Bank of baroda

Statutes Governing Foreign Exchange and Cross-Border Business Transactions
The foreign exchange and cross border transactions undertaken by banks are subject to the provisions of the Foreign
Exchange Management Act. All branches should monitor all non-resident accounts to prevent money laundering.
Restriction on Transfer of Shares
For public sector banks the RBI monitors the ceilings on FII/NRI/PIO investments on a daily basis. For effective monitoring
the RBI has fixed cut off points lower than the actual ceilings which is 18% for public sector banks. Once the aggregate
net purchase of equity shares reaches the cut off points further acquisition of equity shares by FIIs/NRIs/PIOs requires
approval of RBI. However, the Non-Resident Shareholding cannot exceed 20% of the paid up capital of the bank in terms
of Section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
In addition, the provisions of the SEBI Takeover Regulations apply and must be complied with.
Prohibited Business
The Banking Regulation Act specifies the business activities in which a bank may engage. Banks are prohibited from
engaging in business activities other than the specified activities. For further details, please see “History and Certain
Corporate Matters – Main Objects of the Bank” on page 116 of this Red Herring Prospectus.
Reserve Fund
Any bank incorporated in India is required to create a reserve fund to which it must transfer not less than 25.0% of the
profits of each year before dividends. If there is an appropriation from this account, the bank is required to report the

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BANK OF BARODA
same to the RBI within 21 days, explaining the circumstances leading to such appropriation. The Government of India
may, on the recommendation of the RBI, exempt a bank from the requirements relating to reserve fund.