Study MaterialA Reference Book for Promotion Exercise Compilation by Baroda Apex Academy Bank of Baroda Ahmedabad (for internal circulation only) INDEX Sl. No. Subject Page No. 1 AWARENESS ABOUT OUR BANK 1 2 EMERGING TRENDS IN BANKING 21 3 LEGAL & STATUTORY PROVISIONS 33 4 RETAIL BANKING & THIRD PARTY PRODUCTS 42 5 ROLE OF TECHNOLOGY IN BANK 56 6 RURAL/AGRI. BANKING 80 7 MSME BANKING 120 8 WHOLESALE BANKING 137 9 NRI DEPOSITS, REMITTANCES FACILITIES for RESIDENTS, DFB & TREASURY OPERATIONS 187 10 RISK MANAGEMENT 213 11 CREDIT MONITORING, RECOVERY & NPA MANAGEMENT 221 12 HUMAN RESOURCE MANAGEMENT 245 13 RETAIL ASSET PRODUCTS: AT A GLANCE 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. AWARENESS ABOUT THE BANK Quick Bites Bank of Baroda was established on 20th July, 1908 at Baroda by ruler of erstwhile Baroda State, His Excellency Maharaja Sayajirao Gaekwad-III Ten banks have since been merged with BOB Logo, the ‗Baroda Sun‘ reflects our corporate brand identity Founder Bank of Baroda made a humble beginning on 20th July 1908 as ―Bank of Baroda Limited‖ founded by the Ruler of erstwhile Baroda State, His Excellency Maharaja Sayajirao Gaekwad-III. Mission Statement To be a top ranking National bank of International Standards committed to augmenting stake holder’s value through concern, care and competence. A saga of vision and enterprise It has been a long and eventful journey of almost a century across 25 countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate Centre in Mumbai is a saga of vision, enterprise, financial prudence and corporate governance. It is a story scripted in corporate wisdom and social pride. It is a story crafted in private capital, princely patronage and state ownership. It is a story of ordinary bankers and their extraordinary contribution in the ascent of Bank of Baroda to the formidable heights of corporate glory. It is a story that needs to be shared with all those millions of people - customers, stakeholders, employees & the public at large who in ample measure, have contributed to the making of an institution. 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 helping others grow, and growing itself in turn. The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a bank of this nature will prove a beneficial agency for lending, transmission, and deposit of money and will be a powerful factor in the development of art, industries and commerce of the State and adjoining territories." Ethics Between 1913 and 1917, as many as 87 banks failed in India. Bank of Baroda survived the crisis, mainly due to its honest and prudent leadership. This financial integrity, business prudence, caution and an abiding care and concern for the hard earned savings of hard working people, were to become the central philosophy around which business decisions would be effected. This cardinal philosophy was over years of its existence, to become its biggest asset. It ensured that the Bank survived the Great War years. It ensured survival during the Great Depression. Even while big names were dragged into the Stock Market scam and the Capital Market scam, the Bank of Baroda continued its triumphant march along the best ethical practices. Initiatives Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking sector. Bank is amongst first in the industry to complete an all-inclusive rebranding exercise wherein various novel customer centric initiatives were undertaken along with the change of logo. The initiatives include setting up of specialized NRI Branches, Gen-Next Branches and Retail Loan Factories/ SME Loan Factories with an assembly line approach of processing loans 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 Bank‗s processes, structures and systems with an objective to simplify processes, improve branch productivity and provide best in-class service to the customers. The most important initiatives planned under this project include: Conversion of all metro and urban branches into modern centers known as Baroda Next branches. Creation of Automated and Leaner Back Offices like City Back Office (for automated cheque processing etc), Regional Back Office (for faster account opening etc), Establishment of two Call 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 Hong Kong. gave the Bank competitive advantage. electronic (TV / Radio). C-26. viz. Bank also participated in various events such as FICCI-IBA Banking Conference 2014. Bank has a wide network of ATMs across the country and has also launched mobile ATMs. IL&FS BKC Run 2015 and Standard Chartered Mumbai Marathon 2015. In order to augment the Brand connect with its diverse stakeholders. Payment Messaging System with Anti Money Laundering check. India . UAE. Mumbai 400051 4|Page . Kenya. Oman. managerial and leadership skills. a View based e-banking facility was made available in Fiji. Baroda Connect and other facilities such as online payment of direct and indirect taxes. Pravasi Bhartiya Diwas 2015. overseas business and sponsored Regional Rural Banks are on the Core Banking Solution (CBS) platform. World Ranking Snooker Tournament – Indian Leg.West Indies & India. Singapore and Belgium. overseas and subsidiary operations. 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. Baroda 390005 Corporate Centre Bank Of Baroda Baroda Corporate Centre. Block G. State Government taxes. Bank has been providing to its customers Internet Banking. Corporate Offices & Head Office Head Office Suraj Plaza 1. Bahamas. utility bills. All Branches. digital and out of home (OOH) to support the below-the-line (BTL) activities undertaken at the Zonal / Regional level. Bandra Kurla Complex. Bank has implemented the Global Treasury Solution in its key territories like UK. Marketing initiatives involved effective utilization of different media vehicles such as print.. donation to temples and institutional fee payment. Dun & Bradstreet Indian Exporters Excellence Awards 2015. Bandra (East). online shopping.support line functionaries and complementing the technical competencies of its people by imparting conceptual. Anti Money laundering Compliance and Online List Matching solution. MINT Annual Banking Conclave 2015. Botswana. UAE. Extension Counters. New Technology Platform Bank has made substantial progress in its end-to-end business and IT strategy project covering the Bank‘s domestic. Tanzania and UK. New Zealand. Plot No. Sayaji Ganj. rail tickets. where everyone prospered. People initiatives were blended with IR initiatives to create an effectively harmonious workplace. Mauritius and Seychelles. Bahrain. Bank has taken various technological initiatives in overseas operations such as implementation of Centralized SWIFT activity through Data Centre in Mumbai.Sri Lanka Cricket Series 2014. While Bank implemented Transaction-based Internet Banking facility for its customers in Uganda. SMAASH Entertainment Zone among many others events thereby increasing visibility and Brand recall value. (Kenya) Ltd. BOB Capital Markets Ltd.02. (Ghana) Ltd.Branch Network (as of 29. (New Zealand) Ltd (Tanzania) Ltd (Trinidad & Tobago) Ltd. 5|Page .2016) Area No. 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. 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 Subsidiaries & Joint Ventures Domestic Overseas Subsidiary Subsidiary BOBCARDS Ltd. Nainital Bank Ltd. (Uganda) Ltd. (Guyana) Ltd. 48 (as on 31. State Level Bankers Committee (SLBC) Convenorship Rajasthan Uttar Pradesh Banks Lead Districts .2015) State No. Bank of Baroda (Thailand) Associate Associate Baroda Baroda Baroda Baroda Indo-Zambia Bank Ltd. Rajasthan Gramin Bank.V. India International Bank Malaysia Berhad. Uttar Pradesh Gramin Bank. (Lusaka).Joint Venture Company (J. Pioneer Asset Management Company Ltd.03.) Representative Offices India First Life Insurance Company Limited M/s India Infradebt Ltd. Gujarat Gramin Bank. of Lead Districts Gujarat 14 Uttar Pradesh 15 Uttaranchal Rajasthan 2 12 Madhya Pradesh 2 Bihar 2 Delhi 1 6|Page . Mr Prem Kumar Makkar Director 8. R. Narayanaswamy Director 9. Dr.Banks merged with Bank of Baroda As many as 10 banks have been merged with Bank of Baroda during its journey so far: Hind Bank Ltd (1958) New Citizen Bank of India Ltd (1961) Surat Banking Corporation (1963) Tamil Nadu Central Bank (1964) Umbergaon People Bank (1964) Traders Bank Limited (1988) Bareilly Corporation Bank Ltd (1998) Benares State Bank Ltd (2002) South Gujarat Local Area Bank Ltd (2004) Memon Cooperative Bank Limited (2011) Board of Directors The constitution of the Board of Directors is as follows: 1. Mr Bhuwanchandra B Joshi Executive Director 4. Mr P S Jayakumar Managing Director & CEO 3. Mr Ravi Venkatesan Chairman 2. Mr Mayank K. Ms Surekha Marandi Director 7. Ms Usha A Narayanan Director Bank‟s Administrative and Functional Set Up Indian Operations 7|Page . Mehta Executive Director 5. Mr Mohammad Mustafa Director 6. Mr Bharatkumar Dhirubhai Dangar Director 10. 8|Page . 4. 2. 3. This is a change programme which seeks to create the ‗Baroda Next‘. Our Bank has partnered with well known consultants M/s Mckinsey & Company to take this project forward. It is centered on our customers and our employees. NAVNIRMAAN is a comprehensive change programme that seeks to rebuild the Bank for the future. ‗NAVNIRMAAN‘ has two main components: Business Process Re-engineering (BPR) and Organisational Restructuring (OR). structures and systems with an objective to simplify processes improve branch productivity and provide best-in-class service to our customers. Baroda Corporate Office (BCC) Mumbai Zonal Offices Regional Offices Branches (Metro/ Urban/ Semi-Urban/ Rural) Project NAVNIRMAAN: A comprehensive transformation programme called ―Project NAVNIRMAAN was launched by our Bank for its domestic operations on 22 June 2009. This change programme shall touch all aspects of the Bank‘s processes. 5. the brand promise that we are making to our customers at large.1. Head Office. Business Process Re-engineering has following objectives: Improvement in branch productivity. CRM data entry. Changes in customer account details. Account closure. Payment Processing Centre –City Back Office More automation is proposed to be carried out at the existing City Back Offices so that productivity of processing of cheques can be enhanced. 2. Credit Processing Centres – SMELF /URLF As part of business segmentation and to expedite our delivery mechanism. Personalised cheque book issuance. Bank has established -55SME Loan Factories and -66. Reduction in operating costs. renewal and printing of term deposits. Account Opening and Maintenance Lean Service Factory.2015 This will accomplish following activities: Account opening and enrichment – Savings and Current Account. To accomplish above objectives. Generation of debit card request file & i-track number file for internet banking. 9|Page . 3.2015. 4.Retail Loan Factories which work on assembly line principal as on 31.12. Business Intelligence Unit –Data Warehouse Business Intelligence Unit will undertake following activities: Generation of all MIS from CBS and ASCROM.Regional Back Office There are 13 Regional Back Office as on 31. Sustainability of change programme through capability building. Account opening. different types of Back Offices have been proposed: 1. Organizational Restructuring has following objectives: Appropriate organization structure and systems to support BPR and in line with future business plans.12. Redesign of front and back office processes and roles to reduce turnaround time and to simplify processes. Best-in-class service levels for customer delight. Printing of customer statements and other intimations. The Branch is offering following liabilities and assets products to the customers: 1. Gen-Next Lifestyle (Term Loan . Regions. Gen-Next Junior (Saving Account) Target group Minimum amount & balance Non-maintenance of minimum QAB : Children upto 18 years of age : Quarterly Average balance (QAB) Rs 500/: Charges Rs 50/. Communication of MIS to Branches. There are 9 Baroda Gen-Next Branches as on 31. Amount: 5 times of net take home monthly salary subject to: Min Rs 50.12.2015 The branch will have youth specific products and will function as a model for fusion of ―Hi-tech and High-touch Banking. Gen-Next Branches To respond to the needs of the changing demographic profile of the country.Combo Pack) Maximum Loan Amount (Rs 8. the bank has been endeavouring to customize delivery channels especially for youth segment. Contact Centre Bank has set up two Contact Centres in Lucknow & Baroda to fast address the customer queries & grievances. Zones and Corporate office. The prime purpose was to highlight the spirit of the Bank as a vibrant and energetic organization complementing the Logo. Subject to maximum of: Furniture & Fixture / New Consumer Durables : Rs 2 lac New Vehicle (Four Wheeler) : Rs 6 lac New Vehicle (Two Wheeler) : Rs 1 lac Old Four Wheeler (Not more than 3 years old) : Rs 4 lac New modern gadget/s : Rs 1 lac 3. 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 service timing has been increased to 6 am to 10 pm (from earlier 8 am to 8 pm) for better customer convenience. As a part of these efforts. Analysis of MIS. 5.000/- 10 | P a g e .00 lac). the bank has set up innovative ―Gen.Next branches dedicated to youth and young IT professionals at certain places.+ST per quarter 2. Gen-Next Power (OD Facility) This is a special Savings Deposit product having an in built feature of overdraft facility. This facility is known as Non Stop Banking Chillr Mobile App In continuation of endeavour to provide simple and smart solutions to customers. internet banking and phone banking. Currently our Bank and HDFC bank are partner banks. 93 and 2. Baroda Academy Implementation of BPR and OR will require learning of new skill sets for the employees. pass book printing. Application enables customers to send money to any registered Chillr user on phone contact list.2015 Roll out of enterprise-wide Sales Accountability Model – Sales Operating Mode e-Lobbies: Total independent e-Lobbies as on 31. 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. Non-partner bank customers can only receive funds. To train the employees on new desired skills. Ahmedabad has been converted into Baroda Academy Major technology Initiatives: Baroda Rewardz – Bank‘s Loyalty Program 11 | P a g e .2015 is 230. entire training system of the Bank under the aegis of Baroda Apex Academy. Bank has tied up with Chillr to launch ―Chillr Mobile app‖. Bank of Baroda customers can send and receive money instantly to registered Chillr users added in customer‘s phonebook.300 branches. Only the mobile number of the beneficiary in the remitter's phonebook is needed. Using the Chillr app. Customers can send money through Chillr mobile app to both partner and non-partner bank customers. respectively.12.12. These lobbies operate 24X7 providing facilities for cash withdrawal. Mid Corporate Vertical: Separate Mid-corporate vertical has been created and 17 Mid-corporate branches have been opened as on 31. cheque deposit. cash deposit. 1. Online Loan Application – Educational Loan. in obtaining credit facilities from bank / other financial institution and to assist them in setting up their venture successfully. Baroda Grameen Paramarsh Kendras The bank has established Baroda Grameen Paramarsh Kendras where following activities are carried out: Financial Education and Financial Inclusion Information sharing and problem solving on technical issues Credit counseling Synergy and liaison with other organizations and development activities 12 | P a g e . To provide counseling and consultancy guidance with all possible help to the youth in the field of Self Employment and Rural Development. 3.RuPay Platinum & MasterCard Platinum Chip Debit Card Baroda MUDRA Card Baroda Flash N Move+ Contactless Debit Card EMV Chip Debit card Baroda Travel Easy Card Baroda Non-Stop – 24x7 banking Corporate Social Responsibility: Bank of Baroda has been in the forefront for social commitment with its innovative approaches and products viz. Baroda Grameen Paramarsh Kendras 3. To train youth to develop the attitude for working in rural areas. in self employment as far as possible. Financial Literacy and Credit Counseling Centres (FLCC) 1. 2. Home Loan. To train youth and impart them the knowledge and skill for taking up self employment ventures. 2. Baroda Swarojgar Vikas Sansthan 2. To conduct various training programmes (either independent or in-collaboration with other organization connected with rural technology.) 5. To assist trained youth. Car Loan Balance enquiry through Miss Call Introduction of m-passbook New app m-connect Baroda connect – online registration New Debit Cards . 4. Baroda Swarojgar Vikas Sansthan Baroda Swarojgar Vikas Sansthans have been set up with following purpose: 1. in rural development projects. rural development and entrepreneurship development. National Insurance Company Limited Mediclaim Insurance Baroda Health ASBA Application Supported by Blocked Account Mutual Fund UTI Mutual Fund Birla Sunlife Mutual Fund Reliance Mutual Fund - 13 | P a g e . Mutual Funds. The centre opened is christened as ―SAARTHEE‖ amply indicating its basic objective of steering those under financial distress and educating to others to avoid financial mess.02.2016. Ltd. e-Trading etc.Code of Conduct for Officers aimed to familiarize all officers with various guidelines of code of conduct policy for officers of our Bank. E-learning course . Mutual Fund.3. 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. Insurance IndiaFirst Life Insurance Co. Bank‟s HR Initiatives VOICE OF BARODIANS: Employee Engagement Survey-2016 was launched on 22. first-hour‖ productive model. etc. Online trading account etc are offered to the customers through various tie-up partners. Wealth Management Services Bank as part of customer centric measure initiated Wealth Management Services for our HNI and affluent customers. apart from the regular banking activities which includes Life Insurance. under tie up arrangement with various partners. NonLife Insurance. Baroda Manipal School of Banking: The Baroda Manipal School of Banking is a unique association of Bank of Baroda and Manipal Global Education to train students for a banking career in Bank of Baroda on a ―first-day. a complete financial solution at one stop. Financial Literacy and Credit Counseling Centres (FLCC): Bank has opened Financial Literacy and Credit Counseling Centres as a CSR initiative. and thereby have a ready pool of trained Officers. Under Wealth Management Services currently we are offering 3rd party products in Bancassurance. Health Insurance. 71 9.68 Net NPA 1. In crore) Parameter 31-03-2015 31-12-2015 Total Global Business 1045625 973959 Total Global Deposit 617560 589687 Total Global Advances 428065 384272 Net Profit 3398 (3342) Gross NPA (%) 3.Trade Baroda e-Trading Audited Financial Results for the Quarter/Year ended 31st December.33 12.60 12.10.91 CAR (Basel II) 13.90 % (wef.49 -1.31 1. 05.2015) Base Rate: 9.2015) Shower of Awards & Accolades on Bank of Baroda 14 | P a g e . 05.Sundaram Mutual Fund Franklin Templeton Investments Baroda Pioneer Asset Management Co.18 Global NIM (%) 2. 2015 (Rs.89 5.95 CAR(Basel iii) 12.72 Bank's present BPLR 13.10.67 ROAA 0.65% (wef. Kotak Mahindra Mutual Fund IDFC Mutual Fund e-Broking Baroda e . Champion of Champions Award at the 54th annual ABCI Awards 2015. Best Bank .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. on Hindi Diwas 2014. Skoch Order of Merit in India‘s Best 2014Financial Inclusion & Deepening Awards 2014. E . Excellence in Banking (PSU Sector) at the 5th My FM Stars of the Industry Awards recently held in Mumbai on 30. The Government of India awarded Bank with the 1st Prize in the Indira Gandhi Rajbhasha Shield Competition in Region ‗B‘.learning Initiatives. First Runner up in ―Best Use of Data‖.Earnings Focus Business Strategies and Action Points: 1. RACE ahead stands for: R. Further. for 6 Categories. Exhibition Collateral – Gold. First Runner up in Training & Human Resources. Wall Calendar 2014 – Silver. 3 Awards at the IBA Banking Technology Awards 2014 – 15. Environmental Communication – Silver. E-Zine – Bronze. Resource Deployment 15 | P a g e .Indian Language Publication – Bronze. the motto of previous year ―Race Ahead‖ is retained for current year also with addition – ―Good to Great‖. The Most Efficient Public Sector Bank‘ for the year 2014 by Dalal Street Investment Journal in the ‗Best PSU‘s of India Awards‘. New Delhi. Winner in Best Financial Inclusion Initiative.Retail Leaning A. Business Policy Guidelines for 2015-16 (Domestic Operations) Corporate Motto Keeping in mind the goal of improved profitability. Best Public Sector Bank Award under the category of Global Business at the Dun & Bradstreet Banking Awards 2015. ASSOCHAM Social Banking Excellence Award under Public Sector Banks category.Capacity Building E.Asset Quality C. Corporate Film – Gold. in recognition of the significant initiatives being undertaken by the Bank in social banking sphere. Resource Mobilization 2.Global Business Development (Public Sector) & Best Bank – Overall (Public Sector) Award in Dun & Bradstreet – Polaris Financial Technology Banking Awards 2014. BML Munjal award in Public Sector Category for Business Excellence Through Learning & Development – 2015.01. 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. 8. 6. As we grow. it is a family. our processes and strategies may change. DEW 16 | P a g e . Bank of Baroda is more than just a team.3. Retail Lending b. It encourages diversity in ideas. This may be possible with Trust. warm and exciting. It adopts collaborative approach. Bank of Baroda wants to create an environment that is friendly. 7. Transparency and Togetherness Bank of Baroda strongly believes in to augment the value of its stake holders i. Individuals/teams following core values are dynamic and can achieve miraculous results. MSME Advances c. Each one cares for another and goes beyond. Maintain Team spirit. Rural & Agricultural lending d. Customers. opinions and points of view. 9. Values act as internal compass and therefore provide direction. Our core values should always be the framework within which we make all of our decisions. Many of the Bank‘s best ideas have been the direct result of informal interactions outside of the office. 5. a. 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. Shareholders and Regulators are in tune with these values. it creates a powerful emotional connect. 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. but our values should always remain the same.e. When common values are chosen and owned by an Individual or a team. Bank has made it a practice of quick responsiveness as far as customer needs are concerned. Bank keeps transparency in all dealings. demonstrating care and concern that can catapult the standard of our service to create better value for its customers. Employees. Inculcating the culture of sales/ cross sales and providing personal service has made us a great differentiator in the market. Encourage and complements each other. 4. Bank of Baroda wants to create a new benchmark in the dissemination of customer service. Every Barodian is expected to honor his/her words/ promises. it is instilled deep insight that being in a growing organization change is constant. Every Barodian is expected to be trustworthy and honest – in words and actions. every person performing such role deserves dignity. Bank believes that every employee is endowed with immense potential than what the employee himself/herself realizes. enjoyment to maintain. and stretch yourself in order to overcome them. Enjoy life and Work hard These are the philosophy followed by all Barodians. therefore. The key human resources need to develop leadership qualities to build capacity to outperform the competition. Barodians embrace it enthusiastically and. closer to the customers and/or issues. It is expected that seniors in the Organization should play the role of mentor in grooming young ones and young ones should exhibit due respect to seniority and age. Every One is treated equally/ respecting each Role Bank‘s belief is that every role in an organization is important and. It is believed that every person wants opportunity to speak their minds and have their ideas. age or hierarchy.e. Although change can and will come from all directions. opinions and feelings heard regardless of their gender.Dream Big. The goal is to help employees unlock this potential. it‘s important that most of the changes in the Bank are driven from the bottom up – from the people who are on the front lines. 17 | P a g e . Embrace and drive change Bank is all time ready to embrace change. All Barodians Endeavour to acquire new skill sets. Bank does not treat others differently and carries confidence. develop leadership traits and make learning a part of lifestyle to remain more agile in the work space. Observing Integrity and Honesty i. Walking the Talk and Talking the Walk Bank believes in observing integrity at all times. Bank of Baroda stretch the goals trusting potential lies in employees. because the organizations that get into trouble are historically the ones that aren‘t able to adapt to change and respond quickly enough. work hard to achieve it and in the process. Pursue growth and learning It is important for employees to grow both personally and professionally. perhaps even more important. But it has to be a joint effort: You have to be ready to face challenges. Never accept or be too comfortable with the status quo. to believe that in the long run our character will speak for itself. encourage and drive it. Humility While celebrating individual and team successes. 65% d) 5. individual involvement evolves and bind the bank more stronger way. Net NPA of our bank as on 31. A comprehensive transformation programme called ―Project Bank for its domestic operations on NAVNIRMAAN was launched by our a) 22 Jun-2009 b) 31 Dec-2008 c) 01 Oct-2010 d) 19 Jul-2011 e) 15 Aug-2012 3.50 e) 10.95% c) 4.12.Creative and Open-Mind Bank‘s approach to deal with situations and challenges with an open mind.50% e) 5.67% 2.65 c) 9. Bank always pursue to seek adventure and having fun exploring new possibilities.75 d) 10. Passion. Commitment.50% b) 5.50 b) 9. TEST YOUR UNDERSTANDING 1. By having the freedom to be creative in seeking solutions.2015 is a) 3. Our bank‘s present base rate is a) 9.00 18 | P a g e . Competence and Determination of Barodians will surely take the Bank to greater heights. 12.2015 a) 10 b) 12 c) 15 d) 17 e) 20 6.4. Which of the following liabilities and assets products are not offered by Baroda Gen-Next Branches to 19 | P a g e . Which of the following is not the associate of our bank a) Baroda Pioneer Asset Management Company Ltd b) Baroda Uttar Pradesh Gramin Bank c) Baroda Rajasthan Khetriya Gramin Bank d) Nainital Bank Ltd e) Baroda Gujarat Gramin Bank 7.next Branches as on 31.15 are a) 5 b) 6 c) 7 d) 8 e) 9 5. No of Mid corporate have been opened till 31. No of Baroda Gen. The service timing of Baroda Contact Centres are a) 6am to 06pm b) 8am to 08pm c) 6am to 10pm d) 10am to 08pm e) 10am to 10pm 8.12. a) b) c) d) e) Baroda Bombay Delhi Hyderabad Ahmedabad Q 1 2 3 4 5 6 7 8 9 10 A e a b e d d c b b a 20 | P a g e .the customers? a) Gen Next Junior b) Gen Next Senior c) Gen-Next Lifestyle d) Gen Next Power 9. Where the Head Office of our Bank is situated. In how many countries Bank‘s network of overseas branches is expended a) 20 b) 24 c) 25 d) 26 e) 27 10. A Financial Data Management Centre under the aegis of the Financial Stability Development Council (FSDC) to be set up.J. The mission includes the seven key reforms of appointments. Indradhanush – A Mission launched by Govt. regulatory guidelines on bank ownership/concentration.000 crore towards recapitalization of Public Sector Banks (PSBs). a meeting away from the pressures of day-to-day work is meant to unfreeze the established behavior patterns and enable the divergent shareholders i. As a management tool. and an examination of board compensation guidelines. which is also known as A2G for PS Banks. Allocation of Rs. The mission is regarded as one of the big steps after the nationalization of banks in 1970s. Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non-institutional investors to invest in Securitization Receipts.Financial Sector Reforms A comprehensive Code on Resolution of Financial Firms to be introduced. RBI Governor and heads of PSBs in an informal setting is a novel idea. the government.EMERGING TRENDS IN BANKING AND UPDATED GUIDELINES BY REGULATOR Highlights of Budget 2016-2017 . the government and the Reserve Bank of India. regulators and the banks themselves to open a healthy dialogue. the working of these boards. Ministry of Finance under the Department of Financial Services has launched Mission Indradhanush that aimed to revamp the functioning of public sector banks so that PSBs can compete with the Private Sector Banks.e.25. Nayak committee on banking sector reforms The Committee to Review Governance of Boards of Banks in India was constituted by the RBI Governor on 20th January. The terms of reference of the committee included review of the regulatory compliance requirement of the boards of banks. 21 | P a g e . owner. 1) 2) 3) 4) 5) 6) 7) Appointments Bank Board Bureau Capitalization De-stressing PSBs Empowerment Framework of Accountability Governance Reforms P. of India to revamp PSU banks As per the brain child of P J Nayak committee. UPDATES GYAN SANGAM Gyan Sangam is a forum where the highest officials from public sector banks. 2014. meet to discuss issues facing by the Banking Sector. The interaction of ministry officials. A majority of these changes relate to cross border transactions aimed at addressing the funding concerns for the startup companies. now the regulator has decided that the IBUs can open foreign currency current accounts of units operating in IFSCs and of non-resident institutional investors to facilitate their investment transactions. RBI Relaxes Norms to IFSC Banking Units (IBUs) RBI while issuing guidelines relating to setting up of financial institutions in the International Financial Services Centres (IFSC) restricted the IFSC Banking Units (IBUs) from few activities which have been now reviewed. Banks are required to comply with Ind AS for financial statements for accounting periods beginning from April 1. Asset Quality Review (AQR) by RBI RBI has begun the Asset Quality Review (AQR) process to ensure cleaning of books of Indian Banks which have been reeling under the pressure of high level of stressed assets. particularly in respect of the start-up enterprises. a Central Fraud Registry is also proposed to be created simultaneously as a searchable centralized database for use by banks. 2014-15. Governor of RBI announced. Norms for Financial Literacy Centers (FLCS) Revised 22 | P a g e . This is in line with the various initiatives of RBI for early detection and minimization of loan related frauds. RBI Guidelines to Banks on Implementation of Ind AS RBI has released guidelines for banks on complying with the new norms under Companies (Indian Accounting Standards – Ind AS) Rules. 2015. ―Along with early detection mechanisms for frauds. While the IBUs were not allowed to open any current or savings accounts.Government Announces Banks Board Bureau to Advise PSBs Taking the first step towards a holding company structure for public sector banks (PSBs). 2018 onwards. RBI has operationalized the Central Fraud Registry – a searchable centralized database for use by banks with effect from 20th January 2016. Fraud Reporting and Monitoring . It will recommend appointment of directors in PSBs and advice on ways of raising funds and dealing with issues of stressed assets. Regulatory Support to Start Up India RBI has come out with various policy changes and initiatives to promote the ease of doing business and contribute to an eco-system conducive for growth of entrepreneurship. RBI has identified loans which were of concern along with those with potential weaknesses.‖ Accordingly.Operationalisation of Central Fraud Registry by RBI During his Fourth Bi-monthly Monetary Policy Statement. Former Comptroller & Auditor General of India Mr Vinod Rai has been named the first chairman. the government has setup of a Bank‘s Board Bureau (BBB). The NIIF is meant to fund development of infrastructure projects. Pulses and Oilseeds and upto 5% for Annual Horticulture/ Commercial Crops. 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. SEBI Releases a Concept Note on Green Bonds Market regulator SEBI has released Consultation Paper on Issuance of Green Bonds. The bonds are sold through banks. 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. 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. National Investment and Infrastructure Fund (NIIF) International pension funds and sovereign funds from countries such as Russia.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. 2017. 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. 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. SHCIL and designated post offices. It has been asked to complete the opening of bank branches under this roadmap by March 31. 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. Singapore and UAE have evinced interest in participating in India‘s INR 40000 crore NIIF. including reviving stalled ones. The villages thus identified may be allotted among SCBs (including Regional Rural Banks) for opening of branches. RBI Announces Marginal Cost of Funds Methodology for Interest Rate on Advances 23 | P a g e .5% for Rabi and upto 2% for Kharif for Food crops. PMFBY would be available to the farmers at very low rates of premium which would be maximum upto 1. Lending Club. Negative carry on account of CRR c. typically via the internet / social media. and for otherwise adding value. 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.(MCLR): RBI has finalized and released the guidelines under Marginal Cost of Funds Methodology for Interest Rate on Advances.e. ATM expansion. exploiting financial opportunities. i. Tenor premium Financial Engineering: Financial engineering is about the development and creative application of financial technology for solving financial problems. Peer-to-Peer (P2P) lending The practices of lending money to individuals or businesses through online services that match lenders directly with borrowers. volumes of Debit & Credit Card. Operating costs d. The MCLR shall comprise of: a. Marginal cost of funds b. Mobile & SMS Banking. the banks will have to refinance the loan every 5 year 24 | P a g e . However. It will replace ‗Base Rate‘ and will be the internal benchmark for such purposes. which has emerged outside of the traditional financial system. RTGS and NEFT. The new internal benchmark rate to which all rupee loans sanctioned and credit limits renewed wef April 01. The ‗5/25‘ moniker summarily refers to the feature that the loan will be repaid over a maximum period of 25 years. Crowd funding It is the practice of funding a project or venture by raising monetary contributions from a large number of people. Some of trends and examples are E-Banking. Usually Social / Cultural projects and startups are using this informal source of finance. 2016 will be reference rate and has been christened as Marginal Cost of Funds based Lending rate (MCLR). Crowd funding is a form of alternative finance. Internet Banking. business correspondent. 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. IBA Approach Paper on IT-Enabled Financial Inclusion: Financial Inclusion is the delivery of financial services to all the people in a fair. and on Policy Support and State interventions that can facilitate enhanced Agri Credit Flow minimizing Legal intervention encouraging contract farming and Tenant farming. agricultural laborers and share croppers. Financial Inclusion has the potential to improve the standards of life of the poor and the disadvantaged.the fact is farmer is stressed more on the viability of the project and not the debt. to invest in a business venture or property and to cope with unforeseen expenses. ii. borrow on better terms. high costs and impracticality especially in the case of small land holdings. transparent and equitable manner at affordable cost. measures have been suggested to increase the flow of credit to agriculture sector in general and especially to tenant farmers. it has suggested ways of harnessing the potential in agriculture and agri-business: i. vii. formation of SHGs/ 25 | P a g e . iii. All RFAs will have to be reported to the Central Repository of Information on Large Credits (CRILC). The use of technology has been inadequate and hampered by the lack of awareness of such (modern) practices. Banks must use such triggers to launch a detailed investigation. 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. v. IBA Sub-committee on Flow of Credit to Agriculture Sector: In the context of predominance of agriculture as the largest employer of the country‘s population and the financial exclusion as one of the crucial obstacles in ensuring equitable agricultural growth of the nation. Financial services permit individuals and households to manage the risk and uncertainties to save risk free. iv.Red Flagged Accounts A bank can label an account a Red Flagged Account (RFA) if the loan account is under suspicion of fraudulent activity and such a suspicion is thrown up by early warning signal (EWS). vi. Considering ground realities and existing gaps viz-a-viz huge opportunity for processing of foods and exports. 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 . 2015. They can enable transfers and remittances through a mobile phone. Kolkata-headquartered Bandhan is the first bank set up in eastern part of India after Independence. transferring all assets and liabilities of its lending business (―Financing Undertaking‖) to IDFC Bank Limited. and was inaugurated on October 19. 2015 in New Delhi. Vodafone m-pesa Limited The ―in-principle‖ approval granted will be valid for a period of 18 months. Airtel M Commerce Services Limited 3.08. Reliance Industries Limited 8.2015 granted ‗in principle‘ approval for payment banks to 11 entities.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. They can‘t offer loans but can raise deposits and pay interest on these balances. alternate occupation for the small and marginal farmers in terms of dairy. 1949. no additional documentation is 26 | P a g e . IDFC Bank Ltd. which are expected to reach customers mainly through their mobile phones rather than traditional bank branches. Incidentally. 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. the applicants cannot undertake any banking business. 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. The list of approved Payments Bank includes: 1. Bandhan received the in-principle approval of the Reserve Bank of India (RBI) for setting up a universal bank in April 2014. Tech Mahindra Limited 11. It is informed that in such cases. Aditya Birla Nuvo Limited 2. demerged on October 1. Payments banks are new stripped-down type of banks. Until a regular license is issued. Shri Vijay Shekhar Sharma 10. the Reserve Bank would consider granting to them a license for commencement of banking business under Section 22(1) of the Banking Regulation Act. the banking regulator gave its final nod in June 2015. IDFC Bank Limited: The Reserve Bank of India granted a universal banking license to IDFC Limited on July 23. It is head quartered in Mumbai. is a subsidiary of the IDFC Ltd.JLGs helping the farmer to bring in economies of scale. On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of ―in-principle‖ approval. IDFC Ltd. Cholamandalam Distribution Services Limited 4. Department of Posts 5. National Securities Depository Limited 7. 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.. Fino PayTech Limited 6. 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. Payments Bank: The RBI on 19. Shri Dilip Shantilal Shanghvi 9. Reduction in probability of adverse selection. 2015. every copy of Memorandum and Articles issued to members should contain a copy of all resolutions / agreements that are required to be filed with the Registrar. Articles of Association.Under the new Act. email ID. has to inform registrar. Woman Director: Every Listed Company /Public Company with paid up capital of Rs 100 Crores or more / Public Company with turnover of Rs 300 Crores or more shall have at least one Woman Director. taxpayers hold a substantial ownership interest The objective of FATCA is the reporting of foreign financial assets. Foreign Account Tax Compliance Act: The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010. taxpayers with foreign accounts and focuses on reporting: By U. Conversion of existing private Companies with paidup capital up to Rs 50 Lacs and turnover up to Rs 2 Crores into OPC is permitted. his relative. address of its registered office. the Central Board of Direct Taxes said on their website. it is desirable to adopt Table F as standard set of Articles of Association of the Company with relevant changes to suite the requirements of the company.S. all companies have to follow a uniform Financial Year i.S. No compulsion to hold AGM. 3. Resident Director: Every Company must have a director who stayed in India for a total period of 182 days or more in previous calendar year.S. Disqualification of director. from 1st April to 31st March. taxpayers about certain foreign financial accounts and offshore assets By foreign financial institutions about financial accounts held by U. website address if any. 2. Director of holding company.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 Company. Loans to director – The Company CANNOT advance any kind of loan / guarantee / security to any director. 5. 7.S. Firm in which he or his relative is partner. 6.In the next General Meeting. Immediate Changes in letterhead. taxpayers or foreign entities in which U. One Person Company (OPC): It's a Private Company having only one Member and at least One Director. Those companies which follow a different financial year have to align their accounting year to 1st April to 31st March within 2 years.All existing directors must have Directors Identification Number (DIN) allotted by central government. 1. Telephone number. bills or other official communications. fax number. Highlights of Companies Act 2013 The 2013 Act has introduced several new concepts and tried to streamline many of the requirements by introducing new definitions. 4.e. 1 st April 31st March. private limited in which he is director or member or any bodies corporate whose 25% or more of total voting power or board of Directors is controlled by him. as if full name. 8. his partner. FATCA targets tax non-compliance by U. Financial year.e. It is desirable to do the 27 | P a g e . Directors not having DIN should initiate the process of getting DIN allotted to him and inform companies. 9. withholding is the cost of not reporting. in turn. Corporate Identity Number (21 digit number allotted by Government). Directors who already have DIN need not take any action. Accounting Year: Every company shall follow uniform accounting year i. Further. Appointment of Statutory Auditors. have to appoint another auditor in Annual General Meeting for year 2014. and an Association or a fund. The rates shall not be subject to negotiation between the depositors and the bank. No interest shall be paid on deposits held in current accounts. Scheduled Commercial Banks shall.Reserve Bank of India (Interest Rate on Deposits) Directions. formulate term deposit schemes specifically for resident Indian senior citizens. 10. at their discretion. at their discretion. or the spouse of a deceased member or a deceased retired member of the bank‘s staff. 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. institution or any other person except commission paid to agents employed to collect door-to-door deposits under a special scheme. those companies have reappointed their statutory auditors for more than 5 / 10 years. between one deposit and another of similar amount. company. This period of 5 / 10 years commences from the date of their appointment. Scheduled Commercial Banks shall. give their resident Indian retired staffs. who are senior citizens. These directions shall not be applicable to operations of foreign branches of Indian banks. Differential interest rate shall be offered only on bulk (term) deposit 5. 3. Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial Banks other than Regional Rural banks 2. 4. 28 | P a g e . 2. that the monies deposited or which may be deposited from time to time into such account belong to the depositor: member or a retired member of the bank‘s staff. association. Therefore. at any of its offices. commission paid to Direct Selling agents/ Direct Marketing Agents as part of the outsourcing arrangements and remuneration paid to Business facilitators or Business Correspondents. 6.Every Listed Company can appoint an individual auditor for 5 years and a firm of auditors for 10 years. offering higher and fixed rates of interest as compared to normal deposits of any size. 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. accepted on the same date. The additional interest may be paid on deposits after obtaining a declaration from the depositor concerned. Master Direction . 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. members of which are members of the bank‘s staff. 7. 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. Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs. Bulk Deposit: 1. firm. Interest Rate framework 1. either singly or jointly with any member or members of his/her family.same as early as possible since most of the compliances are on financial year basis under the new Companies Act. 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. As soon as the excess/ wrong payment made to a pensioner comes to the notice of the paying branch. a revised Framework along with operating instructions has been furnished by RBI on 17. the same may be adjusted from the future pension payments to be made to the pensioners. the Ministry of Micro. Performance of Indian Banking Sector in FY-2015: 29 | P a g e . The KYC policy shall include following four key elements: (a) Customer Acceptance Policy. Government of India. vide their Gazette Notification dated May 29. 2016). 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.03. 2016: In terms of the provisions of Prevention of Money-Laundering Act. the branch should adjust the same against the amount standing to the credit of the pensioner‘s account to the extent possible including lump sum arrears payment. certain changes in the captioned framework have been carried out in order to make it compatible with the existing regulatory guidelines on ‗Income Recognition. 4. 2015 had notified a ‗Framework for Revival and Rehabilitation of Micro. the pensioner may be asked to pay forthwith the balance amount of over payment. Small and Medium Enterprises. 5. (c) Customer Identification Procedures (CIP). 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. 2005. 3. 2. (b) Risk Management. Asset Classification and provisioning pertaining to Advances‘. and (d) Monitoring of Transactions Framework for Revival and Rehabilitation of Micro. Small and Medium Enterprises‘. 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. If the entire amount of over payment cannot be adjusted from the account.Know Your Customer (KYC) Direction.Master Direction . Accordingly. 2002 and the Prevention of Money-Laundering (Maintenance of Records) Rules.2016 to operationalize the Framework by the banks (not later than June 30. The pensioner may also be advised about the details of overpayment/ wrong payment and mode of its recovery. 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. In case the pensioner expresses his inability to pay the amount. Thereafter. 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. 50% (wef 07. respectively a year ago. The C-D ratio was the highest in March 2015 for Tamil Nadu (119. Arranged according to size of total business (aggregate deposits + gross bank credit) of SCBs.2015) Statutory Liquidity Ratio (SLR) According to Section 24 (2-a) of the Banking Regulation Act.9 per cent. 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. 2015. Karnataka.6 per cent in gross bank credit followed by private sector banks (19. Uttar Pradesh.9 per cent of gross bank credit.8 per cent respectively in March 2015 from 13. viz.7 per cent). By varying the bank rate. NCT of Delhi. At present SLR is 21. Tamil Nadu. Andhra Pradesh (105.4 per cent. Gold or unencumbered.8 per cent.9 per cent of aggregate deposits and 64. private sector banks. approved securities an amount of which is not less than a certain percentage of the total of its demand and time liabilities in India.2015). is required to maintain in India in Cash. West Bengal. seven states. C-D ratio was lower than the all-India ratio of 77.9 per cent in aggregate deposits and 71. Further the money market in our financial system is not fully developed.7 per cent and 9. every banking company in India whether scheduled or non scheduled. These states together accounted for 66.7 per cent for ‗Rural‘ in March 2015 from 14. and Gujarat accounted for 68. the RBI can to a certain extent regulate the commercial bank credit and the general credit situation of the country. The ratio keeps on changing time to time. The present bank rate is 7.2 per cent). As regards credit.0 a year ago Metropolitan branches constituting around 52.4 per cent). so that the Bank rate policy will have if desired impact on the financial system. Maharashtra alone contributed 26.75% (wef 29.02. Growth in gross bank credit increased to 14..1 per cent of the total business. 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‖. respectively) as on March 31. Maharashtra.9 per cent and 13. The above deceleration was broad based and observed across all population groups except ‗Rural‘. recorded the highest credit-deposit (C-D) ratio at 94. 30 | P a g e . This is known as Statutory Liquidity Ratio (SLR).6 per cent) and Telangana (102. and RRBs could maintain accelerated growth in aggregate deposits in March 2015 as compared to their levels a year ago.7 per cent and 20.8 per cent of the total business. SBI and associates.4 per cent of gross bank credit. NCT of Delhi (103. Public sector banks accounted for the largest share of 72. only private sector banks improved their growth rate in March 2015 compared to its level a year ago.09. For other population groups.2 per cent. Growth in aggregate deposits and gross bank credit decelerated to 10.5 per cent) followed by Chandigarh (106.4 per cent of aggregate deposits and 71. Cash in hand in India.15 is 5. Investments in Government Securities. When the repo rate increases. As a result. Balance maintained with the RBI in excess of the minimum CRR requirements. Repo Rate wef 29. 31 | P a g e . Reverse Repo Rate: Reverse Repo rate is the short term borrowing rate at which RBI borrows money from banks.09. The changes in the 2013 Act have far-reaching implications that are set to significantly change the manner in which corporate operate in India.75%. the approved securities must be valued at a price not exceeding the current market price.15 is 6. Reverse Repo Rate wef 29. If RBI wants to make it more expensive for the banks to borrow money.75%. the following liquid assets are taken into account.The Reserve Bank is empowered to increase/ decrease this ratio. The Reserve bank uses this tool when it feels there is too much money floating in the banking system. banks prefer to lend their money to RBI which is always safe instead of lending it others (people. Treasury Bills and other approved securities in India. However. 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. 2013: After getting approval of both the houses of Parliament.09. MSF rate is higher than Repo rate. Presently the CRR is 4. 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%.00% (wef 09-02-2013). An increase in the reverse repo rate means that the banks will get a higher rate of interest from RBI. 2013 (2013 Act). it increases the repo rate similarly.75% Indian Companies Act. Balances in current account with the State Bank of India and its associates. For calculating the SLR. borrowing from RBI becomes more expensive.09. MSF Rate wef 29. the longawaited Companies Bill 2013 obtained the assent of the President of India on 29 August 2013 and became Companies Act. 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.2015 is 7. if it wants to make it cheaper for banks to borrow money it reduces the repo rate. Cash Reserve Ratio Section 42 defines the Cash reserves of scheduled bank to be kept with RBI. companies etc) which is always risky. The 2013 Act has introduced several new concepts and has also tried to streamline many of the requirements by introducing new definitions. 5. 1 The Present CRR is? a. e. 2% 3% 4% 5% 7. b. c. 13 15 14 11 10 Q. 2 The Present SLR is? a. d.50% 22% 24% 26% Q. d.Test your Understanding: Q.5% Q. c.J. c. d.3 P. d. e. d. Marginal Marginal Marginal Marginal Marginal Capital based Lending Rate Cost of Deposits based Lending Rate Cost based Lending Rate Cost of Funds based Lending Rate Capital Funds based Lending Rate Q 1 2 3 4 5 A c b a d d 32 | P a g e . MCLR is: a. 4 : Number of Payments Bank given in principle approval by RBI are: a. e. Nayak committee on banking sector reforms was set up by: a. e. b. RBI GOI SBI World Bank IMF Q. c. e. c. 20% 21. b. b. b. Education Loan. driving license. Personal Loan Auto Loan. NBFCs. Aadhaar Card. Necessary checks before opening a new account profile for each new customer based on risk categorization. which caters to both commercial and consumer segments. Credit Information Bureau (I) Ltd was set-up in January 2001. 3. Over Draft and Commercial Vehicle. SFCs. 2. CIBIL is established with a primary purpose of information sharing between Banks and Financial Institutions for curbing the undesired growth of NPA. proprietary concerns. Key elements of KYC Policy: Customer Acceptance Policy Customer Identification Procedures Monitoring of Transactions Risk Management Customer Acceptance Policy 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. The Consumer Credit Bureau covers credit availed by individuals while the Commercial Credit Bureau covers credit availed by non-individuals such as partnership firms. In case of NPA Home Loan borrowers Branches will get information on enquires with other Banks for all type of loans. Income Tax PAN card. Property Loan. It helps in compilation of credit information. 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. Housing Finance Companies and Credit Card Companies are Members of CIBIL 7. ID card issued by Government of India. accessible to member banks to improve quality of credit proposals. private and public limited companies. CIBIL is a composite Credit Bureau. intentionally or unintentionally. (1) Customer Identification – Banks to obtain all necessary information to establish the identity of each new customer based on disclosures by customers themselves.LEGAL & STATUTORY PROVISIONS Credit Information Bureau (India) Limited – (CIBIL) 1. The easy means would be documents such as passport. KYC procedures also enable banks to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently. etc. Banks. 4. better credit management and Credit dissemination function 6. Know Your Customer (KYC) Guidelines The objective of KYC/AML/CFT guidelines is to prevent banks from being used. Banks are required to provide periodical information to CIBIL in the prescribed format. FIs. Business Loan. Armed Forces ID cards. State Government accompanied by 33 | P a g e . CIBIL. as a joint venture. by criminal elements for money laundering or terrorist activities.Access to consumer credit information: Branches will get data of existing standard Home Loan borrowers who have approached other Banks for Home Loan. like certificate of Practice issued by Indian Institute of Chartered Accountants of India. Towards this. Indian Medical Council. Utility bills such as electricity. vehicle etc. Obligation of Banks under PMLA 2002. The complete Income Tax return (not just the acknowledgement) in the name of the Firm where the Firm‘s income is reflected.) while opening of accounts. 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 individual‘s i. Finance ministry has recognized the ―Aadhar number issued by UIDAI as an officially valid document to satisfy the KYC norms for opening of accounts. dated June 17. 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. partnership firms. Employment details such as job specifications.g. 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 following additional details need to be collected while opening the account. foundations etc. water. Provide details about source of income and annual income. etc."Beneficial Owner" . 2015) 34 | P a g e . name and address of the employer. Food and Drug Control Authorities. 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.Declaration Form (HO:BR:107: 83. bank has also issued a circular that at the time of opening of accounts the requirement of introduction may be waived. Recently. Institute of Company Secretaries of India. duly Authenticated/ Acknowledged by the Income Tax Authorities. length of service etc. 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. Institute of Cost Accountants of India. trusts. unregistered entities (e.signature verification and photographs would help to establish the identity of the person opening the account.e. and landline telephone bills in the name of the firm. Details of assets owned such as house. Layering and Integration A) Placement .Individual Accounts (other than Proprietorship). After activation of the newly opened accounts through RBO. branches should undertake reasonable measures to identify the beneficial owner(s) and verify his/her/their identity. 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. While forwarding the account opening form to respective 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. 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. Anti Money Laundering It is conversion of money. so as to make it appear to originate from a legitimate source. 2. In case the proof of address where the customer is currently residing . To deal with any other issue connected with money laundering in India. the Bank is required to identify and maintain the details of the ―Beneficial Owner" in all Non. 3. As per Bank's Customer Acceptance Policy (CAP). combat and control money laundering.5 lacs. 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. Branches are. which is illegally obtained. Amendment to Prevention of Money Laundering (Maintenance of Records) Rules. For all existing Non. Vide HO:BR:107:33 dated 10/02/2015. The main objective of the Act is: 1. the bank may take a declaration of the local address.process of separation of illicit proceeds from their source by creating complex layers of financial transactions it conceals the audit trail.Individual accounts In the branch.Individuals customers within the branch. therefore. To prevent.Placement. There are three independent steps or stages in Money Laundering -. No proof is required to be submitted for such address for correspondence/ local address. 2013 (Revised list of KYC Documents In CBS system) 35 | P a g e . To confiscate and seize the property obtained from the laundered money. 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.As per extant guidelines of Reserve Bank of India.physical disposal of bulk cash proceeds derived from illegal activity B) Layering . retain a copy of the account opening form of Non. the Bank shall file a review petition within one month from the date of receipt of copy of award. Space for customers in banking hall to be kept clean and tidy with proper seating arrangements. A period of 1 year has not elapsed after bank had rejected the representation. Bank‗s name board to be clean and visible with suitable lighting arrangements. 9.(HO: BR: 107: 101. For approaching to OMBUDSMAN for banking complaints following are the conditions Bank has rejected the complaint and/or no reply within one month. Customer‗s Suggestions to be invited for better customer services. Time norms for common Banking transactions to be displayed prominently in the Banking Hall. 3. 14. Business hours to be prominently displayed at the branches. 6. telephone number and fax numbers of Regional and Zonal Authorities to be displayed in Banking Hall. pass an award after listening to both the parties. 10 lakhs. 4. The Ombudsman has the authority to look into the complaint in the following areas. Counters to remain attended to during business hours. Name. Any dispute between banks or bank and its constituents may be referred to for arbitration provided disputed claim does not exceed Rs. It is not pending with any court. 2. 5. 36 | P a g e . 8. Any complaint relating to Banking services. The time limit for award is fixed as six months from the date of first hearing.01. At large branches ―May I Help You‖ – counters to be located for customer‗s convenience. RBI had made it clear that only the documents mentioned in the PML Rules would be accepted by the branches while opening any new account. dated 24th July 2015) In view of the change in the definition of 'Officially Valid Documents'. 11. 3.e.2006 2. Branch premises to be kept clean and hygienic. 10. address. In the event Bank is unable to comply with the Award for any reason whatsoever. Commencement of working hours of Bank staff to be 15 minutes before commencement of Banking hours. 7. It is not subject matter already settled by Ombudsman.f. Bank would not have the discretion to accept any other document for this purpose. Citizen‗s charter covers the following: 1. It was revised w. 1995 under section 35 of Banking Regulation Act 1934. Refer the complaint to concerned bank and try to facilitate redressal or settlement by agreement between the bank and aggrieved party. If complaint is not settled by agreement within the period of one month.2002 . which has been further revised on 01. Banking OMBUDSMAN Scheme: 1. Reserve Bank of India has announced the Banking Ombudsman Scheme. Branch authority‗s name and designation to be displayed on Name Plate. Citizen„s Charter Citizen Charter gives the customers‗right as well as their demands on service from the bank.6. 1987. transportation. 2015 by the Minister of Consumer Affairs. 37 | P a g e .e. The Bill will replace the Consumer Protection Act. 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. 2. Further. 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. 5. 5. It has the following objectives – 1. the consumer day. Ram Vilas Paswan. as a bench mark standard by the BCSBI. all goods services including banking. 4.no fees earlier 6. A person availing services for commercial purpose will not be a consumer under the act. Banking code and Standards Boards of India (BCSBI): A comprehensive Banker‗s Fair Practice Code prepared by Indian bank Association has been used. Bring confidence in the banking system. Any consumer individually or jointly.4.f. consumer organisation can file complaint within -2-years from the date of cause of action preferably within 3 months. Minimum Scale IV officer is designated as ―Authorized Officer for the purpose of enforcement of security interest under the Act to realize / recover bank‗s dues in case of a NPA-account. Definition of complaint amended to include complaints of unfair trade practices or restrictive trade practices against service provider. Promote cordial and fair relationship between bank and customer. COPRA was initially enacted during 1986 and implemented w. 15th March2003. For the purpose of the Act.4. insurance. The act covers. The code provides protection to the customers on day-to-day basis on banking operations. 4. The purpose of this act was to enable the consumers to enforce his right as a consumer through simple legal procedures. Promote good and fair banking practices by setting minimum standards. To encourage financial institutions to achieve higher operating standards. has since been introduced in Lok Sabha on August 10. RRBs and Schedule Primary Cooperative Banks are covered. Note: The Consumer Protection Bill. Increase transparency 3. on 17th December 2002. 2015. which sets minimum standards of Banking practices to be followed by banks when attending to customers. This is a voluntary code. Mr. All Commercial banks. failure to disclose final results of scheme of gifts & prizes amt.f. processing etc. electricity.e. Food and Public Distribution. 3. The appeal against the Award can be filed within 30 days to the Appellate Authority (DGM RBI). Consumer Protection Act (COPRA) 1986 1. an amendment Act 2002 has been passed and implemented w. 2. Prescribed fee payable on every complaint as court fees . 15. 1986. Plant & Machinery. charges and direct & incidental expenses thereto. Also. all costs. In case of number of secured creditor being more than 1. Agri. Brief guidelines: 1. 3. To provide a legal framework for Securitisation of assets.. 4. etc. 4. In the course of enforcement of security interests by the bank as Secured Creditor. Criteria for determination of Base Rate: While each bank may decide its own base rate. If dues of secured creditors are not fully settled / recovered out of / from sale proceeds of secured assets. 6. which will then resolve those assets either by disposal/ recovery or by reconstruction and realise the proceeds. the specialized agencies created under this act.The Act deals with following aspects: 1.performing assets to asset reconstruction company. 7. some of 38 | P a g e . Such a conversion would imply that lenders or ARC can be an equity holder rather than a creditor of the company. Bank can file the reply of objection raised by borrower within 15 days instead of 7 days. 2010. the Authorized Officers can write to the borrower [section 13 (2)] to repay secured debts within 60 days from the date of notice. as well as ‗immovable properties except agricultural land. Recent changes under the act in 2012: Banks and ARC are allowed to convert any part of the debt of the defaulting company into equity. land. Hire purchase/lease. Possession notice to be given under Sec 13(4). In case of default. Transfer of non. It also allows banks to bid for any immovable property they have put out for auction themselves. The ―Record Date shall be the date agreed upon by the secured creditors representing not less than 60% of the amount outstanding. Followings are not covered under the Act: Pledge of moveable and lien on any goods and security. Vessels. on sale on cash or SR basis. 2.1 lacs. stocks. Enforcement of Security Interest by secured creditor without the intervention of Court. Vehicles. Any Security interest not exceeding Rs. Aircraft. etc. 3. secured creditors may file an application in DRT or in a competent court. 5. the above said rights shall be exercised only when 60% or more (in value terms) secured creditors agree to exercise of the rights. property incurred shall be recoverable from the borrower and money received by the bank as secured creditor shall first be appropriated towards meeting this expenses and thereafter for discharge of the bank‗s secured debts. The secured creditor shall be entitled to proceed against the guarantors or sell pledged assets without first taking any of the measures or possession & sale of the borrower‗s / the guarantor‗s assets. if they do not receive any bid during the auction. Bank has right to file caveat at High court Base rate for Bank loans: RBI has advised Banks to switch over from Bench mark Prime lending rate to Base rate system wef July 1. bank is free to sell these properties to a new bidder at a later date to clear off the debt completely. 2. The action under SARFAESI Act can be initiated for both moveable assets eg. It also gives an option for the Bank to take over the management of the unit and to appoint a manager to run the unit for recovering the NPA. The attitudinal aspects in dealing with customers B. cost of printing and stationery. banks are not permitted to resort to any lending below the Base rate except some special categories like – (i) Short Term agricultural loans. Grievance Redressal Policy of our Bank: Aim / Objective This policy document aims at minimizing instances of customer complaints and grievances through proper service delivery and review mechanism and to ensure prompt redressal of customer complaints and grievances. The bank‗s policy on grievance redressal follows the under noted principles. The policy document would be made available at all branches. if they are not fully satisfied with the response of the bank to their complaints. director‗s and auditor‗s fee. In order to make bank‗s redressal mechanism more meaningful and effective. (iii) Unallocated overhead cost for banks such as aggregate employee compensation relating to administrative functions in corporate office. depreciation. Customers be treated fairly at all times Complaints raised by customers are dealt with courtesy and on time Customers are fully informed of avenues to escalate their complaints/grievances within the organization and their rights to alternative remedy. expenses incurred on communication and advertising. (v) Advance against Bank‗s own term deposit receipts.the criteria that could go in to determination of Base rate are (i) Cost of Deposits (ii) Adjustment for negative carry in respect of CRR & SLR. IT spending and cost incurred towards deposit insurance and (iv) Profit margin (v) Average return on net worth Since the Base rate will be the minimum rate for all commercial loans. Inadequacy of the functions/arrangements made available to the customers or gaps in standards of services expected and actual services rendered. where interest concessions are granted by GOI (iii) Loans granted to a corporate. (vi) Loan granted to Bank‗s own employees. The review mechanism helps in identifying shortcomings in product features and service delivery. (iv) Loans under DRI scheme. Standardized Public grievance redresses System (SPGRS) 39 | P a g e . This system ensures that the redressal sought is just and fair within the given frame-work of rules and regulation. The bank employees must work in good faith and without prejudice to the interests of the customer. legal and premises expenses. post restructuring. a structured system has been built up towards such end. Bank will treat all complaints efficiently and fairly as they can damage the bank‗s reputation and business if handled otherwise. (ii) Export credit. All the employees of the Bank will be made aware about the Complaint handling process Framework The customer complaint arises due to: A. bankofbaroda. of India.f. ministry of finance has advised all public sector banks to develop a SPGRS. An icon for online complaint registration has been provided on bank‗s home page: www.com 40 | P a g e . redress of grievances to bank customers.e. As advised by ministry of finance.In order to bring in customer centricity in banking services and to improve the image of banks for providing expeditious. 11/01/2013. an online complaint lodgment facility for the customers/noncustomers w. our bank has implemented a standardized public Grievance redress system (SPGRS). Govt. 41 | P a g e . + StT NO UPPER LIMIT NO UPPER LIMIT NO UPPER LIMIT NOMINATION YES YES YES NO.(SU/R) 2000/- MIN.(FOR 15-91 DAYS) QAB 75000/- QAB 250000/- NON-MAINTENANCE OF QAB-600/.+ NON-MAINTENANCE OF QAB- ST 1000/.FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER CURRENT ACCOUNT NAME OF THE BARODA ADVANTAGE PRODUCT CURRENT A/C ADVANTAGE BUSINESS BANKING BARODA PREMIUM CURRENT A/C CURRENT A/C PRIVILEGE BUSINESS BANKING MAKES EAZY MAKES EAZY ELIGIBILITY BARODA PREMIUM BUSINESS BANKING MAKES EAZY INDIVIDUALS (14 YRS & INDIVIDUALS (NOT INDIVIDUALS (NOT MINOR) ABOVE) MINOR/NRI/OCB/BANKS/FI) BUSINESS BUSINESS ESTABLISHMENTS/ CLUB/ BUSINESS ESTABLISHMENTS/ ESTABLISHMENTS/ CLUB/ SOCIETIES CLUB/ SOCIETIES CORPORATES/ COMPANIES/ CORPORATES/ COMPANIES/ HUF/ CORPORATES/ COMPANIES/ HUF/ TRUSTS/ TRUSTS/ ASSOCIATIONS HUF/ TRUSTS/ ASSOCIATIONS GOVT ESTABLISHMENTS/ GOVT ESTABLISHMENTS/ TRUSTS/ GOVT ESTABLISHMENTS/ TRUSTS/ BANKS BANKS TRUSTS/ BANKS M/ U/ SU/ R M/ U/ SU/ R M/ U/ SU/ R NA FREE IN MULTIPLES OF 25000/- FREE IN MULTIPLES OF 25000/- ABOVE THRESHOLD LIMIT 75000/- ABOVE THRESHOLD LIMIT (FOR 15-45 DAYS) 250000/.RETAIL BANKING & THIRD PARTY PRODUCTS 1 .PER QTR+ ST 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 . 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 FREE CREDIT CARD (FOR Ist YEAR) FREE CREDIT CARD (FOR Ist (BOBCARD) MAXIMUM TO 2 PARTNERS / YEAR) MAXIMUM TO 2 DIRECTORS PARTNERS / DIRECTORS SOCIETIES ASSOCIATIONS AREA OF OPERATION AUTO / REVERSE SWEEP MINIMUM BAL QAB (M/U) 15000/. BALANCE 500/. Above that Rs 10 per packet PACKETS PER DAY.PERSONAL FREE PERSONAL ACCIDENT FREE PERSONAL ACCIDENT ACCIDENT INSURANCE WITH CREDIT CARD INSURANCE WITH CREDIT INSURANCE CARD DISCOUNT OF 25% DISCOUNT OF DEMAT SERVICES DEMAT SERVICES 25% DISCOUNT OF DEMAT SERVICES PROCESSING WAIVER IN NAME OF PROP/ FIRM/ WAIVER IN NAME OF PROP/ CHARGES ON CAR COMPANY FIRM/ COMPANY LOAN INTER SOL NIL FOR CASH DEPOSIT NIL FOR CASH DEPOSIT UPTO 50000/- NIL FOR CASH DEPOSIT UPTO CHARGES UPTO 25000/.OR 10 FREE UPTO 50000/.per thousand or part thereof. service charge will be @ Rs. 2/.OR 10 PACKETS FREE UPTO 50000/.25000/ per *Per transaction limit calendar month. Above that NON-BASE BRANCH that Rs 10 per packet BANK STATEMENT FREE ONCE (MONTHLY) FREE TWO TIMES IN A MONTH FREE TWO TIMES IN A MONTH BY E-MAIL BY E-MAIL BY E-MAIL UPTO 20000/- UPTO 50000/- UPTO 150000/- NO CHARGES IF AV.PER DAY PER DAY 100000/.per for cash withdrawal by thousand or part thereof drawer by self cheque at Non Base CBS branches irrespective of nature of accounts) CASH DEPOSIT AT FREE UPTO 50000/. service charge will be account in that calendar month .is fixed of Rs. of ` 50000 /. Above PER DAY.OR 10 BASE & LOCAL PACKETS PER DAY.PER DAY (*Inter SOL cash WITHDRAWL UPTO 25000/- First two cash withdrawals of any amount First three cash withdrawals of any payments to third PER DAY during a calendar month are free and amount during a calendar month are parties is totally thereafter for each cash withdrawal in free and there after for each cash withdrawn excess of Rs. 2/. FREE FOLIO USAGE FREE FOLIO USAGE FREE UNLIMITED FREE UNLIMITED IMMEDIATE Rs 10 per packet CREDIT OF OCC (*T & C) FOLIO CHARGES BALANCE IS ABOVE 50000/CHEQUE BOOK FIRST 50 LEAVES FREE 43 | P a g e . 25000/ per account in that withdrawal in excess Rs. ON DAILY QAB 20000/- QAB 15000/- (SU/R) 500/- BASIS (A/C MAY BE OPENED WITH Rs 5/-) MIN.A. 4% P.SAVING BANK (1) NAME OF THE BARODA BARODA SUPER BARODA SHUBH BARODA BARODA PENSION PRODUCT ADVANTAGE SAVING A/C SAVING A/C (SEMI- 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). 4% P. STAFF & SR CITIZENS (NOT FOR NRIs) AUTO / REVERSE NA SWEEP MINIMUM BAL QAB (M/U) 1000/- FREE IN MULTIPLES FREE IN FREE IN OF 10000/.+ ST/ CHARGES 100/.ABOVE MULTIPLES OF MULTIPLES OF THRESHOLD LIMIT 5000/. SINGLE/ JOINT) STAFF & SR CITIZENS STAFF & SR CITIZENS AUTHORISED (NRI/ TRUSTS & OTHER (NRI/ TRUSTS & GOVT DEPTT/ INSTITUTIONS NOT OTHER INSTITUTIONS TRUSTS/ ELIGIBLE) NOT ELIGIBLE) INSTITUTIONS ELIGIBILITY FARMER'S CLUB.FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER . BALANCE QUARTERLY (M/U) NON-MAINTENANCE NON-MAINTENANCE MONTHLY Rs 100/- 100/.(FOR 180 3000/.+ OF QAB-1000/. SINGLE/ JOINT). OF 100 WITHDRAWL 100 WITHDRAWL PER 100 WITHDRAWL PER 20 WITHDRAWL 100 WITHDRAWL TRANSACTIONS PER HALF YEAR HALF YEAR HALF YEAR PER MONTH PER HALF YEAR 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 .(FOR 180 DAYS) DAYS) QAB-10000/- 3000/.+ ST + ST QUARTER NO LIMIT ST MAXIMUM 100000 FOR MINOR 100000 FOR MINOR (10- 100000 FOR MINOR 100000 FOR MINOR BALANCE (10-14 YRS) 14 YRS) (10-14 YRS) (10-14 YRS) INTEREST 4% P. SOCIETIES. VVV.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. (QUARTERLY 4% P.(SU/R) 50/.A.A.(FOR 181 DAYS) THRESHOLD LIMIT THRESHOLD LIMIT 10000/.ABOVE 1000/.2 . SHG ETC.+ ST OF QAB-750/. 4% P.A.ABOVE 20000/. 00 LAC WITH CO.ABOVE THRESHOLD LIMIT 5000/.+ ST/ CHARGES QUARTER AUTO SWEEP FREE IN MULTIPLES OF 5000/. PSU.SAVING BANK (2) NAME OF THE 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.50%) PERSONAL FREE PERSONAL FREE PERSONAL ACCIDENT ACCIDENT ACCIDENT INSURANCE INSURANCE WITH INSURANCE OF 1 CREDIT CARD DURING LAC WITH CREDIT FIRST YEAR CARD 3 .ON RETAIL CHARGES LOANS OD FACILITY MAX OF 2 MONTHS PENSION (ROIBR+5.FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER .PER (DD/BC) & ON MONTH. BALANCE 100/. TRUSTS/ SOCIETIES INDIVIDUALS ELIGIBILITY MINIMUM BAL MINIMUM TAKE HOME (SINGLE/ JOINT- SALARY 5000/- MAX TWO) 18-60 (NOT FOR BOB STAFF) YRS NO MINIMUM NO MINIMUM NO MINIMUM NO MINIMUM 1000/. LIC/ GIC AGENTS.CONCESSION ON No concession REMITTANCE FREE-Both DD/BC & FREE-Both DD/BC & OCC OCC FREE. STUDENTS.ON DAILY BALANCE BALANCE BALANCE BALANCE BASIS MIN. INDIVIDUALS ATTAINED AGE OF 18 YRS) GOVT. WITH MINIMUM 1 HOUSE WIVES. (WITH LIFE EDUCATIONAL COMMON PEOPLE. INDIVIDUALS.(FOR 180 DAYS) 45 | P a g e . LOW AND MIDDLE PERSONS GETTING COVER UPTO Rs SELECTED PVT LTD INCOME GROUP. SALARY ACCOUNT RESIDENT SINGLE/ JOINT (HAVING OF STATE/ CENTRAL ALL RESIDENT OF EMPLOYEES. LOW YR SERVICE NOT FOR NRI/ PREMIUM) MINIMUM AGE 21 YRS. COMPENSATION 5.Only OCC FREE DD/ BC UPTO 100000/. OCC-FREE OCC DISCOUNT OF 25% DISCOUNT OF 25% DISCOUNT OF DEMAT DEMAT SERVICES DEMAT SERVICES CREDIT CARD FREE PARAS CREDIT FREE SILVER (BOBCARD) CARD (FOR Ist YEAR) CREDIT CARD (FOR SERVICES Ist YEAR) PROCESSING NO . IFLIC. INSURANCE INSTITUTIONS. 4-times FACILITY AGAINST NET TAKE HOME of avg monthly balance FDR IN SB A/C.whichever is MONTHS/ OD UPTO *ROI-BR+5. 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.A. 4% P.FOR 12 GUARANTEE or Rs 5000/. (HALFYEARLY ON ON DAILY PRODUCT) (HALFYEARLY ON (HALFYEARLY ON (HALFYEARLY ON DAILY PRODUCT) DAILY PRODUCT) DAILY PRODUCT) YES YES YES DAILY PRODUCT) NOMINATION 100000 FOR MINOR YES YES NO. 46 | P a g e .MAXIMUM NO LIMIT NO LIMIT BALANCE INTEREST NO LIMIT NO LIMIT (10-14 YRS) 4% P.A.00%.subject to. SALARY) or 50% of credit MINIMUM AMT OF *THIRD PARTY summation of 6-months FDR 10000/. 4% P.50% MIN-100/- NIL BUILT IN OD CUSTOMERS HAVE *MAXIMUM 100000 Maximum OD of Rs FACILITY OPTION TO GET OD (SUBJECT TO 90% OF 5000/. ROI FDR RATE+1. (HALFYEARLY 4% P. 4% P.A.A.50% lower 80% OF FD VALUE *A/C TO BE IN CREDIT (MIN LIMIT 8000/- ONCE IN 60 DAYS YES FREE 20 LEAVES IN A HALF YEAR CHARGES MAX 100000/-).A. HUF. TRUST. ASSOCIATIONS RIRD - INDIVIDUALS ABOVE 1000/- MINIMUM-12 AS PER ALLOWED BARODA 14 YR. (IN MULTIPLES OF THAN 12 MONTHS MATURITY (Paid ALLOWED CABL (DEPOSIT TERM SOCIETIES 100/-) (7-14 DAYS FOR on E AMOUNT) DEPOSIT TRADERS.FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER . CLUB. CLUB. ABOVE) APPLI 95% CORPORATES. CORPORATES. HUF. CLUB. HUF. TRUST. MONTHS compunded RECURRING BANKS. MONTHS RATE IN MIP AND INTERETST PLAN BANKS. TRUST. HUF. TRUST.4 . ASSOCIATIONS 47 | P a g e . (IN MULTIPLES OF MONTHS MATURITY ALLOWED CABL (PRESENT REGULAR SOCIETIES 100/-) MAXIMUM-120 (DISCOUNTED E VALUE) INCOME TRADERS. AMT 15 LAC & Maturity/withdrawal) BANKS. DEPOSIT CORPORATES. quarterly) ASSOCIATIONS MIP& QIP - INDIVIDUALS ABOVE 1000/- MINIMUM-12 AS PER APPLI 95% BARODA 14 YR. (IN MULTIPLES OF MONTHS MATURITY PAYMENT CABL (PRESENT FIXED SOCIETIES 1000/-) MAXIMUM-120 IN UNITS E VALUE) DEPOSIT TRADERS. (IN MULTIPLES OF MONTHS MATURITY (Paid CABL (PRESENT REGULAR SOCIETIES 100/-) MAXIMUM-120 Half yearly. CLUB.TERM DEPOSITS (1) NAME OF 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 14 YR. 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 PER THE SCHEME) BEFORE 60 E UPTO 60 TERM ADULTS) MAXIMUM-UPTO MONTHS DEPOSIT HUF (IN THE NAME 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 14 YR. E VALUE) INCOME cum TRADERS. MONTHS OF 1000/- SCHEME BANKS. WHICHEVER IS HIGHER ROI FOR +1.TERM DEPOSITS (2) NAME OF THE 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 .00% OVER ODBOD FDR IIIrd PARTY.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. ALLOWED APPLI 95% CABL (PRESENT E VALUE) APPLI 95% ASSOCIATIONS BARODA INDIVIDUALS ABOVE MINIMUM CORE MINIMUM-12 AS PER ALLOWED FLEXIBLE 14 YR.FEATURES OF VARIOUS RETAIL LIABILITY PRODUCTS-READY RECKONER .@ +1. CLUB. HUF. (MAXIMUM 3 (YSJY) CORPORATES. 50/. OF 100/- MONTHS HALF YEARLY) ACCOUNT BANKS.00% OVER FDR OR BR+0. HUF. TRUST. INSTALMENT 100/- MONTHS MATURITY CABL (PRESENT RECURRING SOCIETIES & IN MULTIPLES MAXIMUM-36 (COMPOUNDED E VALUE) DEPOSITS TRADERS.00% BOB STAFF ROI ON LABOD/ SELF +1. TIMES OF CORE ASSOCIATIONS INSTALMENT upto 10000/.50% TDS CITIZEN IF TOTAL INTEREST PAYABLE IS ABOVE 10000 PER YEAR ROI FOR +1. TRUST.& 100/- MONTHS SCHEME BANKS.25%. RESPECTIVELY) (MONTHLY) CORPORATES. CLUB.BARODA INDIVIDUALS ABOVE R/ SU 50/- MINIMUM-6 AS PER RECURRING 14 YR.50% NOMINATION AVAILABLE BOB STAFF (SR CITIZEN) 5 . U/ M 100/- MONTHS MATURITY DEPOSITS- SOCIETIES (IN MULTIPLES OF MAXIMUM-120 GENERAL TRADERS. VICTIMS AS COLLATE RAL FLEXI DEPOSIT HIGH 5 CRORE MINIMUM-7 DAYS AS AS PER APPLICA SCHEME FOR HIGH NETWORTH. BANKS. 100/- MAXIMUM-120 DEPOSITS SOCIETIES (NOT RESPECTIVELY) MONTHS ALLOWED APPLICA 95% BLE (PRESENT VALUE) FOR NRE) TRADERS. BANKS.LESS months and 27 days ALLOWED APPLICA 95% BLE (PRESENT VALUE) 49 | P a g e . CLUB. CLUB. BANKS. 100/- MAXIMUM-120 DEPOSITS SOCIETIES (NOT RESPECTIVELY) MONTHS ALLOWED APPLICA 95% BLE (PRESENT VALUE) FOR NRE) TRADERS. ASSOCIATIONS BARODA SAMRADHI INDIVIDUALS 1000/- MINIMUM-36 AS PER HALF YEARLY (MINORS ABOVE (IN MULTIPLES OF MONTHS MATURITY RECURRING 10 YR). 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). TRUST. 1000/-) Senior Citizens: 101 SOCIETIES MAXIMUM. 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). TRUST. CLUB. (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. TRUST. ASSOCIATIONS BARODA DOUBLE INDIVIDUALS 5000/- General Public: 108 AS PER DHAMAKA FIXED (MINORS ABOVE (IN MULTIPLES OF months and 12 days MATURITY DEPOSIT SCHEME 10 YR). 100/- MAXIMUM-120 DEPOSITS SOCIETIES (NOT RESPECTIVELY) MONTHS ALLOWED APPLICA 95% BLE (PRESENT VALUE) FOR NRE) TRADERS. CORPORATES. CLUB. CORPORATES. ASSOCIATIONS BARODA SAMRADHI INDIVIDUALS 500/- MINIMUM-36 AS PER QUARTERLY (MINORS ABOVE (IN MULTIPLES OF MONTHS MATURITY RECURRING 10 YR). CORPORATES. THAN Rs 1 CRORE TRUST.00% OVER FDR IIIrd PARTY@ +1.@ ODBOD +1. (55 yrs in IN MULTIPLES OF 5 YEARS AS ADVISED AFTER APPLICA SAVINGS SCHEME - VRS).30%.00% ROI ON LABOD/ SELF. WHICHEVER IS HIGHER ROI FOR BOB STAFF +1.TRADERS.50% TDS IF TOTAL INTEREST PAYABLE IS ABOVE 10000 PER YEAR ROI FOR BOB STAFF +1. CORPORATES.1968 INTEREST PAYMENT QUARTERLY PREMATURE NOT COMPOUNDING CHARGES (1%) APPLICABLE IF DEPOSIT IS UPTO Rs 5 lacs & RUN OVER 12 MONTHS ROI FOR SR CITIZEN +0. 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 WITHOUT VISITING THE BRANCH DEPOSIT THROUGH NET BANKING BARODA CAPITAL INVESTMENT TO BE MADE WITHIN 2 YRS FOR PURCHASE & 3 YRS FOR CONSTRUCTION GAIN ACCOUNT TAX EXEMPTIONS UNDER CAPITAL GAIN AVAILABLE SCHEME . ASSOCIATIONS SENIOR CITIZENS 60 yrs.50% NOMINATION AVAILABLE (SR CITIZEN) 50 | P a g e . BANKS.25%.MAXIMUM (EXTENDABLE BY BY RBI. ONE YR BLE 2004 Defence personnel Rs 15 LAC 3 YRS) Presently (WITH (Excluding civilian @9.00% OVER FDR OR BR+0. Retired 1000/. Minimum amount: Rs. 1. The accounts in which deposits are not made for any reason are treated as discontinued accounts and such accounts cannot be closed before maturity. once every year from his PPF account after expiry of five years. Rate of interest: The rate of interest for every financial year will be notified by RBI. whichever is lower. Interest Rate: The interest is paid as per the rates declared by the Government from time to time. HUF and NRIs cannot open PPF account. The depositor has flexibility and freedom for depositing any amount in a maximum of 12 installments in a financial year. 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.5 Lacs per annum (FY 2014-15).per annum is required to be deposited.500/.with default fee of Rs. can be extended for a further period of five years at a time. The discontinued account can be activated by payment of the minimum deposit of Rs. Rate of interest remains unchanged for the entire duration of the investment till maturity irrespective of the revision in subsequent years. Withdrawal facility: A depositor can make partial withdrawals. this can be extended by 3 more years. from the end of Financial Year. 1000/Maximum investment limit: Rs. Maximum amount: Rs. in which the initial deposit was made. Maturity period: 15 years.Public Provident Fund 1968 Scheme Eligibility: Any adult in his / her name or in minor's name in the capacity of guardian of the minor. Frequency of computing interest: Quarterly Investment to be in multiples of: Rs. An Account. Senior Citizens Savings Scheme 2004 Tenure of the scheme: 5 years. on the expiry of fifteen years. 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. 500/.for each defaulted year. Online subscription facility Existing customers having PPF account with Bank of Baroda can deposit online in PPF account from Bank of Baroda savings account. 15 lakh 51 | P a g e . Premature Encashment: Premature closure of a PPF Account is not permissible except in the case of death of the depositor.50/. Other features: Partial withdrawal. balance will continue to earn interest as specified for the scheme from time to time. in individual or joint names/on behalf of a minor as father/mother/legal guardian.years from the date of the issue. Government of India 8% Savings Bonds 2003 (Taxable) Key Benefits Bonds can be issued to resident Indian. 52 | P a g e .5 Lac can be deposited in a financial year. 1000/. Maturity period: The account shall mature on completion of 21 years. provided that girl is married. Minimum amount: Rs.Minimum eligible age for investment: 60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary 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. 1.Normal premature closure will be allowed after completion of 18 years of age of account holder. Bonds bear interest @ 8% p.per annum is required to be deposited.a. 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. No interest would accrue after the maturity of Bonds. PIO and HUFs: Non resident Indians. Income Tax benefit: Deposits under ‗Sukanya Samriddhi Account‘ scheme are eligible for Income tax deduction under 80C of Income-tax Act. Persons of Indian Origin and Hindu Undivided Family are not eligible to open an account under the 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. Interest Rate: The interest is paid as per the rate declared by Government of India from time to time. Charitable Institution and University. maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder‘s attaining age of 18 years to meet the financial requirements of the account holder for the purpose of higher education and marriage. Maximum amount: Rs. 1961. Hindu Undivided Family. The amount can be deposited in multiples of hundred on a single occasion or on multiple occasions but should not exceed the maximum limit. If account is not closed after maturity. can be done through e-Biz 53 | P a g e . in the States of Gujarat. It is a secured way of paying non-judicial stamp duty to State Govt. & Expenditure Tax. in the States of Gujarat. Treasury/Sub-Treasury business Bank of Baroda undertakes State Governments Treasury-sub-treasury business at its select branches. These Bonds are non-transferable. 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. Maharashtra. Rajasthan.and in multiple thereof with no maximum limit. Present system of physical stamp paper is being replaced by e-stamps gradually by the State Governments. Hotel Tax. 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. Online Mode – Customer using their net banking facility can pay through online mode Fee pertaining to the services like. through its network Collection of Indirect Taxes (CBEC) Bank of Baroda provides the facility of collection of various types of Indirect taxes viz. 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. Customs & Service Tax through its network of select branches in the States of Gujarat. Maharashtra (Mumbai). Wealth Tax. Bengal. Excise duty. Rajasthan. Delhi & W. & Western UP. Corporate Tax. Haryana. There are two modes of collection of e-Biz receipts: 1.1000/. Collection of Central/State Taxes Bank of Baroda. and Employer Registration Service etc. It prevents paper and process related fraudulent practices. Uttar Pradesh. Gift Tax. Industries Entrepreneur Memorandum. provides the facility of collection of various types of direct taxes viz. Industrial License. Delhi. Chhattisgarh and Tamil Nadu. Investment can be made with minimum Rs. Income Tax. Offline Mode – By any of our branch across India 2. Permanent Retirement Account Number (PRAN) will be provided to the subscriber immediately by the Branch. 54 | P a g e . Saving Bank account is mandatory for subscribing under the scheme. Rs. Instead.Atal Pension Yojana (APY) Atal Pension Yojana is a Social Security Scheme introduced by Govt. right issues and follow on public offers (FPO) made through book building route and co-exists with the current process of using cheque as a mode of payment and submitting applications. spouse and 2 dependent children) up to the amount insured without any additional premium. ASBA means "Application Supported by Blocked Amount". 3000/-. of India. aimed at providing a steady stream of income after the age of 60 to all citizens of India. It is based on National Pension Scheme (NPS) frame work.and Rs. Premium paid is eligible for Income Tax exemption under Section 80 D as per Income Tax Rules.2000/-. the amount is blocked in investors' own account and only an amount proportionate to the shares allotted goes out when allotment is finalized. Address Proof and Age Proof to fill the form for registration under the scheme. ASBA (Applications Supported by Blocked Amount) It is a supplementary process of applying in initial public offers (IPO). Rs. 5000/. Under APY the subscribers have a choice to get Fixed monthly Pension amount from Rs. 1000/-. Any surgery that is required in respect of any disease or accident that has arisen during the policy period Salient features: Very low premium Health insurance cover is available to family of -4. in respect of the following eventualities that required the minimum hospitalization for 24 hours Any illness / disease Accidental injury and/ or any ailment.by paying monthly subscription as per the table Individuals between the age of 18 to 40 can visit our nearest Branch with ID proof.(self. "Baroda Health" (Mediclaim Insurance Policy) It is a Medical Insurance Scheme. Medical examination required for commencement of health cover. Rs. 4000/. available only to account holders of our Bank. enables investors to apply for IPOs / FPOs and rights issues without making a payment. which takes care of the hospitalization expenses incurred by the customer up to the amount of sum insured. if insurance cover availed before completion of 65 years. 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. The scheme is administered through Third Party Administrators (TPAs) for settlement of Hospitalization Claims under the insurance cover. 55 | P a g e . 2.g. Mobile Banking: 13. 4. Missed Call facility for ―Balance Inquiry 7. Debit Cards Credit Cards 9. Baroda e-payment Gateway 14. Some Recent Initiatives by the bank Cash Recycler Machines (Cash Deposit + ATM Functions) Multi Function Kiosk (MFK) Self Service Passbook Printer (SSPBP) – Introduction of new feature for ―Self mapping of subsequent passbook‖ 5. Baroda Cash Management System (BCMS) 17. Self Service Passbook printer) Launch of Loyalty program for Debit Card Customers – Baroda Rewardz Master Card Platinum Chip Debit Card (enhanced transaction limits ) Master Card Classic Chip Debit Card Baroda Flash n Move+ (VISA) Contactless Debit Card Card to Card Fund Transfer through ATM Cheque book request through ATM Baroda e-trade now available on mobile devices (Android and ios) through mobile app b. Baroda Demat Services 15. Contact Centre 6. 3.ROLE OF TECHNOLOGY IN BANK Contents 1. Recent Developments in Digital Space 1. ATM. Baroda Connect 12. Baroda Gift card 10. Some Recent Initiatives by the bank a. Bank of Baroda Online Trading (OLT) 16. Baroda Travel easy card 11. SMS Banking 8. for mini statement *99*48*2# Baroda M-Connect – Instant Registration through Branch and Interoperability 56 | P a g e . New Customer Oriented functionalities in our Digital Banking products Baroda Connect (Retail) Online Self Registration by Customer by using Debit Card and Registered Mobile Number Online Retrieval of USERID Online resetting of Transaction Password Mobile OTP – Generation of OTP on Smart Phone Password now being sent in Activated Mode Self mapping of new passbook in Self Service Passbook Printer USSD Direct Access Code to minimise the steps involved in USSD based mobile transaction e. New Products / Services Chillr app Express Lobbies (Includes Cash Recycler. where per transaction & per day limit is of Rs. This limit also includes the cash deposited over the counter at the branches.900/-. regeneration of PIN. Cash Withdrawal This facility is exactly like ATM operations and available with Debit / ATM Card only.is reached.900/.e.000/. 57 | P a g e . Facebook and Twitter c. Daily transaction limit with PAN registered in CBS is Rs. new portal of BOBCARDS for Debit Card CRM (complaint resolution module) 2.f. 2. 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. There is no restriction on number of transactions of cash deposit till daily limit of Rs.02. multiple account linking / delinking and card blocking) DCARDBLK (For f\blocking of Debit card through branch).‘ 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). 20.16 Migration of ECS Outward Services from RECS to NACH platform New Menu options such as DCISS (Debit card reissuance. This limit also includes the cash deposited over the counter at the branches. 49. The Cash Recycler dispenses cash deposited by customers using Cash Acceptor facility. Simplification / Changes in processes Branch retail customer relationship management (CRM) for 360° view of the customer (through BRCRM option in Finacle).00. 49.000/. 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.900/-.without any restriction on number of transactions. 01. 49.subject to daily transaction limit without PAN (Permanent Account Number) registered in CBS of Rs. Following details of customer will be available on the user screen Accounts Transaction analysis Customer Analytics Personal details Organization Address/phone Relationship Issuance of NPDC (Non-Personalised Debit Card) discontinued w. System will provide 45 seconds to insert new passbook for auto mapping. customer is required to first insert the old passbook. 3. In that case. system prompts customer to collect fresh passbook from branch for continuation. however per day Cash withdrawal limit is as per the variant of Debit Card. Multi Function Kiosk (MFK) Benefit to customers Multiple facilities available on a single machine Cheque deposit beyond the branch timings Lesser time spent in the cheque clearing process as the data will be directly uploaded to CTS server from the machine itself. Maximum cash withdrawal limit per transaction for our Customer is Rs. 4. no need of manual data entry at branch level 4. System will prompt him/her to insert the new blank passbook and machine completes the mapping. Thereafter. 5. 2. 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). for mapping of subsequent passbook. 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 . 3. Self Service Passbook Printer (SSPBP) – Introduction of new feature for “Self mapping of subsequent passbook” To improve customer convenience and to reduce workload of staff to map subsequent passbooks. ―Self mapping of subsequent passbook‖ feature is now enabled in SSPBP. customer prints passbook using Self Service Passbook Kiosks. 15000/-. Other Bank customers having Debit / ATM Card can also use Cash Recycler for Cash Withdrawal only. On completion of the passbook. If customer inserts new blank passbook within 45 seconds. Benefit to Bank Reduced branch visits of customers Machine utilization is increased as one machine provides the facilities that were earlier provided through multiple machines Automation of the process of depositing a cheque Cheque clearing process is automated. Contact Centre Bank has established Two Contact Centres at Baroda and Lucknow. Details of this facility are as under: 1. system automatically maps the serial number of the blank passbook with customer‘s account and deactivates the old passbook. 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. Availability of Contact Centre Services: Services through IVR by using TPIN Round the Clock Services through Agent Hotlisting of Debit Card Round the Clock Web-chat facility Round the Clock All other services except others 6 a. Through Agents Account Enquiry of linked Accounts Balance Enquiry Statement Transaction Status Cheque Services in operative Accounts Stop Payment Status Enquiry Cheque Book request Debit Card Services Clocking of Card Request for regeneration of PIN Request for reissuance of Debit Card Complaint of Debit Card Failed transaction Baroda Connect Help Desk Activation of Password Regeneration of password Complaint on failed transaction Mobile Banking General Queries Resend link / PIN General Enquiry Products & Services Branch & ATM Location Interest Rate and Forex rates Lead creation Wealth Management Product 59 | P a g e .m.m. to 10 p. Services Provided 1. SMS Banking A SMS to be sent from their registered mobile number to 5616150 or 9176612303. Deposit account inquiry General Information Menu – Deposit & Retail Loan ROI. Through IVR (Interactive Voice Response) Account Information –Transaction details.2. customer with overseas country code /mobile number will not be sent any SMS. Customer may have more than one account with same mobile number. Services oferred are Balance Enquiry Mini Statement Cheque Status Customer has to send a SMS text as under o o For Balance enquiry For Mini statement . In other words. Branch/ ATM locator. Statement through e-mail Cheque Related Service – Cheque Status.BAL <space> last 4 digit of account number . Loan account statement request. Cash Credit and Overdraft schemes are provided through this facility.MINI <space> last 4 digit of account number o For Cheque status . Stop payment of cheque. Cheque book request Change TPIN Loan and Deposit Account Services – Loan account inquiry. Presently this service is available in English only. 4. 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.e. In that Case SMS of maximum length of 320 characters (2 SMSs) will be sent to customers. Balances of account under Saving. Forex rates. Missed Call facility for ―Balance Inquiry Customers. Salient features of the facility are as under: This facility is available 24X7. who have registered their mobile number. Customer can use this facility maximum ―5 times in a day. For remaining accounts.CHEQ <space> last 4 digit of a/c no <space> cheque no 60 | P a g e . customer can avail the ―SMS Banking Services or our ―Contact Centre services. can get balance of their accounts by just giving a missed call from their registered mobile number to mobile number 09223011311. mobile This service is available only for resident accounts i. Current. system will not respond thereafter. 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. accounts with domestic number only. 5.per day from ATM and Purchases up to Rs 1. Make online purchases through Internet.000/. Card limits: A. ATM: Maximum per day limit Rs 1. travelling. Can be used at ATMs to withdraw Cash or avail any other value added service. POS Maximum per day limits at POS (Inclusive of NFC & e-commerce transactions): Rs 2.by opting for Contact based mode. Near Field Communication): 5 Due to limited availability of contactless enabled POS terminals in India. Higher limits of Cash Withdrawal up to Rs 50. Targeted for HNI. the cardholder simply taps the card over special POS terminals (enabled for accepting contactless cards) for making purchases at POS.00. 3. 61 | P a g e . 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). Validity of card is Five years from the month of issuance.can be done without PIN at POS.000 Maximum per transaction limit on our ATM Rs 15.000 Total Count of purchases at POS in a day using: Contactless mode (NFC i. For convenient shopping.MMCR and MMNR. Customer also has choice of using PIN on purchase at POS for an amount less than Rs 2000/.o For Aadhar seeding a/c no .000 Maximum per transaction limit using Contactless mode: Rs 2. If amount is more than Rs 2000/-.000 Maximum per transaction limit on other Bank‘s ATM Rs 10. 2.000 Maximum no of cash withdrawals allowed per day 10 B.00. presently Flash N Move+ is being launched in 3 Regions of Greater Mumbai Zone viz MMSR. Ready for international usage on millions of MasterCard ATMs/Terminals. Secured with PIN and CVV2 for online transactions.per day at POS/e-commerce merchants wherever Master Cards are accepted in India and Abroad. 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.12 digit aadhar number <space> last 4 digit of 6. 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. dining out at many locations wherever contactless debit cards are accepted As per RBI guidelines.000/. 6. However. 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. Debit Cards a) Launch of MasterCard Platinum Chip Debit Card 1.e. Maximum number of ATM cash withdrawals allowed per day is 10. Instead. Contactless transaction up to a maximum of Rs 2000/. Customer has to mandatorily enter the PIN.00. 4. 000/ Rs 50.000/- Rs 50.00. KITSHORE. Profile of Baroda MUDRA Card: Baroda MUDRA Card is exclusively for PMMY borrowers enjoying Working Capital limits under all three segments of PMMY viz.000/- MasterCard Domestic International & Rs 50.b) Discontinuation of magnetic stripe only debit cards RBI has advised to discontinue the issuance of magnetic stripe only debit cards.000/ Name Acceptance Per day limit at ATM Per day limit at POS Visa Platinum Domestic International & Rs 1. from 1st February 2016. 62 | P a g e . In view of compliance.000/ RuPay Classic Domestic only Rs 25. without visiting the branches.000/- RuPay MUDRA Domestic only Rs 5. SHISHU.000/- RuPay BKCC Domestic only Rs 25.000/ Rs 50.000/- Name Acceptance Per day limit at ATM Per day limit at POS RuPay PMJDY Domestic only Rs 25.000/- Rs 5. c) Summary of Debit Card variants effective from 01/02/2016 Name Acceptance Per day limit at ATM Per day limit at POS Visa Electron Domestic only Rs 25.00. bank is in the process of introducing Chip Based Non Personalized Debit Card as replacement of Magnetic Stripe Non Personalized Debit Card.00. Further.000/ MasterCard Classic Domestic only Rs 25.000/- Platinum d) Launching of Baroda MUDRA Card Bank has launched Baroda Mudra Card in pursuit to offer better banking facilities to borrowers who avail Working Capital facilities under Pradhan Mantri MUDRA Yojana (PMMY).000/ Rs 50. The card is RuPay enabled and is linked to PMMY/ CC/OD accounts to be used at our Bank's ATM network and NFS member ATMs in India.00. except debit cards issued under government schemes.000/- Rs 1.000/- Rs 50.000/- Rs 2.000/- RuPay Platinum Domestic International & Rs 50. TARUN. At present the Card can be used at ATM and POS only with a provision for allowing Online purchases to be considered at a later date. The card is envisaged to meet the requirements of MUDRA customers to use alternate delivery channels like ATMs for cash withdrawal and also POS usage. branches are to discontinue the issuance of Non Personalized Debit Card lying unused in the branches. This will ensure availability of funds 24x7 to borrowers any time as per their needs.000/- Rs 1. viz. Card can be issued to PMMY customers. withdrawal through Baroda MUDRA Card is restricted up to Rs. 50. g) Issuance of RuPay PMJDY Debit Card to Minors Accounts opened under Financial Inclusion Scheme: Minors above the age of 10 years opening Savings Bank Account under Financial Inclusion Scheme in his individual name with operational instruction as ―Self‖ (not through father & natural guardian) can be issued a RuPay PMJDY debit card. Accounts opened in Scheme other than Financial Inclusion Scheme: Existing criteria of 15 years of age and above remains unchanged for issuance of debit 63 | P a g e .00. (subject to balance available in the account). on request. Suitable communication screen about timing will be displayed to the customers. Mumbai.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. Card can also be used at selected RuPay enabled POS outlets (as identified by NPCI).10/.000/.00.5000/. The Registration Facility is provided in CBS through menu option ―BENRATM.per transaction and Rs. 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. as existing. The minimum amount for NEFT through ATM is Re.000). A Customer can register maximum -2. 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. who will be availing Working Capital facilities. Chennai.per day There is no limit for number of transactions in a day (subject to the maximum cap of Rs 2. New Delhi. b) Rs. For current/ Overdraft account holder: Rs 20/.plus service tax per transaction for Financial Transaction. No transactions are free for these account holders for usage of Debit Card on other Banks‗ ATMs.per day at POS.beneficiaries per day and altogether maximum -99.Rationalisation of number of free transactions on other Bank‟s ATMS. 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. f) Usage of ATMs. NEFT fund transfer after the prescribed cut off time will be processed on the next working day.000/. maximum amount is Rs.10/.beneficiaries can be registered with a single debit card. One time registration is required at branch for registration of Beneficiary account and IFSC code. Kolkata. This card is EMV chip card which can be operated through PIN at ATMs and POS. 2.1/-. Further. e) NEFT Funds Transfer through ATM This facility will be available on Bank of Baroda ATM‗s.5000/. Bengaluru and Hyderabad.plus service tax per transaction for Non Financial Transaction. 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 Non Financial Transaction.plus Service Tax for every Financial transaction and Rs. Mobile wallet and other digital products launched from time to time.card (any variant) to Minors maintaining Saving Bank Account in his individual name with operational instruction as ―Self (not through father & natural guardian). This facility is available 24 x 7. bank has embarked upon implementing a comprehensive loyalty program . Card De-blocking Four eye principal/ Maker & Checker has been implemented for all these 4 activities. 1800 220 400 for card blocking. Viewing the status of card/ PIN processed and dispatch. Internet banking. Hence branches have to immediately verify the entries. h) Debit card Hotlisting/Blocking The different options for hot listing of debit cards are Cardholder calls at Bank‘s Contact Centre at 1800 22 33 44/ 1800 102 44 55 and gets the card blocked. bank has launched the loyalty program for our debit card customer‘s wef 03rd December 2015. 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. Mobile Banking. i) Debit Card Dispute Management System BOBCARDS has introduced new portal for branches and contact centers. This program is aimed at encouraging our customers for usage of debit card on POS and e-commerce transactions for all debit card variants. New portal shall be used for following activities: 1. k) Baroda Rewardz . Lodging the debit card related complaints for the failed/fraud transactions. This loyalty program will cover Debit Cards. PIN Regeneration iii. Debit Card Re-issuance ii. Multiple Account linking/ de-linking and Card de-blocking through DCISS will not be instant. This facility is available round the clock. whenever a debit card is hot listed/blocked. j) DCISS A new menu in CBS/Finacle ―DCISS‖ has been developed/ implemented for various card related activities as under:i. Multiple A/c Linking or De-linking iv. It will happen only after the request is processed by BOBCARDS within 1 working day. Cardholder calls at BOBCARDS Toll Free No. The program detail is as follows: 64 | P a g e . 2.Bank‟s Loyalty Program In order to increase the usage of our various ADC products. As a first program under Baroda Rewardz.Baroda Rewardz. per transaction and Rs.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 65 | P a g e .+ taxes per transaction Fund Transfer limit is Rs.jsp or by calling at customer care Toll free number -18001025627. Cash withdrawal Limit: 80% of Credit Limit) 8.com/prepaid/cms/customer/index. Credit Cards Some of the type of credit cards being oferred by our Subsidiary BOBCARDS Ltd : BOBCARD Signature (Visa) BOBCARD Platinum (Visa. Credit limit = 80% of FD amount . longer shelf life and extended shopping options for the beneficiary.5000/.enstage. Master & Assure) BOBCARD Titanium (Master) BOBCARD Bombay Bullion (Visa) BOBCARD Assure (VISA ) (Against FDR. The service is chargable at Rs. Card can be loaded with any amount between Rs 500 to Rs 50.10/. ease of handling.l) Card to Card Fund Transfer This facility is an inter / intra bank fund transfer facility using NFS ATM network.25000/.000 in multiple of Rs 1 Cardholder can check balance & transaction history online through the URL – https://bobprepaid. The fund is transferred instantly on a 24X7 basis including holidays.per month 7. 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. Nepal and Bhutan. Request for cheque book. whichever is earlier. Online Fixed Deposit opening facility 66 | P a g e . Profile – customer can change his profile and change his password. reconciliation and customer support by Operations team. fixed deposit renewal. Centralised accounting.and claim is lodged within 3 months of card expiry. based at Transaction Banking Department. Fund transfer and NEFT can be scheduled for a future date. 100/. AML/CFT requirements are as per prevailing Reserve Bank of India guidelines Card cannot be used in India. Deposit accounts and Loan accounts. the card can be reloaded any number of times. Cardholder will have access to 24x7 Customer care team as well as secured online portal for viewing their card balance and transaction details. Switch Mailing address. Modeling – Customer can model deposit / loan schemes of the bank and know about likely maturity value. EURO and GBP. Baroda Travel easy card Issued in US Dollar. Services offered to Retail Customers Balance enquiry in Operative account. Baroda Connect a. account opening for CBS and e-banking. Minimum load value .USD $200 /EURO €150/ GBP £150 Maximum load value . In this period.as per FEMA guidelines based on the purpose of visit Activation within 24 hours of the card purchase Minimise risk of carrying cash or travelers' cheque during foreign trips Fees/charges lower than charges levied on domestic debit/credit cards when used abroad Cards are valid for -3.years from the date of activation or the date printed on card. Residual balance claim will be entertained only if balance amount is equal to or more than Rs. Stop payments of cheques Tax Deduction Enquiry Account summary – summary of all operative. if he invests or likely EMI if he takes loan. The cards are available for issuance from all the ‗B‘ category branches 10. Application Supported by Blocked Amount (ASBA) facility School Fee options Bill payment option Facility of IMPS for instant Inter/Intra Bank fund transfer through Baroda Connect (This facility is available only to mobile banking customers) . etc. Activity history – Customer can get details of all the activities carried out by bank. 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 9. deposit and loan accounts Fund transfer to Self / linked account and Third party fund transfer. in collaboration with the service provider KYC. 00. Limit for transactions Retail customers can have maximum -5..000 1. Special Services offered to Corporate Customers Approvals – For corporate customers.00. Direct Salary upload facility. B.000 12.00. This facility will be available only to Retail users.00.00.00.000 RTGS 5.00.00. Online RD account opening facility (Standing Instruction is MANDATORY and is automatically noted) Online Gift card request facility Aadhar number linking with operative accounts Our customers can link their PPF account (Maintained in our Bank) with their existing Bank account through Baroda connect facility.00. having mobile banking facility.000 2. Trade Finance queries relating to– Import/Export.00. c.00. they can also credit fund in the PPF Account through Baroda connect.00.Connect users on 24 x 7 basis.G.000 Unlimited Unlimited Unlimited Unlimited 15.00. there can be involvement of multiple users for transfer of funds / payment of bills.00.000 RTGS opping payment 5.00 0 Unlimited Unlimited Unlimited Unlimited Unlimited 10. The limit for corporate customer can be increased on the request of the customer and recommendation of the concerned branch.00.000 4.00.000 30.000 5. Online payment of India First Life Insurance Policy premium payment b. But in case of Corporate customers. Inland Trade.00. Once linked.000 30.00 0 10.00. there will not be any restrictions on the Number of Transactions per day.) 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 2.000 30.000 45.00.00.000 fund transfer Unlimited 4. Per transaction Daily limit Weekly limit Monthly limit Yearly limit (Amt.000 50.00.000 d.000 6.00.00. as per powers delegated by the corporate to their users. in Rs. 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 67 | P a g e . Forward Contract.000 50.50. etc and Baroda connect allows multiple users to log in and initiate / approve the transactions.00.transactions/day. 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.00.000 1.00. This facility can be availed for transfer of funds to Bank of Baroda account holders also. IMPS fund transfer through MMID: Both remitter and beneficiary are required to be mobile banking registered customers of their respective banks and need to have MMID (Mobile Money Identifier) mapped to mobile number. if the system suspects unusual activity/ behavior or non-registered PC. 2012. which is triggered by the system to validate the user/other credentials. One time beneficiary registration with beneficiary MMID / Beneficiary IFSC is required. our IT team has built infrastructure for extending the option of ―Digital signature certificate (DSC) based authentication‖ facility to our corporate users. our IT team has enabled OTP application on mobile handset supporting Apple. After logging-in. User can select the desired account number to be debited from the drop down. facing issue of OTP over SMS. Android. the remitter is required to be mobile banking customer. user can transfer funds to the beneficiary account by keying in Mobile No.digits number which is provided to the customers as part of mobile banking service Under this option. Mobile OTP Application (M-OTP) In compliance with regulatory guidelines. 68 | P a g e . IMPS fund transfer through IFSC: In this mode of funds transfer. Key features of this new functionality are as follows: This will help the users to manually generate the OTP on their mobile handset without using GPRS/internet service. If User wishes to deactivate this facility. Number registered with Baroda Connect facility. User can transfer funds by giving IFS code and account number of the beneficiary. Generation of manual OTP will be protected by PIN set by the user. two factor authentications were implemented in our Net Banking Portal since June. This facility can be availed for transfer of funds to Bank of Baroda account holders also. Activation of Mobile OTP Users can themselves activate M-OTP facility through Baroda Connect. the beneficiary need not be mobile banking customer and can specify only the IFS code and Account no. f. Activation of this application will involve two steps as under: Downloading of Mobile OTP application ―ARCOT OTP‖ on handsets Users are required to download the application from respective app stores. However. Only -2. Windows and blackberry. users are required to click ―Mobile OTP Application‖ link under ―Services‖ tab at home page. and MMID (Mobile Money Identifier) of the beneficiary.beneficiaries can be registered in a day and fund can be remitted after 24 hours of registration. It will enable all the users to get the OTP generated within the time frame. Details of the IMPS transactions and its‗ status for any date can be viewed through Status Inquiry. To obviate the issue of delivery of SMS. User can select the desired account number to be debited from the drop down. e. Authentication by way of OTP through SMS is one part of security process. without any delay. Digital signature based Authentication facility in Baroda connect for corporate users: In order to provide personalized security feature for our Baroda connect corporate users and also as mandate by RBI. as also to enhance security features of Baroda Connect. then the same can be done by clicking on the 'Mobile OTP deactivation' link in the ―services‖ Tab of Baroda Connect and will start receiving the OTP by SMS on registered mobile number. However this requires subsequent activation through their Net banking portals. MMID is a unique -7. This functionality will be specifically beneficial to NRIs/ Customers frequently visiting overseas. The link isprovided on retail user home page On entering valid details an OTO will be sent on customers Registered Mobile Number a. customer will also be able to do transactions like bills payment. 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. Mobile Banking: Our bank offers ―Baroda M Connect. whereby authentication is done through his/her ‗Debit Card number and Pin‘. Pre-requisites for using this facility are: User should be customer of any domestic Branch with valid BANK OF BARODA debit card and PIN. h. Registered Mobile Number (RMN) and email ID After verification of Credentials an OTP is sent to Customer‘s RMN After authentication of OTP system would senf USER ID to registered email ID. Online resetting of Transaction Password By retail users Customers has to enter details like Account number. 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 passwords will be sent to the branches in activated mode. Discontinuing request for Activation of Baroda Connect Passwords In order to reduce turnaround time and increase customer convenience. ANY ONE OR SURVIVORS OR SURVIVOR. User should have valid mobile number registered with bank. IMPS fund transfer etc. bank has introduced ‗Self Registration of Baroda Connect‘ for ‗Retail Customer‘. The concept of activation of password using HDCR/REGPW menu will no longer exist with effect from passwords printed on and after 20th August 2015. Registration either through ATM or through Base Branch or through Baroda Connect 2. Much beyond banking. 69 | P a g e . NEFT fund transfer. and MINOR NATURAL GUARDIAN OPERATION BY GUARDIAN.Retail Users In order to provide customers self driven interface for availing internet banking facility and to reduce turnaround time. 11. Should have high speed internet connection. b. EITHER OR SURVIVOR. The branches will be able to hand over the passwords to the customer for immediate use.more accounts held in the Bank and transact business on them. recharging the mobile phones. the mobile banking facility to its customers. Self Registration Process for „Baroda Connect‟ . Baroda M-Connect –New Application This new application has following major advantages: 1. Downloading of an Application Software for M-Connect or dialing *99# 3. User should have mode of operation as – SELF.g. would encourage the users to regularly use the system. Modern look of the application is appealing and thus. Activation of M-Connect (creating login pw & changing mPIN for software based service or changing mPIN only for NUUP service) a. Customer can also link -5. Debit Card should have been activated at ATM (for first time). the improved search string option. 2. Icon based menu would make the application language agnostic. In case customer does not want to register for the service. b.2. Services: Account Balance Enquiry Account Mini-Statement with color coded debit and credit transactions Fund transfer within Bank / Other Bank using NEFT Fund transfer to other Banks using Immediate Payment Services (IMPS) Mobile Recharge with auto saving of beneficiary name at first recharge. 3. the customer would continue to pay for the SMS generated by the application. customer will be provided mobile banking service. default flag is set as ‗YES‘. In case of Java phone users.. Of these options. provided to locate mobile operator. SAO Menu: In ‗Mobile Banking‘ field (presently shown as ‗Mobile Subscription‘). OAAC and SAO menus which are used to open a new account Default option for Mobile Banking registration will be ‗YES‘ in these menus 70 | P a g e . OACC Menu: Provision is being made to prompt the verifying officer to enable customers for MConnect. For mobile recharge. new app works on GPRS mode. HOPNACCT and SAO. OACC. where customer would be automatically enrolled for M Connect. branches are using predominantly HOPNACCT and SAO menu. Customer is not required to pay SMS charges on every login. where there is no need to wait for 24 hrs to register / de register / generate mPIN through Finacle menus. ‗instant registration / de registration / mPIN generation in Finacle' and 'interoperability between all M-Connect registration channels (Branch-ATM-Net Banking)' Instant registration Like ATM and Net Banking. Mobile operator search option is simplified for a hassle free recharge. Baroda M-Connect facility to all New Customers There are -3. default option in drop down menu is set as ‗YES‘ i. To encourage and register all new customers for mobile banking these menus have now been updated with following changes – 1.menus in Finacle to open an account viz. c. M-Connect for newly opened accounts: Mobile banking registration option will appear automatically on HOPNACCT. Branch channel is also live. then the branch can de-register the customer through HDCR menu.e. 3. If the registration is already completed through branch and at a later date. In Android / iOS / Windows phones. In the later case. bank has made 2 improvements in the current MConnect registration process viz. there is an option for the customer to choose for mobile banking services. 4. HOPNACCT Menu: In ‗Mobile Banking‘ field. reduces the current hassle of multiple entry by the customer. It is mandatory to activate Mobile internet (GPRS) while using M Connect. then the branch is to select ‗NO‘ option for mobile banking while opening account in Finacle using any of three menus. there are options of running the application on GPRS or SMS mode. In our account opening form. Branches are advised to inform the customer about advantages of mobile banking and encourage all new customers to tick the option for Baroda M-Connect. Baroda M-Connect – Instant Registration through Branch and Interoperability To gear up the registrations under M-connect. customer wants to deregister the mobile banking services. 2. bill payment and merchant payment within an overall calendar month limit of Rs.*99*48# (‗48‘ is short code for Bank of Baroda) Direct action Menu options are as under: Salient features are. works even on low end handsets.000 when the service is used over the application/ WAP Through National Unified USSD Platform (NUUP) IMPS transfers 71 | P a g e . ATM.When the account is opened. customer will receive the corresponding message / mPIN immediately. no need to internet/ GPRS connections to access Mobile Banking through USSD and no need of Smart phones. as mPIN will be delivered instantly. a new update has been brought in USSD Mobile Banking. Branch and Net banking. Transaction limit – The daily upper ceiling per customer shall be Rs. Main advantage of this implementation is. d.. 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. Login. and the problem can be resolved without any waiting time.000 for fund transfer. 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. Interoperability There are 3 modes of M Connect registration. e.Main menu of Bank of Baroda Mobile Banking. new customers can be on boarded instantly and can also be activated. M-Connect for existing accounts: FINACLE menu for Mobile banking is HDCR Now.50. customers can be provided handholding by branch staff to activate the mobile banking in branch itself. viz. Mobile banking registration / de registration / mPIN generation will be effective immediately.50. with automation of the menu. within no time As soon as the checker verifies the registration / de registration / mPIN generation request. Direct Access Code in USSD Mobile Banking USSD stands for Unstructured Supplementary Service Data To increase the convenience of the users. wherein customers can dial multi mode codes (direct access codes) to access different menus. customer is also registered for Mobile banking and the password (mPIN) is generated at the same time (instantly) With this. No passwords are stored on the phone locally. can be used.000 Per Week Rs. will be stored by Chillr. Transactions cannot be made without mPIN which is assigned through Bank. Baroda M-passbook • • • App is available in both Hindi and English Languages Transaction and account details stored on the mobile arranged in the chronological order for all the accounts linked to the registered mobile number with the Bank. The minimum amount that can transferred is Rs. The maximum amount that can transferred is Rs. secure and immediate transfer of money between its registered users. Users can transfer funds to other Chillr users and also request money from them.000 Per Day Rs.5. Application enables customers to send money to any registered Chillr user on phone contact list. customer's bank account must have mobile banking activated with IMPS facility. 1000 per transaction to other Bank customers. Only the mobile number of the beneficiary in the remitter's phonebook is needed.50. 5000 The app is now available on iOS. Currently our Bank and HDFC bank are partner banks. Utilities bill payment in all three platform is available g. Mobile recharge and bill payment (will be launched shortly) At one time. Chillr application is directly linked to the Bank account where the customers' Mobile no. After registration. 10. To start using Chillr.Per Transaction Rs. of txn per day 5 f. Non-partner bank customers can only receive funds. The IMEI device no.20. User will require his/her Bank of Baroda Mobile banking MPIN to transact using this appplication. Main Features of the product are as under: Customers can send money through Chillr mobile app to both partner and non-partner bank customers.000 Per Month Rs. Scenarios where the application can be used: Person to person (P2P) money transfer Split bills amongst friends Check account balance View transaction history Request money from friend Pay at stores & to online merchants through Near Me. The daily limit is set at Rs. Windows and Android mobile platform.5. Customer can set his MPIN after OTP verification 72 | P a g e . only one instance of the Chillr Application related to a particular mobile no. is registered and Mobile banking is activated. and device no. Launching of “Chillr Mobile App” Chillr is a smartphone application that enables easy. It uses the Immediate payment services (IMPS) of NPCI as backbone to transfer funds immediately.000 No. merchant and payment processors. leads. • Simple interface with bank‗s system. transaction amount Personalise / add remarks of choice to the transactions. provide assistance in configuring secured access. continuous monitoring of server for vulnerability etc. which can be used to track the transactions on later date. Master Card Secure Code. 128 bit SSL. will enable them to track transactions and generate reports at their end • Merchant will get payment on the next working day in their designated account • Facilitate our merchants to securely accept payment. Create a tech savvy image for merchant. goods/services can be delivered to consumer • Implemented latest industry standard security features viz. 73 | P a g e . If needed. It provides necessary access to payment system including Interchange agencies like Master/Visa. two factor authentication. support would be provided to configure the access. • Merchant can view/print their transactions. • Operations team has been setup to enroll suitable merchants. arrange for day-to-day processing & settlement with Master Card/Visa and carry out associated reconciliation • Software installed at merchant site. Presently this facility is enabled for Savings and Current account holders and the App is made available in Android platform. 12. Based on that. Internet Payment Gateway is essential for retailers. • Consumer is assured of safety of their card details/usage. for their online/web based sale. Opportunities Fast and emerging market in India. who have an online presence and are interested in selling their products over Internet. To avail this service. • Payment is received on the next working day in merchant designated account. card issuing bank. IPG shields the business unit from complex technical infrastructure required for e-commerce business. customer is required to download the app from the Google play store and install the same. so branches should generate max. Baroda e-payment Gateway Internet Payment Gateway (IPG) is a payment and settlement infrastructure which a merchant uses to collect payment from their customer for online sale of products or services. using Credit/Debit cards • Accept Master Card/Visa credit/debit card issued by any institution • Merchant instantly gets confirmation of the receipt of payment. • Round the clock. In addition. Benefits of Baroda e-Gateway for customers • Merchant is shielded from installing and maintaining complex payment gateway technology and interacting with payment systems. hassle free service. they get convenience of purchasing goods/services from the comfort of their home/office. Verified by Visa. IPG is safe & ensures encryption of sensitive card information during secured transmission between customer. Search transaction history by transaction date. settlement bank etc.• • • Customer can select the period of months for which the data can be stored in the app. National Securities Depository Limited (NSDL) ii. NSE and BSE 2.e. NSDL or CDSL or both. banks. Ability to move into new market segments that offer better profits. Thus to open a Demat account of an investor. Benefits which encourage us to have a demat account: 1. 3. 13. For trading in the equity market in India we need to have a demat account. OLT is the state-of-the-art on-line securities trading platform for the 74 | P a g e . Few numbers of entrants in the payment gateway sector. A DP ("Depository Participant") is an agent of the Depository (NSDL or CDSL) who is authorized to offer depository services to investors. there are only two depositories functioning in India and they are:i. CDSL and NSDL. Application can be made vide facility of ASBA (Application Supported by Blocked Amount) wherein amount does not get debited into the account and is remitted only when shares are allotted. Individuals having any other demat account/s where they are not the first holder shall be eligible for BSDA in respect of the single demat account where they are sole or first holder c.e.e. Dividend and issuance of bonus shares are directly credited into linked accounts and demat accounts respectively. We can buy and sell shares and stock of any company listed on the stock exchange of India i. custodians and stockbrokers complying with the requirements prescribed by Securities & Exchange Board of India (SEBI) can be registered as a Depository Participant (DP). Apply in IPO 4. The individual shall have only one BSDA in his/her name across all depositories. No threat of loss of shares due to faulty/bogus/forged delivery. 8. a bank or its branch has to get registered as a DP of a depository i. our subsidiary. Financial Institutions. b. Make on line investment in mutual fund. Bank of Baroda is a DP of both the depository i. No share transfer fees or stamp duty. d. All individuals who have or propose to have only one demat account where they are the sole or first holder. Bank of Baroda Online Trading (OLT) Our bank has launched ―Baroda e-trade an on-line trading facility in July 2012 in association with BOBCAPS Ltd. 14. Flexible price structure that can be improved on the basis of transaction volume and business association. An individual is eligible to have only one Basic Services Demat Account (BSDA) Individuals shall be eligible to opt for BSDA subject to the following conditions – a. 6. Central Depository Services (India) Limited (CDSL). Value of securities held in the demat account shall not exceed Rupees Two Lakhs at any point of time. Baroda Demat Services Presently. Trade in Futures and Options 5. 7. Any customer or non-customer. This product will give long term benefit as well as customer acquisition/retention. Telephonic assistance through centralized Helpdesk Telephone No. Demat and online trading accounts) Savings bank/current and Demat accounts with Bank of Baroda and trading (OLT/Broking) account with BOBCAPS ltd. to be submitted to Demat designated branches for onward submission to BOBCAPS LTD. particularly. There are NIL stamp charges for opening the demat account while Rs 500/. Central Operational Hub (COH) 75 | P a g e . Since it comes with an in-built configuration with proactive approach towards customer service. of corporate customers.. 15. Corporate customers with large volumes of transactions are the target group for BCMS. Account opening form for trading account. Works with low internet bandwidth. This will help our bank in marketing this product. Holding report. Most active scripts. 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. which in turn will give us CASA float and fee income. a. Baroda Cash Management System (BCMS) Cash Management Services is a software application (Cash@Will) that facilitates management of customer funds. Customers could review their margin status.022-61389300 (9am to 5pm). 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. The on-line trading platform ‗Baroda e-trade‗ is powered by a robust trading engine coupled with a comprehensive suite of products and services. Demat account with any of the Depository designated branches of the Bank.is the franking charges for e-trade account. who wants to avail of OLT would be required to have/open the following 3 accounts. and Trading Account with BOBCAPS LTD. Single window order entry with instant order confirmation.e. 128-bit encryption security certified by entrust SSL. Savings Bank/Current Account with any of the branches of the Bank. Multiple market watch facility with streaming quotes( Live markets rates) Customization of screen to show critical market information such as market depth. Operational Model of BCMS is consisting of 3 tiers as listed below:Data Centre 1. i. we aim to provide a constantly delightful trading experience to our customers through this product. Bank account. Top Gainers/Losers.Bank‗s customers. Baroda Cash Management Services also facilitates Internet Based Transactions. Salient Features: Seamless (3-in-1) trading experience (Savings bank/current. Instant fund/share transfer facility through lien marking. order and trade Book on a real time basis. The scope of BBPS will cover repetitive payments for everyday utility services such as electricity. in November 2015. c. Social Media Policy for Employees Bank has launched its presence on social media platforms viz. telephone and Direct-to-Home (DTH). The Liquidity Management Module also facilitates funding of various accounts as per the requirement of the customers out of the balance available in the Concentration account. Gradually. which can be by way of Cash Deposit Proceeds of local cheques Proceeds of outstation Cheques Payment Module– This module handles the outflow of funds by way of Direct Debit Instructions (DDI) ECS – ECS-debit ECS – ECS credit Issuance of DD / BC Payment through RTGS / NEFT Issuance of DW Liquidity Management Module– This module facilitates sweeping of funds from various accounts of the customers and pooling them in a single account called Concentration Account‗. Trade Receivables Discounting System (TReDS) 76 | P a g e . Bharat Bill Payment System (BBPS) RBI. municipal taxes etc. The above policy shall be applicable to employees. Payment & Liquidity Management and a front-end interface available to the customer through the Internet.2. data governance and regulatory compliance. like school / university fees. Post dated Cheque Collection Invoice management 16. Collection Module– The Collection Module handles all inflow of funds in customers‗ accounts. contractors and vendors. Identified BCMS Branches / City Back Office / Service Branches BCMS has three fund management modules. granted an in-principle approval to NPCI to be the Bharat Bill Payment Central Unit under BBPS RBI had received applications banks and non-bank entities for operating as Operating Units BBPS is an integrated bill payment system which will offer interoperable bill payment service to customers online as well as through a network of agents on the ground. water. viz. Having clear guidelines regarding use of social media would be beneficial for the Bank and shall provide an understanding on how to use social media for achieving business goals. reliable content creation. The presence on other social media platforms shall be done subsequently. the scope would be expanded to include other types of repetitive payments. b. Facebook and Twitter today. The presence on social media platforms also warrants Bank to put in place a comprehensive social media strategy and policy framework to ensure consistent. gas. The funds available in this account help the customers in online decision making.. Recent Developments in Digital Space a. Collection. The Liquidity Management Module facilitates both sweep-in and sweep-out from the Concentration account. The payments bank cannot undertake lending activities.Three entities (NSE&SIDBI. Restrictions Payments banks. subject to the Reserve Bank guidelines on BCs. In-Principle Approval to 11 payment Banks In line with the Nachiket Mor Committee (2014) recommendation regarding Differentiated Banks RBI has granted ―in-principle‖ approval to 11 applicants to set up payments banks Those who have received approval include Ecommerce company . cannot issue credit cards. 100. however.000 per individual customer. Payments and remittance services through various channels. 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 TReDS would involve the following Uploading of invoices/bills and creation of factoring units by the MSME sellers Its acceptance by the corporate and other buyers.Pay TM Four Major Telecom Companies – Vodafone. BC of another bank. e. eBiz – India‟s G2B Portal Our bank is one of the accredited bank and branches are suthorised to accept challans pertaining to eBiz portal 77 | P a g e . Distribution of non-risk sharing simple financial products like mutual fund units and insurance products. rating and re-discounting of factoring units Sending of notifications at each stage to the relevant parties to the transaction reporting and MIS requirements Generation and submission of settlement of obligations Reverse factoring: the buyer could also create factoring units based on the documents uploaded by the MSME seller d. etc. They will be required to invest minimum 75 per cent of its "demand deposit balances" in Statutory Liquidity Ratio(SLR) They will have to hold a maximum 25 per cent in Current A/c / Term Deposit A/c with other scheduled commercial banks for operational purposes and liquidity management. including the Government Departments and PSUs. within a specified time limit Discounting. Airtel. Idea and Reliance Two Technology companies – Tech Mahindra and Fino pyatech Two Financial Services Companies – NSDL and Cholamandalam Postal Department Sun Pharma Objective: To further financial inclusion Scope of activities : Acceptance of demand deposits restricted to a maximum balance of Rs. Issuance of ATM/debit cards. 000/4.000/d) Rs. IFSC code comprises of a) 13 characters b) 14 characters c) 11 characters d) 16 characters e) 20 characters 6.00. 2.000/c) Rs. 1. while adopting a decentralised implementation model with respect to various ministries / departments of the government TEST YOUR UNDERSTANDING 1.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.000/b) Rs. Digital India Promotion of e-Governance through a centralised initiative to ensure citizen centric service orientation. 10.00.00. Call Centre of our bank has been christened as a) Contact Centre b) Help Desk centre 78 | P a g e . 5. MMID is related to a) ATM b) Baroda Connect c) Mobile banking d) Contact Centre e) BCMS 3. 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 5.00. interoperability of various e-Governance applications and optimal utilisation of ICT infrastructure/ resources. Online RTGS can be done through a) b) c) d) e) ATM Baroda Connect Phone banking Call Centre Mobile Banking 2. In online RTGS through Baroda connect maximum amount per transaction for a Retail customer is a) Rs. This will help in reducing unnecessary delays in various regulatory processes required to start and run businesses.000/e) Rs 20.00. f. Services for the Contact centre through agents is available between which time of the day a) 7 am to 7 pm b) 6am to 10 pm c) 10 am to 5 pm d) 9 am to 9 pm e) 10 am to 10 pm 9.a) Lucknow & Bareilly b) Bareilly & Mumbai c) Baroda & Rai-bareilly d) Lucknow & Baroda e) Bangalore & Lucknow 10.c) Hot line centre d) TPIN centre e) Global IT Help Desk 7. The Toll Free Numbers of our Contact Centre (Non PMJDY) are a) 1800 22 33 44 & 1800 100 44 55 b) 1800 102 44 55 & 1800 11 22 33 c) 1800 22 33 44 & 1800 102 44 55 d) 1800 33 44 55 & 1800 102 44 55 e) 1800 33 44 66 & 1800 102 44 77 8. Password for caller verification at contact centre is known as a) MPIN b) Sign-on password c) TPIN d) ATMPIN e) PIN 1 Q A 1 b 2 c 3 a 4 d 5 c 6 a 7 c 8 b 9 d 0 c 79 | P a g e . Two contact centres are located at . Moreover.03.bbnl. mobile vans and brick & mortar branches. and. New Gram Panchayats are added every month on NOFN on a continuous basis. Details of the same Gram Panchayat-wise is available on http://www. Hence. under Roadmap for provision of banking outlets in villages with population less than 2000. 80 | P a g e . the said website may be checked up for keeping up with the updates. remittance. insurance.2016. The banking services have been provided to these villages through information and communication technology based models like smart cards. increasing Awareness of such services and ensuring Affordability and Accessibility of the appropriate financial products through a combination of conventional and alternative delivery channels and technology enabled services and processes. wherever feasible.nic. Branches are advised to explore the possibility of getting broadband through NOFN for their Bank Mitras/ATMs in the aforementioned Gram Panchayats. credit. Regional Offices may explore the possibility of getting broadband through NOFN for rural branches in those Gram Panchayats (where V-SAT is used). The basic approach of financial Inclusion is based on the fundamental principle of 5A‗s of ensuring Adequacy and Availability of financial services to all sections of the society through the formal financial system covering savings. micro ATMs. etc.in under the heading-Active GPs-List of active Gram Panchayats connected live on the Network.Gram Panchayats from all over India are connected on National Optical Fibre Network (NOFN) as on 09.RURAL/AGRI. at the same time. BANKING AND FINANCIAL INCLUSION Financial Inclusion Plan The bank has implemented Financial Inclusion Plan for providing banking services in the un-banked / under-banked 20.000 and above during the first phase. our bank has advised all the Financial Inclusion link branches to ask concerned BCs and KIOSK operators/VLEs to visit periodically to their allotted sub service area villages on pre announced days and time to cover 100% Service Area villages. Importance & Scope of FIP: Huge potential at the Bottom of the Pyramid Innovative and effective ways of delivery of financial products Poor are bankable and Creditworthy Financing the poor is not poor financing Bank of Baroda has been in the forefront in financing the poor Financial Inclusion is a business opportunity Skill building Efforts A new Alternate Delivery Channel Life-line of future banking in rural areas Steps taken by the Bank to Promote Financial Inclusion: No Frill Savings Bank account with limited OD facility RD account with Money Back facility Baroda General Credit Card Baroda Kisan Credit Card (All purpose credit to farmers) Micro Insurance product A remittance product Introduced relaxed KYC norms as per RBI guidelines Issuance of ATM/Debit Card to financial Inclusion customers(Savings Bank Scheme SB150) 4772.000 villages having population of 2. The following services can be provided by the ―Business Facilitators‖ to the bank: Business Correspondent„ model In Addition To Activities Listed Under The Business Facilitator Model. Hence. The Scope Of Activities To Be Undertaken By The Business Correspondents Will Include 1. Identification of borrowers as per KYC norms and fitment of activities. The system is integrated with the Core Banking Solution (CBS) RBI has now allowed BC appointed by one bank can also work for other banks and it will not only facilitate the business continuity but also reduce the cost of operation further 81 | P a g e . SU And Urban Areas of30 Kms and 5 Kms in metropolitiancentre has removed. Receipt And Delivery Of Small Value Remittances / Instruments Other Payment The Activities To Be Undertaken By The B.C. Sale Of Micro Insurance / Mutual Fund Products / Pension Products / Other Third Party Products And 5. / B. they have to ensure that KYC norms are scrupulously followed while opening loan accounts. Recovery Of Principal / Collection Of Interest 3. Collection Of Small Value Deposits 4.F. Would Be Within The Normal Course Business Correspondent (BC) Model BCs from the local area will be engaged They will be provided with hand held devices having facility for enrolments and transactions with bio-metric authentication using POS / KIOSK.Now there is no such any distance criteria. Promotion and nurturing of Self Help Groups / Joint Liability Groups In View to Provide Flexibility to the Banks and Technological Development in the Post-sanction monitoring Monitoring and handholding of Self Help Groups / Joint Liability Groups / Credit Groups /Others Banking Sector . Collection & preliminary processing of loan applications including verification of primary information / data Creating awareness liability products Education and advice on managing money and debt counseling Of The Bank's Banking Business. And The Base Branch) Follow-up for recovery for the Operation Of The Business Correspondent(BC)for Rural. Authorised to collect and disburse cash.C. However.Business Facilitator„ Model BF should be used to provide only nonfinancial support services.The RBI has decided to remove the earlier Distance Criteria (Distance Between The Place Of Business Of A B. the branches are ultimately responsible for adherence to the KYC norms. But Conducted Through The Entities Processing and applications to banks Indicated Above At Places Other Than The Bank Premises. Disbursal Of Small Value Credit. about loans and Submission of 2. 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. PMSBY Atal Pension Yojana Loan Recovery 82 | P a g e . 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) Remuneration for Mode of Payment Kiosk Model BC Rs. Services available at BC points: Following services are available at BC points: Saving Bank account opening. 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. he can withdraw only when the account get verified by the Branch. CA.limit being Rs 10000/. Though customer can get the account number instantly and can deposit the amount immediately. This has been designed to prevent opening of zero balance accounts which has been a cause of concern in PMJDY. Currently. however. Further Branch to verify these accounts though menu ― FREEREC‖ immediately and ensure that not a single account remain unverified beyond 3 days. Instant Account Opening at BC points: This facility has been launched since 10.40% of deposit Online credit amount. Max of Rs. Remuneration to BCs: Sr. 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. Our bank has devised an incentive scheme for BCs for canvassing business. Opening of Term Deposit and Recurring Deposit Accounts Opening of accounts through e – KYC Cash deposit in SB. ii) Customers whose saving bank accounts have been Aadhaar seeded.2015 where the customer will get the account number instantly and can deposit money in his account simultaneously. 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. BC should submit the account opening form within 24 hours to link branch. Therefore.12. 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.20/per account 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. system is enabled for cash deposit in LAA scheme type accounts only.per day.10/per Online credit account 0. CC. In case of Kiosk Model BCs. the remuneration net of TDs is paid fully to them by corporate office.This is applicable when at least 90% of accounts opened by BCs are funded and BC maintains at least 1000 accounts. however fixed portion and transaction charges are paid by our corporate office to the field level BCs. Consolidated information of remuneration / incentive available to BCs have been provided in annexure as per circular no. remuneration for account opening is paid by braches. 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. 1. 83 | P a g e . In case of NPA accounts an incentive of 2% of recovered amount may be paid by branch immediately after recovery by BC. For Example. In case of BCs operating under Corporate BCs.Incentive linked schemes for Business Correspondents for Mobilizing deposits in SB accounts opened by them and Management of Asset quality (BCC:BR:107:613 dated 10-122015): 1. in such case incentive shall not be payable to BC.2017. the remuneration net of TDS is shared in the ratio of 80 to 20 between the field level BC and corporate BC. Bank has been providing remuneration/ multiple incentives to the BCs for different types of product & services delivery through them. In case of PWO accounts the incentive of 10% of the recovered amount may be paid immediately after recovery by BC.5 % 2. amounting to Rs. after 12 months. the BC is entitled to get incentive of Rs. account number xxxx0052201006 of respective branch subject to TDS.10 Cr on 01.02 lacs (i. Mobilizing deposits in SB accounts opened by them Incentive for mobilizing Deposits in Savings Account . In the event of BC not able to maintain asset quality. In case of POS model BCs.1% Average balance above 60 lacs – 1. 1% of 1. BCC:BR:108:48 dated 01-02-2016.02 Cr.e. are paid online by our Corporate Office to the field level BCs. 1.02 Cr) on 01. In case of Direct BCs. The incentive will be payable only when 90% of the accounts assigned to the BCs are regular.5% Average balance above 40 lacs and up to 60 lacs .01.If a BC is assigned say 80 loan accounts is his area. Remuneration/ incentives available to our Business Correspondent (BCs): Bank has empanelled 16 corporate BC for supporting Bank‟s FI activities. remuneration for both fixed and variable portions.01. The incentive in % term is as under : Average balance up to 25 lacs – NIL Average balance above 25 lacs and up to 40 lacs – 0. Incentives for Business Facilitation by BCs are paid at branch level to the debit of P/L head ‗incentives paid to BCs‖.e.2016 and 72 accounts (72 accounts is 90% of 80 accounts) are regular (out of 80 accounts) with outstanding amount of 1. The incentive amount will be paid only after the completion of one year. To improve upon the service delivery through the Model of BCs. 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. 84 | P a g e 5. Facility of ATM or ATM cum Debit card. 6. Above said facilities will be provided without any charges. Further, no charges will be levied for non- operation/ activation of in-operative ―Basic Savings Bank Deposit Account‖. Features of Baroda Basic Saving Bank Deposit Account: Parameters Features Minimum Initial Deposit amount Nil The Account can be opened with Zero Balance also No. of withdrawals allowed in a month No. of year cheque 4 leaves allowed free in a 50 Charges for non operation/ activation of NIL Charges in-operative/ dormant a/cs Standing availability 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 85 | P a g e 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 customers„s 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. 86 | P a g e 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 Bank‘s 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 87 | P a g e 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 88 | P a g e more than 7000 branches and more than 20000 new ATMs in the first phase . It is required to confirm from NPCI repository that account holder (Aadhaar holder) has not availed the OD facilities from any other bank.000 Business correspondents (BCs).36 months to annual review of accounts Loan Amount-a)4 times of Average monthly balance b) or. 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.purpose or end use of credit. PMJDY.e. account may be seeded with Aadhaar. MGNREGS sponsored by Ministry of Rural Development (MoRD. Bank has advised to branches to to ensure certain deliverables during these programs in the form of opening of new accounts. There should be regular credits under DBT/DBTL scheme /other verifiable source. 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. 50 % of credit summations in accounts during the preceding 6months. the cost of organizing such Financial Literacy program can be shared between NABARD and the bank in the ratio of 60:40. NABARD has been supporting such programs out of Financial Inclusion Fund subject to a maximum of Rs. Period of sanction.whichever is lower. As per existing norms. General purpose loan to provide hassle free credit to low income group/underprivileged customer to meet their exigencies without insistence on security . c) or. The comprehensive plan is necessary considering the learnings from the past where a large number of accounts opened remained dormant. The plan. PMSBY and APY and the same may be documented and submitted along with its claim for each of the program separately. OD to be granted to the earning member of family. It is to be ascertained by using “ UIDINQ” menu option in Finacle.Rs 5000/. KCC/GCC borrowers. 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. the Government of India has initiated Financial Inclusion in a mission mode to provide all financial products through its ambitious schemes i.000/.per program as grant assistance. 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. For avoiding duplicate benefit. PMJJBY. (Not eligible: minors. 89 | P a g e .Individuals having BSBD accounts.000/. Eligibility. enrolments under PMJJBY.up to open bank accounts of the uncovered households in both rural and urban areas. subject to a maximum of Rs. PMMY and APY. therefore. preferably women of the house.15. PMSBY. the banking sector would also be expanding itself to set up an additional 50. which are operated satisfactorily for at least six months.15. Age of applicant between 18 years to 60 years years. resulting in costs incurred for banks and no benefits to the beneficiaries.per program. more than one member of the same family). GoI) is also likely to be included in Direct Benefit Transfer scheme. 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 Rs. 2 lac payable on death due to any reason. Yearly premium Rs.330 + Service Tax a. Accidental death & full disability Rs. 2 lac b. Partial disability Rs. 1 lac Rs.12 + Service Tax 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. 90 | P a g e 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 Hon‗ble 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. 91 | P a g e 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 cropper‗s 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 Production loans for raising various crops Maintenance of tractor/farm implements, allied activities like dairy, poultry, annual repairs, fuel, cost of feed, etc Based on scale of finance The consumption needs To the extent of 15% / 25% / 35% of the Crop Production expenses limit, depending upon the category*of borrower subject to a maximum of Rs.50000/-per card Working capital for Allied As per actual assessment of credit needs as NO. 01. 02. 03. 04. To the extent of 15% of the crop production expenses limit 92 | P a g e 05. 06. activities Working capital for Non farm sector activities Farm Produce Marketing Loan per our usual norms As per actual assessment of credit needs as per our usual norms As per actual assessment of credit needs as per our usual norms A separate demand loan account for the period not exceeding 12 months is to be opened. The disbursement under this loan component should be made by direct credit to party/s Production credit account. * 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, Bank‗s 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/Bank‗s 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. 93 | P a g e 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 borrower‗s 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. Facility of the Line of Credit / Notional limit under BKCC: At present the crop loan component in form of production credit under BKCC is given as a Cash Credit facility for a period of 5 years, which is subject to review every year. The limit is computed on the basis of total land holding of the farmer, cropping pattern adopted by him during a particular season and approved scale of finance for the crops grown. Thus the limit available changes whenever there is a change in any of the factors mentioned above. It is observed that the farmers and branches are generally aversed to increase the limit due to the workload / cost involved in execution of fresh documents, preparation of fresh proposals etc. This is ultimately adversely affecting the increased off take and thereby the growth in outstanding level of crop loans. This also ends up in providing inadequate crop loan to farmers. To overcome this problem, bank has decided to provide the facility of the Line of Credit / Notional limit wherein the farmer‗s actual requirement worked out on the basis of cropping pattern and land area, can be increased by maximum 50% at the time of sanction of the facility. Though this limit will be valid for a 5 years period, the drawing power/eligible limit for each year shall be arrived based on the area of cultivation and scale of finance for the proposed cropping pattern for that year. This shall obviate the need for fresh sanction and documentation for 5 years thereby helping the farmer to avail increased credit as per the prevailing scale of finance and also in reducing the workload at the branches. This in turn will also expected to encourage the farmer to undertake improved cultivation practices and bring more farmers into our fold due to the inbuilt advantage of hassle-free facility of enhancement of the limits. Baroda Kisan RuPay Card: Our Bank has introduced Baroda Kisan RuPay Card in pursuit to facilities to farmers who avail production credit under Baroda Kisan Credit Card from our Bank. The card meets the requirements of BKCC customers to use channels like ATMs for cash withdrawal and also POS at merchant of Agriculture Inputs such as seeds, fertilizers and pesticides etc. 94 | P a g e CC008. customer complaints etc. should be issued cards on an urgent basis. free Personal Accident Insurance Scheme (PAIS) cover upto Rs. 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.e BKRC in all standard BKCC accounts by December 2015. up to 31.2016..• CC003. where BKRCs have not been issued so far. audit objections.for BKCC holders in our Bank. List of BKCC accounts without BKRC has already been circulated to all Branches. 4) This insurance programme will be an additional insurance cover over any existing insurance cover. All existing standard BKCC accounts. All BKCC holders should be requested to avail the facility by explaining about the advantages of BKRC..2015 for a period of one year i. Ltd for the same and it has come into effect from 01.6 + Service Tax for per each non financial transaction. Non-issuance of BKRC in new accounts will be viewed seriously. 2) Insurance cover of Rs.50000/.Waived for all the years Transaction charges Cash withdrawal for use of ATMs of NFS member banks . Circular is issued so as to collate various guidelines and operational procedures regarding subvention calculation and make it readily available to the operating units.03.00 lac.Rs. viz. 5) Annual Fee. The Regions/ Zones are also advised to ensure the compliance of above guidelines. LA 403 95 | P a g e . tenant farmers. since GOI has instructed to cover 100% farmers at the earliest. as a value added feature. It should be highlighted that the card has no issuance charges and also the added advantage of personal accident insurance cover of Rs. They have tied up with The New India Assurance Co. it is noticed that there are still gaps in the procedures adopted by Branches leading to revenue loss. BKRCs should be issued on a campaign mode so as to ensure achievement of 100% issuance i. 3) The insurance premium is to be borne by NPCI. Salient features of the Rupay Insurance Programme are as under: 1) All BKRC holders are eligible for insurance cover under this programme. Even though we have been calculating subvention through the system since 2012. etc.e.04.1.The National Payments Corporation of India. the administrator of RuPay Cards.1 lac per card to Baroda KisanRuPay Card holders (accidental death and permanent disablement only) is available. Interest Subvention SchemeMonitoring of end use of Crop Loans(BCC:BR:107:398 dated 19-08-2015) :With reference of RBI Circular. has introduced insurance coverage of KisanRuPay Card holders.16 + Service Tax per & Rs. 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. including those of illiterate/unwilling persons. 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. offered by Rupay. Scheme code should be . farmers who are holding non-irrigated land up to 5 acres or 2. 3. Banks to enter into the tie up arrangement with manufacturers of tractors and other farm machineries. 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. For this purpose small and marginal farmers means. Further 3% Incentive in the form of intt. 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 96 | P a g e . 6.00.• CC033. disbursement (Drawing Power/DP) would be permitted after six months. CC092 (in Special Agricultural Zone) Other operational procedures are given in the circular. However. Relaxation in margin & security norms. the SHG should be registered The sanction Savings-cum-overdraft limit is sanctioned for the amount.5 acres of irrigated land. which will take care of consumption need of the farmers. A separate flexible revolving limit to be considered to small borrowers of production or investment loans. which a group will be entitled to have in the ratio maximum upto 1:10 for the projected savings of ensuing five years. The application form should be simplified and in regional language. to farmers. 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.000/. 7.a. 4. 5. Interest subvention of 2% will be made available for short-term crop loans up to Rs. Timely sanction of the credit facility in cost effective manner. 2. 2007.per farmer. provided lending institutions make available short term credit at the ground level at 7% p. L4032. CC034. 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. L4033 and CC091. 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. To sanction composite cash credit limit to farmers.Interest Table code should be . It should contain a comprehensive check list of information to be furnished to avail the credit facility. subvention is given for prompt repayment to Farmers Flow of credit to agriculture sector (VyasCommitte recommendations) 1.3. 00 Procedure for opening an S.B. Social Agenda / Corporate Social Responsibility h.I MMG Scale. What are the advantages to the banks for banking with SHGs? Advantages to the banks for banking with SHGs are following: a. based on the activity undertaken by the group 97 | P a g e .50 2. Unified Processing Charges for Women SHGs (BCC:BR:107:379 dated 10-08-2015): According to Central Level Coordination Committee of NRLM. Financial Services at door steps f.II MMG Scale-III 1. KYC norms. Amount held as cash with the authorized persons.JMG Scale . Amount internally lent amongst the members. etc. Processes for Credit-linkage of SHG by the Bank Opening of S/B Account for the SHG Resolution from the SHG Authorisation from the SHG Copy of the rules and regulations of the SHG Conduct of internal lending by the SHG Assessment of SHGs Sanction of Credit Facility to the SHG Corpus / savings of the group includes following: Group‗s balance in the SB A/c. 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. Copy of the rules and regulations of the SHG. Any other contributions received by the group like grants. 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. Loan to SHGs may be classified as Agriculture & other priority sector. Very little cost for appraisal and monitoring of the loan d. Transaction costs are reduced b. As regards KYC verification at the time of credit linking of SHGs. Increase in the deposit base c. no separate KYC verification of the members or the office bearers is necessary. NPA Reducing g. Authorisation from the SHG (Operating Instructions. Increase in the social base in rural area e.50 5. Amount received as interest on the loans. account of SHG with the Bank Resolution from the SHG. Bank has been decided to waive processing charges for loans granted to all women SHGs irrespective of the activity and limit sanctioned. donation. This will ensure that the voiceless. The village federation is a very important support structure for the members and their SHGs. The exact configuration will vary from State to State. of Financial Services. A cluster consists of a group of villages within a block. Under NRLM this support will be provided to a great extent by capacitating the 98 | P a g e . The cluster federation is the next level of federation. 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. the first preference is given to the poorest of poor households. as it used to be under SGSY. credit decision of banks and Micro Finance Institutions (MFIs) and credit quality of the SHG loan portfolios. and policy for financial assistance for the SHGs. Government of India has launched a flagship program National Rural Livelihood Mission (NRLM) for promoting poverty reduction through building strong institutions of the poor. 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.2016): Underscoring the importance of credit information reporting in respect of the SHG members for financial inclusion.Engagement of SHG Leaders/ Members as BC Agents for Financial Inclusion – Bank Sakhi Approach (BCC:BR:108:42 dated 30-01-2016): Dept. poorest of poor are not ignored. Credit information reporting in respect of Self Help Group (SHG) members (BCC: BR: 108:105 dated 08. 2013 . eligibility criteria and action plan are given in the circular. Details like advantage. However. This was missing in SGSY.40 villages.The Ministry of Rural Development. Unlike SGSY. MoF and RBI have advised that bank may appoint SHG leaders/ members as BC agents for Financial Inclusion. National Rural Livelihood Mission (NRLM) –Aajeevika . and their federations. 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. NRLM will provide continuous hand-holding support to SHGs. 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. particularly women. the working group has emphasized the need for putting in place the credit information reporting for SHG members sooner than later. 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.03. but typically a cluster consists of 25 . infrastructure and marketing. NRLM will promote the formation of women SHGs on the basis of affinity and not on the basis of a common activity. It is definitely possible that members who come together on the basis of affinity could be having a common activity. 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. In fact under NRLM. SHG Federations: All SHGs in a village come together to form a federation at the village level. members of SHGs as BCs Agents through our Corporate BCs. In view of above Bank has decided to appoint leaders. in addition to the existing categories.75% for our Bank for the year 2015-16 based on Weighted Average Interest Charged. For category II districts. Export Credit. Interest to be sub vented will be subject to a cap of 3. 1. 6.L. Micro Enterprises: A target of 7. Micro. Social Infrastructure and Renewable Energy will form part of priority sector. 5. The objective of NRLM is to ensure that SHGs are enabled to access repeat finance from Banks. Government of India. (Other than 150 districts). whichever is higher. 99 | P a g e .5 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure.V will be submitted annually as of March 2016 duly audited by the statutory auditors along with Annexure. Renewable Energy & Others 2.Ms) from the allocation for NRLM. Certificate on annexure. 7 percent by March 2016 and 8 percent by March 2017. National Rural livelihoods Mission (NRLM). New Categories of the priority sector: Medium Enterprises.5 percent by March 2017. whichever is higher. Interest Subvention claims (Regular and Prompt payment separately) will be uploaded on quarterly basis only. where the emphasis was on one time support.SHG federations and by building a cadre of community professionals from among the poor women. Small and Medium Enterprises (MSME).Priority Sector credit should be minimum 40 % of Bank‘s Adjusted Net Bank Credit (ANBC) or credit equivalent amount of Off-Balance sheet exposure whichever is higher. Bank loans to food and agro processing units will form part of Agriculture. 7 percent by March 2016 and 7. 4.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. Important points are as below: 1. 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 federations and the community professionals will be imparted the necessary skills by the mission.III & IV.e.R. till they attain sustainable livelihoods and decent living standards. has been prescribed for Micro Enterprises. REVISED GUIDELINES FOR PRIORITY SECTOR CLASSIFICATION: Target for the Priority sector Lending . This was missing in SGSY. Major segments of Priority Sectors are Agriculture. Social Infrastructure.e. Small and Marginal Farmers: A target of 8 percent of ANBC or Credit Equivalent Amount of OffBalance Sheet Exposure. 2.III & IV). The funding for this subvention will be provided to the State Rural Livelihoods Missions (S. Quarterly Interest Subvention claims to be supported with certificate (Annexure. has been prescribed for Small and Marginal Farmers within agriculture. Housing. 3. to be achieved in a phased manner i. to be achieved in a phased manner i. Agriculture: The distinction between direct and indirect agriculture is dispensed with..Ajeevika. Education. Micro. it should be ensured that: Agriculture: 18 percent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure. 15 crore to borrowers for purposes like solar based power generators. 50. whichever is higher.and for non-rural areas it does not exceed Rs. 35 lakh and Rs. 10 lakh per borrower. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise. Small & Medium Enterprises (MSME). 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. 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.per borrower provided directly by banks to individuals and their SHG/JLG. 25 lakh respectively. the loan limit will be Rs. health care facilities. vide S.000/. wind mills. 100.000/. as notified by Ministry of Micro.1642(E) dated September 9.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.per borrower to 100 | P a g e . Loans to distressed persons (other than farmers ) not exceeding Rs. and remote village electrification. whichever is higher.Advances to micro. street lighting systems.60.Loans to individuals up to Rs. 1. 100. Social infrastructure: Bank loans up to a limit of Rs. 2006 are as under:Manufacturing Sector Enterprises Micro Enterprises Small Enterprises Medium Enterprises Service Sector Micro Enterprises Small Enterprises Medium Enterprises Investment in plant and machinery Does not exceed twenty five lakh rupees More than twenty five lakh rupees but does not exceed five crore rupees More than five crore rupees but does not exceed ten crore rupees Does not exceed ten lakh rupees More than ten lakh rupees but does not exceed two crore rupees More than two crore rupees but does not exceed five crore rupees Education Loan – Loans to individuals for educational purposes including vocational courses upto Rs. Renewable Energy: Bank loans up to a limit of Rs.O. provided the individual borrower‘s household annual income in rural areas does not exceed Rs. micro-hydel plants and for non-conventional energy based public utilities viz. For individual households.000/. Others : Loans not exceeding Rs. 10 lakh irrespective of the sanctioned amount will be considered as eligible for priority sector. 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rs. Housing Loans . Small and Medium Enterprises. biomass based power generators. drinking water facilities and sanitation facilities in Tier II to Tier VI centres. 5 crore per borrower for building social infrastructure for activities namely schools.000/-. Following types of finance are included under Weaker Section finance: No.under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts.a.and Rs. 9. 8. 12.p. 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. in Urban /Semi urban area and Rs. prepay their debt to non-institutional lenders. SHG members who fulfill above criteria can be considered under DRI Scheme.for rural areas and Rs. 03. 1 lakh per borrower Persons with disabilities Overdrafts upto Rs.000/. 6500/BCC:BR:99/211 dt. with loan amount not exceeding Rs. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations. 10. 1.Composite loan limit Rs.000/. Rate of Interest 4% p. The scheme is introduced in July 1972 with a view to give benefit of bank finance to weaker sections of the society.2007) Margin: NIL. Weaker section: In order to ensure proper attention in the matter of allocation of credit to following preferred sector. 7. collect fodder to be sold to farmers. 6.in case of Housing Loan (raised from Rs. provided the borrowers‘ household annual income does not exceed Rs. Eligibility: An individual who is engaged in agriculture and /or allied activities collect or process forest products. Overdrafts extended by banks upto Rs. 101 | P a g e . Category Small and Marginal Farmers Artisans. 24000/.under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts provided the borrowers household annual income does not exceed Rs. 3.a.07. known as WEAKER SECTION. 1.for non-rural areas Minority communities as may be notified by Government of India from time to time DRI Advances. 11. (this does not apply to SC/ST Cases). etc.p. He/She should not hold land more than one acre irrigated land and 2. 18000/.000/.for rural areas and Rs. Limit: . 5. 2.a. and whose family income from all sources should not exceed Rs. village and cottage industries where individual credit limits do not exceed Rs. 5.for non-rural areas.5 acres in case of non irrigated land.60. 100. 100.000/. should not employ workers on regular basis. SC/ST. in Rural. 1.15000/.000/.60. 4. 5. RBI has stipulated mandatory target of 10 % of ANBC / Credit equivalent of Off-balance sheet exposure whichever is higher. any handicapped person.20000/. 1 lakh Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods Mission (NRLM). 1 lakh per borrower to prepay their debt to non-institutional lenders Individual women beneficiaries up to Rs.000/. Advances upto Rs. Total contract Advantages for farmers : 1. grading. Less marketing investments Advantages for Banks : 1. Assured and uninterrupted supply 3.months. drip /sprinkler irrigation sets. horticulture & plantation crops. Finance against gold ornaments/jewellaries. Can get produce as per specific requirement 2. 102 | P a g e . Better recovery 2. Procurement contract 2. Identifying thrust branches for Agri. Finance to Joint Liability Groups (JLGs) Financing production and investment requirements for allied activities. harvesting. weeding. processing and transporting. Partial contract 3. Deposits from farmers Strategies to enhance Agriculture Portfolio • 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. Price & Marketing risks are minimised Advantages to Firms : 1. Time saving 4. Cross selling of products 3.00 lac falling under BMs Power.5. • Financing agri. Take-over of agri. CONTRACT FARMING Definition: Cultivation of crops by the farmers under a buyback arrangement with an agency engaged in trading and/or processing. Even Small farmers can grow high value crops 2. sorting.Repayment: Generally -60. term loan mainly farm machineries like Four-wheeler to farmers. Less production credit will require 4. Loans to distressed farmers indebted to non-institutional lenders • • • • • • • • • • Loans granted for post-harvest activities such as spraying. financing More SHG Linkages as our Bank permits to go to 1:10 ratio of group corpus. Least post harvest loss 5. Can avail benefit of high tech support 3. Finance to Agri-clinics & Agri-Business Centres Finance under comprehensive scheme against Warehouse receipt. tractor. Combined harvester/ power tiller. Types: 1. Baroda Grameen Paramarsh Kendra: It is an innovative idea towards Corporate Social Responsibility. horticulture. the Bank has taken a number of initiatives such as opening of specialized outlets of Gram Vikas Kendras (GVKs) and Multi Service Agencies (MSAs). which would enhance productivity of crops / animals. Margin: Upto 5 lacs. Agribusiness Centres: Agribusiness Centres are envisaged to provide input supply. veterinary.no margin Above 5 lacs. 5. Advances Subsidy : 36 % (44% for SC/ST. • Individual -max. Project cost and coverage : • Either individually or jointly/group basis. Objectives • To supplement the efforts of government extension system • To make available supplementary sources of input supply and services to needy farmers • To provide gainful employment to agriculture graduates in new emerging areas in agricultural sector.100 lacs. especially for the farmers. Limit Rs. farm equipments on hire and other services. dairy. The salient features of the scheme remain unchanged Agriclinics :Agriclinics are envisaged to provide expert services and advice to farmers on cropping practices. technology dissemination. poultry farming.max. forestry. Limit.20 lacs • Group . animal husbandry. In the past. Eligibility: Graduates of agriculture. market trends and prices of various crops in the markets and also clinical services for animal health etc.Rs. crop protection from pests & diseases.max .15 % Rate of interest: As applicable to agri. pisciculture and other allied activities. Concept For the rural community. women) of project cost Repayment : 5 to 10 years with grace period of max 2 years. • Group number . showing Bank„s passion for for agriculture and rural development and to serve the common man. there is a big ―Knowledge Gap in financial 103 | P a g e .AGRI-CLINICS & AGRI-BUSINESS Agriclinics and Agribusiness Centers Scheme: Continuation of Scheme for the financial year 2015-16 (BCC:BR:107:273 dated 10-06-2015): Gol has extended the implementation of ―Agriclinics and Agribusiness Centers Scheme‖ for the year 2015-16. out of which 1 may be a management graduate with qualification & experience. Baroda Swarojgar Vikas Sansthan (BSVS) is another initiative for capacity building by providing appropriate training for skill upgradation to unemployed youth and women for their gainful employment. Mass vaccination camp. the Bank has conceptualised ―Baroda Grameen Paramarsh Kendra (BGPK) and its implementation by the dedicated team. Reduction in transaction costs of financial institutions/Banks. With a view to assist the rural community. must be saved.literacy. Work must be done with skill so as to increase production and productivity. Animal Health Care Camp. d. market linked prices. Increase in loan recovery rate and decline in non-performing assets. Generation of new business avenues. Mobilisation of deposits. In addition to this. b. diversification of opportunities. e. a. women empowerment and also for employment opportunities for rural youth. better farming practices. Increase in the credit flow and diversification of lending. Farmers‗ Club are intended to basically propagate the following five principles of ―Development through Credit. Should be local resident 3. the deficiencies/ ignorance about credit related repayment during distress situations call for credit counseling. The terms and conditions of credit must be fully respected. 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. Applicant must be true owner of gold / gold & silver jewellery / gold coins 2. Loan installments must be repaid in time and regularly so as to recycle credit. community works like roads. A part of the additional income created by credit. The Farmers‗ Club has also been instrumental in certain social welfare measures like arranging free eye check-up camp. Must have a savings a/c 104 | P a g e . value addition services offered by various institutions. which would build the confidence of the rural people. check-dams. technology adoption. Credit must be used in accordance with the most suitable methods of science and technology. Benefits to the Branch : The formation of Farmers‗ Club lead to better Banker-Borrower relationship in the area. Priority Sector Loan against Gold ornaments / jewellery Scheme Purpose: Agriculture or other Priority sector Eligibility: 1. c. afforestation etc. A win-win situation both for the Banker and the borrower. Socio Economic Development of the village. 5000. Minimum – 21 years Maximum–Up to 65 years as on the date of availment of facility. To give min security deposit of Rs.Loan limit: Rs. in such case the son to be made co-borrower . If the main source of income of the farmer is from land based activities. on merits. SUV. The Regional Head is authorized to reduce the land holding criteria by 50% i.BCC/BR/106/338 dt-05-09-2014).up to 2 acres for perennially irrigated lands and 4 acres of seasonally irrigated lands. 2. 3. 75/. for using in their farm management activities.O. If the age of landholder exceeds 60 years.00 lacs. 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. Period– Max. Used vehicle should not be more than 3 years old. 1650/-. To be identified by branch and approved by R.e. 1800/. 105 | P a g e .(Ref. 12 month Assayers 1.00% of the appraised value by the assayer whichever is lower among the three. station wagon etc. Farmers with minimum land holding of 4 acres perennially irrigated land or 8 acres of seasonally irrigated lands.per gram for every carat reduction. As such the advance value per gram of gold jewellary of 22 carat purity is fixed at Rs. Age Incase the main source of income is from Allied activities income certificate from Revenue authorities /IT returns etc to be obtained. 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.per gram for 24 carat purity with a provision for reduction in valuation by Rs. Eligibility/ Beneficiary Farmer including those engaged in Allied activities having family income sufficient to repay the loan. but it should be need based or advance value of gold or 75. 3. provided the crops grown by the farmers is generating sufficient income to insure repayment. 05.) 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. whichever is lower (Anticipated from the farm.no 1 Parameters Types of Facility Prescribed Norms Term Loan 106 | P a g e . 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.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 Loan New Vehicle : Rs. etc.15.2014) Within the eligibility worked out as below: 1 4 Farm Income times of net annual income OR 2 times of total annual farm receipts/value of crops. area under cultivation.00 lac. (Ref. 10. *Limit in case New vehicle–Zonal Head is authorized to increase the limit upto 50% i. The due date to be fixed taking in to account the time taken for receipt of sale proceeds of the crop.09.25%. Old Vehicle :Rs.09.e for New vehicle –Maximum loan amount –Rs 22. Scheme for financing Two Wheeler(Motorcycle /scooter) loans to Famers : The salient Feature of the Modified scheme are as under (Ref.2014): Sr.BCC/BR/106/360 dt-15. BCC/BR/106/338 dt.50 lacs.00 lac. New vehicles: 15% Used vehicle: 40% Rate of interest applicable to Baroda Car loan minus 0. The instalments may be fixed on half yearly/ yearly basis based on cropping pattern. taking into consideration type of crops. Rs. 7. The instalments may be fixed on monthly / quarterly / half yearly/ yearly basis depending upon cropping pattern/ allied activities / other source of income.Comprehensive insurance for first years Note-cost of accessories not to be included. area under cultivation.1.e invoice price. Minimum -21 years Maximum-upto 65 years as on date of availment of facilities. One-time vehicle tax and registration charges. 3.taking into consideration types of crops. Loan repayment will be synchronized with the income generation from the farming & allied activities.in such case the son to be made co-borowwer. Maximum period – Not exceeding –5years. Baroda Kisan Tatkaal Loan: 107 | P a g e .25 p. etc) PLUS/OR Other incomes/incomes 3 time of Net from allied activities and anticipated annual salary income if any income/profit from economic activities /allied activities(existing and proposed to be under taken )salary if any 10 % As applicable to invest loans under direct agriculture finance from time to time (presently at Base Rate i. Cost of vehicle i. 2. Margin Rate of interest 8. Farm Income 6 times of net annual income OR 3 times of total annual farm receipt /values of crop. which is lower (Anticipated from the farm .2 3 Purpose Eligibility/Beneficiary 4 Age 5 Maximum loan Amount 6. If the age of farmers exceeds 60 years .00 lacs It will compromise of: 1. (As per Banks Norms).e 10. The due dates to be fixed taking in to account the time taken for receipt of sale proceeds of the crop.a) Repayment Schedule to coincide with harvesting season. Repayment Purchase of new Two Wheelers (Motorcycle/scooters) All new and existing farmers engaged in Agriculture and/or allied activities /others sources. etc.20.00 lacs Rs.20 lacs Maximum Tatkal Limit 50% of BKCC limit subject to max of Rs.3.storage structures. and also domestic requirements for various religious ceremonies.1.BCC:BR:100/50 dated 23. storage/packing material . taking into consideration the type of crops.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.5 Lacs but up to Rs.00 lacs This is subject to the condition that the Tatkal limit now being sanctioned should be within the eligible limit under Investment Line of Credit in BKCC (as per details in circular No.00 Lacs More than Rs. pledge of KVPs/ NSCs/Bank‘s TDR/Gold Ornaments etc. 2) Eligibility: Individual Farmers/Joint borrowers who are existing Baroda Kisan Card (BKCC) Holders.2008 – given below for ready reference) i. 3) Type of Loan: Term Loan repayable in 3-5 years or Overdraft facility for a period of 12 months.e. 4) Maximum Loan amount: Limit may be fixed as under: BKCC Limit up to Up to Rs. 1. onion sheds.2. Whichever is less out of 1.10 Lacs but up to Rs. purchase of pump set. emergent medical expenses and other emergency expenses etc. area under cultivation. pipes for irrigation etc. OR 2. 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.02.10.00 lacs More than Rs. festivals. 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). Income and 2. implements.) PLUS Other income/income 3 times of net anticipated annual income/ from allied activities profit from economic activities/allied activities ( and salary income.00 lacs Rs.00 lacs More than Rs. Value of Security 5) Security: 108 | P a g e .5.Income Farm Income 6 times of net annual income OR 3 times of total annual farm receipts/value of crops (anticipated from the farm.00 lacs Rs.5. 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. existing and proposed to be undertaken) /salary if any income if any. as per the extant guidelines contained in circular No. 8) Deviation: Any deviation in the scheme should be referred to the competent authorities for approval.767200 depending on the models (Model -1 to Model-IV) Margin: . 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. Repayment The loan will be repayable in .10 . issued by Large Corporate Banking Department. farm ponds and surface water from canals and rivers.years with one year grace period. BCC. BCC:BR:107:186 dated 23. 2) Additional subsidy could be provided by the State Government.2015.04.1 lac.As per norms applicable to direct Agricultural advances from time to time. Ranges from Rs.308320 to Rs. Existing security under BKCC to be extended The existing norms of no collateral security up to Rs. medium tube wells.1 lac to be followed if combined limit is within Rs. pen dug wells.Term Loan Project Cost: Project Cost as decided / approved by PAC of MNRE/NABARD.. The beneficiary may 109 | P a g e .Hence the additional subsidy/margin contribution to be ensured from the state govt/beneficiary. 3) It should be noted that the scheme is financially viable only with subsidy of 60%. Possible water sources: Pits. tanks. Nature of Facility: -. doggies.Minimum 60% including subsidy available from Central & State Govts. 9) Penal Interest and other charges . 7) Rate of interest: As per rates applicable to Farm Credit under Agriculture from time to time. 6) Repayment (For term Loan): In half yearly/yearly instalments depending upon the income generation and cropping pattern. To provide sustainable economic activity to farmers in non-electrified or under electrified rural areas. 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. Mumbai. 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. 00 lakhs per farmer.00 lakhs For Others: Maximum Rs. Warehouse Receipts issued by private registered Warehouses approved by concerned Zonal Head upto individual limits of Rs. 1. Warehouse/Storage Receipts under tie up arrangement with Collateral Managers upto the limit prescribed under the scheme. the maximum loan amount of Rs. 2 or 3 may or may not be negotiable warehouse receipt issued by warehouses approved by WDRA to issue negotiable Warehouse Receipts) Earlier.00 crores.2009 and formulated the Scheme for financing against the Warehouse/Storage receipts. Classification:--Priority Sector (Agriculture) Finance against Warehouse / Storage Receipt: Types of Warehouse/storage receipts eligible to be financed: 01.2016. Warehouse Receipts issued by State/Central Warehouses upto the limits prescribed under the Scheme.50.In case of tie up arrangement with Collateral Managers: 25% or as prescribed by Collateral Managers.00 croresuptoRs.01. (However for private Godowns approved by WDRA. bank has entered into another Tie up arrangement with National Collateral Management Services Ltd (NCMSL) on 18. Branches may continue financing against warehouse / storage receipt issued by other Collateral Managers (NBHC and STARAGRI) approved by our Bank. Millers &Arthias who store agri produce stocks in the Warehouses.2013 In order to tap the large potential available for such financing .00 crores only be considered by the Branches subject to the discretionary lending power of the sanctioning authority.(STARAGRI) for financing against warehousing /storage receipt issiued by them. (The margin should be increased if there is volatility of price for a particular commodity).05. 110 | P a g e .5. As per circular no.10. To have another option available with our Branches. Loan Amount: For farmers: Maximum Rs. For limit above Rs.2. until further instruction. 02. (All the three types of Warehouse receipt at point no. 03. Negotiable Warehouse Receipts issued by Warehouses approved by Warehousing Development and Regulatory Authority (WDRA) upto the limits prescribed under the scheme. BCC/BR/108/110 dated 11. 4. However.repay the loan installment with interest earlier than the period if he so desires. Eligibility: Individual farmers who have produced the farm produce in their own farms.00 crores. As per BCC/BR/105/475 dt 29. activity clearance from the Regional Head be obtained) Margin: Minimum of 25%.5. Food grain traders.03.M/s star Agriwarehousing and collateral management Ltd. Bank has discontinued the financing against warehouse / storage receipt issued by NCMSL.2.50.2012 for providing of finance against Warehouse / Storage Receipts issued by them. our Bank entered into a Collateral Management Agreement with National Bulk Handling Corporation (NBHC) on 08. whichever is higher.we have now entered into a tie up agreement with one more collateral management company namely . farmers. Benefits of Agri. Interest table code: L4281 Sr. members of NGOs/SGHs/JLGs.00 crores : Base Rate+ 1.Utilities like generation of PSR statement .years.for TL/DL Mini dairy units. Centralized database remains available with the bank 8. . 4. Conforms to four eye principle 9.years Maximum: up to -65.00%. which is really a milestone in the area of rural/agriculture finance due to various obvious reasons. Application & Sanction letter can be printed in vernacular language also. Unified Processing charges: 50% of the applicable charges. Finance schemes can be processed through it. For negotiable Warehouse Receipts issued by approved Warehouses. Scheme for financing Mini Dairy Units In order to support famers to increase their household income through adoption of improved dairy farming and also to tap the business potential available in the segment.Nature of Facility: In case of Farmers: Demand Loan. Tenor: Maximum 12 months. Review and renewal of advances can be done 6. At present. 7. Lending module. We were already using this module in Retail Lending but now. For others: Cash Credit (Pledge) Rate of Interest: For individual farmers upto Rs. Agri. The following new scheme code has been created in Finacle for the accounts pertaining to the Scheme under Agriculture: LA428: . 17 agri. 2.to -10.50. 1. Parameter Type of Facility Purpose Eligibility Age Approved Norms Term Loan To establish new small dairy units with -2.00% and Other than farmers upto Rs. 3. Adds to customer satisfaction 10.No. Standard and uniform approach in loan processing 3. Documents can be printed. 5. LAPS Lending Automation Process System (LAPS) is a centralized web enabled software aiming at increasing the efficiency of credit decisions by automating the lending process.00 lakhs: Base Rate+1. Quicker loan processing 2. need was felt to formulate a special Scheme on Dairy on pan India basis.5. bank has rolled out its Agri. Loan application received register and security register are inbuilt in the system. Minimum : -21. Help in avoiding the repetitive work thereby saving precious time. LAPS to the branches: 1.milch animals Individuals . Commitment Charges: NIL Other charges will be as per the extant guidelines. 4. as on the date of availment of facility 111 | P a g e . Jaffarabadi.33. 2. Loans upto Rs. Hypothecation of live stocks.1. General Form of guarantee.3 lacs : @ Base rate Limit above Rs. Graded Murrah. Loans above Rs.P.1. Security 10 Documentation 11 12 13 14 Processing Charges/ Documentation charges Mortgage charges Insurance Subsidy 15 16 Classification Disbursement of Loan Rs.67 lacs for SC/ST). Composite Hypothecation Agreement for Agriculture Finance. subject to maximum of Rs.Sixty Thousand only) per animal.5.10 lacs) Nil (As applicable to Agriculture advances up to Rs. 7. Subsidy is restricted on a pro-rata basis depending on the unit size. Godavari. are to be financed under the Scheme: Cross breed: Jersey cross.(Rs.Six Lacs only) No. financing to NBFCMFIs for on-lending to individuals/ groups is eligible for categorisation as Priority Sector advance under 112 | P a g e .25 % Maximum period : Not exceeding –5. Loan Amount 6.preferably of the following breeds. Mehsana.60.300/. Margin Rate of Interest 8.000/. Holstein Friesian cross Buffalo : Murrah breed.2 Lacs: 1.liters of milk per day ONLY.(Rs.liters of milk per day and cows producing more than -8.33% for SC/ST ) as back ended capital subsidy subject to a ceiling of Rs. if third party guarantee is stipulated Authority to make direct payment to dealer Nil (As applicable to Agriculture advances up to Rs.10 lacs) Nil Comprehensive insurance with Bank‘s clause NABARD is providing subsidy @25% of the outlay (33.2 lacs: 1.3 lacs & upto Rs.6. Note. Mortgage of land or third party guarantee. D. Tharparkar and Red Sindhi 10% Limit upto Rs. Surti Indigenous breed of cows: Sahiwal.animals (Rs. 2.6 lacs: Base rate+0. Agriculture Payment to be made directly to the suppliers/seller Scheme for financing to NBFC-MFIs (PS): As per the extant guidelines of RBI. LDOC-28A.(Rs. Maximum permissible capital subsidy is Rs. Maximum: Ten Buffaloes producing more than -7. Hypothecation of live stocks. Mortgage of land 3 Third party guarantee.1 Lac: Hypothecation of livestock Loans above Rs.for SC/ST) for a two animal unit.000/.1 Lac and up to Rs. Bhadawari.years (including moratorium period of three months). Repayment 9. if stipulated.25.000/.00.of animals to be financed under the Scheme: Minimum : Two.25 lac for a unit of -10. 1. subject to their compliance with all the regulatory guidelines of RBI. as per the last audited Balance sheet (A) Upto Rs. with the following relaxation/modification: Particulars Relaxation/modification Activity Clearance The stipulation of obtaining ―Activity Clearance‖ in cases of the credit proposals of NBFC-MFIs under Priority Sector is modified under the scheme.500.500. Agriculture.00 Crores 5% of (A).00 Crores Above Rs. subject to fulfilling the following conditions: (a) Minimum external credit rating of NBFC-MFI (PS) should be as BBB+/. and which are falling upto the DLP of ZOCC.00 Crores 100. and (b) The loan amount should be within the maximum exposure ceiling.1. for the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as mentioned above on point Nos.00 Crores Above Rs. Micro. Small and Medium Enterprises and Others. sanction will be granted by the respective authorities as per their DLP. 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)}‖. as specified below: Outstanding Loan portfolio of NBFC-MFI (PS).respective categories viz.00 Crores 50.00 Crores However.00 Crores and upto Rs.000. (ii) For the credit proposals of NBFC-MFIs (PS) fulfilling the criteria as 113 | P a g e .000.or equivalent and the Company should be profit making with (+)ve Net worth as per the last audited Balance sheet. subject to the maximum exposure ceiling on a particular NBFC-MFI (PS) (B) 25. as under: (i) The authority for granting “Activity Clearance” on the credit proposals for financing to NBFC-MFIs (PS) falling upto the DLP of ZOCC will be with ZOCC.(i)(a) & (i)(b). which is 7 at present. Company Directors Rate of 1% upward revision in ROI as many Banks/FIs are charging higher ROI on interest: advances to NBFC-MFIs(PS). the final credit proposal is to be submitted to the competent authority for consideration. as mentioned above on point Nos. the stipulation of obtaining ―Activity Clearance‖ has been waived. (iii) For the credit proposals of NBFC-MFIs (PS). even though proposals fall under the powers of Branch/Region/Zone‖ .mentioned above on point Nos.00 Crores & above Arrangement Personal Guarantee of Personal guarantee of all Not to insist for personal the Directors of the guarantee of Directors of the Company to be obtained. under the Scheme Margin 25% on Book Debts 10% on Book Debts DER (TOL/TNW) 4. Thus.(i)(a) & (i)(b). any fresh / increase in exposure would be subject to ―Activity Clearance‖ from Corporate Centre.150. Multiple Banking Arrangement to be allowed for single NBFCMFIs (PS) with aggregate credit limits of Rs. 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 . as per the extant guidelines. Banking Consortium Banking Arrangement is mandatory for single borrower with aggregate credit limits of Rs. (i)(a) & (i)(b). and which are falling beyond the DLP of ZOCC. which are not fulfilling the criteria.00 Crores & above. Relaxation The following relaxations have been approved under the scheme: in other norms Parameter/ Norms As per Domestic Loan Modified Policy/ such Bank‟s Guidelines guidelines for NBFC-MFIs(PS).5:1 (Maximum) Maximum DER to be allowed as per the leverage Ratio (Total outside liability/ owned funds) stipulated by RBI for NBFCs-ND.150. from time to time. Instead. Agriculture. However.25 lacs and above: Ranging from Base Rate+2. Micro.25 lacs and above) to be charged extra as per extant guidelines. Tenor Premium for Term Loans (applicable on accounts with limits of Rs.00% in the revised Rate of Interest on advances to NBFC-MFIs (PS).e. subject to their compliance with the laid down criteria. Assignment of book debt. 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.Banks. as per RBI guidelines. The details of the ―Scheme for financing to NBFC-MFIs (PS)‖ : Facility Demand Loan/Term Loan Purpose of the Facility For on-lending to individuals/groups. irrespective of the tenure ZOCC has been authorized to grant concession upto a maximum of 1. Company & its group concerns do not figure in latest RBI defaulters„ list/willful defaulters‟ list/ECGC caution list /CIBIL list.25 Lacs and above. Limit Rs. Small and Medium Enterprises and Others. if offered by the Company. 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. Security Primary Security: Exclusive charge over the loan assets or book debts funded out of the bank loan i. which is eligible for categorisation as Priority Sector advance under respective categories viz. Other Conditions The names of promoters. under the scheme on a case to case basis on merits. depending upon the Credit Rating of the individual borrower.25%. directors. having limit Rs. the personal Guarantee of the promoters/ Directors of the Company need not be insisted upon. 115 | P a g e .50% to Base Rate +4. Further.09. The modification and relaxation approved under the scheme shall be effective from the date of approval of the scheme i. keeping in view the peak season requirement of the customer. Due diligence in respect of the Company & shareholder Companies to be carried out as per Bank‟ s extant guidelines. subject to observing the amount and period specified for granting adhoc facility under their DLP (where peak and non peak limits have not been sanctioned separately). The recovery position in the existing advances to MFIs in the Region/ Zone must be satisfactory. Bank has created two new scheme codes in Finacle for the accounts pertaining to Food & Agro based Scheme under Agriculture: 116 | P a g e .01/2014-15 dated 23. There are no overdue in the account of the NBFC-MFI with existing bankers/FIs and conduct of the accounts is satisfactory.e. Credit reports are to be obtained. to be eligible for categorization as ―Priority sector Advance‖.2015. underwriting and monitoring mechanisms. ZOCC has been authorized to grant further concession upto a maximum of 1. The NBFC-MFI undertakes KYC guidelines and other due diligence as a part of appraisal. on a case to case basis on merits.04. (ii) ―Food processing units‖ have now been included under purview of the Scheme (iii) Sanctioning authorities have been allowed to sanction additional working capital limit upto 25% of the sanctioned cash credit limit. as per the guidelines issued by RBI vide circular No. Branch to carry out field visit and make random verification of books of the account of the Company with regard to onward lending to JLGs and satisfy with business model of the Company.2016.00% in the applicable concessional Rate of Interest under the Scheme. if any. the NBFC-MFI has put in place processes for credit appraisal. BC. 15. the Company complies with all the norms of Bank loan to MFIs for onlending. subject to minimum applicable ROI at Base Rate.54/0 4. All the extant guidelines with regard to foreign investment in the Company.FIDD. Further. pre sanction & post sanction follow up. to be complied with. while considering the proposal.01. Recovery procedures.Plan. The MFI complies with all the regulatory guidelines of RBI. Renewal/Modification of Food & Agro Based Schemes (BCC:BR:107:458 dated 16-092015): Bank has been renewed ―Agro based Scheme‖ with the following modifications: (i) Zonal Authority i.e. The share holding pattern including of foreign entity and loan outstanding with other Banks/FIs from CA/CS of the Company to be obtained and satisfied upon.CO. 1 lac and up to Rs 5 lacs For loans above Rs. information search by writing to all other Banks operating in the centre where our branch is functioning and the applicant‘s residence/village. 1 lac For all loan amounts more than Rs. Interest table code: L4291 (Base Rate and tenor premium included).5 lacs Self Declaration/Affidavit by the applicant Credit history check/obtaining credit report from credit information companies like CIBIL/ Equifax/Experian/Highmark etc with whom Bank has/will tie-up. Post. with an auto deadline (Maximum 7 days).LA429: . 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: all loan amounts up to Rs. Interest table code: CC211 (Base Rate only) Dispensing with „No Due Certificate‟ for Agri.for TL/DL Food & Agro based. The branch should send the letter by Regd. and CC021: for CC Food & Agro based. In addition to credit history check as mentioned above. 117 | P a g e . 1. a) b) c) d) e) What is the mandatory target for weaker section advances? 5% of ANBC 10% of ANBC 18% of ANBC 13. 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 % 118 | P a g e . a) b) c) d) e) TEST YOUR UNDERSTANDING: Under which segment the loans to Agri clinics &Agri Business Centers advances are classified? Direct Agriculture Ancillary Activities Other Priority Sector Non priority Sector Indirect Agriculture 2. which Banks earns on the accounts eligible for interest subvention in Agriculture? a) 7 % b) 4 % c) 9 % d) Base rate e) 3% 4.50% of ANBC 3. What is the effective rate. 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 5.5% of ANBC 4. APBSLN d.Rupay debit card must be used at least once ina. HACM/ACM e. 2 lacs Rs. b. In ―Baroda Basic Savings Bank Deposit Account‖ -----. c. CUMM/HCUMM b. HCLM 9.Under PMJDY scheme to get the benefit of accidental insurance cover . 8 lacs 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 . c. APBS c. d. maximum limit under priority sector loan against gold Jewellery is : Rs.7. 5 lacs Rs. e. 3 lacs Rs. 1 lac Rs. The a. e. 15 days 30 days 90 days 30 days 30 days 10. d.Cheque Leaves shall be allowed free in a year:-a) 10 b) 20 c) 30 d) 40 e) 50 8. b.The Aadhar number of the customer can be linked in existing account as well as for the new accounts through menu option: a. 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 Manufacturing Enterprise: is an enterprise engaged in manufacture/production or preservation of goods and whose investment in plant and machinery (original cost excluding land and building and the items specified by the Ministry of Small Scale Industries) does not exceed as mentioned in above table. Service Sector Enterprises: engaged in providing or rendering services whose investments in equipment (original cost excluding land & Building and Furniture, Fittings and other items not directly related to the service rendered or as may be notified under MSMED Act, 2006) are as detailed in above table. Computation of value of Plant & Machinery: Investment under head ‗Plant and Machinery‘ should include the original price of every productive item irrespective of whether new or second hand, acquired and proposed to be acquired, whether on lease or hire purchase or on ownership basis by the industrial undertaking, irrespective of the manner in which the cost has been shown in its books. For computing the value of the investment in Plant and Machinery, cost of the following items should be included: 1) Original cost of Plant and Machinery (price paid by the owner / hirer / lessor). 2) Cost of control panels, starters, Electric Motors, other electrical accessories mounted on individual machines. 3) Cost of only those testing and quality control equipments, which are, used for/in process testing. 4) The investment in establishing of Wind Mills to generate electricity for captive consumption or partly for captive consumption and remaining power to sell to Electricity Boards/others Cost of following items should be excluded: a. Equipments such as Tools, Jigs, Dies, Moulds, and Spares for maintenance and cost of Consumable Stores. b. Installation of P & M, 120 | P a g e c. Research & Development Equipments and Pollution Control Equipments d. Power Generation Set and extra Transformer installed e. Bank Charges and Service Charges paid to the NSIC or to the State Small Industries Corporation f. Fire Fighting Equipments, Cables, Wires for safety measures g. Gas producer Plants, Transportation Charges for indigenous Machineries h. Technical Know-how Fees i. Storage Tanks not linked to manufacturing activities but are used for storing of Raw material and Finished Goods. j. The investment in establishing of wind mills to generate electricity for captive consumption or partly for captive consumption and remaining power to sell to Electricity Boards / Others. In case of Imported machinery following should included: i- Import duty. ii- The shipping charges. iii- Custom clearance charges. iv- Sales Tax. Our Bank‟s approach - MSME sector for internal purpose: Our bank considering vital role being played by such organizations in Economic development of the Nation and in order to capture the business, has expanded the coverage of MSMEs well beyond the Regulatory definition as under: Our bank has therefore for internal purposes given focused attention to finance all Commercial enterprises i.e. enterprises which may be outside the purview of regulatory definition of MSME but having assessed turnover upto Rs.150.00 crores. SME Banking business will thus include the following across the bank: - Micro, Small and Medium Enterprises – as per regulatory definition irrespective geographical location, i.e. rural, semi-urban, urban, metro areas. - All other entities with their assessed annual sales turnover up to Rs. 150/- crores and real estate projects, where the project cost is upto Rs. 50/- crores. Other than Real Estate projects, where project cost is up to Rs.50.00 Crores. - SMEs which are Associate/sister concerns of Large Corporate Banking customers. - Clubs, Trusts, etc. (other than NBFCs, Financial Institutions & Banks) - Financing under various Government schemes launched for MSME Sector. The new/extended definition will only be used internally for promotion of business across these segments. All the proposals falling beyond the ambit of regulatory definition shall be covered by the Loan Policy Document and will attract all provisions of C & I sector, if not specified otherwise. However, such Units, which are outside the purview of regulatory definition will not form part of Priority Sector lending. Classification under Priority Sector: Bank loans to Micro, Small and Medium Enterprises, for both manufacturing and service sectors are eligible to be classified under the priority sector as per the following norms: 121 | P a g e 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 Weaver‘s 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 Bank‘s website provides such facility to MSME customer through which the credit application submitted by MSME customers would be reaching our Loan Track system and accordingly, application tracking facility is provided to the MSME customers 5. Time norms for disposal of loan application: As per Code of Bank‘s Commitment to Micro and Small Enterprises August 2015 (Para 5.1 j of BCC:BR:107:624 dated 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 Min. 1.33 & above 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 25. 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. 11. PMEGP scheme are eligible for cover under the Scheme. if accounts are falling under SME category based on expanded coverage i.00 lacs and fulfilling the above criteria.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. rates as applicable to Micro. 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 1.10. regulatory definition. the release of collateral securities obtained if any. Coverage of collateral free loans under Credit Guarantee Fund Trust Scheme for Micro & Small Enterprises (CGTMSE): All the collateral free loans upto Rs. non-submission of financial statement. For the existing borrowers enjoying limits up to Rs. Penal Interest: Penal Interest @ 1% to 2% to be charged for the period of default in repayment. Bank‗s guidelines for providing collateral free loans are as under: Collateral free loan upto Rs. Collateral free loans (including third party guarantee/ security) upto a limit of Rs. However. 12. Continuous profit for last 3 years. Small & Medium Enterprises to be applied.00 lacs to units having satisfactory dealings with the branch for last 3 years and having sound and healthy financial position.100 lacs sanctioned to Micro & Small Enterprises in manufacturing and service sector as defined under MSMED Act.00 Lacs to Micro & Small Enterprises.5 Other take over norms are complied with. 25. at the time of previous sanction / review. non-compliance of terms and conditions etc. Rate of interest: If accounts are falling under SME category as per. It is already decided to dispense with collateral security including third party guarantee for loans to Medium Enterprises upto a limit of Rs.e. Collateral Free Loans: Presently. interest to be applied as per separate guidelines being issued from time to time.25. Credit rating of ―A or equivalent and above and no slippage in credit rating during last 3 years.10. is can also to be released at the specific request of the borrower by PSR noting authority. 2006. as per extant guidelines of Bank. they are outside the purview of regulatory definition. (I) CGTMSE – important Operational Guidelines: Eligibility: Following are eligible for coverage under CGTMSE scheme: 125 | P a g e . 20/.50 lacs entire guarantee fee is to be borne by the borrower. with limits upto Rs. Review with limits upto Rs.50 lacs covered under the scheme. 13.100 lakh o Without any collateral security and\or third party guarantees Quantum of Guarantee & Fee Payable: Category/ Credit facilities upto Micro Enterprise – Upto 5Lacs Category Maximum extent of Guarantee 85% of amount in default subject to Max 4.00Lacs North Eastern Regions – > 5Lacs to 50Lacs (Other than Credit facility upto 5lacs to Micro enterprises) All other Category borrower limit above 75% of amount in default subject to Max. borrowers in rural area.06. Credit facilities (Fund based and/or Non fund based) extended: o To a single eligible borrower in the Micro and Small Enterprises sector(New or Existing both) o Not exceeding Rs. 37. New Originations-Priorities & Approval 126 | P a g e . financed under government sponsored programme. In case of accounts financed under erstwhile PMRY scheme for manufacturing activity and covered under CGTMSE scheme.00Lacs 50Lacs Lodgment / Settlement of Guarantee Claim: Guarantee can be invoked (claim can be lodged) with the TRUST for Ist installment of guaranteed amount when Dues covered under CGTMSE classified as Non-performing Assett Marking of NPA date be done with Trust before end of subsequent quarter of classification of NPA i.15. entire annual service fee is borne by Bank.months period from dt of Ist premium payment date or last date of disbursement.lacs pending receipt of audited financial statements provided the conduct of the account is satisfactory in terms of various parameters 14.50Lacs 5Lacs upto 50Lacs All other Category borrower limit above 50% of amount in default subject to Max 50. Marking with trust be done prior to 30. borrowers enjoying only guarantee facility. Micro & Small Enterprises. If account turned to NPA on 15. In case of accounts with limits over Rs.15.e. Lock in period is -18.25Lacs Women Enterprises/Units located in 80% of amount in default subject to Max 40.lacs pending receipt of audited financial statements Branches have been authorized to review advance accounts of borrowers in trading activities. 20/. etc. whichever is later. Our bank is sharing the one-time guarantee fees and annual service charges on 50:50 basis for advances upto Rs. borrowers having only term loan accounts.01. 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. Corporate Module Manuals. Pursuant to the approval. Engineering iii. Power Generation ii. Financial Services (NBFCs. MFIs) Bank has also advised to focus on channel financing. Renewable Energy vi. CMS. EPC iv.f. Sectors to deal with cautions and selective approach Bank will take cautions and selective approach in taking fresh exposure in following sectors i. Large Trade Accounts (Wholesale Trading) It is advised that fresh/review with increase proposals involving a limit of Rs 5.Bank has approved strategy to take fresh exposure including review with increase and other ancillary business for corporate and clients. IT and IT enabled services vii. Road Projects iii. it was proposed to implement the module in branches also in phased manner. 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. 03/11/2014. 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. Automobile v. Trade Financing.e. Ship Breaking vi. Ratio Micro & Small Enterprises under manufacturing Norms Medium Enterprises under manufacturing Units covered under SME Sector as per expanded definition 127 | P a g e . Pharmaceutical ii. ii. Textile x. Coal Mining viii. Edible Oil & Vanaspati Manufacturing ix. 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. – Projects – LAPS . Defence Equipment Manufacturing iv.00 crores (Five Crores) and above. Gems & Jewellery vii. Iron & Steel v. Detail User manual and Reckoner can download from KM Portal (Intranet) with the following path: BCC – IT Dept. financing of investee companies of large Private Equity Funds. extending advisory Services as new avenues of Business opportunity. bank has advised as under (i) Bank will prefer to take fresh exposure/ review with increase in following sectors: i. 17 sector and Service Sector falling under regulatory guidelines 1.00 instead of 1.25 Average DSCR for Term 1.20 and outside the purview of regulatory definition 3:1 Not below 1. No major inspection/audit irregularities 128 | P a g e . rural. should be available.e. for meeting genuine business requirements only.75 with a condition that in any one year it should not be below 1. Accounts with continuous decline in credit rating will not be considered eligible. 1.75 with a condition that in any one year it should not be below 1.25 1. Satisfactory credit rating for the last three years (BOB-5 and above) and for 4 half years in case of accounts where credit rating is done on half yearly basis. All other entities with their annual sales turnover up to Rs.)(TTL/TNW) FACR (Net FA/ LTL) sector and Service Sector falling under regulatory guidelines 1.) DER(Max. i.25 as per extant guidelines. Satisfactory financial performance in terms of sales / turnover and profits. Latest Balance Sheet etc. or for any purpose not related to the borrower‘s activity. 150/.25 1. Small and Medium Enterprises – as per regulatory definition irrespective of geographical location.Current Ratio (Min.75 with a condition that in any one year Loan it should not be below 1. Purpose 2.25 3:1 Not below 1. semi-urban.crores. Borrower Group To meet temporary shortfall/mismatch in liquidity. urban. unsecured loans etc. Satisfactory dealings with the Bank for at least three years. Negative variance.33 SME Products: The following products are launched for MSME sector across the country: SME SHORT TERM LOANS Sr No Parameter Guidelines 1. SMEs as per Regulatory/ expanded definition given below: 3 Eligibility Criteria Micro. metro areas.25 3:1 Not below 1. should not be more than 10%. if any. The facility is not to be made available for other purposes like repayment of loans of other banks or institutions. BOB-5 rated accounts. Equitable mortgage of Land & Building of educational institute Hypothecation of Instruments & Equipment Personal guarantees of the Promoters of the Institution. the same can be financed. Interest to be served as and when charged.e. (HUF are not eligible).Purchase of land alone is not permissible. subject to a minimum of Rs. . Collateral security level should not be less than 30% by way of Land & Building other than college/school property i. personal property be obtained of OD Limit to be allowed only to existing profit making institutions without any bank liability for meeting short term requirement against fee receivable for one semester with 25 % margin and security of mortgage of assets in the name of the institution or promoters of the institution as the case may be.Construction of building including expansion. 5 Period 6 Powers to sanction To be repaid in 12 months including moratorium period. Trusts. Target Group Educational Institute 2.4 Loan Amount Up to 25% of the existing Fund based Working capital limits in case of BOB-1. Schools. Society etc.00 lacs Maximum: Rs. company.10.25. 20% in case of BOB-4. Repayment period to be decided based on the project cash flow. When credit facilities exceed Rs. if the land cost is included in the total cost of project. 10 lakhs and maximum of Rs. However. Minimum: Rs. BOB-2 and BOB-3 rated accounts. 6 Repayment Period 7 Security 8 Assessment Limit Maximum 84 months (including maximum moratorium up to 2 years) subject to annual review. Regional Manager and above only Baroda Vidhyasathali Sr No Parameter Guidelines 1. OD to be liquidated in maximum period of 6 months out of 129 | P a g e . Eligibility Criteria 3 Purpose 4 Loan Amount Educational institutions. modernization & renovation activities of the education institution for the purpose of education.Purchase of instruments . .00 crores 5 Margin Overall minimum margin of 25% of cost of Project. Assessment on cash budget system. 15.00 Crores. Colleges and other education bodies running education activities set up by Firms. 250 lakhs. 1. Rs.5 times of borrower‘s tangible net worth as per last audited Balance Sheet.17 Medium Ent. . whichever is lower.00 lacs for SMEs as per expanded definition (i. 4 Margin 25% 5 Security 6 Financial Ratios 7 Other Conditions Exclusive charge on the assets of the enterprise. 5. Current Ratio Regulatory MSE . (Will not be applicable in cases covered under CGTMSE scheme) Third party guarantee in case of credit line above Rs.33 DE Ratio(TTL/TNW) 3:1 DE Ratio (TOL/TNW) 4.e.75 Average & should not go below 1. wherever applicable.00 crores. based on Turnover criteria and Medium Enterprises) to maintain asset coverage ratio above 1.25 in any year Financials BARODA SME LOAN PACK Sr No Parameter Guidelines 1 Eligibility SMEs as per Regulatory/expanded definition 2 Purpose 3 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. or.25 Current Ratio 1.1.20 SME expanded . Any other collateral for the credit line above Rs.9 fee collection and may be allowed max. 100.00 lacs in case of Micro and Small Enterprises as per regulatory definition.1.50:1 DSCR 1. Charge on the unencumbered personal properties of the partners. promoter Directors. 2 times a year.20 DE Ratio(TTL/TNW) 3:1 DE Ratio(TOL/TNW) 4. 4.25 Stock/Book Debts statement to be obtained every month/as per credit rating. 25. Personal Guarantees of all promoter Directors/partners. Book debts statement to be certified by Chartered Accountant on quarterly basis 130 | P a g e .50:1 Asset Coverage Ratio 1. tax payment etc.BARODA SME GOLD CARD Sr No Parameter Guidelines 1 Eligibility All MSME Enterprises – As per regulatory definition irrespective of geographical location. 10% of the assessed MPBF 12 months – to be allowed on 4 occasions during the year for a maximum period of 2 months on each occasion.lacs and above. converting the existing account to BOBLUCC account. As per Credit Rating and as applicable to Cash Credit BARODA LAGHU UDYAMI CREDIT CARD Sr No Particulars Guidelines 1 Eligibility The scheme is applicable to all existing customers in the categories of small business.00 Lacs and satisfactory track record/dealing with the Bank for the last 3 years are eligible to avail the facility of BOB Laghu Udyami Credit Card (BOBLUCC) i. Obligor credit rating of ―BOB-5‖ and above 3. Small Scale and Micro Enterprises units.e. Working capital limits of Rs. No deviation allowed in Take over norms while taking over account 3. 25/. i.crores fulfilling following criteria:. entities with their annual sales turnover up to Rs. 25/. semi-urban. Obligor credit rating of ―BOB-5‖ and above 2.lacs and above.In case of existing accounts1. artisans. 2 Purpose 3 Limit 4 Period 5 ROI To meet emergent requirements and tie up temporary mismatch in liquidity arising out of delayed payment by buyers. village industries. Retail Credit. Village Industries. working capital limits of Rs. urban. there should be a minimum gap of 15 days between two drawals.10. retail traders. metro areas and SMEs as per expanded definition viz.. 2 Purpose The borrowers having credit limit up to Rs. rural. To meet the credit requirements of Small business units. In case of Take Over accounts:1.e. small scale industrial units and 131 | P a g e . A/c in Standard Category for last 2 years 2. However. Artisans. 150/. Public Ltd. i. etc. 2 Purpose Note: The main Promoters should have requisite qualification in any branch of medical science from a recognized University and should have minimum 2 years of work experience.10 Lacs will be considered without submission of a detailed proposal by the borrower...lacs... Ltd.3 Limit 4 Period 5 Margin 6 Assessment of Limit tiny units. Individuals . 10/. whichever is higher.Micro. partnership.e. Pvt. The limit fixed under the scheme will be valid for a period of -3years. professionals and self employed persons. Wherever required. subject to internal annual review based on the conduct / operations of the account. retail traders. 132 | P a g e . urban. For professionals and self-employed persons. where sales tax returns are not available. Small and Medium Enterprises – as per regulatory definition irrespective of geographical location. rural.e. BARODA AROGYADHAM LOAN Sr No Particulars Guidelines 1 Eligibility SMEs as per regulatory/ expanded definition given below: . enhancement in Credit Limit within the ceiling of Rs. 20% of the annual turnover declared for tax purposes or last 12 months turnover in the operative account. metro areas and irrespective of Borrower‟s Constitution i.etc. the credit limits may be decided taking into consideration the actual turnover in the account during the last two years. Maximum limit up to Rs.Setting up of new Nursing Home/Hospital/Pathological Laboratory/Diagnostic Centres. 50% of their gross annual income as per IT return shall be considered as the limit for issuing the BOBLUCC. For Small Scale industrial Units including tiny sector units. . . Trust. etc.Expansion/renovation/modernization of existing Nursing Home/ Hospital /Pathological Laboratory/Diagnostic Centers. In respect of parties with good track record. Note: 1) Real Estate Projects are not eligible 2) Promoters /owners should not be HUF. 25% For small business.. the assessment norms in vogue as per the Nayak Committee recommendations would continue. semi-urban. TTL/TNW . etc. 2014 and SME Policy.- - 3 Limit Purchase of medical diagnostic equipments as also office equipments. office furniture. Audited Balance Sheet and Profit & Loss or income – expenditure statement for the last 3 years in case of existing Institution. Minimum Interest coverage ratio should be 2. Demand Loan/Term Loan 75% of the cost of chargeable. Depreciation & Tax) not to be below 10%.50Crore Semi-Urban: 6. All other terms and conditions as per bank‟ s Domestic Loan Policy.3:1 TOL/TNW . Uniform margin of 25% on the chargeable assets as per Project details. air conditioners. DE Ratio . immovable assets as per Project details. movable. subject to 20% of the overall limit approved for the Institution. Demand Loan/Term Loan 35 months to 84 months including moratorium.25 in any particular year. Construction of rest house. computers. Credit rating of the account to be carried out as per bank‘s extant guidelines and the borrowers with credit rating not less than „BOB 6‟ as per CRISIL model only to be financed under the Scheme. limit to be restricted to 20% of the above ceiling limit. In case of only working capital requirements.4. TEV study to be carried out as per bank‟ s extant guidelines.00Crore 4 Margin 5 Assessment of Limit 6 Period 7 Financial Ratios 8 TEV Study 9 Other Conditions Need based Working Capital limits may be considered upto 10% of the annual sale or gross income. Rural: 0.1.5:1 DSCR Average .00Crore Urban: 12. Purchase of ambulance To meet working capital requirements.75 DSCR should not go below the level of 1. Operating Profit Margin (before Interest. subject to 20% of the above ceiling limit in case of borrowers requiring both Term Loan and working capital facilities. viz.00Crore Metro: 15. Working Capital: Need based upto 10% of the annual sale or gross income. staff quarters Portion of the Working capital limits should not exceed 10% of the total limits sanctioned. 133 | P a g e . subject to annual review. Units with credit rating of BOB-6 and above as per CRISIL Module.00 Lacs Maximum Limit Rural – 75. established in the line of business for a minimum period of 2 years and financed/proposed to be financed under sole banking arrangement. Service sector . To meet Fund based Working capital requirements. under PBF Method. whichever is higher.As per Nayak Committee recommendations viz.10. In case of new Manufacturing/Service sector units(other than Retail Trade).00Lacs 4 Margin 5 Assessment of Limit 40% of the market value of property mortgaged.20% of projected Gross receipts subject to verification of sales tax returns of previous years/quarters in case the enterprise is not under audit. facility may be considered if unit is established by our existing customers having satisfactory track record and the same is set up from their own sources.00Lacs Urban & Metro: 500. minimum 20% of the accepted estimated Turnover. 3 Limit Minimum Limit –Above Rs. Working capital limits : SMEs as per Regulatory definition Manufacturing sector .00Lacs Semi-Urban : 200. Regional Head is authorized to reduce the margin up to 35% in deserving cases. Notes: The Manufacturing/Service sector units (other than Retail Trade) should have been established in the line of activity for a minimum period of 2 years. SMEs as per expanded definition: To be assessed as given in loan 134 | P a g e . Stock/Book Debts statement to be obtained once in a year. or. BARODA OVERDRAFT AGAINST LAND & BUILDING Sr No Particulars Guidelines 1 Eligibility 2 Purpose SMEs as per expanded definition. Manufacturing and Service Sector units (other than Retail Trade)having less than two years establishment may be considered with the prior approval of one authority higher than the Sanctioning authority under whose powers the proposal falls. 50:1 Asset Coverage Ratio: 1. 135 | P a g e . certification by Chartered Accountant is not mandatory.50 Stock/ Book Debts statement to be obtained on yearly basis.6 Period 7 Financial Ratios 9 Other Conditions policy. This being a collateral security. i. February every year. Demand Loan/Term Loan 35 months to 84 months including moratorium Current Ratio: Small Enterprises: 1.17 Medium Enterprises: 1.20 SME(Expanded) : 1.e.33 DE Ratio (TTL/TNW): 3:1 DE Ratio(TOL/TNW): 4. Limited Liability partnership firms.25 lacs and Internal Credit rating up to ―BBB‖ in old model (Scoring Type) For acquiring any type of new vehicle eligible for Registration with Regional Transport Authority. Registered Partnership concerns. The facility to be included in the regular review proposal. Head 136 | P a g e .Scheme for financing existing Borrowers under SME Segment for Purchase of New Vehicles Sr No Particulars Guidelines 1 Eligibility 2 Purpose 3 Limit 4 Margin 5 Period 6 DLP Proprietorship firms. body building charges & other incidental charges in case of new vehicle. Co-operative Societies (Except individuals) under SME Segment with Internal credit rating up to BOB-6 in CRISIL model in case of borrowers enjoying credit limits over Rs.In cases where the proposal for regular facilities as also for purchase of vehicles fall under the powers of Branch Head.Acs falling beyond DLP of Zonal Head: Zonal.50 lakhs ) 10 % of total cost of transport vehicle i. Trusts.lacs (Increased from the present level of Rs. inclusive of initial insurance premium.Acs falling beyond DLP of Br Heads & Upto Zonal Head: DRM/RM is empowered to sanction .e. . Maximum 60 months subject to review every year. Limited Companies. Octroi. RTO Tax. Private Limited Companies. 200/. the same to be considered by Branch Head with the relaxed norms as per the Scheme. . Maximum Rs. 150/. To increase fee based income business.crores as per the last Audited Balance Sheet or Previous Financial Year would be classified as Mid Corporate Borrowers. 2. Firms. Trusts. Corporate. Corporates. Firms. Corporations etc having a 137 | P a g e . Corporations etc. Corporate. Corporations etc having a Gross Turnover of over Rs 150/.crores and upto Rs 500/. To increase the existing client base by canvassing new corporate accounts and to get optimum share. BANK„S INTERNAL EXPOSURE CLASSIFICATION DEFINITION : 1) All entities i. Mid Corporates: Companies with annual sales turnover of over Rs. To increase the penetration by increasing the number of products used by clients. Sole Prop. Sole Prop. Partnership firms. 500 crore. Large Corporates: The Companies with annual sales turnover of above Rs. 500 crore.2007) Wholesale Banking Segment is further defined by our Bank in following two parts: 1.Urban. 4. Partnership firms. These segmentations facilitated to bring new large corporate whose sales turn-over is very high but do not have any limits or are enjoying very small limits with the bank. 2) All entities i. 3. Mid Corporate Branch: OBJECTIVES: 1) To set up dedicated Mid Corporate Branches in important cities/centres in the country to tap the potential that this sector offers.e. Trusts.11. Firms. Advantages: 1. Existing CFS branches are functioning as Wholesale Banking Branch where the large/mid corporate accounts of other branches in the city are being parked. Following types of customers irrespective of their annual turnover Financial Institutions .Crores as per the last Audited Balance Sheet or Previous Financial Year would be classified as Large Corporate Borrowers. 150 crore and up to Rs. Trusts. 3) To set up a Mid Corporate Banking segment within the Wholesale Banking Group at Corporate Office to provide the necessary drive support to achieve the above objectives.e.crore. Sole Prop. To have a special focused attention over Large and Mid corporate customers. SemiUrban & Rural branches with Entities (including Private Sector . 3) All entities i.including banks and all type of NBFCs (excluding RRB sponsored by our Bank) Central and State Governments Associate/Sister Concerns of Wholesale Banking Customers. 2.e.WHOLESALE BANKING Wholesale Banking Business: As a part of Business Transformation initiatives. PSU & Foreign) with their annual sales/income turnover of over Rs. Wholesale Banking Business Segment will include All Banking business (Assets & Liabilities) across the Bank at Metro. the bank is repositioning as ―Multi Specialist Bank. having a Gross Turnover (Sales) of over Rs 500/. (Reference BCC:BR/99/343 dated 14. Partnership firms. Loan Policy 2014 1. Project Cost =>Rs. 25 lacs and above are to be sanctioned by the MCB.e. 2.Crores as per the last Audited Balance Sheet or Previous Financial Year would be classified as SME borrowers.50 cr but <Rs. Project Cost < Rs. No loan to be granted to Wilful Defaulters (Refer to Recovery Policy) of our Bank/Other Banks/Financial Institutions.11.Crores as per Last Audited Balance Sheet but have a Projected Gross Sales of over Rs 600/. Infrastructure etc Total Project Cost would determine the Classification as under: (Ref: Page No.250 crs. 58 of Domestic Loan Policy 2014 & BCC/BR/106/454 dated 24. 50 crs – SME b. GM (Mid Corporate) and GM (SME) based on sound reasoning and justification. Partnership firms. 125 Crores and projected gross sales of Rs.Crores for the current year shall be classified as Mid Corporate only. borrowers with Actual Gross Sales of Rs. 1949 lays down restrictions on loans and advances to the directors and the concerns in which they hold substantial interest. 50cr. 5) In respect of New Projects whether Manufacturing.500 cr – Large Corporate ii) Real Estate Projects a.250 cr – Large Corporate 6) The Classification of borrower would be Entity wise and not Group wise. Scheduled Cooperative Banks. Trusts. Project Cost >Rs.e. it will be decided by the Executive Director. – Mid Corporate c.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.– Mid Corporate c. Corporations etc that satisfy the Investment in Plant and Machinery criteria as per Regulatory Definition would also be classified as SME borrowers. Firms. no loan against the security of Bank‗s own shares. 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. Project Cost =>Rs. Loans & Advances. Sole Prop. Similar situation would prevail in respect of SME borrowers also i. Services. 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. 3. other banks. Note: Entities that have Gross Sales of less than Rs 450/. However in case of difference of opinion. it shall be decided mutually by GM (Large Corporate Banking). So different entities in the same Group can be classified as SME.Gross Turnover of upto Rs 150/. no loans and advances should be granted to Directors (including Chairman & Managing Director) and relatives of directors of our Bank. In terms of Section 20(1) of BR Act 1949. The status will be reviewed after reviewing the Actual Gross Sales for the projected year based on Audited Financials. 4) All entities i. b) The proposals for credit facilities of an amount less than Rs. 25 lacs to these borrowers may be 138 | P a g e . Corporates. but <Rs. Section 20(1) of the Banking Regulation Act. Mid Corp or Large Corp depending on the Gross Turnover criteria as above.50cr. Without prior approval of the Board or without the knowledge of the Board.2014) i) Other than Real Estate Projects a. – SME b.500cr. Project Cost =>Rs. Project Cost <= Rs. b) None of the partners is a director or specified near relation of a director of a banking company. 2014). However. 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. No loan to be granted to Partnership/Proprietorship concerns against the primary security of shares and debentures. Infrastructure finance is also made available for a period of more than 15 years on case-to-case basis on merits. Mumbai irrespective of the location of the sanctioning authority. Restrictions under Selective Credit Control (SCC): Presently the following commodities are covered under Selective Credit Control (SCC): -Buffer Stock of sugar with sugar mills. No loan to be granted against partly paid shares. subject to reporting to the Board. 7. 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. 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. 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. the credit validation function of all borrowal accounts with credit limit Rs. In addition.5 crores existing guidelines will continue. Baroda Corporate Centre. 9. In case of green-field project the acceptable investment grade is BOBGF2 (BOB-6). models for rating of any kind of exposure to be taken up are not available. in conformity with regulatory guidelines. cash generation etc. all credit exposures need to be rated. (Ref. Circular No. COCCCMD and COCC-ED the proposals may be considered by the respective sanctioning authorities only. However. the exposure may be considered as unrated. where repayment period of more than 15 years is permitted. for which BOBRAM Rating Models are available. 6. However in case. . as assessed by the Bank 139 | P a g e . non-financial parameters etc. generally a repayment period of 3 to 7 years is considered taking into account the repayment capacity of the borrower. In case of restructured term loan accounts the tenor of the loan will be considered on merits of each case.sanctioned by the appropriate authority under powers vested in such authority.] 4. 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.Unreleased stocks of sugar with sugar mills representing levy sugar and free sale sugar. 8. Housing Loan. and c) None of its directors is a director or specified near relation of a director of a banking company. But in the case of proposals falling under the power of CACB. BCC: BR: 106/26 dated 25th March. Bank will not grant advance against FDR or deposits of other Bank. In case of commercial lending below Rs. must be rated as per extant guidelines. 25 lacs (which are not covered under BOBRAM Rating Models) the existing guidelines issued by SME department and Retail Banking department will continue. (Ref page no. Exposure to unsecured guarantees and unsecured advances: Unsecured Exposure is defined as an outstanding exposure where the realisable value of the security. are to be followed. While taking up such unrated exposure bank‗s extant guidelines including financial. Commercial lending proposals for Rs. 10. for accounts with credit limit up to Rs. Accounts rated BOB 7 and below are considered as non-investment grades. 25 lacs and above (FB+NFB). Minimum investment grade / acceptable for obligor (borrower) rating at entry point is BOB -6. With effect from 1st April 2014. As per RBI guidelines. However. 30 of Domestic Loan Policy) 5. No loan to be granted against partly paid shares.5 crores and above has been centralized at Risk Management Department. authority. 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. However. licences. Short term loans (STL): The STLs may be on secured or unsecured basis depending upon merits of proposal. 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. if a certain level of traffic is not achieved. authority. licences. The total amount of advances for which intangible securities such as charge over the rights. licences./approved valuers / Reserve Bank‗s inspecting officers. COCC-CMD/COCC-EDs is empowered to exceed the cap. Unsecured exposures will be considered only on clients having investment grade or higher rating. etc. The activity clearance will be required from respective Functional Head (SME. etc.. 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. etc. „Outstanding Exposure shall include all funded (excluding investments) and nonfunded outstanding exposures (including guarantees. has been taken as also the estimated value of such intangible collateral should also be disclosed. ab-initio. 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. Activity Clearance & Agreement in Principle: Looking to the increasing trend of stressed assets in Gems and Jewellary sector. the rights. Security will mean tangible security properly charged to the Bank and will not include intangible securities like guarantees & comfort letters. and rights. charged to the Bank as collateral in case of infrastructure projects. authorisations. Following is the summarized table for activity clearance: S. licences. authorisations etc. only is available.No Industry/Activity Authority Remarks 1. subject to reporting to Board. of the outstanding exposure. Total unsecured Short Term Loans shall not exceed 10% of the total domestic credit as of previous quarter. RBI has further advised that for determining the amount of unsecured advances for reflecting in Schedule 9 of the published balance sheet. if the Bank's right to receive annuities and toll collection is legally enforceable and irrevocable. Leasing and Hire purchase Non- Baroda Corporate For fresh /RWI/ Ad- Banking Finance companies (other Centre hoc-Irrespective of 140 | P a g e . 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. shall be considered as tangible security. is not more than 10%. charged to the banks as collateral in respect of projects (including infrastructure projects ) financed should not be reckoned as tangible security. underwriting & similar commitments). Derivatives (LeR).Mid Corporate. However. Financing of Education Institution Baroda Corporate With Limit of Rs. Capital Market ( other than advances Baroda Corporate For Fresh/RWI/Ad-hoc against shares to individuals) stock Centre irrespective of amount Brokers market makers 3. Bridge Loan Baroda Corporate Centre 5. Financing of film Making Baroda Corporate Centre 4. 7. 6. 12. 10. Real estate for Commercial 141 | P a g e . 8. 11.00 Centre Crore and above 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 Securitisation through deed of Baroda Corporate For Fresh/RWI/Ad-hoc assignment Centre irrespective of amount Gems and Jewellary and Diamond Baroda Corporate For Fresh/RWI/Ad-hoc Industry Centre irrespective of amount A.5.Commercial Real Estate for Malls 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 B. 9.than Central /state Govt NBFC) amount ( Sanctioning authority rests with MD-CEO/COCC-ED only within their delegated power 2. activities Centre irrespective of amount Advances to Cooperative Bank Baroda Corporate An exceptionally Centre meritorious cases.No Industry/Activity Authority Remarks 1. Plantation (excluding tea coffee and Zonal Heads For proposals falling up Rubber plantations common to the power of ROCC- horticulture crops jatropha spices RM medicinal plants essential oils/Aromatic plants) 2. Marriage Halls RM (Kalyanamandapams) 5. Manufacturing and trading of Liquor Zonal Heads For proposals falling up to the power of ROCCRM 3. Cinema Halls. Zonal Heads For proposals falling up Theatres/Auditoriums/Amusement to the power of ROCC- parks.5.13. Advances to Hotels & Resorts For proposal upto rs.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 Activity Clearance from Zonal Heads S. Vegetable Oil Vanaspati Zonal Heads For proposals falling up to the power of ROCCRM 4.00 Crore Zonal Heads For proposals falling up 142 | P a g e . Educational Institutions (Existing Zonal Heads Fresh) 6. Further exposure to clients engaged in Jelly-Filled Cables manufacturing/trading and any other category as may be specifically decided by the Bank on account of 143 | P a g e . All other cases falling BCC For Proposals falling under the power of beyond the power of ZOCC and above for ROCC-RM please see the above mentioned the guidelines below** activities are to be put up to Baroda Corporate Centre ** a) For proposals falling under the power of zonal head and the funvtional head at BCC activity cleatance to be given by the functional head at BCC a) For proposals falling under the power if COCC-ED activity clearance to be given by the Executive Director b) For any other proposal not covered above for the said activities the activity clearance will be given by the Managing Director & CEO c) Activities not encouraged by the Bank S.No Activities 1. It & ITES Zonal Heads For proposals falling up to the power of ROCCRM 8.No Industry/Activity Authority Remarks 1. Real estate (Other than Malls) for Zonal Heads For proposals falling up commercial activities but excluding to the power of ROCC- retail loans. Financing for exports to countries for which Export Credit Guarantee Corporation Limited (ECGC) does not extend Guarantee cover 2.to the power of ROCCRM 7. priority sector advances RM Activity Clearance based on DLP S. common horticulture crops.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.No Sector Type of substance 1. 5) Advances to Hotels/ Resorts. Mumbai for consideration. medicinal plants. In respect of following activities. Foam Products Chlorofluoro Carbon-11 (CFC-11 2. 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. Marriage Halls (Kalyanamandapams). 2) Manufacturing & Trading of Liquor. 2. 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. For proposals falling under the power of Executive Director activity clearance to be given by the 144 | P a g e . 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. Vanaspati. Jatropha. 3) Vegetable Oil. Solvents in cleaning CFC-113 Carbon Tetrachloride Methyl applications Chloroform Fire Extinguishers Halons-1211. In exceptionally meritorious cases.. 8) Advances to Co-operative Banks Fresh sanction of any credit facility. 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. 6) Real Estate for Commercial Activities but excluding Retail Loans. 1. are not to be sanctioned to any Co-operative Bank. Large Corporate Banking Dept. spices. Priority Sector Advances 7) Fresh/incremental exposure to Diamond industry. 1301.Bank`s unsatisfactory experience 3. coffee and rubber plantations. Theatres/ Auditoriums/ Amusement Parks. 1) Plantation (excluding tea. whether FB or NFB including Guarantees and Temporary Overdrafts. 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. Aerosol Products Mixtures of CFC-11 & CFC-12 4. 4) Cinema Halls.2402 5. Refrigerators and Air CFC-12 conditioners 3.BCC. Also. 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. essential oils/ Aromatic plants). Restrictions on loans & advances to industries producing/Consuming Ozone depleting substances (ODS) S. 2015Wherever applicable ) 6.04. Board has also advised to focus on Channel Financing Trade Financing Cash Management Service financing if investee Companies of Large Private Equity Funds .00 145 | P a g e . extending Advisory Services as new avenues of business opportunities. This circular has further advice that fresh/review with increase proposals involving a limit of Rs 5. 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. 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. 4. 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. For any other proposal not covered above for the said activities. 3.Executive Director. 7. the activity clearance will be given by Chairman and Managing Director. 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 . 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 16.2015 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.25000 Upto Rs. 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 26.5.e. with all the requisite information/papers.04. will be made available to all the prospective borrowers in a transparent manner. if deemed necessary. The Fair Practices code applies to the following areas: A) Applications for loans and their processing. 9.00 lacs Branch Level 4 weeks Above Rs. along with the loan application. Receipt of completed application forms will be duly acknowledged. irrespective of the loan amount. 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.crores and above. Applications for loans and their processing Standard schedule of fee / charges relating to the loan application depending on the segment.07. All loan applications will be disposed of within a period of 4 weeks from the date of receipt of duly completed loan applications i. B) Loan appraisal and terms / conditions C) Disbursement of loans including changes in terms and conditions D) Post disbursement supervision E) Other general provisions. 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.5. to which the accounts belong.00 lacs Above Rs. The acknowledgment would also include the approximate date by which the applicant should call on the Bank for preliminary discussions. A. amount of fee refundable in the event of non-acceptance of the application. Likewise.25000 Within 2 weeks Upto Rs.2013. 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 Bank‗s prescribed risk based assessment procedures, each loan application will be assessed and suitable margin/securities will be stipulated based on such risk assessment and Bank‗s 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 applicant‗s 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 Disbursement of loans sanctioned is to be made immediately on total compliance of terms and conditions including execution of loan documents governing such sanction. Any change in terms and conditions, including interest rate and service charges, will be informed individually to the borrowers in case of account specific changes and in case of others by Public Notice/display on Notice Board at the branches/on the Bank‗s website/through Print and or other Media from time to time. Changes in interest rates and service charges will be effected prospectively. Consequent upon such changes any supplemental deeds, documents or writings are required to be executed, the same shall also be advised. Further, availability of facility will be subject to execution of such deeds, documents or writings. D. Post disbursement supervision Post disbursement supervision, particularly in respect of loans upto Rs. 2 lacs, would be constructive with a view to taking care of any genuine difficulties that the borrower may face. Before taking a decision to recall/accelerate payment or performance under the agreement or seeking additional securities the Bank would give reasonable notice to the borrower. All securities pertaining to the loan would be released on receipt of full and final payment of the loans subject to any legitimate right or lien and set off for any other claim that the Bank may have against the borrowers. If such right is to be exercised, borrowers would be given due and proper notice with requisite details. E. Other general provisions Complaints: In case of any complaint / grievance, received from the applicant/borrowers in writing, the concerned branch/ the Branch Officials shall immediately take up the matter for redressal. Redressal: On receipt of the complaint, the branch would report the matter with full details within 7 days from date of receipt, to Regional/Zonal Head, who would take all necessary steps to redress and resolve the grievance/dispute, within a maximum period of 30 days. Rejection of proposals: Credit Proposals falling beyond the discretionary lending powers of Branch Managers shall not be rejected at the level of Branches. The authority empowered to sanction a credit proposal may reject such proposal. Branches shall at monthly intervals submit a consolidated statement to the Regional Office, in respect of proposals falling under their powers and rejected by them, giving the details of the applicant viz., name, activity, facility sought etc., along with reasons for rejection of the proposal for their perusal and comments. However, proposals of CACB/MCB powers may be rejected by COCC-CMD. The rejection of credit proposal pertaining to SC / ST beneficiaries and Export Credit shall be by the next higher authority. The existing guidelines about reporting of rejection of Export Credit proposals to CMD through concerned department at Corporate Centre to continue. In case of rejection of loan application, irrespective of category of loans or threshold limits, the same would be conveyed in writing along with the main reason(s), which led to rejection of the loan application. The time frame for conveying the reason/s of rejection will be as per Schedule given below: 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 NON PRIORITY SECTOR Export Credit Within working days Others Within working days* 45 46 Within 8-9 weeks Discretionary Lending Powers: Various functionaries in the Bank are exercising Discretionary Lending Powers in terms of the approval granted by the Board of Directors from time to time. In line with the Ministry guidelines the bank has constituted the following credit committee structure for different levels in the bank: 1. At corporate level there will be following credit committees : a. Management Committee of the Board (MCB). b. Credit Approval Committee of the Board (CACB) – Headed by the CMD c. Corporate Office Level Credit Committee headed by the CMD (COCC-CMD) d. Corporate Office Level Credit Committee headed by respective EDs, in-charge of respective Corporate Credit Function (COCC–ED). e. Corporate Office Level Credit Committee for International Division headed by the CGM/GM (Intl Div) (COCC–GM Intl Div)). 2. Zonal Office Level Credit Committee headed by Zonal Head i.e. ZOCC. 3. Regional Office Level - Two credit committees: a. Regional Office Level Credit Committee headed by Regional Manager (RMCC) b. Regional Office Level Credit Committee headed by Dy. Regional Manager (DRMCC) The Quorum of CACB, COCC-CMD, COCC-ED, COCC-GM (Int‗ll) and ZOCC/ RMCC/DRMCC will be 3 members. The powers of the credit committees shall be at the same level as hitherto exercised by the Executive who will be heading the respective Credit Committee. Before putting up the credit /compromise /write-off proposal to the Regional /Zonal /Corporate level committees, Bank shall continue to have scrutiny /approval from the CREC (Credit Risk Evaluation Committee) /SACs (Settlement Advisory Committees) at respective levels The Officers/ Executives at Branches shall continue to exercise Grade/Scale wise powers hitherto delegated by the Board. Sanctions at SME /Retail Loan Factories: The SME/Retail Loan Factories for the purpose of sanctions/credit decisions shall be considered as Branches only, in respect of SME/Retail proposals. The respective SME/Retail Factory Head shall exercise powers within their delegated powers at substantive Grade/Scale, as hitherto. The present guidelines on delegated powers 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 a. No change in terms & conditions; b. No downgrading in credit rating during the review period; c. Latest rating is minimum ‗BoB6‗ as per new credit rating system The same guidelines would continue up to the level of RMCC i.e. RMCC may exercise powers of ZOCC for review but ZOCC would not exercise powers of COCC-ED. For exercising DLP the tangible security (Primary and Collateral) charged to the bank, is to be taken into account to decide secured and unsecured advances. For Export Finance, the authorities up to the level of General Manager are empowered to exercise their discretionary lending powers up to 125% of their normal powers provided total limits sanctioned exclusively for export business such as packing credit, post shipment credit etc. amount to at least 25% of the delegated powers as hitherto. Other than export credit proposal, all authorities upto the level of DGM shall have discretionary powers as under ,based on credit rating of the borrowers): 1. Latest Credit rating as per CRISIL models (not more than one year old) BOB-1, BOB-2, and BOB-3, the DLP will be 125 % of the normal powers. 2. Latest Credit rating as per CRISIL models (not more than one year old), BOB-4, BOB-5, & BOB-6, the DLP will be 100 % of the normal powers. 3. Latest Credit rating as per CRISIL models (not more than one year old) BOB-7, BOB-8, BOB-9 & BOB-10; the DLP will be 75 % of the normal powers. The lending powers of the General Managers shall be irrespective of the credit rating of the borrower- customers. For new borrowers approaching first time, to be rated as BOB6 for the purpose of sanctioning powers As regard accounts under old rating models (i.e. exposure less than Rs. 25 lacs) the DLP will be 100% of normal powers for A+, A & B+ rated accounts and 75% of normal powers for accounts rated below B+. The officers/ executives who are second in line and those in-charge of credit department in all branches are authorized to grant advances against ―Zero-Risk Assets‖ such as bank‗s own deposits, NSC, LIC Policies, IVPs, KVIPs, Government Securities etc up to the lending powers subject to reporting to branch manager under PSR system Authorities below the level of Chief Managers may exercise delegated lending powers to consider credit facility against hypothecation of book debts, provided the constituents offer sufficient tangible collateral security, the value of which being at least 75 % of the advance, by way of mortgage of immoveable property and/ or other securities. In case no collateral securities are offered/ available, the proposals are to be referred to Higher Authorities as hitherto. ―Annual Cap ―for discretionary lending power : Cap on Discretionary Lending Powers per year of various authorities are as follows: - (For fresh and increase in existing limits) 150 | P a g e Sr. No. DGM & AGM SMGS VI&V 1 Group Limit 2 Per Party Limit 30timesof Group Limit CM & SM GS IV & III Mgr & Officer GS-II JMGS-I 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 bank‗s 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 bank‗s business. Bank follows a transparent pricing policy and is also guided by RBI on Government directed/ sponsored lending. 151 | P a g e for delay in submission of financial statement.a. 10 lacs and above but up to and inclusive of Rs. Competitive price in Market place Expected Loss (Based on Banks Internal PD Estimate for various rating grades) Spread offered by in Bond market in relations to borrower external rating Hurdle Rate Capital at Risk Return on Capital at Risk. creation of security. 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.a.00 crore shall be verified by the Bank‗s identified Advocate / 152 | P a g e . Base rate concept: Bank has migrated to Base rate based pricing since 01. The risk based minimum rates are not applicable to loans with maturity up to 90 days. 2. over the applicable/regular interest rate. quarterly information. Base Rate computation is function of four parameters mentioned hereunder. 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. 2.2 lacs but less than Rs.25 lacs and above pricing continues to be determined by the rating of the borrower with appropriate spread. without any explicit approval /concurrence of appropriate authority. These loans shall be priced based on rates computed/provided by Treasury / Planning / Large Corporate dept. stock statements.2010. Penal interest would be exclusive of the existing pricing of the asse t and additional to any other charge for excess ad-hoc limits.00 crore (Funded plus Non-Funded) would be verified by the Bank‗s Law Officer posted in the respective Zone/ Region and the documents relating to Advance Accounts with aggregate of Rs. which incorporates under mentioned elements. Risk Based pricing methodology: It is feasible to have spreads (Credit premium +Term Premium) over base rate driven by a framework. Verification of documents: Advances accounts with aggregate limit of above Rs. Tenor premium will be applicable for all loans with tenor above three years. credit Risk premium and tenor premium where applicable. The bank shall charge overall penal and additional interest upto 2% p. each. overdues. The credit rating/scoring in respect of the borrower enjoying credit facilities above Rs. breach of covenants etc. for determining the credit risk perception For loans of Rs. Penal interest & additional interest: Bank may apply penal interest of maximum 2% p. The spread over base rate will be fixed taking into account factors like allocable expenses.25 lacs shall continue.07. 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. even-though the pricing is de-linked. Based on above parameters. provided original documents at some stage have been vetted by Zonal Legal Dept. Review/RWI/Review with decrease the SMA status must be incorporated as Point No 5. However in case of borrowal accounts enjoying credit facilities of Rs.5 crore can be got done from empanelled advocate/s of the bank. SMA status should be part of the credit proposal. staff loans and the accounts where facilities sanctioned are for a period less than one year etc.g. the account should be reviewed on half-yearly basis. BCC:WB:POL:F30:99/4511 dated 11th August 2007. Further.10 Crores and above. Branches have been advised vide Circular No./Zonal Legal Dept. BCC: BR: 100:14 dated 14. as per Circular No./Law Officer of Bank. Short Review / Status Note: 153 | P a g e .01. It may be noted that the documents shall be verified by the Bank„s identified panel Advocate/ Lawyer other than the one who has given the Title Opinion/NonEncumbrance Certificate (NEC)/ Report in respect of mortgage(s) in the account.5.In concession/Modification proposals also SMA status should be given. Legal Audit of Title Documents In response to RBI guidelines. & Goa Zone and 7) Rajasthan Zone. it has been approved by our higher authorities that in respect of following Zones.1 crore and Rs. borrowers having only term loan accounts. 20 lacs for facilities enjoyed by borrowers in trading activities.. provided the conduct of the account is satisfactory. In every proposal e. borrowers enjoying only guarantee facility. The accounts are required to be reviewed on or before the due date. The re-verification will be carried out by the Bank‗s empanelled advocate. Notwithstanding what is mentioned above.) as per the prevailing guidelines. all documents pertaining to consortium accounts have to be necessarily got verified from Corporate Legal Dept. etc. pending receipt of audited financial statements.10 of the credit proposal . 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. 1) North Zone 2) Greater Mumbai Zone 3) Southern Zone 4) Eastern Zone 5) Gujarat Operations 6) Mah. In addition to existing practice of verification of documents./Law officer of the bank. A system of periodical ―Legal audit‖ of title deeds and other loan documents in respect of all credit exposure of Rs. where the credit rating is BOB-7 or below. Regular Review Credit facilities sanctioned to borrowers are subjected to annual review (except LABOD.Lawyer other than the one who has given the Title Opinion / Non-Encumbrance Certificate (NEC) / Report in respect of mortgage(s) in the account. documents verification in respect of credit limits between Rs. Micro & Small Enterprises. financed under government sponsored programme.00 Crore & above is introduced for all existing as well as new accounts.2008 to review advances accounts with limit up to Rs. borrowers in rural area. direction and necessary action. Inspection of Collateral Securities The inspection of collateral securities to be carried out preferably on annual basis for all types of facilities i. etc. Bridge Loans Bridge loans may be sanctioned to companies against the expected equity flows/ issues. Fixed Assets (Charged against Demand/Term Loan/DPG)-Half-yearly i. External Commercial Borrowings. Keeping in view the RBI guidelines. 154 | P a g e . for a maximum period of one year. 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. provided the banks are satisfied that the borrowing company has already made firm arrangements for raising the aforesaid resources/funds. Funded as well as Non-Funded. for Corporates who are banking with us with satisfactory track records. status review can be done in respect of accounts marked for strict monitoring or for recovery. 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. Global Depository Receipts and/or funds in the nature of Foreign Direct Investments. 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. 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. But in exceptional cases. Banks may also extend bridge loans against the expected proceeds of Non-Convertible Debentures. BOB –2.. Latest Credit Rating BOB – 6 & Below (B+ & below as per old rating model)-Bi-monthly. 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).e. Under consortium arrangement (Exchange of inspection reports / information –with other banks to be ensured)-As per periodicity fixed by the consortium.The bank has also the practice of Short Review / Status Note. Latest Credit Rating of BOB -4 and BOB – 5 (A as per old rating model)-Quarterly basis. Where there is impairment of borrower‗s quality indicated through various adverse features like default. BOB – 3 (A+ as per old rating model) Half-yearly basis.e. diminution in value of security etc. as of January and July. Bank has devised the following guidelines: Such loans to be considered only at our Corporate Centre. suitable communication and if need be a Short Review / Status Note should be placed before competent authority for perusal.. 155 | P a g e . Credit Risk Rating/Scoring Credit Risk Rating is a method of systematically classifying credit proposals according to their Quality and inherent risk characteristics. Industrial/Agricultural/Rural Development Boards of various State Govts. Large Corporate. Such Bridge Lending should be used for the purpose for which the issue (debenture/ECB/Equity etc. NBFCs. Advances to Central/State Govt. All credit proposals would need to be rated in an internal credit rating model except for under mentioned i. Product specific proposals to be rated in respective product scoring models.). BTL: Traders Loan (For credit facilities under Baroda Traders Loan upto Rs. Portfolio acquired under Interbank Participation Certificate (IBPC) on risk sharing basis. Retail products to be rated in LAPS using Retail credit scoring model. Borrowers who are availing only those loans/limits where full powers have been granted as per loaning power chart e.. Banks. regulators. Traders. f. etc. Proposals backed by 100% cash collateral. Accounts turned NPA. e. purchase of cheques drawn by Central & State Govts and drafts of public sector banks.e. analysts.g. after the date of NPA n.200 lacs) Credit Rating Models Model for Corporate entities. The Bank continues to have different rating models for Green field / Brown field Projects.2 crores. Exposure to foreign banks. d. Home country sovereign l. etc. which need to be rated in MSME scoring model. SME. BOBRAM Model for MSME rating having exposure of Rs. Exposures to Urban Municipal Bodies (on account of non-availability of financial results) who can generate revenue through taxation j. Foreign country sovereign (External rating is used) m. h.) is proposed and not for any other purpose. and g. auditors. Facility having 100% Central or State Government guarantee k. ILCs/FLCs where full cover is held by way of deposits till maturity. SL: Secured Loan 4. 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. Proposals for Bill Discounted under Letter of Credit and assistance backed by SBLC/BG on standalone basis. HL: Housing Loan 2. MSE segment. Undertaking/ Establishments. where the rating of the respective banks may be used. EL : Education Loan 5. where the external rating of the respective banks may be used. b.2 lacs and above and upto Rs. CL: Clean Loan 3. p. Repayment period upto a maximum of one year. interim finance availed or to be availed. c. Borrowers availing Loan against Banks own Deposit (LABOD) Facility i. Rating is an important single -point indicator of credit quality to the Bank as also to outsiders (viz.g. MSME proposals upto `2 crore. Departments. which are not running on commercial basis (e. o. Credit Score Card Model for Retail Loan hosted on LAPS 1. Rating Exception a.). The amount of individual Bridge Loan shall not exceed 75% of the amount called-up on the shares minus any other similar bridge lending. Facility Rating is dependent upon the type of facility and securities charged to the bank against the facility.based on obligor rating Inspection of securities . In case of Traders Loan of More than Rs. 200/.Lacs continue to be rated under Traders Model of BOBRAM under CRISIL.e. An effective way to mitigate credit risk is to have robust credit rating system in place. Risk Rating Models for Credit Risk rating of all commercial advances i. Obligor rating grades range from BOB 1 to BOB 10.e. 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 .(ii) Allow a bank to maintain healthy Asset Quality (iii) Impart flexibility in pricing assets to meet the required risk return parameters as per the bank‗s strategy and credit policy. existing as well as new with exposure of Rs. no loan to be sanctioned to the proposal rated below BOB-6 (Obligor Rating for BOBRAM Model) in web based BOBRAM model.200 Lac. industry risk. 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). 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. 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. Facility Rating The Credit rating can (i) Identify potential risk in a particular asset.25 lacs and above (FB+NFB) for implementation have been introduced by our Bank. and projected cash flows of the company. Facility rating grade ranges from FR 1 to FR 8 156 | P a g e . All Traders Loans proposals of above Rs.based on composite rating Discretionary lending power for sanction / review . The rating models are based on two-dimensional rating methodologies specified under Basel II requirements wherein 4 types of risks viz.based on obligor rating Risk Assessment Model (BOBRAM) Management of Credit Risk determines the asset quality of the Bank.based on obligor rating (BOB-6 and above and GF2 for Green Field Projects) Risk based Pricing .based on obligor rating Rating based exposure ceiling . Facility Rating:-It involves assessment of the security coverage for a given facility and indicates the Loss Given Default (LGD) for a particular facility. Bank has introduced Basel II compliant credit risk rating models of M/s CRISIL.based on obligor rating Sanction of ad-hoc / excess / DAUE . business risk. to Non SME to non-SME non-SME 10. be financed by the bank. whichever is higher provided the 25% of Total Current Assets (2nd method ) Current ratio for MSE/ME segment at and balance amount in Working Capital Gap may 1. either by the borrower or from any other source. and up to Rs crore.2015) MSME (REGULATORY) MSME (Non-REGULATORY) Turnover method or the finance as per 1st Asset Holding Method method of lending (i.00 crore to NonBorrower 157 | P a g e . Bank has accepted BOB 6 as the cut off point for the acceptance of an obligor based on obligor rating carried out as the applicable model Periodicity of Credit Rating Bank has decided to carry out the credit rating on BOBRAM models based on annual audited financials in all eligible commercial advance accounts. authority to modify.. existing guidelines will continue.00 crore to crore. In respect of accounts having exposure (fund based +Non fund based) below Rs. rating may be reviewed immediately in all such accounts with exposure (fund based +Non fund based) of Rs.00 limits over Rs 10.2 cr to Rs 5. 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. Working Capital finance PBF-I PBF-II PBF-III PBF-IV For Working Capital For WC limits over For Working Capital For Working Capital limits over Rs 2.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.17 / 1. 5 Crore and above.01.00 lac and up to Rs.B. Methods of Lending for MSME: Methods of assessment are made by way of Regulatory and Non-Regulatory segments.MSME Methods adopted in Bank of Baroda for assessing F. operative cycle i.00 Crs and up limits over Rs 5. Executive Director.. the NOC may be given by the authorities under whose powers the concerned account falls. (Ref BCC/BR/107/12 dated 05. Issuance of NO Objection Certificate: In respect of borrowers seeking fresh/additional finance from other bank/FI: - In case of accounts falling upto the powers of General Manager. Only in case of any adverse situation faced by the relevant industry/ company/ management which may come to the notice of the Bank. Methods of Lending for Non. Chairman & Managing Director/Executive Director In respect of advance accounts sanctioned by authorities at the level of Executive Directors and above (i. allow concessions in certain specific terms of sanction.e. Chairman and Managing Director and Management Committee of Board) General Managers have been authorised / delegated. For all other cases.e.e.20. 5 Crore. NWC is to be higher of actual amount or basis).00 Rs 2. inter-alia.33.e. and (b) DER is acceptable. ii Cancellation of purchase orders (leading to piling up of stock but necessitating retirement of liabilities on raw material purchased on credit). merger etc.borrowers borrowers SME Borrower Turnover method Turnover basis Borrower‗s Margin 5% * Borrower‗s Margin 6. 158 | P a g e . However. (a) current ratio is not less than 1. and (b) DER is acceptable and * of projected annual turnover or the finance as per 1st method of lending (i. the actual current ratio. operative cycle basis).33:1 or the actual current ratio whichever is higher. Ship-breaking Companies. Any other activity.25% * Bank Finance 20% * Bank Finance 18. Gur and Khandsari Industries. that the current ratio of the borrowing unit should not be less than 1. iv Abnormal rise in purchase price of stock-in-trade.75% * Asset Holding Method i. ii Rehabilitation of sick units.. Diversification. (a) current ratio is not less than 1. wherever higher than 1.33:1 ensures the borrower‗s stake at a minimum of 25%. Sugar. Construction companies. This benchmarking of current ratio at 1. whichever is higher.33. acquisitions. the cash surplus in non-business operations and in Balance Sheet items is not genuinely available to fund cash deficit in business operations.33:1. emphasizes.. Tea Companies. NWC is to be higher of actual amount or 25% of Total Current Assets (2nd method ) and balance amount Cash Flow basis where 100% of cash deficit from operations is financed provided.e. whichever is higher. operative cycle basis). expansion. Diamond Industry. inter-alia. may be allowed to slipback up to 1.. modernization. iii Prudent bulk or economic size procurement of stock-in-trade on credit. which may be advised from time to time. * of projected annual turnover or the finance as per method 2nd method of lending (i. take-over. The following categories of borrowers / activities are covered by separate individual guidelines for assessing Working Capital finance: NBFCs. Temporary transport bottlenecks deterring sales.e. (b) With the bank‗s concurrence / consent: i. Software companies. in Working Capital Gap may be financed by the bank provided. followed under the Asset basis. The methodology. interalia.33:1 in the following circumstances: (a) Without the bank‗s concurrence / consent: i. breach of covenants etc. stock statements. Advances to accounts where HUF is a partner 1. 5. The bank shall charge overall penal and additional interest upto 2% p. branches shall obtain letters of consent from the major members of the HUF declaring themselves as partners of the firm and also to ensure than total number of partners in that firm not to exceed –20-.07.a. in one of the judgments the Supreme Court has expressed that HUF cannot enter into a contract due to floating nature of the organization as it's composition changes by births.2006) providing any credit facilities where HUF is shown as a partner in a partnership firm.. Zonal head and other executive not below the rank of GMs are authorised to waive / relax levy of penal / additional interest on case to case basis strictly on merits. 4. Priority sector lending up to Rs. 25000/-is also exempted from the guidelines of penal and additional interest. 3. As per guidelines (Circular No. Bank should desist from accepting HUF as borrower (proprietor/ partner) or guarantor. creation of security. In case of existing accounts where one or more HUF is/are partners. Waiver/ relaxation of penal interest for non-compliance of terms and conditions other than default of Interest / instalment payments. No HUF property shall be obtained as security for any facilities given to any other individual person. fresh set of documents shall be obtained from all the partners and guarantors. Compliance of terms and conditions and disbursement of credit facilities: If any advance sanctioned is not availed of within four months (six months in case of Priority Sector advance & Project Finance / Infrastructure Finance) from the date of sanction. Alternatively partnership firm can also decide to carry out reconstitution of the firm by inducting one or more adult members of HUF as partners. Stipulated terms and conditions of the sanction are to be conveyed to the borrower in writing and on acceptance. 6. Export facilities are exempted from the purview of penal and additional interest. the facility should not be allowed without referring the matter to the sanctioning authority. 2.quarterly information. While doing so. Any of the above changes taking place must be brought to the notice of the guarantor. over the applicable/regular interest rate. partnership firm and/or any corporate accounts unless and otherwise the Karta and/all major co-parceners of HUF shall claim that offering of such joint family property is only for the benefits of the HUF and that the guardians of minor co-parceners shall also indicate the same. marriages & divorces. the disbursement should take place after due execution of necessary documents. LAD confirming the previous date balance by the existing partners and guarantors 7. each. compliance of various terms and conditions of sanction.PENAL Interest and ADDITIONAL Interest: Bank may apply penal interest of maximum 2% p. for delay in submission of financial statement. No credit facility to be granted to a firm where the HUF is a partner.. Penal interest would be exclusive of the existing pricing of the asset and additional to any other charge for excess ad-hoc limits. DRI advances. BCC: BR: 98 / 203 dated 01. Further. should not be considered at all.a. as regards HUF. deaths. without any explicit approval /concurrence of appropriate authority. 159 | P a g e . overdues. d. clearance.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. 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. group etc are to be obtained. Registration with CERSAI in respect of all the mortgages. In case of all new advances to Pvt Ltd. Filling of Charges with ROC in case of Limited Company 2. In case of all new advances to Public Ltd. c. Creation of charge over Security 1. permission. our bank may also not insist on such guarantee considering large business interests. e. 3. Getting the documents duly vetted (wherever required) as per Bank‗s extant guidelines.Where borrower approaches multiple banks/ financial institutions for funding their project. 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. Ascertaining that the Borrower has obtained necessary licence. 2. approvals required for running the business. Pre-disbursement inspection / site/unit(s) visit. Co (Other than Exporters) personal guarantee of all promoters and Directors (other than nominee and professional directors) are to be obtained. 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. However in case of consortium/multiple advance where all other member banks are not insisting on personal guarantee of promoters and Directors. 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. 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 160 | P a g e . ii) In case of advances accounts falling beyond Branch Manager„s powers: The Branch Manager has to personally verify and confirm in writing to the concerned competent authority that the aspects mentioned in (i) a to d are fully complied with and obtain the prior approval from the designated authorities in writing before making any disbursement under fresh / increased credit facilities. Full compliance of the stipulated terms and conditions (unless specifically exempted by the competent authority) b. Now it has been decided to left out this matter to the sanctioning authority. The concessionary facilities to ―Taken over Accounts‖ should be extended only in extremely deserving cases with specific reasons recorded in writing.2009) Accounts. 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. b. (Refer circular No. 1. 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. subject to the compliance of existing process of disbursement. 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. In case any such account is proposed to be taken over.07. 2 Crore subject to minimum ―MSMEBOB6‖ rating. Manager (SME-Processing) or CM (SME) and parked in AGM Headed branch. which are not covered under above categories may be considered under permitted deviations. guidelines as applicable to borrowal accounts are to be scrupulously followed. 4. 2 Crore. (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. j) All other existing norms. For Loan sanctioned by Sr. 25 Lac and above. 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. TOL/ TNW : Max. BCC:BR:101:194 dated 13. 25 Lac and above up to Rs.5:1 161 | P a g e . minimum ―BOB6‖ obligor rating grade for all exposures of Rs. (MoF Directives). g) Take-over accounts are to be rated as under:(i) As per the BOBRAM credit rating model. h) Take-over accounts (retails) are to be rated as per the applicable scoring model subject to minimum grade as per the scoring model.33.e. the disbursement authority should vest with AGM Branch Head instead of sending it to SME Loan factory. Financial(other than Retail & SME –Regulatory & Expended) a.the disbursement. 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. this rating model is applicable for accounts having exposure of above Rs. (ii) As per MSME Credit rating Model for MSME accounts of Rs. i) There should not have been any reschedulement / restructuring in the account during last two years. For MSME exposures.5 Crore by an approved credit rating agencies should not be below BBB & equivalent. Note: 1. net profit before tax) concerns only as per last audited balance sheet. Current Ratio : Min. other than MSME exposures. The following financial and Non financial aspects are however to be followed: Non-Financial: a) Accounts of profit-making (i. d) External Rating in respect of credit proposal with exposure above Rs. 1 III. Take-over of Retail Loan Accounts Take over accounts are to be rated as per the applicable scoring model subject to securing minimum investment grade for the specific produce. delegated authorities may consider the proposals as per their discretionary lending powers.e. All existing norms. it has been decided to introduce the following additional measures in non-financial aspects of takeover norm: I. Debt Service Coverage Ratio : Min 1. Debt Equity Ratio (TTL/TNW) : Max: 3:1 d. Branches to ensure that credit facility is disbursed within the stipulated time frame fixed for the same. only in extremely deserving cases with specific reasons recorded in writing by the Competent Sanctioning Authority. Proposal for takeover under the powers of Chief Manager and above: Proposals under the powers of Chief Manager and above no prior clearance from next higher authority is required for takeover. Concession in RoI / charges should be extended to ―Taken over Accounts‖ . Authority for Take-over 1. There should not have been any reschedulement/restructuring in the account during the last two years. 2.17 and maximum Debt Equity Ratio of 6.maximum four months Release of existing security/ Guarantee in advances account: 1. Delegated authorities under bank‗s discretionary lending powers may consider takeover cases within their powers. The facility should not be allowed without referring to the sanctioning authority giving full reasons/justifications and confirming that there is no adverse changes have been taken place in the means of the party. 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 of take-over of retail loan. Guidelines for validity of the sanction: i. financials and line of the business during the intervening period. approval from Regional Manager/Zonal Manager is not required. Wherever a request is made by a borrower for release of a security including personal guarantee 162 | P a g e . In case of traders loan. I. Proposal for takeover under the powers of below Chief Manager: Prior approval of next higher authority i. After obtaining prior clearance as above.75 in case of Term Loan (Average DSCR to be calculated for entire repayment period).c. II. All other advances. 2. Accounts with existing lenders should be under the category of ‗Standard Assets‗. II. Priority sector advances – maximum six months ii. accounts should be profit-making and with minimum of Current Ratio 1. guidelines as applicable to borrowal accounts are to be scrupulously followed Further. Validity of sanction for Credit facilities: 1. Regional Manager is required for takeover. The securities/ corporate guarantees obtained to secure the loans before the provisions of Companies Act. 1 Crore (One Crore) and above. Levy of Commitment Charges on Unutilized W. 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). To monitor borrowers to utilize sanctioned working capital facilities and for effective deployment of resources. the sanctioning authority should refer such requests to the next higher authority for prior approval for release of security/guarantee with proper justification. no commitment charges to be recovered separately. such guarantees should be kept alive by obtaining LAD within a period of limitation. facility: It is observed that despite sanction of adequate working capital facility. even though the advance falls under the powers of the concerned sanctioning authority.2. the bank has decided to levy commitment charges in case of non-utilisation / under utilization of working capital limits for advances accounts with fund based working capital limits of Rs. the average utilization of non-fund facility can also be counted as utilization for arriving the overall under utilization. commitment charges to be recovered @ 0. Branches should take care not to release securities/ guarantees taken in facilities already extended prior to this act .C. The result is poor utilisation of working capital sanctioned limit.since our facilities would be rendered unsecured. whereby dilution of security is taking place.50% p. accede to the request keeping proper record of such authorization. borrowers are raising fund at lower rate from the market through various money market instruments. 5. Govt.as per extant guidelines. the actual discharge of the mortgage should be affected only after the mortgage of the new property created.Term ―Undertaking‖ and ―Substantially whole of the undertaking‖ have been defined under the New Act. of India has issued few notifications related to changes in the Companies Act. ―Undertaking‖ shall mean an undertaking in which the investment of the Company exceeds 20% of its net worth as per the audited balance sheet of the 163 | P a g e . The immediate higher authority to whom a request for release of existing security/guarantee is referred may. In such cases. 4. Changes in company law: Ministry of Corporate Affairs. 2013 came into effect need not be disturbed and can be continued to cover the facility granted. This is being done by earmarking the working capital facility. 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.However. 2013. b) Where the average utilization is below 60% of the limit or as indicated in QIS statement. Commitment charges are to be levied on quarterly basis at following rates:a) Where average utilization is upto 60% of the limit or as indicated in QIS statement. There are changes in existing provisions of Law inter-alia relating to borrowing powers by the Companies: . 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. at his discretion. This guidelines will be applicable to GM and below.a. (Plus Service tax) c) In case of Line of Credit. 3. Provisions effective 01. Company shall be required to pass Special Resolution u/s 180 of 2013 Act. Statutory limit of borrowing Powers of the Companies (BCC: BR: 105/514 dated 18 th November. of its paid-up share capital. and for sale.- - preceding financial year or an undertaking which generates 20% of the total income of the company during the previous financial year. No investment shall be made or loan or guarantee or security shall be given by a company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting and the prior approval of the public financial institution concerned where any term loan is subsisting. no company shall directly or indirectly —give any guarantee or provide security in connection with a loan to any other body corporate or person. certified true by the Director /Company Secretary.2014 (Circular no. Provided that prior approval of a public 164 | P a g e . exceeds the aggregate of its paid up share capital and free reserves. for sale. exceeding sixty per cent. apart from temporary loans as stated above. (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. BCC:BR:166 dated 29. Copies of the special Resolution passed by the company. Copies of the special Resolution passed by the company. ―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.2013) Henceforth. including present borrowings. whether private or public. Section 186 (3) stipulates that where the giving of any loan or guarantee or providing any security or the acquisition under sub-section (2-) exceeds the limits specified in that subsection. Company shall be required to pass Special resolution u/s 180 of 2013 Act. Section 186 (which deals with Loans and Investments by company) .e.exceeds the aggregate of its paid up share capital and free reserves.Loans & Investments by Company. apart from temporary loans . certified true by the Director / Company Secretary. disposal of its undertaking.04. whether private or public.09. including mortgage. 1st day of April 2014. whichever is more. should be obtained and kept on records besides certificate from Statutory Auditor of the company that total borrowings by the company. are within the limit specified in the said special Resolution. free reserves and securities premium account or one hundred per cent. should be obtained and kept on records besides certificate from Statutory Auditor of the company that total borrowings by the company. Section 186 . including mortgage.2014) W. Apart from other provisions as per section 186 (2) of the Companies Act. disposal of its undertaking. in case the total borrowings of any company. lease. In case the total borrowngs of any company. 2013. are within the limit specified in the said special Resolution. 2013)(Provisions effective from 12. lease. including present borrowings.prior approval by means of a special resolution passed at a general meeting shall be necessary.f. is obtained. Section 77.04. of its free reserves and securities premium account. 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.Loans to Directors etc. Section 186 except sub-section (1) does not apply in cases of following: a) Banking company. the amount for which guarantee or security so far provided to or in all other. or by two or more such directors. there is prohibition on giving any Guarantee or providing any Security by any Company. As per section 185. the expression ―to any other person in whom director is interested‖ means— (a) any director of the lending company. 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 . (d) any body corporate at a general meeting of which not less than twenty five percent of the total voting power may be exercised or controlled by any such director. or of a company which is its holding company or any partner or relative of any such director. 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. whereof is accustomed to act in accordance with the directions or instructions of the Board. the Board of directors. Rule 10 of Companies (Meetings of Board and its powers) Rules 2014 exempts from the requirements of section 185 for any guarantee given or security provided by a holding company 165 | P a g e . purchase or otherwise of securities of wholly owned subsidiary company. loans. shall give any loan or give any guarantee or provide any security or make an acquisition till such default is subsisting. 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. In case the limits so specified are exceeded by the company. 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. (b) any firm in which any such director or relative is a partner. (c) any private company of which any such director is a director or member. unless the corporate guarantor company in the ordinary course of its business provides loans or gives guarantee or securities for the due repayment of any loan. or of any director or directors. managing director or manager. a special resolution as contemplated in the provision is required. for any loan taken by any of its Director or by any other person in whom Director is interested. together. Section 185 . b) Any company whose main business of acquisition of shares or securities etc. or (e) any body corporate. bodies corporate. For the purposes of this section.e. along with the investments. guarantee or security proposed to be made or given does not exceed the limit as specified in sub-section (2). insurance company..i. of the lending company.financial institution shall not be required where the aggregate of the loans and investments so far made. 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). However. housing finance company etc. subject to the restriction if any stipulated therein. Branches should take care not to release securities/ guarantees taken in facilities already extended prior to this act .2013 with reference to borrowings (subject to the limits prescribed) and/ or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of section 180 of the companies Act. the Registrar may. with the Registrar within 30 days of its creation. one year from 12. This shall be applicable irrespective of charge being created within or outside India or whether the property is situated in or outside India.Duty to register charges. 2013 came into effect need not be disturbed and can be continued to cover the facility granted. However.2014. Branches to insure to have Certificate of Compliance of the provisions of the Companies Act 2013 from the Director / Company Secretary and Statutory Auditors of the Company besides practicing Company Secretary/ Chartered Accountants (wherever empanelled) on our panel. 1956 are withdrawn in the corresponding section 77 of the Companies Act. 2013. (i. on application by the company allow such registration to be made within a period of three hundred days. 04/2014 that the resolutions passed under section 293 of the Companies Act. Every company creating a charge on its property or assets or any of its undertakings (whether tangible or otherwise) shall register the particulars of charge. 166 | P a g e .e. leaving room for wider interpretation. 2013 will continue to be valid until September 12.since our facilities would be rendered unsecured. Also an undertaking that no default is subsisting in the repayment of any deposits accepted or in payment of interest thereon. 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. It is observed that the details as mentioned in section 125 (4) of the Companies Act. etc. signed by the company and the charge-holder together with the instruments creating such charge.09. Any subsequent registration of a charge shall not prejudice any right acquired in respect of any property before the charge is actually registered. 2013 for a period of one year from the date of notification of section 180 of the Act.2013). before or after the commencement of this Act to be taken by the company giving guarantee or providing security. to protect the interest of our Bank. Section 77 . The securities/ corporate guarantees obtained to secure the loans before the provisions of Companies Act. In case the charge is not created within 30 days.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.09. It is clarified that now charge in respect of Pledge is also required to be registered with the Registrar of Companies. 1956 prior to 12. It has been clarified by the Ministry of Corporate Affairs vide its General Circular No. MCA has clarified that ordinary resolution passed with reference to borrowing and/ or creation of security prior to September 12. be also obtained & kept on record. t. 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 private company where director of the guarantor company is not a Director or member of the borrower company. The working units are advised to refer to the above mentioned guidelines/circulars in this regard and clarification circular no. 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. of their borrower constituents who have been sanctioned regular credit facility by the banks. and the beneficiary of the LC is not a constituent of that bank. 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.such guarantees should be kept alive by obtaining LAD within a period of limitation. 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. the bank concerned may negotiate such an LC. In cases where negotiation of bills drawn under LC is restricted to a particular bank. 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). corporate guarantee. (d) or (e) of section 185).2014 Purchase/Discount/Negotiation of Bills under Letter of Credit: As per the revised guidelines of the Reserve Bank of India. The same principles need to be applied while taking security provided by Guarantor Company. which came into effect on 01. Bank shall not extend funded or non funded facilities to non constituent borrowers.as per extant guidelines. Filing of charge with Registrar of Companies is not mandatory w. subject to the condition that the proceeds will be remitted to the 167 | P a g e . Though guarantee by a subsidiary company for a loan taken by its holding company is not specifically mentioned. provided it is not hit by section 185 (e). Where guarantee 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).r. (Exemption provided under Rule 10 (2) to section 185.04.08. 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.2014). BCC: BR: 106:284 dated 04. 1. 5. underwriting an issue of shares or acquiring any shares for investment or even in lieu of debt of any company.10 lakh per individual from banking system if the securities are held in physical form and Rs. discounting of bills of Services Sector (to be treated as unsecured advance) etc. no banking company shall hold share in any company whether as pledgee or mortgagee or absolute owner. as per their discretion and based on their perception about the credit worthiness of the LC issuing bank. regular banker of the beneficiary. Loans and Advances against Share debentures etc. This limit is to be observed while granting any advances against shares. A minimum cash margin of 25% within the overall 50% ceiling shall be maintained in respect of guarantees issued by the bank for capital market operations. on ‗with recourse‗ or ‗without recourse‗ basis. 20 lakh per individual from banking system if the securities are held in demat form. 6. All clean negotiations as indicated above will be assigned the risk weight as applicable to inter bank exposure. of an amount exceeding 30% of the paid up share capital of that company or 30% of its own paid up share capital and reserves. No loan to be granted to partnership/proprietorship against primary security of shares and debentures. However. Bank and their subsidy should not undertake financing of ― Badla‖ transactions 8. The bank may negotiate bills drawn under LCs. would not be reckoned as exposure on borrower. which has been accepted for payment by the LC issuing Bank/Drawee Bank and confirmation of due date of the bill has been received. 2. However. Such exposure will be treated as exposure on LC issuing Bank/Drawee Bank and branches have to ensure that such exposure is noted in the exposure limit on such bank fixed as per ―POLICY ON EXPOSURE LIMITS ON COUNTERPARTY BANKS‖ . convertible bonds. Loans against security of shares. List of approved shares & debentures will be advised periodically by CO For any addition following criteria will be adopted (a) quoted in major stock exchange (b) company must have declared dividend for last 3 years (c) market price should not have fallen below face value any time during last 3 yrs 9. However bank shall not re-discount bills discounted by NBFCs except those arising from sale of light commercial vehicles and two/three wheelers. In Documentary Bill purchased/discounted/negotiated under Prime Bank LC. The Bank shall scrupulously follow the other stipulations of RBI regarding safe custody of LC forms. the restriction on purchase/ discount of other bills (the bills drawn otherwise than under LC) on 'without recourse' basis will continue to be in force. convertible debentures and units of equity oriented mutual funds to individuals would not exceed the limit of Rs. As per section 19(2) of the Banking Regulation Act –1949. No loan to be granted against partly paid shares. The aggregate exposure of a bank to the capital markets in all forms (both fund based and 168 | P a g e . 3. for capital adequacy purposes. 4. 7. Bank shall rediscount only usance bills of other banks. whichever is less. Bills purchased/discounted/negotiated under LC (where the payment to the beneficiary is not made ‗under reserve‗) will be treated as an exposure on the LC issuing bank and not on the borrower for the capital adequacy purpose. the prohibition regarding negotiation of unrestricted LCs of non-constituents will continue to be in force. A uniform margin of 50% shall generally be maintained on advances against shares. post sanction reporting of LABOD and staff loans is not required).. In some cases such schemes were offered without any request from the company whose issues are supported under the schemes. 2. The authority empowered to sanction the credit proposal may reject such application.Disbursement of credit facility/ies is not to be withheld merely for want of observations of the competent authority on PSR.Covers all sanctions and credit decisions viz.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.25 Lakhs Rs. 2.Observations of PSR authority are to be attended immediately. excluding sanction of staff advances. REJECTION OF LOAN APPLICATIONS: 1. A monthly statement for rejection of applications by the BM to be submitted to the Regional office. 3. adequacy of security. RBI has advised to banks/subsidiaries to refrain from such ‗Safety Net‗ facilities. Credit proposals falling beyond the powers of BM shall not be rejected at the branch level.. 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.e. . . A. Safety Net Scheme: 1.5 Lakhs B.nonfund based) would not exceed 40 per cent of its Net Worth as on March 31 of the previous year. LABOD (i. 169 | P a g e . The features are: .. latest financials with necessary comments by the sanctioning authority. Excluding LABOD & Staff Loan Rs. which shall also serve as guide to the sanctioning authority for future. documentation etc. 3. gist of major adverse features and noncompliance of stipulated terms and conditions and the sanctioning authority„s comments thereon. 5 Lakhs Rs.10 Lakhs Retail Rs. PSR (Post Sanction Reporting): Bank follows a Post Sanction Reporting System replacing the erstwhile Post Sanction Scrutiny. Fresh / Increase / Renewal / Rejection / Adhoc / Excess / Modifications / Waivers / restructuring / rescheduling etc. .Where Copies of Credit Proposals are to be submitted PSR authority within 3 days of sanction along with Appraisal Note. latest credit rating sheet. PSR reporting is required to be submitted on monthly basis to PSR Authority Branches in Area Metro & Urban Semi Urban & Rural Sanction Threshold (FB+NFB) Other than Retail. Every issue of CP is to be reported to IECD of RBI within 3 days from the closure of the issue. 8.A-2. b) has been sanctioned funded working capital finance by the bank. 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. + Exchange. ICRA . It is privately placed at a discounted rate to face value as decided by the issuing company. 7. 4 crores as per latest audited balance sheet. 5 lacs maximum up to 100% of Funded working capital finance including bill finance. 4. Yield = (Interest Recd. Any company whose a) tangible net worth is not less than Rs. 9. Yield on advances 1.25 Lakhs Above Rs. 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. Minimum amount of the CP would be Rs.Branches in Area Metro & Urban Semi Urban & Rural Sanction Threshold (FB+NFB) Other than Retail. 2. After implementation of Base rate system. Commercial paper is a short term money market instrument issued as a usance unsecured promissory note which is freely negotiable through endorsement and delivery. or equivalent rating by other agency. 2. 25 lacs and in multiple of Rs. c) account / s has been classified as standard.P2. Banks and FIs have the flexibility to provide for rollover of the working capital limit at their individual judgment and discretion. 5 Lakhs Above Rs. interest rate under CP has increased considerably. hence. a many big corporates including banks / FIs are raising shrt-term funds by issuing CPs. Commissions and other income + Notional 170 | P a g e . d) minimum credit rating as per CRISIL . 5.5 Lakhs The PSR authority is required to clear the proposal from PSR angle within a period of –30-days from the date of receipt of proposal. 6.10 Lakhs Retail Above Rs. Minimum maturity period 07 days and maximum up to one year. Can be issued to any individuals. 3. If the PSR authority has not made any observation within the said period. The total amount should be raised within a period of two weeks from the date of issue open. the assets classification with all the member banks should be standard. it will be presumed that the PSR authority has no observation to make and the proposal is cleared from PSR angle. 10. corporate bodies and also to NRIs on non repatriable and non transferable basis. Excluding LABOD & Staff Loan Above Rs. In case of consortium lending. However. The present guidelines is that interest @ 8% on 50% of the average deposits maintained by the borrower during the year is to be considered. The calculation of yield should be based only on deployment of Rupee funds and interest received thereon. 4. Guidelines for TOD TODs to be granted only on rare occasions to meet temporary and unforeseen contingencies No TOD to be allowed in accounts other than current accounts of the Customer No TOD to be allowed during first 6 months of operation of the account.income of deposit) / Avg. amount of interest received on FCNR loans by the branches must be mentioned as foot note in the yield sheet. However Bank may also consider sanction of TOD after 3 months of operation. Fund Based limit utilised 3. if the account is Premium / Premium Privilege current accounts 171 | P a g e . It has further decided that whenever borrower enjoys FCNR Loans the same should be ignored for the purpose of computation of yield. Notional income means interest at notional rate of interest as advised by the bank on all the deposits of the borrower. 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. minimum balance is not maintained. 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. yield on advances. turnover is not satisfactory and/or TODs granted in the past. Granting of TOD in one account for the purpose of adjusting an advance outstanding in another related account is prohibited. Operations in the account must be satisfactory no instances of return of inward or outward cheque.O. 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. average credit balance in the account etc. DAUE (Drawing Against Uncleared Effects) Drawing against uncleared effects:1. 172 | P a g e .months. Not more than 25 % of the amount of instruments or discretionary lending powers whichever is lower. Other Guidelines: 1. Delegated authority may grant secured non fund based limit in excess of lending powers for NFB against proportionate reduction in fund based limit. BOB6 . No adhoc to be considered in the newly opened account for a period of -12. 3. The facility should be considered/ recommended depending upon the relationship with the customers. In all other cases reference should be made to R. 4. where cheques deposited by customers are returned frequently. Request for adhoc/ excess may be considered only in reviewed accounts with credit rating not less than BBB. were not adjusted in time and MMG Scale-II. TOD can be allowed upto 25% average monthly turnover in the account. TODs should not be granted to the parties enjoying separate cash credit facility also from the branch. 2. twice a month subject to maximum period of 15 days TOD may be given altogether. No DAUE is to be allowed/sanctioned in newly opened accounts for first -6. B+. This system will essentially facilitate medium/large business units in efficient management of their borrowing requirements within the sanctioned Line of Credit facility.granted in accounts where cheques have been returned for TODs not to be financial reasons.months by the branch head 2. 3. sharing pattern of debt.e. 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. 4. On retirement of Advance bill by debiting CC account the drawing power reinstated i. On receipt of acceptance/ offer from the lenders. 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. the lead manager will negotiate the terms of syndication such as. Book Debt and DA letter of credit. In the year 1993 the Shetty Committee had recommended the syndication of credit as an alternative to consortium lending. it will be the responsibility of the transferee branch to have up dated information also. Advising position to the base branch by the transferee branch on last friday of the month. 2.Cum. On the basis of the memorandum. 4. 5. 5. Margin will be decided separately on case to case basis / facility to facility basis. overall DP will cover the outstanding under CC facilities and DA L/C. recovery. 6. 5. PARKING OF LIMITS / SUB-LIMITS AT THE BRANCHES 1. instead of separate limit for CC stock. Advising base branch immediately about irregularities in the conduct of the account with transferee branch.DA L/C may be considered with a sub limit for DA L/C . 6. cost burden. There after. 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. 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. While calculating the drawing power for Cash Credit facility. 4. (b) DP & DA L/C for procurement of capital goods (c) Performance guarantee and guarantee issued in connection with fulfillment of export obligations. LOAN SYNDICATION: 1. (d) Financial Guarantees issued in lieu of security deposit and earnest money deposit. The memorandum spells out the terms of the proposed credit. If the proposal is acceptable to the banks/ lending institute. loan agreement is signed by all the participating lenders. This is to be implemented for all borrowers where the bank‗s exposure by way of working capital finance ( Funded and non Funded) is of Rs. Following facilities are not covered by LOC: (a) DP L/C for procurement of raw materials. 2. 173 | P a g e . 1 crore and above. Under LOC. they will convey their acceptance. Turnover in the account also to the base branch. a combined limit for CC (Stock) & ( Book Debt) . 3. Bank of Baroda is a first runner in introduction of this novel product called Line of Credit.1. other income and other business etc. The conduct of the account must be satisfactory and there is no major adverse features. 3. Drawing power will be advised by the base branch to transferee branch on regular basis. Reveiw of the account to be done by base branch. the lead manager will offer an opportunity to lenders to lend to prospective borrower as per the terms of memorandum. Vide Circular No BCC:BR:105:249 dated 17-06-2013 Loan Syndication Desk has been merged with BOB Capital Market Ltd. Responsibility is cast on the transferee branch to advice the details of the account on monthly basis to base branch. deduct the value of accepted bills under DA L/C from the stock value. 2. 8. 2. 7. 9. The factoring is an arrangement for management of receivable. b. the factor will pay say 85% of invoice to the seller. purchases housing loan granted by canara bank. Full service non recourse. Recourse factoring. e. Factoring is a continuous arrangement in which receivables created out of sale of goods or services are sold to an agency known as ‗factor‗. Can bank Housing finance Ltd.. This arrangement is called ‗factoring‗. 4.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. 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‖ . . 5. The PTC will be backed by assets or backed by mortgage. maintaining the sales or receivables ledgers. The assets themselves will be the security for investments but will be managed by the originator. NHB will purchase housing loan of LIC Housing Finance. Securitisation can be against movable assets which is known as ‗ backed by assets‗ and against immovable assets known as ‗ backed by mortgage‗ 7. Under this arrangement . 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. 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 PTC will have slight lower rate of interest than the loan granted and that will be the profit of PTC issuer. submitting sales accounts . but in India without recourse is not permitted. The SPV (Special Purpose Vehicle) raises the fund from the investor and pass on to the originator. Create liquidity and room for fresh financing. 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. In turn factor will collects dues on due date from the customer.The securitisation may be backed by movable assets or by mortgages backed assets. The SPV now converts the above pool of assets into small bundles that are called PTC (pass through certificate). 4. The factor will recover finance charges for funds prepaid to the seller against the invoice. Securitisation helps to financing bank/ lenders in following ways a. as soon as the invoice is submitted to the factor. In India the concept of factoring is introduced during 1991 as per the recommendation of Shri Kalyansundram committee. These PTCs are collaterised / backed by the above underlying security. They are also recovering service charges for management of receivable also. collection of debt etc. maturity 174 | P a g e . 5. By securitisation lender can liquidate its assets before its maturity. Transfer its credit risk or other risk associated with the assets. The balance payment will be paid to the seller on recovering from the purchaser. 6. 2. The PTC will be traded in security market . 6. purchaser. FACTORING 1. The lender will sell the above pool of loans to an institute called the SPV. 3. There are various types of factoring. This will be with recourse or without recourse.g. 3. While considering project finance a credit officer should carry out future risk inherent due to some adverse circumstances which may affect the profitability or cash inflow and out flow during the life of the project. 4. venture capital is a source of funds used to finance new proposals / ideas involving new technology or products which are risky but with a potential of high returns. 10. Investment made by bank in venture capital will be classified as Priority sector lending. They may raise the fund also from public provided the promoters contribution should not be less than 40% of the capital. 5. Thus. high technology ventures which are usually promoted by qualified entrepreneurs. Thus. 10 crores. 9. The entrepreneurs should be relatively new . relatively untried technology. 5. technically qualified having a new untried technology . SBI capital venture Fund. lacking in adequate resources to finance the project are to be considered. The credit is extended by exporter from 180 days to -7. discount rate or rate of interest commitment fee and option fee. 6. 2. 175 | P a g e . Venture capital is a source of funds used to finance new proposals/ideas involving new technology or products which are risky but may provide high returns 3. Sensitivity Analysis: 1. 2. the transaction is called forfeiting. Thus. forfeiting is a method of discounting of international trade receivables on a without recourse basis. Sometimes an entrepreneur who is having a new idea . Three elements of cost are involved in forfeiting . It offers an opportunity to do business where ECGC does not offer a cover. At that time ‗venture capital fund‗ provides finance to high-risk. Total assistance to a unit should not exceed Rs. 6. 3. (c) Conditional loan with option to convert a part/full loan to equity and (d) Managerial and marketing support through participative management. It can be provided as ―start-up capital‖ but at a later stage finance is provided to help the company to raise public offer also. IFCI. recovery.factoring 8. etc. Financial assistance will be by way of (a) Participating in equity capital with or without buy back by the company. Guidelines. 4. VENTURE CAPITAL FUND 1. (b) Long term loans.D. the minimum size of VCC or VCF would be Rs.years under forfeiting. 10 crores. are the major sponsor for venture capital Fund or Company. 8. 7. IDBI. When an exporter transfers his right to receive payment in favour of a forfeiture. administration etc and can focused on selling and marketing 9. Advantages: Manufacturer or seller will relieved from the responsibility of credit collection. It is not only tool for financing but also an important risk management tools. The liquidity position will be improved and will give better current ratio FORFEITING 1. Moreover due to inherent risk. In India. 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. desires to implement the project but they are lacking in business experience and finance to shape their ideas. sensitivity analysis means an examination of the effect on the project profitability estimates due to variations in the forecast of cash flow predictions / projections. common investor will not come forward to invest in the project. professionally. As per Govt. 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. Take-out financing: 1. 2. power. bridges. telecommunication and ports. The structuring of debt and equity is a crucial aspect in funding of any infrastructure project. Any credit facility provided to a borrower company engaged in . the project sponsor may not like other share holders to have recourse to the assets of the project. 5.Build. water supply. power. Take-out financing is a method of providing finance for longer duration projects say 15 years or 176 | P a g e . 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. viz. cost of raw material. BOT = Build . rail system. irrigation. such as.Operate Lease and Transfer.A key issues while structuring appropriate financing instruments do not yield the expected returns. developing or operating and maintaining or developing. Mainly four factors. As per bank‗s guidelines 10% negative variance in sales and simultaneously. After doing the sensitivity analysis. BOOT = Build – Own – Operates and Transfer.Operate and Transfer. BOLT = Build . There are two types of financing options: (a)Private sponsor participation and (b) Structured financing operations 4. In case of default the debt holder‗s recourse would be limited to the underlying assets only and not extend to general reserves and assets of the company. Limited recourse financing: Under this variant. ports. 5% positive variance on all cost aspects are to be considered to know the sensitivity of the project. roads. airports. Securitisation is one of the method. the parent company attaches other assets/ revenue stream for servicing the instrument to improve its credit worthiness. cost of Power and Fuel and interest are to be considered. 3. Sales. 3. telecommunication. highways. in addition to project assets. The participation of private sponsors in infrastructure development at progressively diminishing levels is depicted as under: BOO = Build-Own and Operate. The relaxation in "group exposure" norm would be available only in respect of four sectors. definition of infrastructure would include sectors. roads. Besides this the companies setting up infrastructure projects have only the prospect of a future earnings stream to collateralize their borrowings. industrial park or any other public facility of a similar nature as may be notified by CBDT in the Gazette from time to time. 4. operating and maintaining any infrastructure facility is falling under the definition of infrastructure lending. housing. DBO = Develop . As per RBI.. Generally.2. revised DSCR and cash flow DSCR are to be worked out to derive conclusion about the sensitivity analysis. 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. sanitation and sewerage system.Operate Structured Financing Option: This is a concept relating to Infrastructure lending. IDFC and SBI have devised different take out financing structures to suit the requirements of various banks. limited availability of project appraisal skills etc. Pari-pasu Charge: When a company has availed credit facilities from more than one bank on the same security / ies with a condition that the charge on the security will be on equal footing ( right basis) in proportion to the amount they have advanced. FLOATING CHARGE & PARI-PASU CHARGE 1. 4. However. addressing issues such as liquidity assets-liability mismatches. the borrower and the TRA agent enter into a tri-partite agreement directed to deposit all cash inflow in a single designated account with TRA agent. (c) A debt service reserve equal to say. Thus. This is done through shifting the control over future cash flows from the hands of the borrowers to an independent agent called TRA agent duly mandated by the lenders.more by banks. banks financing to the infrastructure project will have an arrangement with IDFC (Infrastructure Finance development Corporation) or any other financial institution for transferring to the latter the out standing in their books on pre determined fixed period/pricing. The lenders in consultation with the borrowers draw up a detailed mandate for the TRA agent as to periodical transfer and utilization of funds available with TRA agent. Under the arrangement. would be available to the company by the TRA. Under this arrangement the lenders. The credit risk on the project will be appraised by the bank concerned and not by the IDFC. It seeks to protect the project lenders against the credit risk of default by insulating the cash flows of the project company. The owner can not deal with this property without the consent of the lending institution 2. 3. particularly in infrastructure lending. The floating charge can be converted into fixed charge and all the assets existing as on the date of crystallisation will be covered by this charge. 2. FIXED. (d) A cash reserve equal to four months operating expenses. 2. 1. After meeting all the requirement residual cash flow will be available to the project company. company can sell or otherwise dispose off the property. to take out the entire outstanding loan or part of the loan to the bank after an agreed period say five years. A Fixed charge is one which is created on some specific property of the company like land and building etc. despite charge thereon. 4. It allows bankers to lend for infrastructure with the freedom to decide the lending period and risk profile. 3. Take out financing structure is designed to avoid maturity mismatch of assets and liability due to the infrastructure financing/ longer duration projects. 1. Floating charge: A charge on all the property of the company which is continuously changing. Trust and Retention Agreement (TRA): 1. TRA mechanism is a common feature of infrastructure financing. the lender will have a security of cash flow in addition to the assets of the company.such charge is called pari-pasu 177 | P a g e . TRA is thus a version of No Lien account on which the lending bank does not exercise right of Lien. (b) Monthly dues/accruals of net principal and interest to lenders. They have also developed a Model Agreement that can be considered for use as a document for the purpose. When the period end the bank can exit and IDFC will take out the obligation and charge a fee as per the commitment at the point of sanction. After meeting all above either through cash flow or through L/C the residual funds if any. This is then allocated in a predetermined manner to various requirements including debt service obligation. against which the finance is extended. six month‗s dues which could also be backed by a letter of credit to be arranged by the sponsors of the project company. 3. For example it spell out appropriation as under: (a) All operation and maintenance expenses of the project. In case of Import Bill under L/C. (c) Higher the IRR. The amount then to be recovered from customer as mentioned in case of A. better the project. If liabilities are decreasing it is an application and if it is increasing it is source of 178 | P a g e . It is a statement of inflow and outflow of the fund during a specific period. the residual amount will be made available to the bank who is holding the charge. Generally second charge is created on fixed assets of the company such as land building. 2. a charge on the same security is given to more than one lender this is called the pari-pasu charge. Likewise. SECOND CHARGE 1. Generally bank do not prefer to have second charge. 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. Subsequently this entry is to be reversed. c. Second charge means the assets on which we want to create our charge are already charged to other financing institutions. In case of consortium finance or multiple banking facilities. the entry is to be reversed to the debit of this bills past due account with permission of RO. The issuing bank/ branch will make immediate payment to the beneficiary by debiting G/L Bill past due account. plant and machinery. However. Bill Past Due Account: In case of Guarantee issued by our branch. If assets are increasing it is an application and if it is decreasing it is source of fund. Even in case of Bills purchased remains overdue for a longer period. The procedure for creation of second charge is under: a. FUND FLOW STATEMENT: 1. 3. 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. Fund Flow statement depicts the various sources of the fund and their uses. 4. Inflow and out flow of the fund can be noticed by increase or decrease in assets and liabilities. The payment will always be made through debit of G/L Advance Bill account even though balance in the customer account permits debit. The financing institution will have first charge on the same assets and in case of default after making payment of dues of the FI. 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. No Objection Certificate from the institute having first charge is to be obtained. INTERNAL RATE OF RETURN: It is a discounted rate where projected cost and projected benefits are equal to zero. Our second charge in case of company is to be registered with the ROC. L/C issuing branch is suppose to make payment/ reimbursement if terms and conditions are strictly complied with.B. 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. b. beneficiary has a right to invoke the guarantee as and when default is committed. 2.charge. The cash flow is prepared as per AS-3 of ICAI. 3. In long run. While granting loans banker to satisfy about the repaying capacity of the applicant 2. Liabilities are the sources of the fund and assets are the uses of the fund. This indicates how much cash is generated at the end of financial year. Cash Flow is a statement which depicts changes in cash position from one period to another period as against the changes in total funds. 3. BEP in Rupees: = (Fixed Cost / Contribution ) X sales. sale of assets. It is assumed that Variable Cost and Sales vary proportionately.STU = . Profit = Sales > BEP and Loss = Sales < BEP 4. 4. b. CASH FLOW STATEMENT 1. which should be within the stipulated ceiling. Cash BEP = {(FC .e. BEP indicates ―No Profit and No Loss‖ situation i. Larger DSCR indicates units ability to pay more than its commitments. The DSCR indicates repayment capacity and adequacy of repayment period. decrease in assets. DEBT SERVICE COVERAGE RATIO: 1.Assets = 0 If above equation/result is reversed which represent diversion of short term fund to long term use.75 But it is not necessary that DSCR of each year should be 1. It is true in short term. 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. dividend payment personal drawing etc. BEP means. Here. 5. Depreciation. For listed Compnies and other borrowers where the annual turnover is exceeding Rs. fixed cost may not be fixed.LTU = +Ve STS . 50crore it is a statutory requirement. decrease in liabilities. The sources of cash are PAT. Repayment period may be curtailed or vise a versa BEP = Break Even Point: 1.5 to 2 but to work out average DSCR for the entire term loan repayment period. From financing bankers point of view it is always advisable that LTS . This will give an idea about the increase/decrease in liquid position of the borrower. 2.fund. Margin of Safety: 179 | P a g e . The BEP concept has certain limitations also. Contribution means sales value Variable cost. 4. DSCR is helpful to work out the repayment period and initial moratorium. a. Sales of the Unit is equal to Cost of Unit sold . Cash flow statement helps the management for short term liquidity planning. Sales Revenue = Cost of Units Sold . 3. 8.Depreciation & non cash charges) / Contribution } x sales 6. Therefore. 3. gains form sale of fixed assets. 2. The uses of cash are loss. This may not true all the time. BEP analysis is useful to know the Viability Study of Sick Units. increase in capital or other liabilities. The acceptable DSCR is 1. 4. BEP decides the level of production in order to achieve desired profit 7.Ve Liab . 5. FINANCIAL GUARANTEE: Many times Bank issue guarantee in respect of constituents financial liabilities wherein purely monitoring obligation of the customers are involved. 4 The project with low MOS and high break even is not preferable. the beneficiary can invoke the guarantee. favouring court authorities etc. This guarantee. contractors have been provided with advance money or raw materials etc. this is in case of export in a global tender. Advance Payment or mobilisation of advances. Reasonable cash margin and charge on collateral securities to be obtained. While issuing such performance guarantee.1. Earnest money deposit. Bank issues guarantee which is known as "Financial Guarantee". In lieu of which Bank guarantee is also issued and retention money is released by the deptt. The purpose of performance guarantee is to fix the financial responsibility in the event of default or failure on the part of the customer to perform the obligation undertaken by him 3. In such guarantee Bank does not undertake such specific performance. 2. Where the MOS is low. managerial and financial aspects of the borrower / contract. But this should be studied in connection with correctness of estimated profit and loss figures and BEP. In lieu of such financial commitment . Performance guarantee guarantee the satisfactory performance of the work allotted to the contract as per agreed terms and conditions. 4. 2. To perform the Contracts this is called mobilisation advance. Lower the BEP. custom duty. This type of guarantee is generally asked for in case of (a) Turn Key Project and (b) Performance of machinery/ equipment supplied. guaranteed the payment of due installment and interest in deferred manner 180 | P a g e . MOS describes the tolerance level of the units. However it is to be noted that guarantee for export obligation is not a financial guarantee. branches should ensure technical. 3. Margin on Safety indicates up to how much variance in Sales will sustain by the Unit. MOS gives and idea about the cushion available in case of deviation in cost of production and sales estimation. Excise duty. 2. Following are the some of financial guarantee. tender money deposit. In case of contract work. The guarantee is issued at the request of customers for purchase of capital equipment on long term credit from the supplier. Guarantee issued in lieu of tender/earnest money deposit to be submitted with the tender/ bid is known as Bid Bond Guarantee. there is a clause of retains certain percentage of contract value for specific period to ensure proper performance of the work. PERFORMANCE GUARANTEE: 1. In case of default in repayment of advance/ cost of raw materials due to non performance of the contract. higher will be the MOS. The Bank will be liable to pay a sum not exceeding the guaranteed amount. Retention Money Guarantee: In case of contracts. DEFERRED PAYMENT GUARANTEE: 1. Guarantee in lieu of Sales tax. The difference between projected Sales and BEP Sales in terms of actual sales is MOS. the possibility of unit coming to loss is high and higher the MOS greater the safety. Bid Bond Guarantee. (3) Government Contract works. family residential building. multi. the guarantee is to be treated as Fund based only. 2. This guarantee should be considered in line with guidelines for Term Loan. DPG is a non fund based facility. land acquisition. where the bill is routed through the Bank. Real Estate Sector: Real Estate Sector includes (1) Residential Mortgage (2) Commercial Real Estate and (3) Investment in Mortgage Backed Securities (MBS) and other securities exposures.over a specific period of time. (2)Commercial real Estate means lending secured by mortgage on real estates ( office buildings.) This also includes Non Fund Based Exposure also.e. MCA21 Project of Ministry of Company Affairs for e-governance . to take delivery of goods without delivery of shipping documents such as Bill of Lading.Online Filing of Charges by companies through e-Forms. An undertaking from the customer to be obtained that the borrower will honour the bill irrespective of discrepancy. registration of charges and other event-based filings. 3. (3) Investment in Mortgaged Based securities and other securities exposures in Residential and commercial real estate sector. (4)Fund based and non-fund based exposures on National Housing Bank and Housing Finance Companies (HFCs) which is considered as Indirect Exposure. This project envisages introduction of secure electronic filing (e-Filing) for all services provided by the Registrar of Companies including incorporation of a company. (1)Residential Mortgage means finance against the mortgage of residential property which is occupied by the borrower or is rented. The guarantee is to be issued at 100% cash margin. Government of India is implementing a major e-Governance initiative known as MCA21. The Ministry of Company Affairs. hotels. multi-tenanted commercial premises. individual or warehouse space. 1. So guarantee amount should inclusive of principal and interest thereon. It is to be issued by the Branch Manager as per Discretionary Lending Power of fund base facilities 4. annual filing. New Credit Product Nature of facility ―Corporate Loan Facility : Key Features: Term Loan 181 | P a g e . development and construction etc. 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. if any with the terms of L/C. retail space. multi-purpose commercial premises. However for the purpose of sanctioning/ processing etc. New Borrowers with existing (and satisfactory) group relationship are also eligible provided the internal credit rating is BOB-4 & above and external credit rating of ―A‖ and above. The repayment schedule may be flexible (quarterly/half yearly). Minimum :Rs 10 crore Note: In principle approval to be obtained from BCC for extending any corporate loan. Repayment period not to exceed 10 years or the useful life of the fixed assets under cover. (BB & below rated borrows are not eligible) External Credit Rating is mandatory. BOB -5 Existing Borrowers with Internal Credit rating of & above and External Credit rating of ‗BBB‗ and above. The account should not have been restructured in the last -3years period. 182 | P a g e . whichever is earlier.Eligibility Quantum of Finance Repayment Existing Borrowers with 3 years satisfactory track record with our Bank. which would ensure the health of the firm financed by the bank.00 Lacs Max. if the cash accruals so justify. The dealers to be covered under the scheme would be referred by the ‗Sponsoring Corporate. Wholesale dealer of goods or a provider of Services.Uneven or bullet repayments also be permitted.00 Crores 183 | P a g e . Eligibility To ensure that integrated financial and commercial solution is available to the entire supply and distribution chain. private limited companies. Proprietorship. 2. Existing/new borrowers with Credit Rating of BOB-6 and above. Facilities to suppliers/dealers would be extended based on the referral of the Sponsoring Corporate.‗ Though due weightage shall be given to the recommendation of the sponsoring corporate Bank shall take a decision based on merits of each case.10.-Rs.25. Limit Min. No prior period of association to be prescribed. Sponsoring corporates referral letter to state that their past dealings with the suppliers/dealers are satisfactory. New Product ―Baroda Channel Financing: Key Features: Facility Drawee Bill finance for suppliers Drawee Bill Finance or Overdraft /Cash Credit facility for dealers. partnership concerns. Sponsoring Corporate can be a Manufacturing Unit.-Rs. 1. Liab. x Ability to get goods on credit. Extent to which FA covers Term Liabilities. Higher the ratio better the liquidity Shortfall indicates diversion of short term fund. W. / Tangible Net worth DE(TTL/TNW) = Liab / Tangible. + Int. N.00(For Micro & Small enterprises). Instal.5 :1. on Loan is desirable. Average 1. Net Fixed Assets Term Liability INDICATION Ability to meet current liabilities. More than 1 is desirable. Lower the ratio higher the safety.-Bank Borrowing. Term DE(TTL/TNW) 3:1 & DE(TOL/TNW) 4.-Inventory C.25(Others) in any year.75 & min. Average Period of the credit Credit Sales Creditor T/Over Ratio (No. Average O/S Debtors x 365 Credit policy of the unit/ firm. Ability to repay 184 | P a g e . on Loan Debt Servicing Ability To work out repayment schedule.of days) Average O/S Creditors 365 extended. 1 is desirable Ability to repay debt from own assets on long term basis. Total Coverage of outside liabilities to own fund. PAT + Depri. Net Tangible assets / Total Outside Liabilities DE(TOL/TNW)= Outside Liab.1.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. 1.5 to 2 is desirable Availability of Liquid resources to meet current liabilities. of TL + Int. 1.A. Asper loan policy. Higher the ratio better the solvency. Margin available after meeting manufacturing cost.2016 which described asunder: Bank is required to allocate capital under Basel III guidelines issued by Reserve Bank of India against undrawn/ partially drawn commitments to borrowers. BEP = Break Even Points.Assets ratio. Identify the Cash Credit/ Overdraft limits of the borrowers which are inactive/ where limits 185 | P a g e . Efficiency of Production and Pricing.03. MOS = Margin of Safety. the following changes in process is being proposed:a. declining profitability. turnover Credit Purchase Net Sales Efficient use of assets Net Operating Assets means FA + CA + Non CA. b. It is therefore essential that we put in place a mechanism to ensure that capital outlay against undrawn commitment is maintained at the minimum level. div on non trade investment + non trading adjustment Price earning on present market value. Re: Capital Conservation – Undrawn Commitments.& Tax on Net Operating assets . 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. Return means PAT + Interest on long term debt + Prov. x 100 Capital employed Price earning Ratio Market Price of the share to Total dividend payable to per shares Measure the business performance. In this scenario it is imperative to ensure that Bank‘s capital is put to optimum utilization. Looking to the surge in stressed assets. to support the growth in loan book. Net Operating Assets Gross Profit Margin Gross profit X 100 Net profit Margin Net Sales Net Profit After tax X 100 Dividend per shares Return Investment Return Investment Net Sales Total distributable profit Equity holders on No of equity shares Profit before Int. For tax – Int. Net Profit margin on business. Bank has issued the circular No BCC: BR: 108:114 dated 14. Must have increasing trend.Investments. Inter firm comparison. Overall efficiency of the unit. optimum utilization of scarce capital has emerged as basic pre-requisite for the Bank. Towards this objective. FA = Fixed Assets. Earning Per share PAT = Profit After Tax. Return . 1st April 2016. IV. Borrowers consent should be obtained (under the signature of authorized officials) without leaving any scope for complaint/ legal complications in future. 186 | P a g e . mentioned against (a) and (b). However. 5 Cr and above. Limit may be updated up to the level of utilization of Non Fund Based facilities. III. 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. 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. 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. 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.are resolution sparingly utilized.e.f. Latest and correct value of security to be incorporated in the ASCROM. Full Limit Node for Non Fund Based facilities may not be entered in the CBS system. MCLR Marginal Cost of Funds Based Lending Rate (MCLR) shall be new internal benchmark lending rate for all new sanctions and disbursements w. I. accounts where commitment charges are being recovered should be excluded from this exercise. Limit may be fed as and when the request for issuing BG/LC facility is received from the borrower. This should not be effected unilaterally by the Bank. Ensure that External Credit Rating is carried out in respect of all the eligible borrowers as per extant guidelines of the Bank. Similarly security updation in ASCROM is to be ensured. 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). In both the eventualities. a) A person resident outside India who is a Citizen of India i. 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. Politely explain them the mandatory requirements like KYC/AML/FATCA norms and obtain related documents/declarations. In terms of this Notification. asks for Tea/Coffee/Soft drink/Water. 2000. Pro active actions like sending E-mails for their program. 10. Also arrange for registration in Baroda connect and Mobile banking wherever possible / applicable. 9. If possible. If the job may take some time. Entertain properly the person coming with the NRI though he/she may be a resident Indian. 12. 5. Help them filling up of various forms and politely ask for their documents. observing all related guidelines and obtain Currency Declaration form if encashment is more than USD 5000 equivalent. Some suggestive steps to facilitate & attract NRI customers :1. World Bank. if Customer requires. Provide all information/USPs of various products. 187 | P a g e . asking for any personalized services required by them. All Staff should be updated with the various products / schemes offered by the Bank to NRI customers and USPs of those products / schemes. International Monetary Fund etc.NRI Deposits. Welcoming NRI Customer at their place may be taken. 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. offer them the delivery of service at their door step / place where they stay. UNICEF. Complete the work / all the formalities in respect of NRI Customer as early as possible. Encash Currency notes. Also Provide them Bank‘s brochure. 7. FEMA 5 / 2000. 3. Definition of Non Resident Indian (NRI) Non-Resident Indian (NRI) NRI is defined in Regulation 2 of Notification No. 11. offer seat.e. an NRI means a person resident outside India who is a citizen of India or is a person of Indian origin. 8. Issue NRE cheque book / Credit / Debit card etc as applicable. iii) Indian citizen working abroad on assignment with Foreign Government/Government Agencies/International / Multilateral Agencies like United Nations Organization (UNO). Displaying professionalism will attract NRI Customers. 4. Welcome with smile to NRI customer. 6. Remittances facilities for Residents. NRI Customer‘s meet should be arranged for welcoming / entertaining them.RB dated May 3. 2. due to reasonable ground. NRI Customers look for Professional Approach and Personalized Services from Bankers. 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. or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b). students going abroad for studies are treated as Non . 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. f) participating in sports or cultural activities. For the purpose of Investment in India in immovable property. 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.Resident Indians and are eligible for all the facilities available to NRI under FEMA. 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. Transfer from NRO A/C (USD one million per financial year subject to deduction of applicable 188 | P a g e . a person of Indian origin means an Individual of Indian origin other than a citizen of Bangladesh. 1955 (57 of 1955). if (a) he at any time held Indian passport. FCNR (B). ii) Indians or Persons of Indian origin residing in Nepal/Bhutan /Pakistan/Bangladesh. 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. d) to receive training e) obtaining medical treatment.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. iii) Crew members working for shipping/airlines companies posted in India and those companies whose registered offices are in India. subject to payments of tax and production of C. Internet Banking (Baroda Connect). 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. There is a Centralized Processing for opening NRE/NRO Savings Bank Accounts for applications sponsored by our UAE. From other NRE. Interest earned is exempted from TDS. Max. Kenya and Uganda territories. Remittance outside India of current income like rent. FCNR(B). 10 Year Repatriability: Fully Repatriable ( Principal plus interest amount) Joint Accounts : Allowed with other NRI.e Form 15CA and Form 15 CB. No interest is paid if the deposit is withdrawn before one year of deposit. etc. by the RBI.tax) Permitted Debits: Local Payments. Concession if any is subject to double tax avoidance agreement (DTAA)with certain countries. Account operation allowed for local payments through Power of Attorney. Proceeds of remittance from overseas to India. interest. Premature Withdrawal : Allowed. Repatriability : Rapatriable upto USD 1 million per financial year out of balance held in A/c. certificate i.A. Internet Banking (Baroda Connect). Other Facilities : International Debit Card. dividend. 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. Premature Withdrawal: Allowed. Account operation allowed for local payments through Power of Attorney. Feature of NRO A/Cs in INR: Current/Saving/Term Deposit Accounts Eligibility: Any Non Resident. Tax Exemption . or the general / special permission granted. 189 | P a g e . Remittances outside India. Transfer to NRE / FCNR(B) Accounts of the account holder or any other person eligible to maintain such account. 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. Eligible Credits: Some local credits as permiteed under FEMA. 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. Rules applicable as per Resident Deposits. Other Facilities : International Debit Card. 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. Tax : TDS is levied at present @ 30% + surcharge on interest earned. and other NRO A/Cs Permitted Debits: All local payments in Rupees. 1 Year. pension. any other transaction if covered under general or special permission granted by RBI. NRE Rupee FD: Tenure of Time Deposit : Min. the risk of losing money due to a fall in the exchange rate is eliminated. JPY. the deposit will be converted in to INR at the contracted rate and will be credited to NRE or NRO a/c as per depositor‘s instruction. Foreign Currency Linked Rupee Deposits (FCLR) Scheme This deposit plan offers the dual advantage and benefits of both NRE Rupee Deposits and FCNR Deposits. GBP. GBP. Loan Against Term Deposit: Up to any amount subject to advance value of Term Deposit Premature Withdrawal : Allowed. 1 Year to Max.000 or its equivalent. Moreover. JPY. Tenure of Deposit : Min. since the maturity value is determined in foreign currency at the time of application. Acceptance and execution of Standing Instructions. NRI's can open this account by Inward remittances in any convertible currency from abroad through normal banking channels by way of Demand drafts Telegraphic Transfers Telex Mail Transfers SWIFT Foreign Currency 190 | P a g e .FCNR (B) Time Deposit: Term Deposit accounts in USD. Provision for nomination. Maximum amount of deposit can be upto any amount Period of deposit is one year fixed Applicable rate of interest is the same as the rate of interest given under FCNR (B) deposit for the period of one year in respective currency A forward contract of one year is booked at the time of opening the deposit account on the principal amount to enhance the yield out of the forward premium in order to protect the depositors from exchange risk On maturity. 5 Years Repatriability : Fully Repatriable Joint Accounts : Allowed with other NRI. Interest earned is exempted from TDS Other facilities : Opening of new A/C/Payment/Transfer is done through centralized FCNR Back office using Finacle menu option HFCNR Rupee Linked Foreign Currency Deposit (RLFCD): A high yielding deposit product with inbuilt feature to protect depositors from exchange risk A/C is maintained in USD. Eligibility : Any NRI (except Bangladesh/Pakistan nationality which requires RBI prior approval) Eligible Credits : Proceeds of remittance from overseas to India in foreign currency. EUR. Interest amount will be converted in to INR at the exchange rate prevailing on maturity date. Addition and Deletion of name of account holders is permitted.or its equivalent. The minimum deposit amount: is USD 10000/. EUR. AUD Minimum amount of deposit is USD 10. CAD. Features: Option to keep the deposit receipt free of cost in Bank's safe custody. transfer from NRE a/c and conversion in foreign currency. AUD. No interest is paid if the deposit is withdrawn before one year of deposit Tax Exemption . CAD. The customer is required to book forward contract for the maturity amount on the date of deposit itself. No interest will be payable for deposits run for less than twelve months.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. Deposit will be accepted for period of 12 months only. resident abroad. The deposit is subject to the Rules framed by the Reserve Bank of India. Deposit Receipts will. However local Rupee cheques and Cash Currency in Indian Rupees cannot be deposited in this account. Deposit Receipts are not transferable by endorsement. Average quarterly balance required to be maintained is INR 50. all the persons must be Indians resident abroad or persons of Indian origin.000.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. The remittance received from abroad is converted into Rupees and placed in NRE Rupee Deposit for 12 months. the receipt needs to be signed by all the depositors irrespective of the operational instructions "Either or Survivor". In case of premature withdrawal of the deposit receipt. Baroda Premium NRE SB Account: A premium saving bank account specially designed for valued NRI customers. 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.2015) Feature Product Specification Particulars Term Deposit Product wherein NRI depositor gets more than double of his 191 | P a g e . Interest on deposits will be paid on maturity along with the principal. or "Anyone or Survivors/Survivor". when so required.e.12. BARODA DOUBLE DHAMAKA NRE TERM DEPOSIT SCHEME FOR NRI (w.f. 16. 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. 30 % p. 192 | P a g e . 7 months and 2 days.00 crore TAX Free Interest Principal and interest accrued is FULLY Repatriable Permitted with usual penalty clause.initial deposit amount after a period of9 years. NRI individual in his own name NRIs jointly Eligibility and Target Group NRIs jointly with resident with mode of operation as ‘Former or Survivors‗ NRI Minor of age 10 and above on terms laid down by the Bank. at present (subject to change from time to time) As per RIRD Scheme for NRE Term Deposits Less than Rs.a.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. Account in the name of minor with their father/mother as guardian Minimum Amount of Deposit Rs 5000/(further amount in multiples of Rs 1000/-) 9 years 7 months and 2 days 7.1. no interest shall be payable In case pre-mature payment is requested before completion of 12 months Allowed No auto renewal is envisaged under the scheme Minimum Deposit Amount Period Rate of Interest Payment of Interest Maximum Deposit Amount Tax Repatriation Pre-mature repayment 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 . 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. However. a Resident Foreign Currency (Domestic) Account. 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. Bank notes and travelers cheques from any of the sources like. services rendered in settlement of any lawful obligation from any person not resident in India proceeds of export of goods and/or services. 2.50.All categories of foreign exchange earners are allowed to open and to credit up to 100 per cent of their foreign exchange earnings to their EEFC Accounts with authorized dealers in India subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into rupees on or before the last day of the succeeding calendar month. shall be permitted against the security of balances held in EEFC accounts by the AD Category – I banks 2.Funds held in EEFC account can be utilized for all permissible current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/ Notifications/ Directives issued by the Government/RBI from time to time. either fund-based or non-fund based. 2. gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.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. 3..000 per financial year to undertake a range of miscellaneous non trade current account transactions for the following activities: 1. No credit facilities. 4. Also the unspent portion of foreign exchange availed for travelling purpose can be credited in this account for use in subsequent travels abroad. There is no ceiling on the balances in the account. payment for services rendered abroad. The account shall be maintained in the form of Current Account and shall not bear any interest. RFC (Domestic) Account: 1. royalty. hold and maintain with an authorized dealer in India. A person resident in India can open. This account shall be maintained only in the form of noninterest bearing current account. as honorarium. out of foreign exchange acquired in the form of currency notes. etc. 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 . Foreign Currency Accounts For Residents: Exchange Earners' Foreign Currency (EEFC) Accounts:1. gift. honorarium. 2013. (ii) purchase of property abroad. Form A-2 as per prescribed format and Application-cum-Declaration for purchase of foreign exchange under LRS as per format. 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. PAN card. However.not exceeding USD 3000 or its equivalent. Documents for releasing Foreign Exchange Passport & VISA. The facility is available to all the resident individuals including minors. 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.5. acquisition of ESOPs (the Scheme is in addition to acquisition of ESOPs linked to ADR / GDR and acquisition of qualification shares).not exceeding USD 5000 or its equivalent Travellers proceeding to Islamic Republic of Iran. as the case may be. 2013. promissory notes. a returning traveller is permitted to retain with him. foreign currency travelers cheques and currency notes up to an aggregate amount of USD 2000 and foreign coins without any ceiling beyond 180 days.acquisition and holding shares of both listed and unlisted overseas company or debt instruments. 7. Russian Federation and other Republics of Commonwealth of Independent States . unrated debt securities. Remittances under the facility can be consolidated in respect of family members subject to the 194 | P a g e . Libya. Travellers proceeding to Iraq or Libya . Venture Capital Funds. (iii)making investments abroad.full exchange may be released. Notes: Out of the overall foreign exchange being sold to a traveller. (iv) setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05. Islamic Republic of Iran. Medical treatment 6. Highlights of the scheme: Remittance under this scheme is on a gross basis.263/RB-2013 dated March 5. investment in units of Mutual Funds. 2013) outside India for bonafide business subject to the terms & conditions stipulated in Notification No FEMA. (v) extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act. Period of surrender of foreign exchange: General permission is available to any resident individual to surrender received / realised / unspent / unused foreign exchange to an Authorized Person within a period of 180 days from the date of receipt / realization / purchase / acquisition / date of return of the traveler. 8. Russian Federation and other Republics of Commonwealth of Independent States . years. 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. In this period.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. FEMA came into effect from 1st June 2000 replacing the stringent and draconian FERA of 1973 (Revised in 1993). based at e-Business Department. 195 | P a g e . The object of FERA was to conserve the foreign exchange resources. Baroda TravelEasy Card. EUR & GBP Minimum load value . is to manage foreign exchange resources and facilitate external trade and payments for promoting the orderly development of foreign exchange market in India. 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. un rated debt securities. Separate Application cum declaration Form has been devised for this remittance scheme. reconciliation and customer support shall be provided by the Operations team. Venture Funds. promissory notes. 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. A resident individual can invest in units of Mutual Funds.000 (US Dollars ten thousand) or its equivalent and/or the aggregate value of foreign currency notes (cash portion) exceed USD 5. 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. Nepal & Bhutan FEMA – (Foreign Exchange Management Act-1999).000 (US Dollars five thousand) or its equivalent. The objective of enactment of FEMA. It is mandatory to have PAN number to make remittances under the Scheme and the A/c Should be 6 months old. the resident can invest in such securities out of the bank account opened abroad under the Scheme. Maximum load value . All transactions in foreign exchange are governed by Foreign Exchange Management Act1999. in collaboration with the service provider KYC. 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. AML/CFT requirement are as per RBI guidelines Cards cannot be used in India. Further. on the other hand. Baroda TravelEasy Card Our Bank has launched a foreign currency pre-paid card viz. etc under this Scheme.individual family members complying with the terms and conditions of the Scheme.USD $200 or its equivalent foreign currency. bank notes or travellers cheques exceed USD 10. Import of foreign exchange into India A person on arrival in India. 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. manufacturing or packing of 196 | P a g e . No. not defined Concept of authorized 4. Nature of Violations are criminal offences Violations are civil offences Offence punishable with imprisonment punishable with monetary penalties 7. Definition of Capital/Current transactions. Provision of Arrest 8. Concept of persons was limited to ADs and Concept of authorized personAuthorized AMCs included ADBanks. These transactions/terms are well Terms Person. defined Service etc. of Sections 81 sections 49 sections 2. and off Person shore-banking units 5. Right of Impeded Person to take assistance 10. processing. Authorized moneychangers. of Monetary Penalty 9.The difference between FERA and FEMA can be summarized as under: Feature FERA FEMA 1. Power of Police Officer / ED Sweeping powers to officer of ED Powers to arrest and imprisonment Is restricted and prescribed only when to arrest a person alleged to have one fails to committed offence under the pay monetary penalty contract Could be as much as five times the Decreased to three times the amount involved amount involved in the transaction Impeded person did not have the right to take legal assistance of Lawyer or Chartered Accountant Impeded person has a right to take legal assistance of Lawyer or Chartered Accountant Sweeping powers Restricted powers PRE-SHIPMENT EXPORT CREDIT Pre-shipment / Packing Credit' means any loan or advance granted or any other credit provided by a bank to an exporter for financing the purchase. Amt. Features Presumptions of Mens Rea and Presumptions of Mens Rea and Abatements Abatements excluded 3. Definition of Resident/Non-Resident definition This definition is in harmony with Resident different from in Income Tax Income Tax Act Act 6. Further. 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. the benefit of concessional rate of interest on Pre Shipment Export Finance will be granted for the maximum period of 270 days only. as also from proceeds of any other unfinanced Export (collection) bills or lastly from Rupee resources if no export takes place. (ii) However. (ii) Advances against bills for collection. it can also be repaid out of balances in Exchange Earners Foreign Currency Account (EEFC A/C) representing Export proceeds. subject to mutual agreement between the exporter and the banker. 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.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. If pre-shipment advances are not adjusted by submission of export documents within 360 days from the date of advance. 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. 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. such as the time required for procuring. as also from proceeds of any other unfinanced (collection) bills. manufacturing or processing (where necessary) and shipping the relative goods / rendering of services. 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. However. 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. Types of Post-shipment Credits: Post-shipment advance can mainly take the form of (i) Export bills purchased/discounted/negotiated. Further. (iii) Advances against duty drawback receivable from Government. such adjusted export bills should 197 | P a g e . 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. 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. Other Features: * Preference will be given for grant of PCFC. 3. which are purchased/discounted/negotiated by the Bank. Gold card to the Exporter is issued for a period of three years subject to annual review. if any. 3. The amount recoverable. 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. GOLD CARD SCHEME FOR EXPORTERS Eligibility 1.25 % 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.continue to be followed up for realization of the export proceeds and will continue to be reported in the XOS statement. * Premium on ECGC policy for Pre Shipment Finance will be borne by the Bank and not * recovered from the Gold Card Holder Exporter. Normal Transit Period: Export Bills in Foreign Currencies ( Demand / Sight Bill ) – 25 days Crystallization : Overdue Export Bills. subject to annual review of the account. the Authorized Dealer shall apply its TT selling rate of exchange. All exporters. will be crystallized on 30th day after expiry of Normal Transit Period / Notional / Actual Due Date of the Export Bill. Concession in Rate of Interest: 0. shall be the crystallized Rupee amount along with interest and charges. The account should be ‗ Standard ‗ continuously for three years and should not be in the caution list of ECGC or RBI. Limits: 1.. 2. For crystallization into Rupee liability. thereafter. having a good track record and credit worthiness as per credit rating of the bank 2. Tenor: The Gold Card will be issued for a period of three years and will be renewed unless any adverse/ irregularities are noticed. * The loan application of such export clients will be processed expeditiously 198 | P a g e . Norms for inventory may be relaxed in case of unanticipated export orders. including those in small and medium sectors. taking into account the size and nature of the export order. 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. 3 crores or above during preceding three licensing years (licensing year is from April to March). Eligible firms and companies may be allowed to open not more than 5 Diamond Dollar Accounts with their Bank.Diamond Dollar Account : Firms and companies dealing in purchase/sale of rough or cut and polished diamonds are permitted to open and transact their business through Diamond Dollar Accounts provided. on behalf of the buyers (importer). EXPORT DECLARATION FORM (EDF): RBI has simplified the existing GR/PP forms used for declaration of exports of Goods and a common form called ―Export Declaration Form‖ (EDF) has been devised to declare all types of export of goods from Non-EDI ports. Documentary Credit/Letter of Credit Letter of Credit is a definite undertaking issued by a bank. to pay for goods and/or services. to the seller (exporter). Deemed Exports Projects aided by bilateral or multilateral agencies/funds (world bank. ISSUING BANK: Usually the applicant‗s banker. The EDF will replace the existing GR/PP form used for declaration of export of Goods. There are three formal contractual relationships in the use of documentary credits as means of payment and these are:The contractual relationship between the buyer and seller as evidenced by the terms of the sale contract. IDA). APPLICANT: He is also known as the Importer or Buyer of the goods. IBRD. aided projects and the remittance in the form of foreign exchange will be received into the India. which agrees to issue the documentary credit on behalf of the buyer. Under deemed export goods will not cross the boundary of the India but will be supplied to Govt. 199 | P a g e . The contractual relationship between the buyer and the buyer‗s bank. The contractual relationship between the buyer‗s bank and the beneficiary of the documentary credit who is the seller/exporter of the goods. PARTIES TO A DOCUMENTARY CREDIT 1. Issuing Bank is ultimately responsible for payment under the letter of credit. which issues a letter of credit. they have a satisfactory track record of at least three years in import / export of diamonds have an average annual turnover of Rs. Export Finance to such projects can also be considered by way of pre-shipment/post shipment credit. provided that the seller presents documents which comply fully with the terms and conditions of the documentary credit‖ . 2. The credit facility granted under such letter of credit is to be liquidated by purchase or negotiation of Bills under the L/C. RED CLAUSE AND GREEN CLAUSE LETTER OF CREDIT Red clause Letter of credit which authorize the bank to provides finance to exporter at the preshipment stage which is known as packing credit finance. This L/C guaranteed the payment in the event of failure of the opener to perform the contractual obligations. notwithstanding any occurrence ( bankruptcy of the Issuing Bank etc. The letter of credit issued in favour of the local or other suppliers as above is called back to back letter of credit. REVOLVING LETTER OF CREDIT‖ A Letter of Credit issued for a specific amount within which series of BP or BN are purchased/ negotiated. from various suppliers. Stand-by credit is one which provides for tendering of documents relating to transactions between the buyer and seller at the counter of the issuing bank for settlement of transactions in case of failure of the buyer. Green Clause L/C is only an extension of Red Clause Letter of Credit. Before the shipment is taking place. The stand by L/C also provides for availing finance by the seller or exporter from the bank. In case of Revolving L/C's aggregate turnover of bills under the L/C within the validity period of L/C in addition to a suitable limit for single transaction should be specified. BACK TO BACK LETTER OF CREDIT On many occasion. before the transactions are settled. STAND . Green Clause letter of Credit is one which authorize the bank to grant further finance to exporter for storage of goods in the name of bank. ADVISING BANK:A correspondent of the issuing bank who is able to authenticate the LC message before advising the same to the beneficiary. BENEFICIARY: He is an exporter or seller of the goods. it may happen that the beneficiary of letter of credit has to procure raw materials or finished goods etc. port and insurance charges etc. they will pay. The limit will be automatically reinstated on retirement of earlier bill purchased or negotiated. is called Revolving Letter of Credit. He will request his banker to issue letter of credit in favour of these suppliers on the basis of letter of credit he is having. payment of dockyard. accept or negotiate documents presented in conformity with the terms and conditions of letter of credit. CONFIRMING BANK: The confirming bank provides an undertaking to the beneficiary that. The advice to the beneficiary is without any undertaking or liability on the part of the advising bank.). banks are issuing stand by L/C. The terms and conditions of such back to back L/C should be in conformity with the original letter of credit.BY LETTER OF CREDIT In certain countries where issuance of guarantee is prohibited.3. 5. 4. Bank should recover the commission on each reinstatement. 200 | P a g e . Uniform Customs & Practices for Documentary Credits (UCPDC): These are universally recognized set of rules governing Letter of Credits. This means that second beneficiary cannot transfer the portion allotted to him to next supplier. These rules are binding on all parties. Group 1 terms applicable to all modes of transport and Group 2 terms only applicable to sea and inland waterway transport. This credit can be transferred once only. INCOTERMS are now separated into 2 Groups. Insurance and Freight External Commercial Borrowings: ECB are commercial loans in Foreign Currency and INR raised by eligible resident entities from recognized non-resident entities and should conform to parameters such as minimum maturity. 2007. The rules are published in the form of Brochure by the International Chamber of Commerce. etc. The latest publication is known as ICC 600 and adopted with effect from July 1. 201 | P a g e . INCOTERMS 2010 INCOTERMS means International Commercial Terms. This is called transferable credit. permitted and non-permitted end-uses. maximum all-in-cost ceiling. These are trade terms commonly used in commercial contracts. 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 Only applicable for sea and inland waterway transport: FAS FOB CFR CIF : Free Alongside Ship : Free on Board : Cost and Freight : Cost.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. trusts. Local sourcing of capital goods. Multilateral financial institutions (such as. ii. Exim Bank etc Two routes for raising ECB (a) Automatic Route : ECB under Automatic Route do not require approval of Government of India / RBI. iii. are eligible to raise ECB in Foreign Currency. SIDBI. Suppliers‘ credit. vi. 202 | P a g e . NBFCs.g. v. Foreign equity holders. vi. companies in miscellaneous services etc are eligible to raise ECB in rupees only. and vii. IFC. Financial institutions located in International Financial Services Centres in India viii. Overseas long term investors such as: a. iii. Loans including bank loans. ADB. Recognized lenders are as under i.) / regional financial institutions and Government owned (either wholly or partially) financial institutions. iv. Financial Lease. Foreign Currency Exchangeable Bonds (FCEBs) (under approval route only) Eligible borrowers : Corporates in manufacturing and software development sector. Insurance companies. SEZ units. Overseas branches / subsidiaries of Indian banks Permitted uses: ECB proceeds can be utilized for capital expenditure like Import of capital goods. vii. However. cooperative societies. e. b. d. New project. SIDBI. Export credit agencies. Prudentially regulated financial entities. International capital markets. c. optionally convertible or partially convertible preference shares / debentures). non-convertible. ii. NGOs in microfinance. iv. Infrastructure. EXIM Bank. Pension funds. Buyers‘ credit. Foreign Currency Convertible Bonds (FCCBs). Refinancing of existing trade credit Units of SEZs can raise ECB only for their own requirements For on lending by NBFCs / NGOs in microfinance. Sovereign Wealth Funds. Modernization /expansion of existing units. v. (b) Approval Route: Cases falling outside the purview of Automatic route and cases specified by RBI for approval route. Overseas investment in Joint ventures (JV)/ Wholly owned subsidiaries (WOS). Securitized instruments (e. etc. Suppliers of equipment. Acquisition of shares of public sector undertakings at any stage of disinvestment process.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. floating rate notes and fixed rate bonds. International banks. 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. financial intermediaries (viz. letter of undertaking or letter of comfort by Indian banks. c.e. or NBFCs) shall not invest in FCCBs in any manner whatsoever. pre. ii. 203 | P a g e . Up to USD 750 million or equivalent for the companies in infrastructure and manufacturing sectors. Further. For ECB with minimum average maturity period of 3 to 5 years . if any. The all-in-cost ceiling for track 1 is prescribed through a spread over the benchmark as under: a.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. All-in-cost includes : . Penal interest. and fees payable in Indian Rupees. b. Issuance of Guarantee : Issuance of Guarantee. The all-in-cost for track III. Investing in capital market and using the proceeds for equity investment domestically. standby letter of credit. Up to USD 100 million or equivalent for entities engaged in micro finance activities. and d.Rate of interest. For computation of individual limits under Track III.payment fee. exchange rate prevailing on the date of agreement should be taken into account. Track II : Long term foreign currency denominated ECB with minimum average maturity of 10 years. End use not permitted: The proceeds of the ECB borrowing can not be used for the following purposes: i. b. Moreover. 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 ceiling for track 2 is prescribed through a maximum spread over the benchmark will be 500 basis points per annum. All India Financial Institutions and NBFCs relating to ECB is not permitted. ECB proposals beyond aforesaid limits will come under the approval route. i. ii. ( i. ECB in INR) should be in line with the market conditions. Up to 500 million or equivalent for remaining entities. All India Financial Institutions. for default or breach of covenants should not be more than 2 per cent over and above the contracted rate of interest. Indian banks. 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 200 million or equivalent for companies in software development sector. 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. Real estate activities other than development of integrated township / affordable housing projects.300 basis points per annum over 6 month LIBOR or applicable bench mark for the respective currency. the payment of withholding tax in Indian Rupees is excluded for calculating the all-in-cost. other fees and expenses in foreign currency except commitment fee. The bonds are exchangeable into equity share of another company. Foreign Currency Exchangeable Bonds (FCEBs): FCEBs can be issued only under the approval route and shall have minimum maturity of 5 years. iv. Buyer‗s Credit Buyer‗s Credit is a financing arrangement under which a lending bank outside India lends directly to the buyer or to Buyer‘s bank in the buyer‗s country to enable the buyer to make payments against Imports. and v. to be called the Offered Company. permitted end-uses. On-lending to other entities for any of the above purposes. FCCBs are also subject to all the regulations which are applicable to ECBs. in any manner. Benefits to the Bank: Good Income and self liquidating Higher returns with greater safety Better risk coverage Better utilization of our resources overseas Visibility and image creation Relationship building and customer satisfaction Benefits to Corporates Extremely competitive pricing & Service Interest rate linked with LIBOR increases stability Need not to go overseas market as our bank arranges for everything through Overseas presence No payment of withholding tax. Purchase of Land Foreign Currency Convertible Bonds (FCCBs): The issuance of FCCBs was brought under the ECB guidelines in August 2005. if availed from our foreign branches (Foreign Banks are subject to withholding tax) Better risk coverage by various hedging options Less formalities Supplier‗s Credit 204 | P a g e . if any. 2000 read with Schedule I to the Regulations. (iii) issuance without any warrants attached. etc. shall not be exercisable prior to 5 years. etc. The all-in-cost of FCEBs should be within the ceiling specified by RBI for ECB. or partly or on the basis of any equity related warrants attached to debt instruments. Issuance of FCEBs shall conform to the provisions contained in Regulation 21 of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations. as required in terms of provisions contained in Regulation 21 of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations. either wholly.iii. subscriber. offered company. 2000 read with Schedule IV to the Regulations which contain eligibilities in respect of the issuer. Issuance of FCCBs shall conform to the Foreign Direct Investment guidelines including sectoral cap. (ii) the call & put option. not exceeding 2 per cent of the issue size. (iv) the issue related expenses not exceeding 4 per cent of issue size and in case of private placement. Activities prohibited as per the foreign direct investment guidelines. In addition to the requirements of (i) minimum maturity of 5 years. 5. Repayment of the existing Rupee Term Loan. 6. Supplier avails funds by discounting or selling the bills of exchange or promissory notes so created with the bank in its own country. Therefore. Purchase of indigenous machinery.Supplier‗s credit is a financing arrangement under which a supplier agrees to accept deferred payment terms from the buyer. it may entail lesser interest cost vis-à-vis Rupee borrowings. BOB grants FCNR (B) Loans through its Position Maintaining Offices at Mumbai. of India. The exporters can avail this facility by way of pre-shipment credit as well as post shipment credit in foreign currency. By way of pre-shipment advances/post shipment advances to the exporters. 2. Advantages of FCNR (B) loans: At times. 3. 7. 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. Repayment of any existing ECBs with the permission from RBI. For meeting working capital requirements in Indian Rupees. All other terms applicable to such type of Rupee advances shall also be applicable to foreign currency advances. Features Corporate can raise FCNR (B) loans from the Banks who are authorized dealers. Import of capital goods. Import of raw materials. Govt. i. The period of FCNR (B) loan is 6 month which can be rolled over further. 205 | P a g e . 4. The borrowers should have natural hedge to cover themselves from exchange risk. BOB with a wide global presence has a large base of NRI customers / depositors. 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. The loan can be granted after proper assessment and sanction of working capital requirements/ Maximum Permissible Bank Finance (MPBF) . 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.e. which are required to be borne by them. 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. 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. e.(T + 1) (iii) Spot Rate : Where the settlement is to take place after two working days from the date of contract. LIBOR is published by the British Bankers Association (BBA) at 11:00 A. where the settlement is to take place after the spot rate are termed as "FORWARD RATES" (T + > 2). 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.e. it means that the currency is cheaper for future delivery than for the spot delivery i. Discount: Discount is a value of exchange below spot rate. and is a filtered average of interbank deposit rates offered by designated contributor banks. i.= USD 1. USD 1 = Rs. 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. Indirect Quotations: Under a system of Indirect Quotations. It is termed as "SPOT RATE." (T + 2) (iv) FORWARD RATES: All exchange rates quoted. 100/. cheaper for forward purchase than the spot purchase. SWIFT Society for Worldwide Interbank Financial Telecommunication is a co operative society created 206 | P a g e .65 b.52 In India we follow the direct method of quoting exchange rates since August 1993. whereas the home currency units fluctuates : i. 66. the exchange rates are quoted where the unit(s) of foreign currency remains constant.e. for maturities ranging from overnight to one year. Direct quotations: Under a system of Direct Quotations. Premium: Premium is a value of exchange in excess of spot rate. Rs.Exchange Rate Mechanism: a. every day.e. 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.M London time . The margin may represent either "PREMIUM" or "DISCOUNT". currency is dearer for forward purchase than the spot purchase. the exchange rates are quoted where the unit(s) of home currency remains constant against variable units of foreign currency.(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. it means that the currency is dearer for future delivery than for the spot delivery i. In relation to forward exchange rate. Forward Rates are generally quoted as a margin against the spot rate for currency concerned. In relation to forward exchange rate. 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). swaps are the common instruments of derivatives. 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. Only authorized officials can access and decode the data / information / message.g.) Forward contract in forex business is a best example of derivatives. 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. forwards. commodity etc. foreign currency. but not having powers to operate on the Foreign Currency accounts maintained by their Bank. Specialized Integrated Treasury Branch (SITB) Mumbai is the only Category A Branch of Bank of Baroda.under Belgian law and having its corporate office at Brussels.. 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. It operates computer – guided communication system for transmission of international payment transfers messages in a secured system driven environment. meaning their account with you. 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. The basic object of the derivative is to hedge the risk. LORO ACCOUNT: Entries passed to the account of a third bank are said to be for LORO account. e. options. Category C: All other offices and branches handling foreign exchange business through other category B Branches. 207 | P a g e . Future. VOSTRO ACCOUNT (YOUR ACCOUNT): means foreign bank‗s or branch‗s account with us in Indian Rupees. In Option Forward Contract. Forward Rate Agreements (An interest rate derivative) 1.e. 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. 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. 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. the transaction will have to be completed on the specified future date. Derivatives improve the liquidity of the underlying instrument. Both the parties are obliged to fulfill their contractual terms. Share of Exchange Profit Treasury Branch passes share of profit on exchange transaction done by Authorized Branches on half yearly basis i.T. 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. price discovery. 2. Derivatives perform an important economic function viz. 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.T. 208 | P a g e . 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. March to August and September to February. The contract is negotiated directly by the buyer and seller. This is passed on to the branches during first fortnight of September and March every year. Further.A derivative is an instrument / contract whose value depends on the values of other underlying instrument / contract. the option period of delivery in future should be specified and should not exceed a period of one calendar month. They provide better avenues for raising money. They contribute substantially to increasing the depth of the markets. selling rate Sale contracts shall be cancelled at T. the credit risk with the counter party is minimal. as the commitment is only to settle the interest differential. Interest Rate Swaps : An Interest Rate Swap is invariably an over the counter contract. this means options are basically forward contracts on rights. The rate for LAF is REPO (Repurchase Option) for injection of liquidity and Reverse REPO for absorption of liquidity. MARKET INTEREST RATE The interest rate. FRAs could easily replicate cash market transactions with a lower capital requirement and can also improve the liquidity of the underlying cash markets. 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. or discount rate. The right to buy an underlying is called a Call Option and the right to sell the underlying is called the Put option. the buyer of the option. 2. 4.REPO and Reverse REPO : 1. Interest Rate Options : Interest Rate Options are fundamentally of two types. 3. RBI gives LAF Liquidity Adjustment facility as recommended by Narsimhan Committee. Obviously. A Cap is an interest rate option in which. 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. the Cap and the Floor. 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. 4. Thus they are very useful in Asset Liability Management. they are simply insurance products against adverse movements in the market prices. Interest payments are based on a fixed rate on the one side and a floating rate on the other. future economic outlook etc. Options : 1. It is reverse repo for the suppliers of fund who are purchasing such security. The option which can be exercised by the buyer only on the date of maturity is called an European Option. 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. or yield to maturity is an interest rate which changes constantly depending on various factors like demand/supply of the Financial asset. 209 | P a g e . The purpose of LAF is to provide short-term liquidity support to Banks in India. with the intention of locking himself to a ceiling in interest costs for his borrowing. American Option is the Option which can be exercised on any working day before the maturity or on the maturity date.3. 2. 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. In other words. Mostly. LAF . A financing arrangement used primarily in the Govt. 210 | P a g e . Coupon rate = The rate which is displayed on the instrument and fixed at the time of issuance. Future cash flows includes interest and capital gain/loss. YTM can be defined as the discount rate that equates present value of all cash flows to the present market price of the Bond. the profitability and thereby the net worth of the bank also gets adversely affected. RBI has directed all the banks in India in valuing their investment portfolio at market rates. However RBI issues guidelines on valuation norms from time to time. 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. AFS-Available for sale: The securities which do not fall under the above two categories will be under this category. securities acquired with the intention to trade by taking advantage of the short term price/interest rate movement are classified as HFT. Terms for money market: 1. 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. as per the prevailing market rates.FACE VALUE The principal value of the Bond. securities which are not meant for sale and shall be kept till maturity date 2. This will ensure that Bank‗s Capital base could withstand any eventuality of high volatility in the value of its portfolio at a later date. 3. YTM can be interpreted as the bond‗s average compounded rate of return if the bond is bought at the current asked price and held until it matures and the face value is repaid. That is. cannot be taken to profits of the Bank. For example if the value of the securities in the portfolio have depreciated. Conversely. HFT = Held for trading. say when the Capital account convertibility comes. 3. if there is an appreciation. Valuation of securities at market rates is known as ‘marking to market‗. 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. HTM = Held to maturity. which is printed on the bond and which is fixed throughout the bond‗s life. which are unrealized gains. 4. 2. 4. 3. MARK TO MARKET (REVALUATION): 1. a. a. Account can be opened Jointly with Resident close relatives b. Interest cannot be more than LIBOR + 100 bps 211 | P a g e . 5. Securities can be credited if the same securities was purchased by using FCNR fund. A transaction with a person in Nepal d. Officials of State Government posted to abroad 2. Remittance up to One Million USD from the Account in a calendar year (January – December) d. Travel to Nepal and / or Bhutan b. Availing Foreign Exchange is prohibited for – a. Interest on Govt. d. Which is not True in regards to FCNR a/c. Indian Citizen going abroad for Business Promotion d. A National/Entity of Bangladesh c. All of Above. c. dividend etc. Remittances outside India is permissible for Current Income like rent. A loan to third party can be granted against collateral security of NREFD. Indian Citizen working in UNO c. b. 3. Which of the following Category is not considered as a NRI a. Which is not True with regard to NRE S B A/c. Which of the following statement is not True with regard to a NRO A/c. a. A Non Resident External account can be maintained by a.Multiple Choice Question 1. A National/Entity of Sri Lanka b. NRO account can be opened by a Foreign National of Non Indian Origin visiting India 4. Offices and Branches situated in Nepal. c. A person working for an Airline Company and posted in India d. Account can be opened jointly with Resident close relatives 6. Indian Citizen who proceed abroad for Education b. AD banks in India may be permitted to accept FCNR(B) deposits in any permitted currency b. Remittance of Income from any type of Hobby c. Interest Rate cannot exceed MIBOR/SWAP rate Plus 175 bps. From the First Beneficiary to any number of Secondary Beneficiaries b. which rate will be applicable? a. Transferable LC is one that can be transferred a. Only once. d. Which act provides guidelines for the flow of Foreign Exchange in India. To any number of beneficiaries several times d. The FEMA RBI Act 1935 FEDAI act ICC minimum deposit amount required for opening RLFCD A/c.e. a) USD 5000 Equivalent b) USD 10000 Equivalent c) USD 15000 Equivalent d) USD 25000 Equivalent 9. c. i. 8. Bill Selling d. b. TT Buying rate is applicable for conversation into INR d. Only once to one second beneficiary or c. Bank need not to maintain Reserve requirement (SLR/CRR) on this deposit.TT Selling b. 7. a. In case of export bill crystallization. TT buying c. Only by first beneficiary to second beneficiary and not vice versa 212 | P a g e . Bill Buying 10.c. Frauds committed by either employees or outsiders results into loss of business. 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). For example: In case of non-payment of dues bank will suffer a loss. Generally. Interest Rate Risk: Risk due to change in market interest rate. (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. management and/or external factors. either spot or forward or both in an individual currency. Broadly speaking operational risk covers following: 213 | P a g e .g. Equity Price Risk is a loss in value of the bank‗s equity investments and or equity derivatives. which are charged to the bank as security etc. by way of hypothecation and /or pledge. OPERATION RISK: It is a risk relating to direct or indirect losses arising out of inadequate or failure of people. may be direct or indirect. capital or business. monitoring. Foreign Exchange Risk: Risk due to upward/downward movement in exchange rate when there is an open position. Direct loss may be relating to loss of capital or earning whereas indirect loss may be loss of business. Price fluctuation in stock market where bank has invested fund. Market risk may be relating to: Liquidity Risk: Potential inability of a bank to meets its repayment obligations in a timely and cost effective manner e.RISK MANAGEMENT What is Risk? Risk is a probability of loss. risk means probability of loss of earning. Commodity Price Risk: The price fluctuation in commodity. Thus. in case of compromise loss of earning (waiver) or loss of capital in case of write off. business. any risk not categorized as market or credit risk is called operational risk. system. This depends on types of assets such as fixed or floating rate. Mismatch of deposits and assets.. which might adversely affect the bank‗s financial position. The NIM will reduce. What is Risk Management? The four letters ‗RISK‗ indicates that risk is an unexpected event or incident. Volatility frequently refers to the standard deviation of the change in value of a financial instrument with a specific time horizon. measured monitored and control. process. which needs to be identified. Different Types of Risks? Broadly speaking the risk can be divided into four main categories. quantum of advance etc. controlling) Thus. arising out of change in equity price. R = Rare (Unexpected) I = Incident (Outcome) S = Selection (Identification) K = Knocking (measuring. This arises due to failure of particular segment/activity where the bank is having substantial exposure. Country Risk is the risk arising while dealing with other countries such as sovereign risk. Therefore. currency risk. Stock audit. 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. cross border transactions. between bank and borrower. defaulter country risk etc. Credit Derivatives etc. Group.e. 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. Thus. Insurance and Credit rating Secured & unsecured 214 | P a g e .(1) People (2) Process (3) Management (4) System (5) Business and (6) External. Direct lending: Default risk. Defaulter Risk there is one contract only i. etc. 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. may be due to unwillingness or inability of the borrower. settlement and other financial transactions. transfer risk. single /group exposure ceiling. 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. Security transaction: The counter party may not effect fund settlement/ security settlement. portfolio risk. political risk. Portfolio Risk : is also called Credit Concentration Risk. and activity exposure. activity ceiling etc. Treasury Operations: Forward Contract obligations. it is necessary to increase the credit portfolio and also to mitigate the risk relating to credit. periodical inspection. To mitigate such risk there are sectoral exposure. credit risk may be relating to. On due date the party is refusing/ denying the payment/ delivery. TOOLS FOR CREDIT RISK MANAGEMENT: Credit is considered as core business activity of banking which results into profit. Hedging. (non-payment of instalment and interest by the loanee). annual audit. ZIC inspection.Single. Following are the tools available for risk assessment and monitoring: Operations in the account Stock Statements QIS/QMR Review of account and financial statements ASCROM and PSR Audit & inspections: concurrent audit. Discretionary Lending power and ‗Cap‖ Exposure ceiling. However depending upon the model used. Composite Rating Grades: Composite rating grade ranges from CR-1 to CR-10. the rating structure consists of evaluation by way of four modules viz. The rating models have been grouped in three categories for the purpose of specifying cutoff point for the acceptance of an obligor (borrower) as per details mentioned hereunder: 215 | P a g e . Facility Rating (FR) Grades: Facility Rating grades range from FR-1 to FR-8. the rating grades ranging from BOB-1 to BOB-10 or BOB-3 to BOB-10 or BOB-6 to BOB –10. Facilities proposed/ sanctioned to a company are assessed separately under this dimension of rating. SMA 02 CREDIT RATING METHODOLOGY The BOBRAM Risk Rating Models for Commercial Advances are based on two dimensional rating methodology specified under Basel -II Accord requirements. The Composite Rating is worked out automatically by the software based on the matrix of Obligor (Borrower) Grade (BOB Rating) and Facility Rating Grade (FR). For assessment of an obligor. indicates the Expected Loss in case the facility is defaulted. 1) Industry Risk. Obligor (Borrower) Rating -for credit worthiness indicating the Probability of Default (PD) 2. Obligor (Borrower) Rating Grades: Obligor Rating Grades range from BOB-1 to BOB-10. 3) Financial Risk and 4) Management Quality. CUTOFF GRADE FOR ACCEPTANCE Bank has accepted BOB-6 as the cut-off point for the acceptance of an obligor (borrower) based on Obligor (Borrower) rating carried out as per the applicable model. COMPOSITE RATING The Composite Rating (CR) – which is the matrix or the combination of PD and LGD. 2) Business Risk. Facility Rating -representing the Loss Given Default (LGD) and 3. Composite Rating -which is indicative of the Expected Loss (EL) OBLIGOR (BORROWER) RATING The obligor (Borrower) rating is indicative of creditworthiness of an obligor or the Probability of Default (PD) and it is based on the assessment of past and projected cash flows of the company. FACILITY RATING Facility Rating involves assessment of the security coverage for a given facility and indicates the Loss Given Default (LGD) for a particular facility. The credit risk rating process as per BOBRAM Rating Models involves three types of ratings for each credit facility 1. PRICING The composite Rating or the Combined Rating (CR.focus on historical accounts.suggestions for risk mitigation. Inadequate optimization of audit resources. 100% transaction testing Process identical for branch/unit. under Basel-II also. All other Schedule Commercial banks are encouraged to migrate to these approaches under Basel-II in alignment with them. Difference between Internal Audit & Risk Based Internal Audit Internal Audit Transaction based. Level of transaction testing depends on risk assessment. while continuing to maintain CAR of 9 %. open position of Gold . with approval of their Board. No direct linkage to supervisory process. Periodicity linked to rating. Periodicity linked to risk assessment. each Backward looking . This together with the adoption of Risk Based Supervision would enable factoring in the pillar-II requirements under Basel-II.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. 2008. Risk Based Internal Audit Risk based.Forex-Derivatives . No risk assessment. Banks will formalize their capital adequacy assessment process in alignment with their business plans and performance budgeting system. the banks have been advised to put in place an Internal Capital adequacy Assessment Process (ICAAP). Process differs according to risk assessment. As regard the Market Risk. Essential for regulatory Risk Based Supervision. With regard to pillar 2. the banks will continue to follow the Standardised-Duration Method as already adopted under the Basel-I framework and maintain capital charge for market risk on securities included in the Held for Trading (HFT) and Available for Sale (AFS) categories. past performance and compliance because of lack of risk focus. Risk Management approaches As per RBI guidelines the foreign banks operating in India and the Indian banks having operational presence outside India are required to migrate to the Standardized Approach for Credit Risk and the Basic Indicator Approach for Operational Risk with effect from March 31. Forward looking . RBI has also specified that banks would have to maintain a minimum Tier-I ratio of 6 %. 216 | P a g e . Effective optimization of audit resources. Regulatory Retail portfolio etc. Credit Conversion Factor (CCF) The off balance sheet items have to be converted to credit risk exposure by multiplying with Credit Conversion Factor. Bank‗s own deposit. Off Balance Sheet items will be converted to credit risk exposure by multiplying with ‗Credit Conversion Factor‗ from 0% to 100%.e. etc i. 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. The structure of the reporting and all other related issues are described in annexure I of the above circular. Plant and Machinery as Collateral for risk mitigation purposes. RLF etc are required to report the operational risk losses of their respective unit to this system.Certain securities are eligible to be considered for Basel-II purpose. Gold.e. Indira Vikas Patras & Kisan Vikas Patra. All the operating units of the bank i. NSC. impact of the bank‘s profit and loss account. Basel –II standardized approach has prescribed CCFs of 0% to 100 % for different types of Off Balance Sheet Items.It is confined to loans / advances and deposits.f. SME. On Balance Sheet netting . on solo basis. Credit Risk Mitigation (CRM) Techniques 1.5% and a risk weight of 20% may entail a capital charge of 1. Corporate. in India w. 2. depending on the quality of assets as reflected in the risk rating secured by the borrower from External Credit rating institutions. Standardised Approach to Credit Risk Under the Standardized Approach. all branches. Market Risk a) Standardized Approach (Maturity Method) b) Standardized Approach (Duration Method) c) Internal Models method 3. Risk weight of 100% may entail a capital charge of 9%. RO. BBB rated account will have risk weight of 100% and so on. The system will benefit the bank in online collection of operational risk loss data and its tracking in terms of recovery. where banks have 217 | P a g e .8% etc. Collateralised Transactions .e. bank‗s credit portfolio have been grouped into various class types like Domestic and Foreign Sovereign. The bank will allocate risk weight to fund and non-fund based assets. Credit Risk a) Standardised Approach b) Foundation Internal Rating Based (FIRB) Approach c) Advanced Internal Rating Based (IRB) Approach 2. In respect of Standard Assets Basel-II does not recognize land and building. 01-06-2015. Public Sector entities. Basel-II suggests the following approaches 1. For example ‗AAA‗ rated account will have risk weight of 20%. risk weight of 50% may entail a capital charge of 4. Banks. The securities may be either prime securities or collateral securities like cash margin. while the ‗A‗ rated accounts will have risk weight of 50%.To deal with the different Risks. cash or near cash securities are considered as security for Basel-II purpose. LIC policies. The eligible guarantors are Sovereign. Loans and advances are treated as exposure and deposits as collateral. FITCH & BRIPL (Brickwork Rating India Pvt. where positive. Concentration by Industry. PSEs. Exposure may be offset against eligible collateral credit. Banks. Reputation Risk . involving specific lien with proof documentation. The liquidity risk for the bank will be monitored and measured as per the ALM Policy. other entities rated AA or better External Credit Rating Agencies approved by RBI Domestic . ICRA. Country Risk – The exposure to various countries are in terms of rating categories as specified by the ECGC guidelines on Country Risk Management in terms of percentage to Tier 1 and Tier 2 Capital. 4. Risks to be captured in Pillar II: 1. Interest Rate Risk in the Banking Book – Interest Rate Risk is taken to be the current or prospective risk to both the earning and capital of the bank arising from adverse movements in interest rates.3*a)/3 Where K = Capital Charge under Basic Indicator Approach GI. over the previous three years. sovereign entities.Gross Income (annual). this is to be estimated for only.Reputation risk is the current or prospective indirect risk to earnings and capital from adverse perception of the image of the bank on the part of customers. 5. ECGC. In the context of Pillar 2. It can be expressed as below. Moody‗s & FITCH Basic Indicator Approach (BIA) Under this approach.CARE. in the formula below) of positive annual gross income. given that the interest rate risk in the trading book is already covered under Pillar 1 market risk regulation. Ltd. CRISIL. If annual gross income is negative or zero. a 15% as per Basel-II accord. Liquidity Risk . shareholders 218 | P a g e . 3. appropriate level of Internal Capital in relation to bank‗s risk profile and applications and further development of suitable risk management systems. 2. Credit Concentration Risk – Concentration Risk may be used in a broader sense to include concentration by sector. Guarantees . Internal Capital Adequacy Assessment Process (ICAAP) ICAAP comprises of all bank‗s procedures and measures to ensure the appropriate identification and measurement of risks. composition and distribution of internal capital which is considered adequate to cover current risk and any future risk in both quantitative and qualitative terms. banks must hold capital for operational risk equal to the average over the previous three years of a fixed percentage (denoted alpha. Primary Dealers with a lower risk weight than the counter party (borrower).Liquidity Risk occurs when an institution is unable to fulfil its commitment in time when commitment falls due.legally enforceable netting arrangement. comprehensive strategies and procedures for continuous evaluation and regular review. it should be excluded while calculating the average. K= å (GI 1. It is not mandatory to maintain capital for liquidity risk. 3.) Foreign – Standard & Poor. geographical location and concentration of risk mitigant measures. 31st March. other than that for claims on Bank Assets Class. w. 6. Reputation risk may originate in lack of compliance with industry service standards and regulatory standards. 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.2019.Business risk means current or prospective risk to earnings and capital arising from changes in the business environment and from adverse business decisions. It this reference.03. a service style that does not harmonize with customer expectation.00 1.50 8.50 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).e.and regulator. There has not been much change in Calculation of RWA under Basel II and Basel III. 219 | P a g e .50 2. Minimum total capital requirement under Basel III Regulatory Capital (i) (ii) (iii) (iv) (V) (vi) (vii) (viii) Minimum common equity Tier I Ratio Capital conservation Buffer (comprised of common equity) Minimum common equity Tier 1 Ratio plus capital conservation buffer (i+ii) Additional Tier I capital Minimum Tier I capital(i+iv) Tier 2 capital Minimum total capital ratio (MTC){(v)+(vi)} Minimum total capital ratio plus capital conservation buffer[(vii)+(ii)] As % Of RWA (Risk Weighted Asset) 5.00 9. 2008.00 2. lack of customer friendly service and fair market practices. 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. Business and Strategic risk . popularly known as Basel-II guidelines. failure to deliver on commitments.00 11.50 7. 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. rather than on Total CRAR under Basel II guidelines.f. The Basel III capital regulation has been implemented from 1st April 2013 in india phases and it will be fully implemented as on 31. RBI has advised Banks in India to calculate capital requirement for operational risk as per: a) IRB Foundation Approach b) Basic Indicator Approach c) IRB Advanced Approach d) Standardized Duration Approach 2. Investment in Post Office time deposit is a) b) c) d) Zero Risk investment Low Risk investment Medium Risk investment High Risk investment 220 | P a g e . Branch Manager of Branch A. d) None of the Above 4. What do you mean by Sovereign Exposure a) Exposure against security of gold b) Exposure to Govt. purchased huge amount cheques of a new customer.MULTIPLE CHOICE QUESTIONS 1. beyond his discretionary lending powers. c) Exposure to Foreign Govt. a) b) c) d) Credit Risk Operational Risk Systemic Risk Settlement Risk 3. The cheques were returned unpaid and bank lost huge amount. Name the risk bank was exposed to. Steep decline in production figures 22. Downwards trends in sales and fall in profits 15. Avoiding of visit / inspection at Business premises and/or godowns 2. RECOVERY & NPA MANAGEMENT Bank has laid down following guidelines on credit monitoring & its reporting: Early Warning Signals Reserve Bank of India has issued broad guidelines on preventing Slippage to NPAs by recognizing the problems early and initiating corrective measures to restructure the accounts after an objective assessment of the viability of the unit and promoter's intention (and his stake). Avoiding of sharing of contact details of other lenders /banks and /or avoiding mutual meeting of lenders (whether in consortium or otherwise) 4. 5. Delay in realization and/or frequent returns of cheques /Bills (purchased/ discounted or sent on collection) 17. Continuous irregularities in cash credit/ overdraft accounts such as inability to maintain stipulated margin on continuous basis or drawings frequently exceeding sanctioned limits. valuation. Delay and/or not honoring of inward bills 11. Failure to pay statutory liabilities 24. Avoiding the lenders‘ direct contact with other promoters /partners/guarantors 3. Unreasonable variations in sales/ receivables 20. Longer period of credit allowed on sale 16. 21. Avoiding of obtaining credit opinions or other reports (i. Devolvement of DPG installments and non-payment within a reasonable period. 7. 18. Not furnishing required information/ data on operations in time 26. which may include large proportion of slow or non moving items 23.CREDIT MONITORING. water. Outstanding balance in cash credit account remaining continuously at the maximum without appropriate turnover. Complaints from suppliers of raw materials. Non-disclosure of other borrowings and/or details of securities charged to other lenders. Failure to make timely payment of installments of principal and / or interest on term loans 9. Attempts to divert sale proceeds through accounts with other banks 13. 221 | P a g e . power etc about nonpayment of bills 10. The following features may be treated as early warning signals: 1. Rising level of inventories. Larger & longer outstanding in bills accounts 19.e. 8. 12. Bank shall put in place 'Early Alert System' that captures early warning signals in respect of accounts showing first signs of weakness. NEC etc)directly by the banks and offering/insisting to arrange the same themselves from other lenders or professionals. periodical interest debited remaining unrealized. Issuance of cheques / bills for amount in round figures. Non-payment of bills discounted or under collection. Downward trends in credit summations 14. Utilization of funds for purposes other than running the units 25. Non submission or undue delay in submission or submission of incorrect stock statements & other control returns and statements. 6. Frequent devolvement of LCs and non-payment within a reasonable period 28. Borrower may request the lender/s. FRAMEWORK FOR REVITALIZING DISTRESSED ASSETS IN THE ECONOMY-CENTRAL REPOSITORY INFORMATION ON LARGE CREDITS (CRILC) . 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. with substantiated grounds. store and disseminate credit data to lenders. Frequent queries from other banks. Non-compliance of terms and conditions of sanction. cash losses. for formation of a JLF on account of imminent stress.SMA Reserve Bank of India (RBI) has set up a Central Repository of Information on Large Credits (CRILC) to collect. The JLF should explore the possibility of the borrower setting right the irregularities / weaknesses in the account. 30. 100 Crore and / or when the account is reported as SMA-0 or SMA-1. Poor financial performance in terms of declining sales and profits. Corrective Action Plan (CAP) by JLF 222 | P a g e . 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. SMA-0 Principal or interest payment not overdue for more than 30 days but account showing signs of incipient stress. Avoiding of insurance and/or under insurance of securities 32. 34. Principal or interest payment overdue between 61-90 days. All the lenders should formulate and sign an agreement incorporating the broad rules for the functioning of the JLF. Frequent invocation of BGs and non-payment within a reasonable period 29. 31. Incomplete documentation in terms of creation/registration of charge/Mortgage etc. 100 Crore and above. net losses and erosion of net worth etc. 33. Lenders also have the option of forming a JLF even when the AE in an account is less than Rs.27. Sharp decline in charged current assets and /or the advance value against the charged assets. Banks are required to identify incipient stress in the account by creating three sub-categories under Special Mention Account (SMA) category SMA sub categories Basis for classification. ( Annex-1) Principal or interest payment overdue between 31-60 days. 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. (a) Rectification Obtaining a specific commitment from the borrower to regularize the account. 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. due recovery process may be resorted to. (b) Restructuring Consider the possibility of restructuring the account if it is prima facie viable and the borrower is not a wilful defaulter. Restructuring process If the JLF decides to restructure an account independent of the CDR mechanism. SMA or sub-standard by one or more lenders of the JLF. For accounts with AE of less than Rs. The viability of the account should be determined by the JLF based on acceptable viability benchmarks determined by them. Asset classification benefit as applicable under the extant guidelines will accrue to such restructured accounts as if they were restructured under CDR mechanism.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. Banks will be subjected to accelerated provisioning for these accounts and / or other supervisory actions as deemed appropriate by RBI. 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. 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. (c) Recovery Once the first two options are seen as not feasible.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. 223 | P a g e . For accounts with AE of Rs. the JLF should carry out the detailed Techno-Economic Viability (TEV) study. Wilful defaulters will normally not be eligible for restructuring. Restructuring cases will be taken up by the JLF only in respect of assets reported as Standard. 2. 8.Annex-1 SMA-0 Signs of Stress Illustrative list of signs of stress for categorising an account as SMA-0: 1. or reduction of Drawing Power (DP) by 20% or more after a stock audit. 224 | P a g e . The JLF-EG shall have the following composition: A representative each of SBI and ICICI Bank as standing members. or a single event of non-cooperation / prevention from conduct of stock audits by banks. Promoter(s) pledging/selling their shares in the borrower company due to financial stress. 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. which will be tasked to approve the rectification/restructuring packages under CAPs. then a representative of the fourth largest or a representative each of the fourth and the fifth largest lenders as the case may be. or evidence of diversion of funds for unapproved purpose. 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. In this regard. 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. 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. JLF will finalise the CAP and the same will be placed before an Empowered Group (EG) of lenders. although RBI has not explicitly prescribed the level of representation in its guidelines. Increase in frequency of overdrafts in current accounts. The borrower reporting stress in the business and financials. 6. Nevertheless. 2. Actual sales / operating profits falling short of projections accepted for loan sanction by 40% or more. 5. 7. 4. 3. A representative each of the top three lenders to the borrower. 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. or drop in internal risk rating by 2 or more notches in a single review. banks are expected to depute sufficiently empowered senior level officials for deliberations and decisions in the meetings of JLF. RBI clarified that. If SBI or ICICI Bank is among the top three lenders to the borrower. Promoters infusing more equity into their companies Transfer of the promoters holding to a security trustee or an escrow arrangement till turnaround of company. A representative each of the two largest banks in terms of advances who do not have any exposure to the borrower. 500 crore – 240 days 225 | P a g e . the total time for CDR cases is: For aggregate Exposure (AE) above Rs. JLFs CDR cell may consider following options at the time of restructuring of the loans. 500 crore and above – 285 days For aggregate Exposure (AE) upto Rs. Mandatory time lines for restructuring of Advance A/cs as per the revised restructuring framework of RBI(BCC:BR:107:493 dated 05-10-2015): In the respect of NON – CDR restructuring cases. should lenders favour it. the time for approving the restructuring package by the JLF would stand as 15 days only instead of 30 days. To ensue more involvement and ownership of the promoters in the business /project. Staff at all levels should endeavor to make best use of guidelines and keep a close watch on accounts/JLFs/CDRs where Bank may invoke such provisions and initiate prompt action for appropriate decisions an implementations Prudential Norms on change in ownership of borrowing entities (outside strategic Debt Restructuring Scheme) (BCC:BR:107:579 dated 24-11-2015):In order to further enhance banks‘ ability to bring in a change in ownership of borrowing entities which are under stress primarily due to operational/ managerial inefficiencies despite substantial sacrifices made by the bank. Possibility of transferring equity of the company by promoters to the lenders to compensate for their sacrifices. and The participation in the JLF-EG shall not be less than the rank of an Executive Director in a PSB or equivalent. the shareholders should bear the first loss instead of the debt holders. The JLF convening bank will convene the JLF-EG and provide the secretarial support to it. Branches/Regions/Zones are advised to take note of the guidelines given in the circular and which have been issued by RBI in order to further empower the lenders to curb the rising NPA menace in the banking industry. to Standard category upon Such change in ownership. RBI has permitted allow banks upgrade credit facilities extended to borrowing entities whose ownership has been changed outside SDR. This will enable a change in management control. subject to certain guidelines which are detailed in the circular. Therefore. 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 . 500 crore – 255 days For Non CDR cases: For aggregate Exposure (AE) above Rs. 500 crore and above – 307 days For aggregate Exposure (AE) upto Rs. whether incorporated or not. 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. Though the guidelines inter alia the penal measures as indicated herein above normally are applicable to all the borrowers identified as wilful defaulters. guarantees and letter of credit. provided it is arising on account of any banking transaction. In case of business enterprises (other than companies).Definition of Lender The term ―lender ―covers all banks/FIs to which any amount is due. 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 system of reporting with the cut-off limits of Rs. 25 lac and above has been introduced. Definition of Unit The term ―unit ―includes individuals. Enforcing such provisions also help the Bank in credit discipline and creating a Recovery climate. 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. 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. Diversion and siphoning of funds The terms ―diversion of funds‖ and ―siphoning of funds‖ should construe to mean the following:Diversion of funds would be construed to include any one of the undernoted occurrences: 226 | P a g e . including off balance sheet transactions such as derivatives. 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. nor are the funds available with the unit in the form of other assets. juristic persons and all other form of business enterprises. 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. (e) Investment in other companies by way of acquiring equities / debt instruments without approval of lenders. Denying access to assets financed /collateral securities. 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. 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. 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. This is a prudential measure since the expected losses on exposures to such non-cooperative borrowers are likely to be higher. 227 | P a g e . Thwarting Lenders‘ efforts for recovery of their dues by not providing necessary information sought. its promoters and directors (excluding independent directors and directors nominated by the Government and the lending institutions). (f) Shortfall in deployment of funds vis-à-vis the amounts disbursed / drawn and the difference not being accounted for. 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). obstructing sale of securities etc. 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. a non-cooperative borrower is a defaulter. A non-cooperative borrower in case of a company will include. to the detriment of the financial health of the entity or of the lender. (b) Deploying borrowed funds for purposes / activities or creation of assets other than those for which the facility was sanctioned. besides the company. In effect. (d) Routing of funds through any bank other than the lender bank or members of consortium without prior permission of the lender. In this connection. 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. who deliberately stone walls legitimate efforts of the lenders to recover their dues. (c) Transferring funds to the subsidiaries / Group companies or other corporates by whatever modalities.(a) Utilisation of short-term working capital funds for long-term purposes not in conformity with the terms of sanction. 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. OR Credits are not enough to cover the interest debited during the same period. but there are no credits for 90 days as on the date of Balance Sheet. it should be classified as NPA.e. 90 days.03. Example As on 31. For example. A loan account where the interest has been serviced but the installment has remained unpaid will also be classified as NPA. CLASSIFICATION OF ADVANCE Loan Cash Credit / Overdraft Bills Purchased / Discounted Other Accounts IDENTIFICATION OF NPA LOAN A Loan account [term loan/DL] is to be classified as NPA when interest and/or installment of principal remain overdue for a period of more than 90 days. assets classification and provisioning have been further strengthened to match the international standards NPA – DEFINITION When any asset ceases to generate income for the bank A ‗non-performing asset‗ (NPA) is defined as a credit facility in respect of which the interest and / or instalment of principal has remained ‗overdue‗ or. a loan account will not be classified as NPA on 31st March 2013. income recognition. the norms relating to the capital adequacy. 2012. ‘out of order‗ for a specified period of time i.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. 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. 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 228 | P a g e .2013. if the interest and installment on principal have been fully serviced up to 31st December. As a part of the economic reforms. If as on 31st March 2013. KVP. Agricultural advances A crop loan account for short duration crop will be classified as NPA if the instalment of principal or interest thereon remains overdue for two crop seasons subject to maximum 12 months. if interest and / or instalment of principal or any other amount due to the bank remains overdue for more than 90 days. NSCs. BILLS PURCHASED / DISCOUNTED A bill purchased / bill discounted account will be classified as NPA if the bill remains overdue for a period ofmore than 90 days from the due date. Surrender value of LIC policies 229 | P a g e . we find that in a cash credit account the outstanding balance in the account is less than the DP / sanctioned limit and the total of all credits made during March 2013 quarter is less than the interest debited in this quarter. banks should.] A crop loan account for long duration crops will be classified as NPA if the instalment of principal or interest thereon remains overdue for one crop season. classify an account as NPA only if the interest due and charged during any quarter is not serviced fully within 90 days from the end of the quarter.e. the account has to be classified as NPA.] RBI has directed that the repayment schedule of the rural housing advances to agriculturists under Indira Awas Yojana and Golden Jubilee Rural Housing Finance Scheme should be linked to crop cycles. the account has to be classified as NPA. not applicable for income recognition. subject to maximum 12 months . Further if as on 31st March 2013.March 2013 quarter. [Long duration crops means crops with crop season longer than one year. OTHER FACILITIES In case of interest payments. IVP. Does not cover activity allied to agriculture where normal norms are applicable GOVERNMENT GUARANTEED ADVANCES Guarantee of the Central Government though overdue may be treated as NPA only when the Central Government repudiates its guarantee when invoked. remains unpaid for two crop seasons beyond due date. However. State Government guaranteed advances will become NPA. EXEMPTED CATEGORY Treated as performing even though interest or instalments in following accounts have not been paid for more than 90 days Advances against banks own term deposits. In case of term loans given to non-agriculturists the account becomes NPA on the basis of 90 days delinquency norms as applicable to non-agriculture finance. [i. 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. if uncollected.days even though the unit may be working or the borrower‗s financial position is satisfactory. Non performing assets: Banks are required to classify nonperforming assets further into the following three categories 230 | P a g e . the entire interest accrued and credited to income account in the past periods. including bills purchased and discounted. A working capital borrowal account will become NPA if such irregular drawings are permitted in the account for a continuous period of -90. the account should no longer be treated as nonperforming and may be classified as ‗standard‗ accounts. 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. 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. In respect of NPAs. becomes NPA.Provided debit balance in account is less than the market / surrender value of the securities in all above cases. fees. should be reversed if the same is not realised. NPA due to temporary deficiencies in Accounts In case of cash credit accounts. ASSET CLASSIFICATION Standard AssetsStandard assets are those. Other points on NPA classification Consortium advances: In case of consortium advances. This will apply to Government guaranteed accounts also. NPA classification borrower wise and not facility wise: In case any one of the facilities sanctioned to a borrower is classified as NPA. which are regular in payment of interest and Installments due as per sanction. commission and similar income that have accrued should cease to accrue in the current period and should be reversed with respect to past periods.months would bedeemed as irregular. 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. 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. Reversal of income If any advance. Loss Assets SUB-STANDARD A sub standard asset is one.00%. i. in case of which certain safeguards such as escrow accounts are available will attract an additional provision of 5% only.based on the period for which the asset has remained nonperforming and the realisability of the dues: i. 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.e. the account can be straight away classified as doubtful. Substandard Assets ii. 231 | P a g e . 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. Doubtful Assets iii. Where the realizable value of the security is less than 10 % of the outstanding of the borrowal account. are practically zero or less than 10% of the outstanding amount.e a total of 20% as against the existing 25%. personal worth etc. Provisioning Requirement on Standard Assets Agriculture & SME where it is 0. 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. LOSS ASSETS Assets which are classified as Loss by the Bank‗s Internal/External Auditors or where securities. In case of accounts where there is a significant erosion in the value of security i.25% Commercial Real estate(CRE) 1. (For the Accounts falling above ZOCC. the same may be referred to the competent authority. Commercial Real Estate – Residential Housing Sector (CRE – RH) 0. Accelerated provisioning Asset Classification Period as NPA Asset Period as NPA Current provisioning Revised Classification (%) accelerated Provisioning (%) Sub.40% 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. falling upto his lending powers. the account falls. not below the ROCC can authorise sale of such assets in accounts. Banks will be subjected to accelerated provisioning for these accounts and / or other supervisory actions as deemed appropriate by RBI. Another bank or Financial Institution may also approach for sale of assets commonly charged to them and us. In case the account exposure is beyond his powers. 232 | P a g e . borrowers approach the bank to allow them to sell the assets charged to the bank and deposit the proceeds in the borrowal accounts with the bank.standard Up to 6 months 15 No Change (secured) 6 months to 1 year 15 25 Sub-standard Up to 6 months 25 (other than (unsecured abinitio) infrastructure loans) 25 20 (infrastructure loans) 6 months to 1 year 25 (other than infrastructure 40 loans) 20 (infrastructure loans) Doubtful I 2nd year 25 (secured portion) 40 (secured portion) 100 (unsecured 100 (unsecured portion) portion) Doubtful II 3rd & 4th year 40 (secured 100 for both portion) secured and 100 (unsecured unsecured portion) portions 5th year Doubtful I 100 100 onwards DISPOSAL OF ASSETS IN NPA/ PWO ACCOUNTS : Many times. as per norms. under whose powers.75% Teaser home loans 2% Povision required on all other standard advances except above: 0. In such cases. The account classified as NPA as on 31st March. over and above the level prescribed in IRAC norms of RBI. Date of launching: 11th December 2015 B. 25 lakh and presently outstanding as on 31-11-2015. A. Branches also can use the platform of „Lok Adalat‟ for recovery. Before authorizing sale of current assets. In respect of movable machinery. Written off account.50 Lakh 4.00 Lakh 233 | P a g e . fair market value should be ascertained or valuation should be done before authorising sale of assets (valuation of the lending FI may be considered for approval if done by an Government/ Wealth tax approved valuer). it is termed as Floating Provision. Special power for the Branches Heads in the JMG/S-1. Floating provisions means. Provision Coverage Ratio:Provision coverage ratio is the ratio of provisions to gross NPA and indicates the extent of funds. 25 lakh per borrower. In respect of fixed assets. It is also called as ―Loan Loss Coverage Ratio‗. which is mandatory as per RBI to maintain at least 70% of its Gross NPA.Books dues/ written off amount up to and inclusive of Rs. MMG/S-2 and MMG/S-3 for sacrifice in respect of compromise proposal under the scheme is given as under: Authority As per Recovery Policy Power Revised Power under Sankalp -8 scheme JMG/S-1 0. This ceiling has been withdrawn now.may be considered by Executive Director). Floating provisions can be treated as a part of the Tier II capital within the overall ceiling of 1. provision not against any particular account but on the entire portfolio of advances or investments. Amount Covered . a lender keeps aside to cover loan losses. Validity of the scheme: upto 31st March 2016 C. valuation of such assets should be conducted by bank‗s (or other bank‗s/ FI‗s Valuer) approved valuer. The sanctioning authorities should ensure that the amount to be deposited in the borrowal accounts consequent upon such authorization of sale of assets should generally not be lower/less than the fair Market value of the asset being allowed to be disposed off (Fair Market Value and not the Distress Value).. a fair value of such assets should be ascertained.25 % of the total risk weighted assets. Alternatively it can be netted from the gross npas to reach at disclosure of Net NPAs. 2014 and classified as doubtful or loss as on 31-03-2015 with outstanding upto & inclusive of Rs. SANKALP – 8 SALIENT FEATURES: (BCC:BR:107:616 dated 11-12-2015): Bank has launched SANKALP – 8 Scheme for recovery in smaller accounts by Recovery and Compromises. 25 lakh and presently outstanding as on 30-11-2015. Floating Provision: If any institution makes additional provision. All the PWO/ TWO and written off accounts as on 31-03-2015 with outstanding balance upto & inclusive of Rs. Floating provisions once made can not be reversed back to Profit & Loss Account. 2012. This is to be considered by the Regional Authority after satisfying the needs for reschedulement. of India. Reschedulement: 1. converting irregular portion into WCDL/WCTL. fresh/additional loans. no increase in our exposure. All Standard. 2. II.50 lacs will be monitored by the Regional Committee & above Rs. Sub Standard and doubtful accounts can be considered for reschedulement. no change in the nature of credit facility/ies. rephasement of loan installments.00 Lakh 6. considering FITL. All Senior Branch Managers and Sr. Restructuring: Restructuring can be considered in following ways: (1) Changing existing repayment period of the debt. (2) Changing outstanding exposure of the bank (3) Changing the nature and quantum of existing credit facilities (4) Sanctioning of fresh credit facility or additional facility Thus restructuring involves. as under: I.00 Lakh 10. The silent features of the above policy are.00 Lakh MMG/S-3 6. 4.10. 5. Pure write off without Cash Recovery by compromise settlement is not considered in this scheme. 234 | P a g e . Accordingly policy for Recovery in Fraud accounts has been approved by our Board of Directors in the meeting held on 21. Committee at Zonal/ Regional Level: In compliance with the Govt. of India guidelines it is envisaged that fraud accounts will be monitored by a separate committee at the Zonal and Regional level for the purpose of maximizing the recovery in shortest period and reducing the loss to the Bank. 3.00 Lakh Details note and important action are given in the circular. Under reschedulement pattern of debt repayment obligation will be changed from EMI to ballooning or descending schedule. Amount involved: The fraud cases involving amount up to Rs.MMG/S-2 1. In reschedulement no change in repayment period. waiver of penal interest. no sanction of additional /fresh limit even within the existing exposure.50 lacs by the Zonal Committee. Manager (Credit) can consider for a period of six months in case of proposal falling under their powers. Recovery in Fraud Accounts: Bank has framed a policy for Recovery in Fraud accounts (Advances) pursuant to the instructions from the Govt. working capital limits. Rephasement: Rescheduling with increase in repayment period. Three tier structure:CDR is a non-statutory mechanism consisting three tier viz: CDR Standing forum and its core group CDR Empowered Group CDR Cell CDR Core Group is carved out of the CDR Standing Forum to assist the Standing Forum in convening the meetings and taking decisions relating to policy. CDR Standing Forum and the CDR Empowered Group are assisted by a CDR Cell in all their functions. etc. outside purview of BIFR/DRT/other legal proceedings. by calling for proposed rehabilitation plan and other information and puts up the matter before the CDR Empowered Group. 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. within the ambit of guidelines. The CDR Cell makes the initial scrutiny of the proposals received from borrowers/lenders. 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. 235 | P a g e . 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. on behalf of Standing Forum. 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. either at the time of original loan documentation or at the time of reference to CDR Cell. Eligibility:Multiple banking/syndication/consortium O/s exposure Rs. Legal Basis of CDR CDR is a not statutory mechanism. Suit filed cases – Consent by minimum of 75% of the creditors (by value) and 60% creditors (by number) for such restructuring is required.Corporate Debt Restructuring: Objective The objective of CDR is to ensure timely and transparent mechanism for restructuring the corporate debts of viable entities facing problems. for the benefit of all concerned. 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. Convergence in the methodology for computation of economic sacrifice among banks and financial institutions (FIs). It is a cheap method of enforcing recovery. decision making more equitable. Reserve Bank‗s role limited to providing broad guidelines for CDR mechanism. Disclosures in the balance sheet to be enhanced for providing greater transparency.Revised Guidelines on Corporate Debt Restructuring Based on the recommendations made by the Special Group constituted in September 2004 to review the corporate debt restructuring (CDR) scheme and also the feedback received on the revised draft guidelines circulated amongst banks for comments. It is the version of a small court set up to settle the recovery disputes of borrowers. other than those involving frauds or diversion of funds with malafide intentions. Regulatory concession in asset classification and provisioning to be restricted to the first restructuring where the package also has to meet norms relating to turn-around period and minimum sacrifice and funds infusion by promoters. Non-SLR instruments acquired while funding interest or in lieu of outstanding principal to be subjected to regulatory treatment and valuation. A spot settlement of recovery is made after hearing the case of bank and borrower and the underlying securities. This discount rate may be used to discount both the prestructuring cash flows as well as post restructuring cash flows. is required. Additional finance requirement by both term lenders and working capital lenders. the support of 60 per cent of creditors by number in addition to the support of 75 per cent of creditors by value. 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. Lok Adalat can: 236 | P a g e . the scheme has been modified as below: The coverage of the scheme has been extended to include entities with outstanding exposure of Rs.10 crore or more. One time settlement to be allowed as a part of the CDR mechanism to make the exit option more flexible. 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. to be shared on pro-rata basis. The core group to be given the discretion in dealing with willful defaulters in cases. 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. 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. 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. With a view to making. Accounts where frauds have been reported. Demand Loan. 5.The borrower under such circumstances opens a current account with another bank and routes all sales proceeds through that account. Prudential Write off of the following accounts should not be done – 1. The ceiling amount for coverage under Lok Adalat is Rs. Staff accounts (if any) and staff related / guaranteed accounts.C. amount held in Suit Filed Sundry Deposit account etc. Along with TOD in current account / SB account. 8. amount held in Suit Filed Sundry Deposit account etc. 3. the bank can consider allowing operations. As a consequence the bank not only fails to recover its legitimate dues but also faces the problem of erosion of security. 6. 237 | P a g e . The decrees by Lok Adalats are as good as a decree passed by civil court and are binding on the parties. 7. 2. Advantages of Lok Adalats There is no court fee involved when fresh disputes are referred to it. the parties can continue with court proceedings. Mumbai. (except tangible security available) in the accounts of the bank. DICGC / ECGC claim received. which are in Doubtful and Loss category. It can take cognizance of any existing suit in the court as well as look into and adjudicate upon fresh disputes. (unless the TOD / BOBCARD TOD is recovered). 4. A decision on PWO will always be taken by Corporate Centre. BOBCARD TOD etc. Interest Suspense. A borrower‗s account may have become NPA due to un-serviced interest. All NPA accounts. Loss asset with 100 % cover by way of Provision. Doubtful 3 categories and is covered by 85 % or more by Provision. wages. No appeal lies against the decree passed by Lok Adalats as the matters are settled through negotiation and mutual consent of the parties. Call for any Public Documents from any Public office or court. 5. excess allowed to meet statutory dues. 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. 1. Any credit coming into the account will be appropriated completely towards the over-dues. 3. DICGC / ECGC claim received. insurance premium etc. Take evidence. Or reduction in drawing power. Quick mortality accounts (NPA within one year of sanction / disbursement) 4. If no settlement is arrived at. 2.1. TODs in current account and BOBCARD TODs and adhoc / one time BP/BD. 2. Interest Suspense. both suit filed and others. Cut Back Arrangement: 1. Under this circumstance. 20 lacs. 2. devolvement. Advances accounts such as Cash Credit. till a revival package is prepared and sanctioned or an acceptable compromise proposal is submitted by the borrower. can be included for reference to the Lok Adalats. Mumbai. Cases pertaining to Non-compoundable offence / offences are not taken up by Lok Adalat. L. Term Loan etc. on merits. Therefore. where an application or an appeal is expected to be made or has been made by the borrower / guarantor against the Bank‗s SARFAESI action under the provisions of SARFAESI Act. When SARFAESI Notice can be given– To cover consortium a/cs Wherever we are leader in consortium. ranging from 5 to 10% (or more) of the credits in the account to reduce/wipe-out the excess/overdues in the account. the same shall be retransferred by ARMB to the original base branch. NPA accounts referred to BIFR/AAIFR shall not be transferred to ARMBs. Restructuring / CDR is done for possible revival of the unit and in such accounts recovery action is deferred. How ever after issuance of notice. b.e. suitable proposal be submitted to competent authority. All prudentially/Technically written off accounts wherein amount involved is Rs. 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.lacs or more.up to sanctioned amount or outstanding with a suitable cut-back. 3. 238 | P a g 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. 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. When SARFAESI Notice can be given – To cover restructured a/cs.100/. say. For consortium advances the notice must contain dues of all Banks and details of secured assets charged to Other Lenders. notice must contain dues and details of Secured Assets. 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. All NPA accounts invariably suit filled involving Rs.100/. After failure of CDR / restructuring.lacs or more. In case any account is transferred to ARMB and subsequently the account becomes a BIFR case. Criteria for transferring NPA Accounts to ARMB: Following NPA and write off accounts can be transferred to ARMBs: a. 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. This change enables the banks to secure the asset(s) in part fulfillment or full and final fulfillment of the defaulted loan. Regional Heads may appoint Recovery Agent in NPA accounts in Sub-Standard category (irrespective of the age) with outstanding upto Rs 25. 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. 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. and such conversion shall always be deemed as valid.Validity period of caveat application filed with DRT / Civil Court / High Court is -90-days.00 lacs.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. If the sale of such asset is postponed due to lack of a bid at the reserve price. AO has to visit the prperty to ascertain whether it is tenanted or not. This will facilitate the smooth running of the business. sale of secured assets with symbolic possession. as such Bank has to proceed for taking possession of the secured assets keeping in mind the validity time of the caveat. However. on “As is where is and 239 | P a g e . Conversion of debt into equity: The Act allows for converting any part of debt into equity shares of a borrower company. Branches should take prior permission from controlling offices before bidding for such immovable property. 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. If sale with symbolic possession is proposed by the Authorised Officers.Cum. 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. after obtaining prior Authority of the Regional Manager. 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. as the banks were not able to find appropriate buyers to buy for these secured assets. on case to case basis: Authorised officer may consider on selective basis. Adjudication of tenancy rights of lessee) in SARFAESI Before filing the prescribed afidavit with DM/CMM seeking permission to take physical possession. Regional Heads may appoint Recovery. & Zonal heads up to Rs 100 lacs. the Sale Notice issued by the Bank should contain explicit statement that the sale/auction is proposed on the basis of “Symbolic Possession”. Reply to representation of borrower / guarantor: Bank or raises any objection. Once the implementation of rehabilitation package is finalized during the first six months such hand holding operations are stiupulated/permitted. 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. if any. an agreement to be entered into with the Borrower/Guarantor. 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. clear 30 (thirty) days‟ Notice to be given to the Borrower/Guarantor. including the Mortgagor (as per annexure II of this circular). and the buyer should ascertain the status of the statutory dues and other encumbrances.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 c)The Authorised Offficer should prepare Minutes recording proceedings of sale by public auction/tenders including reasons for failure of the public auction. Modification in the guidelines given in the Recovery Policy for appointment of Enforcement/ recovery Agency for the purpose of Repossession/ Seizing the vehicles in Retail Vehicle Loan (BCC:BR:108:20 dated 12-01-2016): Bank has approved the modification in the guidelines given in the Recovery Policy so as to cover Repossession/ Seizing the vehicles in Retail Vehicle Loan even before the account become NPA by 240 | P a g e . at the earliest. including the Mortgagor (as per annexure I of this circular) f) In all the cases of sale by Private Treaty. by quoting the captioned judgment given by the Hon‟ble Supreme Court. with a prayer for rejection/dismissal of the SA/Appeal for the above reason. Decision of the Supreme Court of India on SARFAESI proceedings – SA/ Appeal under Section 17 of the SARFAESI Act is available to the borrower/Guarantor only after losing the possession of the secured Assets – Standard Chartered Bank Vs.and reasons for going ahead with sale through Private Treaty.As is What is Basis”. e)In all cases of sale by Private Treaty. d)Reserve Price for Private Treaty should not be less than the Reserve Price fixed for the last auction conducted. then appropriate application may be filed in consultation with dealing advocate. Nobel Kumar & others (BCC:BR:107:413 dated 27-08-2015: Banks has advised to ROs/Branches may scan the SA/Appeals pending u/s 17 of the SARFAESI Act and if any case is falling under above category. 2 valuation report from approved valuers to be obtained and average of 2 valuation to be taken into consideration to arrive at Reserve Price. the Hon‘ble High Court of Madras rejected the challenge. 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. 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. value of which is more than Rs. wherein the Hon‘ble Supreme Court upheld the constitutionality of the amended section 2 (1) (o). A Committee consisting of the Authorized Officer and Two officers of the concerned Branch may fix the Reserve Price. For movable secured assets the Authorized Officer to obtain the estimated value and fix the Reserve Price. 3.. fresh valuation from 3rd Approved valuer to be obtained and Reserve Price to be fixed accordingly by the below mentioned committee. The appeals of the CREDITORS are allowed. based on the Realizable Value. 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. A committee consisting of authorized officer and two officers may fix the Reserve Price. It is the constitutionality of the amended section 2 (1) (o) which was the subject matter of dispute before the Hon‘ble Surpeme Court of India in Re Keshavlal Khemchand & Sons v. Union of India & Ors.appointment Enforcement/ recovery BCC:BR:108:20 dated 12-01-2016. For immovable secured assets the authorized officer to obtain valuation from an Approved Valuer and fix the Reserve price. 2. Bank has authorized adoption of the following procedure – 1. 241 | P a g e . In this regard. 2002. 2002 and to maximize recovery by describing the procedure for reduction of Reserve Price. 2002. For detailed Guidelines refer to Constitutional validity of Section 2 (1) (o) of SARFAESI Act. 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. 2002 – upheld by Hon‟ble Supreme Court (BCC:BR:107/85 dated 21/02/2015): Section 2(1)(o) of the SARFAESI Act.‖ All the branches are advised to bring to the notice of our panel Advocates the judgment of the Hon‘ble Supreme Court upholding the validity of the amended section 2 (1) (o) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. In respect of Secured Assets. 5 crore. Agency. In case variation in 2 valuation is more than 25%. while the Hon‘ble High Court of Gujarat has taken a stand that the amended section 2 (1) (o) is unconstitutional. 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. Recovery in suit filed/decreed accounts shall be appropriated first towards legal charges/expenses awarded by the court. Branch should use only the menu ―NPATM‖ at the time of recovery. then the committee headed by the Regional Manager and consisting of the Deputy Regional Manager. 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.LOAN ACCOUNTS: For effecting recovery received in NPA LOAN accounts.. official attached to Regional Recovery Dept.4.e. Stock Audit Charges. Further if recovery is received by way of clearing cheque.TM. In respect of NPA accounts. Towards recovery of expenses. Appropriation of Recoveries in NPA accounts. If bids are not received at Reserved Price fixed in 1st auction. HCASHDEP. The expenses incurred shall be debited to the Bank„s Profit and Loss account and record of the same shall be maintained. 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. Towards unapplied interest. for direct credit to loan account. For NPA CC/OD accounts etc. 242 | P a g e . and authorized officer may reduce the Reserve Price as per table here: Number of Auctions I II III Percentage of reduction vis-à-vis the last auction 10 20 25 Reserve Price However. Assets Valuation charges. i) ii) iii) Towards reduction in Book Dues. Branches should continue to use the existing options i. The reversal of unrealized interest if any will be handled through monthly batch job and Branches need not do any such reversal manually. Security Charges etc. there after interest due and finally principal amount. the reserve price should not be below the distress value. HXFER etc. which are not operated. Insurance Charges. the above mentioned charges shall not be debited to the accounts. In respect of existing NPAs where suit is not filed. 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. recoveries effected in the account ( Including recovery under Pubic Money Recovery Act ) from time to time shall be appropriated in the following manner.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 . 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‘.Compliance of Foreign Exchange Management Act 1999(BCC: LCB: DFB: 108 / 15 dated 22-02-2016): According to Reserve Bank of India circular No. (DIR Series) 88 dated 12.03. Central Bureau of Investigation. 243 | P a g e .2013 regarding simplifying and liberalizing the procedure for write-off of unrealized export bills.2013 and our circular No. GR/ SDF forms which are under investigation by agencies like Enforcement Directorate. 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.03. etc as also the outstanding bills which are subject matter of civil /criminal suit. Directorate of Revenue Intelligence. “Write –off” of unrealized export bills. b. Exports made to countries with externalization problem i. the following would not qualify for the ―write-off‖ facility: a. A. BCC: WB: DFB: 105/20 dated 14.e.P. Rs 50 Lac d. A cash credit account will be treated as irregular if stock statement has not been obtained for more than a)Three months b)90 days c) 180 days d) Three months+ 90 days 244 | P a g e . 60 days d. If balance outstanding in the account is more than Rs 1 lac b. Special Mention account is a category which would fall between the following a)Substandard and Doubtful category. d. Rs 5 lacs 7. against the order passed by DRT is ___________ days. 14 days 3. d) Loss account and written off account. a. 4. contractual dues in the account are more than Rs 1 lac c. An action under SARFAESI ACT can be initiated in case of following: a. In case of unsecured exposures in substandard category the provision to be made is ______% of the total exposure (a) 10 (b) 25 (c) 12. 15 days e. c) Doubtful and Loss category. 60 days d. 90 days e.100 days 5. An account will be classified as substandard if it remains NPA for a period not exceeding ________ months (a) 18 (b) 12 (c) 24 (d) 6 9. Rs 10 Lac b. The Demand Notice under SARFAESI ACT must be issued at least for a period of __________ days. No such ceiling. No ceiling e. a. 07 days c.Multiple Choice Questions Questions 1. If we have to refer the account to Lok Adalat the total dues should not exceed a. Rs 20 Lac d. Rs 50 Lac c. Maximum period within which an appeal can be filed in DRAT. Submission of CIBIL data is done through______ a) ASCROM system b) Finacle c) a&b d) None e) Cloret 2. If the balance in the account is RS 50000 and above. Accounts where total dues are of Rs __________ and above are referred to DRT a. 45 days b. 6. Rs 10 Lac c. b) Standard and sub-standard category. Rs 100 lacs. Rs 20 Lac e. 30 days b.5 (d) 100 (e) 50 8. 30 days c. Rs 5 Lac b. 10. identify and nurture talent.Human Resource Management Bank of Baroda has the tradition of continuous enrichment of its human assets so that they deliver value to the business. To create a performance-driven culture and an exciting workplace for the employees To create a pool of entrepreneurial managers and business leaders for future. the Bank has launched various innovative employee centric initiatives and has also undertaken revamp of key systems and practices. 245 | P a g e . To inculcate a strong and effective sales and service culture across levels in the organization in order to generate strong stakeholder affiliation. and to re-skill the workforce to operate in digitally enabled modern core banking environment. In the ongoing Business Transformation Programme. To create a learning organization for employees‘ intellectual growth and creativity. HR Objectives To initiate & institutionalize globally competitive HR practices in the Bank in our pursuit to become a Bank of international standards and to become an employer of preferred choice: To put in place relevant HRD strategies and use modern methodologies to undertake organizational renewal. our people play a vital role and are one of the key business enablers. bring about marked changes in the mindset of employees at all levels so as to enhance HR Quality. Under its plan of organizational transformation through people processes and systems. collaboration & confrontation.Zonal & Regional level Operational Leadership .e. branch The two vital Human Resource sub-systems i.. autonomy etc.Corporate level Business Leadership .Business unit level i. Positive Attitude & Right Mindset is created among people. people in the organization are facilitated to give their best output (performance). Through proper Communication Medium and an Organizational Culture of sharing. These create proper Employee Motivation. which imparts proper Knowledge and enhances Learning among people (functional. 246 | P a g e .e. openness. A very strong Organizational Leadership at different levels forms the key link in the Model. These are: Strategic Leadership . behavioral etc) so that their Competence increases and their potential could be properly leveraged for greater Individual and Organizational Effectiveness. which ultimately facilitates Goal Achievement. 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.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. Through proper developmental inputs. The Model is adequately supported by a suitable Learning Platform. Treasury / Dealing. Ensure complete control. Promotion and selection policies Bank has formulated and put in place well documented and comprehensive deployment. for grooming of Branch heads. Cost effective HR administration. It comprises of four broad modules encompassing different functions: Oracle Core HR Module. 247 | P a g e . Harnessing the power of workflow to speed up HR processes "HRNes" covers the entire gamut of human resources management function in the Bank currently being performed and also includes many new sub-functions. perks. payments of various benefits. terminal benefits. HRNes (Human Resource Network for Employee Services) To take full advantage of technology for enhancing operational efficiency in HR Processes. covering all current HR processes in the Bank. Bank has introduced a comprehensive web-enabled Human Resources Management System called ‗HRnes‘ (Human Resource Network for Employee Services).HR Initiatives People oriented Deployment. Fluous Payroll Module. Mgmt & monitoring of HR data on near real time basis. welfare schemes. promotion and selection policies oriented towards identifying the best talent and providing opportunities for fast-track growth and development. Objectives: To facilitate bringing technology in HR and thereby brining benefits of technology such as reduction in cost and time by eliminating routine tasks and improving operational efficiency of HR Processes by creating central database and online applications. etc. Some of the prominent HR policies put in place are: HR Resourcing policy Promotion policy for officers Transfer policy for officers Promotion policies for clerical and subordinate cadre Overseas selection policy Talent identification & grooming programmes Various programmes are being run by the Bank for grooming of officers in specialized areas of Credit. Wealth Management. Forex.. . Providing employee Self Service/manager Self Service/Facility for online communications Bring about transparency in HR operations across the organization.centralized payroll. Employee Self-Service Module. etc. To plug the revenue leakage. Self Appraisal by the individual employee (This is optional) 2. The new system enables a holistic approach to the issue of managing performance and does not limit to only an appraisal. Second and Final Review by Final Reviewing Authority (FRA) 248 | P a g e . First review by Reviewing Authority (RA) 3. especially with regard to evaluation of different parameters and marking systems. Govt. feedback and development. APAR (Annual Performance Appraisal Review) In terms of Ministry of Finance. It is 3 tiered performance appraisal system: 1. It starts from performance planning and Goal-setting and takes it forward into performance review discussions. Following Annual Performance Appraisal Report (APAR) formats have now been mandated for the performance assessment of the officers: 1. 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. highly objective and fully transparent. APAR for officers in S-I to S-VI (Budgetary) 2. Various E-Learning modules are gradually being put on the system for employees to avail of and undergo these courses. Oracle Learning Management Module which includes training administration & e-learning. Bank devised a Performance Appraisal System for Award Staff (PASAS). The new system is business-linked. APAR for officers in S-I to S-VI (Non-budgetary) 3. of India advice. with individuals owning and managing their own performance themselves. 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. Keeping in view its importance and criticality to various employee development initiatives. Employee performance management system A new Performance Management system has been formulated and implemented for all officers. Under Project SPARSH. identify training and developmental needs. structures and policies and to create an integrated HR framework. has been undertaken by Bank engaging services of ―The Boston Consulting Group (BCG) to revamp our HR processes. To identify Training needs Uses and Advantages of Performance Appraisal System for Award Staff: To To To To To To To generate a performance oriented culture.Human Touch for Business Excellence Project SPARSH a focused HR project.The Broad Objectives of the Performance appraisal system are: To promote a performance oriented culture To identify good performers and talent amongst employees To improve upon strengths To identify employees for proper placements To match job roles of individuals during job rotation exercise for effective utilization of aptitude and potential. provide feedback to the employee to help achieve better performance in future. bank has covered: Manpower Training and development Incentives to staff Talent management and Performance management. identify exceptional talents for special assignments. identify high performers and groom them for higher order roles. identify factors that hinders performance and reduces them as far as possible. facilitate comprehensive data base on information about award staff. A few of the initiatives taken by bank under the project SPARSH: 249 | P a g e . The Performance Appraisal System for Award Staff shall cover: All clerical staff (including those having combined designations and also all those drawing any Special Pay) All full-time subordinate staff (including staff having combined designations or drawing any Special Pay) The performance appraisal shall be 3-tiered: Self Appraisal by the individual employee (This is optional) First review by Reviewing Authority (RA) Second and Final Review by Final Reviewing Authority (FRA) Project Sparsh. leadership. Role-change programmes and executive development programmes Executive Development programmes are being regularly conducted for newly promoted senior and top management people in conjunction with leading Business schools like ISB. team work. National Institute of Bank Management. etc. Streamlined Induction schedule for all new joinees Bank has put in place a well-defined and properly structured induction programme.com) Idea channels for eliciting new ideas from employees with structured rewards provisions for the best ideas. far sighted and proactive step taken by bank to ensure that our employees can lead happy and satisfied work life through personal counseling for psychological care from trained and experienced clinical psychologist. Gurgaon. The Scheme is applicable to all employees. besides ways on how to cope with the challenges of the new role better. Pune. Role change programmes are being conducted for newly promoted employees at Bank's internal training establishments which give them inputs on behavioral issues. With this objective in mind. It is a progressive. etc. Paramarsh Our bank‘s vision envisages providing not only a healthy work-life but also a satisfying personal and social life to our employees. In the context of technology driven business. Hyderabad. Customer Service and its effectiveness. Paramarsh Centre at BCC have started personal counseling for employees for providing psychological assistance and guidance to overcome their stress. 250 | P a g e . soft skills. which is imparted through a mix of classroom and on-the-job training. MDl. The objective of the Scheme is to encourage the ideation process amongst staff members to offer innovative suggestions which are in tune with Bank‗s priorities and concerns. phase-wise for different batches of directly recruited officers. complexities and conflicts in order to lead a better life. campus recruitees and newly recruited clerks.Inauguration of HR shared services pilot back office at Baroda (HRCPC) Bank‘s career portal On-boarding scheme for newly recruited officers Employee‘s survey Baroda Academy Baroda Sujhav (ideaonline@bankofbaroda. Staff Suggestion Scheme has been titled as ―Baroda Sujhav. It conducts a dedicated one year diploma program for training students in various areas of Banking and Finance. for existing as well as for retired Bank of Baroda employees: Insurance policy for existing employees Insurance policy for retired employees Baroda Manipal School of Banking Bank of Baroda has entered into an MOU with Manipal Education and opened ―Baroda Manipal School of Banking‖. Participants are put through on. the students are awarded a post graduate diploma in Banking and Finance from Manipal University and are absorbed in the Bank as Probationary Officers. The thrust of the training is to impart functional as well as specialized knowledge on Banking and related subjects. The campus is at Bangalore.co. Training at the school is supplemented with practical training at branches of Bank of Baroda through a focused 3 . SEED (Self Efficiency and Effectiveness Development) programme being run for frontline staff of the Bank in order to improve their service skills and servicing efficiency. On successful completion of the course. The application can be installed on android phone using the following link: http://barodaeacademy. Mobile Snippets: For sharing industry related and bank specific information with employees. Employees Group Health Insurance Bank has two separate Employees Group Health Insurance policies with United India Insurance Company Ltd. There are nine Sections in Mobile Snippets: 251 | P a g e . fully trained and ready to deliver from the first day itself. Bank has launched an application ―Mobile Snippets‖ for android phone users.in//install/ The application is available on Google Play Store also.Grooming and etiquettes programmes Grooming and etiquettes programmes are being conducted for front-line employees and also for employees selected for overseas posting in order to improve their service levels and qualitative interaction with customers and various stakeholders better.campus curriculum spread over 9 months (divided into 3 semesters of 3 months each).bankofbaroda.months internship. 8.2016.‖ The survey was through online link in HRnes-HRMS under the Employee Self Service. News – Collection of important banking news published in various newspapers 2. it is imperative that our team is truly energized and fully engaged. 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. b. Message of MD & CEO on the subject: ―As we march forward to realize our aspirations and dreams to take our Bank to further heights. Announcements – Announcements in respect of future events. zones and central office 3. VOICE OF BARODIANS ―Employee Engagement Survey-2016‖ was launched on 22. 6. Each member of the Barodian family makes a difference and plays a unique role in our quest to achieve business excellence and customer delight. Publications – Various publications from Apex Academy. a global leader in human resource consulting solutions.Gist of important RBI circulars fortnightly/ monthly basis. etc. And also that the 252 | P a g e . BoB Circulars – Gist of important BoB circulars on fortnightly/ monthly basis.02. which will help us. the Bank seeks to understand your perspective. are automatically registered in the system.Image upload – Users may upload image at their end for including in Events section c. perceptions and opinions on a wide range of matters that impact you such as Job Role. The survey was for the purpose of identity authentication. Events – Photographs along with description in respect of important events that took place in branches. Recognition. 4. Marketing etc. define the HR transformation journey for the Bank. Rewards. regions. for conducting Employee Engagement Survey 2016. e-Library – Power Point presentations and quiz on important topics for creating awareness. All the staff members who have their mail address in HRNES entered. Towards this endeavor. thoughts. 7. The Bank has partnered with Aon Hewitt.1. Response to the questionnaire was directly sent to Aon Hewitt with full anonymity and it was assured that responses would remain completely confidential to feel free to air individual‘s thoughts. Messages – Video messages from higher authorities/ video of any event. RBI Circulars . a. Working Conditions. Performance Appraisal. 9. Vigilance. 5.Video Upload-Users may upload important even for sharing with all users.. The feedback would be collated by Aon Hewitt and will be shared with the Bank‘s leadership team on a consolidated basis.Feedback – Users may provide feedback. E-learning course .“Code of Conduct for Officers” Baroda NetAcademy launched a course on ‗Code of Conduct for Officers‘. 253 | P a g e . Facility of printing a Certificate on completion of the course.information obtained from this study will be used to shape the organization‘s HR policies and programs going forward.45 minutes approx The course might be stopped at any time in between and learner could start it again from that point It got quizzes during the course and self assessment of 10 MCQs at the end Learner has to score 100% in the self assessment to complete the course. The course aimed to familiarize all officers with various guidelines of code of conduct policy for officers of our Bank. Salient features of the course: Duration of the course . i. Repayment of loan already availed from any other Bank / HFCs and /or other sources. age of the borrower plus repayment period should not be beyond retirement age. Maximum age can be considered upto 70 years. subject to construction thereon within 3 years or upto the period allowed by Development Authority (whichever is earlier) from the date of purchase of plot. Loan for purchase / construction of second house can be considered who secure HL-1 to HL – 3 risks rating under home loan rating model. [Reimbursement of cost of plot is not admissible under the scheme ] ELIGIBILITY: All individuals singly or jointly Principal applicant must be employed minimum for three (03) years.18 yrs Maximum age: Salaried Persons: Maximum age is 70 years. 254 | P a g e .Retail Loan products of our Bank at a glance 1. Purchase of plot of land. A suitable undertaking to be obtained from borrower to construct the house within further period of maximum 2 years without attracting commercial ROI.e. Minimum Age – Principal Borrower – 21 yrs and Co-borrower . with sufficient income for servicing the loan repayment joins as coborrower/Guarantor (OR) (ii) if borrower pledges FDRs / NSCs / Govt. subject to the condition that 40% of the pension is sufficient to pay EMI. Provided: (i) Son/ Daughter/ Spouse who is a legal heir and preferably below 50 years of age. 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). BARODA HOME LOAN PURPOSE: Purchasing of new residential house / flat and construction of new dwelling unit. Security etc. In case EMI exceeds 40% of the pension. also in case of salaried persons drawing pension. the age by which the Loan should be fully repaid. Beyond 25 years Regional Head permission required subject to ascertaining structural soundness / residual life of the building (5 yrs more than the repayment period). 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. If borrower could not construct house within above mentioned stipulated period due to circumstances beyond his/her control or genuine difficulties.. Zonal Authority is authorized to waive the commercial ROI on case to case basis . For houses / flats constructed / purchased (not prior to 24 months) from own sources. Purchase of old dwelling unit (not more than 25 years old). subject to availability of sufficient regular and continuous source of income for servicing the loan repayment. 300/. 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 Co-Borrower/Guarantor. i. If not fulfilling the above criteria (i) or (ii).000/= More than Rs.Lacs for Urban & Metro branches Rs. 100/.Others (Non-salaried/self-employed/professionals/agriculturists etc.): Maximum age is 70 years. 1 lac More than Rs. Total amount of the loan sanctioned including that for extension should not Exceed Rs 300/Lacs for Urban & Metro branches and Rs100/. (OR) (ii) if borrower pledges FDRs / NSCs / Govt.e. age of the borrower plus repayment period should not exceed 65 years Housing Loan to HUF is not to be considered as it is not meant for family business of HUF.Lacs for Rural & Semi-Urban branches For extension: Rs 10/. the age by which the Loan should be fully repaid. LIMIT: Maximum Amount of Loan Rs.Lacs for Rural & Semi-Urban branches. 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 255 | P a g e .000/ Salaried and up to Rs. 20. 20. INCOME CRITERIA: SOURCE INCOME Up to Rs. of adequate value to ensure continuity of income for repayment of loan installment with interest if sanctioning authority is satisfied about the same.Lacs. subject to availability of sufficient regular and continuous source of income for servicing the loan repayment. Security etc. registration charges. including moratorium period Maximum moratorium shall be -36. REPAYMENT: Maximum repayment period is -30. thereafter -6.000/. in the cost of house property should not be included to calculate margin.Lacs 75% Loans upto Rs. 50.000/.months as under: o 18.40.30/.and up to Rs.months moratorium period for under construction Houses and Building upto 7th floor. 12 lacs 60% 70% LOAN TO VALUE (LTV) and MARGIN Margin (%) LTV ratio (%) 10% 90% Loans above Rs.years.000/- 40% 50% Rs. However. 12 lacs Rs.months additional moratorium per floor subject to maximum of - 256 | P a g e . 20. other documentation charges and other expenses like Life Insurance premium etc.Lacs 25% Stamp duty.75/. where cost of the house/ dwelling unit does not exceed Rs.75/.REPAYING CAPACITY: (i) Total deductions including proposed EMI should be as below : In case of Salaried Persons : Monthly Income (Bracket) Total Deductions not to exceed ( including proposed EMI ) Up to Rs. 2.Lacs 80% Loans above Rs. registration and other documentation charges to the cost of the house/ dwelling unit for the purpose of calculating LTV Ratio & margin. 20. branches may add stamp duty.30/.000/Rs.40. 50. 2.000/ Rs.Lacs upto 20% Rs.and up to Rs.10 Lacs.000/- 60% (ii)In case of Others : Annual Income Total Deductions not to exceed ( including proposed EMI ) 50% Up to Rs. 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. internet banking facility. The in-principle‟ approval shall be valid for -4. 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 „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.months Or One month after completion of house/ taking possession of flat/house. The Home Loan account may continue in the existing scheme code itself.+ ST will be 257 | P a g e . Consequently. mobile banking facility etc. The borrower will remit the Equated Monthly Installments (EMIs) into the linked SB account.36.10. ATM cum debit card. Credit rating to be done as per Home Loan Model under Retail Rating Models. The Home Loan sanctioned will be linked with Saving Bank Account. branch needs to link the new SB account to existing home loan account. In such a case. as per normal Savings Bank rules. Charges for cheque book. Facilities available for linked SB account: Balance in SB account is available for drawal on demand. Recovery of EMI will be made by way of auto recovery from linked SB account only. 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. 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. ATM card etc will be as applicable in Savings Bank accounts. Facility: Home Loan linked with Savings Bank Account. Hence. NRIs/PIOs and for Home Loan to Staff under Public scheme.months from the date of issue 50% of unified processing charges applicable to regular Home Loan scheme with a minimum of Rs. RISK RATING: All Home Loan applications are subject to Risk rating. Baroda Pre Approved Home Loan 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.000/. whichever is earlier. 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.+ST and a maximum of Rs. It gives the customer greater flexibility in negotiations with builders/sellers. The rate of interest applicable on this SB account will be Zero Under the scheme. 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.2.500/. borrower is eligible for Cheque book facility. 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 eligible amount for loan will be the residual portion of eligible amount worked out based on income criteria. Repayment Period: New borrowers: Maximum Period up to ½ of the repayment period under Home Loan sanctioned. IndiaFirst Life Insurance Company Ltd. BARODA HOME LOAN TO NRIs /PIOs / Overseas Citizen of India (OCI) PURPOSE: Purchase of new residential house / flat Construction of new dwelling unit Purchase of old dwelling unit ( not more than 15 years old ) Purchase of plot of land. For existing Home Loan borrowers. & M/s. Existing Home Loan borrowers: Residual period of Home Loan sanctioned or ½ of the original repayment period under Home Loan sanctioned. The maximum amount will be worked out within the overall eligibility of the borrower like income criteria. Repayment of loan already availed from any other Bank / HFC For repair / renovation / extension of existing house For purchasing / constructing second house / flat for the purpose of self occupation. Kotak Mahindra Old Mutual Life Insurance Company Ltd. whichever is lower. repayment capacity etc except margin/LTV on cost of project for Home Loan. & M/s. ELIGIBILITY: Non Resident Indians (NRIs) holding Indian passport or Persons of Indian origin (PIOs) holding foreign passport. singly or jointly. Loan shall be considered for residential properties situated in India only.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. 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. For this purpose person of Indian Origin means an individual ( not being a citizen of 258 | P a g e . IndiaFirst Life Insurance Company Ltd.years from the date of purchase of plot. subject to the condition that a house will be constructed thereon within -3. Kotak Mahindra Old Mutual Life Insurance Company Ltd. 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. Baroda Home Loan Suraksha Personal Loan will be sanctioned along with Baroda Home Loan. whichever is lower. 5 lacs For repairs / renovations / extensions Rs. Must have minimum gross annual income equivalent to Rs. 300 lacs for metro/urban branches Rs 100 lacs for SU/Rural Branches Rs. PARTICULARS MINIMUM MAXIMUM Purchase new / old house / construction Rs. organization or government department holding a valid job contract / work permit for the minimum past 2 years. Must be employed / self-employed or having a business unit and staying abroad at least for 2 years. 50 lacs INCOME CRITERIA: The maximum amount of loan should not exceed the following: In case of salaried persons Monthly Income Eligible amount of loan 259 | P a g e . However. 1 lac Rs. Age of the borrower plus repayment period should not be beyond retirement age or 65 years whichever is earlier. AGE: Minimum age must be 21 years. However. 5 lacs per annum. the cost of car parking place / area located in the same building / compound / society can be considered. identifiable and incorporated in the sale agreement / allotment letter. or The person is a spouse of an Indian citizen or a person referred to in sub clause (a) or (b) above. Principal applicant should be having a regular job abroad in a reputed Indian / foreign company. Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan ) if He at any time held Indian Passport or 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. 25 lacs For purchase of plot of land --- Rs. LIMIT & MARGIN: For determining total cost of the house. the minimum age of co-borrower can be 18 years. it should be noted that such car parking area should be specific. e. etc. Baroda Additional Assured Advance (AAA): Baroda Additional Assured Advance (AAA) product under Retail Lending was basically devised for our existing Home Loan Borrowers to provide hassle free finance to them for their various emergent needs (other than speculative purpose). -4.times of monthly gross income In case of others viz.Upto to Rs. The facility is granted against the security of extension of Equitable Mortgage of House Property already mortgaged to secure Home Loan and the facility can 260 | P a g e . Maximum Amount of Loan: Rs 10. This may be verified from income tax return and statement of income and expenditure.1 Lac -48. Maximum age of the borrower + repayment period should not be beyond retirement for salaried person and 65 years in case of others. NRIs. repayment to commence one month after completion of renovation/ extension / repair work subject to maximum moratorium period up to 6 months. In case of repairs/ renovation/ extension.times of average (last two years) annual income. BARODA HOME IMPROVEMENT LOAN Purpose: • For repair / renovation / improvement / extension of existing house. air conditioners. professionals / self-employed / business persons etc. (HUF.21 years. • Purchase of furniture / fixture / furnishing / other gadgets such as fans.times of gross annual income Other than salaried persons i..times of monthly gross income More than Rs. air purifiers. Moratorium Period: For construction of new house .00 Lacs with the provision that the loan component for furniture / fixture / fittings / other gadgets should not exceed Rs 5. Residual life of the house may be minimum repayment period plus 5 years to be certified by approved architect/valuer vis-à-vis total repayment period of the loan Age: Minimum age .times of net annual income (average of last three years) plus depreciation claimed in individual capacity and not by the business unit. professionals/self employed/business persons -3. desert coolers. water filters. heaters.00 Lacs Salaried persons: -2. Staff members are not eligible) Principal applicant must have consistent and stable source of income minimum for last -3-years.one month after completion of the house subject to maximum period of 12 months from the date of first disbursement For purchase of new/ old house/ flat . Repayment Period: Maximum 15 years including moratorium. 1 lac -54.one month after taking possession subject to maximum of 3 months from the date of first disbursement. geysers. The House should not be older than 35 yeas. Take over of existing Loans for repair/renovation/improvement taken from other Banks/HFCs. Farmers. 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.Lac Maximum Rs 200/. 261 | P a g e . Professionals.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. in synchronizing with Home Loan. Proprietors of firms. 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. For purchase of Two wheeler Salaried Employees Businessmen.Lacs Or 75% of Residual Value of House Property after deducting 150% of outstanding loan amount of Existing Home Loan whichever is lower. Directors of Private/Public Ltd Co. Partners of partnership firms High Networth Individuals (HNIs): Individuals with minimum salary of Rs 1.be availed up to a maximum of 5 times during the entire tenure of Home Loan Purpose of loan Any purpose excluding speculative or illegal purpose Eligibility All Existing Home Loan Borrowers including NRIs /PIOs. Loan Limit Margin Repayment Period Maximum age BARODA AUTO LOAN Purpose of loan Eligibility For purchase of New Car / Old Car (not more than 3 Years) for private use. 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. 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/. Maximum Loan For HNIs/ Corporates : Rs 100 Lacs Limit For Others: For New Vehicle : Rs 15.000/. proper justification thereof should be given in the proposal by the sanctioning authority.and up to 60% of Gross Monthly Income 50% of Gross Monthly Income 262 | P a g e . If co-borrower is not available in such cases.00 Lac For Old vehicle : Rs 10.00 Lac For Eco friendly Gas Kit : Rs 0. preferably a family member should be stipulated. Cost of Registration and Insurance) Old Vehicle : 40% of Agreed Sale Price Gas Kit : 15% Two wheeler : 10% on invoice value Income Level (For all segment of people) Up to Rs20. addition of co-borrower.m.25 lac Subject to: 24 times of gross monthly income for salaried persons 3 times of gross annual income (average of last 2 years) for others For Two wheeler: Rs 1. Road Tax. Total deduction not to exceed > Rs 20.00 Lac : 20% on ‗On Road Price‗ (On Road price includes Invoice Price.00 Lac : 15% on ‗On Road Price‗ Loan above Rs 15. Co-applicant: 18 years Age Maximum : Age of the applicant/co-applicant/ guarantor + repayment period should not exceed 70 years.000/.Minimum : Applicant: 21 Years. If the applicant‘s age + repayment period exceeds retirement age (in case of salaried person) or 65 years (in case of others). whichever is lower.p.00 Lac or 5 times of gross monthly income whichever is lower Margin Repayment Capacity For Takeover of Car Loan: Outstanding balance in the existing account or 85% of cost of the vehicle (on Road Price). Loans upto Rs 15. if income of the co-applicant is not considered for assessment of eligible amount of loan. However. the above stipulation of maximum age is not applicable for co-applicant. Stage I : Nursery to V th STD. First installment to be due 12 months after first disbursement of each ear‗s loan component . Evening courses of institutes approved by State/ Central Govt. Should be a Resident Indian. No minimum qualifying marks Loan to be granted in the name of father/mother of the student Fee payable to college / school Examination / Library / Laboratory fee. Student should have secured admission to a Recognized school / Highschool / Jr. College (including CBSE / ICSE / State Board) for any of the following courses 1.Rs 1. Stage II: VI th to VIII th STD.000/- Repayment 70% of Gross Monthly Income New cars : Maximum 84 months Old cars : Maximum 36 months BARODA EDUCATION LOAN BARODA VIDYA Target Group Eligibility Coverage of expenses for Maximum Loan Limit Margin Repayment Period Parents of Students pursuing school education from Nursery to Class XII. Cost of external coaching /tuition is not to be considered Maximum Rs 4.000/>Rs1.00.00. Interest to be serviced as and when applied during the moratorium period Option to repay the loan after moratorium by way of EMI is also available 263 | P a g e . Stage III:IX th to XII th STD 4. Fee and other charges payable to hostel Purchase of books /equipments/ instruments/ uniforms. 3.00 Lac NIL Loan for each yearly sub limit is repayable in 12 equal monthly installments. Personal Computers/Laptops wherever required. 2. Caution deposit / building fund / refundable deposit supported by Institution bills / receipts. essential for completion of the course. Should have secured admission in recognized institution for approved courses by UGC/Govt. Cost of external coaching / tuition is not to be considered. subject to viability of repayment . Purchase of books / equipments / instruments / uniforms. Priority Sector DLPs of Clean advance BARODA EDUCATION LOAN . thesis. Hostel fees / charges. considered under the scheme. project works. fees as approved by the State Government/ Government approved regulatory body for payment seats will be taken. /AICTE through Entrance Test/Merit Based selection process after completion of HSC (10 plus 2 or equivalent) Fee payable to college/Institution/University/school/hostel. Should be Resident Indian. subject to condition that the amount does not exceed 10% of the total tuition fees for the entire course. For admission taken under Management Quota Seats. Professional and other courses in India. Maximum Rs 10 Lac Up to Rs 4 Lac – NIL 264 | P a g e . Purchase of Personal Computer / Laptop . Examination / Library / Laboratory fee. etc.(ii) BARODA GYAN Target Group Eligibility Coverage of expenses for Maximum Loan Limit Margin Students pursuing Graduation. Building fund / refundable deposit supported by institution bills/ receipts. Post Graduation. Caution deposit.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. Insurance premium for student borrower Any other expenses required to complete the course – like study tours. installments • For Loans above Rs. • Examination / Library / Laboratory fee.7. 10.50 lac : Maximum -180. The loan is repayable in maximum 10 – 15 years after the above period as under: • For loans upto Rs.50 lacs: • Collateral in the form of a suitable third party guarantee along with assignment of future income. 4.00 Lacs: Co-obligation of parent.7. whichever is earlier.50 % p. 4. moratorium period will stand extended accordingly. where no tangible securities are available. or 6 months after getting job.Rate of Interest Moratorium period Repayment Period Security Classification of Advances Above Rs 4 Lac – 5% Up to Rs.(iii) BARODA SCHOLAR Target Group Students going abroad for Professional / Technical studies Eligibility Should be an Indian National. Lending DLPs of Clean advance Power BARODA EDUCATION LOAN . Coverage of expenses for 265 | P a g e . If the student is not able to complete the course for reasons beyond his control.50 Lacs.00 Lacs and up to Rs. • Purchase of books / equipments / instruments / uniforms. Above Rs. 7. Up to Rs.7. sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course. extension of time for completion of course may be permitted for a maximum period of 2 years.00 Lacs) Discretionary For Loans upto Rs. Priority Sector (Upto Rs.50 Lacs : Base Rate + 2. • In case of above extension.a. Secured admission to professional / technical courses Abroad through Entrance Test / Merit Based Selection process Fee payable to college/Institution/University / hostel / Mess charges. Above Rs.7.7. No Security. Course period + 1 year.installments • If the student is not able to complete the course within the scheduled time.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.50 lac : Maximum -120. Cost of external coaching / tuition is not to be considered. • Insurance premium for student borrower. subject to condition that the amount does not exceed 10% of the total tuition fees for the entire course. • Travel expenses / passage money. Building fund / refundable deposit supported by institution bills/ receipts. etc. • Caution deposit. thesis. The loan is repayable in maximum 10 – 15 years after the above period as under: 266 | P a g e . project works. Maximum Rs 20 Lac Up to Rs 4 Lac – NIL Above Rs 4 Lac – 15% Course period + 1 year. or 6 months after getting job. • Purchase of computers if essential for completion of the course. • Any other expenses required to complete the course – like study tours.Maximum Loan Limit Margin Moratorium period Repayment Period • Personal Computers/Laptops wherever required. whichever is earlier. 50 lac : Maximum -180. It has the following features: i. No Security. 10 lakh irrespective of the sanctioned amount will be considered as eligible for priority sector. If the student is not able to complete the course for reasons beyond his control. Facility for Students to email grievances/queries relating to Educational Loans to Banks.Security • For loans upto Rs. Information about Educational Loan Schemes of Banks.7. vi.00 Lacs and up to Rs. Facility for Banks to download Students Loan Applications. Apply to multiple Banks for Educational Loans. • In case of above extention. 267 | P a g e .installments • If the student is not able to complete the course within the scheduled time.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.00 Lacs: Co-obligation of parent. Up to Rs. Facility for Banks to upload loan processing status.7. VIDYALAKSHMI Bank has launched the facility of online submission of Education Loan applications by Students. 4. 4.installments • For Loans above Rs. Above Rs. where no tangible securities are available.50 lac : Maximum -120.7. iii. ii. integrated with the 'VIDYALAKSHMI' portal hosted by the Government of India through NSDL. For Loans upto Rs.50 Lacs. iv.50 lacs: • Collateral in the form of a suitable third party guarantee along with assignment of future income. Above Rs. Common Educational Loan Application Form for Students. Vidya Lakshmi Portal provides single window for Students to access information and make application for Educational Loans provided by Banks and Govt Scholarships.7. v. moratorium period will stand extended accordingly. 7. Classification of Advances Discretionary Lending Power Freebies Loans to individuals for educational purposes including vocational courses upto Rs. 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. sanctioning authority may at his discretion consider such extensions as may be deemed necessary to complete the course. extension of time for completion of course may be permitted for a maximum period of 2 years. air-conditioner. 25. purchase of equipment. (HUF & Public Limited Companies are not eligible). furniture etc. P. Dealers in Silver / Gold jewelers against the jewellery. Linkage to National Scholarship Portal for information and application for Govt. Minimum: Rs.years‗ establishment with the prior approval of Regional Head.2-years.000/Maximum: I. Development of shop (e. but not against bullion/ raw gold. For Urban & Metro Branches Rs 400 Lac Assessment of working capital limit: The credit limit is to be considered as under: 20% of the projected/Accepted sales OR 268 | P a g e . Scholarships. Individuals. Bank Guarantee and Letter of Credit). Eligibility Limit Non-fund based facilities within the limits assessed based on value of securities (i. Private Limited Companies and Registered Cooperative societies engaged in trade of any commodity/goods in physical form required by the community and trading in them is not prohibited by law or opposed to public interest. for need based requirements subject to a maximum of 25% of the working capital limit sanctioned. Trading units of non-customers having less than -2. but not for purchase of shop). Trading units established by our existing customers with satisfactory dealings or their close relatives.years. Proprietorship & Partnership Firms. even if these are established for less than -2.vii.C. BARODA TRADERS LOAN : Nature of Overdraft or Loan Facility Purpose Working capital requirements. For Rural & Semi urban Branches Rs..300 Lacs II.e. The business units should have been established in the line of business for minimum period of.g. Government Bonds etc. 10% on Bank‗s own FDRs.Advance value of collateral assets to be charged. 15% on the surrender value of Life Insurance Policies. whichever is lower. Margin Assessment of loan for Shop Development: Need based finance to be considered as per requirements subject to a maximum of 25% of the working capital limit sanctioned (within overall limit assessed based on value of security). the registered value to be accepted as the market value. NSCs. If the property is purchased within last three years. 269 | P a g e . 40% on realizable market value as per recent valuation report of immovable property. 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.Period 12 months subject to annual review. Plot is located in reputed development area. 270 | P a g e .Maximum 60 EMI (depending on repayment capacity). for utilization of limits below 75% (on quarterly average Basis) of sanctioned limit in case the Limit sanctioned is Rs. Plot is clearly demarcated by boundaries. preferably compound walls.a. Site plan/location sketch/lay out plan of the plot obtained from respective Govt. (The allotment/ sale of plot/land by such development/ Govt. wherever available as per state laws. Commitment charge Security 0./Development Authority after obtaining opinion from Zonal Legal Officer subject to: Margin of 60% of Realisable Market value of security.50% p. Property to be mortgaged to be ONLY in the name of Borrower. authorities should not contain any clause stipulating fixed time limit for construction of house/commercial building) Zonal Authority is authorized to allow deviation for accepting plot of land NOT purchased/allotted from Govt. authority of the state. where proper by lanes and roads have been carved out as per development plan of the area so that there is no likely hood of deterioration in valuation of the property. Direct and independent access to the open plot. Display board clearly mentioning bank name to be fixed/cemented to the plot. Repayment Loan . Fresh advance can be granted only to the applicants securing minimum credit rating of BTL-6 under the new Credit Rating Model applicable for limits upto Rs. it has been clarified by our Risk Management Department that external credit rating is to be done where exposure is above Rs. for tax payment. delayed payments by debtors.200 lacs hosted on LAPS. The operating units may take over good quality accounts from other Banks subject to complying with non-financial norms laid down in Domestic Loan Policy.Lacs. Credit Rating Take over Norms Other Provisions Property standing in the name of third party can also be accepted. and b) The credit facility is for Rs.Proprietor.Lacs including proposed limit under Baroda Traders Gold Card. Private Limited Companies and Registered Co-operative Societies engaged in trade of any commodity/goods and have been sanctioned overdraft facility under Baroda Traders Loan Scheme above Rs 25 Lacs and fulfilling the following criteria. Director or their close relatives.200 lacs shall be rated on BOBRAM. by 10th of March every year.5. 20% of the sanctioned Baroda Trader Limit OR 70 % of realizable market value of immovable property (including realizable 271 | P a g e .e. BARODA TRADERS ―GOLD CARD SCHEME Nature of Overdraft Facility Eligibility Individuals. 1 lac and above. etc. Obligor Rating of minimum BOB-4 for limit above Rs 200/. as of last day of February. No major inspection irregularity in the account Credit Rating Minimum BTL – 4 for limit up to Rs 200/. 1. provided: i. Existing account in Standard Asset Category for last 2 years 2.00 Crores under Baroda Traders Loan also. Owner of property offers personal guarantee. Proprietorship & Partnership Firms. Purpose Limit To meet the emergent working capital requirement arising due to peak season requirements. The entity must also satisfy following financial norms: Current Ratio : Minimum 1.17:1 Debt Equity Ratio : Maximum 6:1 Stock statement to be obtained once a year i. In respect of external rating for Baroda Traders Loan. Facilities of more than Rs. Partner. ( NRIs are not eligible for Overdraft facility) (a) Minimum : Rs. However. minimum annual turnover in the account should be at least 25% of the limit. NRIs will be granted Term Loan/Demand Loan only.60 years (The customer age + Loan tenure should not exceed retirement age for salaried class & 65 years for NRIs & others) Term Loan/ Demand Loan/ Overdraft In case of Overdraft. Property Dealers/Brokers. Self Employed & Others. Minimum Gross annual income : Rs. there should be gap of 1 month between two drawls BARODA MORTGAGE LOAN: Purpose For any purpose except for financial speculation of any type. Minimum .00 Lacs (Subject to income criteria. 1. repayment capacity and advance value of the 272 | P a g e . Extension of equitable mortgage of property/ies mortgaged 12 Months . Existing staff members are not eligible.100. Minimum gross annual income: Rs 5 lacs. Individuals Salaried Employees/ Professional. who are income tax assesses for a minimum of last 3 years.Security Period market value set aside for sanctioning of regular Baroda Traders Limit).to be allowed on 3 occasions in a year for a maximum period of 2 months on each occasion.00 Lacs. Loan to professional : Rs. 60.21 years Maximum . whichever is lower.000/ NRIs Must be holding a valid job contract /work permit for minimum past 2 years or employed / self-employed or having a business unit and staying abroad at least for 2 years. Share/Stock Brokers and Persons engaged in speculative activities should not be considered.00 Lacs (b) Maximum: For Rural Branches : Rs.00 Lacs For other Branches : Rs. 300.10. Eligibility Age Type of Facility Limit (Proposals from persons involved in Real Estate Developments. the limit should be reduced annually as under: Maximum period of overdraft: 10 years. son.The facility can be considered against property to be mortgaged in the personal name of borrower or his/her close relatives viz.) 50% of the Distress Sale Value of the immovable property to be mortgaged.years. In case of Loan to Professional: 25% of Average annual Business Turnover /Professional receipt for last .property offered as security) Income Criteria Margin Personal Guarantee Repayment Period Salaried Class: 36 times of Gross Monthly income. In case of properties acquired within last -3. For Agriculturists – To be fixed as annual/ Half yearly repayment for principal and interest considering the harvesting pattern and / or other sources of income.3. (Income of all the joint owners of the property who are co -borrowers can be clubbed. Valuation of Property In case of Overdrafts: Minimum annual turnover in the account should be at least 25% of the limit. parents. brother. 273 | P a g e . sister. Interest to be recovered separately as & when applied in the account during moratorium period. amount of registered sale deed should be taken as value of property.years. Reduction in operative limit proportionately by end of each year. Up to Rs 10 Lacs: Personal Guarantee may not be insisted upon. Term Loan : Maximum 84 Months in Equated Monthly Installments (EMI) Overdrafts : 12 months subject to annual review Moratorium period: Maximum 3 months. Other Individuals: 5 times of Average (last three years) annual income. brother‗s wife who should stand as a co-borrower. Alternatively it may be explored the possibility of converting the overdraft facility into term loan and fix EMI for recovery of the balance amount. spouse.daughter. synchronizing with review of the account.10 Lacs: Third party guarantee of an individual having adequate worth. Over Rs. Wherever it is observed at the time of review that stipulation of annual turnover is not complied with. / MNCs and Reputed Universities/Colleges /Schools/Educational Institutions/Research In with minimum one year of confirmed service. Sanctioning authorities in Grade/Scale IV and above are authorized to exercise their normal DLPs for sanction.3 Crores and for facilities beyond Rs.3 Crores Zonal Heads are authorized to grant Activity clearance. 25. 01.2013. (Employee Partnershi s of Proprietorship. Sanctioning authorities upto Grade/Scale III are authorized to sanction Facilities upto Rs. p firms and Pvt. Autonomous Bodies /Public/ Joint sector undertakings. Reputed Limited Co. Ltd. With our Bank for at least 6 months and the Branch Head is satisfied with the conduct of the account. (Original statement of account for last 6 months to be obtained.e.Lending Powers (In such cases fresh valuation may be dispensed with if the sanctioning authority is satisfied with registered value). Baroda Premium Personal Loan (New Personal Loan Scheme for Salaried Employees w. Retail Loan Factories have been kept out of purview of activity clearance. (OR) With any other Bank for at least 6 months. Check-Off: The process by which the salary disbursing authority undertakes to deduct loan installments from the salary of the borrower and remits the same to the Bank for credit of the Loan account.00 Lacs only. 274 | P a g e . companies are not eligible) (Employees maintaining any Salary linked Loan/ Overdraft accounts with any Bank are not eligible for this Scheme) The Scheme is based on the concept of ‗CHECK –OFF„.) Purpose For any purpose other than speculation Eligible Borrowers Account Relationship Age Permanent confirmed employees of Central/State Govt.11.f. verified and satisfied upon by the conduct of the account) Minimum: 21 years Maximum: Age of Borrower plus repayment period should not exceed retirement age. Activity Activity Clearance for Sanctions under this product is required to be Clearance obtained from Regional Heads for facilities upto Rs. CHECK OFF (Stipulations for Category A & Category – B) CATEGORY.A (with Check Off) ―II as per Satisfying stipulations ―I(AND) below: l. (a) The borrower gives an irrevocable Standing Instruction (SI)/ instruction for auto Recovery for payment of the loan instalments from his aforesaid 275 | P a g e . The salary disbursing authority undertakes to deduct loan installments from the salary of the borrower and remits the same to Bank for credit to the Loan account Or The employer pays the borrower‘s salary into the employee‘s Saving / Current Account with our bank. ll. For Category.B: Minimum Net Monthly Income (NMI) of the employee should be Rs 15.A: Rs 10. retirement.000/For Category. retirement. CATEGORY. retirement.B (without Check Off) Satisfying (OR) Minimum Net Monthly Income (NMI) Loan Amount stipulations I II as per below: I. (AND) (b) Undertaking from the employer to obtain a NOC from the Bank before settling the dues of the borrower on resignation.account with the SI/Auto Recovery being synchronized with the date of credit of salary in the borrower‗s Savings/Current Account (AND) (b) Undertaking from the employer to inform the Bank if and when there is a transfer or severance due to borrower‗s resignation. (a) Conditions I(a) & (b) are not fulfilled but the borrower provides ECS mandate for recovery of monthly installments and if other eligibility criteria are fulfilled.00 Lacs or 24 times of Net Monthly Income (NMI) whichever is 276 | P a g e . (AND) (c) Undertaking from the employer to obtain a NOC from the Bank before settling the dues of the borrower on resignation.000/For Category.A: Minimum Net Monthly Income (NMI) of the employee should be Rs 10. retirement. (OR) II. (a) The employer pays the borrower‗s salary into his Savings/Current Account with our Bank (AND) (b) The borrower gives an irrevocable Standing Instruction (SI)/ Instruction for auto Recovery for payment of the loan installments from his aforesaid account with the SI/Auto Recovery being synchronized with the date of credit of salary in the borrower‗s Savings/Current Account. death etc. death etc. death etc. (AND) (c) Undertaking from the employer to obtain a NOC from the Bank before settling the dues of the borrower on resignation. death etc. months in Equated Monthly Installments Clean Loan Model should be used.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 277 | P a g e .Repayment Period Credit Rating lower. For Category.B: Rs 5. Cut off score is 30 and Investment Grade is CL7 & above. SOME OTHER RETAIL LOAN PRODUCTS PRODUCT 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 50.00 Lacs or 24 times of Net Monthly Income (NMI) whichever is lower. Maximum -84. 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. advance rent. for Max 10 yrs or unexpired certain of lease period. Age 60 yrs. EMI.working capital Rs 3 Lac) Baroda Ashray (For Senior citizens. which ever is less Loan to be repaid in ‗Equated Monthly Instalments (EMI)‘ with a maximum period of 10 .55% of Loan Against Future Rent rent (net of 20% on Present market value The loan shall become due and payable only when the last surviving borrower dies or would like to sell the home / permanently moves out of the home for aged care to an institution or relatives. Joint borrower spouse not below 55 yrs Max Rs 100 Lac Loan Against Future Rent receivable (Non Commercial real Estate) 60% of rent due(Net of TDS. years or unexpired certain lease period and uncertain period of lease (optional period of maximum next 10 years) whichever is less. receivable ( Commercial real Estate) TDS. security deposit). advance rent. The maximum rental period (including the certain and optional period) should be 10 years. Repayment to commence one month after disbursement. 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) .