Bank of Baroda : Offering customized products for various activities and Industries

An interview with Mayank K Mehta | Executive Director | Bank of Baroda

How has Bank of Baroda progressed in terms of setting up new branches?

Reply: As at the end of Dec 2016, our Bank has a domestic network of 5382 Branches spread across length and breadth of the country. Since FY 2012-13, the Bank has opened 1525 domestic Branches in States & UT. Our Bank also has extensive International presence in 24 countries through 107 branches across the globe. Since FY 2012-13, Bank has opened 21 branches/ offices at our overseas centre/ subsidiaries.

We would like to know about some of the important targets fulfilled and achievements of the bank.

Reply: Our Bank is one of the leading public sector banks in India having a total business of around Rs 9.74 lakh crore as on 31st December, 2016.  For FY 2015-16 the Bank has achieved the target allotted for Total Priority Sector Advances, Advances to Weaker Section and Advances to Small Farmers and Marginal Farmers. Bank is continuously progressing under Pradhan Mantri Jan-Dhan Yojana (PMJDY) and nearly 7% of the total accounts opened under this category so far by the Banking Industry have been opened by our Bank Branches and Business Correspondents. Bank’s performance and achievement under Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana is also notable.

Among many awards and recognitions conferred upon our the Bank in recent years, few notable are BML Munjal Award for “Business Excellence through learning & Development 2015”, “HR Excellence” award by Business World, 1st prize under “Rajbhasha Kriti Purashkar”, “Skotch Order of Merit 2014 for Financial Inclusion”, “Golden Peacock National Training Award 2014”, “Best PSU for MSME” by India SME forum, The Economic Times “Best Brand 2014”, FE India’s “Best Bank”, “IBA Banking Technology Award” etc.

What is the current deposit and advance ratio of the bank?

Reply:  CD ratio of the Bank is 63.25% as of Dec 2016.

How has the Bank of Baroda made advancements in specialized branches, especially SME?

Reply:  Specialized branches cater to the need of a particular segment of business and customer.  Our bank came out with this concept way back in early 90s.  Presently, we have -11- International Business Branches (IBB), -9- Corporate Finance Branches (CFS), -17- Mid Corporate Branches, One Specialized Integrated Treasury Branch (SITB) at Mumbai, -72- SME Branches, -15- Asset Recovery Management Branches (ARMB), -9- Gen Next Branches and a few Specialized Agriculture Finance (SAF) and NRI Branches. In addition, Bank has -71- Specialized Mortgage Stores and -54- SME Loan Factories to cater to the needs of customer of Retail and MSME sectors. Processing of loans in these outlets takes place in assembly line method.

To tap vast potential available in the MSME segment, the Bank has carved out a special sale and delivery model for hassle free and faster sanction of credit proposals in the MSME Sector. The model envisages a centralized processing hub, which shall endeavour speedy appraisal, and sanctioning of proposals within 14 days (where TEV Study is not required). Bank is offering customized products for various activities & Industries under this model. The first SME Loan Factory was opened in the year 2006. A team of Relationship Managers are stationed at different branches and are reaching out to customers to market Bank’s SME products and cross selling of other products as well.

What are the important CSR projects currently being undertaken?

Reply: Our Bank has established Baroda Swarojgar Vikas Sansthan (BSVS) which is aimed at carrying out CSR activities. BSVS conducts training programmes on more than -65- different activities for rural/ unemployed youth on skill and entrepreneurship development in order to generate income for self/ wage employment.  BSVS helps the trainees for getting settled in life by hand-holding and facilitating the credit linkage.  Bank has established -49- centers in -7- states across the country.  Since inception 2,94,845 candidates have been trained as on 31.01.2017, out of which 1,79,027 trainees have taken either self or wage employment.

The Bank has also established -51- Financial Literacy and Credit Counselling centers in -9- states, whose objective is to spread the financial literacy among rural population. 

Activities undertaken mostly relate to skill development through training and credit linkage of farmers and beneficiaries of our training programme with a focus on doubling farmer’s current income.

How much funds are allocated to the beneficiaries?

Reply: During FY 2015-16 our Bank has sanctioned a sum of Rs 1940.21 lacs to different organizations engaged in various community development and socio-economic welfare activities for the benefit of weaker section, rural masses and others.

The Prime Minister has introduced the ‘Jan-Dhan-Yojna’. How is Bank of Baroda associated with this scheme? 

Reply: Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Basic Savings Bank Deposit Accounts, Remittance, Credit, Insurance, and Pension in an affordable manner.  Such account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet.  Bank of Baroda, being a Public Sector Bank, is one of the key stakeholders in making the flagship scheme of Government of India a big success.  To facilitate providing banking services in unbanked areas, the Bank has appointed more than 14,000 Business Correspondents. Out of 27.30 crore accounts opened across the banking industry, Bank of Baroda alone has opened 1.90 crore accounts through Branches and Business Correspondents. We have also enrolled 15.35 lacs account holders under Pradhan Mantri Jeevan Jyoti Bima Yojana, 43.65 lacs account holders under Pradhan Mantri Suraksha Bima Yojana and 2.87 lacs under Atal Pension Yojana.

Are there any other important recent activities of the bank?

Reply:  Initiatives on Modification of Agriculture Products

    To make product attractive, BKCC scheme has been revised with increase in limits for

      family maintenance and Farm maintenance. Also, the upper cap of family maintenance has

      been increased to Rs. 1 lakh.

    To promote green energy, Mortgage has been waived for sanction of loan upto the limit of

      Rs.5 lacs for Solar Pumps.

    Rationalised interest on 4 wheeler/ 2 Wheeler loan to farmers and loan for farm structures

      by reducing the rate of interest.

    Limit and rate of interest have been revised in case of sanction of loans under “Food and

      Agro Processing Scheme” to make the product more competitive.

    Gold loan limit has been increased from Rs 3 lakhs to Rs 10 lakhs and the characteristic     

      of this scheme has been simplified to make it attractive. 

    Scheme for financing to MFI for their onward lending to Agriculture sector.

    Introduced “Area specific” schemes to boost Agricultural Lending.

  Initiatives to enhance Agriculture Advances

    Conducting campaign during Rabi & Kharif seasons in order to add new farmers. 

    Conducted specialised customised training programme at CAB, Pune for the Agri-in-                    charge of 35 Agri thrust Regions with more focus on preparation of Hi-value and Hi-tech                    Agriculture projects.

    Tie-up with reputed Collateral Management Companies

 Ø     M/s Edelweiss Agri Value Chain Ltd.

 Ø     M/s Shree Shubham Logistics Ltd.

 Ø      CNX Corporation Ltd – Collateral Manager

 Ø      Arya Collateral warehouse services Pvt. Ltd

    201 branches have been identified in the potential areas for lending against Warehouse                 Receipts.

    Our Bank has taken decision to concentrate on 9 states i.e., Maharashtra, Uttar Pradesh,         

      Bihar, Jharkhand, West Bengal, Andhra Pradesh, Tamil Nadu, Orissa and Madhya                         Pradesh as these states are having potential for Agro processing units

    Tie-up with NETAFIM Irrigation India Pvt. Ltd. to increase our exposure in Micro Irrigation.

    Tie-up with RML AGTECH (technologic company) for giving technical knowledge to                     the farmers right from crop selection to marketing, so as to improve the productivity          and profitability of the farmers.

    The Bank has tied-up with M/s. Heritage Food Ltd. and M/s. Kwality Limited to finance dairy   loans to the members associated with these companies

    Also Tied-up with M/s. S.V. Agro Processing Pvt. Ltd. to boost our Agri lending through                       contract farming

    Special emphasis to lend allied activities to cover the same under PMMY.

What is the current state and developments in progress of the north-east sector?

Reply:  Ourbranches in north-eastern states are also extending all types of Agricultural Advances to the farmers in these states. We are focusing on financing of more numbers of tea plantations along with the development of organic farming in these states.

We would like to know some brief details about the bank’s schemes on Kisan Credit Cards.

Purpose:

Reply: The purpose of BKCC is to provide adequate and timely credit for meeting comprehensive credit requirement of farmers under single window concept for their cultivation and development as well as consumption needs.

Eligibility:

All agriculturists including registered share croppers and tenant farmers with good track record of repayment or a fresh applicant having good reputation/ report are eligible for BKCC who are eligible for sanction of credit limit

Type of Facility:

Finance is provided through production line of credit for short term needs like crop loan, working capital for allied activities etc. and investment line of credit for long term needs like tractor, irrigation facilities, agri-machinery, farm structures, plantation etc.

Production Line of Credit is of the nature of revolving Cash Credit and would provide for any number of withdrawals and repayments within the limit.  The crop loan/ production credit limit assessed will be on the basis of scale of finance decided by the District Level Consultative Committee in respective districts.  Investment Line of Credit is extended in the form ofDemand/ Term Loan.

Highlights of the Scheme:

    Almost all financial needs of farmers can be met through this scheme.

    In addition to crop cultivation portion, the farm maintenance and family maintenance

      portion also covered under BKCC.

    Personal loan up to Rs. 1 lac can also be given under investment line of credit.

    Pradhan Mantri Fasal Bima Yojana (PMFBY) and Modified Weather Based Crop Insurance                    Scheme (WBCIS) for notified crops are available to BKCC borrowers.

    Personal accident insurance for BKCC holders up to Rs.50,000/- is also available from                National Insurance Co Ltd.

    BKCC is issued for a period of 5 years subject to annual review.

    Interest on Credit Balance in BKCC A/c is to be paid to the card-holders at applicable                               interest rate in SB a/c.

    Cheque book facility is provided to literate borrowers.

    RuPay cads are issued to the farmers under BKCC.

What are the structures of Car loans, Home loans and Educational loans that are offered by the bank?

Reply:  Our Car Loan, Home Loan and Education Loan product is structured in a manner to take care of the needs of all sectors & segments of the society. The salient features of these loans are as under:

Car Loan:

    Car Loan is available to resident /non-resident individuals as well as to Corporates.

    Maximum cap of car loan is Rs.1 Crore per person.

    The repayment period is extended for a period as long as 7 years.

    Margin on cost of the vehicle varies from 5% to 25% depending on the model of the car and                  income level of the applicant.

    The pricing of the Loan is decided on the basis of CIBIL score of the applicant.  Accordingly,                the rate of interest on Car Loan at present ranges from 8.85% to 10.60%.

    The eligibility for the amount of loan will be worked out on the basis of income level and         repayment capacity of the applicant.  Co-applicants can be added for higher eligible limit.

    Bank is offering pre approved credit limits for Car Loans to our existing Savings Bank                            account customers.

Home Loan:

    Home Loan is available for purchase/construction of House/Flat, takeover of                         existing loans from other Banks/FIs etc.

    Maximum cap for Home Loan is upto Rs.10 Crores per person.

    Maximum repayment period is upto 30 years.

    The pricing of the Loan is based on the CIBIL score of the applicant.  Accordingly, the rate of                   interest on Home Loan at present ranges from 8.35% to 9.35%.

    Free Personal accidental Insurance is available to principal borrower and all co-borrowers.

    Life Insurance Cover is available on optional basis, on payment of one time premium by the                      borrower.

    Home Improvement Loan is available upto Rs.50/- Lacs per person for repair/renovation                   of existing House or purchase of furniture/fixtures etc.

    Top up Loan (Additional Assured Advance) provided up to Rs. 2.00 Crores.

    Bank is offering pre-approved credit limits for Home Loans to our existing Savings Bank   

      account customers.

    Bank is offering pre-approved Top up Loans to existing Home Loan borrowers.

Education Loan:

    Education Loan is available to students for studies in India as well as for studies abroad.

    Preferential treatment is given to students selected for studies in Premier Institutions in   

      India and abroad.

    Loan amount is available upto Rs.30 Lacs for studies in India and upto Rs.60 lacs for abroad.

    0.50% concessions is extended for girl students under normal schemes.

    Special scheme for providing Skill Loans.

What is your assessment about “Demonetization”?

Reply:  Demonetization helped banks in mobilizing a sizable amount of CASA deposits. Due to demonetization the Alternate Delivery Channels are gaining momentum, more particularly in rural and semi-urban areas.  It has helped in financial inclusion also.

For further details about us you may visit our website www.bankofbaroda.com

(Shilpa Bichitra | Anniversary Edition | 2017)