Case Study Of Bank Of Baroda

Retail Leaning – The Bank will emphasize on low cost current, savings and retail term deposits as opposed to high cost bulk deposits. In an effort to diversify loans, it will focus on MSME, Retail Credit and Agriculture Credit.

Asset Quality Management –Primary focus on Credit Monitoring, recovery of NPA and upgradation.

Capacity Building - During the year 2014, Bank of Baroda opened 601 new Branches, 3,624 new ATMs, 45 e-Lobbies and provided various Bunch Note Acceptors, Self-service Pass book Printers, etc. Other capacity building initiatives were installation of Note Counting Machines at all branches and strengthening the structure of Retail and SME Loan Factories. The bank plans to continue building its capacity in FY15.

Earnings – A mix

Credit Risk ii. Liquidity and Interest Rate Risk

5) Workforce Metrics –

i. Employee Experience ii. Absenteeism iii. Open Positions iv. Net Hire Rate

STAKEHOLDERS AND THEIR OBJECTIVES

PROFESSIONAL BODIES

Bank of Baroda is a member of the Banking Codes and Standards Board of India (BCSBI). It has adopted the “Code of Commitment to the Customers” as prescribed by the BCSBI. Also, it has been identified as one of the six core promoters by the Clearing Corporation of India Limited (CCIL).

BANK EMPLOYEES

One of the most important groups of stakeholders. Their salary and job security will depend on company’s performance. They should always be satisfied and involved in problem solving, teamwork and decision making.

CUSTOMERS

It is vital to identify the customer needs/requirements and keep the customer satisfied by having proper pricing, service levels, commodities, etc. strategy.

EXISTING AND POTENTIAL SHAREHOLDERS

Receive a healthy return on investments - Increase the capital gain and/or dividend for shareholders. They have a financial interest in the working of the company.

GOVERNMENT

Main objective here is to ensure legal working and satisfy all the requirements for tax, interest rates, jobs, etc.

This risk arises when the customers of a bank or other parties related to it default in their payments to the bank (for e.g. a customer takes a loan from the bank but doesn’t pay back on time). This risk reduces the potential returns for a bank and may lead to increase in the amount of Non-Performing Assets (NPA).

Credit risk is also indirectly linked with the reputation risk of a bank. This is because the credit rating agencies would give a lower rating to the bank thereby tarnishing its market image.

THIS RISK CAN BE ASSESSED BY

• Taking into account the customer’s financial background (e.g. Credit Score, KYC etc.)

• Timely assessing the value of collaterals etc.

MARKET RISK:

This risk happens due to losses in the bank’s trading books caused by changes in the equity prices, interest rates, forex rates, and other price indicators which are not controlled by the bank directly. A major factor which comes into play here is the bank’s exposure to these instruments in terms of percentage of investments etc. If a bank invests more in government bonds and other less risky instruments, its exposure and risk is less. Similarly, the reverse is also