Bank of Baroda

PROJECT REPORT

ON

BANK OF BARODA

SUBMITTED BY:

xxxxxxENROLMENT NUMBER # 9xxxx

STUDY CENTRE xxxxxxxREGIONAL CENTRE # xxxxxxxx

SUBMITTED TO:

SCHOOL OF MANAGEMENT STUDIES

INDIRA GANDHI NATIONAL OPEN UNIVERSITY

MAIDAN GARHI

NEW DELHI.

CERTIFICATE

THIS IS TO CERTIFY THAT THE PROJECT TITLED

“xxxxxxxxxxxxxxxxx”

SUBMITTED BY:

XXXXXXXXXENROLMENT NUMBER # xxxxxxx

STUDY CENTRE # xxxxxREGIONAL CENTRE # xxxxx

PROJECT PROPOSAL NO: xxxxxxx

HAS BEEN COMPLETED UNDER MY GUIDANCE AND I AM

SATISFIED WITH THE WORK CARRIED OUT BY HIM. THE

WORK IS AN ORIGINAL ONE AND HAS NOT BEEN

SUBMITTED EARLIER TO ANY OTHER INSTITUTION FOR

FULFILLMENT OF THE REQUIREMENT OF A COURSE OF

STUDY.

PROJECT GUIDE:

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ACKNOWLEDGEMENT

In all modesty, this project wouldn’t have been worth a deco had

it not been for the extremely patients and knowledgeable people

who granted me valuable time.

I am thankful to my project guide xxxxxxxxxx for all the help

extended to me during the compilation of this project report.

Sadly, I can’t mention all the persons who have given me

invaluable help. But my sincere thanks to xxxxxxxxxxxx for his

expert advice and invaluable support and for giving me time and

guidance.

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BANK OF BARODA

Heritage

Bank of Baroda (BOB) was established on 20th July 1908 in

the princely state of Baroda by the great visionary, Sir

Sayajirao Gaekwad III. The founder strongly believed that, "

a bank of this nature would prove to be a beneficial agency

for lending, transmission and deposit of money and a

powerful factor in the development of art, industries and

commerce of the state as also of adjoining territories".

Unlike other state-owned bank, BOB could maintain its

unique identity and established a strong national presence

even before independence, to all corners of the country.

The Bank was led by eminent personalities and great

bankers like Shri V.D. Thakersey, Walchand Hirachand, R.D.

Birla, N.M. Chokshi, M.G. Parikh and others.

BOB was amongst the first few banks to venture overseas

by opening a branch at Mombassa in 1953. Today it has 38

branches and 23 offices of its overseas subsidiaries having

presence in 16 overseas countries.

Bank of Baroda has 95 years of glorious performance and an

uninterrupted profit record, serving generation after

generation around the globe.

Board Of Directors

Name Designation

1. Shri P.S. Shenoy Chairman & Managing Director

2. Dr. A.K. Khandelwal Executive Director

3. Shri Vinod Rai Nominee of Govt. of India.

4. Mr. Ramesh Chander Nominee of RBI.

5. Shri Piyush Goyal Director

6. Shri B.N. Gulvepatil Director

7. Shri Gurmeet Singh Uberai Director

8. Shri Narayan Ganesh Mhatre Director

9. Shri Prem Prakash Pareek Director

10. Amritlal Sanghvi Director

11. Shri Pradip N. Khandwalla Director

Corporate Offices

Head Office Suraj Plaza-1, Sayaji Ganj, Baroda-390005 Ph-(0265)2361852(10lines) Fax-(0265)2362395,2361824,2361806, Central Office Bank Of Baroda Baroda Corporate Centre, Plot No. C-26, Block G, Bandra Kurla Complex, Bandra (East), Mumbai - 400051 Phone : (022) 5698 5000- 04 (PBX) Fax : (022) 5652 3500, 5652 3507,5652 3508, 5652 3509

LITERATURE REVIEW

BANKING SYSTEM

Banking system occupies an important place in a nation's

economy. A Banking institution is indispensable in a modern

society. It plays a pivotal role in the economic development

of a country and forms the core of the money market in an

advanced country .

In India, though the money market is still characterised by

the, existence of both the organised and the unorganised

segments. Institutions in the organised money market have

grown significantly and are playing an increasingly

important role. The unorganised sector, comprising the

money-lenders; and indigenous bankers.; caters to the

credit reeds of a large number of persons especially in the

countryside. Amongst the institutions in the organised

sector of the money market; commercial banks and co-

operative banks pave been in existence for the past several

decades. The Regional Rural Banks came into existence

since the middle of seventies. Thus, with the phenomenal

geographical expansion of the commercial banks and the

setting up of the Regional Rural Banks during the recent

past, the organised sector of money market has penetrated

into rural areas as well.

Besides the aforesaid institutions. which mainly serve as

sources of short-term credit to industry, trade, commerce

and agriculture; variety of specialized financial institutions

have been set up in the country to cater to the specific

needs of industry. Agriculture, and Foreign trade.

In the field of industrial finance the Industrial Development

Bank, India (IDBI), set up in 1964. is the apex bank, which

undertakes. asides direct financing of big industrial

projects. Reefing of term an granted by other financial

institutions including the commercial banks. There are two

prominent all India institutions in this the Industrial Finance

Corporation of India Ltd. (IFCI) arid.

Industrial Credit arid Investment Corporation of India (ICICI)

besides, the State Financial Corporations (SFCs) and State

Industrial development Corporations (SIDCs) have been set

up to meet the, equipment of small and medium scale

industries in the respective states. industrial Re-on striation

Bank of India (IRBI); bring back to normalcy the industrial

units which fall sick. In March 1997 it was re-named as

Ind1.lstrial Investment Bank of India and joined the rank of

full-fledged development financial institutions. Small

Industries Development Bank of India was set up in 1990 as

a subsidiary of Industrial Development Bank of India to

cater ex-elusively to the requirements of the Small Scale

Sector in the country. It was delinquent from IDBI in March

1997, and acquired the status as the apex bank in the field

of financing small scale industries. All these institutions,

engaged as they are in the task of development, are now

designated as 'development banks' which are distinct from

the traditional commercial banks. Development banking has

had its genesis ill the post-independence period in India and

has contributed significantly to the industrial growth of the

country during this period. A few specialist development

financial institutions have also been set up in India e.g.,

Indian Railway Finance Corporation, Power Finance

Corporation of India, Tourism Finance Corporation.

For financing agriculture and allied activities in the rural

areas, though co-operative credit societies and central co-

operative banks have been participating since long, banks

began their active participation after the nationalization of

major banks in 1969. Long and medium-term credit to the

agriculturists is being provided by another specialized

institution, namely, the Land Development Banks which

have a two-tier structure-Pr1mary Land Development Banks

at the district level and State Land Development Banks at

the State level. National Bank for Agriculture and Rural

Development (NABARD) is the full-fidget apex institution in

the field of agriculture and rural development.

During 1988 two important financial institutions were

stabilization. National Housing Bank was set up in July 1988

as the banking institution in the field of housing finance.

Discount and Finance House of India Ltd. was established to

deal in money market instruments in order to provide

liquidity in the money market.

Basis these institutions which are mainly engaged in

meeting the credit needs of various segments of the

economy, there are a few other institutions, which are

essentially engaged in the business of investing in the

corporate. government and semi-government securities and

other instruments. They are the insurance institutions-Life

Insurance Corporation of India (LIC), General Insurance

Corporation of India (GIC) and the Unit Trust of India (un).

These institutions mobilise the savings of the people and

channeled them into desirable securities. Hence the are

called the investing institutions or institutional investors.

To facilitate the banking business and to foster the growth o

banking habit, two other institutions have been set up. The

Deposit Insurance and Credit Guarantee Corporation of India

undertaken the twin functions of extending the insurance

cover to the depositors banks and protect the interest of

banks by providing guarantees in respect of advances

granted by them to small scale industries and the priority

and neglected sectors of the economy. The Export Credit

Guarantee Corporation (ECGC) provides protection to the

banks in respect of risks inherent in financing the export

trade. With the setting up and growth of all these

institutions, Indian banking and financial system may be

claimed to have the finest set-up comparable to any

advanced country as shown in the Chart on the next page.

COMMERCIAL BANKS

Among the banking institutions in the organized sector, the

commercial banks are the oldest institutions having a wide

network of branches, commanding utmost public confidence

and having the lion's share in the total banking operations.

Initially, they were established as corporate bodies with

share-holdings by private individuals, but subsequently

there has been a drift towards State ownership arid control.

Today 27 banks constitute the strong public sector in Indian

commercial banking. -

Up to late sixties, they were mainly engaged in financing

organized trade, commerce and industry , but since then,

they are actively peculating in financing agriculture, small

business and small borrowers also.

The commercial banks operating in India fall under a

number of sub-categories Ion the basis of ownership and

control of management as is evident from the on the next

page.

Foreign commercial banks are the branches in India of the

joint stock banks incorporated abroad. These banks, besides

financing the foreign trade of the country, undertake

banking business within the country as well. .

Public Sector Banks Public sector .in Indian banking reached

its present position three stages-first, the conversion of the

then existing Imperial Bank of India into the State Bank of

India in 1955 followed by the establishment of its seven

subsidiary banks; second, the national1sation of 14 major

commercial banks on July 19, 1969 and last, the

national1sation of 6 more commercial banks on April 15,

1980. One of them -New Bank of India -was later on merged

with Punjab National Bank. Thus 27 banks' constitute Public

Sector in Indian Commercial Banking.

Differences between State Bank and Nationalized

Banks

(1) Though all the 27 public sector banks are corporate

bodies, but the statutes under which they were established

are different. The State Bank of India was established under

the State Bank of India Act, 1955, the subsidiary banks

under tl.1e State bank of India (Subsidiary Banks) Act, 1959,

and the nationalized banks under the Banking Companies

(Acquisition and Transfer of Undertakings) Acts of 1970

&1980. These banks are, therefore, governed by their

respective statutes.

(2) Initially, cent per cent ownership of the 20 rationalized

banks vested in the Government of India, where as the

State Bank of India was owned, to a large extent, by the

Reserve Bank of India -there was small private ownership

the share capital of the State Bank. The subsidiary banks

are owned by the State Bank of India. During recent years

State Bank of India and some of the nationalized banks -

Oriental Bank of Commerce, Dena Bank, Bank of India -

have enlarged their capital by issuing shares to the public.

The State Bank of India acts as an agent of the Reserve

Bank of India, According to Section 45 of the Reserve Bank

of India Act, 1934 "the Reserve Bank shall appoint the State

Bank as its sole agent at all places in India where it does

not have an office or branch of its Banking Department and

there is a branch of the State Bank or branch of a subsidiary

bank." The nationalized banks have not been conferred with

this privilege of acting as agent of the Reserve Bank. .Since

the enforcement of the Banking Laws (Amendment} Act,

1983, the Reserve Bank has been empowered to appoint

any nationalized bank to act as its agent at all places in

India where it has a branch for the following purposes:

(i) paying, receiving, collecting and remitting money. bullion

and securities on behalf of any government in India; and

(ii) undertaking and transacting any other business

entrusted by the Reserve Bank from time to time.

NEW PRIVATE BANKS Mater the nationalization of major

banks in 1969 new banks in the private sector could not be

set up in India for more than two decades, though there was

no legal bar to that effect. The Narasimhan Committee on

Financial Sector (1991} recommended the establishment of

such banks in India. The Reserve Bank of lndia. therefore,

Issued guidelines for the setting up of new private sector

banks in India in January, 1993. These guidelines aim at

ensuring that the new banks are financially viable and

technologically up-to-date from the start. They are expected

to start functioning in a professional manner, so as to

improve the image of commercial banking system and to

win the confidence of the depositing public.

The new banks are required to be registered as public

limited .companies under the Companies Act, 1956, with

initial paid up Capital of Rs. 100 crore. They are to be

governed by the provisions of Reserve Bank of India Act and

the Banking Regulation Act, 1949 shall comply with the

directions issued by the Reserve Bank of India. Ten new

private sector banks have been established mainly by the

financial Institutions such as UTI. ICICI, IDBI, HDFC. One

such bank Times Bank was subsequently merged with

another new bank HDFC Bank.

In January, 2001. Reserve Bank of India issued fresh

Guidelines in this respect, which raised the share capital of

such banks to Rs 200 crore and limited the conversion of

non-banking financial companies into bank.

RELATION BETWEEN BANKERS AND CUSTOMER

DEFINITION OF BANKING

If banking company is defined as a company which

transacts the business of banking in India. The banking

Regulation Act defines the business of banking by stating

the essential functions of a banker , It also states the

various other businesses a banking company may be

engaged in and prohibits certain businesses to be

performed by it.

The term 'Banking' is defined as "accepting, for the purpose

of lending or investment, of deposits of money from the

public, repay- able on demand

Otherwise, and with drawable by cheque draft, order or

otherwise It is thus clear that the underlying principle of the

business of banking is that the resources mobilized through

the acceptance of deposits must constitute the main stream

of funds which are to be utilized for lending or investment

purposes. The banker is thus an intermediary and deals

With money belonging to the public. A number of other

institutions. which also deal With moI1ey. are not

designated as banking institutions. because they do not

fulfil all the above-mentioned pre-requisites. The specialized

financial institutions. e.g. , Industrial Finance Corporation of

India arid State Finance Corporations, are not banks

because they do not accept the deposits in the prescribed

manner i.e essence of banking business lies in the two

essential functions.

Other Businesses permitted for a Banking Company. The

Ban in regulation Act specifies other forms of businesses a

banking company may be engaged in. According to Section

6, the following business may be undertaken by a banking

company:

a) The following functions form the bank of a bank's

activities and are called its main functions:

1. The borrowing, raising or taking of money;

2. The lending or advancing of money either upon security

or without security;

3. The drawing, making accepting, discounting, buying,

collecting and dealing in Bills of exchange, Promissory

notes, coupons, drafts. bills of lading; railway receipts,

warrants, debentures, certificates, scripts and other

instruments and securities whether transferable or

negotiable or not;

4. The granting and is using of letters of credit, travelers'

cheques and circular notes:

5. The buying, selling and dealing in bullion and specie:

6. The buying and selling of foreign exchange including

foreign bank notes: The acquiring holding issuing on

commission, underwriting and dealing in stock, funds,

shares; debentures, debenture stock, bonds, obligations,

securities and investments of all kinds;

7. The purchasing and selling of bonds, scripts and other

forms of securities on behalf of constituents or others;

8. The negotiating of loans and advances;

9. The receiving of all kinds of bonds, Scripps or valuables

on deposit or for safe custody or otherwise:

10. the providing of safe deposit vaults; and

11. The collecting and transmitting of money and

securities.

b) It may act as an agent of the Government, local authority

or person and can carry on agency business but it cannot

act as secretary and treasurer of a company,

c) It may contract for public and private loans and negotiate

and issue the same.

d) It may effect, insure, guarantee, underwrite, participate

in managing and carrying out of any issue of State.

municipal or other loans or of shares. stock. debenture

stock of companies and may lend money for the purpose

of any such issue.

e) It may carry on and transact every kind of guarantee and

Indemnity business.

f) It may manage. sell and realise any property which may

come Into its possession in satisfaction of its claims.

13. It may acquire and hold and deal with any property or

any right. title or interest in any such property which

may form the security for any loan or advance.

14. It may undertake and execute trusts.

(i) It may undertake the administration of estates as

executor, trustee or otherwise.

a) It may establish, support and aid associations,

Institutions, funds, trusts, etc. for the benefit of its

present or past employees and may grant money for

charitable purposes.

(k) It may acquire. construct and maintain any building for

its own purpose.

(l) It may sell. improve. manage. develop. exchange. lease.

mortgage, dispose of all or any part of the property

and rights of the economy.

(m) It may acquire and undertake the whole or any part of

the business of any person or company. when such

business is of a nature described In Sec. 6(1).

(n) It may do all such things which are Incidental or

conducive to the promotion or advancement of the

business of the company.

(0) It may undertake any other form of business which the

Central Government may specify as a of business in

which it is lawful for a banking company to engage.

The range of services offered differs from bank to bank.

depending mainly on the size and type of banks. but the

acceptance of deposits from the public and provision of

credit form the mainstay of the banking business. The

services offered by commercial banks may be classified into

(i) services to depositors borrowers for providing credit to

them. and (ii) ancillary services.

Ancillary Services

1. Performance Guarantees and Financial Guarantees.

2. Safe Custody of Deeds. Securities.

3. Safe Deposit Vault.

4. Purchase and Sale of Securities.

5. Collection of Interest on Securities/Debentures and

Dividend on Shares, Collection of Pension Bills.

6. Remittance of Funds-Bank Drafts, Mail Transfers,

Telegraphic Transfers.

7. Executor and Trustees.

8. Personal Tax Assistance, preparing Income Tax, Sales

Tax, Wealth Tax Returns.

9. Investment Facilities-Underwriting, Banker to new issues,

Guidance to investment, Stock Exchange assistance. 10.

Credit Transfers. 11. Credit Cards.

10. Travelers Cheques and Gift Cheques.

11. Emergency Vouchers.

12. Sale of. Units of Unit Trust of India DEFINITION OF A

CUSTOMER i.e term 'customer' of a bank is not defined

by law. Ordinarily, a person who has an account in a bank

is considered its customer. Banking experts and the legal

judgements in the past however, used to qualify this

statement by laying emphasis on the period for which

such account had actually been maintained with the

bank. In Sir John Paget's view "to constitute a customer

there must be some recognisable course or habit of

dealing in the nature of regular banking business." This

definition of a customer of a bank lays emphasis on the

duration of the dealings between the banker and the

customer and is, therefore, called the 'duration theory'.

Accord in to this viewpoint a person does riot become a

customer of the : banker on the opening of an account.

~e must have been accuse'- to deal with the banker

before he is designated as a customer.

An important consideration-which determines a person's

status as customer is the nature of his dealings with the

banker. It is evident from the above that his dealings with

the banker must be relating to the Siness of banking. A

banker performs a number of agency functions and tenders

various public utility services besides performing essential

functions as a banker. A person who does not deal with the

banker in regard to the essential functions of the banker,

i.e., accepting of deposits and lending of money, but avails

of any of the services rendered by the banker. is not called

a customer of the banker. For example, any person without

a bank account in his name may remit money through a

bank draft, encase a cheque received by him from others or

deposit his valuables in the Safe Deposit Vaults in the bank

or deposit cash in the bank to be credited to the account of

the Life Insurance Corporation or any joint stock company

issuing new shares. But he will not be called a customer of

the banker as his dealings with the banker are not in regard

to the essential functions of the banker. Such dealings are

considered as casual dealings and are not in the nature of

banking business.

Thus, to constitute a customer the following essential

requisites Just be fulfilled:

A bank account-savings, current or fixed deposit-must be

( Ripened in his name by making necessary deposit of

money, and

The dealing between thaker and the customer must be of

the nature of banking business.

Banker as Agent

A banker acts as an agent of his customer and forms a

number of agency functions for the convenience of his

customers. For example. he buys or sells securities on

behalf of his customer collects cheques on his behalf and

makes payment of various dues of his customers. e.g..

insurance premium etc. The range of such agency functions

has become much wider and the banks are now rendering

large number of agency services of diverse nature. For

example. some banks have established Service

Departments to take up the tax problems of their

customers.

Ancillary Services of a Banker

Performing the two essential functions of accepting and

lending and investing its funds-that constitute the business

of banking, a modem banker renders a number of ancillary

services also, The range of these services, as outlined in an

earlier chapter. is being enlarged day by day. These

services full under two broad categories-(t1 those which are

rendered to a bank's own customers, and (ii) those which

are available to the public in general. These services are of

various types and of different nature. Some of them are of

specialized nature which necessitate employment of expert

staff. In this chapter, we shall with some of the important

services rendered a modem banker.

REMITTANCE OF FUNDS

With a network of furies branches spread over the entire

country banks are eminently suitable institutions for the

remittance of funds from one place to another. Bank

remittances are safe swift inexpensive and simple. The main

instruments for transfer of funds are:

(i) Mail transfers.

(ii) Telegraphic transfers, (iii) Bank Drafts, and

(iv)Traveler cheque

TRANSFERS

Money can been through mail transfers to any body who has

an account in any o r branch of the same bank. For this

purpose the sender shall ha to furnish details like the name

of the beneficiary, his/her account number, the amount to

be transferred and the name of the branch where the

account is maintained.

TELEGRAPHIC TRANSFERS

To send money urgently banks may be requested for

telegraphic transfers on payment of a nominal charge and

telegram charges. Such facilities are available at selected

branches only.

Both mail transfers and telegraphic transfers can also be

made payable to a beneficiary on indication. For this

purpose. beneficiary's address is also given.

TRAVELLER CHEQUES

A traveler cheque is another instrument issued by banks for

the remittance of money from one place to another. It is

issued for the convenience of the travelling public. When a

person wants to travel without taking the risk of carrying

cash with him he may avail of the facility of traveler

cheques.

MERCHANT BANKING

Merchant banking line of activity for India (1) banks. State

bank of India has been the first in the country to make a

banking in this line. Merchant banking comprises in

rendering services of non-banking natural to thc industrial

mid business houses. The merchant banking division of (1)

Bank advisor service and assistance to contraction up

(industrial and also to existing: units expanding: or

diversifying: production. The Merchant Banking Division

provides comprehensive service to Its clients.

THE EMBLEM

If you were to look for a symbol that inspires trust, security

and confidence in India, all you have to look for is the Bank

of Baroda emblem.

It is coin-shaped, signifying a financial institution dealing in

money and therefore, with people.

People engaged in industry - symbolised by the cog wheel.

People engaged in agriculture - symbolised by two ears of

corn.

The upraised palm signifies security. And the motto:

"Akshayam te bhavishyati "

(Thou shalt forever be prosperous).

Which to the farmer suggests plentiful harvests. To

industrialists, industrial growth. To businessmen, a brisker

turnover. And to one and all, a better future.

FINANCIAL PERFORMANCE

Key Business Indicators (Rs. In

Crore)

30.06.2003 31.03.2003

Total Deposits 65,398.41 66,366.37

Total Advances 33,051.66 35,348.08

Total Investments 33,006.84 30,179.38

Total Assets 76,597.68 76,417.85

Operating Profit 464.91 1,716.63

Net Profit 244.47 772.78

Capital Adequacy Ratio (percentage) 12.65 12.65

Net Non Performing Assets to Net

Advances (percentage)

3.85 3.72

Operating profit to working funds

(percentage)

2.43 2.24

Business Per Employee (Lacs) 244.8 252.31

Dividend History (percentage)

1998 30

1999 30

2000 40

2001 40

2002 40

2003 60

NETWORK OF BANK OF BARODA

Branch Network Area No of Branches

Metro 496

Urban 497

Semi-Urban 539

Rural 1,182

Total (Indian) 2,714

Foreign (Overseas) 38

Total (Global) 2,752

Controlling Offices

Zonal Offices 13

Regional Offices 43

SUBSIDIARIES & JOINT VENTURES

Domestic Subsidiary

BOB Housing Finance Ltd.

BOB Asset Management Co. Ltd.

BOBCARDS Ltd.

BOB Capital Markets Ltd.

Associate Bank

Nainital Bank Ltd.

Overseas Subsidiary

BANK OF BARODA Botswana Ltd.

BANK OF BARODA Kenya Ltd.

BANK OF BARODA Uganda Ltd.

BANK OF BARODA Hongkong Ltd.

BANK OF BARODA Guyana Inc.

BANK OF BARODA UK Ltd..

CITIZEN’S CHARTERS IN BANK OF BARODA

Common Practices Followed by our branches

Display business hours.

Render courteous services

Attend to all customers present in the banking hall at the

close of business hours Provide separate ‘Enquiry’ or ‘May I

Help You’ counter at large branches Offer nomination

facility to all deposit accounts (i.e. account opened in

individual capacity) and all safe deposit locker hirers (i.e.

individual hirers).

Display interest rates for various deposit schemes from time

to time Notify change in interest rates on advances Provide

details in interest rates on advances Provide details of

various deposit schemes / services of the Bank

Issue Demand Drafts, Pay Orders, etc.

Display Times - Norms for various banking transactions Pay

Interest for delayed credit of outstation cheques, as advised

by Reserve Bank of India (RBI) from time to time.

Accord immediate credit in respect of outstation and local

cheques upto a specified limit subject to certain conditions,

as advised by RBI from time to time Provide complaint /

suggestion box in the branch premises Display address of

Regional / Zonal as well as Nodal Officer dealing with

customer grievances / complaints

Redressal of Complaints

To enable the customers to voice their grievances or offer

suggestions for improvement in customer services.

“Customer Day” is observed at all the offices of the Bank

across the organisation covering branches, Regional / Zonal

Offices and Head Office, on 15th of every month (next day,

if 15th is a holiday or half-day). During specified hours on

this day any customer can meet senior / top executives of

the Bank including Chairman & Managing Director without

prior appointment.

In case of any complaint, the matter may be first brought to

the notice of concerned branch manager for immediate

redressal. If the complaint is not redressed to the

satisfaction of the customer, the matter may be taken up

with the Regional Manager / Zonal Manager concerned.

If the complainant still feels unsatisfied with the responses

received, he can address his complaint to the Bank’s Nodal

Officer designated to deal with customers’ complaints /

grievances giving full details of the case.

After exhausting all the above machinery / channels, if the

customer is not satisfied, he may write to Chairman &

Managing Director of the Bank and even after this, not

satisfied he is free to take recourse to the following :

Directorate of Public Grievances, Govt. of India, Cabinet

Secretariat, Sansad Marg, New Delhi. The Banking

Ombudsman located in State Capitals under RBI

Ombudsman Scheme, 2002 The District Consumer Forum

under Consumer Protection Act, 1985

OTHER ACHIEVEMENTS

Bank's offshore banking unit opened at SEEPZ in

Andheri, Mumbai

Bank opened its first Offshore Banking Unit (OBU) in India

on 21 October 2003. This deemed overseas branch is the

3rd Offshore Banking Unit (OBU) of Bank in its worldwide

offshore banking network. The Offshore Banking Unit will

focus on dealing in major foreign currencies and will provide

–

Single point solution for all financial needs of units

located in special economic zones, 100% EOU,

Corporates and NRI customers.

Solutions for currency risk/hedging loan portfolios or

cash flow mismatches

Wide range of high-yield deposit/investments products

for foreign currency savings.

Fitch assign highest rating "AAA" to Bank's Bonds

Programme

Fitch has assigned "AAA(ind)" (Triple A ind) rating to the

proposed Rs.600 Crore Tier II bonds programme of Bank of

Baroda. The AAA (ind) rating indicates highest safety for the

investors. They are assigned only in case of exceptionally

strong capacity for timely payment of financial

commitments. The FITCH has observed that in the case of

BOB this capacity is unlikely to be adversely affected by

foreseeable events. Further, the Fitch has assigned AAA

(ind) (Triple A ind) rating to the Rs. 1200 Crore Tier II bonds

of the Bank currently outstanding.

The deposit programme of the Bank has also been rated as

tAAA (ind). The tAAA (ind) rating indicates highest credit

quality and denotes that the protection factors are very

high. The short-term debt programme has also been rated

F1+(ind) which shows the strongest capacity for timely

repayment of the financial commitments

The ratings take into account BOB's important position in

the Indian financial system, implicit sovereign support,

widespread branch network, steady improvement in core

banking operations, an improved asset quality, consistent

growth in low cost deposit base, comfortable liquidity

position, satisfactory capitalisation and initiatives in

business process re-engineering and also in information

technology infrastructure of the bank. The FITCH has

observed that the BOB has since focused on upgrading skill

sets of its employees, including hiring of specialists at

salaries superior to the Bank’s own pay structure, which is

probably a “first” among government banks.

The Bank is raising Rs.600 crores (Rs.300 crores with green

shoe option of Rs.300 crores) towards tier II capital by issue

of unsecured subordinated bonds through private placement

basically for augmenting the Capital Adequacy Ratio (CAR)

which is 12.65% as of 31st March 2003. The current CAR of

the Bank is well over the statutory requirement of 9%.

INTERNATIONAL BANKING

Bank of Baroda (BOB) opened its first branch abroad in

Mombasa, Kenya in 1953. Since then BOB has come a long

way in expanding its international network and today it is a

leading International Bank from India having significant

international presence with a network of -61- branches

(including of subsidiaries/ joint ventures) in -16- countries

spread over all the time zones over the Globe. BOB is thus "

Round the clock around the Globe Bank". It is further in the

process of identifying/ opening more overseas centers for

increasing its global presence.

Money Centre Branches

Six branches at London, New York, Brussels, OBU Mauritius,

OBU Nassau and Dubai are our Money Centre Branches

Correspondent Links

This international network is augmented by the

correspondent links with more than 500 leading Banks in

every country around the world over.

Indian network

The international network is supported by a large Indian

network through International Business Branches, Non

Resident Indian Branches, 116 Authorised Forex Branches

and more than 2500 other branches.

Being the second largest Bank of the country with maximum

number of branches abroad among the Indian Banks, BOB is

well positioned to offer variety of services, products and

financial solutions to a cross section of clients, suiting to

their banking requirements through one of the best banking

relationship networks both in terms of strength and spread

among the Indian financial entities.

BOB provides a wide range of services to its customers

across the globe.

PRODUCTS & SERVICES

By Branches in India

The banking services at the International Business Branches

(IBB), Non Resident Indian Branches, 116 Authorised

Branches as well as 2500 other branches are provided for

the benefit of Indian customers, corporates, NRIs, Overseas

Corporate Bodies, Foreign Companies/ Individuals as well as

Foreign Banks etc. BOB provides wide range of products/

services to its customers for their international business

requirements. Brief details of services provided are as

under :-

1) NRI Banking

2) Foreign Currency Loans in India (FCNR 'B' Loans)

3) Export Finance / Services

4) Import Finance / services

5) Correspondence Banking Services in India

6) All General Banking Services

7) Treasury Services

By Branches outside India

The international banking services of BOB at its overseas

branches are provided for the benefit of its Indian

customers, local customers, NRIs, subsidiairies and joint

ventures abroad of Indian corporates, foreign entities,

multinational corporates, Banks as well as customers

around the globe.

The important services provided are :-

1)All general Banking Services including Corporate/ Retail

lending

2)NRI Banking

3)Foreign currency credits to the Indian corporates

4)Arranging/ participating in the Syndicated loans of Indian

corporates as well as rated multinational corporates.

5)Correspondent Banking services to the Indian Banks/

corporates

6)Trade Finance (Bills Discounting)

7)International Treasury Services

The cross border foreign currency lending to Indian

corporate, trade finance and treasury services are provided

at the money center branches as well as subsidiary in Hong

kong. The general Banking Services are provided at all the

branches/ subsidiaries/ joint ventures.

CREDIT CARDS

BOBCARD PARAS INTERNATIONAL

DESCRIPTION

This card is affiliated with MasterCard International and is

accepted in over 1,10,000 establishments in India and over

29 million outlets across the globe. It is also accepted on

about 8,00,000 ATMs worldwide.

ELIGIBILITY

Individual: Annual income of Rs. 60,000.

Company : Paid-up capital Rs. 3,00,000.

FEATURES

Revolving credit : Rs. 21,000.

Cash withdrawal: Rs.5,000 per month.

Service charges on purchase : 2.25%

Service charge on Cash withdrawal : 2.5% or Rs. 125

whichever is higher.

Insurance : Free accidental insurance of Rs.

2,50,000(in case of death).

Minimum payment : 5%

Comprehensive monthly statements.

Zero interest period.

Prompt replacement for lost card.

Limited liability.

FEES

Principal card : Rs.300 per annum.

Add-on : Rs. 200 per annum.

BOBCARD PARAS ELECTRONIC

DESCRIPTION

Bobcard Limited is one of the few banks to

issue Electronic Credit Card in India. Bobcard

Paras Electronic gives you a highly secure

environment to use the credit card. It is a non-embossed

card so it can only be accepted at EDC terminals or ATMs,

this reduces chances of any malpractices with your credit

card and gives you a relaxed highly secure utility with your

credit card. It is an International Master Card and accepted

over 25,000 merchants across India.

ELIGIBILITY

Individual: Gross Annual Income of Rs. 60, 000.

Company: Paid-up capital Rs. 3,00,000.

FEATURES

Revolving credit : Rs. 21,000.


Service charge on purchase : 2.25%

Service charge on Cash withdrawal : 2.5% or Rs. 125


Insurance : Free accidental insurance of Rs.

2,50,000(in case of death).

Minimum payment : 5%




Limited liability.

FEES

Principle: Rs. 300 per annum.

Add-on: Rs. 200 per annum.

BOBCARD SILVER

DESCRIPTION

This card is affiliated with Visa international.

It is welcomed at over 1,10,000 Member

establishments in India. It is a photo card.

ELIGIBILITY

Individual : Annual income of Rs. 75,000.

Company : Paid-up capital of Rs. 3,00,000 or more.

FEATURES

Revolving credit : Rs. 25,000 per month.



Service charge on Cash withdrawal : 3% or Rs. 150


Insurance : Free accidental insurance of Rs. 2,00,000,

In case of air-accident Rs. 4,00,000.

Minimum payment : 5% per month.




Limited liability.

Cash can be withdrawn at any branch of BOBCARDS Ltd.

or at any of the specified branches of Bank of Baroda.

FEES

a. Rs.400/- p.a. for principal cardholder

b. Rs.250/- p.a. for add-on cardholder

BOBCARD PREMIUM

DESCRIPTION

This credit card is affiliated with Visa

International & valid throughout the world. It

is a photo card.

ELIGIBILITY:

Individual : Annual income of Rs. 1,00,000 or more.


FEATURES:


Cash withdrawal: Rs. 10,000 per month.






Spouse insurance : Rs. 2,00,000 (need not be a

bobcard holder).





Limited liability.



FEES



BOBCARD EXCLUSIVE

DESCRIPTION

This card is welcomed at over 29 million

Merchant Establishments and over 8,00,000

ATMs worldwide. This card is affiliated with

MasterCard International and is very popular amongst the

Bobcards holder.

ELIGIBILITY



FEATURES



Interest on purchase : 2.25%

Interest on Cash withdrawal : 3% or Rs. 150





bobcard holder).

Baggage insurance : Rs.10,000 (for air travel only).





Limited liability.



In case of medical emergency for a cardholder, his

spouse or a family member, the cardholder can draw

cash upto a maximum of Rs.15,000 from any of our

specified branches other than at the city of residence

subject to production of satisfactory evidence. This

facility is over and above the cash advance facility of

Rs.10,000 p.m.

FEES


BOBCARD GOLD

DESCRIPTION


International & valid throughout the world. It

is a Photo Card.

ELIGIBILITY



FEATURES









bobcard holder).






Limited liability.



In case of medical emergency for a cardholder, his

spouse or a family member, the cardholder can draw

cash upto a maximum of Rs.15,000 from any of our

specified branches other than at the city of residence

subject to production of satisfactory evidence. This

facility is over and above the cash advance facility of

Rs.15,000 p.m.

FEES



BOBCARD GLOBAL

DESCRIPTION


International & valid throughout the world on

over 30 million establishments & 8,00,000

Visa ATM's. It can only be applied by a corporate.

ELIGIBILITY

Individual : Not applicable.

Company : Turnover of Rs.1 crore or more.

FEATURES

Revolving credit : Rs. 3,00,000 per month.

Cash withdrawal: Rs. 15,000 per month.



whichever is higher. (Outside India : 3.33% )




bobcard holder).






Limited liability.



FEES


Add-on : Not applicable

Internet/Mobile Banking

A Hi-Tech Convenience Banking product suite of Bank

of Baroda Welcome to the OmniBOB suite of services from

Bank of Baroda i-BoB and m-BoB are two services which

allow you to access your account at your convenience

through the internet or your mobile phone.

i-BoB and m-BoB cut across all barriers of conventional time

and place based banking. It offers you a truly round the

clock, around the globe banking service.

Just visit www.bankofbaroda.com and log-in to i-BoB/m-BoB

and access your account via the internet for balance

enquiries, transaction details, order a cheque book and find

the status of your order.

Similarly, use your mobile phone (SMS/WAP) to access these

services.

OBJECTIVES

1. To measure the customer satisfaction level regarding the

various products and services offered by Bank of Baroda.

2. To determine the most popular and widely used services.

3. To determine the factors that motivate people to chose their

primary bank and the factors that help to develop the

awareness level towards the bank.

4. To analyze the major problems faced by the users while

accessing the bank’s services and devise methods to improve

the bank’s services.

LIMITATIONS

1. The survey was conducted in selective areas because of

constraints of time and resources. Therefore the findings

cannot be generalized or claimed until further research has

been carried out.

2. The sample size was 150, which may not reflect a true

picture of the consumers mind. Because of these constraints

the analysis may not be accurate and may vary when tested in

different places and time.

3. Details on the precise nature of consumers goals was

limited, for example the measures used only captured certain

information on standards that individuals had in mind as

acceptable outcomes of their goal directed behavior.

4. Also the research does not elicit more subtle goals such as

mood repair motives. So the possibility of personal biases of

the respondents may not be precluded.

5. Because in-bank behavior was measured after the banking

encounter, some information on the different forms and

dynamics of the behavior was inevitably not captured.

6. The situation in which a person is questioned about routine

actions is an artificial one at best. Due to the influence of

questioning process, respondents may furnish quite different

information from facts.

Thus, though the study is not conclusive in nature it tends to

explore the consumers’ perceptions and ideas about the services

of the bank.

METHODOLOGY

The project was divided into four stages. The first stage included

gathering information about the bank’s profile, the various

schemes launched by the bank and getting acquainted with the

working of the bank. The second stage involved determining the

objective of the study, knowing the target audience and drafting a

questionnaire. The questionnaire was designed keeping in mind

the target audience and objectives of the study. It was non-

disguised in nature and included a few open-ended questions.

Visits to different branches of the bank were made. Around 50%

of the respondents surveyed were from the XXXXX branch, 30%

respondents were surveyed from the XXXX branch and rest of

the respondents were surveyed from the XXXXX branch . The

further details of the survey are presented below:

RESEARCH PLAN

The research conducted was exploratory in nature and the goal

was to gather preliminary data to shed light on the real nature of

problems and to suggest possible solutions or new ideas. It

involves getting a feel of the situation and lays emphasis on the

discovery of ideas and possible insights.

DATA SOURCES

The research can call for gathering secondary data, primary data

or both. Secondary data is the data that was collected from

another purpose and already exists somewhere. Primary data is

gathered for a specific purpose and is collected by the researcher

himself.

The data used in this project is primary data collected from the

various respondents. Secondary data available in different books

and product catalog was also used in compiling the report.

DATA COLLECTION FORM

For the purpose of this project, a questionnaire was designed to

collect data. The questionnaire was non-disguised because the

objective and purpose was conveyed to the respondents before

asking for their responses. The questions were structured open

for general information and closed for collecting specific

information.

SAMPLING PLAN

The sampling unit comprised of the people present in the various

branches of the BANK OF BARODA. The sample size taken for the

study was hundred fifty which. The samples were chosen on the

basis of random sampling and these respondents belonged to

middle and upper class salaried and self-employed people,

students, professionals and housewives. The surveyed

respondents belonged to the age of 18 years and above.

The research was carried out in the following branches of the

bank;

1. XXXXX

2. XXXXX

3. XXXXXX

PRE-TESTING

It involved in applying the draft questionnaire to a sample

of 15 people. This was done to evaluate the suitability of

the questionnaire for accomplishing the objective and to

find out the drawbacks and errors in the questionnaire if

any.

EVALUATION

The data, which was collected, was summarized and tabulated for

further analysis. The analysis performed was mainly comparative

analysis involving statistical analytical method. The results are

shown in the following section.

ANALYSIS

1. It was found that the Savings Bank account scheme offered by

the bank enjoyed the maximum awareness level followed by

Cards. However, schemes like Bank at campus and Business

multiplier were rated low on the awareness scale.

2. As far as the usage level of the various offerings of the bank

was considered the savings bank account was rated the

highest followed by Cards.

3. Convenient timings of the bank emerged to be the most crucial

factor affecting the choice of the bank followed by Proximity and

Exclusive service.

4. Advertisements were found to be the most important factor

influencing consumers’ awareness towards the bank’s offerings

followed by the consumers’ visits to the bank.

5.Problems in operating accounts and accessing online services

emerged to be the important factors affecting the satisfaction

level of the consumers. However, around 41% of the sample

surveyed was found to be totally satisfied with the bank’s services

and did not complain of any problem.

* sluggish response = long waiting times at the bank (cash,

dd/po,atm, opening new accounts)

* account operation = late credit of cheques, delayed receipt of

debit cards, chq books and monthly statements )

Staff = incompetent and insensitive.

6. Respondents suggested various improvements in

Bank Of Baroda’s present services. Some of them are listed

below:

a. ATM’s-A majority of respondents suggested more number of

ATM’s to be opened esp. in the college campuses and small

cities. It was also suggested that the bank should take steps to

reduce incidence of cash shortage on the ATMs.

b. Inadequate staff - A large number of respondents felt that

the staff in the branch is less due to which a lot of time is

consumed. Also it was felt that the personnel should be prompt

in resolving the customers’ problems.

c. Increase in counters- A lot of respondents felt that multiple

counters (esp cash and DD/PO ) should be opened so as to

reduce the servicing time and give personalized service to the

customers.

d. It was felt that the bank should reduce the time it takes for

cheque clearing and collection. Money transfer through

anywhere banking to other cities takes long time and a lot of

follow up with branch.

e. Less interest rate and charges – A majority of the

respondents felt that the interest rate charged by the bank on

cards and personal loans is high as compared to the

competitors and should be reduced.

f. It was suggested to make the bank statements more clear

and simple, which could be easily understood .It was also

suggested that the mini statements issued by the bank, should

state all relevant transactions.

g. It was revealed that a lot of consumers wanted the bank to

devise a method, which would enable users to get their

account status through SMS and Email.

h. The respondents complained that the branches did not have

adequate space to enable visitors to move easily without

feeling suffocated. It was also felt that a few branches did not

have an adequate parking space. The respondents felt that the

authorities should pay more attention into the matter.

i. Also it was felt that the number of lockers per branch

should be increased.

7.The respondents suggested the following new services that

the bank should consider to launch. Some of the suggestions are

listed below:

a. Online customer service

b. Feature of account-to-account transfer in ATMs ( 3 rd party)

c. More MEs which accept Bank Of Baroda Bank credit/debit

cards.

d. To make money available on demand at those branches

where ATMs are not available.

e. Increase in daily withdrawal limit over ATMs ( from Rs

15000 to 25000 per day )

f. Information of new schemes and product launches by mail.

g. Improvements in inter city funds transfer service.

h. ATM card retrieval through any other means than going to

the branch.

i. Launch more branches esp. in state adjacent to borders

9.83%(approx) of the sample surveyed was willing to recommend

Bank Of Baroda’s services to its peer and family.

To analyze the customer preferences and satisfaction further, the

target audience has been broadly divided into two groups-Self

Employed and Salaried. This is done so as to find whether (and to

what extent) the factors affecting customer satisfaction vary with

occupation and income. The findings of the study are presented:

COMPARATIVE STUDY OF TWO GROUPS

I. Self employed

Demographic profile-

Age:

18-24 years: 04 respondents

24-30 years: 08 respondents

30yrs &above: 14respondents

Sex:

No of males: 19

No of females: 07 respondents

Income:

Below Rs. 2lac pa: 06 respondents

Rs. 2-4 lac pa: 06 respondents

Rs.4-6 lac pa: 10 respondents

Rs. 6 lac &above: 04 respondents

II. Salaried:

Demographic profile

Age:

18-24 years: 07respondents

24-30 years: 10respondents

30yrs &above: 07 respondents

Sex:

Males: 16 respondents

Females: 08 respondents

Income:

Below Rs. 2lac pa: 11 respondents

Rs. 2-4 lac pa: 09 respondents

Rs.4-6 lac pa: 2 respondents

Rs. 6 lac &above: 2 respondents

1. A comparative study of the awareness level of the two

groups regarding the various schemes of the bank.

2. A comparative study of the usage level of the

respondents of the two groups .

3. A comparative study of the respondents of the

two groups using Bank Of Baroda as their primary

bank.

4. A comparative study of the factors influencing consumers’

awareness.

5. A comparative study of the problems faced by

the two groups while accessing the bank’s services.

SWOT ANALYSIS

A SWOT analysis of the bank is as follows:

Strengths

Premiere market image

Focus on quality

Committed staff

Satisfied customers

Weaknesses

Low awareness and

usage levels of a few

schemes

Slow processing

Threats

Highly competitive

market

Stagnant urban demand

Opportunity

Convert image into

market share

Wide product portfolio

Positive rub-off due to

some unique schemes

RECOMMENDATIONS

1. The bank should launch awareness campaign for making

various alternate channels of banking more popular like mobile

banking and internet Banking. Making customers aware of new

schemes and interest rates through e-mail or direct mailer

would be a step in this direction.

2.The bank should follow a fierce marketing strategy regarding its

telebanking services. At the same time schemes like Business

multiplier, Recurring deposits and Kid-e-bank should be pursued

with an intensive ‘advertising promotion’.

3.The bank should devise ways to improve the working of ATMs as

a majority of the respondents were dissatisfied with the services

over ATMs. Also the bank should install more number of ATMs in

the crowded branches and also in other class B cities. Feature of

account-to-account transfer in ATMs (third party transfer)

4. A majority of the respondents complained of delayed

compliance of instructions due to inadequate staff. Also number

of cash counters should be increased as the first step towards

giving the customers a quicker service.

5.The bank should devise ways to provide customers with simple

and easy to understand bank statements

BIBLIOGRAPHY

Information collected from the Bank.

Referred to –

o Business Today,

o Business India

o Business World.

o Economic Times

Websites

ANNEXURE

CUSTOMER QUESTIONNAIRE

Preamble: I am a management student of IGNOU. I am doing

project on Bank Of Baroda. So I need your valuable co-operation

in this regard.

Name of the organization ……………………………………………………

Addresss……………………………………………………………

………………………………………………………………………

………………………………………………………………………

Age ……… Sex. : Male Female

Contact Person……………………………………………………………….

Office Phone…………………… Mobile ………………………

1. Kind of the Organisation

Manufacturing Trading other specify

2. What is your annual income

Less than 2 Lakhs

Between 2 Lakhs to 4 Lakhs

Between 4 Lakhs to 6 Lakhs

Above 6 Lakhs

3. Do you maintain account with any bank ?

If yes, go to question no 4 otherwise go to no 11.

4. Specify the name of the bank(s)

5. How frequently do you visit the bank ?

Everyday

2-3 times a week.

Once a week.

Other.

6. What type f A/C you maintain ?

Current A/C

Saving bank A/C

Fixed deposit A/C

Other specify.

7. What facilities are you availing from the bank

Anywhere banking Cash Pickup

Internet banking Cash delivery

Phone banking Cheque Pickup

Temporary overdrafts. Draft delivery

Document collection Balance inquiry

Multicity cheques Foreign remittance

Sweep Utility bill payments

No such facilities availed.

8. Does the bank on cash transaction impose any restriction ?

Small denominations not acceptable (less than 100)

Cash deposit charges.

Deposit at non–home branch

Cash withdrawal at non-home branch

No such restrictions.

9. If better facilities are provided, can you shift to other bank ?

Yes No

10. Do you want to open A/C with any bank ?

Yes No

If no go to question no 16.

11. Name the bank in which you are interested.

12. What type f A/C you maintain ?

Current A/C

Saving bank A/C

Fixed deposit A/C

Other specify.

13. What facilities are you availing from the bank

Anywhere banking Cash Pickup

Internet banking Cash delivery

Phone banking Cheque Pickup

Temporary overdrafts. Draft delivery

Document collection Balance inquiry

Multicity cheques Foreign remittance

Sweep Utility bill Payments

No such facilities availed.

14. What is the broad criteria for selecting any bank ?

Better facilities.

Convenience.

Image of the bank.

16.The most important factor that influence you about banking

Visits

Advertisements

Peer/ Family

Others.

Any Suggestions :………………………………………………….

………………………………………………………………………………………………………………………………………………

Signature with date

Bank of Baroda

Documents

Transcript of Bank of Baroda