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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
5
yeQkeÀ Dee@]HeÀ Fbef[³eeBANK OF INDIA
He´Oeeve keÀe³ee&ue³e ë mìej neGme, meer-5, `peer' yuee@keÀ, yeebêe-kegÀuee& mebkegÀue, yeebêe (HetJe&), cegbyeF& - 400 051.Head Office : Star House, C-5, ‘G’ Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.
met®evee NOTICE
SleÜeje met®evee oer peeleer nw efkeÀ yeQkeÀ Dee@]HeÀ Fbef[³ee kesÀ µes³ejOeejekeÀeW keÀer omeJeeR Jeeef<e&keÀDeece yewþkeÀ meesceJeej efoveebkeÀ 10 pegueeF&, 2006 keÀes oesHenj 2.30 yepes jecee JeeìgceueDee@ef[ìesefj³ece, efkeÀµeve®ebo ®esueejece keÀe@uespe, efoveµee Jeeíe jes[, ®e®e&iesì, cegbyeF& - 400
020. ceW efvecveefueefKele keÀe³e& kesÀ efueS Dee³eesefpele keÀer peeSieer ë
’yeQkeÀ kesÀ legueve-He$e ³eLee efoveebkeÀ 31 cee®e& 2006 SJeb Fmeer efoveebkeÀ keÀes meceeHle Je<e& kesÀefueS ueeYe SJeb neefve uesKee, uesKeeJeefOe ceW yeQkeÀ keÀer keÀe³e&He´Ceeueer Deewj keÀe³e&keÀueeHeeW kesÀmebyebOe ceW efveosµekeÀ ceb[ue keÀer efjHeesì& Deewj legueve He$e leLee uesKee Hejer#ekeÀeW keÀer efjHeesì& Hej®e®ee& keÀjvee“~
NOTICE is hereby given that the Tenth Annual General Meeting of theShareholders of Bank of India will be held on Monday, 10th July, 2006 at2.30 PM at Rama Watumull Auditorium, Kishinchand Chellaram College,Dinshaw Wacha Road, Churchgate, Mumbai – 400 020, to transact thefollowing business:
“To discuss the Balance Sheet as at 31st March, 2006 and the Profit andLoss Account for the year ended on that date, the Report of the Board ofDirectors on the working and activities of the Bank for the period coveredby the Accounts and the Auditors’ Report on the Balance Sheet andAccounts.”
mLeeve ë cegbyeF& (Sce. yeeue®ebêve) Place: Mumbai M. Balachandran
efoveebkeÀ ë 28.05.2006 DeO³e#e SJeb He´yebOe efveosµekeÀ Date : 28.05.2006 Chairman & Managing Director
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
6
1. Hejes#eer keÀer efve³egefkeÌleyewþkeÀ ceW Yeeie uesves leLee celeoeve kesÀ nkeÀoej µes³ejOeejkeÀ DeHeves mLeeve Hej Yeeie uesvesleLee celeoeve nsleg SkeÀ Hejes#eer efve³egkeÌle keÀj mekeÀles nQ~ Hejes#eer HeÀece& keÀes He´YeeJeeryeveeves kesÀ efueS mebyebefOele HeÀece& GmeceW efveOee&efjle mLeeve Hej Jeeef<e&keÀ Deece yewþkeÀ kesÀkeÀce mes keÀce 4 (®eej) efove HetJe& DeLee&le yegOeJeej 5 pegueeF&, 2006 keÀes ³ee GmemesHenues DeJeµ³e He´eHle nes peevee ®eeefnS.
2. HeeefOeke=Àle HeefleefveOeer keÀer efve³egefkeÌlekeÀesF& Yeer J³eefkeÌle, pees efkeÀmeer Ssmeer kebÀHeveer ³ee Dev³e efkeÀmeer efvekeÀe³e-kebÀHeveer pees yeQkeÀkeÀer µes³ejOeejkeÀ nw, keÀe efJeefOeJele He´eefOeke=Àle He´efleefveefOe nw, Üeje Deece yewþkeÀ kesÀefoveebkeÀ mes 4 (®eej) efove Henues DeLee&le yegOeJeej 5 pegueeF&, 2006 keÀes ³ee GmemesHenues yeQkeÀ kesÀ He´Oeeve keÀe³ee&ue³e ceW, efpeme yewþkeÀ ceW Gmes He´eefOeke=Àle He´efleefveOeer kesÀ ©HeceW efve³egkeÌle keÀjves keÀe mebkeÀuHe Heeefjle efkeÀ³ee ie³ee Lee, kesÀ DeO³e#e Üeje GkeÌlemebkeÀuHe keÀer He´ceeefCele mel³e He´efleefueefHe ³eefo He´mlegle veneR keÀer peeleer nw lees Gmes yewþkeÀceW GHeefmLele jnves keÀe, cele osves keÀe DeefOekeÀej veneR nesiee.
3. uesKee yeboer
Mes³ej OeejkeÀeW keÀe efjpemìj SJeb yeQkeÀ keÀe Mes³ej DeblejCe jefpemìj Jeeef<e&keÀ DeeceyewþkeÀ SJeb ueeYeebMe kesÀ Yegieleeve kesÀ efueS Hee$elee DeefYeefveef½ele keÀjves kesÀ GÎsM³e mesieg©Jeej 6 pegueeF& 2006 mes meesceJeej 10 pegueeF&, 2006 (oesveeW efove Meeefceue) lekeÀyebo jnsiee ~
4. Heles ceW HeefjJele&veefpeve Mes³ejOeejkeÀeW kesÀ Heeme µes³ej FueskeÌìeefvekeÀ / Decetleeake=Àle ©He ceW nQ GvnW DeHeves HelesceW ³eefo keÀesF& HeefjJele&ve nes lees GmekeÀer met®evee Gvemes mebyebefOele menYeeieer efve#esHeeieej keÀesDeewj efpevekesÀ Heeme µes³ej Hel³e#e ©He ceW nQ Gvns DeHeves Heles ces HeefjJele&ve keÀer met®evee yeQkeÀkesÀ Hebpeer³ekeÀ SJeb µes³ej DeblejCe SpeWì keÀes efvecveefueefKele Heles Hej osveer ®eeefnS~
cesmeme& µes³ejHe´es meefJe&mespe (Fbef[³ee) He´e. efue. ³etefveì ë yeQkeÀ Dee@]HeÀ Fbef[³ee,meeìce Fmìsmì, leermejer cebefpeue, yeQkeÀ Dee@]HeÀ yeæ[ewoe kesÀ THej, keÀeef[&veue iesefme³emejes[, ®ekeÀeuee, DebOesjer (HetJe&), cegbyeF& - 400 099.ìs. veb. ë 28215168, 28215169 He@ÀkeÌme ë 022-28375646F&-cesue ë [email protected]
5. ueeYeebµe keÀe Yegieleeveµes³ejOeejkeÀeW keÀes efveosµekeÀ yees[& Üeje Ieesef<ele ueeYeebµe keÀe Yegieleeve Jeeef<e&keÀ DeeceyewþkeÀ keÀer leejerKe mes 30 efoveeW kesÀ Yeerlej efkeÀ³ee peeSiee.
6. GHeefmLeefle He®eea-men-HeJesµeHe$eMes³ejOeejkeÀeW keÀer megefJeOee kesÀ ef}S GHeefmLeefle He®eea-men-He´JesµeHe$e Fme efjHeesì& kesÀmeeLe mebueive nw~ Mes³ejOeejkeÀeW / Hejesef#e³eeW/He´efleefveefOe³eeW mes DevegjesOe nw efkeÀ JenefveOee&efjle mLeeve Hej nmlee#ej keÀjW Deewj yewþkeÀ mLeue Hej GHeefmLeefle He®eea-men-He´JesµeHe$e megHeto& keÀjs oW~ µes³ejOeejkeÀ kesÀ Hejes#eer / He´efleefveOeer keÀes GHeefmLeefle He®eea-men-He´JesµeHe$e ceW Hejes#eer DeLeJee He´efleefveOeer ceW mes Jen efpeme ©He ceW GHeefmLele nes jns neWGmekeÀe GuuesKe keÀj osvee ®eeefnS~
1. APPOINTMENT OF PROXYA shareholder entitled to attend and vote at the Annual General Meetingis entitled to appoint a Proxy to attend and vote on his/her behalf. TheProxy form, in order to be effective, must be received at the placespecified in the Proxy form not later than 4(four) days before the dateof the Annual General Meeting i.e. on or before the close of bankinghours on Wednesday, the 5thJuly, 2006.
2. APPOINTMENT OF AUTHORISED REPRESENTATIVENo person shall be entitled to attend or vote at the meeting as a dulyauthorised representative of a Company or any other Body Corporatewhich is a shareholder of the Bank, unless a copy of the Resolutionappointing him/her as a duly authorised representative, certified to betrue copy by the Chairman of the meeting at which it was passed,shall have been deposited at the Head Office of the Bank not less than4 (four) days before the Annual General Meeting i.e. on or before theclose of banking hours on Wednesday, the 5th July, 2006.
3. BOOK CLOSUREThe Register of the shareholders and the Share Transfer Register ofthe Bank will remain closed from Thursday, July 6, 2006 to Monday,July10, 2006 (both days inclusive), for the purpose of Annual GeneralMeeting and ascertainment of entitlement for payment ofdividend.
4. CHANGE OF ADDRESSShareholders holding shares in dematerialised form shouldcommunicate the change of address, if any, to their DepositoryParticipant. Shareholders who hold shares in physical form shouldcommunicate the change of address, to the Registrar and Share TransferAgent of the Bank at the following address :
M/s. Sharepro Services (India) Pvt. Ltd., Unit: Bank of IndiaSatam Estate, 3rd Floor, Above Bank of Baroda, Cardinal GraciousRoad, Chakala, Andheri (East), Mumbai - 400 099.Phone - 28215168/69 Fax:022-28375646E-mail: [email protected]
5. PAYMENT OF DIVIDENDPayment of dividend to shareholders as declared by the Board ofDirectors shall be made within 30 days from the date of AnnualGeneral Meeting.
6. ATTENDANCE SLIP-CUM-ENTRY PASSFor the convenience of the shareholders, Attendance slip-cum-Entrypass is annexed to this Report. Shareholders/ Proxy holders/representatives are requested to affix their signatures at the spaceprovided therein and surrender the Attendance slip- cum-Entry passat the venue. Proxy/Representative of a shareholder should state onAttendance slip-cum-Entry pass “Proxy” or “Representative” as thecase may be.
efìHHeefCe³eeb ë NOTES:
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
7
DIRECTORS’ REPORT
The Board of Directors have pleasure in presenting the Bank’s AnnualReport along with the audited statement of accounts and the cash flowstatement for the year ended 31st March 2006.
PERFORMANCE HIGHLIGHTS
Operating Profit Rs.1701.22 crore.
Net Profit Rs.701.44 crore.
Capital Adequacy at 10.75 %.
Networth at Rs.4577.26 crore, grew by 13.24 %.
Book value per share Rs.93.77 (Rs.82.93) .
Gross NPA declined by Rs.677 crore (-21.44%). Gross NPA ratiodeclined to 3.72% from 5.53% at March-end 2005.
Net NPA declined by Rs.585 crore (-37.62%). Net NPA ratiodeclined to 1.49% from 2.80% at 31.03.2005.
Cash Recovery of Rs.721 crore towards NPA reduction.
Total business of the Bank increased to Rs.160594 crore, a growthof 18.14%. Domestic business grew by 20.31% to reach the level ofRs.131873 crore.
Total deposits of the Bank increased to Rs. 93932 crore, a growth of19.17%. Domestic deposits increased by 18.35% to reach the levelof Rs.77850 crore. Share of low cost deposits in domestic depositsincreased to over 40.64 % in FY 2006 from 40.06% in FY 2005.
Total gross credit of the Bank touched Rs.66662 crore (growth16.71%) with domestic credit recording growth of 23.27% to reachthe level of Rs.54023 crore.
Retail lending grew by 36.71% and contributed 38.12% of total non-food credit growth in FY 2006. Share of retail credit in Non-FoodCredit has gone upto 28 % at 31.03.2006 from 25.51% a year ago.
Priority sector lending at 49.08% of Net Bank Credit and Agriculturefinance at 19.58% surpassing national targets.
Export Credit registered a growth of Rs.514 crore i.e. 13.25%.
Shatabdi Krishi Vikas Card introduced.
Star Vidya Card (Visa Card) and Global Debit cum ATM card (MasterCard) introduced.
All the branches computerised.
Star Insta Remit (RTGS enabled remittance product) introduced forinter bank remittances.
Star e-remit product introduced for facilitating faster remittance forNRIs from our branches abroad.
About 16000 ATMs made available to customers through sharedATMs/VISA network.
Core Banking Solution implemented in 555 branches.
RTGS/SFMS enabled in 555 branches.
efveosMekeÀ efjHeesì&
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
8
515 branches enabled for On-line Tax Accounting System (OLTAS).
Equity participation in ASREC, the Asset Reconstruction Companyfloated by UTI and Multi Commodity Exchange (MCX).
Value added Savings and Current deposit products for high-endcustomers launched in major urban and metro centres as a part ofBusiness Process Re-engineering initiative.
Major initiatives in international operations involving ramp-up offoreign presence, enhancement in product offerings and technologyupgradations.
FINANCIAL REVIEW
Financial markets remained generally stable during 2005-06 although
interest rates firmed up in all segments. The performance of the Indian
economy turned out to be better than expected. The pick up in real economic
activity reflected in a robust expansion of Bank credit for the second year
in succession. Non-food credit remained the key driver of banking industry
growing by 37.3 percent on top of 27.5 percent, net of conversion, a year
ago. Substantial increase was observed in credit flow to industries like
food processing, iron & steel, cotton textiles, vehicles, chemicals, gems
and jewellery and construction. Added thrust to agriculture in the
Government policies resulted in an increase of 22.8 percent in agricultural
credit as compared with 18.9 percent in the corresponding period of the
previous year. Credit growth outpaced deposit growth by a substantial
margin as the aggregate deposits of scheduled commercial banks increased
by 22.4 percent as compared with 18.9 percent in the corresponding period
of the previous year. The efforts of the banks to raise deposits to fund the
credit demand led to a visible shortening of the maturity profile of deposits
in the banking system.
The Bank took advantage of the opportunities offered by the robust growth
in the Indian economy and expanded credit in all segments including
priority sector and retail. Conforming to the Government guidelines the
Bank effectively ensured improved flow of credit to agriculture sector.
Continued thrust on mobilising low cost savings and current deposits
improved the Bank’s share in low cost deposits to over 40% and the cost
of deposits declined to 4.05% from 4.17%. Sluggish growth in deposits
firmed up interest rates.
The equity market witnessed robust activity and the BSE sensex increased
from an average of 6,379 in April 2005 to 10,857 in March 2006. Bank
participated in the market rally and traded in scrips. Bank also earned more
income than any year in the past from the numerous IPOs and follow on
offers.
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®eeuet peceeDeeW kesÀ mebûenCe Hej efoS ieS peesj kesÀ keÀejCe keÀce ueeiele Jeeueer peceeDeeW ceW yeQkeÀ
keÀe efnmmee yeæ{keÀj 40% mes DeefOekeÀ nes ie³ee Deewj peceeDeesW keÀer ueeiele 4.17% mes IeìkeÀj
4.05% nes ieF&~ peceeDeeW ceW Oeerceer Òeieefle kesÀ keÀejCe y³eepe keÀer ojW efmLej yeveer jneR~
FeqkeÌJeìer yeepeej ceW cegKej ieefleefJeefOe yeveer jner Deewj yeerSmeF& meWmeskeÌme DeÒewue 2005 kesÀ
6,379 kesÀ Deewmele mes yeæ{keÀj cee®e& 2006 cesb 10,857 Hej pee HengB®ee~ yeQkeÀ ves yeepeej jwueer
ceW menYeeefielee keÀer Deewj eqm¬eÀHme mes efJeiele mece³e kesÀ efkeÀmeer Yeer Je<e& keÀer leguevee ceW p³eeoe
Dee³e Deefpe&le keÀer~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
9
yeQkeÀ keÀe keÀe³e& efve<Heeove Performance of the Bank (OevejeefMe ©. keÀjesæ[ ceW) (Amount in Rs. crore)
2004-05 2005-06 (%) Je=ef× Growth (%)
Meg× y³eepe Dee³e Net Interest Income 2236.89 2631.98 17.66
iewj-y³eepe Dee³e Non-Interest Income 1155.80 1184.38 2.47
efpemeceW mes Of which:
ÒeefleYetefle³eeW keÀer efye¬eÀer mes ueeYe Profit from sale of securities 180.23 114.09 -36.70
mLee³eer iewj-y³eepe Dee³e (ÒeefleYetefle³eeW keÀer efye¬eÀer íesæ[keÀj) Core Non-interest income (excl. sale of securities) 975.57 1070.29 9.70
Heefj®eeueve J³e³e Operating Expenses 1932.33 2115.14 9.46
Heefj®eeueve ueeYe Operating Profit 1460.36 1701.22 16.49
Heefj®eeueve ueeYe (ÒeefleYetefle³eeW keÀer efye¬eÀer íesæ[keÀj) Operating Profit excl. sale of securities 1280.13 1587.13 23.98
ÒeeJeOeeve / DeekeÀeqmcekeÀleeSb Provisions / Contingencies 1120.31 999.78 -10.76
Meg× ueeYe Net Profit 340.05 701.44 106.28
Meg× ueeYe ÒeefleYetefle³eeW keÀes íesæ[keÀj Net Profit excl. sale of securities 159.82 587.35 267.50
Deewmele Meg× nwefme³ele Hej ÒeefleHeÀue (%) Return on Average Networth (%) 8.63 16.28 88.64
Deewmele Deeefmle³eeW Hej ÒeefleHeÀue (%) Return on Average Assets (%) 0.38 0.68 78.95
Depe&ve Òeefle Mes³ej (©.) Earnings per share (Rs.) 6.98 14.39 106.16
yener cetu³e Òeefle Mes³ej (©.) Book-value per share (Rs.) 82.93 93.77 13.07
Operating Profit of the Bank was Rs.1701.22 crore. Net Profit was
Rs.701.44 crore.
Net interest income shows improvement of 17.66%.
Non interest income of the Bank was Rs.1184.38 crore.
The important yield, cost and other financial ratios are as under:
Important Financial Ratios(Percentages)
2004-05 2005-06
Yield on Advances 7.14 7.58
Yield on Investments 7.62 7.15
Yield on funds 6.71 6.78
Cost of Deposits 4.17 4.05
Cost of Funds 4.22 4.24
Spread 2.49 2.54
Other Income to Average Assets 1.29 1.14
Operating cost to Average Assets 2.15 2.04
Staff cost to Average Assets 1.41 1.28
Other operating cost to Average Assets 0.74 0.76
Asset Utilisation Ratio 1.62 1.64
Non-Interest Income to total Income 16.08 14.42
Non-Interest Income to Net Income 34.07 31.03
Cost to Net Income 56.96 55.42
yeQkeÀ keÀe Heefj®eeueveiele ueeYe ©. 1701.22 keÀjesæ[ Lee~ Meg× ueeYe ©. 701.44 keÀjesæ[
Lee~
Meg× y³eepe Dee³e ceW 17.66% keÀer Je=ef× ngF&~
yeQkeÀ keÀer iewj-y³eepe Dee³e ©. 1184.38 keÀjesæ[ Leer~
cenlJeHetCe& GHeueeqyOe, ueeiele SJeb Dev³e efJeÊeer³e DevegHeele efvecveevegmeej nw ë-
cenlJeHetCe& efJelleer³e DevegHeele(Òee fleMele)
2004-05 2005-06
DeefûeceeW mes ueeqyOe 7.14 7.58
efveJesMeeW mes ueeqyOe 7.62 7.15
efveefOe³eeW mes ueeqyOe 6.71 6.78
peceejeefMe³eeW keÀer ueeiele 4.17 4.05
efveefOe³eeW keÀer ueeiele 4.22 4.24
Devlej 2.49 2.54
Deewmele Deeefmle³eeW ceW Dev³e Dee³e 1.29 1.14
Deewmele Deeefmle³eeW ceW Heefj®eeueve ueeiele 2.15 2.04
Deewmele Deeefmle³eeW ceW mìeHeÀ ueeiele 1.41 1.28
Deewmele Deeefmle³eeW ceW Dev³e Heefj®eeueve ueeiele 0.74 0.76
Deeefmle GHe³eesie DevegHeele 1.62 1.64
kegÀue Dee³e ceW iewj-y³eepe Dee³e 16.08 14.42
Meg× Dee³e ceW iewj-y³eepe Dee³e 34.07 31.03
Meg× Dee³e ceW ueeiele 56.96 55.42
The Financial performance of the Bank for the year 2005-06 is summarised
below:-Je<e& 2005-06 nsleg yeQkeÀ keÀe efJeÊeer³e keÀe³e&efve<Heeove meb#esHe ceW veer®es efo³ee ie³ee nw ë-
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
10
Segment-wise performance
The Bank earned an Operating Profit of Rs.1701.22 crore during the Year
2005-06. The contribution made by Treasury was Rs.373.04 crore and
other banking operations earned a profit of Rs.1429.47 crore. The
unallocable expenditure net of unallocable income was Rs.101.29 crore
during the year 2005-06.
Investments under ‘Held to Maturity’ were earlier amortised over the
remaining period of maturity by adopting ‘Straight Line Method’. From
the current year the Bank has switched over to the ‘Constant Yield Method’.
Consequently the amortisation expenses are lower at Rs.241 crore
(Domestic) as against Rs.268 crore had straight-line method been continued.
Dividend
The Bank has declared a Dividend of 30% for the year. The total dividend
payment amounts to Rs.166.73 crore (including dividend distribution tax).
Capital
Net worth of the Bank has gone upto Rs. 4577.26 crore from Rs. 4042.15
crore in FY 2005. During the year the Bank annulled the forfeiture in
respect of 600 equity shares of Rs.10/- each. Consequently, the paid up
capital of the Bank has gone up by Rs.6000/-.
Capital Adequacy
The Bank maintained Capital Adequacy Ratio of 10.75% against the
regulatory minimum of 9%. The Bank raised Tier II Capital aggregating to
Rs.950 crore during the year.
HetBpeer He³ee&Hlelee kesÀ efJeJejCe efvecveevegmeej nQ ë Details of Capital Adequacy are shown as under:-
(©. keÀjesæ[ ceW)(Rs. in Crore)
31 cee®e& kesÀ Devegmeej : As on 31st March
2005 2006
OevejeefMe Yeeefjle peesefKece Deeefmle³eeW cesb % OevejeefMe Yeeefjle peesefKece Deeefmle³eeW ceW %Amount % to Risk weighted Assets Amount % to Risk weighted Assets
ìe³ej ~ HetBpeer Tier I Capital 3684 7.05 4552 6.75
ìe³ej ~~ HetBpeer Tier II Capital 2334 4.47 2696 4.00
kegÀue HetBpeer Total Capital 6018 11.52 7247 10.75
peesefKece Yeeefjle Deeefmle³eeb Risk Weighted Assets 52230 67422
#es$eJeej keÀe³e&efve<Heeove
Je<e& 2005-06 kesÀ oewjeve yeQkeÀ ves ©. 1701.22 keÀjesæ[ keÀe Heefj®eeueveiele ueeYe Deefpe&le
efkeÀ³ee~ keÀes<eeieej Üeje ©. 373.04 keÀjesæ[ keÀe ³eesieoeve efo³ee ie³ee Deewj Dev³e yeQefkebÀie
Heefj®eeueveeW ves ©. 1429.47 keÀjesæ[ keÀe ueeYe keÀcee³ee~ efveJeue iewj-Deeyebìve ³eesi³e Dee³e
mes iewj-Deeyebìve³eesi³e J³e³e Je<e& 2005-06 ceW ©. 101.29 keÀjesæ[ Lee~
`HeefjHekeÌJelee lekeÀ Oeeefjle' kesÀ Devleie&le Deeves Jeeues efveJesMeeW keÀes `mì^sì ueeF&ve He×efle'
DeHeveekeÀj HeefjHekeÌJelee keÀer Mes<e DeJeefOe kesÀ efueS Henues Decee@jìeFpe efkeÀ³ee ie³ee Lee~ ®eeuet
Je<e& mes yeQkeÀ ves `keÀebmìWì F&u[ He×efle' DeHevee ueer nw~ HeÀuemJeªHe Decee@jìeF&pesMeve J³e³e
keÀce nes ieS nQ pees ©.241 keÀjesæ[ (mJeosMeer) nQ~ ³eefo mìsìueeF&ve He×efle DeHeveeF& ieF& nesleer
lees J³e³e ©.268 keÀjesæ[ Deelee~
ueeYeebMe
Je<e& kesÀ efueS yeQkeÀ ves 30% keÀe ueeYeebMe Ieesef<ele efkeÀ³ee nw~ kegÀue ueeYeebMe Yegieleeve jeefMe
©.166.73 keÀjesæ[ nw~ (efpemeceW ueeYeebMe efJelejCe keÀj Meeefceue nw)
HetBpeer
efJeÊeer³e Je<e& 2005 ceW yeQkeÀ keÀer Meg× nwefme³ele ©.4042.15 keÀjesæ[ mes yeæ{keÀj 4577.26
keÀjesæ[ nes ieF& nw~ Je<e& kesÀ oewjeve yeQkeÀ ves Òel³eskeÀ ©.10/- kesÀ 600 FeqkeÌJeìer Mes³ejeW keÀer peyleer
keÀes jÎ efkeÀ³ee~ HeefjCeeceleë yeQkeÀ keÀer ®egkeÀlee HetBpeer ceW ©.6000/- mes Je=ef× ngF&~
HetBpeer He³ee&Hlelee
HetBpeer He³ee&Hlelee kesÀ efve³eecekeÀ v³etvelece 9% DevegHeele keÀer leguevee ceW yeQkeÀ keÀe HetBpeer He³ee&Hlelee
DevegHeele 10.75% jne~ Je<e& kesÀ oewjeve yeQkeÀ ves ©.950 keÀjesæ[ keÀer ìe³ej ~~ HetBpeer pegìeF&~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
11
MANAGEMENT DISCUSSION AND ANALYSIS
Business Environment
The Indian economy recorded an impressive performance during the year
2005-06. GDP is estimated to have grown by 8.4% according to an advance
estimate of CSO in the year 2005-06. The progress in the economy was
marked by a new industrial resurgence, a pick up in investment, modest
inflation, rapid growth in exports and imports. After dipping below 1.0
per cent in 2004-05, mostly on account of erratic rainfall, agriculture and
allied’s growth in 2005-06 is estimated at 2.3 per cent.
The growth of real GDP originating in industry is estimated by the CSO
to have stepped upto 8.05% in 2005-06 from 7.4% in the previous year.
The industrial growth was driven by robust performance from
manufacturing and construction sectors. Services sector growth continued
to be broad-based. Among the three sub sectors of services, trade,
hospitality, transport and communication services continue to lead by
growing at double digit rates for the third successive year. Growth in
financial services (comprising banking, insurance and real estate services),
which after dipping in 2003-04, had bounced back in the following year,
maintained the momentum with progressive maturing of Indian financial
markets. Real GDP originating in the services sector is estimated to have
increased by 10.1 percent during 2005-06 as against 10.2 percent a year
ago.
The stock market achieved dizzying heights. BSE Sensex crossed 11000
mark in March 2006. It was spurred by overflowing liquidity. Both domestic
mutual funds as well as FIIs are pumping in money into Indian equities.
Prices remained at comfortable level with the WPI inflation at 4.0 per cent
at March-end 2006. Broad money M3 grew at the rate of 20.4% in 2005-
06 as compared with the 12.1 percent, net of conversion in the previous
year. Fiscal deficit was well under control. The gross fiscal deficit in
2005-06 is estimated to be 4.1 per cent of the gross domestic product. This
is lower than the projected 4.3 per cent.
Merchandise Exports increased by 24.7 percent during 2005-06 as
compared with 26.4% in the previous year. Imports showed an increase of
31.5% as compared with 36.4% in the previous year.
Trade deficit widened to US $ 39.6 billion during 2005-06, which was
52.7 percent higher than the deficit of US $ 26.0 billion in the corresponding
period of the previous year.
Foreign exchange reserves increased from U.S.$ 141.5 billion at end
March 2005 to U.S.$ 151.6 billion by end March 2006.
During 2005-06, the rupee depreciated by 1.95% against the U.S.Dollar
but appreciated by 4.4% against the euro, by 5.5% against the pound
sterling and by 7.5% against the Japanese yen.
Industry Structure and Developments
The overall banking environment remained benign in 2005-06, other than
the drying of liquidity and resultant hardening of interest rates in the last
quarter.
ÒeyebOeve ®e®ee& SJe efJeMues<eCe
keÀejesyeej JeeleeJejCe
Je<e& 2005-06 kesÀ oewjeve Yeejleer³e DeLe&J³eJemLee ceW ÒeYeeJeMeeueer keÀe³e&efve<Heeove ¢ef<ìiees®ej
ngDee~ meerSmeDees kesÀ SkeÀ HetJee&vegceeve kesÀ Devegmeej Je<e& 2005-06 ceW peer[erHeer ceW 8.4% keÀer
Je=ef× nesves keÀe Devegceeve nw~ veS DeewÐeesefiekeÀ Go³e, efveJesMe ceW lespeer, cegveeefmeye cegêemHeÀerefle,
Dee³eele Deewj efve³ee&le ceW lJeefjle Je=ef× kesÀ HeÀuemJe©He DeLe&J³eJemLee ceW Òeieefle Heefjueef#ele
ngF&~ 2004-05 ceW 1.0 ÒeefleMele mes keÀce efiejeJeì kesÀ yeeo, p³eeoelej DeefveefM®ele Je<ee& nesves
kesÀ keÀejCe ke=Àef<e Deewj mecye× ieefleefJeefOe³eeW ceW 2005-06 ceW Je=ef× 2.3 ÒeefleMele Devegceeefvele nw~
GÐeesie ceW Meg© nesvesJeeueer JeemleefJekeÀ peer[erHeer keÀer Je=ef× kesÀ yeejs ceW meerSmeDees keÀe Devegceeve
nw efkeÀ ³en iele Je<e& kesÀ 7.4% kesÀ yeæ{keÀj 2005-06 ces 8.05% lekeÀ HengB®e peeSieer~
GlHeeove SJeb efvecee&Ce #es$eeW ceW Meeveoej keÀe³e&efve<Heeove nesves keÀer Jepen mes DeewÐeesefiekeÀ Òeieefle
ngF&~ mesJee #es$eeW ceW Je=ef× J³eeHekeÀ DeeOeej Hej yeveer jner~ mesJeeDeeW kesÀ leerve GHe-#es$eeW kesÀ ceO³e,
J³eeHeej, DeeefleLes³e, HeefjJenve Deewj meb®eej mesJeeDeeW ceW ueieeleej leermejs Je<e& Yeer oesnjs DebkeÀ
keÀer ojeW mes Je=ef× yejkeÀjej jKe DeûeCeer yeves jns~ efJeÊeer³e mesJeeDeeW ceW Je=ef× (efpeveceW yeQefkebÀie,
yeercee Deewj efj³eue Fmìsì mesJeeSB Meeefceue nQ~) ves ÒeieefleMeerue HeefjHekeÌJe nes jns Yeejleer³e
efJeÊeer³e yeepeejeW kesÀ meeLe ieefle keÀes yejkeÀjej jKee efpemeceW 2003-04 ceW efiejeJeì kesÀ yeeo
Deieues Je<e& HegveëmegOeej Dee ie³ee~ Je<e& 2005-06 kesÀ oewjeve mesJee #es$e mes GlHevve nesves Jeeueer
JeemleefJekeÀ peer[erHeer ceW 10.1 ÒeefleMele keÀer Je=efÎ keÀe Devegceeve nw peyeefkeÀ SkeÀ Je<e& Henues ³en
10.2 ÒeefleMele Lee~
mìe@keÀ yeepeej ves Meeveoej TB®eeF&³eeW keÀes ígDee~ yeerSmeF& meWmeskeÌme ves cee®e&, 2006 ceW
11000 keÀe DeebkeÀæ[e Heej keÀj efue³ee~ ³en lejuelee mes mejesyeej Lee~ mJeosMeer c³eg®egDeue
HeÀC[me SJeb efJeosMeer mebmLeeiele efveJesMekeÀ, oesveeW ner Yeejleer³e FeqkeÌJeìerpe ceW OevejeefMe efveJesMe
keÀj jns nQ~ cetu³e SkeÀ cegveeefmeye mlej Hej yejkeÀjej jns pewmee efkeÀ cee®e& 2006 kesÀ Deble ceW
LeeskeÀ cetu³e met®ekeÀebkeÀ 4.0 ÒeefleMele Hej yevee jne~ Je<e& 2005-06 ceW ye´es[ ceveer Sce 3 ceW
20.4% keÀer oj mes Je=ef× ngF& pees iele Je<e& keÀer leguevee ceW efveJeue 12.1 Leer~ efJeÊeer³e Ieeìe Hetjer
lejn mes efve³eb$eCe ceW Lee~ 2005-06 ceW kegÀue efJeÊeer³e Ieeìe, kegÀue mJeosMeer GlHeeo keÀe 4.1
ÒeefleMele nesvee Devegceeefvele nw~ ³en Devegceeefvele 4.3 ÒeefleMele mes keÀce nw~
iele Je<e& ceW 26.4% keÀer leguevee ceW ceeue efve³ee&le ceW Je<e& 2005-06 ceW 24.7% keÀer Je=ef× ngF&~
efHeíues meeue kesÀ 36.4% keÀer leguevee ceW Dee³eeleeW ceW 31.5% keÀer Je=ef× ¢ef<ìiees®ej ngF&~
Je<e& 2005-06 kesÀ oewjeve J³eeHeej Ieeìe yeæ{keÀj ³etSme $39.6 efyeefue³eve nes ie³ee
pee s iele Je<e & keÀe r Gmee r DeJee fOe ke sÀ Ieeìs ³e t Sme $26.0 e fyee fue³eve me s 52.7
ÒeefleMele DeefOekeÀ Lee~
cee®e& 2005 kesÀ Deble ceW efJeosMeer efJeefvece³e meb®e³e ³etSme $141.5 efyeefue³eve mes yeæ{keÀj cee®e&
2006 kesÀ Deble ceW ³et Sme $151.6 efyeefue³eve lekeÀ HengB®e ieS~
Je<e& 2005-06 kesÀ oewjeve DecesefjkeÀve [e@uej kesÀ efJe©× ©HeS ceW 1.95% keÀer efiejeJeì DeeF&
uesefkeÀve FmeceW ³etjes kesÀ cegkeÀeyeues 4.4% keÀer, HeewC[ mìefueb¥ie keÀer leguevee ceW 5.5% keÀer leLee
peeHeeveer ³esve ceW 7.5% keÀer yeæ{esÊejer ngF&~
DeewÐeesefiekeÀ {eB®ee SJeb efJekeÀeme
2005-06 ceW yeQefkebÀie JeeleeJejCe meewc³e yevee jne uesefkeÀve lejuelee keÀce nesleer ieF& efpemekesÀ
HeÀuemJeªHe iele efleceener ceQ y³eepe ojW meg¢æ{ yeveer jneR~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
12
RBI continued the process of financial reforms for induction of best
practices and technological changes emphasizing transparency,
diversification of ownership and strong corporate governance practices to
mitigate the prospects of systemic risks in the Banking Sector.
The road map for entry of foreign banks was also released requiring that
the ownership and control should be well diversified while at the same
time ‘fit & proper’ criteria was applied for Directors, CEOs and
shareholders.
Continuing the liberalization process banks were granted permission to
declare dividend subject to their capital to risk weighted assets ratio (CRAR)
being 9% for the preceding two years apart from the accounting year for
which it proposes to declare dividend and also subject to their net NPA
ratio being less than 7%.
The RBI also took steps to reduce the deployment of loans to the housing
and commercial real estate sectors. Asset prices can have a powerful effect
on investment and/or consumption through a financial acceleration effect.
This step was taken by RBI to check sectoral growth of credit and financial
imbalances arising on account of rising asset prices.
Opportunities
The Indian economy is indicating the beginning of a new phase of business
cycle since 2003-04. There is considerable optimism for 2006-07. Robust
growth of the industrial sector and Government’s conscious decision to
increase credit to agriculture sector offers increasing opportunities to bankers
for increasing credit.
Some of the companies have seen a revised fortune due to the buoyant
economic growth. This led to a surge in corporate lending. This would
also lower bad loan provisioning and even trigger some writing back of
earlier provisions improving profitability of the banks.
Public Sector Banks have been given autonomy package which permits
them to close or merge unviable branches, acquire new companies, open
overseas branches and set up new line of business without any permission
from the Government. They have been given freedom to decide on human
resources issues. All these will help public sector banks in facing marketing
challenges.
The bankers had something to cheer about in the Union Budget 2006-07.
Term Deposits of scheduled commercial banks with maturity of not less
than 5 years are now eligible for deduction under Section 80 C of the
Income-Tax Act. This is likely to give an impetus to deposit mobilisation
by banks.
The Union Budget 2006-07 proved to be a boon for the banks struggling
to raise resources. The banks were also allowed to recapitalise the special
securities issued by the Government since 1993-94 into tradable, dated
securities that could qualify for statutory liquidity ratio purposes. This
move will facilitate increased access of the banks to additional resources
for lending to productive sectors in the light of increasing credit needs of
the economy.
yeQefkebÀie #es$e ceW He×efleiele peesefKeceeW keÀer mebYeeJeveeDeeW mes ye®eves kesÀ efueS HeejoefMe&lee,
mJeeefcelJe ceW efJeefJeOelee Deewj meMekeÌle keÀejHeesjsì ieJeveW&me ÒeLeeDeeW Hej peesj osles ngS meJe&Þes<þ
ÒeLeeDeeW Deewj ÒeewÐeesefiekeÀer³e HeefjJele&veeW keÀes ueeiet keÀjves nsleg Yeejleer³e efj]peJe& yeQkeÀ ves efJeÊeer³e
megOeejeW keÀer Òeef¬eÀ³ee keÀes peejer jKee~
efJeosMeer yeQkeÀeW kesÀ ÒeJesMe keÀe jes[ cewHe Yeer peejer efkeÀ³ee ie³ee efpemekesÀ Devegmeej mJeeefcelJe SJeb
efve³eb$eCe megmHe<ì ªHe mes efJeefJeOeleeHetCe& nesvee ®eeefnS meeLe ner meeLe `efHeÀì SC[ ÒeeHej'
keÀmeewìer keÀes efveosMekeÀeW, meer F& Deesme leLee Mes³ejOeejkeÀeW Hej ueeiet efkeÀ³ee ie³ee~
GoejerkeÀjCe keÀer Òeef¬eÀ³ee keÀes peejer jKeles ngS ueeYeebMe Ieesef<ele keÀjves kesÀ efueS efJeiele oes
Je<eeX kesÀ DeueeJee efpeme Je<e& nsleg ueeYeebMe Ieesef<ele keÀjvee ÒemleeefJele nw Gme uesKee Je<e& ceW
GvekesÀ peesefKece Yeeefjle Deeefmle DevegHeele (meerDeejSDeej) 9% SJeb GvekeÀe efveJeue SveHeerS
DevegHeele 7% mes keÀce nesves kesÀ DeO³eOeerve yeQkeÀeW keÀes Devegceefle oer ieF& Leer~
DeeJeemeer³e SJeb JeeefCeefp³ekeÀ efj³eue Fmìsì #es$eeW ceW efoS peeves Jeeues $eÝCeeW kesÀ efJeefve³eespeve
keÀes Ieìeves nsleg Yeejleer³e efj]peJe& yeQkeÀ ves Yeer GHee³e efkeÀS~ efJeÊeer³e lespeer kesÀ ÒeYeeJe kesÀ peefjS
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
13
Banks have been allowed to raise capital through issues of innovative
instruments like perpetual bonds and other hybrid capital securities to
shore up their capital base to meet increasing business requirements as
well as to maintain the capital adequacy ratio under the Basel-II norms.
In the backdrop of a slowdown in deposit growth, many banks are raising
funds through overseas bond issues and domestic equity issues in order to
meet the increasing credit demands.
Banks have been asked to introduce ‘no frills’ account to bring a large
section of population under the banking net. The idea has been propelled
by the realisation that a large section of the population continue to remain
credit starved. The ‘no-frills’ account is a win-win opportunity for banks
to cater to such segment and attract profitable customers. Banks will be
able to create a database of these customers and can prudently use this
information to target the customers in their databases to cross-sell various
products.
Challenges
The biggest challenge before the banks is to arrest sliding bottomlines due
to decline in treasury profits. Banks need to work hard to adjust with the
reality that the windfall gains from treasuries have stopped.
In order to match up to the capabilities of foreign banks and private banks,
PSU banks are moving to centralised operations and core banking solution.
The surplus staff of the bank is also being diverted for marketing. There is
a need to reskill the staff for these new activities.
Banks also have to prepare a roadmap for migrating to more sophisticated
approaches of risk management. They may have to alter the profile of risk
exposures in order to meet Basel II norms.
Another challenge before the banks is to compete with small savings
schemes of NSO/post offices that offer higher returns. There exists a
fractured structure of interest rates with respect to mobilisation of resources.
The banking industry will also be put to a difficult test when the process of
mergers and acquisition commences.
RISK & CONTROL
Risk Management
The Bank has adopted an integrated approach to risk management.
Risk Management is a Board driven function in the Bank. At the apex
level of the risk management apparatus, there is a Board level Risk
Management Committee. At the operational level, a full-fledged Risk
Management Department headed by a General Manager is in place. The
Bank also has Committees of top executives for managing various risks
viz.-
Asset Liability Management Committee (ALCO) for management of market
risk.
Credit Risk Management Committee (CRMC) for management of credit
risk
Committee for Operational Risk Management (CORM) for management
of operational risk.
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
14
All major policies including Enterprise wide risk management policy,
Credit risk management policy, Operational risk management policy, ALM
policy and Dealing room policy are in place. Based on the recommendations
of our Risk Management Consultants IMACS(ICRA Management
Consulting Services), systems and tools including introduction of new
rating models having greater granularity in ratings are in the process of
implementation. In tandem with rolling out revised credit rating models
the bank has geared up to support functions in upgrading technology and
MIS. CBS has been implemented in over 555 branches. Data warehousing
project is at an advanced stage of implementation to provide comprehensive
information for analysis. Integrated credit risk management software is
being procured.
Risk Profile of the Bank is updated quarterly. Internally the Bank has
carried out the exercise of estimation of capital charge based on Standardised
Approach for Credit and Market Risk and Basic Indicator Approach for
Operational Risk. The Bank has geared up to align with draft RBI guidelines
for undertaking parallel run for computation of capital charge effective
01.04.2006 and migration to Basel II effective 31.03.2007.
Going forward the Bank is preparing for migration to more sophisticated
approaches. A roadmap for enhancing the effectiveness and robustness of
risk management systems has been prepared by the bank. Some of the
priorities are as under:
Introduction of the new Rating models and measurement of
Probability of Default (PD).
Tracking operational risk events.
Introduction of score card approach.
Active Portfolio Management.
Estimation of Loss Given Default (LGD) and Exposure at Default
(EAD).
RAROC (Risk Adjusted Return on Capital) based pricing.
Estimation of Economic Capital.
Internal Control Systems and their adequacy
Inspection and Audit is important for evaluating the effectiveness of internal
control mechanisms in the Bank. The Bank has an internal Audit and
Compliance Department, which is responsible for independently evaluating
the adequacy of all internal controls. The Department also actively
recommends improvements in operational processes and service quality.
The Bank also has a well defined policy for Management Audit of
controlling offices and Head Office Departments. Consequent upon
bringing more and more branches under CBS (Core Banking Solution), a
well defined Information Systems Audit Policy has also been framed.
Concurrent Audit system has been further strengthened and now covers
537 branches, which includes Treasury branch and foreign branches.
Special focus is given to Information System Audit of fully computerised
branches. During the year 2005-06, Information System Audit of 1749
branches has been carried out as per schedule. Well defined Audit policies
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
15
duly approved by Audit Committee of the Board and Manual of Instructions
are in place for various types of audit.
In line with the objectives of Risk Based Supervision of Banks propounded
by the Reserve Bank of India, the Bank has a well defined risk focused
Internal Audit Policy.
Developments in Human Resources
Essential functions of managerial personnel in any organisation are to
motivate the staff for obtaining better results, good treatment, transparent
working environment, providing regular and equal opportunities to all,
rewarding hard work and providing challenging assignments, regular
promotional avenues are the normal expectations of an employee.
A number of initiatives were taken by the Bank for changing the mindset
of the employees, constantly upgrading their knowledge and motivating
them suitably. A new Employee Motivation Scheme was introduced to
cover a larger section of the 42206 employees of the Bank. In order to
recognize the performance of an individual and at the same time recognize
the collective performance of the team as a whole, the awards were instituted
for individual as well as team performance.
Different functional areas were identified for the purpose of awards to
provide opportunities to a wide cross section of employees working in
such functional areas, with a view to recognize their contribution in these
areas. A total of 819 awards were given during the year 2005-06.
A number of in-house training programmes were conducted to upgrade
the knowledge and skill levels of employees. Necessary steps were taken
by the Bank to make the employees computer literate. Training programmes
were also conducted for staff members to ensure smooth transition of our
branches to Core Banking Solution.
Outlook
The bank is well positioned to take advantage of the robust growth in the
Indian economy. The resurgence of the industrial sector, a pick up in
investment, rapid growth in exports and imports and government’s policy
to lay a foundation for faster development of physical infrastructure have
thrown up opportunities for showing improved performance in the coming
years.
The bank has entered the centenary year on 7th September, 2005 and our
‘century young’ bank’s initiative in technology, marketing, human
resources and business process reengineering have set the bank on a high
growth trajectory.
An ambitious business plan has been drawn up for increasing the market
share of the bank and for galvanising the entire workforce into high action.
There has been increased focus for credit expansion in Agriculture, Retail
and SME sectors.
Risk Management systems are being continuously upgraded to match
with international standards. The Bank also took initiative to revamp its
product portfolio to suit the ever increasing expectations of customers.
Value added customised products were introduced to retain and attract
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
16
high-end customers. On the technology front, 555 branches migrated to
Core Banking Solution and various tech driven products like STAR Insta
Remit (RTGS) for remittance of funds for inter-bank transactions and
OLTAS for on line tax payments pertaining to direct tax collections were
introduced. A major drive was also initiated by the bank to ramp up its
international operations by expanding its network overseas.
Profit is expected to rise on account of healthy core performance and
increased opportunities offered by the robust growth in the Indian economy.
The bank is sanguine about a propitious outlook for its business.
BUSINESS REVIEW
Deposits
Bank’s deposits increased by Rs.15111 crore to Rs.93932 crore during
the year recording a growth of 19.17%. The growth in domestic deposits
was to the tune of Rs.12069 crore or 18.35%. Deposits at foreign branches
increased by Rs.3042 crore, recording
a growth of 23.33%.
Non Resident Deposits of the Bank
increased from Rs.9358 crore from
March end 2005 to Rs. 9759 crore as
at March end 2006 which constituted
14.52% of aggregate domestic
deposits. 6 NRI branches and 12 NRI
Centres have been providing services
to the Non Resident depositors
matching with international standards.
143 branches spanning across the
country have been authorised to handle
Foreign Currency Non Resident (FCNR-B) deposits. The Bank is accepting
FCNR deposits denominated in six currencies viz. USD, GBP, JAP Yen,
Euro, CAD and AUD.
Savings Bank deposits grew by
20.86% and Current Deposits by
22.19% in domestic operations. The
share of low cost deposits comprising
of Savings Bank and Current
Deposits, in domestic operations
increased from 40.06% to 40.64%.
Various efforts were made by the bank
to augment low cost deposits. Our
Bank has been approved by the
Government of Maharashtra for
disbursement of salaries of the
employees of entire Maharashtra.
Bank’s Savings and Current deposit
products were realigned, as a part of business process reengineering.
Savings Bank accounts have been tierised into Silver, Gold and Diamond
segments based on the balances maintained by the customers in the account.
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keÀjesæ[ keÀer yeæ{esÊejer ngF&~
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nes ieF& pees meceûe mJeosMeer peceejeefMe³eeW keÀe
14.52% nw~ 6 SveDeejDeeF& MeeKeeSB SJeb
12 SveDeejDeeF & ke s Àvê Dee f v eJeemee r
peceekeÀlee&DeeW keÀes Devleje&<ì^er³e ceevekeÀeW kesÀ
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(SHeÀmeerSveDeej-yeer) peceejeefMe³eeW mes
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
17
Certain privileges such as free ledger folios, multi city cheque book, free
International Gold Debit and Credit cards, free statement etc. have been
accorded to Diamond customers. Bank has also introduced tierised Current
Account deposit products called Star Gold Current Account, Star Diamond
Current Account and Star Diamond plus Current Account. The customers
under these categories get privileges by way of certain facilities besides
dedicated Relationship Managers in the branches.
The Bank has carved out a marketing set up across the country to meet the
challenges. Bank’s marketing personnel are being continuously trained in
marketing skills particularly with a view to focus on garnering retail
deposits.
The bank has a well-diversified deposit base with 49.5% of domestic
deposits coming from rural, semi-urban and urban centres. The Bank has
a total of 2.46 crore deposit customers and 19 lakh advances customers.
Advances
The gross domestic credit excluding investment by Treasury of the Bank
registered a higher growth of 23.27% from Rs.43826 crore as on
31.03.2005 to Rs.54023 crore as at 31.03.2006. The growth has been
made possible with continued increase in credit off-take by corporates
coupled with increase in SME and retail segments. The component of
other than Priority Sector credit as on 31.03.2006 was Rs.32700 crore.
While continuing financing activities to
borrowers in the core sector where the
bank has a higher exposure, the bank
expanded its share in retail and SME
sectors during the year, at the same time
continuing its thrust on bill finance and
trade finance. In the areas of Corporate
finance and export finance, Bank’s thrust
has been on selective mobilisation of new
clientele while at the same time nurturing
existing clientele by meeting all their
credit requirements.
Bank through its 117 specialised
branches caters to the various specialised segments of borrowers in Exports
& Imports, Small Scale Industries, High-tech Agricultural sector, Corporate
finance and Commercial and Personal segments.
Nine corporate banking branches of the bank continue to cater exclusively
to the specialised credit requirements of Corporate borrowers. They account
for more than 21% of Bank’s Domestic Credit.
Export Credit
The Bank is active in meeting the financial requirements of exporters and
importers. The Bank’s export credit registered a growth of Rs. 514 Crore
(13.25 %) over March end 2005 and reached a level of Rs. 4393 Crore as
at March end 2006. The share of export credit to net bank domestic credit
reached 9.53 % and to the total domestic credit at 8.12 % .
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ÒeeHle neslee nw~
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ceW 23.27% keÀer G®®elej Je=ef× ope& ngF& nw Deewj ³es 31.03.2005 kesÀ ©. 43826 keÀjesæ[ mes
yeæ{keÀj ³eLee 31.03.2006 keÀes ©. 54023 keÀjesæ[ nes ieS nQ~ ³en Je=ef× kebÀHeefve³eeW Üeje
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pee se fKece nw, ceW GOeejkeÀlee &Dee W keÀe s
efJeÊeHees<eCe peejer jKeles ngS Je<e& kesÀ oewjeve
yeQkeÀ ves Kegoje SJeb SmeSceF& #es$eeW ceW
DeHeveer efnmmesoejer yeæ{eF& Deewj Fmeer kesÀ
meeLe efyeue efJeÊeHees<eCe SJeb J³eeHeej
efJeÊeHees<eCe Hej peesj osvee peejer jKee~
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Hetje keÀjves kesÀ efueS efJeMes<e O³eeve osvee peejer jKee~
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kesÀ efJeefYeVe efJeefMe<ì JeieeX keÀes, mesJeeSB oslee nw~
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efve³ee&le $eÝCe
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2005 keÀer meceeeqHle Hej yeQkeÀ kesÀ efve³ee&le $eÝCe ceW ©. 514 keÀjesæ[ (13.25%) keÀer yeæ{esÊejer
ngF& Deewj ³es cee®e& 2006 keÀer meceeeqHle Hej ©. 4393 keÀjesæ[ kesÀ mlej Hej HengB®e ieS~ efveJeue
yeQkeÀ mJeosMeer $eÝCe ceW efve³ee&le $eÝCe keÀer efnmmesoejer 9.53% Deewj kegÀue mJeosMeer $eÝCe ceW ³en
8.12% nes ieF& nw~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
18
The Bank met financial requirements in Foreign Currency of both exportersand non-exporters through ECB loans at its overseas branches and foreigncurrency loans at domestic branches. The total amount of such advance asat 31-3-2006 was USD 954 Mn. ( ECB USD 472 Mn. & Foreign CurrencyLoan USD 482 Mn.) equivalent to Rs. 4245 crore. In addition, the bankalso extended pre-shipment & post-shipment credit in foreign currency tothe exporter and the total amount outstanding as at 31-3-2006 was USD258 Mn. equivalent to Rs. 1212 crore.
The Bank issued 800 Gold cards till March end 2006 to exporters withgood track record, under the Exporters’ Gold Card Scheme.
Infrastructure Finance
During the year, the bank actively participated in financing of infrastructureprojects in Roads, Power generation & distribution andTelecommunications. The outstanding advances for infrastructure sectoras on 31.03.2006 are Rs.4099 crore. This is exclusive of an investment inthis sector aggregating to Rs.502 crore.
Retail Credit
Retail lending is the buzzword in the banking circles. Every Bank is chasingRetail Assets to increase the credit portfolio, resulting in a phenomenalgrowth in retail loans in the recent past. The contribution of Retail credit to
overall growth is significant.
In order to sustain the credit growthwith accent on higher yields, theBank gave greater thrust to Retaillending, which has a vast potential.
The Bank has specialised productsto suit various personal/businessfinance requirements viz. Housing,Personal, Education, Auto finance,Mortgage, IPO, Holiday Loan,Retail Trade, Small Business,Professional & Self-employed,Transport Operators etc. in theRetail segment.
During the Financial Year 2005-06, Retail Credit recorded a growth
of 36.71%, constituting 38.12% of the incremental non-food credit, andits share in Non-food credit increased to 28%.
The Bank has fine tuned its rates of interest, other terms of these productsfrom time to time to keep these schemes most competitive/attractive, witha market driven and customer centric approach. To give required push tomarketing of these products, Bank has deployed adequate sales force foraggressive field level marketing/cross-selling of products. The wider reachand skilled staff to support intensive marketing, provides the Bank acompetitive edge for developing retail credit business. During the year,Bank has introduced ‘Retail Hub & Spokes Model’ at certain centres (likeMumbai, Ahmedabad etc.) to give greater thrust to retail credit products.Special thrust is given to these products through the Bank’s 9 Housing &Personal Banking branches and 35 Commercial & Personal Bankingbranches.
With a view to improve marketability of Home Loan and secure it withinsurance cover, the Bank has provided :-
i. Free Personal Accident Insurance cover to its home loanborrowers;
yeQkeÀ ves efve³ee&lekeÀeW SJeb iewj-efve³ee&lekeÀeW oesveeW keÀer efJeÊeer³e peªjleeW keÀes DeHeveer DeesJejmeerpe
MeeKeeDeeW ceW F&meeryeer $eÝCeeW Deewj mJeosMeer MeeKeeDeeW ceW efJeosMeer cegêe $eÝCeeW kesÀ ceeO³ece mes
Hetje efkeÀ³ee nw~ Ssmes Deefûece keÀer kegÀue jeefMe 31.3.2006 keÀes 954 efceefue³eve ³etSme [e@uej
Leer (F&meeryeer 472 efceefue³eve ³etSme [e@uej SJeb efJeosMeer cegêe $eÝCe 482 efceefue³eve ³etSme[e@uej)
pees ©.4245 keÀjesæ[ kesÀ yejeyej nw~ FmekesÀ DeefleefjkeÌle yeQkeÀ ves efve³ee&lekeÀeW keÀes efJeosMeer cegêe
ceW Heesle ueoeve HetJe& SJeb Heesle ueoeveesÊej $eÝCe Yeer efoS nQ~ efoveebkeÀ 31.03.2006 keÀes kegÀue
yekeÀe³ee jeefMe 258 efceefue³eve ³etSme [e@uej Leer pees ©. 1212 keÀjesæ[ kesÀ yejeyej nw~
yeQkeÀ kesÀ efve³ee&lekeÀ ieesu[ keÀe[& ³eespevee kesÀ Devleie&le De®ís efjkeÀe@[& Jeeues efve³ee&lekeÀeW keÀes
cee®e& 2006 kesÀ Deble lekeÀ 800 ieesu[ keÀe[& peejer efkeÀS nQ~
mebj®eveelcekeÀ efJeÊe
Je<e& kesÀ oewjeve yeQkeÀ ves meæ[keÀ, efJeÐegle-GlHeeove SJeb efJelejCe Deewj otjmeb®eej keÀer mebj®eveelcekeÀ
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yekeÀe³ee ³eLee efoveebkeÀ 31.03.2006 keÀes ©. 4099 keÀjesæ[ jne~ ³en Fme #es$e ceW ©.502
keÀjesæ[ kesÀ SkeÀ efveJesMe keÀes íesæ[keÀj nw~
Kegoje $eÝCe
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yeæ{eves kesÀ efueS Kegoje Deeefmle³eeW keÀes ÒeeHle keÀjves keÀe Òe³eeme keÀj jne nw~ HeefjCeeceleë neue
kesÀ efHeíues Je<eeX ceW Kegoje $eÝCeeW ceW DemeeOeejCe Je=ef× nF& nw~ meceûe efJekeÀeme ceW Kegoje $eÝCeeW
keÀe ³eesieoeve cenlJeHetCe& nw~
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jKeves kesÀ efueS yeQkeÀ ves Kegoje $eÝCe Hej Del³eefOekeÀ
peesj efo³ee nw ke̳eeWefkeÀ FmeceW Del³eefOekeÀ mebYeeJ³elee
nw~
yeQkeÀ kesÀ Heeme Kegoje #es$e ceW efJeefYeVe J³eeqkeÌle/
keÀejesyeej keÀer efJeÊeer³e DeeJeM³ekeÀleeDeeW kesÀ
Deve gke tÀue e fJee fJeOe GlHeeo ³eLee DeeJeeme,
J³eeqkeÌleiele, efMe#ee, Dee@ìesHeÀeFveebme, yebOekeÀ,
DeeF&HeerDees, ne@ueer[s $eÝCe, Kegoje J³eeHeej, íesìs
keÀejesyeej, ÒeesHesÀMeveue SJeb mJeefve³eesefpele,
HeefjJenve Òe®eeuekeÀ Deeefo kesÀ efueS GHeueyOe nw~
efJeÊeer³e Je<e& 2005-06 kesÀ oewjeve Kegoje $eÝCe ceW
36.71% keÀer Je=ef× ope& ngF& pees Je=ef×Meerue KeeÐeslej $eÝCe keÀe 38.12% nw Deewj FmekeÀer
efnmmesoejer KeeÐeslej $eÝCe ceW yeæ{keÀj 28% nes ieF& nw~
yeQkeÀ ves DeHeveer y³eepe ojeW keÀes yeepeej kesÀ DevegªHe SJeb ûeenkeÀ keÀes O³eeve ceW jKeles ngS Fve
³eespeveeDeeW keÀes DeefOekeÀ Òeefle³eesieer/DeekeÀ<e&keÀ yeveeS jKeves kesÀ efueS Fve GlHeeoeW keÀer Dev³e
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ªHe mes Deeies yeæ{eves kesÀ efueS yeQkeÀ ves keÀe³e&#es$eeW ceW GlHeeoeW kesÀ efJeHeCeve/Òeefleefye¬eÀer keÀjves kesÀ
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ienve efJeHeCeve ceW men³eesie mes yeQkeÀ keÀes Kegoje $eÝCe keÀejesyeej yeæ{eves kesÀ efueS Òeefle³eesieer
meeceL³e& efceuee nw~ Je<e& kesÀ oewjeve yeQkeÀ ves Kegoje $eÝCe GlHeeoeW Hej DeefOekeÀ peesj osves kesÀ efueS
kegÀí kesÀvêeW (pewmes cegbyeF&, Denceoeyeeo Deeefo) Hej ``efjìsue nye SJeb mHeeskeÌme cee@[ue''Megª
efkeÀS nw~ yeQkeÀ keÀer 9 DeeJeeme SJeb Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeDeeW Deewj 35 JeeefCeeqp³ekeÀ SJeb
Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeDeeW kesÀ ceeO³ece mes Fve GlHeeoeW Hej efJeMes<e peesj efo³ee ie³ee nw~
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yeQkeÀ ves efvecveefueefKele megefJeOee GHeueyOe keÀjeF& nw ë
i. DeHeves $eÝCe GOeejkeÀlee&DeeW keÀes ceg]HeÌle J³eeqkeÌleiele ogIe&ìvee yeercee megj#ee.
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
19
yeQkeÀ keÀer Òeieefle ceW efnmmesoejer yeæ{eves kesÀ efueS Kegoje $eÝCe Deeefmle³eeW Hej Fme #es$e ceW
GHeueyOe DeJemejeW kesÀ mecevegªHe efJeMes<e O³eeve efo³ee peelee jnsiee~
ÒeeLeefcekeÀlee #es$e Deefûece
SkeÀ efpeccesoej kebÀHeveer veeieefjkeÀ nesves kesÀ veeles yeQkeÀ ûeeceerCe efJekeÀeme keÀes megefveefM®ele keÀjves kesÀ
efueS je<ì^er³e veerefle³eeW keÀe Heeueve meef¬eÀ³e ªHe mes keÀjlee jne nw~
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efJekeÀeme kesÀ efueS Òeefleye× nw~ yeQkeÀ jespeieej kesÀ DeJemejeW keÀes Òeeslmeeefnle keÀjves Deewj iejeryeer
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kesÀ meMeeqkeÌlekeÀjCe kesÀ efueS ueieeleej men³eesie os jne nw~ yeQkeÀ meeceev³e ªHe mes ÒeeLeefcekeÀlee
ÒeeHle #es$e Deewj efJeMes<e ªHe mes ke=Àef<e keÀes keÀejesyeej DeJemej kesÀ ªHe ceW ueslee nw Deewj
ÒeeLeefcekeÀlee #es$e kesÀ Devleie&le GOeej osvee SkeÀ
ueeYeÒeo GÐece ceevelee nw~
meceer#eeOeerve Je<e& kesÀ oewjeve ÒeeLeefcekeÀlee #es$e
Deefûece ©. 17910 keÀjesæ[ mes yeæ{keÀj ©.
22611 keÀjesæ[ nes ieS Deewj FveceW ©. 4701
keÀjesæ[ keÀer Je=ef×Meerue yeæ{esÊejer ngF& ~ efJeiele
Je<e& keÀer leguevee ceW 26.25% Je=ef× ope& ngF&
nw~ efveJeue yeQkeÀ $eÝCe kesÀ 40% kesÀ efveOee&efjle
v³etvelece ceeveob[ kesÀ efJe©× ÒeeLeefcekeÀlee #es$e
Deefûece efveJeue yeQkeÀ $eÝCe keÀe 49.08% jns~
kegÀue ke=Àef<e Deefûece yeQkeÀ $eÝCe kesÀ efveOee&efjle
18% kesÀ efJeª× 19.58% jns~
Retail credit assets would be aggressively pursued to contribute increasing
share in the growth of the Bank, in synchronization with the opportunities
in this segment.
Priority Sector Advances
As a responsible corporate citizen, the bank has been actively involved in
pursuing the national policies, for ensuring rural development.
The Bank has effectively ensured improved flow of credit to agriculture
sector while providing relief measures to eligible farmers vis-à-vis
improving their accessibility to formal credit. The bank is committed
towards socio-economic development of the weaker sections of Society.
The Bank is relentlessly extending support to promote employment
opportunities and poverty alleviation, upliftment of poor and minority
communities as well as empowerment of women. The Bank considers
Priority Sector in general and Agriculture in particular as a business
opportunity and lending under Priority Sector as a profitable venture.
During the year under review Priority
Sector advances increased from
Rs.17910 crore to Rs.22611 crore
recording an incremental growth of
Rs.4701 crore and registering a
growth of 26.25% over previous
year. Priority Sector advances
account for 49.08% of NBC as
against stipulated benchmark of 40%
of NBC. Total Agricultural advances
constitute 19.58% as against
stipulated 18% of NBC.
[ ©. keÀjesæ[ ceW Rs. in crore]
³eespevee ³eLee efoveebkeÀ ³eLee efoveebkeÀ jeefMe % Je=ef×
Scheme As on 31.03.2005 As on 31.03.2006 Amount Growth
mìej DeeJeeme $eÝCe
Star Home Loan 2258 3300 1042 46mìej yebOekeÀ $eÝCe
Star Mortgage Loan 747 1858 1111 149mìej efMe#ee $eÝCe
Star Education Loan 291 467 176 60mìej Dee@ìesefHeÀve
Star Autofin 103 286 183 178mJeCe& pe³ebleer DeeJeeme $eÝCe
Golden Jubilee Rural Housing 446 533 87 20
ii. Life Insurance cover to home loan borrowers for loanprotection (optional).
Innovative measures undertaken by the Bank to give further boost toRetail Credit growth included tie-up arrangements for financing – viz.with Yamaha Motor India Sales, TVS Motors, LG Electronics, PhillipsElectronics, Bajaj Auto, ‘Intel’ Tech India, Kesari Tours, etc.The growth in respect of Star Home Loan, Star Mortgage Loan, StarEducation Loan, Star Autofin, Golden Jubilee Rural Housing Scheme
during the year was as under :-
ii. $eÝCe keÀer j#ee kesÀ efueS DeeJeeme $eÝCe GOeejkeÀlee&DeeW keÀes peerJeve yeercee megj#ee
(JewkeÀefuHekeÀ)
Kegoje $eÝCe Je=ef× keÀes Deewj ieefle osves kesÀ efueS yeQkeÀ ves efJeÊeHees<eCe kesÀ efueS ³eeceene ceesìj
Fbef[³ee mesume, ìerJeerSme ceesìme&, Suepeer FueskeÌì^e@efvekeÌme, efHeÀefueHme FueskeÌì^e@efvekeÌme, yepeepe
Dee@ìes, ``Fvìsue'' ìskeÀ Fbef[³ee, kesÀmejer ìtme& Deeefo kesÀ meeLe ieþpeesæ[ J³eJemLee pewmes veS
GHee³e efkeÀS nQ~
mìej DeeJeeme $eÝCe, mìej yebOekeÀ $eÝCe, mìej efMe#ee $eÝCe, mìej Dee@ìesefHeÀve, mJeCe& pe³ebleer
ûeeceerCe DeeJeeme ³eespeveeDeeW kesÀ mebyebOe ceW Je<e& kesÀ oewjeve Òeieefle efvecveefueefKele jner ë
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
20
yeQkeÀ Üeje DeHeveeF& ieF& efJeefYevve keÀejesyeejer keÀe³e&veerefle³eeB SJeb veerefle³eeW kesÀ HeefjCeecemJeªHe
efJeMes<e ke=Àef<e $eÝCe ³eespevee (SmeSmeerHeer) kesÀ Devleie&le ©.4399 keÀe mebefJelejCe ngDee pees
efJeiele Je<e& kesÀ mebefJelejCe keÀer leguevee ceW 33% DeefOekeÀ nw~ GlHeeove $eÝCe ©. 2275 keÀjesæ[
SJeb efveJesMe $eÝCe ©. 2124 keÀjesæ[ jns~ yeQkeÀ ves 36086 veF& efveJesMe Heefj³eespeveeSB Megª keÀeRr
efpeveceW kegÀue $eÝCe jeefMe ©. 497 keÀjesæ[ meeqcceefuele nw~ MeeKeeDeeW ves 154278 efkeÀmeeve
¬esÀef[ì keÀe[& peejer efkeÀS efpevekeÀer meerceeSB ©. 659 keÀjesææ[ nQ~ efpeveceW mes 75818 ¬esÀef[ì
keÀe[& íesìs SJeb meerceeble efkeÀmeeveeW keÀes 2005-06 kesÀ oewjeve peejer efkeÀS ieS~ ³en efkeÀmeeve
¬esÀef[ì keÀe[& ³eespevee kesÀ Devleie&le ueeYeûeeefn³eeW keÀer kegÀue mebK³ee keÀe 49% nw~
yeQkeÀ ves veJeesvces<eer SJeb Devetþer ³eespeveeDeeW pewmes MekeÌkeÀj efceueeW, [s³ejer menkeÀejer meefceefle³eeW
SJeb keÀleeF& efceueeW kesÀ ceeO³ece mes mebefJeoe Kesleer leLee yeerpe GlHeeokeÀ kebÀHeefve³eeW kesÀ meeLe
®ewveue efJeÊesHees<eCe ³eespeveeDeeW keÀe efJeÊeer³eve Deeefo efkeÀ³ee nw~ yeQkeÀ ves keÀeueebefpe³ece HeÀeGb[sMeve
kesÀ meeLe menceefle %eeHeve efkeÀ³ee nw pees 4 jep³eeW ceW $eÝCe ³eespekeÀ Deewj mJe³ebmesJeer mecetneW keÀes
Òeeslmeeefnle keÀjvesJeeuee SkeÀ Òeefleef<þle iewjmejkeÀejer mebieþve nw~
yeQkeÀ ves veeyee[& kesÀ meeLe men-efJeÊesHees<eCe Heefj³eespeveeDeeW kesÀ efueS ueeYeÒeo mecePeewles kesÀ meeLe
meeLe vesyekeÀe@vme pees veeyee[& kesÀ HetCe& mJeeefcelJe keÀer mene³ekeÀ kebÀHeveer nw, kesÀ meeLe ke=Àef<e
Heefj³eespeveeDeeW kesÀ cetu³eebkeÀve kesÀ meeLe-meeLe efJemle=le Heefj³eespevee efjHeesì& lew³eej keÀjves kesÀ
efueS mecePeewlee efkeÀ³ee nw~
yeQkeÀ ves keÀvee&ìkeÀ SJeb iegpejele jep³eeW ceW ûeeceerCe pevelee efJeMes<ekeÀj ke=Àef<ekeÀefce&³eesb kesÀ ueeYe
kesÀ efueS ûeeceerCe efkeÀ³eesmkeÀ Megª efkeÀS nQ~ Fmes Deye Dev³e jep³eeW pewmes leefceuevee[g, kesÀjue
SJeb DeevOe´ÒeosMe ceW Yeer Megª efkeÀ³ee pee jne nw~
yeQkeÀ ves GÐeefce³eeW efJeMes<ekeÀj ûeeceerCe pevelee SJeb efkeÀmeeveeW keÀes ÒeefMe#eCe osves kesÀ efueS
YeesHeeue ceW SkeÀ ©[mesìer ÒekeÀej keÀe ÒeefMe#eCe mebmLeeve mìej mJejespeieej ÒeefMe#eCe mebmLeeve
(SmeSmeHeerSme) mLeeefHele efkeÀ³ee nw~ GÐeceer peneB ve kesÀJeue ÒeefMe#eCe ÒeeHle keÀjWies yeefukeÀ
GvnW iegCeeW kesÀ DeeOeej Hej efJeÊeer³e mene³elee Deewj oerIe&keÀeueerve DeepeerefJekeÀe nsleg mJejespeieej
kesÀ efueS Yeer ceeie&oMe&ve efo³ee peeSiee~
The various business strategies and policies adopted by the Bank have
resulted in achieving disbursement of Rs.4399 crore in agriculture sector
under special Agriculture credit plan (SACP) with a growth of 33% over
previous year’s disbursement. The production credit accounted for Rs.2275
crore and investment credit Rs.2124 crore. The Bank has implemented
36086 new investment projects involving a credit outlay of Rs.497 crore.
The Branches have issued 154278 Kisan Credit Cards with limit of Rs.659
crore of which 75818 credit cards were issued to small and marginal
farmers during 2005-06, which constitutes 49% of the total number of
beneficiaries under the Kisan credit card scheme.
The Bank has financed innovative and novel schemes such as Contract
Farming through sugar mills, Dairy co-operatives and spinning mills and
Channel Financing Scheme through corporates and seed producing
companies. The Bank has also entered into MOU with Kalanjiam
Foundation, a reputed NGO for promoting SHGs and credit linking in 4
states.
The Bank has also pioneered in entering into strategic alliance for co-
financing projects with NABARD besides MOU with NABCONS, the
wholly owned subsidiary of NABARD for preparation of detailed project
reports as well as appraisal of agricultural projects.
The Bank has initiated Rural Kiosks in Karnataka and Gujarat States for
the benefit of rural populace, in particular to Agriculturists. The experience
is now being extended to other states such as Tamil Nadu, Kerala and
Andhra Pradesh.
The Bank has established Star Swarozgar Prashiksha Sansthan (SSPS), a
RUDSETI type training institute at Bhopal for imparting training to
entrepreneurs, in particular, to rural populace and farmers. The entrepreneurs
shall not only get training but also will be guided for financial assistance
on merits as well as further self employment for their sustained livelihood.
[(©. keÀjesæ[ ceW Amt. Rs. in crore]
ÒeeLeefcekeÀlee #es$e kesÀ Keb[ Segments of Priority Sector ³eLee 31 cee®e& ³eLee 31 cee®e& Je=ef× GrowthAs of 31st March As of 31st March jeefMe Amount ÒeefleMele
2005 2006 Percentageke=Àef<e Agriculture 6990 9020 2030 29.04ueIeg GÐeesie Small Scale Industries 4598 5625 1027 22.33Dev³e ÒeeLeefcekeÀlee #es$e Other Priority Sector (inclusive of Agro(ke=Àef<e SJeb KeeÐe ÒemebmkeÀjCe GÐeesie & Food processing Industry &Deewj met®evee ÒeewÐees/meeHeÌìJes³ej-©.1 IT/Software upto Rs.1 crore) 6322 7966 1644 26.00keÀjesæ[ lekeÀ)
kegÀue ÒeeLeefcekeÀlee #es$e Total Priority Sector 17910 22611 4701 26.25
Direct Agricultural advances account for 13.64% as against statutory
requirement of 13.5% of NBC. The weaker section advances constitute
10.31% as against Government stipulation of 10% of NBC.
Advances to women beneficiaries constitute 7.08% as against statutory
requirement of 5% of NBC. The position of outstanding level of business
under various segment of Priority Sector for the year ending March 2005
and March 2006 is as under :-
Òel³e#e ke=Àef<e $eÝCe efveJeue yeQkeÀ $eÝCe kesÀ 13.5% keÀer meebefJeefOekeÀ DeeJeM³ekeÀlee kesÀ efJeª×
13.64% jns~ mejkeÀej Üeje efveJeue yeQkeÀ $eÝCe kesÀ efveOee&efjle 10% kesÀ ceeveob[ kesÀ efJeª×
keÀcepeesj Jeie& Deefûece 10.31% jns~
ceefnuee efnleûeeefn³eeW keÀes Deefûece efveJeue yeQkeÀ $eÝCe kesÀ 5% keÀer meebefJeefOekeÀ DeHes#ee kesÀ
efJeª× 7.08% jns~ Je<e& meceeeqHle cee®e& 2005 SJeb cee®e& 2006 keÀes ÒeeLeefcekeÀlee #es$e kesÀ
efJeefYeVe Keb[eW kesÀ Devleie&le keÀejesyeej kesÀ yekeÀe³ee mlej keÀer efmLeefle efvecveefueefKele Devegmeej jnerë
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
21
yeQkeÀ ves 4576 Yetefcenerve efkeÀmeeve keÀe[& peejer efkeÀS nQ~ yeQkeÀ ves kesÀvêer³e ÒeJeefle&le ³eespeveeSB
pewmes mJeCe&pe³ebleer ûeece mJejespeieej ³eespevee, mJeCe& pe³ebleer Menjer jespeieej ³eespevee, ÒeOeeveceb$eer
jespeieej ³eespevee SJeb meHeÀeF&keÀefce&³eeW kesÀ G×ej SJeb HegveJee&me kesÀ efueS ³eespevee nsleg efJeÊeHees<eCe
peejer jKee~ yeQkeÀ ûeeceerCe iejeryeeW efJeMes<ekeÀj meceepe kesÀ keÀcepeesj JeieeX lekeÀ DeHeveer HengB®e
yeæ{eves kesÀ efueS ceeFkeÀes $eÝCe kesÀ Devleie&le mJe³eb mene³elee mecetneW keÀe efJeÊeHees<eCe keÀj jne
nw~ Je<e& kesÀ oewjeve yeQkeÀ ves cee®e& 2006 lekeÀ 33300 mecetneW SJeb $eÝCe mecye× 28000 mecetneW
keÀes 49000 mJe³eb mene³elee mecetneW kesÀ meb®e³eer ªHe mes peesæ[les ngS Òeeslmeeefnle efkeÀ³ee nw~
yeQkeÀ ves osMe kesÀ DeefJekeÀefmele SJeb efJekeÀemeMeerue kesÀvêeW Hej mJe³eb mene³elee mecetneW keÀes $eÝCe
osves kesÀ efueS efme[yeer/veeyee[& mes ceev³eleeÒeeHle íesìs efJeÊe mebmLeeveeW kesÀ ceeO³ece mes Yeer
efJeÊeHees<eCe efkeÀ³ee nw~
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kesÀ Debleie&le Meew®eeue³eeW kesÀ efvecee&Ce ceW ûeeceerCe HeefjJeejeW keÀes mene³elee os jne nw~ yeQkeÀ Üeje
Fme ³eespevee kesÀ Debleie&le ceneje<ì^ ceW keÀesuneHegj, meebieueer, je³eieæ[ efpeueeW leLee leefceuevee[g
ceW ke=À<Ceeefiejer ceW meIeve efJeÊeer³e mene³elee Òeoeve keÀer nw~ ³en Òemevvelee keÀe efJe<e³e nw efkeÀ 9
Heb®ee³eleeW ves, efpeveceW nceves ³eespevee keÀe keÀe³ee&vJe³eve efkeÀ³ee nw, Je<e& 2006 kesÀ oewjeve
je<ì^Heefle HegjmkeÀej ÒeeHle efkeÀ³ee nw~ yeQkeÀ ûeeceerCe #es$eeW ceW meewj GHekeÀjCeeW keÀe DeefOeûenCe
keÀjves kesÀ efueS meceLe&ve Òeoeve keÀj jne nw~ yeQkeÀ J³eeqkeÌle³eeW keÀes GOeej osves kesÀ efueS ceO³emLe
DeeJeeme efJeÊe kebÀHeefve³eeW, HesÀ[jsMeveeW Deeefo keÀes efJeÊeHees<eCe Hej efJe®eej keÀj jne nw~ ûeeceerCe
DeeJeeme nsleg efJeÊeHees<eCe kesÀ Debleie&le yeQkeÀ keÀe keÀe³e& efve<Heeove efvecveevegmeej nw ë
The Bank has issued 4576 Bhumiheen Kisan Cards. The Bank continued
extending finance under centrally sponsored schemes viz. Swarnajayanti
Gram Swarozgar Yojana, Swarnajayanati Shahari Rozgar Yojana, Prime
Minister’s Rozgar Yojana and Scheme for Liberation and Rehabilitation
of Scavengers. The Bank in order to enhance the outreach to rural poor,
especially to weaker sections of the Society, is extending finance under
Micro credit to SHGs. During the year Bank has promoted 33300 Groups
and credit linked 28000 groups with cumulative linking of 49000 Self
Help Groups . The Bank has also financed through reputed Micro finance
Institutions which are accredited to SIDBI/NABARD for onlending to
SHGs from the undeveloped and developing centres of the various parts
of the country.
The Bank has extended financial support to SC/ST families for water
harvesting schemes and irrigation development. With a view to provide
anytime anywhere banking facilities for the benefit of farmers, the Bank
has launched BOI Shatabdi Krishi Vikas Card, an e-enabled credit card
(VISA) to the farmers and so far 6373 cards have been issued.
The Bank has undertaken an innovative and ambitious project for integrated
development of 101 villages spread all over the country and also hand holding
of one poor farmer, one poor artisan, one poor woman, one poor student and
one poor dalit by each branch till they sustain their livelihood and stand on
their own as a Centenary Year Project. The Bank has also organized 1067
Farmers’ Clubs and 58 Demonstration Plots in various states to sensitise the
farmers to increase their productivity and economic conditions. The Bank has
entered into MOU with National Collateral Management Services Ltd.,
(NCMSL) and will be signing MOU with National Bulk Handling
Corporation (NBHC) for enhancing our financing under Produce
Marketing Scheme.
The Bank is actively involved in implementing Golden Jubilee Rural
Housing Finance Scheme (GJRHFS) and is supporting rural families in
construction of toilets under Nirmal Gram Yojana of the Central
government. The Bank has extended financial assistance under this Scheme
extensively in Kolhapur, Sangli, Raigad Districts in Maharashtra and
Krishnagiri in Tamil Nadu. It is heartening to note that 9 panchayats in
which we have implemented the scheme have received presidential awards
during March 2006. The Bank is extending financial support for acquiring
solar equipments in rural areas. The Bank is considering financing to
intermediary housing finance companies, federations etc. for on lending to
individuals. Bank’s performance under financing for rural housing is as
under :-
(©. keÀjesæ[ ceW Rs. in crore)
mJeerke=Àle Sanctioned mebefJeleefjle Disbursed
Keeles A/cs jeefMe Amount Keeles A/cs. jeefMe Amount
peerpesDeejS®eSHeÀSmeGJRHFS 10795 168.00 10543 153.00
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
22
DeûeCeer yeQkeÀ
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mes mecye× meele [erHeerDees mLeeefHele efkeÀ³es nQ~ Hemeboeroe efve#esHeeieej keÀer efve#esHeeieej mesJeeDeeW
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Lead Bank
The Bank has been assigned with Lead Bank responsibility in 46 Districtsspread over 5 States viz., Jharkhand (13), Maharashtra (12), MadhyaPradesh (12), Uttar Pradesh (7) and Orissa (2). The Bank has beensuccessfully discharging its duties of Lead Bank in all these Lead Districts.The Annual Credit Plan for the year 2005-06 was launched in all the LeadDistricts involving credit outlay of Rs.1916.38 crore for our Bank vis-a-vis Rs.12008 crore for all Banks. The Bank has disbursed Rs.2283 croreachieving 119% of the target, while all other banks have disbursedRs.12589 crore achieving 105% of the target.
Forex Business
The forex business handled by the bank showed robust growth. Exportturnover increased to Rs. 22510 crore, and import turnover reachedRs.26030 crore, during FY 2006, a growth of 11.65% and 63.16 %respectively.
The Bank continued to be a leading player in the Forex Market. Turnoverof the Bank’s three dealing rooms have gone up to Rs.315418.63 crore.Profit from domestic dealing room operations however, declined fromRs.162.24 crore in FY 2004-05 to Rs.133.35 crore in FY 2005-06 due tosqueeze in exchange margins.
Investments
During the year interest rates continued an upward bias with the yield onbenchmark 10-year G-secs. further increasing from 6.68 % as on March05 to 7.52 % as on 31-03-06. In view of the rising interest rate scenario,Bank maintained an optimum level of investments with a view to containmarket risk. As against the SLR requirement of 25% of Net Demand andTime Liabilities (NDTL) , Bank maintained SLR investments marginallyhigher at 26.21% of NDTL. At year-end SLR investments on grossbasis amounted to Rs.21094.52 crore (79.21%) of total investments) andNon SLR investments stood at Rs.5537.72 crore (20.79 %) of totalinvestments).
Investments are made in accordance with the comprehensive investmentpolicy approved by the Board. The policy is reviewed periodically torespond to market dynamics and regulatory requirements.
Treasury Operations
Bank played an active role in all segments of the market – Funds / Forexand Bonds during the year 2005-06. During the year the equity marketwitnessed robust activity with Sensex and Nifty reaching historic levels.Bank participated in the market rally and actively traded in scrips. Bankalso earned more income than any year in the past from the numerousIPOs and follow-on offers. The equity desk contributed an amount of Rs.49.55 crore towards Treasury income.
The Bank has been active in derivative business by offering a full spectrumof derivative products. A number of new customers were added in thederivative segment.
Depository Participants (DP) Services
The Bank made it’s initial foray into depository services during 1998-99with the setting up of a Depository Participant Office (DPO) affiliated tothe National Securities Depository Ltd (NSDL). Thereafter, Bank set upseven DPOs affiliated to CDSL at Ahmedabad, Bangalore, Chennai, NewDelhi, Kolkata and Mumbai. The option to avail depository services of aDepository of choice is an unique feature of the services offered by theBank.
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
23
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keÀes yeouevee mebYeJe nes mekeÀe nw~ Je<e& kesÀ oewjeve 30518 ve³es ¬esÀef[ì keÀe[& peejer efkeÀ³es ie³es
Les efpemekesÀ keÀejCe ³eLee 31 cee®e& 2006 keÀes meef¬eÀ³e keÀe[& DeeOeej 1,06,378 keÀe[& lekeÀ
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efpeveceW mes 1037 J³eeHeejer Òeefle<þeveeW keÀes F&[ermeer ceMeervesb (FueskeÌì^e@efvekeÀ [eìe kewÀH®ej) oer ieF&
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keÀjesæ[ Lee~
Another striking feature of Bank‘s depository services is the networkingof a large number of MBB/CBS branches with the DPOs by leveragingcore banking capabilities thus providing convenience to clients to havetheir time critical transactions done through their branch level. Major MBB/CBS branches at Ahmedabad, Bangalore, Chennai, Kolkata, Mumbai andNew Delhi are linked with the DPOs at their respective centre. Further,major MBB/CBS branches at Bhubaneshwar, Chandigarh, Hyderabad,Indore, Jaipur, Kolhapur, Ludhiana, Pune, Rajkot, Surat, Ujjain andVadodara are linked with the NSDL DPO at Mumbai. About 300 branchesare presently linked with the DPOs. This is also in tune with SEBI’sdesire to further reduce settlement cycle from T+2 presently to T+1. Bankhas developed a pool of qualified staff to handle depository services asprescribed by the Depositories.
The number of demat accounts opened by our DPOs by the end of FY2005-2006 have gone upto 115000 (no. of active accounts 88000 ) whichis significantly higher than the previous year’s tally of 90700. During theyear 2005-06, Bank earned gross revenue of Rs. 387 lakh from DP servicesas against Rs.283 lakh in the year 2004-05. Other than providing usualsecurities related depository services, Bank also extends depository servicesin commodity futures linked with NCDEX (Commodity Exchange) inNSDL/CDSL depository system.
Star Share Trade - On-line Trading in Shares
As internet trading in shares has been gaining popularity amongst theinvestors in the stock markets and its share in the traded volumes on theexchanges has been increasing, with a view to meeting the aspiration ofour clients, Bank has entered into tie-up arrangement with M/s Asit C.Mehta Investment Intermediates Ltd., a SEBI registered corporate memberof repute of both the stock exchanges viz. BSE and NSE during the year,to facilitate launching of various capital market related products including‘On-Line Trading in Shares’. To begin with the On-Line Trading in Sharesfacility was made available to clients of our CBS branches in MumbaiNorth, Mumbai South and Raigad-Thane Zones. The facility is proposedto be rolled out to clients of all our CBS branches in a phased manner. Thisis expected to provide our banking and demat products an edge in themarket.
Card Products Business
Various innovations brought in by the bank through additional features to
the existing Cards Products and introduction of new Cards during the year
2004-2005, have started bearing fruits this year. The year saw launch of
three new products, viz. Shatabdi Krishi Vikas Card, Star Vidya Card
(both VISA Cards) and Global Debit cum ATM Card(MasterCard).The
Shatabdi Krishi Vikas Card was issued to commemorate the centenary
year of the Bank and as a salute to the farmers of the country. The Card
was launched through the hands of the Hon. Minister of Finance Shri
P. Chidambaram on 10th September, 2005.
New innovations and additional features have enabled the bank to reverse
the trend in erosion of Card base. During the year 30518 new Credit Cards
were issued taking the active Card base to 1, 06,378 Cards (including
6373 Shatabdi Krishi Vikas Cards) as on 31st March, 2006, comprising of
both Master Card and VISA Cards. Merchant establishments enrolled
with the Bank stood at 1993 of which 1037 merchants are equipped with
EDC (Electronic Data Capture) machines. Issuing turnover of the bank
stood at Rs 143.83 Crore and acquiring turnover stood at Rs.140.14 Crore.
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
24
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J³eJemLee :
During the year, the bank issued 4.29 lakh Starlinks International Debit
cum ATM Cards (VISA Electron) and the total number of such Cards
issued by the Bank stood at 9.80 lakh as at the end of March, 2006. Global
Debit cum ATM Card (Master Card) was launched by the Bank on 22nd
February, 2006. The number of cards issued stood at 16540 as at the end
of March 2006.
By the end of March 2006 number of ATMs installed by the Bank stood
at 314 across the country including one mobile ATM.
One of our affiliate banks, Union Bank of India ceased to be our affiliate
since they have started issuing their own Cards. The Bank now has three
affiliate banks, viz. Bank of Maharashtra, United Western Bank and
Tamilnadu Mercantile Bank issuing Credit Cards under our brand name
‘India Card’. The relation continues on mutual trust and cooperation.
Apart from Credit Card issuing and acquiring business, the Bank also
performs the role of settlement bank for Master Card in India, Cash Tree
and Bancs ATM networks.
Bullion Exchange
The turnover in bullion business amounted to Rs. 414.76 crore during the
year as compared with Rs. 408.73 crore in the previous year. Under the
‘Bullion Loan Scheme for Exporters’(BLSE) at SEEPZ Branch, 5302 kgs
of gold was sold to exporters and 550 kg of gold was sold to domestic
customers at Ahmedabad Branch. Total earnings to the tune of Rs. 210.30
lakh were recorded during the year.
Star Cash Management Services
Star Cash Management Services has been in operation for the last five
years facilitating speedier collection of local and upcountry cheques. The
customers can pool the funds arising out of local and upcountry collections
and have these funds made available at a particular centre or at multiple
centres of their choice. This service is available at 33 centres of the Bank.
The turnover clocked during the year is Rs.59.61 crore. In tune with the
advancing technology we are revamping our Star Cash Management
Services.
THIRD PARTY PRODUCTS
Corporate Agency arrangement with ICICI Prudential Life Insurance Co
Ltd. for selling Life Insurance Products :
The Bank has entered into a corporate agency arrangement with ICICI
Prudential Life Insurance Co Ltd. for selling life insurance products. The
number of branches engaged in selling life insurance products has gradually
increased and presently more than 900 branches are undertaking this
business. Various initiatives were undertaken for giving thrust to this
business, like identifying Marketing Managers exclusively for Insurance
business in high potential areas and regular monitoring by controlling
offices. This resulted in increase in volume of business and referral
commission by 90% over the previous year.
Tie-up with National Insurance Company Limited for selling Non-Life
Insurance products :
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
25
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The existing tie-up with NICL has been further strengthened with all the
branches in all the Zones undertaking this business and thereby ensuring
more than 75% increase in commission on year to year basis.
Tie-up with UTI Mutual Funds for selling Mutual Funds Products :
Our existing tie-up as a distributor for ‘UTI MF’ has resulted in our
customers getting other financial products under one roof. Looking to the
potential and need to satisfy the ever growing demand for similar products
and to offer a choice, Bank has tied up with HDFC Asset Management
Company Ltd. in Feb 2006 for distributing their mutual fund products.
We have adequate number of AMFI qualified personnel placed strategically
at branches to ensure focussed sales activity at all our major centres.
ECGC Credit Insurance
Bank entered into a corporate agency tie-up with Export Credit Guarantee
Corporation of India Ltd. (ECGC) for marketing the credit insurance
products of ECGC. The agreement to this effect was signed on 7th June
2005. Under the tie-up, the Bank’s branches are undertaking the business
of distribution of various credit insurance products of ECGC to their
constituents.
Participation of the exporters in these ECGC insurance products is purely
voluntary and no charge or fees or commission is levied by us on these
products. During the Year 2005-06, the Bank procured a business of
Rs.23.72 lakh and earned commission of Rs.73,626/- from ECGC.
International Operations
The overseas network of the Bank consists of 20 branches and 3
Representative Offices spread across 12 countries in four continents, with
presence in all the major financial centres such as London, New York,
Paris, Tokyo, Singapore and Hong Kong. The Bank has 7 well equipped
active foreign exchange dealing rooms the world over covering all time
zones.
The Bank has one subsidiary and one associate abroad. The Bank has
correspondent relationship with 257 foreign entities spread over 104
countries.
The Foreign Branches are active in investment market and loan
syndications. The overseas branches of the Bank accounted for 18 % of
Bank’s total business as at March end 2006. Operating profit of foreign
branches contributed 15.41 % to the Bank’s global operating profit at the
end of March 2006.
Customer Deposits stood at a level of Rs 14125 crore recording a rise of
Rs. 3082 crore (27.90%) over the deposits of Rs. 11043 crore as on
31.3.2005. Advances stood at the level of Rs.12639 crore recording a fall
of Rs.652 crore (-4.90 %) over the advances of Rs. 13291 crore as on
31.3.2005. Investments stood at the level of Rs 5453 crore recording a rise
of Rs.552 crore (11.26 %) over the investments of Rs. 4901 crore as on
31.3.2005. Gross NPAs stood at the level of Rs 260 Crore recording a fall
of Rs. 18 crore (-6.47%) compared to the NPAs of Rs. 278 crore as on
31.3.2005. Operating Profit stood at the level of Rs.262 crore. Net profit
stood at the level of Rs.207 crore.
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
26
efJeosMeer MeeKeeDeeW keÀe Meg× Devepe&keÀ Deeefmle³eeW keÀe DevegHeele cee®e& 2005 kesÀ 0.11 kesÀ
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kesÀ mecelegu³e nw~
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10 keÀjesæ[ kesÀ yekeÀe³ee Mes<e Jeeues KeeleeW kesÀ efueS DeesìerSme ³eespevee ÒeejbYe keÀer ieF& nw~
The ratio of net non-performing assets of the Foreign Branches has also
come down to 0.03% as at March-end 2006 as against 0.11 % as at
March-end 2005.
During the year the Bank raised USD 250 Million under Medium Term
Note (MTN) program of USD 1 Billion for its overseas operations. The
MTN issue of USD 250 Million was rated as Baa3 by Moodys and BB+
by S &P. The rating are on par with the sovereign rating assigned by these
agencies to India.
NPA Management
Reduction of NPAs is given utmost priority and this function has been
achieved successfully over the years. Suitable measures were initiated to
augment recovery and contain NPAs. Efforts were also made to maximise
recovery in written off accounts and uncharged / unrealised interest in
NPA accounts which improves Bank’s profits significantly. To highlight
importance of these aspects during the year, the slogan ‘ARD- A profit
centre’ was adopted. During the year, a sizeable contribution to bank’s
profitability amounting to Rs. 235 crore came through recovery in Written
off accounts/ URI/UCI.
Sale of assets to Asset Reconstruction Companies is being explored as
one of the options. We have sold to ARCIL 3 impaired assets receiving
Rs. 43 crore during the year. More and more ARCs are expected to become
functional in times to come and hence we are further exploring the
possibilities of selling identified assets to ARCs for reducing NPAs.
During the year policy for sale of financial assets to Banks/FIs/NBFCs
based on RBI guidelines is already approved. We are exploring the
possibilities of selling identified assets through this route also to increase
recovery.
During the year, a Specialised Large Asset Recovery Branch – named
ASSET RECOVERY MANAGEMENT SERVICES (ARMS) was
opened to tackle high value of NPAs of Rs.100 lakhs in the city of
Mumbai. The step proved a success as the branch could recover Rs. 75.46 crore.
A special Scheme to tackle Small NPA/written off accounts with balances
upto Rs. 50,000 was approved by our Board in July 2005 delegating
powers to all Branch Managers. Since inception of the Scheme we could
recover about Rs. 59.20 crore in more than 1.14 lakh accounts. This has
enabled bank to resolve a large number of Small accounts during the
current year.
Various Branches/Zones have been conducting recovery camps and
participating in LOK ADALATs for speedy resolution of small NPAs.
Bank is laying emphasis on organizing more and more recovery camps.
In the month of November, 05, an OTS Scheme was introduced by RBI for
accounts with outstanding balances upto Rs.10 crore under SME Sector.
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
27
ceo mJeosMeer efJeosMeer JeweféekeÀ
Item Domestic 31.03.2006 Foreign 31.03.2006 Global 31.03.2006
³eLee 31.03.2006 keÀes ÒeejbefYekeÀ SveHeerS Opening NPA as on 31.03.2005 2878 278 3156IeìeSb ë Less:vekeÀo Jemetueer Cash Recovery 707 14 721mecegVe³eve Upgradation 142 — 142yeÆs Keelee Write Off 515 08 523kegÀue keÀìewleer Total Reduction 1364 22 1386peesæ[s ë Add:eqmueHespe Slippage 705 04 709³eLee 31.03.2006 keÀes Mes<e SveHeerS Closing NPA as on 31.03.2006 2219 260 2479
(©. keÀjesæ[ ceW Rs. in crore)
nceejer MeeKeeDeeW ves ³eespevee kesÀ Debleie&le Hee$e KeeleeW keÀes Meeefceue keÀjves nsleg ³eespevee keÀe
ueeYe efue³ee nw~
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keÀjesæ[ keÀer leguevee ceW ©.288 keÀjesæ[ keÀer Jemetueer
keÀer ieF&~
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(©.721 keÀjesæ[ keÀer vekeÀo Jemetueer Deewj ©.142
keÀjesæ[ keÀe mecegVe³eve) neefmeue keÀer ieF& nw~
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DeÒeYeeefjle y³eepe KeeleeW ceW ©.235 keÀjesæ[
keÀer Jemetueer Deewj FmekesÀ meeLe Jemetueerke=Àle
SveHeerS ceW ÒeeJeOeeveeW keÀes peejer keÀjves mes yeQkeÀ
kesÀ ueeYe ceW megOeej ngDee nw~ mJeosMeer SveHeerS
ceW vekeÀo Jemetueer, mecegVe³eve, yeÆs Keeles Deewj
DeJemetueerke=Àle y³eepe Deewj DeÒeYeeefjle y³eepe
keÀe meYeer yepeì neefmeue keÀj efue³ee ie³ee nw~ FmekesÀ efJeefYeVe DeebkeÀæ[s efvecveevegmeej nQ ë
Our branches have taken advantage of the Scheme to cover the eligible
borrowers under the Scheme.
The provisions of SARFAESI Act have also been implemented to the
maximum advantage and Rs. 288 crore is recovered through this route
during the year 2005-06 as against Rs. 235 crore in the previous year.
During the year, reduction of Rs.1386
crore (including cash recovery of Rs.
721 crore and upgradation of Rs. 142
crore) have been achieved.
Additionally, recoveries in written
off accounts, unrealised/uncharged
interest amounted to Rs. 235 crore
and this coupled with the release of
provision in the NPAs recovered
have improved the bottom line of the
Bank. In domestic NPAs all the
budgets of Cash Recovery,
Upgradation, Recovery in Written off
accounts and URI & UCI have been surpassed. The various figures are as
below:
Je<e& kesÀ oewjeve SveHeerS kesÀ GHe®e³e ceW Ieìlee ÒeJeen jne nw~ eqmueHespe keÀer jeskeÀLeece SJeb
efve³eb$eCe kesÀ efueS Òe³eeme peejer nw leeefkeÀ mekeÀue SveHeerS ceW ve³ee GHe®e³e YeefJe<³e ceW Yeer
kegÀue $eÝCe Deeefmle³eeW kesÀ 1% mes keÀce jns~
Yeejleer³e efj]peJe& yeQkeÀ ves efoveebkeÀ 31.03.2005 mes ÒeeJeOeeveerkeÀjCe kesÀ mebMeesefOele ceeveob[
efveOee&efjle efkeÀ³es nQ~ mebMeesefOele ceeveoC[eW kesÀ Devegmeej ÒeeJeOeeve DeeJeM³ekeÀleeDeeW keÀes Hetje
keÀjves kesÀ efueS, pees 31.03.2005 mes ÒeYeeJeer nw, ®ejCeye× ªHe ceW ÒeeJeOeeve efkeÀ³ee ie³ee nw~
yeQkeÀ ves ©. 195 keÀjesæ[ keÀe DeefleefjkeÌle/ÒeJeener ÒeeJeOeeve jKee nw~
There has been a decreasing trend in the accretion to NPAs in the year.Efforts will continue to contain and arrest the slippages so that fresh accretionto gross NPA are lower than 1% of the total Loan Assets in future.
Reserve Bank of India has prescribed revised norms of Provisioningw.e.f. 31.03.2005. Sufficient provisions have been made in a phased mannerto take care of provision requirements as per the revised norms, whichhave come into effect from 31.3.2005. The Bank has an extra/floatingprovision to the extent of Rs. 195 crore
(Rs. in crore)
2003-04 2004-05 2005-06
Gross NPA 3734 3156 2479
Net NPA 2061 1554 970
% of Gross NPA 7.86% 5.53% 3.72%
(to gross advances)
% of Net NPA 4.50% 2.80% 1.49%
(to net advances)
efvecveevegmeej DeebkeÀæ[s ³en oMee&les nQ efkeÀ efHeíues kegÀí Je<eeX mes JewefMJekeÀ mekeÀue SveHeerS kesÀ
meeLe ner efveJeue SveHeerS keÀer Òecee$ee ceW keÀceer nes jner nQ ë-
(©. keÀjes[ ceW)
2003-04 2004-05 2005-06
mekeÀue SveHeerS 3734 3156 2479
efveJeue SveHeerS 2061 1554 970
mekeÀue SveHeerS keÀe % 7.86% 5.53% 3.72%
(mekeÀue Deefie´ceeW mes)
efveJeue SveHeerS keÀe % 4.50% 2.80% 1.49%
(Mg× Deefie´ceeW mes)
The following figures show that there is decline in the quantum of globalGross NPAs as well as Net NPA over the years:
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
28
As on 31.3.2006, the gross Non-performing Advances stood at a reduced
level of Rs.2479 crore as compared to Rs. 3156 crore in the previous year.
Ratio of gross NPA to gross advances has come down to 3.72 % from
5.53 % recorded last year. The ratio of net NPA to net advances for the
Bank has also declined to 1.49% this year from 2.80 % last year.
Branch Network and Expansion
The Bank has a geographically well-spread branch network in India and
abroad. The bank has 2622 branches in India as at the end of March 2006.
In foreign countries, 20 branches and 3 representative offices make our
presence felt in all time zones of the globe.
During the year, 34 new branches were opened and 2 extension counters
were converted into full-fledged branches. Distribution of these new
branches is Metropolitan 12, Urban 12, Semi Urban 9 and Rural 3. The
Bank closed one extension counter and opened a new extension counter
during the year.
As part of branch rationalisation exercise the Bank closed or merged 8 un-
remunerative branches. These were, Sion Housing & Personal Finance
Branch, Mullakkal Branch, Maniadih Branch, Kolkata Capital Market
Branch, Mumbai Drafts Paying Branch, Limbi Branch, Pipalzopa Branch
and Padlya Branch.yeQkeÀ keÀe MeeKee vesìJeke&À efvecveevegmeej nw ë Composition of branch network of the Bank :
ÒeJeie& 31.03.2005 31.03.2006
Category MeeKeeDeeW keÀer mebK³ee kegÀue keÀe % MeeKeeDeeW keÀer mebK³ee kegÀue keÀe %No. of Brs. % to Total No. of Brs. % to Total
ceneveiejer Metropolitan 423 16.3 505 19.2
Menjerr Urban 446 17.2 432 16.5
DeOe& Menjer Semi Urban 488 18.8 484 18.5
ûeeceerCe Rural 1237 47.7 1201 45.8
kegÀue MeeKeeSb Total Branches 2594 100 2622 100
efJemleej Heìue Extension Counters 165 - 163 -
³eLee 31.3.2006 keÀes, mekeÀue Devepe&keÀ Deefûece efJeiele Je<e& ceW ©. 3156 keÀjesæ[ keÀer leguevee
ceW ©. 2479 keÀjesæ[ kesÀ Ieìs ngS mlej Hej jne nw~ mekeÀue DeefûeceeW keÀer leguevee ceW mekeÀue
SveHeerS keÀe DevegHeele efJeiele Je<e& ope& 5.53% mes keÀce neskeÀj 3.72% jne nw~ yeQkeÀ kesÀ
efueS efveJeue Deefûece keÀer leguevee ceW efveJeue SveHeerS DevegHeele Yeer Fme Je<e& efJeiele Je<e& kesÀ
2.80% keÀer leguevee ceW keÀce neskeÀj 1.49% jne nw~
MeeKee vesìJeke&À SJeb efJemleej
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ceW nw~
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
29
RBI has announced a liberalised policy of Branch Authorisation in
September 2005. Banks have been given more autonomy to shift, merge
and close branches without referring to RBI. Banks also have been
authorized to freely convert specialised branches into general banking
branches and extension counters into full-fledged branches. Taking
advantage of this policy we propose to have a close look at our un-
remunerative branches and shift them to alternate sites where their
contribution to Bank’s profit will be enhanced. Similarly specialised
branches will be converted into general banking branches wherever they
are found to have outlived their purpose. The extension counters showing
good performance and those which have locational advantage will be
converted into full-fledged branches to increase our branch network during
the year.
Marketing & Publicity
The Bank has carved out a marketing set up across the country to meet the
challenges of the present day scenario . At the corporate level, an independent
Marketing Department has been set up to focus on image building, strong
visibility and campaigning of the products. During the year under review,
advertisements were released through various channels of media to give
discernible boost to Bank’s visibility in Metros as well as interior India.
Bank’s over 1000 ‘feet on street’ marketing personnel are continuously
trained in marketing skills apart from product knowledge. Marketing of
Bank’s products is taken up as a thrust area particularly in respect of retail
credit, low cost deposits, credit cards and third party products. Bank has
clearly defined Personal Banking teams for retail banking products and
Business Banking teams for SME products to ensure focussed penetration.
The histroric happening of our centenary year was suitably publicised
across various media and a symbolic and dynamic logo was designed. A
systematic and concerted campaign was carried out to highlight the Bank’s
strides in areas such as Core Banking, Anytime Anywhere Banking, global
and instant national remittances, crossing the landmark Rs.1,50,000 crore
business mix and its pioneering initiative in taking technology to rural/
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yeQefkebÀie, YeewieesefuekeÀ Deewj lelkeÀeue je<ì^er³e OeveÒes<eCeeW, 1,50,000 keÀjesæ[ ªHe³es kesÀ GuuesKeveer³e
efceefÞele keÀejesyeej keÀes Heej keÀjves Deewj leefceuevee[g kesÀ efMeJeiebiee ceW ceesyeeFue SìerSce kesÀ
meeLe MeeKee KeesuekeÀj ûeeceerCe DeOe&Menjer #es$e ceW lekeÀveerkeÀer keÀes ues peeves keÀer FmekeÀer
The bank has 119 specialised branches catering to the specific financialneeds of certain categories in the domestic market. Details are as under:
31.03.2005 31.03.2006
1 SME Branches 32 32
2 Overseas Branches 7 7
3 Corporate Banking Branches 9 9
4 N.R.I. Branches 6 6
5 Capital Market Branches 3 2
6 Agricultural Hi-Tech Finance Branches 4 4
7 Recovery Branches 12 13
8 Commercial & Personal Banking Brs. 35 35
9 Treasury Branch 1 1
10 Housing & Personal Finance Brs. 9 911 Government Business Branch — 1
TOTAL 118 119
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keÀjves kesÀ efueS yeQkeÀ keÀer 119 efJeefMe<ìerke=Àle MeeKeeSb nQ~ FvekeÀe y³eewje Fme ÒekeÀej nw ë
31.03.2005 31.03.2006
1 SmeSceF& MeeKeeSb 32 32
2 DeesJejmeerpe MeeKeeSb 7 7
3 keÀeHeexjsì yeQefkebÀie MeeKeeSb 9 9
4 SveDeejDeeF& MeeKeeSb 6 6
5 kesÀefHeìue ceekexÀì MeeKeeSb 3 2
6 ke=Àef<e G®®e lekeÀveerkeÀ efJeÊe MeeKeeSb 4 4
7 Jemetueer MeeKeeSb 12 13
8 JeeefCeeqp³ekeÀ SJeb Jew³eeqkeÌlekeÀ yeQefkebÀie MeeKeeSb 35 35
9 keÀes<eeieej MeeKee 1 1
10 ie=n efvecee&Ce SJeb Jew³eeqkeÌlekeÀ efJeÊe MeeKeeSb 9 9
11 mejkeÀejer keÀejesyeej MeeKee - 1
kegÀue 118 119
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
30
semi urban areas by opening a branch with a Mobile ATM at Sivaganga in
Tamilnadu.
INFORMATION TECHNOLOGY
Branch Automation
As on March 2006, all branches have been computerized, with 555 Brancheson CBS mode, 1979 Branches on TBM mode and 88 Branches on AELPMmode.
Branch Networking
Leveraging on technology, over 1200 branches in more than 300 centreshave been networked through Core Banking Solution (CBS) or MultiBranch Banking (MBB) software so that customers can avail of anywhereanytime banking facility. Other high tech facilities of telebanking, internetbanking and SMS banking are also made available in all these branches.
Internet Banking
Internet Banking has been introduced in all 1200 networked Brancheswith features like viewing statement of accounts, enquiring status ofcheques, request for cheque book, transfer of funds between designatedaccounts, etc.
Automated Teller Machines
As on 31.03.2006, 314 ATMs (both on-site & off-site) are presently inoperation. The Bank is sharing its ATMs with 11 other Banks under thenetwork name ‘Cash Tree’. The Bank is also the Settlement and Nodal Bankfor Cash Tree ATMs. Besides, the Bank has formed a new network of ATMscalled BANCS. 13 banks have joined this network including PSBs / Private& Co-operative banks. The Bank is Settlement and Nodal Bank for thisnetwork too. At present the bank’s customers have access to about 16000ATMs across the country through shared ATM network. Bilateral agreementsare being worked out for sharing the ATMs with State Bank of India.
Other IT initiatives
BOI Star e-Pay
Bank has started a new utility payment
service called ‘BOI Star e-pay’.
Under this service, customers can
register for select utility services like
payment of telephone bills, electricity
bills, cell-phone bills, credit card bills,
insurance premia and certain other
service providers for periodic
payments through automatic or on-
line payments. Presently this service
covers 18 cities viz. Mumbai, Pune,
Hyderabad, Kolkata, New Delhi, Bangalore, Chennai, Surat, Ahmedabad,
Kolhapur, Goa, Indore, Bhopal, Chandigarh, Coimbatore, Jaipur, Lucknow
and Nagpur. The Bank also activated the ‘direct pay’ mode for making
payments through Biller’s website.
Core Banking Solution
555 Branches are already migrated to CBS mode as on 31.03.2006. The
CBS will be extended to a total of 900 branches, by December 2006.
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
31
Wireless connectivity
Wireless connectivity has been introduced for Extension Counters at Patna,
Hyderabad, Chennai, Ranchi, Ghaziabad, Nagpur and Bangalore Zones.
Star Insta Remit
The bank introduced Star Insta Remit which is a RTGS enabled remittance
product. This is used for remittance of funds arising out of inter bank or
customer transactions utilizing the RBI initiatives of Real Time Gross
Settlement (RTGS) / Structured Financial Messaging System (SFMS).
OLTAS
Bank enabled 515 branches effecting On-Line Tax Payments pertaining to
Direct Tax collection under On-Line Tax Accounting System (OLTAS).
RTGS
555 branches of the Bank have been RTGS enabled. The turnover is over
Rs.1500 crore per day. All the CBS branches of the bank are RTGS
enabled.
Arrangement with Directorate General of Foreign Trade (DGFT)
Online filing of applications for importers and exporters with DGFT has
been enabled.
Tie up with Western Union
This service has been launched for facilitating Rupee Remittances from
NRIs to India.
Star e-remit
A remittance product facilitating faster NRI remittance from our Branches
abroad like Singapore, London, Tokyo, etc.is put in place.
EFT (Electronic Funds Transfer) has been enabled in all the 15 specified
centers, wherever RBI manages the Clearing House.
Business Process Re-engineering
The Bank has undertaken Business Process Re-engineering in consultancy
with M/s Boston Consulting Group in view of the changed technological
and market environment and to stay competitive, to identify niche market
segments for focused growth and increased profitability, and to remove
the redundancies in the system. The current phase of BPR is over and the
Bank is rolling out various initiatives.
Bank has gained proficiency in Product Profitability Studies and accordingly
some of the plain vanilla products have been redesigned with various tiers.
More profitable tiers have higher levels of service enhancement/and other
complimentary features. This will ensure that the Bank retains and attracts
high end discerning customers by ensuring highest quality service standards
to them. As part of this study the Bank has also moved on to a more
elaborate and accurate Matched Funds Transfer Price Mechanism
technique. This will enable the Top Management to make strategic business
decisions based on more accurate empirical data. The Product Profitability
Study has been institutionalized in the Bank and the MIS is helping the
Management to revisit the strategies on an ongoing basis.
As part of Customer Focus, the Bank has already launched over 1000
strong ‘feet on street’ sales force to get more customers and service them.
The sales force is specific and is divided into Personal Banking sales force
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
32
and Business Banking sales force to give them more focus and to service
the customers efficiently. Sales force is backed by Relationship Managers
for high-end customers at the branches.
The Organization has been restructured into Strategic Business Units
(SBUs) for better business focus and to make it more nimble footed. To
sharpen the focus on SME segment and to reduce turn around time, SME
cells have been established based on cluster approach and backed by sales
force. Large Corporate branches are being established to service the specific
needs of large corporates. The division has the backing of Relationship
Managers and Product Managers. Retail division looks after the burgeoning
demand for personal loans in the economy. Retail Hubs supported by
sales force have been established under this division for faster sanctions.
Based on sound principles of Corporate Governance the three arms of
Organization, viz. Business, Support and Control have been segregated
and now function at an arms length with one another.
The various Processes in the Bank have been reengineered in view of the
core banking solution being implemented across the Bank. The Back Office
processes are being centralized at a remote location to attain economies of
scale, reduce white spaces and increase productivity through specialization.
This will also help branches to free resources for crucial customer related
activities. We have already centralized, Inward Clearing, Outward Clearing,
Account Opening, Pension Processing and Cheque book issuance at few
centres. The results are encouraging and the learnings will help us in
hastening the tasks. We are now stepping up the pace of centralization at
all major centers. The aim of the exercise is to rejuvenate the processes by
making full use of technology for improving customer service, reduction
in branch load and reducing transaction cost.
HUMAN RESOURCES DEVELOPMENT
Bank has continued to lay great emphasis on Human Resources
Development, to make its employees attain high standards in efficiency
and productivity. A number of initiatives have been undertaken by the
bank for changing the mindset of the employees, constantly upgrading
their knowledge to ensure significant improvements in their performance
and to motivate / recognize / reward them suitably. In that direction the
focus of HR Policy of the Bank has been to facilitate knowledge
management, skill enhancement, motivational strategies and cultural change
to equip staff members for the ever changing competitive environment.
Accordingly, the training system and infrastructure has been revamped
and dovetailed to the business plan, branch expansion, technology plan
and business environment. During the year various in-house training
programmes aimed at upgrading the knowledge and skill levels of
employees were conducted at Bank’s training colleges. A number of short
duration capsule workshops were introduced, on locational basis towards
achieving this objective.
Bank has initiated necessary steps to make all the employees computer-
literate by nominating them to various computer training programmes. For
the smooth migration of our Branches to Core Banking Solution (CBS)
numerous programmes like Roll-over Training and End User’s Training
were conducted for the staff members. Total numbers of staff members
trained for CBS are 4228.
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Fme ÒeKeb[ kesÀ Debleie&le lespe ieefle mes cebpetjer kesÀ efueS efye¬eÀer oue mes ceoo ÒeeHle Kegoje nJe
mLeeefHele efkeÀS ieS nQ~ keÀeHeexjsì efve³eb$eCe kesÀ cepeyetle efme×ebleeW Hej DeeOeeefjle jnkeÀj mebieþve
kesÀ leerve Debie ³eLee keÀejesyeej, meHeesì& Deewj efve³eb$eCeeW keÀes Deueie-Deueie efkeÀ³ee ie³ee nw Deewj
Deye SkeÀ otmejs kesÀ meeLe kebÀOes mes kebÀOee efceueekeÀj keÀece keÀj jner nQ~
®etbkeÀer mebHetCe& yeQkeÀ ceW keÀesj yeQefkebÀie meeu³egMeve keÀe³ee&eqvJele efkeÀ³ee pee jne nw FmeefueS yeQkeÀ ceW
efJeefYeVe ÒeesmesmeeW keÀes Hegvej&ef®ele efkeÀ³ee ie³ee nw~ mkesÀue keÀer DeLe&veerefle keÀes ÒeeHle keÀjves, mece³e
J³eLe& nesves mes ye®eeves Deewj efJeefMe<ìerkeÀjCe kesÀ ceeO³ece mes ueeYeÒeolee yeæ{eves kesÀ efueS otjmLe
mLeeveeW ceW yewkeÀ Dee@efHeÀme Òeef¬eÀ³eeDeeW (Òeesmesmesme) keÀes kesÀvêer³ekeÀ=le efkeÀ³ee pee jne nw~ Fmemes
MeeKeeDeeW keÀes cenlJeHetCe& ûeenkeÀ mebyebOe ef¬eÀ³eekeÀueeHeeW kesÀ efueS mebmeeOeveeW keÀes cegkeÌle keÀjves
ceW Yeer ceoo efceuesieer~ nceves kegÀí kesÀvêeW ceW Henues mes ner DeeJekeÀ meceeMeesOeve, peeJekeÀ
meceeMeesOeve, Keelee Keesueves, HeWMeve Òeesmesefmebie Deewj ®eskeÀ yegkeÀ FM³et pewmes keÀe³eeX keÀe kesÀvêerkeÀjCe
keÀj efue³ee nw~ HeefjCeece GlmeenJeOe&keÀ nQ Deewj Fmemes nceW keÀe³eeX keÀes peuoer efveHeìeves keÀer
keÀuee keÀer meerKe efceuesieer~ Deye nce meYeer ÒecegKe kesÀvêeW ceW kesÀvêerkeÀjCe keÀer ieefle keÀes yeæ{eves
keÀe keÀece keÀj jns nQ~ Fme DeY³eeme keÀe GÎsM³e lekeÀveerkeÀer keÀe YejHetj GHe³eesie keÀj ûeenkeÀ
mesJee ceW Je=ef×, MeeKee kesÀ keÀe³e&Yeej ceW keÀceer ueeves Deewj mebJ³eJenej ueeiele keÀce keÀjves kesÀ
efueS Òeef¬eÀ³eeDeeW keÀes ve³ee ªHe osvee nw~
ceeveJe mebmeeOeve efJekeÀeme
yeQkeÀ ves DeHeves keÀce&®eeefj³eeW ceW o#elee Deewj ueeYeÒeolee kesÀ Tb®es ceevekeÀeW keÀes ÒeeHle keÀjves kesÀ
efueS ceeveJe mebmeeOeve efJekeÀeme Hej yengle DeefOekeÀ peesj osvee peejer jKee nw~ keÀce&®eeefj³eeW keÀer
ceeveefmekeÀlee ceW HeefjJele&ve ueeves kesÀ efueS, GvekesÀ keÀe³e&efve<Heeove ceW cenlJeHetCe& megOeej ueeves kesÀ
efueS, GvekesÀ %eeve ceW efve³eefcele ªHe mes Je=ef× keÀjves kesÀ efueS Deewj GvekeÀes Òesefjle keÀjves/
ceev³elee osves/ Gef®ele mLeeve osves kesÀ efueS yeQkeÀ ves DeveskeÀ Henue keÀer nQ~ Fme efoMee ceW yeQkeÀ keÀer
ceeveJe mebmeeOeve veerefle keÀe mebkebsÀêCe efvejblej yeoueles ÒeeflemHeOeea JeeleeJejCe mes mìeHeÀ meom³eeW
keÀes lew³eej jKeves kesÀ efueS %eeve ÒeyebOeve, efveHegCelee ceW Je=ef×, DeefYeÒesjCe jCeveerefle³eeW Deewj
meebmke=ÀeflekeÀ HeefjJele&ve ceW megefJeOee GHeueyOe keÀjevee jne nw~
leodvegmeej ÒeefMe#eCe ÒeCeeueer Deewj FvÖeÀemìkeÀ®ej ceW yeoueeJe efkeÀ³ee ie³ee nw Deewj keÀejesyeej
³eespevee, MeeKee efJemleej, lekeÀveerkeÀer ³eespevee Deewj keÀejesyeej JeeleeJejCe kesÀ meeLe GmekeÀe
meecebpem³e efkeÀ³ee ie³ee nw~ Je<e& kesÀ oewjeve keÀce&®eeefj³eeW kesÀ %eeve Deewj efveHegCelee kesÀ mlej ceW
Je=ef× keÀjves kesÀ efueS efJeefYeVe DeebleefjkeÀ ÒeefMe#eCe keÀe³e&¬eÀce ³ee yeQkeÀ kesÀ efJeefYeVe ÒeefMe#eCe
ceneefJeÐeeue³eesb ceW efJeefYeVe DeebleefjkeÀ ÒeefMe#eCe keÀe³e&¬eÀce Dee³eesefpele efkeÀS ieS~ Fme
Òe³eespeve keÀes ÒeeHle keÀjves kesÀ GÎsM³e mes mLeeveer³elee kesÀ DeeOeej Hej DeveskeÀ DeuHeDeJeefOe keÀer
kesÀHmetue keÀe³e&MeeueeSb Dee³eesefpele keÀer ie³eeR~
yeQkeÀ ves efJeefYeVe keÀcH³etìj ÒeefMe#eCe keÀe³e&¬eÀceeW ceW keÀce&®eeefj³eesb keÀes veeefcele keÀj GvekeÀes
keÀcH³etìj efMeef#ele yeveeves keÀer ¢ef<ì mes DeeJeM³ekeÀ keÀoce GþeS nQ~ keÀesj yewefkebÀie meeu³egMeve
ceW MeeKeeDeeW kesÀ Deemeeveer mes ÒeJemeve kesÀ efueS mìeHeÀ meom³eeW kesÀ efueS DeveskeÀeveskeÀ keÀe³e&¬eÀce
³eLee DeeJeleea/Hegveefve&OeejCeer³e ÒeefMe#eCe Deewj JeemleefJekeÀ GHe³eeskeÌlee keÀe³e&¬eÀce Dee³eesefpele
efkeÀS ieS~ kegÀue efceueekeÀj 4228 keÀce&®eeefj³eeW keÀes meeryeerSme ceW ÒeefMeef#ele efkeÀ³ee ie³ee~
FmekesÀ DeefleefjkeÌle, kegÀí efJeK³eele mebmLeeveeW ³eLee SSmemeerDeeF&, nwojeyeeo Deewj yeQkeÀme&
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
33
Besides, a few specially designed in-company training programmes were
arranged at institutions of repute like ASCI, Hyderabad and Bankers
Training College, Mumbai. In all, 24853 employees were imparted training
at bank’s own colleges, 8902 were recipients of locational learning in
capsule workshops and another 529 had the benefit of attending the
programmes conducted by outside institutions. Besides, 4 officers were
deputed abroad for seminars and workshops. Bank had expended
Rs.470.43 lakh towards training activities during the year.
As motivation is an integral part of human resources development, as part
of its Centenary Year Celebrations bank suitably recognised the outstandingperformance of a number of staff members. Bank has also put in place anincentive scheme to recognize significant individual and team-efforts inachieving the bank’s business goals. Numerous staff members wererecognized for their outstanding performance under this scheme. Apartfrom enthusing the achievers under the scheme, this initiative is expectedto have beneficial demonstrative effect on others in enhancing their
competencies.
To encourage staff members to enrich their knowledge base, the Bank hasintroduced incentives to encourage participation in management courses,computer courses, various diploma examinations conducted by the IndianInstitute of Bankers, programmes for learning foreign languages, NationalCertification in Financial Market Examination (Depository ParticipantModule and AMFI Mutual Fund Module), Diploma in Training &Development, Certified Information Systems Auditor Examination (CISA)and Post Graduate Diploma in Securities Law.
Bank’s house journal ‘Taarangan’ was awarded 2nd Prize in ‘BilingualPublication’, by the Association of Business Communicators of India,Mumbai. It also received the Certificate of Merit from the Public Relations
Society of India, Hyderabad Chapter.
With the advent of technology, organisations all over the world are
undergoing a startling transformation in all important aspects of functioning.
A major initiative taken by the bank during the year is to make the entire
HR tech-savvy and technology-driven.
Compliance with Reservation Policy
The Bank is complying with the reservation policy of the Government of
India. Special Recruitment and SC/ST Cells at Head Office / Zonal Officesare functioning to monitor the implementation of the reservation policyand redressal of grievances relating to SC/ST/OBC Employees.
Pre-Recruitment Training and Pre-Promotion Training from clerical cadreto General Banking Officers cadre and from Scale - I to Scale - II promotionsare imparted to SC/ST candidates / staff. Details of such pre-promotion
trainings imparted to SC/ST employees during the year, 2005-06 are as
under :
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ÒeefMe#eCe keÀe³e&¬eÀce Dee³eesefpele efkeÀS ieS~ kegÀue efceueekeÀj, yeQkeÀ kesÀ mJe³eb kesÀ ÒeefMe#eCe
ceneefJeÐeeue³eeW ceW 24853 keÀce&®eeefj³eeW keÀes ÒeefMe#eCe Òeoeve efkeÀ³ee ie³ee~ 8902 keÀce&®eeefj³eeW
keÀes mLeeefvekeÀlee kesÀ DeeOeej Hej kesÀHmegue keÀe³e&¬eÀceeW ceW ÒeefMeef#ele efkeÀ³ee ie³ee Deewj Dev³e
529 ves yeenjer mebmLeeveeW Üeje Dee³eesefpele keÀe³e&¬eÀceeW ceW Yeeie efue³ee~ FmekesÀ DeefleefjkeÌle
4 DeefOekeÀeefj³eeW keÀes mesefceveejeW Deewj keÀe³e&MeeueeDeeW ceW Yeeie uesves kesÀ efueS Òeefleefve³egkeÌle
efkeÀ³ee ie³ee~ yeQkeÀ ves Je<e& kesÀ oewjeve ÒeefMe#eCe keÀe³e&¬eÀceeW Hej 470.43 ueeKe ©He³es J³e³e
efkeÀS~
®etbefkeÀ DeefYeÒesjCe ceeveJe mebmeeOeve efJekeÀeme keÀe SkeÀ DeefYevve Debie nw~ yeQkeÀ ves DeHeves Meleeyoer
Je<e& kesÀ SkeÀ Yeeie kesÀ ªHe ceW DeveskeÀ mìeHeÀ meom³eeW kesÀ Glke=À<ì keÀe³e&efve<Heeove keÀes ³eLee³eesi³e
ªHe mes ceev³elee oer~ yeQkeÀ ves J³eeqkeÌle efJeMes<e kesÀ GuuesKeveer³e keÀe³eeX SJeb yeQkeÀ kesÀ keÀejesyeejer
ue#³eeW keÀer ÒeeeqHle nsleg efkeÀS ieS ìerce Òe³eemeeW keÀes ceev³elee osves keÀer ¢ef<ì mes Òeeslmeenve
³eespevee Yeer DeejbYe keÀer nw~ DeveskeÀeveskeÀ mìeHeÀ meom³eeW keÀes Fme ³eespevee kesÀ Devleie&le GvekesÀ
GuuesKeveer³e keÀe³e&efve<Heeove kesÀ efueS ceev³elee oer ie³eer~ Fme ³eespevee kesÀ Devleie&le ceev³eleeÒeeHleeW
keÀes Glmeeefnle keÀjves kesÀ DeefleefjkeÌle Fme Henue keÀe Dev³e ueesieeW Hej Yeer GvekeÀer me#ecelee keÀes
yeæ{eves ceW mebkesÀleelcekeÀ ÒeYeeJe Heæ[ves keÀer iegbpeeFMe nw~
mìeHeÀ meom³eeW keÀes GvekesÀ %eeve DeeOeej ceW DeefYeJe=ef× keÀjves kesÀ efueS Òeeslmeeefnle keÀjves keÀer
o=ef<ì mes yeQkeÀ ves ÒeyebOeve keÀesmeex, keÀcH³etìj keÀesmeex, Yeejleer³e yeQkeÀj mebmLeeve Üeje Dee³eesefpele
efJeefYeVe ef[Hueescee Hejer#eeDeeW, efJeosMeer Yee<eeDeeW keÀes meerKeves kesÀ efueS keÀe³e&¬eÀceeW, efJeÊeer³e
yeepeej Hejer#ee (efve#esHeeieej menYeeieer cees[îetue Deewj SSceSHeÀDeeF& c³eg®³egDeue HebÀ[ cee[îetue)
ceW je<ì^er³e ÒeceeCeve, ÒeefMe#eCe SJeb efJekeÀeme ceW ef[Hueescee, ÒeceeefCele met®evee ÒeCeeueer uesKee
Hejer#ekeÀ Hejer#ee Deewj ÒeefleYetefle efJeefOe (keÀevetve) ceW Heer.peer.ef[Hueescee ceW menYeeefielee keÀes
Òeeslmeeefnle keÀjves kesÀ efueS Òeeslmeenve ³eespevee DeejbYe keÀer nw~
yeQkeÀ keÀer ie=nHeef$ekeÀe ``leejebieCe'' keÀes efÜ-Yeeef<ekeÀ ÒekeÀeMeveeW keÀer ÞesCeer ceW Yeejleer³e keÀejesyeej
mecÒes<ekeÀ mebIe, cegbyeF& keÀer Deesj mes efÜleer³e HegjmkeÀej mes veJeepee ie³ee~ Fmes Yeejleer³e pevemebHeke&À
meesmee³eìer, nwojeyeeo ®esHìj keÀer Deesj mes Yeer Þes<þlee ÒeceeCeHe$e ÒeeHle ngDee~
lekeÀveerkeÀer kesÀ Deeieceve mes efJeMJeYej kesÀ meYeer mebieþve keÀe³e&keÀueeHeeW kesÀ meYeer cenlJeHetCe&
HenuegDeeW ceW ®eeQkeÀevesJeeues ªHeevlejCe mes iegpej jns nQ~ yeQkeÀ Üeje Je<e& kesÀ oewjeve keÀer ie³eer
SkeÀ cenlJeHetCe& Henue mebHetCe& ceeveJe mebmeeOeve keÀes ìskeÀ-mesJeer Deewj lekeÀveerkeÀer ®eeefuele yeveeves
kesÀ ªHe ceW jner nw~
Deej#eCe veerefle keÀe DevegHeeueveyeQkeÀ Yeejle mejkeÀej keÀer Deej#eCe veerefle keÀe DevegHeeueve keÀj jne nw~ ÒeOeeve keÀe³ee&ue³e/
Deeb®eefuekeÀ keÀe³ee&ue³eeW ceW efJeMes<e efve³eespeve Deewj Devegmetef®ele peeefle/pevepeeefle keÀ#e Devegmetef®ele
peeefle/pevepeeefle/Dev³e efHeíæ[s Jeie& kesÀ keÀce&®eeefj³eeW mes mebyebefOele Deej#eCe veerefle kesÀ keÀe³ee&vJe³eve
kesÀ DevegÒeJele&ve Deewj efMekeÀe³eleeW kesÀ efveHeìeve keÀe keÀe³e& osKe jns nQ~
Devegmetef®ele peeefle/pevepeeefle kesÀ DeY³eefLe&³eeW/mìeHeÀ meom³eeW keÀes efueefHekeÀ Jeie& mes meeceev³e
yeQefkebÀie DeefOekeÀejer mebJeie& Deewj Jesleveceeve I mes II ceW HeoesVeefle mes mebyebefOele efve³eespeve HetJe&
ÒeefMe#eCe Deewj HeoesVeefle HetJe& ÒeefMe#eCe Òeoeve efkeÀ³ee peelee nw~ Je<e& 2005-06 kesÀ oewjeve
Devegmetef®ele peeefle/pevepeeefle kesÀ keÀce&®eeefj³eeW keÀes HeoesVeefle HetJe& efoS ieS Fme lejn kesÀ
ÒeefMe#eCeeW keÀe y³eewje efvecveevegmeej nw ë
1. Officers 7 6 days 177 89Staff
2. Clerical 19 6 days 1227 420Staff
3. SubordinateStaff 37 6 Days 935 284
No. of programmes
Conducted
Duration of
Programme
No. of Employees
SC ST
¬eÀ.meb. mebJeie& Dee³eesefpele keÀe³e&¬eÀceeW keÀer keÀce&®eeefj³eeW keÀer mebK³ee
keÀe³e&¬eÀceeW DeJeefOe
keÀer mebK³ee Depee Depepee
1. DeefOekeÀejer mebJeie& 7 6 efove 177 89
2. efueefHekeÀer³e mebJeie& 19 6 efove 1227 420
3. DeOeervemLe mebJeie& 37 6 efove 935 284
Sr.
No.Cadre
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
34
The Bank has designated two General Managers as Chief Liaison Officers
for OBCs and SCs/STs respectively at Head Office. Officers belonging to
SC/ST/OBC categories are designated as Liaison Officers / Cell Officers
at Zonal Offices. In terms of Government guidelines, Rosters maintained
at Head Office/ Zonal Offices are inspected annually. SC/ST Cells
established at Head Office and Zonal Offices are also associated with
implementation of reservations in respect of other categories like Ex-
servicemen / Physically Handicapped etc. Category-wise break-up of staff
is as under :
cee®e& meceeeqHle March-end 2005 2006
kegÀue keÀce&®eeefj³eeW keÀer mebK³ee Total No. of Employees 42635 42206
DeefOekeÀejer Officers 12166 13119
efueefHekeÀ Clerks 20879 19620
DeOeervemLe keÀce&®eejer Sub-staff 9590 9467
Yeejleer³e keÀe³ee&ue³eeW ceW In Indian Offices 42220 41808
DeesJejmeerpe keÀe³ee&ue³eeW ceW In Overseas Offices 415 398
ceefnuee keÀce&®eejer Women Employees 6525 6517
kegÀue keÀe % % to Total 15.30 15.44
MeejerefjkeÀ efJekeÀueebie Handicapped 620 636
kegÀue keÀe % % to Total 1.45 1.50
DeefOekeÀejer efueefHekeÀ DeOeervemLe keÀce&®eejer kegÀue
cee®e& meceeeqHle-2006 March-end-2006 Officers Clerks Sub-staff Total
Deveg. peeefle SC 2212 2894 3423 8529
Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 17.11 14.88 36.29 20.40
kesÀ kegÀue mìeHeÀ keÀe %
Deveg. pevepeeefle ST 947 1165 899 3011
Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 7.32 5.99 9.53 7.20
kesÀ kegÀue mìeHeÀ keÀe %
Deesyeermeer OBC 236 544 576 1356
Yeejleer³e keÀe³ee&ue³eeW % to total Staff in Indian Offices 1.83 2.80 6.10 3.24kesÀ kegÀue mìeHeÀ keÀe %
Inspection and Audit
Inspection and Audit is an important tool in the hands of the Management
to ensure that the systems and procedures laid down by the Bank are
implemented in right earnest by all the branches/controlling offices. It also
helps the Management at various levels in evaluating the effectiveness of
the Internal Control Mechanism in the Bank. The audit report is a blue
print to the branch functionaries and controllers for initiation of actions for
correction of systemic deficiencies. Bank is having a well established
Internal Control Mechanism.
The following are some of the highlights of functioning of Inspection &
Audit Department during the year 2005-2006:
� All branches have been audited under Risk Based Internal Audit
system for the 3rd successive year.
� Completion of Internal Audit Plan 2005-06 in time.
yeQkeÀ ves ÒeOeeve keÀe³ee&ue³e ceW oes ceneÒeyebOekeÀeW keÀes ¬eÀceMeë Dev³e efHeíæ[e Jeie& Deewj Devegmetef®ele
peeefle/pevepeeefle mes mebyebefOele keÀce&®eeefj³eeW kesÀ efueS cegK³e mebHeke&À DeefOekeÀejer kesÀ ªHe ceW
Heoveeefcele efkeÀ³ee nw~ Depee/Depepeeefle/Dev³e efHeíæ[e Jeie& kesÀ DeefOekeÀeefj³eeW keÀes Deeb®eefuekeÀ
keÀe³ee&ue³eeW ceW mebHeke&À DeefOekeÀejer / keÀ#e DeefOekeÀejer kesÀ ªHe ceW Heoveeefcele efkeÀ³ee ie³ee nw~
mejkeÀejer efoMeeefveoxMeeW kesÀ DevegªHe ÒeOeeve keÀe³ee&ue³e/Deeb®eefuekeÀ keÀe³ee&ue³eeW ceW jKes ie³es
jesmìjeW keÀe Jeeef<e&keÀ DeeOeej Hej efvejer#eCe efkeÀ³ee peelee nw~ ÒeOeeve keÀe³ee&ue³e/Deeb®eefuekeÀ
keÀe³ee&ue³eeW ceW mLeeefHele Deveg peeefle/pevepeeefle keÀ#e Dev³e ÒeJeieexb ³eLee YetleHetJe& mewefvekeÀeW/
MeejerefjkeÀ ªHe mes efJekeÀueebie J³eeqkeÌle³eeW kesÀ Deej#eCe kesÀ keÀe³ee&vJe³eve mes Yeer mecye× nQ~
mìeHeÀ keÀe ÒeJeie&Jeej y³eewje efvecveevegmeej nw ë
efvejer#eCe Deewj uesKee Hejer#ee
efvejer#eCe SJeb uesKee Hejer#ee ÒeyebOeve kesÀ neLe ceW ³en megefveefM®ele keÀjves kesÀ efueS SkeÀ
cenlJeHetCe& meeOeve nw efkeÀ yeQkeÀ Üeje efveOee&efjle ÒeCeeueer SJeb Òeef¬eÀ³eeDeeW keÀe meYeer MeeKeeDeeW/
efve³eb$eCe keÀe³ee&ue³eeW Üeje mener HeefjÒes#³e cebs keÀe³ee&vJe³eve efkeÀ³ee peelee nw~ Fmemes yeQkeÀ keÀes
yeQkeÀ kesÀ Yeerlej efJeefYeVe mlejeW Hej DeebleefjkeÀ efve³eb$eCe cewkesÀefvepce keÀer ÒeYeeJeMeeruelee kesÀ
cetu³eebkeÀve ceW Yeer ceoo efceueleer nw~ uesKee Hejer#ee efjHeesì& MeeKee, efve³eb$ekeÀ keÀe³ee&ue³eeW ceW
HeomLe HeoeefOekeÀeefj³eeW kesÀ efueS ÒeCeeueer mes pegæ[er keÀefce³eeW kesÀ efvejekeÀjCe kesÀ efueS keÀej&JeeF&
DeejbYe keÀjves kesÀ efueS cenlJeHetCe& ªHejsKee (yuet efÒebì) nw~ yeQkeÀ ceW megmLeeefHele DeebleefjkeÀ
efve³eb$eCe cewkesÀefvepce efJeÐeceeve nw~
� Je<e& 2005-06 kesÀ oewjeve efvejer#eCe SJeb uesKee Hejer#ee efJeYeeie kesÀ Üeje efkeÀS ieS
keÀe³e&keÀueeHeeW ceW mes kegÀí efvecveefueefKele Devegmeej nQ ë
� ueieeleej leermejs Je<e& meYeer MeeKeeDeeW keÀer peesefKece DeeOeeefjle DeebleefjkeÀ uesKee
Hejer#ee ÒeCeeueer kesÀ DeOeerve uesKee Hejer#ee keÀj oer ieF&~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
35
� Management Audit of controlling offices was completed as per
schedule.
� 81% of Advances and 67% of Deposits of the Bank were covered
under Concurrent Audit as against the stipulated level of 50% each.
� All the Foreign Branches of the Bank were covered under Concurrent
Audit.
� Internal audit of all the Foreign Branches was completed under the
18 months cycle by deputing India based officers.
� 2022 branches were covered under Revenue Audit.
� Credit Audit of 2191 accounts in 417 branches were undertaken.
� System Audit (Computer Audit) of branches and controlling offices
completed as per schedule.
� Consequent upon bringing more and more branches under CBS (Core
Banking Solution), a well defined Information Systems Audit Policy
has been framed.
� Well defined Audit Policies duly approved by Audit Committee of
Directors and Manual of Instructions are in place for various types
of audit.
� 96% of the branches audited were rated as Satisfactory as a result of
overall improvement in their functioning.
Compliance with Reserve Bank of India Guidelines
Compliance Unit was established at Head Office as per Reserve Bank of
India guidelines in switching over to Risk Based Supervision under Basel
II norms. A General Manager has been designated as Compliance Officer
of the Bank to monitor the implementation of various guidelines being
received from Reserve Bank of India and Government of India. The Unit
is reporting to the Board of Directors on quarterly basis. Systematic
approach is being followed in the process of compliance.
Compliance Unit is also monitoring the submission of various calendar
Review items to the Board and its various Committees as per Reserve
Bank of India guidelines. There was no overdue position for submission
of such Review items as on 31.03.2006.
Vigilance
The Vigilance machinery of the Bank is headed by the Chief Vigilance
Officer of the rank of General Manager and assisted by officers having
knowledge / background of investigation and disciplinary action matters
as well as banking, for professional management of the department.
CUSTOMER SERVICE
The bank is conscious of the fact that the customer is the king and has
taken initiatives to meet the ever escalating expectations of the customers.
The bank is also alive to the emerging competition from new more agile
and tech savvy players and is continuously fine tuning its strategies to
meet the challenges. Various recommendations of the Government, Reserve
Bank of India and Indian Banks’ Association have been implemented by
the Bank. Excellent customer service, which has always been an ingrained
culture with us, is being constantly improved to create customer delight.
� DeebleefjkeÀ uesKee Hejer#ee ³eespevee 2006 keÀe mece³e Hej DevegHeeueve~
� efve³eb$ekeÀ keÀe³ee&ue³eeW keÀer ÒeyebOeve uesKee Hejer#ee efveOee&efjle mece³eeJeefOe ceW HetCe& keÀer ieF&~
� Òel³eskeÀ kesÀ efueS efveOee&efjle 50% mlej kesÀ meeceves yeQkeÀ kesÀ DeefûeceeW kesÀ 81% Yeeie
Deewj peceejeefMe³eeW kesÀ 67% Yeeie keÀes meceJeleea uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~
� yeQkeÀ keÀer meYeer efJeosMeer MeeKeeDeeW keÀes meceJeleea uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~
� Yeejle efmLele DeefOekeÀeefj³eeW keÀes Òeefleefve³egkeÌle keÀjkesÀ meYeer efJeosMeer MeeKeeDeeW keÀer
DeebleefjkeÀ uesKee Hejer#ee 18 cenerveeW kesÀ ®e¬eÀ kesÀ DeOeerve HetCe& keÀj oer ieF&~
� 2022 MeeKeeDeeW keÀes jepemJe uesKee Hejer#ee kesÀ oe³ejs ceW uee³ee ie³ee~
� 417 MeeKeeDeeW kesÀ 2191 KeeleeW ceW $eÝCe uesKee Hejer#ee keÀer ieF&~
� efveOee&efjle mece³eeJeefOe ceW MeeKeeDeeW leLee efve³eb$ekeÀ keÀe³ee&ue³eeW keÀer kebÀH³etìj uesKee
Hejer#ee HetCe& keÀj oer ieF&~
� DeefOekeÀ mes DeefOekeÀ MeeKeeDeeW keÀes meeryeerSme (keÀesj yeQefkebÀie meceeOeeve) kesÀ DeOeerve
ueeS peeves kesÀ HeM®eele SkeÀ megmHe<ì HeefjYeeef<ele met®evee ÒeCeeueer uesKee Hejer#ee veerefle
lew³eej keÀer ieF&~
� efJeefYeVe ÒekeÀej keÀer uesKee Hejer#ee kesÀ efueS efveosMekeÀeW keÀer uesKee Hejer#ee meefceefle Üeje
efJeefOeJele Devegceesefole megmHe<ì HeefjYeeef<ele uesKee Hejer#ee veerefle Deewj cewvegDeue lew³eej
efkeÀ³ee ie³ee~
� keÀe³e&keÀueeHeeW ceW meceûe ©He mes megOeej keÀjves mes uesKee Hejeref#ele MeeKeeDeeW ceW mes 96%
MeeKeeDeeW keÀes meblees<eÒeo ªHe ceW DeekeÀefuele efkeÀ³ee ie³ee~
Yeejleer³e efj]peJe& yeQkeÀ kesÀ efoMeeefveoxMeeW keÀe DevegHeeueve
yeemesue II ceeveoC[eW kesÀ Debleie&le peesefKece DeeOeeefjle He³e&Jes#eCe kesÀ efueS Yeejleer³e efjpeJe&
yeQkeÀ kesÀ efoMeeefveoxMeeW kesÀ Devegmeej ÒeOeeve keÀe³ee&ue³e ceW DevegHeeueve FkeÀeF& mLeeefHele keÀer ieF&
Leer~ Yeejleer³e efj]peJe& yeQkeÀ SJeb Yeejle mejkeÀej mes ÒeeHle efJeefYeVe efoMeeefveoxMeeW kesÀ keÀe³ee&vJe³eve
kesÀ ÒeyebOeve nsleg DevegHeeueve DeefOekeÀejer kesÀ ªHe ceW SkeÀ ceneÒeyebOekeÀ keÀes veeefcele efkeÀ³ee ie³ee
nw~ ³en FkeÀeF& efleceener DeeOeej Hej efveosMekeÀ yees[& keÀes met®evee Òemlegle keÀjleer nw~ DevegHeeueve
kesÀ ÒeyebOe keÀer ³en Òeef¬eÀ³ee ³eLee³eesi³e {bie mes keÀece keÀj jner nw~
DevegHeeueve FkeÀeF&, yees[& Deewj GmekeÀer efJeefYeVe meefceefle³eeW keÀes Yeejleer³e efj]peJe& kesÀ efoMeeefveoxMeeW
kesÀ Devegmeej efJeefJeOe kewÀueW[j meceer#ee ceoeW kesÀ ÒemlegleerkeÀjCe keÀer Yeer efveiejeveer keÀjleer nw~
meleke&Àlee
yeQkeÀ keÀer meleke&Àlee ceMeervejer kesÀ ÒecegKe ceneÒeyebOekeÀ kesÀ mlej kesÀ cegK³e meleke&Àlee DeefOekeÀejer
nQ Deewj DevJes<eCe leLee DevegMeemeveelcekeÀ keÀej&JeeF& kesÀ %eeve/He=<þYetefce kesÀ meeLe-meeLe yeQefkebÀie
keÀe %eeve jKevesJeeues DeefOekeÀejer efJeYeeie kesÀ J³eeJemeeef³ekeÀ ÒeyebOeve kesÀ efueS GvekeÀer mene³elee
keÀjles nQ~
ûeenkeÀ mesJee
Fme leL³e mes yeQkeÀ JeeefkeÀHeÀ nw efkeÀ ûeenkeÀ jepee nw Deewj ûeenkeÀeW keÀer yeæ{leer DeHes#eeDeeW keÀer
Hetefle& keÀjves nsleg yeQkeÀ ves kegÀí Henue keÀer nQ~ yeQkeÀ Fme leL³e mes Yeer me®esle nw efkeÀ veS DeefOekeÀ
o#e SJeb kegÀMeue ÒeewefÐeefiekeÀer ³egkeÌle ueesieeW mes ÒeeflemHeOee& keÀjveer nw Deewj ®egveewefle³eeW keÀe
meecevee keÀjves kesÀ efueS Jen melele ªHe mes keÀe³e&veerefle kesÀ meeLe leeuecesue jKelee nw~ yeQkeÀ ves
mejkeÀej, Yeejleer³e efj]peJe& yeQkeÀ leLee Yeejleer³e yeQkeÀ mebIe keÀer efJeefJeOe efmeHeÀeefjMeeW keÀes
keÀe³ee&eqvJele efkeÀ³ee nw~ Glke=À<ì ûeenkeÀ mesJee nceejs yeQkeÀ kesÀ meeLe HekeÌkeÀer mebmke=Àefle kesÀ ªHe ceW
pegæ[ ie³ee nw Deewj ûeenkeÀeW ceW meblees<e keÀe me=peve keÀjves nsleg nce FmeceW melele megOeej keÀjles Dee
jns nQ~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
36
8 a.m. to 8 p.m. Banking
With a view to increasing our customer base and also to extend additional
banking hours to our existing clientele, the bank has introduced 8 a.m. – 8
p.m. banking in 105 branches across the country. It was increasingly felt
that customers feel more comfortable to physically visit the branch and
transact business. This personal touch is of vital importance. The facilities
of cash withdrawal and deposit, cheque deposit, issuance of Demand
Drafts and payslips, updation of pass books etc. are being offered during
the extended hours of business in these branches.
Quality Policy
The Bank has taken steps in order to render speedy, efficient and quality
service to our customers.
The policy, as enumerated by the Bank, centres around our commitment to
become the ‘Bank of Choice’ by providing superior proactive, innovative
state-of-the-art banking services with care and concern for the customers
and patrons.
Adhoc Committee on Procedures and Performance Audit on
Customer Service
The Adhoc Committee in the Bank was set up in January 2004 as directed
by the Reserve Bank of India to support broad-based improvement in
customer service through simplification of the processes and procedures
in relation to various banking services. In terms of RBI instructions, the
Adhoc committee, which was in operation up to March 2005, has been
renamed and restructured into Standing Committee on Customer Service
with broad-based membership of Chairman & Managing Director,
Executive Director, five General Managers and one Assistant General
Manager. Three non official members add value to deliberations of the
committee. During the year, the committee met 3 times to deliberate and
discuss various issues for effecting improvements in customer service.
Know Your Customer (KYC)
Indian Banks’ Association has framed a model policy on the Know Your
Customer norms. Our bank adopted the policy on 24.05.2005. The branches
properly identify the customer either by an introductory reference from an
existing account holder or on the basis of the documents provided by the
customer. Simplified KYC norms for accounts of low income customers
have also been introduced by our bank under RBI instructions.
Anti Money Laundering MeasuresImplementation of Prevention of Money Laundering Act, 2002
Gazette Notification of 01.07.2005 by Government of India
The Prevention of Money Laundering Act,2002 was enacted by the
Parliament to prevent Money Laundering. The Goverment of India in
consultation with the RBI has framed the Prevention of Money Laundering
Rules 2005 regarding Maintenance of Records of nature and value of
transactions, the procedure and manner of maintaining and the time for
furnishing information and verification of records of the identity of the
clients of the Banking companies, Financial Institutions and Intermediaries
for implementation of the said Act.
megyen 8.00 mes mee³eb 8.00 yepes lekeÀ yeQefkebÀie
nceejs ûeenkeÀ DeeOeej ceW Je=ef× keÀjves SJeb nceejs Jele&ceeve ûeenkeÀeW keÀes DeefleefjkeÌle yeQefkebÀie
mece³e ceW efJemleej keÀj kesÀ mesJee osves nsleg Yeer yeQkeÀ ves osMe Yej ceW 105 MeeKeeDeeW ceW megyen
8.00 yepes mes mee³eb 8.00 yepes lekeÀ yewefkebÀie ueeiet keÀj oer nw~ DeefOekeÀebMeleë ³en cenmetme
efkeÀ³ee peelee Lee efkeÀ ûeenkeÀeW keÀes MeeKee ceW J³eeqkeÌleMeë YeWì keÀjvee Deewj DeHeves J³eJenej
keÀjvee DeefOekeÀ Deemeeve ueielee nw~ ³en J³eeqkeÌleiele ueieeJe ner Del³eeJeM³ekeÀ ªHe mes
cenlJeHetCe& nw~ Fve MeeKeeDeeW ceW efJemleeefjle mece³e kesÀ oewjeve vekeÀo DeenjCe Je pecee, ®eskeÀ
pecee keÀjvee, ceebie [^eHeÌì Deewj Yegieleeve He®eer& peejer keÀjvee, HeemeyegkeÀ DeÐeleve keÀjvee
Fl³eeefo megefJeOeeSb Òeoeve keÀer peeleer nQ~
iegCeJeÊee veerefle
ûeenkeÀeW keÀes MeerIe´, lelHej SJeb iegCeelcekeÀ mesJee Òeoeve keÀjves kesÀ efueS yeQkeÀ ves kegÀí GHee³e
efkeÀS nQ~
yeQkeÀ Üeje le³e keÀer ieF& veerefle kesÀ Devegmeej nceejer Òeefleye×lee nw efkeÀ yeQkeÀ keÀes Hemeboeroe yeQkeÀ
yeveeves nsleg DeHeves ûeenkeÀeW Deewj mebj#ekeÀeW keÀes Glke=À<ì, J³eJene³e&, veJeesvces<e Del³eeOegefvekeÀ
yeQefkebÀie mesJeeSb lelHejlee Deewj Meeueervelee mes Òeoeve keÀjvee~
ûeenkeÀ mesJee mes mebyebefOele Òeef¬eÀ³ee Deewj keÀe³e& efve<Heeove Hej uesKee Hejer#ee
leoLe& meefceefle
Yeejleer³e efj]peJe& yeQkeÀ kesÀ efveosMe kesÀ Devegmeej peveJejer 2004 ceW yeQkeÀ ceW leoLe& meefceefle keÀer
mLeeHevee keÀer ieF& pees efJeefYeVe yeQefkebÀie mesJeeDeeW mes mebyebefOele Òeef¬eÀ³ee Deewj keÀe³e& efJeefOe keÀes
mejue yeveekeÀj ûeenkeÀ mesJee ceW efJemle=le DeeOeej Hej megOeej kesÀ efueS men³eesie keÀjsieer~
Yeejleer³e efj]peJe& yeQkeÀ keÀer MeleeX kesÀ Devegmeej leoLe& meefceefle pees cee®e& 2005 lekeÀ Heefj®eeueve
ceW Leer GmekeÀe Hegvevee&ceebkeÀve efkeÀ³ee ie³ee Deewj efJemle=le DeeOeej Hej ûeenkeÀ mesJee Hej mLee³eer
meefceefle kesÀ ªHe ceW Hegveie&þve efkeÀ³ee ie³ee efpemekesÀ DeO³e#e SJeb ÒeyebOe efveosMekeÀ, keÀe³e&HeeuekeÀ
efveosMekeÀ, Heeb®e ceneÒeyebOekeÀ SJeb SkeÀ mene³ekeÀ ceneÒeyebOekeÀ meom³e nQ~ leerve iewj mejkeÀejer
meom³e meefceefle kesÀ efJe®eej efJeceMe& ceW men³eesie osves kesÀ efueS jnWies~ Je<e& kesÀ oewjeve ûeenkeÀ
mesJee ceW megOeej ueeves kesÀ efueS efJeefYeVe cegÎeW Hej ®e®ee& keÀjves kesÀ efueS meefceefle keÀer leerve yewþkeWÀ
ngF&~
DeHeves ûeenkeÀ keÀes peeefveS (kesÀJeeF&meer)
Yeejleer³e yeQkeÀ mebIe ves DeHeves ûeenkeÀ keÀes peeefveS ceeveob[ Hej SkeÀ cee@[ue veerefle lew³eej keÀer
nw~ nceejs yeQkeÀ ves efoveebkeÀ 24.05.2005 keÀes ³en veerefle DeHeveeF& nw~ MeeKeeSb mecegef®ele ªHe
mes ûeenkeÀeW keÀer Hen®eeve ³ee lees Jele&ceeve KeeleeOeejkeÀ mes Heefj®e³eelcekeÀ meboYe& mes DeLeJee
ûeenkeÀ Üeje efoS ieS omleeJespeesb kesÀ DeeOeej Hej keÀj mekeÀleer nQ~ nceejs yeQkeÀ ves Yeejleer³e
efj]peJe& yeQkeÀ kesÀ DevegosMeeW kesÀ Devegmeej DeuHe Dee³e ûeenkeÀeW kesÀ KeeleeW kesÀ efueS Yeer DeHeves
ûeenkeÀeW keÀes peeefveS Deemeeve ceeveob[ ueeiet efkeÀS nQ~
Oeve MeesOeve efveJeejCe GHee³e
Oeve MeesOeve efveJeejCe DeefOeefve³ece 2002 keÀe keÀe³ee&vJe³eve
Yeejle mejkeÀej Üeje efoveebkeÀ 01.07.2005 keÀer iepeì DeefOemet®evee
OeveMeesOeve efveJeejCe nsleg mebmeo Üeje Oeve MeesOeve efveJeejCe DeefOeefve³ece 2002 ueeiet efkeÀ³ee
ie³ee~ Yeejle mejkeÀej ves Yeejleer³e efj]peJe& yeQkeÀ kesÀ HejeceMe& mes keÀefLele DeefOeefve³ece kesÀ
keÀe³ee&vJe³eve kesÀ efueS mebJ³eJenejeW kesÀ mJeªHe Deewj cetu³e kesÀ efjkeÀe@[& jKeves mes mebyebefOele
keÀe³e&efJeefOe Deewj efkeÀme ÒekeÀej efjkeÀe@[& jKevee nw Deewj met®evee keÀer Òemlegefle nsleg mece³eeJeefOe
leLee yeQefkebÀie kebÀHeefve³eeW, efJeÊeer³e mebmLeeveeW Deewj ceO³eJeleea mebmLeeveeW kesÀ ûeenkeÀeW keÀer Hen®eeve
kesÀ efjkeÀe@[& kesÀ mel³eeHeve nsleg Oeve MeesOeve efveJeejCe efve³eceeJeueer 2005 lew³eej keÀer nw~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
37
The Act requires banks to appoint principal officer, verify identity of
clients, maintain records and furnish information. We have framed
guidelines for implementing the various provisions of the act. We have
designated General Manager (Operations) as the Principal Officer (MLRO)
for the bank. For submitting the various reports to Financial Intelligence
Unit – India, we have also formed Anti Money Laundering Cell at Head
Office. Necessary Technology initiatives have been taken to comply with
the requirement for implementing the guidelines/rules.
Setting up of Customer Committee of Directors
A Customer Service Committee at Board level was set up, consisting of
the Chairman & Managing Director, the Executive Director and three
Directors, including RBI Nominee Director. This committee is not only
overseeing the work of the Standing Committee on Customer Service but
also suggests innovative measures for enhancing the quality of customer
service and improving the level of customer satisfaction for all categories
of clientele.
Official Language
During the year, Bank’s performance in implementing Official Language
policy was commendable. Bank continued its vigorous efforts to achieve
the various targets set out in Annual Implementation Programme for the
year 2005-06. For effective implementation of Official Language Policy,
Bank has promoted 21 clerical staff as Official Language Officers and
posted them at various zones.
26 Hindi workshops were conducted during the year in which 675 Officers/
Clerks were trained to use Hindi in day to day banking. Hindi stenographers
were imparted training and training was also imparted within the time
frame to those who do not possess working knowledge of Hindi.
Third Sub-committee of Parliamentary Committee on Official Language
reviewed the Bank’s performance while inspecting the Bank’s branches.
The Drafting and Evidence Sub-committee of Parliamentary Committee
on Official Language reviewed performance of Bank’s branches. Officials
from various Regional Implementation Offices of Ministry of Home
Affairs, Official Language Deptt. inspected various branches of the Bank
across the country. Ministry of Finance (Banking Division) carried out a
detailed inspection of the Head Office and appreciated performance of the
Bank in implementing official language policy.
During the year, Bank received various awards for its performance for
implementation of official Language policy. Prominent among them are
first prize and second prize to the Bhubaneshwar Zonal Office and Patna
Zonal Office respectively from Ministry of Home Affairs. SLBC,
Maharashtra awarded consolation prize to the Bank.
During the year, Official Language Department of the bank translated into
Hindi Bank’s SME Policy, Booklet on Retail Banking products, Credit
Monitoring Policy, check list for Core Banking Branches as well as various
publicity materials/documents. Bank also gives wide publicity to its products
in Hindi through print and electronic media.
DeefOeefve³ece ceW yeQkeÀeW mes ³en DeHesef#ele nw efkeÀ Jes ÒeOeeve DeefOekeÀejer keÀer efve³egeqkeÌle keÀjW, ûeenkeÀeW keÀer
Hen®eeve keÀe mel³eeHeve keÀjW, efjkeÀe@[& jKeW leLee met®evee Òemlegle keÀjW~ DeefOeefve³ece kesÀ efJeefJeOe
ÒeeJeOeeveeW kesÀ keÀe³ee&vJe³eve kesÀ efueS nceves efoMeeefveoxMe lew³eej efkeÀS nQ~ nceves yeQkeÀ kesÀ efueS ÒeOeeve
DeefOekeÀejer (SceSueDeejDees) kesÀ ªHe ceW ceneÒeyebOekeÀ (Heefj®eeueve) keÀes Heoveeefcele efkeÀ³ee nw~
efJeÊeer³e met®evee FkeÀeF& - Yeejle keÀes efJeefJeOe efjHeesìeX kesÀ ÒemlegleerkeÀjCe kesÀ efueS nceves ÒeOeeve
keÀe³ee&ue³e ceW Oeve MeesOeve efveJeejCe keÀ#e keÀer mLeeHevee Yeer keÀer nw~ efoMeeefveoxMeeW/efve³eceeJeueer kesÀ
keÀe³ee&vJe³eve kesÀ efueS DeHes#eeDeeW kesÀ Heeueve nsleg DeeJeM³ekeÀ ÒeewÐeesefiekeÀer Henue Yeer keÀer ieF& nw~
yees[& efveosMekeÀeW keÀer ûeenkeÀ meefceefle keÀer mLeeHevee
yees[& mlej Hej ûeenkeÀ mesJee meefceefle mLeeefHele keÀer ieF& Leer efpemeceW yeQkeÀ kesÀ DeO³e#e SJeb ÒeyebOe
efveosMekeÀ, keÀe³e&HeeuekeÀ efveosMekeÀ Deewj Yeejleer³e efj]peJe& yeQkeÀ kesÀ veeefceefle efveosMekeÀ meefnle
leerve efveosMekeÀ meefcceefuele nQ~ ³en meefceefle ve kesÀJeue ûeenkeÀ mesJee Hej mLee³eer meefceefle kesÀ
keÀe³eeX keÀe efvejer#eCe keÀjleer nw yeefukeÀ ûeenkeÀ mesJee keÀer iegCeJeÊee ceW Je=ef× kesÀ efueS veJeesvces<eer
GHee³eeW keÀe megPeeJe osleer nw Deewj meYeer ÞesefCe³eeW kesÀ ûeenkeÀeW kesÀ efueS ûeenkeÀ meblegef<ì kesÀ mlej
ceW megOeej ueeleer nw~
jepeYee<ee
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jne~ Je<e& 2005-06 kesÀ efueS Jeeef<e&keÀ keÀe³ee&vJe³eve keÀe³e&¬eÀce kesÀ efJeefJeOe ue#³eeW keÀes ÒeeHle
keÀjves kesÀ efueS yeQkeÀ ves DeLekeÀ Òe³eeme peejer jKes~ jepeYee<ee veerefle kesÀ ÒeYeeJeer keÀe³ee&vJe³eve
kesÀ efueS yeQkeÀ ves 21 efueefHekeÀer³e mìeHeÀ keÀes jepeYee<ee DeefOekeÀeefj³eeW kesÀ ªHe ceW HeoesVele
efkeÀ³ee Deewj GvnW efJeefJeOe Deb®eueeW ceW lewveele efkeÀ³ee~
Je<e& kesÀ oewjeve 26 efnboer keÀe³e&MeeueeSb meb®eefuele keÀer ieF¥ efpeveceW 675 DeefOekeÀeefj³eeW/
efueefHekeÀeW keÀes yeQefkebÀie kesÀ owefvekeÀ keÀe³eeX ceW efnboer keÀe Òe³eesie keÀjves keÀe ÒeefMe#eCe efo³ee ie³ee~
efnboer DeeMegefueefHekeÀeW keÀes Yeer ÒeefMe#eCe efo³ee ie³ee Deewj efpevnW efnboer keÀe keÀe³e&meeOekeÀ %eeve
veneR nw GvnW Yeer mece³e meercee kesÀ Yeerlej ÒeefMe#eCe efo³ee ie³ee~ jepeYee<ee Hej mebmeoer³e
meefceefle keÀer leermejer GHe meefceefle Üeje MeeKeeDeeW kesÀ efvejer#eCe kesÀ mece³e yeQkeÀ kesÀ keÀe³e&efve<Heeove
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
38
BANK’S SUBSIDIARIES/ASSOCIATES
Regional Rural Banks (RRBs)
The Bank has sponsored 16 Regional Rural Banks which are located in 5
States. These RRBs are operating in 37 districts (with a network of 976
branches , 4 Extension counters and 2 Satellite Branches ) in which our
Bank is entrusted with the Lead Bank responsibility. Besides initial
subscription of Rs. 5.60 crore to their issued capital, the Bank has infused
additional equity of Rs. 54.70 crore towards restructuring of these RRBs.
The Bank is continuing to provide necessary managerial and administrative
support to these RRBs. As at the end of financial year 2005-2006 the total
deposits and advances of these RRBs have grown to Rs.4346 crore and
Rs.2176 crore respectively. 15 out of 16 RRBs have registered profit
during 2005-2006.
BOI Shareholding Ltd.
Bank’s association with the Capital Market spans over a period of more
than seven decades with the clearing and settlement functions of the Stock
Exchange, Mumbai being handled by the Bank. Later on in 1989, Bank set
up BOI Shareholding Ltd. as a joint venture with the Stock Exchange,
Mumbai (BSE) to manage the clearing house activities of BSE. The
company is carrying out the demat rolling settlements on T+2 basis of the
Exchange through the National Securities Depository Services Ltd.
(NSDL) and Central Depository Services (India) Ltd. (CDSL) efficiently
and also the settlement of G-Secs through an integrated computerized
system.
With a view to optimising use of its trained manpower and sophisticated
IT infrastructure, besides handling settlement related work of the Exchange,
the company also extends depository services to member brokers of the
stock exchanges and retail investors. During 2004-05, the company had
commenced new business activity i.e. franking of stamp documents, which
has proved to be highly lucrative and has been contributing significantly to
the revenues of the company. With the corporatisation of Mumbai Stock
Exchange, and its transformation into a corporate entity viz. the Bombay
Stock Exchange Ltd. during the year, the clearing and settlement functions
of BOI Shareholding Ltd. are likely to get transferred to a clearing
corporation in the near future.
BOISL earned a net profit of Rs. 309.25 lakh during 2005-06 as against
Rs.152.13 lakh earned during 2004-05. The company paid an interim
dividend of 15% during FY 2005-06 and a final dividend of 45% taking
total dividend for FY 2005-06 to 60% as against 25% dividend paid
during FY 2004-05.
Indo Zambia Bank Ltd.
Indo Zambia Bank Ltd. (IZB) is a joint venture of three Indian Banks viz.
Bank of India, Bank of Baroda, Central Bank of India and Government of
Zambia. Each of the Indian Banks holds 20% of the share capital, whereas
Government of Zambia holds 40% of the share capital. Indo-Zambia Bank
Ltd. is a fine example of a successful Joint venture. It enjoys the patronage
of two friendly republics, the Government of the Republic of Zambia and
the Government of India.
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yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
39
Securities Trading Corporation of India Ltd. (STCI)
Securities Trading Corporation of India Ltd. (STCI) is one of the leading
Primary Dealers in the country enjoying the highest credit rating of P1+
by CRISIL and A1+ by ICRA for short term debt instruments. The Bank
is the single largest stakeholder of STCI with 29.95% stake in its equity.
The year 2004-05 witnessed a sudden and swift hardening of interest rates
and narrowing down of margins in trading and gilt securities. As such, all
major PDs including STCI incurred losses from operations. For the first
time in its history, the company incurred a loss of Rs. 97 crore during FY
2004-05. With diversification plan and strategies, the company made a
quick turn around and earned a net profit of Rs.24 crore during FY 2005-
06. During the year STCI also successfully bid for acquiring the UTI
Securities Ltd. from the specified undertaking of the Unit Trust of India.
With this acquisition, STCI hopes to mark its presence in the field of
equity trading, portfolio management services, commodity trading,
depository services etc.
Other Strategic Investments
IL&FS Investment Managers Ltd.
Bank is the second largest stakeholder of IL&FS Investment Managers
Ltd. with 14.39% participation in its equity capital. The company earned a
Net Profit of Rs.7.15 crore in FY 2005-06 as against Rs.5.22 crore in FY
2004-05 and declared a dividend of 35 % as against 30% paid in 2004-05.
Central Depository Services (India) Ltd. (CDSL)
Central Depository Services (India) Ltd. was set-up in 1998 as the second
depository in the Country promoted by the Stock Exchange, Mumbai
(BSE). Bank is one of the co-sponsors of CDSL and has an investment of
about 10% in the equity capital of the company. CDSL offers demat
facilities for all kinds of debt instruments, government securities, equity
shares etc.
ASREC (India) Ltd.
The company was floated by the Specified Undertaking of the Unit Trust
of India (SUUTI) to undertake securitisation and asset reconstruction
activities and was granted Certificate of Registration by RBI under the
SARFAESI Act, 2002 in the second half of FY 2004-05. Bank has an
investment of 13.6% in the equity capital of the company and expects to
earn good returns on its investment once full fledged operations commence.
Multi-Commodity Exchange of India Ltd. (MCX)
MCX is a new generation multi-commodity exchange undertaking future
trading in different specified commodities at the national level. The Exchange
commenced operation during FY 2004-05. Bank had acquired a nominal
stake of 2% by way of equity participation in the capital of MCX with a
view to be associated with one of the major commodity exchanges. Bank
also handles clearing bank functions of the Exchange through Bullion
Exchange Branch.
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ngDee nw~
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ceW SkeÀ men Òee³eespekeÀ kesÀ ªHe ceW nw Deewj FmekeÀer keÀjerye 10% F&eqkeÌJeìer Hetbpeer nw~ meer[erSmeSue
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ceuìer keÀceesef[ìer SkeÌme®eWpe Dee@HeÀ Fbef[³ee (ScemeerSkeÌme)
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2004-05 kesÀ oewjeve Heefj®eeueve keÀjvee ÒeejbYe efkeÀ³ee nw~ yeQkeÀ ScemeerSkeÌme ceW FeqkeÌJeìer
menYeeefielee kesÀ efueS 2% keÀe meeceev³e mìskeÀ keÀe OeejkeÀ nw pees yeæ[s efpevme yeepeej kesÀ meeLe
pegæ[ves Deewj keÀejesyeej ceW ye{eslejer keÀer ¢ef<ì mes nw~ yeQkeÀ yegefue³eve SkeÌme®eWpe MeeKee kesÀ
ceeO³ece mes SkeÌme®eWpe kesÀ yeQkeÀ meceeMeesOeve keÀe³eeX keÀes Yeer mebYeeuelee nw~
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
40
National Collateral Management Services Ltd. (NCMSL)
The Company, promoted by the National Commodity and Derivatives
Exchange Ltd. (NCDEX), a leading multi commodity exchange was
incorporated on 28.09.2004 to promote and provide collateral management
services for securing, managing and controlling securities and commodities.
It offers various services for the development of trades on commodity
exchange such as valuation, grading, insuring, securing, storage,
distribution, clearing and forwarding of securities and commodities etc.
Bank had taken a stake of 10% (Rs.3 crore) in the equity capital of the
Company. Bank has signed MOU with NCMSL.
Credit Information Bureau (India) Ltd. (CIBIL)
CIBIL is the first credit information bureau in the Country, incorporated in
August, 2000 for providing credit information and risk analysis services
to the banking and financial services sectors. The company launched its
consumer bureau operations in FY 2004-05 though its commercial bureau
operations are likely to commence shortly on a full scale. Bank acquired a
stake of 5% in the equity share capital of the company during 2005-06 and
expects to derive synergies through its association with the company.
SME Rating Agency of India Ltd. (SMERA)
SMERA was set-up during FY 2005-06 by SIDBI in association with
Dun & Bradstreet, one of the leading credit rating agencies. SMERA‘s
primary objective is to provide comprehensive, transparent and reliable
ratings which would facilitate greater and easier flow of credit to SME
sector. During the year Bank acquired a nominal stake of 4% in the equity
capital of the company.
Strategic Alliance
National Commodity & Derivatives Exchange Ltd. (NCDEX)
NCDEX is one of the prime commodity exchanges, promoted by the
National Stock Exchange and other FIs and permitted by the Forward
Market Commission to undertake on-line screen based trades in agricultural
and other commodities. Bank had joined NCDEX as a business associate
and is empanelled as a clearing bank through Stock Exchange Branch and
also extends Depository Services to the traders/members of NCDEX under
NSDL and CDSL through its DP offices. Bank expects to leverage the
association for business growth.
SME-SBU : (Small & Medium Enterprises Strategic Business Unit)
As part of implementing Business Process Re-engineering projects, Bank
has created a Strategic Business Unit for the Small and Medium
Enterprises in view of the importance and priority given to this sector by
the Government. In line with the Government’s policy Bank has to double
the advances in SME sector in Five years i.e. by 2009-2010.
In order to achieve the above objective Bank has taken several measures
like signing MOU with SIDBI (Small Industrial Development Bank Of
India) and APSFC (Andhra Pradesh State Finance Corporation) for joint
financing in SME sector, MOU with SMERA (SME Rating Agency) for
rating of SME and Bank has offered concession in rate of interest upto
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kebÀHeveer vesMeveue keÀceesef[ìer Sb[ [sefjJesefìJepe SkeÌme®eWpe efue. Üeje ÒeesVele SkeÀ yeng keÀceesef[ìer
SkeÌme®eWpe nw efpemekeÀer efoveebkeÀ 28.09.2004 keÀes ÒeefleYetefle³eeW SJeb keÀceesef[ìerpe kesÀ megj#ee,
ÒeyebOeve leLee efve³eb$eCe kesÀ keÀesuesìjue ÒeyebOeve mesJeeDeeW keÀes ÒeesVele keÀjves leLee mesJee Òeoeve
keÀjves nsleg efveieefcele keÀer ieF& nw~ keÀceesef[ìer kesÀ J³eeHeej kesÀ efJekeÀeme kesÀ efueS ³en efJeefJeOe
mesJeeSb Òeoeve keÀjleer nQ~ pewmes efkeÀ efmeke̳egefjefìpe SJeb keÀceesef[ìerpe Fl³eeefo keÀer Jesu³egSsMeve,
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kebÀHeveer keÀer FeqkeÌJeìer Hetbpeer ceW yeQkeÀ keÀe 10% mìskeÀ (©He³es 3 keÀjesæ[) nw~ yeQkeÀ ves SvemeerSceSmeSue
kesÀ meeLe mecePeewlee %eeHeve Hej nmlee#ej efkeÀS nQ~
$eÝCe Deemet®evee y³etjes (Yeejle) efue. (meerDeeF&yeerDeeF&Sue)
meerDeeF&yeerDeeF&Sue osMe keÀe Henuee $eÝCe Deemet®evee y³etjes nw pees yeQefkebÀie Deewj efJeÊeer³e mesJee
#es$e keÀes $eÝCe met®evee Deewj peesefKece efJeMues<eCe mesJeeSb osves kesÀ efueS Deiemle 2000 ceW
efveieefcele efkeÀ³ee ie³ee nw~ kebÀHeveer ves efJeÊeer³e Je<e& 2004-05 ceW GmekesÀ ûeenkeÀ y³etjes Heefj®eeueve
keÀe ÒeejbYe efkeÀ³ee~ neueebefkeÀ GmekesÀ JeeefCeeqp³ekeÀ y³etjes kesÀ Heefj®eeueve keÀe ³eLee mece³e HetCe&
mlej Hej ÒeejbYe efkeÀ³ee peeSiee~ Je<e& 2005-06 kesÀ ojc³eeve yeQkeÀ ves kebÀHeveer keÀer 5% FeqkeÌJeìer
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DeHes#ee nw~
SmeSceF& jsefìbie Spesvmeer Dee@HeÀ Fbef[³ee efue. (SmeSceF&DeejS)
SkeÀ ÒecegKe $eÝCe mlejebkeÀve Spesvmeer [ve Sb[ yew[efmì^ì kesÀ men³eesie mes efme[yeer Üeje efJeÊeer³e
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vesMeveue keÀceesef[ìer SJeb [sefjJesefìyme SkeÌme®eWpe efue. (Svemeer[erF&SkeÌme)
Svemeer[erF&SkeÌme SkeÀ ÒecegKe keÀceesef[ìer SkeÌme®eWpe nw efpemes vesMeveue mìe@keÀ SkeÌme®eWpe Deewj
Dev³e efJeÊeer³e mebmLeeDeeW ves Òee³eesefpele efkeÀ³ee nw Deewj Jee³eoe yeepeej Dee³eesie Üeje ke=Àef<e
SJeb Dev³e keÀceesef[ìer (efpevme) ceW efvejblej efmLeefle (Dee@ve ueeFve m¬eÀerve) kesÀ DeeOeej Hej
keÀejesyeej keÀjves kesÀ efueS Devegcele efkeÀ³ee nw~ yeQkeÀ ves Svemeer[erF&SkeÌme ceW SkeÀ keÀejesyeej
menYeeieer kesÀ ªHe ceW ÒeJesMe efkeÀ³ee Lee Deewj mìe@keÀ SkeÌme®eWpe MeeKee kesÀ ceeO³ece mes Fmes SkeÀ
meceeMeesOeve yeQkeÀ kesÀ ªHe ceW met®eerye× efkeÀ³ee ie³ee nw Deewj pees ìs[me&/Svemeer[erF&SkeÌme kesÀ
meom³eeW keÀes SveSme[erSue Deewj meer[erSmeSue kesÀ Debleie&le DeHevess [erHeer keÀe³ee&ue³eeW kesÀ
ceeO³ece mes ef[Heeefpeìjer mesJeeSB Òeoeve keÀjlee nw~ yeQkeÀ keÀes DeHes#ee nw efkeÀ Fmemes keÀejesyeej keÀer
Òeieefle ceW þesme mene³elee efceuesieer~
SmeSceF&-Smeyeer³et ë (ueIeg SJeb ceO³ece GÐece ueeYekeÀejer keÀejesyeej FkeÀeF&)
keÀejesyeej Òeef¬eÀ³ee Hegvej&®evee Heefj³eespevee kesÀ keÀe³ee&vJe³eve kesÀ SkeÀ Yeeie kesÀ ªHe ceW yeQkeÀ ves
íesìs SJeb ceO³ece GÐeesieeW kesÀ efueS ueeYekeÀejer keÀejesyeej FkeÀeF& keÀer mLeeHevee mejkeÀej Üeje
Fme #es$e keÀes efoS ieS cenlJe Deewj ÒeeLeefcekeÀlee keÀes O³eeve ceW jKeles ngS keÀer nw~ mejkeÀej keÀer
veerefle kesÀ Devegmeej yeQkeÀ keÀes HeeB®e Je<eeX ceW DeLee&led 2009-2010 lekeÀ SmeSceF& #es$e kesÀ
DeefûeceeW ceW oesiegveer Je=ef× keÀjveer nw~
GHe³eg&keÌle GÎsM³e keÀer ÒeeeqHle nsleg yeQkeÀ ves keÀF& GHee³e efkeÀS nQ~ pewmes SmeSceF& #es$e ceW meb³egkeÌle
efJeÊeHees<eCe nsleg efme[yeer (Yeejleer³e ueIeg GÐeesie efJekeÀeme yeQkeÀ) Deewj SHeerSmeSHeÀmeer (DeebOe´
ÒeosMe jep³e efJeÊe efveiece) kesÀ meeLe mecePeewles kesÀ %eeHeve Hej nmlee#ej keÀjvee, SmeSceF& keÀer
yeQkeÀ Dee@]HeÀ Fbef[³ee BANK OF INDIA | Jeeef<e&keÀ efjHeesì& | Annual Report | 2005-2006
41
0.50% to units who obtain desired rating from SMERA. Bank has adopted
SME Policy and a Policy on Debt Restructuring and Rehabilitation of
SME units which are placed in Bank’s website for public information.
During the year under review advances in SME sector increased from
Rs.14525 crore to Rs. 17675 crore registering a growth of 22 %. Under
SSI sector the growth was from Rs.4598 crore to Rs. 5625 crore registering
growth of 22.34 %. Under the tie up arrangement with SIDBI for joint
finance 15 accounts with limit of Rs.27 crore have been financed.
New schemes have been evolved for financing such as Energy Efficiency
Project, Solar Water Heating System and greater impetus has been given
for Star Channel Financing Scheme, Cluster Finance and collateral
free loan upto Rs.25 lakh under CGTSI guarantee scheme besides
promoting advances under KVIC’s scheme under Rural Employment
Generation Programme (REGP), Technology Upgradation Fund Scheme
under Credit Linked Capital Subsidy Scheme (CLCS-TUF and CLCSS)
where capital subsidy of 20% to textile and Jute industries and 15% to
other industries are available. Bank has issued 3471 Artisan Credit Cards
and 4477 Laghu Udyami Trade Card. We have built up exposure under
Channel Financing to the extent of Rs.189.70 crore. Two cluster based
schemes have so far been implemented in the state of Kerala to the tune of
Rs. 42.93 crore in 2797 accounts.
Right to Information Act 2005
Bank in pursuance of the enactment of Right to Information Act 2005
which came into force w.e.f. 12.10.2005 designated the Central Public
Information Officers for Head Office and for all the Zones and also
designated Appellate Authority in order to implement the provisions of
the said Act and has placed the vital information about Bank required
under the Act on Bank’s web site. Bank is complying with the provisions
of the Act within the stipulated time provided under the Act. As on
31.03.2006 Bank has disposed of all the applications and all appeals received
from the parties within the time prescribed under the Act.
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors confirm that in the preparation of the annual accounts for theyear ended March 31, 2006.
the applicable accounting standards have been followed along with
proper explanation relating to material departures, if any;
the accounting policies, framed in accordance with the guidelines of
the Reserve Bank of India, were consistently applied;
reasonable and prudent judgement and estimates were made so as to
give a true and fair view of the state of affairs of the Bank at the end
of the financial year and of the profit of the Bank for the year ended
on March 31, 2006.
proper and sufficient care was taken for the maintenance of adequate
accounting records in accordance with the provisions of applicable
laws governing banks in India, and
the accounts have been prepared on a ‘going concern’ basis.
jsefìbie nsleg SmeSceF&DeejS (SmeSceF& jsefìbie Spesvmeer) kesÀ meeLe mecePeewlee %eeHeve keÀjvee Deewj
yeQkeÀ ves Gve FkeÀeF³eeW keÀes y³eepe ojeW ceW 0.50% efj³ee³ele Yeer Òemlegle keÀer nw pees SmeSceF&DeejS
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mene³ekeÀer keÀe ueeYe GHeueyOe nw, keÀes Deefûece osves nsleg ÒeewVele efkeÀ³ee nw~ yeQkeÀ ves 3471
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©He³es 42.93 keÀjesæ[ keÀe efJeÊeHees<eCe efkeÀ³ee nw~
met®evee keÀe DeefOekeÀej DeefOeefve³ece, 2005
yeQkeÀ ves efoveebkeÀ 12.10.2005 mes ÒeYeeJeer ngS met®evee keÀe DeefOekeÀej DeefOeefve³ece, 2005 kesÀ
DevegmejCe ceW ÒeOeeve keÀe³ee&ue³e Deewj meYeer Deb®eueeW ceW kesÀvêer³e meeJe&peefvekeÀ met®evee DeefOekeÀejer
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mebiele leLee efJeJeskeÀHetCe& efveCe&³e leLee DeekeÀueve efkeÀS ieS nQ~
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