Bank of India Management Discussions.

GLOBAL SCENARIO

The global economic scenario remained volatile during 2019 with slowdown in the growth momentum of 2017 and 2018. A host of factors such as intensifying US-China trade tensions, disruptions in the automobile sector in Europe, Brexit related uncertainty and slower domestic demand in China due to regulatory measures to contain debt overhang impacted growth prospects. Apart from this, the year was also marked by social conflicts in certain countries like Argentina, Iran, Turkey, Venezuela etc, geopolitical tensions across various regions and natural disasters in Caribbean, Australia and Africa etc, which acted as economic shocks. The most unprecedented development during the year has been the outbreak of Covid-19 pandemic towards December,2019, which engulfed almost all the counties across the globe. The resultant lockdown almost brought economic activities to a halt adding to the economic stress, although the larger impact of this will be visible in FY 2020-21.

In order to lift economic growth, several countries resorted to monetary easing and major central banks turned more accommodative. The US Fed reduced fund rates several times and European Central Bank, apart from reducing rate also announced quantitative easing. The Central Banks of emerging market and developing economies, such as Brazil, Chile, Indonesia, Mexico, Russia, South Africa etc also resorted to policy rate cuts.

The International Monetary Fund (IMF) has estimated world output growth for 2019 at 2.9 % against 3.6% in 2018. The growth rate of advanced countries is estimated at 1.7% vis a vis 2.2% of 2018 and that of the emerging market economies at 3.7% in 2019 against 4.5% in 2018.

DOMESTIC ECONOMIC SCENARIO

The domestic economic scenario during the year 2019-20 remained muted with fall in demand and investment rate. As per the estimate of National Statistical Office (NSO), the Gross Domestic Product (GDP) growth rate decelerated from 6.1% in FY 2018-19 to 4.2% in FY 2019-20. The agricultural sector registered higher growth rate from 2.4% during 2018-19 to 4.0% during FY 2019-20 and growth rate of mining activity improved from -5.8% in 2018-19 to 3.1% in 2019-20. The manufacturing sector growth rate, however, came down steeply from 5.7% during 2018-19 to 0.03%. The ‘electricity, gas, water supply sector and construction sector also witnessed lower growth rate of 4.1% and 1.3% against 8.2% and 6.1% growth rate during 2018-19, respectively.

The industrial output contracted during the year FY 2019-20, with Index of Industrial Production (IIP) registering growth at -0.7% against 3.8% during FY 2018-19. All the three sub-segments viz. mining, manufacturing and electricity registered lower growth rate with manufacturing sector having negative growth rate of 1.3% vis a vis 3.9% during FY 2018-19. The use based classification indicates that the capital goods, infrastructure and construction goods and consumer durables witnessed contraction by -13.7%, -4.0% and -8.4% respectively.

Retail inflation remain elevated during the year. The Consumer Price Index (CPI) which stood at 2.99% in April, 2019 gradually went up to 7.59% in January, 2020 because of food price inflation. However, CPI inflation declined thereafter and stood at 5.91% in March, 2020. On the external sector front, both exports and imports showed negative growth at -4.02% and -9.17% during 2019-20,

respectively vis a vis 8.6% and 10.7% growth rate of FY 2018-19. The current account deficit stood lower at 0.9 per cent of GDP in 2019-20 against 2.1 per cent in 2018-19 with reduction in trade deficit to US$ 157.5 billion in 2019-20 from US$ 180.3 billion in 2018-19.

BANKING AND FINANCIAL SECTOR DEVELOPMENT

The Deposits and Advances growth rate of the Banking System during FY 2019-20 remained much below than that of the last year. The deposits rose by 7.9% and advances by 6.1% in comparison with 10.0% deposits and 13.3% advances growth rate during FY 2018-19.

In order to boost economic growth, RBI cut policy repo rate five times during FY 2019-20 and changed monetary policy stance from ‘neutral to ‘accommodative from June, 2019. The CRR was also reduced from 4.0% to 3.0% during March, 2020. Several policy changes were introduced by RBI such as Large Exposure Framework (LEF) prescribing norms for banks exposure on counterparties, external Benchmarking of loans to Retail and MSE segments, Long Term Repo Operations (LTRO) and Targeted Long Term Repo Operations (TLTRO) to provide durable liquidity and to facilitate monetary transmission.

To lessen the adverse impact of Covid-19 pandemic and alleviate macro-economic stress, several monetary and regulatory measures were declared by RBI in March 2020. Apart from reduction in repo rate and CRR, moratorium on term loan instalment and deferment of repayment of interest up to three months (which was later extended for six months) were granted with effect from March 1, 2020 and re-assessment of working capital limit in case of fall in drawing power was allowed.

The performance of banks during FY 2019-20 in terms of profitability and asset quality has improved and with recapitalisation of PSBs, CRAR of several banks also stood higher. One of the significant developments during FY 2019-20 has been the decision of the Government for merger of PSBs to create strong banks having national presence and global reach.

The liquidity condition during the year, barring a few months in the beginning, remained in surplus mode. Several factors, such as RBIs open market operation, US$ 5 billion buy/ sell swap auction, forex operations of RBI, reduction in SLR and introduction of Long Term Repo Operations (LTRO) contributed to easy liquidity condition in the system.

The G-Sec yield softened during the year, with 10 year benchmark yield dropping from 7.46 % as on March 29, 2019 to 6.11% as on March 31, 2019. The surplus liquidity, the policy rate cuts by RBI, change in policy stance by US Federal Reserve and above all benign crude oil prices helped G-Sec yield to have a downward bias.

The equity market experienced upward movement till January, 2020 during which sensex crossed 40,000 mark because of several positive cues such as fall in global oil prices, recovery in industrial output etc. However, subsequently, because of a number of adverse developments including that of Covid-19, the sensex began to fall to 29,468 by March end.

In the foreign exchange market, rupee exhibited depreciating bias during the year. The exchange rate of rupee vis-a-vis US dollar in terms of FBIL Reference rate moved down from Rs.69.17 as on March 29, 2019 to Rs.75.39 as on March 31, 2020. The rupee depreciated by 2.1% in the first half and 6.2% in second half during

FY 2019-20, due to various factors, including withdrawal of portfolio investment on global growth concerns

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.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. Bank is now in the process of acquiring new systems and modifications / changes in existing core banking system for smooth implementation of Ind AS.

Banks Medium term and long term strategy:

Presently Bank has identified the following priority areas for achieving its medium and long term Goals.

• More focus on NPA Mangement and Credit Monitoring

• Increase in Low cost Deposit/CASA through improvement in Customer Service

• Rebalancing Assets Portfolio in favour of retail lending.

• Monetization Non-Core Assets

• Curtailling Operational expenses BUSINESS REVIEW

1. RESOURCE MOBILISATION:

There has been a YoY growth in saving bank deposit of 8.39% in FY 19-20, with an increase of Rs 13,293 crore. Moreover, the current deposits has shown YoY growth of 11.53% amounting to an increase of Rs 2,692 crore. This has resulted in Overall CASA figures increasing by Rs.15,986 crore showing YoY growth of 8.79%. Saving Bank Deposit diamond customers segment (with average quarterly balance of Rs.1 lakh & above) registered a YoY growth of 8.55% & Current Deposit diamond customers segment (with average quarterly balance of Rs 2 lakh & above) registered a YoY growth of 6.80%. CASA ratio has decreased from 43.36% in March19 to 41.50% in March20. The share of retail term deposits to total term deposit has decreased to 84.35 % in FY 19-20 as compared to 91.78% in FY 18-19, however the total deposits have shown an increase of 14.42%.

2. ADVANCES:

Banks Global Gross Advances increased from Rs. 382,860 crores as on 31.03.2019 to Rs. 416,521 crores as on

31.03.2020 with an increase of 8.79%. Gross Domestic Credit registered a moderate growth of 9.00% from Rs. 328,137 crore as on 31.03.2019 to Rs. 357,670 crore as on 31.03.2020. Bank caters to specialised needs of Corporates/Mid Corporates through 10 Large Corporate Branches and other Large Branches headed by AGMs/CMs. The requirements of other clients from Retail, MSME and Agriculture are met through the Network of 5,083 branches and the Specialized Processing Centers.

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 7.69% during FY 19-20. 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 11.03% from Rs. 32,417 crore to Rs. 35,994 crore. The Vehicle Loan segment recorded growth of 10.02% from Rs. 5,089 crore to Rs. 5,599 crore during the year. Bank has tie-up arrangement with Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra and Mahindra. Our Bank also extends Personal Loans to employees of PSUs/PSEs/Reputed Corporates/ Institutions under tie up arrangement with employer. Apart from Home Loans, Vehicle loans & Personal Loans, we also extend Loan against Property and Education Loans. Our Bank has launched 3 products viz Home loan, vehicle loan and personal loan on PSB 59 platform.

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

Micro, Small and Medium Enterprises (MSME) is a very important segment and contribute nearly 8 % of the countrys manufacturing GDP, 45 % of the manufacturing output and nearly 40 % of the exports. It generate employment for about 60 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. w.e.f 01.07.2020

As per new definition /classification 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 and Digital India have also brought major changes in MSME credit at Banks level.

PERFORMANCE

• Performance of the Bank in lending to MSME Sector as on

31.03.2020 is depicted as under:

Particulars

March19 Actual

March20 Actual

Y-O-Y Growth

Amt. %
Total MSME (Including SIDBI) 54,595 56,092 1,497 2.74
Core MSME (Excluding SIDBI) 53,878 55,617 1,739 3.22
MSME Priority 53,809 55,242 1,433 2.66
Micro Enterprises 26,941 (Priority) (8.86% of ANBC) 28,184 (Priority) (8.88% of ANBC) 1,243 4.61

• During the current financial year up to 31.03.2020, 209,417 new accounts have been added with sanctioned limit of Rs. 12,770. crore. These accounts have outstanding of Rs. 9,131 crore.

• During the FY 19-20 total sanction under MUDRA as on

31.03.2020 was Rs. 6,274 crore against budget of Rs. 7,500 crore.

• During FY 19-20 total 8,755 accounts were sanctioned through “online psb loans” amounting to Rs. 1,729 crore.

• During the FY 19-20, We have undertaken Restructuring of accounts as per One time MSME Restructuring as permitted by Reserve Bank of India in approx. 99,000 accounts amounting to Rs. 2,500 crore.

• During FY 19-20, 31,166 new accounts covered under CGTMSE with total guarantee amount of Rs. 3,905 crore and cumulative accounts covered CGTMSE is 397,269 with total amount of Rs. 28,771 crore as on 31.03.2020.

• Total NPA under MSME segment was approximately at 22%.

HIGHLIGHTS OF FY19-20

• Undertaken various Pool Buyouts under PCG.

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

• Launched Stand by Line of Credit for MSME borrowers to meet temporary liquidity mismatches.

TReDS: We have now on boarded all the three TReDS platforms i.e. RXIL / Invoicemart / M1 Exchange.

• Identified Relationship managers in all SME focused branches and SME nodal officers at all our administrative offices for providing assistance to MSME borrowers in all 206 SME branches.

• Achieved the regulatory target under micro enterprises with total outstanding being 8.88% of ANBC as on 31.03.2020 against target of 7.5% on ANBC.

• Launched new products for GST compliant borrowers for increased requirement of working capital limits and input credit.

• Identified and approved new schemes under cluster based lending in different sectors such as footwear, textile, glass, medicine etc.

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

• We have initiated various measures for improved Underwriting & Assessment Parameters like use of CMR/ tie-up with Probe42 / automation of loan process etc.

• Introduced Repo Linked Rates for MSME.

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 and 57 Agricultural Banking Centres (ABCs) set up in these areas. The Bank has registered an outstanding level of Rs 1,26,138

crore (40.81 % of Average FY 19-20 ANBC) under Priority Sector Advances consisting of Agriculture Rs 52,819 crore (17.09% of Average FY 19-20 ANBC). Out of which SF & MF Rs.26,415 crore (8.60% of Average FY 19-20 ANBC), SME Rs 52,198 crore out of which MSME Micro Rs. 27,161 crore (8.60 % of Average FY 19-20 ANBC), Education Rs 2,860 crore, Housing Rs 18,058 crore and other priority sector advances is Rs 203 crore. The Bank has surpassed the regulatory ratios under Priority sector, SF & MF, MSME Micro and credit to weaker sections of FY 2019-20.

Particulars Amt O/S

Y-O-Y Growth

% of Average ANBC (FY 19-20)

RBI Bench mark (in%)

Mar 19 Mar 20 Amount %
Total Agriculture 57,302 52,819* -4,483 -7.82 17.09 18.00
Small & Marginal Farmers 28,455 26,415 -2,040 -7.17 8.60 8.00
Micro Enterprises 26,148 27,161 1,013 3.87 8.60 7.50
Priority Sector Advances 130,494 126,138 -4,356 -3.34 40.81 40.00

*Total Agriculture includes outstanding of RIDF & PSLC.

Under Agriculture, Bank branches disbursed Rs. 14,261 crore during the year. Bank has issued 2.49 lakhs Kisan Credit Cards during the year with credit limits of Rs. 3,216 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 263 cases under DRI scheme during the year involving Rs, 1.60 crore. Banks credit exposure to the Minority Communities is Rs. 16,657 crores as on March 20 (14.28% of Priority Sector Lending against target of 15%). Amount O/s as on 31.03.2020 under weaker section is Rs. 36,858 crore (11.62 % of March ANBC). Banks finance to Food & Agro Industries as on 31.03.2020 is Rs. 6,094 crore.

Gold Loan has registered Rs.1,741 crore growth on Y-o-Y basis in FY 19-20 whereas in FY 18-19 growth was Rs. 1,945 crore. The total outstanding under gold loan is Rs. 6,823 crore of which agri gold loan is Rs.5,293 crore.

National Rural Livelihood Mission (NRLM): It is an important poverty eradication programme for rural poor. During the year Bank has disbursed Rs 1,822 crore to 0.93 lakhs borrowers.

Self Help Groups (SHGs): Bank has customer base of 4.56 lakhs Self Help Groups (SHGs) as on 31.03.2020 of which 1.60 lakhs SHGs are credit linked including 1.16 lakhs women SHGs as on 31.03.2020. Bank has introduced Dual Biometric authentication for offsite transactions, financial and Data Digitalization for monitoring of SHGs.

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.

Gold Loan: As on 31.03.2020 we have registered growth of Rs.1,741 crore under total gold loan & Rs.1,117 crore growth under Agri. Gold Loan which is 34.26% and 26.75% over previous year O/s.

KCC Saturation: During FY.19-20 we have added 186262 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 20.01 Lakh PMJDY account has been opened. Bank has also actively participated in Social security schemes launched by Govt of India. During the year bank has covered 15.77 Lakh account under PMSBY ( Pradhan Mantri Suraksha Bima Yojana). 6.45 Lakh account has been covered under PMJJBY ( Pradhan Mantri Jivan Jyoti Bima Yojana) in this period. There are 3.76 Lakh number of APY (Atal Pension Yojana) has been canvassed by the bank in FY 19-20. Our Bank has been awarded with “ Leadership Capital 2.0” for its performance under APY.

STAR SWAROJGAR PRASHIKSHAN SANSTHAN (RSETIS):

Bank is operating 42 RSETIs in the States of Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal. During the year the RSETIs have conducted 1,007 training programs and imparted training to 28,547 candidates ensuring settlement of 46% (13,019) and providing credit linkage to 56% (7290) candidates to enable them for gainful employment.

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. At present 15,74,443 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. In this context, it has been directed to commission a pilot project for setting up 80 CFLs in 80 Blocks across 9 states with the support of Financial Inclusion Fund (FIF). As per scheme the pilot project will be implemented by bank in collaboration with NGO / agencies identified by RBI.

Our Bank have been given 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 recently we have been given responsibility to open 5 CFL in collaboration with SWADHAR, in Khunti District in Jharkhand State.

REGIONAL RURAL BANKS:

Post amalgamation, we are sponsoring 3 RRBs, Aryavart Bank (AB)- in Uttar Pradesh, Madhya Pradesh Gramm Bank (MPGB) in Madhya Pradesh and Vidharbha Konkan Gramm Bank (VKGB) in Maharashtra state, covering 82 districts with a network of 2557 branches as on 31.03.2020. All these sponsored RRBs are managed by the Chairmen 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. They have a combined business mix of Rs. 76,626 crore as on 31.03.2020.

7. INTERNATIONAL:

The Bank has 24 Branches (23 operational), 1 Representative Office, 4 Subsidiaries and 1 Associate/Joint Venture spread across 20 countries of all time zones. The contribution of foreign operations in Banks global business mix has been 14.29% as on 31.03.2020.

Overseas Subsidiaries and Associates:

• PT Bank of India Indonesia Tbk

• Bank of India (Tanzania) Ltd

• Bank of India (New Zealand) Ltd

• Bank of India (Uganda) Ltd

• Indo-Zambia Bank Ltd. (IZB) - Joint Venture

During the year, the Bank has closed its representative offices at Beijing, merged Kowloon Branch with Hong Kong, and closed Kisumu Branch in Kenya.

The Bank also wrapped up operations in Botswana with closure of our subsidiary BOI (Botswana) Ltd.

8. CREDIT MONITORING:

Monitoring of the credit portfolio and individual accounts is essential in order to maintain and improve the asset quality of the credit portfolio 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 technology based EWS solution will be shortly implemented in our Bank. Alerts will be generated on the basis of both transaction & non transaction based Data. The alerts generated will help the Bank for identifying weakness & initiate proactive remedial measures. The solution also help the Bank in early identification of Fraud in accounts. We are developing

automated solution for EWS with inbuilt work flow. We are integrating Banks internal data, rating data and external data feeds. Once implemented it will generated automated EWS for branches to enable them close monitoring in accounts.

CRILIC 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.5crore 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 nonsubmission 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 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. 5crore 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 Banks is migrating to daily marking of NPA w.e.f. 01.09.2020, to have more transparency in identification of NPA & for compliance of regulatory guidelines. Daily NPA Marking is already implemented in Ratnagiri and Mumbai North Zone.

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 above Rs. 250 crore 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 fraud, in RBIs CRILC platform.

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 to opt out of moratorium and to continue the repayment, we have made available and introduced SMS/Missed call alert for the benefit the borrowers.

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 of as on 31.03.2020 are as under:

Particular Position as on 31.03.2019 Position as on 31.03.2020
Gross NPA 60,661 61,550
Net NPA 19,119 14,311
Gross NPA (%) 15.84% 14.78%
Net NPA (%) 5.61% 3.88%
Provision Coverage Ratio (%) 76.95% 83.75%

The measures initiated resulted in improved recovery through

some of the following strategies:

• ABC analysis of NPA.

• 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 profits & 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 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 so as to provide better services to the customers. During the FY 19-20, Merchant and interbank turnover was Rs.1.32 lakh crore and Rs. 28.05 lakh crore respectively. The aggregate turnover of Banks forex business during the year was Rs. 29.37 lakh crore. The treasury actively participates in trading in Currency Futures and is one of the leading banks in all the exchanges. During the FY 19-20 Banks Turnover in Currency Futures was USD 90.79 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) 2018-19, “MARKET ACHIEVERS AWARD” in Currency Derivatives Segment amongst Public Sector Banks by NSE and “BEST PERFORMER IN CURRENCY DERIVATIVE SEGMENT” and “OUTSTANDING PERFORMER ON BSE BOND PLATFORM” amongst all Banks Category by BSE.

Treasury Operations & Investments: Bank continued to play an active role in all segments of the market - Money market, Forex, Bonds and Derivatives 2019-20. Bank has maintained a higher level of investments by holding SLR investments in excess of the regulatory requirement of 18.25% of NDTL from time to time to utilize excess SLR for borrowing from Repo/ TREPS windows. As on 31.03.2020 the gross SLR investments were Rs. 117,744 crore (74.35% of total investments) and Non-SLR investments stood at Rs. 38,522 crores (24.65% of total investments). The Non- SLR investments also includes Recapitalisation Bonds of Rs. 21,699 crore. The treasury dynamically managed its investment portfolio and brought down M-Duration of SLR AFS portfolio from 2.65 as on 31.03.2019 to 1.51 as on 31.03.2020. 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:

Mobile Banking

• Currently we have 23,45,449 registered users in Mobile Banking that includes 22,52,338 Android users and 93,111 iOS users. We have introduced 12 languages including English and Hindi in BOI Mobile App.

• We have made necessary changes to make BOI Mobile app compatible with Android 10. We have also introduced Government Micro Insurance Schemes like PMJJBY and PMSBY where customer can enroll for new policy and view policy receipt of existing policies.

• We have also introduced Recurring Deposit module that enables customer to open, view and premature closure of RD accounts.

• Auto fetch OTP feature has also been enabled.

• We are also providing options to download mPassbook statements for (i) Last one month (ii) Last three months (iii) Last six months and (iv) Last one year. FASTAG recharge is now available in Billpay section of BOI Mobile App

Website related development

• We have introduced Online OTS (One Time Settlement) application to submit OTS requests online and track their status online.

• We have developed Online POS survey form. We have also developed Grievance Feedback form to capture feedback on grievance resolutions for complaints logged through website

• Central Proposal Tracking System (CPTS) for Micro, Small and Medium Enterprises (MSME) Loan

• Development of Online Grievance Module for Kenya Site as per requirement from Kenya center is in progress on UAT.

• Dashboard for Chatbot-BOI SEVA is deployed for Bank Team to view a summary of fallback in chatbot inputs.

Internet Banking

• Introduction of Voice-enabled Captcha.

• Encrypted communication between IB and payment gateways.

• Senior Citizen Savings Scheme (SCSS) account statement has been enabled in Internet Banking.

• ASBA Debenture Request through from Retail Internet Banking

• Release of new Startoken client for Windows platform and for MAC devices.

• Introducing CBDT Form 26QD payments.

• Restricting opening of TDR for duration greater than 10 years.

• Revamping of Bulk NEFT/RTGS.

• Restriction of Junk Characters in NEFT payment.

Regional Rural Banks Segment

• We have credited the PM KISAN instalment to 19.80 lakh beneficiaries combining all 3 RRBs on 02.01.2020 within stipulated timeline successfully.

• Anti-Money Laundering (AML) Software Implementation Project in all 3 RRBs sponsored by Bank of India.

• We have completed the Network Migration of the newly amalgamated RRBs, CMPGB (Central Madhya Pradesh Gramin Bank) with eNJGB and AUPGB (Allahabad UP Gramin Bank) with eGBA; presently Madhya Pradesh Gramin Bank (MPGB) and Aryavart Bank (AB) respectively.

• CTS Implementation in newly amalgamated RRBs - In 17 branches of MPGB, CTS Implementation was completed in the month of November and December. In

4 branches of Aryavart Bank (AB), CTS Implementation was completed in January.

• NEFT 24/7 - NEFT 24/7 has been implemented in RRBs successfully from 16.12.2019.

Improving the Network Infrastructure of Branches

• 4900 Branches upgraded with 2 MPBS or higher bandwidth.

Anytime Anywhere Loan Processing - RETAIL LOAN

TAB/MOBILE APPLICATION

• Retail Loans have been integrated with PSB59min Online portal for Home Loan, Personal Loan and Vehicle Loan.

• In-principle approval is instantly provided to the customer through the PSB59min portal and application processed in CAPS for further final Sanction.

• Retail Online Module introduced on our website, through which customers are able to apply for Retail Loans online and same is integrated with our CAPS application for further processing. The application form and the documents can be uploaded instantly in CAPS.

• MSME Loans Format - 2 and Format - 3 has been introduced in CAPS for processing all MSME loans upto Rs. 2.00 crore.

Meghtara- Creating State of Art Cloud Facility

• To create Banks private Cloud to maximize the

potential benefits of Cloud Architecture. For compliance of Banks and Regulatory requirements.

• We have migrated 207 VMs out of 218 VMS

successfully on private cloud infra. The VMs which are pending for Migration are MB, GPS, UPI and Mailbox for which we are in process of seeking downtime from the application owners.

• Virtual infrastructure has been upgraded and integrated with Private Cloud at DR.

• Backup Server implementation is pending and

FI Switch uplink Up gradation will be started after all VMs migration.

• In DC Private Cloud infrastructure implementation is completed.

Stardesk Development of modules /forms in Stardesk:

• Vigilance Portal revamp

• Development of Compliance Portal

• Application for Reference number generation

• Quiz module setup for DRO confirmation exam

• Application/Form for Zonal Budget allocation

• Online feedback form on locational workshop by AMOs in GyanPatal Portal on Stardesk

• Online Form for setup of staff at training college in GyanPatal Portal on Stardesk

• Monthly monitoring report form for NBG, Zone , Branch and Compliance Officer in Compliance Portal on Stardesk

• Modification for Hindi Reporting Forms

New initiatives of Datawarehouse:

Branch Datasheet:

• Branch Datasheet was launched on 01/01/2020 containing Branch Business figures viz. Deposit, Advances, Sector Wise Credit, Disbursement, NPA, Recovery, OTS etc.

• We have started sending Branch Datasheet weekly to all Branches to their Branch email IDs.

• Branch Datasheet provides Provided 3750+ no. of reports for adhoc requirements of HO departments / NBGs / Zonal Offices.

• Integrated 56 new reports in SAP BO during the period. These includes 22 reports of ZO monitoring tool for BPR dept. (under testing).

New initiatives of Information Technology:

Document Management System:

• A document management system (DMS) is a system (based on computer programs in the case of the management of digital documents) used to track, manage and store documents and reduce paper. I t facilitates keeping a record of the various versions created and modified by different users (history tracking).

• We have provided DMS access to premises department. We have also tested DMS Readiness in Branches for Account Opening process, CBOD Dept. and Swift Centralization for FBD Dept.

Payment Modulator (Card Control) on mobile application:

• Two applications namely “Card Shield” for Debit Cards and “Card Control” for Credit Cards have been inaugurated on 06/06/2019 at the hands of our esteemed Chairman in the presence of respected MD and CEO, all Executive Directors and two Directors.

• Card Control is now available in iOS also. We propose to integrate these applications viz Card Shield and Card Control into our BOI Mobile App. Further SMS/ Email alert to be sent for any change in limits through the App.

Doorstep Banking:

• Doorstep banking is a facility provided to Customers so that they dont have to visit bank branch for routine banking activities like cash deposit, cash withdrawal, cheque deposit or making a demand draft. The bank extends these facilities at Customers work place by appointing a service provider on their behalf.

• We have initiated doorstep banking and the UAT has been conducted.

Robotic Process Automation:

• Robotic process automation (RPA) is the use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks that previously required humans to perform.

• These tasks can include queries, calculations and maintenance of records and transactions. Proof of Concept (PoC) has been carried out in Alternate Delivery Channel (ADC) department and running successfully from April 2019. We have automated three new processes.

12. RISK MANAGEMENT:

Risk and Control:

Bank has established mechanism to ensure ongoing assessment of relevant risks on an individual as well as on a portfolio basis to maintain the trade-off between risks and returns. Risk Management is a Board (R.Com) driven function in the Bank with the Risk Management Committee of the Board 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).

The process of Risk Management consists of identification, measurement, monitoring and control of all sources of risk to which the Bank is exposed to. These processes are covered under various policies on Enterprise Wide Risk Management, Credit Risk Management, Collateral Management, Operational Risk Management, Market Risk Management, Exposure (Bank Exposure & Large Exposure Framework), Derivatives, ALM, Foreign Exchange and Dealing Room operations etc. The identification, measurement, monitoring & mitigation of potential risks, in all activities and products is done through detailed analysis and vetting of the same is done by the operational level risk committees and task forces. Tools and systems for prudential limits, Basel Compliant Credit Rating Models, Credit Audit. Sensitivity based measures such as M Duration, PV01, and VaR models for Market Risks, Self-assessment exercise (RCSA) coupled with tracking of Key Risk Indicators (KRI) for Operational Risk are in place for assessing / measuring the identified risks.

Bank has migrated to computation of Capital Adequacy under Basel III regulation based on Standardized Approach (SA) for Credit Risk, Standardised Measurement Method (SMM) for Market Risk and Basic Indicator Approach (BIA) for Operational Risk as per the RBI guidelines effective 01st April, 2013. The Bank undertakes Internal Capital Adequacy Assessment Process (ICAAP) on a yearly basis for assessment / measurement of various risks, the limits of its risk-bearing capacity and appropriate level of internal capital in relation the Risk Appetite. Stress Testing Process is in place for enhancing risk assessment by providing the Bank a better understanding of the likely impact even in extreme unfavorable circumstances. In addition , Bank has field level Risk Managers at all 8 NBGs and 54 Zones to predicate the risk culture at the field functionary level also.

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) at Data Center. Bank has implemented information security tools for RealTime monitoring of Information Security breach attempts / incidents / events on 24x7 basis. 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 have been deployed. Various new security solutions focusing on threat hunting, prevention, detection and response are in the advanced stage of procurement and implementation. Bank has developed reasonable resilience to safeguard IT services in adverse situations. The Bank is ISO 27001:2013 (ISMS) and ISO 22301:2012 (BCMS) certified and the PCI- DSSV3-2 certification is in the advanced stage of acquisition. Risk and vulnerability assessment exercises are regularly carried out for all critical applications and services 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.

13. ALTERNATE DELIVERY CHANNEL:

Bank of India is providing various digital products and services to promote digitalisation. Different variants ofDebitand Credit Cards are issued. Bank has launched card control application to help customers secure their cards and card 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 / Bharat QR devices to merchant customers. As on 31.03.2020, Bank has installed 48,361 devices in various metro, urban, semi-urban and rural areas.

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. 1800 New Age Cash Recycler Machines are installed as on 31.03.2020 to facilitate seamless cash deposit / withdrawal experience to our customers.

14. TRANSACTION BANKING:

Bank set up separate Transaction Banking Department (TrBD) to generate bulk income and float for the Bank by providing management of "cash flows" of customers especially large corporate, government institutions and high net worth individuals through digital banking. The main function comprises of Cheque collections, PDC collections and Direct Debit mandates, other services viz. Cash Management Services (Doorstep Banking), On-line Share Trading - (3 in 1 A/cs, ASBA SYNDASBA), Payment Gateways, NACH activities on NPCI platform and operational aspect of Star Channel Finance.

The Department has posted an income Rs. 150.59 crore in the Cunent FY 19-20 vis-a-vis Rs. 100.38 crore income of previous FY 18-19.

15. THIRD PARTY PRODUCTS DIVISION:

LIFE INSURANCE:

Bank is having its Corporate Agency arrangement with Banks Joint Venture life Insurance Companyi.e. Star Union Dai-ichi Life Insurance Co. Ltd. for distributing life insurance products. Bank has more than 8800IRDAI certified Specified Personplaced 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. 1,080 crore thus earned commission income of Rs. 78.60 crore for the FY 19-20.

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. Ltdto 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. 154.30 crore thus earned commission income of Rs. 18.60 crore for the FY 19-20.

STANDALONE HEALTH INSURANCE:

Bank has tie-up arrangement with Star Health & Allied Insurance Co. Ltd. under Standalone Health Insurance category. Bank has collectedHealth Insurance premium of Rs. 39.06 crore thus earnedcommission income of Rs. 4.16 crore for the FY19-20.

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. 2.82 crore from Mutual Fund business during FY 19-20.

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 as also on other aspects of change management that include the organizational structure, products, & policies. The major customer centricinitiatives taken during 2019-20 are:

Project works/initiatives during FY 19-20:

BOI Star NRI Shield: Prepared new deposit

schemes called NRE TDR Plus and FCNR (B) plus for NRI customers which can attract NRI deposits by combining FNCR scheme with forward cover for better yield on maturity. End value of the deposit is known to the customer upfront at the time of opting the product scheme

Categorization of Branches: Re-categorization of branches as on 31.03.2019 done under revised norms for ensuring right staffing and ease of customer service delivery.

Rationalization of Service Charges: Our service charges have been rationalized in order to make it customer friendly and cheaper compared to others in the industry.

Centralization of SWIFT as per RBI guidelines with our Bank: Centralized SWIFT operation having link with FINACLE is underway to avoid fraud & provide better, smooth and reliable services to our customers.

Star Paramarsh - Staff Suggestion Scheme:

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: 1214, Selected for implementation: 63, Awarded prizes: 13.

Creation of Zones: Two new zones Visakhapatnam and Vijayawada Zones created from existing A. P Zone for smooth functioning and better customer service.

18. INSPECTION & AUDIT:

Bank has board approved policy on Risk Based Internal Audit, Risk Based Management Audit (Domestic), Concurrent Audit, Information System Audit and Audit of Foreign Branches. The policies were reviewed/revised to comply with the Guidelines issued by the Department of Financial Services, MOF, GOI and covers the areas mentioned in the RBI SPARC report, MOF guidelines and also as per the directions of Audit Committee of the Board. During the FY 19-20, the Department conducted audit of 3261 branches and offices. Concurrent Audit covers 847 Branches, Treasury Branch, Data Centre and HO Departments by practicing CAs and all the Foreign Branches are covered in-house by Banks officers. Concurrent Auditors covered more than 51.50% of Global Deposits and more than 74.25% 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 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 implemented Unified Audit Management Solution (UAMS) i.e. Star Audit. For Risk Based Internal Audit (RBIA), Concurrent Audit , Service Branch , Currency Chest and Management Audit.

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 functionals.

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, 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) 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:

An independent Compliance Department since the year 2008. headed by Chief Compliance Officer in the rank of General Manager. Compliance of statutory, regulatoryand 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 Rulesfor different work areas of Banks domestic operations. The compliance department is conducting halfyearly compliance testinge xercise, 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 prescribedby 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 directedby RBI is ensured. As per the provisions of Prevention of Money Laundering Act, 2002 (PML Act) and its subsequenta mendments thereto and the Rules made thereunder as well as the guidelines issued by the RBI, Bank has put inplace Board approved KYC/ AML/CFT Policy which is adopted by branches in India. All customers have been classified into High, Medium or Low Risk categorybased on the Risk perception. As per extant RBI guidelines,the review of the Risk categorisation is done once in everysix months. The department also ensures for imparting oftraining on KYC / AML and its related compliance aspects tothe 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 inconducting 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 officerof eachoverseas Branch undertakes QuarterlyCompliance 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 regarding official language policy of the Government of India. During the year, in ‘B” region for banks category, TOLIC Ratnagiri has been awarded ‘Rajbhasha Kirti Puraskar, Second Prize by the Government of India. TOLIC (Bank) Nagpur has been awarded ‘First Prize in ‘B region (regional awards) by the Government of India. Our bank is the convener for both the TOLICs.For the period from April to September, 2019, the ‘Appreciation Certificate was awarded by Honble Ms.Dakshita Das, Additional Secretary, Department of Financial Services, Ministry of Finance, Govt. of India to our bank as the second best institution in ‘B region for the better implementation of official language hindi. Total 19 awards have been received by the different zones working in different regions of the country for the better implementation of Hindi. Our bank has organized 147 hindi workshops in which 3784 staff members have been trained. Further, ‘Parangat class under Hindi Teaching Scheme, Government of India has been organizedin the banks premisesfor the staff members of the head office. From 26 November, 2019 to 26 November, 2020 Citizen Duties Awareness Campaign is being celebrated in our bank. On the occasion of Vishva Hindi Diwas, our bank has organized debate and speech competitions in different schools throughout the country. Rajbhasha E-learning module-2 on ‘Rajbhasha Legal Glossary has been prepared to enhance and upgrade the skill regarding official language of staff members. Hindi E-mail competition on quarterly basis is continued during the whole year for the departments of head office. Hindi Month was celebrated from 15 August, 2019 to 14 September, 2019 in which different competitions/ programmes have been organized for the staff members to develop interest towards the use of hindi for their daily works. For the divyang (blind) official language officers of our bank, the official language policy, annual programme and bilingual notings in ‘Brail Script have been prepared by one divyang official language officer of bank. The same have been released by the Director (Implementation),DOL, MHA, Govt. of India in a review meeting of our official language officers in presence of our Executive Director (now MD&CEO) Shri. A.K.Das.

Hindi Workshop Reference Book has been prepared by the head office. ‘Rajbhasha Shield Competition has been organized for the departments of head office and zones separately. Reference books have been prepared in regional languages, hindi and bilingual. Our bank is successfully carrying out the responsibility of the convenorship of 7 TOLICs.

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

HR Department:

Banks HR transformation strategy is focused on Capacity Building and Talent Management to ensure availability of manpower with right set of skills, its optimum utilization and to bridge skill gaps in critical areas of Banking such as Credit, Finance & Planning, Treasury & FOREX, HR, IT & Analytics, Risk Management and Compliance & Audit through appropriate training and certification. The Talent Management

programme is aimed at building a robust and sustainable pipeline of leaders as a succession management plan. Additionally, Bank has also started Employee Engagement Survey and 360 degree Feedback process under its HR Initiatives.

Bank has during the year 2019-20, recruited 606 General Banking Officers, 442 Specialist officers and 1824 Clerks. Endeavour is to bridge the human skill gaps in areas of Corporate Credit, Risk Management, Treasury, IT and Marketing on an on-going basis.

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.

Representation of SC/ST/OBC Staff:

As on March 2020 Officers Clerks Sub

Staff

Staff

Total

Total 21,773 20,777 7,217 49,767
SC 3,891 3,344 2,404 9,639
% to total Staff 17.87 16.09 33.31 19.37
ST 1,868 2,427 825 5,120
% to total Staff 8.58 11.68 11.43 10.28
OBC 5,635 5,223 1,772 12,630
% to total Staff 25.88 25.14 24.55 25.38

LEARNING AND DEVELOPMENT:

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. Bank has introduced 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. 21604 officers have done various e learning modules. The Banks 7 Training Colleges have imparted training to 24500+ staff members. To enhance the capabilities of officers in key work areas of the Bank, the Capacity building certification programmeis also launched. Executive Development Programmes for AGMs were conducted in-house and for DGMs these programmes were conducted in house with the help of faculty support from one of the institutes of repute. GMs and DGMs have been nominated for outside training programme on Leadership Excellence at one of the Institutes of repute. Also select Executives were nominated for training on Cyber security at outside Institute. Bank has also conducted, special training programmes for visually impaired staff members to enable them to perform their job with greater satisfaction and ease.

BANKS HOUSE JOURNAL ‘TAARANGAN

Our bilingual house Journal ‘Taarangan has been the medium of expression of BOIs in-house talent since 1964. House journals are also an important tool for employee engagement in any organization. Taarangan has been quite effective in this role. It has constantly provided a platform to our employees to showcase their creative talent, in the field of Art, Music, Culture, sports etc. Taarangan provides entertainment as well as enlightens our readers. It continues to churn out interesting and insightful articles for the readers.

Taarangan also provides opportunities for knowledge sharing wherein articles relevant to the prevailing banking and economic scenario are shared by staff members.It also covers and highlights various activities conducted by Zones/ Branches/Offices/Overseas Centres. Taarangan is also available in digital form in staff portal “HRMS” and on Banks corporate website. Over the years our house magazine has received several awards and brought laurel to our Bank.

23. CUSTOMER EXCELLENCE BRANCH BANKING:

The Bank is committed to providing Customer service of a high order in a transparent manner. The Bank undertakes customer orientation programs and Customer Meetings on a regular basis to provide necessary information so as to enable them to take appropriate decision on different banking products offered by the Bank.

Various policies such as Customer Rights Policy, Customer Acceptance, Customer Care & 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 in public domain. We have appointed Internal Ombudsman as per RBI guidelines.

The Bank has taken several initiatives during the year to enhance Customer service.

• Our full-fledged Call center continues to provide assistance to the customers from Airoli (Mumbai) and Begumpet (Hyderabad).

• To speed up the complaints relating to the failed ATM/ POS transactions, we have incorporated the Digital Complaint Stream in our OCRM module.

• We have also included Feedback system in our Operational Customer Relationship Management (OCRM) to analyze the level of Customer Satisfaction in their grievance redressal.

• Customer Satisfaction Survey is conducted by Third party PAN India for the feedback and suggestions from the customers for our various products and services. We have received the overall satisfaction rating 7.74 on the scale of 10, where 10 is on higher side.

24. BRANCH NETWORK & EXPANSION

Bank has a geographically well spread branch network in India and aboard. Bank had 5083 branches in India as on 31.03.2020. In the foreign countries 24 branches, 20 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 2019-20, Bank has opened 1 new branch. Composition of Banks Branch Network is as under:

Category

31-03-2019

31.03.2020

No of % to No of % to
Brs. total Brs. total
Metropolitan 994 19.52 991 19.50
Urban 812 15.95 810 16.00
Semi-Urban 1,454 28.55 1,454 28.50
Rural 1,832 35.98 1,828 36.00
Total Domestic Branches 5,092 100 5,083 100
Overseas 27 - 24 -
Total Branches 5,119 - 5,107 -

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). The Company also undertakes collection of Broker Turnover Stamp Duty on behalf of Government of Maharashtra, Gujarat, New Delhi, Tamil Nadu, Telangana, West Bengal, Haryana, Karnataka and Uttarpradesh.

BOI AXA INVESTMENT MANAGERS PVT. LTD.& BOI AXA TRUSTEE SERVICES PVT. LTD:

These subsidiaries are in the business of Mutual Fund and Investment Advisory Services under SEBI Investment Advisor Regulations. Bank of India is holding 51% Stake in both the Companies with Investment of Rs.60.69 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 crore) 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 Insurance Company, 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 Insurance Company 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.ajoint 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 croreInvestment.

Acuite Ratings & Research Limited (Earlier SME Rating Agency of India Ltd. (SMERA)) was set up during FY 2005-06 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. 0.28crore.

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.10crore), MCX Stock Exchange Ltd. (Rs.27.50 crore), CSC e-Governance services India Ltd. (Rs.1 crore), Invent Assets Securitisation 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 all fraud related matters independently in 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 (EFRM) encompassing all delivery channels has been acquired and it is currently underway.

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 covered 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 8 National Banking Groups (NBGs). Each such unit is headed by an Assistant General Manager who is assisted by an able team of support staff.

The Vigilance department functions under the basic premises of Preventive, Participative 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 DES, 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-2019-20

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 2020

In terms of RBI Circular DBOD.No.BPBC.1/21.06.201/2015- 16 dated July 1, 2015 on Basel III Capital Regulations read togetherwith RBI Circular DBR.No.BP. BC.80/21.06.201/2014- 15 dated March 31,2015 on Prudential Guidelines on Capital adequacy and Liquidity Standard - Amendments, requires Banks to make applicable Pillar 3 disclosures including Leverage Ratio and Liquidity Coverage Ratio under the Basel III framework. These disclosures are available on Banks website at the link https://www.bankofindia.co.in/ RegDisclosureSec.

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 s upport. 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 Directors
Sd/-
Place : Mumbai A. K. Das
Date : 25.06.2020 MD & CEO