Proj Npa

CHAPTER -1 INTRODUCTION TO BANKING INDUSTRY
BANK OF BARODA Page 1
BANKS India cannot have a healthy economy without a sound and effective banking system. The banking system should be hassle free and able to meet the new challenges posed by technology and other factors, both internal and external. In the past three decades, India's banking system has earned several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to metropolises or cities in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main aspects of India's growth story. The government's regulation policy for banks has paid rich dividends with the nationalization of 14 major private banks in 1969. Banking today has become convenient and instant, with the account holder not having to wait for hours at the bank counter for getting a draft or for withdrawing money from his account. History of Banking in India The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases: Early phase of Indian banks, from 1786 to 1969 Nationalization of banks and the banking sector reforms, from 1969 to 1991
New phase of Indian banking system, with the reforms after 1991
Phase i The first bank in India, the General Bank of India, was set up in 1786 Bank of Hindustan and Bengal Bank followed. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840), and Bank of Madras (1843) as independent units and called them Presidency banks Allahabad Bank was established, exclusively by Indians, in 1865. Punjab National Bank was set up in 1894 with headquarters in Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. The Reserve Bank of India came in 1935. Phase 2 The government took major initiatives in banking sector reforms after Independence. In 1955, it nationalized the Imperial Bank of India and started offering extensive banking facilities, especially in rural and semiurban areas. The government constituted the State Bank of India to act as the principal agent of the RBI and to handle banking transactions of the Union government and state governments all over the country. Seven banks owned by the Princely states were nationalized in 1959 and they became subsidiaries of the State Bank of India. In 1969, 14 commercial banks in the country were nationalized. In the second phase of banking sector reforms, seven more banks were nationalized in 1980. With this, 80 percent of the banking sector in India came under the government ownership.
Phase 3 This phase has introduced many more products and facilities in the banking sector as part of the reforms process. In 1991, under the chairmanship of M Narasimham, a committee was set up, which worked for the liberalization of banking practices. Now, the country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking are introduced. The entire system became more convenient and swift. Time is given importance in all money transactions.
Nationalization Process 1955: Nationalization of State Bank of India 1959: Nationalization of SBI subsidiaries

1969: Nationalization of 14 major banks 1980: Nationalization of seven banks with deposits over Rs 200 crore
Functions of the Reserve Bank of India The Reserve Bank of India Act of 1934 entrusts all the important functions of a central bank with the Reserve Bank of India. Bank of Issue: Under Section 22 of the Act, the Bank has the sole right to issue currency notes of all denominations. The distribution of one-rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the government. Banker to the Government: The second important function of the RBI is to act as the governments banker, agent, and adviser. Bankers' Bank and Lender of the Last Resort: The RBI acts as the bankers' bank. Since commercial banks can always expect the RBI to come to their help in times of banking crisis, the RBI becomes not only the banker's bank but also the lender of the last resort. Controller of Credit: The RBI is the controller of credit, i.e., it has the power to influence the volume of credit created by banks in India. It can do so through changing the Bank rate or through open market operations. Custodian of Foreign Reserves: The RBI has the responsibility to maintain the official rate of exchange. Besides maintaining the rate of exchange of the rupee, the RBI has to act as the custodian of India's reserve of international currencies. Supervisory Functions: In addition to its traditional central banking functions, the RBI has certain non-monetary functions of the nature of supervision of banks and promotion of sound banking in India. The
Reserve Bank Act, 1934, and the Banking Regulation Act, 1949, have given the RBI wide powers of supervision and control over commercial and co-operative banks, relating to licensing and establishments, branch expansion, liquidity of their assets, management and methods of working, amalgamation, reconstruction, and liquidation.
Banking Activities Retail banking, dealing directly with individuals and small businesses Business banking, providing services to mid-market businesses

Corporate banking, directed at large business entities Private banking, providing wealth management services to high networth individuals Investment banking, activities in the financial markets, such as "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities like mergers and acquisitions Merchant banking is the private equity activity of investment banks Financial services, global financial institutions that engage in multiple activities such as banking and insurance
A bank is an financial institution whose primary motive is to act as payment agent for its customers & to borrow & lend money. 1st bank was founded in Italy in 1406 namely Bank of St. George Main functions of bank 1) Accepting deposits 2) Lending money (Loan) 3) Transfer money 4) Keep valuables in safe custody 5) Government businesses
Types of Bank A) Public Bank Public sector banks are those in which the majority stake is held by the Government of India(GoI). Public sector banks together make up the largest category in the Indian banking system.There are currently 27 public sector banks in India. Some public banks in India are :
Central bank Dena Bank Bank of India Indian Overseas Bank Punjab & Sindh Bank B) Private Banks Some private banks in India are: ICICI Bank IDBI Bank IDBI Bank Axis Bank
C) C-operative Banks Some co-operative banks in India Sardar Bhiladwalla Pardi Peoples Co-operative Bank Bank of Ahmadabad D) Foreign Banks Some foreign banks in India HSBC CITI Standard Charted E) Regional Rural Banks
RESERVE BANK OF INDIA (Central & Supreme Authority)
SCHEDULED BANK
COMMERCIAL BANK FOREIGN BANKS PUBLIC BANKS
Banking Structure in India

REGIONAL RURAL BANKS PRIVATE BANKS
CO-OPERATIVE BANK
URBAN COOPERATI VE
STATE COOPERATI VE
STATE BANK OTHER OF INDIA & NATIONALIS ASSOCIATES ED BANKS BANK OF BARODA Page 10 OLD BANKS NEW BANKS
CHAPTER-2 COMPANY PROFILE
BANK OF BARODA
Bank of Baroda was found by Sayajirao Gaekwad III(11 March 1863 6 February 1939), Maharaja of Baroda State (1875-1939). Maharaja Sayajirao Gaekwad, had a vision that a bank like BANK OF BARODA will prove a beneficial agency for lending, transmission, and deposit of money and will be a powerful factor in the development of art, industries and commerce of the country
VISION STATEMENT
It has been a long & eventful journey of almost a century across 25 countries. Starting in 19082 from a small building in vadodra to its new hirise & hi-tech Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise, financial prudence & corporate governance .It is a story scripted in corporate wisdom and social pride. It is a story crafted in private capital, princely patronage and state ownership. It is a story of ordinary bankers and their extraordinary contribution in the ascent of Bank of Baroda to the formidable heights of corporate glory. It is a story that needs to be shared with all those millions of people customers, stakeholders, employees & the public at large - who in ample measure, have contributed to the making of an institution.
MISSION STATEMENT
To be a top ranking National Bank of International Standards committed to augmenting stake holders' value through concern, care and competence.
Bank Of Baroda(BoB) is a nationalized bank having headquarters at Vadodra. Its total global business was Rs. 8,021 billion as of 31 mar 2013, making it the second largest Bank in India after State Bank of India Milestones Of Bank Of Baroda(BoB) 19081959 First branch was established in Ahmadabad In 1953, established a branch each in Mombasa(Kenya) and Kampala(Uganda)
In 1956, a branch at Dar-es-Salaam In 1957, branch at London In 1959, took over Hind Bank 1960s In 1961, merged in New Citizen Bank of India In 1962, opened a branch in Mauritius In 1963, acquired Surat Banking Corporation in Surat, Gujarat In 1964, acquired two banks: Umbergaon Peoples Bank in southern Gujarat and Tamil Nadu Central Bank in Tamil Nadu In 1965, branch in Guyana In 1965, lost one of its branches due to Indo-Pak War in Narayanganj(East Pakistan) 1970s In 1972, opened branches at Abu Dhabi & Dubai In 1975, acquired majority of shares at Bariely Corporation Bank In 1976, opened a branch at New York
1980s In 1980, opened a branch at Sydney(Australia) In 1988, acquired Traders Bank

1990s In 1990, BoB opened an OBU in Mauritius, but closed its representative office in Sydney In 1991, took over the London branches of Union Bank of India and Punjab & Sind Bank In 1996, BoB entered the capital market in December with an Initial Public Offering (IPO) In 1997, opened a branch in Durban
2000s
In 2000, established BoB (Botswana). In 2002, acquired Benares State Bank (BSB) at the Reserve Bank of Indias request. BSB was established in 1946 but traced its origins back to 1871 and its function as the treasury office of the Benares state. In 1964, BSB had acquired Bareilly Bank (est. 1934), with seven branches; it also had taken over Lucknow Bank in 1968. The acquisition of BSB brought BoB 105 new branches. In 2002, BoB (Uganda) was listed on the Uganda Securities Exchange (USE). In 2005, BoB built a Global Data Centre (DC) in Mumbai for running its centralised banking solution (CBS) and other applications in more than 1,900 branches across India and 20 other counties where the bank operates. BoB also opened a representative office in Thailand. In 2006, BoB established an Offshrore Banking Unit (OBU) in Singapore. In 2007, In its centenary year, BoBs total business crossed 2.09 trillion (short scale), its branches crossed 2000, and its global customer base 29 million people.
In 2008, BoB opened a branch in Guangzhou, China, Harrow United Kingdom. BoB opened a joint venture life insurance company with Andhra Bank and Legal and General (UK) called India First Life Insurance Company.
2010s Malaysia awarded a commercial banking licence to a locally incorporated bank to be jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra Bank BoB also opened a branch in New Zealand BoB opened an Electronic Banking Service Unit (EBSU) at Hamriya Free Zone, Sharjah
LOGO OF BANK OF BARODA New logo of Bank Of Baroda is a unique representation of a universal symbol. It comprises dual B letterforms that hold the rays of the rising sun. We call it 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 they touch. At Bank of Baroda, we seek to be the source that will help all our stakeholders realise 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-colour, compelling vermillion palette has been carefully chosen, for its distinctiveness because saffron color shows the hope and energy. We also recognize that our bank is characterised 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 stakeholders.
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.
NUMBER OF BRANCHES
AREA Metro Urban Semi-Urban Rural Total Foreign Total
No. Of Branches 922 772 1171 1469 4333 93 4426
FINANCIAL INDICATORS
Key Business Indicators Total Deposits Total advances Total Investments Total Assets Net Profit Net NPA to Net Advances Net Interest Margin Business Per Employee
2012 384871.11 287377.29 83209.4 447321.47 5006.96 0.54 2.97 1466
2011 305439.45 228676.33 71260.63 35839.78 4241.68 0.35 3.12 1229
Technology @ Bank of Baroda The number of ATMs at overseas territories and subsidiaries increased to 76 (45 onsite and 31 offsite) as on 31st March, 2012 from 68 (42 onsite and 26 offsite) as on 31st March, 2011. The Global Treasury Solution is implemented by your Bank at UK, UAE, Bahamas, Bahrain, Hong Kong, Singapore and Belgium. The Centralized SWIFT activity is operating from the Data Centre of your Bank. All Territories/Subsidiaries except UK and USA are routing their Swift operations through SWIFT Cell, Data Centre.
The Payment Messaging System implemented is a middleware between Core Banking Solution (Finacle) and SWIFT, which help in Straight Through Processing of Incoming and Outgoing SWIFT Messages with Anti Money Laundering check. It is implemented in all Territories/Subsidiaries, except in UK and USA. The Anti Money laundering Erase (Batch mode) is implemented in all the overseas centres of your Bank except in Belgium and USA. An Anti Money Laundering Online List Matching Solution is also implemented in all the overseas centres with the exception of USA.EBanking in Overseas Operations .Bank is gradually implementing and popularizing the e-banking services at its overseas centres.Transaction based e-banking has been implemented in UAE,UK, Mauritius, Fiji, Seychelles, Uganda, Kenya, Botswana and New Zealand. It is in the process of being implemented in Oman and Tanzania. (At present, a view based e-banking is available at both these centres).In T&T, Guyana and South Africa, it will be introduced in thenext phase which will start shortly.The transaction based e-banking is being implementedgradually at the Overseas Centres looking to their retail base and the cost effectiveness.
CHAPTER -3 CORPORATE SOCIAL RESPONSIBILITY BY BANK OF BARODA
CORPORATE SOCIAL RESPONSIBILITY BY BANK OF BARODA As a responsible corporate citizen, it has been the vision of the Bank to empower the community through socio-economic development of underprivileged and weaker sections. In its continued efforts to make a difference to the society at large, your Bank intensified its efforts further in this direction in FY13. Bank has established Baroda Swarozgar Vikas Sansthan (Baroda R-SETI) for imparting training to unemployed youth, free of cost for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to various regional economies within these locations. All the Lead Districts of your Bank have R-SETI each. About 46 such Sansthans have been established by your Bank in which more than 1, 22,000 youth have been trained and around 75,000 have been gainfully self employed. Bank has established 52 Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural mass on
various financial and banking services and to speed up the process of financial inclusion, your Bank has also established 21 Financial Literacy and Credit counseling Centres (FLCC)during FY12 making the total number of FLCCs to 39. E-BUSINESS Your Banks e-business department provides different types of Alternate Delivery Channels (ADC) such as ATMs, Internet Banking (Baroda Connect), RTGS/NEFT, Phone Banking, Internet Payment Gateway (IPG) etc. In addition to this, the e-banking department of your Bank looks after Depository Services, Cash Management Services & Sale of Gold Coins. This year, the Bank successfully launched Contact Centers from Lucknow & Baroda, mobile banking and pre-paid gift card etc. Given below is the performance of various segments under the e-Business activity, during FY13.
SC/ST Cell An exclusive SC/ST Cell in your Bank has been set up to monitor the reservation and other enabling provisions for SC/ST employees. An executive in the rank of General Manager is appointed as Chief Liaison Officer for SC/ST employees who ensures compliance of various guidelines pertaining to the SC/ST employees. A Liaison Officer for SC/ST has been appointed in each Zone of the Bank who takes care of all matters and grievance redressal of SC/ST employees of that Zone. Meeting with SC/ST Welfare Association With a view to have direct dialogue and review of reservation and other special provisions for SC and ST, your Bank holds quarterly meetings with
the representatives of SC/ST Welfare Association of the Bank. Your Banks Chairman and Managing Director and Senior Executives including the Chief Liaison Officer for SC/ST participate in the meeting. Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust Your Bank has established the Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust in 1991 for promoting welfare activities for the benefit of SC/ST employees and their family members. Apart from scholarships to children of employees belonging to SC/ST, the Trust also provides scholarship to needy students belonging to SC/ST community, in general, in major centres of the country. Visit of National Commission for Scheduled Castes The National Commission for Scheduled Castes visited your Bank at various places during the year viz. at Ahmedabad (09.09.2011), Rajkot (16.09.2011), Surat (08.10.2011),
Anand (09.11.2011), Bulsar (11.11.2011), Jamnagar (23.12.2011), Bharuch (05.12.2011), Udaipur (29.12.2011), Mehsana (27.01.2012), Godhra (17.03.2012), Kolkata (21.02.2012) and Jodhpur (29.03.2012) to review the implementation of the reservation policy of the Government of India for SCs in your Bank, had discussions and interactions and examined the level of mplementation of the policies and programmes. It may be noted that the Suggestions and guidance of the Commission are being scrupulously observed by the Bank.
CHAPTER-4 HUMAN RESOURCE AT BANK OF BARODA
The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission and
Philosophy and is focused towards attainment of long-term organizational goals. A very strong Organizational Leadership at different levels forms the key link in the Model. These are; Strategic Leadership - Corporate level Business Leadership - Zonal & Regional level Operational Leadership - Business unit level i.e. branch The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-System &Competency Based HRD SubSystem 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 properKnowledge and enhances Learning among people (functional, behavioural etc) so that their Competence increases and their potential could be properly leveraged for greaterIndividual and Organizational Effectiveness. These create proper Employee Motivation, which ultimately facilitates Goal Achievement.
Recruitment 2012-13
Banks HR Function has focused on hiring efforts on a sustained basis to bridge the gap created by superannuation and to cater to the Banks consistent business growth and branch expansion Banks Proposed New Hiring in FY13: 3,400 { 2,280 joined up to 30th Sept, 2012} Probationary Officers: 600 { 403 joined up to 30/09/12} Specialist Officers: 150 { 25 joined up to 30/09/12} Baroda Manipal Trainees: 400 { 169 joined up to 30/09/12} Campus Recruitment: 250 { 220 joined up to 30/09/12} Clerks: 2,000 { 1,463 joined up to 30/09/12}
Bank carried out a three-month long residential programme involving massive skills upgradation for its new recruits during FY13 with a focus on development of key banking skills covering the major areas like credit, forex operations, soft skills, etc. Other path-breaking initiatives in Employee Development & HR are Baroda Next: A comprehensive leadership development training covering almost 1,500 leaders {all branch heads of urban/metro branches & AGMs/DGMs in the Bank Project Sparsh: A transformational HR project focusing on talent management, succession planning, creation of a scientific staffing model & manpower planning, capability building & performance management. Baroda-Manipal School of Banking: An innovative & new channel of resourcing of trained manpower in the Bank. Around 180 students are being inducted in this school every quarter for
a focused grooming and a one-year full-time PG Course in Banking that is tailored to the Banks specific requirements.
CHAPTER-5
PRODUCTS & SERVICES BY BANK OF BARODA
Products By Branches in India The banking services at the 11 International Business Branches (IBB), 3 Non Resident Indian Branches, 151 Authorised Branches as well as more than 3870 other branches are provided for the benefit of Indian customers, corporations, NRI's, Overseas Corporate Bodies, Foreign Companies/ Individuals as well as Foreign Banks etc Services that target these groups include: 1. NRI Services 2. Foreign Currency Loans in India (FCNR 'B' Loans) 3. Export Finance / Services 4. Import Finance / services 5. Correspondence Banking Services in India 6. All General Banking Services 7. Treasury Services
By Branches outside India The international banking services of Bank of Baroda at its overseas branches are provided for the benefit of its Indian customers, local customers, NRI's, subsidiaries and joint ventures of Indian corporations operating out of India, foreign entities, multinational corporations, banks as well as customers around the globe.
Services that target these groups include: 1. All general Banking Services including Corporate/ Retail lending 2. NRI Services 3. Foreign currency credits to the Indian corporations 4. Arranging/ participating in the Syndicated loans of Indian corporations as well as rated multinational corporations. 5. Correspondent Banking services to the Indian Banks/ corporations 6. Trade Finance (Bills Discounting) 7. International Treasury Services 8. NRI Services 9. Foreign Currency Loans in India (FCNR 'B' Loans) 10. 11. 12. 13. Export Finance / Services Import Finance / services Correspondence Banking Services in India All General Banking Services
14.
Treasury Services
The cross border foreign currency lending to Indian corporate, trade finance and treasury services are provided at the money center branches. General banking services are provided at all the branches/ subsidiaries/ joint ventures.
Facilites at Bank of Baroda Lockers
Bank of Baroda has adopted the various guidelines issued by Reserve Bank of India in connection with allotment of Safe Deposit Lockers allowing access to the nominees / survivors / legal representatives in the event of the death of the Locker Hirer/s and Depositor/s of Safe Custody articles. Allotment & Operations of Locker: i. The lockers will be allotted on first come first served basis to the customers only. A waiting list register is maintained by the branches for the purpose. At the time of hiring the locker, bank will obtain a Fixed Deposit under bank's lien which would cover 3 years rent and the charges for breaking open the locker in case of an eventuality. The hirer of the locker will be provided the copy of the agreement i.e. 'Memorandum of Letting' by the bank. Loss of key should be immediately informed to the Branch. With standing instruction, the rent may be paid from the deposit account of the hirer on due date.
ii.
iii. iv. v.
Where the lockers have remained un-operated for more than three years for medium risk category or one year for a higher risk category, the bank
may ask the Renter/Lessee to either operate the locker/give valid reason for not operating the same or surrender the locker even though the rent is paid regularly. In case the Renter/Lessee does not respond nor operate the locker, the bank would have the right to cancel the allotment of the locker and may consider break opening the lockers after giving due notice to the Renter/Lessee.
Access to the survivor(s) / Nominee(s) / Legal Heir(s) A. With Survivor/Nominee clause: i. If the sole locker hirer nominates a person, bank will give to such nominee access of the locker and liberty to remove the contents of the locker in the event of the death of the sole locker hirer. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given over to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause, bank will follow the mandate in the event of the death of one or more of the locker-hirers. The similar procedure will be followed for return of articles placed in the safe custody to the survivor/ nominee. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates person(s), in the event of death of any of the locker hirers, the bank may give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s). The claimants will have to establish their identity and submit documentary proof in respect of death of the locker hirer. In such cases, the Bank will not insist on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the Survivor(s) / Nominee(s).
ii.
iii. iv.
v. vi.
vii. viii.
There should not be any order from a competent court restraining the bank from giving access to the locker of the deceased. In case of Locker/ Safe Custody with nomination/survivorship clause the bank will demand only following papers:
o o o
Copy of Death certificate (duly certified from original) Duly filled in claim application in the prescribed form No.352. Stamped receipt for discharged safe custody receipt/Locker
ix.
The access given to the survivor(s) / nominee(s), subject to the applicable conditions, would constitute a full discharge of the bank's liability and the bank will not insist on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the Survivor(s) / Nominee(s).
B. Without Survivor/Nominee clause : i. In case where the deceased locker hirer/ depositor of the articles under safe custody had not made any nomination or clear survivorship clause, the access may be provided to the legal representative of the deceased based on Succession Certificate or Probate of a WILL or Letter of Administration. In such cases the bank will give access to their legal heir(s) / legal representative on the basis of following documents:
o o o
ii.
Copy of Death certificate (duly certified from original) Duly filled in claim form together with surety letter Legal representation i.e. succession certificate or letter of administration or Probate of Will. Stamped receipt for discharged safe custody/Locker receipt.
iii.
However, in case the contents of the locker are not of great value, the Bank may at its discretion allow the heirs of the deceased to see the contents of the locker after fulfilling certain conditions and thereafter access to the locker may be allowed if the Bank deem fit so.
C. General Guidelines : The Renter/Lessee and depositor of safe custody articles are advised that access to locker / safe custody articles may be given to survivor(s) / nominee(s) only as a trustee of the legal heirs of the deceased locker hirer/depositor of safe custody articles on the condition that such access if given to survivor(s) / nominee(s) shall not affect the right or claim which any person may have against the survivor(s) / nominee(s) to whom the access is given. D. Breaking Open of Lockers: The Bank may break open the lockers within a period of six months from the date rent became overdue and by sending due notices as per prescribed format. However, in respect of High Risk and Medium Risk customers, procedure will be followed as per point No. 1(iv) above.
PROCEDURE OF SANCTIONING A LOAN
CHAPTER-6 RESEARCH METHODOLOGY
Objectives of the Study The main objectives of my study are as follows: To know the\ NPA of the bank Comparison of NPAs of different banks
METHODOLOGY OF THE STUDY

1) Primary Data Collection This data is collected by the face to face interaction with the bank manager Mr. Jha and other staff members of the bank.
2) Secondary Data Collection This datais the secondhand data collected from the data provided by the bank like Domestic Recovery Policy booklet, annual reports of the bank.
CHAPTER-7
NON PERFORMING ASSETS
INTRODUCTION TO NON-PERFORMING ASSETS (NPA) NPA is a classification used by financial institutions that refer to loans that are in risk of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset. Non-performing assets are problematic for financial institutions since they depend on interest payments for income. With a view to moving towards international best practices and to ensure greater transparency, it has been decided to adopt the 90 days overdue norm for identification of NPA, from the year ending March 31, 2004. Factors contributing to NPAs: According to a recent study conducted by the RBI, the underlying reasons for NPAs in India can be classified into two heads, namely:
1. Internal Factors 2. External Factors
Internal Factors: Diversion of funds for expansion/diversification/modernisation or for taking up new projects Diversion of funds for assisting or promoting associate concerns Time or cost overrun during the project implementation stage Business failures due to product failure, failure in marketing, etc Inefficiency in management External Factors: a. Recession in the economy as a whole b. Input or power shortage c. Price escalation of inputs d. Exchange rate fluctuation
e. Accidents & natural calamities f. Changes in government policies relating to excise & import duties, pollution control orders, etc g. Government loan waiver scheme h. Poor monitoring of credits & the failure to recognise early warning signals shown by standard assets i. Promoters over-optimism in setting up large projects j. Sudden crashing of capital markets & the failure to raise adequate funds k. Granting of loans to certain sectors on the basis of the Governments directives rather than commercial imperatives l. Mismatch of funding i.e. using loans granted for short term for long term transactions m. High leveraging & high cost of borrowing n. Commitment of wilful defaults sensing that the legal recourse available to collect debts is very slow
Early Warning Signals The Early Warning Signals (EWS) are those that clearly indicate or show some signs of credit deterioration in the loan account. They indicate the potential problems involved in the accounts so that remedial action can be initiated immediately. In fact most banks have Early Warning Systems for identification of potential NPAs.
a. Frequent request for further loans b. Delays in servicing of interest

c. Reduction of operations in the account or reduction in bank balances d. Opening of accounts with other banks e. Dishonouring of cheques or return of bills sent for collection f. Not routing sales transactions through the account g. Delays in submitting stock statements & other data or nonsubmission of periodical statements h. Frequent excesses in the account
ASSET CLASSIFICATION
ASSET CLASSIFICATION
STANDAR D ASSETS
SUBSTANDARD ASSETS
DOUBTFUL ASSETS
LOSS ASSETS
A) STANDARD ASSET
Standard assets are those, which are regular in payment of interest and installments due as per sanction. They are normally treated as accounts without any problems. This accounts are monitored to ensure the compliance of all the terms and conditions specified in the sanction.
B) SUB-STANDARD ASSETS
With effect from 31st March 2005, a sub-standard asset is the one which has remained NPA for a period less than or equal to 12 months. All the recovery measures are relevant in substandard assets also. If the entire dues are recovered by way of such cash recovery, the account is upgraded to standard category immediately.
C) DOUBTFULASSETS
With the effect from 31st March2005, an asset is considered doubtful if it remained in substandard category for 12 months.
D) LOSS ASSETS
A loss asset is one where loss has been identified by the bank or internal or external auditors or in the RBI inspection but the amount has not been written off wholly.
APPLICATION OF NPA NORMS FOR DIFFERENT KIND OF ACCOUNTS EFFECTIVE FROM 31ST MARCH, 2004
TERM LOANS If a customer wants to buy a house or a vehicle or a machinery. This is one time expense, so loan is provided in lump sum amount in advance for 3-5 years and sometimes even more. The installments are paid monthly, quarterly or yearly depending upon the loan agreement. The term loan account becomes a Non-Performing account if interest or installment remains over due for period more then 90 days.
CASH CREDIT OR OVERDRAFT ACCOUNT In this type of accounts frequent debit or credits are done. The outstanding balance in the account will not exceed the sanction limit or the drawing power derived on the basis of the value of security offered for such advance. Cash credit accounts are generally for working capital requirement. A drawing limit is sanctioned on the basis of the value of outstanding stocks or book debts. Money can be withdrawn from the account up to limit based on the underlying value of stocks/book debts minus stipulated margin. Recovery from sale and book debts realization is created in the account and the account runs into debit/credit.
BILLS DISCOUNT/BILL PURCHASED
Credit facility against outstanding bills. Materials are bought and are to be sold within 30-90 days. If the buyer will pay after 30-90 days but the seller needs money immediately for operation. In such case he will request the bank to discount the bill and pay him immediately. Bank will charge interest for the period till the bank payment is received. The cash credit or overdraft account will be treated as NPA account if it remains out of order for a period more than 90 days. An account is considered out of order if the outstanding balance remains continuously in excess of the sanctioned limit /drawing power, but there is no credit continuously for 90 days or credits are not enough to cover the interest debited during the same period.
WARNING SIGNALS OF NPA
Outstanding balance in account remains for a long period of time. Failure to make timely payments of installment or interest of the term loan Non-submission or undue delay in submission or submitting wrong stock of statement Decline in production figures Fall in profit & sales
WAYS TO REDUCE NPAs
1. Compromise settlement
2. Rescheduling 3. Rephasement 4. Restructured
COMPROMISE /SETTLEMENT
A compromise is an agreement reached by mutual consent, a negotiated settlement with or without sacrificing components of the either of the parties. Compromise is a non-legal remedy for reducing NPA of the bank. Normally bank would like to recover the entire dues with unapplied interest at contractual rates and costs the full, without any sacrifice. However, there are some instances when the bank may consider wavier of part interest and/or legal charges and agree to settle the account by receiving a little lesser amount
The difference between total actual dues and the dues received is called sacrifice. This sacrifice is to be borne by the bank.
When to compromise?
i. ii.
When the borrower is willing to settle the dues in a full lump sum and the sacrifice for the bank is minimum. When the branch of the bank feels that the time consumed & cost required recovering the cost through the process of filling suit and executing the decree will be more than the likely recovery to be effected. When the borrowed unit is suffering from chronic problems of production, sales etc and it becomes impossible for the firm to carry out such operations. When there is no security available or realization of the same is difficult or unit is closed and there are no assets for execution of decree and the borrower/guarantor is willing to settle the dues out of the court.
iii.
iv.
RESCHEDULING
Changing the pattern of debt service obligation, from equated monthly installment to descending schedule without considering any enhancement in repayment period and quantum of outstanding.
Retaining the existing repayment period Not exceeding the existing outstanding exposure Without changing the nature and quantum of existing credit facility
REPHASEMENT
Rephasement is rescheduling with enhancing the repayement period only. In the genuine case of retail loans granted to the individuals, the rephasement can be considered by Regional Authority after satisfying the genuineness of rephasement provision repayment period shall not exceed 60 years of the age of the borrower in case of salaried borrowers and 65 for others.
RESTRUCTING
In restructuring following may be considered: Changing existing repayment period Changing existing outstanding exposure Changing the nature and quantum of existing credit facility Sanctioning any fresh credit facility or additional limit whether within the existing outstanding exposure or beyond
VARIOUS STEPS TO REDUCE NPA

Study the problem of NPA branch wise and amount wise. Prepare loan recovery policies and strategies Create recovery cells Identify critical recovery cell Fix the target of recovery and draw time based action plans Select proper technique for solving problems of each NPA Monitor implementation of time based action plan Take possession of the secured assets of the borrower including the right to transfer lease Take corrective steps when ever found necessary while implementing the action plan and make changes in the original plan if required
MONITORING AND FOLLOW UP MEASURES With the Income Recognition and Asset Classification Norms becoming stricter, Branches are required to be more alert and proactive in monitoring the accounts. For this purpose, monthly interest application has become a useful tool to tackle potential delinquencies or defaults in standard accounts. To retain the asset quality, Branches should promptly act and : Recover the overdues or at least the critical amount through active follow up with borrowers; Put the accounts under holding on operations in case of temporary cash flow mismatches; Reschedule the repayment terms as per expected cash flows; Restructure the dues in keeping with the expected cash flows and gaps in cash flows, if any as per guidelines given in the restructuring policy.
Any one or more of the above actions should be taken before the account becomes NPA
Measures for follow up of Watch Category Accounts / NPA Accounts The various means of monitoring/resolving NPAs generally available to the Banks are listed below :A) Before the account becoming NPA (Watch Category A/c) 1. Close monitoring for compliance of sanction terms to maintain asset quality. 2. Reminders to be sent promptly whenever irregularities are observed.
3. To recover overdues quickly to ensure account does not slip to NPA category 4. Periodic inspection of the unit and charged assets along with analysis of financial data. 5. To restructure the dues before accounts become NPAs. Remedial action includes
enhancement of moratorium period, funding of interest, deferment of installments. Such rescheduling /restructuring/ rehabilitation to be done under Banks Restructuring Policy / BIFR approved scheme / CDR Mechanism.
B) After the account becoming NPA following measures to be initiated for recovering Banks dues. 1. Appropriation of liquid securities (TDR, NSC, shares, margin money etc.) and pledged goods, to reduce outstanding balance 2. 3. Disposal of other securities, with the co-operation of borrowers. Restructuring under Banks policy, CDR, BIFR etc., for viable units
4. Compromise settlement of dues through negotiation under Banks Recovery Policy and special RBI OTS Schemes (in force from time to time) 5. 6. 7. Forum of Lok Adalat and Recovery Camps Recalling the advance Initiating action under SRFAESI Act against charged securities
8. Filing suit in Court / DRT (Debt Recovery Tribunal) Execution of decree 9. 10. Sale of financial assets to ARCs Sale of financial assets to Banks
11. Lastly, after all the chances of recovery of dues are exhausted, we may resort to writing off of the balance dues All these means have to be effectively pursued for resolution of NPAs.
Appointment of Nominee Director: As an effective measure for closely monitoring the NPA accounts where Bank of Indias exposure is substantial or where they are the sole bankers (or in consortium where they have substantial share), they may appoint Nominee Director in consultation with the borrower company. Recommendations for appointing Nominee Director shall be submitted by the Zonal Office for approval at Head Office. A committee of 3 General Managers shall process the requirement and after their clearance, the same shall be submitted to Executive Director and Chairman & Managing Director for approval. The Nominee Director shall be an official of the Bank, not below the rank of Assistant General Manager, who is conversant with the affairs of the company. The appointments (and also changes due to transfer/retirement of officials) shall be subject to annual review.
CHAPTER -8 ANALYSIS & INTERPRETATION
AMOUNT OF GROSS NPA (AMOUNT IN CRORES)
YEAR 2012 2011 2010 2009 2008
GROSS NPA 4464.75 3152.5 2400.69 1842.92 1981.36
Gross NPA of BoB is rising from time to time. In the year of 2009 is came down but again it is rising from the year 2010. Gross NPA = Substandard Assets + Doubtful Assets + Loss Assets Since NPA is increasing it shows either of this three is increasing day by day.
NET NPA (Amount in crores)
YEAR 2008 2009 2010 2011 2012
AMOUNT 451.16 602.32 790.88 543.64 419.02
Standard Assets
2008 2009 2010

105690.14 143001.94 174736.43
2011 2012
228173.03 286542.53
Standard assets are those account whose repayment is done on time and which are not liability for the bank and they are the source of income for the bank. As they receive payment from the borrower at the end of the loan period. This shows that the bank has sound recovery policy
DOUBTFUL ASSETS
Year 2008 2009 2010 2011 2012
Amount 887.65 832.32 743.23 1336.64 1318.71
Doubtful assets are those which remain as NPA for more then 24 months and if the bank can recover it. BoBs doubtful assets increased in 2011 and reduced in 2012 with compared to 2011, this shows that the bank is developing good recovery policy.
SUBSTANDARD ASSETS
YEAR 2008 2009 2010 2011 2012
AMOUNT 727.61 665.26 894.83 1097.23 2661.82
Sub-standard assets are those which remain NPA for more than 24 months, but the bank has chances to recover them in the nearby future.
The sub-standard assets of the bank is rising continuously from the year 2009, which shows the bank should be more careful while lending the loans, and banks should take the required steps for restructuring the time period of loan so that maybe the longer period for repayment of loan will allow the lenders to pay the amount quickly.
LOSS ASSETS
YEAR 2008 2009 2010 2011 2012
AMOUNT 366.12 345.34 762.64 718.63 484.22
Loss Assets are falling in the year 2012 with compare to year 2011 which shows that the bank has recovered much of its NPA. Loss assets are those which are not recovered ever by the bank from the borrower and the cost is to be ultimately paid by the bank. This does not create an income for the bank but are just liability for the bank. Fall in this loss assets shows that bank has made some good recovery policies which are allowing the bank to recover loan amount from its customers.
COMPARIOSION OF BoB WITH OTHER BANKS (Axis, Standard Charted & IDBI)
SUBSTANDARD ASSETS
Axis Sub-standard 643.57 assets
IDBI 1595.18
BoB 894.83
Standard Charted 833.11
IDBI bank shows the maximum substandard assets which shows that the bank needs to be careful while lending loans to the borrowers.
DOUBTFUL ASSETS Bank Baroda 1318.71 Of Axis Bank 628.17 IDBI 1186.31 Standard Charted 6.411
This graph clearly shows that Standard Charted Bank has the lowest Doubtful assets and Bank of Baroda has the highest Doubtful assets.
LOSS ASSETS
Bank of Baroda Axis Bank 484.22 1070.94
IDBI 103.24
This graph shows that the Standard Charted bank has lowest loss assets and Axis bank has the highest loss assets. The Standard Charted bank being a foreign bank its recovery policy and rules and regulations may vary from the rules of the Indian banks this could be the major reason of having the least Loss assets
GROSS NPA
Bank of Baroda 4464.75
Axis Bank 2393.32
IDBI 2784.73
Bank of Baroda is showing the highest gross assets (Substandard assets+ doubtful assets + loss assets). Whereas Axis bank shows the least NPA.
NET NPA
Bank Of Baroda 419.02
Axis Bank 704.13
IDBI 1677.91
IDBI bank shows the least NET NPA whereas IDBI shows the highest NPA,
FINDINGS
The gross NPA of the bank is increasing from last 3 years The bank should try to find out which class of people are not able to repay the loan that whether the group of people belon to business class, or personal loan or some loans at agricultural section etc. And therefore be careful while lending loans to such section of society. The bank has not taken major steps to reduce NPA as it is not decreasing from the previous years. The bank could overcome high NPA situation because their NPA are not stagnant. Though the recovery has delayed the flow Banks standard assets should increase
CONCLUSION
The above analysis has concluded that the bank has immense potential in the activites performed and if it starts concentrating more professionally on its NPA problem then it can automatically increase its profit and channelize these profits in other activities
RECOMMENDATIONS
The bank should establish appropriate internal systems to eliminate the tendency to delay/postponed the identification of NPA Strict actions against the defaulters Bank has to take required precautions while lending the loans to the borrowers of the bank Recovery cells for all the branches which are facing the problems of NPA NPA is a major tool to analyze the profitability of the bank therefore the bank has to reduce its NPA to show better financial position to its stakeholders.
BIBLIOGRAPHY
Credit Risk and NPA management, Issued by RBI Handbook issued by RBI Annual Reports of the bank Domestic Recovery Policy(2012), Bank of Baroda

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CHAPTER -1 INTRODUCTION TO BANKING INDUSTRY

BANK OF BARODA Page 1

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RESERVE BANK OF INDIA (Central & Supreme Authority)

COMMERCIAL BANK FOREIGN BANKS PUBLIC BANKS

Banking Structure in India

CHAPTER-2 COMPANY PROFILE

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1980s In 1980, opened a branch at Sydney(Australia) In 1988, acquired Traders Bank

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AREA Metro Urban Semi-Urban Rural Total Foreign Total

No. Of Branches 922 772 1171 1469 4333 93 4426

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2012 384871.11 287377.29 83209.4 447321.47 5006.96 0.54 2.97 1466

2011 305439.45 228676.33 71260.63 35839.78 4241.68 0.35 3.12 1229

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CHAPTER -3 CORPORATE SOCIAL RESPONSIBILITY BY BANK OF BARODA

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CHAPTER-4 HUMAN RESOURCE AT BANK OF BARODA

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PRODUCTS & SERVICES BY BANK OF BARODA

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Facilites at Bank of Baroda Lockers

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PROCEDURE OF SANCTIONING A LOAN

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CHAPTER-6 RESEARCH METHODOLOGY

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METHODOLOGY OF THE STUDY

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NON PERFORMING ASSETS

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1. Internal Factors 2. External Factors

a. Frequent request for further loans b. Delays in servicing of interest

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BILLS DISCOUNT/BILL PURCHASED

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WARNING SIGNALS OF NPA

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WAYS TO REDUCE NPAs

2. Rescheduling 3. Rephasement 4. Restructured

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