The Directors have pleasure in presenting the One Hundred and Ninth Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and operations for the year ended March 31, 2017 (FY 2017)

Financial Performance

The snapshot of our Bank’s financial performance is as below:

Rs. in crore




Growth (%)





of which- Domestic Deposits




International Deposits




Domestic Deposits



of which - Current Account Deposits




Savings Bank Deposits




CASA Deposits




Domestic CASA to Domestic Deposits (%)







of which- Domestic Advances




International Advances




Total Assets




Net Interest Income (Nil)




Other Income




of which-Fee Income




Trading Gains




Recovery from PWO




Nil Other Income




Operating Expenses




Operating Profit








of which: Provisions for NPAs & Bad debts written off




Profit Before Tax




Provision for Tax




Net Profit




Appropriations/ Transfers

Statutory Reserve



Capital Reserve



Revenue and Other Reserves

I) General Reserve



II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 1961



III) Investment Reserve 0 0 Account

IV)Transfer from Excess Appropriation of previous year



Proposed Dividend



Key Performance Indicators

Average Cost of Funds



Average Yield (%)



Average Interest Earning Assets



Average Interest Bearing Liabilities



Net Interest Margin (%)



Cost-lncome Ratio (%)



Return on Average Assets (ROAA) (%)



Return on Equity (%)



Book Value per Share (Rs.)



EPS (Rs.)



*Post split of face value of the share to Rs. 2/-

The financial year 2016-17 had been a mix of opportunities and challenges. With asset quality challenges in the banking industry continuing, credit growth has been at multi decade low of 5.08% during FY 2017 on account of weak corporate demand. Despite the challenges, Bank performed well during the year leveraging its retail franchise.

The net interest income (Nil) of the bank increased by 6.07% to Rs. 13,513.41 crore as of March 31, 2017 while other income increased by 35.19% to Rs. 6,758.06 crore backed by 122.05% rise in treasury income to Rs. 2,618.01 crore as well as 5.95% growth in core fee income to Rs. 3,813.22 crore. Operating expenses increased by 4.18% to Rs. 9,296.40 crore.

Our Bank posted an operating profit of Rs.10,975.07 crore during FY2017 registering a growth of 24.49%. The provision cost (other than taxes) declined significantly by 45.19% to Rs. 8,502.37 crore compared to Rs. 15,513.64 crore last year and Bank posted a profit before tax of Rs. 2,472.70 crore. After making provision for tax of Rs. 1,089.56 crore, net profit for the year ended March 31, 2017 was Rs. 1,383.14 crore.

For the year ended March 31, 2017, the return on average assets was 0.20% while return on equity was 4.53%. The earnings per share (FV Rs. 2/-) were Rs. 6.00.

Capital Adequacy Ratio (CAR)

Ratios in %



Capital Adequacy Ration-Basel III












Capital Adequacy Ratio under Basel III was well above the regulatory requirements at 12.24% as of March 31, 2017. Tier 1 ratio was at 9.93% and common equity Tier 1 (CET-1) was at 8.98% under Basel III framework. Bank raised Rs.2,000 crore of debt capital by way of AT-1 bonds in two tranches of Rs.1,000 crore each in December 2016 and March 2017.

Bank’s Net Worth as of March 31, 2017 was Rs.30,519.80 crore comprising paid-up equity capital of Rs.462.09 crore and reserves (excluding revaluation reserves, FCTR & Net of Intangible assets) of Rs.30,057.71 crore. The book value of share (FV Rs.2/-) was Rs.132.46.


Board of Directors of the bank has recommended a dividend of Rs.1.20 per share for the financial year ended March 31, 2017. The total outgo in the form of dividend, including taxes, will be Rs.332.79 crore. The payment of dividend is subject to requisite approvals.


An independent compliance function is a key component of the bank’s second line of defence. This function is responsible for, among other things, ensuring that the bank operates with integrity and in compliance with applicable, laws, regulations and internal policies. The Board of Directors of the Bank oversees the management of the Bank’s compliance risk.

Our Bank has put in place a Board approved compliance policy outlining the compliance philosophy of the Bank. Compliance function in the Bank is an integral part of governance along with internal control and compliance risk management process. It ensures observance of regulatory / statutory provisions contained in various legislations viz. Banking Regulation Act, Reserve Bank of India Act, Foreign Exchange Management Act, Securities and Exchange Board of India Act and Prevention of Money Laundering Act and also the regulations of the various regulators where the Bank is having its offices / branches in overseas centers. It also ensures standards and codes prescribed by BCSBI (Banking Codes and Standard Board of India, IBA (Indian Banks Association), FEDAI (Foreign Exchange Dealers Association of India), FIMMDA (Fixed Income Money Market and Derivatives Association of India).

Bank is in the process of putting up a web based compliance management system to further strengthen the compliance function in the Bank.

The compliance function advises senior management and the Board on the Bank’s compliance with these applicable laws, rules and standards as well as keeping them informed of developments in the area. It also helps educating employees about compliance issues by conducting periodic trainings and workshops for business staff as well as designated compliance officers. Knowledge management tools for this purpose have also been uploaded on the Bank’s site.

Compliance function has an important role in supporting corporate values, policies and processes that help ensure that the Bank acts responsibly and fulfils all applicable obligations.

KYC/AML Compliance

Our Bank has well defined KYC-AML-CFT Policy, which is the foundation on which the Bank’s “Implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002” is based. Bank electronically generates Cash Transaction Reports (CTRs) for submission to Financial Intelligence Unit-lndia (FIU-IND). AML Solution for generating system-based alerts on the basis of transactions in the accounts of the customers is in place. A central transaction monitoring unit (CTMU) also monitors of the transactions/ alerts generated in AML Solution and escalation of STRs, if found suspicious, to the Principal Officer. System-based risk categorization of Bank’s customers’ accounts is done on half yearly basis. Bank files Counterfeit Currency Reports (CCRs) and Non Profit Organizations Transaction Reports (NTRs) to FIU-IND, New Delhi every month. It generates cross border wire transfer reports every month through electronic mode for submission to FIU-IND, New Delhi. CBS system has been modified suitably so as not to accept cash deposits of Rs.50,000/- and above in absence of PAN / Form No. 60/61.

For further strengthening KYC compliance, online verification of PAN from NSDL has been operationalised. Bank has implemented Aadhaar based e-KYC in collaboration with UIDAI. Real-time checking of names from UNSCR list is available in all the branches as a step towards CFT Online scanning of the customer’s name with the names of the individuals/ entities appearing in the sanctions list or any other blacklist issued by Govt. Authorities, while opening of accounts has been put in place which generates the AML Alerts on predefined criteria. The Bank is in the process of allotting Unique Customer Identification Code (UCIC) to all its existing customers as per the RBI guidelines.

Bank has also carried out an independent review of its KYC, AML, & CFT policy and practices for the domestic branches and six overseas territories (UK, UAE, South Africa, Mauritius, Hong Kong and Bahamas) through independent reputed consultancy firms and taken steps to stream line the processes where required.

Internal Audit - The Third Line of Defence

The third line of the defence consists of an independent and effective internal audit function. Among other things, it provides independent review and objective assurance on the quality and effectiveness of the Bank’s internal control system, the first and second lines of defence and the risk governance framework as well as strategic and business planning and decision-making processes. The internal auditors are not involved in developing, implementing or operating the risk management function or other first or second line of defence functions.

Our Bank carries internal audit function through a Central Internal Audit Division (CIAD). CIAD administers various streams of audits besides Risk Based Internal Audit (RBIA) of branches and offices. Audit Committee of the Board oversees overall internal audit function of the Bank. The committee guides in developing effective internal audit, concurrent audit, IS Audit and all other audit functions of the Bank. The committee monitors the functioning of the Audit Committee of Executives and internal audit department in the Bank.

CIAD operates through thirteen Zonal Internal Audit Divisions to carry out internal audit of branches/offices as per the periodicity decided by the Risk Based Internal Audit Policy. All branches of the Bank are covered under Risk Based Internal Audit. Out of 4,566 branches audited during 2016-17, 3,669 branches (80.35%) were in Low Risk, -851-branches (18.64%) were in Medium Risk and 46 branches (1.01%) were in High Risk category.

During the year, Bank engaged an independent firm as a knowledge partner for comprehensive review of the Audit function in line with the processes focusing on centralization of activities by use of technology, imaging solutions and digitization. The whole gamut of audit approach will undergo a change with extensive use of technology, analytics, sampling and advanced audit methodology. Internal audit processes thus are being revamped aided by technology.

For streamlining the concurrent audit function with the objective of improved oversight and consistency in approach, Bank has revamped this mechanism whereby a single firm is appointed to conduct concurrent audit of all branches in a Zone. A single audit firm would bring in the benefits of uniformity of approach and with more accountability. It will bring in benefits of unified view on control & compliances, observations of irregularities and patterns if any.

Customer Service

Our Bank is sensitive and responsive to the customer needs and believes that technology, products, processes and human resources must be leveraged for delivering superior banking experience to its customers.

During the year, an independent study on Customer Satisfaction and Brand Health across all products lines was commissioned by the Bank through an independent reputed agency. The survey covered all the geographies across products like savings bank, current account, wealth management products, home loans, auto loans, agri loan, traders loan, mortgages, MSME and mid-large corporates. The findings of the survey provided valuable insights on customer satisfaction levels, loyalty levels and experience levels across the product lines and geographies. Bank is taking necessary steps to further improve the customer satisfaction levels with an aspiration to be the “Most Admired Service Brand” in the banking Industry.

At the Board level, the sub-committee of Board for customer service addresses the issues relating to the formulation of policies and assessment of their compliance with the aim of consistent improvement in the quality of customer service.

Our Bank has also set up a Standing Committee on Procedures and Performance Audit on Customer Services, comprising of two eminent public personalities as members along with all the Executive Directors and seven General Managers of Bank. This Committee oversees timely and effective compliance of the RBI instructions on Customer Service and also reviews the practices and procedures prevalent in Bank and takes necessary corrective steps on an ongoing basis. The suggestions emanating from the Branch Level Customer Service Committee meetings, which are held every month, are placed before the Standing Committee on Procedure and Performance Audit on Customer Services on quarterly basis. The feedback of the committee meetings is then put up to the Customer Service Committee of the Board of Directors.

For redressal of customer complaints, Our Bank has a policy in place on customer grievance redressal and the same is placed on the Bank’s website. Bank is also having a well structured Customer Grievance Redressal Mechanism, due to which the outstanding complaints have also come down significantly. The General Manager, Operations & Services, is designated as Principal Nodal Officer for customer complaints in our Bank. Moreover, all Zonal Heads and Regional Heads are designated as Nodal Officers for their respective Zones and Regions. Further, the names of all Nodal Officers along with their contact numbers are displayed in all the branches of our Bank.

Our Bank views each complaint seriously and undertakes root cause analysis of the complaints for suitable remedial measures including updation of the systems, procedures and sensitization of employees. Our Bank has a web based online complaint registration and redressal portal named as Standardized Public Grievance Redressal System (SPGRS) for lodgment of complaint by the customers online. SPGRS also has a facility to capture suggestions/ feedbacks.

Our Bank has appointed an Internal Ombudsman designated as Chief Customer Service Officer (CCSO). The Bank’s internal ombudsman is a forum made available to customers for grievance redressal before they approach the Banking Ombudsman. All complaints, which are rejected or partially accepted by the Bank, are examined by the Internal Ombudsman. It enhances the confidence of the customers in the Bank’s systems and hastens the process of grievance redressal, making it more transparent.

Our Bank is also a member of the Banking Codes and Standards Board of India (BCSBI) and has adopted the “Code of Commitment to the Customers” and the “Code of Bank’s Commitment to MICRO and Small Enterprises” prescribed by the BCSBI. These have been placed on our Bank’s website and also made available to customers at the branches. BCSBI monitors the implementation of the codes inter-alia by visits to branches to find out the status of ground-level implementation of codes and studies complaints received from customers and orders / awards issued by Banking Ombudsmen / Appellate Authority to find out whether there is any system-wide deficiency. During the rating exercise in 2016, our Bank has been rated “above average” in overall PSB category.


Our Bank gives importance to preventive vigilance to inculcate awareness on the compliance to internal systems and processes. In this connection, after root cause analysis of incidents of frauds, Bank has a system of conveying to the operating units about the deficiencies observed in observance of systems and procedures as a preventive vigilance measure. The employees are also sensitized about preventive vigilance through vigilance newsletter, circulars, meetings etc.

The concept of whistle blower is another effective tool for preventive vigilance. Our Bank has a well-defined whistle blower policy which acts as a deterrent for employees who may be prone to carrying out malicious activities. Bank has designed software which is used for lodgments of complaints online by the employees under whistle blower policy.

With the objective of bringing awareness among the staff about preventive vigilance and also to put forth consequences of flouting the rules and regulations which may lead to perpetration of frauds by unscrupulous elements, sensitive branches of the Bank are identified on the basis of risk perception and preventive vigilance audits are conducted.

To bring about greater transparency in procurement and tendering processes in the Bank, notice inviting tenders/ details of tenders awarded by the Bank and summary of tenders/ contracts concluded are put on the Bank’s website. Standardized Public Grievance Redress System (SPGRS) for uniform implementation in PSBs is also operational.

Vigilance in the Bank aims at ensuring proper justice and fair play in the organization, protecting the innocent; supporting quality decisions and striving to bring the real offenders to book thereby eliminating forces that thwart integrity and cause loss to the Bank.

Human Resources

Our Bank truly believes that our human resources is our biggest differentiator having a direct and significant impact on our Bank’s overall performance, both current and future. Our Bank has a rich reservoir of human resources comprising over 51,000 employees. As we march forward to realize the rising expectations of our stakeholders, it is imperative that our employees are motivated and fully engaged in the present dynamic and competitive environment. Bank’s HR team has been working hard to address the challenges from a human resources standpoint through a plethora of initiatives viz. recruitment and onboarding of talent in the wake of a large number seasoned bankers who are superannuating, focus on strengthening performance management through Project SparshPlus, addressing training needs, leadership development across the Bank, succession planning and higher levels of employee engagement aided by our first ever formally conducted employee engagement survey “Voice of Barodians”. Our Bank continues to take the lead in the conceptualization and execution of various HR transformation efforts, many of which have begun during FY 2017 and mark a first for Public Sector Banks in the country.

There were several positives that emerged from the “Voice of Barodians” Survey 2016 and also some areas that need to be strengthened further through a variety of action plans. These measures also include capability building initiatives to take on higher order challenges in the Bank’s transformation journey. Bank’s intent is to ensure that the employee experience across all levels is further enhanced so as to create a fun and happy place to work in. Towards this end, the Bank launched a series of initiatives for the employees, who are the main drivers for the Bank’s Business and the chief brand ambassadors for the Bank. These include:

Baroda Anubhuti Programme

This is an Employee Engagement programme for enhancing the employee experience at the workplace with initiatives such as Employee of the Month, Spot recognition - capturing “WoW” moments, “Zero Hour” (Fun hour) at all our branches/ offices, local “community service / social activity” by employees, sports and wellness activities

WELEAD - A comprehensive Leadership Programme

Our Bank has introduced a comprehensive Leadership Development Initiative ‘WeLead’, based on behavioural competencies with the objective of building a robust and sustainable pipeline of leaders for the future. This is through the following 4 distinctive programmes:

- Baroda Senior Leadership Programme - for Officers in Scales VI & VII of mandatory courses required for each critical role. Our Bank has been continuously upgrading our capabilities in the area of Learning and Development and has adopted several innovative efforts for this.

Launch of ‘Sparsh Plus’

The Bank has also unveiled ‘Sparsh Plus’ with the objective of revamping the performance and talent management systems in our Bank, aided by the best-in-class technology and digital tools. Our intent is to ensure that our people processes and systems provide our staff with role clarity and empower them to perform their role more effectively, help employees in their development and enable them to enhance their overall contribution.

Bridging the talent deficit and augmenting skillsets

While our Bank has been undertaking hiring on a sustained basis year on year, to cater to business requirements, various recruitment exercises were undertaken during the year to address the emerging manpower needs of our Bank such as recruitment of specialist officers and probationary officers among others.

Our Bank has also on-boarded specialists from the market having skill sets, knowledge and competencies for various critical positions in the Bank with the objective of augmenting our internal team’s capabilities in various strategic areas for the future and for adopting the best practices in the Market/Industry.

Sayajirao Gaekwad Fellowship Programme

Our Bank has instituted the Sayajirao Gaekwad Fellowship Programme in March 2017 in support of Startup India and Standup India initiatives. The Fellowship Programme seeks to encourage young professionals with entrepreneurial ideas to gain a one year experience in the banking and financial services industry and obtain organizational support in development of their start up idea. In addition, the selected Fellows are supporting the execution of several strategic initiatives currently underway in the Bank.

Employee Helpline (HR-Helpline)

Our Bank has launched a central HR helpline for all the employees for resolving their queries/ issues on HR matters, support them in times of distress and help them tide over any emergency situation or any other hardship, which may impede their personal or professional life. There is a dedicated team at corporate office which monitors the Employee Helpline on real time basis and resolves the issues/grievances/queries promptly.

Career Progression

Concerted efforts have been taken by our Bank for fostering career progression of employees to reward them for their performance and also to motivate them further to progress in their careers by fulfilling both the organizational as well as personal aspirations. Our Bank not only provides opportunities for upward movement in the hierarchy but also ensures horizontal movement of Officers across different functions to provide them wider exposure and carve out a definite career path for them.

Thrust on Diversity

Our Bank follows non-discriminatory and equal opportunity policies for all employees. Every employee in the organization has equal access to the available opportunities - whether they concern career progression, perquisites and benefits, welfare schemes, training, grievance redressal or other amenities. Promotion, career path, deployment and transfer policies are made open and transparent and all employees in the Bank are made aware of the same for uniform implementation.

In order to create a more diverse workplace, our Bank has been progressively increasing its recruitment of women employees over the last few years. The percentage of women in the overall staff composition has increased to 22.70% in FY 2017 from 22.05% in FY2016.

In order to retain women employees at all levels and in recognition of the concomitant responsibilities of women, our Bank has put in place various facilities to support women employees such as sabbatical leave, health check program for women employees and other initiatives.

Implementation of Official Language (OL) Policy

During the year FY 2017, our Bank made outstanding progress in implementing the Official Language Policy of Government of India. Besides compliance of various statutory requirements under Official Language Policy of the Union Government and directives issued by Reserve Bank of India, our Bank promoted Hindi as a tool for business development and connecting with the customers.

Our Bank adopted a well-structured Annual Action Plan for Official Language in order to achieve various targets set by the Government of India under its Annual Action Plan 2016-17 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/branches of the Bank. Our Bank has made significant progress in achieving many of the major targets of the Annual Action Plan. Our Bank has fulfilled all the assurances given to the Committee of Parliament on Official Language within the stipulated time frame.

The Meetings of Central Official Language Implementation Committee were organized regularly on quarterly basis. Under the guidance received from the Committee, several new initiatives were taken during FY 2017. Bank took important initiatives of providing M-Clip Services in Hindi and Baroda M-Connect Plus services in Hindi and Gujarati. Mobile Pass book services are being extended to our customers in Hindi and six other Regional Languages. The Bank also provided Online complaint module i.e. SPGRS services in Hindi for convenience of the customers. All alternate delivery channels viz. Self passbook printing machines, cheque deposit machines, cash deposit machines, Multi function Kiosks, Account Opening Kiosks etc. were equipped with Hindi user interface for the convenience of customers. All ATMs of the Bank were enabled for printing of transaction slips and mini statements in Hindi and major regional languages for the convenience of customers selecting Hindi or the language concerned as the language of their choice for interaction with the machine. As a major IT enabled initiative, Bank launched transactional SMS services in Hindi and 11 other Regional Languages on the occasion of World Hindi Day 2017.

During the year, our Bank organized an All India Seminar on “Demonetization and Digital India” in New Delhi wherein representatives/speakers/participants from different Public Sector Banks took part. An Inter Bank Seminar was organized at Corporate Office, Mumbai on “Importance and Challenges of Language in Digital Era”, which was attended by the Heads/representatives of OL and IT Departments of various PSBs/FIs in Mumbai. This initiative earned accolades from the RBI and Government of India and Parliamentary Committee on Official language. Our Bank celebrated World Hindi Day in January, 2017 at its overseas territories which was attended by eminent personalities related to Hindi Literature and valued customers and officials of Indian Embassies.

Our Bank has instituted an award namely “Maharaja Sayajirao Bhasha Samman” in memory of its founder Maharaja Sir Sayaji Rao Gaekwad-lll. The award consists of a Citation/ Memento and cash award of Rs. 1.51 lakh. During the year, Bank honoured Shri Ashutosh Rana, the eminent Actor and poet with this award.

Bank has expanded the ambitious initiative of regional language training to its employees across various linguistic regions so that they learn the basics of the concerned regional languages which would help them in discharging their duties well while dealing with the local customers.

The Third Sub-Committee of the Committee of Parliament on Official Language visited Bank’s branches/offices at Mount Abu and Alwar during the year. The Committee appreciated the efforts put in by the Bank for progressive use of Hindi. All the assurances given to the Committee have been fulfilled within the prescribed time frame. Our Bank was awarded Second prize for ‘ A’and ‘B’ linguistic Regions and consolation prize for Region ‘C’ by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield Competition. Besides, Bank’s bilingual house journal Bobmaitri also received Third Prize. Jaipur, Varanasi, Goa, Guwahati, and Jodhpur offices of our Bank received awards from Govt. of India through its Regional Implementation Offices for their outstanding work. Bank also received Second Prize from Maharashtra State Level Bankers Committee. Bank continued with its unique scheme “Medhavi Vidyarthi Samman Yojana” for popularising Hindi amongst the students’ community. Under this scheme, cash prizes and commendation certificates are given to the two of the students securing First and Second positions in M.A. (Hindi) examinations. This scheme, at present, is applicable in 64 universities of the country.

In compliance to the directives of Government of India as per Annual Action Plan, Bank carried out Official Language inspection of overseas branches at Fiji, Australia and New Zealand to promote and propagate Hindi amongst local staff members and conducted Hindi Workshop for them. Our Bank published books in Hindi during the year viz.”Grameen Vipananevam Banking Vyavasay” by Corporate Office, “Banking Paridrishya” by Jaipur, “Banking ke Vividh Aayam” by Baroda, “Banking - NayaDaur, NayaParivesh” by Pune and “Maangjama Rashiyan - Banking ka Aadhar” by New Delhi offices for providing qualitative/informative reading material in Hindi language.

Domestic Subsidiaries and Joint Ventures

The performance of the Bank’s Domestic Subsidiaries and Associates was satisfactory during FY 2017.

BOB CARDS Limited is a wholly owned subsidiary of the Bank and is into the business of issuance of Credit Cards and Merchant Acquiring. Gradually, widening its scope of work based on the skill-sets and expertise acquired in the payment card industry over a period of time, Bobcards Ltd. undertook ancillary activity of providing support services to our Bank’s debit card operations.

Envisaging huge growth opportunities for cards and digital payments in India, the Company is gearing up to be a consumer credit and payment leader in the evolving market landscape by introducing new business lines under the NBFC domain besides revamping the existing businesses. Bobcards Ltd. aims to be a consumer finance company for Credit Card (CC) and Personal Loans (PL) business. In addition, it will provide product and servicing capabilities for POS business and sourcing of Retail/SME products for the Bank.

FY 2017 witnessed various initiatives undertaken by the company for its overall growth. In the wake of demonetization, in order to promote cashless transactions, Bank launched a nationwide campaign for enrollment of new POS merchants during November and December 16 whereby more than 60,000 new POS installations were carried out and POS base increased to over 85,000. Post-demonetization, the POS transaction volumes scaled up to Rs.30 crore per day as against earlier volume of ’8 crore. The number of transactions also increased from 25,000 per day to 2 lakh transactions per day. The monthly transaction volume increased from Rs.244 crore to Rs.700 crore. Bobcards has successfully expanded its POS Product Suite by adding m-POS (Mobile POS Terminals) and QR based acquiring (m-VISA& Bharat QR Code). The company continued to focus on issuance of quality cards, resultant to which transaction volumes through Credit Card Business increased significantly. The process of tapping the potential in the travel segment has been initiated to bring more such agents to our fold. Total 24,770 new cards have been issued till February 2017 despite the shift in thrust for POS installation after de-monetization. As a mass marketing initiative, Bobcards has tie-up with XLRI, Jamshedpur for issuance of Co-branded cards to its alumni.

Providing prompt and courteous service to customers continued to be the major strength of the Company, which not only enabled it to emerge as a customer friendly organization but also helped in retaining quality customers. Quick grievance redressal approach resulted in high level of customer satisfaction and response.

BOB Capital Markets Limited is a wholly owned subsidiary established by Bank in 1996. Main businesses of BOBCAPS are Investment Banking (Debt Restructuring, Project Finance, M&A, Debt Capital Markets and Equity Capital Markets), Institutional & Retail Equity Broking and Distribution of Financial Products. The Company also has a license for Portfolio Management Services (PMS).During FY 2017, the Company has embarked on a significant scale up in its key businesses. The company has successfully strengthened its teams in businesses such as Investment Banking, Broking and Wealth Management / Distribution- to be able to leverage strengths of our Bank and establish BOBCAPS as one of the leading and most respected player in its businesses.

The Nainital Bank Limited was promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and others became an Associate Bank of Bank of Baroda in the year 1973. Shareholding of our Bank in Nainital Bank Ltd. is 98.57%. The Total Business of Bank which was Rs.8,049.22 crore as of Martch 31, 2016 has increased to Rs.10,132.66 crore as of March 31, 2017, showing growth of 25.88%. Bank has opened 11 new branches &established -5-Loan processing units by the name Naini Loan Points (NLPs). Bank also installed 13 white label ATMs with collaboration with TCPSL. Bank issued 22,688 debit cards to its customers during FY 2017.

Baroda Pioneer Asset Management Company Limited, a Joint Venture with Pioneer Global Asset Management SpA, is in its eighth year of operation. In light of a good year for the Mutual Fund Industry, Baroda Pioneer Asset management Company has also been able to increase its AUM. The average AUM of the company for FY 2017 was Rs.10,535 crore. Further, the company has improved its asset mix, with share of liquid reducing and that of fixed income going up. This helped the company to maintain its budgeted margins during the year. The company continued to focus on developing the banking and IFA channels for distribution. This helped in getting the flows in the fixed income and equity segments. The company’s SIP book is also growing steadily and has seen inflows from beyond the top 15 towns of the country. Gathering assets in equity funds and building the momentum in fixed income segment continues to be the top agenda for the company. The company continues to explore enhanced technological solutions to continuously improve its service delivery.

India First Life Insurance Company Ltd a joint venture company with Andhra Bank and Legal & General group, commenced its business operations on November 16, 2009 and has received an overwhelming response for its products across the country. India First is amongst the fastest Life Insurance Company to break even in the 5th year of operation and its industry ranking is 8th among the private players with market share of 4.5% and AUM (Asset under Management) at Rs. 9,061 crore as of March 31, 2017.

India Infradebt Limited (Infradebt) It is the first Infrastructure Debt Fund (IDF) under a non-banking finance company structure set up and was promoted by ICICI Bank Limited, Bank of Baroda, Citicorp Finance (India) Limited and Life Insurance Corporation of India in which Bank is holding 30% stake. The Company’s principal activity is to re-finance part of the debt liabilities of the Infrastructure Projects which have completed one year of commercial operations. The Company has made aggregate disbursements of Rs. 4,712 crore to 22 road projects under PPP format awarded by NHAI, 18 renewable energy projects and two other Infrastructure projects (Hospitals) as of March 31, 2017. As of March 31, 2017, India Infradebt Ltd. has raised a total of Rs. 4,205 crore of funds through Non-Convertible Debentures.

Baroda Global Shared Services Ltd. It is a newly formed wholly owned subsidiary of our Bank. The subsidiary is formed with the objective of migrating some of the back-office processes to handle through a centralized set up. The Company is yet to be operationalised.

A brief synopsis of domestic subsidiaries, associates and Joint Ventures is as below:

(Rs. in lakh)

Entity (with date of registration)

Owned Funds

Total Assets

Net Profit



BOB Capital Markets Ltd. (11.03.1996)






BOBCARDS Ltd. (29.09.1994)






Baroda Pioneer Asset Management Co. Ltd. (05.11.1992)






Baroda Pioneer Trustee Co Pvt Ltd. (23.12.2011)






IndiaFirst Life Insurance Co. Ltd. (05.11.2009)






The Nainital Bank Ltd. (31.07.1992)






India Infradebt Ltd. (31.10.2012)






BOB Shared Services Ltd. (15.03.2017) Operations yet to be started




Awards and Accolades

During FY 2017, our Bank has won following awards and accolades on both business and financial parameters.




Bank was awarded 2nd prize by Maharashtra State Level Bankers Committee in the area of Official Language Implementation during 2015-16 under Rajbhasha Shield Yojana under Public sector Category held in Pune.


Bank was awarded for “Excellence in Banking, (PSU Sector)” and “Excellence in Education Loan” at 7th My FM Stars of the Industry awards for Excellence in Banking, Insurance and Financial Services held in Mumbai on 14th February, 2017.


Bank was awarded Amity Corporate Excellence Award for being the First Bank to Launch Digital Portal Branch by Amity University, Noida & Greater Noida Campus. The Award received during 17th International Business Horizon Inbush Era World Summit 2017 on 8th to 10th February 2017 held at Noida.


Bank was awarded in three categories: Skoch Award Platinum- Banking Category; Skoch Award Platinum for Cash on Mobile and Skoch Award Platinum for Digital Portable Branch by Skoch Group. The Award received during Skoch Technologies for Growth Award 2016 held at New Delhi on 16th December, 2016.


Bank won -4- Awards at the 56th Association of Business Communicators of India (ABCI) Awards as under:

1. Bank’s Wall Calendar 2016 - Bronze

2. Bilingual Publications - Bronze

3. Special Column (English) - Bronze

4. Features (Language) -Akshayyam - Silver


Bank received The Best Official Language Implementation’ award and special award for Bank’s Hindi Magazine ‘Akshayyam’ for the year 2016 by reputed Literary Organization “Aashirwad” at Mumbai.

31st Aug to 6th Sept. 2016

Bank ranked 21st amongst Best Indian Brands 2016 in Brand Equity - The Economic Times dated 3151 August to 6th September, 2016.


Bank was awarded runner-up-award - ‘Public Sector Bank’ category for the year 2013-14 at ‘FE India’s Best Bank’ by The Financial Express (FE) a function held in Mumbai on 01.09.2016

Registrar & Share Transfer Agent, Share Transfer System and Redressal of Investors’ Grievances

Bank has established Investors’ Services Department, headed by the Company Secretary at Corporate Office, Mumbai wherein Shareholders can mail their requests / complaints for resolution at the address given below. They can also lodge their complaints online through SPGSR.

Dividend Distribution Policy

As required under Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), 2015, our Bank has a dividend distribution policy in place which sets out the parameters and circumstances that will be taken into account by Board in determining distribution of dividend to its shareholders. The policy is given in this Annual Report and is also available on the Bank’s website at www.bankofbaroda. com/download/Dividend.pdf

Board of Directors (Appointment /Cessation of Directors during the year)


Prof. Biju Varkkey was nominated as a Part Time Non-Official Director w.e.f. 25.04.16 by the Central Government u/s 9(3)(h) and (3-A) of section 9 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, for a period of 3 years or until further orders, whichever is earlier.

Shri Gopal Krishan Agarwal was nominated as Parttime Non-Official Director w.e.f. 26.07.16 by the Central Government u/s 9(3)(g) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, under Chartered Accountant category for a period of three years or until further orders, whichever is earlier.

Shri Ashok Kumar Garg was appointed as Executive Director by the Central Government u/s 9(3)(a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 9th August, 2016 for a period upto 30.06.2018 i.e. the date of his superannuation or until further orders, whichever is earlier.

Smt. Papia Sengupta was appointed as Executive Director by the Central Government u/s 9(3)(a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 1st January, 2017 for a period upto 30.09.2019 i.e. the date of her attaining the age of superannuation or until further orders, whichever is earlier.

Shri Ajay Kumar was nominated as Director by the Central Government u/s 9(3)(c) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 13th January, 2017 to hold the post until further orders.


Shri Bhuwanchandra B Joshi. Executive Director, ceased to be Executive Director w.e.f. 1st January, 2017 on his attaining the age of superannuation from the Bank’s service.

Smt. Surekha Marandi, Director, ceased to be a Director w.e.f. 13th January, 2017 on the appointment of Shri Ajay Kumar in her place.

Board Evaluation

Bank engaged the services of a reputed external specialist firm to conduct an independent Board evaluation and review of overall effectiveness of the Board. The firms global methodology for conducting board reviews was followed for this purpose. This entailed effectiveness assessment of the following areas of the Board - a) Board strategy and alignment, b) Management of the Board by the Chairperson, c) Functioning of the Board committees, d) Relationship between the Board and the management team, e) Quality of the Board processes, f) Board composition and g) Quality of discussions/decisions taken by the Board in key areas like risk management, talent etc. In addition, at an individual level, members of the Board were assessed in areas like a) Overall engagement and alignment, b) Quality of their contribution, c) Openness in listening and receiving feedback, d) Ability to challenge and take/oppose tough decisions etc.

For conducting the assessment a combination of three methods was followed. This included in depth structured one on one interviews with all members of the Board. In addition, key personnel of the Bank such as the CFO and Company Secretary were also interviewed. The review team attended Board meetings and committee meetings to observe and study the Board dynamics in a live environment. The minutes of the previous Board and committees meetings and the Board materials used to present policies and support decisions were analyzed.

The results of the review were shared with the Chairman and the Board members in a daylong session. As part of this session a workshop was conducted in September 2016 to determine and align on key next steps and actions that the Board and management agreed to undertake following from the Board review. A follow on session was conducted in April 2017 to assess the effectiveness of the actions. It was unanimously concluded that significant progress had been made in a short span of time.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2015-16 is annexed with this report pursuant to “Part ”E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Responsibility Report

Business Responsibility Report as required by SEBI has been hosted on the website of the Bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31, 2017:

a) the applicable accounting standards had been followed along with proper explanation relating to material departures if any;

b) the accounting policies framed in accordance with the guideline of Reserve Bank of India were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by Reserve Bank of India in this regard and that such internal financial controls are adequate and were operating effectively.

Explanation. For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Directors place on record their appreciation for the contributions made by the outgoing Directors viz. Shri Bhuwanchandra B Joshi and Smt. Surekha Marandi.

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities and overseas regulators for their continued co-operation, guidance and support.

Bank would like to take this opportunity to express sincere thanks to its valued clients and customers for their continued patronage and support.

The Directors acknowledge with deep appreciation of the cooperation extended by all shareholders, banks and financial institutions, rating agencies, stock exchanges and all the well wishers in India and abroad.

The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of our Bank which enabled our Bank to record growth with quality year after year despite economic challenges and consolidate its position as one of the premier banks in the country.

For and on behalf of the Board of Directors,

R S. Jayakumar

Managing Director & CEO

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

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