BCC:BR:105/ BCC:BR:105/278 CIRCULAR TO ALL BRANCHES AND OFFICES IN INDIA

05.07.2013 .07.2013

SUB FILE: ADVADV- 2 ISSUED BY RETAIL BANKING DEPARTMENT

Dear Sir, Re: Takeover of Home Loans Time and again, Bank has been issuing various communications for sensitizing the staff members on compliance of KYC, Product norms, guidelines on takeover of Retail Loans and strict adherence of preventive vigilance measures, while processing Retail Loans. As you are aware, Bank has reduced interest rate on Home Loans to Base Rate i.e., 10.25% at present irrespective of amount and tenure for fresh sanctions as well as for existing borrowers w.e.f. 01.06.2013. With this reduction, our Banks rate of interest on Home Loan has become the most competitive amongst PSB & Pvt Banks. It is an excellent business opportunity for our branches/RLFs to take over quality Home Loan accounts as well as to aggressively canvass quality fresh Home Loans. Therefore there is an urgent need to canvass good number of quality Home Loans through take over of the same from other Banks/Institutions like ICICI Bank, HDFC Bank, Axis Bank etc highlighting our USPs like competitive rate of interest, higher repayment period, free personal accidental insurance etc. This opportunity to be utilised without any loss time since other Banks have also started reducing interest rates on Home Loans. At the same time ,Branches should ensure that the effect of reduction of interest rate to Base rate have been given to all existing Home Loan borrowers under floating rate option as per extant guidelines. Further branches must leverage the goodwill generated by the reduction in rate of interest on existing Home Loans without any conversion charges for augmenting their Home Loan portfolios by inviting new references from their existing Home Loan borrowers. Branches must confirm to their Regional Office having sent communication to all their existing Home Loan borrowers informing about the customer centric initiative taken by our Bank as conveyed vide Circular No.BCC:BR:105/259 dated 24.06.2013. . Further the benefit of reduction in interest rates on Home Loans in future will also be pass on to the existing borrowers, as and when effected by the Bank. Now platform to take off the Home Loan sanction / disbursement to a greater height has been well set for RLFs/ Branches. It is essential that guidelines for Take over of Home Loan accounts, must be scrupulously adhered and followed religiously. At the cost of repetition, we are reiterating the following safeguards in respect of such take over of accounts. i. Accounts should be taken over in consideration / possibility of larger business interests / valuable connections.

ii. The prospective borrower should handover a Power of Attorney in favour of Bank of Baroda alongwith a letter addressed to the Bank / HFCs from where finance has been availed authorizing them to deliver the title deeds and all the collateral securities charged to them, directly to our bank branch upon receipt of the loan amount. However, the condition of handing over the collateral securities may be waived provided the borrower has made 50% of the loan sanctioned by such other Bank / HFC. (For POA format refer circular no. BCC:BR:101:79 dated 19.03.2009)

iii. The institution should confirm the above to our branch and further that they are holding an equitable mortgage over the property. iv. The disbursement of the loan should be made directly to the institution and their receipt kept along with the loan documents i.e under no circumstances Banker Cheque be delivered to the Borrower. v. The amount of loan may include the outstanding balance, foreclosure fee payable to existing Bank, if any and stamp duty for creation of equitable mortgage in our Banks favour subject to margin, income and repaying capacity criteria, Loan to Value (LTV) ratio etc. vi. Repayment may be fixed, keeping in view our Banks guidelines in respect of income and repaying capacity of the applicant. However, Additional Assured Advance (AAA) may be considered as per norms. vii. All other collaterals charged to the previous institution from whom the loan is being taken over should also be made available as security to our Bank. viii. Guidelines for Takeover of Borrowal accounts from other Banks as per circular no BCC:BR:104:305 dated 27.08.2012 must be complied with. ix. There should not have been any reschedulement / restructuring in the account during last two years. x. Takeover accounts are to be rated as per the applicable scoring model subject to minimum grade as per the scoring model. xi. Accounts with the existing lenders should be under the category of Standard Assets. The growth under our Home Loan portfolio during the first quarter of Current Financial Year 2013 -14 is not upto the expected level of our Top Management due to various reasons. As such, it is of paramount importance that each branch should revisit their existing strategies and chalk out new action plan to deliver growth on budgeted parameters. We are keenly watching the performance of Branches under Retail Loan portfolio particularly in Home Loan segment and the continuation of concessional rate of interest etc will be renewed only after achievement of expected results. We, therefore, once again request all Branch Heads to initiate vigorous marketing efforts and sensitize their teams to extend their wholehearted support and cooperation in building a strong Home Loan Portfolio. All the Branches should sincerely endeavors to achieve their set targets for September, 2013 so as to ensure an accretion of minimum business of `4,000/- Crores to Banks Retail Loan Book under Home Loan segment. Yours faithfully,

(Usha L Khamkar) General Manager (Retail Banking)