Bank of baroda

Correspondent Banking
Our extensive worldwide network of branches are able to offer correspondent banking services to other Indian banks as
well as banks from other countries. In particular, our New York, Brussels and London branches are equipped with the
latest technology and trained staff to provide services in Nostro accounts in United States Dollars, Euros and United
Kingdom Pounds Sterling respectively. The main services provided through our correspondent banking network include
collection of bills, advising and confirming letters of credit issued by other banks, discounting of bills drawn under letters
of credits, maintenance of foreign currency accounts, and handling remittances on behalf of other banks.
Trade Finance
We are very active in financing post sales international trade bills through our vast network of overseas branches and
Subsidiaries. We are able to discount at competitive rates bills under letters of credit issued by most Indian banks as well
as other international banks.
Overseas Expansion
We intend to grow our operations through the following expansion overseas:
We have received RBI approval for the opening of additional offices in, Canada, New Zealand, Sri Lanka, Trinidad
and Tobago and Isle of Man;
We are awaiting host country approval for the opening of a branch in Houston, USA, Bangladesh, Maldives and
Hong Kong and an OBU in Singapore; and
We have undertaken feasibility studies for the opening of an office in Australia.
Treasury
Domestic Operations
We have established dedicated desks at the specialised integrated treasury branch, headed by professionals with significant
experience to undertake various types of treasury activities for us in different financial markets. Apart from activities
relating to management of funds and liquidity, our domestic treasury operations also handles commercial paper, certificate
of deposits, government securities, treasury bills, bonds and debentures, equities and various other derivatives along with
other financial instruments.
Under RBI’s statutory liquidity ratio (“SLR”) requirement, we are required to maintain an amount equal to at least 25.0%
of our demand and time liabilities in approved securities, such as Government of India securities, state government
securities and other approved securities. As of September 30, 2005, 36.21% of our net demand and time liabilities
consisted of Government and other approved securities. India has an active and mature bond market which offers trading
opportunities in these securities. Under RBI’s cash reserve ratio requirements, we are required to maintain a minimum of
5% of our net demand and time liabilities in a current account with RBI. As of September 30 2005, 3.84% of our net
demand and time liabilities were maintained in current account with RBI. RBI pays no interest on these cash reserves up
to 3.0% of the net demand and time liabilities and pays interest at 3.5% per annum on the remaining eligible balance.
Treasury is responsible for maintaining these ratios for the bank. For further discussion of these regulatory requirements,
see the section titled “Regulations and Policies–Legal Reserve Requirements” on page 108 of this Red Herring Prospectus.
Our treasury is the focal point for the management of market risk for the bank. Our treasury undertakes liquidity management
by seeking to maintain an optimum level of liquidity while complying with the cash reserve and statutory liquidity ratios.
We maintain the statutory liquidity ratio through a portfolio of Government of India securities that we actively manage to
optimize the yield and benefit from price movements.

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