The distribution channel (definition)

Chains of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user of the product or services.

Now let us study the various channels of distribution which had been used by BOB for its financial services.

1. Distribution through its branches in India (direct channel of distribution)

Firstly, the bank provides and distributes its financial services through its various branches set up in all over India with its Corporate Centre at Bandra (East),

Mumbai. At all the branches provides all the financial services of the bank i.e. deposit and withdrawal of money, lending loans etc.

2. Structural changes done by bank in order to facilitate the distribution of its financial services

• Bank opened eight new urban retail loan factories at powai, Mumbai, Agra, bareilly, Bhopal, nagpur, ernakulam, jodhpur and last at noida ( thus total URLF’s rising to 23) in order to strengthen the Retail Credit Delivery System.
• Gen-Next Branches- total five two Gen-next branches were opened till 2009. These Branches are equipped with modern gadgets, ambience and all other facilities, which a youth requires in today’s modern era
• Memorandums of understanding were signed in order to provide and boost auto loan with number of car manufacturing company’s viz. Maruti Suzuki India Ltd, Tata Motors Ltd, Hyundai Motors India Ltd and Mahindra & Mahindra Ltd. during the year 2008-09.
• Bank has done “Tie-up” with M/s Kotak Mahindra Old Mutual Life Insurance Ltd for providing Life Insurance Cover to Education Loan borrowers and Home Loan borrowers sanctioned under a special package.
• Bank has also started to provide online Home Loan application facility , which is also another added distribution method to increase the bank’s reach.
• Lastly, providing the brick and mortar channels closer to the customer

3. Wealth Management Services

Bank has initiated Wealth Management Services to provide its High Net worth (HNI) and affluent customers as its customer centric measures; a total financial solution at one place.

Bank has initiated Wealth Management Services to provide its High Net worth (HNI) and affluent customers as its customer centric measures; a total financial solution at one place.

The tie-up partners in these products are HDFC Standard Life Insurance Co. Ltd. in Life Insurance, National Insurance Company Ltd. in General Insurance, India Infoline Ltd. in e-trading and six leading Asset Management Companies including our joint venture Baroda Pioneer Asset Management Co. Ltd. in Mutual Fund products.

4. SME loan factory

To cover the SME Sector, the Bank has launched a special and novel delivery model, viz. SME Loan Factory, which is presently functioning in 34 centers of the Bank and is well accepted in the market. The SME Loan Factory is an innovative model for streamlining processes and for timely sanctions of SME loan proposals. The model comprises of the Central Processing Cell for speedy appraisal and sanctioning of proposals within the stipulated deadline.

A team of Relationship Managers stationed at different branches of the Bank spread over micro segments of the city reaches out to customers to facilitate completion of pre-sanction formalities in a hassle free manner.

The Relationship Managers would also be marketing, not only various SME products of the Bank, but also other products and services including the Third Party products like Life Insurance, Mutual Funds, Equity Trading etc.

The Bank has SME Loan Factories at all major business canters across the country(total 34), viz. Agra, Ahmedabad, Bangalore, Baroda, Bhilwara, Bhubhaneshwar, Bulsar, Chennai, Coimbatore, Dehradun, two factories in Delhi, Hyderabad, Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur, Kolkata, Lucknow, Ludhaina, three factories in Mumbai, Nagpur, Nashik, Noida, Pune, Rajkot, Raipur, Surat, Vishakhapatnam.

The Bank has planned to establish six more SME Loan Factories during the year 2009-10 to increase its reach further to SME business.

5. Baroda Connect and ATM’S services

“Baroda Connect” is an internet banking facility introduced as an alternative delivery channel for rendering effective customer service on 24 X 7 bases. It offers unique customized services to both Retail & Corporate customers.

BoB has undertaken technology initiatives in order to improve its customer service levels and provide new distribution channels to counter stiff competition, especially in the metro and urban centers, that account for a bulk of the business for banks.

The bank has retained the Gartner Group as its technology consultant for the same.

The major technology initiatives include implementation of a Core Banking Solution, networking its branches to offer “Anywhere Banking.”

Bank of Barodahad set up an extensive network of3127 branches(including 26 extension counters) spanning the length and breadth of the country. There is a branch in the vicinity of everyone in need of a banking solution.

All customers can register under Baroda Connect for View and / or Transaction facility

Can see their Account summary of all operative, deposit and loan accounts and can get

Account statements. Under Transaction facility customer can (in addition to the above VIEW facilities) can transfer funds immediately or schedule for a future date to self linked and third party, can pay through Online Tax – Direct and Indirect taxes online such as Excise Duty, Service Tax, Customs Duty, Income Tax etc.

Bank customers can also Pay through Baroda Easy Pay – utility bills like electricity, mobile etc, Donations, Subscription, Travel plan booking online and booking of the Rail Ticket – IRCTC

Baroda Connect facility provided by the bank is free of cost.

6. Baroda Mobile Banking

Bank’s latest initiatives which enable its customers to operate their account just like they would do in any bank branch. Bank customers can check their account balance, request for chequebooks and can transfer funds etc. through their mobiles. Thus, it also plays a vital role in distribution channels of the bank to provide its financial services.

24-hour ATMs enable its customers to withdraw cash, check account balance and request for a new chequebooks even after banking hours.

7. Financing Agencies Providing Custom Services To Farmers

Agriculture being the backbone of the Indian Economy, Bank of Baroda has contributed significantly in accelerating the pace of rural development by providing finance to farmer. Bank finance to all individuals, entrepreneurs, organizations, institutions corporations such as agro industries corporations, market yard or authorized licensee in market yard, warehouse panchayats and agro service centers who are capable of carrying out such activities and have viable schemes for providing custom services to farmers.

The mode of finance covers activities of for purchase oftractor, bulldozer, drill rig for boring wells, drilling tube wells, equipment for construction of wells, lift irrigation, purchase of combine harvester, thresher for hiring on custom basis, construction of godown, warehouse to provide storage facility on rental basis, purchase of truck for transporting agriculture produces to farmer on hiring basis, acquiring milk tankers for transporting milk, establishing curing barn for tobacco, working capital finance to organization/ institution providing such services etc.