A Project Report Submitted to Kuvempu University in partial fulfillment of

requirements for the award of the Degree of

Master of Commerce

“Management of Productivity in Commercial Banks : A Case

Study on Bank of Barodaa”

Submitted by
Mr. ABHILASH. G. R
IV Semester, M.Com
Register No. PC180601

Kadidal Manjappa National Institute of Post Graduate Studies

(M.Com.Department)
Acharya Tulsi National College of Commerce
N.E.S Campus, Balaraj Urs Road, Shivamogga – 577201

Under the Guidance of

Dr. A Venkataraju
Faculty
Kadidal Manjappa National Institute of Post Graduate Studies
(M.Com. Department)
Acharya Tulsi National College of Commerce
N.E.S Campus, Balaraj Urs Road, Shivamogga – 577201

April, 2020
 National Education Society ® Shivamogga
KADIDAL MANJAPPA NATIONAL INSTITUTE OF POST-GRADUATE STUDIES
(M.Com Department)
ACHARYA TULSI NATIONAL COLLEGE OF COMMERCE
(Affiliated to Kuvempu University)
N. E.S Campus, Balaraj Urs Road, Shivamogga 577201 (Karnataka)
www.atncc.org [email protected] Ph.No.08182 640325

Mr. ABHILASH. G. R
Register No. PC180601
IV Semester, M.Com
Kadidal Manjappa National Institute of Post Graduate Studies
(M.Com. Department)
Acharya Tulsi National College of Commerce
N.E.S Campus, Balaraj Urs Road, Shivamogga – 577201

DECLARATION
I here by declare that the project report entitled “Management of Productivity
in Commercial Banks : A Case Study on Bank of Barodaa” has been
prepared by me during the year 2019-20 under the guidance and supervision of
Dr. A Venkataraju, Faculty, Kadidal Manjappa National Institute of Post
Graduate Studies (M.Com. Department) Acharya Tulsi National College of
Commerce, Shivamogga in partial fulfillment of the requirement for the degree
of Master of Commerce. Any content of this work has not been submitted for
the award of any degree or diploma or similar titles for any university or
institutions.
Place: Shivamogga
SD/-
date: (Mr. ABHILASH. G. R)
 National Education Society ® Shivamogga
KADIDAL MANJAPPA NATIONAL INSTITUTE OF POST-GRADUATE STUDIES
(M.Com. Department)
ACHARYA TULSI NATIONAL COLLEGE OF COMMERCE
(Affiliated to Kuvempu University)
N. E.S Campus, Balaraj Urs Road, Shivamogga 577201 (Karnataka)
www.atncc.org [email protected] Ph.No.08182 640325

GUIDE CERTIFICATE

This is to certify that Mr. ABHILASH. G. R bearing Register No.

PC180601 is a bonafide student of our Institution for the academic years
2019-20. The project report on “Management of Productivity in Commercial
Banks : A Case Study on Bank of Barodaa” has been prepared by him under
my guidance and supervision in partial fulfillment of the requirements for the
award of Degree of Master of Commerce.

SD/-
Faculty Guide
Dr. A Venkataraju
(K.M.N.I.P.G.S)
 National Education Society ® Shivamogga
KADIDAL MANJAPPA NATIONAL INSTITUTE OF POST-GRADUATE STUDIES
(M.Com. Department)
ACHARYA TULSI NATIONAL COLLEGE OF COMMERCE
(Affiliated to Kuvempu University)
N. E.S Campus, Balaraj Urs Road, Shivamogga 577201 (Karnataka)
www.atncc.org [email protected] Ph.No.08182 640325

CERTIFICATE

This is to certify that Mr. ABHILASH. G. R bearing Register No.

PC180601 is a bonafide student of our Institution for the academic years
2019-20. The project report “Management of Productivity in Commercial
Banks : A Case Study on Bank of Barodaa” has been prepared by him in
partial fulfillment of the requirements for the award of Degree of Master of
Commerce under the guidance of Dr. A Venkataraju, Faculty of this
Institution.

SD/-
Place : SHIVAMOGGA Director
Date : Dr. A. VENKATARAJU
(K.M.N.I.P.G.S)
 National Education Society ® Shivamogga
KADIDAL MANJAPPA NATIONAL INSTITUTE OF POST-GRADUATE STUDIES
(M.Com. Department)
ACHARYA TULSI NATIONAL COLLEGE OF COMMERCE
(Affiliated to Kuvempu University)
N. E.S Campus, Balaraj Urs Road, Shivamogga 577201 (Karnataka)
www.atncc.org [email protected] Ph.No.08182 640325

CERTIFICATE

This is to certify that Mr. ABHILASH. G. R bearing Register No.

PC180601 is a bonafide student of our Institution , for the academic year
2019-20. The project report “Management of Productivity in Commercial
Banks : A Case Study on Bank of Barodaa” has been prepared by him in
partial fulfillment of the requirements for the award of Degree of Master of
Commerce under the guidance of Dr. A. VENKATARAJU, Faculty of this
Institution.

SD/-
Place : SHIVAMOGGA Principal
Date : Prof. R.L. PRAKASH BABU
(A.T.N.C.C.)
 ACKNOWLEDGMENT

I wish to express my deep sense of gratitude to all the persons who have
helped me, to complete this work successfully.

I express my deep sense of gratitude to my project guide Dr. A.

VENKATARAJU Faculty, Kadidal Manjappa National Institute of Post-
Graduate Studies, Shivamogga, for his valuable guidance, supervision and
encouragement, which I received from him throughout my project work.

I am very thankful to Dr. A. VENKATARAJU, Director, Kadidal

Manjappa National Institute of Post-Graduate Studies, Shivamogga and
Prof. R.L. PRAKASH BABU, Principal, A.T.N.C.C.Shivamogga, for having
motivated me to complete this project work.

I am indeed indebted to my parents and other members of my family and

friends who have been the source of strength and inspiration in completion of
the project report.

(Mr. ABHILASH. G. R)
 CERTIFICATE

This is to certify that Mr.Abhilash . G .R (PC180601), pursuing Final

year (IV semester ) M.Com in “National Institute of post Graduate Studies,
ATNCC Shivamogga “ has taken up a project in our Bank on the topic entitled
“Management of Productivity in Commercial Banks : A Case Study on
Bank of Barodaa” in our organization ,and he had successfully completed the
project work under our guidance.

His performance during the tenure of this project work was satisfactory .

Place: SD/-

Date: signature
 TABLE OF CONTENTS
Chapter Title Page No.
1 Introduction 01 – 08
2 Industry profile 09 – 26
3 Company Profile 27 – 40
4 Data Analysis and Interpretation 41 – 53
Summary of Findings,
5 54 – 57
Suggestions and Conclusion
6 Annexure 58 – 62
 LIST OF TABLES
Table No Title Page No

1 Table showing the Return on Assets Ratio 42

2 Table showing the Return on Equity Ratio 43

3 Table showing the Net Intrest Margin Ratio 44

4 Table showing the Debt Equity Ratio 45

5 Table showing the Current Ratio 46

6 Table showing the Debt to Assets Ratio 47

7 Table showing the Earning Per Share Ratio 48

8 Table showing the Operating Expenses Ratio 49

9 Table showing the Proprietory Ratio 50

Table showing the Current Assets to

10 51
proprietory Fund Ratio

11 Table showing the Loans to Deposit Ratio 52

Table showing the Net profit as Percentage of

12 53
Total Deposits Ratio
 LIST OF GRAPHS
Table
Title Page No
No

1 Graph showing the Return on Assets Ratio 42

2 Graph showing the Return on Equity Ratio 43

3 Graph showing the Net Intrest Margin Ratio 44

4 Graph showing the Debt Equity Ratio 45

5 Graph showing the Current Ratio 46

6 Graph showing the Debt to Assets Ratio 47

7 Graph showing the Earning Per Share Ratio 48

8 Graph showing the Operating Expenses Ratio 49

9 Graph showing the Proprietory Ratio 50

Graph showing the Current Assets to proprietory Fund

10 51
Ratio

11 Graph showing the Loans to Deposit Ratio 52

Graph showing the Net profit as Percentage of Total

12 53
Deposits Ratio
 CHAPTER : 1

INTRODUCTION

1.1 INTRODUCTION

1.2 LITERACY REVIEW

1.3 STATEMENT OF PROBLEM

1.4 OBJECTIVE OF STUDY

1.5 SCOPE OF THE STUDY

1.6 METHODOLOGY

1.7 LIMITATION OF PROJECT REPORT

1
 1.1 INTRODUCTION

Financial performance analysis is the process of identifying the

financial strengths and weakness of the firm by properly establishing the
relationship between the items of balance sheet and profit and loss
account . it also helps in helps in short term and long term forecasting and
growth can be identified with the help of financial performance analysis .
The dictionary meaning of „analysis‟ is to resolve or separate a thing in to
its elements or components puts for tracing their relation to the things as
whole and to each other . The analysis of financial statement is a process
of evaluating the relationship between the component puts of financial
statement to obtain a better understanding of the firms positioning
performance . This analysis can be undertaken by management of the
firm or by parties outside the namely, owners creditors , investor.

Financial analysis can be defined as a study of relationship between

many factors as disclosed by the statement and the study of these factors.
The objective of financial analysis is the pinpointing of strength and
weakness of a business undertaking by regrouping and analyzing of
figures obtained from financial statement and balance sheet by the tools
and technique of management accounting . Financial analysis is as the
final step of accounting that result in the presentation of final and the
exact data that helps the business managers , creditors and investors.

Based on this reasoning , this project is an attempt to analyze the

financial performance of Bank of Baroda. in the financial analysis a ratio
is used as an index for evaluating the financial position and performance
of the firm . The absolute accounting figures reported in the financial
statement do not provide a meaningful understanding of the performance
and the financial position of a firm. But the accounting figures convey the

2
meaning when it is related to some other relation information for example
rs. 5 crores net profit may look impressive, but the firm performance can
be said good or bad only when net profit figures is related to the firms
investment.

Accounting ratios are relationships expressed in the mathematical

terms between figures that are connected with each other In the some
manner . The information contained in the balance sheet , profit and loss
account or the income statements are used by the management , creditors
investors and others to from judgment about the operating performance
and the financial strength and weaknesses of the firm if we properly
analysis the information reported in the statement.

1.2 Literacy Review :

Avkiran , 1995 Simply much of the current bank performance litretured

describes the objective of financial organization as that of earning
acceptable returns and minimizing the risk taken to earn this return.

Chien and Danw 2004 showed in their study that most previous studies
concerning company performance evaluation focus merely on operational
efficiency and operational effectiveness. Which might directly influence
the survival of a company. By using an innovative two stage data
envelopment analysis model in their study. The empirical result of this
study is that a company with better efficiency does not analysis means
that it has better effectiveness.

Elizabeth and ellot 2004 indicated that all financial performance

measures interest margin , return on assets , and capital adequacy are
positively correlated with customer service quality . Scores Mazler 2003
discussed the development and performance of domestic and foreign
banks in Arab gulf countries and showed that local and foreign banks in

3
these countries . Literature on community bank performance especially
related to efficiency and bunk strategy continues to expand . The
following discussion summarizes some research in this area over the past
decade.

Wall 1985 examined small and medium sized banks from early 1970
until deregulation occurred in the early 1980‟s .He found that profitable
banks had lower interest and non interest expense than less profitable
banks. In addition the more profitable banks had lower cost of funds ,
greater use of transaction deposits , more marketable securities and higher
capital levels.

Zimmerman 1996 examined community bank performance in California

during the early 1990‟s a period of slow recovery for these institutions.
Excessive reliance on real estate lending caused deterioration in assets
quality which reduced overall profitability . Lack of geographic
diversification further compounded community bank performance.

Myers and spong 2003 examined community bank growth in the 10th
federal reserve District (Kansas City) with an emphasis on economic
conditions in slower growing markets.

These slower growing markets presented problems in loan quality as well

as staffing including senior management and directors . Community
banks in low growth markets experienced higher overhead costs relative
to income than banks in higher growth markets.

1.3 Statement of problem

The study of financial performance contains revenue ,tax, expenses, etc.

on one side and the other side shows the liabilities and assets position in
the year . Ratio analysis is a very useful analytical technique to raise

4
pertinent questions on a number of managerial issues. It provides base or
clues to investigate such issues in detail. While assessing the financial
health of a company , ratio analysis answers to questions relating to the
bank‟s profitability , asset utilization and liquidity and financial
capabilities of the bank‟s.

1.4 Objective of study

 To present the profile of Bank of Baroda in detail and the Industry

profile in general .
 To evaluate the financial performance of Bank of Baroda with the
help of Ratio technique.
 To suggest on the light of the study.

1.5 Scope of the study

For the purpose of study I have selected the Bank of Baroda to

know the financial performance and to maintain the structure of inflow
and outflow of finance . This report is aimed at giving clear picture about
financial performance through ratio techniques which is conducted on
Bank of Baroda.

1.6 Methodology

The important point for the validation of any research study is

based on what type of methodology is adopted .

Project report is based on following data collected method.

To fulfill the objectives of my study , I have taken both into

consideration viz primary and secondary data .

5
 Primary data has been collected through personal interview by
direct contact method . The method which was adopted to collected the
information is „Personal interview „ method .

Personal interview and discussion was made with manager and

other personnel in the organization for this purpose .Secondary data is
collected from the magazines , Annual report , internet , Text books.

Statistical tools and techniques:

For the study tools and techniques such as diagram and graphical
representation of data through tables , bar chart are used to analyze and
interpret the data.

The data is collected for the preparation of the project report

includes primary and secondary data .

Primary data : The primary data is collected through an interview with

the manager of the bank and the bank staff to collect information about
service rendered by the bank to study the various aspects of annual report
Secondary data : The secondary data is collected through Newspaper ,
books and banks website, journals ,magazines, books on financial
management.

1.7 Limitation of project report

 This study is limited to Bank of Baroda of shimoga branch.

 This study is mainly based on secondary data .
 Due to time constrain only few ratios are analysed.
 Only past four years data has been taken for the analysis.

6
Chapter Scheme

Chapter 1 – Introduction to the study

This chapter gives us a general introduction to the study undertaken

. it talks about the problem for which the project has been taken the
introduction of the study , need, objective and the limitation of the study
conducted.

Chapter 2 – Industry profile

This chapter gives us a general introduction of the Bank , It talks

about the history, origin, Function of bank , structure of Indian banking.

Chapter 3 – Company profile

This chapter views the present status of the organization that is

Bank of Baroda . it also covers the history, vision and Mission, its
competitors, SWOT analysis , conclusion.

Chapter 4 – Data analysis and Interpretation

In this chapter all calculations pertaining to the study are

calculated and interpreted . Calculation refer to the ratios calculated in the
study. The trends of the ratios are also projected and interpreted. As it is
said that one picture is worth 1000 words, graphs have also been provided
for better understanding.

Chapter 5 – Finding, Suggestions and Conclusion

In this chapter conclusion of the overall study along with

suggestion pertaining to the areas of improvement.

7
Conclusion

Ratio analysis is the basic tool of Financial analysis and Financial

analysis itself is an important part of any business planning process as
SWOT , being basic tool of the strategies analysis plays a vital role in a
business planning process and no SWOT analysis would be complete
without an analysis of companies financial position .

In this way ratio analysis is very important part of whole business

strategic planning.

As companies dispatch their long annual report once a year, the financial
ratio help us to profile a company easily.

8
 CHAPTER : 2

INDUSTRY PROFILE

2.1 INTRODUCTION

2.2 ORIGIN OF BANK

2.3 HISTORY OF BANKING

2.4 INDIAN BANKING REGULATION ACT 1949

2.5 MEANING AND DEFINITION OF BANKING

2.6 FUNCTION OF BANKING

2.7 EVOLUTION OF INDIAN BANKING INDUSTRY

2.8 STRUCTURE OF INDIAN BANKING

2.9 SERVICE PROVIDED BY BANKING

ORGANIZATION

2.10 RBI- RESERVE BANK OF INDIA

9
 INDUSTRY PROFILE

2.1 INTRODUCTION
Banking system plays a very important role in the economic development of
the country. Commercial Banks are having loans shares in total Banking operation in
our nation. Commercial Bank is the oldest institution having wide network of
business. They keep the wheels of economy moving progressively by supplying two
vitamin 'M' that is money for trade commerce industry and home Banks provide
financial assistance to small scale and large scale industries. Banks today are the back
bone of modern industry. They are assistance part of the society.

2.2 ORIGIN OF BANK

There are different opinion regarding the origin of the term Bank' according to
some it is derived from Italian word Banco", Latin word "Bancus" Banks and French
word Basque which means a bench the reason believed this argument is that in olden
banking business but according to some other the work 'Bank' which mean' common
fund raised from a large number of public by clear analysis the latter argument fees to
be more realistic and with most people have accepted the German word Bank to be
the origin of Banks.

2.3 HISTORY OF BANKING

Even in ancient times banking was in existence in one form or another

writings of man could Hindu low maker and Kautilya (the minister of Chandragupta
Mourya) contained reference to Banking. In olden days there were merchant Bankers
who carried on Banking beside trading, money to used people and also safeguard the
excess wealth of the people who opposites with them. Thus merchant Bankers, money
lenders and goldsmith are rightly regarded as ancestors of modern Banking that is
joint stock come into existence only after the industrial revolution, when the thought
of industry grew and need for financial was felt.

2.4 INDIAN BANKING REGULATION ACT 1949

This act enhanced the strength of Indian Banking system some of the major
points drafted in this act are discussed below. Section 5(1) (b) of the act defines

10
bounding business as, accepting for the purpose of lending or investment of deposits
of money from public repayable on demand or otherwise withdraw by cheque, draft
order or otherwise.

2.5 Meaning of Banking

A Bank is a financial institution and a financial intermediary that accepts

deposits and channels those deposits into lending activities , either directly by loaning
or indirectly through capital market . A Bank is the connection between customers
that have capital deficits and customer with capital surplus.

Definition of Baking

According to banking regulation Act of 1949, section 5(1)(b),-“Banking

means accepting or the purpose of lending or investing , of deposits money from the
public repayable on demand or otherwise able by cheques , drat and order or
otherwise”.

2.6 Function of a Bank

The act has identified various function of a Bank under

11
The Primary Functions Of a Bank
The primary functions of a bank are two:

1. Accepting Deposits: Deposits are the amount of money that a customer hands
over to the bank. This is known as making a deposit. The deposits are of a few types
namely: Saving Deposit, Fixed Deposit, Current Deposit and the Recurrent Deposit.
The various deposit schemes are based on the type of deposit and the frequency of
depositing. For example, in a fixed deposit a definite sum is handed over to the bank
for a few years. The interest is only compounded if the deposit term is complete.

Saving/ Fixed/ Current Deposit

In a saving deposit, the amount and the rate of interest are low.Withdrawals
are also allowed but only in a limited number. The account is suitable for people who
want to save on salaries and similar sources of income.

Similarly, the fixed deposit is a fixed sum that one gives to the bank for a certain
agreed time. The withdrawals are not allowed in before the completion of the time of
the fixed deposit. On the other hand, the current account or deposit, there is no interest
paid by the bank and the customer can withdraw or deposit any number of times

2. Granting Loans and Advances: The bank lends people money on a time-
interest basis. Each loan amount is passed by the bank after due consideration and
securing the bank‟s profit. The bank also gives advances to its customers. These are
also the primary functions of the banks. The bank provides the services of overdraft,
cash credits, loans, and discounting of the bill of exchange.

Secondary Functions Of The Bank

The secondary functions of the Bank are either selling gold coins to the public
or selling insurance products and selling mutual fund products etc. Let us make a
more formal study. Following are the important secondary functions of the Banks:

12
1. Agency Functions: The bank is an agent for its customers in a way that it
invests on behalf of its customer. Acting as the agent of the customer the bank may
transfer funds, the collection of cheques, periodic payments, portfolio management,
periodic collections, and several other agency functions. All of these functions are the
secondary functions of the bank.

2. General Utility Functions: The bank also performs several utility functions.
Some of the most important utility functions of the banks may include the issue of
drafts, letter of credits etc., locker facility, underwriting of shares, dealing in foreign
exchange, project reports, social welfare programmes, other utility functions. The
banks also provide several services like the safe deposit locker facilities, safe custody
facilities and demat accounts. The opening of demat accounts allows the account
holder to trade in the stock exchange or the money market directly. The customer that
holds a demat account can directly buy or sell shares from the capital market.

The General Utility Functions are also called as Social development functions.
In some areas, the banks will help you with all the transactions that you will have to
do during a course of time. For example, you will be able to pay your phone,
electricity and other utility bills from a centre that is run by the banks. This sums up
the functions of the banks.

2.7 Evolution of the Indian Banking Industry:

The Indian banking industry has its foundations in the 18 and has a varied
evolutionary experience since initial banks in India were primarily traders' banks
engaged only in financing activities. Banking industry in the pre-independence era
developed with the Presidency Banks, which were transformed into the Imperial Bank
of India and subsequently into the State Bank of India. The initial days of the industry
saw a majority private ownership and a highly volatile work environment. Major
studies the century, then, the wards the public ownership and accountability were
made with to nationalization in 1969 and 1980 which transformed the face of banking
in India. The industry in recent times has recognized the importance of private and
foreign players in a competitive scenario and has moved towards greater
liberalization.

13
 In the evolution of this strategic industry spanning over two centuries,
immense developments have been made in terms of the regulations governing it, the
ownership structure, products and services offered and the technology deployed. The
entire evolution can be classified into four distinct phases.

Phase I- Pre-Nationalization Phase (prior to 1955)

Phase I1- Era of Nationalization and Consolidation (1955-1990)

Phase III- Introduction of Indian Financial & Banking Sector Reforms and Partial
Liberalization (1990-2004)

Phase IV- Period of Increased Liberalization (2004 onwards)

14
The milestone of Indian industry are:

The first bank in India, though conservative, was established in 1786. From
1786 till today, the journey of Indian Banking System can be segregated into three
distinct phases.

They are as mentioned below:

 Early phase from 1786 to 1969 of Indian banks.
 Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
reforms
 New phase of Indian Banking System with the advent of Indian Financial and
Banking Sector Reforms after 1991.

Phase I:
The Genera; Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of Bengal
(1806), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and
called them Presidency Banks. These three banks were amalgamated m 1921 and
imperial Bank of India was established which started as private shareholders banks,
mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between
1885 and 1913, Bank of India Central Bank of India, Bank of Baroda, Canara Bank,
Indian Bank, and Bank of Mysore were set up Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. There were approximately 1100 banks,
mostly small. To streamline the functioning and activities of commercial banks, the
Government of India came up with the Banking Companies Act, 1949 which was later
changed to Banking Regulation Act, 1949 as per amending Act of 1965 (Act No. 23
of 1965). Reserve Bank of India was vested with extensive power for the supervision
of banking in India as the Central Banking Authority.

15
 During those day‟s public has lesser confidence in the banks. As an aftermath
deposit mobilization was slow. Abreast of it the savings bank facility provided by the
Postal department was comparatively safer. Moreover, funds were largely given to
traders.

Phase II:
Government took major steps in the Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale specially in rural and semi urban areas. It formed State Bank
of India to act as the principal agent of RBI and to handle banking transactions of the
Union and State Governments all over the country.

Seven banks forming subsidiary of State Bank of India were nationalized on

19th July 1959. In 1969, major process of nationalization was carried out. It was the
effort of the then Prime Minister of India, Mrs. Indira Gandhi 14 major commercial
banks in the country was nationalized.

Second phase of nationalization in Indian Banking Sector Reform was carried

out in 1980 with six more banks. This step brought 80% of the banking segment in
India under Government ownership.

Phase III:
This phase has introduced many more products and facilities in the banking
sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was setup by his name which worked for the liberalization of banking
practices.

The country is flooded with foreign banks and their ATM stations. Efforts are
being made to give a satisfactory service to customers. Phone banking and net
banking is introduced. The entire system became more convenient and swift. Time is
given more importance than money.

The financial system of India has shown a great deal of resilience. It is

sheltered from any crisis triggered by any external macro-economics shock as other
East Asian Countries suffered. This is all due to a flexible exchange rate regime, the

16
foreign reserves are high, the capital account is not yet fully convertible, and banks
and their customers have limited foreign exchange exposure.

2.8 STRUCTURE OF SCHEDULED BANKS IN INDIA

Reserve Bank of India (RBI)

The country had no central bank prior to the establishment of the RBI. The
RBI is the supreme monetary and banking authority in the country and controls the
banking system in India. It is called the Reserve Bank‟ as it keeps the reserves of all
commercial banks.

Scheduled & Non –scheduled Banks

A scheduled bank is a bank that is listed under the second schedule of the RBI
Act, 1934. In order to be included under this schedule of the RBI Act, banks have to
fulfill certain conditions such as having a paid up capital and reserves of at least 0.5
million and satisfying the Reserve Bank that its affairs are not being conducted in a
manner prejudicial to the interests of its depositors. Scheduled banks are further

17
classified into commercial and cooperative banks. Non- scheduled banks are those
which are not included in the second schedule of the RBI Act, 1934. At present these
are only three such banks in the country.

Commercial Banks

Commercial banks may be defined as, any banking organization that deals
with the deposits and loans of business organizations. Commercial banks issue bank
checks and drafts, as well as accept money on term deposits. Commercial banks also
act as moneylenders, by way of installment loans and overdrafts. Commercial banks
also allow for a variety of deposit accounts, such as checking, savings, and time
deposit. These institutions are run to make a profit and owned by a group of
individuals.

Types of Scheduled Commercial Banks

Public Sector Banks

These are banks where majority stake is held by the Government of India.
Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.

Private Sector Banks

These are banks majority of share capital of the bank is held by private
individuals. These banks are registered as companies with limited liability. Examples
of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks

These banks are registered and have their headquarters in a foreign country but
operate their branches in our country. Examples of foreign banks in India are: HSBC,
Citibank, Standard Chartered Bank, etc

Regional Rural Banks

Regional Rural Banks were established under the provisions of an Ordinance

promulgated on the 26th September 1975 and the RRB Act, 1976 with an objective to
ensure sufficient institutional credit for agriculture and other rural sectors. The area of

18
operation of RRBs is limited to the area as notified by GoI covering one or more
districts in the State.

RRBs are jointly owned by GoI, the concerned State Government and Sponsor
Banks (27 scheduled commercial banks and one State Cooperative Bank); the issued
capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35%
respectively.

Prathama bank is the first Regional Rural Bank in India located in the city
Moradabad in Uttar Pradesh.

Scheduled Co-operative Banks

A co-operative bank is a financial entity which belongs to its members, who

are at the same time the owners and the customers of their bank. Co-operative bank
are often created by persons belonging to the same local or professional community or
sharing a common interest.

Co-operative banks differ from stockholder banks by their organisation, their

goals , their values and their governance . Regulated by the reserve bank of India, they
are governed by the banking regulation act 1949 and banking laws ( co-operative
societies) act,1965.

In the next post we will be discussing about RESERVE BANK OF INDIA)

and it's role as central bank, regulator and supervisor of commercial banks.

Three tier structure exist in the co-operative banking:

1. State co-operative bank at the apex level.

2. Central co-operative banks at the district level.
3. Primary co-operative banks and the base or local level.

Business Segmentation

The entire range of banking operations are segmented into four broad heads-
retail banking businesses, wholesale banking businesses, treasury operations and other
banking activities. Bank have dedicated business units and branches for retail banking
wholesale banking (divided again into large corporate, mic corporate) etc.

19
 Retail banking Treasury

BUSINESS

Wholesale Other banking

banking business

Retail banking

It includes exposures to individuals or small businesses. , product criterion and

low value of s should be to individuals or small businesses (whose tail banking
activities are identified based on four criteria of Re orientation, granularity individual
exposures. In essence, these qualifiers imply that retail exposure annual turnover is
limited to Rs. 0.50 billion) and could take any form of credit like cash credit,
overdrafts etc. Retail banking exposures to one entity is limited to the extent of 0.2 %
of the total retail portfolio of the bank or the absolute limit of Rs. 50 million. Retail
banking products on the liability side includes all types of deposit accounts and
mortgages and loans (personal, housing, educational etc) on the assets side of banks.
It also includes other ancillary products and services like credit cards, debit accounts
etc.

The retail portfolio of banks accounted for around 21.3 % of the total loans
and advances of SCBs as at end-March 2009. The major component of the retail
portfolio of banks is housing loans, followed by auto loans. Retail banking segment is
a well diversified business segment. Most banks have a significant portion of their
business contributed by retail banking activities. The largest players in retail banking
in India are ICICI Bank, SBl, PNB, BOI, HDFC and Canara Bank.

Among the large banks, ICICI bank is a major player in the retail banking
space which has had definitive strategies in place to its retail portfolio. It has a strong
focus on movement ds cheaper channels of distribution, which is vital for the
transaction intensive retail business. SBI's retail business is also fast growing and a

20
strategic business unit for the bank. Among the smaller banks, many have a visible
presence especially in the auto loans business. Among these banks the reliance on
their respective retail portfolio is high, as many of these banks have advance
portfolios that are concentrated in certain usages, such as auto or consumer durables.
Foreign banks have had a somewhat restricted retail portfolio till recently. However,
they are fast expanding in this business segment. The retail banking industry is likely
to see a high competition scenario in the near future.

Wholesale banking

Wholesale banking includes high ticket exposures primarily o corporate.

Internal processes of most banks classify wholesale banking into mid corporate and
large corporate according to the size of exposure to the clients. A large portion of
wholesale clients also account for off balance sheet businesses. solutions form a
significant portion of exposures coming corporate. Hence, wholesale banking clients
are strategic for banks with the view to gain other business from them. Various forms
of financing, like project finance, leasing finance, finance for working capital, term
finance etc form part of wholesale banking transactions. Syndication services and
merchant banking services are also provided to wholesale clients in addition to the
variety of products and services offered.

Wholesale banking is also a well diversified banking vertical Most banks have a
presence in wholesale banking. But this vertical is largely dominated by large Indian
banks. While a large portion of the business of foreign banks comes from wholesale
banking, their market share is still smaller than that of the larger Indian banks. A
number of large private players among Indian banks are also very active in this
segment. Among the players with the largest footprint in the wholesale banking space
are SBI, ICICI Bank, IDBI Bank, Canara Bank, Bank of India, Punjab National Bank
and Central Bank of India. Bank of Baroda has also been exhibiting quite robust
results from its wholesale banking operations.

Treasury Operations

Treasury operations include investments in debt market sovereign and

corporate), equity market, mutual funds. derivatives, and trading and forex operations.
These functions can . proprietary activities, or can be undertaken on customer s

21
account. Treasury operations are important for managing the funding of the bank.
Apart from core banking activities, which be comprises primarily of services; treasury
lending, deposit taking functions income is a significant component of the and
earnings of banks. Treasury deals with the entire investment portfolio of banks
(categories of HTM, AFS and HIFT) and provides a range of products and services
that deal primarily with foreign exchange, derivatives and securities. Treasury
involves the front office (dealing room), mid office (risk management including
independent reporting to the asset liability committee) and back office (settlement of
deals executed, statutory funds management etc).

Other Banking Businesses

This is considered as a residual category which includes all those businesses of

banks that do not fall under any of the aforesaid categories. This category includes
para banking activities like hire purchase activities, leasing business, merchant
banking, factoring activities etc.

2.9 Services provided by banking organizations:

Banking Regulation Act in India, 1949 defines banking as “Accepting “ for

the purpose of lending or investment of deposits of money from the public , repayable
on demand and withdraw able by cheques, drafts, orders etc. As per the above
definition a bank essentially performs the following functions :-

 Accepting deposits or savings functions from customers or public by

providing bank account , current account, fixed deposit account, recurring
accounts etc.
 The payment transaction like lending money to the public . Bank provides an
effective credit delivery system for loan able transactions.
 Provide the facility of transferring of money from one place to another place.
For performing this operation, bank issues demand drafts , banker‟s cheques,
money orders etc . for transferring the money . Bank also provides the facility
of Telegraphic transfer or tele-cash orders for quick transfer of money.
 A bank performs a trustworthy business for various purpose.
 A bank also provides the safe custody facility to the money and valuables of
the general public . Bank offers various types of deposit schemes for security

22
 of money. For keeping valuables bank provides locker facility . The locker are
small compartments with dual locking system built into strong cupboards .
These are stored in the bank‟s strong room and are fully secured.

2.10 RBI – Reserve Bank of India

The Reserve Bank of India (RBI) is India‟s central bank, also known as the
banker‟s bank. The RBI controls monetary and other banking policies of the Indian
government. The Reserve Bank of India (RBI) was established on April 1, 1935, in
accordance with the Reserve Bank of India Act, 1934. The Reserve Bank is
permanently situated in Mumbai since 1937.

Establishment of Reserve Bank of India

The Reserve Bank is fully owned and operated by the Government of India.

The Preamble of the Reserve Bank of India describes the basic functions of the
Reserve Bank as:

 Regulating the issue of Banknotes

 Securing monetary stability in India
 Modernizing the monetary policy framework to meet economic challenges

The Reserve Bank‟s operations are governed by a central board of directors,

RBI is on the whole operated with a 21-member central board of directors appointed
by the Government of India in accordance with the Reserve Bank of India Act.

The Central board of directors comprise of:

 Official Directors – The governor who is appointed/nominated for a period of

four years along with four Deputy Governors
 Non-Official Directors – Ten Directors from various fields and two
government Official

23
Organization Structure

Objectives

The primary objectives of RBI are to supervise and undertake initiatives for
the financial sector consisting of commercial banks, financial institutions and non-
banking financial companies (NBFCs).

Some key initiatives are:

 Restructuring bank inspections

 Fortifying the role of statutory auditors in the banking system

Legal Framework

The Reserve Bank of India comes under the purview of the following Acts:

 Reserve Bank of India Act, 1934

 Public Debt Act, 1944
 Government Securities Regulations, 2007
 Banking Regulation Act, 1949

24
  Foreign Exchange Management Act, 1999
 Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002
 Credit Information Companies(Regulation) Act, 2005
 Payment and Settlement Systems Act, 2007

Major Functions of RBI

Monetary Authority

 Formulating and implementing the national monetary policy.

 Maintaining price stability across all sectors while also keeping the
objective of growth.
 Regulatory and Supervisory
 Set parameters for banks and financial operations within which banking
and financial systems function.
 Protect investors interest and provide economic and cost-effective banking
to the public.
 Foreign Exchange Management
 Oversees the Foreign Exchange Management Act, 1999.
 Facilitate external trade and development of foreign exchange market in
India.
 Currency Issuer
 Issues, exchanges or destroys currency and not fit for circulation.
 Provides the public adequately with currency notes and coins and in good
quality.
 Developmental role
 Promotes and performs promotional functions to support national banking
and financial objectives.
 Related Functions
 Provides banking solutions to the central and the state governments and
also acts as their banker.
 Chief Banker to all banks: maintains banking accounts of all scheduled
banks.

25
RBI Policies

Repo Rate Repo or repurchase rate is the benchmark interest rate at which the
RBI lends money to all other banks for a short-term. When the repo rate increases,
borrowing from RBI becomes more expensive and hence customers or the public bear
the outcome of high-interest rates.

Reverse Repo Rate (RRR) Reverse Repo rate is the short-term borrowing rate
at which RBI borrows money from other banks. The Reserve Bank of India uses this
method to reduce inflation when there is excess money in the banking system.

Cash Reserve Ratio (CRR) is the particular share of any bank‟s total deposit
that is mandatory and to be maintained with the Reserve Bank of India in the form of
liquid cash.

Statutory liquidity ratio (SLR) Leaving aside the cash reserve ratio, banks are
required to maintain liquid assets in the form of gold and approved securities. A
higher SLR disables the banks to grant more loans.

Conclusion

Banking system have been with us for as long as people have been using
money. Banks and other financial institution provide security for individuals.

In general , what banks do is pretty easy to figure out . For the average persons
banks accept deposits , make loans, provide a safe place for money and valuables, and
act as payment agents between merchants and banks .

Banks are quite important to the economy and are involved in such economic
activities as issuing money , settling payments , credit intermediation, maturity
transformation and money creation in the form of fractional reserve banking.

In addition to fees and loans , banks are also involved in various other types of
lending and operations including , buy / hold securities , non-interest income ,
Insurance and leasing and payments treasury services.

26
 CHAPTER : 3

COMPANY PROFILE

3.1 Introduction

3.2 History

3.3 Vision

3.4 Mission

3.5 Logo

3.6 SWOT analysis

3.7 Products and Services offered by Bank of Baroda

3.8 Awards and Recognition to Bank of Baroda

3.9 Board of directors

3.10 Organisation structure of Bank of Baroda

3.11 Competitors

3.12 Balance sheet

27
Company profile

Introduction

Bank of Baroda (BOB) is an Indian Multinational, public sector Banking

and financial services company. It is the second largest public sector bank in India
post merger with a business mix of close to US$225 billion.

Based on 2019 data, it is ranked 1145 on Forbes Global 2000 list. BoB has
total assets in excess of ₹ 3.58 trillion (making it India's 2nd biggest bank by assets),
a network of 9583 branches in India and abroad, and 10442 ATMs as of July,
2017. The government of India announced the merger of Bank of Baroda, Vijaya
Bank and Dena Bank on September 17, 2018, to create the country's third largest
lender. The amalgamation is the first-ever three-way consolidation of banks in the
country, with a combined business of Rs 14.82 lakh crore, making it the third largest
bank after State Bank of India (SBI) and ICICI Bank.

The Maharaja of Baroda, Maharaja Sayajirao Gaekwad III, founded the bank
on 20 July 1908 in the Princely State of Baroda, in Gujarat. The Government of
India nationalized the bank, along with 13 other major commercial banks of India on
19 July 1969; the bank has been designated as a profit-making public sector
undertaking(PSU).

As many as 10 banks have merged with Bank of Baroda to date.

Industry Banking
Financial services

Founded 20 July 1908; 111 years ago

Founder Sayajirao Gaekwad III

Headquarters Vadodara, Gujarat, India

Number of locations 9898 branches (2019)

Area served India & Worldwide

28
 

 Hasmukh Adhia
Key people
(Chairman)
 Sanjiv Chada
(MD & CEO)

Services Consumer banking, corporate banking, finance and

insurance, investment banking, mortgage oans, private
banking, private equity, savings, Securities, asset
management, wealth management

Owner Government of India (69.2%)

Number of employees 86,170 (2019)

Capital ratio 12.13% (2019)

Website www.bankofbaroda.com

History

Bank of Baroda began as “The Bank of Baroda Limited”, in 1908 in Baroda. It

was founded by the great visionary the late Maharaja of Baroda – Sir Sayajirao
Gaekwad-III. On 18 July 1908, an auspicious day, the Maharaja took an elephant ride
to a small rented office in the heart of the city. He arrived before 11 am, and deposited
a silver plate filled with 101 gold coins – Bank of Baroda‟s first deposit.

In 1953, the Bank opened its first overseas branch at Mombasa, Kenya.
During the period 1953-1969, the Bank opened three branches in Fiji, five branches in
Kenya, three branches in Uganda and one each in London and Guyana. Between 1969
to 1974, we established three branches in Mauritius, two branches in UK and one
branch in Fiji. A significant development in the sphere of overseas operations was the
entry of the Bank in the oil rich Gulf countries in 1974 when two branches were
opened in UAE, one at Dubai and another at Abu Dhabi.

29
A committee in 1955 suggested that 10 state banks, including Bank of Baroda, should
be amalgamated with State Bank of India. But Bank of Baroda had already expanded
beyond the state, and even abroad. It handled no government business, as Baroda was
now part of Bombay, and it was served by Imperial Bank of India. In 1959, The State
Bank of India Subsidiaries Act was passed, and Bank of Baroda did not figure in the
list to which the legislation was to apply.

The bank was nationalized in 1969.

Vision

It has been a long and eventful journey of almost a century across 25

countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-
tech Baroda Corporate Centre in Mumbai, it is a saga of vision, enterprise, financial
prudence and corporate governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted
in private capital, princely patronage and state ownership. It is a story of ordinary
bankers and their extraordinary contribution in the ascent of Bank of Baroda to the
formidable heights of corporate glory. It is a story that needs to be shared with all
those millions of people - customers, stakeholders, employees & the public at large -
who in ample measure, have contributed to the making of an institution.

30
Logo

The logo is a unique representation of a universal symbol. It comprises dual

‘B’ letterforms that hold the rays of the rising sun. BoB call this the Baroda Sun. The
sun is an excellent representation of what the Bank stands for. It is the single most
powerful source of light and energy. Its far-reaching rays dispel darkness to
illuminate everything they touch.

Ace Indian cricketer Rahul Dravid is set to become the brand ambassador for a
new avtaar of the Bank of Baroda (BoB).

Even as the bank expands its presence-both nationally and in the overseas
markets, on Monday it will shed its original logo of a hand and a wheel of industry
and agriculture within a circle and adopt a new logo - the Baroda Sun.

The traditional blue letters of Bank of Baroda on a yellow background is to be

replaced by a more vibrant orange colour. The new logo, with two `B' letters
overlapping each other spring out from the rays of sun at the lower left corner and the
logo will have a halo effect representing the sun.

Since its inception in 1908 in Gujarat, the bank has the logo of an industrial
and agriculture wheel with Sanskrit letters - `Akshayam te Bhavishyati' (the future is
secure). A hand overlapping a wheel was also part of the original logo.

31
 Now, on the threshold of adopting new international standards, BoB clearly
intends to project itself as a modern and technologically savvy bank. The new logo
and the signing of Rahul Dravid as brand ambassador is also a clear indication that the
bank is trying to address the needs of the younger generation.
SWOT analysis

SWOT analysis of Bank of Baroda analyses the brand/company with its

strengths, weaknesses, opportunities & threats. In Bank of Baroda SWOT Analysis,
the strengths and weaknesses are the internal factors whereas opportunities and threats
are the external factors.

SWOT Analysis is a proven management framework which enables a brand

like Bank of Baroda to benchmark its business & performance as compared to the
competitors and industry. Bank of Baroda is one of the leading brands in the banking
& financial services sector.

Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT)

Analysis of Bank of Baroda. Strengths are:

Strengths

1. Bank of Baroda is one of the biggest names in public sector banking in India
2. Bank of Baroda offers number of services and products offered by the bank
3. CBS implementation in its branches
4. International presence adds to the credibility of Bank of Baroda
5. Strong legacy of the bank since its inception in 1908
6. More than 50,000+ people are employed with Bank of Baroda
7. Acquisitions have strengthened the position of the bank in the Indian market
8. Bank of Baroda has more than 5000+ branches and 10000+ ATMs
9. Strong advertising and branding of the brand
Weaknesses

1. Limited market share growth due to intense competition

2. International presence of Bank of Baroda is limited as compared to global banks

32
Opportunities

1. International branches of Bank of Baroda give scope to expand in other economies

2. Expansion in the rural areas to include the unbanked and underbanked
3. Bank of Baroda Caps can contribute more to the revenues
4. Capturing the youth with internet services and apps.
Threats

1. New banking licenses by RBI can affect operations

2. Foreign banks investing in huge numbers can reduce market share of Bank of
Baroda
3. Online facilities are vulnerable to data leaks and loss of confidential
information
Product and services offered by BOB

Products & Services of BOB

Given below is the list of services offered by the Bank of Baroda:-

 Retail Banking
 Rural/Agri Banking
 Wholesale Banking
 SME Banking
 Wealth Management
 Demat
 Product Enquiry
 Internet Banking
 NRI Remittances
 Baroda e-Trading
 Interest Rates
 Deposit Products
 Loan Products
 ATM / Debit Cards
Bank of Baroda takes special care to look after the requirements of its shareholders.
Given below are the various benefits provided to the shareholders of the bank:-

33
  Change of address or names of Shareholders
 Transmission of shares
 Transposition
 De-materializing Shares
 Investors Services Department
 Registrars & Share Transfer Agent
 Bonds related to Transfer
 Lodgment of Shares
 Duplicate Share Certificate
 Duplicate Dividend Warrants
 Revalidation
 Means of communication
 Investor Grievance Committee
 Electronic Clearing Services or ECS
 Stock Market Data

Personal Services

 Deposits
 Gen-Next
 Loans
 Credit Cards & Debit Cards
 Services
 Lockers

Corporate Services

 Wholesale Banking
 Deposits
 Loans
 Advances
 Services

34
International Services

 NRI Services
 FGN Currency Credits (Foreign Currency Credits)
 ECB (External Communication Borrowings)
 FCNR (B) Loans
 Offshore Banking
 Finance in Export and Import
 Correspondent Banking Facility
 International Treasury
Treasury service of Bank of Baroda includes Domestic operations and Forex
operations.

Bank of Baroda Rural Services:-

Domestic Services
 Deposits
 Priority Sector Advances
 Services
 Lockers
Priority Sector Advances
 Small Scale Industries
 Small Business
 Retail Loans
 Schemes sponsored by the GOI (Government of India)
 Baroda General Credit Card Scheme (BGCC)
 Agriculture related Loans
Bank of Baroda Home Loan
Bank of Baroda home loan is one of the most well known products of the bank. It
comes in various forms and is tailor made as per the requirements of the different
customers.

35
About Home Loans

Contact Details

Bank of Baroda home loans are a prestigious part of the Bank of Baroda. The
bank was established in the year 1908. It has its headquarters in Mumbai. The Bank of
Baroda offers various types of loans and the home loans are an important part of the
package.

The need for new houses, flats, apartments, house construction, repairing an
existing house requires financial support. Bank of Baroda home loans is one of the
best financial support all such people who are looking for houses or trying to repair
existing houses can avail.

Types of Home Loans

Baroda Housing Loan

Bank of Baroda provides easy Home Loan, which is also tailor- made to the fit the
requirement of different customers. The repayment period is up to 25 years with the
option of floating or fixed rate of interest.

Baroda Housing Loan is available for –

 Construction of house.
 Purchase of old or new dwelling unit
 Repaying a loan borrowed from other housing finance company or
commercial bank.
 Purchase of plot of land for construction of a house.
Baroda Housing Loans to NRIs and PIOs and Advantages

Bank of Baroda offers innovative home loan solutions to the Non Resident
Indians (NRI) and Persons of Indian Origin (PIO).
 It is a home loan, which is custom made for the Non Resident Indians (NRI)
and Persons of Indian Origin (PIO).
 Free insurance pertaining to personal accident and property.
 No pre payment or foreclosure charges for part as well as full prepayment.

36
  Option of Flexi Rate plan, which evades the interest rate risk by breaking the
loan into two separate accounts.
Baroda Home Improvement Loan and Advantages
This is a loan pertaining to the extension of home, repairs, improvement,
renovations, extension of home and for furniture, fittings and fixtures
 Loans are available for renovation, repairs, extension of the existing house,
improvements.
 Loans are available for purchase of fixtures, furniture, home appliances,
furnishing, and other gadgets.
Bank of Baroda Credit Cards
Bank of Baroda credit card also known as Bobcards Ltd is a 100% subsidiary
of the reputed Indian Bank, Bank of Baroda. Bank of Baroda credit card or Bobcards
Ltd. is a credit card company and it offers wide varieties of credit card to its
customers, perfectly tailor made to suit the needs of the Indian customers. Bank of
Baroda credit card is being headed by Dr. Anil K. Khandelwal, Chairman and CMD,
Bank of Baroda and Mr. B.B.Garg, Managing Director of the company.

Types of credit cards offered by BOB

 Nextgen Bobcard Gold - a special type of credit cards for students.

 Bobcard Gold - Are affiliated to both Visa & Mastercard International and
are accepted globally in over 29 million locations and 800,000 ATMs the
world over.
 Bobcard Exclusive Woman - this card is tailor made to meet the needs of
today's woman. This card can be accessed in more than 29 million locations
and more than 800,000 ATMs the world over.
 Bobcard Exclusive Youth - this card is tailor made to meet the needs of
today's Indian youth. This card can be accessed in more than 29 million
locations and more than 800,000 ATMs the world over.
 Bobcard Silver - this card has affiliation of Visa international and is accepted
the world over.
 Bobcard Corporate Global - Affiliated to Visa International, this card can be
accessed throughout the world in more than 30 million counters and in more
than 8,00,000 Visa ATM's the world over.

37
Bank of Baroda stock
The Bank of Baroda stock can be considered as a good investment option.
With the economy performing well and the rapid growth of the banking and financial
services, large banks would come up with various long - term prospects. The Bank of
Baroda has been performing very well from the year 2005. This progress is been
reflected in its stocks which is also performing well in the stock market. Prior to this
Bank of Baroda, has been under performing as many other public sector banks. It was
worst hit when the interest rates rose in the 2004. The main factor for the losses was
large investments in government securities.
Awards and Recognition to BOB

 BankofBaroda received the IPE award for "Best practices in CSR awards -
2020" for livelihood initiative. The award was received by Shri P. Srinivas,
Zonal Head, Hyderabad on behalf of the Bank

 Bank of Baroda Apex Academy Research Team of Baroda bagged the 3rd
prize in Technology Category for their paper on the theme 'Technological
Development in Banking and Payment Systems' at the 5th International Youth
Symposium by Gujarat University.

 Bank of Baroda was conferred the Rajbhasha Kirti award by Shri Amit Shah,
Union Minister of Home Affairs

 Bank of Baroda awarded „National Award for Excellence in Training &

Development‟ for Excellence in Training & Development and „National
Awards for Best in Class Learning & Development‟ for Best Deployment of a
Learning Management System.

 SKOCH „Order of Merit‟ Award for Baroda Anubhuti (Enhancing Employee

Experience) on 29.06.2019

 SKOCH „Order of Merit‟ Award for Project SparshPlus (Human Touch for
Business Excellence) on 29.06.2019

 Bank of Baroda awarded the National Award for outstanding performance in

SHG Financing during FY 2018-19, among the Public Sector Banks.

38
  Bank of Baroda bags an award “Winner for the Most Customer Centric Bank
Using Technology” at the IBA Banking Technology 2019 Awards Function,
held at St. Reges, Mumbai.

 Bank of Baroda received Runners Up award for “Best Payment Initiatives”, at

the IBA Banking Technology 2019 Awards Function, held at St. Reges,
Mumbai.

Board Of Directors

Name Designation
Hasmukh Adhia Chairman
Vikramaditya Singh Khichi Executive Director
Bharatkumar D Dangar Director
Soundara Kumar Director
Murali Ramaswam Executive Director
Sanjiv Chadha Managing Director & CEO
Name Designation
Shanti Lal Jain Executive Director
Srinivasan Sridhar Director
Ajay Kumar Director
Debashish Panda Director
Biju Varkkey Part Time Non Official Director
Amit Agrawal Government Nominee Director

39
Organisation structure of BOB

Competitors
Below are the top 6 Bank of Baroda competitors:
1. ICICI Bank
2. Andhra Bank
3. Allahabad bank
4. HDFC
5. Axis Bank
6. State Bank of India (SBI)

40
 Chapter – 4

Data analysis and Interpretation

Analysis of data means study the original material to discovery the inherent
factors. The data are studied form as many angles as possible to explore the research
can processed of interpretation is essential one, Starting what the results shows. The
research data essential one, starting what the results shows. The research data become
meaningful only being analysized interpreted .

Results and finding are also called analysis and interpretation this part of the
report contains an allocation of tables , charts , graphs and narrative of the result of
the survey. The analysis identifies the various factors that play a major role in the
determining why the respondents go for a particular product on brand.

Data analysis and interpretation is the process of assigning meaning to the

collected information and determining the conclusions, significance and implications
of the findings. It is an important and exciting step in the process of research studies,
analysis follows data collection.

The analysis has also been made with reference to factory effecting buying
decisions . The multinational factor to go for particular brand. For some of the tables ,
graphs, are used to interpret the finding in the better manner.

41
4.1 RETURN ON ASSETS

Return on assets ratio often called the Return on total assets , is a profitability ration
that measures the net income produced by total .

Return on assets = x 100

( in crores)

YEAR NET INCOME TOTAL ASSETS Ratio

2016 131524902 77863883 168.92
2017 129574387 79597394 162.79
2018 140307212 99774265 140.62
2019 141904519 169847020 83.55

4.1 graph

Return
180
160
140
120
100
80 Return
60
40
20
0
2016 2017 2018 2019

Interpretation

From the aboe, table and graph represents the ROA of bank of Barodaa . In the
year 2016 is 168.92 and it is decreasing contineously year by year i.e from 2017-2019
i.e 162.79, 140.62, 83.55. It shows that the bank is not properly utilizing its income
on assets.

42
4.2 RETURN ON EQUITY

The ROE is a measure of the profitability of a business in relation to the equity

also known as net assets. ROE is a measure how well a company uses investment to
generate earnings growth .

Return on equity = x 100

( in crores)

YEAR NET INCOME EQUITY Ratio

2016 131524906 61597544 213.52
2017 129574387 76247238 169.93
2018 140307212 81514879 172.12
2019 141904519 106271981 133.53

4.2 Graph

Return
18
16
14
12
10
8 Return
6
4
2
0
2016 2017 2018 2019

Interpretation

The above table and graph represents the ROE of the bank. Where the ROE is not
consistent in its activity which is proved from the above analysis . The bank as to
concentrate on fluctuating of ROE.

43
4.3 NET INTEREST MARGIN
The net interest margin ratio measures the profit of a company makes on its
investing activities as a percentage of total investing assets . Banks and other
financial institution typically use this ratio to analyze their investment decision and
track the profitability of their lending operation.

Net interest margin = x 100

( in crores)

YEAR NET INTEREST NET INTEREST Ratio

INCOME EXPENDED
2016 122735265 99812473 1.23
2017 120835790 93227447 1.30
2018 123794585 88730179 1.40
2019 125898430 82869547 1.52

4.3 Graph

Return
18
16
14
12
10
8 Return
6
4
2
0
2016 2017 2018 2019

Interpretation

The above table and graph represents NIM is increasing every year. Which
gives a good interest margin to the bank. The NIM increased from 1.23 to 1.52 from
the year 2016 to 2019 . That gives a position sign to the bank towards making profit.

44
4.4 DEBT EQUITY RATIO

The debt equity ratio is a financial ratio indicating the relative proportion of
shareholder equity and debt used to finance a company assets.

Debt equity ratio = x100

( in crores)

YEAR DEBT EQUITY RATIO

2016 1336215442 61597544 21.69
2017 1357412947 76247238 17.80
2018 1440737488 81514879 17.67
2019 1645873299 106271981 15.49

4.4 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

The above table and graph shows the debt equity ratio of Bank of Baroda. The
debt which is related with equity is decreasing year by year, hence the liability of the
bank decreases . As it decreases the debt it‟s a positive growth towards making profit.

45
4.5 CURRENT RATIO

The ratio measures the solvency of the company in the short term . it is the
ratio of current assets to current liabilities. It shows the firm‟s ability to cover its
current liabilities with its current assets . generally 2:1 is considered ideal for a
concern

Current ratio =

( in crores)

CURRENT CURRENT
YEAR RATIO
ASSETS LIABILITIES
2016 1012674385 28109037 36.03
2017 1022779565 20427224 50.07
2018 1091382649 26563392 41.09
2019 1368189106 24175192 56.59

4.5 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

The above table and graph represents the current ratio of Bank of Baroda. In
the year 2016 and 2017 the current ratio is 36.03 and 50.07 but in the year 2018 it
decreased to 41.09 but in the year 2019 it again increased to 56.59 . It shows that the
financial position of a bank is not stable and consistent.

46
4.6 DEBT TO ASSETS

The debt to asset ratio is a leverage ratio that measures the amount of total
assets that are financed by creditors instead of investors . In other words , it shows
what percentage of assets is funded by borrowing compared with the percentage of
resources that are funded by the investors .

Debt to assets =

( in crores)

YEAR TOTAL DEBT TOTAL ASSETS Ratio

2016 1336215442 77863883 17.16
2017 1357412947 79597394 17.05
2018 1440737488 99774265 14.44
2019 1645873299 169847020 9.69

4.6 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

The above table and graph represents the DOA of the bank. The debt is related
with assets is decreasing year by year , hence the liability of the bank decreases . As it
decreases the debt it‟s a positive growth towards making profit .

47
4.7 EARNING PER SHARE
Earning is also called as Net Income per share this is the amount of money
each share of stock would receive if all of the profits were distributed to the
outstanding share at the end of the year .

Earning per share =

(in crores)

PROFIT TO NUMBER OF
EARNING PER
YEAR EQUITY SHARE EQUITY
SHARE
HOLDER SHAREHOLDER
2016 13736848 859119307 0.016
2017 14839830 932560315 0.016
2018 20877278 998845340 0.021
2019 20018753 1304147965 0.015

4.7 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

The EPS was same when compared during the year 2016 and 2017 that is
0.016 considered as an idle proprietary ratio. But in the year 2018 it was increased to
0.021 but in the year 2019 it decreased to 0.015 . The capacity of the bank to pay
dividend to its ESH is fluctuating every year.

48
4.8 OPERATING EXPENSES RATIO

The operating expenses ratio is a measurement of the cost to operate a piece of

property compared to the income brought in by the property. It is calculated by
dividing a property‟s operating expense by its gross operating income and is used for
comparing the expense of similar properties.

Operating expenses ratio = x 100

( in crores)

OPERATING
YEAR NET INCOME RATIO
EXPENSES
2016 19122120 131524906 14.54
2017 20858241 129574387 16.10
2018 27365495 140307212 19.50
2019 28056956 141904519 19.77

4.8 Graph

Return
20

15

10

0
2016 2017 2018 2019

Interpretation

The above table and graph represents the OER of the Bank of Baroda. The
operating expense which is related with net income is increasing year by year, hence
the expense of the bank increasing . As it increases the expense its negative growth
towards making profit.

49
4.9 PROPRIETARY RATIO

The proprietary ratio is also called as equity ratio . is the proportion of

shareholders equity to total assets and as such provides a rough estimates of the
amount of capitalization currently used to support a business.

Proprietary ratio =

( in cores)

YEAR NETWORTH TOTAL ASSETS RATIO

2016 61597544 77863883 0.79
2017 76247238 79597394 0.96
2018 81514879 99774265 0.82
2019 106271981 169847020 0.63

4.9 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

The proprietary ratio of Bank of Baroda over a period of 4 years is presented

in tabular and graphical form. In the year 2017 bank accumulated high proprietary
ratio i.e 0.96 and in the year 2019 it decreased to 0.63 . From creditors point of
view, it indicates more of creditors fund and less of shareholders funds in total assets.

50
4.10 Current assets to proprietary fund ratio

Current assets to proprietary fund ratio establishes the relationship between

current assets and shareholder‟s funds. The purpose of this ratio is to calculate the
percentage of shareholders fund invested in current assets.

Current assets to proprietary fund ratio =

( in crores)

CURRENT
YEAR NETWORTH RATIO
ASSETS
2016 1012674385 61597544 16.44
2017 1022779565 76247238 13.41
2018 1091382649 81514879 13.39
2019 1368189106 106271981 12.87

4.10 Graph

Return
18
16
14
12
10
8
6
4
2
0
2016 2017 2018 2019

Interpretation

With reference to the above, that the ratio is showing highest in the year 2016
i.e 16.44 as compared to the year 2017 and 2018 i.e 13.41 and 13.39 . In the year
2019 it decreased to 12.87. it shows that the proprietary fund has been invested more

51
4.11 Loans to Deposit ratio

Loan deposit ratio is a ratio between the banks total loans and total deposits.
The ratio is generally expressed in percentage terms if the ratio is lower than one , the
bank relied on its own deposits to make loans to its customers , without any outside
borrowing.

Loans to deposit ratio = /

( in crores)

Year Advances Deposits ratio

2016 866958633 1336215442 0.65
2017 889869612 1357412947 0.66
2018 945488880 1440737488 0.66
2019 1161654423 1645873299 0.71

4.11 Graph

Return
200

150

100

50

0
2016 2017 2018 2019

Interpretation

The above table and graph shows the loans to deposits ratio of Bank of
Baroda. The advances which is related to deposits is same in the year 2017-18 i.e
0.66 and increased in the year 2019 the ratio was 0.71 that means bank is not having
enough liquidity to cover any unforeseen fund requirements.

52
4.12 Net profit as percentage of total deposits

Net profit as percentage of total deposits=

( in crores)

Year Net profit Deposits Ratio

2016 13736848 1336215442 0.010
2017 14839830 1357412947 0.011
2018 20877278 1440737488 0.014
2019 20018753 1645873299 0.012

4.12 Graph

Return
180
160
140
120
100
80
60
40
20
0
2016 2017 2018 2019

Interpretation

The above table and graph shows net profit to total deposits ratio. In the year
2018 it accumulated more ratio 0.014 . In the year 2019 i.e it decreased to 0.012.It is
a positive sign to bank.

53
 CHAPTER -5

5.1 FINDINGS

5.2 SUGGESTIONS

5.3 CONCLUSION

54
 FINDINGS, SUGGESTION AND CONCLUSION

In this chapter analysis and interpretation of data has been presented . this
chapter presents the summary of finding of study and suggestion made in the light of
finding of the study and suggestion made in the light of the finding of the study .this
chapter also present formal conclusion of the study .

5.1 Findings:

The following are the findings of the study

 Return on assets Ratio is decreasing year by year .

 Return on Equity Ratio which is fluctuating year by year .

 Current Ratio which is fluxuating year by year it shows that the financial
position of bank is not stable.

 Operating expense Ratio is increasing that means the expense of the bank is
more , it is a negative sign to the bank.

 The EPS was same while compare during the year 2016 and 2017 i.e 0.016 it
is considered as on idle proprietary ratio

55
5.2 Suggestions:

The following are the suggestion of the study

 Bank as to utilize its assets which are in the form of advances to improve its
income, by this it can increase the banks return on assets .

 Bank as to maintain consistency in its Equity returns to attract stake holders of

the bank and to maintain a consistent return on equity.

 Bank as to maintain or utilize its working capital in a proper channel so that it

can avoid fluctuation in maintaining current Ratio.

 Bank as to use necessary and advanced tools and techniques to control the
cost of operation for making maximization of profit and minimization of cost.

 Bank as to concentrate more on its investment pattern and return on the

investment so that it can improve its EPS ratio year by year instead of
maintaining constant return in EPS.

56
5.3 Conclusion:

The study entitle “Management of Productivity in Commercial Banks : A Case

Study on Bank of Barodaa,” has been undertaken with the objective to analyze and
interpret the banks financial performance. The analysis of the bank was undertaken
with the help of ratios, which are important tools of financial analysis. The bank has
been able to achieve heavy growth across multiple parameters , including customer‟s
acquisition and revenue .

After having solved the ratios and analyzing the financial data, we can
conclude that the bank has gradually excelled over the years . thus , ratio analysis
has been a very useful technique , which has highlighted the performance of Bank of
Baroda limited in key areas and also has in the allocation of certain strategies to be
followed by Bank of Baroda Limited , which is indispensable to its future growth.

57
ANNEXURES

58
 Appendices,(Annexure)
Statement of profit and loss for the year ended 31-03-2016 , 17 and 18 ,19

Particulars 31-03-2016 31-03-2017 31-03-2018 31-03-2019

Income
Interest earned 122735265 120835790 123794585 125898430
Other Income 8789641 8738597 16512627 16006089
Total 131524906 129574387 140307212 141904519
Expenditure
Interest Expended 99812473 93227447 88730179 82869547
Operating Expenses 19122120 20858241 27365495 28056956
Provision and 8196219 11670747 16706687 23707787
Contingencies 127130812 125756435 132802361 134634290
Total
Profit / Loss 4394094 3817952 7504851 7270229
Net Profit for the year 9342754 11021878 13372427 12748524
Add :Profit brought 0 0 0 0
forward 0 0 0 0
Less : Special Reserve u/s 13736848 14839830 20877278 20018753
36(1)(viii)
Add: Transfer from 1098524 954487 1876213 1817557
General Reserve 0 0 800000 800000
Total 65418 512916 3649256 882950
Appropriations 0 0 0 0
Transfer to Statutory 0 0 0 0
Reserve
Transfer to Special 1551028 0 1803285 1883569
Reserve of the IT 0 0 0 0
Transfer to capital 11021878 13372427 12748524 14634677
Reserve 13736848 14839830 20877278 20018753
Transfer to General
Reserve
Interim Dividend
(inclusive of tax)
Proposed dividend:
Equity Share Capital
Preference Share Capital
Balance c/f to Balance
Sheet
Total

59
 Balance sheet as on 31-03-2016,17 and 18,19

Particulars 31-03-2016 31-03-2017 31-03-2018 31-03-2019

Capital and
Liabilities 8591194 9988454 13041480
capital 0 9325604 0 0
Share Application 53006350 93230501
Money 1263433506 220000 71526425 1572875358
Reserves and 72781936 72997941
Surplus 28109037 64721634 1330119521 24175192
Deposits 1425922023 1254407229 1776320472
Borrowings 103005718 110617967
Other liabilities and 65342947 20427224 43036975
provision 8175370 1454087409 26563392 6665440
TOTAL 407581190 395116614
ASSETS 866958633 1548815759 1161654423
Cash and Balance 5666448 62683499 13014752
with RBI 72197435 156832268
Balance with Banks 1425922023 3512009 57704212 1776320472
& MC&SN 140922519 150010562
Investment 24688524 418424895 1602889 91667534
Advances
Fixed Assets 889869612 444245513
Other Assets
TOTAL 12882949 945488880
Contingent liabilities
Bills for Collection 66714445 13187597

1454087409 86586668

172765798 1548815759

21656727 159201445

22812122

60
BIBLOGRAPHY

61
Books:

 Prasanna Chandra, Financial management , Tata McGraw Hill Education

Private limited, New Delhi.
 M Y Khan, Indian Financial system, McGraw Hill Education Private limited,
New Delhi.
 P.V Kulkarni and B.G Satyaprasad, Financial management, Himalaya
Publishing House.

Journals

 Published by Oxford Academic. Covering both theoretical and empirical work

in finance, the Review publishes high-quality papers which are immediately
relevant to the field of finance.

Journal of Banking and Finance

 Published by Elsevier. A journal for research on financial institutions and the

system in which they operate, with a focus on
 policy-oriented research and theoretical work.

Website
www.bankofbaroda.com

www.rbi.com

http://www.encyclopedia.com

Annual Report of bank of baroda

62