MANAGEMENT DISCUSSION AND ANALYSIS

OVERALL BUSINESS ENVIRONMENT

Global Developments:

Growth is sluggish across the globe. According to the latest World Economic Outlook released by IMF, global growth is expected to be 3.2% for 2016 and 3.5% for 2017. Among Asian economies, growth in China moderated to 6.9% for 2016 and growth for 2017 is expected to be 6.5%.This is expected to pull down overall growth for Emerging Markets and Developing Economies (EMDEs). Countries dependent on exports would be adversely impacted and so will commodity producers. Another notable feature is world trade growth (2.8%) lagging behind global output growth (3.5%).

Domestic Economic Scenario:

GDP is estimated at 7.6 % during FY 2016 and growth projection for FY 2017 is at 7.90%. However, high frequency indicators such as Index of Industrial Production (IIP), bank credit growth and capacity utilization by industry show moderation. Falling commodity prices kept Current Account Deficit under check which is expected to be 1.3% of GDP for FY 2016.

Both CPI and WPI inflation are benign. Low inflation has been sustained due to low commodity prices. Government is expected to meet its fiscal deficit target of 3.5 per cent of GDP for FY 2017. Due to comfort on inflation front and efforts at fiscal consolidation, repo rate has been reduced by 0.25% to 6.50% in April 2016 and the band between repo-reverse repo-MSF corridor has been narrowed to 1% from 2% to minimize volatility in interest rates.

In the real sector, imbrssive strides are being made in power, coal, mining, electricity and cement segments. Foreign direct investment norms have been liberalized and vigorous efforts have been undertaken to improve the ease of doing business. Bank accounts for over 200 million people under Pradhan Mantri Jan Dhan Yojana have also been opened.

Banking Sector:

As far as banking industry is concerned, FY 2016 has been one of the most challenging year in the post reforms era. The business of all Scheduled Commercial banks’ recorded a lower growth of 10- 11 percent. Asset Quality of banks suffered on account of variety of factors like global economic slowdown, lower exports, infra and road projects getting stalled for lack of necessary approvals, withdrawals of regulatory forbearance and Asset Quality Review (AQR) by RBI.

While the performance of banks was adversely impacted on profitability front, there have been a slew of policy changes. Under the Indra Dhanush programme of Government of India, Bank Boards Bureau was set up and entrusted with the task of improving Board Governance, consolidation, NPA resolution and providing more autonomy to banks in their day to day functioning. The much awaited Bankruptcy Code has been introduced for faster resolution of impaired assets. The DRT and SARFAESI Acts are also being modified to make them more effective. The Reserve Bank of India issued licenses to Payment and Small Finance banks. New licenses are also being offered to universal banks. On payment and settlement technology front, NPCI launched a unified interface and also introduced the Bharat Bill Payment system. RBI introduced certain changes in items which could be reckoned as capital for calculation of CRAR. At the same time the Capital Conservation Buffer of 0.625% was introduced starting from FY 2016. Overall, the operating environment for Banks has been quite challenging during FY 2016. The Government of India has pledged its full support to public sector banks in terms of capital infusion, autonomy etc. and at the same time, expecting banks to improve their operational efficiency & profitability.

Banking Sector-Issues and Challenges:

Ø Banks in India transitioned to Marginal Cost of Funds Based Lending Rates (MCLR) system with effect from April 1, 2016. This is expected to lower borrowing costs for borrowers.

Ø Aggregate deposits are at Rs. 97 Lakh crore and Gross Advances at Rs. 75 Lakh crore, according to latest banking system data. Deposit growth has lagged behind credit growth for the last couple of fortnights.

Ø A big leap is expected on the technology front with the ushering in of Unified Payment Interface (UPI) enabling seamless money transfer and remittance services. Moreover, with the entry of small finance and payment banks, the number of players in the banking space is set to increase.

Ø New categories of banks like Wholesale Banks and Custodian Banks are also proposed while universal banking licenses on tap is on the anvil.

Ø The ratio of bank credit and deposits to GDP is low in India against other financial majors like China. Moreover, we still do not have a bank among the top 10 global banks.

Ø Human resource management is an area of focus due to retirement of experienced senior personnel. This is complicated by the challenge to retain skilled personnel.

Ø There is a need to keep pace with changing technological trends. Banks, especially PSBs, need to embrace disruptive technologies and focus more on innovation.

Ø Investing in analytics platforms will help brvent frauds.

Outlook:

With good monsoons and industry revival, growth during FY 2017 is expected to be better. Interest rates outlook is benign. On the real economy front, coal, mining, cement and electricity sectors would have a positive outlook while commodities continue to be subdued. Stressed asset ratio of banks is expected to be moderated.

BUSINESS REVIEW:

DEPOSITS:

Savings Deposits grew by 12.54%, whereas Current deposits grew by 8.04%. Overall, Bank’s total deposits (domestic + overseas) reduced by Rs. 18,902 crore to Rs. 5,13,005 crore during the year. The domestic deposits stood at Rs. 3,77,309 crore as on March 31, 2016.

CASA:

CASA deposits comprising Savings & Current deposits stood at 34.18% of total deposits. CASA deposits have grown by 11.84%.

Majority of Bank’s Savings account schemes have in-built feature of automatic Free Group Personal Accidental Death Insurance Cover. The Bank is sharing updates with the customers on the benefits/ incentives/ discounts / waiver of charges & other facilities extended by the Bank, via e-mail and SMS. This gives scope to connect and interact with customers.

The Cooperative banks segment have also been targeted for low cost deposits. The accounts of Cooperative banks have been extended the ATM sub-membership facility, POS machines and IMPS facilities.

ADVANCES:

Bank’s gross advances during the FY 2016 registered de-growth of 7.30%. Gross Domestic Credit registered a negative growth of 7.23% from Rs. 2,89,515 crore on 31.03.2015 to Rs. 2,68,579 crore on 31.03.2016. The focus during FY 2016 was on increasing the Priority Sector & Retail portfolio and to diversify the risk.

2.i) Priority Sector Advances:

The Bank has always been one of the leaders in servicing to the priority and agriculture sectors, with its vast network of rural and semi-urban branches and committed work force. The Bank has registered an outstanding level of Rs.1,04,656 crore under Priority Sector.

Under Special Agricultural Credit Plan, Bank branches could disburse Rs. 27,253 crore during the year.

Centralized Processing Centres in Focused Districts:

There are 43 Rural Centralized Processing Centres operating in zones with the objective of augmenting agriculture credit and reducing Turnaround Time (TAT) in sanctioning/disbursing credit proposals.

Kisan Credit Cards:

Kisan Credit Card Scheme aims at providing need based and timely credit support throughout the year to the farmers for their cultivation needs as well as non-farm activities with an objective to bring about operational freedom and flexibility in credit utilization.

During the year, Bank has issued 3,97,743 new Kisan Credit Cards with aggregate limit of Rs. 4,632 crore. The Bank has so far issued 8.36 lakhs Kisan Credit Cards (cumulative).

Differential Rate of Interest:

A scheme for extending financial assistance at concessional interest rate of 4% to selected low income groups for productive endeavors under the name Differential Rate of Interest (DRI) Scheme is being implemented by the Bank. The Bank has sanctioned 5,012 cases under DRI Scheme during the year.

Minority Communities:

There is focused attention for the welfare of minority communities. Bank has been extending finance to the minority communities.

During the year 2015-16, Bank has financed Rs.4,846 crore to the minority communities and registered an outstanding level of Rs. 13,468 crore as on March 2016.

Golden Jubilee Rural Housing Finance Scheme:

The Bank has been actively involved in implementation of the Golden Jubilee Rural Housing Finance Scheme (GJRHFS). During the year, Bank has sanctioned 242 cases under GJRHFS.

Solar Energy Home Lighting System:

To address the issue of electricity paucity in the country, the Bank has launched a scheme on Solar Energy Home Lighting System.

The Bank extends financial assistance to the prospective borrowers for purchase and installation of Solar Energy Home Lighting System. The Bank has sanctioned 3,687 units with financial outlay of Rs. 16.10 crore.

ii) Retail Banking:

During the year 2015-16, bank pursued the policy of building up a healthy Retail Credit portfolio. The retail credit portfolio of the Bank increased from Rs. 34,153 crore to Rs. 37,777 crore as on 31st March, 2016. A strategy of rebalancing advances portfolio in favour of retail lending and to reduce the Corporate loans portfolio has been adopted. Bank’s 49 Retail Business Centers (RBCs), across the country covering Tier-I &Tier-II cities, continue to play a key role in processing of Retail Home Loans/Loan against Property /Vehicle Loans/ Education Loan proposals.

During the year bank introduced new housing loan products as under:

(i) Top Up Loan for Home Loan customers, (ii) Revamped Home Loan Scheme for financing of flats/house for under construction projects (iii) Revamped Scheme for financing of payment of EMD in schemes promoted by the Urban Development Authorities..

The Home Loan segment recorded a growth of 17.97% from Rs. 16,664 crore to Rs. 19,658 crore during the year. Bank has tie-up arrangement with reputed builders with proven track records across the country for lead generation. Special brference is given for tie-up arrangement with reputed residential projects funded by the Bank. During the year, Bank has introduced Prime Minister Awas Yojana to participate in Government of India (GOI) initiative for “Housing for All (Urban)” Mission, being implemented during 2015- 2022.

Loan Against Property (LAP), one of the popular products of the Bank with attractive features of low rate of interest, longer repayment period and flexible repayment options has registered apbrciable growth. LAP portfolio registered a growth of 21.96% from Rs. 4,144 crore to Rs. 5,054 crore during the year.

Education Loan portfolio recorded a growth of 7.71% from Rs. 2,918 crore to Rs. 3,143 crore during the year. Bank has participated in various interest subsidy schemes of Government of India; (i) Central Scheme for Interest Subsidy,

(ii) Padho Paradesh Scheme(Interest subsidy for students of Minority communities for pursuing studies abroad), (iii) Dr. Ambedkar Central Sector Scheme for Interest Subsidy(for students of OBC/EWC for pursuing studies abroad). Bank also has a special scheme viz., BOI Star Vidya Loan aimed to cater to students seeking admission to Premier Educational Institutions in the country viz IITs/IIMs/NIDs and other professional institutes of repute.

During the year, Bank has also introduced Pradhan Mantri Kaushal Rin Yojana (Skill Loan Scheme) to provide fillip to Skill Development initiatives of the GOI. The first ever sanction letter under Skill Loan was handed over to BOI beneficiary by Hon’ble Prime Minister of India, during the launch of Skill Loan Scheme on 15th July 2015. The Bank is also one of the 1st few banks to have integrated its operating system with Vidya Lakshmi Portal, an initiative of the GOI to provide a single window solution to students, to access information on Education Loan and also apply on-line for loan to single/multiple banks.

The Bank’s Vehicle Loan segment also recorded growth of 5.82% from Rs. 2,733 crore to Rs. 2,892 crore during the FY 2016. Bank has tie-up arrangements with reputed auto manufacturers Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra and Mahindra and to provide healthy retail leads to augment Vehicle Loan portfolio.

Bank also extends Personal Loans to employees of PSUs/PSEs/Reputed Corporates/Institutions under tie up arrangement with employers for loan recovery.

iii) SME:

Performance of the Bank under MSME Segment:

Ø MSE manufacturing sector has declined from Rs. 21,595 crore as on March 2015 to Rs. 9,938 crore as on March 2016. (Y-O-Y de-growth of 7.67%).

Ø Share of Micro sector within MSE has increased to 44% as at March 2016 from 43 % as at March 2015.

Ø Growth in number of Micro accounts – 1,79,524 accounts have been sanctioned under Micro segment during 2015- 16 registering growth of 40 % over 31.03.2015 against the mandatory target of 10%.

Ø Performance under CGTMSE - 68,869 new accounts added under CGTMSE scheme during 2015-16 covering exposure of Rs. 2,628 crore. Bank continues to maintain number one position amongst PSU banks in terms of total coverage under the scheme which has reached the level of 2,69,604 accounts with total exposure of Rs. 5,738. crore as on March 2016.

Ø Under Prime Minister’s Employment Generation Programme (PMEGP), Bank has sanctioned 1,108 accounts with limit of Rs. 65 crore during FY 2016.

Ø Under Pradhan Mantri Mudra Yojana (PMMY), Bank has opened 3,76,486 accounts and Rs. 2,752.28 crore has been disbursed under the scheme. MUDRA cards has also been given to 17,998 beneficiaries during the year (FY 2016).

iv) Corporate Credit :

There are 10 Large Corporate Branches (LCBs) located at major cities catering to all the major corporates across country – Mumbai (3 branches), New Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune. Further, 33 Mid Corporate Branches and 30 SME City Centres cover the rest of major business centers.

The advances through LCBs constituted 38% share in total domestic advances as on 31.03.2016. Advances to Corporate segment has declined from Rs. 1,19,675 crore as on 31.03.2015 to Rs. 1,05,133 crore as on 31.03.2016, showing a negative growth of 12% over last year.

As on March, 2016, outstanding credit under Mid Corporate Branches stood at Rs. 33,128 crore.

v) Infrastructure Finance :

During the FY 2016, the Bank has sanctioned Fund Based Limits of Rs. 5,737 crore and Non Fund Based Limit of Rs. 1,762 crore under infrastructure projects in new and addition to existing accounts covering Power, Telecommunication, Roads, Ports and other infrastructure. As on March 31, 2016 outstanding credit to infrastructure sector stood at Rs. 45,935 crore.

3. FINANCIAL INCLUSION:

Financial Inclusion is integral to the inclusive growth process and sustainable development of the country. There has been a strategic shift in sustainable financial inclusion to the adoption of market oriented approach viewing financial inclusion as a viable business proposition. The paradigm has decidedly shifted from “CSR” to “economic viability”. It has been made possible with the availability of ICT based solution to support, secure and undertake sufficiently low cost transactions required by the financial sector. The launch of Pradhan Mantri Jan Dhan Yojna (PMJDY) in August 2014, the financial inclusion drive has gained momentum. The Mission mode plan aimed at providing a bank account to each house-hold was achieved successfully and now focus is on for ensuring the effective utilization of the infrastructure for the betterment of the economy. Bank is viewing these prospective banking service users through a prism of opportunity rather than obligation.

Bank is committed to provide banking services in unbanked rural areas through ICT led Business Correspondents model. Services offered to citizens include opening of Basic Savings Bank Deposit Account with inbuilt overdraft facilities to take care of their urgent consumption needs, entrebrneurship credit to eligible persons to earn their livelihood, mobile based remittance facility to help mainly the migrant labour/ self-employed to remit money to their family members and access to Bank’s third party products including Micro Insurance and pension besides other Banking services. Bank has effectively pursued the Direct Benefit Transfer scheme of the Central / State Governments for transfer of benefits directly to the account of beneficiary by providing the requisite payment and other infrastructural supports.

Progress under Financial Inclusion:

Ø Number of Basic Savings Bank Deposit Accounts opened : 221.56 lakhs,

Ø Balance outstanding in BSBD accounts opened: Rs.2,909 crore,

Ø GCC/KCC issued: 20.83 lakhs,

Ø Number of Business Correspondents engaged: 7,591

Ø Channel Management Partners engaged: 51

Ø Number of Villages where 100% FI achieved:4,404,

Ø Number of transactions through ICT-BC : 155.37 Lakhs,

Ø Volume of Amount transacted : Rs.5,396.88 crore,

Ø Bank has achieved 100 % Financial Inclusion in all 4,404 allotted villages with population above 2,000 and total 23,058 villages covered as on 31.03.2016,

Ø Robust operational systems with adequate risk mitigants and best practices have been built up and are being pursued.

Pradhan Mantri Jan Dhan Yojana (PMJDY) :

Ø Number of Basic Savings Bank Deposit Accounts (BSBD) opened: 113.50 lakhs

Ø Balance outstanding in BSBD accounts opened: Rs.1,442.93 crore

Ø Number of Rupay card Issued : 104.48 lakhs

PM’s Insurance & Pension scheme:

Ø Number of person enrolled under Pradhan Mantri Suraksha Bima Yojana (PMSBY) : 34.27 lakhs

Ø Number of person enrolled under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): 12.56 lakhs

Ø Number of person enrolled under Atal pension Yojna : 0.95 lakhs

Star Swarojgar Prashikshan Sansthan (RSETIs):

Majority of the youth of the country remain un-employed for want of adequate skills either in entrebrneurship, manufacturing or in professional activities even in small, micro or tiny levels. Skill development is a key to bring economic prosperity by way of providing sustainable livelihood, particularly in rural sector. In order to provide the opportunity to have gainful employment through skill development, Government of India has directed all public sector Banks to open RSETIs in their respective Lead Districts.

Bank has opened 43 RSETIs in the states of Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal.

In all, Bank’s RSETIs have conducted 3,934 training programs and imparted training to 1,11,390 candidates and credit linkage of 59,995 trainees has been provided from these centres to help them for their gainful employment.

Financial Literacy and Credit Counseling Centres (FLCC):

In order to extend financial education among people in rural and urban areas, FLCC/FLCs are established as per Reserve Bank of India guidelines. In terms of extant guidelines, Financial Literacy Centres (FLCs) are to be opened at the district locations where Bank is having Lead Bank responsibilities.

Bank’s 51 FLCs are functional in all 51 Lead districts assigned to the bank. In addition to remedial counselling on case to case basis for the distressed borrowers, brventive counselling through media, workshops and seminars are also undertaken. So far 8,85,575 cases of counselling were taken up and disposed off quickly bringing smiles on the faces of the distressed people.

4. LEAD BANK RESPONSIBILITY:

The Bank has Lead Bank responsibility in 51 districts sbrad across five states of Jharkhand (15), Maharashtra (14), Madhya Pradesh (13), Uttar Pradesh (7) and Orissa (2).

The Bank has been discharging its duties of Lead Bank in all these districts. The achievement of the Bank under Annual Credit Plan (ACP) is Rs. 23,403.87 crore which is 121.74% of ACP against the plan outlay of Rs. 19,224.24 crore for the Bank. Bank is designated as the “Lead Bank Convener” in SLBC in the state of Jharkhand.

Regional Rural Banks:

Bank has sponsored 4 (four) Regional Rural Banks (RRBs) namely Gramin Bank of Aryavart-GBA (Uttar Pradesh State), Narmada Jhabua Gramin Bank -NJGB(Madhya Pradesh State) , Vidarbha Konkan Gramin Bank –VKGB (Maharashtra State) and Jharkhand Gramin Bank-JGB (Jharkhand State).

All Branches and administrative offices of the Gramin Banks are on CBS platform. These banks are enabled on RTGS, NEFT and ATM platforms. These RRBs cover 61 districts with a network of 1,557 branches and have garnered a business mix of Rs. 40,126 crore.

5. CREDIT MONITORING:

The FY 2016 has seen rising concerns on asset quality front, calling for a regimented approach to monitoring of credit assets.

The Bank has a structured set up for monitoring of the credit portfolio at Branch, Zone, National Banking Group (NBG) and Head Office levels, for identifying accounts with signs of incipient stress/potential default/delinquencies and to take timely corrective action to brserve/improve the quality of its credit portfolio..

Monitoring of the credit portfolio encompasses:

Ø Identification of weakness/potential default/incipient sickness in the account at an early stage. MIS Reports generated regularly on weekly basis reflect accounts with aberrations which warrant attention.

Ø Timely Recognition of stress in the account.

Ø Initiation of timely mitigating actions upon identification and recognition of borrowers at risk of distress or default. Under the RBI framework for Revitalizing Distressed Assets in the Economy, accounts with incipient stress are identified under Special Mention Account (SMA) categories.

Ø Monitoring/follow up of Special Mention Accounts (SMA) including formation of a Joint Lenders’ Forum (JLF) and formulation of Corrective Action Plan (CAP) in the case of consortium/MBA accounts, for early resolution.

Ø Prevention of slippage in the Asset Classification and relegation in Credit Rating through mitigating steps for rectification or recovery.

Ø Follow up for periodic review of accounts and for compliance of sanction terms and conditions including post disbursement terms/covenants by conduct of Credit Process Audit (CPA).

Similarly, periodic conduct of Stock & Receivable Audit by empanelled Chartered Accountants in all eligible accounts to safeguard quality of assets charged to the Bank.

Ø Leveraging technology to achieve better traction in monitoring Bank’s large exposures and credit portfolio.

NPA MANAGEMENT & RECOVERY:

NPA Management

The Bank continued its drive and focus on improving performance in the area of NPA Management in the year 2015-16 as well. NPA Reduction has been given topmost priority in the Bank and this function has steadily grown in importance considering the economic climate and conditions. Measures have been initiated to augment recovery and contain slippages and NPAs. Three General Managers are posted to drive and continue recovery efforts in stressed assets aggressively. Efforts have also been made to maximize recovery in written off accounts and uncharged/unrealized interest in NPA accounts, which contributes to the Bank’s profits significantly.

Besides, Holding on Operations, Restructuring, One Time Settlement, the Bank has adopted the following strategies for NPA management.

Ø Recovery of entire over dues to upgrade the account;

Ø In case of viable units, explore restructuring through flexible repayment schedule, induction of strategic partner, strategic debt restructuring;

Ø Follow up for Recovery Certificate at DRTs and pursuing advocates for quick disposal, including attachment of personal assets of Borrowers/Guarantors ;

Ø Name and Shame – Photo Publication of NPA Borrowers ;

Ø Willful Defaulters & filling of FIR and Forensic Audit in cases of misutilisation of funds.

During last 3 years, Bank sold NPA of Rs. 7,720 crore to Asset Reconstruction Companies (ARCs) with Security Receipts (SRs) investment of Rs. 4,239 crore wherein the redemption is at 4.17%.

7. INTERNATIONAL:

The Bank has 28 Branches, 5 Rebrsentative Offices, 5 Subsidiaries and 1 Joint Venture sbrad over 22 countries and across all time zones.

The contribution of foreign operations towards Bank’s global business and profits has been significant over the years. As on 31.03.2016, the share of foreign branches in the global business is around 28%.

Bank’s International operations have experienced stress on asset quality mainly due to general economic slowdown. The Bank's overseas branches are comparatively small in size and scale in respect to local banks of host countries. They are subject to the regulatory compliance requirements of monetary authorities which have become stringent over the past years. We are well positioned to meet these challenges.

In most of the Centres where the Bank is brsent, there is a large Indian diaspora. Bank is continuing to explore and assess new territories with Indian brsence and/or opportunities of large external trade with India. It also includes those territories where high economic growth is foreseen, even if Indian brsence is not very significant.

Foreign Business:

Meeting the domestic and foreign currency needs of import and export clients is one of the bank’s key priority areas. Bank’s has 217 branches functioning as Authorised Dealers across the country which are undertaking foreign exchange business opportunities and catering to the credit / foreign exchange needs of importers and exporters.

Bullion Banking:

Bullion banking was introduced by the Bank in November 1997.

Initially the scheme was introduced at SEEPZ and Ahmedabad branches and was subsequently introduced at other branches.

As on date, nine branches are authorized to undertake bullion business. Gold is procured on consignment basis for catering to the needs of jewelry exporters and domestic jewelers.

8. TREASURY OPERATIONS:

Forex Business:

The foreign exchange business handled by the Bank has been stable during the year. Merchant and Interbank turnover was Rs.1,58,337.02 crore and Rs. 6,28,652.95 crore respectively. The Bank continues to be one of the leading players in the forex market. The aggregate turnover of Bank’s Forex Business during the year was Rs. 7,86,989.97 crore.

Investments:

The yield on benchmark 10 year G sec which was 7.74% as on 31st March 2015 has softened to 7.69% as on 31st March 2016. The Bank has maintained a higher level of investments keeping a balance between interest income and market risk. The Bank has maintained SLR investments in excess of the regulatory requirement from time to time and excess SLR is utilized for borrowing from Repo /CBLO windows for money market operations. As on 31.03.2016, SLR is required to be maintained at 21.50% of Net Demand and Time Liabilities. The gross SLR investments were Rs. 99,787 crore (86.63 % of total investments) and Non SLR investments were Rs.15,392 crore (13.37 % of total investments). The investments are made in accordance with the combrhensive policy in this regard approved by the Board. The policy is reviewed periodically to respond to market developments/regulatory requirements.

Treasury operations:

The Bank continued to play an active role in all segments of the market- Money Market, Forex and Fixed Income during FY 2015- 16. Taking advantage of the G sec rate movements, Bank has churned its Investment portfolio and earned profit from trading of securities. Bank has taken advantage of arbitrage opportunity within various market segments.

9. INFORMATION TECHNOLOGY:

The Bank has been focusing on IT with emphasis onTechno Enabled Services:

Ø New features in Internet Banking –Opening of Term Deposit facility with online nomination facility, Online Deposit in PPF A/c and Facility of Online updation of contact details.

Ø BOI e-Pay Payment of Utility Bills, Insurance Premium, Credit Card payments of Specified Banks and Property Tax of Specified Municipal Corporations.

Ø Hot listing / reset / unblock / change of Debit-cum-ATM Card pin using Internet Banking Password.

Ø Digital Signage at branches.

Ø E- Galleries with Passbook Printing Kiosks, Cash Acceptor Machines, ATMs and Bulk Note Acceptors in all major branches.

Ø BOI Star Sandesh – SMS based alerts for ATM financial transactions, Funds Transfer and Term Deposit Receipts.

Ø Missed call facility for balance confirmation in SB/CD/OD accounts and facility also extended now for PMSBY /PMJBY accounts.

Ø Extension of BOI Star Rewards Program to cover Credit Card customers in addition to Debit card holders.

Ø IMPS facility made available through Branches.

Ø Facility of acceptance of cheque book request through SMS.

Ø Implemented Customer Relationship Manager (CRM) portal for quick resolution of issues.

Ø Portal for Online account opening under PMKVY scheme.

10. TRANSACTION BANKING:

Depository Services:

Depository Services are also offered by the bank to customers from all the Branches across India. The Bank is offering the Depository Services of both NSDL and CDSL depositories. The operations are centralized at Mumbai. The active Demat Accounts with the DP are 96,450 as on 31.03.2016. During the year 2015-16 the Bank earned a gross Income of Rs. 351 lakhs as against Rs. 346 lakhs earned during 2014-15. In all 3,210 new Accounts were opened in FY 2015-16.

Star Share Trade (Online Share Trading):

With a view to meet the growing needs of Online Share Trading (OLST) to Bank’s customers and in order to provide comfort of trading in securities on a mouse click, Bank had launched Star Share Trade (Online Share Trading) facility by integrating Bank Account, Demat Account and Trading Account of the customers under Tie-up arrangement with three leading Stock Brokers M/s Asit C Mehta Investment Intermediates Limited (ACMIIL), M/s Ajcon Global services Ltd (AGSL) and M/s GEPL Capital. The facility has also been made available to the NRI clients for subscribing to IPOs.

Application supported by Blocked Amount (ASBA):

Bank has registered with SEBI as a Self – Certified Syndicate Bank (SCSB) and IPO applications received under ASBA (Physical application). All Branches are authorized to accept the applications under ASBA. Bank’s Stock Exchange Branch, Mumbai is the nodal Branch for ASBA. In addition to the above designated Branch, customers of all branches who have availed Internet Banking facility also have access and can avail the facility of Online Bid cum Application for ASBA IPO through Star connect Retail Internet Banking facility. Bank has started accepting the SYNDICATE ASBA applications of investors duly bid by brokers across 14 centers through 23 branches located across the country.

11. THIRD PARTY PRODUCTS:

Tie-up for Life Insurance:

Bank has continued its Corporate Agency arrangement with Bank’s Joint Venture life Insurance Company Star Union Dai-ichi Life Insurance Co Ltd. for sale of their life insurance products. Bank has 4667 IRDAI qualified employees to act as ‘Specified Person’ for sale of insurance products at various branches.

During the current financial year, Bank collected brmium of Rs. 554.03 crore (Number of Policies 3.33 lakhs) and contributed to 43 % of the total new business of the Joint Venture company.

Bank continues to offer optional life insurance cover to Bank’s Retail Loan Borrowers including Star Home Loan and Star Education Loan borrowers under Group Insurance Policy wherein the borrowers pay discounted brmium for life cover.

Bank also offers SUD Life Group Term Insurance plan for Sum Assured from Rs. 1 lakh to Rs. 5 lakh at competitive rates to Bank’s C/ D and S/B A/c customers.

Bank also has a co-branded health insurance product - BOI National Swasthya Bima, which is a Family Floater Mediclaim Insurance Cover available only for Bank of India account holders, at a very low brmium. It has been a popular product and as on 31.03.2016, around 1,90,000 Bank of India Account holders have availed of this policy.

Tie-up for General Insurance (Non-life):

Bank also has Corporate Agency agreement with National Insurance Co. Ltd. (NICL) to sell their General Insurance Products. Bank offers various types of General Insurance cover for Standard Fire & Special perils, Marine and Motor insurance facilities to customers. The total brmium collected by the Bank for NICL general insurance policies during financial year 2015-16 was Rs. 196.55 crore and the commission earned was Rs.19.79 crore.

Mutual Funds Products:

Bank undertakes distribution of Mutual Fund products of 10 Asset Management Companies. Bank has earned a commission of Rs. 4.54 crore from distribution of Mutual Fund business during FY 2016.

12. BUSINESS PROCESS RE-ENGINEERING:

As part of re-organization, realignment of Zones were carried out in the States of Uttar Pradesh, Uttarakhand, Madhya Pradesh, Odisha, Bihar,Telangana and Andhra Pradesh.

Business Development Clusters have been re-defined and the role / position of Business Development Managers (BDM) strengthened.

Branch of the Future (BOTF):

A total of 306 branches have been transformed under this model till date. The interiors of these branches have been aesthetically laid out creating large customer area with sufficient seating arrangement. In addition, provision of Pass Book kiosk (PBK), Queue Management System (QMS), Automated Teller Machines (ATM), Cash Deposit Kiosk (CDK), training for better customer management and cross selling has been provided to staff working at these branches. All these branches are being closely monitored in the area of usage of all the Kiosks, inducing customers to avail alternate delivery channels.

History & Museum Project:

Initiated during 2011, this project was launched with the twin objective of writing the Bank’s history and establishing a museum for showcasing the Bank’s working from its inception. The Bank’s history was detailed by noted historian, Mr Abhik Ray. The Book was released and the Museum was inaugurated by Dy. Governor of RBI, Shri S S Mundra on 29th May 2015.

13. MARKETING & PUBLICITY:

Marketing:

Marketing has been one of the thrust areas of the Bank for acquisition of new customers, servicing the existing customers and creation of customer centric processes for enhancing value.

The Bank’s Marketing set-up focuses on business developmental activities of mobilizing Deposits (including Government. Deposits and Trusts, Association, Societies & Clubs) , Retail Advances, Alternate Delivery Channel (ADC) Products and sale of Third Party Products (TPP). Under the reorganized marketing set–up, marketing staff are placed / attached to the branches / RBCs and are working under the Head, Marketing (DZM) at Zonal Office. The Bank has 609 marketing executives for focused marketing efforts.

Publicity Activities:

Bank’s Publicity & Public Relation Department executes multi- media corporate campaigns to enhance the visibility of Bank’s Image and promote bank’s various products down the line across the country. In order to execute the media plan, the foundation of Bank’s tagline & theme “Relationships beyond banking” has been continued. Advertisement of Bank’s Products on various Radio channels and digital platform has been undertaken in a big way. The promotion of Bank’s product through print media i.e. in major national/regional dailies and various top magazines and OOH activities i.e. Hoarding/Bill boards/Gantries is undertaken. Sponsorship of CSR and branding activities is also undertaken.

14. RISK MANAGEMENT:

Risk is inherent in any business activity that a Bank undertakes. Banking activities are exposed to Credit, Market, Liquidity, Operational, Strategic, Compliance, Reputational risks. Bank must manage these risks to maximize its longterm results by ensuring the integrity of the assets and the quality of earnings.

Bank has built a combrhensive risk management culture which identifies, measures and handles risks and brpares adequate reports on all these efforts so that the extent of risks, which have occurred, should not endanger the continuity of operations.

The Bank has established mechanism which ensures the ongoing assessment of relevant risks on an individual basis and also of the overall risk position of the Bank. There is a Risk Management Committee of the Board at the apex level supported by operational level committees of top Executives for managing various risks. The process of risk management consisting of various stages i.e. identification, measurement, monitoring and control, is covered in the policies for Enterprise Wide Risk Management, Credit Risk Management, Operational Risk Management, Market Risk Management, Derivatives, ALM, Foreign Exchange and Dealing room operations. The identification, measuring, monitoring & mitigation of all potential risks, in all activities and products is done through detailed analysis and vetting the same by the operational level risk committees and task forces. Risk profiling of the bank is also done on a quarterly basis. Various tools and systems like prudential limits, new Basel Compliant credit Rating Models, Credit Audit, VaR models for market risks, Self-assessment exercise coupled with tracking of Key Risk Indicators for operational risk have been introduced for assessing/measuring the identified risks.

Bank has well established Fraud Risk Management System with clear objectives to obviate fraud risk in the face of acceleration in Bank’s business by strengthening internal controls to protect brand, reputation and assets of the Bank. Bank has implemented various information security projects for monitoring of real time information security attempts/ incidents/events on 24x7 basis. Bank has put in place Captive Security Operation Centre (SOC).

15. INSPECTION & AUDIT:

Policy on Risk Based Internal Audit, Risk Based Management Audit (Domestic), Concurrent Audit, Information System Audit and Audit of Foreign Branches, were reviewed/ revised suitably to comply with the Guidelines issued by the Department of Financial Services, MOF, GOI and covers/ elaborates the areas mentioned in the RBI AFI report, MOF guidelines and also as per the directions of Audit Committee of the Board.

During the year 2015-16, the Department undertook Risk Based Internal Audit, Information System Audit & Revenue Audit at domestic and all foreign branches, Currency Chests, Depository Participant Offices and Risk Based Management Audit at HO Departments, Zonal Offices, Zonal Audit Offices, Staff Training Centres, Management Development Institute, LDM Offices and RRBs. Concurrent Audit covers 765 Branches, Treasury Branch, Data Centre, Card Products, Estate and other HO Departments by FCAs and 27 Foreign Branches. The coverage of Concurrent Audit in the Bank is 69.83% of Global Deposits and 85.95% of Global Advances as on 31.03.2015. This coverage is in excess of RBI guidelines of 50% of total deposits and 50% of total credit and risk exposure of the Bank.

The project STAR BOOST has been implemented in the bank and Audit Exception Reports (AERs) of branches under audit are generated and sent to the branches in advance to enable them to initiate necessary corrective measures for a meaningful audit.

The Bank’s top management team regularly conduct meetings of concurrent auditors/internal auditors across Zones to emphasize the need for quality and timely reporting of audit findings and also timely submission of reports and compliances. Regular reporting on all important Audit findings are made to Top Management, Audit Committee of Executives and Audit Committee of the Board as brscribed and the directions thereof are being complied with.

16. LEGAL & RIGHT TO INFORMATION ACT (RTI):

Legal Department of the Bank acts as support department and attends to various matters of Opinion, Documentation, Litigation, emanating from various functional departments at Head Office, besides attending to referral matters of various NBGs/Zones, Indian Branches/Foreign Branches and Bank’s subsidiaries. Department also caters to the specific need of specialized Departments like Information Technology/ International/Treasury/Card Products/Transaction Banking by Drafting /Vetting of documents of various contracts/ Service Level Agreements (SLAs), Software/Hardware procurement, Service Level Agreements, various types of tie-up arrangements /new products.

Under the Right to Information Act, Bank has identified a Central Public Information Officer and an Appellate Authority at various Zones / NBGs. Asstt. General Manager (Law) of Legal Department, Head Office is designated CPIO of the Bank, and the General Manager, Legal Department is the Appellate Authority. It involves collecting the desired information from various Departments and supplying the same to the applicant within the fixed time frame of 30 days and also to guide the other Zones / NBG on specific points.

Moreover, with a view to create awareness among the staff, Legal Department issues circulars and guidance to NBGs/ Zones on the amendments on Statutes and new legislations.

During the financial year 2015-16, the Bank has received 3925 applications under Right to information Act, 2005. The same were disposed of by the Central Public Information Officer (CPIO) within the stipulated period of 30 days. 619 Applicants brferred appeals against the decision of the CPIO and the appeals were also disposed off by the Appellate Authority within the stipulated timeframe of 30 days.

17. COMPLIANCE:

Compliance Function Policy for the Bank was adopted by the Board as per Reserve Bank of India guidelines. A Board approved Compliance Function Policy (approved at Board Meeting held on 26.2.2016) is in place. An independent Compliance Department, headed by a Chief Compliance Officer of the rank of General Manager, is functioning at Head Office. Compliance of statutory, regulatory and internal guidelines of the Bank is the scope of operation of the compliance function of the Bank both for Domestic and Overseas operations. The department has drafted and put in place Compliance Rules in the following areas of branch banking:

The department is conducting half-yearly compliance testing at select branches all over India and the findings are submitted to the Top Management with suggestions of areas for improvement. Compliance Officer has been identified for monitoring of the respective Zone.The Board / Audit Committee of the Board / Top Management / Head Office departments are appraised through several monthly reports/certificates.

The department carries out a Compliance testing exercise every half year for 10 to 15 % branches as stipulated by RBI. A sample check (approximately 10% of the new business added) of the accounts is undertaken with reference to the CR-12, CR-13, CR- 14, CR-15 and the Tranche III compliance rules brscribed by RBI. Similarly, a separate system of quarterly Compliance testing for the Overseas branches is also in place and is conducted through the Compliance Officers at the respective centers / branches.

KYC /AML / CFT:

The department is also vested with the responsibility of implementation/ monitoring of Know Your Customer (KYC)/Anti Money Laundering (AML) Measures/ Combating Financing of Terrorism (CFT) Guidelines in the Bank. The department has taken up earnestly the task of ensuring compliance with KYC norms in all the existing accounts, as directed by RBI. A separate mandatory field is provided in the Finacle system to facilitate noting of KYC status in each account.

As per the provisions of Prevention of Money Laundering Act, 2002 (PML Act) and Amendments thereto and the Rules made there under as well as the guidelines issued by Reserve Bank of India (RBI) on KYC, branches are properly identifying every customer by obtaining recent photograph, proof of identity and proof of current address for KYC compliance. Opening of accounts of persons under “Small Account” has been facilitated. All the customer accounts have been classified into High, Medium or Low Risk category based on the Risk perception. As per extant RBI guidelines, the review of the Risk categorisation is to be undertaken once every six months. The review of the Risk categorisation of accounts has been centralised at Head Office. The Bank has implemented the provisions of the Prevention of Money Laundering Act, 2002 and Amendments thereto.

The department handles the Risk Based Supervision (RBS) of RBI by co-ordinating with Head Office departments. The RBS reports are scrutinised and compliance is submitted to the RBI. The Compliance department is the single point of contact for all the Regulatory agencies.

18. VIGILANCE:

The Bank’s Vigilance Department is headed by the Chief Vigilance Officer (CVO) appointed with concurrence of the Ministry of Finance and the Central Vigilance Commission. The CVO is assisted by officers having knowledge/ background of investigation and disciplinary action matters as well as banking, for tendering advice to Disciplinary Authorities / Controlling Authorities in all vigilance cases. Vigilance Department also focuses on initiation and dissemination of brventive vigilance measures. In this regard, Bank has eight separate “Vigilance Units” to deal with the vigilance matters. The Vigilance Department also tenders advice of the CVO in Vigilance cases referred by the Bank’s sponsored four Regional Rural Banks (RRB).

19. OFFICIAL LANGUAGE:

Bank has a well-established Official Language Department at Head Office to ensure implementation of GOI guidelines with regard to progressive use of Hindi in the Bank.

During the year the department has initiated the following measures:

Ø Conducted 194 Hindi workshops across the zones and training colleges during the year in which 4,838 staff members (Officers - 2,514 / Clerks - 2,324) were imparted training to improve their Hindi language skills,

Ø A special training program for new appointed Official Language Officers on questionnaire related to parliamentary committee on official language was organized,

Ø A seminar on “Role of language in Business development” was organised for senior executives of the Bank in New Delhi/NCR on 25.08.2015. An E-magazine consisting of articles on various festivals, birth anniversaries of eminent personalities, International days was released by the department. Hindi month was celebrated at Head Office and all the zones from 15th August to 14th September 2015.

Hindi day was also celebrated in our foreign centers at Johannesburg, Mombasa, Singapore and Glasgow.

20. HUMAN RESOURCES AND LEARNING & DEVELOPMENT:

Human Resources Development (HRD) is engaged in empowering people and enabling them to use their knowledge, ability and competency for development of the Organization as well as self-actualization. HR Policy involves the use of processes through which the employees are brpared to give their best for Corporate Objectives.

Policies, Recruitment & Promotion:

In a service-oriented industry like Banking, success depends on prompt and efficient customer service, which can be achieved by recruiting right talent, grooming and right placement. Bank has recruited employees both in Clerical and Officer Cadre through Bank Specific recruitment process and common recruitment processes conducted by IBPS which has helped in maintaining the required staff strength.

Bank has recruited 2,117 officers in General Banking & Specialist cadres in various scales and 4,476 in clerical cadre in financial year 2015-16.

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 Offices are functioning to monitor the implementation of the reservation policy and redress of grievances relating to SC/ST/OBC Employees.

Pre-Promotion Training from Clerical cadre to General Banking Officers cadre and within the Officer cadre from Scale - I to II and Scale II to III is imparted to SC/ST candidates / staff. The Bank has designated an officer of the rank of General Manager as Chief Liaison Officer for OBCs and SCs/STs respectively at the Head Office. Officers belonging to SC/ST/OBC categories are designated as Liaison Officers / Cell Officers at Zonal Offices. In terms of the Government guidelines, Post-based Reservation Rosters maintained at Head Office/ Zonal Offices are inspected annually. SC/ ST Cells established at the Head Office and Zonal Offices are also associated with implementation of reservations in respect of other categories like Ex-servicemen / Persons with different ability.

In-house Publications (Taarangan & BOI guiding star):

Since last 51 years, Bank’s in-house Journal ‘Taarangan’ has been playing a significant role of internal communication in the Bank. It is also one of the medium of promoting employee engagement in the bank. It has developed as a platform where the employees exbrss their creativity through articles, poems, experiences, cartoons and other means. The house journal also contains success stories of Bank’s customers, customer special achievements including details of social, promotional and other activities undertaken by Zones/Branches/ offices in India/ abroad along with achievements of staff members and their children. Guiding Star is a corporate knowledge magazine.

Learning & Development:

Learning & Development Division through its continuous training and development programmes and e-learning initiatives act as a catalyst in augmenting the competencies of employees and equip them with right skills and knowledge for meeting ever-changing business needs of customers in different segments. The Training Policy was reviewed and the revised policy was approved by Board on 12.03.2015.

During the year, 22,424 staff members of the bank and 690 participants of other institutes and RRBs were provided training. Induction Training of two weeks was conducted for newly recruited 4,472 clerks and 2,111 DROs. Training programs on Vigilance Administration, Preventive Vigilance and other specialized programs were conducted. Executive Development Programmes for newly promoted AGMs were conducted in-house for the first time. Exclusive customized training programmes on Credit Appraisal, Retail Banking and First Time Branch Managers were also conducted at outside institutes, Manipal Global and Bankers Quotient Academy. 100 e-learning modules on banking topics are developed and made available to all the employees through HRMS. Online knowledge tests on day-to-day banking related subjects are regularly conducted. Bank also imparts Summer Internship/ on the job training for management students.

21. OPERATIONAL EXCELLANCE:

Commitment towards Customers:

The Bank has been a voluntary member of the Banking Codes and Standards Board of India (BCSBI) since its inception in 2006, to emphasize Bank’s customer orientation and commitment to provide service of a high order in a transparent manner, supplying and updating the customer with necessary information to take an informed decision. The Bank has policies on Customer Right Policy, Customer Acceptance, Care and Severance and Grievance Redress Policy for rendering services to the customers

22. BRANCH NETWORK & EXPANSION:

Composition of Bank’s Branch Network is:

23. BANK’S SUBSIDIARY / ASSOCIATES / JOINT VENTURES:

Indo Zambia Bank Ltd. (IZB):

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 Bank holds 20% of the share capital, whereas Government of Zambia holds 40% of the share capital.

PT Bank of India Indonesia Tbk:

Bank acquired a stake of 76 % in PT Bank Swadeshi Tbk which now stands changed to PT Bank of India Indonesia Tbk. Net Loss for 2015-16 is Rs. 262.38 crore (our share: Rs. 199.41 crore).

Bank of India (Tanzania) Ltd:

Bank of India (Tanzania) Ltd. is a wholly owned subsidiary of the Bank and commenced operations on 16th June 2008 with first branch at Dar-E-Salam. Bank’s investment is Rs. 50.12 crore. Net profit for 2015-16 is Rs. 10.71 crore.

Bank of India (New Zealand) Ltd:

Bank of India (New Zealand) Ltd. is a wholly owned subsidiary of the Bank with investment of Rs. 176.90 crore and commenced operations on 06th October, 2011. Net profit for 2015-16 is Rs. 2.63 crore.

Bank of India (Botswana) Ltd:

Bank has established a subsidiary in the name of “Bank of India (Botswana) Ltd.” In the year 2013-14 which commenced operations w.e.f. 09.08.2013 with its first branch at Gaborone, Botswana.

Bank’s investment is Rs. 33.82 crore. Net loss for 2015-16 is Rs. 0.12 crore.

Bank of India (Uganda) Ltd:

Bank of India (Uganda) Ltd. is a wholly owned subsidiary of the Bank operating since June 2012. Bank’s investment is Rs. 57.74 crore. Net profit for 2015-16 is Rs. 4.41 crore.

BOI Shareholding Ltd. (BOISL):

Bank set-up “BOI Shareholding Ltd (BOISL)”, joint venture with BSE, in 1989, to manage the clearing house activities of the Bombay Stock Exchange. The clearing activity has since been discontinued by the company. Earlier Bank was holding 51% of its paid up capital of Rs. 2 crore. During FY 2016, the Bank has acquired the shareholding of 49 % from BSE and the company has become 100 % owned subsidiary of the Bank. Currently, the investment in the company is Rs. 8.86 crore.

BOISL also acts as Depository Participant (DP) of both the Depositories-- the National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL). BOISL also provides depository services to the clearing members and investors. BOISL earned a net profit of Rs. 3.89 crore for 2015-16.

BOI AXA Investment Managers Pvt. Ltd. and BOI AXA Trustee Services Pvt. Ltd:

These subsidiaries are in the business of Mutual Fund and Portfolio Management. Bank of India is holding 51% stake in both the companies.

BOI Merchant Bankers Ltd. (BOIMB):

BOIMB incorporated on 31.10.2014 was promoted to undertake merchant banking business including arranging of Syndicated Loans, Bonds and Debentures. It is a wholly owned subsidiary with paid up capital of Rs.10 crore. The Company has made a net profit of Rs. 1.48 crore in first full year of its operation during 2015-16.

STCI Finance Limited:

STCI Finance Ltd. is an NBFC, established in 1994. Bank of India with 29.96% holding is the single largest stakeholder of the company having Paid Up Capital of Rs. 380 crore. The Company is an associate company of the Bank in terms of Accounting Standards (AS-23).

STCI Primary Dealer Ltd. (STCIPD) is a wholly owned subsidiary of STCI Finance Limited. STCIPD commenced its operations from 25th June 2007 and is one of the leading primary dealers in the country.

Star Union Dai-ichi Life Insurance Company Ltd. (SUDLife):

Bank of India, Union Bank of India and Dai-ichi Life Insurance Company, Japan have formed “Star Union Dai-ichi Life Insurance Company” to provide quality assured life insurance services to its clients sbrad across the length and breadth of the country. The company commenced insurance business in February 2009. Out of the paid up equity of Rs. 250 crore of the company, BOI holds 48%, UBI holds 26%, and Dai-ichi Life Insurance Company holds 26%. We are in the process of selling 18% of our stake to Dai-Ichi Life Insurance Ltd. with the change in FDI norms. BOI’s stake will be 30% thereafter.

Strategic Investment / Alliances:

Central Depository Services (India) Ltd. (CDSL):

The Company was promoted in 1997 by the Bombay Stock Exchange and Bank of India along with other Banks. The main objective of promoting CDSL, was to accelerate the pace of dematerialization of scrips, bring wide participation of investors in the capital market and to create a competitive environment as country’s second depository. Bank now holds 5.57% stake in the paid up capital of Rs. 104.50 crore of CDSL.

ASREC (India) Ltd:

The Company was floated by the Specified Undertaking of the Unit Trust of India (SUUTI) to undertake securitization and asset reconstruction activities. Currently, the Bank holds 26.02% stake, in the equity capital of the company which is Rs. 98 crore.

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 service sectors. Bank holds a stake of 5% in the equity share capital of the company.

National Collateral Management Services Ltd. (NCMSL):

National Collateral Management Services Ltd. is promoted by the National Commodity and Derivatives Exchange Ltd. (NCDEX).

It 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, storing, distributing, clearing and forwarding of securities and commodities. Bank holds stake of 10.17% in the equity capital of the company, thus providing opportunities to the bank to harness its association with NCMSL for credit lines to its members and clients.

SWIFT India Domestic Service Pvt. Ltd:

The new joint venture company is promoted by SWIFT and 8 major Banks including Bank of India. SWIFT is holding 55 % equity and remaining 45% is held by 9 major Banks. Bank of India has an equity stake of 5 % in the company. The company began its operations in February 2015.

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 combrhensive, transparent and reliable ratings which would facilitate greater and easier flow of credit to SME sector. Bank has a nominal stake of 4% in the equity capital of the company.

Other Strategic Investments:

Apart from the above listed major Strategic Investments, Bank also has strategic investments in Bombay Stock Exchange Ltd. (Rs.49.97 crore), CERSAI (Rs.2.15 crore), Equifax Credit Information Services Ltd. (Rs. 4.73 crore), U.V. Asset Reconstruction Co. Ltd. (Rs. 15 lakhs), Clearing Corporation of India (Rs. 0.50 crore), Agricultural Finance Corporation Ltd. (Rs. 1.26 crore), SIDBI (Rs. 45.30 crore), Tourism Finance Corporation Limited (Rs. 8.59 crore), Central Ware Housing Corporation Ltd. (Rs. 1.11 crore), Loss Data Consortium CORDEX (Rs. 1 crore) and SBIDFHI (Rs.6.34 crore).

24. BUSINESS RESPONSIBILITY REPORTING 2015-16

Clause 34(2) (f) of SEBI Listing Regulation – 2015. The text of the same is available on our

Website – www.bankofindia.com

Acknowledgement:

The Board exbrsses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchange Board of India and other regulatory authorities for their valuable guidance and support. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers, business associates and shareholders. The Board also wishes to place on record its apbrciation of staff members for their dedicated service and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

Sd/- (Melwyn Rego)

Managing Director & CEO

Place – Mumbai

Date – 14th June, 2016