The Board of Directors have pleasure in presenting the Banks Annual
 Report along with the audited statement of accounts and the cash flow
 statement for the year ended 31st March 2011.
 
 PERFORMANCE HIGHLIGHTS
 
 FINANCIAL PARAMETERS
 
 - Operating profit Rs. 5,384 crore.
 
 - Net Profit Rs. 2,489 crore, recording 42.94% growth over previous
 year.
 
 - Capital Adequacy Ratio at 12.17% as against 12.94% in previous year
 (under Basel-II).
 
 - Net Worth at Rs. 15,500 crore grew by 24.43% over March 2010.
 
 - Book Value per share Rs. 283.24 (Rs. 236.84 previous year).
 
 - Gross NPA ratio at 2.23% as on 31.03.2011.
 
 - Net NPA ratio at 0.91% as on 31.03.2011.
 
 - Total business (Deposits + Advances) reached at Rs. 5,15,040 crore
 recording a growth of Rs. 1,13,961 crore (28.41%).  Domestic business
 grew by 26.02% to reach the level of Rs. 4,18,110 crore.
 
 - Total deposits increased by Rs. 69,124 crore reached the level of Rs.
 2,98,886 crore, a growth of 30.08%. Domestic deposits increased by
 28.68% to reach the level of Rs. 2,52,963 crore. Share of low cost
 deposits in the domestic deposits is 29.18% as on 31.03.2011.
 
 - Gross credit touched Rs. 2,16,154 crore, recording a growth of 26.17%
 with domestic credit recording a growth of 22.16% to reach level of Rs.
 1,65,147 crore.
 
 - Priority Sector lending constituted 46.27% of Net Adjusted Bank
 Credit and the share of Agricultural Credit to Net Adjusted Bank Credit
 was 16.76%.
 
 - Credit to SME sector grew from Rs. 29,568 crore to Rs. 35,586 crore
 recording a growth of 20.35%.
 
 - Retail Credit grew by 5.70% from Rs. 15,750 crore to Rs. 16,649
 crore.
 
 - Export Credit registered a growth of Rs. 898 crore, i.e., 13.53%
 growth over previous year.
 
 NEW PRODUCTS & SERVICES
 
 - Welcome Kits introduced for NRI Customers opening NRE/ NRO accounts
 at foreign centers.
 
 - Calculation of interest on Savings Bank account, from 1st April 2010,
 has been changed from monthly product basis to daily product basis.
 
 - Launched Marathi version of the Banks website.
 
 - As per Finance Ministry guidelines and recommendations, the Banks
 corporate web-site (English) has been enabled for persons with
 Disabilities.
 
 - The Bank has introduced a new format of Savings Bank Passbook
 (Horizontal Format) which will print all details of the transaction on
 the same page as against the existing format (Vertical Format) where
 the details are printed on two pages.
 
 - As per Banking Codes and Standards Board of India (BCSBI)
 requirements, the Bank is printing helpline number on the passbook &
 statement of accounts.
 
 - The Bank introduced issuance of insta-pin for Debit-cum- ATM Card.
 This will address the customer grievance for non-receipt of Re-pin and
 also save the effort and expense in generating and mailing Re-pins.
 
 - Quarterly consolidated Statement of a/c is sent to the Diamond
 customers in PDF format via email.
 
 - As a fraud prevention measure, SMS alerts - Star Sandesh are
 generated and provided to all customers
 
 who have registered their mobile number with the Bank for all Debit
 transactions from delivery channels (Internet banking/ATM/POS); all
 Debit clearing transactions of Rs. 25,000/- and above; all Customer
 induced debit transfer & cash payments of Rs. 10,000/- and above; all
 Debit ECS transactions of Rs. 10,000/- and above; all Debit RTGS
 transactions and acknowledgment on accepting the cheque book issue
 request.
 
 - Enabling internet banking customers to make online Fixed Deposit.
 
 - Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN using
 Internet Banking password.
 
 - Viewing of Annual Tax Statement (Form 26AS).
 
 - Star eTrade - Online share trading - Integration with Gupta Equities.
 
 - Extended the facility of online e-Payment to the customers holding
 Banks Debit-cum-ATM card. This will enable the customers to use their
 Debit-cum-ATM cards for e-payments in addition to credit card &
 Internet banking account.
 
 - Mobile Banking facility is introduced as the latest alternate
 delivery channel which allows customers to do banking activities
 virtually from the convenience of the Mobile phone at any time and from
 anywhere. This facility is extended to all Retail internet banking
 customers and includes features like Balance enquiry, last five
 transactions, Cheque status, Funds Transfer & Mobile Payments.
 
 - Online Interbank Fund Transfer across banks, through Star Connect
 Internet Banking Services, using RTGS/ NEFT
 
 - BOI Star e-Pay for Auto-pay or on-line payment of various utility
 services/ bills.
 
 - e-Payment for Direct & Indirect, Central Excise & Service Tax.
 
 - Star e-Share Trade to trade in shares.
 
 - e-Freight Payment.
 
 - Online Payment of Directorate General of Foreign Trade (DGFT) license
 fees.
 
 - Online Booking of Railway & Airlines Ticket.
 
 - Online Application for Education loan.
 
 - Facility to make online bid-cum-application for Application Supported
 by Blocked Amount (ASBA) IPO issues by Retail Internet Banking
 Customers having account with any DPO
 
 BUSINESS INITIATIVES
 
 - Keeping its growth aspirations in mind, the Bank has embarked upon a
 new bold vision Sankalp 10,000. Sankalp 10,000 rests on the three
 pillars of Customer First, Building Winning Teams & High performance
 Driven Culture.
 
 - Under Project Sankalp, the organizational structure of the Bank has
 been redesigned in September 2010 with its division in two distinctly
 separate groups of businesses i.e. (a) National Banking Group and (b)
 Wholesale and
 
 International Banking Group in order to have a more focused attention
 to each business segment. The two groups are headed by the two
 Executive Directors of the Bank.
 
 - National Banking Group (Head Office) - The National Banking Group is
 comprised of Rural Banking, Financial Inclusion, Retail Banking and SME
 Banking business units.
 
 - Wholesale and International Banking Group (Head Office) - The
 Wholesale and International Banking Group are comprised Large Corporate
 Banking, Mid- Corporate Banking, Project Finance, Transaction Banking,
 International Banking and Treasury.
 
 - All accounts of Mid-Corporate and Large Corporate Branches have been
 mapped to respective branch RSMs.
 
 - Fifteen Rural Centralised Credit Processing Centres (CPC) have been
 started at Belgaon, Ujjain, Barabanki, Mehasana, Ludhiana, Karad,
 Amalapuram, Tanjavur, Barasat, Hardoi, Nadiad, Ratnagiri, Nashik,
 Solapur & Barnagar.
 
 - In all, 40 focused districts have been identified in 19 zones to
 target large and medium farmers and large institutions with high credit
 quality.
 
 - Five New Retail Business Centres were launched in 5 identified Zones
 namely Bangalore, Chandigarh, Mumbai South, New Delhi and Pune on Pilot
 basis on 14.01.2011.
 
 - Five SME City Centres at Ahmedabad, Coimbatore, Kolkata, Ludhiana,
 and Pune were launched on 14th December, 2010.  Subsequently, seven
 more SME City Centres at Bangalore, Chandigarh, Hyderabad, NewDelhi,
 Nagpur, Mumbai North and Vadodara have started functioning.
 
 - Mid-Corporate branches at Ernakulam, Andheri and Seepz opened.
 
 - 10 Mid-Corporate CPCs started functioning.
 
 - Large Corporate branches at Mumbai (Nariman Point) and Hyderabad
 opened.
 
 - Lead Management System (Sales Force Automation), to generate, track
 and monitor leads, revamped.
 
 - The Bank is treating financial inclusion as social cause and
 implementing it as a movement taking all banking products and services
 to those who are currently deprived from these services. So far, first
 step towards achievement of financial inclusion was opening of No-Frill
 Accounts and accordingly the Bank has opened 50.07 lakh No-Frill
 Accounts.
 
 - The Bank is also implementing IT solutions on end to end basis using
 hand held devices and smart cards. The Bank has issued/ enrolled 6.01
 lakh smart cards.
 
 - Project Finance And Syndications Group: It takes up assignments of
 technical appraisal, underwriting and syndication of loans. During
 FY11, financial closures were done with a project cost of Rs. 26,901
 crore and syndicated debt of Rs. 9,008 crore. Bank of India achieved
 sixth position in syndication space as per the Bloomberg Lead tables
 for the calendar year 2010.
 
 - The Bank has created a new SME vertical headed by a General Manager
 to cater to the specific business needs of the segment. A more
 inclusive definition has been given for SME business to include all
 business activities with a turnover of up to Rs. 100 crore. The
 vertical will look for growth not only on credit, but CASA, retail
 business, fee based income and third party products in the SME segment.
 
 - Mobile Banking facility is introduced as the latest alternate
 delivery channel which allows customers to do banking activities
 virtually from the convenience of the Mobile phone at any time and from
 anywhere. This facility is extended to all Retail internet banking
 customers and includes features like Balance enquiry, last five
 transactions, Cheque status, Funds Transfer & Mobile Payments.
 
 - Established Global Remittance Centre for centralizing some of the
 activities related to NRI Customers which would hasten turnaround time
 and product delivery and also enable proactive marketing strategies &
 grievance redressal mechanism.
 
 AWARDS & ACCOLADES
 
 - The Bank has received the Winners Award in International Banking
 Technology Award 2010 from IBA in the Best Business Enablement
 Initiative category in recognition of its achievement in Banking
 Technology for the Year 2009.
 
 - The Bank has been adjudged FE-EY Most Efficient Public Sector Bank
 2010 by Dalal Street.
 
 - Mumbai North Zone of the Bank has received Third Prize for use of
 Official Language Hindi in Bank from Government of India, Ministry of
 Home Affairs, Official Language Department.
 
 - The Bank has received the consolation prize from Maharashtra State
 Level Bankers Committee for commendable work done in implementation of
 official language in Hindi.
 
 - The Bank has received National Award for Best Bank in West Zone for
 PMEGP under lending to KVIC in August 2010.
 
 - The Bank has been rated by The Economic Times/The Nielsen company
 survey “The Most Trusted Brands” (MTB) 2010 as follows”
 
 - Under PSU Banking Category - 2nd next to SBI
 
 - Under Top Service Brands-8th rank
 
 FINANCIAL REVIEW
 
 FINANCIAL PERFORMANCE
 
 The Bank recorded an Operating Profit of Rs. 5,384.23 crore, (growth of
 14.44% over previous year). Net Profit stood at Rs. 2,488.71Crore,
 recording a growth of 42.94%.
 
 Net interest income grew by 35.70% on the backdrop of rise in volume of
 business mix by 28.41% (from Rs. 4,01,078.83 crore to Rs. 5,15,040.06
 crore). Non-interest income increased by 0.96% and covered 52.12% of
 Operating Expenses as against 71.34% in the previous year.
 
 The Financial performance of the Bank for the year 2010-11 is
 summarised below:
 
                                                (Amount in Rs. Crore)
 
 Particulars                      2009-10      2010-11     Growth (%)
  
 Net Interest Income             5,755.94     7,810.69          35.70
 
 Non-Interest Income             2,616.64     2,641.77           0.96
 
 Operating Expenses              3,667.81     5,068.24          38.18
 
 Operating Profit                4,704.77     5,384.23          14.44
 
 Provisions / Contingencies      2,963.70     2,895.52          -2.30
 
 Net Profit                      1,741.07     2,488.71          42.94
 
 Earnings per share (Rs.)           33.15        47.35          42.84
 
 Book value per share (Rs.)        236.84       283.24          19.59
 
 Return on Average Networth (%)     14.76         8.90              –
 
 Return on Average Assets (%)        0.70         0.82              –
 
 
 Some of the Financial Ratios are presented below:
 
                                                     (Percentage) (%)
 
 Parameters                               2009-10             2010-11
 
 Yield on Advances                           8.42                8.62
 
 Yield on Investment                         7.46                7.59
 
 Yield on Funds                              7.14                7.14
 
 Cost of Deposits                            5.16                5.03
 
 Cost of Funds                               4.84                4.57
 
 Net Interest Margin                         2.51                2.92
 
 Non Interest Income to Operating           71.34               52.12 
 Expenses
 
 Other Income to Average Working Fund        1.05                0.87
 
 Operating Expenses to Average               1.47                1.66 
 Working Fund
 
 Staff Expenses to Average Working Fund      0.92                1.14
 
 Other operating Exp. to Average             0.55                0.52 
 Working Fund
 
 Asset Utilisation Ratio                     1.88                1.77
 
 Non-Interest Income to Total Income        12.77               10.83
 
 Non-Interest Income to Net Income          31.25               25.27
 
 Cost to Net Income                         43.81               48.49
 
 SEGMENT- WISE PERFORMANCE
 
 The Bank earned an Operating Profit of Rs. 5,384.23 crore during the
 year 2010-11. The contribution made by Treasury was Rs. 371.38 crore
 and other banking operation earned a profit of Rs. 5,161.12 crore. The
 unallocable expenditure net of unallocable income was Rs. 148.27 crore
 during the year 2010-11.
 
 DIVIDEND
 
 A Dividend at the rate of Rs. 7 per share (70%) for the year, has been
 declared. The total dividend payment amounts to Rs. 444.29 crore
 (including dividend distribution tax).
 
 CAPITAL
 
 Net worth of the Bank in FY 2010-11 has increased to Rs. 15,499.5 crore
 from Rs. 12,456 crore. During the year the bank has issued 2,13,04,870
 Equity Shares of Rs. 10 each to Government of India at a price of Rs.
 474.07 per share, on preferential basis, as approved by the
 shareholders in an Extra ordinary General Meeting held in accordance
 with the regulation 76(1) of SEBI (Issue of Capital and disclosure
 requirements) Regulations, 2009. The amount received by the bank on
 this account is Rs. 1,010 crore. Consequently, the Government of India
 shareholding has increased from 64.47% to 65.86%.
 
 CAPITAL ADEQUACY
 
 As per Basel II framework, the Banks Capital Adequacy Ratio was at
 12.17%, which was higher than the regulatory requirement of 10%.
 
 Details of Capital Adequacy (BASEL II) are shown as under:
 
                                                     (Rs. in crore)
 
 Particulars                        31.03.2010           31.03.2011
 (Under BASEL – II)
 
                                Amount   CRAR (%)    Amount  CRAR (%)
 
 Tier I Capital                 13,725   8.48        17,047   8.33
 
 Tier II Capital                 7,218   4.46         7,867   3.84
 
 Total Capital                  20,943  12.94        24,914  12.17
 
 Risk Weighted Assets         1,61,857      –       2,04,762     –
 
 BORROWINGS
 
 The Bank has raised debts instrument through private placements like
 perpetual bonds and Upper Tier II Bonds and Medium Term Notes (MTN)
 through overseas borrowings.  The bank has raised Rs. 300 crore through
 issue of IPDI and Rs. 1000 crore through Upper Tier-II instrument
 during the year 2010-11. The Bank has also redeemed Tier II
 Subordinated bonds for Rs. 450 crore.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Directors confirm that in the preparation of the annual accounts
 for the year ended March 31, 2011,
 
 - The applicable accounting standards have been followed along with
 proper explanation relating to material departures, if any;
 
 - The accounting policies, framed in accordance with the guidelines of
 the Reserve Bank of India, were consistently applied;
 
 - Reasonable and prudent judgement and estimates were made so as to
 give a true and fair view of the state of affairs of the Bank at the
 end of the financial year and of the profit of the Bank for the year
 ended on March 31, 2011;
 
 - Proper and sufficient care was taken for the maintenance of adequate
 accounting records in accordance with the provisions of applicable laws
 governing banks in India, and
 
 - The accounts have been prepared on a “going concern” basis.
 
 CORPORATE GOVERNANCE
 
 A detailed report on Corporate Governance, being a part of Directors
 Report is appearing from page no. 59 to 76.
 
 ACKNOWLEDGEMENT
 
 The Board express its gratitude to the Government of India, Reserve
 Bank of India and Securities and Exchanges Board of India for the
 valuable guidance and support received from them. The Board places on
 record its deep appreciation for the services and contributions made by
 Shri M. Narendra (Ex Executive Director), Shri K.S. Sampath, Shri A.V.
 Sardesai, Shri Amit K. Motayed, Shri Indresh V. Singh, all Directors of
 the Bank, who have relinquished office during the year. The Board also
 thanks financial Institutions and correspondent banks for their
 co-operation and support. The Board acknowledges the unstinted support
 of its customers and shareholders and also wishes to place on record
 its appreciation of staff members for their dedicated services and
 contribution for the overall performance of the Bank.
 
                          For and on behalf of the Board of Directors
 
                                                      (Alok K Misra)
                                        Chairman & Managing Director
 
 Place : Mumbai 
 Date  : 02.05.2011