The Hindu Business Line : BoB: A journey spanning 100 years

Set up by the visionary Maharaja Sir Sayajirao Gaekwad – III of Baroda in the year 1908, Bank of Baroda, now one of India’s leading public sector Banks, has entered its 100th year of service. From humble beginning from a small building in Baroda, the bank has now emerged as a leading Indian financial powerhouse with a network of over 2,800 branches in India and 65 branches/offices in 23 countries across all continents.

Post-Nationalisation

The bank has stood the test of times all through – the two World Wars, post-independence tribulations, challenges of nationalised banking era, the new prudential regime and competitive banking era from the early 90s and, most recently, the compulsions of 21st century banking. Among the first batch of nationalised banks in 1969, the bank demonstrated its resilience, financial acumen and progressive outlook through its diversified lines of business and by refashioning its bouquet of products and services to suit the new markets and new customer groups.

In tune with the times and in response to the emerging market requirements, the bank took a number of steps dedicated to specific customer segments like opening of specialised branches, etc., besides being one of the earliest public sector banks to diversify its business through setting up of various Subsidiaries like BOBCARDS Ltd., BOB Capital Markets Ltd., BOB Housing Finance Ltd., BOB Asset Management Company Ltd. The bank gave social banking a new dimension, with its Multi-Service Agency (MSA) model for urban micro-credit and Gram Vikas Kendras (GVK) for integrated rural development.

Bank of Baroda was one of the earliest nationalized banks to tap the capital market in the mid-90s to shore up its capital base to be in alignment with Basel-I norms and also the first nationalised bank to return part of the capital to Government of India.

Global Footprints

It set up its first overseas venture in 1953 in Kenya, followed by Uganda and UK and many other countries thereafter. Its aggressive overseas foray took a new direction when it set up branch operations in UAE in mid-1970s, followed by branch offices in the developed markets – Belgium & United States of America (New York). The Bank continued its international expansion drive, seizing the opportunities as they emerged. A significant aspect is that the Bank is present in all the leading financial centres of the world like London, Brussels, New York, Bahamas, Dubai, Hong Kong & Singapore. The Bank’s international operations now account for 20% of the Bank’s global business and around one-third of its net profits (as at 31st March’2007). Asset quality of International Operations continues to be best –in- class, with gross NPA at less than 1% and Net NPA at Zero level. As part of its ambitious plan for expansion abroad, the bank is entering new geographies and setting up 10 overseas branches/offices during its centenary year (2007-08).

The author is Advisor, Bank of Baroda