Bank of baroda

Restrictions on Investments in a Single Company
No bank may hold shares in any company, whether as owner or as pledge or mortgagee, exceeding the lower of 30.0%
of the paid up share capital of that company and 30.0% of its own paid up share capital and reserves, whichever is less,
except as statutorily provided.
Limit on Transactions through Individual Brokers
Guidelines issued by the RBI require banks to empanel brokers for transactions in securities. These guidelines also
require that a disproportionate part of the bank’s business should not be transacted only through one broker or a few
brokers. The RBI specifies that not more than 5.0% of the total transactions in securities through empanelled brokers can
be transacted through one broker. If for any reason this limit is breached, the RBI has stipulated that the board of
directors of the bank concerned should be informed on a half-yearly basis of such occurrences.
Prohibition on Short-Selling
RBI does not permit short selling of securities by banks.
Regulations Relating to Deposits
The RBI has permitted banks to independently determine rates of interest offered on term deposits. Primary (urban) co-
operative banks are permitted to pay interest on current account deposits at rates not exceeding 0.5% per annum.
Further, banks may only pay interest of 3.5% per annum on savings deposits. In respect of savings and time deposits
accepted from employees, we are permitted by the RBI to pay an additional interest of 1.0% over the interest payable on
deposits from the public.
Domestic time deposits have a minimum maturity of seven days (seven days in respect of deposits over Rs. 1.5 million)
and a maximum maturity of 10 years. Time deposits from NRIs denominated in foreign currency have a minimum maturity
of one year and a maximum maturity of three years.
The RBI has permitted banks the flexibility to offer varying rates of interests on domestic deposits of the same maturity
subject to the following conditions:
Time deposits are of Rs. 1.5 million and above; and
Interest on deposits is paid in accordance with the schedule of interest rates disclosed in advance by the bank and
not pursuant to negotiation between the depositor and the bank.
The RBI has stipulated that the interest rate on NRE deposits accepted before July 17, 2003 should not exceed 250
basis points and interest rates on those NRE deposits accepted before September 15, 2003 should not exceed 100 basis
points over the U.S. dollar LIBOR/ swap rates for the corresponding maturity. Further, NRE deposits contracted effective
close of business in India on October 18, 2003 should not exceed 25 basis points over the U.S. dollar LIBOR/ swap rates
for the corresponding maturity, and those contracted effective close of business in India on April 17, 2004 should not
exceed the LIBOR/ swap rates for US dollar of corresponding maturity.