SUMMER TRAINING PROJECT REPORT

On

FINANCIAL INCLUSION
Bank of Baroda

Towards Partial fulfillment of

Master of Business Administration (MBA)

(Affiliated to U.P. Technical University, Lucknow)

Guided by Submitted by
Mr. Priyadarshi Kumar Malhotra Eva Singh
Faculty Guide Roll No.: 1366470011
MBA III Sem.

Session 2014-15

YASH RAJ INSTITUTE OF EDUCATION &

MANAGEMENT

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CERTIFICATE

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 ACKNOWLEDGEMENT

I am thankful to YASH RAJ INSTITUTE OF EDUCATION & MANAGEMENT.,

who showers his ever graceful guidance by extending his co-operation in giving an

opportunity to do my Summer Internship Program on Bank of Baroda under the

guidance Mr. Sunil Kumar (Branch Manager) Lucknow.

I am also highly indebted to my esteemed Guide and mentor Mr. Priyadarshi Kumar

Malhotra, whose continued and invaluable guidance can never be forgotten by me and

without her support this project could have get.

Lastly, I am thankful for my Family and friends for their support and help to done this

program.

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 TABLE OF CONTENT

Sr. Content Page No.

No.

1. Introduction of the topic

2. Company Profile

3. Research methodology

4. Data analysis and interpretation

5. Findings

6. Conclusion

7. Suggestion

8. Limitation

9. Bibliography

10. Annexure

INTRODUCTION

Financial Exclusion

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Financial Exclusion refers to a certain section of the population or a certain group of
individuals that has denied the access to basic financial services. The term came to
prominence in the early 90s in Europe where the geographers found that a certain pockets
or regions of a particular country were behind the others in utilizing financial services. It
was also found that these pockets or regions were poorer compared to regions which
utilized more of financial services. The term attained a wider connotation in the late 90s
when it was expanded to refer to individuals who were denied access to financial
inclusion rather than geographical areas. Financial Exclusion could be a hindrance to
growth of economy. Without a formal and a legally recognized financial system in which
all sections of the population are a part of, it would be impossible even for the most
efficient of the governments to reach out to all sections of the people. A stable and
healthy financial service sector creates trust among the people about the economy and
only with this trust (which has legal validity) could a strong, stable and an inclusive
economy be created.

Financial exclusion is individuals’ limited access to or use of formal financial services is

a problem of epic proportions. More than 3 billion people are financially excluded
around the world.

With barely 34 percent of its population engaged in formal banking, India has the
second-highest number of financially excluded households in the world—about 135
million.

Among those who are financially excluded is a distinct and huge group of consumer,
whose potential to become viable banking customers has been greatly under-estimated.

Categorized by income, this segment sits just above the poorest of the poor and just
below consumers who are currently targeted by most banks. It is served primarily by the
informal financial sector.

Type of Financial Inclusion Who is Financially Excluded?

1. Transaction accounts 1. Poor

2. Time Deposits 2. Socially under-privileged privileged
3. Financial Advice 3. Disabled
4. Appropriate small credit 4. Old as well as children
5. Insurance 5. Women
6. Mortgage Loans 6. Uneducated
7. Superannuation 7. Ethnic Minorities
8. Enterprise based loan 8. Un-employed
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India has 91 million households that fit the profile of future customers. A typical
household in this segment in a large metropolitan area earns between Rs (rupees) 60,000
and Rs 180,000 annually. In smaller towns and villages, where the cost of living is lower,
the income floor falls to Rs 45,000.

Indian government has made some headway in alleviating financial exclusion, mainly by
requiring the formal sector to provide services to low-income households or to certain
sectors of the economy.

Causes of financial exclusion

1. LACK OF FINANCIAL AWARENESS: The lack of financial awareness about the benefits
of the banking and also illiteracy act as stumbling blocks to financial inclusion. The lack of
financial awareness maybe the single most risk in financial inclusion as those who are newly
included in the financial sector have to maintained within the formal financial sector.

2. EASY ACCESS TO ALTERNATIVE CREDIT: For a good amount of low income people,
the alternative credit provided by the money lenders and pawn shop owners are far more
attractive and hassle free compared to getting a loan from a commercial bank. Some of the poor
that do not have property find it impossible to get credit without the collateral.

3. LOW INCOME: Most of the poor are low wage earners, for them opening an account and
withdrawing money is seemingly unviable. Most of the poor do not have high spending that
would require borrowing of credit from a formal agency like banks. They would rather keep their
daily income at their homes rather than in a bank.

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 Income and Exclusion are Closely Linked

Source – BCG Survey, 2007

4. LACK OF UNDERSTANDING OF PROPERTY RIGHTS: The concept of property rights

are still not clearly understood in most parts of India. In most of the developing nations, the poor
and the weaker sections of the society have little or no knowledge of property rights since most
are uneducated.

5. LACK OF INTEREST FROM COMMERCIAL BANKS: There is a lot of criticism on the

commercial banks because of their inherent tendency to think that poor people and not worthy of
being banked on. Banks are in business to make profit and would like to only indulge in activities
that give them profit. Unless banks see any incentive in banking with the weaker sections of the
society, they would not be willing to do so.

Magnitude and Spread of Financial Exclusion

Reserve Bank of India data shows that as many as 139 districts suffer from massive
financial exclusion, with the adult population per branch in these districts being above
20,000 and only 3 percent with borrowings from banks. On the assumption that each
adult has only one bank account (which does not hold good in practice, so that actual
coverage is likely to be worse) on an all India basis, 59 percent of the adult population in
the country has bank accounts. 41 percent of the population is, therefore, unbanked. In
rural areas the coverage is 39 percent against 60 percent in urban areas. The unbanked
population is higher in the poorer regions of the country, and is the worst in the North-
Eastern and Eastern regions. Credit markets have much more exclusion, as the number of
loan accounts constituted only 14 per cent of adult population. In rural areas, the

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coverage is 9.5 per cent against 14 per cent in urban areas. Regional differences are
significant with the credit coverage at 25 per cent for the Southern region and as low as 7,
8 and 9 per cent respectively in North Eastern, Eastern and Central regions. The extent of
exclusion from credit markets can be observed from a different perspective as well. Out
of 203 million households in the country, 147 million are in rural areas 89 million are
farmer households. 51.4 per cent of farm households have no access to formal or informal
sources of credit while 73 per cent have no access to formal sources of credit. As per NSS
only 37 percent of the urban self-employed have access to credit.

inancial Inclusion – Banking the Unbanked

Financial inclusion is aimed at providing banking / financial services to all people in a
fair, transparent and equitable manner at affordable cost. Households with low income
often lack access to bank account and have to spend time and money for multiple visits to
avail the banking services, be it opening a savings bank account or availing a loan. These
families find it more difficult to save and to plan financially for the future. Thus, the
unbanked public is largely cut off from the Banking products/services. It is the endeavor
of the Bank to provide the basic banking facility of SB a/c’s to all the unbanked. Towards
this initiative the Banks has taken the lead and evolved two different models i.e. Rural
and Urban Financial Inclusion Model to take care of the requirement of the people in
rural and urban areas which differ from each other.

Financial Inclusion is “delivery of banking services at an affordable cost to the vast

sections of disadvantaged and low income groups. Unrestrained access to public goods
and services is the sine qua non of an open and efficient society”. As banking services
are in the nature of public good, it is essential that availability of banking and payment
services to the entire population without discrimination is the prime objective of the
public policy.
---Shri V.Leeladhar, Former Deputy Governor RBI
(Dec, 2005)

Scope of Financial Inclusion

In India the focus of the financial inclusion at present is confined to ensuring a bare
minimum access to a savings bank account without frills, to all. Internationally, the
financial exclusion has been viewed in a much wider perspective. Having a current
account / savings account on its own, is not regarded as an accurate indicator of financial
inclusion. There could be multiple levels of financial inclusion and exclusion. At one
extreme, it is possible to identify the ‘super-included’, i.e., those customers who are

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actively and persistently courted by the financial services industry, and who have at their
disposal a wide range of financial services and products. At the other extreme, we may
have the financially excluded, who are denied access to even the most basic of financial
products. In between are those who use the banking services only for deposits and
withdrawals of money. But these persons may have only restricted access to the financial
system, and may not enjoy the flexibility of access offered to more affluent customers.

Middle-Income Households will lead India’s Population Growth

From the above report by NCAER it is outlined that there will be increased number of
middle class income groups in the total population by 2010 i.e. the figure currently is 70
millions (approx) which will be extended to 80 million by 2010. So, it would be
profitable for bank to target such a mass group.

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Microfinance and Financial Inclusion

Financial Inclusion is a paradigm shift from microfinance to inclusive finance. Financial

Inclusion acquires a broader definition since it is not limited to micro-finance institutions.
Financial Inclusion aims at bringing into the mainstream those people who hadn’t had the
chance of being financially included while at the same time looking at the comparative
advantages for the banks. Although the terms Micro-finance and Financial Inclusion are
closely inter-related, there is some difference between the two. Till now, through
microfinance we have only allowed the people access to micro-financial services
provided mostly by small agencies. Financial Inclusion aims at bringing the un-banked
citizens into the financial mainstream. With initiatives the previously excluded section of
the population could have access to financial facilities. They should be made aware of the
advantages of remaining with a formal financial agency. The Financial Inclusion is
therefore a step by step process involving the people as well as the respective agencies.
Financial inclusion takes the process of micro-finance a step further by not just treating
them as different or poor but by considering them as credit-worthy citizens and bankable
consumers. Financial Inclusion aims to bring into contact the poorest of the poor with the
big banks who have so far been hesitant to deal with them.

The valuable experience of microfinance has shown that the doubts of poor consumers
defaulting payment of credit might not be valid after all. Microfinance Institutions have
been a big success because they have been able to come up with financial products that
the population in the lower economic strata wants. However there still remains to be seen
how the transaction costs on the large number of small credit can be lowered.

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RBI and Financial Inclusion
As the central bank of the country, the Reserve bank of India has taken steps to ensure
financial inclusion in the country. It has tried to make banking more attractive to citizens
by allowing for easier transactions with banks. In 2004 RBI appointed an internal group
to look into ways to improve Financial Inclusion in the country. It came out with a report
in 2005 (Khan Committee) and subsequently RBI issued a circular in 2006 allowing the
use of intermediaries for providing banking and financial services. Through such policies
the RBI has tried to improve Financial Inclusion. Financial Inclusion offers immense
potential not only for banks but for other businesses. Through an integrated approach the
businesses, the NGOs, the government agencies as well as the banks can be partners in
growth. RBI has realized that a push is needed to kick start the financial inclusion
process. Some of the steps taken by RBI include the directive to banks to offer No-frills
account, easier KYC norms, better customer services, promoting the use of IT and
intermediaries, and asking SLBCs and UTLBCs to start a campaign to promote financial
inclusion on a pilot basis. So far the campaign for 100% financial inclusion has been said
to be a success with many states now reaching near-total financial inclusion.

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 International Scenario
An interesting feature which emerges from the international practice is that the more
developed the society is, the greater the thrust on empowerment of the common person
and low income groups. It may be worthwhile to have a look at the international
experience in tackling the problem of financial exclusion so that we can learn from the
international experience.

India Has the Second-Highest Number of Financially Excluded Households in the World, After China

Source: - The Economist Intelligence Unit; World Bank

reports

The Financial Inclusion Task Force in UK has identified three priority areas for the purpose of

financial inclusion, viz., access to banking, access to affordable credit and access to free face-to-

face money advice. UK has established a Financial Inclusion Fund to promote financial inclusion

and assigned responsibility to banks and credit unions in removing financial exclusion. Basic

bank no frills accounts have been introduced. An enhanced legislative environment for credit

unions has been established, accompanied by tighter regulations to ensure greater protection for

investors. A Post Office Card Account (POCA) has been created for those who are unable or

unwilling to access a basic bank account. The concept of a Savings Gateway has been piloted.

This offers those on low-income employments £1 from the state for every £1 they invest, up to a

maximum of £25 per month. In addition the Community Finance Learning Initiatives (CFLIs)

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were also introduced with a view to promoting basic financial literacy among housing association

tenants.

A civil rights law, namely Community Reinvestment Act (CRA) in the United States
prohibits discrimination by banks against low and moderate income neighborhoods. The
CRA imposes an affirmative and continuing obligation on banks to serve the needs for
credit and banking services of all the communities in which they are chartered. In fact,
numerous studies conducted by Federal Reserve and Harvard University demonstrated
that CRA lending is a win-win proposition and profitable to banks. In this context, it is
also interesting to know the other initiative taken by a state in the United States. Apart
from the CRA experiment, armed with the sanction of Banking Law, the State of New
York Banking Department, with the objective of making available the low cost banking
services to consumers, made mandatory that each banking institution shall offer basic
banking account and in case of credit unions the basic share draft account, which is in
the nature of low cost account with minimum facilities.

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 INTRODUCTION:

Banking in India originated in the last decades of the 18th century. The first banks were
The General Bank of India which started in 1786, and the Bank of Hindustan, both of
which are now defunct. The oldest bank in existence in India is the State Bank of India,
which originated in the Bank of Calcutta in June 1806, which almost immediately
became the Bank of Bengal. This was one of the three presidency banks, the other two
being the Bank of Bombay and the Bank of Madras, all three of which were established
under charters from the British East India Company. For many years the Presidency
banks acted as quasi-central banks, as did their successors. The three banks merged in
1921 to form the Imperial Bank of India, which, upon India's independence, became the
State Bank of India. Indian merchants in Calcutta established the Union Bank in 1839,
but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad
Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in
India.(Joint Stock Bank. . That honor belongs to the Bank of Upper India, which was
established in 1863, and which survived until 1913, when it failed, with some of its assets
and liabilities b Foreign banks too started to arrive, particularly in Calcutta, in the 1860s.
The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another
in Bombay in 1862; branches in Madras and Pondichery, then a French colony,
followed. HSBC established itself in Bengal in 1869. Calcutta was the most active
trading port in India, mainly due to the trade of the British Empire, and so became a
banking center.
Being transferred to the Alliance Bank of Simla. The Bank of Bengal, which later merged
with the Bank of Bombay and the Bank of Madras to form the Imperial Bank of India in
1921.

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 The period between 1906 and 1911 a
number of banks established then have survived to the present such as Bank of India,
Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of
India.

The partition of India in 1947 adversely impacted the economies of Punjab and West
Bengal, paralyzing banking activities for months. India's independence marked the end of
a regime of the Laissez-faire for the Indian banking. The Government of India initiated
measures to play an active role in the economic life of the nation, and the Industrial
Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This
resulted into greater involvement of the state in different segments of the economy
including banking and finance. The major steps to regulate banking included:

 In 1949, the In 1948, the Reserve Bank of India, India's central banking authority,
was nationalized, and it became Banking Regulation Act was enacted which
empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the
banks in India."

The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the RBI, and no two banks could have
common directors.

However, despite these provisions, control and regulations, banks in India except the
State Bank of India, continued to be owned and operated by private persons. This
changed with the nationalization of major banks in India on 19 July 1969.

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16
NATIONALISATION :

The RBI was nationalized on January 1, 1949 in terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 (RBI,

By the 1960s the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large
employer, and a debate had ensued about the possibility to nationalise the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the
GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray
thoughts on Bank Nationalisation. The paper was received with positive enthusiasm.
Thereafter, her move was swift and sudden, and the GOI issued an ordinance and
nationalised the 14 largest commercial banks with effect from the midnight of July 19,
1969. Jayaprakash Narayan, a national leader of India, described the step as a
"masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking)
Bill, and it received the presidential approval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The

stated reason for the nationalization was to give the government more control of credit
delivery. With the second dose of nationalization, the GOI controlled around 91% of the
banking business of India. After this, until the 1990s, the nationalised banks grew at a
pace of around 4%, closer to the average growth rate of the Indian economy.

Liberalization:

In the early 1990s, the then Narsimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of
Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move,
along with the rapid growth in the economy of India, revitalized the banking sector in

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India, which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks.

The next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be given
voting rights which could exceed the present cap of 10%,at present it has gone up to 74%
with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning.
The new wave ushered in a modern outlook and tech-savvy methods of working for
traditional banks.All this led to the retail boom in India. People not just demanded more
from their banks but also received more.

Currently , banking in India is generally fairly mature in terms of supply, product range
-even though reach in rural India still remains a challenge for the private sector and
foreign banks. In terms of quality of assets and capital adequacy.

Markets First
31st May, 2010
Headlines

 Equity benchmark indices recover lost ground with a 2.5% gain for the week on
the back of short covering.

 10 year GOI Benchmark at 7.55% (17 bps hardening WoW) due to pressure of
liquidity.

Robust GDP growth of 7.4% for the FY 2010 - helped by higher than expected growth
from manufacturing and agriculture.

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Bond market update
10 year benchmark G-sec at 7.55% on 28th May, 2010 (hardening of 17bps WoW)
The yields on the G-sec started hardening in view of the impending liquidity shortage due
to the 3G auction, tax outflows and the weekly auction supply. The yields on the US
Treasury also hardened.
Corporate bonds yields range bound in view of ample liquidity

The 10 year AAA bond traded at a yield of around 8.67% compared to 8.60% observed in
the previous week. The 1 year bond was stable at 6.65%. The AAA 5 year corporate
bonds hardened to 8.18%. The hardening is due to the increase in yields in government
securities and the impending liquidity shortage.

GDP growth and inflation

The robust GDP growth of 7.4% for the FY 2010 was triggered by the higher than
expected growth from manufacturing and agriculture, boosted by the economic stimulus.
The primary articles inflation rate for the week ended 15th May stood at 15.9% vis-à-vis
16.19% a week earlier - the index declined by 0.1%. The fuel and power index rose
0.05% taking the YoY inflation rate to 12.08% from 12.33% a week earlier.

Foreign exchange reserves

India's foreign exchange reserves for the week ended 21st May stood at $273.36 bln
lower by $2.87bln.

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Global news update for bond markets

 According to the 2nd estimate released by the Bureau of Economic Analysis, real
GDP of the US increased at an annual rate of 3.0% in the first quarter of 2010 as against
3.2% in the advance estimate. In the fourth quarter of 2009, real GDP had increased
5.6%.

 As per the Office for National Statistics, GDP in the UK rose by 0.3% in the first
quarter compared to an initial measurement of 0.2% as rebounding investment and the
biggest jump manufacturing for four years strengthened the recovery.

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“PASSION TO SERVE.
PASSION TO PERFORM”

COMPANY PROFILE

Our Mission:

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 BRIEF HISTORY

Bank of Baroda is having a long, eventful and glorious history of more than 101 years.
HH Sir. Maharaj Sayajirao-III founded the Bank.The Bank made a humble beginning in
1908 in a small building in Baroda. On 20 th July 1908 Bank of Baroda Limited was
registered under the Baroda Companies Act of 1897, with a paid up capital of Rs. 10 lacs.

In the year 1935 Bank became a scheduled Bank. RBI included the Bank in the second
schedule of RBI and brought under direct control of RBI. At the time of independence in
1947, Bank of Baroda was a regional bank with 48 branches. However, it found a place
in India’s ‘Fortune Five’ list of Banks. During 1953 - 1958 Bank opened 30 new offices

and had become an all-India Bank. Bank of Baroda (BSE: 532134) (BoB) (Hindi: बैंक

ऑफ़ बड़ौदा) is the 3rd largest bank in India, after State Bank of India and Punjab National
Bank and ahead of ICICI Bank. BoB has total assets in excess of Rs. 2.27 lakh crores, or
Rs. 2,274 billion, a network of over 3000 branches and offices, and about 1100+ ATMs.
It offers a wide range of banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its specialised subsidiaries
and affiliates in the areas of investment banking, credit cards and asset management.

Maharajah of Baroda Sir Sayajirao Gaekwad III founded the bank on July 20, 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial
banks of India, was nationalised on 19 July 1969, by the Government of India.

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As many as nine 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 People Bank (1964)
Traders Bank Limited (1988)
Bareilly Corporation Bank Ltd (1998)
Benares State Bank Ltd (2002)
South Gujarat Local Area Bank Ltd (2004).

The 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, THE BANK OF BARODA

It has been a wisely orchestrated growth, involving corporate wisdom, social pride and
the vision of helping others grow, and growing itself in turn.

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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."

These words are etched into the mind, body and soul of what has now become a banking
legend. Following the Maharaja's words, the emblem has been crafted to represent
wealth, safety, industrial development and an inclination to better and promote the
country's agrarian economy. This emblem shows a coin, symbolizing wealth, embossed
with an upraised palm, a safety cover for the depositor's money, with a cogwheel that
promotes industrial growth in tandem with the two corn ears that stand for the progress of
the staple agricultural growth in the country.

The 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 the century old 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

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 Our Logo:

Our new logo is a unique representation of a universal symbol. It comprises

dual ‘B’ letterforms 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 they touch. At Bank of Baroda, we seek to be the source that will help all our
stakeholders realise their goals. To our customers, we seek to be a one-stop, reliable
partner who will help them address different financial needs. To our employees, we offer
rewarding careers and to our investors and business partners, maximum return on their
investment.

The single-colour, compelling vermillion palette has been carefully chosen, for its
distinctivenes as it stands for hope and energy. 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. 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.

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 INITIAL EMBLEM:

The emblem show a coin, symboilizing wealth , embossed with an an unpraised palm, a
safety cover for the depositor’s money with a cogwheel that promotes industrial growth
in tandem with the two corn ears that stan for the progress of the staple agriculture
growth in the country .

Marketing Initiatives

The mid-eighties marked the beginning of the shift to a buyers` market. The Bank
orchestrated its business strategies around the centrality of the customer. It diversified
into areas of merchant banking, housing finance, credit cards and mutual funds. A string
of segment specific branches entrenched operations in the profitable markets. Overseas
operations were revamped and structural changes intensified in the territories to cater to
second generation NRIs. Slowly but surely, the move to become a one stop financial
supermarket had been set in motion. Service delivery standards were stipulated.

Technology was adopted to add punch. Employees across the board were inculcated with
the marketing concept. Aggressive marketing became the new business philosophy.

People Initiatives

Bank of Baroda has always had an immense faith in the infinite potential of its people.
This has been historically demonstrated in its recruitment practices, developmental
initiatives, placement processes and promotion policies. Strategic HR interventions like,
according cross border and cross cultural work exposure to its managers, hiring diverse
functional specialists to support line functionaries and complementing the technical
competencies of its people by imparting conceptual, managerial and leadership skills,
gave the Bank competitive advantage. The elaborate man management policies also made

26
the Bank a breeding ground for business leaders. The Bank provided around a dozen
CEOs to the industry- men who went on to build other great institutions. People
initiatives were blended with IR initiatives to create an effectively harmonious
workplace, where everyone prospered.

Financial Initiatives

New norms for capital adequacy required new capital management strategies. In 1995 the
Bank raised Rs 300 crores through a Bond issue. In 1996 the Bank tapped the capital
market with an IPO of Rs 850 crores, Despite adverse market conditions prevailing then,
the issue was over subscribed, reflecting the positive public perception of the Bank's
fundamental financial strength.

The Future

Revolutionary and discontinuous changes in the operating environment are a stark

reminder that business success is 'impermanent'. The emergence of IT as a major driver
for change, has accentuated the need to initiate a major transformation program. The
conversion to an IT savvy, market driven bank will be a prerequisite to survival and
growth. A major and strategic step in hi-tech, was the establishment of the Integrated
Treasury branch, as a forerunner to full-fledged global treasury operations. Towards
creating a future Bank of Baroda, the Bank has adopted a revolutionary new business
strategy that will be enabled by a revolutionary new IT strategy. Actioning this strategy
will position Bank of Baroda as India's uncontested premier bank.

At Bank of Baroda, change is a journey. It has a beginning. There will be no end. It will
be a long and difficult march. And the Bank will emerge stronger, more resilient and
positioned to become India's first bank of truly global standards. The relocation to the
imposing Baroda Corporate Centre, is a true reflection of the Bank's resolve to move
ahead of the times. It will not be out of place now, as it stands on the threshold of a
digital era, to echo the same sentiments that guided the Bank in its platinum jubilee year -
'a promising future is the sequel to a glorious past'.

27
International Presence:

In the year 1953, taking a pioneering step, the Bank opened its first overseas branch at
Mombasa on 14.12.1953 followed by two other branches at Kampala and Nairobi.

Subsequently, operations started in Dar-Es-Salaam in 1956 and in London in 1957. At

present, the Bank has 78 overseas network branches / offices in the following 25
countries:

1 Australia 10 Guyana 19 Tanzania

2 Bahamas 11 Hong Kong 20 Trinidad & Tobago
3 Bahrain 12 Kenya 21 Uganda
4 Belgium 13 Mauritius 22 UAE
5 Botswana 14 Malaysia 23 UK
6 Bangkok 15 South Africa 24 USA
7 China 16 Seychelles 25 Zambia
8 Fiji Island 17 Sultanate of Oman 26 Mozambique
9 Ghana 18 Singapore 27 Quatar

OVERSEAS SUBSIDIARIES

Bank of Baroda (Botswana) Ltd.

Bank of Baroda (Kenya) Ltd.
Bank of Baroda (Uganda) Ltd.
Bank of Baroda (Guyana) Inc.
Bank of Baroda (Tanzania) Ltd.
Bank of Baroda (Ghana) Ltd.
Bank of Baroda (Trinidad & Tobago) Ltd.
Bank of Baroda (New Zealand Ltd.

28
Joint Venture
India-Zambia Bank Ltd. (Lusaka)
Representative Offices
Australia
Kuala Lumpur, Malaysia

29
PRODUDT & SERVICES OFFERED BY BANK OF BARODA :

Retail Loans:

A wide range of solutions for your financial needs.

Bank of Baroda offers a wide range of retail loans to meet your diverse needs. Whether
the need is for a new house, child's education, purchase of a new car or home appliances,
our unique and need specific loans will enable you to convert your dreams to realities.

Key products :

BARODA HOME LOAN:

Home Improvement Loan

Bank of Baroda brings to you a unique loan product. A loan for

Repairs / Renovations / Improvement / Extension of Home and for Furniture, Fittings &
Fixtures.

Key Benefits

 Loan available for repairs / renovation / improvement / extension of the existing

house.

 Loan available for purchase of furniture / fixtures / furnishing / other gadgets such
as fans, geysers, air conditioners etc. required, to:

Baroda Mortgage Loan

30
Bank of Baroda brings to you an innovative combination of a loan and over draft facility
with flexible repayment options against the security of your immovable property.

Key Benefits

 Ideal use of idle property - Generate additional income from an otherwise idle
property.

 Withdraw money as per your need and save on interest cost.

 Deposit surplus money / regular income / salary and save interest.

Baroda Education Loan :

Education is the most important investment one makes in life. Higher studies and
specialization in certain fields call for additional financial support from time to time.

Whether you are planning school education (nursery to standard XII) of your child,
pursuing a graduate or post-graduate degree, the Bank of Baroda Education Loans, can
help finance your ambitions and goals.

Following are the loan options available:

 Baroda Vidya

 Baroda Gyan

 Baroda Scholar

Baroda Vidya:

Bank of Baroda presents a one of its kind finance option for parents of students pursuing
school education. These loans are available for studies from Nursery to Senior Secondary
School.

Baroda Scholar:

31
Bank of Baroda presents financial assistance to students going abroad for Professional /
Technical studies. The loan offering is designed to empower you with the financial
capability to realise your dreams... Achieve your goals... Reach out to the maximum
limits...

Graduate/Post Graduate / Doctorate / Job Oriented Professional / Technical Courses

offered by reputed Universities .

BARODA CAR LOAN :

In today's fast paced world, a vehicle is but a necessity. Yet other expenses and plans in
life take priority and the dream of owning a car takes a back seat. Whether as a
comfortable and dependable means of transport or as a status symbol in society, we
believe you deserve ownership of a vehicle.

The Car Loans from Bank of Baroda are designed to finance the car that suits your
need and matches to your status & taste.

Baroda Loan to Doctors

Bank of Baroda brings to you Baroda Loan to Doctors, a one of its kind, designed
specially to cater to the financial needs of the doctors.

The advance is available for projects related to setting up / expansion of nursing home /
hospital / clinic and pathological .

32
BARODA PERSONAL LOAN:

A wedding in the family. Maybe it's high time you surprised your spouse with a priceless
gift. Or you simply need to pamper your family with an extended vacation. These are the
times when you may need a helping hand. That's when you can bank on us. Bank of
Baroda's Personal Loan offers financial help to meet your personal requirements.

Key Benefits:

 Helps you take care of all kinds of expenses at a short notice.

 The Loan may be availed to meet expenses related to marriage, travel,

honeymoon, holiday and medical expenditure or for any other personal use.

 The loan is also available to Pensioners/Defence Pensioners

 Loan is also available for Earnest Money Deposits for buyers of home/flat/plot.

Baroda Ashray (Reverse Mortgage Loan)

Eligibility:

33
  Should be Senior Citizen of India, above 60 years of age.

 Married couples will be eligible as joint borrowers provided one of them is above
60 years of age and age of spouse is not below 55 years at the time of application.

 Should be the owner of a residential property (house or flat) located in India in

his/her own name.

The maximum loan amount inclusive of interest for entire tenure of the loan shall be
restricted to Rs. 1 crore subject to value of the property. The Bank shall have the option
to revise periodic annuity amount, if lump-sum payment is taken or at the interval of
every 5 years based on valuation of the property.

Repayment of Loan:

The loan shall become due and payable 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. The loan will, as such, become due for recovery and payable.

 Settlement of loan, along with accumulated interest, to be met by the proceeds

received out of sale of residential property.

 The borrower(s) or his/her/their estate shall be provided with the first right to
settle the loan along with accumulated interest, without sale of property. A
reasonable period of 2 months may be provided when repayment is triggered, for
house to be sold.

.Baroda Traders Loan:

The Baroda Traders Loan facility enables individuals, Proprietorships, bodies such as
Partnership firms and Co-op societies to avail of working capital or undertake
development of shop by way of loan/overdraft. Dealers in gold/ silver jewelry are also
covered under the scheme.

34
Key Benefits

 Option to avail the credit facility as loan or overdraft.

 Advance available up to Rs. 200 Lacs.

 Loan can be repaid in a maximum period of 60 months.

 The business units should have been established in the line of business for a minimum
period of 2 years

 40% on realizable market value of immovable property.

 10% on Bank's own Fixed Deposits.

 15% on face value of NSCs, Govt. Bonds, surrender value of LIC policies.

35
 BARODATWOWHEELERLOAN:

For those individuals who prefer to travel more conservatively or to get to their
destinations faster, a two-wheeler is as much a boon as it is to a car owner. With newer
models coming out each year, the options available to the customer are both attractive as
well as convenient.

Bank of Baroda's Two-Wheeler Loan make it possible to purchase a two-wheeler and

pay back in easy monthly instalments, thereby reducing the burden of a one-time
payment.

All resident Indians, salaried, professionals, self-employed, businessmen and farmers can
apply for this loan.

Terms & Conditions

 Finance for a minimum of Rs. 5000 and a maximum of Rs. 1 Lakh (or five times
of the monthly income, whichever is less) can be availed of through the loan.

 Margin of 10% on loan amount.

 The loan amount can be repaid in maximum 60 months from the date of
disbursement of loan.

36
Baroda Career Development

Gainfully employed persons intend to pursue higher education, vocational courses,

trainings, pilot trainings, skill up gradation, diploma or degree courses offered in aviation,
hospitality and travel management, executive development etc. in India / abroad.

Eligiblity of Courses :

 Graduate, Post Graduate, Diploma, Professional Courses, Specialization courses

offered by reputed Universities/ Institutions (Indian or Overseas), having assured
employment prospects,

 Skill up gradation courses offered by various institutes (Indian/Overseas), having

assured employment prospects,

 Courses offered by Hospitality Management Institutes for Skill upgrade/Short

course/ Training etc.

 Pilot Training Courses, offered by reputed Institutions (Indian or Overseas),

approved by Director General of Civil Aviation (DGCA) /International Civil
Aviation Organization (ICAO).

Student Eligiblity :

 Should be an Indian National.

 Have secured admission to the course through entrance test / merit based selection
process.

Loan Against Future Rent Receivables

37
Has been developed considering the growth potential in the real estate in various metros
and urban centers, where many commercial properties/shopping malls are being
developed and the owners approach banks for loans against securitization of future rent
receivables from such properties.

Key Benefits

 The scope for the New Product has been kept wide to cover the target groups, viz.
owners of immoveable properties (lessor) belonging to all types of the
constitution.

 The minimum and maximum loan limits are fixed at Rs.1 lac and Rs.1000 lacs
respectively.

Baroda Home Loans to NRIs / PIOs

Bank of Baroda presents yet another innovative product in the form of Baroda Home
Loans to NRIs / PIOs, a unique housing loan facility designed specially for Non Resident
Indians (NRI) and Person of Indian Origin (PIO).

Key Benefits

 A loan product tailor-made for NRI / PIO needs

 Opt for Flexi Rate plan to hedge the interest rate risk by breaking the loan into
two separate accounts

 Free property insurance and personal accident insurance

 No pre payment / foreclosure charges for part as well as full prepayment (when
repaid from own sources by the borrower) .

Baroda Home Loans to NRIs / PIOs:

Bank of Baroda presents yet another innovative product in the form of Baroda Home

38
Loans to NRIs / PIOs, a unique housing loan facility designed specially for Non Resident
Indians (NRI) and Person of Indian Origin (PIO).

Key Benefits

 A loan product tailor-made for NRI / PIO needs

 Opt for Flexi Rate plan to hedge the interest rate risk by breaking the loan into
two separate accounts

 Free property insurance and personal accident insurance

 No pre payment / foreclosure charges for part as well as full prepayment (when
repaid from own sources by the borrower)

Deposits:

 Bank of Baroda offers various deposit plans that you can choose from depending
on the term period, nature of deposit and its unique saving and withdrawal
features.
 Apart from competitive interest rates and convenient withdrawal options, our
deposit plans offer other features such as overdraft facility, outstation cheque
collections, safe deposit lockers, ATM's etc.

 Choose from Fixed, Current and Savings Deposit plans.

 Fixed deposits are categorised into deposits with a term period of less than 12
months, more than 12 months and recurring deposits. These deposit plans offer
convenient solutions to both working individuals as well as senior citizens.

 Current and saving deposits are ideal for individuals who wish to take advantage
of multiple benefits within the same plan and even be eligible to opt for
overdrafts.

39
 Gen Next Services:

Gen-Next Junior (Saving Account)

Product Nature

 This is a Special kind of Savings Bank Deposit product for children to be made
available in Gen-Next Pune branch.

Gen-Next Lifestyle

Type Of Facility

 Term Loan (Combo Pack)

Purpose

 Purchase of Home Furnishings / Consumer Durable goods (includes color T.V.,

video camera / refrigerator / washing machine / music system / air-conditioners /
cooking system etc).
 Purchase of vehicle i.e. two-wheeler / four-wheeler.

 Purchase of Laptop / PC.

 Purchase of any new electronic gadgets like Mobile, i-Pod, Handycam etc.

Target Group

40
Working Gen-Next Power (OD Facility)

Product Nature

 This is a special Savings Deposit product having an in built feature of overdraft

facility to be available at Gen-Next Pune branch.

Target Group

 The product is targeted to working executives and other working professionals.

Our Bank’s Staff members are not eligible to avail the product.

. Gen-Next Suvidha :

Product Nature :

 This is a Recurring Deposit product enabling the customer to make regular

savings on monthly basis and earn higher interest.

Customer Segment :

 Individuals in their single / joint names.

 Minors of age 10 years and above jointly with their parents / natural guardians.

 Minors below 10 years age through their parents.

DEBIT CARD :

41
Bank of Baroda International Debit Card is accepted at over 50000 Visa Electron
ATMs in India and 1000000 ATMs worldwide. The card is also accepted at any 350000
merchant outlets in India and around 29 millions globally. The card enables you to enjoy
the convenience of cash-less purchasing power without the fear of overdrawing your
account

Key Benefits

 Take advantage of the most widely accepted card and be able to withdraw from
any ATM displaying the VISA logo, in India and abroad.

 At VISA Electron merchant shops, it can also serve as your electronic purse, and
money gets debited instantly from your account, as you pay.

 The Card allows you to get mini-statements from Bank of Baroda ATMs, or to
check the balance in your account, avoiding visits to even our nearest branches.

Remittances (Baroda Money Express):

Business relations get strengthened and add to the trust when financial dealings happen
on time. The Baroda Money Express remittance facility ensure instant payments and
transfer of funds, saving you and your associates from waiting endlessly for funds to get
credited.

This facility is available for both retail and corporate customers enabling efficient and
easy transfer of money. So no more delays in transfer of funds typical of Banker's
Cheque, Demand Drafts, Mail Transfers and Telegraphic Transfers.

The facility is available at 345 branches across 53 centres in India inclusive of all
branches in Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Mumbai, and Pune.

Key Benefits:

42
  Can be used to transfer money to the beneficiary's account in the same bank, or
another bank or even to their residential/office address, thus offering convenient
options.

 This electronic remittance is the fastest way of transferring money from one
place.

Demat:

The Depository system was introduced in India more than a decade back.

Today the word "Demat" is well known and most of the investors are conversant with the
Demat of shares and securities.

Presently, there are only two depositories functioning in India and they are:-

i. National Securities Depository Limited (NSDL) and

ii. Central Depository Services (India) Limited (CDSL).

Financial Institutions, banks, custodians and stockbrokers complying with the

requirements prescribed by Securities & Exchange Board of India (SEBI) can be
registered as a Depository Participant (DP).

A "Depository Participant" is an agent of the Depository (NSDL or CDSL) who is

authorized to offer depository services to investors. Thus to open a Demat account of an
investor, a bank or its branch has to get registered .

Baroda Health:

"Baroda Health" (Mediclaim Insurance Policy) for Bank’s Account holders.

43
With a view to offer value added services to our customers, we have developed a co-
branded insurance product called as "BarodaHealth" (Mediclaim Insurance Policy) for
Bank's Account holders w.e.f. 23rd February 2006 available at all our branches across
the country.

What is Baroda Health Policy?

It is a Medical Insurance Scheme, available only to account holders of our Bank, which
takes care of the hospitalization expenses incurred by the customer up to the amount of
sum insured, in respect of the following eventualities.

 Any illness / disease

 Accidental injury and/ or any ailment.

 Any surgery that is required in respect of any disease or accident that has arisen
during the policy period

 The minimum hospitalization should be for 24 hours.

Collection Services >

Outward Bills for Collection:

All branches of Bank of Baroda have the facility of collecting Cheques, Demand Drafts,
Interest Warrants, Dividend Warrants, Refund Orders, Clean Bills and Documentary Bills
from customers and various centres.. All Cheques and other instruments are collected into
properly introduced accounts and sent for collection on the day of receipt from the
customers or the next working day.

Time Bound Collection:

All branches of Bank of Baroda are prompt in terms of the collections and forwarding of
cheques and other instruments. For metro cities, when financial instruments are presented
in a branch, the proceeds are credited to the customer's account on the same day in the

44
following week. For state capitals, (and centres with more than 100 branches), amount is
credited only after 10 days. If these instruments are not collected within 14 days of
lodgement, interest @ 2% per annum over savings bank rate is paid and is credited to the
customer's account, without the customer having to claim it.

Branches also accept requests for collection of Loan Certificates / FDRs issued by Joint
Stock Cos.; prize money of Lottery Tickets, Foreign Currency Notes etc. The bank levies
service charges as stipulated from time to time.

Inward Bills for Collection:

Bills of Exchange, Promissory Notes, Hundi's etc. (Clean / Documentary), payable

locally but received from outstation branches / banks / parties are treated as "Inward Bills
for Collection". Also, Bills received from Bank of Baroda branches and from other
banks, directly from drawers or outstation parties are treated as Usance (??) Bills.

BOB Quick:

The Funds collected in this offering are credited to the customer's account within a
guaranteed period of 7 days. Bank of Baroda's BOB Quick ensures a better collection
service, which creates new avenues of income and ensures better investment of funds. All
cheques amounting to Rs. 25000/- and above are drawn on select banks and are eligible
for "Quick inter station clearing". Rs. 50/- per packet is charged for courier charges
with an additional but nominal collection charge.

National Clearing Special Facilities:

This product is an undertaking by the Reserve Bank of India, for inter city clearing of
cheques between the four metropolitan centres of Delhi, Mumbai, Chennai and Calcutta.

Key Benefits

 Settlement of transactions on the basis of net value of instruments.

45
  All financial instruments are cleared promptly with the introduction of
mechanised cheque processing, achieved through MICR technology. The concept
of clearing has been extended to clearance of outstation cheques also.

 In addition to the four metropolitan centres, certain other centres have also been
identified for "One Way National Clearing". These centres are Nagpur,
Ahmedabad, Hyderabad, Bangalore, Pondichery, Trichy, Trivendrum, Vellore,
Baroda, Erode, Madurai, and more.

ElectronicClearingServices(ECS):

This is a unique system under which Bank of Baroda helps companies and
institutions making heavy payments disburse these amounts directly into the bank
accounts of the beneficiaries such as account holders, shareholders, investors etc.

WholesaleBanking:

Bank has identified the following new business segments as a step toward becoming
Multi Specialist Bank.

 Wholesale (Large & Mid Corporates)

 Urban Retail

 Small & Medium Enterprises

 Rural/Agri Business

Under Wholesale Banking the corporate customers are identified as Large and Mid
corporates. Companies having annual sales turnover of over Rs. 500 crore are classified
as Large Corporate and those having annual sales turnover between Rs 100 crore to 500
crore are classified as Mid Corporate.

TREASURY:

46
DomesticOperations

Bank of Baroda has set up dedicated desks at the SITB, headed by experienced
professionals, for undertaking various types of treasury activities in different financial
markets. Apart from activities pertaining to management of funds and liquidity, the
domestic treasury also handles financial instruments like:
 Commercial Papers (CP)
 Certificate of Deposits (CD)

 Government Securities

 Treasury Bills (TB)

 Bonds and Debentures

 Equities and various other derivatives.

The products and services offered by SITB cater to the inter-bank market as well as to the
Corporate customers of the bank. The Bank is an active participant both in the inter-bank
market and the corporates for all the products.

The Bank offers its customers, including firms, companies, corporate bodies, institutions,
provident funds trusts, Regional Rural Banks, Urban Cooperative Banks and Non-
Banking Financial Companies opportunities to invest in Government Securities as
allowed by Reserve Bank of India for non-competitive bidding.

ForexOperations:

Bank of Baroda, one of the major public sector banks in India having a strong global
presence with a wide network of 61 overseas offices, including those of subsidiaries,
spread over 16 countries, is considered as a market leader in foreign exchange operations
in India. At present the Bank is having branches / offices in countries like USA, UK,
Belgium, South Africa, Hong Kong, UAE, Oman, Fiji Islands, Mauritius, Seychelles,
Bahamas, Guyana, Kenya, Uganda and Zambia

47
The Bank has completed fifty years of operations in overseas territories and is poised to
expand its reach to countries like Tanzania and China, apart from consolidating its
overseas operations in those countries where the bank has already made its presence felt.

The modern state-of-the-art dealing room at its Specialised Integrated Treasury Branch
(SITB) at Mumbai provides the necessary wherewithal to its 95 designated branches
across the length and breadth of the country authorized to handle foreign exchange
business of its clientele. The bank has retained its primacy as a leading market maker
both in spot and forward markets, along with foreign exchange swap markets.

The forex dealing desk at the SITB is provided with all modern communication facilities
and is in the process of linking all its authorized branches via Reuters Automated Dealing
System, to provide on-line quotes for foreign exchange transactions.

Through its large network of authorized branches, the bank caters to the foreign exchange
needs of its clientele engaged in export and import trade and the SITB provides rates for
conversion of all major world currencies like U S Dollar, Sterling Pounds, Euro, Swiss
Francs, Japanese Yen and other exotic currencies. The services to the customers of the
Bank include hedging of foreign currency risks by providing forward covers and various
derivatives product.

IN RURAL SECTOR :

Bank’s passion for Rural Development

48
Bank of Baroda, since its inception on 20th July 1908 by the great visionary Maharaja
Sayajirao Gaekward III, has been in the forefront for social commitment with its
innovative approaches and products. A passion for agriculture and rural development and
to serve the common man is ingrained in the Bank’s philosophy.

In the past, the Bank has taken a number of initiatives such as opening of specialized
outlets of Gram Vikas Kendras (GVKs) and Multi Service Agencies (MSAs). 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.

Centenary Year commitments

During the Centenary Year, the Bank is committed to continue its initiatives towards
Corporate Social Responsibilities. Baroda Grameen Paramarsh Kendra (BGPK) – a
centre for Knowledge Sharing, Problem solving and Credit Counseling for the Rural
Community, is one of such initiatives.

Concept :

For the rural community, especially for the farmers, there is a big “Knowledge Gap” in
financial literacy, better farming practices, technology adoption, diversification of
opportunities, market linked prices, value addition services offered by various
institutions, women empowerment and also for employment opportunities for rural youth.
In addition to this, the deficiencies/ ignorance about credit related repayment during
distress situations call for credit counseling.

With a view to assist the rural community, the Bank has conceptualised “Baroda
Grameen Paramarsh Kendra (BGPK)” and its implementation by the dedicated team,
which would build the confidence of the rural people.

Activities to be covered:

 Financial Education and Financial Inclusion

49
  Information sharing and problem solving on technical issues

 Credit counseling

Services offered: (Illustrative Only)

1. Financial Education and Financial Inclusion:

o Spreading “Financial Awareness” among rural masses through village

level meetings and help them to choose suitable banking products.

o 100% Financial Inclusion in 5-10 villages.

2. Information sharing and problem solving:

o Interface sessions with the Subject Matter Specialists from Knowledge

institutions like Agri. Universities, KVKs, NGOs, etc.

o Providing extension services to the farmers by organizing / participating in

Grameen melas, TV & Radio talks, Film / Puppet shows, etc.

o Maintaining a small library containing books, journals, audio-visual aids,

etc.

o Information on the prices of Agriculture commodities in various mandis

across the country so that the farmers can sell their products at best price.

3. Credit Counseling:

o Providing credit counseling on repayment pattern, rephasement,

reschedulement and fresh credit during distress situations for rural people.

Baroda Fixed Deposit Account

50
Why just let your money idle, when you can idle it with interest?
Depending on the period, our various fixed deposit products help you get the best out of
your savings by offering you good interest rates.

Enjoy both security and competitive rates of interest on your deposits with any of the
following products. Click each product for more information.

 For Deposits upto 12 months:

o Short Deposits

 For Deposits over 12 months:

o Fast Access Deposit Scheme

o BoB Flexible Fixed Deposit Scheme

o Regular Income Plan

AGRICULTURE:

AGRICULTURAL FINANCE SCHEMES :

Agriculture being the backbone of the Indian Economy, Bank of Baroda, is contributing
significantly in accelerating the pace of rural development by providing finance to
farmers by way of following agriculture products.

 Baroda Kisan Credit Card (BKCC)- Empowering the farmer : The BKCC facility
designed exclusively for the benefit of the farmers aims to provide them the
opportunity to manage and utilise their funds in the manner they deem fit. BKCC
provide adequate and timely support to farmers for their production needs e.g.
purchase of quality inputs, investment requirements like purchase of agriculture
implements/tractor etc, farming expenses towards farm maintenance, unforeseen
family expenses (consumption) and maintenance of non-farm activities.

51
  Purchase of agricultural implements including indigenous improved ones being
utilised for field operations including harvesting/sorting/grading, for not only to
farmers, but also for land-less labourers.

 Small Scale Industries

 A Small Scale Industrial Unit, is one which is engaged in the manufacture,

processing or preservation of goods or is a servicing and repair workshop
undertaking repairs of machinery used for production, mining or quarrying or
custom service unit (except water service units), having investments in plant and
machinery (original cost) not exceeding Rs. 1 Crore.

 Bank of Baroda has special Loans and Advances for the purpose of fixed
capital investment and also for working capital requirement.

Baroda General Credit Card Scheme (BGCC):

Bank of Baroda presents a tailor-made Credit Card Scheme for the citizens belonging to
the rural and semi-urban parts of India. Baroda General Credit Card Scheme (BGCC) is
designed to provide hassle free and easy credit access to people in the rural and semi-
urban areas.

Key Benefits

 No insistence on security, purpose or end-use of credit

 Upto a maximum limit of Rs.25000/-

 Unlimited number of withdrawals and repayments (within the credit limit)

52
Bank of Baroda Next Has Miles to go!

  ABOUT US

Bank of Baroda, one of India's oldest and largest PSU banks, has always made a
concerted effort to stay in tune with changing times and consumer preferences.

BARODA NEXT – “ STATE-OF-THE-ART- STRAIGHT FROM THE HEART”

Baroda Next is Bank of Baroda's initiative to offer high-tech banking solutions without
losing the human touch. It aims to bring in new technologies, systems and processes to
offer fast, prompt and paperless banking solutions. At the same time, it also focuses on
nurturing long term relationships and superior customer service.

STICKMAN

The protagonist Stickman is our customer who discovers the joy of technology in
banking with Bank of Baroda. In a series of ads, stick man faces a number of tricky
situations which he resolves using Bank of Baroda’s services in a humorous and
endearing manner. You will experience the magic as you further surf the pages of this site

PRODUCT OF BARODA NEXT:

ONLINE PAYMENT OF INSURANCE PREMIUMS

To unleash the power of technology for the convenience of our customers, we have
devised a series of e-banking products and services.

53
 Through Baroda Connect internet banking facility, we let you pay your insurance
premium online so that you don't have to run around to pay your premiums.

Because at Bank of Baroda, we understand time is very precious to you, and we are
committed to compliment your effort to do things faster with less strain or stress to you. 

HOME LOAN: MOVE INTO DREAM HOME IN 6 DAYS:

You don't have to wait for your dream home for long. Through simplified processing
systems, we offer you home loan in just 6 days. The loan is available for construction of
new house, purchase of new/old house/flat/residential plot and extension/renovation of
existing house/flat.

Loans are also available for those who wish to transfer their existing home loan from
another financial institution/bank to Bank of Baroda.

ONLINE UTILITY BILLS PAYMENT :

To unleash the power of technology for the convenience of our customers, we have devised a
series of e-banking products and services.

Now you can stop worrying about due dates of your bills and live a relaxed life as we make
life easier by offering Baroda Connect internet banking facility to pay your bills online.

Because at Bank of Baroda, we understand time is very precious to you, and we are
committed to compliment your effort to do things faster with less strain or stress to you.

54
INDIAFIRST LIFE INSURANCE:

Joint venture on bank of baroda & Legal & General & Andhra Bank

GOLD COIN:

Bank of Baroda offers sale of 24 Karat 999.9 pure Swiss made gold coins with Assay
Certification in the denomination of 2, 4, 5 & 8 grams in round shape and 10 grams bar. These
coins are available for sale at select POS Branches. Baroda Vidyasthali Loan

Baroda Vidyasthali Loan is a special scheme for financing Educational Institutions.

PURPOSE

To meet the financial requirements for setting up the institutions which includes construction
of building, purchase of equipment etc. for the new set up as also renovation of the existing
facilities, purchase of instruments for imparting education training to the students.

Baroda Arogyadham Loan:

PURPOSE

To meet the financial requirements for setting up of new Nursing Home/Hospital including
Pathological Laboratory, Expansion/renovation/modernization of existing Nursing Home/
Hospital including Pathological Laboratory, Purchase of medical diagnostic equipments as also
office equipments, viz. computers, air conditioners, office furniture, Purchase of ambulance etc
and to meet working capital requirements.

Baroda Artisans Credit Card (BACC):

55
PURPOSE

 To provide adequate and timely assistance to the artisans to meet their credit
requirements - both investment needs as well as working capital - in a flexible and cost
effective manner. The scheme is implemented in rural and urban areas.

Loans Under Interest Subsidy Eligibility Certificate Scheme of Khadi & Village
Industries Commission (KVIC-ISEC)

Purpose

To finance institutional financing agencies for lending to Khadi & Village Industries

CREDIT CARD:

 BOBCARD EXCLUSIVE WOMAN

DESCRIPTION

56
BOBCARD Exclusive Woman Card is a tribute to the glorious women of India who are
acclaimed for their contributions to the human civilization. BOBCARDS presents this Card to
offer its gratitude to the great women souls of the land.

This card is welcomed at over 29 million Merchant Establishments and over 8,00,000 ATMs

MARKETING STRATEGY OF THIRD PARTY PRODUCT IN GENERAL AND

NON LIFE PRODUCT :

History of insurance

Insurance began as a way of reducing the risk of traders, as early as 5000 BC in China
and 4500 BC in Babylon. Life insurance dates only to ancient Rome; "burial clubs"
covered the cost of members' funeral expenses and helped survivors monetarily. Modern
life insurance started in 17th century England, originally as insurance for traders[7] :
merchants, ship owners and underwriters met to discuss deals at Lloyd's Coffee House,
predecessor to the famous Lloyd's of London.

The first insurance company in the United States was formed in Charleston, South
Carolina in 1732, but it provided only fire insurance. The sale of life insurance in the U.S.
began in the late 1760s. The Presbyterian Synods in Philadelphia and New York created
the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian
Ministers in 1759; Episcopalian priests organized a similar fund in 1769. Between 1787
and 1837 more than two dozen life insurance companies were started, but fewer than half
a dozen survived.

Prior to the American Civil War, many insurance companies in the United States insured
the lives of slaves for their owners. In response to bills passed in California in 2001 and
in Illinois in 2003, the companies have been required to search their records for such

57
policies. New York Life for example reported that Nautilus sold 485 slaveholder life
insurance policies during a two-year period in the 1840s; they added that their trustees
voted to end the sale of such policies 15 years before the Emancipation Proclamation.

Insurance developed from the fourteenth century as a means of spreading huge risks
attendant on early maritime enterprises; life and fire insurance developed later. The main
classes of insurance are life and other personal insurance, marine insurance, accident or
property insurance and liability insurance when the sum becomes payable when legal
liability is incurred as for personal injuries or professional negligence to another.

LIFE INSURANCE :

life insurance is a contract between the insurer and the policy owner whereby a benefit is
paid to the designated beneficiaries if an insured event occurs which is covered by the
policy. In return, the policy owner agrees to pay a stipulated amount at regular intervals
or in lump sums. There may be designs in some countries where bills and death expenses
plus catering for after funeral expenses should be included in Policy Premium. In the
United States, the predominant form simply specifies a lump sum to be paid on the
insured's demise.

Life-based contracts tend to fall into two major categories:

 Protection policies - designed to provide a benefit in the event of specified event,

typically a lump sum payment. A common form of this design is term insurance.
 Investment policies - where the main objective is to facilitate the growth of capital
by regular or single premiums. Common forms (in the US anyway) are whole life,
universal life and variable life policies.

 Types of life insurance

58
  Life insurance may be divided into two basic classes – temporary and permanent
or following subclasses - term, universal, whole life and endowment life
insurance.

There are three key factors to be considered in term insurance:

 Face amount (protection or death benefit),

 Premium to be paid (cost to the insured)

 Length of coverage (term)

Various insurance companies sell term insurance with many different combinations of
these three parameters. The face amount can remain constant or decline. The term can be
for one or more years. The premium can remain level or increase. Common types of term
insurance include Level, Annual Renewable and Mortgage insurance. Level Term policy
has the premium fixed for a period of time longer than a year. These terms are commonly
5, 10, 15, 20, 25, 30 and even 35 years. Level term is often used for long term planning
and asset management because premiums remain consistent year to year and can be
budgeted long term. At the end of the term, some policies contain a renewal or
conversion option. Guaranteed Renewal, the insurance company guarantees it will issue a
policy of equal or lesser amount without regard to the insurability of the insured and with
a premium set for the insured's age at that time. Some companies however do not
guarantee renewal, and require proof of insurability to mitigate their risk and decline
renewing higher risk clients (for instance those that may be terminal). Renewal that
requires proof of insurability often includes a conversion options that allows the insured
to convert the term program to a permanent one that the insurance company makes
available. This can force clients into a more expensive permanent program because of
anti selection if they need to continue coverage. Renewal and conversion options can be
very important when selecting a program.

What is General Insurance?

59
 Insurance other than ‘Life Insurance’ falls under the category of General Insurance.
General Insurance comprises of insurance of property against fire, burglary etc, personal
insurance such as Accident and Health Insurance, and liability insurance which covers
legal liabilities. There are also other covers such as Errors and Omissions insurance for
professionals, credit insurance etc.

Non-life insurance companies have products that cover property against Fire and allied
perils, flood storm and inundation, earthquake and so on. There are products that cover
property against burglary, theft etc. The non-life companies also offer policies covering
machinery against breakdown, there are policies that cover the hull of ships and so on. In
respect of insurance of property, it is important that the cover is taken for the actual value
of the property to avoid being imposed a penalty should there be a claim. Where a
property is undervalued for the purposes of insurance, the insured will have to bear a
ratable proportion of the loss There are general insurance products that are in the nature
of package policies offering a combination of the covers mentioned above. For instance,
there are package policies available for householders, shop keepers and also for
professionals such as doctors, chartered accountants etc. Apart from offering standard
covers, insurers also offer customized or tailor-made ones. Insuring anything other than
human life is called general insurance. Examples are insuring property like house and
belongings against fire and theft or vehicles against accidental damage or theft. Injury
due to accident or hospitalization for illness and surgery can also be insured. Your
liabilities to others arising out of the law can also be insured and is compulsory in some
cases like motor third party insurance.

THIRD PARTY INSURANCE:

There are two quite different kinds of insurance involved in the damages system. One is
Third Party liability insurance, which is just called liability insurance by insurance
companies and the other one is first party insurance.

A third party insurance policy is a policy under which the insurance company agrees to
indemnify the insured person, if he is sued or held legally liable for injuries or damage

60
done to a third party. The insured is one party, the insurance company is the second party,
and the person you (the insured) injure who claims damages against you is the third party.

Salient Features of Third Party Insurance

Ø Third party insurance is compulsory for all motor vehicles. In G. Govindan v. New
India Assurance Co. Ltd.[2],Third party risks insurance is mandatory under the statute
.This provision cannot be overridden by any clause in the insurance policy.

Ø Third party insurance does not cover injuries to the insured himself but to the rest of
the world who is injured by the insured.

Ø Beneficiary of third party insurance is the injured third party, the insured or the policy
holder is only nominally the beneficiary of the policy. In practice the money is always
paid direct by the insurance company to the third party (or his solicitor) and does not
even pass through the hands of the insured person.

Ø In third party policies the premiums do not vary with the value of what is being insured
because what is insured is the ‘legal liability’ and it is not possible to know in advance
what that liability will be.

Ø Third party insurance is almost entirely fault-based.(means you have to prove the fault
of the insured first and also that injury occurred from the fault of the insured to claim
damages from him)
Ø Third party insurance involves lawyers aid

Ø The third party insurance is unpopular with insurance companies as compared to first
party insurance, because they never know the maximum amounts they will have to pay
under third party policies.

THIRD PARTY PRODUCT :

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LIFE INSURANCE: - INDIAFIRST LIFE INSURANCE

GENERAL INSURANCE: - BARODA HEALTH & NICL

JOINT VENTURE OF:

& &

62
Vision:

“Become a life insurance and pensions business leader in providing significant value
for all stakeholders through true customer delight”

 Bank of Baroda: is the 3rd largest public sector bank in the country with an enviable
network of over 3000 branches that spreads across the geography of India and over 70
branches across 22 countries globally! This behemoth financial institution is over 100
years old and has been built on financial prudence, corporate governance and most
importantly – the trust of valuable customers like you.

Andhra Bank has been serving the Indian customer for over 85 years and currently has a
network of over 1500 branches. The bank has developed best in class deposit and lending
schemes for its valued customers.

Both the banks are nationalized and provide best in class products and services to every
Indian citizen.

Legal & General is one of UK’s leading financial institutions with a heritage of over 150
years. It provides life assurance, pensions, investments and general insurance plans to
over 5 crore customers across countries. Legal and General brings rich fund management
and insurance experience into India and aspires to provide first-rate products and services
to the doorstep of every Indian customer in conjunction with the 2 trusted public sector
banks.India First Life Insurance Co. Ltd. is a 3 way joint venture of Bank of Baroda,
Andhra Bank and Legal & General (UK), in which Bank of Baroda holds major share of
44% and remaining 30% & 26% are shared between Andhra Bank and Legal & General
(UK) respectively. Bank of Baroda entered into a Strategic Marketing tie-up with the
company for distribution of its life insurance products across the Bank’s branches on 12th
November, 2009 at Mumbai. Banking Channel is one of the best platforms for reaching
out to the masses more particularly in rural and semi-urban area where the vast potential

63
lies for insurance business. Bank’s foray into life insurance business through this joint
venture route will help its customers to have convenience of all at one place at the
branches of the Bank in catering to their insurance needs. The Company since plans to
initially focus on bancassurance model, it will be largely benefited by the Bank’s large
presence throughout the country in augmenting its business. With this tie-up, the Bank’s
customers will get easy access to the insurance schemes of India First Life Insurance Co.
Ltd. This joint venture brings together a real understanding of the Indian consumers by
the promoter banks with international best practices developed by Legal & General. We
aim to provide world class products and services that are customized to meet the
requirements of the Indian consumer. The three promoters put together have over 360
combined years of service to customers across the world an envious achievement. The
company plans to initially focus on the bancassurance model. It plans to leverage the
existing customer base of over 50 million customers of the promoter banks spread across
4,500 branches in the country. Each bank has its own segmentation and profile of
customers. Both have a huge semi urban and rural network. The challenge for the
company is to optimally exploit the entire potential provided by both Bank of Baroda and
Andhra Bank. The new corporate identity represents the company's personality.
IndiaFirst aims to be modern in its outlook, creative in its approach, energetic in its
attitude, focus on principles, cheerful and vibrant yet simple and clear in its
communication. It aims to always place the Indian consumer First in everything it does.
Our philosophy of putting the customer First together with our cost effective distribution
model, will enable us to make a real long-term contribution to the Indian economy by
broadening the choices available to our customers as they harvest the fruits of their
economic success and invest them for a stable long term future for themselves and their
families. They are a testimony to the commitment of our promoters of always putting our
customers First in everything we do. We represent India's new found confidence, its
resolve, grit and spirit. The wave in the logo represents the colors of the three promoters
Bank of Baroda, Andhra Bank and Legal & General. Dr. Nandagopal added, IndiaFirst is
an open, modern and hardworking organization. We believe in doing things right for the
customer, the distributors and our shareholders. We as a company are committed to
providing value for money products and service excellence to our customers.

64
IndiaFirst Life Insurance has, so far, collected Rs 200 crore as premium in four months of
operations and is all set to release more products in the current financial year, according
to Dr P. Nandgagopal, Managing Director and CEO.At a press meet here on Thursday, he
said the company — a joint venture between the Andhra Bank, the Bank of Baroda and
Legal & General— had made rapid strides, with only three products. “The company is
offering IndiaFirst Education Plan, IndiaFirst Savings Plan and IndiaFirst Future Plan.
We will release two more products on April 21 - Creditlife and Groupterm. In the current
financial year, we are planning six to eight new products,” he said.He said the company
currently was selling its products through3,000 branches of Andhra Bank and Bank of
Baroda.“Both the banks put together have 4,500 branches and we will in a few more
months' time extend our services to all the branches,” he added.“In future, the products
may be sold through the regional rural banks of bothAndhra Bank as well as Bank of
Baroda, he said.Dr Nandagopal said the company was also planning to have of its own
and in Andhra Pradesh initially three branches would be set up — one each in
Hyderabad, Vijayawada and Visakhapatnam.

During the current financial year, 50 such independent branches may be set up in the
country.He said, “Our aim is to offer simple products suited to the needs of our
customers, fairly priced and truthfully delivered. We insist on showing the audio-visuals
to our customer and explain all the features of the products to them.”

SALIENT FEATURES AND BENEFITS:

 You can build your savings corpus systematically, through investments in various
funds.
 You secure the future of your family, as they get an assured lump sum benefit
immediately, in case of your untimely death.
 You have the option to invest in debt, equity or a balanced fund, where you
choose the proportion of your investment into each!

65
 You can make the most of your investments by ‘switching’ from one fund to
another.
 You have the option to build up your corpus through additional deposits.
 You get easy access to your money by being able to withdraw partially.
 Under Section 80C you can enjoy Tax Benefits on the premium you invest.
 You also get tax benefits on the benefits you receive at maturity of your payment.

66
PRODUCT OF INDIAFIRST INSURANCE:

Your child, your pride… Our responsibility"

We understand that, as a parent, you want to give nothing but the best to your child. Be it
your child’s education or any dream. You will not allow anything to come in the way of
your child’s success.

To help you give your child everything that you have dreamt of, we have introduced the
IndiaFirst Education Plan.

BENEFITS AND FEATURES:

 Your child will always receive funds at every momentous occasion in his/her life.
 Be it High School / College/ Professional course or any other life event!

 Your child gets financial security even if any untoward incident results in your
death / disability.

 We will do this by paying the remaining premiums into your policy.

67
  Your child, who we may also refer as the ‘ Beneficiary ‘, receives the Fund Value
at Maturityeven if the ‘Sum Assured’ has been paid out on the unfortunate
incident of your demise.

 You have the option to invest in debt, equity or a balanced fund, where you
choose the proportion of your investment into each!

 You can make the most of your investments by ‘switching’ from one fund to
another.

 You have the option to build up your corpus through additional deposits.

 You get easy access to your money by being able to withdraw partially.

 Under Section 80C and 10(10D) you can enjoy Tax Benefits on the premium you
invest

You evolve, you mature... And we help you prosper"

The best years of ‘Life’ ought to be your retirement

years. You have worked hard all your life, and you deserve the best things in life in these
golden years.

68
We identify with you. We are therefore presenting the perfect plan that will empower you
for this golden period. The IndiaFirst Future plan helps you set-aside money in your
prime years when are generating income and enjoy a healthy lump sum or a steady
income in your retirement years.

69
BENEFITS AND FEATURES

 You can choose the age at which you want to retire.

 You have the option to invest in Debt, Equity or a Balanced fund, where you
choose the proportion of your investment into each!
 You can make the most of your investments by ‘switching’ from one fund to
another.
 You have the option to build up your retirement corpus through additional
deposits.
 You get easy access to your money by being able to withdraw partially.
 You can enjoy tax free returns up to 1/3rd of the fund value as at your chosen date
of retirement (called Vesting Age).

You dream, you aspire…. And we help you achieve!

Each of us aspires to own a house, dreams of exotic

overseas vacations, wishes to fund our children in all their life’s events, hopes to have
sufficient retirement funds…

70
The IndiaFirst Savings Plan helps you grow and develop a body of wealth through market
linked investments. We help you save systematically and provide you avenues to invest
your savings in funds, on the basis of your risk appetite.

71
BENEFITS AND FEATURES:

 Your child will always receive funds at every momentous occasion in his/her life.
 Be it High School / College/ Professional course or any other life event!

 Your child gets financial security even if any untoward incident results in your
death / disability.

 We will do this by paying the remaining premiums into your policy.

 Your child, who we may also refer as the ‘ Beneficiary ‘, receives the Fund Value
at Maturityeven if the ‘Sum Assured’ has been paid out on the unfortunate
incident of your demise.

 You have the option to invest in debt, equity or a balanced fund, where you
choose the proportion of your investment into each!

 You can make the most of your investments by ‘switching’ from one fund to
another.

Your protection, our security…

BENEFITS AND FEATURES:

 Enjoy the benefits of a life cover for a period of up

to 30 years at an extremely reasonable price

72
   The life assured's family is secured, as they get an
assured lump sum benefit immediately, in case of
the life assured's untimely death

Under Section 80C you can enjoy tax benefits on

the premium you invest

• Under Section 10 (10D) your family also gets tax

break on the benefits they receive from your plan

Risk factors

 There is no maturity or survival benefit payable

under this plan

• this is a non participating pure term

assurance

Your people, your trust… our accountability

73
BENEFITS AND FEATURES:

 You can now provide life cover at reasonable rates to your members – be it your
employees or your customers.
  You have the flexibility to automatically cover the life of all your members or
offer it as a voluntary scheme where your members may choose to participate.
 You have the flexibility to choose between three premium paying frequencies.
 The plan provides you the flexibility of adding new members during the plan
year.
 You can also opt for the Employees Deposit Linked Insurance (EDLI) scheme
under this plan.
 The plan is renewed yearly.

Risk factors:

The sum assured is paid to the nominee through you, the master policyholder

 You may deduct any amount due before paying the proceeds to the nominee.
However, this is not applicable under EDLI
 Minimum group size is 50.
 Tax laws are subject to change from time to time. Please speak to your tax
consultant before deciding to invest in any financial planning tool. Please read the
entire brochure to understand how this plan can work for you.

74
 You build your dreams, we help protect them…

 BENEFITS AND FEATURES:

 You can enhance your product offering by combining insurance with your credit
or
loan products
 You can protect your assets against uncertainty.
 We help you do this by paying the outstanding loan amount in the unfortunate
event of the member’s demise
 You have the flexibility to choose the coverage and the mode of payment you
want to offer your members.

IndiaFirst Annuity Plan:

This is a traditional Immediate Annuity plan, which can be purchased by paying a lump
sum
amount. You get the choice to select your retirement age, and we pay you a fixed annuity
on a
monthly basis for life.

Key Features

75
• You can choose your retirement age as per your need; You can reap the returns starting
anytime between 40 and 80 years.
• You can receive a definite regular monthly income through your years of retirement.

2. WHAT IS THE ELIGIBILITY FOR ENTERING THE PLAN?

The eligibility criterion is as under:

Minimum age at entry 40 years (attained)
Maximum age at entry 80 years (attained)

3.WHAT IS THE MODE FOR PAYMENT OF PREMIUMS?

This is like a single premium policy. You make a single lump sum payment to enter the
plan. This
payment is called the purchase price paid through cheque, DD or ECS.

4.WHAT IS THE TERM FOR ANNUITY PAYOUTS?

The term for annuity payouts is as follows:

Term for Annuity payouts Single Life Annuity
i.e. we will pay you the annuity till as long as you live.

IN GENERAL INSURANCE WE HAVE TIE UP WITH NATIONAL INSURANCE

COMPANY LIMITED WHICH PROVIDE BARODA HEALTH POLICY :

COMPANY PROFILE:

76
National Insurance Company Limited was incorporated in 1906 with its Registered
office in Kolkata. Consequent to passing of the General Insurance Business
Nationalisation Act in 1972, 21 Foreign and 11 Indian Companies were amalgamated
with it and National became a subsidiary of General Insurance Corporation of India
(GIC) which is fully owned by the Government of India. After the notification of the
General Insurance Business (Nationalisation) Amendment Act, on 7thAugust 2002,
National has been de-linked from its holding company GIC and presently operating as a
Government of India undertaking.

National Insurance Company Ltd (NIC) is one of the leading public sector insurance
companies of India, carrying out non life insurance business. Headquartered in Kolkata,
NIC's network of about 1000 offices, manned by more than 16,000 skilled personnel, is
spread over the length and breadth of the country covering remote rural areas, townships
and metropolitan cities. NIC's foreign operations are carried out from its branch offices in
Nepal.

Befittingly, the product ranges, of more than 200 policies offered by NIC cater to the
diverse insurance requirements of its 14 million policyholders. Innovative and
customized policies ensure that even specialized insurance requirements are fully taken
care of.

National Insurance Co Ltd awarded "Most Preferred Non Life Insurer" by CNBC
AWAAZ Consumer Awards 2009

77
WE ARE:

The fastest growing Non-life Insurance Company in India The second largest Non-life
Insurance Company in India Internationally recognized as one of the top 5 General
Insurance Companies in the Asia Pacific.

 CUSTOMER SERVICE INITIATIVES

 Establishing Connectivity among 1000 offices with in the country  Facility to get Policy
through NET Tie-ups with leading Banks, Corporate Sectors, State Government
Conciliatory Fora for facilitating quick settlement of Motor Third Party claims,
Compromise settlement, Lok Adalat and Jald Rahat Yojana.Zonal Advisory Committees
set up to maintain progress.

  PRODUCT DEVELOPMENT

 More than 200 products available to cater to the needs of various sectors of the
economy.

 Continuous product development to meet emerging needs of society and industry.

 R&D cell set up at Head Office for distinctive product innovation relevant to
indigenous conditions and rural masses.

The paid-up share capital of National is Rs.100 crores. Starting off with a premium base
of 500 million rupees (50 crores rupees) in 1974, NIC's gross direct premium income has
steadily grown to 42799 million rupees (4279.9 crores rupees) in the financial year 2008-
2009.

National transacts general insurance business of Fire, Marine and Miscellaneous

insurance. The Company offers protection against a wide range of risks to its customers.
The Company is privileged to cater its services to almost every sector or industry in the
Indian Economy viz.

78
Banking, Telecom, Aviation, Shipping, Information Technology, Power, Oil & Energy,
Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education,
Environment, Space Research etc.

National Insurance is the second largest non life insurer in India having a large market
presence in Northern and Eastern India.

The steady growth in premium income has been commensurately matched by profits over
the years. As of March 2009, NIC's general reserve stood at 13080.5 million rupees
(1308.05 crores rupees) with a net worth of 5015.97 million rupees (501.59 crores
rupees) signaling strong financial fundamentals. No wonder than that NIC has been
accorded “AAA/STABLE” financial strength rating by CRISIL rating agency, which
reflects the highest financial strength to meet policyholders’ obligations.

Banking, Telecom, Aviation, Shipping, Information Technology, Power, Oil & Energy,
Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile, Education,
Environment, Space Research etc.

National Insurance is the second largest non life insurer in India having a large market
presence in Northern and Eastern India.

The steady growth in premium income has been commensurately matched by profits over
the years. As of March 2009, NIC's general reserve stood at 13080.5 million rupees
(1308.05 crores rupees) with a net worth of 5015.97 million rupees (501.59 crores
rupees) signaling strong financial fundamentals. No wonder than that NIC has been
accorded “AAA/STABLE” financial strength rating by CRISIL rating agency, which
reflects the highest financial strength to meet policyholders’ obligations.

POLICIES:

MOTOR POLICY : TWO WHEELER

Policy indemnifies bona fide owner of Two wheeler, used for personal purposes against

79
the loss due to damage / theft / burglary of vehicle or any part there of, electrical
accessories and also includes cover against liability towards third party personal injury
and property damage1.

BARODA HEALTH:

Baroda Health policy is a unique Health cum Accident Policy designed especially for the
a/c holders of Bank of Baroda. The entire family consisting of the a/c holder, spouse and
2 dependent children can be covered under this policy. This policy covers Hospitalization
expenses for a/c. holder and family. In case of Hospitalization Expenses, the entire family
is covered for the Floater Sum Insured as opted for, i.e., either one or all members of the
family can utilize the Sum Insured during the policy period.

"Baroda Health" (Mediclaim Insurance Policy) for Bank’s Account holders.

With a view to offer value added services to our customers, we have developed a co-
branded insurance product called as "BarodaHealth" (Mediclaim Insurance Policy) for
Bank's Account holders w.e.f. 23rd February 2006 available at all our branches across
the country.

What is Baroda Health Policy?

It is a Medical Insurance Scheme, available only to account holders of our Bank, which
takes care of the hospitalization expenses incurred by the customer up to the amount of
sum insured, in respect of the following eventualities.

 Any illness / disease

 Accidental injury and/ or any ailment.
 Any surgery that is required in respect of any disease or accident that has arisen
during the policy period
 The minimum hospitalization should be for 24 hours

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Key Benefits :

 Very low premium

 In this co-branded product, single premium (generally payable for a single
person) is payable and Medical Health insurance cover is available to
family of -4- (self, spouse and 2 dependent children) up to the amount
insured without any additional premium.
 A member or all the members in insured family can avail hospitalization
benefits during the policy period, to the extent of aggregate sum not
exceeding the sum insured.
 Premium paid is eligible for Income Tax exemption under Section 80 D as
per Income Tax Rules.

Salient features:

 No medical examination required for commencement of health cover.

 Pre-existing diseases also get coverage after 3 continuous claim-free
policy years.
 Coverage options available: 8 slabs ranging from Rs. 50,000/- to Rs.
5,00,000/- per family of 1+3.
 Upper age limit of primary member (first named person) is allowed upto
80 years, if a person obtains the insurance cover before completion of 65
years and continue to renew the policy upto the age he wishes to or 80
years, whichever is earlier.
 The scheme is administered through Third Party Administrators (TPAs)
for settlement of Hospitalization Claims under the insurance cover.
 The insured individuals get cashless hospitalization facility also in the
selected hospitals through TPAs. The whole process is hassle-free and
treatment upto the limit of insurance is available without any payment at
the time of admission or discharge. Payment of hospital bill up to the sum
insured will be taken care of by the TPA directly.

81
82
 Objective
Every project is based on a theme or has some specific objectives which are given more
importance. The objective of my project is to know the level of Financial Inclusion & the
impact of initiatives taken by the bank in of Financial Exclusion. However, this broad
objective is defined more clearly as under:-

 To know the measures and initiatives taken by Bank of Baroda and financially
challenged people under Financial Inclusion project.
 To know the level of Financial Exclusion and the progress that has been achieved
by the 100% financial inclusion campaign.

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 Research Methodology
The area of study
As a part of the financial inclusion in urban areas, a survey was conducted in the areas of
East Lucknow to know the level of financial exclusion and the progress that has been
achieved by the 100% financial inclusion campaign.

The survey was conducted in a random manner in Lucknow and nearby areas.

Methodology

The study about the level of financial inclusion is exploratory study in nature which
requires the field work and hence, a survey is done on the basis of a set of open ended
and closed ended questions.

In order to build relevant questions, these have been pre-tested on the basis of discussion
over the objective of topic with some of my friends, peer group and some faculty
members.

Data Collection

The survey is done in the Lucknow city itself, so the outcomes might vary when it will be
compared with any other part of India.

• The sample size taken is 150 households.

• The sampling method is random sampling.

• Only the criterions for the selection are that respondents should be above
25 years of age and should be from study concerned areas.

• Data collection through questions asked has resulted in availability of the

desired information but these were useless until there were analyzed.

• The data collected was analyzed, interpreted with the help of bar chart and
pie chart.

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Scope of Study
The following Questions were asked to respondents in our survey.

• The occupation of the respondent, educational qualification, the source of income

for the family and whether the respondent had an account, if so the type of the
bank.

• About the awareness of new measures for financial inclusion like no-frills account
and relaxation of KYC norms for accounts.

• The reason for not opening the account and if aware about measures for Financial
Inclusion, the reason for not opening an account.

• The spending patterns of the respondents and what constitutes the maximum
expenditure over a particular period of time.

• The credit requirements and whether they were interested in availing credit from
banks and for what particular reason.

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Limitations

 The survey was limited to three areas & therefore cannot give a complete picture
of the level of financial inclusion of the city.

 The study is concentrated on the poor people of the city, since the poor are the
majority who make up the financially excluded.

 The study is also limited by the number of individuals.

 Time span was limited.

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 Data Analysis
The survey is done as per the given objective, to find out the level of financial inclusion
amongst people, and the factors which influence the mind set of people while taking
financial services. So the outcome of survey and its interpretation is done through Excel
tools as given below.

---Finding is comprised of three parts:

---Question.
---Outcome from survey i.e. data interpretation.
---Analysis of outcome.

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1. Occupational Distribution

The survey found that a major share of the respondents or the earning members of the
family were either Manual Laborers or self employed. The respondents belong to the
working age from 30 to 55 and the average family size is around five i.e. total sample
sizes 750. 90 people were unemployed and 210 were self-employed.

Analysis
 It was noticed here that Government employees included mainly those who are
working in the Municipal Corporation and the Housing Board that built the colony.

 Self employed are mainly working as auto rickshaw drivers, fruit & vegetable
vendors and owning small businesses.

2. Educational Qualification

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 Following were the responses from respondents when asked about Educational
Qualification:-

Analysis
 Most of people were either illiterate or have only done primary schooling. And 50%
people have done either S.S.C or H.S.C.
 And it was not surprising to know that only a small segment i.e. 9% of total sample
size were graduate or above.
 It was found that less the educational qualification of the respondents lesser they were
aware about financial inclusion.

3. Level of Financial Inclusion

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 The survey has found that a greater share of the households do not have access to
banking facility. 47% of the households in the areas had access to banking facilities
and around 398 households had no account. It should be noted here that some of the
respondents said that they had stopped using the accounts.
Level of Financial Inclusion

Analysis
 It can be interpreted from the above chart that most of the respondents do not have
access to financial services offered by banks so it would be beneficial for society if
bank cater to these segments.
 Only one third of manual labors have bank accounts. The reasons for this maybe due
to the fact that they get daily wages and spend most of what they earn on household
items. There is a need to make them aware of the uses of banking.
 Out of 12% unemployed, 10% don’t have bank a/c’s but as survey shows the majority
of people are employed hence there is good chance of these people getting
employment in future also here some students are present.
 Inclusion of this segment will increase the customer base of bank which can lead to
profitability in long-run.

4. Major Reasons cited for Financial Exclusion.

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 Following were the responses from respondents when asked about reasons for
Financial Exclusion:-

Analysis
 The results were close to each other. All three reasons emerged as the major problem
for financial inclusion.
 It was quiet surprising to know that Easy access to alternate credit also carried a high
weightage.
 On enquiring further about this reason we came to know that these people have
access to easy credit form private money lenders and they do not like the slow &
paper involving process of commercial banks.

5. Distribution of Bank accounts

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 It is necessary as an indicator to find out the kind of banks in which the people bank
in, but it is not directly related in the context of Financial Inclusion. An
overwhelming 82% of the accounts were in public sector banks which were the
Punjab National Bank, State Bank of India, Canra Bank. The Urban and Rural
cooperative banks could cater to populations that are generally neglected by the
commercial banks. Their position allows them to reach out to the people far easier.

82% Distribution of bank account

Analysis
 The PSU’s have a high % of customers because of the reason that a section of people
are government or retired employees (who receive regular pensions), thus every one
of them maintains account with PSU.
 The number of private banks having branches in urban areas is high, yet they have not
had a major impact among the poor in the city.
 The account opening charges/ penalty/maintenance charges of most of private banks
are quiet high therefore the people prefer Public Sector Banks.

6. Credit Requirements and type

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Most of respondents responded positively about their need for credit and the rest of them
were in dilemma. The requirement of credit for housing was in demand more than any other
types of credit. A small section of people are willing to have the credit facility for education
purposes.

65% Credit Need

Analysis
 When asked about the credit requirements 35% of the households responded that
they wouldn’t want to have any long-term or short-term credit fearing that they
might default.
 Only a small minority responded that banks would not give any credit to them.
 The highest demanded is for housing, which for many living in sub-standard
housing looking for a house of their own is not an unexpected answer.
 The second highest preference was for self-employment credit facility, as some
people are unemployed and desperately want credit for self-employment and rests
of them want the credit for betterment of their existing mode of earning.

7. Amount & time period for Credit requirement

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Most of people who require loan for period of 6 to 18 months fall in credit range b/w Rs
25000 to 65000. 25% people are from segment that need credit facilities for
comparatively high period for the purpose of educational requirements & housing.

40% Amount
35%

25%

Analysis
 35% people require loans for automotive and self-employment purposes and the
repayment is expected in short period of less than six months.
 Lying in medium range are people, who need credit for housing and family
purpose and the requirement of credit was for a considerable amount of time.

8. Awareness about measures of R.B.I

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The survey has shown a dismal performance by banks in reaching out to the people and
making them aware about the new initiatives taken for financial inclusion. It was found that
only in 8 out of the total 150 households the people had any knowledge about the new
measures of RBI.
Those who knew had some idea about
95% Awareness no-frills account but not about the
relaxation of the KYC norms.

5% people who responded positively

were those people who were aware of
Bank of Baroda account opening
campaign and majority of people were
thinking that this initiative is taken by
5% school and not by bank.

Analysis
 The low awareness about the steps taken by RBI and the financial institutions
shows that there is an urgent need to reach out to them and to spread the
awareness about the initiatives

 It seems that merely displaying posters informing consumers about no-frills

account will not by itself increase the awareness about the new measures.

9. Reachability of student a/c opening campaign

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Following were the results when we asked people about the reach ability of student a/c
opening campaign:-

 92% people responded that this campaign has reached to their homes out of them
majority of people were those whose children are studying in nearby schools.
 Respondents also say that this campaign has generated a lot of confidence in
them for using banking services.

8%

92%

Analysis
 This proved to be a good decision for bank to go for this student account
campaign for Financial Inclusion.
 So, from this survey we can interpret that this campaign has achieved 100%
Financial Inclusion as far as opening of student bank account is concerned.

10. Impact of Financial Inclusion campaign

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As bank has taken so many measures to make this financial Inclusion Campaign
successful, we asked about impact to know level of satisfaction among the people and
level of success of this campaign. Following are the results:-

78% Impact of Financial Inclusion campaign

10% 12%

Analysis
 As it was very much expected, majority of respondent i.e. 78% responded ‘yes’
when asked about positive impact of financial inclusion.
 A very small segment feels that this campaign is like any other ordinary
campaign and it will not have any positive impact on their life or way of living.
 Few respondents were not aware of financial inclusion campaign so they could
not give their judgment when asked about the importance of this campaign.

Conclusion

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Financial Inclusion has been a catch phrase for the past few years. Delivering financial
services to all sections of the population will remain a challenge that banks around the
world will face over the next few years. Increasing educational level means more
financial inclusion; therefore a literate population must be created in order to create a
meaningful financially included population. Not only should people have access to basic
financial services but should also actively use them. A modern and a globalized economy
cannot be successful unless it is inclusive. With enthusiasm and foresight this challenge
would be overcome rather simply.

It may appear in the first instance that taking banking to the sections constituting “the
bottom of the pyramid”, may not be profitable but it should always be remembered that
even the relatively low margins on high volumes can be a very profitable proposition.

The banks would have to evolve specific strategies to expand the outreach of their
services in order to promote financial inclusion. Technology can be a very valuable tool
in providing access to banking products in remote areas.

Financial inclusion can emerge as commercial profitable business. Only the banks should be

prepared to think outside the box!

Suggestions & Recommendations

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It is becoming increasingly apparent that addressing financial exclusion will require a
holistic approach on the part of the banks in creating awareness about financial products,
education, and advice on money management, debt counseling, savings and affordable
credit. The banks would have to evolve specific strategies to expand the outreach of their
services in order to promote financial inclusion.

1. Strengthening financial literacy: With already 47% financial inclusion in the area,
the rest 53% need to be brought into mainstream. This would require giving the
occupants of the area a simple bank account and thereby become financially included.

2. Decentralized banking system: Banks should be given more freedom to deal in the
manner in which they would want to deal with the public. Flexibility and independence
are needed to make small banking viable.

3. Excluded segment specific products and services: The credit needs and amount of
credit needed by the poor or the financially excluded differs from the middle class and
the upper class needs hence require adoption of new strategies. Most of the self-employed
and the daily wage earners find it cumbersome to go to banks and cash their money;
therefore, the use of Business Correspondents (BC) could bring in such occupational
groups who have little time for the conventional system of banking. It would require
person-to-person interactions to make banking and the use of financial services a part of
their lifestyle.

4. Need to adopt a professional approach: - There is a need for increasing

professionalism among banks and related agencies. There is no doubt that these
organizations have helped the poor tremendously but just as in the case of many co-
operative banks, NGO’s and PSU’s, they remain prone to lack of professionalism and
negligence. The commercial banks and other agencies can play their part by training
individuals and organizations that help to reach out to the poor.

5. Private Public Collaboration: -Financial inclusion would become meaningless if the

burden of it falls wholly on the government. The Corporate, the large commercial banks
and NBFCs should be made aware of the advantages of Financial Inclusion and the
business opportunities it offers to them. Private partnership will ensure that there would
be financial products which are more in tune with the needs of the customers, big and
small. The partnership of private financial institutions would ensure a healthy
competition leading to on-time delivery of services at affordable rates. Small private
banks can be encouraged to practice targeted banking aimed at delivering services to
certain communities rather than the society as a whole. This would not only ensure a
steady number of banking customers for the small banks but also a chance to do business
in a market dominated by large commercial banks. By doing so, the chances of financial

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exclusion are reduced as small banks would try to bring in as much customers as
possible.

6. Retired bank employees as Business Correspondents: - looking at retired bank

employees as Business correspondents for branchless banking can be a good option.
Retired bank employees with their experience in banking are far more likely to be
professional in their dealings and more accustomed to new methods of banking. They
could provide an essential middle link between the banks and the thousands of customers
that they intend to serve.

7. Separate department & highly trained employee: - There is need to have a

dedicated department with highly trained employee to deal with this segment to achieve
100% financial inclusion.

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 Bibliography

1 “The Next Billion Customers: A road map for expanding Financial Inclusion in
India”, Sinha J. and A. Subramanian – Boston Consulting Group, 2007
2 Report of C. Rangarajan Committee on Financial Inclusion, 2008

3 Press Release of Bank of Baroda for the Year ended 31st March 2009
4 http://www.skoch.in/SDF/html/national_study_on_speeding_fin.html

5 Draft Report of the Committee on Financial Sector Reforms (CFSR), ch.3, Planning Commission,
2008

6 Commemorative Lecture by Shri V.Leeladhar, Deputy Governor Reserve bank of India at

the Fedbank Hormis Memorial Foundation at Ernakulam on December 2, 2005

7 Promoting Financial Inclusion, UK Task Force, HM Treasury, 2004

8 Financial Inclusion – The Indian Experience, Text of speech by Smt. Usha Thorat, Reserve Bank
of India, 2007.

9 Financial Inclusion-Reaching the Unreached, Indian Bank, 2007

10 Financial Inclusion for Sustainable Development: Role of IT and Intermediaries, Smt. Usha
Thorat, Reserve Bank of India, 2007.

11 Banks for everyone, Vijay Mahajan, Mint, July,2007

12 Financial inclusion and micro-credit, Column, The Economic Times, 2009 34 | P a g e

13 Government aims for financial inclusion in 5 years: FM - Daily News & Analysis, 2008

14 Annual Report 2008-09, Reserve Bank of India, 2007

15 Report on Trends and Progress of Banking in India, 2008-09, Reserve Bank of India, 2007

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 Annexure

Abbreviations & Acronyms

SHG Self Helping Groups

NSS National Sample Survey
NCAER National Council of Applied Economic Research
KYC Know Your Customer
SLBC State Level Bankers' Committee
UTLBC Union Territory Level Bankers' Committee
IT Information Technology
POCA Post Office Card Account
CLFIs Community Finance Learning Initiatives
CRA Community Reinvestment Act
CBS Core Banking Solution
FINO Financial Institutions Network & Operations
BC/BF Business Correspondents & Business Facilitators
SME Small Medium Enterprises
PSU Public Sector Units
MFI Monetary Financial Institution
NBFCs Non-Banking Financial Company

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