Bank of baroda

Operational Risk
We face operational risk on account of inadequate or failed internal process, people and systems or external events. We
have established systems and procedures, which are available up to the branch level in the form of books of Instructions
and circulars covering different lines of activities of the Bank. To monitor operational risk on an on-going basis, we have
established an Operational Risk Management Committee (ORMC) under the overall supervision of Sub-Committee of
Board on ALM and Risk Management. ORMC meets on a regular basis to review matters relating to operational risk.
We have an independent department that monitors operational risk by reviewing whether our laid down systems and
procedures are duly complied with.
We collect and analyze data on operational risk on different parameters on a half yearly basis and, where necessary,
corrective steps are taken.
Basel II Requirements
RBI is adopting the requirements of Basel II, the inteernaational capital adequacy framework for banks. These requirements
will affect our management of all threee principal categories of risk. In particular, Basel II will introduce minimum capital
requirements for market risk andoperaational rissk in addition to the previous requirement of minimum capital only for
credit risks. RBI has also indicated the phased implementation of Basel II norms.
We have performed a comprehensive self-assessment exercise spanning all the risk areas and have evolved a roadmap
to move towards implementation of Basel II, as per the RBI directions. Implementation of standardized method for market
risk as per Basel II norms will be implemented as directed by RBI by March 31, 2006. Credit risk and operational risk as
per Basel II norms will be implemented as directed by RBI by March 31, 2007.
Human Resources
As at September 30, 2005, we had 39,170 employees. Following is a table of our total number of employees as of the
dates indicated: