Bank of India Management Discussions.

GLOBAL SCENARIO

The year 2020-21 was overshadowed by the COVID-19 pandemic across the globe with its deep impact on social and economic environment. Almost all the countries had to impose lockdown as a preventive and containment measure, apart from attending to medical emergencies and boosting health care system. The situation was further aggravated with the mutant variants of coronavirus spreading more virulently, which led to recurrence of pandemic even after it subsided. The pandemic took a heavy toll of human beings and left millions unemployed. The scientific and medical communities across the world, however, made relentless efforts for developing vaccines against the disease and towards the end of 2020, a number of vaccines got the approval of authorities of various countries for emergency uses.

The spread of epidemic and disruption in economic activities caused by the lockdown was a great economic shock which led to contraction of GDP across all the countries. Particularly, contraction for the quarter ended June 2020 was more pronounced. In order to prevent the economy from sliding further, the Governments across all the nations came out with various fiscal stimulus and social welfare measures. Similarly, almost all the Central Banks pursued easy money policy with supportive liquidity enhancing measures and allowed special regulatory dispensation. With this, the contraction in GDP, to a major extent was arrested.

The IMF, in its World Economic Outlook for April 2021, has estimated global growth during 2020 at -3.3 %. The growth rate of Advanced Economies is estimated at -4.7% and that of Emerging Market and Developing Economies at -2.2%. The world trade volume is also estimated to have contracted by 8.5%.

DOMESTIC ECONOMIC SCENARIO

Domestic economy also presented a similar scenario. As per the provisional estimate of the National Statistical Office, the GDP witnessed contraction of 24.4% during Q1 FY21 and 7.4% during Q2. However, it registered a positive growth of 0.5% during Q3, which improved to 1.6% in Q4. The overall GDP growth rate for the year 2020-21 is estimated at -7.3% against 4.0% for 2019-20. Out of the eight specified economic sectors, only ‘Agriculture & allied and ‘Electricity, gas & water supply recorded positive growth and all others showed negative growth with the ‘trade, hotels, transport, communication services recording the highest contraction of 18.2%.

The industrial growth rate as per the index of industrial production (IIP) stood negative for most of the months during the year. For the full year 2020-21, industrial growth rate stood at -8.6%. Among the three sub-sectors of industry, the decline in the case of ‘manufacturing sector has been the highest at -9.8%. As regards the use-based classification, the growth rate of ‘capital goods, ‘infrastructure/construction goods and ‘consumer durables stood negative at -19.2%, -9.1% and -15.2%, respectively.

Retail inflation as measured by the Consumer Price Index remained elevated throughout the year 2020-21, with inflation rate above RBIs upper tolerance level i.e. 6.0% remaining till November 2020 due to various factors such as supply side bottleneck, food price inflation, higher fuel prices etc. However, towards the year-end, moderation was witnessed and during the last quarter, retail inflation ranged between 4.0% to 5.5%.

Both exports and imports, which showed downward movement till November,2020 started picking up since then. For the full year 2020-21, however, exports and imports growth stood negative, with exports growth rate at (-)7.32% and imports growth rate at (-) 17.36%. The trade deficit stood at USD 98.55 bn, lower than the last years amount of USD157.36 bn. With lower imports and lower trade deficits, the current account showed surplus balance. During April to December 2020 period, the current account surplus balance stood at 1.7% of GDP against a deficit of 1.2% during April to December 2019.

Fiscal Deficit for 2020-21 stood at Rs.18.21 lakh crore or 9.30% of GDP against the Revised Budget estimate of 9.5% and originally envisaged budget estimate of 3.5%., primarily because of higher Government expenses in the areas of health care and stimulus packages undertaken for economic revival.

BANKING AND FINANCIAL SECTOR DEVELOPMENT

During the year 2020-21, the banking industry witnessed a higher deposits growth but a subdued advances growth. The deposits registered a growth of 11.4% and advances 5.6% against a growth of 7.9% in deposits and 6.1% in advances during 2019-20. The financial performance of banking sector improved during 2020-21 with better NIM and most of the PSBs, barring a few, posted net profits for the full year. The Gross NPAs and Net NPAs witnessed reduction, both in terms of amount and percentage. The capital adequacy ratio of PSBs also improved, with capital support from the government and raising of capital by banks, mainly in the form of Tier-I bonds. Among others, the regulatory relaxation by RBI and supportive measures under Aatmanirbhar Bharat Abhiyan boosted the performance of banking sector during the year.

During 2020-21, the liquidity in the system remained in abundantly surplus mode with average absorption through reverse repo operation (Net LAF) being more than Rs. 4 lakh crore during the first half of the year and over Rs. 5 lakh crore during the second half. Systemic liquidity was augmented by several measures of RBI such as one percentage point reduction of CRR, TLTRO, Net forex operations and Open market operations etc.

At the beginning of the year, the G-Sec yield ruled high because of various factors including rise in US treasury yield, selling pressure from foreign portfolio investment, adverse developments in mutual funds sector, which softened towards middle of June 2020 because of RBIs various liquidity boosting measures. During Q3, yield softened further; however, towards January,2021, G-Sec yield again began to harden on account of announcement of higher market by the Government, rise in US treasury yields and increase in crude oil prices. The G-Sec yield which was 6.14% in March,2020 went down to 6.02% in September 2020 and further to 5.89% in December 2020 went up to 6.18% in March 2021.

The equity market, which was reeling low at the beginning of the year, supported by monetary and fiscal measures, started picking up fast and continued its upward movement throughout the year. The equity market was buoyed, among others, by the inflow of foreign portfolio investment, prospects of development of corona virus vaccine and revival of economic growth. With this, the sensex increased by 68%, from 29,468 as on March 31,2020 to 49,509 as on March 31, 2021.

In the foreign exchange market, rupee depreciated initially in April, 2020 because of disruptions and uncertainty caused by onset of pandemic. However, it gradually started appreciating with support from sustained inflows of foreign portfolio investment and expectation of growth revival. The dollar-rupee exchange rate which was at Rs75.38 as on March 31,2020 improved to Rs73.50 as on March 31,2021.

In response to onset of pandemic, RBI announced a series of measures in end-March 2020 such as reduction of policy repo rates and CRR, moratorium in term loan instalment and deferment of interest in working capital etc. In addition to these, regulatory relaxation continued in April,2020 and subsequent months during the year. A number of liquidity enhancing measures such as additional refinance windows for NBFCs, Mutual funds, TLTRO, relaxation on maintenance of SLR, relaxation in LCR requirement were resorted to by the RBI. Apart from these, a special resolution framework for COVID-19 related stressed sectors was formulated and the period of one-time restructuring of loans for MSME entities was extended. Looking to the stressed situation, RBI also allowed deferment of the last tranche of capital conservation buffer (CCB) and activation of counter cyclical capital buffer.

The Government of India, in order to mitigate distress and support growth announced a series of stimulus measures aiming at economically weaker sections as also for various sectors viz. MSMEs, Agriculture, NBFCs and Corporate sectors. Notable among them are: Pradhan Matri Garib Kalyan Yojana, measures under Aatmanirbhar Bharat Abhiyan i.e. Emergency Credit Line Guarantee Scheme (ECLGS), Subordinate debt scheme for MSME sector, Production Linked Incentive (PLI) to select industries, financing of Agriculture infrastructure projects and financing for development of animal husbandry, fisheries, micro food enterprises, etc.

BUSINESS REVIEW:

1.RESOURCE MOBILISATION:

There has been an overall CASA growth of Rs. 26,918 crore during the FY 2020-21 depicting a YoY growth of 13.61%. During the period Saving Bank Deposits have shown a higher growth of Rs. 24,799 crore. The Bank has registered growth in Current Deposits also with base figures increased by Rs. 2,119 crore with 8.14% growth over last year.

The Banks focus on high value customers "Diamond Customers" has yielded good result. The SB Diamond customer base has grown by 11.21% and there has been a good growth of Rs. 18,484 crore in the deposit base of Diamond Customers depicting a YoY growth of 17.60%. Similarly the CD Diamond Customer base also grew by Rs. 1,268 crore with YoY growth of 3.83%.

The CASA ratio has dipped marginally to 41.27% from last years figure of 41.50% during the period, the share of retail term deposits has marginally dipped from 84.19% to 84.35%.

The total term deposit has registered a growth of 14.22% amounting to an increase of Rs. 68,623 crore.

2.ADVANCES:

Banks Global Gross Advances decreased from Rs. 416,521 crore as on 31.03.2020 to Rs. 410,436 crore as on 31.03.2021 with a decrease of 1.46%. Gross Domestic Credit registered a moderate growth of 1.31 % from Rs. 357,670 crore as on 31.03.2020 to Rs. 362,361 crore as on 31.03.2021. Bank caters to specialised needs of Corporates/ Mid Corporates through 10 Large Corporate Branches and other Large Branches headed by AGMs/CMs.

Bank has launched special scheme under RBIs COVID 19 Regulatory Package for borrowers facing stress on account of economic fallout of the pandemic.

3.RETAIL:

The Retail loan segment grew at 11.87% during FY 202021. We kept our special focus on Home Loans during the year, which has yielded us a good growth. The Home loan segment during the year recorded a growth of 11.39% from Rs. 35,994 crore to Rs. 40,094 crore. The Vehicle Loan segment recorded growth of 23.07% from Rs. 5,599 crore to Rs. 6,891 crore during the year. We had introduced COVID 19 Personal & Pensioner Loan during the year. The Personal Loan Segment recorded a growth of 45.56% from Rs.1,757 crore to Rs. 2,557 crore. Bank has tie-up arrangement with Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra and Mahindra. Bank also extends Personal Loans to employees of PSUs/PSEs/Reputed Corporates/ Institutions under tie up arrangement with employer. Apart from above metioned products, we also extend loans to the customers for Loan against property and Educational loan.

4.MSME (MICRO, SMALL & MEDIUM ENTERPRISE):

Micro, Small and Medium Enterprises (MSME) is a very important segment. Around 6.50 crore. MSME entrepreneurs contributing nearly 30 % of the GDP, 45 % of the manufacturing output and nearly 48 % of the exports of the country. It generates employment for about 110 million people. MSME sector is considered to be the backbone of Indian economy that has contributed substantially in the socio economic development of the country.

Considering the importance of the MSME and to bring larger business population under its fold, Government of India has now revised the definition of the MSMEs.

As per new classification of MSME w.e.f. 01.07.2020, all enterprises with investment in plant & machineries up to Rs. 1 crore and with turnover up to Rs. 5 crore will be classified as Micro enterprises.

All enterprises with investment in plant & machineries up to Rs. 10 crore and turnover up to Rs. 50 crore will be classified as Small enterprises.

All enterprises with investment in plant & machineries up to Rs. 50 crore and turnover up to Rs. 250 crore will be classified as Medium enterprises.

Focus on programmes, such as Make in India, Skill India, Digital India, Atmanirbhar Bharat, EASE Reforms and One time restructuring have also brought major changes in MSME credit at Banks level.

PERFORMANCE:

Performance of the Bank in Lending to MSME Sector during the current financial year up to 31.03.21 is depicted as under:

Particulars

March19 Actual

March ‘20 Actual

March ‘21 Actual

Y-o-Y growth

Amt. %
Total MSME (Including SIDBI) 54,595 56,092 63,237 7,145 12.73
Core MSME (Excluding SIDBI) 53,878 55,617 62,804 7,187 12.92

• 592,748 new accounts have been added with sanctioned limit of Rs. 14,753 crore. These accounts have outstanding of Rs. 11,912 crore.

• Total sanction under MUDRA as on 31.03.2021 was Rs. 8,624 crore against budget of Rs. 6,500 crore.

• Total 25,888 accounts were sanctioned through "online PSB59 loans" amounting to Rs 2193 crore.

• We have undertaken Restructuring of accounts as per One time MSME Restructuring as permitted by Reserve Bank of India in 77,053 accounts of sanctioned limits Rs. 3,050 crore with an outstanding amount of Rs. 2,365 crore.

• 34,623 new accounts are covered under CGTMSE with total guarantee amount of Rs. 2,635 crore and cumulative accounts covered by CGTMSE is 431,892 with total amount of Rs. 31,407 crore as on 31.03.2021.

• Total NPA under MSME segment was 22%.

HIGHLIGHTS OF FY 20-21:

• Entering into Co-lending with different NBFCs for reaching out to new set of borrowers and exploring new markets.

• Introducing differential products for differential customer segment.

• Successfully implemented various Govt. supported Covid relief schemes i.e. ECLSG-1, ECLGS 2, CGSSD for MSME entrepreneurs to meet their operational liabilities and restart their businesses. .

• TReDS : Concessions in Rate of Interest made available by shifting from MCLR to RBLR in TReDS business platform.

• SMECC Revamping: Strengthening of all existing 58 SMECCs for smooth functioning and centralised processing of all proposals of Rs. 10 Lakh and above implemented during the FY.

• Achieved the regulatory target under micro enterprises with total outstanding being 11.53% of ANBC as on 31.03.2021against target of 7.5% of ANBC.

• Launched "Think Big - Bring Big" campaign to target to tap big ticket MSME advances under both Star Welcome Offer and Star Asset Backed Loan Schemes.

• Launched "Hum Honge Kamyab" campaign to target MSME advances under both Star Welcome Offer and Star Asset Backed Loan Schemes.

• Launched "LAKSHYA 10000" campaign with a specific target of achieving Rs. 10,000 crore MSME Disbursement from Dec20 to Mar21.

• Initiated Campaigns with concession in ROI for accelerating credit flow to MSME sector; under Star MSME Welcome offer.

• Various measures for improved Underwriting & Assessment Parameters like use of CMR/ tie-up with Probe42 / automation of loan process through e-platform for MSME are at implementation stages.

• Successfully implemented RBI Restructuring Resolution Framework 1.

5.AGRICULTURE FINANCE:

Priority Sector Advances:

The bank is serving to the priority and agriculture sectors, through its network of rural and semi-urban branches. During FY 2020-21, we have revamped Agriculture Banking Centers (ABCs) structure as Star Krishi Vikas Kendra (SKVK). Presently 77 SKVKs are functional (including merger of 6 SKVKs). In addition to this, 48 Agri Desks are operationalized in SME City centres and zones have formulated 280 Agri. Clusters with RDO (Rural Development Officer) for focused & quality growth in agriculture portfolio including Agriculture Infrastructure and Food & Agro business. The Bank has registered an outstanding level of Rs. 138,935 crore (41.25 % of Average FY 20-21 ANBC) under Priority Sector Advances consisting of Agriculture Rs. 59,007 crore (17.50% of Average FY 20-21 ANBC). Out of which S&MF Rs. 31,992 crore (9.29% of Average FY 20-21 ANBC), SME Rs. 57,267 crore out of which MSME Micro Rs. 38,158 crore (11.54% of Average FY 20-21 ANBC), Education Rs. 2,304 crore, Housing Rs. 20,207 crore and Other Priority Sector advances is Rs. 150 crore. The Bank has surpassed the regulatory ratios under Priority sector, S&MF, MSME Micro and credit to weaker sections of FY 2020-21.

Particulars

Amt O/S

Y-O-Y Growth (Mar20/Mar21)

% of Average ANBC (FY 2020-21)

RBI Benchmark (ANBC %)

Mar 20 Mar 21 Amount %
*Total Agriculture 52,918 59,007 6,089 11.51 17.50 18.00
Small & Marginal Farmers 26,476 31,992 5,516 20.83 9.29 8.00
Micro Enterprises 27,040 38,158 11,118 41.12 11.54 7.50
‘Priority Sector Advances 126,371 138,935 12,564 9.94 41.25 40.00

*Total Agriculture includes outstanding of RIDF & PSLC

Under Agriculture, Bank branches disbursed Rs. 35,051 crore, whereas under Small and Marginal Farmers total disbursement during FY 20-21 was Rs. 20,355 crore. Bank has issued 2.39 lakhs Kisan Credit Cards during the year with credit limits of Rs. 2,821 crore for flexible credit utilization. The Bank also extends financial assistance under

Differential Rate of Interest at concessional rate of interest of 4% to low income groups. The Bank has sanctioned 847 cases under DRI scheme during the year involving Rs 1.44 crore. Banks credit exposure to the Minority Communities is Rs 17,624 crore as on March 21 (15.01 % of Priority Sector Lending against target of 15%). Amount O/s as on 31.03.2021under weaker section is Rs. 41,776 crore (12.15 % of ANBC). Banks finance to Food & Agro Industries as on 31.03.2021is Rs. 6,208 crore.

Gold Loan: Gold loans registered incremental growth of Rs. 4,257 crore (YTD growth of 62.39%) during FY20-21 and stands at Rs. 11,079 crore as on 31.03.2021. Gold loans under agriculture increased by Rs. 3,779 crore (YTD growth of 71.39%) during FY20-21 and stand at Rs. 9,072 crore as on 31.03.21.

Self Help Groups (SHGs): Bank has customer base of 5.42 lakh Self Help Groups (SHGs) as on 31.03.2021 of which 1.96 lakh SHGs are credit linked including 1.61 lakh women SHGs as on 31.03.2021. Bank has introduced Dual Biometric authentication for offsite transactions, financial and Data Digitalization for monitoring of SHGs.

National Rural Livelihood Mission (NRLM): It is an important poverty eradication programme for rural poor. During the year Bank has disbursed Rs. 1,163 crore to 0.88 lakh borrowers.

Star Krishi Vikas Kendra (SKVK)- Presently 77 SKVKs are functional. In addition to this, 48 Agri Desks are operationalized in SME City centres and zones have formulated 280 Agri. Clusters with RDO (Rural Development Officer) for focused & quality growth in agriculture portfolio.

Lead Bank Scheme: The Bank has Lead Bank responsibility in 51 districts spread across five states of Jharkhand (15), Maharashtra (14), Madhya Pradesh (13), Uttar Pradesh (7) and Odisha (2). The Bank is convener of the State Level Bankers Committee (SLBC) in the state of Jharkhand.

KCC Saturation: During year 20-21 we have added 2.27 lakh new KCC customer under KCC Saturation Campaign..

6.FINANCIAL INCLUSION:

Bank considers Financial Inclusion as a viable business proposition and has shifted outlook from "CSR" to "economic viability". ICT based solution to support and secure sufficiently low cost transactions required by the financial sector. Financial inclusion drive gained momentum with Pradhan Mantri Jan Dhan Yojna (PMJDY) programme. Bank has provided banking services in unbanked rural areas through ICT led Business Correspondents model.

PMJDY and Social Security Schemes:

During the year 21.70 Lakh PMJDY accounts has been opened. Bank has also actively participated in Social Security Schemes launched by Govt of India. During the year bank has covered 28.42 Lakh accounts under PMSBY (Pradhan Mantri Suraksha Bima Yojana). 8.62 Lakh accounts has been covered under PMJJBY (Pradhan Mantri Jivan Jyoti Bima Yojana) during current financial year. There are 4.00 Lakh number of APY ( Atal Pension Yojana) new subscribers have been canvassed by the bank in FY 2020-21 with cumulative APY at 14.88 Lakh number of accounts. Our Bank has been awarded Best PSB with "Amazing Achievers of APY (1st February, 2021 to 31st March,2021)" for its performance under APY.

Star Hawker Atamnirbhar Loan (SHAL):

Star Hawker Atamnirbhar Loan (SHAL)-PMSVANidhi has been launched in June 2020 to provide hassle free Working Capital Demand Loan up to 10,000/- repayable in 12 EMI to Street Vendors. We have sanctioned 1.72 lakh cases (95%) during this year and total disbursed 1.64 lakhs (90%) cases out of 1.82 Lakhs applications received.

Star Swarojgar Prashikshan Sansthan (RSETIs):

Bank is sponsoring 43 RSETIs in the States of Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal. During the year RSETIs have conducted 741 training programs and imparted training to 20,524 candidates ensuring settlement of 39.30% (8064) and providing credit linkage to 59.45% (4794) candidates to enable them for gainful employment. We have 33 RSETIs rated "AA" to impart training to Rural Youth.

Financial Literacy and Credit Counseling Centres (FLCC):

FLCC/FLCs are established as per Reserve Bank of India guidelines at Rural and Urban Centers at district locations where Bank is having Lead Bank responsibility. Banks 51 FLCs are functional in all 51 Lead districts. The FLCs in addition to imparting training also undertake remedial counselling on case to case basis for the distressed borrowers, preventive counselling through media, workshops and seminars. Presently 1,621,218 needy distressed people were given counseling.

Centre For Financial Literacy (CFL): Pilot Project:

Reserve Bank of India vide their circular no. FIDD.FLC. NO.4520/12.01.018/ 2016-17 dated 04.05.2017, asked Banks to explore innovative and participatory approaches to financial literacy. Our Bank have been entrusted responsibility for opening of 5 CFL in 5 Blocks of Ratnagiri District in collaboration with CRISIL Foundation. Accordingly we have opened all 5 CFL (Khed, Chipun, Mandangad, Guhagar and Dapoli) in Ratnagiri District in collaboration with CRISIL Foundation. All CFL are working since October 2017 and thereafter, in 2019 we have been given responsibility to open 5 CFL in collaboration with SWADHAR, in Khunti District in Jharkhand State. Recently we have been entrusted to scaling up 110 CFL in Five States (Jharkhand, Maharashtra, Odisha, Madhya Pradesh & Uttar Pradesh) in collaboration with RBI identified Five NGOs by December, 2021, of which we have already opened Ten (10) CFL in the Month of March, 2021 in the State of Jharkhand.

Regional Rural Banks:

Post amalgamation, we are sponsoring 3 RRBs, Aryavart Bank (AB),- in Uttar Pradesh, Madhya Pradesh Gramin Bank (MPGB) in Madhya Pradesh and Vidharbha Konkan

Gramin Bank (VKGB) in Maharashtra state, covering 82 districts with a network of 2,554 branches as on 31.03.2021. All these sponsored RRBs are managed by the Chairman deputed from Bank of India and the performances are being monitored by General Manager FI & RRB (Div.) from Head Office. All three RRBs branches and administrative offices are on CBS platform with system generated report facility.

These RRBs are enabled on RTGS, NEFT and ATM platform. All our RRBs have a combined business mix of Rs.85,824 crore as on 31.03.2021.

7.INTERNATIONAL:

The Bank has 24 Overseas Branches (23 operational), 1 Representative Office at Jakarta (Indonesia), 4 Subsidiaries, 1 Associate/Joint Venture spread across 19 countries of all time zones, The contribution of foreign operations in Banks global business mix has been 11,96% as on 31,03,2021,

Overseas Subsidiaries and Associates:

i)PT Bank of India Indonesia Tbk

ii)Bank ofIndia (Tanzania) Ltd

iii)Bank ofIndia (New Zealand) Ltd

iv)Bank ofIndia (Uganda) Ltd

v)Indo-Zambia Bank Ltd, (IZB) - Joint Venture

8.CREDIT MONITORING:

Monitoring of the credit portfolio is essential in order to maintain and improve the asset quality of the bank and minimize credit risks, The main objective of Credit Monitoring is to ensure Compliance of sanction terms and end use of funds, It has to further ensure that the credit assets remain in standard category, endeavor made for up-gradation of identified stressed accounts/watch list accounts and take corrective action to prevent slippage of the accounts from Standard to Sub-standard, The Department has been using various tools and methods for identifying and monitoring stressed accounts with signs of weakness /potential default/ delinquencies to ensure good asset quality coupled with containment of probable slippages effectively,

Tools for efficient monitoring & control process:- Early Warning Signal:

• A fully tech based EWS solution is implemented in our Bank since August 2020, Our EWS is fully automated solution with in built well defined work flow. Alerts are generated based on both internal (CBS and Rating Data) and External Data (MCA, CIC etc), The alerts generated helps the bank for identifying incipient weakness and initiate proactive timely remedial measures, The solution help the bank in early identification of fraud in accounts (if any). This solution also enables the branches for close monitoring of accounts with appropriate resolution/ action,

CRILC Reporting:

• Identification of the accounts in SMA category triggers, mitigating steps such as follow-up for regularization, restructuring etc, In terms of RBIs revised guidelines, stressed accounts with credit limit of Rs, 5 crore and above are reported to RBI on CRILC platform on weekly basis,

System Asset Classification (SASCL):

• A predictive program in identifying the probable slippages showing overdue of more than two months period based on record of recovery as well as for accounts showing technical irregularities such as non-submission of Stock/QIS statement over three months, insufficient/ no credit in CC accounts etc. This may cause downgrading of accounts, if timely corrective action is not taken, These accounts are monitored specifically by various verticals for containment of downgrading of standard assets,

Credit Process Audit :

• Credit Process Audit is to ensure compliance of Pre and Post disbursement terms of sanction terms/ covenants, where in the disbursing officer, before parting with the banks funds, has taken all necessary measures for creation/perfection of security with a view to ensure enforceability of the said securities, Now, CPA is introduced in Finacle integrated to monitor in real-time,

Stock Audit:

• We ensure timely conduct of Stock & Receivables audit in eligible accounts and take active/preventive steps wherever warranted, The stock audit is applicable mostly for standard advance accounts having working capital exposure of Rs,5 crore and above, It is required to be conducted annually, Assets showing inherent signs of weakness, such as out of order position, overdue Bills under Letters of Credit, invocation of guarantees, review overdue etc,, which pose a threat to the banks asset quality, are followed up at various platforms & levels through Tele/ Video conferencing,

Daily marking of NPA:

• The Bank has migrated to daily marking of NPA w.e.f. 15.04.2021to have more transparency in identification of NPA & for compliance of regulatory guidelines, COVID19- regulatory relief package :

• In terms of RBI guidelines, moratorium benefit has been extended to all the borrowers from 01,03,2020 to 31,08,2020 and eligible accounts are rescheduled and restructured as per RBI relief package, Other monitoring tools:

• Centralized monitoring of pre-disbursement & post disbursement covenants implemented for strengthening compliance level,

• Bank has appointed ASMs for specialized monitoring in accounts of Rs. 250 crore & above for verification of transaction monitoring, Inspections etc,

• Policies are in place for Red Flagging of accounts on observance of EWS & examination of fraud angle within a specified timeline in terms of regulatory guidelines, Prompt reporting is ensured once account is declared as fraud, in RBIs CRILC platform,

9. NPA MANAGEMENT:

The Bank made sustained relentless efforts for NPA and Written Off recovery by adopting Board approved strategies with activation of Asset Recovery Branches, staff at grass root levels.

The NPA Position as on 31,03,2021 are as under:

Particular Position as on 31.03.2020 Position as on 31.03.2021
Gross NPA 61,550 56,535
Net NPA 14,320 12,262
Gross NPA (%) 14,78% 13,77%
Net NPA (%) 3,88% 3,35%
Provision Coverage Ratio (%) 83,74% 86,24%

The measures initiated resulted in improved recovery through some of the following strategies despite pandemic effect.

ABC analysis of NPA :

• We had launched Star SAKSHAM Campaign to encourage and involve sub staff in the recovery process.

• We have modified our tailor made scheme for One Time Settlement (OTS) which were non-discretionary & nondiscriminatory,

• Posting of 3 General Managers in the Department looking after different geographies and Buckets,

• Structured follow up and ownership - Area Managers, Nodal officers for cluster of branches. Functioning of War Room with dedicated officers for Credit Monitoring & Recovery.

• Thrust on generation of OTS proposals at each level. Accounts of Rs. 5 crore & above being driven by Head Office. Online monitoring of OTS proposals.

• Conclusive SARFAESI/Legal action and legal menu for suit filed/ decreed accounts

• Rejuvenating Asset Recovery Branches by transferring suit filed NPAs > Rs. 50.00 lac & major ARBs are headed by dgm/agm.

• Holding-on operations in NPA accounts arising out of temporary Cash Flow mismatch, for up-gradation within short span of time,

• Up-gradation of the entire account after recovery of the total overdue,

• Restructuring in accounts which need long term support.

• Filing application with NCLT and pursuing other Banks in the consortium where we are not leader,

• Filing of suit, follow-up for vacation of stay and for speedy resolution through the DRT.

• Facility of online submission of OTS application by NPA borrowers with tracking option,

• Driving OTS in accounts which have positive impact on Banks profit & loss A/c;

• Invoke promptly the provisions of SARFAESI Act.

• Tracking of recovery in OTS approved accounts to ensure that they dont fail,

• Initiating the process of declaring Borrowers as Wilful Defaulters / Non-Cooperative in all eligible cases

• Conducting Mega E-auctions on Pan-India basis to fast forward the process,

• Participation in the National Lok Adalat at various levels.

• Suit filed/decreed cases are now monitored online.

• Proactive participation in JLM meetings conducted at Bank level in all cases where Bank is Leader and also a member of consortium,

10.TREASURY:

Forex Business:

The Treasury manages the foreign exchange business of the bank, providing hedging solutions to the customers through forwards, options and swaps, Apart from having Centralized Treasury at Mumbai, the Bank has 4 satellite dealing rooms situated at New Delhi, Ahmedabad, Chennai and Kolkata and one centralized back office in Gift city(Ahmedabad) so as to provide better services to the customers, During the financial year 2020-21, Merchant and interbank turnover was Rs, 1,38 lakh crore and Rs, 49,78 lakh crore respectively, The aggregate turnover of Banks forex business during the year was Rs, 51,16 lakh crore, The treasury actively participates in trading in Currency Futures and is one of the leading banks in all the exchanges, During the Financial Year 2020-21, Banks Turnover in Currency Futures was USD 73,08 Bn, Bank has been conferred various awards for Currency Futures business, The Bank was awarded "TOP VOLUME PERFORMER" by BSE for Best Performance in Currency Derivatives Segment (Banks) 2020-21 and Top performer in MCX in currency derivative segment amongst all bank,

Treasury Operations & Investments:

Bank continued to play an active role in all segments of the market - Money market, Forex, Bonds and Derivatives in 2020-21, Bank has maintained a higher level of investments by holding SLR investments in excess of the regulatory requirement of 18,00% of NDTL from time to time to utilize excess SLR for borrowing from Repo/TREPS windows, As on 31,03,2021 the gross SLR investments were Rs, 141,117 crore (75,92% of total investments) and Non-SLR investments stood at Rs, 44,760 crores (24,08% of total investments), The Non- SLR investments also includes Recapitalization Bonds of Rs, 24,699 crore, The treasury dynamically managed its investment portfolio and brought down M-Duration of SLR AFS portfolio from 1,51 as on 31,03,2020 to 1,22 as on 31,03,2021, The investments are made in accordance with the Board approved investment policy which is reviewed periodically to respond to market developments/regulatory requirements,,

11.INFORMATION TECHNOLOGY:

Document Management System:

• Document Management System helped various department to continue their work in a effective way without any hindrance during the Covid 19 pandemic,

• Various HO departments, branches and zones are accessing DMS in Live environment

• Statutory Branch Audit (SBA) and Statutory Control Audit (SCA) has been conducted effectively with the help of DMS, All the documents have been made available to the auditors on real-time basis,

• The SB account opening Process through DMS is made live in all the branches linked to 59 ZCODs (Zonal Centralized Operations Department), based on the request received from Centralized Back-Office Department w.e.f, 01.04.2021.

• Usage of DMS in Swift Centralization Process has been made live in AD branches and FBD new template "FE-BO" has been made live on 24.03.2021.

• ECS mandates through DMS has been made live in all branches w.e.f. 17.02.2021.

Website Related Development :

• Dedicated website has been developed for Antwerp Branch in Belgium

• Online Suggestion Module has been developed for Kenya site

• Online GECL ( Guaranteed Emergency Credit Line) was provided to eligible MSME borrowers.

• Development of online contactless debit card survey form with survey link on website to gather feedback for enhancement of card services.

• Development of Finance restructuring application form on website where provision to opt for relief ( extension of loan moratorium as well as tenure) has been provided to eligible borrowers who are affected during the ongoing Covid Pandemic.

• Introduction of Door Step Banking services and display of contact information to connect and avail DSB services have been developed and integrated.

Stardesk:

• Development of Gyan Atmanirbhar Portal for Standard Operating Procedure SOPs and Online forms for feeback on SOPs, Staff contribution on SOPs on Gyan Atmanirbhar Portal.

• Online Application form for Reference number Generation to generate the reference nos from system & Online form for capturing payment details.

• Online Form for Zonal Budget allocation, MIS of Security department, Information security portal

• Online form for capturing Payment Details.

Internet Banking(IB):

• Debit card Control module as per RBI mandate has been made live in Internet Banking application where user can manage channel access as well as channel limit along with hot listing of card, temporary blocking of card, change card PIN, reset card PIN.

• As per advisory received from RBI, forced password change has been introduced for SCBs and UCBs Corporate Internet Banking users.

• As per RBI guidelines, communication between Bank of India Internet Banking and PayU & ATOM/ Tech Process Payment Gateway has been encrypted.

• Internet Banking (Retail) has been integrated with e-FRM system of Fraud Risk Management.

• Facility has been introduced in Retail Internet Banking to allow customers to add nominee in savings bank account.

• Door Step Banking portal redirection has been integrated on internet banking home page.

• Success, failure and all bulk upload report post processing of bulk upload transactions facility was provided to the customers.

• SGB (Sovereign Gold Bond) functionality has been enabled for HUF customer. With this, Hindu Undivided Family (HUF) can also apply for Gold bond using Internet Banking.

Mobile Banking(MB):

• Currently we have 44,61,183 registered users in Mobile Banking (as on 30th Apr 2021) that includes 42,77,608 Android users and 1,83,575 iOS users and now it has been made compatible with Android 11

• Integrated Debit Card Control and Credit card control changes according to RBI guidelines that includes features like Hotlist, Temporary Block/Unblock, Change PIN, Manage Limits and Manage Channel, view statement, Pay Bill, temporary block card, replacement card.

• Integrated Doorstep Banking and PPS-Cheque Positive Pay System

• Integrated OCRM (Operational Customer Relationship Management) feature for Lead Generation where customer can request for 46 facilities e.g. request for credit card, request for different types of loan, request for locker etc. to name a few.

• 15GH form is made available in the app where user can submit application to prevent TDS deduction on the income.

• Changes have been done to allow credit in Loan accounts using Third Party fund transfer option in MB.

• Display of loan account and loan offers functionality integrated in mobile banking.

• Given Date Balance functionality and mPassBook made live for end users to check balance in their SB, CD, ODA, Loan, TD and RD accounts.

Digital Documentation Execution:

• DDE Project has been made live for Retail loan products on 31.03-2021 which includes e-stamping and e-signing using Aadhar based OTP

• (NeSL) has been implemented in CAPS i.e. Credit Application Processing system. (Banks-Loan Orientation System (LOS).

• At present Single borrower with multi documents and multipage documents is implemented.

• DDE project is available for 8 states as viz Delhi, Rajasthan, Uttar Pradesh, Jharkhand, Tamil Nadu, Karnataka, Pondicherry, Andaman Nicobar.

Bharat Bill Payment System:

• During the year, the solution is integrated seamlessly with Bank‘s CBS, Financial Inclusion gateway, MultiFunction Kiosks, IVR services, and in Alternate Delivery Channels provided by Bank. The transaction can be initiated via alternate delivery channel or from any bank branch terminal or through payment agent terminal

PPS - Positive Pay System for CTS (Cheque Truncation System):

• As per RBI advise and facility developed by NPCI for participant banks, Positive Pay System functionality is implemented in Internet Banking, Mobile Banking and Finacle CBS for all account holders issuing cheques for amounts of Rs. 50,000 and above for reconfirming key details of large value cheques.

• Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary / payee, amount, etc.) to the drawee bank, details of which are cross checked with the presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures.

ONGOING PROJECTS:

Digilocker Solution:

• Bank is in the process of procuring DigiLocker Solution to provide facility to Customers. Using this solution bank can issue document like interest certificate, TDS document etc. to customers DigiLocker account as well as bank can request document like KYC document, OVDs etc. from customer.

• On-boarded M/S MISCOT for implementation of DigiLocker solution. Development, deployment and UAT has been completed. Integration with MB and IB is in progress.

FASTag:

• FASTag is a simple & reusable tag that works on the Radio-frequency identification technology (RFID). Each tag is linked to a registered wallet to facilitate instant automatic deduction of toll charges. Our banks customer has the facility to recharge their existing FASTag through Internet Banking, Mobile Banking and branches.

Now bank is working to be an issuer of this FASTag. Integration with Finacle, MB, IB, UPI and BBPS will be donce after NPCI Certification.

MISSCALLPAY:

• MissCallPay is digital payment solution that provides all the functionality of UPI based mobile payments over a feature phone using Missed Call. It does not have any dependency on interenet connection, hence it is suitable for rural and urban under-served population fIndia.

• Users can also transact in their local language.

Interoperable Cardless cash withdrawal:

• QR based cash withdrawal in ATM has been launched on 07th September 2019, where the customers need not use ATM cards to withdraw cash anymore. QR- Cash leverages QR platform and Customer can use BHIM BOI UPI Application to scan the QR generated on Recycler/ATM Screens. QR-Cash is an attempt for curbing ATM cloning, skimming & ATM related frauds and promoting card less cash withdrawals.

• To make this product interoperable among all peer banks, NPCI has given approval for UAT of Interoperable Card less Cash Withdrawal (ICCW). Customers using any UPI Application will be able to withdraw money from ICCW/ QR-Cash enabled ATM/ recyclers.

12 MANAGEMENT INFORMATION SYSTEM DEPARTMENT:

New Initative of MIS Department:

Next-gen Datawarehouse solution:

Bank has engaged a consultant firm to study our existing processes, setup and propose suitable, cost- effective next generation Datawarehouse solution. Accordingly, RFP has been floated in first week of May,2021 for selection of System Integrator to implement proposed next-gen solution alongwith Data-Lake.

e-PLATFORM Solution:

System Integrator is appointed by the Bank through RFP prosess to implement & maintain e-PLATFORM solution for Straight Through Origination and Processing of all Banking Products (Assets & Liability products) including third party products. The broad scope of work is as under -

• New Customer RelationManagement - Lead Mgmt, Campaign Mgmt, Complaint Mgmt, 360 degree view of customer , Service Mgmt

• Loan Processing Lifecycle Management System

• Digital Maketing

• Implementation of Straight Through Processing (STP) for Banks Assets & Liability and Third Part products

Enhanced Access and Services Excellence (EASE):

For improvement of EASE score and digital transformation , various activities such as Analytical based and technology base Retails and MSME credit offers is required to be carried out. MIS has Implemented following requirements of EASE 3.0

• Activation of digital lead initiation channels : SMS, Missed Call, Call Center, Web-site, Mobile Banking

• Analytics based lead generation implemented for :

• Retail-Home Loan Top-Up Loan

• Retail-Pre-Closed TD

• Retail-Home Loan Takeover

• Retail-Personal Loan to Salaried Customers

• MSME - Pre-Approved Business Loan to MSME Customers.

13.RISK MANAGEMENT :

Risk and Control:

Bank has appropriate mechanism in place to ensure ongoing assessment of relevant risks on an individual bucket as well as on a portfolio basis to maintain the trade-off between risks and returns. Risk Management is a Board driven function in the Bank with the Risk Management Committee of the Board (R.Com) at the apex level, supported by operational level committees of Top Executives for managing various risks, such as Asset Liability Management Committee (ALCO), CRMC (Credit Risk Management Committee), MRMC (Market Risk Management Committee) and CORM (Committee for Operational Risk Management).

Banks Risk Management Framework is focused on full integration of risk management into its operations and culture. The integrated risk management framework starts with a risk management cycle, consisting of several steps: determining the risk appetite, stress testing, scenario analysis, preparing full scope risk assessment of all segments and measuring & monitoring risks. Risks are adequately identified, analysed, reported and managed. Risk management is responsible for putting in place procedures for measuring, monitoring and reporting risks. Risks are proactively identified and managed within the Bank. Risk Management is one of the core focus areas in the Bank. The Bank is working to ensure that it adopts global best practices in all the risk areas. This commitment is being achieved by investing both in people and systems and building an enduring risk culture.

Risk Management Department ensures through an extensive framework of limits and controls to monitor and manage Banks risk profile. The Risk Management Department ensures that risk management is implemented correctly, that it is in line with all regulatory guidelines.

During FY 2020-21, credit rating thresholds were based on the performance of the specific industry/sector. Bank uses different internal Credit Risk Assessment Models and scorecards for assessing borrower wise credit risk models for internal credit ratings of the borrowers were developed in house. They are being reviewed through cycles of comprehensive validation and back testing frameworks including external validation and review. Bank is in the process of implementing framework for Risk Adjusted Return on Capital (RAROC)

Bank has migrated to computation of Capital Adequacy under Basel III regulation based on Standardized Approach (SA) for Credit Risk, Standardized Duration Method (SDM) for Market Risk and Basic Indicator Approach (BIA) for Operational Risk as per the RBI guidelines.

Operational Risk is defined as the risk of loss resulting from inadequate or failed internal process, people and systems or external events. Operational Risk includes legal risk, but excludes strategic and reputation risk. Bank calculates Operational Risk Weighted Assets through Basic Indicator Approach (BIA).

The Bank monitors and manages operational risks vis-avis a comprehensive set of processes, systems of internal controls, and policies, to reduce the probability and potential impact of losses from Operational Risks.

Banks Information Risk Management System has clear objective to obviate Information Security risks in the face of acceleration in Banks business by strengthening internal controls to protect the brand, reputation and assets of the Bank. Bank is vigilant of the security and privacy of the data related to its patrons and account holders and takes utmost care to protect it from cyber-attacks. Bank has put in place Captive Security Operation Centre (SOC). Bank has implemented information security tools for Real-Time monitoring of Information Security breach attempts / incidents / events on 24x7 basis in order to timely prevent, detect and respond. Advanced security tools like SIEM (Security Information and Event Management), PIM (Privilege Identity Management), DAM (Database Activity Monitoring), WAF (Web Application Firewall), NBAD (Network Behaviour Anomaly Detection), Anti-APT (Advance Persistence Threat) for Web & Email Channels and Anti-DDoS, Data DLP (Data Leakage Prevention) are some of the many security solutions deployed. Various new security solutions focusing on threat hunting, prevention, detection and response are also put in place. The Bank is ISO 27001:2013 (ISMS) and ISO 22301:2012 (BCMS) certified. Effective brand protection services are put in place to protect Banks customers from Phishing attacks by way of fake sites. Risk and vulnerability assessment exercises are regularly carried out for all systems with timely remedial activities. Security awareness campaigns, especially with respect to social engineering, are conducted across the Bank encompassing staff as well as customers through various channels of learning and communication.

14.DIGITAL BANKING:

Bank of India is providing various digital products and services to promote digitalisation. Different variants of Debit and Credit Cards from VISA, Mastercard and RuPay are issued to customers. During the year we have launched a premium debit card, both in metal and plastic variants, for our high valued customers. Bank has integrated debit and credit card services to BOI mobile application for seamless control over cards related transactions. BHIM UPI, Mobile Banking and Internet Banking services are availed by large number of customers. Bank provides Point of Sale (POS) EDC machines, BHIM Aadhaar Pay / UPI QR / Bharat QR to merchant customers. As on 31.03.2021, Bank has installed 30,560 physical PoS terminals and issued 179,901 QR code (including PM Svanidhi accounts) to various merchants in metro, urban, semi-urban and rural areas.

As on 31.03.2021, Bank has installed 5,551 ATMs. All ATMs of the Bank are compliant with latest security features. We have also enabled Voice Guidance facility in all our ATMs to help the visually challenged. 2,727 New Age Cash Recycler Machines are installed to facilitate seamless cash deposit / withdrawal experience to our customers.

Bank provides various facilities relating to transaction banking. This includes NACH mandates, direct debit mandates, Payment Gateway, Cash Management Services for Corporates, on-line-share trading 3-in-1 accounts and Channel Finance.

15.THIRD PARTY PRODUCTS DIVISION:

Life Insurance:

Bank is having its Corporate Agency arrangement with Banks Joint Venture life Insurance Company i.e. Star Union Dai-ichi

Life insurance Co. Ltd. for distributing life insurance products. Bank has 9067 IRDAI certified Specified Person placed at various branches across India. Besides distributing various life insurance products of SUD Life, we also market/distribute optional Life insurance cover to Banks Retail Home loan and Education Loan borrowers under Group insurance Policy at a competitive premium. Bank has collected life insurance premium of Rs. 1,396.67 crore thus earned commission income of Rs. 77.64 crore for the FY 20-21.

General Insurance:

Bank has tie up arrangement with two general insurance companies i.e. The New India Assurance Co. Ltd. and Reliance General insurance Co. Ltd to distribute their products. We also have a co-branded health insurance product - "Reliance BOI Swasthya Bima" which is a Family Floater policy available for Bank of India account holders at a competitive premium. Bank has collected General insurance premium of Rs. 153.60 crore thus earned commission income of Rs. 21.26 crore for the FY 20-21.

Standalone Health Insurance:

Bank has tie-up arrangement with Star Health & Allied insurance Co. Ltd. under Standalone Health insurance category. Bank has collected Health insurance premium of Rs. 38.52 crore thus earned commission income of Rs. 5.25 crore for the FY 20-21.

Mutual Funds Products:

Bank continues to be a shop for all financial needs for our customers. We have basket of financial products which also consists of 10 Asset Management Companies including BOi AXA Mutual Fund, our own Joint venture company for distribution of their mutual fund products. Bank has earned a commission of Rs. 3.14 crore from Mutual Fund business during FY 20-21.

16.MARKETING & PUBLICITY :

Banks Publicity and Public Relation Department executes multi-media corporate campaigns to enhance the visibility of Banks products and services along with image building. Banks various products down the line across the country are executed by various media plan, on the lines of Banks theme "Relationship Beyond Banking". Bank has been continuously undertaking the publicity of Banks products through Radio channels, Television and Digital platform in a big way. The promotion of Banks product through print media in major national / regional dailies and various top magazines and Out Of Home (OOH) activities i.e. hoarding/Bill Boards/ Gantries is also undertaken.

17.BUSINESS PROCESS RE-ENGINEERING:

BPR Department works on improving the existing systems and processes in the Bank and on other aspects of change management that include the organizational structure, products, & policies. The major customer centric initiatives taken during 2020-21 are:

Project works/initiatives during FY (2020-21):

• Creation of Two NBGs and Four New zones: Two new NBGs, NBG-Bihar and NBG-MP & Chhattisgarh and four new zones namely, Nasik, Jabalpur, Madurai and Sambalpur zones are created to garner potential business opportunities, facilitate smooth functioning, better monitoring and customer outreach.

• Policy document on guidelines for Restructuring of Organizational Structure: Policy has been made for robust growth in terms of overall business, better control on Zones /branches and better customer service.

• Set up of new Departments: Foreign Business Department, MiS department and Digital Banking Department were created for better customer service and quick redressals of customer query/complaints by Branches.

• Star Paramarsh - Staff Suggestion Scheme to have firsthand operational/practical suggestions from the field: We have expanded the scheme to cover all ideas & suggestions of staff given at all fora, including at conferences, conclaves, & training centers, for operational efficiency & service effectiveness. Suggestions received during the year: 469, Selected for implementation: 19, Awarded prizes: 1.

18. INSPECTION & AUDIT :

Bank has Board approved policies on Risk Based internal Audit (RBiA), Risk Based Management Audit (Domestic), Concurrent Audit, information System Audit, Off site Monitoring (OMS) and Audit of Foreign Branches. The policies are reviewed to comply with the directions of the Regulators and also as per the directions of Audit Committee of the Board. During the FY 2020-21, the Department conducted audit of 3210 branches and offices. Concurrent Audit covered 1211 Branches, Treasury Branch, Data Centre and HO Departments by practicing CAs and all the Foreign Branches are covered by Banks own officers. Concurrent Auditors covered more than 59.41% of Global Deposits and more than 83.97% of Global Advances. Bank also conducts special assignments to meet requirements of the Bank from time to time in areas of:

• Discretionary Audit conducted at branches with ‘High Risk and above rating.

• Assessment of impact of preventive vigilance measures at branches under audit.

• Special Audit of select Authorized Dealer (AD) branches for checking/verification of transactions relating to Export transactions / import Advance Remittances.

• iS Audit of Data Centre, Disaster Recovery site (DR) and other critical departments along with branches by Banks internal information System Auditors.

• Concurrent audit of Data Centre to ensure verification of interest parameters, application of interest process and checking of interest in sample accounts.

• Regular reporting on all important Audit findings are made to Top Management, Audit Committee of Executives and Audit Committee of the Board as per the directions.

• Bank has also introduced the Off-site Monitoring System to monitor the identified exceptions on daily basis,

19.LEGAL & RIGHT TO INFORMATION ACT :

Legal Department of the Bank acts as support department and provides platform for various matters of Opinion, Documentation, Litigation etc, emanating from various other functional departments at Head Office.

Besides attending to referral matters of various NBGs/ Zones, Domestic Branches/Foreign Branches and Banks subsidiaries, the Department also caters to the specific needs of specialized Departments like Information Technology Department, International Department, Treasury Department, Digital Banking Department, Card Products Department, Transaction Banking Department etc, by Drafting / Vetting of documents of various contracts/ Service Level Agreements (SLAs), Software/Hardware procurement, various types of tie-up arrangements /new products etc,

The Right to Information Act has taken a pivotal role in the Society and lot many applications are received by the Bank at various levels. Bank has identified Central Public Information Officer and Appellate Authority at various Zones / NBGs, Deputy General Manager (Law)/Assistant General Manager (Law) of Legal Department, Head Office is designated as the CPIO of the Bank, and the General Manager, Legal Department is the Appellate Authority, The procedure for disposing of application or appeals involves collecting the desired information from various Departments and supplying the same to the applicant within the fixed time duration 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,

In addition to the above, the Legal Department also attends to:

• Approval of Plaints in respect of suits filed by Bank and Monitoring of said cases,

• Advising on writs, cases, appeals, claims etc. filed against the Bank, vetting of the applications/affidavits etc, wherever required,

• Attending to the various queries of Ministry, Reserve Bank of India and IBA on different matters including new Legislation/amendments under consideration on various Acts,

• Opinion on Share transmission matters of Share Dept.

• Cases against Bank/ Claim against Bank not acknowledged as debt/provision requirement/ follow up with Zones etc,

• Collection and compilation of data/statistics pertaining to suit filed/ decreed cases and submission to various authorities like Reserve Bank of India, MOF etc, RBS data,

20.COMPLIANCE DEPARTMENT ;

Bank has an independent Compliance Department since the year 2008. The department is headed by Chief Compliance Officer in the rank of General Manager. Compliance of statutory, regulatory and Banks internal guidelines is the scope of compliance function in the Bank, both for Domestic and Overseas operation who is also designated as "Principal Officer" in line with Prevention of Money Laundering Act, 2002 (PML Act),

Bank is adopting Board approved Compliance Function Policy framed as per Reserve Bank of India guidelines, Bank is continually enhancing its compliance culture with adoption of Compliance Rules for different work areas of Banks domestic operations, The compliance department is conducting half-yearly compliance testing exercise, quarterly compliance testing of implementation of Regulatory guidelines, compliance audit of action taken to RBI observations made under Risk Based Supervision and test check for Tranche III compliance rules prescribed by RBI to ensure compliance sustainability,

Bank has also vested with the responsibility of implementation/ monitoring Know Your Customer (KYC)/ Anti Money Laundering (AML) Measures/ Combating Financing of Terrorism (CFT) Guidelines in the Bank, Compliance with KYC norms in all accounts, as directed by RBI is ensured, As per the provisions of Prevention of Money Laundering Act, 2002 (PML Act) and its subsequent amendments thereto and the Rules made thereunder as well as the guidelines issued by the RBI, Bank has put in place Board approved KYC/ AML/CFT Policy which is adopted by branches in India, All customers 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 done once in every six months, The department also ensures for imparting of training on KYC / AML and its related compliance aspects to the staff members,

The Compliance department is the single point of contact for all the Regulatory Agencies, It is the focal point of the Bank to respond to RBI in conducting Risk Based Supervision (RBS), The RBS reports are attended in coordination with all the departments of Bank and compliance is submitted to RBI,

The compliance department at HO is also overseeing compliance function of overseas establishments who follow their respective territory based compliance policies as well as KYC-AML-CFT Policies, Each overseas Centre/ Branch/subsidiary has a compliance officer to look after the respective compliance function, Overseas branches comply with the applicable regulatory requirements (home country / host country regulatory guidelines whichever is stringent) and submit confirmations / compliance sustainability reports. The compliance officer of each overseas Branch undertakes Quarterly Compliance testing and submits reports to Head Office.

21.OFFICIAL LANGUAGE :

There is a well-established Official Language Department in our bank which ensures the implementation of the provisions and the progressive use of Hindi with regard to the official language policy of the Government of India, During the year our Bank bagged "Kirti Puraskar" (First Prize) for the year 2019-20 which is the highest award given by Government of India for Rajbhasha Implementation, TOLIC Ratnagiri which is working under the convenorship of our Bank has been awarded with "Kirti Puraskar" (Second Prize), TOLIC Noida,

Nagpur and Muzaffarpur have got prizes at regional level. Apart from this, Zonal Office Goa, Huballi Dharwad and STC Noida have also bagged prizes at regional level which are highest prizes at the said level, Further our Zones/Branches have got prizes from TOLIC. Our bank has organized 139 Hindi workshops during the year in which 3124 staff members have been trained, Rajbhasha E-learning and a module on Anuwad have been prepared, Hindi E-mail competition on quarterly basis was conducted during the year for the departments of head office. Hindi Month was celebrated from 15 August, 2020 to 14 September, 2020. Rajbhasha Shield Competition was organized for the departments of head office and zones separately. Reference literatures were prepared by the Bank in the Regional Languages, Writeups on eminent personalities is sent to all offices/branches in Rajbhasha Hindi every week by the Head Office. Our bank is successfully carrying out the responsibility of the convenorship of 8 TOLICS,

22.HUMAN RESOURCES, LEARNING & DEVELOPMENT AND IN HOUSE JOURNALS:

HUMAN RESOURCES:

During financial year 2020-21, our Bank recruited 1092 Staff Officers in General Banking and Specialist cadre in various scales and 3256 in Clerical cadre, During FY 2021-22, the Bank has a plan to recruit 2274 Staff Officers and 2780 clerical staff,

The following initiatives in the HR field has been introduced by the Bank during the recent years:

• Job Family

• Performance Management System

• Talent Management

• Leadership Development

• Employee Engagement Survey (Star Anveshan)

• 360 Degree Feedback Survey

HR continues its efforts in supporting the physical and mental well being of its staff employees amidst the second wave of the coronavirus pandemic which is still causing tremendous disruption in work life, Bank has undertaken several measures to protect the Staff employees from spread of Covid-19 infection like staggered working hours, work from home, restricted business hours, work on rotational basis etc, based on SOP advisories as and when received from the Government/ I BA, besides financial support schemes like ‘Star Abhar, ‘Star Sahay and ‘Star Kutumb.

The implementation of the focus areas derived from the recently conducted employee engagement survey among staff officers is under process. The 360 degree feedback survey being conducted among senior executives shall facilitate in maintaining a leadership pipeline,

Performance Management:

Bank has put in place the mechanism for achieving an objective assessment of employee performance through a system driven mechanism that will allow course correction feedback and action thereof, In the FY 2021-22, the Performance Management System (PMS) in our Bank will be based on following parameters:

(Budgetary Appraisal) 65% weightage for business dimensions, 15% weightage for managerial dimensions, 5% for completion of E-learning and 15% for qualitative aspects of business,
(Non Budgetary Appraisal) 50% weightage given for KRAs, 45% weightage for managerial dimensions and 5% weightage for completion of E-learning modules,

With the Budgetary Appraisal, target / budget figures already being captured from the FINACLE and compared with budgetary targets vis-a-vis the actual performance since 2019-20, Banks current endeavor is to increase the degree of measurability of the Non-budgetary parameters of Appraisal as well,

Talent Management and Succession Planning

Identifying and shortlisting critical positions/ roles in nine critical areas such as, Corporate Credit, Credit Monitoring, Recovery, Treasury, Risk Management, International Division, Information Technology, ITES and HRD, It is proposed that upon identification of the critical roles, competencies will be mapped vis-a-vis the critical roles identified. Accordingly, the current incumbents and potential employees in these roles will be suitably trained and groomed to assume these roles in time,

A focussed talent review/ development process is being undertaken to ensure that our Bank is fully prepared to address the challenge of exceptionally high level of vacancies in the senior management levels so that we have a healthy pipeline of quality talent suitably equipped to fill all ensuing vacancies, In the area of Talent Management, we have completed the Development Conversations of 76 DGMs, The Development Conversations of 177 AGMs are under process,

Towards HR transformational strategy we shall initiate succession planning exercise to bridge the gap in exposure and skills with dual purpose:

To identify amongst the available talent to assess potential before considering and grooming for suitable critical roles/ positions in the Bank, and

Over the next 5 years, Bank shall implement Succession Planning with an aim to groom identified talents for future leadership roles,

Compliance with Reservation Policy:

The Bank is complying with the reservation policy of Government of India, Recruitment and SC/ST Cells at Head Office and Zonal Offices ensure to implement the reservation policy and redressal of grievances relating to SC/ ST/OBC Employees. General Managers at Head Office are designated as Chief Liaison Officer for SC/STs and OBCs. Officers from SC/ST/OBC categories are designated as Cell / Liaison Officers at Zonal Offices. Post-based Reservation Rosters are maintained as per Government guidelines,

The Bank has been providing Reservation for Persons with Disabilities (PWDs) @ 4% of the total vacancies arising in Officer, Clerical and Sub-staff cadre. Reservation of 10% to Economically Weaker Sections (EWSs) in Direct Recruitment was implemented in the Bank with effect from 1st February, 2019,

Representation of SC/ST/OBC Staff:

As on March 2021 Officers Clerks Sub-Staff Staff Total
Total 23543 21025 6891 51459
SC 4306 3259 2280 9845
% to total Staff 18.29 15.50 33.09 19.13
ST 2077 2468 778 5323
% to total Staff 8.82 11.74 11.29 10.34
OBC 6406 5484 1766 13716
% to total Staff 27.21 26.08 25.63 26.65

LEARNING AND DEVELOPMENT DEPARTMENT:

A separate independent Department as overall countrywide in charge of the training colleges, MDI and all related activities including capacity building. In house talent development and imparting of class room trainings are being taken care of by the Learning and Development Department. Due to COVID 19 pandemic, bank has been using Digital Platform to train its employees. Banks 7 training colleges have imparted training to 30000+ number of employees during the financial year using digital platform. Bank has been using E-Learning modules for enhancing the competencies of employees and to equip the staff with right skills and knowledge for meeting ever changing business dynamics across different segments. 21000+ officers have done various e learning modules. To enhance the capabilities of officers in key work areas of the Bank, the Capacity building certification programme is also launched. To improve Data Analytical Skill of Staff, Bank has made collaboration with Manipal Global to impart training in niche area of Data Science. Select Executives have been nominated for training for IIM Bengaluru as per BBB instructions. As per CVC guidelines, uniform Induction Training Programme of Newly Recruited Officers and also programme on Preventive vigilance for newly joined officers and mid-career officers have been adopted by the Bank.

BANKS HOUSE JOURNAL ‘TAARANGAN :

The Journey of our Banks house Journal began in the year 1964. During the years it assumed different names and is presently known as ‘Taarangan. It has been a medium of expression of BOIs in-house talent and also an important tool for employee engagement. Taarangan provides a platform to our staff members to showcase their skills. Through its interesting and insightful articles Taarangan provides wholesome entertainment to our readers.

Taarangan is also a forum for knowledge sharing wherein articles on various subJects by our staff members are published. It also covers and highlights various activities conducted by Zones/Branches/ Offices/ Overseas Centres. Digital copy of Taarangan is also available in staff portal "Star desk", "HRMS" and on Banks corporate website. Over the years our house magazine has received several awards and brought laurels to our Bank.

23.CUSTOMER EXCELLENCE BRANCH BANKING:

The Bank has a full-fledged Call Centre located at two centres viz. Airoli (Navi Mumbai) and Begumpet (Hyderabad) providing 24x7x365 assistance to the customers / non customers.

Various Policies such as Customer Rights Policy, Customer Acceptance, Customer Care and Customer Severance Policy and Grievance Redressal Policy are in place as per the regulatory requirements and same are reviewed from time to time to incorporate the changes as per the directions/ guidelines of the regulatory authorities. All these policies are placed on public domain. We have appointed Internal Ombudsman as per the RBI guidelines to review the wholly/ partly reJected complaints and give decision.

Our Bank is committed to provide Customer Service of a high order in a transparent manner. Our Bank undertakes customer meetings on a regular basis to get the feedback of customers so as to enable the Bank to take appropriate decision on different banking products offered by the Bank.

24.BRANCH NETWORK & EXPANSION :

Bank has a geographically well spread branch network in India and aboard. Bank had 5084 branches in India as on 31.03.2021. In the foreign countries 24 branches, 4 Subsidiaries, 1 Joint Venture and 1 representative offices keep Banks presence felt in all times Zones and important financial centers of the globe. During the year 2020-21, Bank has opened 4 new branch. Composition of Banks Branch Network is as under:

Category

31.03.2020

31.03.2021

No of Brs % to total No of Brs % to total
Metropolitan 991 19.50 991 19.49
Urban 810 15.93 812 15.97
Semi-Urban 1,454 28.61 1,453 28.58
Rural 1,828 35.96 1,828 35.96
Total Domestic Branches 5,083 100 5,084 100
Overseas 24 - 24
Total Branches 5,107 - 5,108

25.BANKS DOMESTIC SUBSIDIARY/ASSOCIATES/JOINT VENTURES :

BOI SHAREHOLDING LIMITED (BOISL):

Bank has investment of Rs.6.64 crore in BOISL, a 100% subsidiary of the Bank. BOISL acts as Depository Participant (DP) of both the Depositories, National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL).

BOI AXA INVESTMENT MANAGERS PVT. LTD. (BAIM) & BOI AXA TRUSTEE SERVICES PVT. LTD (BATS):

These subsidiaries are in the business of Mutual Fund and Investment Advisory Services under SEBI Investment Advisor Regulations. Bank of India is holding 52.29% Stake in BAIM and 51% stake in BATS with Investment of Rs.66.48 crore .

BOI MERCHANT BANKERS LIMITED (BOIMBL):

BOI Merchant Bankers Limited was promoted on 31.10.2014 to undertake merchant banking business including arranging of Syndicated Loans, Bonds and Debentures. It is a wholly

owned subsidiary of the Bank with paid up capital of Rs.10 crore,

STCI FINANCE LIMITED:

Established in 1994, STCI Finance Ltd., acts as a non deposit taking NBFC, Bank of India with 29,96% holding (Investment of Rs. 130.10 Cr.) is the largest stakeholder in STCI, with a Paid up Capital of Rs.380 crore, 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 International Holdings, Japan have formed "Star Union Dai-Ichi Life Insurance Company" to provide life insurance services to its clients, The company commenced insurance business in February 2009. BOI holds 28,96% (Investment of Rs. 75 crore), UBI holds 25.10%, and Dai-Ichi Life International Holdings holds 45,94% stake of the Company,

INVESTMENT / ALLIANCES :

ASREC (India) Ltd. was floated by the Specified Undertaking of the Unit Trust of India (SUUTI) to undertake securitization and asset reconstruction activities. Bank holds 26,02% stake (Investment of Rs. 27,60 crore), in the equity capital of the company of Rs. 98 crore,

National Collateral Management Services Ltd. (NCML) 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. Bank holds stake of 2,34% in the equity capital of the company with Investment of Rs. 3 crore,

SWIFT India Domestic Service Pvt. Ltd. a Joint venture company promoted by SWIFT and 9 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 3,26% in the company with Rs. 7.71 crore Investment.

Acuite Ratings & Research Limited (Earlier SME Rating Agency of India Ltd. (SMERA))

06 by SIDBI in association with Dun & Bradstreet, one of the leading providers of commercial data and analytics. The Companys objective is to provide comprehensive, transparent and reliable ratings which would facilitate greater and easy flow of credit to SME sector. Bank holds a stake of 1.88% in the equity capital with investment of Rs. 0,28 crore,

Other Strategic Investments:

Bank also has strategic investments in CERSAI (Rs. 2.15 crore), U.V. Asset Reconstruction Co, Ltd, (Rs. 0,15 crore) Clearing Corporation of India (Rs. 0,50 crore), Agricultural Finance Corporation Ltd, (Rs. 1.26 crore), SIDBI (Rs.45.30 crore), Central Ware Housing Corporation Ltd, (Rs. 1,11 crore), Loss Data Consortium CORDEX (Rs. 1 crore), SBIDFHI (Rs. 5,54 crore), NPCI (Rs.10 crore), MCX Stock Exchange Ltd, (Rs. 27,50 crore), CSC e-Governance services India Ltd, (Rs. 1 crore), Invent Assets Securitization and Reconstruction Pvt, Ltd, (Rs. 10 crore),

26.FRAUD RISK MANAGEMENT:

Good corporate governance serves as an important factor in control of fraudulent activities. It may be true that Fraud itself cannot be eliminated but fraud risks can be managed and mitigated like other business risks with a proactive framework and approach.

Fraud Risk Management Department handles fraud related matters independently in the areas of:

• Devising and Administration of FRM (Fraud Risk Management) and LOC (Look-out Circular),Policy for the Bank,

• Reporting to RBI within stipulated timeline and Monitoring of Frauds,

• Maintenance of Centralized data on frauds,

• Analysis of Perpetrated and Attempted Frauds,

• Diagnostic and root cause analysis of fraud cases and implementation of remedial measures and steps to mitigate risks thereof in respect of product deficiencies,

• Plugging the loopholes in the systems, procedures & practices leading to perpetration of frauds,

• Dissemination of modus operandi & reasons for occurrence of fraud revealed by way of Circulars/ instructions to avoid the risk of recurrence of frauds of similar nature,

• Sensitizing staff through short alerts messages through tickers/periodical messages through MMS/ training/Video Conferencing on Fraud prevention,

• Periodical circulation of checklist on prevention of frauds,

• Convening meeting of Task Force Committee on frauds at HO and monitoring the meeting of Zonal Task Force Committee on frauds,

• Enterprise wide Fraud Risk Management Solution (EFRMS) encompassing all delivery channels except cards has been implemented covering domestic branches.

27.VIGILANCE MANAGEMENT :

Vigilance department is headed by Chief Vigilance Officer for vigilance administration in the Bank under the general superintendence of the Central Vigilance Commission (CVC). The vigilance department covers all vigilance related matters of banks officials in domestic operation, overseas operations, and subsidiaries.

The vigilance administration of three Regional Rural banks sponsored by Bank of India, viz, Vidharbha-Konkan Gramin Bank, Aryavart Bank and Madhya Pradesh Gramin Bank are also supervised by vigilance department.

The Vigilance Department works under Chief vigilance Officer assisted one Deputy General Manager and other officials having background/experience in the field of investigation and disciplinary matters, For operational convenience,

Vigilance Department has operationalized 8 Vigilance Units under the direct control of Vigilance Department, Head Office, which covers all the National Banking Groups. Separate Vigilance Units for the recently created 2 NBGs, i.e., NBG- Patna & NBG-Bhopal are to be set-up shortly. Currently, their Vigilance matters are being handled by Vigilance Unit-North II, Lucknow and Vigilance Unit-Central (Ahmedabad), which have been catering to the undivided NBGs, North II and Central.

The Vigilance department deals with all 3 functions of vigilance administration such as, Preventive, Detective and Punitive vigilance with the objective of enhancing the level of managerial efficiency and effectiveness in the organisation. The vigilance department has brought out a revised Vigilance Reference Manual in 2019 collating the gists of circulars, guidelines, and instructions etc., issued by the DFS, CVC and Bank from time to time.

28.DIVIDEND DISTRIBUTION POLICY:

In terms of Clause 43A of SEBI-Listing Obligation and Disclosure Requirement Regulations, Bank has formed a Dividend Distribution Policy and the same is available on our website - https://www.bankofindia.co.in/pdf/DDP.pdf

29.BUSINESS RESPONSIBILITY REPORTING-2020-21:

In terms of Clause 32 (2) (F) of SEBI-Listing Obligation and Disclosure Requirement Regulations, the Business Responsibility Report is available on our website - www. bankofindia.co.in.

30.BASEL-III (PILLAR 3) DISCLOSURE (CONSOLIDATED) MARCH 2021:

In terms of RBI Circular DBOD.No.BP.BC.1/21.06.201/2015- 16 dated July 1, 2015 on Basel III Capital Regulationsread togetherwithRBICircularDBR.No.BPBC.80/21.06.201/2014-

15 dated March 31,2015 onPrudential Guidelines on Capital adequacy and LiquidityStandard - Amendments, requires Banks to make applicablePillar 3 disclosures including Leverage Ratio and LiquidityCoverage Ratio under the Basel III framework. Thesedisclosures are available on Banks website at the link https://www.bankofindia.co.in/ RegDisclosureSec.aspx.

31.STRATEGY FOR IND-AS IMPLEMENTATION AND ITS PROGRESS:

RBI vide its circular DBR.BP.BC.No.29/21.07.001/2018-19 dated March 22, 2019, deferred implementation of Ind AS till further notice as the legislative amendments in Banking Regulation Act, 1949 as recommended by RBI are under consideration of the Government of India. The Bank has been submitting quarterly Proforma Ind AS Financial Statements (PFS) from June-2018 after discussion/approval by Steering Committee. The PFS are also presented to Audit Committee of Board along-with the overall progress report regarding Ind AS implementation.

ACKNOWLEDGEMENT:

The Board expresses 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 appreciation 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/-
Place : Mumbai A. K. Das
Date : 4 June, 2021 MD & CEO