“The work environment went through a sea change during the pandemic. Employees were able to seamlessly work from home and office. The Bank believes that “Work from Anywhere” is the new norm and will offer a better work-life balance to employees and boost productivity in the long run,” bank MD and CEO Sanjiv Chadha said.
“The bank is working on an operating model for remote working options for certain roles and hybrid employment formats which will offer greater flexibility to employees,” he added.
In a note to shareholders, Chairman Hasmukh Adhia stated that during the challenging times of the pandemic, “banking services have been operational and have played a key role in implementing various economic measures announced by Government of India and RBI”.
“Bank of Baroda was instrumental in offering moratorium and restructuring to customers impacted by the pandemic. The Bank also extended credit lines to customers under sovereign credit linked guarantee. Bank also transferred funds to beneficiaries identified by Government of India,” he added.
Emphasising on the growing popularity of digitally banking services, Adhia said Bank of Baroda has greatly digitised its operations, with specific focus on mobile banking.
A large proportion of deposit accounts opened by the bank branches are in paperless format, he said. Given the ubiquity of mobile handset and mobile application, mobile banking is now the centerpiece of offering digital solutions for which the bank has revamped its mobile applications to offer more services, Adhia said.
“The bank has now extended its digital offering on the asset side as well by building a digital lending platform wherein end-to-end customer journey from sourcing to sanction to disbursement is being completely digitised,” Adhia said.
The bank of the future will have the right mix of physical and digital presence, Adhia said. Keeping this in mind, Bank of Baroda has introduced ‘BOB NOWW-New Operating model and Ways of Working’, to rightsize its branch network by increasing customer touch points through digital formats and business correspondent network, the Chairman added.
“Customer interface for lending will be more digital. The focus is on capturing the entire corporate value chain by cross-selling banking services such as cash management solution and supply chain finance. For the employees, the work environment will be more flexible with option to work from anywhere for select roles,” he said.
On future prospects, Adhia said that the bank is well placed to grow and participate in the initiatives announced by the government. “We have raised capital and maintained a high Provision Coverage Ratio of 81.80 per cent as of March 31, 2021. We are transforming our processes, products and services to create an agile organisation where employees will have hybrid working formats with select roles having the option to work from anywhere.”
CEO Sanjiv Chadha mentioned in the annual report that Bank of Baroda’s asset quality has improved despite the economic impact of the pandemic. Gross nonperforming ratio of the Bank has declined to 8.87 per cent as of March 31, 2021, from 9.40 per cent as of March 31, 2020. Meanwhile, its domestic CASA deposits increased by 16.48 per cent during FY 2021, within which, current account deposits increased by 24.09 per cent and savings deposits by 15.06 per cent.
On transforming the public sector bank to meet the future challenges, Chadha said that the lender is working the organisation-wide transformation initiative BOB-NOWW.
“At its core, the aim is to better serve every customer with tailored offerings and to enhance customer centricity. Employees will get remote working options for certain roles and hybrid employment formats. The initiatives being undertaken aim to help the Bank optimise costs and unlock growth potential by creating value for all stakeholders,” Chadha said.
Chadha said that Bank of Baroda’s mobile application will be the primary interface with customers.
“Apart from a few services which are best delivered at a branch, we believe customers will increasingly be using mobile phones for meeting banking requirements. Bank has revamped its mobile application and added services so that customers don’t have to visit the branch unless essential,” he said.
The importance of digital lending has emerged as a clear trend during pandemic, he said.
“The bank is digitising customer journeys in the lending business. The endeavour is end-to-end digitisation of the loan process in retail and MSME segments from sourcing to sanction to disbursement. Small ticket personal loans have already been digitised and the other segments will be progressively moved to this platform,” Chadha said.
Bank of Baroda posted a net profit of ₹829 crore for 2020-21 as against ₹546 crore in 2019-20. The bank also moved to a lower tax rate structure. Adjusting for the one-time impact of deferred tax asset (DTA), the bank’s profit after tax would have been at ₹4,143 crore in 2020-21, BOB said.
The lender said it has completed the integration with the erstwhile Dena and Vijaya Bank. The bank has merged or rationalised 1,310 branches and 1,135 ATMs during the year, it said. Also, it increased the business correspondent (BC) network by 5,200 to 23,320 as of March 31, 2021.
Bank of Baroda said it plans to have 50,000 touch points, including BCs and new formats such as mini branches and service outlets In the next two years.
“These touch points would be newage, compact and digital to offer seamless customer service across the country. This will help the bank in strengthening its branch network in geographies where it is under-penetrated,” the bank said in the annual report.
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