KNOW BANK

MISSION STATEMENT
To be a Top Ranking National Bank of International Standards Committed to augmenting stake holders value through Concern, Care and Competence.

CORPORATE MOTO 2011-12

Business Growth through Sales and Service Excellence.

BRIEF HISTORY
Founder:- HH Sir Maharaja Sayajirao Gaikwad-III. The Bank made a humble beginning in 1908 in a small building in Baroda on 20th July 1908. Bank of Baroda Ltd. was registered under Baroda Companies Act of 1897, with a paid up capital of Rs. 20 lacs and Shri Vithaldas Damodar Thackersay as the first Chairman. 1918,Mumbai Main Office set up. 1935 Bank became a Scheduled Bank. 1947 was a regional bank with 48 branches. 1953- International foray with opening of branch at Mombasa, Kenya. 1969- Nationalised; was having 433 branches (411-Domestic & 22International.) As many as -10- Banks have 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 Peoples Bank (1964) Traders Bank Limited (1988) Bareilly Corporation Bank (1999) Benaras State Bank Limited (2002) South Gujarat Local Area Bank Ltd (2004)

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 Menon Co operative Bank (2010)

Branch Network

As on 31.03.2011 Bank was having total network of 3,364 (M- 730 ,U-631 ,SU- 832 & R- 1,171).

branches

NAME OF SUBSIDIARY
Nainital Bank Limited BOBCARDS Limited BOB Capital Market Limited

EXTENT OF OWNERSHIP 98.57% 100% 100%

ASSOCIATES
Baroda Pioneer Asset Management Co. Ltd. Jhabua Dhar K G Bank Nainital Almora K G Bank Baroda Gujarat Gramin Bank Baroda Rajasthan Gramin Bank Baroda UP Gramin Bank 49.00% 35.00% 35.00% 35.00% 35.00% 35.00%

JOINT VENTURE
India First Life Insurance Company Ltd. 44.00%

India First Life Insurance Company Ltd. is a Joint venture between Bank of Baroda (44%) , Andhra Bank (30%) and Life & General of UK (26%). Baroda Pioneer Asset Management Co. Ltd. is a JV in Mutual Fund in association with Pioneer Investments of Italy (51%). MoU signed on 15th December 2010 with BBVA (Banco Bilbao Vizcaya Argentaria) with HQ at Madrid, Spain to form a JV credit card business. On regulatory approvals BBVA will be given 51% stake. 5 RRBs had 1218 branches.

HIGHLIGHTS
100% CBS for all domestic branches. 100% CBS of all 1218 RRB branches as on 31.03.2011. 44 branches in 13 overseas territories and 28 branches of 8 subsidiaries are on CBS covering 97 % of Banks overseas business. All CBS branches RTGS & NEFT enabled.

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 URLFs

35. 36. 2 Sultanpur & Rae Bareilly. 8 52. 450.

SMELFs Micro Loan Factories Gen- next Branches Thurst Branches for Agriculture

BGPK-Baroda Grameen Paramarsh Kendra

BSVS-Baroda Swarojgar Vikas Sansthan R-SETI 36. BSVS Women exclusive 2 Rae Bareilly & Ajmer. 18. 13 branches. 26. 1561 68. 4 Delhi, Pune, Lucknow,

FLCC-Financial Literacy & Credit Counselling Centre Baroda Gold Lounge CSOs (City Sales Office) No. of ATMs ATMs at overseas territories Centres with Mobile ATMs Ahmdabad Per day cash withdrawal limit from ATM RBOs (Regional Back Office) CBOs(City Back Office)

Rs.25000/5 -21- Service Branches & -47- Main Offices. 57.03% 24.60% Baroda (for Civil Pensioners)

Governments Shareholding Contribution of Overseas Network CPPC (Central Pension Processing Cell)

ASBA (Application Supported by Blocked Amont) enabled branches 2100+ Convener of SLBC(State Level Bankers Committee) of 2 states. Uttar Pradesh and Rajasthan. Lead Districts 45 Gujarat(12); Rajasthan(12);Uttar Pradesh(15);Uttaranchal(2);MP(2);Bihar(2). .

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 Gold Coin denominations Purity of Gold coins Zones Regions (Proposed) OVERSEAS PRESENCE

2,4,5,8,10 &20gms 99.999%

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Bank has presence in 26 countries with 85 branches. In addition, Banks associate in Zambia 12 branches. NAME OF SUBSIDIARY Bank of Baroda (UK) Ltd. Bank of Baroda (Uganda) Ltd. Bank of Baroda (Kenya) Ltd. Bank of Baroda (Guyana) Ltd. Bank of Baroda (Botswana) Ltd. Bank of Baroda (Tanzania) Ltd. Bank of Baroda (Trinidad & Tobago) Ltd. Bank of Baroda (Ghana) Ltd. Bank of Baroda (New Zealand) Ltd.
Holding %

1 2 3 4 5 6 7 8

100% 80% 86.70% 100% 100% 100% 100% 100% 100% TOTAL

11 8 1 2 2 3 1 1 29

Baroda Capital Markets (Uganda) Ltd. a subsidiary of BOB (Uganda) Ltd. ASSOCIATE Indo Zambia Bank Ltd. JOINT VENTURE India International Bank(Malaysia) Bhd.

20%

12

40%

10 11 12

REPRESENTATIVE OFFICE Australia Thailand Malaysia TOTAL BRANCHES

1 1 1 3

13

United Arab Emirates

13

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14 15 16 17 18 19 20 21 22 23 24 25 26

Sultanate of Oman Singapore (OBU) South Africa Hongkong Mauritius Fiji Seychelles United Kingdom Bahamas (OBU) Bahrain China USA Belgium TOTAL TOTAL OVERSEAS REACH

3 1 2 2 8 8 1 10 1 1 1 1 1 53 85

Seven branches at London, New York, Brussels, OBU Mauritius, OBU Nassu, Dubai and Singapore are our Money Centre Branches, thus offering flexibility as well as good standing.

Banks application for setting up of subsidiary in Surinam and Canada, branch in Qatar and up gradation of Representative office to a branch are under consideration. New centres also being explored for further expansion.

Global Syndication Centres at London & Dubai. OBU Singapore and IMBC (International Merchant Banking Cell) at Corporate Office , Mumbai are engaged in loan syndication.

Our International Banking network is further augmented by Correspondent links with more than 500 leading Banks around the world.

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BOARD OF DIRECTORS

1 2 3 4 5 6 7 8 9 10 11 12 13

Shri M D Mallya Shri Rajiv K Bakshi Shri N S Shrinath Shri Alok Nigam Shri Sudershan Sen Shri V B Chauhan Shri. Shri Ajay Mathur Shri Maulin A Vaishnav Shri Satya Dev Tripathi Dr. Dharmandra Bhandari Dr. Deepak Bhaskar Phathak Dr. Massarat Shahid

Chairman & Managing Director Executive Director Executive Director Nominee of Govt. of India Nominee of R B I Officer Employee Director on Board Workmen Employee Director Nominee Director Shareholder Director Nominee Director Shareholder Director Shareholder Director Nominee Director

AWARDS & ACCOLADES

Business Standard Best Banker award to CMD. SKOCH Financial Award -2011. Business India Best Bank Award 2010. IBA Banking Technology Award 2011- Runner Up. Silver Award by Dainik Bhaskar Group under its Annual India Pride Award 2010. National Awrad 2010 for Excellence in the field of Khadi & Village Industries Central Zone for PMEGP. My FM Stars of the Industry Brand Leadership Award 2010. ABCI- Silver CSR Column (Bobmaitri). ABCI Silver Bilingual Publication (Bobmaitri). ABCI Silver Indian Language Publications Akshayyam. DSIJ PSU Award for Excellence in performance and contribution to the Indian economy by the PSUs Dalal Street Investment Journal. .

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 Bank of the Year 2010 (for India) by the Banker Magazine UK London. President Juma Award For outstanding contribution to advancement of South Africa 9th Jan 2011 at Durban. Best SME Business Start Up Scheme Award in the Banker Middle East Product Awards 2011.

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PERFORMANCE 2010 11

Total Business (Deposit + Advances) increased 28.30% to Rs. 5,34,116 cr. Gross Profit & Net Profit were Rs. 6,981.61 cr. and Rs. 4,241.68 cr. (+38.77%). CD Ratio at 86.77% against 84.47% last year. Retail Credit grew 33.8% and constituted 18.88% of Gross Domestic Credit. NIM Global Operations 3.12% // Domestic Operations 3.72%. NET NPA 0.35% against 0.34% last year. Capital Adequacy Ratio (CAR) Basel I 13.02% // Basel II 14.52% Net Worth improved to Rs. 19,750.63 cr (+43.27%). Book Value improved to Rs. 504.43 from Rs. 378.44. Business per Employee at Rs. 1,229 lac from Rs. 981 lac.

KEY FINANCIAL RATIOS PARTICULARS Return on Average Assets (ROAA) (%) Average Cost of Funds (%) Average Yield (%) Net Interest margin (%) Cost Income Ratio (%) Book Value per Share EPS 2009-10 1.21 4.98 7.70 2.74 43.57 378.44 83.96 2010-11 1.33 4.67 7.76 3.12 39.87 504.43 116.37

Rs. 1500 cr raised through unsecured subordinated bonds and Rs. 711.50 cr. through innovative perpetual bonds. AGM posted at New Delhi for business development from Government Departments. Authorised for payment of pension to all Central Civil Pensioners in the Country.

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 CPPC (Central Pension Processing Cell) established at Baroda for Civil Pensioners. Authorised for pension payment to Railway Pensioners under Single Window Scheme (SWS). Reimbursement will be available through CAS, Nagpur. e-payment of State Taxes of 7 states TN , Kerala, Uttarakhand, Karnataka, AP, WB & Delhi. Agreement with SCHIL (Stock Holding Corporation of India Ltd.) for sale of e-stamps. Business commenced in Gujarat. RTO fee collection commenced in Gujarat. Direct Agency Business for Railway Receipt and Payment Business instead of sub-agent of SBI at 9 centres. Proposal / request to Ministry of Finance for authorising 700 additional branches for PPF / SCSS Business. Payment of Income Tax through ATM. Authorised for collection of Customs Duty through e-mode at all locations in the country. Wholesale Banking Dept.s motto for 2010-11 Year of Strengthening Corporate Relationship. Project Finance Division earned Rs. 19.14 cr. during FY through 156 TEV studies, vetting of projects and syndication deals. 15 Syndication deals finalised. Comprehensive grooming in Credit given to a batch exclusively of lady officers. 14 exclusive Mid-Corporate branches proposed in 2011-12. CFS branches proposed at North Mumbai, Greater NOIDA & Surat. Maximum period of deposit under RD & YSJY increased to 120 months from existing 36 months. Tie up with India First Life LIC for providing Life Insurance Cover to Home Loan Borrowers.

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 Existing accounts of Home Loan & Education Loan brought under Group Credit Life Insurance Cover under tie-up arrangement with Kotak LIC & India First Life LIC from 31st December 2010. International Operations contributed to 24.60% to the Banks global business as on 31st March 2011. E Banking View based e-banking available in Fiji, Oman, Tanzania & UK. Transaction based e-banking in Uganda, Kenya, Botswana, Mauritius, Seychelles, UAE and New Zealand. Bank plans to cover all the remaining overseas centres under this facility in 2011-12. Global Treasury Solution implemented at UK, UAE, Bahamas, Hong Kong, Singapore and Belgium.

NEW PRODUCTS / SERVICES LAUNCHED Baroda Pensioners Savings Bank Account. Baroda Loan to Retirees for Pension Option from 4th Dec to 11th Dec. 2011. Baroda Utsav Deposit Scheme for 444 days introduced on 15th October 2010. Baroda Advance against Gold Ornaments / Jewellaries launched at all Metro & Urban Branches. Education Loan Interest Subsidy Scheme launched. Life Insurance linked Savings product styled as Baroda Jeevan Suraksha Savings Account under a tie-up arrangement with India First LIC launched on 15th January 2011. Protrack- an e-tracking system for SME credit proposal introduced.

Kumar Ajay Singh (E C No 61431) e-mail : ajsinghin@indiatimes.com

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BUSINESS POLICY GUIDELINES 2011-12

PARAMETER Agriculture Industry Services Total GDP 2008-09 2009-10 0.4 7.3 10.2 8.0 2010-11 5.0 8.6 9.4 8.6 2011-12

6.8

9.0

Corporate Motto for the year 2011-12 Business Growth through Sales and Service Excellence.

The breakup of banks business as on 31.03.2011 was as under:(Rs. in crore) DEPOSITS ADVANCES TOTAL DOMESTIC 2,33,323.30 1,69,407.86 4,02,731.16 OVERSEAS 72,116.18 59,268.50 1,31,384.68 GLOBAL 3,05,439.48 2,28,676.36 5,34,115.84

Government has targeted a GDP growth of 9% during 2011-12, hence Bank has aimed at a top line business growth of 25%. Domestic business of Rs. 5,00,000 crore by 31st March 2012 is targeted. DOMESTIC BUSINESS PLAN: 2011-12 Parameter Total Business Total Deposits CASA Deposits Average CASA Retail Term Deposit Advances Average Advances Agriculture MSME Advances Retail Advances Fresh Slippages Recovery in NPAs Non-Interest Income (Growth) Return on Average Assets New Quality Savings Bank Accounts Growth in % p.a. 24% to 25% 22% to 23% 26-27% 25% 25% to 26% 25% to 26% 24% to 25% 22% 28% 30% Less than 1% Rs. 500 crore 25% 1.25% to 1.35% 50 lac

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STRATEGIES AND ACTION PLAN Four pillars for sustainable business model: Strong and growing CASA base. Well diversified & high quality credit deployment. Continuous improvement in asset quality. A growing pool of fee based income. These are the basic of any commercial banking model and resources are to be optimised in these areas. All strategies and actions should be devoted to these four pillars while keeping the customer at centre stage. 1. RESOURCE MOBILISATION With recovery of economy, the credit growth is outstripping deposit growth. The pace of deposit mobilisation has not only slowed down, its structure has undergone a change with most of the incremental growth coming from bulk deposit segment. Share of CASA is not improving. Retail Time Deposits, Savings Deposits and Current account deposits need to be focused for a consistent and broad based growth on average basis. Branches under Project Navnirmaan must assume challenging targets. Recurring Deposits, NRI deposits and institutional deposits need to be focused. Acquiring new customers across all customer segments and branches to be the key driver for achieving a qualitative improvement in our deposit portfolio. Quality customer service is the dominant determinant of success in acquiring new customers and making the Bank a truly Sales and Service Organisation.

2. Resource Deployment Focus in the area of Credit will continue to be on Quality credit expansion and balanced growth across all segments. Specialised outfits like CFS, SME & Retail Loan Factories have been recognised as unique initiatives by the Bank to bring in more efficiencies in the credit delivery system both in terms of speed of disposal and containment of adverse selection.

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This needs to be carried forward with more focus on higher volumes and better Turnaround Time (TAT). Each credit segment needs to be focused in a unique way as under:2.1 Wholesale Banking Wholesale banking consists of more than 50% of the Banks credit portfolio. The portfolio mainly consists of project loans, corporate loans and non-fund based limits. While transaction cost is very low, the yields are also very low due to competition amongst major banks. There is need to balance Risk and Adequate Returns. There is need to canvass new proposals were we get more exposure in working capital rather than giving Corporate loans or Term Loans to infrastructure companies. To provide more focused attention to tap the mid-corporate business Bank is going to set up 14 mid-corporate branches to cater to needs of corporate having turnover upto Rs. 500crore with the help of cross functional Client Service Team (CST).

2.2 MSME Advances SMEs account for 50% of industrial production. 40% of export. 17% of the GDP. Employing over 6 crore people. For a more focused attention Bank has opened 36 SME Loan Factories and is in the process of opening more during the current year. GoI has introduced CGTFMSE for new entrepreneurs. Cluster approach in lending to MSME will help the Bank in tapping the advances potential. Towns like Ludhiana, Tirupur, Guntur, Sivakasi,Coimbatore have emerged as strong SME clusters. 2.3 Retail Credit The share of Retail Credit has been growing over the years. Its share has increased from a modest 6% in March 2002 to 18% in March 2011.

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As per Boston Consulting Group (BCG) mortgage loans will grow faster and will cross Rs. 40 trillion mark by 2020 and present total loan book of banking industry at Rs. 38 trillion at present. Mortgage loans now account for 7.7 % of GDP. Each branch to endeavour to disburse at least 2 housing loans per month. The expectations in the area of Retail Credit is as under:(Rs. in crore) Parameter Mar 10 Mar 11 % Growth 22.18 39.23 17.22 28.58 25.79 Mar 12 Proj. 16,125 2,800 2,100 18,500 39,525 % Growth 27.98 40.00 20.00 30.74 29.59

Home Loan Auto Loan Education Loan Other Retail Loans Total Retail Credit 2.4 Agriculture

Actual Estmates 10,313 12,600 1,436 2,000 1,493 1,750 11,005 14,150 24,247 30,500

70% of population still lives in rural areas. Banks will continue to play vital role for sustainable agriculture development. Future of countrys banking system will be guided by consolidation, standardisation, re engineering and automation. Emerging agriculture will witness entry of large corporate and MNCs and larger flow of credit to rural sector. Bank has targeted a growth rate of at least 25% in Direct Agriculture and 20% in Indirect Agriculture in 2011-12. 3. Financial Inclusion Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at as affordable cost in a fair and transparent manner by mainstream institutional players. The purpose is to take banking services to the masses to meet their entire savings, credit and remittance needs initially and need for all other financial products and services subsequently. Almost half the country is unbanked, only 10% of the population has any kind of insurance and 9.6% of the population has non-life insurance coverage. Banks to initially cover villages with population over 2000 and subsequently population below 2000 in an integrated manner over a period of 3 to 5 years.

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Bank plans to cover 20000 villages by 2013 with the help of brick and mortar branches, BC model, ATMs, Satellite offices , Mobile Banking, kiosk banking etc. 4. Non Interest Income

LC / BG business should be given boost. Export / Import turnover needs to be improved further. Sale of third party to be boosted.

Life / Non life insurance(India First LIC, Baroda Health,

Bancassurance)

Mutual funds, Sale of Gold coins.

Cash Management services to be marketed. Govt. business is an important source of revenue. Bank has identified -10Government Business Revenue Streams (GBRS) to tap this business. Target of atleast 30% growth in non-interest income excluding Profit from sale of Investments and Recovery in PWO. 5. Wealth Management As a part of customer centric measure our Bank has initiated Wealth Management Services (WMS) to provide HNIs and affluent customers a total financial solution at one place since 2004 Under WMS , the Bank provides through the network of its branches various 3 rd party products like:-

Life Insurance policies of India First Life Insurance Co. Ltd. Non life Insurance including Health Insurance through National Insurance
Company Limited.

Mutual Fund products of -7- leading Asset Management Companies. E- trading through India Infoline Limited. Our own Retail e-banking platform under BOB Capital will soon start
operating.

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 Over -1200- branches enabled to accept ASBA applications for IPO/FPO/NFO

subscriptions.

6. Alternate Delivery Channels

ATMs average hits per day less than 200. Should be increased to atleast 300 during the year. Cash withdrawal limit increased to Rs. 25,000/- from Rs. 15,000/-. Debit Cards. Baroda Connect Retail and Corporate customers.

7. Asset Quality Management Provision coverage at 85% is above the mandatory level of 70%. Every account of Rs. 5 lac and above should be closely monitored by the Branch Manager whereas account below Rs 5 lac to be monitored by the officer-incharge. SPTF Slippage Prevention Task Force at RO level to keep close watch on each and every account and the progress taking place in the branches. Lok Adalats Execution of Decrees Action under SARFAESI Recovery in PWOs. OTS (One Time Settlement) Targets for 2011-12 :Recovery of atleast Rs. 500 cr in NPA Rs. 250 cr in PWO Slippages to be contained at less than 1% of standard advances of the previous year. 8. Organisational Restructuring and BPR

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-6- new ROs (3 in UP and 1 each in Northern , Rajasthan and Mah & Goa Zones proposed to increase no of ROs to 49. All Metro and Urban branches proposed to be covered under Project Navnirmaan where all non-customer facing activities are either shifted to RBO/CBO or redesigned within the branches leaving more space for the customers. 500 more branches proposed to take domestic branch network to 4000. 9. To be Most Admired Bank Team Baroda should strive to see our Bank to lead the industry by setting an example by achieving consistent sustainable and profitable business growth on all key parameters. A consistent growth on average basis in all segments of deposits and advances coupled with minimum delinquencies and robust fee-based income is our objective which is to be achieved by focusing upon customers needs and preferences and fulfilling them in a cost-effective manner. Let all work together to create the most Admired Bank.

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ANNUAL BUSINESS PLAN : 2011-12 (Rs. in crore) March 10 Actual 3,100 3,18,872 1,85,283 14,766 51,258 1,19,259 83,388 66,024 35.63 1,33,589 48,552 21,617 13,329 17,481 3,630 21,111 24,247 4,802 17,048 13,078 3,969 2,045 372 195 2,045 March 11 Expected 3,500 4,00,000 2,34,000 17,500 64,570 1,51,750 96,750 82,250 35.15 1,66,000 58,200 25,400 17,400 21,500 5,415 26,915 30,500 5,600 20,925 15,335 5,590 2,800 450 175 450 Parameters March 12 Projected 4,000 4,97,000 2,88,000 22,000 82,000 1,84,000 1,21,000 1,04,000 36.11 2,09,000 71,700 31,000 21,900 27,500 7,050 34,550 39,525 7,000 25,500 17,950 7,550 3,400 500 200 500 Rise / Fall Abs 500 97,000 54,000 4,500 17,250 32,250 24,250 21,750 43,000 13,500 5,600 4,500 6,000 1,635 7,635 9,025 1,400 4,575 2,615 1,960 600 xxx xxx xxx

% 24.25 23.08 25.71 26.64 21.25 25.06 26.44 25.90 23.20 22.05 25.86 27.90 30.19 28.37 29.59 25.00 21.86 17.05 35.06 21.43 xxx xxx xxx

Branches Total Business Total Deposits Current Savings Time (of which) Retail Time Deposit CASA % share of CASA Total Advances Priority Sector Agriculture Direct Agriculture MSE ME MSME Retail Credit Export Credit Total Income Total Expenses Gross Profit NPA Cash Recovery Up gradation PWO

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Kumar Ajay Singh (E C No 61431) e-mail : ajsinghin@indiatimes.com

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