COMPANY PROFILE Bank of India

Bank of India was founded on 7th September 1906 by a group of eminent businessmen from Mumbai. The Bank was under private ownership and control till July 1969 when it was nationalized along with 13 other banks. Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank has made a rapid growth over the years and blossomed into a mighty institution with a strong national presence and sizable international operations. In business volume, the Bank occupies a premier position among the nationalized banks. The Bank has 2528 branches in India spread over all states/ union territories including 93 specialized branches. These branches are controlled through 47 Zonal Offices. There are 19 branches/ offices (including one representative office at Jakarta, Indonesia) abroad located in 10 countries. The Bank came out with its maiden public issue in 1997. Total number of shareholders as on 31/3/2009 is 4,03,225. While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of introducing various innovative services and systems. Business has been conducted with the successful blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first among the nationalized banks to establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio. The Bank's association with the capital market goes back to 1921 when it entered into an agreement with the Bombay Stock Exchange (BSE) to manage the BSE Clearing House. It is an association that has blossomed into a joint venture with BSE, called the BOI Shareholding Ltd. to extend depository services to the stock broking community. Bank of India was the first Indian Bank to open a branch outside the country, at London, in 1946, and also the first to open a branch in Europe, Paris in 1974. The Bank has sizable presence abroad, with a network of 19 branches (including one representative office at Jakarta in Indonesia) at key banking and financial centers viz. London, New York, Paris, Tokyo, HongKong, and Singapore. The international business accounts for around 22% of Bank's total business.

The Bank has a strong position in financing foreign trade. Over 270 branches provide export credit. The expertise in this area has enabled the Bank to achieve a leading position in providing export credit in certain areas like diamond export. The Bank has identified specialized target groups to develop core advantage for future growth. The Bank, as on March 2011, had 93 specialized branches comprising Corporate Banking Branches to undertake very large credit business, Overseas Branches specializing in Foreign Exchange Business, NRI Branches which specially cater to the requirements of NonResident Indians, Capital Market Branches which undertake all activities relating to capital market such as collection of applications, processing of refund orders, Merchant Banking etc. Commercial & Personal Banking Branches cater to the requirements of high net worth customers. Apart from this, the Bank also has specialized Branches for Asset Recovery, Small Scale Industries, Hi-tech Agriculture Finance, Lease Finance and Treasury. To effectively meet the ever-growing challenges and competition, the Bank has made a good headway in bringing about technological upgradation. MIS and critical functions of controlling offices have been computerized. At present, the operations at about 793 branches are totally computerized. Another 1111 branches operate in partially computerized mode. New facilities such as, Telebanking, ATM & Signature Retrieval Systems have been introduced in a progressing manner to add value to services. Telebanking facilities with Fax on Demand facility, Remote Access Terminals for Corporate Customers are now available at many branches. The Bank has installed ATMs in Mumbai and other centres in the country. The Bank is a member of the RBI's VSAT Network and has installed 39 VSATs linking strategic branches/offices. The Bank is making a paradigm shift from branch automation to bank automation and is in the process of implementing a Multi-Branch Banking Project, which facilitates City-wise Connectivity of Computerized Branches. As on March 2012 the connectivity has been done in 5 cities DELHI, MUMBAI, PUNE, BANGALORE, and HYDERABAD. The Bank is in the process of installing BOINET, a Wide Area Network for providing an inter- and intra-city connectivity, as a part of enhancing its decision support system.

The Bank's corporate personality and philosophy are fully reflected in the emblem, which is a five-pronged Star -- a harmonious blend of traditional and the functional. The elongated prong pointing upwards conveys the Bank's drive to achieve ascending goals. The Star is a beacon and guide to those in need of direction.

Star Performance
The Financial results of the Bank for the Year 2012-13 were adopted by the Bank's Board of Directors at its meeting held in Mumbai on 30th April, 2013 and declared the following results:

PERFORMANCE HIGHLIGHTS % Growth During Quarter ended March (Rs. in Crore) FY 12 FY 13

% Growth

2012

2013

Operating Profit Net Profit Operating Results

1412 505

2030 851

43.8 68.5

447 90

719 283 214

60.8

Operating Profit surges to Rs.2030 crore, recording an increase of Rs .618 crore or growth of 43.8% over the previous fiscal. Likewise, Net Profit zooms to Rs. 851 crore, or 68.5% growth. During the quarter ended March 2012, operating profit stood at Rs.719 crore and net profit at Rs.283 crore as compared to Rs.447 crore and Rs.90 crore respectively in the corresponding quarter a year ago.

 Earning per share (EPS) scaled to Rs.17.43 at March-end 2013 as compared to Rs.7.91 at March-end 2012. Likewise, Book value per share has jumped to Rs.72.15 from Rs.54.33, a year ago. Return on Assets has increased from 0.78% in FY 12 to 1.16% in FY 13. Likewise, Asset Utilisation Ratio moved up from 2.17% to 2.77%. Return on Net worth improved significantly from 19.68% in FY 12 to 27.57% in FY 13. Capital Adequacy Ratio improved to 12.02% at March-end 2013 from 10.68% at Marchend 2012. Non-Interest Income went up from Rs.1117 crore in FY 12 to Rs.1642 crore during FY 13 showing an increase of Rs.525 crore or 47% growth. The ratio of Non-Interest Income to Net Income improved from 37.49% in FY 12 to 44.65% in FY 13. Non-Interest income has covered the entire operating expenses almost at 99.6% during FY 13 as compared to 72.07% in FY 12. Cost ratios have been coming down steadily. Operating Cost to average working funds declined from 2.35% in FY 12 to 2.25% in FY13 and Operating Cost to Net Income has declined from 52.02% in FY 12 to 44.82% in FY 13. Likewise, Staff Cost to Average Working Funds has declined from 1.67% to 1.54% and Staff Cost to Net Income declined from 36.93% to 30.60%. Global business mix touched Rs.1, 09,000 crore. Global Deposits touched a level of Rs.64454 crore on 31.03.2013 recording a growth of 8.16% over the previous year-end. Domestic Deposits grew by Rs.4794 crore or 9.74% to reach Rs.54030 crore at March-end 2013.

Global Advances (Gross) up by 9.68% to reach Rs.44491 crore. Domestic Advances grew by 8% to touch Rs.33013 crore, while Foreign Advances rose by 14.79% to reach Rs.11478 crore.

 Priority Sector Advances of the Bank at Rs.12546 crore as at March-end 2013 worked out to 49.95% of Net Adjusted Credit and Agricultural Advances of Rs.4547 crore stood at 18.10 % of the Net Adjusted Credit, thereby surpassing the stipulated ratios at the national level. Gross NPA has declined from 9.37% at March-end 2012 to 8.62% at March-end 2013. Likewise, Net NPA has declined from 6.02% to 5.59%. The Bank has 2562 Branches (2541 Indian and 21 Foreign). The Bank has 117 Specialized Branches catering to niche clientele and 124 Extension Counters in India. The Bank has opened 2 representative Offices, one each at Shenzhen, China and Ho Chi Minh city, Vietnam during the year.

New Strategies Initiated Bank assurance: The Bank has entered into strategic alliance with ICICI Prudential Life Insurance Company Ltd. for selling the Life insurance products through its select branches on referral basis, having potential of earning substantial fee income. Distribution of Mutual Fund Products: The Bank has tied up with DSP Merrill Lynch for selling their products of Mutual Funds through its select branches. Retailing of Government Securities: The Bank has launched jointly with the Securities Trading Corporation of India Ltd. (STCI) for retail sale of Government Securities through its select branches for expanding its fee income direction.

Main Objectives of the Bank Objective of the Banking Companies (Acquisition and The Transfer of undertakings) Act, 1970:

The main objective of the Banking Companies (Acquisition and Transfer of undertakings) Act 1970 under which the undertaking of the bank was taken over by the Central Government is as under: An Act to provide for the acquisition and transfer of the undertakings of certain Banking Companies, having regard to their size, resources, coverage and organization, in order to control the heights of the economy and to meet progressively, and serve better, the needs of the development of the economy, in conformity with national policy and objectives and for matters connected therewith or incidental thereto.

Products & Services

Corporate Loan Eligibility: High net worth corporate, partnership firms or proprietorship concerns having a good track record of profits/dividend payment and market reputation. Minimum credit rating of 'A'. Focus is on the financial strength of the Company and the asset cover available, with flexibility with regard to end-use of funds. Purpose: General corporate purposes. Could be to augment long term resources for working capital management/ acquisition and/or refinance of fixed assets/prepayment of high cost loans etc. Discounting Future Cash Flows Eligibility: High net worth corporate/non-corporate/landlords of repute with a minimum credit rating of 'A'. Purpose: To discount future cash flows including lease rentals. General corporate purposes - like augmentation of long term resources for working capital management/ acquisition and/or refinance of fixed assets/ prepayment of high cost loans/availing loan against identifiable assets without joining consortium etc. Foreign Currency Loan (Against FCNR (B) Funds)

Eligible borrowers: Export earning units and other customers with 'AAA' or 'AA' credit rating. Customers with credit rating 'A', having natural hedge. Purpose: Working Capital. Demand Loan for purchase of new plant and machinery, acquisition of equipments and other assets. Quantum: Minimum US Dollars 100,000/-. Lending only in US Dollars. Dual Currency Swing Limit Scheme: A credit facility with built-in option for the borrowers to switch between foreign currency limits and rupee limits and vice-versa depending on prevailing environment. Eligibility: Corporate borrowers with minimum credit rating 'A'. Foreign Currency: Presently USD. The borrowers will have the flexibility for conversion from USD to INR and vice-versa. Tenure: The facility is available for a period not exceeding 1 year. Can be renewed, if required.

Commercial Paper
(A) CP Issue Eligibility: Corporate with Minimum Tangible Net Worth of Rs.400 lakhs as per latest audited Balance Sheet, having working capital limits sanctioned by banks/FIs.

Credit Rating: Credit rating done by Credit Rating Agencies like CRISIL, ICRA, CARE, FITCH with minimum credit rating of P2 of CRISIL or equivalent rating of CARE/ICRA/FITCH. Rating should be current and valid for the tenure of CP Size of Issue: To be fixed by the Board of Directors of issuing Company or the quantum indicated by the Credit Rating Agency for the specified rating, whichever is low. Tenor: Minimum 15 days; Maximum 1 year from the date of issue Denomination: Minimum Rs.5 lakhs or multiples thereof.

Charges/Fees: Commitment Charges of 1% in case of Working Capital

(B) Banks as Facilitator (IPA) The Strength: With strong integrated Treasury, The bank is one of the pioneers in acting as Issuing and Paying Agent (IPA) for issuance of CP. Services offered: The Bank undertake all incidental services relating to issue of CP including placement. The Bank also facilitates in obtaining Credit Rating from approved agencies and issuing CP in de-mats form. The Bank is depository participant of both the depositories viz. Central Depository Services (India) Ltd. (CDSL) and National Depository Services Ltd. (NSDL) and has a chain of DPs located at the major commercial centres.

Star Cash Management Services Purpose: Speedy collection facility of local and upcountry cheques. Eligibility: Customers having credit limits, with a Credit Rating of "A" and above. Customers not having credit limits but maintaining satisfactorily conducted Current Account for 3 years or more. Salient Features: With the advent of communication facility and computer net work, Star Cash Management Services makes fund management easy by making available to the customer, proceeds of cheque deposited at various centers within a predefined period in the fastest mode. Funds can be made available at any of the operating Branches as per option given by the customer.Even as collections are in transit, funds can be drawn upto agreed amounts.Availability of MIS report over E-Mail on a daily / weekly/monthly basis enables better control of receivable. The customers or their agents or their clients can deposit cheques at any of the Operating Branches. Charges: Nominal service charges and interest only for the period of actual credit availed.

Other Services
Interest Rate Swaps For enabling corporate to hedge interest rate risk, the Bank offer interest rate swap in which a fixed/floating interest stream can be exchanged with a floating/fixed interest stream. Corporate Remote Access Fax Tele Banking (CRAFT) Facility On Demand CRAFT facility enables the corporate to download account information at their office itself/get the same through fax. They can get their account balances over Phone and can register request for cheque book.

Corporate Remote Access Terminal (CORAL) Facility The Corporate can view their account information on-line from their offices without visiting the Branch. Printing of statement of accounts and requisition for issuing cheque books are now rendered possible from the corporate office. Aashiyana Housing Finance Schemes Eligibility: Salaried employees, Professionals like Doctors, Lawyers, Engineers, Self-employed persons and corporate. Purpose: To purchase/ construct house/flat. To renovate/ extend/repair existing house. To take over housing loans extended by other banks/ institutions Provides loans for buying plots, owning houses, as well as for renovation/repair and extension, at highly flexible and liberal terms & conditions. Maximum loan amount is Rs.50.00 lakh and repayment ranges up to 20 years, with a very reasonable margin and processing charges. No prepayment/commitment charges. The loan is available at very competitive rates of Interest, currently available in the Industry. Mortgage Loan Scheme Purposes: a. To meet the credit needs of trade, commercial activity, other general business, and

professionals as also for their other bonafide purposes. b. To meet marriage or medical or educational expenses of family members including near

relatives. c. d. To undertake repairs/renovation/extension to the residence. Purchase of consumer durables.

BOI Star Suvidha Personal Loan It provides Funds to meet all Personal requirements of you and your family. Bank offers loans for marriage expenses, tours and excursions, purchase of all types of consumer durables, purchase of cars etc. The quantum of advance varies from Rs 50,000/- to Rs. 10 lakh, depending upon the income, with a very attractive Interest rate and easy repayment plan. Eligibility: Salaried employees, professionals and individuals with high networth. Type of Loan: Demand Loan/Term Loan/Overdraft

A. Clean Loan 1. Marriage expenses of self, son, daughter or a dependent near relative. 2. Expenses related to Tours/Excursions of self, spouse, children within India or abroad. 3. Medical expenses incurred for self, spouse, children, dependent near relative. 4. Any other personal expenses of bonafide nature as approved by the Bank.

B. Secured Loan 1. Purchase of new/second hand car/two wheeler; 2. Repayment of existing Housing Loans from other banks/Financial Institutions etc.; 3. Repairs/Renovation/Extension of House property; 4. Education of self, spouse, children, near dependent relatives; 5. Purchase of consumer durables, computers, professional equipments, etc.

Bullion Banking A. Millennium Gold Coin Bank of India, a pioneer in Bullion Banking business, have launched the millennium Gold Coin. Gold coin of 10 gms. (999.9 purity) at a very reasonable price are available for sale at the select branches. A perfect gift for the one you love. B. Gold loan scheme The Bank is one of the first to enter into Bullion Banking Business, after it was permitted by Govt. in 1997 and have launched schemes like Consignment sale of Gold and Duty-free Gold for exporters. Other value-added products such as "Bullion Loan" and "Gold deposits" have also been introduced at the select branches. Kissan Credit Scheme: A green card (Kisan Credit Card Scheme) has been introduced to help farmers to reap a rich harvest. This card helps the farmer to raise short-term funds For Agriculture/Other farmbased activities, on an on-going basis, with very flexible and friendly Repayment terms. Bill Finance Bank of India also offers Bill finance to its customers. The Bank collect bills on behalf of customers. The Bank offer post-sale credit against bills. BOI offers both Inward and Outward bills, which include: 1. Inland / Foreign Bills. 2. Demand Bills. 3. Usance Bills. 4. Documentary Bills. 5. Document against payment bill. 6. Document against acceptance bill.

 Bank Guarantee Bank of India, issues Bank Guarantees, on behalf of their customers, in favour of third parties like Government Departments, Public- Sector Organizations, etc. BoI issues both types of Guarantees viz. Performance Guarantee and Financial Guarantee. The type of Guarantee, track record of customers and their financial position are the guiding factors in deciding the Guarantee limit, security and margin.

Export Finance BOI is a pioneer in Export Finance. The Bank extends two types of Export Finance. 1. Pre-Shipment Finance. 2. Post-Shipment Finance. 1. Pre-Shipment Finance: Packing Credit in Rupees. Packing Credit in Foreign Currency. Advances against incentives receivable from the Govt. Advances against duty-drawback. 2. Post-Shipment Finance: Purchase and discount of Export Documents under confirmed orders. Negotiation / payment / acceptance of documents under L/C. Advances against Export Bills sent for collection. Export Bills rediscounted in Foreign Currency.

 Interest Rates on Advances a. BOI Prime Lending Rate (PLR) 11.5% b. BOI Prime Term Lending Rates (PTLR) 12.00% *Rates are subject to revision from time to time as per directives of RBI/Bank. **Corporate are rated as per internal credit rating system devised by the Bank taking into consideration various relevant parameters.

Depository Services Aim: Add Speed, accuracy and Transparency in the securities settlement mechanism and cut transfer cost at the same time. Purpose: Working Capital or demand loan for acquisition of business asset. Salient Features: Materialization/ Dematerialization Credit Cards Bank of India's range of Card Products is an open line of credit and a useful source of cash, anytime and anywhere. Bank of India issues a range of card products. i) INDIA CARD ( Master Card) ii) INDIA CARD ( Visa Gold) iii) BOI NAVY CLASSIC (Master Card) iv) BOI NAVY GOLD (Master Card) v) TAJ PREMIUM CARD (Master Card) vi) ATM INDIA CARD

 Gold Card Other Additional Benefits: Bank of India offers a UNIQUE SECURITY PLAN in collaboration with the Oriental Insurance Company Ltd., at a discounted premium exclusively for its CARD HOLDERS. Mediclaim & accident insurance at Lower Premium for all Credit Card holders and their family members. Personal accident insurance covers upto Rs. 5.0 lakh. Mediclaim cover upto Rs.6.0 lakh. 100% Income- tax benefit upto Rs.10, 000/- on Mediclaim insurance premium.

ATM / Swadhan Cards Bank of India is one of the main participants in the Indian Bank's Association's Swadhan ATM Network in Mumbai. Presently Swadhan cards are issued to valued customers of the Mumbai Branches only. The ATM cardholders of Mumbai Branches can withdraw cash upto Rs. 5000/- per day from any of the 380 ATMs of Swadhan Network in India including 185 ATMs in Mumbai. Further, an interconnected ATM Network for three Branches at Hyderabad has already been operationalised. This facility will be extended to all Branches within Hyderabad city, very soon. Bank also proposes to provide inter-city connectivity of ATMs, beginning with Hyderabad-Mumbai connectivity.

Deposit schemes The Branches have facilities to open various types of Deposit accounts. Savings Bank (Domestic, NRE, NRO)

Current account. Term Deposits Double Benefit Deposit Fixed Deposit Receipt Short Deposit Receipt Quarterly Income Certificate Monthly Income Certificate Recurring Deposit BOI Star-92 (Flexible fixed deposit scheme) Mamta Deposit Scheme (A long term recurring deposit scheme for your girl child) Star Suvidha.

BOI Floating Rate Deposit Schemes Objective: To optimize returns on high value deposits by permitting the depositor to have the benefit of market-related interest rates Minimum amount of deposit Rs.1 crore and thereafter-in multiples of Rs.10, 000/= Period of deposit one year (fixed) Interest rate on deposit 0.25% more than the yield rate on 91 days treasury bill Re-pricing dates: Interest will be re-set effective first day of every calendar quarter i.e. 1st of January, April, July and October

 Star Cash Management A cash management product specifically for Corporate Customers, which offers fast track cheque collections, speedier release of funds and profitable funds management, at a reasonable cost. Safe Deposit Vault/Safe Custody Services BOI also offers safe deposit Lockers and safe custody services to its customers through its large number of branches, at a very reasonable charge. BOI Medi Mobile Schemes Specifically for medical practitioners / dentists for purchase of vehicle of their choice up to a maximum limit of Rs.5.00 lakh. Technology Products / Services 1. Telebanking & Fax on Demand: BOI offers Telebanking and Fax on demand facilities to its customers, for enquiring the balances in their accounts, making requisition for cheque books and having Statements of account on fax. This facility is currently available at 188 of the Fully Computerised Branches, free of cost to the customers. 2. Corporate Remote Access Terminal: BOI offers Banking facility to its Corporate Clientele from the comforts of their offices/house on their PCs. The facilities offered are query on balances in their accounts, requisition for chequebooks, Statements of account etc. All these facilities are offered at a very reasonable cost. 3. S.W.I.F.T BOI also facilitates services to its customers through S.W.I.F.T (Society for World-wide Inter Bank Financial Telecommunications), thereby providing cost-effective financial processing and communication services of assured quality, integrity, reliability for International fund transfer

and other financial transactions. There are currently 75 branches / offices of the Bank on S.W.I.F.T network, (domestic and foreign centres) 4. ATM BOI offers its customers round-the-clock banking services through its network of 48 ATMs throughout the country. 5. Electronic Clearing Service (Debit & Credit) BOI offers its customers, faster and easier method of effecting repetitive payments by direct debit to the customers' account in case of utility payments, credit card bills etc. Similarly, ECS is also a preferred method of credit in respect of dividend warrants, interest warrants, refund orders, salary, pension etc. 6. Electronic Funds Transfer BOI offers its customers an easy mode of Inter Bank, Inter-city transfer of domestic funds between metros and select major cities within 24-hours, at a very nominal service charge.

Bank of India Launches the Online ATM Card Bank of India has launched an online ATM Card. This card is a convenient way to carry out your banking transactions round the clock - at any hour of the day or night, all seven days of the week. Regardless whether the bank is open or not! And regardless whether you are in the same city as your branch or not! The Bank of India ATM Card would allow you access to your account from any of the ATMs of Bank of India as well as the ATMs of other banks through the SWADHAN network The Bank of India ATM Card currently comes to you absolutely free when you open a Savings Bank/Current Deposit/Overdraft account in their single names; or those, which they operate under their single signatures. However, cards will not be issued to minors, corporate bodies, firms and legal entities. You can link your SB, CD, and OD accounts to your Bank of India ATM Card and withdraw cash.

Deposit Schemes For Senior Citizens Senior Citizens: One who has completed 60 Years of age. The first deposit holder should necessarily be Senior Citizen. The joint account holder may be Spouse. Spouse need not be senior citizen.

Interest Rate on Deposits: 0.5% higher than the applicable rate for the period of ONE-YEAR AND ABOVE. Nomination Facility: The depositors can nominate any relative to receive the balance outstanding in his credit. On production of the proof of death of the depositor, by the relative so nominated. In terms of RBIs monetary and credit policy for 2011-12 announced on April 29, 2012, banks have been advised to provide information on effective annualised rate of return on deposits of various maturities. Accordingly, the effective annualised rate of return on Banks cumulative deposit schemes under the Reinvestment Plan on quarterly compounding basis.

Non-Resident Indians Non Resident Indians (NRI s) have a choice of two schemes for depositing their savings with Bank of India. These are: Foreign Currency Non Resident (FCNR) accounts Non-Resident External (NRE) accounts, and, The brief comparative features of the two schemes are: Particulars: FCNR and NRE

Who can open accounts NRI s, OCB s Joint accounts of two or more NRI s Permitted Joint account with Residents Not permitted Nomination facility available Currency of account USD, GBP, EUR, JPY Indian Rupees Reparability: Principal and interest reparable . Type of account Term deposits "Savings, Current and Term deposits Period 12 months to 3 years 6 months to 7 years Minimum amount: USD 1,500GBP 1,000EUR 1,500JPY 50,000- Taxation (Indian taxes) Exempt from income and wealth tax Exempt from income and wealth tax. Liquidity Easy pre-mature encashment facility. Automatic renewal facility (ARS) Available on signing of ARS agreement Safe custody facility Available on request; Compulsory with ARS Available on request.

Renewals Deposit receipt to be submitted duly discharged within 14 days from date of maturity for retrospective renewal alternatively renewal will be with simple interest from maturity date

to renewal date Deposit receipt to be submitted duly discharged within 14 days from date of maturity for retrospective renewal alternatively renewal will be with simple interest from maturity date to renewal date Rules governing Non-Resident deposits are guided by regulations of Reserve Bank of India and rules formulated by the Bank from time to time. These are subject to change without notice.

New Products Launched Deposit Products BOI Current Deposit Plus Account: A value- added product launched by the Bank for providing operational flexibility with optimisation of earnings on the short-term surplus funds of high-value current account customers. Multi-city Cheque Facility: The instrument launched by the Bank is payable at par at Branches of the Bank at its Multi Branch Banking (MBB) Centres and is available to high-value current deposit account customers. ATM cum Debit Card: The Bank has launched Visa Electron Debit Card, which is a ATM cum Debit Card.

Credit Products Line of Credit: For Corporate and Export credit sector envisaging identification of the prospective clients and In-principle sanction of line of credit. BOI Star Mortgage Loan: A retail product against mortgage of property. Star SSI Supreme: Short-term finance to "AAA" and "AA" rated SSI borrowers with good track record at attractive rates.

Technology Savvy initiatives The Bank has a comprehensive technology up gradation plan and is continuously implementing new IT initiatives to be a technology savvy modern global Bank. Major IT initiatives implemented in FY 13 / being introduced are as under: 2155 Computerised Branches capturing 91% of Domestic business. Remaining 380 infrastructurally suitable Branches will be computerised in FY 13. 275 networked Branches in 9 cities providing Multi Branch Banking, which is being extended to another 450 Branches at 21 centres. 121 on-line ATMs of the Bank are in operation and with about 900 "Swadhan" ATMs, the number of on-line ATMs are over 1000. The Bank's own on-line ATMs are being increased to 325 by the year-end. Sharing of ATM network with 4 other Banks is also finalized. Internet banking available at 8 NRI Branches being extended to all the networked branches. SMS banking introduced at Hyderabad and Secunderabad being extended to all the networked branches.

Mobile ATM introduced at Mumbai. More Mobile ATMs to be introduced. Kiosks with Passbook printing facility have been installed at select Branches in Mumbai. About 25 more Kiosks will be introduced. Creation of a central hub at Singapore for all Foreign centers introducing common standard software. An integrated communication corporate backbone networked system for the Bank is being created. Implementation of a core banking solution is in the offing.

 Business process outsourcing in non-core areas like Human Resources.

The Bank's Head Office shifted to its own state-of-the-Art Building "Star House" at Bandra-Kurla Complex, Mumbai. The formal inauguration is on 1st May 2013 by Hon'ble Dr. Bimal Jalan, former Governor, Reserve Bank of India.

Introduction to Credit Credit in its literal sense means trust or confidence. Actually it means the postponement of payment. Credit is an act of exchanging in which the creditor delivers certain goods, money or services in the present and believes sometime in the future. The word Credit has been derived from the Latin Credo meaning, I believe. This also shows that credit has no existence without belief, faith or confidence.

Definitions of Credit: In the words of Prof. Gide, It (credit) is an exchange which is complete after the expiry of a certain period of time after payment. In the words of Prof. Cole, Credit is purchasing power not derived from income but created by financial institutions either as an offset to idle incomes held by depositors in the banks or a net addition to the total amount of purchasing power. Basis of Credit: Credit involves three essentials. They are 1. 2. 3. Exchange or transfer of value Time Confidence Confidence both in the integrity and capacity of the borrower

Characteristics of Credit: 1. Confidence 2. Character 3. Capacity 4. Debtors capital and property 5. Amount of the debt 6. Period of credit Kinds of Credit: Credit may be classified into two broad categories: Public Credit: Public credit includes all loans and advances which are extended to government, municipalities and other local bodies. Bonds, notes, certificates and similar government securities usually represent such credits. Private Credit: Private credit includes all advances of credit to individuals, partnership firms and joint stock companies. Trade bills, hundis, promissory notes, shares, debentures, etc represent such credits. For modern business, private credit is very essential. Forms of Credit: 1. Cash Credit: Cash Credit is a kind of running account opened by the bank for a

borrower. The borrower can draw the amounts as and when he needs. Interest is charged on the amount actually drawn. Banks also supply short-term finances. Under short-term financial arrangement, a firm can get credit instruments like bills of exchange; promissory note or hundies discounted at a price lower than the face value and thus obtain an unsecured loan from the bank. Generally, bank gives credit accommodation on pledge, hypothecation or collateral security.

2.

Investment Credit: This credit is granted for investment purpose. Generally

long-term capital is required for investment purpose. When credit is extended for a period of more than five years, it is known as long-term credit. Extension of buildings and plants are generally financed with the help of long-term credits and loans. 3. Commercial Credit: Short-term credit (or) Credit instruments, which, are

primarily used for commercial purposes are known a commercial credit instruments. Bank drafts, bills of exchange and promissory notes are the examples of commercial credit. This loan is granted for period of less than a year. It is known as short-term credit. This type of credit is generally related to the current operation of a business, ex: purchase of raw materials, payment of wages etc. 4. Consumers Credit: retailers for selling consumer durables like Television sets,

Refrigerators, Furniture, Electric fans, Washing machines etc, generally use it.

Role of Credit in modern business Finance is the life-blood of modern commerce. necessary lubrication to its mechanism. It facilitates trade and provides

Provision of funds is essential for every type of

domestic trade. In the modern money-using economy, finance may be defined as the provision of money at the time it is wanted. Success of a business today depends upon the credit and borrowing abilities of a businessman. In the words of Macleod, What the steam engine is in mechanism; What the differential Calculus is in Mathematics; that is credit in Commerce. Economic Significance of Credit In days of self-sufficiency there was no question of credit. Its need arose only when people adopted division of labour and large-scale production. It has now become international in character and forms the foundation of the modern economy. Some of the services of credit rendered to the economic system are: 1. It provides a convenient and economical means of exchange by supplementing other

forms of money.

2. 3. 4. 5. 6. 7.

It facilitates production and exchange. It increases consumption and raises standard of living. It encourages capital formation. It facilitates development of large-scale enterprises and industry. It makes possible the optimum utilization of capital. It exchange of commodities and services are possible without making payment in cash

8. 9. 10.

Influence on output and employment. Proper utilization of National resources. Credit transactions are easier.

Dangers of Credit 1. Leads to inflation. 2. Conceals financial weakness. 3. Leads to monopoly. 4. Competition and exploitation. 5. It encourages wastefulness on the part of individuals, commercial concerns and government.

RBI Credit Control Quantitative Controls:

(1) Bank Rate Policy: Bank rate is one of the oldest instruments of credit control used by the central bank. When a Central Bank intends to restrict the volume of credit, it raises the bank rate. Rise in the bank rate will discourage business people and investors to borrow from the banks. A fall in the bank rate results in encouraging business people and investors to borrow more and there is an expansion of credit. corresponding variation in the market value. (2) Open Market Operations: This method implies the purchases or sale of securities by the central bank with a view to expanding or contracting credit. When the central bank desires to contract the credit, it may sell the securities in the open market. The customers and the banks buy these securities and to that extent cash with the commercial banks is reduced. If the Central bank desires to expand credit, it may purchase the securities in the open market, where by more funds would be released into circulation. (3) Variations of Cash Reserves: Under this method, the Central Bank is authorized to change the minimum cash reserve to be maintained by the commercial banks with the central bank. The Central Bank may alter the cash reserve by changing or varying the reserve ratio. When the Central Bank desires to reduce the credit-creation by the commercial banks, it will raise the reserve ratio. With the increased reserve ratio banks will have to deposit more cash with the central bank. To that extent their cash reserves are reduced. On the other hand, if the Central Bank intends to expand the credit, it will lower the reserve ratio Qualitative Controls (selective controls): These methods control the distribution of bank credit in a particular direction. It controls the quality of bank credit. In India, qualitative controls have been used to prevent speculative hoarding of commodities like food grains and essential raw materials to check inflationary trends. Forms of Selective Control: 1) Margin requirements: This method aims at regulating the supply of credit for speculative purposes. When margin requirements are fixed, banks cannot lend to the extent of the full value of the securities. Variations in the bank rate are followed by

To prevent hoarding and speculative dealings in essential commodities, the Reserve Bank of India has been making use of this method of margin requirements especially in case of advance against food grains, oil-seeds, sugar, etc. 2) Consumer Credit Control: Another method of selective credit control is to regulate the credit granted to the consumers to enable them to buy certain durables commodities. The durable commodities like cars, refrigerators, televisions sets, air-conditioning etc., are costly and an average consumer is not in a position to purchase them by paying a lumpsum amount. Therefore, the consumers arrange to purchase these commodities through bank credit repayable in Installments.