposit the amount immediately,
however, he can withdraw only when the account get verified by the Branch. Therefore, BC should
submit the account opening form within 24 hours to link branch. Further Branch to verify these accounts
though menu FREEREC immediately and ensure that not a single account remain unverified beyond
3 days.
Scheme Code for opening of Saving Bank account at BC points: (BCC:BR:108:80 dated 1802-2016):SB150 scheme code is only meant for opening of Saving Bank Accounts at our
Business Correspondent (BC) points.
Opening of Term Deposit and Recurring Deposit Accounts at BC points: As a new initiative our
Bank has started opening of FD & RD accounts at BC points.
Target Group: The following customers are eligible to open FD and RD accounts at BC
points
i) Customers who have opened their saving bank accounts through BC points.
ii) Customers whose saving bank accounts have been Aadhaar seeded.
Remuneration to BCs:
Sr.
Activity
No
1
Opening of Recurring Deposit
account (Max 10000 per a/c
through transfer only)
2
Opening of Fixed Deposit account
(Max 1 lakh per a/c through
transfer only)
Provision for our customers to deposit loan amount in their loan accounts at our BC points
(Kiosk) (BCC:BR:107:627 dated 18-12-2015) : Any of our customer or his representatives, who
wants to deposit the loan installment need to visit our KIOSK point and provide the loan account
number wherein the deposit needs to be done. Currently, system is enabled for cash deposit in LAA
scheme type accounts only,limit being Rs 10000/- per day.
Services available at BC points: Following services are available at BC points:
Saving Bank account opening;
Opening of Term Deposit and Recurring Deposit Accounts
Opening of accounts through e KYC
Cash deposit in SB, CA, CC, OD and Loan accounts
Withdrawal from Saving Bank account
Aadhaar Enabled payments (AEPs)
Aadhaar Seeding
Balance Enquiry
Fund transfers / remittances
Canvassing of loan accounts
Micro Insurance product like PMJJBY, PMSBY
Atal Pension Yojana
Loan Recovery
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2. Management of Asset quality: Incentive for follow up & recovery in loan accounts and
maintaining asset quality
Incentive is 1% of the Amount of loan account assigned to BC for follow up and recovery where the
account is standard and regular at the end of the year i.e. after 12 months.
The incentive amount will be paid only after the completion of one year.
The incentive will be payable only when 90% of the accounts assigned to the BCs are regular.
For Example- If a BC is assigned say 80 loan accounts is his area, amounting to Rs. 1.10 Cr on
01.01.2016 and 72 accounts (72 accounts is 90% of 80 accounts) are regular (out of 80
accounts) with outstanding amount of 1.02 Cr, the BC is entitled to get incentive of Rs. 1.02 lacs
(i.e. 1% of 1.02 Cr) on 01.01.2017.
In case of NPA accounts an incentive of 2% of recovered amount may be paid by branch
immediately after recovery by BC. In case of PWO accounts the incentive of 10% of the
recovered amount may be paid immediately after recovery by BC.
In the event of BC not able to maintain asset quality, in such case incentive shall not be payable
to BC.
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Increment of incentive for Aadhaar seeding through branches and BCs from Rs. 3/- to Rs.
5/- and extension till 30/09/2016 (BCC:BR:108:59 dated 08-02-2016):Incentive of Rs. 5/- to
BCs for activation of RuPay card. Bank has increased the incentive amount from Rs. 3/- to Rs. 5/- and
scheme has extended till 30/09/2016. Bank has also decided to provide an incentive of Rs. 5/- per
RuPay debit card activation to our BC with immediate effect.
Opening of Settlement accounts (OD124) tor BC Operation (BCC: BR: 108:109 dated 10-032016): Bank has reiterated the modalities for opening of BC settlement account.
Branch should open settlement account of BCs under Scheme Code OD124 only and the account can
be opened with zero balance.
The Overdraft facility should be granted to the business correspondent against collateral security on
usual commercial terms and conditions as per bank's extant guidelines.
Branch has to monitor overdraft account of the BC on daily basis.
Quarterly Inspection/Audit of BC points (BCC: BR: 107:491 dated 03-10-2015): Bank has
decided to conduct inspection/ audit of BC points at regular interval. In this regards, Bank advised
Branches, Regional Offices and inspection to audit BC Points in their respective area of operation in the
following manner.
Branches to audit all their respective BC points once in every quarter and take appropriate remedial
action in case of any irregularity is found and same copy should send to RO for their record and action if
warranted.
RO on its own will audit 10% of the BCs of the region randomly every quarter (rotation basis) in
addition to branch audit and initiate necessary action.
The internal Auditors from ZIAD concerned will visit a few BC points randomly during their regular
inspection of the Branch.
Precautions to be taken by Branches to prevent frauds at BC points (BCC:BR:123:123 dated
17-03-2016): BC must be local preferably from same village or adjacent villages.BC must not use any
stationery such as Pay-in-slip, withdrawal slip, blank passbook etc. of the bank. They must issue system
generated receipts for all type of transactions. The branch along with BC must organize
meetings/camps/financial literacy programs in villages; schools at least once in a month and the system
followed by BC should be well explained.The customers should be convinced to seed their mobile
numbers in their accounts to receive alerts or SMS for all credit and debit transactions in their accounts.
Baroda Basic Saving Bank Deposit Account: RBI, with a view to do away with the stigma
associated with the nomenclature no frills account and making the basic banking facilities available in a
more uniform manner across the banking system, has decided to modify the guidelines for
opening of basic banking no-frills accounts. Modified guidelines on no-frill a/cs are as under :1. The Banks will offer a Basic Savings Bank Deposit Account which should be considered a normal
banking service available to all.
2. This account shall not have the requirement of any minimum balance.
3. The services available in the account will include deposit and withdrawal of cash at bank branch
as well as ATMs, receipt/ credit of money through electronic payment channels or by means of
deposit/ collection of cheques drawn by Central/ State Government Agencies and Departments.
4. While there will be no limit on the number of deposits that can be made in a month, account holders
will be allowed a maximum of four withdrawals in a month, including ATM withdrawals.
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Features
Nil
The Account can be opened with Zero Balance also
cheque
Instruction/
Internet Banking
ECS
facility To be provided
To be provided
Whether Account holder is eligible to No (if a customer has any other existing
open any other Savings Bank Deposit in savings bank deposit account in the bank, he/
Bank
she will be required to close it within 30 days
of opening of Basic Savings Bank Deposit
Account )
Small Account (KYC non-Compliant BSBD accounts) - A small account can be opened on the
basis of a self attested photograph and putting her/his signature/thumb print in the presence of an
official of the Bank.
Limitation in the account:
i) Aggregate credits not more than Rupees one lakh in a year.
ii) Aggregate withdrawals (not more than ten thousand in a month.
iii) Balance in the accounts not more than Rupees fifty thousand at any point in time.
Such accounts would be normally valid for 12 months. Thereafter allowed for further 12 months only on
condition that account holder provides a document that she/he has applied for any of the officially valid
document within twelve month of the opening the small account.
At branch level BSBD accounts to be opened only under following scheme codes:
1. SB124 Wherever KYC documents have been submitted by the customer.
2. SB136 Small accounts opened on declaration basis from the customer
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Mobile Vans- Mobile vans with systems having connectivity moving in a cluster of villages.
Bio-metric ATMs- Establishing Bio-metric ATMS, Fixed as well as mobile.
Ultra Small Branches
Ultra Small Branches have established by the bank for effective coverage under
Financial Inclusion.
It can be established between the base branch and BC locations so as to support to about 8-10 BC
units at a reasonable distance of 3-4 Km.
USB is brick & mortar unit of floor area of 100-200 sq.ft., from where banking facilities will be
provided to people and nearest branch from which it will be attached, officer of link branch will visit
once in a week to the USB just like earlier concept of Satellite Branch.
BoB- Kiosks Model under financial inclusion:
Presently we are covering financial inclusion villages through three models such as POS based BC
model, Mobile Van model and Brick & Mortar branch model. All these models have unique features and
own merits. As a part of continual development in financial inclusion, our bank has introduced one more
model Kiosk Banking which is web based application that can be accessed through desktop or laptop.
This is card less solution so that time period required for printing and distribution of smart card can be
eliminated and customer can start operating the account immediately from date of opening of account.
Transactions processing is based on centralized biometric authentication on real time basis. This model
is very useful to increase our reach into the villages as well as implementation of Urban Financial
Inclusion at urban and semi-urban locations.
Bank has already entered into an agreement with the CSC e-Governance India Services Ltd., which is
SPV for the purpose launched by Department of Information and Tech., Government of India to appoint
their Common Services Centers (CSCs) as Business Correspondents.
Linking of customerss Aadhaar number with their bank account
The government of India has decided to transfer direct payments to the bank accounts of the
beneficiaries under various government programmes such as MGNREGA wages, fertilizer subsidy,
scholarship, LPG subsidyetc through Electronic Benefit Transfer (EBT). In addition to the other platforms
like NEFT, RTGS etc. , the govt. of India has given emphasis to roll out subsidies/direct cash transfers
also on the basis of Aadhar /UID number of the resident.
The Aadhar number of the customer can be linked in existing account as well as for the new accounts
through menu option APBSLN .
Branch to senitize customer about the importance of seeding aadhaar with their saving bank account for
availing a) various Govt. benfits b) for claim settlement under various insurance schemes and c)
availing transaction facility through Aadhaar enabled payment system (AEPS) at BC points.
Following strategies in the strategic Board Meet have been devised to improve the Aadhar seeding
position (BCC: BR: 107:301 dated 24-06-2015):
Open the account through e-KYC
If e-KYC not possible, then obtain Aadhaar as KYC and seed the account
Link branch to ensure that all the BCs are opening accounts through e-KYC
Branches should allot challenging target to BCs
Branch should nominate one staff member as Aadhaar champion. A report to be generated
using UIDLNKOS menu.
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Consent cum declaration form submitted by customer to avail the insurance facilities under
PMSBY & PMJJBY scheme where in most of the customers have mentioned their Aadhaar
number can also be used for seeding.
Aadhaar linking with bank account through menu option HOPNACCT for accounts opened
at branches & RBOs (BCC:BR:107:381 dated 11-08-2015): Bank has enabled the menu option
HOPNACCT for Aadhaar seeding at the time of account opening. This will be done by the branch staff
at the branch level only.
Provision for Aadhaar seeding at BC Point (BCC: BR: 108:37 dated 27-01-2016): Bank has
enabled Banks BCs for Aadhaar seeding of customers who have opened their accounts at BC points.
Seeding of Aadhaar number in bank account (BCC:BR:108:38 dated 29-01-2016):Bank has
advised to all branches to improve voluntary seeding of Aadhaar in all bank account including pension
accounts of Central Government Pensioner. Banks has also advised to keep improving on Aadhaar
seeding position so that Bank as a whole reaches at least 80% mark by end of March 2016.
Aadhar seeding in Bank accounts of MGNREGA beneficiaries (BCC:BR:108:85 dated 18-022016): Ministry of Rural Development, Govt. of India has proposed camp mode approach to help the
banks for the prompt Aadhar seeding as per following action plan:
The Ministry will organize village level camps to reach out to MGNREGA beneficiaries.
The beneficiaries will be sensitized about benefits of using RuPay debit card and advantages of
Aadhar seeding of their accounts.
On a voluntary basis, they will try to obtain consent of beneficiaries for Aadhar seeding of their
accounts in writing.
Consent form contains details such as name and address of beneficiaries, bank account, Aadhar
number, etc which are required by Bank for Aadhar seeding.
The consent form will be duly signed by beneficiaries account holder. It is advised to obtain signature of
a witness wherever the beneficiary is illiterate and puts only thumb impression on consent from.
Rollout of Aadhaar enabled payment system (AEPS) BCC: BR: 107:130 dated 19-03-2015:
Our Bank has rolled out AEPS for providing banking services at BC/Kiosk locations. AEPS is interoperable
system through which any customer of our bank and other bank who has Aadhaar linked bank account
can avail banking services such as cash deposit, cash withdrawal, Balance inquiry, and fund transfer at
any of our BC location.
The transaction in AEPS is Aadhhar based and as such transaction is based on biometric authentication
and therefore, account should be aadhaar seeded.
Pradhan Mantri Jan DhanYojana (PMJDY):
Pradhan Mantri Jan Dhan Yojana is a scheme for comprehensive financial inclusion launched by the
Prime Minister of India, Narendra Modi on 28 August 2014. He had announced this scheme on his first
Independence Day speech on 15 August 2014.
Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore (15
million) bank accounts were opened under this scheme. By 28 January 2015, 12.58 crore accounts
were opened, with around 10590 crore (US$1.7 billion) were deposited under the scheme, which also
has an option for opening new bank accounts with zero balance.
The scheme has been started with a target to provide 'universal access to banking facilities' starting
with "Basic Banking Accounts" with overdraft facility of Rs.5000 after six months and RuPay Debit card
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with inbuilt accident insurance cover of Rs. 1 lakh and RuPay Kisan Card. In next phase, micro
insurance & pension etc. will also be added.
Under the scheme:
1. Account holders will be provided zero-balance bank account with RuPay debit card, in addition
to accidental insurance cover of Rs 1 lakh.
2. Those who open accounts by January 26, 2015 over and above the 1 lakh accident, they will be
given life insurance cover of 30,000 (to be given by LIC).
3. After Six months of opening of the bank account, holders can avail Rs.5,000 overdraft from the
bank.
4. With the introduction of new technology introduced by National Payments Corporation of India
(NPCI), a person can transfer funds, check balance through a normal phone which was earlier limited
only to smart phones so far.
5. Mobile banking for the poor would be available through National Unified USSD Platform (NUUP)
for which all banks and mobile companies have come together.
PMJDY, Comprehensive Financial Inclusion based is proposed be achieved under the six pillars as under:
Phase I (15thAugust ,2014-14th August,2015) Universal access to banking facilities
Providing Basic Banking Accounts with overdraft facility of Rs.5000 after six months and RuPay Debit
card with inbuilt accident insurance cover of Rs. 1 lakh and RuPayKisan Card
Financial Literacy Programme
Phase II (15th August 2015-15th August,2018) Creation of Credit Guarantee Fund for coverage of defaults in overdraft A/Cs
Micro Insurance
Unorganized sector Pension schemes like Atal Pension Yojana
In addition, in this phase, coverage of households in hilly, tribal and difficult areas would be carried
out. Moreover, this phase would focus on coverage of remaining adults in the households and
students.
All the rural & semi urban areas of the country is proposed to be mapped into Sub Service Area
(SSA) comprising 1000-1500 households with an average 3-4 villages with relaxation in NE/ Hilly
states.
It is also proposed that looking to the viability of each centre around 74000 villages with population
more than 2000 which were covered by Business Correspondents under Swabhiman Campaign will
be considered for conversion into full fledged Brick & Mortar branches with staff strength of
1+1/1+2 in the next three years.
All the 6 lakh villages across the entire country are to be mapped according to the Service Area of
each Bank to have at least one fixed point Banking outlet catering to 1000 to 1500 households,
called as Sub Service Area (SSA). It is proposed that SSAs shall be covered through a combination of
banking outlets i.e branch banking and branch less banking.
Branch banking means traditional Brick & Mortar branches. Branchless banking comprises of fixed
point Business Correspondents agents, who act as representative of Bank to provide basic banking
services.
The implementation strategy of the plan is to utilize the existing banking infrastructure as well as
expand the same to cover all households. While the existing banking network would be fully geared
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up to open bank accounts of the uncovered households in both rural and urban areas, the banking
sector would also be expanding itself to set up an additional 50,000 Business correspondents (BCs),
more than 7000 branches and more than 20000 new ATMs in the first phase .
The comprehensive plan is necessary considering the learnings from the past where a large number
of accounts opened remained dormant, resulting in costs incurred for banks and no benefits to the
beneficiaries.
The plan, therefore, proposes to channel all Government benefits (from Centre/State/Local body) to
the beneficiaries to such accounts and pushing the Direct Benefits Transfer (DBT) scheme of the
Union Government including restarting the DBT in LPG scheme. MGNREGS sponsored by Ministry of
Rural Development (MoRD, GoI) is also likely to be included in Direct Benefit Transfer scheme.
Financial Support under Financial Inclusion Fund (FIF) to commercial banks by NABARD for
organizing Financial Literacy camps/ awareness camps (BCC:BR:107:559 dated 13-112015): In order to ensuring financial security to the poor and vulnerable, the Government
of India has initiated Financial Inclusion in a mission mode to provide all financial products
through its ambitious schemes i.e. PMJDY, PMSBY, PMJJBY, PMMY and APY. NABARD has
been supporting such programs out of Financial Inclusion Fund subject to a maximum of
Rs.15,000/- per program as grant assistance. As per existing norms, the cost of organizing
such Financial Literacy program can be shared between NABARD and the bank in the ratio
of 60:40, subject to a maximum of Rs.15,000/- per program.
Bank has advised to branches to to ensure certain deliverables during these programs in
the form of opening of new accounts, enrolments under PMJJBY, PMSBY and APY and the
same may be documented and submitted along with its claim for each of the program
separately.
PradhanMantri Jan DhanYojana(PMJDY)-Overdraft:
Under Financial inclusion after implementation of PradhanMantri Jan dhanyojana
It has been decided by the government of India to devise a uniform SBOD across the industry under
PMJDY. General purpose loan to provide hassle free credit to low income group/underprivileged
customer to meet their exigencies without insistence on security ,purpose or end use of credit.
Eligibility- Individuals having BSBD accounts, which are operated satisfactorily for at least six months.
OD to be granted to the earning member of family, preferably women of the house. There should be
regular credits under DBT/DBTL scheme /other verifiable source. For avoiding duplicate benefit,
account may be seeded with Aadhaar. Age of applicant between 18 years to 60 years years. (Not
eligible: minors, KCC/GCC borrowers, more than one member of the same family).
Period of sanction- 36 months to annual review of accounts
Loan Amount-a)4 times of Average monthly balance
b) or, 50 % of credit summations in accounts during the preceding 6months.
c) or,Rs 5000/- whichever is lower.
Procedures for sanctioning overdraft to PMJDY customers (BCC:BR:107:177 dated 20-042015): Branches are advised to follow the procedures given below while sanctioning the
OD facilities
1. It is required to confirm from NPCI repository that account holder (Aadhaar holder) has
not availed the OD facilities from any other bank. It is to be ascertained by using
UIDINQ menu option in Finacle.
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2. It is also mandatory to update the OD status of the account in NPCI repository so that
the customer will not be able to avail similar OD facility from any other bank or our
branches. For this, use the menu HAPBSLN
The user can create OD limit in the account of the customer through menu option
ACLHM
Overdraft up to Rs. 5000/- Pradhan Mantri Jan Dhan Yojana Non mandatory of Aadhaar
seeding (BCC:BR:107:469 dated 23-09-2015):Bank has advised to branches to take note of
Government of India and should not insist for Aadhaar seeding in the account for granting overdraft up
to Rs. 5000/- under PMJDY accounts.
Pradhan Mantri Jeevan Jyoti Bima Yojna ( PMJJBY) and Pradhan Mantri Suraksha Bima
Yojna (PMSBY): Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha
Bima Yojna (PMSBY) are the flagship schemes under ambitious social security schemes captioned "JAN
DHAN SE JAN SURAKSHA" launched by Government of India on 1st of June 2015. ln absence of any
formal social security system in India, Government had envisioned to cover a larger set of population
through the Banking channel.
Particulars
Pradhan Mantri Jeevan Jyoti Pradhan Mantri Suraksha Bima
Bima Yojna
Yojna
Type
Insurance
of Life Insurance
Eligibility
Accidental Insurance
All saving Bank account holders All saving Bank account holders
within the age group given within the age group given
below.
below.
The insurance premium amount The insurance premium amount
will be directly debited to their will be directly debited to their
account.
account.
Sum Insured
Rs. 2 lac
Rs.2 lac
Period
1 Year
1 Year
Age limit
18-50 Years
18-70 Years
Cover
Yearly premium
Commission
to Rs. 30 to BC & Rs.11 to Bank + Rs.1 to BC & Rs.1 to Bank +
Bank
from service tax
service tax
premium amount
The insurance cover shall be for one year period starting from 1 st June to 31st May for which
premium will be required to be paid from account of the customer by 31st May every year.
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There is waiver of self Declaration for good health for enrollment under PMJJBY till 31/05/2016.
Atal Pension Yojana (APY) : a pension scheme for citizens of India, is focused on the unorganised
sector workers. APY is being administered by the Pension Fund Regulatory and Development Authority
(PFRDA) under the overall administrative and institutional architecture of the National Pension System
(NPS). Under the APY, guaranteed minimum pension of Rs. 1,000/- or 2,000/- or 3,000/- or 4,000 or
5,000/- per month will be given at the age of 60 years depending on the contributions by the
subscribers.
Any Citizen of India can join APY scheme. The following are the eligibility criteria:(i) The age of the subscriber should be between 18 - 40 years.
(ii) He / She should have a savings bank account.
The prospective applicant may provide Aadhar and mobile number to the bank during registration to
facilitate receipt of periodic updates on APY account. However, Aadhar is not mandatory for enrolment.
The contributions can be made at monthly / quarterly / half yearly intervals through auto debit facility
from savings bank account of the subscriber. The subscribers are required to contribute the prescribed
contribution amount from the age of joining APY till age 60. The details of age-wise, pension-wise and
contribution-frequency-wise prescribed contribution amount and the indicative pension wealth available
for the nominee has been given in the scheme.
The co-contribution of the Government of India is available for 5 years, i.e., from the Financial Year
2015-16 to 2019-20 for the subscribers, who join the scheme during the period from 1st June, 2015 to
31st December, 2015 and who are not covered by any Statutory Social Security Schemes and are not
income tax payers.
Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing
the guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher
than the guaranteed returns embedded in APY. The same amount of monthly pension is payable to
spouse (default nominee) upon death of subscriber. Nominee will be eligible for return of pension
wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.
Baroda Kisan Group Loan Scheme (Joint Liability Group):
It is financing of joint farming groups of Bhoomi Heen Kisan. In the budget announcement of F.Y
2014-15 ,the Honble finance minister has proposed to provide finance to 5 lacs joint Liability Farming
Groups of Bhoomiheenkisan during the year .The scheme was formulated on the direction of the
Government of India/RBI and intended to open a separate window for Joint Liability groups oftenant
farmers, oral lessees, share croppers and ensuring that a certain production of the extended to them.
1. A joint liability group is an informal group comprising 4 to 10 individuals coming together for the
purpose of availing bank loan either singly or through group mechanism, against mutual
guarantees.
2. The JLG members are to engage in similar type of activities like crop production and must trust
each other.
3. The members should live in the same neighborhoods or in the same village and must be from
the same socio economic background and environment.
4. The members should be engaged in agricultural activity for a continuous period of not less than
1 year in the area of operation of the branch.
5. The group member should not be a defaulter of any other formal financial institution.
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6. The member to open an individual No frill account. However with mutual consent the group can
open and maintain SB account in the name of Group.
7. The JLG would prepare a credit plan for individual members and aggregate credit plan for the
group to be submitted to the bank.
8. The max. loan amount per member not to exceed Rs.100000 and for group Rs. 10 lacs for
Tenant farmers/oral lessee/share cropper.
9. The credit need assessment of individual members will be based on the crop to be cultivated,
available land and capacity also. However this is only with the mutual consent of the members.
10. The credit facility to the JLG will be assessed by way of production / investment
credit in the form of BKCC. The maximum loan limit for Small /Marginal will be need based ,to be
assessed as per the BKCC Norms.
11. Personal accident insurance for Rs.50000/- to one borrower per account.
12. Crop insurance available for notified crops
Baroda Kisan Credit Card:
1. The purpose of BKCC is to provide adequate and timely credit for the comprehensive credit
requirement of farmers under single window concept for their cultivation and development as
well as consumption needs.
2. All farmers, registered share croppers and tenant farmers cultivating crops for a period not
less than 5 years, individual tenant farmers and share croppers cultivating land on lease basis
at least for a period of 3 years are eligible for BKCC.
3. Baroda Kisan Credit Card will consist of Production Line of Credit as well as Investment Line of
Credit. Under the production line of credit requirements of farmers in terms of production loan
for various crops, maintenance of tractor/farm implements, allied activities like dairy, poultry,
annual repairs, fuel, cost of feed, etc., consumption needs, Working capital requirement for
allied activities, non farm sector activities and finance against storage receipts/produce
marketing loans are taken into account in the following manner:
Sr.
Requirement
Quantum/Remark
NO.
01.
02.
03.
04.
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05.
06.
activities
Working capital for Non farm
sector activities
Farm Produce Marketing Loan
* Various categories:
BKCC Green: New & existing agril. Borrowers dealing with us since last 3 years
BKCC Silver:Agril. Borrowers having satisfactory conducted borrowal account relationship with us for
more than 3 years and upto 5 years
BKCC Gold: Regular agril. Borrowers dealing and maintaining satisfactory account with us for the period
exceeding 5 years having excellent repayment record
Under Investment line of credit, credit facilities for agriculture activities (Investment related) , farm
development ,allied activities , loans for off farm activities/needs of farmer like personal loans including
purchase of consumer durables, housing subject to maximum of Rs. 1.00 lac as well as loans for
redemption of loan availed from Non Institutional lenders are considered.
However, quantum of loan under investment LOC is restricted to 6 times of net annual income or 3
times of total annual farm receipt /crop value plus other annual income (3 times of annual net income)
from allied activities, Non Farm Activities, salary, rent, etc. or, 75% of value of land plus 100 % of face
value of securities like, Banks FDR, NSC, KVP, LIC policies, whichever is lower.
However, Quantum of finance for investment credit may be decided as per the needs expressed by the
farmer for various investment and other purposes, subject to following:
1. Farm income- 6 times of net annual income Or 3 times of total annual farm receipts/value of crops
PlusOther income 3 times of net anticipated annual income/profit from allied activities/ salary
income Or
2. Value of Security-75% of value of land mortgaged as collateral security and 100% of value of other
securities like assignment of LIC Policy (surrender value), pledge of KVPs/
NSCs/Banks TDR/Gold Ornaments etc.
1)
2)
A concession in rate of interest on investment line of credit at the rate of 0.25% and 0.50% can be
considered to agriculture borrowers who is dealing with us for a period of above 3 and upto 5 years
(BKCC Silver card holder) and more than 5 years (BKCC Gold card holder) respectively with
good track record. No concession to new as well as existing borrowers having less than 3 years
dealing (BKCC Green card holder) with us. But this concession in rate of interest will not be
clubbed with any other concession including subvention.
Total limit under BKCC can be granted as per DLP of concerned authority.
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3)
4)
5)
For regular production line of credit, no margin to be fixed if it is on the basis of scale of finance.
On investment line of credit the margin is as per our individual scheme as prescribed and it can be
reduced to 10% by the sanctioning authority.
Credit balance under BKCC will fetch interest rate as applicable to Savings bank deposit.
The validity of the card has been increased from 3 year to 5 years subject to renewal after 12
months. The cash withdrawal facility in case of production credit account is extended by the issuing
branch only.
6)
The Baroda Kisan Credit card has 10 characters/digits (first 6 characters being alpha code of the
branch and last four digits being serial number of the card). The card also bears borrowers
signature, signature of issuing branch head with specimen number.
7) Bank has introduces personal accident policy for BKCC holders and branch to ensure that all BKCC
holders are covered under the said policy.
8) Personal accident insurance for Rs.50000/- to one borrower per account.
9) Crop insurance available for notified crops.
10) Baroda BKCC RuPay Card can be issued in existing regular accounts and all new BKCC borrowers.
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The National Payments Corporation of India, the administrator of RuPay Cards, has introduced insurance
coverage of KisanRuPay Card holders, as a value added feature. They have tied up with The New
India Assurance Co. Ltd for the same and it has come into effect from 01.04.2015 for a period of one
year i.e., up to 31.03.2016.
Salient features of the Rupay Insurance Programme are as under:
1) All BKRC holders are eligible for insurance cover under this programme.
2) Insurance cover of Rs.1 lac per card to Baroda KisanRuPay Card holders (accidental death and
permanent disablement only) is available.
3) The insurance premium is to be borne by NPCI.
4) This insurance programme will be an additional insurance cover over any existing insurance
cover, viz., free Personal Accident Insurance Scheme (PAIS) cover upto Rs.50000/- for BKCC
holders in our Bank.
5) Annual Fee- Waived for all the years
Transaction charges Cash withdrawal for use of ATMs of NFS member banks - Rs.16 + Service Tax per
& Rs.6 + Service Tax for per each non financial transaction.
Issuing Baroda Kisan RuPay Card (BKRC) to all BKCC Holders (BCC: BR: 107:465 dated 18-092015): Bank has advise to branches:
Issue BKRC compulsorily in all fresh BKCC accounts. Non-issuance of BKRC in new accounts will be
viewed seriously, since GOI has instructed to cover 100% farmers at the earliest.
All existing standard BKCC accounts, including those of illiterate/unwilling persons, where BKRCs
have not been issued so far, should be issued cards on an urgent basis. List of BKCC accounts
without BKRC has already been circulated to all Branches.
All BKCC holders should be requested to avail the facility by explaining about the advantages of
BKRC. It should be highlighted that the card has no issuance charges and also the added advantage
of personal accident insurance cover of Rs.1.00 lac, offered by Rupay.
BKRCs should be issued on a campaign mode so as to ensure achievement of 100% issuance i.e BKRC
in all standard BKCC accounts by December 2015.
Interest Subvention SchemeMonitoring of end use of Crop Loans(BCC:BR:107:398 dated 19-08-2015) :With reference of
RBI Circular, Bank has advised that the branches should ensure to finance short term crop loan
accounts strictly linking the same to scale of finance and other stipulated parameters and more so in the
case of Agriculture Gold Loan and financing to oral lessee, tenant farmers, etc. The Regions/ Zones are
also advised to ensure the compliance of above guidelines.
Calculation of Interest Subvention for Crop Loans in Finacle (BCC:BR:107:568 dated 16-112015):Our Bank is one of the first Banks which implemented interest subvention calculation through
CBS (Finacle) system. Even though we have been calculating subvention through the system since
2012, it is noticed that there are still gaps in the procedures adopted by Branches leading to revenue
loss, audit objections, customer complaints etc. Circular is issued so as to collate various guidelines and
operational procedures regarding subvention calculation and make it readily available to the operating
units.
Scheme code should be - CC003, CC008, LA 403
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Interest Table code should be - CC033, CC034, L4032, L4033 and CC091, CC092 (in Special
Agricultural Zone)
Other operational procedures are given in the circular.
Interest subvention of 2% will be made available for short-term crop loans up to
Rs.3,00,000/- per farmer, provided lending institutions make available short term credit at
the ground level at 7% p.a. to farmers. Further 3% Incentive in the form of intt.
subvention is given for prompt repayment to Farmers
Flow of credit to agriculture sector (VyasCommitte recommendations)
1. Bank should make efforts to increase their disbursement to Small and Marginal farmers to 40%
of their direct agriculture advances under special agriculture credit plan by March, 2007. For this
purpose small and marginal farmers means, farmers who are holding non-irrigated land up to 5
acres or 2.5 acres of irrigated land.
2. Banks to enter into the tie up arrangement with manufacturers of tractors and other farm
machineries.
3. The application form should be simplified and in regional language. It should contain a
comprehensive check list of information to be furnished to avail the credit facility.
4. To sanction composite cash credit limit to farmers.
5. Relaxation in margin & security norms.
6. Timely sanction of the credit facility in cost effective manner.
7. A separate flexible revolving limit to be considered to small borrowers of production or
investment loans, which will take care of consumption need of the farmers.
Self Help Groups
Self Help Groups fulfilling the following criteria would broadly be eligible:
The Group should be in existence for at least six months
The Group should have actively promoted the savings habit
Groups could be formal (registered) or informal (unregistered)
Membership of the group could be between 10 to 20 persons
If membership exceeds 20, the SHG should be registered
The sanction Savings-cum-overdraft limit is sanctioned for the amount, which a group will be entitled to
have in the ratio maximum upto 1:10 for the projected savings of ensuing five years. However,
disbursement (Drawing Power/DP) would be permitted after six months, based on actual corpus fund
including SHGs savings as above and thereafter reviewed each year in the ratio of corpus fund
including savings as prescribed above and accordingly DP be fixed time to time.
Discretionary Lending Powers
The finance to SHGs is considered as a clean loan facility and the Branch Managers are considering the
facility under their powers for granting such facilities in order to ensure quick disposal of application for
credit linkage of SHGs at Branch level itself. It has been decided to enhance the lending powers of
Branch Managers as under:
(Rs in lacs)
Scale of Branch Manager
Revised powers for SHG
Bank linkage
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JMG Scale - I
MMG Scale- II
MMG Scale-III
1.50
2.50
5.00
Procedure
for opening an S.B. account of SHG with the Bank
Resolution
from the SHG.
Copy
of
the
rules and regulations of the SHG.
Authorisation
from the SHG (Operating Instructions.
KYC norms.
Processes for Credit-linkage of SHG by the Bank
Opening of S/B Account for the SHG
Resolution from the SHG Authorisation from
the SHG
Copy of the rules and regulations of the SHG
Conduct of internal lending by the SHG
Assessment of SHGs
Sanction of Credit Facility to the SHG
Corpus / savings of the group includes following:
Groups balance in the SB A/c.
Amount held as cash with the authorized persons.
Amount internally lent amongst the members. Amount
received as interest on the loans.
Any other contributions received by the group like grants, donation, etc.
What are the advantages to the banks for banking with SHGs?
Advantages to the banks for banking with SHGs are following:
a. Transaction costs are reduced
b. Increase in the deposit base
c. Very little cost for appraisal and monitoring of the loan
d. Increase in the social base in rural area
e. Financial Services at door steps
f. NPA Reducing
g. Social Agenda / Corporate Social Responsibility
h. No subsidy Dependence Syndrome
Simplifying KYC norms for Self Help Groups (SHGs)
KYC verification of all the members of SHG need not be done while opening the savings bank account of
the SHG and KYC verification of all the office bearers would suffice. As regards KYC verification at the
time of credit linking of SHGs, it is clarified that since KYC would have already been verified while
opening the savings bank account and the account continues to be in operation and is to be used for
credit linkage, no separate KYC verification of the members or the office bearers is necessary.
Unified Processing Charges for Women SHGs (BCC:BR:107:379 dated 10-08-2015):
According to Central Level Coordination Committee of NRLM, Bank has been decided to waive
processing charges for loans granted to all women SHGs irrespective of the activity and limit sanctioned.
Loan to SHGs may be classified as Agriculture & other priority sector, based on the activity undertaken
by the group
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Engagement of SHG Leaders/ Members as BC Agents for Financial Inclusion Bank Sakhi
Approach (BCC:BR:108:42 dated 30-01-2016): Dept. of Financial Services, MoF and RBI have
advised that bank may appoint SHG leaders/ members as BC agents for Financial Inclusion. In view of
above Bank has decided to appoint leaders, members of SHGs as BCs Agents through our Corporate
BCs. Details like advantage, eligibility criteria and action plan are given in the circular.
Credit information reporting in respect of Self Help Group (SHG) members (BCC: BR:
108:105 dated 08.03.2016): Underscoring the importance of credit information reporting in respect
of the SHG members for financial inclusion, credit decision of banks and Micro Finance Institutions
(MFIs) and credit quality of the SHG loan portfolios, the working group has emphasized the need for
putting in place the credit information reporting for SHG members sooner than later. However, the
group has suggested a phased approach to the implementation of the RBI directions so as to ensure
that the data quality is not compromised.
National Rural Livelihood Mission (NRLM) Aajeevika - The Ministry of Rural Development,
Government of India has launched a flagship program National Rural Livelihood Mission (NRLM)
for promoting poverty reduction through building strong institutions of the poor, particularly
women, and enabling these institutions to access a range of financial services and livelihoods services
by restructuring Swaranjayanti Gram Swarojgar Yojana (SGSY) replacing the existing SGSY scheme,
effective from April 1, 2013 .
Key difference from SGSY: NRLM is promoting a major shift from purely allocation based strategy
to a demand driven strategy wherein states have the flexibility to develop their own plans for
capacity building of women SHGs and Federations, infrastructure and marketing, and policy for
financial assistance for the SHGs.
NRLM will identify the target group of poor through a participatory identification of the poor
process instead of using the BPL list as was done in SGSY. This will ensure that the voiceless,
poorest of poor are not ignored. In fact under NRLM, the first preference is given to the poorest of
poor households.
NRLM will promote the formation of women SHGs on the basis of affinity and not on the basis of a
common activity, as it used to be under SGSY. It is definitely possible that members who come together
on the basis of affinity could be having a common activity.
Unlike SGSY, the NRLM has taken a saturation approach and will ensure all the poor in a village are
covered and a woman from each poor family is motivated to join the SHG.
SHG Federations: All SHGs in a village come together to form a federation at the village level. The
village federation is a very important support structure for the members and their SHGs. The cluster
federation is the next level of federation. A cluster consists of a group of villages within a block. The
exact configuration will vary from State to State, but typically a cluster consists of 25 - 40 villages.
The Village federations and the Cluster federations are the two critical support structures for the SHG s
and their members in their long journey out of poverty.
NRLM will provide continuous hand-holding support to SHGs, and their federations. This was
missing in SGSY. Under NRLM this support will be provided to a great extent by capacitating the
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SHG federations and by building a cadre of community professionals from among the poor
women. The federations and the community professionals will be imparted the necessary skills by the
mission.
The objective of NRLM is to ensure that SHGs are enabled to access repeat finance from Banks, till
they attain sustainable livelihoods and decent living standards. This was missing in SGSY, where
the emphasis was on one time support.
National Rural livelihoods Mission (NRLM)- Ajeevika- Interest Subvention Scheme for
Women SHGs for the Year 2015-16 (BCC:BR:108:72 dated 12-02-2016) :RBI has informed
Bank that the revised guidelines for the year 2015-16 on Interest Subvention Scheme
under NRLM has been issued by the Ministry of Rural Development, Government of India.
Important points are as below:
1. Interest to be sub vented will be subject to a cap of 3.75% for our Bank for the year
2015-16 based on Weighted Average Interest Charged.
2. Interest Subvention claims (Regular and Prompt payment separately) will be uploaded
on quarterly basis only. Quarterly Interest Subvention claims to be supported with
certificate (Annexure- III & IV). Certificate on annexure- V will be submitted annually
as of March 2016 duly audited by the statutory auditors along with Annexure- III & IV.
For category II districts, (Other than 150 districts), all women SHGs under NRLM will
continue to be eligible for interest subvention to avail the loan facility at an interest rate of
7%. The funding for this subvention will be provided to the State Rural Livelihoods
Missions (S.R.L.Ms) from the allocation for NRLM.
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Within the overall priority sector lending target of 40 per cent of Adjusted Net Bank Credit (ANBC)
or equivalent amount of Off-Balance sheet exposure, it should be ensured that:
Agriculture:
18 percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is
higher.
Micro, Small & Medium Enterprises (MSME)- Advances to micro, small & medium enterprises
sector will be reckoned in computing achievement under the overall priority sector target of 40
percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.
The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as
notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006
are as under:Manufacturing Sector
Enterprises
Micro Enterprises
Small Enterprises
Medium Enterprises
Service Sector
Micro Enterprises
Small Enterprises
Medium Enterprises
Education Loan Loans to individuals for educational purposes including vocational courses
upto Rs. 10 lakh irrespective of the sanctioned amount will be considered as eligible for priority
sector.
Housing Loans - Loans to individuals up to Rs. 28 lakh in metropolitan centres (with population
of ten lakh and above) and loans up to Rs. 20 lakh in other centres for purchase/construction of
a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre
and at other centres should not exceed Rs. 35 lakh and Rs. 25 lakh respectively.
Social infrastructure: Bank loans up to a limit of Rs. 5 crore per borrower for building social
infrastructure for activities namely schools, health care facilities, drinking water facilities and
sanitation facilities in Tier II to Tier VI centres.
Renewable Energy: Bank loans up to a limit of Rs. 15 crore to borrowers for purposes like
solar based power generators, biomass based power generators, wind mills, micro-hydel plants
and for non-conventional energy based public utilities viz. street lighting systems, and remote
village electrification. For individual households, the loan limit will be Rs. 10 lakh per borrower.
Others :
Loans not exceeding Rs. 50,000/- per borrower provided directly by banks to individuals and
their SHG/JLG, provided the individual borrowers household annual income in rural areas does
not exceed Rs. 100,000/- and for non-rural areas it does not exceed Rs. 1,60,000/-.
Loans to distressed persons (other than farmers ) not exceeding Rs. 100,000/- per borrower to
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Category
Small and Marginal Farmers
Artisans, village and cottage industries where individual credit limits do not exceed Rs.
1 lakh
Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment
Scheme for Rehabilitation of Manual Scavengers (SRMS)
Scheduled Castes and Scheduled Tribes
Beneficiaries of Differential Rate of Interest (DRI) scheme
Self Help Groups
Distressed farmers indebted to non-institutional lenders
Distressed persons other than farmers, with loan amount not exceeding Rs. 1 lakh per
borrower to prepay their debt to non-institutional lenders
Individual women beneficiaries up to Rs. 1 lakh per borrower
Persons with disabilities
Overdrafts upto Rs. 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts,
provided the borrowers household annual income does not exceed Rs. 100,000/- for
rural areas and Rs. 1,60,000/- for non-rural areas
Minority communities as may be notified by Government of India from time to time
DRI Advances.
The scheme is introduced in July 1972 with a view to give benefit of bank finance to weaker sections of
the society.
Eligibility: An individual who is engaged in agriculture and /or allied activities collect or process forest
products, collect fodder to be sold to farmers, SC/ST, etc. and whose family income from all sources
should not exceed Rs. 24000/- p.a. in Urban /Semi urban area and Rs. 18000/- p.a. in Rural.
He/She should not hold land more than one acre irrigated land and 2.5 acres in case of non irrigated
land, (this does not apply to SC/ST Cases), should not employ workers on regular basis, SHG members
who fulfill above criteria can be considered under DRI Scheme, any handicapped person.
Limit: - Composite loan limit Rs.15000/- and Rs.20000/- in case of Housing Loan (raised from Rs. 6500/BCC:BR:99/211 dt. 03.07.2007)
Margin: NIL.
Rate of Interest 4% p.a.
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To increase Crop loans by financing to new as well as existing finance by assessing as per latest
scale of finance and also offering Line of credit / Notional Limit.
Financing agri. term loan mainly farm machineries like Four-wheeler to farmers, Combined
harvester/ power tiller, drip /sprinkler irrigation sets, tractor, horticulture & plantation crops.
Take-over of agri. Advances upto Rs.5.00 lac falling under BMs Power.
Identifying thrust branches for Agri. financing
More SHG Linkages as our Bank permits to go to 1:10 ratio of group corpus.
Finance to Agri-clinics & Agri-Business Centres
Finance under comprehensive scheme against Warehouse receipt.
Finance to Joint Liability Groups (JLGs)
Financing production and investment requirements for allied activities.
Loans to distressed farmers indebted to non-institutional lenders
Loans granted for post-harvest activities such as spraying, weeding, harvesting, grading, sorting,
processing and transporting.
Finance against gold ornaments/jewellaries.
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literacy, better farming practices, technology adoption, diversification of opportunities, market linked
prices, value addition services offered by various institutions, women empowerment and also for
employment opportunities for rural youth. In addition to this, the deficiencies/ ignorance about credit
related repayment during distress situations call for credit counseling.
With a view to assist the rural community, the Bank has conceptualised Baroda Grameen Paramarsh
Kendra (BGPK) and its implementation by the dedicated team, which would build the confidence of the
rural people.
Activities to be covered:
Financial Education and Financial Inclusion
Information sharing and problem solving on technical issues
Credit counseling
Synergy and liaison with other organizations and development activities
Farmers Club Programme :
Objectives:
Farmers Clubs have been organised by our bank in the Service Area Villages with the sole objective
of improving the recovery climate for rural lending and creating better awareness about loan and
deposit products with the ultimate aim of building a Rural Credit Portfolio on a sound scale. Farmers
Club are intended to basically propagate the following five principles of Development through
Credit.
a. Credit must be used in accordance with the most suitable methods of science and technology.
b. The terms and conditions of credit must be fully respected.
c. Work must be done with skill so as to increase production and productivity.
d. A part of the additional income created by credit, must be saved.
e. Loan installments must be repaid in time and regularly so as to recycle credit.
Benefits to the Branch :
The formation of Farmers Club lead to better Banker-Borrower relationship in the area.
Mobilisation of deposits.
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Loan limit: Rs. 3.00 lacs, but it should be need based or advance value of gold or 75.00% of the
appraised value by the assayer whichever is lower among the three.
Period Max. 12 month
Assayers
1. To be identified by branch and approved by R.O.
2. To give min security deposit of Rs. 5000.
3. must be changed every 2years
Advance Value of Gold Jewellery/ Ornament (BCC:BR:108:62 dated 08-02-2016): Bank has now
fixed the advance value of gold jewellary at Rs. 1800/- per gram for 24 carat purity with a provision for
reduction in valuation by Rs. 75/- per gram for every carat reduction. As such the advance value per
gram of gold jewellary of 22 carat purity is fixed at Rs. 1650/-.
Scheme for financing to farmers for purchase of four Wheeler :
Parameter
Prescribed Norms
Type of Facility
Term Loan
Purpose
For purchase of new/used four wheeler including jeep, SUV, station wagon
etc. for using in their farm management activities. Used vehicle should not be
more than 3 years old.
Eligibility/
Beneficiary
If the main source of income of the farmer is from land based activities.
Age
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Banking
Relationship
Loan can be extended to the Existing /New farmer including those engaged
in Allied activities
In applicable cases endeavour should be made to issue BKCC to the eligible
farmers who avail loan under this scheme.
Maximum
Amount
Farm Income
2
times
of
total
annual
farm
receipts/value of crops, whichever is
lower
(Anticipated from the farm, taking into
consideration type of crops, area under
cultivation, etc.)
Plus/OR
Margin
Rate of Interest
Repayment
Other
3 times of net anticipated annual
income/income from income/profit from economic activities/
allied activities and allied activities (existing and proposed to be
salary income if any undertaken) /salary income if any.
New vehicles: 15%
Used vehicle: 40%
Rate of interest applicable to Baroda Car loan minus 0.25%, subject to
minimum Base Rate
New vehicles : 7 years
Second hand vehicles : 4 Years
Loan repayment will be synchronized with the income generation from the
farm activities. The due date to be fixed taking in to account the time taken
for receipt of sale proceeds of the crop. The instalments may be fixed on half
yearly/ yearly basis based on cropping pattern.
Parameters
Types of Facility
Prescribed Norms
Term Loan
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2
3
Purpose
Eligibility/Beneficiary
Age
6.
7.
Margin
Rate of interest
8.
Repayment
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In order to facilitate the farmers and to make the product more attractive Bank has been decided to (i)
to grant the facility as an overdraft or loan (ii) Increase the limit granted under the scheme.
1) Purpose: An instant credit for farming community to meet the emergent funds requirements
for Agriculture and domestic purposes during off season such as purchase of bullock, implements,
storage/packing material ,storage structures, onion sheds, purchase of pump set, pipes for irrigation
etc. and also domestic requirements for various religious ceremonies, festivals, emergent medical
expenses and other emergency expenses etc.
2) Eligibility: Individual Farmers/Joint borrowers who are existing Baroda Kisan Card (BKCC)
Holders.
3) Type of Loan: Term Loan repayable in 3-5 years or Overdraft facility for a period of 12 months.
4) Maximum Loan amount: Limit may be fixed as under:
BKCC Limit up to
Up to Rs.5.00 Lacs
More than Rs.5 Lacs but up to Rs.10.00 lacs
More than Rs.10 Lacs but up to Rs.20.00 lacs
More than Rs.20 lacs
This is subject to the condition that the Tatkal limit now being sanctioned should be within the eligible
limit under Investment Line of Credit in BKCC (as per details in circular No.BCC:BR:100/50 dated
23.02.2008 given below for ready reference) i.e. the income and value of security conditions should
be met and this Tatkal limit should be deducted from the eligible/available quantum of finance for
investment credit also.
1.Income
Farm Income
PLUS
Other income/income
3 times of net anticipated annual income/
from allied activities
profit from economic activities/allied activities (
and salary income,
existing and proposed to be undertaken) /salary
if any
income if any.
OR
2. Value 75% of value of land mortgaged as
of
collateral security and 100% of
Security
value
of
other
securities
like
assignment of LIC Policy (surrender
value), pledge of KVPs/ NSCs/Banks
TDR/Gold Ornaments etc.
Whichever is less out of 1. Income and 2. Value of Security
5) Security:
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6) Repayment (For term Loan): In half yearly/yearly instalments depending upon the income generation
and cropping pattern.
7) Rate of interest: As per rates applicable to Farm Credit under Agriculture from time to time.
8) Deviation: Any deviation in the scheme should be referred to the competent authorities for approval,
as per the extant guidelines contained in circular No. BCC:BR:107:186 dated 23.04.2015, issued by
Large Corporate Banking Department, BCC, Mumbai.
9) Penal Interest and other charges - As per norms applicable to direct Agricultural advances from time
to time.
10) Finacle Codes: The accounts are to be opened in the relevant scheme codes in Finacle as
given below:
For Term Loans: LA420
For Overdraft Accounts: OD022
Scheme for Installation of Photo-voltaic Pumping System for Small Irrigation Projects :
Objective:
To utilize the solar energy for water pumping and support irrigation schemes under Agriculture.
To provide sustainable economic activity to farmers in non-electrified or under electrified rural
areas.
Eligibility: All persons/SHGs/JLGs/Small & Marginal Farmers engaged in cultivation of crops as owners of
land or permanent tenants or lease-holders non electrified or under electrified rural areas..
Possible water sources: Pits, pen dug wells, medium tube wells, doggies, tanks, farm ponds and surface
water from canals and rivers.
Nature of Facility: -- Term Loan
Project Cost: Project Cost as decided / approved by PAC of MNRE/NABARD. Ranges from Rs.308320 to
Rs.767200 depending on the models (Model -1 to Model-IV)
Margin: - Minimum 60% including subsidy available from Central & State Govts. Capital
Subsidy
1) The Ministry of New & Renewable Energy under JNNSM programme provides subsidy for off grid solar
applications (solar Water pumping) @ 30% of capital cost.
2) Additional subsidy could be provided by the State Government.
3) It should be noted that the scheme is financially viable only with subsidy of 60%.Hence the additional
subsidy/margin contribution to be ensured from the state govt/beneficiary.
Repayment The loan will be repayable in - 10 - years with one year grace period. The beneficiary may
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repay the loan installment with interest earlier than the period if he so desires.
Classification:--Priority Sector (Agriculture)
Finance against Warehouse / Storage Receipt:
Types of Warehouse/storage receipts eligible to be financed:
01. Warehouse Receipts issued by State/Central Warehouses upto the limits prescribed under the
Scheme.
02. Warehouse/Storage Receipts under tie up arrangement with Collateral Managers upto the limit
prescribed under the scheme.
03. Warehouse Receipts issued by private registered Warehouses approved by concerned Zonal Head
upto individual limits of Rs.50.00 lakhs per farmer.
4. Negotiable Warehouse Receipts issued by Warehouses approved by Warehousing Development
and Regulatory Authority (WDRA) upto the limits prescribed under the scheme.
(All the three types of Warehouse receipt at point no. 1, 2 or 3 may or may not be
negotiable warehouse receipt issued by warehouses approved by WDRA to issue negotiable
Warehouse Receipts)
Earlier, our Bank entered into a Collateral Management Agreement with National Bulk Handling
Corporation (NBHC) on 08.05.2009 and formulated the Scheme for financing against the
Warehouse/Storage receipts. To have another option available with our Branches, bank has entered into
another Tie up arrangement with National Collateral Management Services Ltd (NCMSL) on 18.01.2012
for providing of finance against Warehouse / Storage Receipts issued by them.
As per BCC/BR/105/475 dt 29.10.2013 In order to tap the large potential available for such financing
,we have now entered into a tie up agreement with one more collateral management company namely
,M/s star Agriwarehousing and collateral management Ltd.(STARAGRI) for financing against
warehousing /storage receipt issiued by them.
As per circular no. BCC/BR/108/110 dated 11.03.2016, Bank has discontinued the financing against
warehouse / storage receipt issued by NCMSL, until further instruction. However, Branches may
continue financing against warehouse / storage receipt issued by other Collateral Managers (NBHC and
STARAGRI) approved by our Bank.
Eligibility: Individual farmers who have produced the farm produce in their own farms, Food grain
traders, Millers &Arthias who store agri produce stocks in the Warehouses.
Loan Amount: For farmers: Maximum Rs.50.00 lakhs
For Others: Maximum Rs.5.00 crores. (However for private Godowns approved by WDRA, the maximum
loan amount of Rs.2.00 crores only be considered by the Branches subject to the discretionary lending
power of the sanctioning authority. For limit above Rs.2.00 croresuptoRs.5.00 crores, activity clearance
from the Regional Head be obtained)
Margin: Minimum of 25%.In case of tie up arrangement with Collateral Managers: 25% or as prescribed
by Collateral Managers, whichever is higher. (The margin should be increased if there is volatility of
price for a particular commodity).
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. Parameter
Type of Facility
Purpose
Eligibility
Age
Approved Norms
Term Loan
To establish new small dairy units with -2- to -10- milch animals
Individuals , farmers, members of NGOs/SGHs/JLGs.
Minimum : -21- years
Maximum: up to -65- years, as on the date of availment of facility
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5.
Loan Amount
6.
7.
Margin
Rate of Interest
8.
Repayment
9.
Security
10
Documentation
11
12
13
14
Processing Charges/
Documentation charges
Mortgage charges
Insurance
Subsidy
15
16
Classification
Disbursement of Loan
Scheme for financing to NBFC-MFIs (PS): As per the extant guidelines of RBI, financing to NBFCMFIs for on-lending to individuals/ groups is eligible for categorisation as Priority Sector advance under
112 | P a g e
respective categories viz. Agriculture, Micro, Small and Medium Enterprises and Others, subject to their
compliance with all the regulatory guidelines of RBI.
Bank has approved Scheme for financing to NBFC-MFIs which are engaged in on-lending to
individuals/groups under Priority Sector {here-in-after referred as NBFC-MFIs(PS)}, with the
following relaxation/modification:
Particulars
Relaxation/modification
Activity
Clearance
(b) The loan amount should be within the maximum exposure ceiling, as
specified below:
However, for the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as
mentioned above on point Nos.(i)(a) & (i)(b), and which are falling upto the
DLP of ZOCC, sanction will be granted by the respective authorities as per their
DLP.
(ii) For the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as
113 | P a g e
mentioned above on point Nos.(i)(a) & (i)(b), and which are falling beyond the
DLP of ZOCC, the stipulation of obtaining Activity Clearance has been waived.
Instead, the final credit proposal is to be submitted to the competent authority
for consideration.
(iii) For the credit proposals of NBFC-MFIs (PS), which are not fulfilling the
criteria, as mentioned above on point Nos. (i)(a) & (i)(b), any fresh / increase in
exposure would be subject to Activity Clearance from Corporate Centre, even
though proposals fall under the powers of Branch/Region/Zone , as per the
extant guidelines.
Relaxation
The following relaxations have been approved under the scheme:
in
other
norms
Parameter/
Norms
guidelines
for
Margin
DER
(TOL/TNW)
4.5:1 (Maximum)
Banking
Consortium
Banking
Arrangement is mandatory
for single borrower with
aggregate credit limits of
Rs.150.00 Crores & above.
Arrangement
Personal
Guarantee of
Directors
Rate
of 1% upward revision in ROI as many Banks/FIs are charging higher ROI on
interest:
advances to NBFC-MFIs(PS). Thus, need was being felt to realign our ROI
structure on such advances in line with the ROI being charged by the peer
114 | P a g e
Banks.
Limit Rs.25 lacs and above: Ranging from Base Rate+2.50% to Base Rate
+4.25%, depending upon the Credit Rating of the individual borrower,
irrespective of the tenure
Tenor Premium for Term Loans (applicable on accounts with limits of Rs.25 lacs
and above) to be charged extra as per extant guidelines.
The details of the Scheme for financing to NBFC-MFIs (PS) :
Facility
Purpose of the
Facility
Security
Primary Security:
Exclusive charge over the loan assets or book debts funded out of the bank
loan i.e. Assignment of book debt, created out of the funds borrowed from
the Bank
Collateral:
(i) Cash Collateral of minimum 10% of the sanctioned limit in the form of
Term Deposit to be kept for the tenure of the loan. Lien to be marked on the
said FDR in favour of our bank for the principal amount along with the interest
credited thereon in the account
(ii) Personal Guarantee of main promoter/Directors of the Company, if
offered by the Company. However, the personal Guarantee of the promoters/
Directors of the Company need not be insisted upon.
Other
Conditions
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LA429: .for TL/DL Food & Agro based, Interest table code: L4291 (Base Rate and tenor premium
included); and
CC021: for CC Food & Agro based, Interest table code: CC211 (Base Rate only)
Dispensing with No Due Certificate for Agri. Loan applications (BCC:BR:107/74 dated
16/02/2015):
It has been decided to dispense with obtaining No Dues Certificate for individual loan applicants/
borrowers (including JLGs and SHGs) for agriculture loan proposals in our rural and semi-urban
Branches and to adopt the following procedure for due diligence:
117 | P a g e
1.
a)
b)
c)
d)
e)
2.
a)
b)
c)
d)
e)
3. What is the effective rate, which Banks earns on the accounts eligible for interest subvention in
Agriculture?
a) 7 %
b) 4 %
c) 9 %
d) Base rate
e) 3%
4. What is the maximum repayment period under the scheme of Priority Sector loans against Gold
Ornaments/Jewellary?
a) 24 months
b) 6 Months
c) 36 Months
d) 12 Months
e) 18 months
5. What is the minimum margin under farm produce marketing loans/finance
against warehouse receipt?
a) 10%
b) 15%
c) 25%
d) 40%
e) 30%
6. Margin in case of New & Old Tracor loan is
a) 15% & 50%
b) 20% & 40%
c) 10% & 20%
d) 25% & 60%
e) 25 % & 35 %
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7. In Baroda Basic Savings Bank Deposit Account ------ Cheque Leaves shall be allowed free in
a year:-a) 10
b) 20
c) 30
d) 40
e) 50
8.The Aadhar number of the customer can be linked in existing account as well as for the new accounts
through menu option:
a. CUMM/HCUMM
b. APBS
c. APBSLN
d. HACM/ACM
e. HCLM
9.Under PMJDY scheme to get the benefit of accidental insurance cover ,Rupay debit card must be
used at least once ina.
b.
c.
d.
e.
15 days
30 days
90 days
30 days
30 days
10. The
a.
b.
c.
d.
e.
Q
A
1
b
2
b
3
c
4
d
5
c
6
c
7
e
8
c
9
c
10
C
119 | P a g e
MSME BANKING
Micro Small and Medium Enterprises(MSME) : An Overview
MSMED Act was operationalized with effect from 2nd October 2006, which defines an enterprise
instead of an industry to give recognition to service sector and also defines a medium enterprise to
facilitate technology up gradation and graduation.
Section 7 of the Act protects the sector by restricting the investment in Plant & Machinery in case of
Industries and investment in equipments for service enterprises as below with effect from 2nd Oct. 2006:
Particulars
Micro
Enterprises
Investment in Plant & Not Exceeding
Machineries in case of Rs.25lakh
Manufacturing
Enterprises
Investment in Equipment Not Exceeding
in case of Service Sector Rs.10lakh
Enterprises
Small Enterprises
Medium
Enterprises
Above Rs.25lakh up Above Rs.5cr to not
to Rs.5cr
exceeding Rs.10cr
Above Rs10lakh up Above Rs.2cr to not
to Rs.2cr
exceeding Rs.5cr
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Manufacturing Enterprises: The Micro, Small and Medium Enterprises engaged in the manufacture
or production of goods to any industry specified in the first schedule to the Industries (Development and
Regulation) Act, 1951 and as notified by the Government from time to time. The Manufacturing
Enterprises are defined in terms of investment in plant and machinery.
Service Enterprises:
Bank loans up to Rs.5.00crore per unit to Micro and Small Enterprises and
Rs.10.00crore to Medium Enterprises engaged in providing or rendering of services and defined in terms
of investment in equipment under MSMED Act, 2006.
Other Finance to MSMEs
i. Loans to entities involved in assisting the decentralized sector in the supply of inputs to and
marketing of outputs of artisans, village and cottage industries.
ii. Loans to co-operatives of producers in the decentralized sector viz. artisans, village and
cottage industries.
iii. Loans sanctioned by banks to MFIs for on-lending to MSME sector as per the conditions
specified in paragraph IX of this circular.
iv. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami
Card, Swarojgar Credit Card, and Weavers Card etc. in existence and catering to the nonfarm entrepreneurial credit needs of individuals).
v. Outstanding deposits with SIDBI on account of priority sector shortfall.
Considering that the MSMED Act, 2006 does not provide for any sub-categorization within the definition
of micro enterprises and that the sub-target for lending to micro enterprises has been fixed, the current
sub-categorization within the definition of micro enterprises in the existing guidelines is dispensed with.
To ensure that MSMEs do not remain small and medium units merely to remain eligible for priority
sector status, the MSME units will continue to enjoy the priority sector lending status up to three years
after they grow out of the MSME category concerned.
The targets and sub-targets set under priority sector lending for Domestic scheduled
commercial banks and Foreign banks with 20 branches and above operating in India are
furnished below:
7.5 percent of ANBC(Adjusted Net Bank Credit) or Credit Equivalent Amount of Off-Balance
Sheet Exposure, whichever is higher to be achieved in a phased manner i.e. 7 per cent by
March 2016 and 7.5 per cent by March 2017.
The sub-target for Micro Enterprises for foreign banks with 20 branches and above would be
made applicable post 2018 after a review in 2017.
Credit rating:
(i) Internal Credit Rating System: The internal comprehensive credit rating system under BOBRAM
(CRISIL) Model has been approved by the bank and is already in place as advised to all branches. The
BOBRAM model is applicable to MSME accounts having exposure of above Rs. 2 Crores.
Bank has approved adoption of New Scoring Card type of Model for rating MSME accounts with
exposure of Rs.2.00 Lacs to Rs.2.00 Crores.
As per extant guidelines, periodicity of credit rating in respect of borrowal accounts is on annual basis.
122 | P a g e
In case of adverse features in the account, the rating has to be reviewed immediately in all such
accounts with exposure (FB+NFB) of Rs.5 crores and above.
(ii) External Credit Rating System (not eligible under BASEL-II norms of capital adequacy)
SME borrowers are rated by few external credit rating agencies. In case of MEs, some of the borrowers
are getting their accounts rated by external credit agency like CRISIL etc.
Our Bank has entered into MOU with credit rating agencies viz: CRISIL, ICRA, CARE, and BRICKWORK
INDIA to get our SME borrowers rated.
(iii) External Credit Rating System (under Basel-II norms of Capital Adequacy)
External Credit Rating should be carried out in all SME loan accounts with credit limits of above Rs 5
crores by any one of the RBI approved external credit rating agencies. Presently ICRA, CARE, CRISIL
FITCH, SMERA and Brickworks India are the only Reserve Bank of India approved external credit rating
agencies in India. The exposure to SME borrower rated by any of these rating agencies will be
recognized as rated exposure for the purpose of computation of Risk Weighted Assets under
Standardized Approach of credit risk under Basel-II guidelines.
Pricing be continued to be linked to our internal credit rating system. However due weightage will be
given for the external credit rating by the external rating agency. Detailed guidelines on credit rating are
covered under Loan Policy.
COMMON GUIDELINES
1. The simple standardized loan application form for borrowers in MSME Sector circulated by Indian
Banks Association has been adopted for credit limits upto Rs.100 lakhs.
2. Receipt and acknowledgement of application & Maintenance of Register for application received.
3. No application to be rejected without referring to next higher authority.
4. Our Bank has introduced online application & Loan Tracker Module and Our Banks website
provides such facility to MSME customer through which the credit application submitted by MSME
customers would be reaching our Loan Track system and accordingly, application tracking facility
is provided to the MSME customers
5. Time norms for disposal of loan application: As per Code of Banks Commitment to Micro
and Small Enterprises August 2015 (Para 5.1 j of BCC:BR:107:624 dated 31.10.2015) Disposal of
application for a credit limit or enhancement in existing credit limit up to Rs.5 lakh should be
within two weeks provided application is complete in all respects and is accompanied by
documents as per check list provided.
6. Financials for TAKE OVER of advance accounts:
Ratio
Norms
Micro
&
Small Medium Enterprises
Enterprises
CR
Min. 1.17 & above
Min. 1.20 & above
Others
DER (TTL/TNW)
Max.4:1
Max.3:1
Max.3:1
DER (TOL/TNW)
Max.4.5:1
Max.4.5:1
Max.4.5:1
Average DSCR
1.75 (anyone yr. should 1.75 (anyone yr. should not 1.75 (anyone yr.
not be below 1.25)
be below 1.25)
should
not
be
123 | P a g e
below 1.25)
NON-FINANCIAL NORMS FOR TAKEOVER OF ADVANCE ACCOUNTS:
a. Profit-making (i.e. net profit before tax) concerns only as per last audited Balance Sheet
b. Accounts be rated internally as per the new credit rating model (BOBRAM) subject to minimum
BOB 6. In case of take over of accounts for Rs.25 lakhs and above and upto Rs.2 Crores , the
accounts are to be rated as per New MSME Credit rating model subject to a minimum of MSME
BOB 6.
c. No reschedulement / restructuring in the existing a/c. during last -2- years
{in a, b & c deviation can be allowed by ZOCC for accounts with exposure up to Rs.3 cr.; in other
cases COGM-MSME for proposals up to powers of RMCC; COCC-ED for proposals up to powers of
ZOCC and COCC ED/ COCC- CMD in all other cases}
d. Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as per latest
statement of accounts.
e. STANDARD ASSET with existing banker
f. All other existing norms , guidelines to be scrupulously followed
a. {Deviation can be allowed by the COCC-ED/COCC-CMD in respect of d, e, & f}
g. External rating in respect of credit proposal with exposure above Rs.5.00Crores by an approved
credit rating agencies should not be below BBB & equivalent.
7. Collateral Free Loan: Branches may be noted that Collateral securities are not to be obtained
by the banks in respect of MSE advances up to the credit of Rs. 10 Lacs.
8. Assessment of Working Capital:
The credit requirements of Micro, Small & Medium Enterprises (i.e. MSME-Regulatory) will be
computed on the basis of a minimum of 20 % of their acceptable projected annual turnover or
First Method of Lending, whichever is higher, for new as well as existing units.
Limits under non regulatory definition: The assessment of working capital credit limits
should be done based on second method of lending as per Tandon committee guidelines.
9. MARGIN:
(a) For Term Loan
In case of factory land & building, overall margin of 30%
In case of Plant & Machineries and Equipment margin is proposed at 25%
In exceptional cases, finance may be made available against second hand imported machinery,
with a minimum margin of 40% at the discretion of sanctioning authority, keeping in view the
extant guidelines for financing against second hand machinery.
(b) For Working Capital
25% uniform margin is proposed on stocks and receivables. For export credit margin may be
stipulated @ 10 %.
The next higher authority is authorized to reduce margin maximum by 5% in deserving cases in
respect of Land & Building & Plant & Machineries & Equipments/Current Assets.
If deviation is proposed beyond 5 %, Executive Director / Chairman & Managing Director is authorized
for the same.
124 | P a g e
10. Rate of interest: If accounts are falling under SME category as per, regulatory definition, rates
as applicable to Micro, Small & Medium Enterprises to be applied. However, if accounts are
falling under SME category based on expanded coverage i.e. they are outside the purview of
regulatory definition, interest to be applied as per separate guidelines being issued from time to
time.
11. Penal Interest: Penal Interest @ 1% to 2% to be charged for the period of default in
repayment, non-submission of financial statement, non-compliance of terms and conditions etc.
as per extant guidelines of Bank.
12. Collateral Free Loans:
Presently, Banks guidelines for providing collateral free loans are as under:
Collateral free loan upto Rs.10.00 Lacs to Micro & Small Enterprises.
Collateral free loans (including third party guarantee/ security) upto a limit of Rs. 25.00 lacs to
units having satisfactory dealings with the branch for last 3 years and having sound and healthy
financial position.
It is already decided to dispense with collateral security including third party guarantee for loans
to Medium Enterprises upto a limit of Rs. 25.00 lacs as in case of loans to Micro & Small
Enterprises in manufacturing activities subject to satisfying the following criteria in case of
existing borrower as also takeover accounts:
Consistent growth in sales for last 3 years.
Continuous profit for last 3 years.
Credit rating of A or equivalent and above and no slippage in credit rating during last 3
years.
The units assets (fixed as also current) are charged to the bank and promoters / directors
personal guarantee are available
Asset coverage ratio of more than 1.5
Other take over norms are complied with.
For the existing borrowers enjoying limits up to Rs.25.00 lacs and fulfilling the above criteria, the
release of collateral securities obtained if any, at the time of previous sanction / review, is can
also to be released at the specific request of the borrower by PSR noting authority.
Coverage of collateral free loans under Credit Guarantee Fund Trust Scheme for Micro &
Small Enterprises (CGTMSE):
All the collateral free loans upto Rs.100 lacs sanctioned to Micro & Small Enterprises in manufacturing
and service sector as defined under MSMED Act, 2006, PMEGP scheme are eligible for cover under the
Scheme.
Detailed guidelines of Scheme are as under:
What is CGTMSE: It is a Trust established by Govt of India and SIDBI on 01st August 2008 in the ratio
of 20:80.
(I)
Eligibility:
125 | P a g e
Trust will pay 75% of guaranteed amount as Ist Installment within 30days of lodgment of claim and
balance amount will pay after completion of recovery proceedings.
Our bank is sharing the one-time guarantee fees and annual service charges on 50:50 basis for
advances upto Rs.50 lacs covered under the scheme. In case of accounts with limits over Rs.50 lacs
entire guarantee fee is to be borne by the borrower. In case of accounts financed under erstwhile PMRY
scheme for manufacturing activity and covered under CGTMSE scheme, entire annual service fee is
borne by Bank.
13. Review with limits upto Rs. 20/- lacs pending receipt of audited financial statements
Branches have been authorized to review advance accounts of borrowers in trading activities, Micro &
Small Enterprises, borrowers in rural area, borrowers having only term loan accounts, financed under
government sponsored programme, borrowers enjoying only guarantee facility, etc, with limits upto Rs.
20/- lacs pending receipt of audited financial statements provided the conduct of the account is
satisfactory in terms of various parameters
14. New Originations-Priorities & Approval
126 | P a g e
Bank has approved strategy to take fresh exposure including review with increase and other ancillary
business for corporate and clients. Pursuant to the approval, bank has advised as under
(i) Bank will prefer to take fresh exposure/ review with increase in following sectors:
i.
Pharmaceutical
ii.
Engineering
iii.
Defence Equipment Manufacturing
iv.
Automobile
v.
Renewable Energy
vi.
IT and IT enabled services
vii.
Financial Services (NBFCs, MFIs)
Bank has also advised to focus on channel financing, Trade Financing, CMS, financing of investee
companies of large Private Equity Funds, extending advisory Services as new avenues of Business
opportunity.
ii. Sectors to deal with cautions and selective approach
Bank will take cautions and selective approach in taking fresh exposure in following sectors
i.
Power Generation
ii.
Road Projects
iii.
EPC
iv.
Iron & Steel
v.
Ship Breaking
vi.
Gems & Jewellery
vii.
Coal Mining
viii.
Edible Oil & Vanaspati Manufacturing
ix.
Textile
x.
Large Trade Accounts (Wholesale Trading)
It is advised that fresh/review with increase proposals involving a limit of Rs 5.00 crores (Five Crores)
and above, coming under the purview of these sectors mentioned here in above under point no (ii)
should be referred to the respective credit verticals at BCC through respective Regional Offices for
approval before putting up to the Sanctioning Authority.
Implementation of Corporate Module (MSME Banking) of LAPS (Loan Automation
Processing System) to all branches: After rollout LAPS Corporate Module under MSME Banking
across all SMELF w.e.f. 03/11/2014, it was proposed to implement the module in branches also in
phased manner. Detail User manual and Reckoner can download from KM Portal (Intranet) with the
following path: BCC IT Dept. Projects LAPS - Corporate Module Manuals.
Financial Ratios for Credit Appraisal (Not Applicable in case of takeover of accounts)
Following ratios can be accepted for granting credit facilities to SME units failing as per regulatory
guidelines or SME as per expanded coverage.
Ratio
Micro & Small
Enterprises under
manufacturing
Norms
Medium Enterprises
under
manufacturing
127 | P a g e
3:1
Not below 1.25
3:1
Not below 1.25
3:1
Not below 1.25
1.33
SME Products: The following products are launched for MSME sector across the country:
SME SHORT TERM LOANS
Sr
No
Parameter
Guidelines
1.
Purpose
2.
Borrower Group
Eligibility Criteria
128 | P a g e
Loan Amount
Period
Powers to sanction
Baroda Vidhyasathali
Sr
No
Parameter
Guidelines
1.
Target Group
Educational Institute
2.
Eligibility Criteria
Purpose
Loan Amount
Margin
Repayment Period
Security
Assessment
Limit
129 | P a g e
Financials
Parameter
Guidelines
Eligibility
Purpose
Composite
Limit
To provide hassle free credit for working capital (fund based and
non-fund based) as also capital expenditure related to the business
of the borrower within the overall composite limit sanctioned to the
borrower.
4.5 times of borrowers tangible net worth as per last audited Balance
Sheet, or, Rs. 5.00 crores, whichever is lower.
Margin
25%
Security
Financial
Ratios
Other
Conditions
3:1
DE Ratio(TOL/TNW)
4.50:1
1.25
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Parameter
Guidelines
Eligibility
Purpose
Limit
Period
ROI
Particulars
Guidelines
Eligibility
Purpose
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Limit
Period
Margin
Assessment
of Limit
Particulars
Guidelines
Eligibility
Purpose
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Limit
Margin
Assessment
of Limit
Period
Financial
Ratios
TEV Study
Other
Conditions
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Particulars
Guidelines
Eligibility
Purpose
Limit
75.00Lacs
Semi-Urban : 200.00Lacs
Urban & Metro: 500.00Lacs
4
Margin
Assessment
of Limit
134 | P a g e
Period
Financial
Ratios
Other
Conditions
policy.
Demand Loan/Term Loan 35 months to 84 months including
moratorium
Current Ratio:
Small Enterprises: 1.17
Medium Enterprises: 1.20
SME(Expanded) : 1.33
DE Ratio (TTL/TNW): 3:1
DE Ratio(TOL/TNW): 4.50:1
Asset Coverage Ratio: 1.50
Stock/ Book Debts statement to be obtained on yearly basis, i.e.
February every year. This being a collateral security, certification
by Chartered Accountant is not mandatory.
135 | P a g e
Scheme for financing existing Borrowers under SME Segment for Purchase of New Vehicles
Sr No
Particulars
Guidelines
Eligibility
Purpose
Limit
Margin
Period
DLP
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WHOLESALE BANKING
Wholesale Banking Business:
As a part of Business Transformation initiatives, the bank is repositioning as Multi Specialist Bank.
Wholesale Banking Business Segment will include
All Banking business (Assets & Liabilities) across the Bank at Metro,Urban, SemiUrban & Rural branches with
Entities (including Private Sector , PSU & Foreign) with their annual sales/income
turnover of over Rs.150/- crore. Following types of customers irrespective of their
annual turnover
Financial Institutions ,including banks and all type of NBFCs (excluding RRB sponsored
by our Bank)
137 | P a g e
Gross Turnover of upto Rs 150/- Crores as per the last Audited Balance Sheet or Previous
Financial Year would be classified as SME borrowers.
4) All entities i.e. Corporates, Partnership firms, Sole Prop. Firms, Trusts, Corporations etc that
satisfy the Investment in Plant and Machinery criteria as per Regulatory
Definition would also be classified as SME borrowers.
Note: Entities that have Gross Sales of less than Rs 450/- Crores as per Last Audited Balance Sheet
but have a Projected Gross Sales of over Rs 600/- Crores for the current year shall be classified as
Mid Corporate only. The status will be reviewed after reviewing the Actual Gross Sales for the
projected year based on Audited Financials. Similar situation would prevail in respect of SME
borrowers also i.e. borrowers with Actual Gross Sales of Rs. 125 Crores and projected gross sales of
Rs.200 Crores will be classified as SME only and will be reviewed based on Actual Sales on receipt
of Audited Balance Sheet for projected period.
5) In respect of New Projects whether Manufacturing, Services, Infrastructure etc Total Project Cost
would determine the Classification as under: (Ref: Page No. 58 of Domestic Loan Policy 2014 &
BCC/BR/106/454 dated 24.11.2014)
i) Other than Real Estate Projects a.
Project Cost <= Rs. 50cr. SME
b. Project Cost >Rs.50cr. but <Rs.500cr. Mid Corporate c.
Project Cost =>Rs.500 cr Large Corporate
ii) Real Estate Projects
a. Project Cost < Rs. 50 crs SME
b. Project Cost =>Rs.50 cr but <Rs.250 crs. Mid Corporate
c. Project Cost =>Rs.250 cr Large Corporate
6) The Classification of borrower would be Entity wise and not Group wise. So different entities in the
same Group can be classified as SME, Mid Corp or Large Corp depending on the Gross Turnover criteria
as above.
7) All agriculture and indirect agriculture accounts (as per regulatory definition) shall be classified
under Rural & Agriculture Banking Business Segment and be dealt at Rural & Agri Banking Deptt at BCC
8) Notwithstanding the above if there is any doubt about the classification of any borrower entity, it
shall be decided mutually by GM (Large Corporate Banking), GM (Mid Corporate) and GM (SME) based
on sound reasoning and justification. However in case of difference of opinion, it will be decided by the
Executive Director.
Loans & Advances- Loan Policy 2014
1. No loan to be granted to Wilful Defaulters (Refer to Recovery Policy) of our Bank/Other
Banks/Financial Institutions.
2. In terms of Section 20(1) of BR Act 1949, no loan against the security of Banks own shares.
3. Section 20(1) of the Banking Regulation Act, 1949 lays down restrictions on loans and
advances to the directors and the concerns in which they hold substantial interest. Without
prior approval of the Board or without the knowledge of the Board, no loans and advances
should be granted to Directors (including Chairman & Managing Director) and relatives of
directors of our Bank, other banks, Scheduled Cooperative Banks, Subsidiaries/Trustees of
Mutual Funds/ Venture Capital Funds set up by the Bank/ Other Banks subject to the
following: a) Loans & advances aggregating to Rs. 25 lacs and above are to be sanctioned by the MCB.
b) The proposals for credit facilities of an amount less than Rs. 25 lacs to these borrowers may be
138 | P a g e
sanctioned by the appropriate authority under powers vested in such authority, subject to reporting to
the Board.
Every borrower should furnish a declaration to the bank to the effect that:a) He is not a director or specified near relation of director of a banking company.
b) None of the partners is a director or specified near relation of a director of a banking company; and
c) None of its directors is a director or specified near relation of a director of a banking company. No
loan to be granted against partly paid shares.]
4. No loan to be granted against partly paid shares. No loan to be granted to
Partnership/Proprietorship concerns against the primary security of shares and debentures. (Ref
page no. 30 of Domestic Loan Policy)
5. Bank will not grant advance against FDR or deposits of other Bank.
Restrictions under Selective Credit Control (SCC): Presently the following commodities are
covered under Selective Credit Control (SCC): -Buffer Stock of sugar with sugar mills.
- Unreleased stocks of sugar with sugar mills representing levy sugar and free sale sugar.
6. Term Loan is granted for a period of 3 years and above but not exceeding 15 years except in
case of scheme specific advance i.e. Housing Loan, where repayment period of more than 15
years is permitted. However, generally a repayment period of 3 to 7 years is considered
taking into account the repayment capacity of the borrower, cash generation etc. In addition,
Infrastructure finance is also made available for a
period of more than 15 years on case-to-case basis on merits, in conformity with regulatory
guidelines. In case of restructured term loan accounts the tenor of the loan will be
considered on merits of each case. However, exposure to Term Loans
(Domestic) in terms of residual maturity of more than 3-years should not exceed
35% of the last quarter domestic credit.
7. Commercial lending proposals for Rs. 25 lacs and above (FB+NFB), for which BOBRAM Rating
Models are available, must be rated as per extant guidelines. Minimum investment grade /
acceptable for obligor (borrower) rating at entry point is BOB -6. In case of green-field
project the acceptable investment grade is BOBGF2 (BOB-6). Accounts rated BOB 7 and
below are considered as non-investment grades. No authority less than MCB will have the
power to sanction any credit facility at the entry level/review cum enhancement for accounts
rated BOB 7 and below. However, accounts rated BOB 7 & below in case of DR/Restructured/
Review/Review with decrease may be considered by the next level of sanctioning
authority/committee. But in the case of proposals falling under the power of CACB, COCCCMD and COCC-ED the proposals may be considered by the respective sanctioning
authorities only.
8. In case of commercial lending below Rs. 25 lacs (which are not covered under BOBRAM
Rating Models) the existing guidelines issued by SME department and Retail Banking
department will continue.
9. As per RBI guidelines, all credit exposures need to be rated. However in case, models for
rating of any kind of exposure to be taken up are not available, the exposure may be
considered as unrated. While taking up such unrated exposure banks extant guidelines
including financial, non-financial parameters etc. are to be followed.
10. With effect from 1st April 2014, the credit validation function of all borrowal accounts with
credit limit Rs.5 crores and above has been centralized at Risk Management Department,
Baroda Corporate Centre, Mumbai irrespective of the location of the sanctioning authority.
(Ref. Circular No. BCC: BR: 106/26 dated 25th March, 2014). However, for accounts with credit
limit up to Rs.5 crores existing guidelines will continue.
Exposure to unsecured guarantees and unsecured advances: Unsecured Exposure is defined as
an outstanding exposure where the realisable value of the security, as assessed by the Bank
139 | P a g e
/approved valuers / Reserve Banks inspecting officers, is not more than 10%, ab-initio, of the
outstanding exposure. Outstanding Exposure shall include all funded (excluding investments) and nonfunded outstanding exposures (including guarantees, Derivatives (LeR), underwriting & similar
commitments).
Security will mean tangible security properly charged to the Bank and will not include intangible
securities like guarantees & comfort letters, and rights, licences, authorisations etc. charged to the Bank
as collateral in case of infrastructure projects. However, annuities under "Built Operate and Transfer"
model in respect of road/highway projects and toll collection rights where there are provisions to
compensate the project sponsor, if a certain level of traffic is not achieved, shall be considered as
tangible security, if the Bank's right to receive annuities and toll collection is legally enforceable and
irrevocable.
RBI has further advised that for determining the amount of unsecured advances for reflecting in
Schedule 9 of the published balance sheet, the rights, licences, authorisations, etc., charged to the
banks as collateral in respect of projects (including infrastructure projects ) financed should not be
reckoned as tangible security. The total amount of advances for which intangible securities such as
charge over the rights, licences, authority, etc. has been taken as also the estimated value of such
intangible collateral should also be disclosed.
The domestic outstanding unsecured guarantee plus the total of domestic outstanding unsecured
advances in terms of definition of unsecured exposure of RBI as stated above should not exceed 30
percent of total domestic outstanding advances. The cap of 30% may be exceeded by additional 10%
provided the additional exposure is on account of financing to infrastructure projects for which
intangible securities such as charge over the rights, licences, authority, etc. only is available.
Short term loans (STL): The STLs may be on secured or unsecured basis depending upon merits of
proposal. Total unsecured Short Term Loans shall not exceed 10% of the total domestic credit as of
previous quarter. However, COCC-CMD/COCC-EDs is empowered to exceed the cap, subject to reporting
to Board.
Unsecured exposures will be considered only on clients having investment grade or
higher rating.
Activity Clearance & Agreement in Principle:
Looking to the increasing trend of stressed assets in Gems and Jewellary sector, Board of our Bank has
directed to adopt cautious approach in taking fresh exposure/additional exposure/ ad-hoc limit in Gems
and Jewellary sector and introduce the system of obtaining Activity clearance prior to regular sanction
irrespective of the quantum of exposure.
The activity clearance will be required from respective Functional Head (SME,Mid Corporate, Large
Corporate) at Baroda Corporate centre with immediate effect.
Therefore prior activity clearance will be a pre requisite before fresh sanction/ review with increase /adhoc of credit facility to Gems and Jewellary sector irrespective of amount of loan.
Following is the summarized table for activity clearance:
S.No
Industry/Activity
Authority
Remarks
1.
Baroda Corporate
Centre
hoc-Irrespective of
140 | P a g e
amount ( Sanctioning
authority rests with
MD-CEO/COCC-ED only
within their delegated
power
2.
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
Centre
4.
Bridge Loan
Baroda Corporate
Centre
5.
6.
7.
8.
9.
10.
11.
12.
Baroda Corporate
Centre
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
assignment
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Industry
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Centre
irrespective of amount
Baroda Corporate
For Fresh/RWI/Ad-hoc
Aviation
Infrastructure-Power
Infrastructure-Road
Infrastructure-Telecom
141 | P a g e
13.
activities
Centre
irrespective of amount
Baroda Corporate
An exceptionally
Centre
meritorious
cases.Fresh//new
credit facility to
cooperative banks
and/or to their
customer on the
strength of counter
guarantee of a
cooperaaative bank
irrespective of amount
Industry/Activity
Authority
Remarks
1.
Zonal Heads
RM
Zonal Heads
3.
Zonal Heads
4.
Cinema Halls,
Zonal Heads
Theatres/Auditoriums/Amusement
RM
(Kalyanamandapams)
5.
Zonal Heads
Fresh)
6.
Zonal Heads
142 | P a g e
It & ITES
Zonal Heads
8.
Zonal Heads
RM
Industry/Activity
Authority
Remarks
1.
BCC
Activities
1.
Financing for exports to countries for which Export Credit Guarantee Corporation
Limited (ECGC) does not extend Guarantee cover
2.
143 | P a g e
Bank will not encourage financing for setting up new sugar factories in cooperative sector and/or sugar factories of capacity less than 5000 TCD (Tonnes of
Crussing per day) of sugar cane.Bank may however meet the working capital
request from the sugar factory if requested under pledge & subject to guidelines
of RBI under Selective Credit control.
Restrictions on loans & advances to industries producing/Consuming Ozone depleting substances
(ODS)
S.No
Sector
Type of substance
1.
Foam Products
2.
CFC-12
conditioners
3.
Aerosol Products
4.
Solvents in cleaning
applications
Chloroform
Fire Extinguishers
Halons-1211, 1301,2402
5.
In respect of following activities, the activity clearance may be accorded by Zonal Heads for
proposals falling up to the power of Regional Heads irrespective of substantive rank of Zonal Heads.
1) Plantation (excluding tea, coffee and rubber plantations, common horticulture crops, Jatropha,
spices, medicinal plants, essential oils/ Aromatic plants),
2) Manufacturing & Trading of Liquor,
3) Vegetable Oil, Vanaspati.
4)
Cinema Halls, Theatres/ Auditoriums/ Amusement Parks, Marriage Halls (Kalyanamandapams).
5) Advances to Hotels/ Resorts.
6) Real Estate for Commercial Activities but excluding Retail Loans, Priority Sector Advances
7) Fresh/incremental exposure to Diamond industry.
8) Advances to Co-operative Banks
Fresh sanction of any credit facility, whether FB or NFB including Guarantees and Temporary
Overdrafts, are not to be sanctioned to any Co-operative Bank.
Also, guarantee or any other credit facility is not to be sanctioned to any customer of any cooperative
Bank merely on the strength of counter-guarantee of a co-operative Bank.
In exceptionally meritorious cases, the proposal for sanction of fresh/new credit facility to cooperative
banks and/or to their customers merely on the strength of counter-guarantee of a Co-operative bank
may be sent to the Corporate Office, Large Corporate Banking Dept.,BCC, Mumbai for consideration.
All other cases falling under the power of Zonal Head and above for the above mentioned activities are
to be put up to Baroda Corporate Centre for consideration as under.
1. For proposals falling under the power of Zonal Head and the functional Head at BCC activity
clearance to be given by the Functional head at BCC.
2. For proposals falling under the power of Executive Director activity clearance to be given by the
144 | P a g e
Executive Director.
3. For any other proposal not covered above for the said activities, the activity clearance will be given
by Chairman and Managing Director.
4. Bank will prefer to take fresh exposure /review with increase in the following sectors: Pharmaceuticals
Engineering
Defence Equipment Manufacturing
Automobile
Renewable Energy
IT and IT enabled services
Financial Services (NBFCs MFIs)
5. Fresh/review with increases proposals in these segment can be considered as per extant guidelines
of the Bank subject to Activity Clearance ( Circular letter no BCC: BR:70:171 dated 16.04.2015Wherever applicable )
6. Board has also advised to focus on Channel Financing Trade Financing Cash Management Service
financing if investee Companies of Large Private Equity Funds , extending Advisory Services as new
avenues of business opportunities.
7. Bank will take cautious and selective approach in taking fresh exposure in the following sectors: Power Generation
Road Projects
EPC
Iron and Steel
Ship Breaking
Gems and Jewellery
Coal Mining
Edible Oil & Vanaspaaati Manufaacturin
Textiles
Large Trade Accounts (Wholesale Trading)
8. This circular has further advice that fresh/review with increase proposals involving a limit of Rs 5.00
145 | P a g e
crores and above, coming under the purview of these sectors mentioned here in above under point ni
(ii) should be referred to the respective credit verticals at BCC through respective Regional Offices for
approval before putting up to the Sanctioning Authority CFS Branches and select Large Branches will
directly refer the proposals to BCC as mentioned in our letter no BCC/LCB/105/2220 dated 26.07.2013.
9. A Committee of General Managers (CoGM) at BCC will examine the proposal from viability and risk
angle. (CoGM) will also simultaneously look into the aspect of Activity Clearance (wherever applicable)
as mentioned in our circular no: BCC:BR:70:171 dated 16.04.2015
Fair Practices Code for Lenders:
RBI has advised all Banks and Financial Institutions to adopt the Fair Practices Code duly approved
by their respective Boards. The Fair Practices code applies to the following areas:
A) Applications for loans and their processing.
B) Loan appraisal and terms / conditions
C) Disbursement of loans including changes in terms and conditions
D) Post disbursement supervision
E) Other general provisions.
A. Applications for loans and their processing
Standard schedule of fee / charges relating to the loan application depending on the segment,
to which the accounts belong, will be made available to all the prospective borrowers in a
transparent manner, along with the loan application, irrespective of the loan amount.
Likewise, amount of fee refundable in the event of non-acceptance of the application,
prepayment options and any other matter which affects the interest of the borrower will also
be made known to the borrower at the time of application.
Receipt of completed application forms will be duly acknowledged.
The acknowledgment would also include the approximate date by which the applicant should
call on the Bank for preliminary discussions, if deemed necessary.
All loan applications will be disposed of within a period of 4 weeks from the date of receipt of
duly completed loan applications i.e. with all the requisite information/papers.
Time Limit observed by Bank (maximum time-limit for disposal of application as under)
Type of Advance
Time Frame for disposal of loan applications
Priority Sector
Upto Rs.25000
Upto Rs.25000
Within 2 weeks
Upto Rs.5.00 lacs
Branch Level
4 weeks
Above Rs.5.00 lacs
Above Rs.25000
RO/ZO Level
45 days
BCC Level
90 days
Export Credit
Branch Level
4 weeks
RO/ZO Level
45 days
Export Credit
BCC Level
90 days
146 | P a g e
In case of SME:
Upto Rs.2.00 lacs : 2 weeks
Above Rs.2.00 lacs: 4 weeks
At SME Factories : within 14 days if no TEV
required & -21-days if TEV study is required
Retail Loans
As prescribed at product level but not beyond 4 weeks/45 days/90 days at Branch, RO/ZO and BCC
level respectively.
(B) Other than Priority sector / Retail / SME Lending:
1) at branch level within 10 days from the date of submission of full information,
2) at Regional / Zonal office level within -7- days from the date of receipt of completed
proposal/information from branch.
3) at Zonal Manager within 7 days from the date of receipt of completed proposal/information
from branch.
4) at GM at BCC within -15- days from the date of receipt of full information from Zone/Brs.
5) ED/CMD - within -7 days from the date of receipt of full information.
CFS/IFS branches will have to forward their proposal directly to BCC with a copy to
Zonal Office and Zonal office will have to offer their views/comments within 15 days
to BCC.
*The time frame is for the sanction up to the level of COCC-CMD. In case of proposals falling within the
powers of the Management Committee of Board, the proposals are to be submitted at the next meeting
scheduled to be held after the clearance by the Chairman and Managing Director.
The above time frame for disposal of applications is from the date of receipt of loan
application, which is complete in all respects.
B. Loan appraisal and terms/conditions
In accordance with Banks prescribed risk based assessment procedures, each loan application
will be assessed and suitable margin/securities will be stipulated based on such risk assessment
and Banks extant guidelines, however without compromising on due diligence.
The sanction of credit limit along with the terms and conditions thereof is to be conveyed to the
loan applicant in writing and applicants acceptance of such terms and conditions will be
obtained in writing. Such terms and conditions as have been mutually agreed upon between the
bank and borrower prior to the sanction will only be stipulated.
Copy of loan documents, along with a copy each of all relevant enclosures quoted in the loan
agreement are to be furnished to all the borrowers at the time of sanction / disbursement of
loans.
Standard sanction letter would include instances of approval, disallowance, etc.
The bank is under no legal obligation to consider increase/additional limits/facilities without
proper review/assessment.
In case of lending under consortium arrangement, the participating banks would decide the
timeframe to complete appraisal of the proposal and communication of the decision. The Bank
will abide by the decision of the consortium.
C. Disbursement of loans including changes in terms and conditions
147 | P a g e
148 | P a g e
PRIORITY SECTOR
Up to Rs.25000
Above Rs.25000 and
up to Rs.5.00 lac
Above Rs.5.00 lac
Within 2 weeks
Within 4 weeks
45
46
Within 8-9
weeks
Sanctions at SME /Retail Loan Factories: The SME/Retail Loan Factories for the purpose of
sanctions/credit decisions shall be considered as Branches only, in respect of SME/Retail
proposals. The respective SME/Retail Factory Head shall exercise powers within their delegated
powers at substantive Grade/Scale, as hitherto.
The present guidelines on delegated powers provide for exercising powers of next higher
authority for the purpose of review of existing credit facilities subject to the conditions
149 | P a g e
Cap on Discretionary Lending Powers per year of various authorities are as follows: - (For
fresh and increase in existing limits)
150 | P a g e
Sr. No.
Group Limit
30timesof
Group Limit
CM & SM
GS IV & III
25 times of
Group Limit
25 times of Per
Party Limit
20 times of
Group Limit
20 times of Per
Party Limit
&
30 times of Per
Party Limit
Following advances are excluded from the annual cap limit:
a. Advances to staff members under the specific schemes for the banks staff only.
b. Advances against our own deposits and securities such as NSCs / KVPs / LIC Policies / Relief
Bond/ IVPs etc.
c. Advances under Govt. Sponsored programme and to weaker sections
d. Review (including review with decrease in limit) of accounts at the existing level.
e. In case of review with increase only existing limit is excluded whereas increased portion will be
counted for cap limit.
f. However, sanction of retail loans to the Proprietor/Partners/Directors of a firm/ company
stands de-linked from per party/group discretionary lending powers.
This provision of annual cap will not be applicable to GMs, the in-charge and second line
officers of Central Processing Cells (CPCs) of Retail Lending / Urban Retail Loan Factory
and SME Loan Factory.
Depending upon business needs the sanctioning authority may be authorized to exceed the annual
ceilings by the next authority not below the level of Asst. General Manager, by considering suitable
increase in the ceiling.
Financial Ratios for Credit Appraisal:
In our loan policy following Ratios are considered as bench mark
1. Current Ratio (Current Assets/ Current Liabilities) 1.33:1 (1.20 for Medium Enterprises and 1.17
for Micro & small enterprises)
2. Debt Equity ratio 3:1 (Total term Liabilities/TNW). TDE= Total outside liabilities/TNW is 4.5:1
3. FA coverage Ratio (Net Fixed Assets / Term Debts (Medium & Long) 1:1 (Net FA/Term
Liabilities) SSI/SME Not below 1.25
4. DSCR (Profit after tax + Dep.+ Int. on TL) / (Int. on TL+TL Instalments) average 1.75 however
in any year it should not be less than 1.25 (For Micro & Small enterprises it should not be less
than 1.00 in any year)
5. The above ratios are indicative and deviations can be considered by the sanctioning authority
on case to case basis, depending on industry, specific problems of unit, etc.
6. An Interest Coverage Ratio (ICR=EBDITA / Interest expense) of 5 may be considered
satisfactory.
Pricing of the loan
Pricing of Loans is quite crucial for banks business. Bank follows a transparent pricing
policy and is also guided by RBI on Government directed/ sponsored lending.
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The credit rating/scoring in respect of the borrower enjoying credit facilities above Rs.2 lacs
but less than Rs.25 lacs shall continue, even-though the pricing is de-linked, for determining
the credit risk perception
For loans of Rs.25 lacs and above pricing continues to be determined by the rating
of the borrower with appropriate spread.
Base rate concept: Bank has migrated to Base rate based pricing since 01.07.2010. Base Rate
computation is function of four parameters mentioned hereunder.
Cost of Deposits or Funds
Negative Carry on SLR & CRR
Unallocatable Overhead Cost
Profit Margin
The Base Rate will be reviewed by the Asset Liability Management Committee (ALCO) of the Bank with
a periodicity of at least once in a quarter. The spread over base rate will be fixed taking into account
factors like allocable expenses, credit Risk premium and tenor premium where applicable. Tenor
premium will be applicable for all loans with tenor above three years.
Risk Based pricing methodology: It is feasible to have spreads (Credit premium +Term Premium)
over base rate driven by a framework, which incorporates under mentioned elements;
Based on above parameters, Bank has computed the credit spread to be quoted in reference to the
over composite rating of the facilities to the borrower under different segments.
The risk based minimum rates are not applicable to loans with maturity up to 90 days. These loans
shall be priced based on rates computed/provided by Treasury / Planning / Large Corporate dept,
keeping in mind Banks and system liquidity into account plus the applicable risk spread subject to the
floor of Base Rate or any other stipulated minimum rate.
Penal interest & additional interest:
Bank may apply penal interest of maximum 2% p.a. each, for delay in submission of financial
statement, stock statements, creation of security, quarterly information, overdues, breach of
covenants etc. without any explicit approval /concurrence of appropriate authority. Penal interest
would be exclusive of the existing pricing of the asse t and additional to any other charge for excess
ad-hoc limits.
The bank shall charge overall penal and additional interest upto 2% p.a. over the applicable/regular
interest rate.
Verification of documents:
Advances accounts with aggregate limit of above Rs. 2.00 crore (Funded plus Non-Funded)
would be verified by the Banks Law Officer posted in the respective Zone/ Region and the
documents relating to Advance Accounts with aggregate of Rs. 10 lacs and above but up to and
inclusive of Rs. 2.00 crore shall be verified by the Banks identified Advocate /
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Lawyer other than the one who has given the Title Opinion / Non-Encumbrance Certificate (NEC)
/ Report in respect of mortgage(s) in the account.
Further, as per Circular No. BCC:WB:POL:F30:99/4511 dated 11th August 2007, it has been approved
by our higher authorities that in respect of following Zones, documents verification in respect of
credit limits between Rs.1 crore and Rs.5 crore can be got done from empanelled advocate/s of the
bank, provided original documents at some stage have been vetted by Zonal Legal Dept./Law officer
of the bank.
1) North Zone 2) Greater Mumbai Zone 3) Southern Zone 4) Eastern Zone 5) Gujarat Operations 6)
Mah. & Goa Zone and 7) Rajasthan Zone.
Notwithstanding what is mentioned above, all documents pertaining to consortium accounts have to
be necessarily got verified from Corporate Legal Dept./Zonal Legal Dept./Law Officer of Bank.
It may be noted that the documents shall be verified by the Banks identified panel
Advocate/ Lawyer other than the one who has given the Title Opinion/NonEncumbrance Certificate (NEC)/ Report in respect of mortgage(s) in the account.
Legal Audit of Title Documents
In response to RBI guidelines, A system of periodical Legal audit of title deeds and other
loan documents in respect of all credit exposure of Rs.5.00 Crore & above is introduced for
all existing as well as new accounts.
In addition to existing practice of verification of documents, Re-verification of title deed as to
their genuineness with relevant authorities along with verification of other loan documents
will be carried out within a period of 05years from the date of such first verification of title
deeds/ documents and for every block of five years thereafter till the loan is settled in full.
The re-verification will be carried out by the Banks empanelled advocate.
Regular Review
Credit facilities sanctioned to borrowers are subjected to annual review (except LABOD, staff loans
and the accounts where facilities sanctioned are for a period less than one year etc.) as per the
prevailing guidelines. However in case of borrowal accounts enjoying credit facilities of Rs.10 Crores
and above, where the credit rating is BOB-7 or below, the account should be reviewed on half-yearly
basis.. The accounts are required to be reviewed on or before the due date.
Branches have been advised vide Circular No. BCC: BR: 100:14 dated 14.01.2008 to review
advances accounts with limit up to Rs. 20 lacs for facilities enjoyed by borrowers in trading
activities, Micro & Small Enterprises, borrowers in rural area, borrowers having only term loan
accounts, financed under government sponsored programme, borrowers enjoying only guarantee
facility, etc, pending receipt of audited financial statements, provided the conduct of the account
is satisfactory.
SMA status should be part of the credit proposal. In every proposal e.g. Review/RWI/Review
with decrease the SMA status must be incorporated as Point No 5.10 of the credit proposal .In
concession/Modification proposals also SMA status should be given.
Short Review / Status Note:
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The bank has also the practice of Short Review / Status Note, which is done when it is not
possible to carry out a comprehensive Regular Review of the account within the stipulated period
pending receipt of certain particulars/ information or where the account is placed under special
monitoring, etc.
We continue to deal with the matter as under:Consecutive Short Reviews shall be restricted to two with a maximum period of six months for each
short review. But in exceptional cases, status review can be done in respect of accounts marked for
strict monitoring or for recovery. Relaxation is also provided to restructured accounts and accounts
under rehabilitation where for a variety of reasons only, Short Reviews may have to be done till such
time the unit/account becomes normal and healthy.
Where there is impairment of borrowers quality indicated through various adverse features like
default, diminution in value of security etc., suitable communication and if need be a Short Review /
Status Note should be placed before competent authority for perusal, direction and necessary action.
Inspection of Securities
Periodicity of the inspection of securities to be carried out is as under: Prime securities charges for working capital as per BOBRAM rating:
Latest Credit Rating for BOB 1, BOB 2, BOB 3 (A+ as per old rating model) Half-yearly basis.
Latest Credit Rating of BOB -4 and BOB 5 (A as per old rating model)-Quarterly
basis.
Latest Credit Rating BOB 6 & Below (B+ & below as per old rating model)-Bi-monthly.
Fixed Assets (Charged against Demand/Term Loan/DPG)-Half-yearly i.e. as of January and
July.
Under consortium arrangement (Exchange of inspection reports / information with other banks
to be ensured)-As per periodicity fixed by the consortium.
Inspection of Collateral Securities
The inspection of collateral securities to be carried out preferably on annual basis for all types of
facilities i.e. Funded as well as Non-Funded.
Bridge Loans
Bridge loans may be sanctioned to companies against the expected equity flows/ issues, for a
maximum period of one year. Such loans (fund-based & non-fund based) would be included in the
overall ceiling of 40 % of the Bank's TNW as on March 31 of the previous year prescribed for capital
market exposure (both Fund based and non-fund based)..
Banks may also extend bridge loans against the expected proceeds of Non-Convertible
Debentures, External Commercial Borrowings, Global Depository Receipts and/or funds in the
nature of Foreign Direct Investments, provided the banks are satisfied that the borrowing
company has already made firm arrangements for raising the aforesaid resources/funds.
Keeping in view the RBI guidelines, Bank has devised the following guidelines:
Such loans to be considered only at our Corporate Centre, for Corporates who are banking
with us with satisfactory track records.
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Such Bridge Lending should be used for the purpose for which the issue
(debenture/ECB/Equity etc.,) is proposed and not for any other purpose.
The amount of individual Bridge Loan shall not exceed 75% of the amount called-up on the
shares minus any other similar bridge lending, interim finance availed or to be availed.
Repayment period upto a maximum of one year.
Credit Risk Rating/Scoring
Credit Risk Rating is a method of systematically classifying credit proposals according to their Quality
and inherent risk characteristics. Rating is an important single -point indicator of credit quality to the
Bank as also to outsiders (viz. regulators, analysts, auditors, etc.). All credit proposals would need to
be rated in an internal credit rating model except for under mentioned i.e. Rating Exception
a. MSME proposals upto `2 crore, which need to be rated in MSME scoring model;
b. Product specific proposals to be rated in respective product scoring models;
c. Retail products to be rated in LAPS using Retail credit scoring model.
d. Proposals for Bill Discounted under Letter of Credit and assistance backed by SBLC/BG on
standalone basis, where the rating of the respective banks may be used;
e. Portfolio acquired under Interbank Participation Certificate (IBPC) on risk sharing basis;
f. Exposure to foreign banks, where the external rating of the respective banks may be used; and
g. Proposals backed by 100% cash collateral.
h. Borrowers availing Loan against Banks own Deposit (LABOD) Facility
i. Exposures to Urban Municipal Bodies (on account of non-availability of financial results) who can
generate revenue through taxation
j. Facility having 100% Central or State Government guarantee
k. Home country sovereign
l. Foreign country sovereign (External rating is used)
m. Accounts turned NPA, after the date of NPA
n. Advances to Central/State Govt. Departments. Undertaking/ Establishments, which are not running
on commercial basis (e.g. Industrial/Agricultural/Rural Development Boards of various State Govts.).
o. Borrowers who are availing only those loans/limits where full powers have been granted as per
loaning power chart e.g. purchase of cheques drawn by Central & State Govts and drafts of public
sector banks, ILCs/FLCs where full cover is held by way of deposits till maturity, etc.
p. Advances against clearing instruments/ bills/ clean overdrafts permitted within the vested loaning
powers at various levels where the client is not availing any other loan/limit for which risk rating is
applicable as per guidelines.
The Bank continues to have different rating models for Green field / Brown field Projects, Large
Corporate, SME, Traders, MSE segment, NBFCs, Banks,
Credit Score Card Model for Retail Loan hosted on LAPS
1. HL: Housing Loan
2. CL: Clean Loan
3. SL: Secured Loan
4. EL : Education Loan
5. BTL: Traders Loan (For credit facilities under Baroda Traders Loan upto Rs.200 lacs)
Credit Rating Models
Model for Corporate entities, BOBRAM
Model for MSME rating having exposure of Rs.2 lacs and above and upto Rs.2 crores.
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All Traders Loans proposals of above Rs. 200/- Lacs continue to be rated under
Traders Model of BOBRAM under CRISIL. In case of Traders Loan of More than Rs.200 Lac,
no loan to be sanctioned to the proposal rated below BOB-6 (Obligor Rating for BOBRAM
Model) in web based BOBRAM model.
Use of Ratings: The rating assigned at the time of credit approval process shall form the basis for
taking following decisions:
Acceptance criteria : cut-off grade for investment - based on obligor rating (BOB-6
and above and GF2 for Green Field Projects)
Risk based Pricing - based on composite rating
Discretionary lending power for sanction / review - based on obligor rating
Sanction of ad-hoc / excess / DAUE - based on obligor rating
Inspection of securities - based on obligor rating
Rating based exposure ceiling - based on obligor rating
Risk Assessment Model (BOBRAM)
Management of Credit Risk determines the asset quality of the Bank. An effective way to mitigate
credit risk is to have robust credit rating system in place.
Bank has introduced Basel II compliant credit risk rating models of M/s CRISIL. The rating models
are based on two-dimensional rating methodologies specified under Basel II requirements
wherein 4 types of risks viz. industry risk, business risk, financial risk and management quality
risk are assessed pertaining to characteristics on an obligor(borrower) while facilities
proposed/sanctioned to a borrower are assessed separately under second dimension of rating i.e.
Facility Rating
The Credit rating can (i) Identify potential risk in a particular asset.(ii) Allow a bank to maintain
healthy Asset Quality (iii) Impart flexibility in pricing assets to meet the required risk return
parameters as per the banks strategy and credit policy.
Risk Rating Models for Credit Risk rating of all commercial advances i.e. existing as well as new
with exposure of Rs.25 lacs and above (FB+NFB) for implementation have been introduced by
our Bank.
These Models involves three types of ratings Obligor Rating(PD)
Facility Risk Rating(LGD)
Composite Rating(EL)
Obligor (borrower) Rating for credit worthiness indicating the Probability of Default (PD). The
obligor rating is indicative of creditworthiness of an obligor or the Probability of Default (PD) and
it is based on the assessment of past; and projected cash flows of the company. Obligor rating
grades range from BOB 1 to BOB 10.
Facility Rating:-It involves assessment of the security coverage for a given facility and indicates
the Loss Given Default (LGD) for a particular facility. Facility Rating is dependent upon the type of
facility and securities charged to the bank against the facility.
Facility rating grade ranges from FR 1 to FR 8
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Composite Rating (CR 1 to CR 10) It is matrix of PD and LGD and indicates the Expected Loss in
case the facility is defaulted. The composite rating is worked out automatically by software based
on the matrix of Obligor Grade and Facility Rating Grade
Composite rating grade ranges from CR 1 to CR 10. Bank has accepted BOB 6 as the cut off point
for the acceptance of an obligor based on obligor rating carried out as the applicable model
In case of accounts falling upto the powers of General Manager, the NOC may be given
by the authorities under whose powers the concerned account falls.
For all other cases, Chairman & Managing Director/Executive Director
In respect of advance accounts sanctioned by authorities at the level of Executive
Directors and above (i.e. Executive Director, Chairman and Managing Director and
Management Committee of Board) General Managers have been authorised / delegated,
authority to modify, allow concessions in certain specific terms of sanction.
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borrowers
borrowers
SME Borrower
Turnover method
Turnover basis
Borrowers Margin
5% *
Borrowers Margin
6.25% *
Bank Finance
20% *
Bank Finance
18.75% *
Asset
Holding
Method
i.e., NWC is to be
higher
of
actual
amount or
25% of
Total
Current
Assets (2nd method
) and balance amount
*
of
projected
annual turnover
or
the finance as
per
1st
method
of
lending
(i.e.,
operative
cycle
basis), whichever is
higher.
* of
projected
annual turnover or
the finance as per
method
2nd
method of lending
(i.e.,
operative
cycle
basis),
whichever
is
higher.
in Working
Capital
Gap may be financed
by
the
bank
provided, inter-alia,
(a) current ratio
is
not less than 1.33;
and (b) DER
is
acceptable.
NBFCs.
Construction companies.
Tea Companies.
Ship-breaking Companies.
Diamond Industry.
Sugar, Gur and Khandsari Industries.
Software companies.
Any other activity, which may be advised from time to time.
The methodology, followed under the Asset basis, emphasizes, inter-alia, that the current ratio
of the borrowing unit should not be less than 1.33:1 or the actual current ratio whichever is
higher. This benchmarking of current ratio at 1.33:1 ensures the borrowers stake at a minimum
of 25%. However, the actual current ratio, wherever higher than 1.33:1, may be allowed to slipback up to 1.33:1 in the following circumstances:
(a) Without the banks concurrence / consent:
i. Temporary transport bottlenecks deterring sales;
ii Cancellation of purchase orders (leading to piling up of stock but necessitating retirement
of liabilities on raw material purchased on credit);
iii Prudent bulk or economic size procurement of stock-in-trade on credit;
iv Abnormal rise in purchase price of stock-in-trade.
(b) With the banks concurrence / consent:
i. Diversification, expansion, modernization, take-over, acquisitions, merger etc.
ii Rehabilitation of sick units.
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Where borrower approaches multiple banks/ financial institutions for funding their project, it should be
ensured that the borrower is in a position to tie-up with definite commitment from all the participants
and achieve FINANCIAL CLOSURE within the committed time frame
Personal Guarantee of Promoters/Directors:
1. In case of all new advances to Pvt Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors (other than nominee and professional directors) are to be obtained.
2. In case of all new advances to Public Ltd. Co (Other than Exporters) personal guarantee of all
promoters and Directors who are exercising control or having significant influence and hold equity
share of the company in sole or joint name or in associate concern, group etc are to be obtained. Now
it has been decided to left out this matter to the sanctioning authority.
3. However in case of consortium/multiple advance where all other member banks are not
insisting on personal guarantee of promoters and Directors, our bank may also not insist on
such guarantee considering large business interests.
Requirements before disbursements
i) In case of advances accounts falling within the discretionary Lending Powers of the
Branch Manager:
The Branch Manager has to make necessary arrangements to ensure compliance of the following
aspects before making any disbursement under fresh / increase credit facilities and the proper record
inthis respect has to be kept by the Branches for perusal of higher authorities / inspecting officers
/auditors:
a. Full compliance of the stipulated terms and conditions (unless specifically exempted by the
competent authority)
b. Getting the documents duly vetted (wherever required) as per Banks extant guidelines.
c. Ascertaining that the Borrower has obtained necessary licence, permission, clearance, approvals
required for running the business.
d. Pre-disbursement inspection / site/unit(s) visit.
e. Creation of charge over Security
1. Filling of Charges with ROC in case of Limited Company
2. Registration with CERSAI in respect of all the mortgages.
ii) In case of advances accounts falling beyond Branch Managers powers:
The Branch Manager has to personally verify and confirm in writing to the concerned competent
authority that the aspects mentioned in (i) a to d are fully complied with and obtain the prior approval
from the designated authorities in writing before making any disbursement under fresh / increased
credit facilities. The authorities from whom the clearance for disbursement is to be obtained by the
branches are as under:
Clearance to be given by:
For Branch headed by Officers up to MMG/SS III- Deputy Regional Manager or Regional Head
(where DRM is not posted)
For Branch headed by Chief Manager (i) Deputy Regional Manager in the rank of AGM or Regional
Head in the Rank of AGM and above, otherwise (ii) Zonal Head
For Branch headed by Assistant General Manager - Regional Head in the rank of Deputy General
Manager or Zonal Head (where Regional Head is in the rank of AGM)
For Branch headed by Deputy General Manager Zonal Head
ForBranch headed by Corporate Financial Service branches GM/DGM at Zonal Office can authorize
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the disbursement.
Note:
1. Disbursement permission of all sanctions made by SMELF/RLFs head will be given by respective
factory heads unless the sanction is made by some next higher Authorities
2. For Loan sanctioned by Sr. Manager (SME-Processing) or CM (SME) and parked in AGM Headed
branch, the disbursement authority should vest with AGM Branch Head instead of sending it to SME
Loan factory, subject to the compliance of existing process of disbursement.
GUIDELINES FOR TAKE OVER OF THE LOAN ACCOUNT FROM OTHER BANK:
Bank provides the operating units to take over accounts from other FI s/Banks keeping in view
the foremost objective of canvassing only good quality accounts. The following financial and Non
financial aspects are however to be followed:
Non-Financial:
a) Accounts of profit-making (i.e. net profit before tax) concerns only as per last audited balance
sheet.
b) Accounts with existing lenders should be under the category of Standard Assets
c) Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as per latest
statement of accounts.
d) External Rating in respect of credit proposal with exposure above Rs.5 Crore by an approved credit
rating agencies should not be below BBB & equivalent. The concessionary facilities to
Taken over Accounts should be extended only in extremely deserving cases with specific reasons
recorded in writing. (MoF Directives).
e) No credit facility should be taken over by a Bank from other Bank where any of its
Executive Director or Chairman & Managing Director has worked earlier. In case any such account is
proposed to be taken over, the proposal will required to be put up to the Board of the Bank with
specific reasons justifying the need for taking over the account. (MoF-Directives)
f) The WC facilities against the pledge of sugar stock to sugar factories under collateral management
services are outside the purview of Takeover norms with regard to external credit rating of below
BBB.
g) Take-over accounts are to be rated as under:(i) As per the BOBRAM credit rating model, minimum BOB6 obligor rating grade for all exposures
of Rs. 25 Lac and above, other than MSME exposures. For MSME exposures, this rating model is
applicable for accounts having exposure of above Rs. 2 Crore.
(ii) As per MSME Credit rating Model for MSME accounts of Rs. 25 Lac and above up to Rs. 2 Crore
subject to minimum MSMEBOB6 rating. (Refer circular No. BCC:BR:101:194 dated
13.07.2009)
Accounts, which are not covered under above categories may be considered under permitted
deviations.
h) Take-over accounts (retails) are to be rated as per the applicable scoring model subject to
minimum grade as per the scoring model.
i) There should not have been any reschedulement / restructuring in the account during last two
years.
j) All other existing norms, guidelines as applicable to borrowal accounts are to be scrupulously
followed.
Financial(other than Retail & SME Regulatory & Expended)
a. Current Ratio
: Min. 1.33.
b. TOL/ TNW
: Max. 4.5:1
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2.
3.
4.
5.
whereby dilution of security is taking place, the sanctioning authority should refer such requests
to the next higher authority for prior approval for release of security/guarantee with proper
justification, even though the advance falls under the powers of the concerned sanctioning
authority.
The immediate higher authority to whom a request for release of existing
security/guarantee is referred may, at his discretion, accede to the request keeping proper
record of such authorization.
The sanctioning authority may authorize release of mortgage of an existing property against
creation of mortgage of another property if the market value of the new property is at least
equal to the current market value of the property proposed to be released. In such cases,
the actual discharge of the mortgage should be affected only after the mortgage of the new
property created. This guidelines will be applicable to GM and below.
The securities/ corporate guarantees obtained to secure the loans before the provisions of
Companies Act, 2013 came into effect need not be disturbed and can be continued to cover the
facility granted. Branches should take care not to release securities/ guarantees taken in
facilities already extended prior to this act ,since our facilities would be rendered
unsecured.However, such guarantees should be kept alive by obtaining LAD within a period of
limitation,as per extant guidelines.
Corporate guarantee/ security so obtained prior to the new Act coming into force cannot be
extended to cover increased/ additional facilities (after the new Act came into force). The same
can be extended to cover enhanced facilities only if it is not hit by the provisions of sections and
will be subject to provisions of 186 of the new Act.
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preceding financial year or an undertaking which generates 20% of the total income of
the company during the previous financial year.
Substantially whole of the Undertaking in any financial year shall mean 20% or more
of the value of the undertaking as per the audited balance sheet of the preceding
financial year.
In case the total borrowngs of any company, whether private or public, exceeds the
aggregate of its paid up share capital and free reserves, apart from temporary loans , for
sale, lease, disposal of its undertaking, including mortgage, Company shall be required to
pass Special Resolution u/s 180 of 2013 Act.
Copies of the special Resolution passed by the company, certified true by the
Director / Company Secretary, should be obtained and kept on records
besides certificate from Statutory Auditor of the company that total borrowings by the
company, including present borrowings, are within the limit specified in the said
special Resolution.
Statutory limit of borrowing Powers of the Companies (BCC: BR: 105/514 dated 18 th
November, 2013)(Provisions effective from 12.09.2013)
Henceforth, in case the total borrowings of any company, whether private or public,exceeds the
aggregate of its paid up share capital and free reserves, apart from temporary loans as stated
above, and for sale, lease, disposal of its undertaking, including mortgage, Company shall be
required to pass Special resolution u/s 180 of 2013 Act.
Copies of the special Resolution passed by the company, certified true by the Director /Company
Secretary, should be obtained and kept on records besides certificate from Statutory Auditor of
the company that total borrowings by the company, including present borrowings, are within the
limit specified in the said special Resolution.
Provisions effective 01.04.2014 (Circular no. BCC:BR:166 dated 29.04.2014)
W.e.f. 1st day of April 2014, Section 186 (which deals with Loans and Investments by company) ,
Section 77, (Registration of Charges) The Companies (Meeting of Board and its Powers) Rules
2014 and The Companies (Registration of Charges) Rules 2014 are also notified to come into
force.
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financial institution shall not be required where the aggregate of the loans and investments so far
made, the amount for which guarantee or security so far provided to or in all other, bodies
corporate, along with the investments, loans, guarantee or security proposed to be made or given
does not exceed the limit as specified in sub-section (2), and there is no default in repayment of
loan installments or payment of interest thereon as per the terms and conditions of such loan to
the public financial institution.
No company which is in default in the repayment of any deposits accepted before or after the
commencement of this Act or in payment of interest thereon, shall give any loan or give any
guarantee or provide any security or make an acquisition till such default is subsisting.
Branches/concerned authorities to examine and confirm that corporate guarantees issued by
companies forthwith are not hit by the limits provided in section 186 (2). In case the limits so
specified are exceeded by the company, a special resolution as contemplated in the provision is
required.
However, Rule 11 o f Companies (Meetings of Board and its powers) Rules 2014
stipulates the circumstances where subsection (3) o f section 186 (passing of special
resolution etc) shall not apply - i.e.,
where a loan or guarantee is given or security has been provided by a company to its wholly
owned subsidiary company or a joint venture company or where acquisition is made by a holding
company by way of subscription, purchase or otherwise of securities of wholly owned subsidiary
company. This is subject to company disclosing the details of such loans or guarantees or security
or acquisition in the financial statement as provided under section 186
(4) of 2013 Act.
Section 186 except sub-section (1) does not apply in cases of following:
a) Banking company, insurance company, housing finance company etc.
b) Any company whose main business of acquisition of shares or securities etc.
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in respect o f loan made by any bank or financial institution to its subsidiary company provided
that such loan is utilized by the subsidiary company for its principal business activities.
Hence before accepting/ entertaining proposal for corporate guarantee branches should ascertain
whether same is permissive/ exempted under section 185 and 186 of the Act and rules made
there under, subject to the restriction if any stipulated therein.
166 | P a g e
such guarantees should be kept alive by obtaining LAD within a period of limitation,as per extant
guidelines.
Corporate guarantee/ security so obtained prior to the new Act coming into force cannot be
extended to cover increased/ additional facilities (after the new Act came into force). The same
can be extended to cover enhanced facilities only if it is not hit by the provisions of sections and
will be subject to provisions of 186 of the new Act.
Filing of charge with Registrar of Companies is not mandatory w.r.t. corporate guarantee.
Following are the circumstances where Bank can obtain/ stipulate corporate guarantee/ security
from a company (which is also illustrated by way of an example) in fresh sanctions/
enhancements.Where a guarantee is given by the company (public or private) in the ordinary course of its
business.
Where a holding company gives guarantee for a loan given to its subsidiary provided the loan is
utilized by the subsidiary for its principal business activity.
(Exemption provided under Rule 10 (2) to section 185, which came into effect on 01.04.2014).
Though guarantee by a subsidiary company for a loan taken by its holding company is not
specifically mentioned, the same can be considered if the same is not otherwise hit by section
185.
Where guarantee is given by a company (whether public or private) for a loan taken by a public
company even if the Director of the guarantor company is a Director or Member of the borrower
company (provided it is not otherwise hit under any of the other Explanations (a), (d) or (e) of
section 185).
Where guarantee is given by a company (whether public or private) for a loan taken by a private
company where director of the guarantor company is not a Director or member of the borrower
company, provided it is not hit by section 185 (e).
Where guarantee is not otherwise hit by section 185.
The same principles need to be applied while taking security provided by Guarantor Company.
The working units are advised to refer to the above mentioned guidelines/circulars in this regard
and clarification circular no. BCC: BR: 106:284 dated 04.08.2014
Bank shall not extend funded or non funded facilities to non constituent borrowers.
Bank shall open Letters of Credit and purchase/discount/negotiate bills under LCs only in
respect of genuine commercial and trade transactions of borrower constituents who enjoy
regular credit facilities.
In cases where negotiation of bills drawn under LC is restricted to a particular bank, and
the beneficiary of the LC is not a constituent of that bank, the bank concerned may
negotiate such an LC, subject to the condition that the proceeds will be remitted to the
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nonfund based) would not exceed 40 per cent of its Net Worth as on March 31 of the previous
year.
Safety Net Scheme:
1. Often merchant banker assume large exposures by way of commitments to buy the
relative securities from the original investors at any time during a stipulated period at a
price determined at the time of issue irrespective of the market price.
2. In some cases such schemes were offered without any request from the company whose
issues are supported under the schemes.
3. RBI has advised to banks/subsidiaries to refrain from such Safety Net facilities.
REJECTION OF LOAN APPLICATIONS:
1. Credit proposals falling beyond the powers of BM shall not be rejected at the branch
level.
2. The authority empowered to sanction the credit proposal may reject such application.
3. A monthly statement for rejection of applications by the BM to be submitted to the
Regional office.
PSR (Post Sanction Reporting):
Bank follows a Post Sanction Reporting System replacing the erstwhile Post Sanction Scrutiny.
The features are:
- Covers all sanctions and credit decisions viz., Fresh / Increase / Renewal / Rejection /
Adhoc / Excess / Modifications / Waivers / restructuring / rescheduling etc., excluding
sanction of staff advances, LABOD (i.e. post sanction reporting of LABOD and staff
loans is not required).
- Broad parameters relating to sanction are only examined by the PSR authority
whereas the sanctioning authority shall take care of all procedural details on credit
appraisal, adequacy of security, documentation etc.,
- Observations of PSR authority are to be attended immediately, which shall also serve
as guide to the sanctioning authority for future.
- Disbursement of credit facility/ies is not to be withheld merely for want of
observations of the competent authority on PSR.
A. PSR reporting is required to be submitted on monthly basis to PSR
Authority
Branches in Area
Sanction Threshold
(FB+NFB) Other than Retail,
Excluding LABOD
&
Staff Loan
Rs.25 Lakhs
Rs.10 Lakhs
Retail
Rs. 5 Lakhs
Rs.5 Lakhs
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Branches in Area
Sanction Threshold
(FB+NFB) Other than Retail,
Excluding LABOD
&
Staff Loan
Above Rs.25 Lakhs
Above Rs.10 Lakhs
Retail
The PSR authority is required to clear the proposal from PSR angle within a period of 30-days
from the date of receipt of proposal. If the PSR authority has not made any observation within
the said period, it will be presumed that the PSR authority has no observation to make and the
proposal is cleared from PSR angle.
COMMERCIAL PAPERS
1. Commercial paper is introduced in India in the year 1990 by RBI as per the
recommendations Voghul Committee to enable high rated corporate customers to
diversify their source of short term finance.
2. Commercial paper is a short term money market instrument issued as a usance
unsecured promissory note which is freely negotiable through endorsement and
delivery. It is privately placed at a discounted rate to face value as decided by the
issuing company.
3. Any company whose
a) tangible net worth is not less than Rs. 4 crores as per latest audited balance sheet,
b) has been sanctioned funded working capital finance by the bank.
c) account / s has been classified as standard. In case of consortium lending, the assets
classification with all the member banks should be standard.
d) minimum credit rating as per CRISIL - P2, ICRA - A-2, or equivalent rating by other
agency.
4. Minimum maturity period 07 days and maximum up to one year.
5. Minimum amount of the CP would be Rs. 25 lacs and in multiple of Rs. 5 lacs maximum up
to 100% of Funded working capital finance including bill finance.
6. The total amount should be raised within a period of two weeks from the date of issue
open.
7. Can be issued to any individuals, corporate bodies and also to NRIs on non repatriable and
non transferable basis.
8. Banks and FIs have the flexibility to provide for rollover of the working capital limit at their
individual judgment and discretion.
9. Every issue of CP is to be reported to IECD of RBI within 3 days from the closure of the
issue.
10. After implementation of Base rate system, a many big corporates including banks / FIs
are raising shrt-term funds by issuing CPs, hence, interest rate under CP has increased
considerably.
Yield on advances
1. Yield on advances means the amount of total income received by the bank/branch
out of the total operations of the borrower with the branch as compared to fund
based limit utilized.
2. Yield = (Interest Recd. + Exchange, Commissions and other income + Notional
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granted in accounts
where cheques
have been returned for
TODs not to be
financial reasons, where cheques deposited by customers
are returned frequently,
minimum balance is not maintained, turnover
is not
satisfactory and/or TODs
granted in the past, were not adjusted in time
and MMG
Scale-II, are not allowed
Branches headed by officer in JMG Scale-I
to grant TODs but Rural Branches headed
by
officer in MMG Scale-III and above
are authorised to allow TOD.
TOD can be allowed upto 25% average monthly turnover in the account.
twice a month subject to maximum period of 15 days
TOD may be given
altogether. TOD may be sanctioned 10 times within a financial year subject to
maximum 15 days in a month(twice in a month)
in anticipation of sanction of regular limits and should
TOD should not be granted
not be converted into demand
loans or any other credit facilities.
Granting of TOD in one account for the purpose of adjusting an advance
outstanding in another related account is prohibited.
TODs should not be granted to the parties enjoying separate cash credit facility
also from the branch.
DAUE (Drawing Against Uncleared Effects) Drawing against uncleared effects:1. No DAUE is to be allowed/sanctioned in newly opened accounts for first -6- months.
2. Not more than 25 % of the amount of instruments or discretionary lending powers
whichever is lower.
3. The facility should be considered/ recommended depending upon the relationship with
the customers, yield on advances, average credit balance in the account etc.
4. Operations in the account must be satisfactory no instances of return of inward or outward
cheque.
Other Guidelines:
1. No adhoc to be considered in the newly opened account for a period of -12- months by the
branch head
2. Request for adhoc/ excess may be considered only in reviewed accounts with credit rating
not less than BBB, B+, BOB6 . In all other cases reference should be made to R.O.
3. Delegated authority may grant secured non fund based limit in excess of lending powers for
NFB against proportionate reduction in fund based limit.
LINE OF CREDIT
Line of Credit system offers flexibility to clients to switch over between the various working
capital facilities sanctioned with relative ease as per their needs compared to the prevalent
system of restricting the usage of funds within the maximum limits available within the facility
only. This system will essentially facilitate medium/large business units in efficient
management of their borrowing requirements within the sanctioned Line of Credit facility.
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1. Bank of Baroda is a first runner in introduction of this novel product called Line of Credit. Under
this LOC borrower has been sanctioned an outer limit within which he has full flexibility to switch
over from fund based to non fund based limit and vice a versa for procurement of current assets.
2. This is to be implemented for all borrowers where the banks exposure by way of working capital
finance ( Funded and non Funded) is of Rs. 1 crore and above. The conduct of the account must
be satisfactory and there is no major adverse features.
3. Under LOC, instead of separate limit for CC stock, Book Debt and DA letter of credit, a combined
limit for CC (Stock) & ( Book Debt) - Cum- DA L/C may be considered with a sub limit for DA L/C .
4. Margin will be decided separately on case to case basis / facility to facility basis.
5. While calculating the drawing power for Cash Credit facility, deduct the value of accepted bills
under DA L/C from the stock value. On retirement of Advance bill by debiting CC account the
drawing power reinstated i.e. overall DP will cover the outstanding under CC facilities and DA L/C.
6. Following facilities are not covered by LOC:
(a) DP L/C for procurement of raw materials.
(b) DP & DA L/C for procurement of capital goods
(c) Performance guarantee and guarantee issued in connection with fulfillment of export obligations.
(d) Financial Guarantees issued in lieu of security deposit and earnest money deposit.
The Line of Credit as a product is innovative and the branches should make every effort to canvass
and make it the Unique Selling Proposition (USP) of the bank.
PARKING OF LIMITS / SUB-LIMITS AT THE BRANCHES
1. Reveiw of the account to be done by base branch.
2. Drawing power will be advised by the base branch to transferee branch on regular basis.
3. Advising position to the base branch by the transferee branch on last friday of the month.
4. Advising base branch immediately about irregularities in the conduct of the account with
transferee branch. Turnover in the account also to the base branch.
5. Responsibility is cast on the transferee branch to advice the details of the account on monthly
basis to base branch, it will be the responsibility of the transferee branch to have up dated
information also.
LOAN SYNDICATION:
1. In the year 1993 the Shetty Committee had recommended the syndication of credit as an
alternative to consortium lending.
2. Syndication of credit is an agreement between two or more bankers/lending institutes to provide
credit facility/ies to a single borrower using one common loan documents.
3. The borrower who intend to raise long term resources through this method give a mandate to
lead manager to arrange for the credit on his behalf. The memorandum spells out the terms
of the proposed credit.
4. On the basis of the memorandum, the lead manager will offer an opportunity to lenders to
lend to prospective borrower as per the terms of memorandum.
5. If the proposal is acceptable to the banks/ lending institute, they will convey their acceptance.
On receipt of acceptance/ offer from the lenders, the lead manager will negotiate the terms
of syndication such as, cost burden, sharing pattern of debt, recovery, other income and
other business etc.
6. There after, loan agreement is signed by all the participating lenders.
Vide Circular No BCC:BR:105:249 dated 17-06-2013 Loan Syndication Desk has been merged with
BOB Capital Market Ltd.
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SECURITISATION OF LOAN
1. Securitisation is a process by which the future income or receivables (loans) of an
organization are converted into debt instrument say bond and then sold.
2. Under securitisation lending institutes transfer the loans granted by them to investor s/
purchaser of the loans through an intermediary by packaging them in the form of securities
which are usually termed as pass through certificate .
3. The SPV (Special Purpose Vehicle) raises the fund from the investor and pass on to the
originator. On due date the payment by SPV to the investors are funded by the cash flow
from the underlying assets during the life of the transaction. The assets themselves will be
the security for investments but will be managed by the originator.
4.The securitisation may be backed by movable assets or by mortgages backed assets. The PTC
will be backed by assets or backed by mortgage.
5.The PTC will have slight lower rate of interest than the loan granted and that will be the profit
of PTC issuer.
6. Securitisation can be against movable assets which is known as backed by assets and
against immovable assets known as backed by mortgage
7. By securitisation lender can liquidate its assets before its maturity.
8. The PTC will be traded in security market . e.g. NHB will purchase housing loan of LIC
Housing Finance. Can bank Housing finance Ltd. , purchases housing loan granted by canara
bank.
9. Securitisation helps to financing bank/ lenders in following ways
a. Transfer its credit risk or other risk associated with the assets.
b. Create liquidity and room for fresh financing.
10 For example: The lender who has financed for long term projects and want to improve
immediate cash flow position and get liquid funds against the above security. The lender will
sell the above pool of loans to an institute called the SPV. The SPV now converts the above
pool of assets into small bundles that are called PTC (pass through certificate). These PTCs
are collaterised / backed by the above underlying security.
FACTORING
1. In India the concept of factoring is introduced during 1991 as per the recommendation of Shri
Kalyansundram committee..
2. Factoring is a continuous arrangement in which receivables created out of sale of goods or
services are sold to an agency known as factor. This arrangement is called factoring.
3. The factoring is an arrangement for management of receivable, maintaining the sales or
receivables ledgers, submitting sales accounts , collection of debt etc. This will be with recourse
or without recourse, but in India without recourse is not permitted.
4. Under this arrangement , as soon as the invoice is submitted to the factor, the factor will pay say
85% of invoice to the seller. In turn factor will collects dues on due date from the customer,
purchaser. The balance payment will be paid to the seller on recovering from the purchaser.
5. The factor will recover finance charges for funds prepaid to the seller against the invoice. They are
also recovering service charges for management of receivable also.
6. The advantages of factoring are that practically sales become cash sales and liquidity of the seller
will be maintained resulting into efficient management of working capital finance.
7. There are various types of factoring, Recourse factoring, Full service non recourse, maturity
174 | P a g e
factoring
8. Advantages: Manufacturer or seller will relieved from the responsibility of credit collection,
recovery, administration etc and can focused on selling and marketing
9. The liquidity position will be improved and will give better current ratio
FORFEITING
1. Forfeiting in India is approved by RBI in the year 1992 and it is to be provided by an International
forfeiting agency with EXIM bank or any other A.D.
2. When an exporter transfers his right to receive payment in favour of a forfeiture, the transaction is
called forfeiting. Thus, forfeiting is a method of discounting of international trade receivables on a
without recourse basis.
3. Three elements of cost are involved in forfeiting ; discount rate or rate of interest commitment fee
and option fee.
4. The credit is extended by exporter from 180 days to -7- years under forfeiting.
5. It is not only tool for financing but also an important risk management tools.
6. It offers an opportunity to do business where ECGC does not offer a cover.
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2. Mainly four factors; Sales, cost of raw material, cost of Power and Fuel and interest are to be
considered. As per banks guidelines 10% negative variance in sales and simultaneously, 5%
positive variance on all cost aspects are to be considered to know the sensitivity of the project.
3. After doing the sensitivity analysis, revised DSCR and cash flow DSCR are to be worked out to
derive conclusion about the sensitivity analysis.
4. The concept of margin on safety is also a part of sensitivity analysis where in variance in sales as
compared to BEP sale is studied.
5. Sensitivity analysis can be taken-up for comparison of different projects (assuming mutually
exclusive and looking apparently worthwhile in terms of return in the basic workings)
Infrastructure Finance:
1. Any credit facility provided to a borrower company engaged in ; developing or operating and
maintaining or developing, operating and maintaining any infrastructure facility is falling under
the definition of infrastructure lending.
2. As per RBI, definition of infrastructure would include sectors, such as, power, roads, highways,
bridges, ports, airports, rail system, water supply, irrigation, sanitation and sewerage system,
telecommunication, housing, industrial park or any other public facility of a similar nature as may
be notified by CBDT in the Gazette from time to time. The relaxation in "group exposure" norm
would be available only in respect of four sectors, viz., roads, power, telecommunication and
ports.
3. There are two types of financing options: (a)Private sponsor participation and (b) Structured
financing operations
4. The participation of private sponsors in infrastructure development at progressively diminishing
levels is depicted as under:
BOO = Build-Own and Operate,
BOOT = Build Own Operates and Transfer,
BOT = Build - Operate and Transfer,
BOLT = Build - Operate Lease and Transfer,
DBO = Develop - Build- Operate
Structured Financing Option:
This is a concept relating to Infrastructure lending. The structuring of debt and equity is a crucial
aspect in funding of any infrastructure project. Generally, the project sponsor may not like other
share holders to have recourse to the assets of the project. Besides this the companies setting up
infrastructure projects have only the prospect of a future earnings stream to collateralize their
borrowings.A key issues while structuring appropriate financing instruments do not yield the
expected returns. The structured financing options assume two forms:
Non recourse financing: Under this option the debt instrument is secured by the cash-flows
generated by the project or the collateral value of the specified assets financed by the instrument
under consideration. In case of default the debt holders recourse would be limited to the underlying
assets only and not extend to general reserves and assets of the company.
Limited recourse financing: Under this variant, in addition to project assets, the parent company
attaches other assets/ revenue stream for servicing the instrument to improve its credit worthiness.
Securitisation is one of the method.
Take-out financing:
1. Take-out financing is a method of providing finance for longer duration projects say 15 years or
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charge. In case of consortium finance or multiple banking facilities, a charge on the same
security is given to more than one lender this is called the pari-pasu charge.
SECOND CHARGE
1. Second charge means the assets on which we want to create our charge are already charged to
other financing institutions. The financing institution will have first charge on the same assets and
in case of default after making payment of dues of the FI, the residual amount will be made
available to the bank who is holding the charge.
2. Generally second charge is created on fixed assets of the company such as land building, plant
and machinery.
3. Generally bank do not prefer to have second charge.
4. The procedure for creation of second charge is under:
a. No Objection Certificate from the institute having first charge is to be obtained.
b. Our second charge in case of company is to be registered with the ROC.
c. However, it is to be noted that when we are holding the first charge on the assets authority to
create second charge by other lending institution does not fall under the power of the branch.
INTERNAL RATE OF RETURN:
It is a discounted rate where projected cost and projected benefits are equal to zero. Uses of
IRR :(a) A project is acceptable when the IRR > the expected rate of return or market rate of return
(b) A project is acceptable when the IRR > the cost of capital.
(c) Higher the IRR, better the project.
ADVANCE BILL AND BILLS PAST DUE ACCOUNTS
Advance Bill account:
When documents received under Letter of Credit issued by our branch is presented for payment/
reimbursement by the negotiating bank, L/C issuing branch is suppose to make payment/
reimbursement if terms and conditions are strictly complied with.
The payment will always be made through debit of G/L Advance Bill account even though
balance in the customer account permits debit. Subsequently this entry is to be reversed.
In case of Import Bill under L/C, the party is suppose to retire the bill within 10 days otherwise
the bill will be treated as overdue and fetch higher rate of interest of 2%
over the applicable rate as above.
Bill Past Due Account:
In case of Guarantee issued by our branch, beneficiary has a right to invoke the guarantee as
and when default is committed. The issuing bank/ branch will make immediate payment to the
beneficiary by debiting G/L Bill past due account.
Even in case of Bills purchased remains overdue for a longer period, the entry is to be reversed
to the debit of this bills past due account with permission of RO.
The amount then to be recovered from customer as mentioned in case of A.B.
FUND FLOW STATEMENT:
1. Fund Flow statement depicts the various sources of the fund and their uses. It is a statement
of inflow and outflow of the fund during a specific period.
2. Inflow and out flow of the fund can be noticed by increase or decrease in assets and
liabilities. If assets are increasing it is an application and if it is decreasing it is source of fund.
Likewise, If liabilities are decreasing it is an application and if it is increasing it is source of
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fund.
3. To carry out fund flow analysis one should have an idea about the long term sources and
short term sources as well as uses of the fund.
Liabilities are the sources of the fund and assets are the uses of the fund.
4. From financing bankers point of view it is always advisable that
LTS - LTU = +Ve
STS - STU = - Ve
Liab - Assets = 0
If above equation/result is reversed which represent diversion of short term fund to long term
use.
CASH FLOW STATEMENT
1. Cash Flow is a statement which depicts changes in cash position from one period to another
period as against the changes in total funds. This indicates how much cash is generated at
the end of financial year. This will give an idea about the increase/decrease in liquid position
of the borrower.
2. The cash flow is prepared as per AS-3 of ICAI. For listed Compnies and other borrowers
where the annual turnover is exceeding Rs. 50crore it is a statutory requirement.
3. The sources of cash are PAT, Depreciation, sale of assets, gains form sale of fixed assets,
increase in capital or other liabilities, decrease in assets. The uses of cash are loss, decrease
in liabilities, dividend payment personal drawing etc.
4. Cash flow statement helps the management for short term liquidity planning.
DEBT SERVICE COVERAGE RATIO:
1. While granting loans banker to satisfy about the repaying capacity of the applicant
2. The DSCR indicates repayment capacity and adequacy of repayment period.
3. The acceptable DSCR is 1.75 But it is not necessary that DSCR of each year should be 1.5 to 2
but to work out average DSCR for the entire term loan repayment period, which should be
within the stipulated ceiling.
4. DSCR is helpful to work out the repayment period and initial moratorium. Larger DSCR
indicates units ability to pay more than its commitments. Repayment period may be curtailed
or vise a versa
BEP = Break Even Point:
1. BEP indicates No Profit and No Loss situation i.e. Sales of the Unit is equal to Cost of
Unit sold .
2. BEP means, Sales Revenue = Cost of Units Sold .
3. Therefore, Profit = Sales > BEP and Loss = Sales < BEP
4. BEP in Rupees: = (Fixed Cost / Contribution ) X sales. Here, Contribution means sales value Variable cost.
5. Cash BEP = {(FC - Depreciation & non cash charges) / Contribution } x sales
6. BEP decides the level of production in order to achieve desired profit
7. BEP analysis is useful to know the Viability Study of Sick Units.
8. The BEP concept has certain limitations also.
a. It is assumed that Variable Cost and Sales vary proportionately. This may not true all the
time.
b. In long run, fixed cost may not be fixed. It is true in short term.
Margin of Safety:
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1. MOS describes the tolerance level of the units. The difference between projected Sales and
BEP Sales in terms of actual sales is MOS. Lower the BEP, higher will be the MOS. But this
should be studied in connection with correctness of estimated profit and loss figures and BEP.
2. MOS gives and idea about the cushion available in case of deviation in cost of production and
sales estimation.
3. Margin on Safety indicates up to how much variance in Sales will sustain by the Unit. Where
the MOS is low, the possibility of unit coming to loss is high and higher the MOS
greater the safety.
4 The project with low MOS and high break even is not preferable.
FINANCIAL GUARANTEE:
Many times Bank issue guarantee in respect of constituents financial liabilities wherein purely
monitoring obligation of the customers are involved. In lieu of such financial commitment , Bank
issues guarantee which is known as "Financial Guarantee".
Following are the some of financial guarantee.
Guarantee in lieu of Sales tax, custom duty, Excise duty, Earnest money deposit, tender
money deposit, favouring court authorities etc.
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.
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over a specific period of time. So guarantee amount should inclusive of principal and interest
thereon.
3. DPG is a non fund based facility. However for the purpose of sanctioning/ processing etc. the
guarantee is to be treated as Fund based only. It is to be issued by the Branch Manager as
per Discretionary Lending Power of fund base facilities
4. This guarantee should be considered in line with guidelines for Term Loan.
SHIPPING GUARANTEE
1. Shipping Guarantee is issued in favour of shipping company/ agent when the goods arrived
at port of destination but shipping documents are yet not received i.e. to take delivery of
goods without delivery of shipping documents such as Bill of Lading.
2. The guarantee is to be issued at 100% cash margin, where the bill is routed through the
Bank.
1. An undertaking from the customer to be obtained that the borrower will honour the bill
irrespective of discrepancy, if any with the terms of L/C.
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Eligibility
Quantum of Finance
Repayment
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Ratio at a glance :
RATIO
Current Ratio
Quick Ratio
Solvency Ratio
Debt-Equity Ratio
Assets
Coverage
Ratio
Debt-Service
Coverage Ratio
Debtor
turnover
Ratio (No of Days)
FORMULA
Current Assets /
Current Liabilities
Quick Assets /
Current Liabilities
OR
C.A.-Inventory
C. Liab.-Bank Borrowing.
Net Tangible assets /
Total Outside Liabilities
DE(TOL/TNW)=
Outside Liab. /
Tangible Net worth
DE(TTL/TNW) =
Liab /
Tangible. N.
W.
Net Fixed Assets
Term Liability
INDICATION
Ability to meet current liabilities.
Higher the ratio better the liquidity
Shortfall indicates diversion
of
short term fund.
1.5 to 2 is
desirable
Availability of Liquid resources to
meet current liabilities.
1 is desirable
Creditor
T/Over
Ratio (No.of days)
extended.
x
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Assets
ratio.
turnover
Credit Purchase
Net Sales
Net Sales
Net Profit After tax X 100
Return
Investment
Return
Investment
Net Sales
Total distributable profit
Equity holders
on
No of equity shares
Profit before Int.& Tax
on
to
QIS statements as per extant guidelines be obtained from the customers and operative limit
as indicated in the QIS statements may be fed in the CBS system.
b.
Identify the Cash Credit/ Overdraft limits of the borrowers which are inactive/ where limits
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are
resolution
sparingly utilized. Reduce the limit in the CBS system to a minimum operative limit after
discussing with borrowers and obtaining their consent letter (coupled with Board
wherever required).
However, accounts where commitment charges are being recovered should be excluded from this
exercise.
In both the eventualities, mentioned against (a) and (b), borrowers may be advised to inform the
Bank in advance (2/3 days) their requirement of funds above the operative limit and the limit may
be revised upwardly up to the regular sanctioned limit according to their requests subject to
availability of drawing power. This should not be effected unilaterally by the Bank.
Borrowers consent should be obtained (under the signature of authorized officials) without leaving
any scope for complaint/ legal complications in future.
I.
All expired Bank Guarantees/ Letter of Credits should be reversed in the CBS system from
time to time after complying with the laid down guidelines of the Bank.
II.
Full Limit Node for Non Fund Based facilities may not be entered in the CBS system. Limit
may be updated up to the level of utilization of Non Fund Based facilities. Limit may be fed
as and when the request for issuing BG/LC facility is received from the borrower.
III.
IV.
Ensure that External Credit Rating is carried out in respect of all the eligible borrowers as
per extant guidelines of the Bank.
Branches are requested to incorporate the External Credit Rating and modified limit correctly
in to the ASCROM systems to effectively reap the benefit of capital conservation. Similarly
security updation in ASCROM is to be ensured. Latest and correct value of security to be
incorporated in the ASCROM.
MCLR
Marginal Cost of Funds Based Lending Rate (MCLR) shall be new internal benchmark lending rate for
all new sanctions and disbursements w.e.f. 1st April 2016.
RAROC
decided to introduce the evaluation of Risk Adjusted Return on Capital (RAROC) in appraisal of
all credit proposals with aggregate credit exposures of Rs. 5 Cr and above.
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NRI Deposits, Remittances facilities for Residents, DFB & Treasury operations
NRI BUSINESS:
NRI customers are very important for Bank for resource mobilization and pitching retail
asset products as well as wealth management products.
Some suggestive steps to facilitate & attract NRI customers :1. NRI Customers look for Professional Approach and Personalized Services from Bankers.
Displaying professionalism will attract NRI Customers.
2. Pro active actions like sending E-mails for their program, asking for any personalized services
required by them, Welcoming NRI Customer at their place may be taken.
3. If possible, NRI Customers meet should be arranged for welcoming / entertaining them.
4. All Staff should be updated with the various products / schemes offered by the Bank to NRI
customers and USPs of those products / schemes.
5. Welcome with smile to NRI customer, offer seat, asks for Tea/Coffee/Soft drink/Water.
6. Provide all information/USPs of various products. Also Provide them Banks brochure.
7. Help them filling up of various forms and politely ask for their documents.
8. Politely explain them the mandatory requirements like KYC/AML/FATCA norms and obtain
related documents/declarations.
9. Issue NRE cheque book / Credit / Debit card etc as applicable. Also arrange for registration
in Baroda connect and Mobile banking wherever possible / applicable.
10. Encash Currency notes, if Customer requires, observing all related guidelines and obtain
Currency Declaration form if encashment is more than USD 5000 equivalent.
11. Complete the work / all the formalities in respect of NRI Customer as early as possible. If the
job may take some time, due to reasonable ground, offer them the delivery of service at
their door step / place where they stay.
12. Entertain properly the person coming with the NRI though he/she may be a resident Indian.
Definition of Non Resident Indian (NRI)
Non-Resident Indian (NRI)
NRI is defined in Regulation 2 of Notification No. FEMA 5 / 2000- RB dated May 3, 2000. In terms of
this Notification, an NRI means a person resident outside India who is a citizen of India or is a
person of Indian origin.
a) A person resident outside India who is a Citizen of India i.e.
i) Indian Residents stay abroad for more than 182 days in the preceding financial year
ii) Indian citizens who proceed abroad for employment or for carrying on any business or
vocation or for any other purpose in circumstances indicating indefinite period of stay
outside India.
iii) Indian citizen working abroad on assignment with Foreign Government/Government
Agencies/International / Multilateral Agencies like United Nations Organization (UNO),
UNICEF, World Bank, International Monetary Fund etc.
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iv) Officials of the Central and State Government and Public Sector Undertakings deputed
abroad on temporary assignments or posted to their offices (including diplomatic missions)
abroad except those situated in Nepal and Bhutan.
b) Person of Indian Origin (PIO)
PIO for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any
country other than Bangladesh or Pakistan, if
(a) he at any time held Indian passport; or
(b) he or either of his parents or any of his grandparents was a citizen of India by virtue of
the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
(c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or
(b).
c) Indian Students studying abroad
In terms of FEMA regulations Indian students studying abroad can be treated as Non
Resident Indians having regard to the circumstances stated as under
i) their stay abroad for more than 182 days in the preceding financial year and
ii) their intention to stay outside India for an uncertain period when they go abroad for
their studies
Accordingly, students going abroad for studies are treated as Non - Resident Indians and
are eligible for all the facilities available to NRI under FEMA.
For the purpose of Investment in India in immovable property, a person of Indian origin means
an Individual of Indian origin other than a citizen of Bangladesh, Pakistan and Sri Lanka
Persons of following categories will not be considered as NRI:
i) Indians who go abroad for the purpose of
a) tourism
b) pursuing research
c) undertaking business promotion visits.
d) to receive training
e) obtaining medical treatment.
f) participating in sports or cultural activities.
ii) Indians or Persons of Indian origin residing in Nepal/Bhutan /Pakistan/Bangladesh.
iii) Crew members working for shipping/airlines companies posted in India and those companies
whose registered offices are in India.
NON RESIDENT DEPOSIT (NRE/NRO/FCNR(B)/RLFCD)/FCLR/RFC:
Features of NRE Deposit in INR:
Current / Saving / Term Deposit Accounts
Eligibility : Any NRI (except Bangladesh/ Pakistan nationality which requires RBI prior approval)
Eligible Credits : Proceeds of remittance from Overseas to India/From other NRE, FCNR (B).
Transfer from NRO A/C (USD one million per financial year subject to deduction of applicable
188 | P a g e
tax)
Permitted Debits: Local Payments, Remittances outside India, Transfer to NRE / FCNR(B) Accounts
of the account holder or any other person eligible to maintain such account, Investment in Shares /
Securities of an Indian Company or for purchase of Immovable Property in India provided such
investment / purchase is covered by the regulations made, or the general / special permission
granted, by the RBI, any other transaction if covered under general or special permission granted
by RBI.
NRE Rupee FD:
Tenure of Time Deposit : Min. 1 Year; Max. 10 Year
Repatriability: Fully Repatriable ( Principal plus interest amount)
Joint Accounts : Allowed with other NRI. Resident close relative may also become joint account
holder with operational instructions Former or Survivor
Loan against Term Deposit : Up to any amount subject to advance value of Term Deposit.
Premature Withdrawal : Allowed. No interest is paid if the deposit is withdrawn before one year
of deposit.
Tax Exemption ; Interest earned is exempted from TDS.
Other Facilities : International Debit Card, Internet Banking (Baroda Connect), Account operation
allowed for local payments through Power of Attorney.
There is a Centralized Processing for opening NRE/NRO Savings Bank Accounts for applications
sponsored by our UAE, Kenya and Uganda territories.
Feature of NRO A/Cs in INR:
Current/Saving/Term Deposit Accounts
Eligibility: Any Non Resident.
Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of
Bangladesh ownership requires prior approval of the Reserve Bank.
Opening of accounts by individual/s of Bangladesh nationality may be allowed by Authorised
Dealer or Authorised Bank, subject to satisfying itself that the individual/ s hold a valid visa and
valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional
Registration Office (FRRO) concerned.
Eligible Credits: Some local credits as permiteed under FEMA, Proceeds of remittance from
overseas to India, From other NRE, FCNR(B), and other NRO A/Cs
Permitted Debits: All local payments in Rupees, Remittance outside India of current income
like rent, dividend, pension, interest, etc.
Repatriability : Rapatriable upto USD 1 million per financial year out of balance held in A/c.
subject to payments of tax and production of C.A. certificate i.e Form 15CA and Form 15 CB.
Loan Against Term Deposit : Permitted without any limit (As per Advance value of the deposit)
Joint Accounts : Allowed with other NRIs and local residents also.
Premature Withdrawal: Allowed, Rules applicable as per Resident Deposits.
Tax : TDS is levied at present @ 30% + surcharge on interest earned, Concession if any is
subject to double tax avoidance agreement (DTAA)with certain countries.
Other Facilities : International Debit Card, Internet Banking (Baroda Connect), Account operation
allowed for local payments through Power of Attorney.
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Foreign Travellers cheques (during their personal visit) as well as transfer from any non-resident
(External) Rupee Savings & Fixed Deposit account or Foreign Currency Non Resident deposit
accounts
of
any
NRI
on
maturity.
However local Rupee cheques and Cash Currency in Indian Rupees cannot be deposited in this
account.
The remittance received from abroad is converted into Rupees and placed in NRE Rupee Deposit for
12 months. The customer is required to book forward contract for the maturity amount on the date
of deposit itself.
The effective yield to the customer will be the difference between the Rate of Interest on NRE
Rupee deposits and the Forward Premium prevailing on the date of effecting the transaction.
The deposit is subject to the Rules framed by the Reserve Bank of India. Deposit Receipts are not
transferable by endorsement.
Deposit Receipts will, when so required, be issued in the names of two or more persons and be
made payable to any one or more of them or to any one or more of the survivors of them or the last
survivor. However, all the persons must be Indians resident abroad or persons of Indian origin,
resident abroad.
Deposit will be accepted for period of 12 months only. In case of premature withdrawal of the
deposit receipt, the receipt needs to be signed by all the depositors irrespective of the operational
instructions "Either or Survivor", or "Anyone or Survivors/Survivor".
Interest on deposits will be paid on maturity along with the principal. No interest will be payable for
deposits run for less than twelve months.
Baroda Premium NRE SB Account:
A premium saving bank account specially designed for valued NRI customers.
Average quarterly balance required to be maintained is INR 50,000.00
Free remittance facility if beneficiary maintains account at any of branch in India
No charges for collection of cheque drawn on self a/c / travelers cheques / Currency notes
surrendered during personal visit
Demand draft / Bankers cheque issued free of any charges Cheque book facility available free of
cost
Preferential Exchange Rate for conversion
Interest and principal fully repatriable
Tax exemption on interest earned
Baroda Double Dhamaka NRE Term Deposit Scheme for NRIs: As per the prevailing rate of
interest the principal amount is doubled in a given period under RIRD scheme.
BARODA DOUBLE DHAMAKA NRE TERM DEPOSIT SCHEME FOR NRI (w.e.f. 16.12.2015)
Feature
Product Specification
Particulars
Term Deposit Product wherein NRI
depositor gets more than double of his
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Nomination
Auto Renewal
Additional Rate of Interest to Senior
Citizens and Staff/Ex-Staff
Availability of Loan/Overdraft
NIL
Permitted up to 95% of outstanding
balance as per the Interest rate guidelines
in force at the time of loan
Resident Foreign Currency Account - for NRIs returning to India for settling in India
Our Bank offers remunerative deposits for NRIs returning to India with the intention of
permanently settling down. NRIs can also open RFC account with the ASSETS brought by them
on return as well as their foreign assets held abroad at any future date in case they desire so.
192 | P a g e
Their present NRI accounts will be re classified and called RFC accounts while the continuity of
the deposit will be maintained till maturity date of the deposit.
Foreign Exchange Facilities for Resident Indians under Liberalized Remittance Scheme (LRS)
Foreign Exchange can be released under Liberalized Remittance Scheme for maximum amount
of USD 2,50,000 per financial year to undertake a range of miscellaneous non trade current
account transactions for the following activities:
1.
2.
3.
4.
Private Visits: For one or more private visits to any country (except Nepal & Bhutan)
Business Visits and travel for international conference/seminar/ training
Employment abroad
Emigration to other country
193 | P a g e
5.
Medical treatment
6.
7.
8.
Education abroad
Gift/Donations
Maintenance of close relatives abroad
The permissible capital account transactions by an Resident individual under LRS are:
(i) opening of foreign currency account abroad with a bank, (ii) purchase of property abroad;
(iii)making investments abroad- acquisition and holding shares of both listed and unlisted overseas
company or debt instruments; acquisition of ESOPs (the Scheme is in addition to acquisition of
ESOPs linked to ADR / GDR and acquisition of qualification shares); investment in units of Mutual
Funds, Venture Capital Funds, unrated debt securities, promissory notes;
(iv) setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013)
outside India for bonafide business subject to the terms & conditions stipulated in Notification No
FEMA.263/RB-2013 dated March 5, 2013;
(v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are
relatives as defined in Companies Act, 2013.
Notes:
Out of the overall foreign exchange being sold to a traveller, exchange in the form of foreign
currency notes and coins may be sold up to the limit indicated below:
Travellers proceeding to countries other than Iraq, Libya, Islamic Republic of Iran, Russian
Federation and other Republics of Commonwealth of Independent States - not exceeding USD
3000 or its equivalent.
Travellers proceeding to Iraq or Libya - not exceeding USD 5000 or its equivalent
Travellers proceeding to Islamic Republic of Iran, Russian Federation and other Republics of
Commonwealth of Independent States - full exchange may be released.
Documents for releasing Foreign Exchange
Passport & VISA, Form A-2 as per prescribed format and Application-cum-Declaration for
purchase of foreign exchange under LRS as per format, PAN card.
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individual family members complying with the terms and conditions of the Scheme.
Remittances under the Scheme can be used for purchasing objects of art subject to the
provisions of other applicable laws such as the extant Foreign Trade Policy of the Government
of India.
Remittance against gifts and donations cannot be made separately and have to be made under
the LRS Scheme only and therefore no separate limits for gift and donation are available.
The Scheme can also be used for remittance of funds for acquisition of ESOPs in addition to
acquisition of ESOPs linked to ADR/GDR and acquisition of qualification shares.
A resident individual can invest in units of Mutual Funds, Venture Funds, un rated debt
securities, promissory notes, etc under this Scheme. Further, the resident can invest in such
securities out of the bank account opened abroad under the Scheme.
It is mandatory to have PAN number to make remittances under the Scheme and the A/c
Should be 6 months old. Separate Application cum declaration Form has been devised for this
remittance scheme.
Import of foreign exchange into India
A person on arrival in India, has to make a declaration to the Custom Authorities at the Airport
in the Currency Declaration Form (CDF) where the aggregate value of the foreign exchange in
the form of currency notes, bank notes or travellers cheques exceed USD 10,000 (US Dollars
ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash
portion) exceed USD 5,000 (US Dollars five thousand) or its equivalent.
Baroda TravelEasy Card
Our Bank has launched a foreign currency pre-paid card viz. Baroda TravelEasy Card.
These cards have to be issued to resident Indians and are usable abroad for ATM cash withdrawal
and making merchant payments at physical/online stores from the loaded currency
Salient features of Baroda TravelEasy Card:
Issued in USD, EUR & GBP
Minimum load value - USD $200 or its equivalent foreign currency.
Maximum load value - as per extant FEMA guidelines based on the purpose of visit
Activation within 24 hours of purchase
Travelers are relieved of the risk of carrying cash & travelers cheque during foreign visits
Fees/charges are lower than applicable charges on domestic debit/credit cards used abroad
Cards are valid for -3- years. In this period, the card can be reloaded
Cardholder will have access to 24x7 Customer Care team as well as secured online portal for
viewing their card balance and transaction details Accounting, reconciliation and customer
support shall be provided by the Operations team, based at e-Business Department, in
collaboration with the service provider
KYC, AML/CFT requirement are as per RBI guidelines
Cards cannot be used in India, Nepal & Bhutan
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The difference between FERA and FEMA can be summarized as under: Feature
FERA
FEMA
1. No. of Sections 81 sections
49 sections
2. Features
Presumptions of Mens Rea and
Presumptions of Mens Rea and
Abatements
Abatements excluded
3. Definition of
Capital/Current
transactions, These transactions/terms
are well
Terms
Person,
defined
Service etc. not defined
Concept of authorized
4. Concept of
persons was limited
to ADs and Concept of authorized
personAuthorized
AMCs
included ADBanks,
Authorized moneychangers, and off
Person
shore-banking
units
5. Definition of
Resident/Non-Resident
definition This definition is in harmony with
Resident
different from in Income Tax
Income Tax Act
Act
6. Nature of
Violations are criminal
offences Violations
are
civil
offences
Offence
punishable with imprisonment
punishable with monetary penalties
7. Provision of
Arrest
8. Amt. of
Monetary
Penalty
9. Right of
Impeded
Person to
take
assistance
10. Power
of
Police Officer
/ ED
Sweeping powers
Restricted powers
196 | P a g e
goods prior to shipment / working capital expenses towards rendering of services on the basis
of irrevocable letter of credit opened in his favour by an overseas buyer or a confirmed order
for the export of goods / services or any other evidence of an order for export having been
placed on the exporter.
Period of Advance
(i) The period for which a packing credit advance may be given by a bank will be operating
cycle or maximum period of 360 days and depending upon the circumstances of the
individual case, such as the time required for procuring, manufacturing or processing
(where necessary) and shipping the relative goods / rendering of services.
(ii) However, the benefit of concessional rate of interest on Pre Shipment Export Finance will
be granted for the maximum period of 270 days only. It is primarily for the banks to decide
the period for which a packing credit advance may be given, having regard to the various
relevant factors so that the period is sufficient to enable the exporter to ship the goods /
render the services.
If pre-shipment advances are not adjusted by submission of export documents within 360 days
from the date of advance, the advances will cease to qualify for concessive rate of interest to
the exporter ab initio.
Disbursement of Packing Credit should be made on FOB vale of LC/Export Order.
Liquidation of Pre-shipment Credit:
Pre-shipment credit is to be liquidated by the purchase / discount of export bills received from
Exporter in respect of Goods / Services exported. Further, subject to mutual agreement
between the exporter and the banker, it can also be repaid out of balances in Exchange
Earners Foreign Currency Account (EEFC A/C) representing Export proceeds, as also from
proceeds of any other unfinanced Export (collection) bills or lastly from Rupee resources if no
export takes place.
POST-SHIPMENT EXPORT CREDIT
'Post-shipment Credit' means any loan or advance granted or any other credit provided by a
bank to an exporter of goods / services from India after shipment of goods / rendering of
services.
Types of Post-shipment Credits:
Post-shipment advance can mainly take the form of (i) Export bills purchased/discounted/negotiated.
(ii) Advances against bills for collection.
(iii) Advances against duty drawback receivable from Government.
Liquidation of Post-shipment Credit:
Post-shipment credit is to be liquidated by the proceeds of export bills received from abroad in
respect of goods exported / services rendered. Further, subject to mutual agreement between
the exporter and the banker it can also be repaid / prepaid out of balances in Exchange
Earners Foreign Currency Account (EEFC A/C) representing Export proceeds, as also from
proceeds of any other unfinanced (collection) bills. However, such adjusted export bills should
197 | P a g e
continue to be followed up for realization of the export proceeds and will continue to be
reported in the XOS statement.
Normal Transit Period: Export Bills in Foreign Currencies ( Demand / Sight Bill ) 25 days
Crystallization : Overdue Export Bills, which are purchased/discounted/negotiated by the Bank,
will be crystallized on 30th day after expiry of Normal Transit Period / Notional / Actual Due Date of
the Export Bill.
For crystallization into Rupee liability, the Authorized Dealer shall apply its TT selling rate of
exchange. The amount recoverable, thereafter, shall be the crystallized Rupee amount along with
interest and charges, if any.
The outstanding Export Bill which is crystallized will be treated on collection basis and will be
realized at TT Buying rate when actual realization proceed is coming.
GOLD CARD SCHEME FOR EXPORTERS
Eligibility
1. All exporters, including those in small and medium sectors, having a good track record
and credit worthiness as per credit rating of the bank
2. The account should be Standard continuously for three years and should not be in
the caution list of ECGC or RBI.
3. Export firms making losses for the past three years or having overdue export bills in
excess of 10% of the current years' turnover are not eligible for Gold Card.
Limits:
1. Gold card to the Exporter is issued for a period of three years subject to annual
review..
2. A stand by limit of 20 percent of the sanctioned limit may be additionally granted for
facilitating urgent credit needs of Gold Card Holder Exporter for executing sudden
orders.
3. Norms for inventory may be relaxed in case of unanticipated export orders, taking into
account the size and nature of the export order.
Concession in Rate of Interest: 0.25 % concession on applicable Interest Rate for Export Credit to
the Gold Card Holder Exporter
Concession in Other Charges: 10% concession will be given to the cardholders in commission and
exchange.
Tenor: The Gold Card will be issued for a period of three years and will be renewed unless any
adverse/ irregularities are noticed, subject to annual review of the account.
Other Features:
* Preference will be given for grant of PCFC.
* Premium on ECGC policy for Pre Shipment Finance will be borne by the Bank and not
* recovered from the Gold Card Holder Exporter.
* The loan application of such export clients will be processed expeditiously
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2.
ISSUING BANK: Usually the applicants banker, which issues a letter of credit.
Issuing Bank is ultimately responsible for payment under the letter of credit.
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3.
4.
5.
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TRANSFERABLE CREDIT
When a letter of credit authorise to transfer the credit to the second beneficiary at the request
of first beneficiary to the extent of amount and quantity of goods. This is called transferable
credit. This credit can be transferred once only. This means that second beneficiary cannot
transfer the portion allotted to him to next supplier.
Uniform Customs & Practices for Documentary Credits (UCPDC):
These are universally recognized set of rules governing Letter of Credits. The rules are published in
the form of Brochure by the International Chamber of Commerce. These rules are binding on all
parties. The latest publication is known as ICC 600 and adopted with effect from July 1, 2007.
INCOTERMS 2010
INCOTERMS means International Commercial Terms. These are trade terms commonly used in
commercial contracts. INCOTERMS are now separated into 2 Groups. Group 1 terms applicable
to all modes of transport and Group 2 terms only applicable to sea and inland waterway
transport.
In all there are a total of 11 INCOTERMS. The expanded form of the same are as under:
Applicable for all modes of transport:
EXW
FCA
CPT
CIP
DAT
DAP
DDP
:
:
:
:
:
:
:
Ex Works
Free Carrier
Carriage Paid To
Carriage and Insurance Paid
Delivered At Terminal
Delivered At Place
Delivered Duty Paid
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External Commercial Borrowings (ECB) refer to commercial loans availed from non-resident
lenders in Foreign Currency with a minimum average maturity of 3 years in the form of
i. Loans including bank loans;
ii. Securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally
convertible or partially convertible preference shares / debentures);
iii. Buyers credit;
iv. Suppliers credit;
v. Foreign Currency Convertible Bonds (FCCBs);
vi. Financial Lease; and
vii. Foreign Currency Exchangeable Bonds (FCEBs) (under approval route only)
Eligible borrowers :
Corporates in manufacturing and software development sector, Infrastructure, SIDBI, EXIM
Bank, SEZ units, are eligible to raise ECB in Foreign Currency. However, NBFCs, NGOs in
microfinance, trusts, cooperative societies, companies in miscellaneous services etc are eligible
to raise ECB in rupees only.
Recognized lenders are as under
i. International banks.
ii. International capital markets.
iii. Multilateral financial institutions (such as, IFC, ADB, etc.) / regional financial institutions and
Government owned (either wholly or partially) financial institutions.
iv. Export credit agencies.
v. Suppliers of equipment.
vi. Foreign equity holders.
vii. Overseas long term investors such as: a. Prudentially regulated financial entities;
b. Pension funds; c. Insurance companies; d. Sovereign Wealth Funds;
e. Financial institutions located in International Financial Services Centres in India
viii. Overseas branches / subsidiaries of Indian banks
Permitted uses:
ECB proceeds can be utilized for capital expenditure like
Import of capital goods, Local sourcing of capital goods, New project, Modernization /expansion of
existing units, Overseas investment in Joint ventures (JV)/ Wholly owned subsidiaries (WOS),
Acquisition of shares of public sector undertakings at any stage of disinvestment process,
Refinancing of existing trade credit
Units of SEZs can raise ECB only for their own requirements
For on lending by NBFCs / NGOs in microfinance, SIDBI, Exim Bank etc
Two routes for raising ECB
(a) Automatic Route : ECB under Automatic Route do not require approval of Government of India
/ RBI.
(b) Approval Route: Cases falling outside the purview of Automatic route and cases specified by
RBI for approval route.
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The framework for raising loans through ECB comprises the following three tracks:
Track I : Medium term foreign currency denominated ECB with minimum average maturity of 3/5
years. The all-in-cost ceiling for track 1 is prescribed through a spread over the benchmark as
under:
a. For ECB with minimum average maturity period of 3 to 5 years - 300 basis points per annum over
6 month LIBOR or applicable bench mark for the respective currency.
b. For ECB with average maturity period of more than 5 years 450 basis points per annum over 6
month LIBOR or applicable bench mark for the respective currency.
ii. Penal interest, if any, for default or breach of covenants should not be more than 2 per cent over
and above the contracted rate of interest.
Track II : Long term foreign currency denominated ECB with minimum average maturity of 10
years. The all-in-cost ceiling for track 2 is prescribed through a maximum spread over the
benchmark will be 500 basis points per annum. Remaining conditions will be as given under Track I
Track III : Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.
The all-in-cost for track III, ( i.e. ECB in INR) should be in line with the market conditions.
All-in-cost includes : - Rate of interest, other fees and expenses in foreign currency except
commitment fee, pre- payment fee, and fees payable in Indian Rupees. Moreover, the payment of
withholding tax in Indian Rupees is excluded for calculating the all-in-cost.
Amount wise Individual Limits:
The individual limits refer to the amount of ECB which can be raised in a financial year under the
automatic route.
i. The individual limits of ECB that can be raised by eligible entities under the automatic route per
financial year for all the three tracks are set out as under:
a. Up to USD 750 million or equivalent for the companies in infrastructure and manufacturing
sectors;
b. Up to USD 200 million or equivalent for companies in software development sector;
c. Up to USD 100 million or equivalent for entities engaged in micro finance activities; and
d. Up to 500 million or equivalent for remaining entities.
ECB proposals beyond aforesaid limits will come under the approval route. For computation of
individual limits under Track III, exchange rate prevailing on the date of agreement should be taken
into account.
Issuance of Guarantee :
Issuance of Guarantee, standby letter of credit, letter of undertaking or letter of comfort by Indian
banks, All India Financial Institutions and NBFCs relating to ECB is not permitted. Further, financial
intermediaries (viz. Indian banks, All India Financial Institutions, or NBFCs) shall not invest in FCCBs
in any manner whatsoever.
End use not permitted:
The proceeds of the ECB borrowing can not be used for the following purposes:
i. Real estate activities other than development of integrated township / affordable housing projects;
ii. Investing in capital market and using the proceeds for equity investment domestically;
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Suppliers credit is a financing arrangement under which a supplier agrees to accept deferred
payment terms from the buyer. Supplier avails funds by discounting or selling the bills of
exchange or promissory notes so created with the bank in its own country.
FCNR(B) LOANS
The foreign currency denominated loans in India are granted against the foreign currency
funds accumulated by the Bank by way of FCNR (B) Deposit The loans given from this
FCNR deposit funds are commonly known as FCNR (B) loans.
BOB with a wide global presence has a large base of NRI customers / depositors.
Therefore, BOB has a large resource base of FCNR (B) deposits and is in a position to offer
the Foreign Currency Loans in India under FCNR (B) Loan Scheme at very competitive
rates.
Advantages of FCNR (B) loans:
At times, it may entail lesser interest cost vis--vis Rupee borrowings. The borrower is not
required to go to the International market for raising the funds as foreign currency funds
are made available in India reducing the cost of raising such funds.
Features
Corporate can raise FCNR (B) loans from the Banks who are authorized dealers. BOB
grants FCNR (B) Loans through its Position Maintaining Offices at Mumbai, i.e. SITB
Mumbai
The Indian corporate are allowed to raise the funds through FCNR (B) Loans at the
selected Indian branches within the prevailing policy guidelines of the Bank/ RBI. The
period of FCNR (B) loan is 6 month which can be rolled over further. The spread of 350
bps over LIBOR will be taken for Rate of Interest on FCNR(B) loans.
Purpose
Corporate is allowed to obtain foreign currency denominated loans in India under the
above scheme for the following purposes: 1.
2.
3.
4.
5.
6.
7.
The loan can be granted after proper assessment and sanction of working capital
requirements/ Maximum Permissible Bank Finance (MPBF) . The borrowers should have
natural hedge to cover themselves from exchange risk, which are required to be borne by
them. The exporters can avail this facility by way of pre-shipment credit as well as post
shipment credit in foreign currency. All other terms applicable to such type of Rupee
advances shall also be applicable to foreign currency advances.
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Types of Rates:
(i)
Cash / Ready: When the deal is entered into and its settlement is done on the very
same day then it is known as Cash / Ready Rate.(T + 0)
(II) TOM: When the deal is entered into but the settlement is done on the next working day
then it is known as TOM.(T + 1)
(iii) Spot Rate : Where the settlement is to take place after two working days from the date
of contract. It is termed as "SPOT RATE." (T + 2)
(iv) FORWARD RATES: All exchange rates quoted, where the settlement is to take place after
the spot rate are termed as "FORWARD RATES" (T + > 2). Forward Rates are generally
quoted as a margin against the spot rate for currency concerned. The margin may
represent either "PREMIUM" or "DISCOUNT". There is a facility of settlement of forward
contract either on a fixed date or with an option of settlement within a period agreed
which can be maximum one months period.
Premium: Premium is a value of exchange in excess of spot rate. In relation to forward
exchange rate, it means that the currency is dearer for future delivery than for the spot
delivery i.e. currency is dearer for forward purchase than the spot purchase.
Discount: Discount is a value of exchange below spot rate. In relation to forward exchange
rate, it means that the currency is cheaper for future delivery than for the spot delivery i.e.
cheaper for forward purchase than the spot purchase.
LIBOR (London Inter-Bank Offered Rate):
LIBOR is a daily reference rate based on the interest rates at which banks offer to lend funds
to other banks in the London inter-bank market. LIBOR is published by the British Bankers
Association (BBA) at 11:00 A.M London time , every day, and is a filtered average of interbank deposit rates offered by designated contributor banks, for maturities ranging from
overnight to one year.
SWIFT
Society for Worldwide Interbank Financial Telecommunication is a co operative society created
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under Belgian law and having its corporate office at Brussels. It operates computer guided
communication system for transmission of international payment transfers messages in a
secured system driven environment. Only authorized officials can access and decode the data /
information / message.
Categories of AD branches:
Category A: Offices and branches maintaining independent foreign currency accounts
(NOSTRO A/C) with overseas correspondents / branches in their own names. Specialized
Integrated Treasury Branch (SITB) Mumbai is the only Category A Branch of Bank of
Baroda.
Category B: Offices and branches not maintaining independent foreign currency accounts
but having powers of operating on the accounts maintained abroad by their A category
branch.
Category C: All other offices and branches handling foreign exchange business through
other category B Branches, but not having powers to operate on the Foreign Currency
accounts maintained by their Bank.
ACCOUNTING ARRANGEMENTS:
NOSTRO ACCOUNT (OUR ACCOUNT): means our account in foreign currency with a bank or
branch abroad. They are the current accounts of the bank with their correspondents /
branches in foreign centers in their currencies.
VOSTRO ACCOUNT (YOUR ACCOUNT): means foreign banks or branchs account with us in
Indian Rupees.
LORO ACCOUNT: Entries passed to the account of a third bank are said to be for
LORO account, e.g., a remittance made by one bank to another for account of a third
bank may be sent by the remitter for credit of a LORO a/c (bank), meaning their account with
you.
What do you understand by Derivatives?
It is a financial contract value (spot rate) of which is derived from another financial
products/commodity called underlying (that may be stock, foreign currency, commodity etc.)
Forward contract in forex business is a best example of derivatives.
The basic object of the derivative is to hedge the risk. Future, forwards, options, swaps are the
common instruments of derivatives.
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A derivative is an instrument / contract whose value depends on the values of other underlying
instrument / contract.
These variables may be :
Stock Prices
Exchange rates
Interest rates
Functions of Derivatives :
Derivatives shift the risk from the buyer of the derivative product to the seller and as such are
very effective risk management tools.
Derivatives improve the liquidity of the underlying instrument. Derivatives
perform an important economic function viz. price discovery. They provide
better avenues for raising money.
They contribute substantially to increasing the depth of the markets.
Share of Exchange Profit
Treasury Branch passes share of profit on exchange transaction done by Authorized Branches
on half yearly basis i.e. March to August and September to February. This is passed on to the
branches during first fortnight of September and March every year.
FORWARD CONTRACT
A forward foreign exchange contract is one which is booked today at a rate agreed today but
settlement takes place at an agreed future date.
The contract is negotiated directly by the buyer and seller. It is an OTC (over the counter )
product
No money exchanges between the parties when it is contracted and the actual conversion
/ settlement takes place at agreed rates at future maturity date.
Both the parties are obliged to fulfill their contractual terms.
Cancellation of Forward Contract
Cancellation of forward contracts before the maturity date may be at the discretion of bank.
Purchase contracts shall be cancelled at T.T. selling rate Sale contracts shall be cancelled at T.T.
buying rate
In the absence of any instructions from the customer a contract which has matured shall be
cancelled by the bank on the 3rd working day after the maturity date
Fixed Forward Contract and Option Forward Contract
In a fixed forward contract, the transaction will have to be completed on the specified future
date.
In Option Forward Contract, the option period of delivery in future should be specified and
should not exceed a period of one calendar month.
Forward Rate Agreements (An interest rate derivative)
1. A Forward Rate Agreement is a contract between two parties by which they agree to settle
between them the interest differential on a notional principal on a future settlement date for
a specified future period.
2. Further, as the commitment is only to settle the interest differential, the credit risk with the
counter party is minimal.
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3. FRAs can be used effectively to lock in interest rates and thus manage the gaps between
rate sensitive assets and liabilities of the balance sheet. Thus they are very useful in Asset
Liability Management.
4. FRAs could easily replicate cash market transactions with a lower capital requirement and
can also improve the liquidity of the underlying cash markets.
Interest Rate Swaps :
An Interest Rate Swap is invariably an over the counter contract. It is a contact between two
parties who agree to exchange interest payments on a notional principal at pre -agreed
intervals of time for a given maturity. Mostly, Interest payments are based on a fixed rate on
the one side and a floating rate on the other.
Options :
1. An Option contract is essentially a contract between two parties wherein one party buys the
right to sell or buy a given underlying at a future date at a pre-agreed price and the other
sells this right. Obviously, this means options are basically forward contracts on rights. In
other words, they are simply insurance products against adverse movements in the market
prices.
2. The right to buy an underlying is called a Call Option and the right to sell the underlying is
called the Put option.
3. The option which can be exercised by the buyer only on the date of maturity is called an
European Option.
4. American Option is the Option which can be exercised on any working day before the
maturity or on the maturity date.
Interest Rate Options :
Interest Rate Options are fundamentally of two types, the Cap and the Floor. A Cap is an
interest rate option in which, the buyer of the option, with the intention of locking himself to a
ceiling in interest costs for his borrowing, reserves the right to receive the difference in
interest rate on a notional principal in case the interest rate on the underlying borrowing goes
higher than the ceiling he has chosen at pre-agreed periodic intervals for a given time
maturity.
LAF - REPO and Reverse REPO :
1. RBI gives LAF Liquidity Adjustment facility as recommended by Narsimhan Committee. The
purpose of LAF is to provide short-term liquidity support to Banks in India. The rate for LAF
is REPO (Repurchase Option) for injection of liquidity and Reverse REPO for absorption of
liquidity.
2. A financing arrangement used primarily in the Govt. security markets whereby a dealer or
other holder of the security sells the securities to a lender and agrees to repurchase the
same at an agreed future date at an agreed price is called Repo transaction when viewed
from the sellers perception. It is reverse repo for the suppliers of fund who are purchasing
such security.
MARKET INTEREST RATE
The interest rate, or discount rate, or yield to maturity is an interest rate which changes
constantly depending on various factors like demand/supply of the Financial asset, future
economic outlook etc.
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FACE VALUE
The principal value of the Bond, which is printed on the bond and which is fixed throughout
the bonds life.
YIELD TO MATURITY
This term popularly known as YTM connotes redemption yield and is very useful for Treasury
Managers whose investment horizon is long term. YTM can be interpreted as the bonds
average compounded rate of return if the bond is bought at the current asked price and held
until it matures and the face value is repaid. That is, YTM can be defined as the discount rate
that equates present value of all cash flows to the present market price of the Bond. Future
cash flows includes interest and capital gain/loss.
MARK TO MARKET (REVALUATION):
1. RBI has directed all the banks in India in valuing their investment portfolio at market rates.
Valuation of securities at market rates is known as marking to market.
2. This process of valuation of the portfolio exposes the Bank to the market risk and forces the
treasury to take suitable steps to hedge such risk. For example if the value of the securities
in the portfolio have depreciated, as per the prevailing market rates, the profitability and
thereby the net worth of the bank also gets adversely affected.
3. Conversely, if there is an appreciation, which are unrealized gains, cannot be taken to
profits of the Bank. However RBI issues guidelines on valuation norms from time to time.
3. This portion of portfolio which is marked to market is termed as Current category while the
remaining portion which is not marked to market is termed as Permanent category.
4. This will ensure that Banks Capital base could withstand any eventuality of high volatility in
the value of its portfolio at a later date, say when the Capital account convertibility comes.
Terms for money market:
1. HTM = Held to maturity, securities which are not meant for sale and shall be kept till
maturity date
2. HFT = Held for trading, securities acquired with the intention to trade by taking advantage
of the short term price/interest rate movement are classified as HFT.
3. AFS-Available for sale: The securities which do not fall under the above two categories will
be under this category.
4. Coupon rate = The rate which is displayed on the instrument and fixed at the time of
issuance.
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a. Interest on Govt. Securities can be credited if the same securities was purchased by using
FCNR fund.
b. Interest Rate cannot exceed MIBOR/SWAP rate Plus 175 bps.
c. A loan to third party can be granted against collateral security of NREFD.
d. Account can be opened jointly with Resident close relatives
6. Which is not True in regards to FCNR a/c.
a. AD banks in India may be permitted to accept FCNR(B) deposits in any permitted
currency
b. Interest cannot be more than LIBOR + 100 bps
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FEMA
RBI Act 1935
FEDAI act
ICC
minimum deposit amount required for opening RLFCD A/c.
d. Bill Buying
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RISK MANAGEMENT
What is Risk?
Risk is a probability of loss, may be direct or indirect. Direct loss may be relating to loss of
capital or earning whereas indirect loss may be loss of business. Thus, risk means probability of
loss of earning, capital or business.
For example:
In case of non-payment of dues bank will suffer a loss, in case of compromise loss of earning
(waiver) or loss of capital in case of write off.
Frauds committed by either employees or outsiders results into loss of business.
What is Risk Management?
The four letters RISK indicates that risk is an unexpected event or incident, which needs to be
identified, measured monitored and control.
R = Rare (Unexpected)
I = Incident (Outcome)
S = Selection (Identification)
K = Knocking (measuring, monitoring, controlling)
Thus, the risk management is a sum of (1) Risk identification (2) Risk measurement (3) Risk
monitoring and (4) Risk control with a view to maximize Risk Adjusted Return on Capital
Employed = (RAROCE).
Different Types of Risks?
Broadly speaking the risk can be divided into four main categories.
(1) Market Risk (2) Operational Risk (3) Credit Risk and (4) Country Risk
Market Risk
Market risk is the risk that the value of an investment will decrease due to moves in
market factors. Volatility frequently refers to the standard deviation of the change in
value of a financial instrument with a specific time horizon.. Market risk may be
relating to:
Interest Rate Risk: Risk due to change in market interest rate, which might adversely
affect the banks financial position. The NIM will reduce. This depends on types of assets
such as fixed or floating rate, quantum of advance etc.
Commodity Price Risk: The price fluctuation in commodity, which are charged to the
bank as security etc. by way of hypothecation and /or pledge.
Equity Price Risk is a loss in value of the banks equity investments and or equity
derivatives, arising out of change in equity price. Price fluctuation in stock market where
bank has invested fund.
OPERATION RISK:
It is a risk relating to direct or indirect losses arising out of inadequate or failure of people,
process, system, business, management and/or external factors. Generally, any risk not
categorized as market or credit risk is called operational risk.
Broadly speaking operational risk covers following:
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(1) People (2) Process (3) Management (4) System (5) Business and (6) External.
COUNTRY RISK:
Country Risk is the possibility that a Country will be unable to service or repay its debts foreign
lenders in a timely manner. Country Risk is the risk arising while dealing with other countries
such as sovereign risk, political risk, transfer risk, currency risk, cross border transactions,
defaulter country risk etc.
WHAT IS CREDIT RISK?
Credit risk is a risk of potential loss arising out of inability or un-willingness of a customer or
counter party to meet its commitments in relation to lending. Hedging, settlement and other
financial transactions. Thus, credit risk may be relating to;
Direct lending: Default risk, (non-payment of instalment and interest by the loanee), portfolio
risk.
Off Balance Sheet items: Counter party risk-Invocation of Guarantee or crystallization of L/C
liability for which dues have not been paid or denied by the counter party.
Treasury Operations: Forward Contract obligations, Credit Derivatives etc. On due date the
party is refusing/ denying the payment/ delivery.
Security transaction: The counter party may not effect fund settlement/ security settlement.
Counter Party Risk:When there are two or more contracts entered into and liabilities are
depending upon happening of certain events and the party on whose behalf we have taken
exposure express his inability to pay out is called counter party risk.
Portfolio Risk : is also called Credit Concentration Risk. This arises due to failure of particular
segment/activity where the bank is having substantial exposure. To mitigate such risk there are
sectoral exposure, single /group exposure ceiling, activity ceiling etc.
Defaulter Risk there is one contract only i.e. between bank and borrower, may be due to
unwillingness or inability of the borrower.
TOOLS FOR CREDIT RISK MANAGEMENT:
Credit is considered as core business activity of banking which results into profit. Therefore, it is
necessary to increase the credit portfolio and also to mitigate the risk relating to credit. Following
are the tools available for risk assessment and monitoring:
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SMA 02
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PRICING
The composite Rating or the Combined Rating (CR- 1 to CR-10) is computed on the basis of matrix
of Obligor Rating for credit worthiness and the Facility Rating representing the expected loss in
case of default.
Difference between Internal Audit & Risk Based Internal Audit
Internal Audit
Transaction
based.
No risk
assessment. 100% transaction testing
Process
identical
for
branch/unit.
Periodicity linked to rating.
each
Effective
optimization of audit
resources.
Essential
for regulatory Risk
Based Supervision.
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To deal with the different Risks, Basel-II suggests the following approaches
1. Credit Risk
a) Standardised Approach
b) Foundation Internal Rating Based (FIRB) Approach
c) Advanced Internal Rating Based (IRB) Approach
2. Market Risk
a) Standardized Approach (Maturity Method)
b) Standardized Approach (Duration Method)
c) Internal Models method
3. Operational Risk
a) Basic Indicator Approach
b) Standardised Approach
c) Advanced Measurement Approach
Roll out of operational Risk Management system SASEGRC (BCC: BR: 107:257 dated 0106-2015): Bank has decided to roll-out this system for all entities of the bank, on solo basis, in
India w.e.f. 01-06-2015. The system will benefit the bank in online collection of operational risk loss
data and its tracking in terms of recovery, impact of the banks profit and loss account. All the
operating units of the bank i.e. all branches, RO, SME, RLF etc are required to report the operational
risk losses of their respective unit to this system. The structure of the reporting and all other related
issues are described in annexure I of the above circular.
Standardised Approach to Credit Risk
Under the Standardized Approach, banks credit portfolio have been grouped into various class types
like Domestic and Foreign Sovereign, Banks, Corporate, Public Sector entities, Regulatory Retail
portfolio etc. The bank will allocate risk weight to fund and non-fund based assets, depending on
the quality of assets as reflected in the risk rating secured by the borrower from External Credit
rating institutions.
For example AAA rated account will have risk weight of 20%, while the A rated accounts will
have risk weight of 50%, BBB rated account will have risk weight of 100% and so on. Off Balance
Sheet items will be converted to credit risk exposure by multiplying with
Credit Conversion Factor from 0% to 100%. Risk weight of 100% may entail a capital charge of
9%, risk weight of 50% may entail a capital charge of 4.5% and a risk weight of 20% may entail a
capital charge of 1.8% etc.
Credit Conversion Factor (CCF)
The off balance sheet items have to be converted to credit risk exposure by multiplying with Credit
Conversion Factor. Basel II standardized approach has prescribed CCFs of 0% to 100 % for
different types of Off Balance Sheet Items.
Credit Risk Mitigation (CRM) Techniques
1. Collateralised Transactions - Certain securities are eligible to be considered for Basel-II
purpose. The securities may be either prime securities or collateral securities like cash margin,
Banks own deposit, NSC, Indira Vikas Patras & Kisan Vikas Patra, LIC policies, Gold, etc i.e. cash
or near cash securities are considered as security for Basel-II purpose. In respect of Standard
Assets Basel-II does not recognize land and building, Plant and Machinery as Collateral for risk
mitigation purposes.
2. On Balance Sheet netting - It is confined to loans / advances and deposits, where banks have
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and regulator. Reputation risk may originate in lack of compliance with industry service standards
and regulatory standards, failure to deliver on commitments, lack of customer friendly service and
fair market practices, a service style that does not harmonize with customer expectation.
6. Business and Strategic risk - Business risk means current or prospective risk to earnings and
capital arising from changes in the business environment and from adverse business decisions.
Basel III Capital Accord
Reserve Bank of India has issued guidelines based on Basel II reforms on capital regulation
applicable to banks operating in india. The Basel III capital regulation has been implemented from
1st April 2013 in india phases and it will be fully implemented as on 31.03.2019.
Minimum total capital requirement under Basel III
Regulatory Capital
(i)
(ii)
(iii)
(iv)
(V)
(vi)
(vii)
(viii)
As % Of RWA (Risk
Weighted Asset)
5.50
2.50
8.00
1.50
7.00
2.00
9.00
11.50
Capital Adequacy under New Capital Adequacy Framework (Basel II) and Basel III
(BCC: BR: 107:477 dated 28-09-2015):
Our Bank has implemented the New Capital Adequacy framework (NCAF), popularly
known as Basel-II guidelines, w.e.f. 31st March, 2008. It this reference, RBI has
directed
the banks in India to implement Basel III guidelines on capital Regulation from
01st April 2013 and disclose the Basel III capital ratio from quarter ended 30 th June
2013 onwards.
There has not been much change in Calculation of RWA under Basel II and Basel III,
other than that for claims on Bank Assets Class, where Risk Weight of Indian Banks and
banks operating in India would be calculated on Minimum common Equity Capital and
Capital Conservation Buffer ratio prescribed by RBI, rather than on Total CRAR under
Basel II guidelines.
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Credit Risk
Operational Risk
Systemic Risk
Settlement Risk
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SMA-0
SMA-1
SMA-2
Joint Lenders Forum (JLF) {Applicable for lending under Consortium and Multiple Banking
Arrangements (MBA)}
As soon as an account is reported by any of the lenders as SMA-2, they should mandatorily form a
committee to be called Joint Lenders Forum (JLF) if the aggregate exposure (AE) [FB and NFB taken
together] in the account is Rs. 100 Crore and above.
Lenders also have the option of forming a JLF even when the AE in an account is less than Rs. 100
Crore and / or when the account is reported as SMA-0 or SMA-1.
Borrower may request the lender/s, with substantiated grounds, for formation of a JLF on account of
imminent stress.
All the lenders should formulate and sign an agreement incorporating the broad rules for the
functioning of the JLF. The JLF should explore the possibility of the borrower setting right the
irregularities / weaknesses in the account.
Corrective Action Plan (CAP) by JLF
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The JLF may explore various options to resolve the stress in the account and to arrive at an early
and feasible solution to preserve the economic value of the underlying assets as well as the lenders
loans.
(a) Rectification
Obtaining a specific commitment from the borrower to regularize the account.The commitment
should be supported with identifiable cash flows within the required time period and without
involving any loss or sacrifice on the part of the existing lenders.
(b) Restructuring
Consider the possibility of restructuring the account if it is prima facie viable and the borrower is not
a wilful defaulter.
(c) Recovery
Once the first two options are seen as not feasible, due recovery process may be resorted to. The
JLF may decide the best recovery process to be followed among the various legal and other
recovery options available with a view to optimizing the efforts and results.
Restructuring process
If the JLF decides to restructure an account independent of the CDR mechanism, the JLF
should carry out the detailed Techno-Economic Viability (TEV) study.
For accounts with AE of less than Rs. 500 Crore the restructuring package should be
approved by the JLF and conveyed by the lenders to the borrowers within the next 15 days
for implementation.
For accounts with AE of Rs.500 crore and above the TEV study and restructuring package
will have to be subjected to an evaluation by an Independent Evaluation Committee (IEC) of
experts.
Asset classification benefit as applicable under the extant guidelines will accrue to such
restructured accounts as if they were restructured under CDR mechanism.
Restructuring cases will be taken up by the JLF only in respect of assets reported as
Standard, SMA or sub-standard by one or more lenders of the JLF.
The viability of the account should be determined by the JLF based on acceptable viability
benchmarks determined by them.
Accelerated provisioning
In cases where Banks fail to report SMA status of the accounts to CRILC or resort to methods with
the intent to conceal the actual status of the accounts or evergreen the account, Banks will be
subjected to accelerated provisioning for these accounts and / or other supervisory actions as
deemed appropriate by RBI.
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Annex-1
SMA-0 Signs of Stress
Illustrative list of signs of stress for categorising an account as SMA-0:
1. Delay of 90 days or more in
(a) Submission of stock statement / other stipulated operating control statements or
(b) Credit monitoring or financial statements or
(c) Non-renewal of facilities based on audited financials.
2. Actual sales / operating profits falling short of projections accepted for loan sanction by 40% or
more;
or a single event of non-cooperation / prevention from conduct of stock audits by banks;
or reduction of Drawing Power (DP) by 20% or more after a stock audit;
or evidence of diversion of funds for unapproved purpose;
or drop in internal risk rating by 2 or more notches in a single review.
3. Return of 3 or more cheques (or electronic debit instructions) issued by borrowers in 30 days on
grounds of non-availability of balance / DP in the account or return of 3 or more bills / cheques
discounted or sent under collection by the borrower.
4. Devolvement of Deferred Payment Guarantee (DPG) instalments or Letters of Credit (LCs) or
invocation of Bank Guarantees (BGs) and its non-payment within 30 days.
5. Third request for extension of time either for creation or perfection of securities as against time
specified in original sanction terms or for compliance with any other terms and conditions of
sanction.
6. Increase in frequency of overdrafts in current accounts.
7. The borrower reporting stress in the business and financials.
8. Promoter(s) pledging/selling their shares in the borrower company due to financial stress.
Joint Lenders Forum Empowered Group (JLF EG):
1. Sometimes Boards of the banks find it difficult to approve the decisions taken by JLF as the JLFs
do not have senior level representations from the participating lenders.
In this regard, RBI clarified that, although RBI has not explicitly prescribed the level of
representation in its guidelines, banks are expected to depute sufficiently empowered senior level
officials for deliberations and decisions in the meetings of JLF.
2. Nevertheless, JLF will finalise the CAP and the same will be placed before an Empowered Group
(EG) of lenders, which will be tasked to approve the rectification/restructuring packages under CAPs.
The JLF-EG shall have the following composition:
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A representative each of the two largest banks in terms of advances who do not have any
exposure to the borrower; and
The participation in the JLF-EG shall not be less than the rank of an Executive Director in a
PSB or equivalent.
The JLF convening bank will convene the JLF-EG and provide the secretarial support to it.
Strategic Debt Restructuring scheme (BCC:BR:107:295 dated 18-06-2015):In accordance
with the general principle of restructuring and as directed by RBI , the shareholders should bear the
first loss instead of the debt holders. To ensue more involvement and ownership of the promoters in
the business /project, JLFs CDR cell may consider following options at the time of restructuring of
the loans.
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Definition of Lender
The term lender covers all banks/FIs to which any amount is due, provided it is arising on account
of any banking transaction, including off balance sheet transactions such as derivatives, guarantees
and letter of credit.
Definition of Unit
The term unit includes individuals, juristic persons and all other form of business enterprises,
whether incorporated or not. In case of business enterprises (other than companies), bank /FIs may
also report the names of those persons who are in charge and responsible for management of
affairs of the business enterprises.
Wilful Defaulter
Considering the concerns over the persistence of wilful default in the financial system, Reserve Bank
of India has put in place a system to disseminate credit information pertaining to wilful defaulters
for cautioning banks and financial institutions so as to ensure that further bank finance is not made
available to them. Enforcing such provisions also help the Bank in credit discipline and creating a
Recovery climate.
Though the guidelines inter alia the penal measures as indicated herein above normally are
applicable to all the borrowers identified as wilful defaulters.
The system of reporting with the cut-off limits of Rs. 25 lac and above has been introduced. The
present guidelines are as follows:
Definition of wilful default
The term wilful default has been redefined in supersession of the earlier definition as under:
A wilful default would be deemed to have occurred if any of the following events is noted:
The unit has defaulted in meeting its payment / repayment obligations to the lender even
when it has the capacity to honour the said obligations.
The unit has defaulted in meeting its payment / repayment obligations to the lender and has
not utilised the finance from the lender for the specific purposes for which finance was
availed of but has diverted the funds for other purposes.
The unit has defaulted in meeting its payment / repayment obligations to the lender and has
siphoned off the funds so that the funds have not been utilised for the specific purpose for
which finance was availed of, nor are the funds available with the unit in the form of other
assets.
The unit has defaulted in meeting its payment / repayment obligations to the lender and has
also disposed off or removed the movable assets or immovable property given by him or it
for the purpose of securing the facility/ies without the knowledge of the bank/ lender.
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(a) Utilisation of short-term working capital funds for long-term purposes not in conformity with the
terms of sanction;
(b) Deploying borrowed funds for purposes / activities or creation of assets other than those for
which the facility was sanctioned;
(c) Transferring funds to the subsidiaries / Group companies or other corporates by whatever
modalities;
(d) Routing of funds through any bank other than the lender bank or members of consortium
without prior permission of the lender;
(e) Investment in other companies by way of acquiring equities / debt instruments without approval
of lenders;
(f) Shortfall in deployment of funds vis--vis the amounts disbursed / drawn and the difference not
being accounted for.
Siphoning of funds would be construed to occur if any funds borrowed from banks / FIs are
utilised for purposes un-related to the operations of the borrower, to the detriment of the financial
health of the entity or of the lender. The decision as to whether a particular instance amounts to
siphoning of funds would have to be a judgment of the lenders based on objective facts and
circumstances of the case.
Non-Cooperative Borrowers
A Non-Cooperative Borrower is one
Who does not engage constructively with his lender by defaulting in timely repayment of dues while
having ability to pay,
Thwarting Lenders efforts for recovery of their dues by not providing necessary information sought,
Denying access to assets financed /collateral securities, obstructing sale of securities etc. In effect, a
non-cooperative borrower is a defaulter, who deliberately stone walls legitimate efforts of the
lenders to recover their dues.
In
this connection, RBI advised Banks to take the following measures in classifying
/declassifying a borrower as non-cooperative borrower and reporting information on such borrowers
to Central Repository of Information on Large Credits (CRILC),
The cut off limit for classifying borrowers as non-cooperative would be those borrowers having
aggregate fund-based and non-fund based facilities of Rs 50 million from the bank.
A non-cooperative borrower in case of a company will include, besides the company, its promoters
and directors (excluding independent directors and directors nominated by the Government and the
lending institutions).
In case of business enterprises (other than companies), non-cooperative borrowers would include
persons who are in-charge and responsible for the management of the affairs of the business
enterprise.
This is a prudential measure since the expected losses on exposures to such non-cooperative
borrowers are likely to be higher.
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IRAC NORMS
The reform process initiated by RBI based on the recommendations of Narsimham Committee
has brought about many changes in the Indian Financial System. As a part of the economic
reforms, the norms relating to the capital adequacy, income recognition, assets classification
and provisioning have been further strengthened to match the international standards
NPA DEFINITION
When any asset ceases to generate income for the bank
Loan
Other Accounts
IDENTIFICATION OF NPA
LOAN
A Loan account [term loan/DL] is to be classified as NPA when interest and/or installment of
principal remain overdue for a period of more than 90 days.
For example, a loan account will not be classified as NPA on 31st March 2013, if the interest and
installment on principal have been fully serviced up to 31st December, 2012.
A loan account where the interest has been serviced but the installment has remained unpaid will
also be classified as NPA.
CASH CREDIT / OVERDRAFT
A cash credit or overdraft account is to be classified as NPA when it remains out of order as on
date of Balance Sheet for reasons as given below:
If the outstanding balance remains continuously in excess of the sanctioned limit / drawing power
for 90 days, OR
where the outstanding balance in the principal operating account is less than the sanctioned
limit/drawing power, but there are no credits for 90 days as on the date of Balance Sheet, OR
Credits are not enough to cover the interest debited during the same period;
Example
As on 31.03.2013, if we find that the outstanding balance in a cash credit account has remained
continuously in excess of the sanctioned limit / drawing power during the March 2013 quarter, it
should be classified as NPA.
If as on 31st March 2013, we find that in a cash credit account the outstanding balance in the
account is less than the DP / sanctioned limit and there has been no credit to the account during
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Provided debit balance in account is less than the market / surrender value of the
securities in all above cases.
NPA due to temporary deficiencies in Accounts
In case of cash credit accounts, where the stock statement has not been obtained for a continuous
period of more than three months and the outstanding in the account is based on drawing power
calculated from stock statements which is older than -3- months would bedeemed as irregular.
A working capital borrowal account will become NPA if such irregular drawings are permitted in the
account for a continuous period of -90- days even though the unit may be working or the borrowers
financial position is satisfactory.
An account where the regular/ ad hoc credit limits have not been reviewed/ renewed within 180
days from the due date/ date of ad hoc sanction will be treated as NPA.
Other points on NPA classification
Consortium advances: In case of consortium advances, the account will be classified as NPA by a
member bank depending on the record of recovery in its own books irrespective of the recovery
status with the lead bank or any other member bank.
NPA classification borrower wise and not facility wise: In case any one of the facilities
sanctioned to a borrower is classified as NPA, all other credit facilities availed by him and also the
investments made by the bank in all securities issued by him will also be classified as NPA.
Reversal of income
If any advance, including bills purchased and discounted, becomes NPA, the entire interest
accrued and credited to income account in the past periods, should be reversed if the same is not
realised. This will apply to Government guaranteed accounts also.
In respect of NPAs, fees, commission and similar income that have accrued should cease to
accrue in the current period and should be reversed with respect to past periods, if uncollected.
Upgradation of loan accounts classified as NPAs
If arrears of interest and principal are paid by the borrower in the case of loan accounts
classified as NPAs, the account should no longer be treated as nonperforming and may be
classified as standard accounts.
ASSET CLASSIFICATION
Standard AssetsStandard assets are those, which are regular in payment of interest and Installments due as per
sanction.
Non performing assets:
Banks are required to classify nonperforming assets further into the following three categories
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based on the period for which the asset has remained nonperforming and the realisability of the
dues:
i. Substandard Assets ii. Doubtful Assets iii. Loss Assets
SUB-STANDARD
A sub standard asset is one, which has been classified as an NPA for a period not
exceeding 12 months
DOUBTFUL
A doubtful asset is one which has remained NPA for a period exceeding 12 months.
In case of accounts where there is a significant erosion in the value of security i.e. if the realizable
value of the security is less than 50% of the value of security assessed in the last year by the bank /
RBI inspectors or where the borrower has provided fraudulent security, the account can be straight
away classified as doubtful.
LOSS ASSETS
Assets which are classified as Loss by the Banks Internal/External Auditors or where securities,
personal worth etc. are practically zero or less than 10% of the outstanding amount.
Where the realizable value of the security is less than 10 % of the outstanding of the borrowal
account, the existence of the security should be ignored and the account should straight away be
classified as loss asset
PROVISIONING NORMS:
NPA Category
Sub Standard
Secured portion of
loan outstanding
15% ( General
Provision on O/S )
Unsecured portion of
loan outstanding
25%
25%
40%
100%
100%
100%
100%
100%
100%
Doubtful:
Up to one year
One to three years
More than three
years
Loss assets
However unsecured exposures in respect of Infrastructure Loan accounts classified as substandard, in case of which certain safeguards such as escrow accounts are available will attract an
additional provision of 5% only. i.e a total of 20% as against the existing 25%.
Provisioning Requirement on Standard Assets
Agriculture & SME where it is 0.25%
Commercial Real estate(CRE) 1.00%,
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JMG/S-1
0.50 Lakh
4.00 Lakh
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MMG/S-2
1.00 Lakh
6.00 Lakh
MMG/S-3
6.00 Lakh
10.00 Lakh
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CDR Cell
CDR Core Group is carved out of the CDR Standing Forum to assist the Standing Forum in
convening the meetings and taking decisions relating to policy, on behalf of Standing Forum.
CDR Standing Forum and the CDR Empowered Group are assisted by a CDR Cell in all their
functions. The CDR Cell makes the initial scrutiny of the proposals received from borrowers/lenders,
by calling for proposed rehabilitation plan and other information and puts up the matter before the
CDR Empowered Group, etc. within the ambit of guidelines.
Eligibility:Multiple banking/syndication/consortium
O/s exposure Rs. 10 crore and above with Banks/FIs
Should not be willful defaulter
No fraud
Standard and Sub-Standard Accounts If the accounts is classified as Standard or
Sub-Standard by 90% of the lenders in their books, the same could be treated as Standard or
Sub-Standard to become eligible for CDR
Doubtful Accounts Consent by minimum of 75% of the creditors (by value) and 60% creditors
(by number) for such restructuring is required.
Suit filed cases Consent by minimum of 75% of the creditors (by value) and 60% creditors (by
number) for such restructuring is required.
BIFR cases can also be considered on case to case basis after obtaining approval of BFIR
before implementation of CDR package
Reference to CDR could be triggered by (i) any or more or the secured creditors who have
minimum 20% share in either working capital or term finance or (ii) by the concerned corporate, if
supported by a bank or financial institution having stake as in (i) above.
Legal Basis of CDR
CDR is a not statutory mechanism. it is a voluntary system based on Debtor Creditor Agreement
(DCA) and Inter Creditor Agreement (ICA)
DCA & ICA shall provide legal basis to CDR mechanism
The debtors shall have to accede to DCA, either at the time of original loan documentation or at
the time of reference to CDR Cell.
ICA would be legally binding agreement amongst the Creditors whereby creditors would commit
themselves to abide by the various elements of CDR system
If 75% of creditors by value and 60% by number agree to a restructuring package of an existing
debt the same would be binding on remaining creditors.
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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.
Convergence in the methodology for computation of economic sacrifice among banks and
financial institutions (FIs).
Reserve Banks role limited to providing broad guidelines for CDR mechanism.
Disclosures in the balance sheet to be enhanced for providing greater transparency.
Additional finance requirement by both term lenders and working capital lenders, to be
shared on pro-rata basis.
One time settlement to be allowed as a part of the CDR mechanism to make the exit option
more flexible.
Discount rate for computing present value of Future Cash flow (BCC:BR:107:328 dated
07-07-2015): On review, it has been decided by RBI that a rate equal to the actual interest rate
charged to the borrower before restructuring may be used to discount the future cash flows for the
purpose of determining the diminution in fair value of loans on restructuring. In cases where the
existing credit facilities to a borrower carry different rates of interest the weighted average interest
rate may be used as discounting rate. This discount rate may be used to discount both the prestructuring cash flows as well as post restructuring cash flows. It is also clarified that this instruction
will be applicable to all projects where changes in amortization schedule have been carried out
under the above circular
Lok Adalat
The Lok Adalats are established under the Legal Services Authority Act. It is a loan recovery
redressal mechanism where the banks organize a camp for recovery in one place under the aegis
of Civil Court and DRT as well. A spot settlement of recovery is made after hearing the case of
bank and borrower and the underlying securities. It is the version of a small court set up to settle
the recovery disputes of borrowers. It is a cheap method of enforcing recovery. Lok Adalat can:
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1.
2.
3.
4.
5.
Take evidence.
Call for any Public Documents from any Public office or court.
Advantages of Lok Adalats
There is no court fee involved when fresh disputes are referred to it.
It can take cognizance of any existing suit in the court as well as look into and adjudicate
upon fresh disputes.
6. If no settlement is arrived at, the parties can continue with court proceedings.
7. The decrees by Lok Adalats are as good as a decree passed by civil court and are binding on
the parties.
8. No appeal lies against the decree passed by Lok Adalats as the matters are settled through
negotiation and mutual consent of the parties.
The ceiling amount for coverage under Lok Adalat is Rs. 20 lacs. All NPA accounts, both suit filed
and others, which are in Doubtful and Loss category, can be included for reference to the Lok
Adalats. Cases pertaining to Non-compoundable offence / offences are not taken up by Lok Adalat.
Prudential Write-off (PWO)
Prudential write off is generally resorted to by the bank in respect of following advances accounts
where suits have been filed unless specifically exempted by Corporate Centre, Mumbai.
1. Loss asset with 100 % cover by way of Provision, Interest Suspense, DICGC / ECGC claim
received, amount held in Suit Filed Sundry Deposit account etc.
2. Doubtful 3 categories and is covered by 85 % or more by Provision, Interest Suspense, DICGC /
ECGC claim received, amount held in Suit Filed Sundry Deposit account etc. (except tangible
security available) in the accounts of the bank. A decision on PWO will
always be taken by Corporate Centre, Mumbai.
Prudential Write off of the following accounts should not be done
1. TODs in current account and BOBCARD TODs and adhoc / one time BP/BD.
2. Accounts where frauds have been reported.
3. Quick mortality accounts (NPA within one year of sanction / disbursement)
4. Staff accounts (if any) and staff related / guaranteed accounts.
5. Advances accounts such as Cash Credit, Demand Loan, Term Loan etc. Along with TOD in current
account / SB account, BOBCARD TOD etc. (unless the TOD / BOBCARD TOD is recovered).
Cut Back Arrangement:
1. A borrowers account may have become NPA due to un-serviced interest, L.C. devolvement,
excess allowed to meet statutory dues, wages, insurance premium
etc. Or reduction in drawing power. Any credit coming into the account will be appropriated
completely towards the over-dues.
2.The borrower under such circumstances opens a current account with another bank and
routes all sales proceeds through that account. As a consequence the bank not only fails to
recover its legitimate dues but also faces the problem of erosion of security. Under this
circumstance, the bank can consider allowing operations, on merits, till a revival package is
prepared and sanctioned or an acceptable compromise proposal is submitted by the borrower,
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up to sanctioned amount or outstanding with a suitable cut-back, say, ranging from 5 to 10%
(or more) of the credits in the account to reduce/wipe-out the excess/overdues in the account.
3.Therefore, Branch Managers are allowed to permit operations in such accounts falling under their
Discretionary Lending Power with a cut back arrangements for a period up to 3 months subject to
confirmation of their action by Regional Head/Zonal Head from the date of such cut back
arrangement permitted by them and for further period/ restructuring etc. suitable proposal be
submitted to competent authority.
Criteria for transferring NPA Accounts to ARMB:
Following NPA and write off accounts can be transferred to ARMBs:
a. All NPA accounts invariably suit filled involving Rs.100/- lacs or more.
b. All prudentially/Technically written off accounts wherein amount involved is Rs.100/- lacs or
more.
NPA accounts referred to BIFR/AAIFR shall not be transferred to ARMBs. In case any account is
transferred to ARMB and subsequently the account becomes a BIFR case, the same shall be retransferred by ARMB to the original base branch.
Accounts under nursing programme/rehabilitation/ restructuring also shall not be transferred to
ARMBs
SARFAESI ACT-2002
Consent of Secured Lenders : Either our Bank must be the sole banker to the borrower i.e. 100%
lending is done by us or in case of consortium lending consent of secured lenders representing not
less than 60% of the amount outstanding in value is obtained
Prefer suit filing where documents are getting time barred. To make clear that initiating of
SARFAESI action does not provide limitation to the security documents and suit filing is to be done if
documents are getting time barred and renewal of documents (obtaining LAD) is not possible for
particular account.
When SARFAESI Notice can be given To cover consortium a/cs Wherever we are leader in
consortium, notice must contain dues and details of Secured Assets. For consortium advances
the notice must contain dues of all Banks and details of secured assets charged to Other
Lenders.
When SARFAESI Notice can be given To cover restructured a/cs. Restructuring / CDR is done
for possible revival of the unit and in such accounts recovery action is deferred. After failure of CDR
/ restructuring, recovery action may be initiated under Sarfaesi act
When SARFAESI Notice can be given To cover BIFR accounts Reference made to BIFR by the
Company seeking rehabilitation does not debars Bank from initiating SARFAESI action. How ever
after issuance of notice, BIFR is to be intimated of the same
Incorporate filing of caveat : Bank has right to lodge caveat against the borrowers / guarantors after
initiating action under SARFAESI, where an application or an appeal is expected to be made or has
been made by the borrower / guarantor against the Banks SARFAESI action under the provisions of
SARFAESI Act.
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Validity period of caveat application filed with DRT / Civil Court / High Court is -90-days, as such
Bank has to proceed for taking possession of the secured assets keeping in mind the validity time of
the caveat.
Reply to representation of borrower / guarantor: Bank or raises any objection, the Bank shall reply
the representation within fifteen days positively of receipt of such representation / objection (to
be replied by authorized officer) with the reason for non acceptance of the objection.
Adjudication of tenancy rights of lessee) in SARFAESI Before filing the prescribed afidavit with
DM/CMM seeking permission to take physical possession, AO has to visit the prperty to ascertain
whether it is tenanted or not. This is an important determining fact beause if valid lease is created
before the mortgage in accordance with the requirements ofSection 65A of the Transfer of Property
Act and that the lease has not been deermined in accordance with the provisions of section 111 of
Transfer of Property Act DM/CMM cannot pass an order for delivering possession of the secured
asset to the Secured Creditor.
Banks and financial institution can accept immovable property to settle their claims: Now the banks
are empowered to accept any immovable property in realization of a claim from a defaulted
borrower, as the banks were not able to find appropriate buyers to buy for these secured assets. If
the sale of such asset is postponed due to lack of a bid at the reserve price, the secured creditor
(including banks) may bid for the asset at a subsequent sale and make appropriate adjustments of
the amount due to the Bank. This change enables the banks to secure the asset(s) in part fulfillment
or full and final fulfillment of the defaulted loan. Branches should take prior permission from
controlling offices before bidding for such immovable property.
Conversion of debt into equity: The Act allows for converting any part of debt into
equity shares of a borrower company, and such conversion shall always be deemed as
valid. The change ensures ARCs with more legal protection while restructuring loans
and supporting weak units
Appoint
Recovery / Enforcement Agent
Administrative powers for empanelment of Enforcement Agencies are vested with the
Zones so this aspect is to be ensured at the Zonal level.
Regional Heads may appoint Recovery Agent in NPA accounts in Sub-Standard category
(irrespective of the age) with outstanding upto Rs 25.00 lacs. & Zonal heads up to Rs 100
lacs.
However, Regional Heads may appoint Recovery- Cum- Seizure Agent in case of NPA a/cs
(including Sub-Std a/cs) under Vehicle loan/ Tractor Loan category irrespective of amount
Hand Holding:
Under hand holding operations the small units will be permitted to draw funds from their
cash credit account upto the amount equal to the amount of sale proceeds deposited in
the account. This will facilitate the smooth running of the business.
Once the implementation of rehabilitation package is finalized during the first six months
such hand holding operations are stiupulated/permitted.
SARFAESI Act Sale of Secured Assets with symbolic possession (BCC: BR: 108:74
dated 15-02-2016): Bank has authorized to effect sale of secured assets with symbolic
possession as well, on case to case basis: Authorised officer may consider on selective
basis, sale of secured assets with symbolic possession, after obtaining prior Authority of
the Regional Manager. If sale with symbolic possession is proposed by the Authorised
Officers, the Sale Notice issued by the Bank should contain explicit statement that the
sale/auction is proposed on the basis of Symbolic Possession, on As is where is and
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As is What is Basis, and the buyer should ascertain the status of the statutory dues and
other encumbrances, if any.
SARFAESI Act Sale of secured Assets through Private Treaty (BCC: BR: 108:74 dated
15-02-2016): Bank has restated the procedure to be followed for sale by private treaty
as follow
a) Public auction/inviting tenders should be the preferred mode of sale in all cases
covered under SARFAESI Act
b)As an alternate,sale by Private Treaty may be resorted to only if the attempt/s for sale
of secured assets through Public Auction/Inviting Tenders in the following manner fails:
Value of Secured Asset (as per the latest Number
of
Attempts
Valuation Report of the Approved Valuer) Auction/Inviting Tenders
Upto Rs 1 Crore
Two Times
Above Rs 1 Crores
Three Times
by
Public
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Agency.
For
detailed
Guidelines
refer
to
Constitutional validity of Section 2 (1) (o) of SARFAESI Act, 2002 upheld by Honble
Supreme Court (BCC:BR:107/85 dated 21/02/2015):
Section 2(1)(o) of the SARFAESI Act, which defines Non-Performing Asset (NPA) was amended by
Act 30 of 2004
It has been observed that several borrowers (of our Bank as well) have filed Writ Petitions in various
High Courts challenging the constitutionality of the amended section 2 (1) (o) of the SARFAESI Act,
2002. In this regard, while the Honble High Court of Gujarat has taken a stand that the amended
section 2 (1) (o) is unconstitutional, the Honble High Court of Madras rejected the challenge.
It is the constitutionality of the amended section 2 (1) (o) which was the subject matter of dispute
before the Honble Surpeme Court of India in Re Keshavlal Khemchand & Sons v. Union of India &
Ors., wherein the Honble Supreme Court upheld the constitutionality of the amended section 2 (1)
(o).
All the writ petitions and the appeals are disposed of declaring that the amended definition of the
expression NPA under Section 2(1)(o) of the Act is constitutionally valid In the result, all the writ
petitions either filed before this Court or filed before the Madras and Gujarat High Courts and the
appeals of the borrowers stand dismissed.
The appeals of the CREDITORS are allowed. Each of the writ petitioners/borrowers shall pay costs to
the respective CREDITORS calculated at 1% of the amount outstanding on the date of the notice
under Section 13(2) of the Act in each of the cases.
All the branches are advised to bring to the notice of our panel Advocates the judgment of the
Honble Supreme Court upholding the validity of the amended section 2 (1) (o) of Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Reduction of reserve Price Sale of Secured Assets under SARFAESI Act
(BCC:BR:108:78 dated 16-02-2016):To expedite the recovery process under SARFAESI Act,
2002 and to maximize recovery by describing the procedure for reduction of Reserve Price, Bank has
authorized adoption of the following procedure
1. For movable secured assets the Authorized Officer to obtain the estimated value and fix the
Reserve Price. A Committee consisting of the Authorized Officer and Two officers of the
concerned Branch may fix the Reserve Price.
2. For immovable secured assets the authorized officer to obtain valuation from an Approved
Valuer and fix the Reserve price, based on the Realizable Value. A committee consisting of
authorized officer and two officers may fix the Reserve Price.
3. In respect of Secured Assets, value of which is more than Rs. 5 crore, 2 valuation report
from approved valuers to be obtained and average of 2 valuation to be taken into
consideration to arrive at Reserve Price. In case variation in 2 valuation is more than 25%,
fresh valuation from 3rd Approved valuer to be obtained and Reserve Price to be fixed
accordingly by the below mentioned committee.
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4. If bids are not received at Reserved Price fixed in 1st auction, then the committee headed by
the Regional Manager and consisting of the Deputy Regional Manager, official attached to
Regional Recovery Dept. and authorized officer may reduce the Reserve Price as per table
here:
Number of Auctions
I
II III
Percentage of reduction vis--vis the last auction 10 20 25
Reserve Price
However, the reserve price should not be below the distress value.In case of consortium accounts
where we are the leader/ sale is undertaken by our Bank the Authorized Officer to fix the Reserve
Price in consultation with the Consortium Members
RECOVERIES RECEIVED IN NPA - LOAN ACCOUNTS:
For effecting recovery received in NPA LOAN accounts, Branch should use only the menu
NPATM at the time of recovery.
Further if recovery is received by way of clearing cheque, for direct credit to loan account, then
the proceeds should be first credited to either operative (SB/CA/CC/OD) or GL Intermediary
account and thereafter credited to respective loan account by using NPATM menu.
For NPA CC/OD accounts etc., Branches should continue to use the existing options i,e,TM,
HCASHDEP, HXFER etc. The reversal of unrealized interest if any will be handled through
monthly batch job and Branches need not do any such reversal manually.
Appropriation of Recoveries in NPA accounts.
In respect of existing NPAs where suit is not filed, recoveries effected in the account ( Including
recovery under Pubic Money Recovery Act ) from time to time shall be appropriated in the following
manner.
i)
ii)
iii)
Recovery in suit filed/decreed accounts shall be appropriated first towards legal charges/expenses
awarded by the court, there after interest due and finally principal amount.
Record of Unapplied Interest /charges
Branch shall maintain a record of unapplied interest and other charges at contracted rate and
update the same at periodical intervals.
Insurance Charges, Assets Valuation charges, Stock Audit Charges, Security Charges
etc.
In respect of NPA accounts, which are not operated, the above mentioned charges shall not be
debited to the accounts. The expenses incurred shall be debited to the Banks Profit and Loss
account and record of the same shall be maintained.
Appropriation of Fixed Deposits of NPA Borrowers (free from margin) to the concerned
NPA loan accounts (BCC: BR: 108:68 dated 06-02-2016): Bank has advised to all
branches to appropriate fixed deposits of NPA borrowers (free from margin) to the
concerned NPA Loan accounts.
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Recording follow up status for NPA and PNPA accounts in Finacle:With a view to record
follow up made by field staff for recovery in NPA and PNPA accounts our data centre has provided
the functionally to record follow up actions with menu id RECVFLW.
Write off of unrealized export bills- Compliance of Foreign Exchange Management
Act 1999(BCC: LCB: DFB: 108 / 15 dated 22-02-2016): According to Reserve Bank of India
circular No. A.P. (DIR Series) 88 dated 12.03.2013 and our circular No. BCC: WB: DFB: 105/20
dated 14.03.2013 regarding simplifying and liberalizing the procedure for write-off of unrealized
export bills, the following would not qualify for the write-off facility:
a. Exports made to countries with externalization problem i.e. where the overseas buyer has
deposited the value of export in local currency but the amount has not been allowed to be
repatriated by the central banking authorities of the country.
b. GR/ SDF forms which are under investigation by agencies like Enforcement Directorate,
Directorate of Revenue Intelligence, Central Bureau of Investigation, etc as also the outstanding bills
which are subject matter of civil /criminal suit.
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b)90 days
c) 180 days
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HR Business Model
The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission and
Philosophy and is focused towards attainment of long-term organizational goals.
A very strong Organizational Leadership at different levels forms the key link in the Model. These
are:
The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-System &
Competency Based HRD Sub-System shape the very crucial Performance Environment within the
Bank which facilitates development of enabling capabilities of people.
Through proper developmental inputs, Positive Attitude & Right Mindset is created among people.
Through proper Communication Medium and an Organizational Culture of sharing, openness,
collaboration & confrontation, autonomy etc., people in the organization are facilitated to give their
best output (performance).
The Model is adequately supported by a suitable Learning Platform, which imparts proper
Knowledge and enhances Learning among people (functional, behavioral etc) so that their
Competence increases and their potential could be properly leveraged for greater Individual and
Organizational Effectiveness.
These create proper Employee Motivation, which ultimately facilitates Goal Achievement.
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HR Initiatives
People oriented Deployment, Promotion and selection policies
Bank has formulated and put in place well documented and comprehensive deployment, promotion
and selection policies oriented towards identifying the best talent and providing opportunities for
fast-track growth and development. Some of the prominent HR policies put in place are:
HR Resourcing policy
Promotion policy for officers
Transfer policy for officers
Promotion policies for clerical and subordinate cadre
Overseas selection policy
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Oracle Learning Management Module which includes training administration & e-learning;
Various E-Learning modules are gradually being put on the system for employees to avail of and
undergo these courses.
Employee performance management system
A new Performance Management system has been formulated and implemented for all officers. The
new system enables a holistic approach to the issue of managing performance and does not limit to
only an appraisal. It starts from performance planning and Goal-setting and takes it forward into
performance review discussions, feedback and development. The new system is business-linked,
highly objective and fully transparent, with individuals owning and managing their own performance
themselves.
APAR (Annual Performance Appraisal Review)
In terms of Ministry of Finance, Govt. of India advice, Bank has adopted the revised Annual
Performance Appraisal Report (APAR) for different categories of officers with a view to bring in
uniformity in the performance assessment of officers at various levels in all PSBs, especially with
regard to evaluation of different parameters and marking systems.
Following Annual Performance Appraisal Report (APAR) formats have now been mandated for the
performance assessment of the officers:
1. APAR for officers in S-I to S-VI (Budgetary)
2. APAR for officers in S-I to S-VI (Non-budgetary)
3. APAR for officers in S-VII (General Managers)
APAR envisage a -3-tier system of Review:
Reporting authority (minimum one Scale higher than the Appraisee)
Reviewing Authority (minimum one Scale higher than the Reporting Authority)
Accepting Authority (one grade above the reviewing Authority)
PASAS (Performance Appraisal System for Award Staff)
`Performance Evaluation' and `Performance Recognition' have been the focus of various HR
initiatives taken by the Bank. Keeping in view its importance and criticality to various employee
development initiatives, Bank devised a Performance Appraisal System for Award Staff (PASAS). It is
3 tiered performance appraisal system:
1. Self Appraisal by the individual employee (This is optional)
2. First review by Reviewing Authority (RA)
3. Second and Final Review by Final Reviewing Authority (FRA)
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To
To
To
To
To
To
To
Manpower
Training and development
Incentives to staff
Talent management and
Performance management.
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VOICE OF BARODIANS
Employee Engagement Survey-2016 was launched on 22.02.2016.
Message of MD & CEO on the subject:
As we march forward to realize our aspirations and dreams to take our Bank to further
heights, it is imperative that our team is truly energized and fully engaged. Each member of
the Barodian family makes a difference and plays a unique role in our quest to achieve
business excellence and customer delight.
Towards this endeavor, the Bank seeks to understand your perspective, thoughts, perceptions
and opinions on a wide range of matters that impact you such as Job Role, Rewards,
Recognition, Working Conditions, Performance Appraisal, etc., which will help us, define the
HR transformation journey for the Bank. The Bank has partnered with Aon Hewitt, a global
leader in human resource consulting solutions, for conducting Employee Engagement Survey
2016.
The survey was through online link in HRnes-HRMS under the Employee Self Service.
The survey was for the purpose of identity authentication. Response to the questionnaire was
directly sent to Aon Hewitt with full anonymity and it was assured that responses would
remain completely confidential to feel free to air individuals thoughts. The feedback would be
collated by Aon Hewitt and will be shared with the Banks leadership team on a consolidated
basis.
It was reiterated that the views and feedback are very important as bank strongly believes
that the ideas play a key role in helping strengthening our organization. And also that the
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information obtained from this study will be used to shape the organizations HR policies and
programs going forward.
E-learning course - Code of Conduct for Officers
Baroda NetAcademy launched a course on Code of Conduct for Officers. The course aimed to
familiarize all officers with various guidelines of code of conduct policy for officers of our Bank.
Salient features of the course:
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Salaried Persons:
Maximum age is 70 years. i.e., the age by which the Loan should be fully repaid, subject to
availability of sufficient regular and continuous source of income for servicing the loan
repayment, Provided:
(i) Son/ Daughter/ Spouse who is a legal heir and preferably below 50 years of age, with
sufficient income for servicing the loan repayment joins as coborrower/Guarantor
(OR)
(ii) if borrower pledges FDRs / NSCs / Govt. Security etc. of adequate value to ensure
Continuity of income for repayment of loan installment with interest if sanctioning authority
is satisfied about the same
If not fulfilling the above criteria (i) or (ii), age of the borrower plus repayment period
should not be beyond retirement age.
Maximum age can be considered upto 70 years, also in case of salaried persons drawing
pension, subject to the condition that 40% of the pension is sufficient to pay EMI. In
case EMI exceeds 40% of the pension, the borrower to deposit adequate amount in the
loan account so as to reduce the outstanding amount of loan to the extent it can be
serviced by 40% of the pension.
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Housing Loan to HUF is not to be considered as it is not meant for family business of HUF.
LIMIT:
Maximum Amount of Loan
Rs. 300/- Lacs for Urban & Metro branches
Rs. 100/- Lacs for Rural & Semi-Urban branches
For extension: Rs 10/- Lacs.
Total amount of the loan sanctioned including that for extension should not Exceed Rs 300/Lacs for Urban & Metro branches and Rs100/- Lacs for Rural & Semi-Urban branches.
INCOME CRITERIA:
SOURCE INCOME
Up to Rs. 20,000/=
More than Rs. 20,000/
Salaried
and up to Rs. 1 lac
More than Rs. 1 lac
Other than Salaried Persons
CRITERIA
36 times of monthly gross income
48 times of monthly gross income
54 times of monthly gross income
5 times of average ( last 3 years ) annual
income (Depreciation to be considered for
computing eligibility subject to certain conditions
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REPAYING CAPACITY:
(i)
Up to Rs. 20,000/-
40%
50%
60%
Up to Rs. 2,40,000/
60%
70%
10%
90%
80%
75%
25%
Stamp duty, registration charges, other documentation charges and other expenses like Life
Insurance premium etc. in the cost of house property should not be included to calculate
margin.
However, where cost of the house/ dwelling unit does not exceed Rs.10 Lacs, branches may
add stamp duty, registration and other documentation charges to the cost of the house/
dwelling unit for the purpose of calculating LTV Ratio & margin.
REPAYMENT:
Maximum repayment period is -30- years, including moratorium period
Maximum moratorium shall be -36- months as under:
o
18- months moratorium period for under construction Houses and Building upto 7th
floor, thereafter -6- months additional moratorium per floor subject to maximum of -
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36- months
Or
One month after completion of house/ taking possession of flat/house, whichever is earlier.
RISK RATING:
All Home Loan applications are subject to Risk rating. Credit rating to be done as per Home Loan
Model under Retail Rating Models. Total marks are 168 and the cutoff is set at 96 (Investment
Grade HL-8)
New Home Loan Products
Baroda Home Loan Advantage Scheme:
The scheme will be available to Resident Individuals, NRIs/PIOs and for Home Loan to
Staff under Public scheme.
Facility: Home Loan linked with Savings Bank Account.
The Home Loan sanctioned will be linked with Saving Bank Account.
The rate of interest applicable on this SB account will be Zero
Under the scheme, the borrower shall have the option to deposit all his savings in the
linked SB account to avail maximum benefit of interest in the Home Loan account. Any
credit available in the linked SB a/c at the end of the day will be counted for credit in
linked Home Loan account. Consequently, the borrower will get the benefit of interest
amount reduction in the Home Loan account to the extent of daily outstanding credit
balance in the Savings Bank account.
The branch can verify the interest debited in Home Loan account by taking interest
product sheet anytime after interest application / at the end of the month.
The borrower will remit the Equated Monthly Installments (EMIs) into the linked SB
account.
Recovery of EMI will be made by way of auto recovery from linked SB account only.
Facilities available for linked SB account: Balance in SB account is available for drawal on
demand. Hence, borrower is eligible for Cheque book facility, ATM cum debit card, internet
banking facility, mobile banking facility etc. as per normal Savings Bank rules. Charges for
cheque book, ATM card etc will be as applicable in Savings Bank accounts.
Conversion of Existing Home Loan to Baroda Home Loan Advantage Scheme: New Savings
Bank account will be opened in separate scheme code (even if the borrower is maintaining
another SB account as per normal scheme) and will be linked to existing Home Loan
account. The Home Loan account may continue in the existing scheme code itself. In such
a case, branch needs to link the new SB account to existing home loan account.
Baroda Pre Approved Home Loan provides in-principle approval for a Home Loan
prior to identification of a specific house/flat/plot by a prospective applicant of Home Loan.
It gives the customer greater flexibility in negotiations with builders/sellers.
The in-principle sanction letter for Baroda Pre Approved Home Loan will give eligible loan
amount calculated as per prevailing interest rates and other existing guidelines of Home Loan.
Therefore all the documents in support of income and repayment capacity (except property
documents) to be obtained and duly verified before issuing the Pre Approved Sanction letter.
The in-principle approval shall be valid for -4- months from the date of issue
50% of unified processing charges applicable to regular Home
Loan scheme with a minimum of Rs.2,500/- +ST and a maximum of Rs.10,000/- + ST will be
257 | P a g e
recovered upfront and will be non-refundable (in case of not availing the loan)
Baroda Home Loan Suraksha Personal Loan
Purpose
Exclusively for Home Loan borrowers along with Home Loan for funding the premium amount under
Group Credit Life Insurance cover provided by M/s. IndiaFirst Life Insurance Company Ltd. & M/s.
Kotak Mahindra Old Mutual Life Insurance Company Ltd.
Baroda Home Loan Suraksha Personal Loan will be sanctioned along with Baroda Home Loan. For
existing Home Loan borrowers, loan can be availed separately
Maximum Amount:
Upto the applicable premium amount for Group Credit life insurance cover for the Home Loan
borrower/s and or co-borrower/s provided by M/s. IndiaFirst Life Insurance Company Ltd. &
M/s. Kotak Mahindra Old Mutual Life Insurance Company Ltd.
The maximum amount will be worked out within the overall eligibility of the borrower like
income criteria, repayment capacity etc except margin/LTV on cost of project for Home Loan.
The eligible amount for loan will be the residual portion of eligible amount worked out based
on income criteria, repayment capacity except margin/LTV on cost of project for Home Loan
OR the applicable premium amount for Group Credit life insurance for the borrower/coborrower/s, whichever is lower.
Repayment Period:
New borrowers: Maximum Period up to of the repayment period under Home Loan
sanctioned.
Existing Home Loan borrowers: Residual period of Home Loan sanctioned or of the original
repayment period under Home Loan sanctioned, whichever is lower.
BARODA HOME LOAN TO NRIs /PIOs / Overseas Citizen of India (OCI)
PURPOSE:
ELIGIBILITY:
Non Resident Indians (NRIs) holding Indian passport or Persons of Indian origin (PIOs) holding
foreign passport, singly or jointly.
For this purpose person of Indian Origin means an individual ( not being a citizen of
258 | P a g e
AGE:
Minimum age must be 21 years. However, the minimum age of co-borrower can be 18 years.
Age of the borrower plus repayment period should not be beyond retirement age or 65 years
whichever is earlier.
For determining total cost of the house, the cost of car parking place / area located in the
same building / compound / society can be considered. However, it should be noted that such
car parking area should be specific, identifiable and incorporated in the sale agreement /
allotment letter.
PARTICULARS
MINIMUM MAXIMUM
Rs. 5 lacs
Rs. 1 lac
---
Rs. 50 lacs
INCOME CRITERIA:
The maximum amount of loan should not exceed the following:
In case of salaried persons
Monthly Income
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In case of others viz. professionals / self-employed / business persons etc., -4- times of average
(last two years) annual income.
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Eligibility
All Existing Home Loan Borrowers including NRIs /PIOs, Staff and
Ex-staff Members (availed home loan under public scheme as well as
Staff Housing Loans) whose conduct of the account is good and the
account is classified Standard
There is no adverse feature / Auditor's/Inspecting Officer's
remarks in existing Housing Loan a/c
The facility can also be considered when an account is taken over
from other banks/HFCs
Minimum Rs 1/- Lac
Maximum Rs 200/- Lacs
Or
75% of Residual Value of House Property after deducting 150% of
outstanding loan amount of Existing Home Loan whichever is lower.
25% of Residual Value of House Property after deducting 150% of
outstanding loan amount of Existing Home Loan
As per request of the borrower subject to repayment capacity. However the
maximum period should not be more than the remaining period of Home Loan
Age of borrower + tenure of AAA Loan should not exceed 70 years, in
synchronizing with Home Loan.
Loan Limit
Margin
Repayment
Period
Maximum age
Eligibility
For purchase of New Car / Old Car (not more than 3 Years) for
private use.
For Installation of CNG/LPG Gas kit in four wheelers (New vehicle/
old vehicle not more than 5 years) and owned by individuals
Take over of existing Car Loans from other Banks.
For purchase of Two wheeler
Salaried Employees
Businessmen, Professionals, Farmers,
Directors of Private/Public Ltd Co.
Proprietors of firms, Partners of partnership firms
High Networth Individuals (HNIs): Individuals with minimum salary of
Rs 1.25 Lacs per month and carry home salary should be at least 40%
(inclusive of proposed deductions) OR with annual income of Rs15/Lacs in case of business persons/farmers
Corporates with minimum Tangible Networth of atleast 10 times of
the Loan requested.
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Minimum :
Applicant: 21 Years;
Co-applicant: 18 years
Age
Maximum :
Margin
Repayment
Capacity
262 | P a g e
Rs 1,00,000/>Rs1,00,000/-
Repayment
Coverage of
expenses for
Maximum Loan
Limit
Margin
Repayment
Period
263 | P a g e
Security
Classification
of Advances
Discretionary
Lending Power
No security
In case the loan is given for purchase of computer the same is to
be hypothecated to the Bank.
Priority Sector
DLPs of Clean advance
Target Group
Eligibility
Coverage of
expenses for
Maximum
Loan Limit
Margin
.
Maximum Rs 10 Lac
Up to Rs 4 Lac NIL
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Rate of Interest
Moratorium
period
Repayment
Period
Security
Classification
of Advances
Above Rs 4 Lac 5%
Up to Rs.7.50 Lacs : Base Rate + 2.50 % p.a.
Course period + 1 year, or 6 months after getting job, whichever is earlier.
The loan is repayable in maximum 10 15 years after the above period as
under:
For loans upto Rs.7.50 lac : Maximum -120- installments
For Loans above Rs.7.50 lac : Maximum -180- installments
If the student is not able to complete the course within the scheduled
time,
extension of time for completion of course may be permitted for a
maximum
period of 2 years. If the student is not able to complete the course for
reasons beyond his control, sanctioning authority may at his discretion
consider such extensions as may be deemed necessary to complete the
course.
In case of above extension, moratorium period will stand extended
accordingly.
Up to Rs. 4.00 Lacs: Co-obligation of parent. No Security.
Above Rs. 4.00 Lacs and up to Rs. 7.50 lacs:
Collateral in the form of a suitable third party guarantee along with
assignment of future income.
Above Rs.7.5 lacs :
Tangible collateral security equal to 100% of the loan amount along with
assignment of future income of the student for payment of installments.
Priority Sector (Upto Rs. 10.00 Lacs)
Discretionary For Loans upto Rs.7.50 Lacs, where no tangible securities are available,
Lending
DLPs of Clean advance
Power
BARODA EDUCATION LOAN - (iii) BARODA SCHOLAR
Target Group
Eligibility
Coverage of
expenses for
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Maximum Loan
Limit
Margin
Moratorium
period
Repayment
Period
266 | P a g e
Security
Classification
of Advances
Discretionary
Lending Power
Freebies
Loans to individuals for educational purposes including vocational courses upto Rs.
10 lakh irrespective of the sanctioned amount will be considered as eligible for
priority sector.
For Loans upto Rs.7.50 Lacs, where no tangible securities are available, DLPs
of Clean advance
Drafts in foreign currencies drawn on our branches / subsidiaries required in
favour of college/University /Student will be issued free of exchange /
commission.
VIDYALAKSHMI
Bank has launched the facility of online submission of Education Loan applications
by Students, integrated with the 'VIDYALAKSHMI' portal hosted by the Government
of India through NSDL.
Vidya Lakshmi Portal provides single window for Students to access information and
make application for Educational Loans provided by Banks and Govt Scholarships. It
has the following features:
i. Information about Educational Loan Schemes of Banks.
ii. Common Educational Loan Application Form for Students.
iii. Apply to multiple Banks for Educational Loans.
iv. Facility for Banks to download Students Loan Applications.
v. Facility for Banks to upload loan processing status.
vi. Facility for Students to email grievances/queries relating to Educational Loans
to Banks.
267 | P a g e
vii. Linkage to National Scholarship Portal for information and application for
Govt. Scholarships.
Eligibility
Limit
268 | P a g e
Margin
269 | P a g e
Period
Repayment
Commitment
charge
Security
0.50% p.a. for utilization of limits below 75% (on quarterly average Basis) of
sanctioned limit in case the Limit sanctioned is Rs.500 lacs and above
Tangible collateral securities in the form of Equitable mortgage of:
Residential House/Flat or Commercial property)Building/Land and
Building)
OR
Plot of land (not agricultural land) allotted/purchased from any
Development/Government authority subject to margin of 50% of
Realizable Market value of security.
(The allotment/ sale of plot/land by such development/ Govt. authorities
should not contain any clause stipulating fixed time limit for construction
of house/commercial building)
270 | P a g e
Credit Rating
Take over
Norms
Other
Provisions
271 | P a g e
Security
Period
market value set aside for sanctioning of regular Baroda Traders Limit),
whichever is lower.
Extension of equitable mortgage of property/ies mortgaged
12 Months - to be allowed on 3 occasions in a year for a maximum period of 2
months on each occasion. However, there should be gap of 1 month between
two drawls
Eligibility
Age
Type of Facility
Limit
272 | P a g e
Margin
Personal
Guarantee
Repayment
Period
Valuation of
Property
In case of Overdrafts:
Minimum annual turnover in the account should be at least 25% of the
limit.
Wherever it is observed at the time of review that stipulation of
annual turnover is not complied with, the limit should be reduced
annually as under:
Maximum period of overdraft: 10 years.
Reduction in operative limit proportionately by end of each year,
synchronizing with review of the account.
Alternatively it may be explored the possibility of converting the
overdraft facility into term loan and fix EMI for recovery of the
balance amount.
In case of properties acquired within last -3- years, amount of registered
sale deed should be taken as value of property.
273 | P a g e
Lending Powers
(In such cases fresh valuation may be dispensed with if the sanctioning
authority is satisfied with registered value).
Sanctioning authorities upto Grade/Scale III are authorized to
sanction Facilities upto Rs. 25.00 Lacs only.
Sanctioning authorities in Grade/Scale IV and above are authorized
to exercise their normal DLPs for sanction.
Activity
Clearance
obtained from Regional Heads for facilities upto Rs.3 Crores and for
facilities beyond Rs.3 Crores Zonal Heads are authorized to grant
Activity clearance.
Retail Loan Factories have been kept out of purview of activity
clearance.
Baroda
Premium
Personal Loan
(New Personal Loan Scheme for Salaried Employees w.e.f. 01.11.2013.)
Purpose
For any purpose other than speculation
Eligible
Borrowers
Account
Relationship
Age
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CHECK OFF
(Stipulations
for Category A
& Category B)
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account with the SI/Auto Recovery being synchronized with the date of
credit of salary in the borrowers Savings/Current Account
(AND)
(b) Undertaking from the employer to inform the Bank if and
when there is a transfer or severance due to borrowers resignation,
retirement, death
etc.
(AND)
(c) Undertaking from the employer to obtain a NOC from the Bank
before
settling the dues of the borrower on resignation, retirement, death
etc.
CATEGORY- B (without Check Off)
Satisfying
(OR)
Minimum Net
Monthly
Income
(NMI)
Loan Amount
stipulations
I
II as per below:
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Repayment
Period
Credit Rating
lower.
For Category- B:
Rs 5.00 Lacs or 24 times of Net Monthly Income (NMI) whichever is lower.
Maximum -84- months in Equated Monthly Installments
Clean Loan Model should be used. Cut off score is 30 and Investment
Grade is CL7 & above.
Eligible Amount
Loan
for
consumer
5 times of GMI
Durable/PC/Lapto
p
or Max Rs 1 Lac
Whichever is
lower
Personal Loan
6 times of
GMI Max Rs 2
Lac
Pension Loan
18 times of
(Regular)
monthly pension
Max Rs 8 Lac
Loan to Doctors
Min Rs 50,000
Max: R/SU Rs
15 lac
(of which
working
capital
Rs 1 Lac)
U/Metro Rs 50
Lac
(of which
Margin
Repayment
For Consumer
60 EMI
Durable 10%
For PC/Laptop
25%
36 EMI
60 EMI
Upto Rs 5 Lac
25%
Above Rs 5 Lac
15% of cost of
Loan 60
EMI
project
Working capital Nil
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working capital
Rs 3 Lac)
Baroda Ashray
(For Senior
citizens, Age 60
yrs. Joint
borrower spouse
not below 55 yrs
Loan Against
Future Rent
receivable
(Non Commercial
real Estate)
60% of rent
due(Net of
TDS, advance
rent, SD) &
receivable
subject to min
Rs 25 lac
For Landlord
of Bank of
Baroda
Premises: No
Min Limit
Max Rs 200 Cr
(Single)
Rs 250 cr
(group)
CRE- 55% of
Loan Against
Future Rent
rent (net of
20% on Present
market value
Loan to be
repaid
in
Equated
Monthly
Instalments
(EMI) with a
maximum
period of 10
years
or
unexpired
certain lease
period and
uncertain
period of lease
(optional
period
of
maximum next
10
years)
whichever
is
less.
Repayment to
commence one
month
after
disbursement.
The
maximum
rental period
(including
the
certain
and optional
period)
should be 10
years.
receivable
( Commercial real
Estate)
TDS, advance
rent, security
deposit), due
and receivable,
for the
unexpired
certain period
of lease and
uncertain
period of lease
(optional period)
Max Rs 200 Cr
(Single)
Rs 250 cr (group)