PRACTICE QUESTIONS FOR PROMOTION FROM JM-I TO MMG/S-II & FROM MMG/S-II TO MMG/S-III, 2012

(Updated upto 31.05.2012)

Compiled by

F.C.Swain, Chief Manager Bank of Baroda, Retail Loan Factory, Bhubaneswar Phone: 0674-2570261, 2570841 Mobile: +919938933933 e-mail: Fakira.Swain@bankofbaroda.co.in
(Version:1.5.12)

( While every effort has been made for accuracy in preparing this reading material, candidates are requested to refer to Banks circulars and other guidelines in case of doubt)

Major Ratios of our Bank as on 31.03.12 Ratio Net Interest Margin How to Calculate Total interest earned minus total interest paid divided by average interest earning assets Net Profit divided by AWF Interest Paid on Deposits divided by Average Deposits Total Capital including Tier I plus Tier II multiplied by 100 and then this figure is divided by total Risk Weighted Assets of the Bank (Total interest income minus total interest expenses) divided by AWF Operating expenses divided by AWF Net Profit Divided by NW Dividend including corporate dividend tax divided by Net Profit Total Advances divided by Customer Deposit(Total deposits minus inter bank deposits) Net Profit divided by AWF Total Interest income divided by AWF Total interest expenses divided by AWF Total Deposits plus total advances divided by No. of employees Rs.14.66 crore 0.54% Ratio as on 31.03.12 2.96%-Global 3.44%Domestic 1.24% 5.81% 14.67%

Return on Average Assets Cost of Deposit Capital Adequacy Ratio

Interest Spread/Average Working Funds(AWF) Operation Expenses/AWF Return on Net Worth Dividend Payout Ratio Credit Deposit Ratio Net Profit/AWF Interest Income/AWF Interest Expenses/AWF Business per employee Net NPA

Average Working funds(AWF) - Fortnightly Average of Total Assets Average Deposits Fortnightly Average of Total Deposits Average Advances Fortnightly Average of Total Advances Average Business Total of Average Deposits plus total of Average Advances 31.03.2012 : Net Profit: Rs. 5006.96 Cr, Total Business: Rs. 6,72,248.40 Cr Net NPA : 0.54% Capital Adequacy Ratio : 14.67%

CREDIT, RECOVERY AND NPA MANAGEMENT

Objective Type - Fill up the gaps most appropriately
1. The maximum annual income criteria for DRI advances is Rs.24,000/- in semi-urban & urban area and Rs 18,000/- for rural area. 2. The cut-off amount for reference to CDR mechanism is Rs.10.0 Crore and CDR is not applicable in case of finance by a single bank. 3. The incentive linked recovery scheme Sankalp-5 is operational from 01.05.2012 to 31.03.2013. 4. Present Base rate of our bank is 10.50% p.a.(w.e.f. 01.05.2012). 5. Amount that can be sanctioned under Baroda AAA is 90 % of the principal amount repaid subject to minimum amount of Rs. 25,000/6. Minimum amount of Baroda Car loan to HNI and corporates is Rs.15.0 lac 7. BGPK is the centre of our Bank for financial education, credit counselling, knowledge sharing & problem solving on technical issues in rural area. 8. Maximum permissible deduction including EMI / instalment of the proposed Housing Loan for a salaried person whose gross monthly salary is Rs.20,000/- is 40% of the gross salary. 9. Maximum loan under Baroda Loan against Future Rent Receivable to individuals is Rs.200 Crores. 10. Maximum amount of loan that can be sanctioned for a second hand tractor is Rs.2,00,000/11. Minimum educational qualification under Prime Ministers Employment Generation Programme is VIII pass for loan of Rs.10.0 lac & above in manufacturing sector and for loan of Rs.5.0 lac & above in service sector. 12. Investment limits in Plant & Machinery in manufacturing sector and service sector under Small Enterprise are Rs.500 lacs and Rs.200 lacs respectively. 13. Subsidy available to SC/ST, OBC, Minorities, women, ex-service men, physically handicapped, NER, Hill & border area under Prime Ministers Employment Generation Programme is 35% in rural area and 25% in urban area. 14. Sankalp-5 is applicable to doubtful, loss & PWO accounts (as on 31.03.2012) upto Rs.15.0 lac which were NPA as on 31.03.2011 and outstanding on 31.03.2012 and is operative upto 31.03.2012. 15. Special feature of SANKALP-5 is write off with compromise only. 16. Any two types of Bank Guarantees are Performance Guarantee & Financial Guarantee. 17. Any two types of Letter of Credit are Revolving Letter of Credit & Irrevocable Letter of Credit 18. Under SME Gold Card Scheme there is provision for additional limit of 10% of the assessed eligible Bank finance for working capital to SMEs to meet temporary mismatch in liquidity. 19. The second method of lending stipulates that the borrower is required to contribute a minimum of 25% of the total current assets from the long term resources irrespective of the working capital gap.

20. Name two important ratios/ figure to decide financial viability & fixing of repayment schedule Ans: Debt Service Coverage Ratio & Break Even Point 21. Under Baroda Kisan Credit Card, Gold card holders get a concession of 0.50% in interest and 100% of the premium under PAIS for the borrower is borne by Bank 22. Minimum cultivable land holding for financing a tractor is 4 acres perennially irrigated land and margin stipulated is 10% of cost of tractor, implements, registration charges & insurance premium for first year. 23. For SHG maximum amount of loan is Rs.50,000/- to individual members & Rs.3.00 lac to group where as for JLGs maximum amount of loan is Rs.50,000/- to individual members and Rs.5.00 lac to the JLG. 24. Name the three Education Loan products of our Bank. Baroda Vidya, Baroda Gyan, Baroda Scholar. 25. Maximum age of the borrower stipulated under Baroda Loan to Pensioners is 70 years excluding repayment period. 26. Current Ratio is defined as ratio of Current Assets to Current Liabilities. This ratio measures liquidity of an entity. 27. Under SARFAESI Act Banks are required to give 60 days notice to the defaulting borrower before taking possession of the assets. 28. Maximum repayment period of Home Loan is 25 years. 29. Maximum number of members for a non-registered SHG is 20 . 30. Deferred Payment Guarantee is a type of Financial Guarantee. 31. Staff members are eligible for Baroda Home Improvement loan (TRUE / FALSE) 32. Reverse Mortgage product of our Bank is Baroda Ashray. 33. In educational loan collateral security is not required up to Rs.4.0 lac. 34. The document to be taken to avoid Claytons rule is Letter of continuing security. 35. Limitation period for guarantee favouring government is 30 years. 36. Maximum amount of loan for purchase of car for HNIs and Corporates is Rs.100 lacs. 37. Concessions allowed in Home Loans under our present Retail Loan Campaign: a. 100% waiver of processing charges b. 0.25 to 0.50% concession in rate of interest. 38. Under BKCC the lines of credit are Production Line of Credit and Investment Line of Credit.

DESCRIPTIVE TYPE 1. Write down the parties involved in Letter of Credit? Ans: 1. Applicant 2. Issuing Bank 3. Advising Bank 4. Confirming Bank 5. Negotiating Bank 6. Beneficiary 2. Write down the difference between Rephasement & Rescheduling. Ans: Rephasement: Rephasement is rescheduling with enhancing the repayment period only. In genuine cases of retail loans granted to individuals, the rephasement can be considered by Regional Authority after satisfying the genuineness of rephasement provided

repayment period shall not exceed 60 years of age of the borrower in respect of salaried individuals and 65 years of age in respect of others. Rescheduling: Pattern of debt service obligation may be changed e.g. from equated monthly instalment to ballooning schedule or descending schedule subject to: a) retaining the existing repayment period. b) not exceeding the existing outstanding exposure. c) without changing the nature and quantum of existing credit facilities. d) without sanctioning any fresh credit facility or additional limit whether within the existing outstanding exposure. All standard, substandard and doubtful accounts can be rescheduled. While rescheduling substandard and doubtful accounts, staff accountability shall be examined and suitable comments shall be incorporated in the proposal. No rescheduling of willful defaulters' accounts or accounts where frauds are committed shall be attempted. 2. What are the Prudential guidelines of RBI on Restructuring of Advances by banks? As per latest guidelines of RBI, retention of Standard Assets classification of accounts which could have turned to NPA but for restructuring package is possible, provided the restructuring package is implemented expeditiously i.e. within 120 days from the date of receipt of application for taking restructuring process. Accordingly, all accounts covered under special regulatory treatment, which were Standard Assets on 1st September 2008 would be treated as Standard accounts even on restructuring provided the restructuring is taken up on or before 31st March, 2009 provided further that the restructuring the restructuring package is put in place within a period of 120 days from the date of taking up the restructuring package, with outer date of 30th June,2009. Further Banks have to ensure that appropriate provisioning is made for reduction in the value on account of interest sacrifice in the restructured accounts.

3. What is NWC & what is Turnover Method of Lending? Ans: Net working Capital is defined as Gross Working Capital minus Total Current Liability. Total Current Liability is Short Term Bank Borrowing plus Other Current Liabilities. If short term bank borrowings are NIL, then the Gross Working Capital is financed entirely by other liabilities. Normally this does not happen. So the difference between Gross Working Capital and Other Current Liabilities (excluding bank borrowings) is called Working Capital Gap. Turnover Method of Lending: This method was originally recommended by Nayak Committee for assessment of working capital for SSI borrowers and later it was made applicable for all borrowers with Fund based Working Capital limits up to Rs.5 crore. Under this method, the computation of working capital is made at 20% of the projected gross sales (accepted to the bank) The gross working capital is uniformly assumed to be a minimum of 25% of projected gross sales. On this, the borrower is required to maintain a margin equivalent to 20% of the gross working capital.

4. Define Deferred Payment Guarantee. Also mention if it is a Financial Guarantee or Performance Guarantee? Ans: Deferred payment guarantee is a way of raising long term resources for acquiring fixed assets/capital goods by securing guarantee of repayment of principal and interest from his banker to the supplier of capital goods for suppliers credit. This also helps the supplier to improve his cash flow by discounting these bills from his bankers. Deferred Payment Guarantee is a financial guarantee. 5. What are the components of Weaker Section under Priority Sector? a. Small & marginal farmers, landless labourers, tenant farmers & share croppers b. Artisans, village & cottage industries up to loan limit of Rs.50,000/c. Beneficiaries of SGSY, SJSRY, SLRS etc d. Beneficiaries of DRI advances e. All SC/ST beneficiaries f. Advances to SHGs g. Loans to the distressed poor for redemption of debt availed from noninstitutional lenders, against appropriate collateral or group security h. Loans granted under 1 to 7 above to persons from Minority Community notified by GOI. 6. Write the eligibility criteria, limits and targets for finance under DRI scheme. Ans: Eligibility 1. Land holding should not exceed 1 acre irrigated or 2.5 acre un-irrigated Land holding criteria does not apply to SC/ST cases 2. Family income not to exceed Rs.18,000/-p.a. in rural & Rs.24,000/- p.a. in semi-urban and urban area. Loan Limits: Rs.15,000/- composite loan for other purposes Rs. 20,000/- for Housing purposes Targets: a) 1% of Banks total advance of previous year must go to advances under DRI b) 2/3rd of total DRI advances should be routed through rural & semiurban branches c) 40% of the DRI advances must go to SC/ST 7. What is Special Mention Account & Potential NPA? Ans: Special Mention Account Accounts showing the following symptoms are called Special Mention Accounts: Interest and / or instalment overdue for more than 30 days Account shows unsatisfactory tendencies like return of cheques/ bills, poor turnover, continuously for 30 days Non- compliance of terms of sanction within 30 days of stipulated date. Potential NPA Delay in submission of stock/ book debt statement/ financial papers Frequent return of cheques issued by the party Devolvement of LC or invocation of BG and non payment within reasonable time Return of cheques/ bill discounted or sent for collection Poor financial performance i.e. decline in sales/ profit/cash losses/ erosion of net worth Incomplete documentation

Non creation of charge / mortgage Non compliance of terms of sanction 8. What is Right of Recompense? is the Right available to the creditor to recover the amount of interest and installment sacrificed while accepting a rehabilitation proposal after the unit has been revived fully. 2. This is only a Right and it is left to the option of the individual Banks/Financial Institutions etc. whether to exercise this right or not. However, branches should incorporate this clause in the package and in case of any difficulty refer the matter to Corporate Centre. 3. Normally this right shall not be exercised within the first 3 years of rehabilitation/restructuring. 4. In regard to concessions and reliefs made available to sick units, a Right of Recompense clause should be incorporated in the sanction letter and other documents to the effect that when the units turn the corner and the rehabilitation is successfully completed, the sacrifices undertaken by the institutions and banks should be recouped from the units out of their future profits/cash accruals. Alternatively, there may be a provision for equity participation to the extent
of the sacrifices made. 5. Zonal Managers, regional Managers and Branches have no power to waive the right of recompense.

Ans:1. This

9. What do you understand by Cut Back Arrangement & Hand Holding Operations?
Cut Back Arrangement 1.A borrowers account may have become NPA due to un-serviced interest, L.C. devolvement, excess allowed to meet statutory dues, wages, insurance premium etc. or reduction in drawing power. Any credit coming into the account will be appropriated completely towards the overdues. 2.The borrower under such circumstances opens a current account with another bank and routes all sales proceeds through that account. As a consequence the bank not only fails to recover its legitimate dues but also faces the problem of erosion of security. Under this circumstance, the bank can consider allowing operations, on merits, till a revival package is prepared and sanctioned or an acceptable compromise proposal is submitted by the borrower, upto sanctioned amount or outstanding with a suitable cut-back, say, ranging from 5 to 10% (or more) of the credits in the account to reduce/wipe-out the excess/overdues in the account. 3.All Regional Managers can consider allowing operations in the account upto sanctioned limit or the outstanding with suitable cut back arrangement which would eventually lead to reduction in the outstanding in the account. Hand Holding Operation: Under hand holding operations the small units will be permitted to draw funds from their cash credit account upto the amount equal to the amount of sale proceeds deposited in the account. This will facilitate the smooth running of the business. Once the implementation of rehabilitation package is finalized during the first six months such hand holding operations are stiupulated/permitted.

10.

What is CDR? What are the conditions applicable for CDR?

Ans: CORPORATE DEBT RESTRUCTURING (CDR): The CDR mechanism enables Corporate debts, which are viable in nature and are affected by certain internal and external factors, for restructuring, in a timely and transparent manner outside the purview of BIFR, DRT and other legal proceedings, for benefit of all concerned. CDR is a nonstatutory mechanism consisting of three tier i.e. CDR standing Forum, CDR empowered group and CDR cell. CDR standing forum is a self empowered body and a CDR Core group is carved out of it. The CDR cell makes the initial scrutiny of proposals and submits to the CDR Empowered group. The main features of CDR are: Not applicable to sole banking accounts and with outstanding below Rs.10 cr. 90% of lenders should have classified the a/c. as standard or substandard. Consent by min. of 75% of lenders (by value) and 60% of creditors (by no.)in case of doubtful accounts / suit filed accounts. BIFR accounts, on a case-to-case basis, after approval of BIFR Reference to CDR system can be made by i) any one or more creditors who have min 20% share in WC or Term finance ii) by the Corporate, if supported as in i) above. Each CDR package to be approved by CMD/ED and proposals exceeding their powers, to be reported to MCB. Any corporate indulging in wilful default, fraud or misfeasance, even in a single bank, will not be entertained. 11. What is Credit Audit and what are its functions? Ans: For improvement in the quality of credit portfolio, review and compliance of sanction process, feedback on regulatory compliance, independent review of credit risk, picking up early warning signals, suggesting remedial measures and to improve the credit quality, credit administration and the credit skills of staff, a Credit Audit Cell is formed under the CIAD. All fresh sanctions/ increase in limit of Rs. 5 cr. & above (FB+NFB), existing accounts of Rs.10 cr. & above and 5% of a/cs. of Region with Rs. 1 cr. and below Rs.10 cr. limit on a random basis, are to be covered by Credit audit. The Credit Audit should be conducted within 3 to 6 months of sanction / review and the audit of eligible accounts will be carried out by officers of another Region within the Zone. The identification of Officers & eligible accounts will be done by ZO and the officers are to submit the audit report within a period of 15 days to Credit Audit cell, with a copy to Br. & RO. 12. What are the salient features of Prime Ministers Employment Generation Programme? Ans: 1. PMRy and REGP of KVIC have been merged w.e.f. 01.04.2008 into a new scheme called Prime Ministers Employment Generation Programme (PMEGP) 1. It is a Credit Linked Central Sector Scheme 2. The scheme provides for higher rate of Government subsidy for marginalized section of the society for promoting inclusive growth 3. BPL families are also eligible for assistance under the scheme. There is no ceiling limit of annual income in respect of beneficiaries. 4. A minimum educational qualification of Class-VIII pass is stipulated for manufacturing sector above Rs.10 lac and above Rs. 5.0 lac for services sector.

5. The beneficiaries will be identified interalia with the help of Panchayats, special awareness camps and will be provided backward & forward linkages support for awareness, project formulation, EDP training, marketing support etc. 6. Project profiles will be provided for selection of projects by the beneficiary. 7. KVIC, a statutory body under the Ministry of MSME will be the single nodal agency for implementation of the scheme at national level. 8. The scheme will be implemented through KVIC / State KVIB in rural area( as defined under KVIC Act) & by DICs in urban and other rural area. 9. At least 60% of the subsidy outlay will be earmarked for setting up of projects in rural area. 10. Advances under the scheme will be eligible for cover under Credit Guarantee Scheme. 13. Write down how working capital limit is assessed in Baroda Traders loan? Ans: Working Capital for Baroda Traders Loan is assessed on the following basis: 1. Advance value of the collateral security calculated with margin as below: 15% on Banks own FDR; 15% on surrender value of LIC policies, NSCs and Govt. Bonds; 50% on approved shares/bonds; 40% on immovable property as per recent valuation report OR 2. 20% of the projected annual sales, subject to verification of sales tax returns of previous year Whichever is lower. 14. What is Willful Defaulter? A wilful default would be deemed to have occurred if any of the following events is noted :(a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to honour the said obligations. (b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes. (c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilised for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets. d)The unit has defaulted in meeting its payment / repayment obligation to the lender and has also disposed of or removed the movable fixed assets or immovable property given by it for the purpose of securing a term loan without the knowledge of the bank / lender." 15. What are the different types of BKCC? What are the eligibility criteria for these cards? Ans: There are three types of Baroda Kisan Credit Cards viz. BKCC Green, BKCC Silver & BKCC Gold. The eligibility criteria for these cards are as below: BKCC Type Eligibility BKCC Green New & existing agril. borrowers dealing with us since last

BKCC Silver

BKCC Gold

3 years Agricultural borrowers having satisfactorily conducted borrowal account relationship with us for more than -3years and upto -5- years Regular agril. borrowers dealing & maintaining satisfactory account with us for the period exceeding -5years having excellent repayment records

16. Write down the components of Composite Limit under BKCC? Ans: a) Production line of Credit comprising of loan for crop production, maintenance & repairs of farm implements, cost of fuel, feed etc, working capital for allied & non-farm activities, consumption needs and Farm produce marketing loan upto Rs.10.0 lac against storage receipt b) Investment line of Credit comprising of credit facilities for 1. Cultivation of horticultural & plantation crops, investment in farm development, purchase of tractor, farm machineries & equipments, purchase of animals, milch cattle, transport vehicles, pre/post harvest processing equipments and farm structure; 2. Setting up units of allied activities 3. Personal loans including purchase of consumer durables, housing, subject to a maximum of Rs.1.0 lac 3.Loans for redemption of loan availed by farmers from non-institutional lenders. 17. How the limit under Investment Line of Credit under BKCC is calculated? Ans: Quantum of finance for investment credit may be decided as per the needs expressed by the farmer for various investment and other purposes, subject to following: 1. Farm income- 6 times of net annual income or 3 times of total annual farm receipts/ value of crops plus Other income- 3 times of net anticipated annual income/ profit from allied activities/ salary income OR 2. 75% of value of land mortgaged as collateral security and 100% of value of other securities Lower of 1 & 2 would be the quantum of finance 18. Write down the norms for financing second hand tractors. Ans. a)Minimum cultivable land: 2 acres of perennially irrigated land or corresponding acreage prescribed for different categories of land as per state government b) Loan amount: 80% of depreciated value (12% straight line method) Plus repairs expenses not exceeding Rs.50,000/- as per estimates Plus Equipment cost (Depreciated) if not included in valuation of tractor, maximum not exceeding Rs.2,00,000/c) Margin: 20% d) Repayment period : 3 to 5 years depending on Percentage of standard performance

19. Write the difference SHG & JLG ? Criteria Members Nature SHG 10-20 for unregistered group Same economic & social status JLG 4-10 members Members to be engaged in similar type of activities like crop production for a period of minimum one year Not mandatory Max. Rs.50,000/- per member, max. Rs.5.0 lac In the form of Cash Credit

Internal Lending Amt. of Loan Facility

Mandatory Max. 10 times of group corpus or Rs.3.0 lacs By way of production/investment credit in form of BKCC Compulsory At regular intervals

Saving habit Meetings

Not compulsory May not be at regular intervals

20. What is Second Method of Lending? Ans: Reserve Bank of India accepted two methods of lending recommended by Tondon Committee. As per Second Method of lending, the contribution of the borrower has to be 25% of the total current assets build-up instead of working capital gap. As per RBI guidelines, this method of lending applies to borrowers availing working capital fund based limit of Rs.5.0 crore or more. 21. What is Reverse Mortgage? What are the eligibility criteria for Baroda Ashray? Ans: Reverse mortgage is the process of sanctioning loan against mortgage of existing housing property, releasing the loan in small installments (annuity of the loan) and repayment of the loan in a single payment ( may be from sale of the property or by the borrower and/ or his legal heir) Eligibility Criteria: a. Senior Citizen of India, above 60 years of age b. Married couples, provided one of them is above 60 years & other not below 55 years c. Should be owner of house/ flat located in India in his /her name d. Residential property should be used as permanent primary residence(fully self occupied property) 22. Write short note on SME Gold Card Scheme? Baroda SME Gold Card envisages provision of additional limit of 10% of the assessed eligible bank finance for Working Capital to existing Small & Medium Enterprises, on request along with regular application for Working Capital limits to meet emergent requirements. PURPOSE:To provide hassle free on the spot assistance to take care of borrowers emergent requirements and tie up temporary mismatch in liquidity arising out of delayed

payment by buyers, tax payment, execution of bulk orders, etc. ELIGIBILITY - All Micro, Small & Medium Enterprises as per the regulatory definition given below in standard category for last two years and with obligor rating of BOB4 and above in CRISIL module. - Accounts having sole banking arrangement with our bank. Margin : Nil Security : As applicable to regular Cash Credit limit Period: Four ( 4) occasions during a year, maximum for -2- months per occasion 23. What is minimum and maximum loan amount under Baroda Traders Loan and how the Working Capital under this product is assessed? Ans: Min: Rs.25,000/- , Max: Rs.200 lacs ASSESSMENT OF WORKING CAPITAL:
Advance value of collateral security Or 20% of the projected annual sales subject to verification of sales tax returns of previous year, Which ever is less. MARGIN: 10% on Banks own FDR. 15% on surrender value of LIC policies, NSCs, and Govt. Bonds. 50% on approved shares / bonds 40% on immovable property as per recent valuation report.

24. What are the criteria of gross deduction for determining repaying capacity under Baroda Housing Loans? Ans: Criteria of gross deduction for determining repaying capacity
Income Bracket (Monthly) Upto Rs. 20000/Above Rs. 20000/- and upto Rs. 50,000/Above Rs.50,000/- & upto Rs.1.0 lac Above Rs. 1.0 lac Total deductions not to exceed 40% 50% 60% 60%

25. Write down five USPs for Baroda Home Loans. 1. Shortest processing period 2. Longest Repayment period (25 years)- Low EMI 3. Availability of AAA (Additional Assured Advance) 4. Free Insurance coverage 5. Concession in interest for Home Improvement Loan 6. Highest loan amount ( upto Rs.100 lacs) 7. Option to change tenure 26. Write down the guidelines for Valuation of Immovable Properties charged to our Bank in Retail Loans. Ans: As per extant guidelines of our Bank, valuation of immovable property mortgaged to the Bank should be done once in every three years. Subsequent valuation should not be entrusted to the same consultant / valuer who had valued it earlier. Normally value of immovable property appreciates with the passage of

time while our exposure gradually declines due to regular repayment in case of standard Retail Accounts. Considering above aspects, existing guidelines of valuation of immovable properties charged to the Bank in Retail Loans have been reviewed and decided as under: 1.Waive the condition of valuation of the properties once in three years, if relative retail account is regular and classified as standard. 2. Advances granted for professional / business needs i.e. under our Baroda Traders Loan, Baroda Loan to Doctors, Baroda Professional Loan products, will be out of purview of modified guidelines. Valuation of the property charged to the Bank for loans / overdrafts taken under these products need to be got done once in 3 years as hitherto. 3. Wherever, advances are granted in the form of overdraft facility under any retail product, valuation of the property mortgaged to the bank need to obtain once in every three years. 4. In conformity to banks extent guidelines, valuation in NPA a/cs will be got done once in 3 years. 5. If any increase in existing exposure / additional limit / facility is considered by extending the charge over the property, fresh valuation will be taken hitherto, before taking additional exposure. 6. The branches will carry out periodical inspection as per extant guidelines. If any adverse developments are noticed during the inspection of the property, valuation of the property is to be got done as usual. 27. . What is Standby Letter of Credit? Ans: It is a Letter of Credit which performs a function similar to a bank guarantee but is issued in a format corresponding to that of a documentary credit. Its prime function is to provide a financial remedy to the seller in the event of non-performance by the buyer. It is not intended to be the payment mechanism for the underlying transaction. 28. What is the difference between Buyers Credit & Suppliers Credit? BUYER'S CREDIT : A financing arrangement under which a lending bank in the supplier's country lends directly to the buyer or to a bank in the buyer's country to enable the buyer to make payments due to the supplier; under a contract to supply goods or services SUPPLIER'S CREDIT : A financing arrangement under which the supplier agrees to accept deferred payment terms from the buyer and funds itself by discounting or selling the bills of exchange or promissory notes so created with a bank in its own country. 29. What are the steps we should take to reduce NPA? Ans: a) Quality lending through proper appraisal of borrower & facility a) Recovery through regular monitoring & follow up b) Recovery through SARFAESI act in eligible hard core accounts c) Compromise in deserving cases d) Taking the help of DRT & Lok Adalat e) Filing suit f) PWO / Write off in case security / collateral securities are not available and the borrower has no means for recovery of our dues

30. What is Early Alert System? Ans: It is the system through which our Bank identifies early warning signals in respect of advance accounts showing first signs of weakness for preventing slippage to NPA by recognizing the problems and corrective measures to restructure the accounts after an objective assessment of the viability of the unit and promoters intention as per RBI guidelines. The following features may be treated as early warning signals: i)Delay in submission of stock statement/ other control statements/financial statements. ii) Return of cheques issued by the borrower. iii) Devolvement of DPG instalments and non-payment within a reasonable period. iv) Frequent devolvement of LCs and non-payment within a reasonable period. v) Frequent invocation of BGs and non-payment within a reasonable period. vi) Return of bills/cheques discounted. vii) Non-payment of bills discounted or under collection. viii) Poor financial performance in terms of declining sales and profits, cash losses, net losses and erosion of net worth etc. ix) Incomplete documentation in terms of creation/registration of charge/ mortgage etc. x) Non-compliance of terms and conditions of sanction. 31. What is its formula for DSCR? What does DSCR indicate? Ans: DSCR= PAT + depreciation +Intt. On Term Loan Intt. On Term Loan + Inst.of Term Loan This ratio indicates if the project will generate sufficient additional income to service the interest and instalments of the term loan.
32. What is the difference between Net Worth and Net Working Capital? Ans. Net Worth is the share holders fund, including Share Capital and Free Reserves. Net Working Capital = Current Asset Current Liability It is the margin, brought by the borrower from his long term sources towards short term uses.

33. GUIDELINES FOR TAKE OVER OF THE LOAN ACCOUNT FROM OTHER BANK: Bank provides the operating units to take over accounts from other FI s/Banks keeping in view the foremost objective of canvassing only good quality accounts. The following financial and Non financial aspects are however to be followed: a. Accounts of profit-making (i.e. net profit before tax) concerns only as per last audited balance sheet. b. Accounts with existing lenders should be under the category of Standard Assets. c. Satisfactory report from the existing bank/FI and/or satisfactory conduct of account as per latest statement of accounts. d. Take-over accounts are to be rated as under:-

i. As per BOBRAM credit rating model (CRISIL), minimumBOB6 obligor rating for all exposures of Rs. 25 lacs and above, other than MSME exposures. For MSME exposures, this rating model is applicable for accounts having exposure of above Rs. 2 crore. ii. As per New Scoring Card Type model for MSME accounts of Rs.25 lac and above up to Rs.2 crore subject to minimum MSMEBOB 6 rating. e. Take-over accounts (retails) are to be rated as per the applicable scoring model subject to minimum grade as per the scoring model. f. There should not have been any reschedulement / restructuring in the account during last two years. g. All other existing norms, guidelines as applicable to borrowal accounts are to be scrupulously followed. Financial(other than Retail & SME Regulatory & Expended) a. Current Ratio b. TOL/ Equity c. Debt Equity Ratio : Min. 1.33. : Max. 4.5:1 : Max: 3:1

d. Debt Service Coverage Ratio : Min 1.75 in case of Term Loan (Average DSCR to be calculated for entire repayment period). SHORT NOTES

1. Guidelines for allowing TOD

Only in rare occasions to meet temporary and unforeseen contingencies. Only in Current account No TOD in first year of operation Look at the conduct of account No TOD at Rural Area Maximum TOD upto 25% of average credit balance during last 6 months. TOD once in a month. TOD maximum 5 times in a year No TOD in anticipation of regular limit Avoid TOD simultaneously in group accounts. No TOD to Cash Credit Parties and SB accounts.

2. Rescheduling, Rephasement & Restructuring

Reschedulement: Retaining existing repayment period Not to exceed exposure No change in nature and quantum of existing credit facilities

 No fresh credit facility is sanctioned Standard, Sub standard and doubtful accounts can be rescheduled No rescheduling of willful defaulter account One time reschedulement not exceeding 6 six months is not considered restructuring. Rephasement: Rescheduling with enhancing repayment period. Retail loan rephasement by Regional Authority provided period should not exceed 60 years of age of borrower in salary class and 65 years in other cases. Maximum 6 months without sacrifice and additional funding Rephasement means reschedulement with extended period of repayment Restructuring: Changing repayment period, Changing outstanding exposure, Changing nature, quantum of facilities, Sanctioning additional facility Additional requirement after critically analyzing funds flow position Special investigative audit to ensure that there is no diversion of funds. It may also involve refund of penal interest, reduction in rate of interest, funding of unpaid interest, reschedulement of instalments, fresh additional working capital/term loan No restructuring of willful defaulter.

3. Lok Adalat:
It is a loan recovery redressal mechanism where the banks organize a camp for recovery in one place under the aegis of DRT. A spot settlement of recovery is made after hearing the case of bank and borrower and the underlying securities. It is not mandatory for either parties to accept the verdict but many recovery cases are settled to the satisfaction of both the parties. It is the version of a small court set up to settle the recovery disputes of borrowers. It is a cheap method of enforcing recovery.

4. Stand by letter of credit

It performs similar function to a bank guarantee but is issued in a format corresponding to that of a documentary credit. Its prime function is to provide a financial remedy to the seller in the event of non/performance by the buyer. These credits are generally used as substitutes for performance guarantee or for securing repayments of loans. The document generally called for under such credits is simple statement of claim or proof of delivery of goods or certificate of non performance. This type of LC is opened mostly by banks in countries where, by law they are precluded from issuing guarantees and in such cases of credit is issued as a substitute for performance and other financial guarantees.

LIABILITY PRODUCTS AND SERVICES, THIRD PARTY PRODUCTS

OBJECTIVE TYPE 1. In Savings Bank account, interest is currently paid in the month of May & November in CBS branches. Current interest rate in Saving Bank accounts is 4.00% p.a.

2. Validity period of our credit card is 5 (five) years and that of our International Debit card is 10 (ten) years. 3. Per transaction limit for self and third party transfer for Retail Customers under Baroda Connect internet banking Rs.25,000/4. In Baroda Premium Current Account, instant credit against outstation cheques can be given up to Rs.50,000/- on request. 5. Under Baroda Nagarik Bachat Khata, maximum permitted balance is Rs.50,000/- and maximum credit permitted per year is Rs.1,00,000/-. 6. Baroda Gold Coin is Assay certified & is of 999.9 fineness. 7. Service charges RTGS above Rs.5.0 lac beyond 17.30 hours is Rs.61. 8. Two GEN-NEXT Asset products are Gen-Next Life style (Term Loan-Combo pack) & Gen-Next Power (OD) 9. Two Gen-Next liability products of our Bank are Gen-Next Junior (SB) & Gen-Next Suvidha(YSJY). 10. Write down two documents which can be accepted as Proof of Identity as well as proof of address. A) Passport B) Voter Identity Card C) Driving Licence. 11. Our Bank has developed a co-branded product Baroda Health Medi-Claim policy in association with National Insurance Co. 12. Baroda Wealth Pack has the following components 1.Saving Bank account, 2.Recurring Deposit account, 3. ULIP, 4. Insurance. 13. At present the limit for inter-SOL cash payment at non-base branch to third party is NIL and to the customer of the account irrespective type of account is Rs.50,000/-. 14. Rate of interest payable to retired employees of our Bank (senior citizen) on term deposits is 1.50% over the rate payable to the public. 15. W.e.f. April, 2010, interest on Saving Bank accounts is paid on daily product and compounded half yearly.(TRUE /FALSE) TRUE. 16. Minimum and maximum amount of Baroda gift Card is Rs.500/- and Rs.50000/respectively. 17. Baroda Wealth Pack has 4 components. 18. Commission for handling PPF accounts: for receipts Rs.45/- per transaction and for payments @ Re.0.09 per Rs,100/-. 19. Pensioner is required to give life certificate once a year. 20. From 01.03.2010, NEFT has 11 hourly settlement between 9 a.m. to 7 p.m. on week days and 5 hourly settlements between 9 a.m. to 1 p.m. on Saturdays. 21. Baroda Cash Management Services is a product meant for Corporates. 22. Period of Baroda Utsav Deposit Scheme is 444 days. 23.

DESCRIPTIVE TYPE 1. Write down any five features of the product Baroda Tax Saving Term deposit account. a) Minimum period: 60 months, Maximum: 120 months, in the form of RIRD,MIP or RIP b) Minimum deposit Rs.100/- & in multiple of Rs.100/-, maximum Rs.1.0 lac c) Tax rebate U/S 80C of IT Act available on the deposits d) No premature payment before 60 months except in case of death of depositor e) No overdraft or loan can be granted against this term deposit. f) Interest subject to TDS

2. Write down difference in the features of Baroda Premium Current Account and Baroda Premium Current Account- Privilege. Criteria BPCA BPCAP Min. AQB Rs.75,000/Rs.2,50,000/Instant credit of Rs.50,000/Rs.1,50,000/out-station cheques Exchange on 50% concession 100% concession DD/MT/TT 3. Write down the names of our Banks business partners and their (third party) products we are offering at our service outlets? Service Remittance Mediclaim Life Insurance Wealth Management Mutual fund Business Partners Times of Money National Insurance Co. Kotak Mahindra Life Ins. Co. IndiaFirst Life Insurance Co. India Infoline Ltd Baroda Pioneer Mutual Fund Reliance asset Management Co., Birla Sun Life, UTI MF, Franklin Templeton, Sundaram BNP Paribas Products BarodaRemitXpress Baroda Health Mediclaim Sale of life insurance products Baroda e-trading Sale of third party mutual fund products

4. What are the guidelines for settlement of balance in deceased accounts? Ans: Guidelines for Settlement of balance in Deceased Accounts In case of nomination, the balance in the account of deceased account holder will be transferred to /paid to the nominee after satisfying about the identity of the nominee. In case of joint account holders, one of the account holder dies, the bank has to pay balance jointly to the legal heirs and the surviving depositor(s) However, if there is a mandate, either or survivor, former/later or survivor, Any one of the survivors or survivor etc., the payment will be made as per the mandate to avoid delay in production of legal papers by the legal heirs. In the absence of nomination and when there is no dispute among the claimants, the bank will pay the amount against joint application and indemnity by all the legal heirs up to the limit prescribed by the bank.
5. What documents would you take while opening a current account in the name of a public limited co. How does it differ from a private limited co. Ans: We have to obtain following documents from a public limited co., while opening their account with us:a) Certificate of incorporation b) Certificate of commencement of business. c) Memorandum and Articles of Association d) Board Resolution e) List of Present Directors

f) Reference to the companies previous Bankers. In case of a Private Limited Co., the certificate of commencement of business is not required.

FOREIGN EXCHANGE, TRAESURY OPERATIONS

OBJECTIVE TYPE 1. Any two ways for corporates to borrow overseas funds are External Commercial Borrowing and Foreign Currency Convertible Bonds. 2. An agreement to buy or sell currency at the current exchange Rate is known as Spot Transaction 3. In a LC transaction, Beneficiary is Exporter / Buyer and the applicant is Importer / Buyer. 4. The authority for implementation and monitoring Foreign Trade Policy in India is DGFT (Director General of Foreign Trade). 5. Bill of lading is a title to goods. 6. ECGC provides information on credit worthiness of overseas buyers. DESCRIPTIVE TYPE 1. What is Capital account transaction? Identify a few of them. Ans:A transaction which alters the assets or liabilities, including contingent liabilities outside India of persons resident in India OR assets and liabilities in India of persons resident outside India. Examples: Investment in foreign securities Transfer of immovable security outside India Remittance of Capital assets outside India Loans & OD to a non-resident Loans and OD from a non-resident 2. What is Current Account transaction? Give five examples. Ans:Business related transactions which affect Current assets / liabilities and income & expenditure of a resident / non resident. Examples: Payment in connection with foreign trade, services etc. Payment dues like interest on loans, living expenses of parents, spouse, children living abroad Expenses in connect with foreign travel, medical expenses etc. Any person may sell or draw Foreign Exchange is such sale or withdrawal is current account transaction. 3. What is ECB? What are the conditions applicable for ECB? Ans: External Commercial Borrowing(ECB) refers to commercial loans (bank loan, buyer's credit, supplier's credit), securitized instruments (floating rate note, fixed rate bond) availed from Non-Resident lenders with minimum average maturity of 3 years.

4. What is a Spot & forward transaction? Ans: SPOT & FORWARD TRANSACTIONS: In a contract, the actual payment in rupees and receipt in foreign currency may take place on the same day, two days later or a month later. VALUE DATE: While quoting rates, the Bank takes into account, the time factor, how much of time is going to be taken to get the Credit in Nostro Account abroad. This date is known as Value Date CASH Payment in Rupees and receipt in foreign currency on the same day T TOM Payment in Rupees and receipt in foreign currency on immediately succeeding working day T+1 SPOT Payment in Rupees and receipt in foreign currency within 48 hours T+2 FORWARD TRANSACTION: If exchange takes place at a predetermined future date, it is called a forward transaction. PREMIUM / DISCOUNT ON FORWARD TRANSACTIONS: The difference between Spot rate and forward rate is called forward margin. If it is higher / costlier than the Spot rate it is said to be at Premium. If it is lesser / cheaper than the spot rate it is said to be at Discount. Under Direct quotation, premium is added to spot rate and discount is reduced from Spot rate to arrive at forward rate, Premium / Discount depends on factors like a) Rate of Interest Prevaling at home / foreign currency centre b) Demand & Supply c) Speculation and d) Exchange Control regulations. 5. What do you understand by Arbitrage? Ans: The foreign currency is quoted at different rates in different markets. Sometimes, Bank may purchase and sell foreign currency in different centres to take advantage of these rate differences. Such transactions are called Arbitrage Transactions. Arbitrage is the practice of taking advantage of a price differential between two or more markets: a combination of matching deals are struck that capitalize upon the imbalance, the profit being the difference between market prices. 6. What is EEFC? What type of accounts can be maintained by an exporter under EEFC? Ans: Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer, i.e. a bank dealing in foreign exchange. The account is a Non-interest bearing current account. A person resident in India may open the account. A person can credit 100 percent of his foreign exchange earnings into this account subject to permissible credits and debits. Recipients can retain 100% of amount in Foreign Currency account with AD. After 31.10.2008, the exporters can maintain the EEFC account in form of non-interest bearing current account.

7. How is FEMA different from FERA?

FEMA 1999 (w.e.f.1.07.2000 replacing stringent & draconian FERA 1973) the FERA 1973

To facilitate external trade payment development and maintenance of Forex market in India Provisions are part of FEMA For, violations, no arrest, only civil consequences Maximum penalty 3 times 'Mens rea', culpable mental state dropped

To conserve Forex Through notifications The power to arrest Max penalty 5 times Provision of 'Mens rea'

8. What is Person of Indian Origin? Ans: a) A foreign passport holder - who had held an Indian passport at any time - whose parents / grand parents / great grand parents were a Citizen of India -Spouse of an Indian Citizen( not from Pakistan or Bangladesh) 9. What is Crystalisation of Export Bills? What are the guidelines of our bank with regard to crystallization of export bills? Ans: Crystallization of Foreign Currency Export Bill As per FEDAI guidelines any Foreign Currency overdue purchased bill which is outstanding beyond 30 days after expiry of Normal Transit Period in case of demand bills and 30 days after notional due date in case of Usance bills should be converted into Rupee Liability. Guidelines formulated by our bank are as under:1. To crystallize the overdue export bill on 30th day after expiry of the normal transit period in case of unpaid demand bills and on 30th day after the notional due date in case of unpaid usance bills. 2. To crystallize on any day between due date to 30th day if specific request is received from the exporter. 3. To recover or pass on the exchange difference arising out of crystallization of export bills from/to the customer as the case may be. 4. Exchange benefit arising out of crystallization should not be credited to the account of the exporter. Instead it should be adjusted against the respective outstanding overdue export bills. 10. Write short note on Gold Card Scheme for Exporters? Ans: Gold Card Scheme for Exporters The Gold Card Scheme envisages certain additional benefits based on the performance record of exporters. The Gold Card Holder enjoys simpler and more efficient credit delivery mechanism in recognition of his good track record. The Gold Card is issued to creditworthy exporters with good track record. The features are:1. All exporters having good track record and credit worthiness with minimum credit rating of CR1 to CR 6

The account should be Standard continuously for three years and should not be in the caution list of ECGC or RBI. 3. Export firms making losses for the past three years or having overdue export bills in excess of 10% of the current years turnover are not eligible. 4. Based on usual appraisal of the credit needs for export appropriate limits will be sanctioned for a period of three years subject to annual review of the account. 5. A stand by limit of not less than 20% of the assessed limit may be additionally granted for facilitating urgent credit needs for executing sudden orders. 6. Norms for inventory may be relaxed in case of unanticipated orders taking into account the size and nature of the export order. 7. Rate of interest - BPLR minus 3.75% ( for account with credit rating CR 1 to CR 3) and BPLR minus 3.50% (for account with credit rating CR 4 to CR 6) in case of Rupee Export Credit. LIBOR plus 100bps in case of Foreign Currency Export Credit. 8. The rate of interest on Post Shipment rupee export credit up to 90 days to be extended to exporters for a maximum period up to 365 days. 9. 10% concession is given to card holders in commission and exchange. 10. The card is issued for 3 years and is renewed for a further period of 3 years unless any adverse/irregularities are noticed, subject to annual review of the account. 11. Preference will be given for grant of PCFC 12. The loan application will be processed within 25 days (fresh application), 15 days (renewal of limit) and 7 days(sanction of ad hoc) 13. Security norms may be relaxed based on credit worthiness and track record of the exporter eligible for Gold Card. 14. The premium under Export Credit Insurance Cover for Banks(WT-PC) is to be borne by Bank

2.

11.Yield Curve
Yield Curve is a graphic representation of the relationship among yields by similar securities, like Government Bonds of different tenures. Yield curve is important because it serves at least two purposes. One, it serves as a benchmark for pricing of bonds or loans of comparable tenures. Two, it reflects the markets expectations on interest rates. A rising yield curve suggests that the market expects interest rates to be higher in the future than they are presently; while, a flat yield curve suggests that the market expects interest rates to be stable. Further a falling yield curve often suggests that the market is expecting interest rates to be soft in the future.

RESOURCE MANAGEMENT
OBJECTIVE TYPE 1. RBI absorbs liquidity from the system through Reverse Repo and injects liquidity to the system through Repo. 2. Present Repo rate is 8.00%, Reverse Repo rate is 7.00%. & Marginal Standing Facility Rate is 9.00%. 3. DESCRIPTIVE TYPE

1. What do you understand by the term HTM, HFT & AFS? HTM-(Held to maturity): These are securities/ investments not meant for sale and shall be kept till maturity. Such investments should not exceed 25% of banks total investment. Profits on sale of these securities is taken to P/L and appropriated to Capital account etc. HFT (Held for Trading) :These are securities held with the intention to trade by taking advantage of short term price / interest rate movements and are to be sold within -90- days. AFS (Available for Sale): The rest of the securities which do not fall under the above two groups of securities are categorized as securities under AFS category. 2. What is Residual Maturity & what is its use in ALM? Residual maturity is the time period which a particular asset or liability will still take to mature i.e. Become due for payment (once at a time, say in case of a term deposit or in installments, say in case of term loan). It is used as tool by the ALCO in product pricing for deposit & loans, deciding mix of incremental assets & liabilities, reviewing & articulating funding policies and deciding the transfer pricing policy of the bank. 3. What do you mean by Maturity Bucket? Ans: Maturity buckets are different time zones in which the value of a particular asset or liability is placed depending on its residual maturity. At present there are -8- maturity buckets, namely 1-14 days, 15-28 days,29-90 days, 91-180 days,181-365 days, 1-3 years, 3-5 years and above 5 years. Maturity buckets help the ALCO in determining the maturity mismatch and accordingly it considers the pricing of both asset & liability products.
4. How can you improve the profitability of your branch? Write minimum 5 such measures? Ans. We can improve the profitability of our branch by adopting following measures :a) Improving Deposit Mix & Credit Mix b) Improving total per employee business & average per employee business. c) Reducing NPAs, especially preventing slippage & making recoveries in P.W.O. a/cs. d) Managing Assets, other than advances, (e.g.. Cash, Bank Balance, Suspense, furniture & fittings etc.) to minimum possible level. e) Keeping controllable expenses under control. f) Mobilizing CASA deposits

SHORT NOTES

1.

Securitisation

Securitisation is the process of transfer of loan assets of homogeneous nature by a term lending institution to investors through an intermediary, by packaging them in the form of securities which are usually called as Special Purpose Vehicles (SPV). The cash flw by way of Principal and interest on the underlying loan assets is passed through to the security holders. The lending institutions free a large amount of funds by this process, for reinvestment purposes, long before they become due.

2. External Commercial Borrowing (ECB)

External Commercial Borrowing (ECB) refers bank loans, buyers credit, supplierscredit, securitised instruments (e.g. floating rate notes and fixed rate bonds) availed from non-resident lenders with minimum average maturity of 3 years. The various types of borrowings are as under Commercial Bank Loans (Foreign Currency Loans) Buyers Credit Suppliers Credit Floating / Fixed Rate Notes Foreign currency convertible bonds (FCCBs) Credit from Official Credit Agencies Commercial Borrowings from Private Sector Window of Multinational Financial Institutions like IFC, ADB and CDC.

OPERATIONAL RISK AND CREDIT RISK

OBJECTIVE TYPE 1. Present BPLR of our Bank is 14.75 %. 2. The three types of risks spelt out in Basel-II framework are Credit Risk, Market Risk and Operational Risk. 3. ALMAN is used for evaluating Liquidity Risk. 4. Basel-II compliant Crisil Rating Module of our bank is CRISIL RAM or BOB RAM. 5. All commercial advances i.e. existing as well as new with exposure of Rs.25.00 lac and above are to be rated under Credit Risk rating model BOBRAM of our Bank. 6. Investment grade of BOBRAM for financing commercial advances in our Bank is BOB-6. 7. Three Pillars of Basel-II are Minimum Capital requirement, Supervisory Review Process and Market Discipline. 8. Minimum capital requirement under Basel-II is 8.0%. 9. Obligor rating gives Probability of Default, Facility Rating provides Loss Given Default and Composite Rating indicates Expected Loss. 10. RBI has approved the following external credit rating agencies: CRISIL, ICRA, CARE and FITCH (India). 11. At present RBI has advised the banks in India to adopt Standardized approach to measure Credit Risk. 12. Accounts having annual turnover of Rs.50.00 crore and above are to be rated under Large Corporate model of CRISIL. DESCRIPTIVE TYPE 1. What is Risk? What are the different types of risks involved in banking operations? Ans: Risk can be defined as the potential loss from a banking transaction, which a bank can suffer due to variety of reasons. Different types of risk involved in banking operations are: a) Financial Risk: Credit Risk, Transaction Risk, Portfolio Risk b) Market Risk : Interest Rate Risk, Liquidity Risk, Forex Risk c) Non-Financial Risk: Operating Risk, Systematic Risk

2. What are the Prudential Floors for Capital Requirement under Basel-II? What is its implication on exposure and capital of the Bank? Ans: Prudential floor is the minimum level of capital, that the banks will have to maintain even if their capital requirement as per Basel II norms is less than what is their existing capital level as per Basel-I and thus they can not get the benefit of reduction in capital requirement due to new guidelines. Prudential floor is 100% for March 2008, 90% for March 2009, 80% for March 2010 of the Capital requirement as per Basel-I. 3. Write short notes on Value at Risk, Yield Curve & Credit Default Swap? Value at Risk:The maximum loss which will be suffered in a specified period and at a specified confidence level from a fall in the price of security (or exchange rate), given historic date on the price behavior of the security (exchange rate) on assessment of likely future market movements. The concept is applied to calculate the risk content of an individual security, a foreign exchange position, an equity share or a portfolio of these instruments. Yield Curve : A graphic representation of the relationship among yields of bonds with similar credit qualities but different maturities. A normal yield curve is upward sloping and is explained by the hypothesis of term risk. That is, because uncertainty increases with longer terms to maturity, yields will increase as well to compensate holders for the perceived greater risk. Occasionally a yield curve may be flat or inverted. An inverted curve is marked by higher yields at the short end of the spectrum. They decrease as term increases. Usually, government securities are used to construct such curves. Credit Default Swaps (CDS) A credit default swap (CDS) is essentially a financial instrument that allows a bank or financial institution to insure a loan or a debt investment it has made by paying periodic fees to another institution called protection seller which is willing to take the risk. In case the borrower to whom the bank has given out the loan default,then the protection seller pays the bank. Through this process the risk on the books of the bank or the financial institution is transferred to the books of the protection seller willing to take the risk. 4. Write short notes on Option. Options :'Option contract' is a contract under which the buyer has a right but not an obligation to buy or sell a specific quantity of a given asset at a specified price at or before a particular date in future. Option is in the nature of an insurance obtained by the buyer of the Option from the Writer of the Option against adverse price movements, like Interest Rate, Exchange Rate, etc. against payment of a premium to the Writer. The potential loss to option seller is unlimited and to the buyer it is limited to the premium paid. Call option Buyer gets right but not obligation to buy underlying assets during specified period of time at an agreed upon price.

Put option This option gives holder the right but not obligation to sell the underlying assets American option Can be exercised on any day upto expiry. Write down the salient features of Standardized Approach for Credit Risk. RBI has prescribed Standardized Approach for Credit Risk and Basic Indicator Approach for Operational Risk. The features of SA are:1. Different type of borrowers carry different weight 2. Non-fund facilities are converted to credit exposure by applying credit conversion factor. 3. Direct exposure to domestic sovereign 4. The risk weight for the exposures on the public enterprise, corporates and primary dealers are dependent upon the external rating given by one of the four rating agencies (CRISIL,ICRA, FITCH & CARE) approved by RBI. 5. Regulatory Retail Portfolio (with limits up to Rs.5.0 crores and sales turnover upto Rs.50.0 crores) carry Risk Weight of 75%. 6. Exposure against residential property carry risk weight of 50% uoto loan amount of Rs.30 lacs and 75% for amount above Rs.30 lac provided loan to value ratio(LTV) is more than 75%. For all other loans where LTV is more , RW will be 100%. 7. Exposure to Commercial Real Estate sector carry RW of 150%. 8. Exposure to Consumer Credit (including personal loans ) carry RW of 125% 9. Staff loans carry RW of 20% provided they are fully covered by superannuation benefits and/or mortgage of house. Risk weifht for other staff loans will be 75%. 10. Risk Mitigation Techniques are: a) On Balance Sheet Netting (for cash and deposits with bank) b) Collateralized Transactions (near cash securities like NSCs, KVPs, rated Bonds, Shares) (d) guarantees (by entities enjoying better RW) 11. HAIR-CUTS: Certain adjustments are to be made to the value of exposures / collaterals to take care of future fluctuations. These are called Hair cuts. RBI has prescribed Standard Supervisory Hair-cuts. 6. What are the components of Capital Market Exposure? Ans: a) Direct investment in equity shares, convertible bonds, convertible debentures & units of equity oriented mutual funds the corpus of which is not exclusively invested in corporate debt b) Advances against shares/bonds/debentures or other securities or on clean basis to individuals for investment in shares ( IPOS /ESOPs), convertible bonds, convertible debentures & units of equity oriented mutual funds c) Advances for any other purposes where shares, convertible bonds, convertible debentures & units of equity oriented mutual funds are taken as primary securities d) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds e. Secured & unsecured advances to stock brokers and guarantees issued on behalf of stock brokers and market makers f. Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoters contribution to the equity of new 5.

companies in anticipation of raising resources g. Bridge loans to companies against expected equity flows/issues h. Underwriting commitments taken up by the banks in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i. Financing to stock brokers for margin trading j. All exposures to Venture Capital Funds SHORT NOTES

1. Credit Audit
The Narang Committee, constituted by Reserve Bank of India, suggested for Credit Audit in banks. Thereafter, Reserve Bank of India advised that banks should ensure a lending (Loan) review mechanism for larger advances soon after their sanctions. The purpose of the credit audit is to: 1. Improvement in the quality of credit portfolio; 2. Review of sanction process & compliance status of large loans; 3. Feedback on regulatory compliance; 4. Independent review of Credit Risk Assessment; 5. Pick-up early warning signals and suggest remedial measures; 6. Recommend corrective action to improve credit quality, credit administration and credit skills of staff. Following accounts are covered under Credit Audit 1. All fresh sanctions / increase in limit whether Fund based and / or NonFunded limits individually and combined of Rs. 5 crores and above. 2. All existing accounts with sanctioned limit (Fund based and / or NonFund based) of Rs. 10 crores and above. 3. 5 % accounts of Region on random selection basis with sanctioned limit of Rs. 1crore and below Rs. 10 crores (from rest of the portfolio). Credit audit should be conducted within 3 to 6 months of sanction / review. Credit Audit of eligible accounts of one Region is to be carried out by Officers of another Region within the Zone. Zonal Office shall do identification of Credit Auditors and eligible accounts. Accounts of CFS / Specialised branches shall be treated accounts of the region to which these branches are reporting for administrative purposes. Identified Credit Auditors shall submit the Credit Audit Report in the Prescribed format within a period of 15 days to Credit Audit Department with a copy to Branch & Regional Office.

2. Value at Risk
Value at Risk (VaR) is an estimate of the maximum loss possible given a predetermined probability or confidence level and time horizon from a fall in the price of security (or exchange rate), given historic date on the price behavior of the security (exchange rate) on assessment of likely future market movements. It is commonly used by broking firms or investment banks to measure the market risk of their asset portfolios. Typical time periods are 1 day, 10 days or 1 year and commonly used confidence levels are 99 % and 95 %.

3. Substantial Exposure Cap

It is sum total of exposures assumed in respect of those single borrowers enjoying credit facilities in excess of threshold limit. The aggregate SEL( substantial exposure limit) shall be 500% of capital fund as per previous year Balance Sheet. For the purpose of aggregating single borrower exposure for SEL, the thresholds will 5% of Capital Fund. Bank may exceed 5% upto 15% but shall not exceed the overall SEL of 500% so as to meet SEL.

4. Liquidity Risk:
Risk of loss due to potential inability of a bank to meet its repayment obligation in a timely and cost effective manner is called Liquidity Risk. This may arise out of mismatch in tenor of its deposits (liabilities) and loans(assets) leading to a situation that it does not have enough of ready cash to honor its commitments towards its depositors. Liquidity Risk may also deprive a bank from taking benefit of some available opportunity of investment and thereby make money, leading to a lost opportunity. The price of converting an illiquid asset into a liquid asset in the given market environment is the quantum of liquidity risk (VaR). When an asset cannot be converted into cash when needed runs the bank into a liquidity risk. Scarcity of funds in the market is also one of the factors of liquidity risk. 5. Basic Indicator Approach for Operational Risk Capital required for Operational Risk =Average of (Gross income x Alpha) for last three years, excluding years of negative or zero gross income. (Alpha =15%) Gross income =Net Profit (+) Provisions and write off made during the year. (+) Operating expenses (+) Loss on sale of HTM investments. (-) Reversals made during the year in respect of provisions and write offs made during the previous year (-) Income recognized from disposal of items of movable and immovable property. (-) Profit on sale of HTM investments (-) Income from Legal settlements in favour of the bank. (-) Extraordinary/irregular item of income. (-) Income from insurance activities.

LEGAL AND STATUTORY PROVISIONS AFFECTING BANKERS

OBJECTIVE TYPE 1. A companys powers to borrow is restricted by Section 293D(1) of the Companies Act. 2. Banking Ombudsman can give award up to actual amount of loss or Rs.10.0 lac whichever is less. 3. The reason to be given for return of a cheque due to insufficient balance insufficient opening balance. 4. Penalty for offence under Section 138 of NI Act is fine upto two times of the amount of the instrument or imprisonment upto two years or both.

5. Write any two financial assets not covered under SARFAESI Act 2002. a) A/cs where contractual dues are less than Rs.1.0 lac b) Agricultural Land c) Contractual dues remaining unpaid are less than 20% of the principal d) Assets under pledge, lien & assets financed under lease/hire purchase e) Vessels f) Air Craft 6. TDS amount has to be deposited with the Government Account within 7 days of deduction from the deductee. 7. Accounts with dues upto Rs.20.00 lac can be referred to Lok Adalats. DESCRIPTIVE TYPE 1. What is SARFAESI Act 2002? Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is an effective tool in the hands of the banks to enforce the security interest and recover the dues thereby reducing NPAs. Bank can issue a Notice to the NPA borrower to discharge his liabilities within 60 days from the date of Notice failing which the bank can take possession of the secured assets and sell the same for realizing the secured advances without intervention of the court. Certain types of securitized assets are excluded from the ambit of SARFAESI Act 2002 2. What are the exclusions under SARFAESI Act 2002? Ans: The following are exempted from the purview of the Act 1. Accounts where the contractual dues are less than Rs.1 lac. 2.When the security interest is created on agricultural land. However, other agricultural related assets like tractor, implements etc. can be enforced, if charged as security to Bank's advance. 3. Where the contractual dues remaining unpaid are less than 20% of the principal i.e. total amount disbursed and interest. 4. Assets under pledge, lien / assets financed under lease or hire purchase are not covered. 5. Vessels 6. Air crafts 3. What is the protection available to collecting bank under NI Act and what are the conditions for getting the protection? Ans: Statutory protection is available to the collecting banker under Sec.131 for collection of cheques and under Sec.131(A) for collection of drafts when the bank acts as an agent of the customer. Conditions for getting protection: d) Collection is in good faith & without negligence e) Payment is received for the customer f) Cheque is generally or specially crossed 4. Enumerate five situations which are not Payment in due course. a)Payment after banking hours b) Payment of post dated cheque c) Payment of cheque with forged signature d) Payment of a cheque stopped by the drawer e) Payment by wrong debit to the account

5. Explain MONEY LAUNDERING? What are the stages of Money Laundering? Money Laundering is defined as cleansing of dirty money obtained from legitimate or illegitimate activities with the objective of hiding its source and rendering it in legally usable form. The process of money laundering is also an illegal activity involving financial jugglery and the prevention of Money Laundering Act, 2002 seeks to combat money laundering in India. The main objective of the Act is three-fold: * To prevent, combat and control money laundering. * To confiscate and seize the property obtained from the laundered money. * To deal with any other issue connected with money laundering in India. The followings are the stages of Money Laundering: 1. Placement 2. Layering 3. Integration 6. Write down the jurisdiction of different authorities under Consumer Protection Act. Ans: The authority or jurisdiction is

1) District forum for a complaint up to Rs. 20 lac 2) State Commission Rs. 100 lac 3) National Commission above Rs. 100 lac SHORT NOTES

1. Right to Information Act 2005

Enacted by Govt. of India came into effect from Oct 13, 2005. This act gives the citizens access to information under control of public authorities to promote transparency and accountability in these organizations. The act also provides for appointment of a Chief Public Information Officer to deal with requests for information. Any citizen, along with payment of prescribed fee, can request for information to the public body by making an application in writing, including by electronic means. The public authority is bound to dispose off the request within 30 days. The Act, under Sections 8 and 9, provides for certain categories of information to be exempt from disclosure.

2. Holder in due Course

Section 9 of Negotiable Instrument Act 1881 talks about the important features of Holder in due course

-He must be a holder(i.e. in possession of the instrument and be the payee or endorsee).
-Possession of the instrument before due date -Possession for consideration -The possession should have been obtained in the ordinary course and under suspicion-less circumstances.

EMERGING TRENDS IN BANKING

OBJECTIVE TYPE 1. The independent stages of Money Laundering are Placement, Layering and Integration. 2. A derivative transaction can be undertaken by the Bank even without a Primary Transaction.(TRUE / FALSE) FALSE 3. Gold coin rate of banks is decided on daily basis depending on market rates. 4. Minimum amount of facility under Marginal Standing Facility from RBI is Rs.1.00 crore and multiple thereof. 5. Rate of interest under Marginal Standing Facility is 100 basis point over Repo Rate 9.00% at present. DESCRIPTIVE TYPE QUESTIONS 1. Write down the Green initiatives taken by our Bank. a. Sending Annual report in electronic form b. Issue of circulars in electronic form through corporate intranet. c. Use of electronic payment (e-governance) 1.a) What do you mean by Financial Inclusion? What are its benefits to the society and to the Bank? What are the initiatives taken by our Bank under Financial Inclusion? Financial inclusion is providing the vast majority of under privileged people of the society with banking facilities at an affordable cost. Benefits to the society a) Inculcates saving habit among the poor people b) Hassle free banking facility c) Upliftment of the poor d) Healthy and inclusive growth of the society e) It removes social disparity in the society f) Empowerment of the poor people Benefits to the Bank a) Bank fulfils its social obligation b) Increase in customer base c) Slow and gradual increase in low cost deposits d) Slow and steady growth of advances As an initiative in this direction our Bank has launched a Saving Bank product christened as Nagarik Bachat Khata, a no freebies account. Baroda General Credit Card is another credit product for this section of the society. Recently our Bank has opened many Ultra Small branches in service area villages with population of above 2000 and upto 5000. Besides this our bank has provided mobile banking facility through mobile vans in four centres. 2. What is Cheque Truncation? What are its advantages?Under cheque truncation, the physical flow of cheques to the paying bank is stopped. In place of the physical cheque

the electronic image of the cheque moves and the processing of the cheque is done on the basis of the electronic image. Our Bank has two cheque truncation centres (Delhi & Chennai) Advantages: a) Saves the clearing time of cheques b) Quick available of funds to the customer c) It is safe and saves cost of movement of instruments 3. What are the differences between Repo & Reverse Repo? What is the implication of rise in Repo rate? Heads Funds Securities Repo RBI to Banks Banks to RBI. Transfer of securities through SGL Account of respective banks with an undertaking to buy back after 1 to 14 days 8.00 Banks to RBI To provide liquidity to Banks 1-14 days Banks can freely borrow subject to availability to excess securities over SLR limit Reverse Repo Banks to RBI RBI to Bank through SGL accounts of respective banks

Interest Purpose Period Availability

7.00% RBI to Banks To absorb liquidity from market. To control inflation No specific period Subject to ceiling on Bid Basis

As a result of rise in repo rate bank will have to pay more on borrowed funds from RBI in case of fund used for credit growth. For bank it is REPO but for RBI it is Reverse REPO to check infusion of liquidity into the market. Present repo rate is 8.00%% and rate for reverse repo is 7.00% 4. What is Right to Rescission& what is Re-set clause? Ans: In case of Reverse Mortgage loan Baroda Ashray the borrower is given a time period of -7- business days to cancel the transaction. This is called Right to Rescission. In case the borrower has not availed the loan, processing charges may be waived and if the borrower has availed the loan, he has to repay the entire loan with interest. Re-set Clause: To protect themselves against rising interest rates, banks try to protect their interest in fixed option long term housing loans by putting a clause to review the interest rate after some period and to adjust the rate if there is a rise in the interest rate. This is called Re-set clause. 5. What do mean by Corporate Social Responsibility(CSR), Sustainable development(SD) & Non-Financial Reporting (NFR)? Corporate Social Responsibility(CSR): Corporate Social Responsibility entails the integration of social and environmental concerns by companies in their business operations as also in interactions with stakeholders.

Sustainable Development: Sustainable development essentially refers to the process of maintenance of the quality of environmental and social systems in the pursuit of economic development. Non-Financial Reporting: Non-Financial Reporting is basically a system of reporting by organizations on their activities in the context of sustainable development, especially as regards to the triple bottom line, that is, the environmental, social and economic accounting. In the context of CSR,SD and NFR, the urgency for banks to act as responsible corporate citizens in the society, especially in a developing country like ours, needs no emphasis. Their activities should reflect their concern for human rights and environment. 6. Base rate for Bank loans: Base Rate is the minimum rate of interest below which banks can not lend to commercial activities. RBI has advised Banks to switch over from Bench mark Prime lending rate to Base rate system wef July 1, 2010. Criteria for determination of Base Rate: While each bank may decide its own base rate, some of the criteria that could go in to determination of Base rate are i) Cost of Deposits ii) Adjustment for negative carry in respect of CRR & SLR. iii) Unallocable overhead cost for banks such as agreegate employee compensation relating to administrative functions in corporate office, directors and auditors fee, legal and premises expenses, depreciation, cost of printing and stationery, expenses incurred on communication and advertising, IT spending and cost incurred towards deposit insurance and iv) Profit margin Since the Base rate will be the minimum rate for all commercial loans, banks are not permitted to resort to any lending below the Base rate except some special categories like i) Short Term agricultural loans. ii) Export credit, where interest concessions are granted by GOI iii) Loans granted to a corporate, post restructuring. iv) Loans under DRI scheme. v) Advance against Banks own term deposit receipts. vi) Loan granted to Banks own employees. Present Base Rate of our Bank is10.75% p.a. SHORT NOTES

1. No Frills Accounts
A No Frills account is an account with basic features and is devoid of additional benefits or frills and is intended for a commoner or low income group customer who does not need accounts with loaded features. No frills accounts are designed to propagate Financial Inclusion. As a step towards this and with a view to cater to the needs of vast majority of Indian Population and also to provide a simple banking account to general public with a limited withdrawal facility and a reasonable minimum balance, our Bank has launched a saving bank product known as Nagarik Bachat Khata which is a No frills account.

2. Credit Information Bureau (India) Limited (CIBIL) Credit Information Bureau (I) Ltd was set-up in January 2001 by way of Budgetary Proposal,as a four-way joint venture between SBI, HDFC, Transunion International Inc and Dun & Bradstreet Information Services India P. Ltd. CIBIL is established with a primary purpose of information sharing between Banks and Financial Institutions for curbing the undesired growth of NPA. Banks are required to provide periodical information to CIBIL in the prescribed format. The operating units shall take necessary steps to quickly and regularly furnish the information in the prescribed format for use and benefit of all the concerned.
It helps in Compilation of credit information Assessable to member banks to improve quality of credit proposals Better credit management Credit dissemination function

3. Alternate Delivery channels

Banking business is no longer confined to limitations of space and time. Business factors like globalization and regulations along with technological development like emergence of internet and e commerce have changed conventional style. Present day customer prefers to carry banking transactions any time, anywhere and through any device, not necessarily by visiting branch. This has led to emergence of alternate channels for delivery of banking services like ATMs, internet banking, phone banking, mobile banking, call centre. In addition to providing convenience of Anywhere Any Time banking to customers, they also offer cost reduction in terms of cost of transactions, to the banks in long run. The channels are:- ATMs, Internet Banking, Mobile Banking, Debit Cards, Point of Sales, Tele Banking, Omnibob.

4.

Bancassurance:
Bancassurance is nothing but an alliance between a bank and an insurance provider. It is a kind of service that fulfils the need of banking as well as insurance. It stands for distribution of life/non life insurance products through the banks various outlets as agents of the insurance companies for earning non-interest income. It is meant to use the synergy of our wider presence for selling the insurance products to our own customers who are also the consumers of the insurance companies. As a further step bank has got into JV/strategic alliances with the insurance companies to increase the sale of insurance products. Advantages of Bancassurance are:- (i) utilization of existing banking network(ii) saving of various costs of insurance company. (iii)instant reach to rural area(iv) availability of large readily available customer base.(v) product development due to better customer relations(vi)banks increase their revenue (vii) banks expand their portfolio(viii) an answer to changing needs of consumers.

5. CORPORATE GOVERNANCE
A corporation is a congregation of various stakeholders, namely, customers, employees, vendor partners, government and society. A corporation should be fair and transparent to its stakeholders and society. This has become imperative in todays globalized business world where corporations need to access global pools of capital, need to attract and retain the best human capital from the various parts of the world, need to partner with vendors on mega collaborations and need to live in harmony with the community. Unless a corporation embraces and demonstrates ethical conduct, it will not be able to succeed. Corporate Governance encompasses commitment to values and to ethical business conduct to maximize shareholder values on a sustainable basis, while ensuring fairness to all stakeholders including customers, employees, and investors, vendors, Government and society at large. Corporate Governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed and how performance is optimized. Sound Corporate Governance is, therefore, critical to enhance and retain investors trust. It is a code of corporate conduct which ensures that corporate body is managed in the best interest of all stakeholders It is concerned with Right action in business Fairness Responsibility Accountability Transparency - disclosure (Full of RAT- please remember ) In the financial system corporate governance assumes importance in order to determine the health of the system and its ability to survive economic shocks Under corporate governance banks articulate corporate values, code of conduct and standards of appropriate behavior, etc and have systems and controls to ensure compliance with them. The board and top management meet at specified intervals for timely exchange of information on the bank's financial condition and management practices.

6. Cross selling and Up-selling

Cross selling Cross selling refers to sale of additional products / services to the existing customers with a view to increase the business with reduced cost of customer acquisition, providing a range of products / services under one umbrella and increasing the level of customer satisfaction. Sale of a car loan to an existing housing loan customer is an example of cross selling. Our bank has targeted the products per customer at 1: 2.5 for 2009-10. This can be possible by aggressive cross selling of our products. Up-selling: Up-selling refers to sale of a value added or superior product rather than a base product to a prospective customer / customer based on his need. This adds to customer delight and also increases the quantum of business of the Bank.

Sale of Baroda Premium Privilege current account to a prospective corporate client who desire to open a Baroda Advantage Current Account is an example of up-selling.

AWARENESS ABOUT THE BANK

OBJECTIVE TYPE 1. Total business of our bank as on 31.03.2012 was Rs.6,72,248 crore. 2. Net profit of our bank as on 31.03.2012 was Rs.5006.96 crore. 3. Maximum number of days of extra-ordinary leave on loss of pay that can be allowed to a staff of our Bank is 360 days. 4. SME Loan Factories of our Bank work on assembly line principle. 5. The performance appraisal system for Award Staff is called PASAS. 6. Our Banks Premium Debit card of our Bank is Visa Premium. 7. What is the motto of bank for the year 2012-13? Business Growth through Higher Productivity, Efficiency and Profitability 8. Business Process Re-engineering and Organization restructuring programme of our Bank is called NAVANIRMAAN. 9. Latest HR initiative of our Bank is Project Sparsh. 10. Bank has classified the entire Government Business into 10 Revenue Streams. 11. Ultra-Small branches can be opened in villages with population of more than 2000 and below 5000. 12. Our Bank has 85 overseas branches and offices in 26 numbers of countries. 13. Our banks first Composite loan Factory has been opened at Mangalore.

DESCRIPTIVE TYPE QUESTIONS 1. What is the mission Statement of our Bank? TO BE A TOP RANKING NATIONAL BANK OF INTERNATIONAL STANDARDS COMMITTED TO AUGMENTING STAKE HOLDERS VALUE THROUGH CONCERN, CARE AND COMPETENCE. 2. What is Baroda Gramin Paramarsh Kendra? What are its objectives? Our Bank is committed to social responsibility and as a continuous effort towards this objective, our Bank has started Baroda Gramin Paramarsh Kendra(BGPK), a centre for knowledge sharing, problem solving, and credit counseling for rural communities is one of the initiatives in this direction. Objectives: a) Financial education b) Credit counseling c) Knowledge sharing d) Problem solving in rural area through synergy & liaison with other organizations ( for value addition & developmental activities). 3. Write down any five Quantitative Targets of our Bank for 2012-13 as per Domestic Business Policy Guidelines? a. Global Business to cross Rs.800000 crore b. Retail Advances to grow by 25% c. Total Advances to grow by 21%

d. CASA Deposit to grow by 22% e. Fresh slippage to be less than 1% f. NPA recovery to be Rs.750 crore 4. Write down the Four Pillars of Sustainable Business Module spelt out in Business Policy Guidelines 2012-13. a. A strong and growing CASA base b. Well diversified and quality credit expansion c. Continuous improvement in asset quality through arresting slippages and recovery / upgradation of bad loans d. Growing pool of fee based business and income. 5. What is NAVANIRMAN-Baroda Next? What are its main objectives? NAVANIRMAN is a comprehensive transformation programme launched by our Chairman and Managing Director on 22nd June, 2009 for growth of our Bank in pace
with the changing environment which is triggered by market place dynamics. It is centered around our customers and our employees and has two core elementsBusiness Process Reengineering (BPR) and Organization Restructuring. Primarily, the main objectives of this programme revolves around the following: a. To ensure best in class customer service b. To streamline processes to make life simple for employees and customers c. To equip the staff with best tools and techniques to discharge their roles effectively Alignment of Banks organization structure and systems to help build Baroda Next and drive the new strategy.

BPR (Business Process Re-engineering) Main Objectives -Improvement in branch productivity on sales -Best-in-class service levels for customer delight -Redesign of front and back office processes and roles to reduce turnaround time
-Reduction in operating costs Organization restructuring Main Objectives -Appropriate organization structure and systems to support BPR and be in line with future business plans At corporate, zonal and regional offices - At branches Sustainability of change program through capability building -Our Bank has partnered with McKinsey & Company for this programme

6. Write down the full form & formulae of the followings and also the figures for our Bank as on 31.03.2012 NIM: Net Interest Margin = Total Interest Earned minus Total Interest Paid divided by average Interest earning assets . Banks figure : 2.96 % ROAA: Return on Average Assets = Net Profit divided by Average working Funds. Our banks figure on 31.03.2012 is 1.24 % CAR: Capital Adequacy Ratio = Capital divided by Risk Weighted Assets multiplied by 100. Our Banks CAR on 31.03.2012: Basel II-14.67% Cost of Deposits= Interest paid on Deposits Divided by Average Deposits X 100

Cost of Deposits of our Bank as on 31.03.2012 is 5.81% (Global) Yield on Advances= Interest Earned on Advances Divided by Average Advances X 100 Yield on Advances of our Bank as on 31.03.2012 is 9.33% (Global) 7. What are the HR initiatives taken by our Bank in recent past? Ans: Paramarsh center for personal counseling
Sampark SOS helpline for employee Khoj-I & Khoj-II talent identification and development programme Baroda Sujhav -Staff suggestion scheme Idea online Staff suggestion fore innovative bankable ideas HRnes- Covers the entire gamut of human resource management functions being performed in the Bank Project LEAP- Special grooming programme for top 300 future leaders New EPM system- Making the performance review system of officers result oriented, more subjective and reducing the number of performance matrixes.

Fast Track promotion for career growth of employees. Baroda Financial reward Scheme for Business leaders HRNes Payroll a centralized salary processing system Project Sparsh- Human Resources reformation project of our Bank in a scientific manner. 8. What is HRNes? What are the benefits available to employees under HRNes? Ans: Human Resource Network for Employee Services is a comprehensive webenabled HRM system which covers the entire gamut of human resources management function in the Bank currently being performed and also includes many new sub-functions. Benefits to Employees: a) Employees can view their own personal data, salary slip, income tax calculation, online application for leave,LFC,promotions & other HR processes. b) Accurate calculation of pay, pay fixation, settlement of claims & other benefits and perks c) Speedier processing of benefits to employees through the system d) Can support development & training activities e) Can develop competency framework f) Can submit application online for participating in Promotion exercise, Faculty selection, Selection for overseas posting, KHOJ, resignation,VRS, request for transfer etc g) Employee can modify certain personal details & submit application online, pointing out discrepancies in data. 9. Write down the modules available under HRNes? i) Oracle Core HR Module, covering all current HR processes in the Bank ii) Fluous Payroll Module- covering payroll, payment of various benefits, perks, welfare schemes, terminal benefits etc iii) Oracle Learning Management Module which includes training administration & elearning. iv) Employee Self Service Module, through which employee can have access to information relating to him and can request for updation of his personal information, transfer, promotion, leave & resignation etc.

10. What is Project Sparsh? What are its dimensions? Ans: The new HR project to harness Banks human resources in a scientific manner encompassing all facets of HRD launched by our Bank with the assistance of Boston Consultancy Group is called Project Sparsh. It has the following nine dimensions: a. b. c. d. e. f. g. h. i. Strategic Manpower Planning Recruitment and On-boarding Performance Management Talent Management Training and development Incentives HR Structure HR Automation Employee Engagement

SHORT NOTES 1. Baroda Swarajgar Vikas Sansthan Baroda Swarojgar Vikas Sansthan (BSVS) is a body registered under Societies Act and Trust Act at our Staff College with the Principal as its President. The objectives of BSVS are: -To provide education, information and skills to youth for setting up own enterprise -To encourage them to start suitable viable economic activities in their local areas -To help them in establishing the enterprise by arranging bank credit -To keep contact with trainees till they establish themselves -Research and Development in rural area self employment. Training is imparted free of cost. To facilitate effective training guidance / assistance of institutes / experts is utilized. At present there are 16 BSVS. 2. SME Loan Factory Dedicated SME Loan Factories has been set up by our Bank at identified centres representing a unique and innovative Sales and Delivery Model based on assembly line principles, for providing customized products and services to SME customer through simplified processes with the least turnaround time. These factories are helping the bank to get closer to its SME customers and improve its SME Asset base. Structure SME factory is divided into two divisions Central Hub and Sales Hub Central Hub to be headed by Head (Credit) Sales Hub to be headed by Head (Sales) and sales coordinator Both are located in same premises for better liaison and coordination. Relationship Managers and Relationship officers are located at strategic designated branches in various locations of the city, based on business potential available in the designated branches and other factors. At present our Bank has 29 SME Loan Factories. 3. Baroda Gold Coin As a financial super market, our Bank is selling gold coins at designated branches/ (POS). Our gold coins have the following characters:

- 24 carat Gold Coins / Bars with 999.9 fineness - Assay certified - Round coins in 2,4,5 & 8 grams and rectangular bar in 10 grams & 20 grams Rate of the gold coins is fixed on daily basis depending on the market price of gold. Our Bank offers a discount to its customers on the price of gold coins. 4. Baroda Wealth Pack Our Banks joint venture insurance company IndiaFirst Life Insurance Company has recently launched a new product Baroda Wealth Pack to cater with the multiple financial needs of our customers. The product has four components namely a Saving Bank account, a Recurring deposit Account, an insurance policy and an investment product under ULIP. The Wealth Packs are of three categories namely Baroda Wealth Pack-Silver, Baroda Wealth Pack-Gold and Baroda Wealth Pack- Platinum and the amount for opening the accounts are Rs.25,000/-, Rs.50,000/- and Rs.1,00,000/respectively. For a Silver pack out of Rs. 25,000/-, Rs. 10,000/- is invested p.a.under Recurring Deposit, Rs.12,000/- for investment p.a.under ULIP, Rs.750/- for group insurance of Rs.200000/- and Rs.2250/- remains in the Saving Bank account. Insurance cover available for a Silver Pack is Rs.4,00,000/- ( Rs.200000/- from investment under ULIP + Rs.200000/- from group insurance). There is a lock-in period of five years under ULIP. 5. Urban Retail Loan Factory: It works on assembly line principle of completing various processes within stringent time lines , using simplified and technology supported workflow. It employs our own staff who are specially selected, trained and equipped with special skill to ensure fast and accurate decision making resulting in customer convenience. It has two wings 1) Sales and Marketing Wings- It is dedicated to generate retail loan products. It consist of tely callers, data miners, sales executives, campaigners, sales co-ordinators, sales head. 2) CPC It is a assembly line retail loan processing unit doing the job of apprising , processing and and approving the proposal. It consist of LAP operators, field inspectors, credit officers and other functionaries who facilitate and expedite processing loan applications. The approval for loan application is given within a period of 7 days. 6. City Sales Office A new concept in the area of sales has been initiated by our Bank in the name of City Sales Office. The salient features of City Sales Office are a) It is a back-office for sales b) Not a branch, so no banking operations carried out c) No regulatory permission required d) The head of City sales Office has administrative powers e) It carries out compliance of KYC norms, introduction, signature verification etc. City Sales Office has a three tier structure

CSO Head in the cadre of Scale-IV, III or II Relationship Manager- Scale-III, II or I Sales Associate- Officer and Award Staff

Function Sales Associates work as the Fleet on Street(FOS).They generate leads from each meeting with prospects driven by daily / weekly targets and follow a strict schedule for reporting to the Relationship Manager. The Relationship Manager ensures proper documentation of reporting, makes joint calls, provides training support to the sales Officers and has weekly/daily target driven sales activity. The CSO head functions as the leader in Team Building and provides training on products and sales to the line staff. He has weekly and daily sales targets. He generates leads, makes joint calls and follows up the leads. He organizes weekly meeting and starts new initiatives and also reports the progress of the office to the controlling office. 7. City Back Office (CBO) After implementation of CBS, Service branches are designated as City Back Office The primary function of CBOs are centdralized operations of Inward and Outward Clearing, payment of DDs, Bankers Cheques, etc. The CBOs are required to handle ECS also. For smooth functioning of CBOs, following should be ensured by the branches:Signatures of all accounts are scanned. Account operating instructions and change therein are entered in the system. Cheque books issued are entered in the system Sanctioned limits in accounts are timely renewed. ECS Mandates given by customers are updated with new account numbers in CBS. 8. Write down the Five Stars of productivity discussed in our Business Policy Guidelines 2012-13. The Boston Consultancy Group in their survey report has highlighted Five Stars of productivity which are very critical and if pursued and focused by Indian banks, they can rank in the league of best International banks. The five stars of productivity are: a. Branch sales and Service excellence b. New Channel Excellence c. Lean Operating Model d. High Performance Organisational design e. Proactive & Pre-emptive Bad Debt Management

REGULATORY COMPLIANCE, SYSTEM AND PROCEDURES

OBJECTIVE TYPE 1. RBI absorbs liquidity from the system through Reverse Repo and injects liquidity to the system through Repo 2. The periodicity of submission of CTR to RBI is monthly. 3. R return is submitted to RBI at fortnightly interval. 4. Interest paid by RBI on CRR is NIL. 5. Matters relating to sanction of credit are under the jurisdiction of Banking Ombudsman. True / False 6. Time frame for disposal of retail loan applications at branch is four weeks. 7. Fair Practice Code provides valuable safe guard to customers in their day to day banking transactions. 8. The key elements of KYC policy are a) Customer Acceptance Policy b) Customer Identification Procedure c) Monitoring of transactions d) Risk Management. 9. Registration charges under CERSAI is Rs.250/- upto loan of Rs.5.0 lac and Rs.500/above Rs.5.0 lac. 10. Banks are required to maintain 24% of their Demand and Time liabilities as SLR. 11. As per BCSBI, one months notice is required to be given to customers before implementation of revised charges. 12. Provisioning requirement for standard advances under direct agriculture and SME sector is 0.25%. 13. LTV for Home Loans above Rs.20.00 is 80% excluding registration charges, stamp duty and other expenses. DESCRIPTIVE TYPE 1. Which documents are accepted as Proof of Identity as well as Proof of address under KYC Norms? Ans: a) Passport b) Driving License c) Voter Identity Card d) Letter from a recognized public authority verifying the identity (photo) and certifying the address of the person 2. Write down the penalty to Domestic Banks for non-achievement of targets / subtargets under Priority sector Advances. Ans: 1. Banks not achieving targets / sub-targets of Priority Sector advances will be allocated amounts for contribution to RIDF established with NABARD. For the purpose of allocation of RIDF trench, the achievement level of Priority Sector lending as on the last reporting Friday of March of the immediate preceding financial year will be taken into account. The concerned banks will be called upon by NABARD, on receiving demand from various state governments, to contribute to RIDF. a. The corpus of particular trench of RIDF is decided by Govt. of India every year. 50% of the corpus shall be allocated among domestic commercial banks having shortfall in Priority Sector lending on a pro-rata basis & the balance 50% of the corpus shall be allocated among the domestic commercial banks having shortfall in Agriculture lending on a pro-rata basis.

b. The rate of interest on Banks contribution to RIDF shall be fixed by RBI from time to time. c. Non-achievement of Priority Sector targets & sub-targets will be taken into account while granting regulatory clearances / approvals for various purposes. 3. What are the targets and sub-targets for lending to Agriculture? Ans: Total agriculture advances of Domestic Commercial Banks should be 40% of ANBC ( Adjusted Net Bank Credit) or credit equivalent amount of Off Balance Exposure, whichever is higher. Out of total agriculture advances, Direct Agriculture advance must be minimum 13.5% & Indirect Agriculture advance can be maximum 4.50%. However, total flow including actual indirect agriculture advance will be reckoned for computing overall PS target of 40%). 4. What do you mean by MSME? What are the criteria for classification of MSME? Ans: MSME stands for Micro, Small and Medium Enterprise. The classification of enterprises in to micro, small and medium is based on their investment in plant and machinery in manufacturing sector & investment in equipment in services sector as below: Enterprise Investment in P&M of Investment in equipments of manufacturing enterprises service sector enterprises Up to Rs.10.00 lacs Micro Enterprises Upto Rs.25 lacs > Rs25 lacs & upto Rs500 lac > Rs10 lacs & uptoRs.200 lac Small Enterprises >Rs500 lac &upto Rs1000 lac >Rs200 lac &upto Rs.500 lac Medium Enterprise

5. What is the structure of margin and subsidy under PMEGP? Ans: Categories of beneficiaries Beneficiarys contribution (% of project cost) Area / Location of unit General Category 10% Special ( including 5% SC/ST,/OBC?Minoroties/ Women/ Exservice men, physically handicapped, NER, Hill and border areas etc. 6. What are the provisioning norms for standard accounts & NPA? Ans: Guidelines for making provision in standard assets :h. Direct advances on agricultural and SME sectors at 0.25% i. Commercial Real Estate 1.0%

Rate of subsidy ( % of project cost) Rural Urban 25% 15% 35% 25%

j. Housing Loans at teaser rates-2.0% (can change to 0.40% one year after resetting to normal rate. k. All other advances - 0.40%

These provisions towards Standard Assets need not be netted from gross advances but shown separately as contingent Provisions against Standard Assets under other Liabilities and Provisions others in Schedule 5 of the Balance Sheet.
7. What is the current rate of SLR, CRR, Bank rate, Repo & Reverse Repo Rate? SLR 24%; CRR 4.75%; Bank rate 9%; Repo Rate-8.00%; Reverse Repo Rate- 7.00% 8. Write down any four information which are exempt from disclosure under Right to Information Act, 2005.

Ans: ( any four of the following)

Disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence Which has been expressly forbidden to be published by any court of law or Tribunal or the disclosure of which may constitute contempt of court Disclosure of which would cause a breach of privilege of Parliament or the State Legislature Information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information Information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information Information received in confidence from foreign Government Disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes Which would impede the process of investigation or apprehension or prosecution of offenders Cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers.

SHORT NOTES

1. Citizens Charter
Citizen Charter gives the customers right as well as their demands on service from the bank. Citizens charter covers the following. 1. Business hours to be prominently displayed at the branches. 2. Counters to remain attended to during business hours. 3. Space for customers in banking hall to be kept clean and tidy with proper seating arrangements, etc. 4. Branch premises to be kept clean and hygienic. 5. Time norms for common Banking transactions to be displa yed prominently in the Banking Hall. 6. At large branches May I Help You counters to be located for

customersconvenience. 7. Commencement of working hours of Bank staff to be 15 minutes Before commencement of Banking hours. 8. Banks name board to be clean and visible with suitable lighting arrangements. 9. Branch authoritys name and designation to be displayed on Name Plate. 10. Name, address, telephone number and fax numbers of Regional and Zonal Authorities to be displayed in Banking Hall. 11.Customers Suggestions to be invited for better customer services.

2. Adjusted Net Bank Credit(ANBC)

Reserve bank of India has stipulated that priority sector lending of domestic scheduled commercial banks should be 40% of the Adjusted Net Bank (Credit) or credit equivalent of Off Balance sheet exposure whichever is higher. For this purpose Adjusted Net Bank Credit is equal to Net Bank Credit plus investments made by Banks in non-SLR bonds in the HTM category. Investments made by banks in Recapitalisation Bonds floated by Government of India will not be taken into account for calculation of ANBC. Fresh investments made by banks in non-SLR bonds in HTM category after 31.03.2010 will be taken into account for arriving at Adjusted Net Bank Credit. Net Bank Credit denotes total advances figures reported in the fortnightly return submitted to RBI under RBI Act,1934. Outstanding NRNR and FCNR(B) deposit balances are no longer deducted from total advances for computation of Net Bank Credit.

3. Repo and Reverse Repo

Repo means Repurchase Agreement or Ready forward transaction. A holder of security sells them to an investor with an agreement to repurchase at a predetermined rate and time. It is an instrument used by RBI for injection of liquidity in the financial system. Present Repo rate is 8.00%. Reverse Repo is a mirror image of Repo. Here securities are acquired with a simultaneous commitment to resell. It is an instrument used by RBI for absorption of liquidity from the financial system. Present rate for Reverse Repo is 7.00%.

4.

Current Liabilities and Contingent Liability

Current Liabilities Liabilities to be settled in less than a year. These include trade creditors and Debts due within a year. eg. Sundry Creditors, Working Capital loan. Contingent Liability - A liability which is contingent upon the happening or not happening of a specified event, i.e. a deferred payment guarantee issued by bank gives rise to a contingent liability. If the customer on whose behalf the guarantee was issued, fails to make payment of instalment amount on due dates, the bank will be called upon to pay the amount under its guarantee obligations.

ROLE OF TECHNOLOGY IN BANK

OBJECTIVE TYPE
1. The utility service for generation of various reports under CBS is NetCAST. 2. Phishing refers to attempted fraud in internet banking through malicious e-mails. 3. Under Baroda Connect internet banking the customer can print mini statement with last 10 numbers of transactions. 4. A customer can pay the utility bills & for reserving rail tickets through Baroda Connect internet banking product of our Bank. 5. Windows XP is an operating system. 6. A word document can be processed through MS Word or Lotus Word pro. 7. Employee can apply online for request transfer and separation.(TRUE / FALSE) TRUE 8. Financial data in tabular form is spread sheet. 9. Our Banks product for utility bill payment is Baroda Easy Pay. 10. Baroda Connect internet banking of our bank uses Java platform. 11. Name four e-channel products of our Bank. A. ATM-cum-Debit Card B. Baroda Connect C. RTGS /NEFT D. Phone Banking /Mobile Banking E. Depository Services F. E-payment of taxes G. E-shoppe 12. Mobile banking service of our Bank is Baroda M-connect. DESCRIPTIVE TYPE 1. Write down the advantages of Baroda Connect to Bank & to the customer? Advantages to the Bank
i. Low cost of transaction. Following details may justify the same:

Average per transaction cost - At branch= Rs.30/- At ATM = Rs.16/- Through e-banking=Re.1/ii. Customer satisfaction and thereby retention iii. Provide competitive services in line with other Banks

iv. Save time of Bank staff, in handling across the counter queries v. Surplus time of staff can be deployed for business development Advantages to the Customer a.24X7 Online Anytime Anywhere Banking i. Summarized view of all accounts ii. Online transaction iii. Online Inquiry iv. Make Requests v. Communicate with Relationship Manager vi. Instant Alerts or Messages of Account Status vii. Saving of time and energy

viii. Online payment of utility bills & payment for railway reservation ix. Online NEFT and RTGS facility

2. Write down the difference between NEFT and RTGS?

Criteria What they are Credit to the beneficiary a/c RTGS Real Time Gross Settlement Real time basis, no waiting period, transaction one to basis No settlement cycle NEFT National Electronic Fund Transfer Credit given on batch clearance basis, Net credit/debit given to Bank, payment same day or next day There are six settlement cycles at present There is no minimum amount for remittance under NEFT Charges linked to amount of remittance

Settlement Cycle

Amount of remittance Our Bank has fixed mini. Amount of Rs.2.0 lac under RTGS Service charges Charges are per transaction payable by remitter

3. What do mean by Alternate Delivery Channels? What are its objectives? Write down five alternate delivery channels available in our Bank. Ans: Alternate Delivery channels Banking business is no longer confined to limitations of space and time. Business factors like globalization and regulations along with technological development like emergence of internet and e commerce have changed conventional style. Present day customer prefers to carry banking transactions any time, anywhere and through any device, not necessarily by visiting branch. This has led to emergence of alternate channels for delivery of banking services like ATMs, internet banking, phone banking, mobile banking, call centre. In addition to providing convenience of Anywhere Any Time banking to customers, they also offer cost reduction in terms of cost of transactions, to the banks in long run. The alternate delivery channels are:- ATMs, Internet Banking, Mobile Banking, Debit Cards, Point of Sales, Tele Banking. 4. What are the benefits of Core Banking Solution to Customer & to Bank? Benefits of CBS to Customer: a. Customer is Customer of Bank & can open a/c anywhere withsame customer ID b. Customer can operate any of his a/c from any branch or preferred delivery channel & has access to funds anytime 24 hours a day c. Quick service, hence saves time & money Benefits of CBS to Bank 2. Executives and managers can obtain information on any area of banking 3. Accounts of customer can be viewed to monitor advance accounts 4. Line managers can determine branch, product , profitability and can ensure operational steps to maximize profit

SHORT NOTES 1. Password Security

Maintenance of secrecy password is of utmost importance for users while working in computerized environment. Any compromise of password may have devastating financial loss to the Bank. To avoid leakage of password, the following precautions should be taken: a. Password should not be full / part of name, nickname, date of birth, name of child etc which can be easily guessed. b. It should be the combination of alpha, numeric and special characters and be of minimum length of -8- characters or as specified by the system. c. User should remember the password and should not write anywhere. d. It should be typed in such a way that anybody standing nearby cannot make it out. e. Password should be changed frequently and also when leakage is suspected. f. While leaving the seat, the user should log off from the system. g. Before proceeding on leave, the password should be blocked to prevent use by others

2. RAM and ROM

RAM (Random Access Memory) RAM is temporary memory and is erased when we turn off our computer. The more RAM we have, the less frequently the computer has to access instructions and data from the more slowly accessed hard disk form of storage. Memory should be distinguished from storage, or the physical medium that holds the much larger amounts of data that wont fit into RAM and may not be immediately needed there. ROM - It is an Acronym for Read only memory. It contains the bare minimum of instructions needed to start computer. These are used to keep special programs and data, such as the BIOS, that need to be in our computer all the time. ROM is built in computer memory containing data that normally can only be read, not written to. ROM contains the programming that allows our computer to be booted up or regenerated each time we turn it on. Unlike a computers RAM, the data in ROM is not lost when the computer is turn off.

Part-II -Write the acronyms of the followings

1. AP 2. APAR 3. AUM 4. ALCO 5. ANBC 6. ASCROM 7. ASBA 8. BCBS 9. BCOT 10. BCSBI 11. BSVS 12. BGPK 13. BPO 14. CRISIL 15. CIBIL 16. CCF 17. CASA 18. CBO 19. CSO 20. CRAR 21. CLORET 22. COPRA 23. CERSAI 24. DRT 25. DSCR 26. DP 27. ECGC 28. EEFC 29. ECB 30. ELIS 31. FEDAI 32. FII 33. FEMA 34. FCNR 35. HRNes 36. IFSC 37. JLG 38. LIFO 39. LIBOR 40. MICR 41. MSME 42. NAV 43. NEFT 44. NIM 45. OLTAS : Authorized Person : Annual Performance Appraisal Report : Assets Under Management : Assets Liability Committee : Adjusted Net Bank Credit : Asset Classification and Credit Monitoring (System) : Applications Supported by Blocked Amount : Basel Committee on Banking Supervision : Baroda Connect Operation Team : Banking Code Standards Board of India : Baroda Swarojgar Vikas Sansthan : Baroda Gramin Paramarsh Kendra : Business Process Outsourcing : Credit Rating Information Services of India Limited : Credit Information Bureau (I) Limited : Credit Conversion Factor : Current Account & Saving Account : City Back Office : City Sales Office : Capital to Risk weighted Assets Ratio : Closing Returns : Consumer Protection Act : Central Registry of Securitisation Asset Reconstruction and Security Interest of India : Debt Recovery Tribunal : Debt Service Coverage Ratio : Depository Participant : Export Credit Guarantee Corporation : Exchange Earners Foreign Currency ( A/c) : External commercial Borrowing : Education Loan Interest Subsidy Scheme : Foreign Exchange Dealers Association of India : Foreign Institutional Investors : Foreign Exchange Management Act : Foreign Currency Non Resident : Human Resources Network for Employee Services : Indian Financial System Code : Joint Liability Group : Last in First Out : London Inter Bank Offer Rate : Magnetic Ink Character Recognition :Micro Small and Medium Enterprise : Net Asset Value : National Electronic Fund Transfer : Net Interest Margin : On Line Tax Accounting System

46. PASAS 47. PBIDT 48. PMLA 49. PMEGP 50. RTGS 51. ROAA 52. ROE 53. RWA 54. SOL 55. SARFAESI 56. SLR 57. SJSRY 58. SCSB 59. SWIFT 60. URL 61. UIDAI 62. VOIP 63. VaR 64. YTM

: Performance Appraisal System for Award Staff : Profit Before Interest Depreciation & Tax : Prevention of Money Laundering Act : Prime Ministers Employment Generation Programme : Real Time Gross Settlement : Return on Average Assets : Return on Equity : Risk Weighted Assets : Service Outlet : Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Act) : Statutory Liquidity Ratio : Swarn Jayanti Sahari Rojgar Yojna : Self Certified Syndicated Bank : Society for Worldwide Inter Bank Financial Telecommunications. : Universal Resource Locator : Unique ID Authority of India : Voice Over Internet Protocol : Value at Risk : Yield to Maturity

RECALLED QUESTIONS EXERCISE FOR PROMOTION FROM SCALE-I TO SCALE-II-2008 Part-A ( Objective) Q.1. Current Ratio is defined as ratio of Current assets to Current Liabilities. This ratio measures liquidity of an entity. Q.2. Repayment period of Overdraft Facility under Baroda Advance Against Property is a) Up to 10 years b) Up to 5 years c) Up to 3 years Q.3. The number of SME loan factories in the Bank is 27 . Q.4. BSVS stands for Baroda Swarojgar Vikas Sansthan. Q.5. Under SARFAESI Act, Banks are required to give 30 days notice to the defaulting borrower before taking possession of the property. Q.6. A sub-standard account referred to CDR can be deemed as Standard Account. True / False Q.7. Service Charges for Baroda RTGS inward transactions is Nil. True / False Q.8. Minimum Balance in Baroda Super Saving Bank account in metro centre is Rs.25,000/-. Q.9. Life certificate is obtained by the Bank from pensioners a) Once a year b) Twice a year c) Thrice a year Q.10. The daily limit for third party fund transfer under Baroda Connect retail users is Rs.50,000/Q.11. Validity period of Banks International Debit Card is 5 years. True / False Q.12. A documentary bill is a bill accompanied by document of title to goods such as Railway Receipt / Bill of lading / Airways bill etc along with other documents like bill of exchange, certificate of origin, commercial invoice, packing list, insurance documents etc. Q.13. A derivative transaction can be undertaken by the Bank even without a primary transaction. True / False. Q.14. Banks are required to maintain 24% of their Demand & Time liabilities as SLR. Q.15. The number of overseas offices of our Bank as on 31st March 2008 is a) 71 b) 65 c) 75 Q.16. The present number of ATMs in our Bank is a) Less than 1000 b) 1001 to 1100 c) 1101 to 1200 Q.17. When Bank has taken stock of stocks as security for an advance, it gets an automatic right to sale ion the event of default. (True / False ). Proper notice has to be given before affecting sale. Q.18. Endorsement of a Document of Title to Goods constitutes a valid sale.(True / False) ( Right in the goods passes to the transferee only on delivery after endorsement)

Q.19. The three types of risk spelt out in Basel-II framework are Credit Risk, Market Risk and Operational Risk. Q.20. The performance system for award staff is PASAS (Performance Appraisal System for Award Staff) PART-II (Short Answers) Q.1. What is CIBIL ? How does it benefit the Bank? Q.2. Explain briefly what is Self Help Group? Q.3. Briefly explain what is Reverse Mortgage? Q.4. What is the definition of a sick unit under SICA? Q.5. Explain briefly the difference between Reschedulement and Rephasement. Q.6. Explain what you understand by OLTAS and EASIEST. Q.7. What are the salient features of Baroda Premium Current Account? Q.8. Briefly explain the different Alternate Delivery Channels offered by the Bank to its Customers. Q.9. Briefly explain the difference between Bill of Entry and Bill of Lading. Q.10. List out any -6- provisions of the Banking codes and Standards Board of India. Q.11. Briefl;y explain 5 in-house software packages used by our Bank. Q.12. Explain the difference between a Holder in Due Course and Holder for Value. Q.13. What is CTR and STR ? What are their reporting periods? Q.14. Briefly explain what you understand by Door Step Banking? Q.15. Explain the difference between Cash flow and Fund Flow. PART-III ( Long Type ) Q.1. What is Financial Inclusion? Enumerate the benefits available through this to the Society and to the Bank. Q.2. Explain the concept of SME Loan Factory. Enumerate its operating model and the benefits of such a set up. Q.3. Give the salient features of the Baroda Gold Coin SchemeAlso give your suggestions for marketing of the same. Q.4. NPAs are known as double-edged sword for Banks for both top and bottom line. What are the methods for containing NPAs? Q.5. Explain the various types of Guarantees normally issued by the Bank. Discuss in particular the precautions to be taken for issuance of Bank guarantees.

RECALLED QUESTIONS OF WRITTEN TEST FOR PROMOTION FROM SCALE-II TO SCALE-III: 2008 (With suggested answers for Part-A)
PART-A Q.1. The periodicity of credit rating for accounts having limit more than Rs.1.0 Crore is a) 3 months b) 6 months c) 1 year Ans: b & c Q.2. The maximum TOD permitted by RBI in NRE A/cs is Rs.50,000/- ( Loan amount is Rs. 1 cr) Q.3. The mandatory target of agriculture advance in Public Sector Banks is 18% of ANBC (Adjusted Net Bank Credit) or credit equivalent of Off-Balance Sheet Exposure, whichever is higher. Q.4. The maximum number of members required for formation of Self Help Groups is 20 for un-registered groups and more than 20 for registered SHGs. Q.5. The maximum income criteria for DRI loan in Rural area is Rs.18,000/- per annum. Q.6. The assets which are not covered under SARFAESI Act are a) Pledge of moveable and lien on any goods or security b) Aircraft c) Vessel d) Assets under Hire purchase / lease e) Any security interest not exceeding Rs.1.0 lac f) Agricultural land g) Loan assets where the outstanding is 20% or less of the total liability Q.7. The cut-off amount for reference to CDR is Rs.10.0 crore. Q.8. The minimum amount of transaction for Baroda RTGS is Rs.2,00,000/Q.9. In Saving Bank account, interest is currently payable in the months of May & November for CBS branches and janary & July for non-CBS branches. Q.10. Banks utility bill payment product is known as Baroda Easy Pay. Q.11. TDS amount has to be deposited with the Government within -7- days. Q.12. Rapidfunds2India is a remittance product which offers online credit to Beneficiaries account from any overseas branch. True / False ( The facility is available only in countries where the scheme is launched and is on CBS platform) Q.13. The periodicity of submission of R-Return to RBI is Fortnightly. Q.14. RBI injects liquidity through Repo (Liquidity adjustment facility) Q.15. 24 hours human Banking is currently available at Nine branches in India. Q.16. Inter-SOL transaction means transaction between two branches on CBS platform. Q.17. Upto what extent an award can be given by Banking Ombudsman? Ans: Actual amount of loss or Rs.ten lacs whichever is less. Q.18. A Companys powers to borrow is restricted by Section 293(1)(D) of the Companies Act.

Q.19. ALMAN is used to evaluate Liquidity Risk. Q.20. Staff members are eligible for Baroda Home Improvement Loan. True / False

PART B(Short Answers)

Q.1. Explain the salient features of Baroda Kisan Credit Card. Q.2. Briefly explain the process of online submission of application for Education loan. Q.3. Briefly explain the difference between Working Capital and Net Working Capital. Q4. hat are the distinguishing features between a wholesale and an SME proposal. Q.5. Briefly explain Securitization Q.6. briefly explain what Right of Recompense is. Q7. Explain the salient features of No Frills Account Q.8. Briefly explain between Debit Card and Credit Card. Q.9. What is Bancassurance and what are its advantages? Q.10. Briefly explain the rules for granting Packing Credit to an Exporter. Q.11. Briefly explain the features of a back-to-back Letter of Credit Q.12. Briefly explain the effects of using as a tool to control inflation. Q.13. briefly explain the term assignment and set off Q14. Briefly explain what do you understand by Liquidity Risk and Interest Rate Risk Q.15. Briefly explain the benefits of Core Banking Solution to banks customers.

PART C (Long type)

Q.1. suggest strategies for boosting rural business portfolios of branches during 2008-09 and action plan. Q.2. Explain in detail the various third party products of our Bank. Q.3. What are the guidelines for making provision in standard and restructured accounts? Q.4. Describe the customer centric initiatives taken by our Bank during last -3- years. Q.5. What are the guidelines of KYC norms? Elaborate the same in the light of Anti Money Laundering.

RECALLED QUESTIONS OF WRITTEN TEST FOR PROMOTION EXERCISE FROM SCALE-III TO IV- 30.08.2009 PART-I Answer any two questions 1. Customer is the only profit centre, all else are overheads. Do you agree with the statement? In the context of corporate motto for 2009-10 write down the strategies for maximizing for growth and profit. (For answer refer to Business Policy Guidelines 2009-10 page-5 1st paragraph & points a to i) 2. What is Risk Management? What are the procedures of Credit Risk Management as per Basel-II? 3. What are the e-channels? Write down if the e-channels will affect the profitability of our Bank. 4. What is Financial Inclusion? What are its benefit to the society and Bank? 5. Write down the Take Over Norms for loans and advances followed in our Bank. ( For answer refer to Banks Domestic Loan Polcy) PART-II Marks: 40 Marks: 40

Answer any five questions 1. Difference between NEFT and RTGS 2. Functions of CBO and RBO 3. Write short note on City Sales Office 4. What is BGPK and what are its objectives? 5. What is EPMS and how it is better than EPRS? 6. Write short note on financing Agri-Clinic and Agri-Business Centres. 7. Write short notes on Sankalp and Sahakar.

PART-III

Marks: 20

Answer all the questions ( Fill up the gaps or Write True / False) 1. Present BPLR of our Bank is 14.75%. 2. Number of overseas branches / offices of our Bank is 85 3. Present Repo rate is 8.00% and Reverse Repo rate is 7.00%. 4. Minimum and maximum limit for Baroda Traders Loan is Rs.25,000/- & Rs.200 lac. 5. Total business of our Bank as on 31-03-2009 is Rs.________ and net profit is Rs_________. 6. Maximum loan permitted against FCNR and NRE deposits Rs.1 Crore. 7. Net profit figure of our Bank as on 30-06-2009 is Rs.685.38 Cr. 8. Baroda Connect is deactivated if not used for 90 days. 9. Gen-Next Life Style is a Loan combo pack product and is meant for Gen-Next Customers.

10. A clerk can avail -2-days Casual Leave and -2- days Privilege leave continuously. True / False. 11. Fixed cost of a unit is Rs.40,000/-. The unit sale price of the product is Rs16/- and variable cost is Rs.12/-. N. of units of the product to be sold to break even. Ans:10,000 units 12. Loan can be sanctioned against EEFC account. True / False. 13. Core elements of Navanirmaan Baroda Next are business process re-engineering (BPR) and organizational restructuring. 14. Validity period of Gold Card Scheme for exporters is -3- years and will be renewed for a further period of three years unless any adverse /irregularities are noticed subject to annual review of the account. 15. Limit for inter-SOL cash transactions is Rs.50,000/- (to the account holder only). 16. CRAR of our Bank as on 31-03-2009 is ____% as per Basel-I and ____% as per BaselII. 17. Total Business Target of our Bank for 31-03-2010 is Rs.4,18,000 Cr for (global target) & Rs.3,23,000 Cr for domestic operations 18. Rahul Dravid continues as our Brand Ambassador. True / False N.B.: Two more questions could not be recalled by the candidates.