Bank of Baroda, BFSI News, ET BFSI

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Bank of Baroda has been the first of the nationalised banks to have completed the amalgamation of two smaller banks with itself. The bank’s experiences in the merger have helped other consolidating public sector banks to draw their strategy. In an interview with TOI, MD & CEO Sanjiv Chadha speaks of the road ahead…

How has the second quarter been in terms of business?

There have been challenges in credit growth — the investment cycle in particular — for the last few years. Even today capacity utilisation is about 70% and it’s only when it moves up to 80% that you get a serious round of investments. We are seeing some investment in brownfield projects in companies that have gone through an ownership change. We are seeing large capacities in areas like renewable energy. We also have a large investment in electric vehicles. We are seeing progress in going beyond green shoots. For this to gather momentum and become a full-fledged revival of the investment cycle, we might be a few months away.

On the asset quality side, do you see more clean-up happening?

There has been a broad-based improvement in the corporate credit cycle, which we have seen for the last few quarters. Corporate slippage has had come down dramatically compared to what was the case in the previous quarters. Challenges in retail and MSME have got accentuated during the pandemic. Overall, in terms of credit quality for banks, I think we should see an improvement notwithstanding the challenges that we saw with the second wave.

When do you expect RBI to start normalising its monetary policy?

I think there are two pieces to the monetary policy stimulus. One has been in terms of rates and the other has been in terms of liquidity. So, you would expect that the liquidity piece will start getting normalised first. Change in the rate cycle is a few quarters ahead. The distortions in risk pricing due to liquidity surplus should get sorted and we should start seeing credit risk that way it would be in normal times.

You have launched a new digital platform BoB world. What does this mean for customers?

Covid has brought a broad and deep transformation and nearly twice the number of customers visiting the branch, now use the app. So rather than being an adjunct to the bank, it will be the bank and the other parts of the bank will become an adjunct. The thought was to enable everything that can be done in the branch within the app. Therefore, we got down to see what should be the design, branding and positioning of the app. BoB world will be the primary interface at the centre of the bank.

What is the effort that has gone into the back-end?

The bank has been making investments and was identified as the best technology bank of 2021 by the IBA. The integration (of Dena and Vijaya Bank) on a common platform after the merger gave us a robust base to build this strategy.

How scalable is the core banking platform for digital?

Today we 13 million customers using bob World which is a very robust platform and scalable. For the future cloud computing will be a very important element as this will help scale up not only in terms of users but also multiple fintech partners on the platform.

Will bob World be a super app like SBI’s Yono and are you integrating the subsidiaries?

The way the app is being positioned that you can save, borrow, invest and pay. All four capabilities are in the app and are being scaled up every day. In addition to the regular transaction, we are having things like airline ticket booking and comparison shopping across merchants to bring the cheapest proposition to the customers. The other important thing is the benefit programme which depends on the category you choose in terms of the balance you would like to maintain.

How do you as a 100-year bank plan to attract millennials?

The marketing campaign is squarely aimed at millennials. The design is something they will find appealing. They can open the account entirely online through video KYC and the account will have benefits including Amzon Prime.

Will you be part of the account aggregator platform?

It is a conversation that we are still having. But having a platform of this sort gives you a very powerful lever to make sure you can profit from certain engagements.

Will BoB World be restricted to retail?

We’re starting off with retail with about 95% of all retail services now available on mobile. The logical next step is to fashion it for other segments.

On the corporate side are there any gaps in digital banking that you will fill?

The primary banking channel for banks is mobile. Not too far ahead the mobile phone is likely to become an important piece particularly for MSME and that is what we will target next in Bob World.

How do you plan to reach unbanked areas and push the financial inclusion agenda?

It’s a matter of great pride for us that while we have a 6-7% share in banking. Our share in Jan Dhan Yojana is 15%. So one piece of service delivery will be digital but that may not be relevant to people who are on the other side of the digital divide. We have a very aggressive programme for increasing our business correspondent and increase their number from two for every branch to five BCs for every bank branch that we have. We want to double the BC outlets to 50,000.

Would you be hiring people?

The amalgamation has brought about efficiencies, but we have not shed people. Redeployment will help in filling marketing and other vacancies. We will continue to recruit specialists. For instance, we are now recruiting wealth relationship managers. We may also recruit for specific skills like digital banking. But there may not be much of an increase in the headcount.



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BLS International becomes National Business Correspondent of SBI

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BLS International Services Ltd has been selected as National Business Correspondent for State Bank of India (SBI) to deliver banking services in urban, semi-urban and rural areas across the country.

It would deliver last mile banking services to support the financial inclusion mission of Indian government.

BLS will soon initiate banking services like savings bank deposits, fixed deposit, recurring deposit, remittances, micro pension, micro insurance, account open with e-KYC, AEPS mini statement, passbook printing for SBI account holders spread across India.

Commenting on this development, Shikhar Aggarwal, Joint Managing Director, BLS International, said, “This partnership with State Bank of India will support government’s initiative to deliver last mile banking services to the tier2 & tier3 cities. It will strengthen our reach in the southern, eastern and western parts of India while we already have an extensive network in northern India. This is a testimony to our commitment to serve the unserved and underserved population of India.”

Bank of Baroda

Meanwhile, the subsidiary of BLS International, Starfin India Pvt. Ltd. has won a contract from Bank of Baroda to support the financial inclusion mission of Government.

Under the contract, the company will be the official National Business Correspondent (BC) to deliver last mile banking services in rural and urban areas.

Effective immediately, Starfin will start basic banking services like enrolment of customers, debit cards, balance enquiry, statement of accounts, pass book printing, money deposit, and bills/utilities payment services to account holders across India.

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PayPoint ties up with BoB to expand bank’s network

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PayPoint India has entered into a partnership with Bank of Baroda, enabling the bank to further expand its network by utilising PayPoint’s customer service points to a reach out to a larger pool of customers and achieve a bigger geographical spread.

This move is part of BoB’s new initiative “BOB NOWW—New Operating model and Ways of Working”, aimed at rightsizing its branch network by increasing customer touch points through digital formats and business correspondent (BC) network. PayPoint will be BoB’s BC.

PayPoint, in a statement, said it will offer several services and open savings bank/ PMJDY accounts and provide withdrawal, deposit, and money transfer services at its exclusive BC customer service points (CSPs) for BoB.

The CSPs will also offer other services such as passbook printing, the opening of recurring deposit and fixed deposit accounts, loan repayments, AePS and micro-ATM withdrawals for the account holders of other banks, and social security schemes of the government.

Ketan Doshi, Managing Director of PayPoint India, said, this partnership will take banking to the doorstep of customers in the hitherto unbanked hinterland and help them make informed choices and avail of utility services at their convenience.

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Bank of Baroda announces festive offers on retail loans, BFSI News, ET BFSI

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State-owned Bank of Baroda on Thursday rolled out a slew of festive offers for its retail borrowers. The lender is offering a waiver of 0.25 per cent in the existing applicable rates for Baroda Home Loans and Baroda Car Loans, according to a release.

The bank’s home loan rates start at 6.75 per cent and car loan rates at 7 per cent.

It has also waived off processing fee on home loans.

“With the introduction of these retail loan offers for this festive season, we intend to bring festive cheer among our existing loyal customers and also offer new to bank customers an attractive proposition for availing home loans and car loans,” the bank’s general manager (mortgages & other retail assets) H T Solanki said.

Customers can apply for home or car loans by using the lender’s mobile banking application or its website for instant sanction.

Earlier in the day, State Bank of India (SBI) announced various festive offers for prospective home loan customers, including credit score-linked home loans starting at 6.70 per cent, irrespective of the loan amount.



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Bank of Baroda launches one-stop digital platform ‘bob World’, BFSI News, ET BFSI

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State-owned Bank of Baroda on Wednesday announced the launch of its digital banking platform ‘bob World‘, aimed at providing all banking services under one roof. The lender aims to provide an all-inclusive and seamless virtual banking experience, encompassing all digital banking services under one roof for the convenience of customers, the bank said in a release.

‘bob World’ will offer a wide gamut of banking products and services, to be rolled out in phases, under four key pillars — Save, Invest, Borrow and Shop — the lender said.

The pilot of bob World began on August 23, and the application (app) is already being used by more than 50 lakh users, it added.

Over 220 services will be converged into one single app, covering nearly 95 per cent of all retail banking services, which can be accessed by customers domestically and globally, Bank of Baroda said.

“With an ultra-modern look and feel, the app aims to provide an intuitive experience to the customers and is carefully crafted to balance the needs of the millennial users with that of the more experienced customers.”

The bank said ‘bob World’ offers digital account opening in 10 minutes with instant virtual debit card issuance, online loan application with instantaneous disbursal for selected loan products.

It has also integrated e-commerce to provide a wholesome and rewarding experience of banking and beyond, under one roof to the customers.

“The new corporate sub-brand for digital is testimony to our commitment to serve the customers across the world…With ‘bob World’, we offer all our digital offerings under one umbrella so that the customer is provided with all digital services under one roof with a consistent experience,” Sanjiv Chadha, Managing Director & CEO, Bank of Baroda said.



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BoB launches revamped mobile banking app ‘bob World’

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Bank of Baroda (BoB) has launched its revamped mobile banking application ‘bob World’ to provide all-inclusive virtual banking experience, encompassing all its digital banking services under one roof, for its customers.

BoB’s mobile banking application was earlier known as M-Connect Plus.

This digital banking platform will be rolled out in phases, under its four key pillars of “save, invest, borrow, shop”, the public sector bank said in a statement.

The app will offer a wide repertoire of over 220 services converged into a single app, covering nearly 95 per cent of all retail banking service offerings, which can be accessed by customers, both, domestically and globally, it added.

Sanjiv Chadha, Managing Director & CEO, BoB, said, “The new corporate sub-brand for digital is testimony to our commitment to serve the customers across the world, digitally and 24*7 in a seamless manner.

“…Embedded finance is a big theme across the ‘bob World’ application as is the enriching loyalty programme, which underlies all digital interactions with the bank”.

The Bank said since the pilot launch of ‘bob World’ on August 23, 2021, the app is already being used by more than 50 lakh users.

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Shanti Lal Jain assumes charge as MD & CEO of Indian Bank, BFSI News, ET BFSI

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Shanti Lal Jain assumed charge as Managing Director and Chief Executive Officer of Indian Bank on 1st September 2021.

Earlier Bank Of Baroda had announced that Shanti Lal Jain would cease to be its executive director from September 1, due to his appointment as the MD & CEO of Indian Bank for a tenure of 3 years.

Jain’s appointment is extendable based on his performance by upto two years, or till attaining the age of superannuation (i.e.January 31, 2024), the order said.

With more than 25 years of experience in banking, Jain possesses rich experience in critical portfolios. He joined Allahabad Bank in 1993 in the Middle Management cadre. As a General Manager, he has served as the Chief Financial Officer, Chief Risk Officer and headed the IT department of the Bank.

Later, he led the Mumbai team as Field General Manager (West) and was responsible for Maharashtra, Gujarat and Goa Operations having business of around Rs 50000 Crores. Prior to joining Allahabad Bank, he worked in various Industries for about 6 years.

Jain holds a Postgraduate Degree in Commerce, with Professional Qualification of Chartered Accountant, Company Secretary and CAIIB.



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BOB mobile app has a 95% bank branch in it, BFSI News, ET BFSI

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Bank of Baroda through its BOB World application is offering a host of benefits and services such as Times Prime subscription to people who are stuck at home due to the pandemic.

“Our customers spending more time at home. So we don’t really want to be offering them mixers and grinders. So we thought about what it is that they would like to spend their time on and I would like the time on probably 42 platforms,” Akhil Handa, CDO, Bank of Baroda, said at the ETBFSI Summit.

“So we gave them a range of odd benefits. Without the food tech benefits, in fact, we are offering the Times Prime subscription to customers,” he said.

Under one platform

Bank of Baroda has brought 95% of services that the customer can do in a bank branch under its BOB world application. “This application really brings the world of banking and beyond to the customer. And of course, goes without saying Bank of Baroda satisfies us there is always a Bank of Baroda branch that is working at any given point in time across the board, Handa said.

He said platform banking is the one thing that the bank putting a lot of energy into. “This is what we’ve been working on for the last couple of years of work is one that you see now. And we are rolling out a lot of new propositions across the different product segments, he said.

Platform vertical

Handa said in the organisation, the bank now has three verticals, and one of them is dedicated to platforms. “So when they were talking about globally, some of the banks have designated a chief platform officer, I think we are on the same track as well as ahead of platforms. On the asset side, we also have platforms of deposits and payments, we are no different,” he added.

Stating that the emergence of platform banking is rooted in the whole shift of commerce from physical to electronic and the rise of e-commerce, he said the pandemic has really pushed the e-commerce shift in terms of channel metrics by about 10-15 years in some geographies.



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Balance transfers lead home loan growth of 26% in H1 as rates hit rock bottom, BFSI News, ET BFSI

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As the economic situation recovers from the pandemic lows last year and interest rates are at all-time low levels, demand for home loans in India rose 26 per cent during the first half of 2021, compared to the preceding six months.

However, there is a catch. About 42% rise in borrowers opting for balance transfers in the first half of the calendar 2021 as compared to the preceding six months of

July-December.

According to a Home Loans Consumer Study, the balance transfer requests have increased because of a dip in interest rates.

“The soaring demand has been triggered largely by the fact that the Reserve Bank of India (RBI) has kept the repo rate unchanged at a constant 4%, allowing many banks to offer interest rates of less than 7% for home loans. This has also been a key driver in augmenting the demand for home

buying,” the report said.

Low rates

Borrowers opt for a balance transfer when they feel that they can bring down their interest rates by switching to a new contract. An increase in the number of balance transfer requests also reflects a growing level of awareness. “Almost 50% of the borrowers opt for tenures less than 15 years. With factors like low interest rates, stable prices and attractive payment plans, we are hopeful that the pent-up demand would soon translate into sales,” said Magicbricks CEO Sudhir Pai.

In terms of the demand for balance transfers, New Delhi, Bengaluru, Mumbai, Pune and Hyderabad were the top five tier-1 cities. Among tier-2 cities, Ghaziabad, Noida, and Visakhapatnam were the top five.

Other loans grow too

In addition to growth in loans for new home purchases and balance transfers, loans against property has also seen a growth of 20% because of the low rates.

For loans against property, Bengaluru, Hyderabad, Chennai, New Delhi and Pune saw the most demand across tier-1 cities, and Gurgaon, Jamshedpur, Patna, Faridabad and

Lucknow for tier-2 cities. Another finding from the report is Bank of Baroda, Indian Bank, SBI, HDFC and ICICI Bank are the most searched lenders on Magicbricks’ platform.



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Shanti Lal Jain appointed MD and CEO of Indian Bank

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Shanti Lal Jain has been appointed Managing Director and Chief Executive Officer of Indian Bank for three years, a Personnel Ministry order issued on Thursday said. Jain is currently Executive Director (ED), Bank of Baroda.

The Appointments Committee of the Cabinet (ACC) has approved the proposal of the Department of Financial Services for appointment of Jain as Managing Director & Chief Executive Officer in lndian Bank for a period of three years with effect from the date of assumption of office on or after September 1, 2021, it said.

Jain’s appointment is extendable based on his performance by upto two years, or till attaining the age of superannuation (i.e.January 31, 2024), the order said.

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