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Notes to Accounts of Central Bank of India
Mar 31, 2025
14. Provisions, Contingencies and Contingent
assets:
14.1 In conformity with AS 29, âProvisions,
Contingent Liabilities and Contingent
Assetsâ, issued by the Institute of Chartered
Accountants of India, the Bank recognises
provisions only when it has a present obligation
as a result of a past event, and would result
in a probable outflow of resources embodying
economic benefits will be required to settle the
obligation, and when a reliable estimate of the
amount of the obligation can be made.
14.2 No provision is recognised for:
a) any possible obligation that arises from past
events and the existence of which will be
confirmed only by the occurrence or non¬
occurrence of one or more uncertain future
events not wholly within the control of the Bank;
or
b) any present obligation that arises from past
events but is not recognised because:
i. it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation; or
ii. a reliable estimate of the amount of
obligation cannot be made.
Such obligations are recorded as contingent
liabilities. These are assessed at regular intervals
and only that part of the obligation for which an
outflow of resources embodying economic benefits
is probable, is provided for, except in the extremely
rare circumstances where no reliable estimate can
be made.
14.3 Provision for reward points in relation to the
debit card holders of the Bank is made on
estimated basis.
14.4Contingent assets are neither recognised nor
disclosed in the Financial Statements.
15 Special Reserves:
Revenue and other Reserve include Special Reserve
created under Section 36(i)(viii) of the Income Tax
Act, 1961. The Board of Directors of the Bank
has passed a resolution approving creation of the
reserve and confirming that it has no intention to
make withdrawal from the Special Reserve.
16 Segment Reporting
The Bank recognises the business segment as
the primary reporting segment and geographical
segment as the secondary reporting segment
in accordance with the RBI guidelines and in
compliance with the Accounting Standard 17 -
âSegment Reportingâ issued by The Institute of
Chartered Accountants of India.
17 Earnings per Share:
a) The Bank reports basic and diluted earnings
per share in accordance with AS 20 - âEarnings
per Shareâ issued by the Institute of Chartered
Accountants of India. Basic Earnings per Share
is computed by dividing the Net Profit after Tax
for the year attributable to equity shareholders
by the weighted average number of equity shares
outstanding during the year.
b) Diluted earnings per share reflect the potential
dilution that could occur if securities or other
contracts to issue equity shares were exercised
or converted during the year. Diluted earnings per
equity share is calculated by using the weighted
average number of equity shares and dilutive
potential equity shares outstanding during the year.
The average LCR for the quarter ended March 31, 2025, was at 194.89% as against 205.09% for the quarter
ended March 31, 2024 and well above the regulatory prescribed minimum requirement of 100%. The average HQLA
for the quarter ended March 31, 2025, was ''92,665.00 Crore as against ''98,005.00 Crore for the quarter ended
March 31,2024.
The average LCR for the year ended March 31,2025, was at 215.75 % as against 223.77% for the year ended March
31,2024.
c) Net Stable Funding ratio (NSFR):
Reserve Bank of India vide its circular no. BR.BPBC.No.106/21.04.098/2017-18 May 17, 2018, had issued guidelines
on âBasel III Framework on Liquidity Standards - Net Stable Funding Ratio (NSFR)â. The guidelines for NSFR were
effective from October 1,2021.
The objective of NSFR is ensure reduction in funding risk over a longer time horizon extending to one year by
requiring banks to fund their activities in relation to the composition of their assets and off-balance sheet activities,
with sufficiently stable sources of funding on an on-going basis. A sustainable funding structure is intended to reduce
the probability of erosion of a bank''s liquidity position due to disruptions in the regular sources of funding. NSFR limits
over-reliance on short term wholesale funding, encourages better assessment of funding risk across all on and off-
balance sheet items, and promotes funding stability.
The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding.
âAvailable Stable Fundingâ (ASF) is defined as the portion of capital and liabilities expected to be reliable over the
time horizon considered by the NSFR, which extends to one year. The amount of stable funding required (âRequired
Stable Fundingâ) (RSF) is a function of the liquidity characteristics and residual maturities of the various assets
held by the Bank as well as those of its off-balance sheet (OBS) exposures. The Available Stable Funding (ASF)
is primarily driven by the total regulatory capital as per Basel III Capital Adequacy guidelines stipulated by RBI
and deposits from retail customers, small business customers and non-financial corporate customers. Under the
Required Stable Funding (RSF), the primary drivers are unencumbered performing loans with residual maturities of
one year or more.
The runoff factors for the stressed scenarios are prescribed by the RBI, for various categories of liabilities (viz.,
deposits, unsecured and secured wholesale borrowings), undrawn commitments, derivative-related exposures, and
offset with inflows emanating from assets maturing within the same period. The minimum NSFR requirement set out
in the RBI guideline is 100%.
The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by
the Board. The Asset Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity
and interest rate risk management strategy of the Bank in line with its risk management objectives and ensures
adherence to the risk tolerance/limits set by the Board.
Central Bank of India on standalone basis maintained Available Stable Funding (ASF) of ''3,99,641.65 Crore against
the RSF requirement of ''2,83,577.45 Crore as on 31st March 2025. The NSFR for the quarter ended Mar 2025 is at
140.93%.
In view of significant development in global financial reporting standards, the linkages with the capital adequacy framework as
well as progress in the domestic financial marlets, revised regulatory framework for the investment portfolio has been issued
by Reserve Bank of India vide its Master Direction 2023 vide RBI DOR/2023-24/104 DOR.MRG.36/21.04.141/2023-24 dated
12.09.2023.
The corresponding previous year figures related to investment portfolio of the Bank pertaining to Financial Year ended March
31,2025 are not comparable with figures for the Financial Year ended 31st March 2024, since these have not been restated.
As a sequel of that, the income on investments increased by ''31,298 lakh, provision for tax is lower by ''26,467 lakh due to
reduction in General Reserve by ''1,24,395 lakh and increase in AFS Reserve by ''48,652 lakh for the Financial Year ended
31st March, 2025.
During the year ended March 31,2024 the value of sales and transfers of securities to/from HTM category (excluding
one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken
by banks at the beginning of the accounting year, sale to RBI under pre-announced Open Market Operation auctions
and repurchase of Government securities by the government of India) had not exceeded 5% of the Book Value of the
Investment held in HTM category at the beginning of the year.
d. Sale and Transfers of Securities To/From AFS/HFT Category
As per the directives of Reserve Bank of India guidelines No RBI/DOR/2023-24/104 DOR.MRG.36/21.04.141/2023-
24 dated 12.09.2023 and our Investment Policy, profit on sale of investments under AFS/HFT category should be first
taken to P&L account and thereafter be appropriated to the Investment Fluctuation reserve Account
Profit on sale/redemption of AFS/HFT securities amounted to ''8,66,89,11,921.02 for the Financial Year ended
March 31,2025.
process for the year ended March 31,2025, based on the conditions mentioned in RBI circular No. DOR.ACC.REC.
No.45/21.04.018/2021-22 dated August 30, 2021 (Updated as on April 01, 2025). Pursuant to Reserve Bank of
India Risk Assessment Report (RAR) for the year ended 31st March 2024, all cases of divergence in assets
classification and shortfall in provision, reported their in, have been considered and accounted during the financial
year ended 31st March 2025.
f. Disclosure of Transfer of Loan Accounts (SMAs & NPAs) in terms of RBI Circular No. DOR.STR.REC.51/21.04.048/
2021-22 dated 24th September 2021
At March 31, 2025, the Bank held Government guaranteed SRs amounting to initial Face value of ''307.50 crore,
against which a provision of ''179.83 crores was held. The Bank has reversed the provision held against such SRs
i.e. ''179.83 crores to profit and loss account.
Further, a net unrealized MTM gain of ''125.71 crores has been taken to P&L account on account of fair valuation of
Government guaranteed SRs on the basis of Net Asset Value declared by the ARC based on the recovery ratings as
mandated by above RBI guidelines.
g. Fraud Accounts
In terms of RBI circular RBI/2015-16/376/DBR.No.BPBC.92/21.04.048/2015-16 dated 18.04.2016 details of Fraud
and Provision are as below: -
Bank holds full provision as applicable against outstanding balance as on 31.03.2025 in respect of frauds reported
during the year ended 31.03.2025.
iii. Disclosure with respect to accounts kept as standard due to the Court order:
As per directions of RBI vide letter no 10655/21.04.048/2018- 19 dated 21.06.2019 (as amended from time to time)
disclosure with respect to accounts kept as standard due to the Court order, M/s. SEL MANUFACTURING CO LTD
with an Outstanding Balance of ''4,52,24,888.79 as on 31.03.2025 is classified as Standard as per Court orders
vide Hon''ble NCLT Chandigarh Bench No. NCLT/No/CHD/REG/4010 dated 18/02/2021, however Bank is holding
provision of ''1,13,06,222.20 as per IRAC Norms, including provision for unrealized interest on prudent basis.
iv. Additional Provisions at higher than prescribed rates:
In compliance to the RBI guidelines on Prudential norms on Income Recognition, Asset Classification and Provisioning
pertaining to Advances vide RBI/2023-24/06 DOR.STR.REC.3/21.04.048/2023-24 dated 01.04.2023, Point No.
5.7.2, Bank, after evaluation of various sectors, had changed the sectors considered as Stress for the purview of
additional provision at higher than prescribed rates in Standard Advances in accordance with the Bank''s Industry
Outlook âNegative Outlookâ Sectors. Accordingly Stressed Sector has been reviewed as under.
Accordingly, Additional Provision at higher than prescribed rates in Standard Advances in Stressed Sector during
March 31st, 2025, is ''1.67 Crore (''6.01 Crore as on 31.03.2024)
i. Disclosure with respect to NCLT provisions: -
As per RBI circular No. DBR No. BP15199/21.04.048/2016-17 and DBR No. BP1906/21.04.048/2017-18 dated
June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and
Bankruptcy Code (IBC), the Bank is holding total provision of ''5,781.68 Crore including FITL of ''124.61 Crore
as at 31 March 2025 (''5,883.23 Crore for March 31st, 2024 including FITL of ''125.00 Crore) i.e. 100 % of total
outstanding including Investment as at March 31st, 2025.
j. Disclosure in respect of Additional Provision to be made as per RBI guidelines on Prudential Framework for Resolution
of Stressed Assets:
RBI vide their circular no. RBI/ 2018-19/ 203 DBR. No.BPBC. 45/21.04.048/2018-19 dated June 7, 2019 on
Prudential Framework for Resolution of Stressed Asset issued guidelines for implementation of Resolution Plan, also
containing requirements of additional provision as per Para 17 of this RBI circular. The outstanding in such cases
as of March 31,2025, is ''384.39 Crore (''756.51 Crore for March 31,2024) and in compliance of the above RBI
circular, the Bank has held additional provision of ''127.82 Crore as at March 31,2025 (''117.44 Crore for March 31,
2024) and hold total provision of ''213.76 Crore (''480.18 Crore for March 31st, 2024) as at March 31st, 2025.
g) Unhedged Foreign Currency exposure:
The Bank has put in place a Board approval policy and process for managing currency induced credit risk. The credit
appraisal memorandum (Executive Brief) prepared at the time of origination and review of a credit facility covers the
required details viz. Total Foreign Exchange exposure, of which hedged position & if un-hedged, how the borrower
plans to cover.
Provision on the un-hedged portion of foreign portion of currency exposures of customers is made on quarterly basis.
As per the Board approval policy, all Advances involving foreign currency lending of USD 1 million or equivalent and
above is mandatory to be hedged unless specially permitted by the competent authorities. However, hedging need
not be insisted in the following cases
⢠Where Forex loans are extended to finance exports, hedging need not be insisted. However, it should be ensured
that such customers have uncovered receivables to cover the loan amount.
⢠Where Forex loans are extended for meeting forex expenditure.
⢠In respect of advances involving foreign currency loans below USD 1 million or equivalent:
⢠In case of corporates who are rated âAâ and above, Competent Authority may permit allowing advances involving
foreign currency loans without insisting on hedging.
⢠Customers who do not satisfy the conditions stipulated above will be required to provide cash margin, if they prefer
to keep exposure open, to the extent of the forward premium prevailing for the tenor of un-hedged exposure.
Movement of Provision is as under: -
In accordance with RBI guidelines, as of March 31,2025, the amount of bank''s credit exposure against un-hedged
Foreign Currency Exposure of borrowers attracting 80 bps provisions was ''1,865.56 Crore. The additional RWA on
this exposure is ''284.14 Crore against this additional minimum capital requirement is ''32.68 Crore.
Based on the available financial statements and the declarations from borrowers, the Bank has estimated the liability
for Un-hedged Foreign Currency in terms of RBI circular RBI/2022-23/131 DOR.MRG.REC.76/00-00-007/2022-23
dated October 11,2022 and is holding a provision of ''11.22 Crore as on March 31,2025 (Previous Year ''4.28 Crore
as on March 31,2024)
e) Disclosures on risk exposure in derivatives:
i) Qualitative Disclosures
a) The Bank currently deals in over the counter (OTC) interest rate and currency derivatives as also in Interest
Rate Futures and Exchange Traded Currency Derivatives. Interest Rate Derivatives dealt by the Bank are
rupee interest rate swaps and foreign currency interest rate swaps. Currency derivatives dealt by the Bank
are USD/INR currency swaps and cross currency swaps. The products are offered to the Bank''s customers
to hedge their exposures, and the Bank also enters into derivatives contracts to cover off such exposures.
Derivatives are used by the Bank both for trading as well as hedging balance sheet items.
b) Derivative transactions carry market risk i.e. the probable loss the Bank may incur because as a result of
adverse movements in interest rates/exchange rates and credit risk i.e. the probable loss the Bank may
incur if the counterparties fail to meet their obligations. The Bank''s âPolicy for Derivativesâ approved by the
Board prescribes the market risk parameters (Greeks limits, Loss Limits, cut-loss triggers, open position
limits, duration, modified duration, PV01 etc.) as well as customer eligibility criteria (credit rating, tenure
of relationship, limits and customer appropriateness and suitability of policy (CAS) etc.) for entering into
derivative transactions. Credit risk is controlled by entering derivative transactions only with counterparties
satisfying the criteria prescribed in the Policy. Appropriate limits are set for the counterparties taking into
account their ability to honor obligations and the Bank enters ISDA agreement with each counterparty.
c) The Asset Liability Management Committee (ALCO) of the Bank oversees efficient management of these
risks. The Bank''s Market Risk Management Department (MRMD) identifies, measures, monitors market
risk associated with derivative transactions, assists ALCO in controlling and managing these risks and
reports compliance with policy prescriptions to the Risk Management Committee of the Board (RMCB) at
regular intervals.
d) The accounting policy for derivatives has been drawn-up in accordance with RBI guidelines, the details of
which are presented under Schedule 17: Significant Accounting Policies (SAP) for the financial year 2024¬
25.
e) Interest Rate Swaps are used for hedging of the assets and liabilities. The trading of Interest rate Swaps are
also undertaken by the bank.
f) Majority of the swaps were done with First class counterparty banks.
g) Derivative transactions comprise of swaps which are disclosed as contingent liabilities. The swaps are
categorized as trading or hedging.
h) Derivative deals are entered with only those interbank participants for whom counterparty exposure limits
are sanctioned. Similarly, derivative deals entered with only those corporates for whom credit exposure
limit is sanctioned. Collateral requirements for derivative transactions are laid down as a part of credit
sanctions terms on a case-by-case basis. Such collateral requirements are determined based on usual
credit appraisal process. The Bank retains the right to terminate transactions as a risk mitigation measure
in certain cases.
i) Risk management policy approved by the Board of Directors for the use of derivative instruments to hedge/
trade is in place.
j) Policy for forward rate agreement, interest rate swaps, currency futures and interest rate futures for hedging
the interest rate risk in investment portfolio and also for market making is in place.
k) The risk management policies and major control measures like stop loss limits, counterparty exposure
limits etc. as approved by board of directors are in place.
l) Hedge Positions: Accrual on account of interest expenses/income on the interest rate swap (IRS) are
accounted and recognized as income/expenses.
m) I f the swap is terminated before maturity, mark-to-market (MTM) loss/gain and accrual till such date are
accounted as expenses/income under interest paid/received on IRS.
Note: Keeping in line with para 9 of the AS - 18 - âRelated Party Disclosureâ issued by ICAI, the transactions with the
Subsidiaries and Associates Enterprises have not been disclosed which exempts the State Controlled Enterprises from
making any disclosures pertaining to transactions with other related State Controlled Enterprises.
Further, transactions in Banker-Customer relationship including those with KMP and relatives of KMP have not been
disclosed in terms of Para 5 of AS-18.
g) Balancing of Books / Reconciliation:
i. The parent Bank is under process of reconciling the outstanding balances/entries in various heads of accounts
included in Inter office adjustment (IBR) account.
The Net balance of IBR account as of March 31, 2025 is ''0.26 Crore (Net Credit) and as at 31st March, 2024 is
''87.72 Crore (Net Debit).
The bank maintains 16 Nostro Accounts for 8 different currencies. These nostro accounts are operated by 1''Aâ
category branch (Integrated Treasury Branch) and 64''B'' category branches.
Reconciliation of these nostro accounts is done by Integrated Treasury Branch. Reconciliation is an ongoing process
and is done on daily basis.
Progress Report on reconciliation and outstanding entries in nostro Accounts is placed before Audit Committee of
the board at quarterly intervals.
ii. The reconciliation of the following items is in progress:
- Inter Branch Office Balance
- Inter Bank Accounts & CD Internal Office Accounts
- Suspense Accounts
- Clearing & other Adjustment Accounts
- Certain balances in nominal account
- NOSTRO Accounts
- Balances related to Digital Payment & Transaction Banking Department/ATM Department
- Mirror Accounts maintained by various Department
- Data/System updating of Agricultural and Priority Sector Advances
- GST
-Fixed Asset
- Other Assets
- Other Liabilities
The management is of the opinion that the overall impact, if any, on the accounts will not be significant.
The expected contribution to the Pension and Gratuity fund for the March 2025 is ''146.16 Crore and ''20.50 Crore
respectively which is to be received in the FY 2025-26.
ii. Defined Contribution Plan:
The bank has a defined contribution pension scheme (DCPS) applicable to all categories of officers and employees
joining bank on or after 01/04/2010. The scheme is managed by NPS trust under the aegis of the Pension Fund
Regulatory and Development Authority. Protean eGov Technologies Ltd (Formerly NSDL e-Governance Infrastructure
Limited) has been appointed as the Central Record Keeping Agency for the NPS. During FY 2024-25, the bank has
contributed ''300.26 Crore (Previous year ''252.94 Crore).
iii. Employees'' Provident Fund: -
During the year bank has recognized expenses of ''0.54 Crore and corresponding year ''0.77 Crore on account of
employer contribution for the employees covered under PF option Scheme i.e. PF Optees.
d) Accounting Standard 17 -
Segment Reporting
As per the revised guidelines of Reserve Bank of India the Bank has recognized Treasury Operations Corporate/
Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no
secondary reporting segments.
Primary (Business Segment)
The following are the primary segments of the Bank: -
- Treasury
- Corporate / Wholesale Banking
- Retail Banking
- Other Banking Business.
The present accounting and information system of the Bank based on the present internal, organizational and
management reporting structure and the nature of their risk and returns, the data on the primary segments have
been computed as under:
i. Treasury -
The Treasury Segment includes the entire investment portfolio and trading in foreign exchange contracts and
derivative contracts. The revenue of the treasury segment primarily consists of fees and gains or losses from trading
operations and interest income on the investment portfolio.
ii. Corporate / Wholesale Banking -
The Corporate / Wholesale Banking segment comprises the lending activities of Corporate Accounts, Trust
/ Partnership Firms Companies and statutory bodies which are not included under Retail Banking and Stressed
Assets Management Branch. These include providing loans and transaction services to corporate and institutional
clients.
iii. Retail Banking -
The Retail Banking Segment comprises of retail branches, which primarily includes Personal Banking activities
including lending activities to corporate customers having banking relations with these branches. The Retail
Banking Segment consists of all exposures up to a limit of ''7.50 Crore (including Fund Based and Non-Fund Based
exposures) subject to orientation product granularity criteria and individual exposures. This segment also includes
agency business and ATMs.
iv. Other Banking business -
Segments not classified under (1) to (3) above are classified under this primary segment.
Secondary (Geographical Segment)
1) Domestic Operations - Branches/Offices having operations in India
2) The Bank has only one geographical segment i.e. Domestic Segment.
As per RBI Circular DOR.AUT.REC.12/22.01.001/2022-23 dated April 07, 2022, for disclosure under Accounting
Standard 17, Segment reporting, âDigital Banking'' has been identified as a sub-segment under Retail Banking by
the Reserve Bank of India (RBI). However, as the proposed Digital Banking Unit (DBU) of the Bank has not yet
commenced operations, hence applicability of the said reporting will be on approval of RBI.
i. The premises of the Bank were revalued to reflect the market value as on 31.03.2024 based on valuation
reports of external independent valuers'' and approved by the Board of Directors and ''490.00 Crore
(''329.98 Crore for Freehold properties and ''160.02 Crore during FY 2023-24 for Leasehold properties)
increases in value thereof have been credited to Revaluation Reserve Account.
ii. I n case of assets, which have been revalued, the depreciation is provided on the revalued amount charged
to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount
''163.08 Crore for F.Y. 2024-25 up to March 2025 (Previous year ''54.87 Crore) is transferred from âRevaluation
Reserves'' and credited to âRevenue and Other Reservesâ.
iii. Land obtained on lease by bank includes market value as on 31.03.2025 is ''6.51 Crore (Previous year ''6.51
Crore) with written down value of ''5.58 Crore (Previous year ''6.30 Crore), the lease period of which has
expired, and the bank is still having its offices/building on these lands.
iv. As per AS-19, operating leases primarily comprise office premises and staff residences, which are renewable at
the option of the Bank.
a) Liability for Premises taken on non-cancellable operating lease are ''NIL as on 31.03.2025.
b) Amount of lease payments recognized in the P&L Account for operating leases is ''521.53 Crore as on
31.03.2025 (Previous year ''454.39 Crore).
v. Additional Disclosure:
The title of property amounting to ''37.13 Crore (Revalued value as on Mar-21) acquired on disposal of security
has been got registered by the bank in its favor during the current year 2024-25. As the matter with the borrower
is sub-judice neither the rent received on such property has been accounted for as income nor the property has
revalued after 31.03.2021 to reflect its market value.
Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial
decisions on disputed issues.
i. Section 115BAA in the Income Tax Act 1961 (âActâ) provides a non-reversible option to domestic companies
to pay corporate tax at a reduced rate effective from April 01,2019 subject to certain conditions. The Bank has
assessed the applicability of the Act and opted to continue the existing tax rate (i.e. 34.944%) for the financial
year ended March 31st, 2025.
ii. The Income Tax Appellate Tribunal, âSpecial Bench'' Mumbai, vide order dated 06/09/2024 has held that clause
(b) to sub section (2) of section 115JB of the Income-tax Act inserted by Finance Act, 2012 w.e.f. 1-4-2013, that
is, from assessment year 2013-14 onwards, is not applicable to the banks constituted as âcorresponding new
bank'' in terms of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and therefore,
the provision of Section 115JB cannot be applied and consequently, the tax on book profits (MAT) are not
applicable to the banks.
The Income Tax Department has completed the Income Tax Assessment for the Assessment Year (A.Y.) 2023¬
24 vide order u/s 143(3) read with section 144B of the Income Tax Act dated 14/03/2025 where the Income
Tax Department has not accepted the above said judgement of Income Tax Appellate Tribunal, âSpecial Bench''
Mumbai and treated Section 115JB as applicable to the Bank against which Bank has already filed appeal
before appellate authority. As a matter of prudence and considering the above assessment order of A.Y. 2023¬
24, the Bank has continued to make the provision of Minimum Alternative Tax (MAT) u/s 115JB of ''447.24
Crore for current year (Previous Year ''275.33 Crore). The Bank has also recognized corresponding MAT credit
entitlement (''2,407.02 Crore as on 31.03.2025) as an asset under section 115 JAA of the Income Tax Act,
1961 and the said MAT credit along with interest is receivable/adjusted from/by the Income tax Department. The
said being an interim / part order, execution will take place on award of final order.
Management will continue to contest the applicability of Section 115JB of the Income Tax Act, 1961 before
appropriate authorities.
iii. Keeping in view the significant provisioning requirements and revision in guidelines of Deferred Tax Assets
(DTA) in CET1 calculation by RBI tax review based on management''s estimate of possible tax benefits against
timing difference has been carried out and ''3,145.57 Crore has been recognized as Deferred Tax Assets as
of 31st March 2025 taking applicable tax rate of 34.944%. Component of deferred tax assets/ liabilities as on
31st March 2025 are as under:
i) Accounting Standard 23 -
Accounting for Investments in associates in consolidated financial Statements Since Investments of the bank in
its Associates are participative in nature and the Bank having the power to exercise significant influence on their
activities, such Investments are recognized in the Consolidated Financial Statements of the Bank. (Previous year:
Since Investments of the bank in its Associates are participative in nature and the Bank having the power to exercise
significant influence on their activities, such Investments are recognized in the Consolidated Financial Statements of
the Bank).
i. Claims against the bank not acknowledged as debt under contingent liabilities (schedule 12) includes ''6,519.17
Crore (Previous year ''5,964.67 Crore) towards disputed Income Tax liability of the parent Bank. It includes
Income tax appeals at various levels by bank and Income tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank based on various judicial pronouncements and favorable
decisions in Bank''s own case. Payments/ adjustments against the said disputed dues are included under Other
Assets (schedule 11). Disputed service tax matter and GST matter as on March 31st, 2025 is ''15.16 Crore.
m) Additional Disclosures: -
Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and
Cyber Frauds. The bank has formulated policy/procedures as per RBI circular RBI/2010-11/494 DBS.CO.ITC.BC.No.
6/31. 02.008/2010-11 dated April 29, 2011. These policy/procedures are being reviewed by the management of
the bank on periodical basis. The Information Security Management System (ISMS) policy was last reviewed by the
Board of Directors in the meeting held on 20.01.2025.
n) Payment to Micro, Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act,
2006: - There has been no reported cases of the delayed payments of the principal amount or interest due to Micro,
Small & Medium Enterprises.
o) With reference to the RBI guidelines DBOD No.BPBC.57/62-88 dated December 31, 1988, Inter-Bank Participation
Certificates (IBPC) Lending has been undertaken by the bank & accordingly, the outstanding as on 31.03.2025 is
''22,00,00,00,000.00 Interest income is therefore ''41,58,90,410.00.
p) During the Year ended 31st March, 2025, the Bank has continued the provision of ''500 lakh in respect of investment
in Alternate Investment Fund (AIF), made in March 2024, as per RBI circular RBI/2023-24/140 DOR. STR.
REC.85/21.04.048/2023-24 dated 27th March, 2024
q) Disclosure on Acquisition of Stake in Insurance Companies
Pursuant to Regulation 29 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for
Corporate Persons) Regulations, 2016, the Bank was declared the successful bidder for Category I assets and was
issued a Letter of Intent (LOI) on August 20, 2024 by the Resolution Professional in the matter of CIRP of M/s Future
Enterprises Limited.
This pertains to the acquisition of 24.91% shareholding in Future Generali India Insurance Company Limited
(FGIICL), and 25.18% shareholding in Future Generali India Life Insurance Company Limited (FGILICL), earlier
held by Future Enterprises Limited. Bank has paid entire amount of bid of ''50800 lakhs for the said acquisition.
Further bank has received all requisite regulatory approvals for the aforementioned acquisition, as detailed below:
Competition Commission of India (CCI) - Approval received on October 15, 2024 Reserve Bank of India (RBI) -
Approval received on November 21,2024, permitting the Bank to participate in the insurance sector through a joint
venture in FGIICL and FGILICL Insurance Regulatory and Development Authority of India (IRDAI) - Approval received
on February 06, 2025 Transfer of said shares in Demat account of the bank will effect upon direction of Hon''ble NCLT,
Mumbai Bench. The matter will be heard on May 07, 2025
r) In preparation of consolidated financial statement in accordance with applicable Accounting Standards issued by the
ICAI, Bank has considered unaudited financials of its RRB''s i.e. Uttar Bihar Gramin Bank, Muzaffarpur & Uttar Banga
Kshetriya Gramin Bank, Cooch Behar.
Further as per DFS gazette notification CG-DL-E-07042025-26232 dated 05th April 2025, where Central Government
in consultation with NABARD, Banks and various stake holders has provided amalgamation of RRBs with effect from
May 01,2025.
s) Previous year figures have been re-grouped / re-classified wherever considered necessary to confirm current year''s
classification.
VIVEK WAHI M V MURALI KRISHNA MAHENDRA DOHARE
Executive Director Executive Director Executive Director
M. V. RAO
Managing Director & CEO
HARDIK M. SHETH MANORANJAN DASH PRIAVRAT SHARMA S. K. HOTA PRADIP P. KHIMANI
Director Director Director Director Director
For A.R. & CO. For A D B & COMPANY For AMIT RAY & CO. For JAIN PARAS BILALA & CO
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
FR. No. 002744C FR. No. 005593C FR. No. 000483C FR. No. 011046C
(CA ANIL GAUR) (CA SHIKHAR CHAND JAIN) (CA JITENDRA PANDEY) (CA PARAS BILALA)
PARTNER PARTNER PARTNER PARTNER
M. No. 17546 M. No. 074411 M. No. 177655 M. No. 400917
Place: Mumbai
Date: April 28, 2025
Mar 31, 2024
The average LCR for the quarter ended March 31, 2024 was at 205.09% as against 285.51% for the quarter ended March 31, 2023 and well above the regulatory prescribed minimum requirement of 100%. The average HQLA for the quarter ended March 31,2024 was '' 98,005.00 crore as against '' 1,06,207.00 crore for the quarter ended March 31, 2023.
The average LCR for the year ended March 31,2024 was at 223.77 % as against 302.34% for the year ended March 31, 2023.
c) Net Stable Funding ratio (NSFR): (This has not been audited by Statutory Central Auditor)
Reserve Bank of India vide its circular no. BR.BPBC.No.106/21.04.098/2017-18 May 17, 2018 had issued guidelines on âBasel III Framework on Liquidity Standards - Net Stable Funding Ratio (NSFR)â. The guidelines for NSFR were effective from October 1,2021.
The objective of NSFR is ensure reduction in funding risk over a longer time horizon extending to one year by requiring banks to fund their activities in relation to the composition of their assets and off balance sheet activities, with sufficiently stable sources of funding on an on-going basis. A sustainable funding structure is intended to reduce the probability of erosion of a bank''s liquidity position due to disruptions in the regular sources of funding. NSFR limits over-reliance on short term wholesale funding, encourages better assessment of funding risk across all on and off balance sheet items, and promotes funding stability.
The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. âAvailable Stable Fundingâ (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of stable funding required (âRequired Stable Fundingâ) (RSF) is a function of the liquidity characteristics and residual maturities of the various assets held by the Bank as well as those of its off-balance sheet (OBS) exposures. The Available Stable Funding (ASF) is primarily driven by the total regulatory capital as per Basel III Capital Adequacy guidelines stipulated by RBI and deposits from retail customers, small business customers and non-financial corporate customers. Under the Required Stable Funding (RSF), the primary drivers are unencumbered performing loans with residual maturities of one year or more.
The runoff factors for the stressed scenarios are prescribed by the RBI, for various categories of liabilities (viz., deposits, unsecured and secured wholesale borrowings), undrawn commitments, derivative-related exposures, and offset with inflows emanating from assets maturing within the same time period. The minimum NSFR requirement set out in the RBI guideline is 100% on an on-going basis.
The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by the Board. The Asset Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity and interest rate risk management strategy of the Bank in line with its risk management objectives and ensures adherence to the risk tolerance/limits set by the Board.
Central Bank of India on standalone basis maintained Available Stable Funding (ASF) of '' 3, 76,703.47 crore against the RSF requirement of '' 2,43,138.59 crore as on 31st March 2024. The NSFR for the quarter ended Mar 2024 is at 154.93%.
c) Sale and transfer to / from HTM category
As per the directives of reserve Bank of India and our Investment Policy, profit on sale of investments under HTM category should be first taken to P&L account and thereafter be appropriated to the Capital Reserve Account.
During the year ended March 31, 2024 the value of sales and transfers of securities to/from HTM category (excluding one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year, sale to RBI under pre- announced Open Market Operation auctions and repurchase of Government securities by the government of India) had not exceeded 5% of the Book Value of the Investment held in HTM category at the beginning of the year.
As per RBI circular DBR. No. BP BC.45/21.04.048/2018-19 dated 7th June 2019, the bank has implemented Resolution Plans for 8 borrowers (Total 10 borrowers was there at March 31,2023) having total exposure of '' 3,723.19 crore ('' 4,810.49 crore as at March 31,2023) at the time of implementation. The total exposure outstanding in such resolved accounts as at March 31,2024 is '' 1,978.56 crore ('' 1,930.09 crore for March 31,2023).
e) Divergence in asset classification and provisioning:
No disclosure on divergence in asset classification and provision for NPAs is required with respect to RBI''s supervisory process for the year ended March 31,2024, based on the conditions mentioned in RBI circular No. DOR.ACC.REC. No.74/21.04.018/2022-23 dated 11th October 2022.
g) Fraud Accounts
In terms of RBI circular RBI/2015-16/376/DBR.No.BP.BC.92/21.04.048/2015-16 dated 18.04.2016 details of Fraud and Provision are as below:-
Bank holds full provision as applicable against outstanding balance as on 31.03.2024 in respect of frauds reported during the year ended 31.03.2024.
# Standard Restructured accounts exposure. The Bank has maintained additional provision on standard restructured accounts at 5% & 10% whichever applicable.
iii. Disclosure with respect to accounts kept as standard due to the Court order:
As per directions of RBI vide letter no 10655/21.04.048/2018- 19 dated 21.06.2019 (as amended from time to time) disclosure with respect to accounts kept as standard due to the Court order, M/s. SEL MANUFACTURING CO LTD with an Outstanding Balance of '' 45,112,763.50 is classified as Standard as per Court orders vide Hon''ble NCLT Chandigarh Bench No. NCLT/No/CHD/REG/4010 dated 18/02/2021; however Bank is holding provision of '' 6,766,914.52 as per IRAC Norms, including provision for unrealized interest on prudent basis.
iv. Additional Provisions at higher than prescribed rates:
In compliance to the RBI guidelines on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances vide RBI/2023-24/06 DOR.STR.REC.3/21.04.048/2023-24 dated 01.04.2023, Point No. 5.7.2, Bank, after evaluation of various sectors, had changed the sectors considered as Stress for the purview of additional provision at higher than prescribed rates in Standard Advances. Accordingly, Vide Board Agenda No. BM/756/2023-24/10/CAT-4/2.03 Dated 28.02.2024 Stressed Sector has been reviewed as under;
Accordingly, Additional Provision at higher than prescribed rates in Standard Advances in Stressed Sector during March 31,2024 is '' 6.01 crore ('' 30.89 Crore as on 31.03.2023)
i) Disclosure with respect to NCLT provisions:
As per RBI circular No. DBR No. BP15199/21.04.048/2016-17 and DBR No. BP1906/21.04.048/2017-18 dated June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of '' 5,883.23 crore including FITL of '' 125.00 crore as at 31st March 2024 ('' 6,316.13 crore for March 31, 2023 including FITL of '' 127.90 crore) i.e. 100 % of total outstanding including Investment as at 31st March, 2024.
j) Disclosure in respect of Additional Provision to be made as per RBI guidelines on Prudential Framework for Resolution of Stressed Assets dated 07.06.2019:-
RBI vide their circular no. RBI/ 2018-19/ 203 DBR. No.BPBC. 45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Asset issued guidelines for implementation of Resolution Plan, also containing requirements of additional provision as per Para 17 of this RBI circular. The outstanding in such cases as at March 31,2024 is '' 756.51 crore ('' 1,602.59 crore for March 31,2023) and in compliance of the above RBI circular, the Bank has held additional provision of '' 117.44 crore as at March 31,2024 ('' 251.26 crore for March 31,2023) and hold total provision of '' 480.18 crore ('' 1,116.67 crore for March 31,2023) as at March 31,2024.
g) Unhedged Foreign Currency exposure:
The Bank has put in place a Board approval policy and process for managing currency induced credit risk. The credit appraisal memorandum (Executive Brief) prepared at the time of origination and review of a credit facility covers the required details viz. Total Foreign Exchange exposure, of which hedged position & if un-hedged, how the borrower plans to cover.
Provision on the un-hedged portion of foreign portion of currency exposures of customers is made on quarterly basis.
As per the Board approval policy, all Advances involving foreign currency lending of USD 1 million or equivalent and above is mandatory to be hedged unless specially permitted by the competent authorities. However hedging need not be insisted in the following cases
⢠Where Forex loans are extended to finance exports, hedging need not be insisted. However it should be ensured that such customers have uncovered receivables to cover the loan amount.
⢠Where Forex loans are extended for meeting forex expenditure.
⢠In respect of advances involving foreign currency loans below USD 1 million or equivalent:
⢠In case of corporates who are rated âAâ and above, Competent Authority may permit allowing advances involving foreign currency loans without insisting for hedging.
⢠Customers who do not satisfy the conditions stipulated above will be required to provide cash margin, if they prefer to keep exposure open, to the extent of the forward premium prevailing for the tenor of un-hedged exposure.
In accordance with RBI guidelines, as at March 31,2023, the amount of bank''s credit exposure against un-hedged Foreign Currency Exposure of borrowers attracting 80 bps provisions was ''. 509.29 crore (Total UFCE Exposure of '' 1,575.24 crore). The additional RWA on this exposure is '' 92.71 crore against this additional minimum capital requirement is '' 10.66 crore.
Based on the available financial statements and the declarations from borrowers, the Bank has estimated the liability for Un-hedged Foreign Currency in terms of RBI circular RBI/2022-23/131 DOR.MRG.REC.76/00-00-007/2022-23 dated October 11, 2022 and is holding a provision of ''. 4.28 crore as on March 31,2024 (Previous Year ''. 7.61 Crore as on March 31,2023)
d) Disclosures on risk exposure in derivatives: i) Qualitative Risk Exposure
a) The Bank currently deals in over the counter (OTC) interest rate and currency derivatives as also in Interest Rate Futures and Exchange Traded Currency Derivatives. Interest Rate Derivatives dealt by the Bank are rupee interest rate swaps and foreign currency interest rate swaps. Currency derivatives dealt by the Bank are USD/ INR currency swaps and cross currency swaps. The products are offered to the Bank''s customers to hedge their exposures and the Bank also enters into derivatives contracts to cover off such exposures. Derivatives are used by the Bank both for trading as well as hedging balance sheet items.
b) Derivative transactions carry market risk i.e. the probable loss the Bank may incur as a result of adverse movements in interest rates/exchange rates and credit risk i.e. the probable loss the Bank may incur if the counterparties fail to meet their obligations. The Bank''s âPolicy for Derivativesâ approved by the Board
prescribes the market risk parameters (Greeks limits, Loss Limits, cut-loss triggers, open position limits, duration, modified duration, PV01 etc.) as well as customer eligibility criteria (credit rating, tenure of relationship, limits and customer appropriateness and suitability of policy (CAS) etc.) for entering into derivative transactions. Credit risk is controlled by entering into derivative transactions only with counterparties satisfying the criteria prescribed in the Policy. Appropriate limits are set for the counterparties taking into account their ability to honor obligations and the Bank enters into ISDA agreement with each counter party.
c) The Asset Liability Management Committee (ALCO) of the Bank oversees efficient management of these risks. The Bank''s Market Risk Management Department (MRMD) identifies, measures, monitors market risk associated with derivative transactions, assists ALCO in controlling and managing these risks and reports compliance with policy prescriptions to the Risk Management Committee of the Board (RMCB) at regular intervals.
d) The accounting policy for derivatives has been drawn-up in accordance with RBI guidelines, the details of which are presented under Schedule 17: Significant Accounting Policies (SAP) for the financial year 2023-24.
e) Interest Rate Swaps are mainly used for hedging of the assets and liabilities.
f) Majority of the swaps were done with First class counterparty banks.
g) Derivative transactions comprise of swaps which are disclosed as contingent liabilities. The swaps are categorized as trading or hedging.
h) Derivative deals are entered with only those interbank participants for whom counterparty exposure limits are sanctioned. Similarly, derivative deals entered with only those corporates for whom credit exposure limit is sanctioned. Collateral requirements for derivative transactions are laid down as a part of credit sanctions terms on a case-by-case basis. Such collateral requirements are determined based on usual credit appraisal process. The Bank retains the right to terminate transactions as a risk mitigation measure in certain cases.
h) Disclosure on amortization of expending on account of enhancement in family pension of employees of Banks :-
RBI vide their Circular No.: RBI/2021-22/105 DORACC.REC.57/21.04.018/2021-22 dated 4th October 2021, has permitted Banks to amortize the additional liability on account of revision in family pension for employees over a period of not exceeding 5 (five) years, beginning with financial year ended 31st March 2022, subject to a minimum of 1/5th of the total amount being expensed every year. Based on the Actuarial Valuation report obtained by the Bank the additional liability on account of revision in family pension for employees is arrived at '' 821.95 crore. Bank has opted to amortize the same as per the said circular of RBI and has charged an amount of '' 544.52 crore out of '' 821.95 crore to the Profit & Loss account during the financial year ended 31st March, 2022. During the year ended March 31,2024, the Bank has charged '' 113.03 crore to the Profit and Loss account. The unamortized expense being carried forward to subsequent years is NIL.
* This shall contain the cumulative amount since the RE started offering green deposits. For example, if a bank has commenced raising green deposits from June 1, 2023, then the annual financial statement for the period ending March 31,2025, would contain particulars of deposits raised and allocated from June 1,2023, till March 31,2025. Further, the actual amount of green deposits raised during the year and use of such funds shall be given under this disclosure. **Under each category, REs may provide sub-categories based on the funds allocated to each subsector. For example, REs may provide sub-categories like solar energy, wind energy, etc. under âRenewable Energyâ.
The expected contribution to the Pension and Gratuity fund for next year is '' 131.78 crore and '' 26.79 Crore respectively which is to be received in the FY 2024-25.
ii. Defined Contribution Plan:
The bank has a defined contribution pension scheme (DCPS) applicable to all categories of officers and employees joining bank on or after 01/04/2010. The scheme is managed by NPS trust under the aegis of the Pension Fund Regulatory and Development Authority. Protean eGov Technologies Ltd (Formerly NSDL e-Governance Infrastructure Limited) has been appointed as the Central Record Keeping Agency for the NPS. During FY 2023-24, the bank has contributed '' 252.94 crore (Previous year '' 244.48 crore).
iii. Employees'' Provident Fund:-
During the year bank has recognized expenses of '' 0.77 crore and corresponding year '' 0.96 crore on account of employer contribution for the employees covered under PF option Scheme i.e. PF Optees.
iv. A) Long Term Employee Benefits (Unfunded Obligation):
During the year bank has recognized expenses of '' 131.38 crore (Previous Year '' 78.70 crore) towards leave encashment expenses based on actuarial valuation.
As per the revised guidelines of Reserve Bank of India the Bank has recognized Treasury Operations Corporate/ Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no secondary reporting segments.
Primary (Business Segment)
The following are the primary segments of the Bank:- Treasury
- Corporate / Wholesale Banking
- Retail Banking
- Other Banking Business.
The present accounting and information system of the Bank based on the present internal, organizational and management reporting structure and the nature of their risk and returns, the data on the primary segments have been computed as under:
i. Treasury -
The Treasury Segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts. The revenue of the treasury segment primarily consists of fees and gains or losses from trading operations and interest income on the investment portfolio.
ii. Corporate / Wholesale Banking -
The Corporate / Wholesale Banking segment comprises the lending activities of Corporate Accounts, Trust / Partnership Firms Companies and statutory bodies which are not included under Retail Banking and Stressed Assets Management Branch. These include providing loans and transaction services to corporate and institutional clients.
iii. Retail Banking -
The Retail Banking Segment comprises of retail branches, which primarily includes Personal Banking activities including lending activities to corporate customers having banking relations with these branches. The Retail Banking Segment consists of all exposures up to a limit of '' 7.50 crore (including Fund Based and Non Fund Based exposures) subject to orientation product granularity criteria and individual exposures. This segment also includes agency business and ATMs.
E) Accounting Standard -10 & Accounting Standard - 19 & (Freehold & Leases)
i. The premises of the Bank were revalued to reflect the market value as on 31.03.2024 based on valuation reports of external independent valuers'' and approved by the Board of Directors and '' 490.00 crore ('' 329.98 crore for Freehold properties and '' 160.02 crore. For Leasehold properties) increases in value thereof have been credited to Revaluation Reserve Account.
ii. In case of assets, which have been revalued, the depreciation is provided on the revalued amount charged to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount '' 54.87 crore ('' 38.71 crore for Freehold properties and '' 16.16 crore for Leasehold properties) for F.Y. 2023-24 upto March 2024 (previous year 2022-23 '' 65.36 crore) is transferred from âRevaluation Reserves'' and credited to âRevenue and Other Reservesâ. Depreciation on increased value on account of revaluation has not been considered for the financial year ending 31.03.2024.
iii. Land obtained on lease by bank includes market value of buildings as on 31.03.2024 for '' 6.36 crore (previous year '' 8.99 crore) with written down value as NIL (previous year NIL), the lease period of which has expired and the bank is still having its offices/building on these lands and vacant land obtained on lease by the Bank includes market value as on 31.03.2024 is '' 16.43 crore with written down value as NIL, where the lease period is expired, perusing with authorities for lease renewals.
iv. As per AS-19, operating leases primarily comprise office premises and staff residences, which are renewable at the option of the Bank.
i) Liability for Premises taken on Non-Cancellable operating lease are '' NIL as on 31.03.2024
ii) Amount of lease payments recognized in the P&L Account for operating lease is '' 454.39 crore as on 31.03.2024 (Previous year '' 392.02 crore).
v. Additional Disclosure:
a) Premises obtained by bank include own property of '' 37.13 crore for which registration formalities are still under progress.
b) The title of property amounting to '' 37.13 crore acquired on disposal of security are not in favour of the Bank as the matter is sub-judice.
Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial
decisions on disputed issues.
i. Claims against the bank not acknowledged as debt under contingent liabilities (schedule 12) includes '' 5,964.67 crore (previous year '' 5,969.69 crore) towards disputed Income Tax liability of the parent Bank. It includes Income tax appeals at various levels by bank and Income tax department. Provision for disputed amount of taxation is not considered necessary by the Bank on the basis of various judicial pronouncements and favorable decisions in Bank''s own case. Payments/ adjustments against the said disputed dues are included under Other Assets (schedule 11). Disputed service tax matter as on March 31st, 2024 is '' 9.12 crore.
ii. Government of India has inserted Section 115BAA in the Income Tax Act 1961 (âActâ) vide the Taxation Laws (Amendment) Ordinance 2019 dated September 20, 2019 which provides a non-reversible option to domestic companies to pay corporate tax at a reduced rate effective from April 01,2019 subject to certain conditions. The Bank has assessed the applicability of the act and opted to continue the existing tax rate (i.e. 34.944%) for the financial year ended March 31st, 2024.
iii. In the Opinion of the Management, the provisions of Section 115JB of the Income Tax Act, 1961 are not applicable. Without prejudice to this stand, the Bank has recognized a MAT tax provision of '' 275.33 crore for the current financial year and the entire sum, being MAT credit entitlement ('' 1,960.90 crore as on 31.03.2024) under section 115 JAA of the Income Tax act, 1961 has been recognized and treated as an asset. The applicability of provisions of Section 115JB (post amendment by the Finance Act, 2012) of the Income Tax Act, 1961 is under adjudication before Special Bench of Income Tax Appellate Tribunal, Mumbai.
iv. Keeping in view the significant provisioning requirements and revision in guidelines of Deferred Tax Assets (DTA) in CET1 calculation by RBI tax review based on management''s estimate of possible tax benefits against timing difference has been carried out and '' 4,294.57 crore has been recognized as Deferred Tax Assets as at 31st March 2024. Component of deferred tax assets/ liabilities as on 31st March 2024 are as under:
Net decrease in Deferred Tax Assets for the Financial Year 2023-24 is '' 1,504.33 crore (Previous year '' 1,063.14 crore) has been recognized in profit & loss account.
g) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bank''s assets comprise financial assets to which Accounting Standard-28 on impairment of assets is not applicable. In the opinion of the Management there is no material impairment on Other Assets other than financial assets as at March 31,2024 requiring recognition in terms of the Standard
I) Additional Disclosures:-
Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and Cyber Frauds. The bank has formulated policies as per RBI circular RBI/2010-11/494 DBS.CO.ITC.BC.No. 6/31. 02.008/2010-11 dated April 29, 2011. These policies are being reviewed by the management of the bank on periodical basis. The policies were last reviewed by the Board of Directors in the meeting held on 28.02.2024.
J) Payment to Micro, Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act, 2006:- There has been no reported case of delayed payments of the principal amount or interest due thereon to Micro, Small & Medium Enterprises.
K) In terms of RBI guidelines DBOD No.BPBC.57/62-88 dated December 31,1988, Inter-Bank Participation Certificates (IBPC) Lending of '' NIL has been undertaken. Accordingly, these have been adjusted from the advances of the Bank. Interest income of '' NIL has been recognized against these borrowings.
L) Disclosure with respect to spreading of MTM losses in asset:
This has reference to RBI circular RBI/2017-18/200 DBR No BPBC.113/21.04.048/2017-18 dated 15 June 2018 regarding the option to spread provisioning for mark to market (MTM) losses on investments held in AFS and HFT on account of sharp increase in the yields on Government Securities: NIL
M) Previous year figures have been re-grouped / re-classified wherever considered necessary to confirm current year''s classification.
Mar 31, 2023
The average LCR for the quarter ended March 31, 2023 was at 285.51% as against 311.32% for the quarter ended March 31, 2022 and well above the regulatory prescribed minimum requirement of 100%. The average HQLA for the quarter ended March 31,2023 was '' 106,207.00 crore as against '' 1,28,085.00 crore for the quarter ended March 31, 2022.
The average LCR for the year ended March 31,2023 was at 302.34 % as against 360.81% for the year ended March 31, 2022.
c) Net Stable Funding ratio (NSFR): (This has not been audited by Statutory Central Auditor)
Reserve Bank of India vide its circular no. BR.BPBC.No.106/21.04.098/2017-18 May 17, 2018 had issued guidelines on âBasel III Framework on Liquidity Standards - Net Stable Funding Ratio (NSFR)â. The guidelines for NSFR were effective from October 1,2021.
The objective of NSFR is ensure reduction in funding risk over a longer time horizon extending to one year by requiring banks to fund their activities in relation to the composition of their assets and off balance sheet activities, with sufficiently stable sources of funding on an on-going basis. A sustainable funding structure is intended to reduce the probability of erosion of a bank''s liquidity position due to disruptions in the regular sources of funding. NSFR limits over-reliance on short term wholesale funding, encourages better assessment of funding risk across all on and off balance sheet items, and promotes funding stability.
The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. âAvailable Stable Fundingâ (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of stable funding required (âRequired Stable Fundingâ) (RSF) is a function of the liquidity characteristics and residual maturities of the various assets held by the Bank as well as those of its off-balance sheet (OBS) exposures. The Available Stable Funding (ASF) is primarily driven by the total regulatory capital as per Basel III Capital Adequacy guidelines stipulated by RBI and deposits from retail customers, small business customers and non-financial corporate customers. Under the Required Stable Funding (RSF), the primary drivers are unencumbered performing loans with residual maturities of one year or more.
The runoff factors for the stressed scenarios are prescribed by the RBI, for various categories of liabilities (viz., deposits, unsecured and secured wholesale borrowings), undrawn commitments, derivative-related exposures, and offset with inflows emanating from assets maturing within the same time period. The minimum NSFR requirement set out in the RBI guideline is 100% on an on-going basis.
The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by the Board. The Asset Liability Committee (ALCO) is a decision-making unit responsible for implementing the liquidity and interest rate risk management strategy of the Bank in line with its risk management objectives and ensures adherence to the risk tolerance/limits set by the Board.
Central Bank of India on standalone basis maintained Available Stable Funding (ASF) of '' 3,44,387.62 Crore against the RSF requirement of '' 2,13,238.27 Crore as on 31st March 2023. The NSFR for the quarter ended Mar 2023 is at 161.50%.
c) Sale and transfer to / from HTM category
During the year ended March 31, 2023 the value of sales and transfers of securities to/from HTM category (excluding one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year, sale to RBI under pre-announced Open Market Operation auctions and repurchase of Government securities by the government of India) had not exceeded 5% of the Book Value of the Investment held in HTM category at the beginning of the year.
Profit on sale/redemption of HTM securities amounted to '' 257.27 crore for the financial year ended 31 March 2022.
Divergence in asset classification and provisioning:
No disclosure on divergence in asset classification and provision for NPAs is required with respect to RBI''s supervisory process for the year ended March 31,2022, based on the conditions mentioned in RBI circular No. DOR.ACC.REC. No.74/21.04.018/2022-23 dated 11th October 2022.
Disclosure of Transfer of Loan Accounts (SMAs & NPAs) in terms of RBI Circular No. DOR.STR.REC.51/21.04.048/ 2021-22 dated 24th September 2021 (as amended)
The outbreak of Corona virus (COVID-19) pandemic globally including India has resulted in slowdown of economic activities and increased volatility in financial markets. The extent to which the COVID-19 pandemic will impact the Bankâs financial results will depend on future developments, which are highly uncertain. Given the uncertainty, because of COVID-19 pandemic, the Bank is continuously monitoring any material change in future economic condition which may impact the Bankâs operations and its financial results in future depending on the developments which may differ from that estimated as at the date of approval of the financial statements.
i. Disclosure with respect to NCLT provisions:
As per RBI circular No. DBR No. BP 15199/21.04.048/2016-17 and DBR No. BP.1906/21.04.048/2017-18 dated June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of '' 6316.13 crore as at 31 March 2023 ('' 6406.10 crore for March 31, 2022) (including FITL of '' 127.90 crore) @ (100 % of total outstanding including Investment) as at March 31,2023.
j. Resolution of Stressed Assets:
RBI vide their circular no. RBI/ 2018-19/ 203 DBR. No.BPBC. 45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Asset issued guidelines for implementation of Resolution Plan, also containing requirements of additional provision as per Para 17 of this RBI circular. The outstanding in such cases as at March 31,2023 is '' 1602.59 crore ('' 1757.84 crore for March 31,2022) and in compliance of the above RBI circular, the Bank has held additional provision of '' 251.26 crore ('' 435.37 crore for March 31,2022) as at March 31,2023 and hold total provision of '' 1116.67 crore ('' 1092.32 crore for March 31,2022) as at March 31,2023.
g) Unhedged Foreign Currency exposure:
The Bank has put in place a Board approval policy and process for managing currency induced credit risk. The credit appraisal memorandum (Executive Brief) prepared at the time of origination and review of a credit facility covers the required details viz. Total Foreign Exchange exposure, of which hedged position & if un-hedged, how the borrower plans to cover.
Provision on the un-hedged portion of foreign portion of currency exposures of customers is made on quarterly basis.
As per the Board approval policy, all Advances involving foreign currency lending of USD 1 million or equivalent and above is mandatory to be hedged unless specially permitted by the competent authorities. However hedging need not be insisted in the following cases
⢠Where Forex loans are extended to finance exports, hedging need not be insisted. However it should be ensured that such customers have uncovered receivables to cover the loan amount.
⢠Where Forex loans are extended for meeting forex expenditure.
⢠In respect of advances involving foreign currency loans below USD 1 million or equivalent:
⢠In case of corporates who are rated âAâ and above, Competent Authority may permit allowing advances involving foreign currency loans without insisting for hedging.
⢠Customers who do not satisfy the conditions stipulated above will be required to provide cash margin, if they prefer to keep exposure open, to the extent of the forward premium prevailing for the tenor of un-hedged exposure.
In accordance with RBI guidelines, as at March 31,2023, the amount of bank''s credit exposure against un-hedged Foreign Currency Exposure of borrowers attracting 80 bps provisions was ''. 4604.40 Crore. The additional RWA on this exposure is '' 87.04 Crore against this additional minimum capital requirement is '' 10 Crore.
Based on the available financial statements and the declarations from borrowers, the Bank has estimated the liability for Un-hedged Foreign Currency in terms of RBI circular RBI/2022-23/131 DOR.MRG.REC.76/00-00-007/2022-23 dated October 11,2022 and is holding a provision of ''. 7.61 Crore as on March 31 2023 (Previous Year ''. 4.18 Crore)
c) Disclosures on risk exposure in derivatives:
I) Qualitative Risk Exposure
i. The Bank currently deals in over the counter (OTC) interest rate and currency derivatives as also in Interest Rate Futures and Exchange Traded Currency Derivatives. Interest Rate Derivatives dealt by the Bank are rupee interest rate swaps and foreign currency interest rate swaps. Currency derivatives dealt by the Bank are USD/INR currency swaps and cross currency swaps. The products are offered to the Bank''s customers to hedge their exposures and the Bank also enters into derivatives contracts to cover off such exposures. Derivatives are used by the Bank both for trading as well as hedging balance sheet items.
ii. Derivative transactions carry market risk i.e., the probable loss the Bank may incur as a result of adverse movements in interest rates/exchange rates and credit risk i.e. the probable loss the Bank may incur if the counterparties fail to meet their obligations. The Bank''s âPolicy for Derivativesâ approved by the Board prescribes the market risk parameters (Greeks limits, Loss Limits, cut-loss triggers, open position limits, duration, modified duration, PV01 etc.) as well as customer eligibility criteria (credit rating, tenure of relationship, limits and customer appropriateness and suitability of policy (CAS) etc.) for entering into derivative transactions. Credit risk is controlled by entering into derivative transactions only with counterparties satisfying the criteria prescribed in the Policy. Appropriate limits are set for the counterparties taking into account their ability to honor obligations and the Bank enters into ISDA agreement with each counter party.
iii. The Asset Liability Management Committee (ALCO) of the Bank oversees efficient management of these risks. The Bank''s Market Risk Management Department (MRMD) identifies, measures, monitors market risk associated with derivative transactions, assists ALCO in controlling and managing these risks and reports compliance with policy prescriptions to the Risk Management Committee of the Board (RMCB) at regular intervals.
iv. Interest Rate Swaps are mainly used for hedging of the assets and liabilities.
v. Majority of the swaps were done with First class counterparty banks.
vi. Derivative transactions comprise of swaps which are disclosed as contingent liabilities. The swaps are categorized as trading or hedging.
vii. Derivative deals are entered with only those interbank participants for whom counterparty exposure limits are sanctioned. Similarly, derivative deals entered with only those corporates for whom credit exposure limit is sanctioned. Collateral requirements for derivative transactions are laid down as a part of credit sanctions terms on a case-by-case basis. Such collateral requirements are determined based on usual credit appraisal process. The Bank retains the right to terminate transactions as a risk mitigation measure in certain cases.
Bank has not taken any position in Credit Default Swap in the financial year 2022-23.
8) Disclosure Relating to securitization
Policy on Securitization of Standard Assets in line with RBI Guidelines has been approved by our Bank''s Board. At present our Bank has no exposure under this segment.
9) Off-Balance Sheet SPVs sponsored
The Bank had not floated any off Balance Sheet SPV.
The Bank has not purchased PSLC during FY 2021-22 and FY 2022-23.
e) Provisions and Contingencies: Refer note no 15 (i) of Disclosure made as per the Accounting Standard-29 hereinafter in this schedule.
f) Implementation of IFRS converged Indian Accounting Standards (Ind AS)
RBI vide Circular DBR.BPBC.No.29/21.07.001/2018-19 dated March 22, 2019 deferred implementation of Ind AS till further notice. However, RBI requires all banks to submit Proforma Ind AS financial statements every half year. Accordingly, the Bank is preparing and submitting to RBI Proforma Ind AS financial statements every half year after approval by Management.
Disclosure on amortization of expending on account of enhancement in family pension of employees of Banks :-
RBI vide their Circular No.: RBI/2021-22/105 DORACC.REC.57/21.04.018/2021-22 dated 4th October 2021, has permitted Banks to amortize the additional liability on account of revision in family pension for employees over a period of not exceeding 5 (five) years, beginning with financial year ended 31st March 2022, subject to a minimum of 1/5th of the total amount being expensed every year. Based on the Actuarial Valuation report obtained by the Bank the additional liability on account of revision in family pension for employees is arrived at '' 821.95 crore. Bank has opted to amortize the same as per the said circular of RBI and has charged an amount of '' 544.52 crore out of '' 821.95 crore to the Profit & Loss account during the financial year ended 31st March, 2022. During the year ended March 31st, 2023, the Bank has charged '' 164.40 crore to the Profit and Loss account. The balance unamortized expense of ''.113.03 crore has been carried forward to subsequent years. The consequential impact of unamortised pension liability on net profit for the current financial year is '' 73.53 crores (net of taxes).
. Disclosure Requirements as per the Accounting Standards
The following information is disclosed in terms of Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI):
a) Accounting Standard - 5 âNet Profit or Loss for the period, Prior Period Items, and Changes in Accounting Policiesâ
The financial statements for the year ended March 31,2023 have been prepared following the Accounting Policies and practices as those followed in the annual financial statements for the year ended March 31, 2022 except for accounting of Performance Linked Incentives (PLI). Until the financial year 2021-22, PLI was accounted for on cash basis and from financial year 2022-23 the PLI is accounted for on accrual basis. This change in accounting policy has resulted in decrease in profit before tax by '' 104.24 crore for year ended March 31,2023.
The expected contribution to the Pension and Gratuity fund for next year is '' 245.08 crore and '' 14.30 Crore respectively.
ii. Defined Contribution Plan:
The bank has a defined contribution pension scheme (DCPS) applicable to all categories of officers and employees joining bank on or after 01/04/2010. The scheme is managed by NPS trust under the aegis of the Pension Fund Regulatory and Development Authority. National Securities Depositary Limited (NSDL) has been appointed as the Central Record Keeping Agency for the NPS. During 2021-22, the bank has contributed '' 244.48 crore (Previous year '' 146.97 crore).
iii. Employees'' Provident Fund:-
During the year bank has recognized expenses of '' 0.96 Crore and corresponding year '' 1.12 Crore on account of employer contribution for the employees covered under PF option Scheme i.e. PF Optees.
iv. Long Term Employee Benefits (Unfunded Obligation):
During the year bank has recognized expenses of '' 78.70 crore (Previous Year '' 43.24 crore) towards leave encashment expenses based on actuarial valuation.
Segment Reporting
As per the revised guidelines of Reserve Bank of India the Bank has recognized Treasury Operations Corporate/ Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no secondary reporting segments.
The following are the primary segments of the Bank:- Treasury
- Corporate / Wholesale Banking
- Retail Banking
- Other Banking Business.
The present accounting and information system of the Bank based on the present internal, organizational and management reporting structure and the nature of their risk and returns, the data on the primary segments have been computed as under:
The Treasury Segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts. The revenue of the treasury segment primarily consists of fees and gains or losses from trading operations and interest income on the investment portfolio.
ii. Corporate / Wholesale Banking -
The Corporate / Wholesale Banking segment comprises the lending activities of Corporate Accounts, Trust / Partnership Firms Companies and statutory bodies which are not included under Retail Banking and Stressed Assets Management Branch. These include providing loans and transaction services to corporate and institutional clients.
The Retail Banking Segment comprises of retail branches, which primarily includes Personal Banking activities including lending activities to corporate customers having banking relations with these branches. The Retail Banking Segment consists of all exposures up to a limit of '' 7.50 crore (including Fund Based and Non Fund Based exposures) subject to orientation product granularity criteria and individual exposures. This segment also includes agency business and ATMs.
Segments not classified under (i) to (iii) above are classified under this primary segment.
Secondary (Geographical Segment)
i) Domestic Operations - Branches/Offices having operations in India
ii) Foreign Operations - Bank has only one Joint Venture in Zambia.
e) Accounting Standard - 19 âLeasesâ
i. The premises of the Bank were revalued to reflect the market value as on 31.03.2021 based on valuation reports of external independent valuers'' and approved by the Board of Directors and '' 881.96 crore increase in value thereof have been credited to Revaluation Reserve Account.
ii. In case of assets, which have been revalued, the depreciation is provided on the revalued amount charged to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount '' 65.36 crore for March 2023 (previous year 2021-22 '' 54.12 crore) is transferred from âRevaluation Reserves'' and credited to âRevenue and Other Reservesâ.
iii. Land obtained on lease by bank includes market value as on 31.03.2021 is '' 8.99 crore (previous year '' 8.02 crore) with written down value as NIL (previous year '' NIL), the lease period of which has expired and the bank is still having its offices/building on these lands and vacant land obtained on lease by the Bank includes market value as on as on 31.03.2021 is '' 13.72 crore with written down value as NIL, where the lease period is expired, perusing with authorities for lease renewals.
iv. As per AS-19, operating leases primarily comprise office premises and staff residences, which are renewable at the option of the Bank.
i) Liability for Premises taken on non-Cancellable operating lease are NIL as on 31.03.2023.
ii) Amount of lease payments recognized in the P&L Account for operating leases is '' 392.02 crore as on 31.03.2023 (Previous Year '' 357.07 crore).
v. Additional Disclosure:
Premises obtained by the bank include own property of '' 37.13 crore for which registration formalities are still under progress.
The title of property amounting to '' 37.13 crore acquired on disposal of security are not in favor of bank as the matter is sub-judice.
g) Accounting Standard 22 -Accounting for Taxes on Income
Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial
decisions on disputed issues.
i. Claims against the bank not acknowledged as debt under contingent liabilities (schedule 12) includes '' 5726.89 crore (previous year '' 6050.22 crore) towards disputed Income Tax liability of the parent Bank. It includes Income tax appeals at various levels by bank and Income tax department. Provision for disputed amount of taxation is not considered necessary by the Bank on the basis of various judicial pronouncements and favorable decisions in Bank''s own case. Payments/ adjustments against the said disputed dues are included under Other Assets (schedule 11). Disputed service tax matter as on March 31st, 2023 is '' 7.64 crore.
ii. Government of India has inserted Section 115BAA in the Income Tax Act 1961 (âActâ) vide the Taxation Laws (Amendment) Ordinance 2019 dated September 20, 2019 which provides a non-reversible option to domestic companies to pay corporate tax at a reduced rate effective from April 01,2019 subject to certain conditions.
The Bank has assessed the applicability of the act and opted to continue the existing tax rate (i.e. 34.944%) for the financial year ended March 31st, 2023.
i. Details of Letter of Comfort issue by Banks and outstanding as on 31.03.2023 - There are no Letter of Comfort issued during the year as well as in previous year by Bank.
ii. Payment to Micro, Small & Medium Enterprises under the Micro, Small and Medium enterprises under the Micro, Small & Medium Enterprises Development Act,2006: There has been no reported cases of the delayed payments of the principal amount or interest due to Micro, Small & Medium Enterprises.
iii. Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and Cyber Frauds
The bank has formulated policies as per RBI circular RBI/2010-11/494 DBS.CO.ITC.BC.No. 6/31. 02.008/2010-11 dated April 29, 2011. These policies are being reviewed by the management of the bank on periodical basis. The policies were last reviewed by the Board of Directors in the meeting held on 17.03.2023.
k) Reserve Bank of India vide their letter dated June 13, 2017, has put the Bank under Prompt (PCA) Corrective Action in view of high net NPA and negative Return on Assets. Bank had complied with the PCA framework norms meticulously. Reserve Bank of India vide its communication CO.DOS.SED.No.S3988/14.01.040/2022-23 dated
September 20, 2022 has removed our Bank from the Prompt Corrective Action (PCA) framework.
l) Payment to Micro, Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act, 2006
There has been no reported case of delayed payments of the principal amount or interest due thereon to Micro, Small & Medium Enterprises.
m) In terms of RBI guidelines DBOD No.BPBC.57/62-88 dated December 31,1988, Inter-Bank Participation Certificates (IBPC) Lending of '' NIL has been undertaken. Accordingly, these have been adjusted from the advances of the Bank. Interest income of '' NIL has been recognized against these borrowings.
n) Disclosure with respect to spreading of MTM losses in AFS and HFT:
This has reference to RBI circular RBI/2017-18/200 DBR No BPBC.113/21.04.048/2017-18 dated 15 June 2018 regarding the option to spread provisioning for mark to market (MTM) losses on investments held in AFS and HFT on account of sharp increase in the yields on Government Securities: NIL
o) Previous year''s figures have been re-grouped / re-classified wherever considered necessary to conform current year''s classification.
Mar 31, 2022
1. Regulatory Capital:
a) Paid up Equity Share Capital of the Bank as on 31.03.2022 is T 8,680.94 crore, which is increased from T 5,875.56 crore of previous year by issuance and allotment of fresh 280,53,76,972 equity shares of T 10 each to President of India (Government of India) on preferential basis at an issue price of T 17.11 per equity share including premium of T 7.11 per equity share on 29.05.2021. With this allotment, shareholding of President of India (Government of India) in the Bank has increased from 89.78% to 93.08%.
Note: 1. The said computation of Capital to Risk weighted asset Ratio & Leverage ratio is arrived at after considering the effect of Net Present Value of non-interest bearing recapitalization bond infused as capital by the Government of India during the FY ended 31.03.2021. Without considering the said adjustment, CET 1 ratio is 13.39%, Tier 1 ratio is 13.39%, Tier 2 ratio 2.36% , CRAR is 15.75% and Leverage ratio is 4.98% as on 31-03-2022.
Note: 2. capital funds of T 4,800 crores was received from Government of India on 31.03.2021 towards preferential allotment of equity shares. The amount was kept in share application money account pending allotment and considered as part of CET1 capital for financial year ended on 31.03.2021 with the prior approval of Reserve Bank of India. The resultant 280,53,76,972 equity shares of T 10 each was allotted to President of India (Government of India) at an issue price of T 17.11 per equity share including premium of T 7.11 per equity share on 29.05.2021. Though the paid up equity share capital of the Bank was increased in financial year ended on 31.03.2022, the increase in CET 1 capital was factored in previous financial year ended on 31.03.2021. Therefore, no fresh capital infusion was shown in the financial year ended on 31.03.2022.
Note: 3. Capital ratios as assessed by RBI (considering interalia effect of NPV of non interest bearing recapitalization bond) in its Risk Assessment Report for the FY ended 31st March 2021 are CRAR - 12.78% and CET 1&Tier 1 Ratio -10.79%
## The said computations of Capital to Risk Weighted Average Ratio and Leverage Ratio has been reckoned after taking into effect of the present value of non-interest carrying recapitalization bond.
c) Draw down from reserves
During the financial year 2021-22, Bank has not drawn down any Reserves.
Note: - # Excluding those considered under Tier II Capital.
The above data has been compiled on the basis of the Guidelines of RBI and certain assumptions made by the Management,
b) Liquidity coverage ratio (LCR)
LCR Qualitative Disclosures:
The Liquidity Coverage Ratio (LCR) standard has been introduced with the objective that a Bank maintains an adequate level of unencumbered High Quality Liquidity Assets(HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar date and horizon under significantly severe liquidity stress scenario.
LCR has been defined as : Stock of high quality liquid assets fHQLAst
Total net cash outflow over the next 30 calendar days
The Liquidity Coverage Ratio (LCR) is one of the Basel Committeeâs key reforms to develop a more resilient banking sector. The LCR is expected to improve the banking sectorâs ability to absorb shocks arising from financial and economic stress, thus reducing the risk of spill over from the financial sector to the real economy. The Liquidity Risk Management of the Bank is governed by the Asset Liability Management (ALM) Policy approved by the Board.
NOTE: In accordance with RBI Circular no. RBI/2014-15/529 DBR No. BP.BC.80/21.06.201/2014-15 dated 31st March 2015 guidelines; the LCR is calculated by dividing a Bankâs stock of HQLA by its total net cash outflows over a 30-day- stress period. The line items significant to LCR are:
The average LCR for the quarter ended March 31, 2022 was at 311.32% as against 417.10% for the quarter ended March 31,2021 and well above the present prescribed minimum requirement of 100%.
The average HQLA for the quarter ended March 31,2022 was 1,28,085 crore as against 1,29,693 crore for the quarter ended March 31,2021.
The average LCR for the year ended March 31,2022 was at 360.81 % as against 386.91% for the year ended March 31, 2021.
c) Net Stable Funding ratio (NSFR):
DISCLOSURE ON NET STABLE FUNDING RATIO (NSFR) AS ON 31.03.2022
Reserve Bank of India vide its circular no. BR.BP.BC.No.106/21.04.098/2017-18 May 17, 2018 had issued guidelines on âBasel III Framework on Liquidity Standards - Net Stable Funding Ratio (NSFR)â. The guidelines for NSFR were effective from October 1,2021.
NSFR indicates institution''s resilience to have a stable funding profile over a time horizon of one year. It is defined as the amount of available stable funding relative to the amount of required stable funding. âAvailable stable fundingâ (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year.
The amount of stable funding required (âRequired stable fundingâ) (RSF) of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures.
e. During the year ended Mar 31, 2022 the value of sales and transfers of securities to/from HTM category (excluding one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year, sale to RBI under pre-announced Open Market Operation auctions and repurchase of Government securities by the government of India had not exceeded 5% of the Book Value of the Investment held in HTM category at the beginning of the year.
n) Disclosure with respect to NCLT provisions:-
As per RBI circular No. DBR No. BP15199/21.04.048/2016-17 and DBR No. BP1906/21.04.048/2017-18 dated June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of ? 6406.10 crore (including FITL of ? 127.90 crore) @ (100 % of total outstanding including Investment) as on March 31,2022.
o) Resolution of Stressed Assets
RBI vide their circular no. RBI/ 2018-19/ 203 DBR. No.BPBC. 45/21.04.048/2018-19 dated June 7, 2019 on Prudential Framework for Resolution of Stressed Asset issued guidelines for implementation of Resolution Plan, also containing requirements of additional provision as per Para 17 of this RBI circular. The outstanding in such cases as on March 31,2022 is ? 1757.84 crore and in compliance of the above RBI circular, the Bank has made additional provision of ? 435.37 crore during the quarter ended March 31,2022 and hold total provision of ? 1092.32 crore as on March 31,2022.
r) Advances to units which have become sick including those under nursing/ rehabilitation/ restructuring programme and other advances classified as doubtful/ loss assets have been considered secured/ recoverable to the extent of estimated realizable value of securities carrying first or second charge based on valuers'' assessment of properties/ assets mortgaged to the Bank and other data available with the Bank.
e) Qualitative Disclosures Qualitative Risk Exposure
The Bank currently deals in over the counter (OTC) interest rate and currency derivatives as also in Interest Rate Futures and Exchange Traded Currency Derivatives. Interest Rate Derivatives dealt by the Bank are rupee interest rate swaps, foreign currency interest rate swaps. Currency derivatives dealt by the Bank are USD, INR & cross currency swaps. The products are offered to the Bank''s customers to hedge their exposures and the Bank also enters into derivatives contracts to cover off such exposures. Derivatives are used by the Bank both for trading as well as hedging balance sheet items.
i. Derivative transactions carry market risk i.e., the probable loss the Bank may incur as a result of adverse movements in interest rates/exchange rates and credit risk i.e. the probable loss the Bank may incur if the counterparties fail to meet their obligations. The Bank''s âPolicy for Derivativesâ approved by the Board prescribes the market risk parameters (Loss Limits, cut-loss triggers, open position limits, duration, modified duration, PV01 etc.) as well as customer eligibility criteria (credit rating, tenure of relationship, limits and customer appropriateness and suitability of policy (CAS) etc.) for entering into derivative transactions. Credit risk is controlled by entering into derivative transactions only with counterparties satisfying the criteria prescribed in the Policy. Appropriate limits are set for the counterparties taking into account their ability to honor obligations and the Bank enters into ISDA agreement with each counterparty.
ii. The Asset Liability Management Committee (ALCO) of the Bank oversees efficient management of these risks. The Bank''s Risk Management Department (RMD) identifies, measures, monitors market risk associated with derivative transactions, assists ALCO in controlling and managing these risks and reports compliance with policy prescriptions to the Risk Management Committee of the Board (RMCB) at regular intervals.
iii. Interest Rate Swaps are mainly used for hedging of the assets and liabilities.
iv. Majority of the swaps were done with good rated counterparty banks.
v. Derivative transactions comprise of swaps which are disclosed as contingent liabilities. The swaps are categorized as trading or hedging.
vi. Derivative deals are entered with only those interbank participants for whom counterparty exposure limits are sanctioned. Similarly, derivative deals entered with only those corporates for whom credit exposure limit is sanctioned. Collateral requirements for derivative transactions are laid down as a part of credit sanctions terms on a case-by-case basis. Such collateral requirements are determined based on usual credit appraisal process. The Bank retains the right to terminate transactions as a risk mitigation measure in certain cases.
vii. Hedge Positions:
» Accrual on account of interest expenses/ income on the Interest Rate Swap (IRS) are accounted and recognized as income/expenses.
» If the swap is terminated before maturity, mark-to-market (MTM) loss/gain and accrual till such date are accounted as expenses/ income under interest paid/ received on IRS.
viii. Trading Position:
» Currency futures and interest rate futures are marked to market on daily basis as per exchange guidelines of MCX-SX (MSEL) and NSE.
» MTM profit/loss is accounted by credit/debit to the margin account on daily basis and the same is accounted in Bank''s profit and loss account in final settlement.
» Trading swaps are marked to market at frequent intervals. Any MTM losses are booked and gains, if any are ignored.
» Gains or losses on termination of Swaps are recorded as immediate income/expenses under the above head.
11. The outbreak of Corona virus (COVID-19) pandemic globally including India has resulted in slowdown of economic activities and increased volatility in financial markets. The extent to which the COVID-19 pandemic will impact the Bank''s financial results will depend on future developments, which are highly uncertain. Given the uncertainty, because of COVID-19 pandemic, the bank''s is continuously monitoring any material change in future depending on the developments which may differ from that estimated as at the date of approval of the financial statements.
13. Disclosure of Penalties imposed by the Reserve Bank of India
i. Penalties imposed by RBI
a) Reserve Bank India has levied penalties of ? 0.36 crore (previous year ? NIL) in terms of clause (c) of subsection (1) of section 47(A) read with clause (i) of sub-section (4) of section 46 and section (1) of section 51 of the Banking Regulation Act 1949 for non-compliance with the controversial of the failed to credit (Shadow reversal) the amount involved in the unauthorized electronic transaction to the customers'' accounts.
b) RBI has imposed a penalty of ? 1.00 crore (previous year ? NIL crore) in terms of clause (c) of section (1) of section 41 (A) of the act, Read with clause I (i) of section (4) of section 46 & sub-section (1) of section 51 of the Act for the contra version of section 20 (1) of the act entering in to commitment with the borrower company for guaranteeing loans to it, despite commonality of director.
c) RBI has imposed a penalty of ? NIL crore (previous year ? 0.50 crore) to our bank due to non-compliance of RBI circular dated 03.09.2013 on few housings loan accounts.
d) RBI has imposed a penalty of T NIL crore (previous year T 0.31 crore) in terms of section 47A (1) (a) read with section 46(4) (i) of the Banking Regulation Act 1949 for non-compliance of RBI norms on currency chest operation.1 2 3 4
*As complied by the Management and relied by the Auditors.
e) Penalties imposed by Financial Intelligence Unit - India
The Earlier version FIU-India imposed penalty of T 0.02 Crore for delay in submission of Report - 1 & nonsubmission of Report-2 under Alert No.5, General Election (Lok Sabha)-2019 as per FIU-India order dated 2312-2020. The said penalty was paid by Bank on 15th January 2021. Since there is no penalty this year, it may be treated as NIL.
Note: Keeping in line with para 9 of the AS - 18 - âRelated Party Disclosureâ issued by ICAI, the transactions with the Subsidiaries and Associates Enterprises have not been disclosed which exempts the State Controlled Enterprises from making any disclosures pertaining to transactions with other related State Controlled Enterprises.
Further, transactions in the nature of Banker-Customer relationship including those with KMP and relatives of KMP have not been disclosed in terms of Para 5 of AS-18.
ii. Bancassurance Business:
The details of fees / brokerage earned in respect of insurance broking, agency and bancassurance business undertaken by them shall be disclosed for both the current year and previous year.
v. Disclosure on amortization of expending on account of enhancement in family pension of employees of Banks :-
RBI vide their Circular No.:RBI/2021-22/105 DORACC.REC.57/21.04.018/2021-22 dated 4th October 2021, has permitted Banks to amortize the additional liability on account of revision in family pension for employees over a period of not exceeding 5 (five) years, beginning with financial year ending 31st March, 2022 subject to a minimum of 1/5th of the total amount being expensed every year. Based on the Actuarial Valuation report obtained by the Bank the additional liability on account of revision in family pension for employees is arrived at T 82,195.00 lakh. Bank has opted to amortize as per the said circular of RBI and has charged an amount of T 54,452.00 lakh out of T 82,195.00 lakh to the Profit & Loss account during the financial year ended 31st March 2022. The balance unamortized expense of T 27,743.00 lakh has been carried forward to subsequent years. The consequential impact of unamortized pension liability on net profit for the current year is T 18,048.00 lakh (Net of Taxes).
a) Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial decisions on disputed issues.
b) Other Assets [Schedule 11 (ii)] includes T 2405.58 crore (previous year T 1771.51 crore) towards disputed Income Tax liability of the parent Bank. It includes Income tax appeals at various levels by bank and Income tax department. Provision for disputed amount of taxation is not considered necessary by the Bank on the basis of various judicial pronouncements and favorable decisions in Bank''s own case. Disputed service tax matter as on March 31st, 2022 is T 7.64 crore.
c) Government of India has inserted Section 115BAA in the Income Tax Act 1961 (âActâ) vide the Taxation Laws (Amendment) Ordinance 2019 dated September 20, 2019 which provides a non-reversible option to domestic companies to pay corporate tax at a reduced rate effective from April 01,2019 subject to certain conditions. The Bank has assessed the applicability of the act and opted to continue the existing tax rate (i.e. 34.944%) for the financial year ended March 31st, 2022.
a) Premises obtained on Lease by the Bank include properties costing T 1.45 crore (previous year T 1.45 crore) for which registration formalities are still under progress.
b) The premises of the Bank were revalued to reflect the market value as on 31.03.2021 based on valuation reports of external independent valuers'' and approved by the Board of Director and T 881.96 crore increases in value thereof have been credited to Revaluation Reserve Account.
c) In the case of assets, which have been revalued, the depreciation is provided on the revalued amount charged to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount T 54.12 crore (previous year T 58.85 crore) is transferred from âRevaluation Reserve'' and credited to âRevenue and Other Reservesâ.
d) Land obtained on lease by bank includes T 8.02 crore (previous year T 8.02 crore) with written down value as NIL (previous year T NIL), the lease period of which has expired and the bank is still having its offices/building on these lands and perusing with authorities for lease renewals.
18. In terms of RBI guidelines DBOD No.BP.BC.57/62-88 dated December 31, 1988, Inter-Bank Participation Certificates
(IBPC) Lending of T NIL has been undertaken. Accordingly, these have been adjusted from the advances of the Bank.
Interest income of T NIL has been recognized against these borrowings.
19. Amount lying in Blocked accounts pertaining to old NOSTRO/MIRROR Credit entries are carried at historical cost using
the exchange rate on the date of the crystallization.
The Bank maintains 15 Nostro Accounts for 8 different currencies. These Nostro accounts are operated by one âA''
category Branch (Integrated Treasury Branch) and Sixty two âB'' category branches.
Reconciliation of these Nostro accounts is done by Integrated Treasury Branch. Reconciliation is an ongoing process and
is done on daily basis.
Progress Report on Reconciliation and outstanding entries in Nostro Accounts is placed before audit Committee of the Board at quarterly intervals.
20. The following information is disclosed in terms of Accounting Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 5 âNet Profit or Loss for the period, Prior Period Items, and Changes in Accounting Policiesâ
- During the year, there were no material prior period income / expenditure items.
- There is no change in the Significant Accounting Policies adopted during the year ended 31st March 20220 as compared to those followed in the previous financial year 2020-21.
b) Accounting Standard - 9
Certain items of income are recognized on realization basis as per significant accounting policy No. D-1. However, the said income is not considered to be material.
c) Accounting Standard-15 âEmployee Benefitsâ:
i. Defined Benefit Plans, Employee''s pension plan and Gratuity plan
ii. Defined Contribution Plan:
The bank has a defined contribution pension scheme (DCPS) applicable to all categories of officers and employees joining bank on or after 01/04/2010. The scheme is managed by NPS trust under the aegis of the Pension Fund Regulatory and Development Authority. National Securities Depositary Limited (NSDL) has been appointed as the Central Record Keeping Agency for the NPS. During 2021-22, the bank has contributed T 146.97 crore (Previous year T 103.67 crore).
iii. Long Term Employee Benefits (Unfunded Obligation):
During the year bank has recognized expenses of T 43.24 crore (Previous Year T 131.20 crore) towards leave encashment expenses based on actuarial valuation.
d) Accounting Standard 17 -
Segment Reporting
As per the revised guidelines of Reserve Bank of India the Bank has recognized Treasury Operations Corporate/ Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no secondary reporting segments.
The following are the primary segments of the Bank:- Treasury
- Corporate / Wholesale Banking
- Retail Banking
- Other Banking Business.
The present accounting and information system of the Bank based on the present internal, organizational and management reporting structure and the nature of their risk and returns, the data on the primary segments have been computed as under:
i. Treasury -
The Treasury Segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts. The revenue of the treasury segment primarily consists of fees and gains or losses from trading operations and interest income on the investment portfolio.
ii. Corporate / Wholesale Banking -
The Corporate / Wholesale Banking segment comprises the lending activities of Corporate Accounts, Trust / Partnership Firms Companies and statutory bodies which are not included under Retail Banking and Stressed Assets Management Branch. These include providing loans and transaction services to corporate and institutional clients.
iii. Retail Banking -
The Retail Banking Segment comprises of retail branches, which primarily includes Personal Banking activities including lending activities to corporate customers having banking relations with these branches. The Retail Banking Segment consists of all exposures up to a limit of T 5 crore (including Fund Based and Non Fund Based exposures) subject to orientation product granularity criteria and individual exposures. This segment also includes agency business and ATMs.
c. The vendors whose services are utilized are selected in compliance with Government of India guidelines regarding MSME sector and Micro, Small and Medium Enterprises Development Act, 2006. This is relied upon by the Auditors.
j) Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and Cyber Frauds
The bank has formulated policies as per RBI circular RBI/2010-11/494 DBS.CO.ITC.BC.No. 6/31. 02.008/2010-11 dated April 29, 2011. These policies are being reviewed by the management of the bank on periodical basis. The policies were last reviewed by the Board of Directors in the meeting held on 30.03.2022.
k) Reserve Bank of India vide their letter dated June 13, 2017, has put the Bank under Prompt (PCA) Corrective Action in view of high net NPA and negative Return on Assets. Bank is complying the PCA framework norms meticulously. Bank has prepared an action plan and also taken various steps to reduce NPA and improve the profitability.
l) Previous year figures have been re-grouped / re-classified wherever considered necessary to confirm current year''s classification.
Working funds to be reckoned as average of total assets (excluding accumulated losses, if any) as reported to Reserve Bank of India in Form X for Commercial Banks and Form IX for UCBs, during the 12 months of the financial year.
Net Interest Income/ Average Earning Assets. Net Interest Income= Interest Income - Interest Expense
Return on Assets would be with reference to average working funds (i.e. total of assets excluding accumulated losses, if any)
For the purpose of computation of business per employee (deposits plus advances), inter-bank deposits shall be excluded.
Mar 31, 2019
1. Capital:
Paid up Equity Share Capital of the Bank as on 31.03.2019 is Rs. 4047.20 crore increased from Rs. 2618.16 crore of previous year by issue of fresh 1429045682 equity shares of Rs. 10 each in three allotments.
a. 354357970 Equity Share of Rs. 10 each allotted to Government of India on Preferential Basis at premium of Rs. 56.43 on 13.11.2018
b. 387439390 Equity Share of Rs. 10 each allotted to Government of India on Preferential Basis at premium of Rs. 33.31 on 28.02.2019.
c. 687248322 Equity Share of Rs. 10 each allotted to Government of India on Preferential Basis at premium of Rs. 27.25 on 28.03.2019.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items are in progress :
- Inter Branch Office Balance
- Inter Bank Accounts
- Suspense Accounts
- Clearing & other Adjustment Accounts
- Certain balances in nominal account
- NOSTRO Accounts
- Balances related to ATM
- Mirror Accounts maintained by Central Card Department
- Data/System updation of Agricultural and Priority Sector Advances
The management is of the opinion that the overall impact, if any, on the accounts will not be significant.
3. Income Tax:
3.1 Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial decisions on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs. 2569.16 crore (previous year Rs. 2979.91 crore) towards disputed Income Tax paid by the Bank or adjusted by the Income Tax department. Provision for disputed amount of taxation is not considered necessary by the Bank on the basis of various judicial pronouncements and favourable decisions in Bankâs own case.
4. Premises:
4.1 Premises obtained on Lease by the Bank includes properties costing Rs. 0.75 Crore (previous year Rs. 0.75 Crore) for which registration formalities are still under progress.
4.2 In the case of assets, which have been revalued, the depreciation is provided on the revalued amount charged to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount Rs. 64.80 Crore (previous year Rs. 75.13 Crore) is transferred from âRevaluation Reserveâ and credited to âRevenue and Other Reservesâ.
5. Advances / Provisions
5.1 Advances to units which have become sick including those under nursing/ rehabilitation/ restructuring programme and other advances classified as doubtful/ loss assets have been considered secured/ recoverable to the extent of estimated realizable value of securities carrying first or second charge based on valuersâ assessment of properties/ assets mortgaged to the Bank and other data available with the Bank.
5.2 In accordance with the guidelines issued by Reserve Bank of India, the Bank has netted the balance Floating Provision amount of Rs. 100.56 crores (previous year Rs. 100.56 crore) and Countercyclical Provision amount of Rs. 47.34 Crore (previous year. Rs. 47.34 Crore) from gross NPAs to arrive at net NPAs.
6. The following information is disclosed in terms of guidelines issued by Reserve Bank of India :
a. (i) Capital
*Includes capital funds of Rs. 2354.00 crore received from Government of India on 19.09.2018 and the same was kept in the âCentral Bank of India Share Application Money Accountâ. Bank allotted (35,43,57,970) equity shares of Rs. 10 each at premium Rs. 56.43 to President of India (Government of India) on 13.11.2018.
Further, capital funds of Rs. 1678.00 crore received from Government of India on 31.12.2018 and the same was kept in the âCentral Bank of India Share Application Money Accountâ. Bank allotted (38,74,39,390) equity shares to President of India (Government of India) on 28.02.2019.
Further, capital funds of Rs. 2560.00 crore received from Government of India on 21.02.2019 and the same was kept in the âCentral Bank of India Share Application Money Accountâ. Bank allotted (68,72,48,322) equity shares of Rs. 10 each at premium Rs. 27.25 to President of India (Government of India) on 28.03.2019.
Capital funds of Rs. 212.54 crore received against valid applications from eligible employees under Central Bank of India Employee Stock Purchase Scheme, 2019 on 30.03.2019 and the same was kept in the âCentral Bank of India Share Application Money Accountâ. Allotment of Equity shares is in process.
b. (i) Investments
(v) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the use of derivative instruments to hedge/trade is in place.
- Policy for Forward Rate Agreement, Interest Rate Swaps, Currency Futures and Interest Rate Futures for Hedging the Interest Rate Risk in the Investment Portfolio and also for Market Making is in place.
- The risk management policies and major control limits like stop loss limits, counter party exposure limits etc. as approved by the Board of Directors are in place.
Hedge Positions
- Accrual on account of interest expenses/income on the IRS are accounted and recognized as income/ expense.
- If the swap is terminated before maturity, the Mark to Market (MTM) loss/gain and accrual till such date are accounted as expense/income under interest paid/received on IRS.
Trading positions
- Currency Future and Interest Rate Future are marked to market on daily basis as per exchange guidelines of MCX-SX, NSE and United Stock Exchange.
- MTM profit/loss is accounted by credit/debit to the margin account on daily basis and the same is accounted in bankâs profit & loss account on final settlement.
- Trading swaps are marked to market at frequent intervals. Any MTM losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate income/expense under the above head
b. Group Borrower Limit exceeded by Bank : NIL
(v) Statement of Loans and Advances secured by Intangible Assets viz. Rights Licenses Authorizations etc. which is shown as unsecured in Schedule-9.
Advances amounting to Rs. Nil (previous year Rs. Nil) against charge over intangible security such as Rights Licences Authorization etc. are considered as unsecured.
The value of intangible security is Rs. Nil (previous year Rs. Nil)
(vi) In terms of RBI guidelines DBOD No.BP.BC.57/62-88 dated December 31, 1988, Inter-Bank Participation Certificates (IBPC) of Rs. Nil as on March 31, 2019 (Previous year Rs. 2,115.52 crore were issued on risk sharing basis for a maximum period of 120 days ending July 30, 2018, thereby reducing the Bankâs Total Advances as on March 31, 2018 to same extent.)
(vii) Sale and transfer to / from HTM category
During the year ended Mar 31, 2019 the value of sales and transfers of securities to/from HTM category (excluding one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year sale to RBI under pre-announced Open Market Operation auctions and repurchase of Government securities by the government of India) had exceeded 5% of the book value of the investments held in HTM category at the beginning of the year. The market value of investments held in the HTM category was Rs. 75022 crore whose book value is Rs. 74570 crore as on March 31, 2019 which includes investments in subsidiaries/joint ventures carried at cost. The book value of such investments being lower than market value, no provision is required to be made.
7. Disclosure of penalties imposed by RBI
RBI has imposed a penalty of Rs. 1.16 crore (pevious year Rs. 0.91 crore) in terms of Section 47A(1)(a) read with Section 46(4)(i) of the Banking Regulation Act 1949 for non-compliance of RBI norms.
8. The following information is disclosed in terms of Accounting Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 9
Certain items of income are recognized on realization basis as per significant accounting policy No. 8. However the said income is not considered to be material.
b) Accounting Standard - 15 (Revised)
Defined Contribution Plan:
National Pension Scheme (NPS):-
During the year Bank has recognized Rs. 79.62 crore (Previous year Rs. 67.82 crore) as contribution to NPS in profit & loss account.
Other long term benefits:
During the year bank has recognized expenses of Rs. 84.09 crore (Pervious year Rs. 72.94) towards leave encashment expenses based on actuarial valuation.
c) Accounting Standard 17 - Segment Reporting
As per the revised guidelines of Reserve Bank of India the Bank has recognised Treasury Operations Corporate/ Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no secondary reporting segments.
* Segment Revenue and Expenses have been apportioned on the basis of the segment assets wherever direct allocation is not possible. Figures have been regrouped wherever considered necessary to conform to current year classification.
ii) Treasury Operations include dealing in Government and Other Securities Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit of Rs. 5 crore (including Fund Based and Non Fund Based exposures) subject to orientation product granularity criteria and individual exposures.
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/ Partnership Firms Companies and statutory bodies which are not included under Retail Banking.
v) The other Banking Segment includes all other Banking operations not covered under the above three categories.
vi) Retail Banking Segment is the Primary resource mobilizing unit and Treasury Segment compensates the Retail Banking Segment for funds lent by it to them taking into consideration the average cost of deposits incurred by it.
Note: Keeping in line with para 9 of the AS - 18 - âRelated Party Disclosureâ issued by ICAI, the transactions with the Subsidiaries and Associates Enterprises have not been disclosed which exempts the State Controlled Enterprises from making any disclosures pertaining to transactions with other related State Controlled Enterprises.
f) Accounting Standard 22 -Accounting for Taxes on Income
Keeping in view the significant provisioning requirements and revision in guidelines of Deferred Tax Assets (DTA) in CET1 calculation by RBI tax review based on managementâs estimate of possible tax benefits against timing difference has been carried out and Rs. 7894.01 Crore has been recognized as Deferred Tax Assets as at 31st March 2019. Component of deferred tax assets/ liabilities as on 31st March 2019 are as under:
Net increase in Deferred Tax Assets for the year 2018-19 is Rs. 2525.98 crore (Previous year Rs. 3014.35 crore) has been recognized in profit & loss account.
g) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bankâs assets comprise financial assets to which Accounting Standard-28 on impairment of assets is not applicable. In the opinion of the Management there is no material impairment on Other Assets other than financial assets as at March 31, 2019 requiring recognition in terms of the Standard.
9. Provisioning Coverage Ratio (PCR)
The PCR (ratio of Provisioning to Gross NPA) stood at 76.60 % (Previous Year 63.31%)
10. As per the information complied by the Management the Vendors whose services are utilized and from whom purchases were made by the Bank are not registered under Micro Small and Medium Enterprises Development Act 2006. This is relied upon by the Auditors.
11. Unhedged Foreign Currency exposure:
Unhedged Foreign Currency exposure as on 31.03.2019: Rs. 5612.12 Crores (As on 31.03.2018 Rs. 4310.81 crore)
Bank has taken into consideration the exchange risks arising out of volatility in the forex market and accordingly has made suitable provisions to reduce the risks. Bank has also taken into consideration credit risks arising out of unhedged Foreign currency exposure and accordingly Bank has put in place risk mitigation measures. Total Provision made for exposures to entities with UFCE for the year ended March 31, 2019 is Rs. 1.62 crores (Previous Year: Rs. 3.00 Crore)
12. Provision for Frauds :
In terms of RBI circular RBI/2015-16/376/DBR.No.BP.BC.92/21.04.048/2016-16 dated 18.04.2016 details of Fraud and Provision are as below:-
13. Credit Default Swaps
Bank has not taken any position in Credit Default Swap in the financial year 2018-19(Previous Year-Nil).
14. Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and Cyber Frauds
The bank has formulated policies as per RBI circular RBI/2010-11/494 DBS. CO. ITC. BC. No. 6/31. 02.008/2010-11dated April 29 2011. These policies are being reviewed by the management of the bank on periodical basis. The policies were last reviewed by the Board of Directors in the meeting held on 28.03.2019.
15. Disclosure with respect to NCLT provisions:-
As per RBI circular No. DBR No.BP.15199/21.04.048/2016-17 and DBR No.BP. 1906/21.04.048/2017-18 dated June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of Rs. 6,479.59 crores (86.34% of total outstanding) as on March 31, 2019.
16. Disclosure of Divergence in Asset Classification and Provisioning for NPAs
As the additional provisioning requirements assessed by RBI for FY 2017-18 exceeded threshold limit of 10% of the reported profit before provisions and contingencies, the following disclosure is made pursuant to RBI circular no. DBR. BP.BC.No. 32/21.04.018/2018-19 dated 01.04.2019 regarding Divergence in Asset Classification and Provisioning:
17. The RBI had permitted Banks vide its Circular DBR.No.BP.BC.108/21.04.048/2017-18 dated 6th June 2018 to continue the exposures to MSME borrowers to be classified as standard assets. Accordingly, the bank has retained advances of Rs.241.68 crores as standard assets as on 31.03.2019. In accordance with the provisions of the circular, the bank has not recognized un-realized interest on these accounts and maintained a standard assets provision of Rs.12.08 crores (@ 5% on Rs.241.68 crores) as on March 31, 2019 in respect of such borrowers. Further, in accordance with RBI vide circular no. DBR.No.BP.BC.18/21.04.048/2018-19 dated 1st January 2019, on âRelief for MSME borrowers registered under Goods and Service Tax (GST)â the details of MSME restructured accounts as on 31.03.2019 as under:-
18. Disclosure with respect to spreading of MTM Losses
The RBI had permitted Banks vide its Circular DBR.No.BP.BC.113/21.04.048/2018-19 dated 15th June 2018, to spread MTM losses on investments held in AFS and HFT category for the quarter ended 30th June 2018, over four quarters commencing from that quarter, in which loss has been incurred such loss amounting to Rs. 74.81Crore during the quarter ended 30th June, 2018 and provided % of such loss each in June and September 2018 quarters by availing the benefit permitted for staggering of provision and un-amortised balance was Rs. 37.40 Crore. Since Bond rate has eased as on 31.12.2018 deferred provision was not required. Consequent to the above, entire MTM Losses stands fully covered as on 31.03.2019.
19. Draw Down from Reserves
During the Financial Year 2018-19, there has been no draw down from the reserves (Previous Year - NIL).
20. Previous year figures have been re-grouped / re-classified wherever considered necessary to confirm to current yearâs classification.
Mar 31, 2018
1. Capital:
Paid up Equity Share Capital of the Bank as on 31.03.2018 is Rs.2618.16 crore increased from Rs.1902.17 crore of previous year by issue of fresh 715984791 equity shares of Rs.10 each in three allotments.
a. 9601536 Equity Share of Rs.10 each allotted to Government of India on Preferential Basis at premium of Rs.94.15 on 18.08.2017
b. 55976956 Equity Share of Rs.10 each allotted to Government of India on Preferential Basis at premium of Rs.94.15 on 16.11.2017 against Share Application Money of Rs.583.00 crore, arising on extinguishment of 5830 Innovative Perpetual Debt Instruments (IPDI) of the face value of Rs.10.00 lakh each held by Government of India on 31.03.2017
c. 38845460 Equity Share of Rs.10 each at premium of Rs.73.15 and 611560839 Equity Share of Rs.10 each at premium of Rs.69.06 allotted to Government of India on Preferential Basis on 27.03.2018.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items are in progress :
- Inter Branch Office Balance
- Inter Bank Accounts
- Suspense Accounts
- Clearing & other Adjustment Accounts
- Certain balances in nominal account
- NOSTRO Accounts
- Balances related to ATM
- Mirror Accounts maintained by Central Card Department
- Data/System updation of Agricultural and Priority Sector Advances
The management is of the opinion that the overall impact, if any, on the accounts will not be significant.
3. Income Tax:
3.1 Provision for Income Tax for the year is arrived at after due consideration of relevant statutory provisions and judicial decisions on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs.2979.91 crore (previous year Rs.3298.14 crore) towards disputed Income Tax paid by the Bank or adjusted by the Income Tax department. Provision for disputed amount of taxation is not considered necessary by the Bank on the basis of various judicial pronouncements and favourable decisions in Bankâs own case.
4. Premises:
4.1 Premises owned by the Bank includes properties costing â Nil (previous year Rs.1.63 Crore) for which registration formalities are still under progress.
4.2 Premises obtained on Lease by the Bank includes properties costing Rs.0.64 Crore (previous year Rs.0.64 Crore) for which registration formalities are still under progress.
4.3 In the case of assets, which have been revalued, the depreciation is provided on the revalued amount charged to Profit & Loss Account and the amount of incremental depreciation attributable to the revalued amount Rs.75.13 Crore (previous year Rs.86.97 Crore) is transferred from âRevaluation Reserveâ and credited to âRevenue and Other Reservesâ.
5. Advances / Provisions
5.1 Advances to units which have become sick including those under nursing/ rehabilitation/ restructuring programme and other advances classified as doubtful/ loss assets have been considered secured/ recoverable to the extent of estimated realizable value of securities carrying first or second charge based on valuersâ assessment of properties/ assets mortgaged to the Bank and other data available with the Bank.
5.2 In accordance with the guidelines issued by Reserve Bank of India, the Bank has netted the balance Floating Provision amount of Rs.100.56 crores (previous year Rs.100.56 crore) and Countercyclical Provision amount of Rs.47.34 Crore (previous year. Rs.47.34 Crore) from gross NPAs to arrive at net NPAs.
6. The following information is disclosed in terms of guidelines issued by Reserve Bank of India :
a. (i) Capital
*Includes capital funds of Rs.100.00 crore received from Government of India on 31.03.2017 and the same has been kept in the newly opened Bank account namely, â Central Bank of India Share Application Money Accountâ. Bank allotted the said shares to Government of India on 18th August 2017.
*Further, it also include equity capital of Rs.583.00 crore, arising out of extinguishment of 5830 Innovative Perpetual Debt Instruments (IPDI) of face value of Rs.10.00 Lakh each held by Government of India and kept into Share Application Money Account pending allotment of shares. Bank allotted the said shares to Government of India on 16th November 2017.
b. (i) Investments
(ii)) Repo Transactions (in face value terms)
(iii) Non SLR Investment Portfolio
Issuer wise composition of Non SLR Investments
Note: Amounts reported under Columns 4, 5, 6 and 7 above may not be mutually exclusive
(iv) Non Performing Non-SLR Investments (including Matured Investments)
Disclosures on risk exposure in Derivatives
(v) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the use of derivative instruments to hedge/trade is in place.
- Policy for Forward Rate Agreement, Interest Rate Swaps, Currency Futures and Interest Rate Futures for Hedging the Interest Rate Risk in the Investment Portfolio and also for Market Making is in place.
- The risk management policies and major control limits like stop loss limits, counter party exposure limits etc. as approved by the Board of Directors are in place.
Hedge Positions
- Accrual on account of interest expenses/income on the IRS are accounted and recognized as income/ expense.
- If the swap is terminated before maturity, the Mark to Market (MTM) loss/gain and accrual till such date are accounted as expense/income under interest paid/received on IRS.
Trading positions
- Currency future and Interest Rate Future are marked to market on daily basis as per exchange guidelines of MCX-SX, NSE and United Stock Exchange.
- MTM profit/loss is accounted by credit/debit to the margin account on daily basis and the same is accounted in bankâs profit & loss account on final settlement.
- Trading swaps are marked to market at frequent intervals. Any MTM losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate income/expense under the above head
(iv) Details of Single borrower limit/Group Borrowers Limit exceeded by the Bank for which necessary Board approval has been obtained.
a. Single Borrower Limit exceeded by Bank
b. Group Borrower Limit exceeded by Bank : NIL
(v) Statement of Loans and Advances secured by Intangible Assets viz. Rights Licenses Authorizations etc. which is shown as unsecured in Schedule-9.
Advances amounting to â Nil (previous year â Nil) against charge over intangible security such as Rights Licences Authorization etc. are considered as unsecured.
The value of intangible security is â Nil (previous year â Nil)
(vi) In terms of RBI guidelines DBOD No.BP.BC.57/62-88 dated December 31, 1988, Inter-Bank Participation Certificates (IBPC) of Rs.2,115.52 crore (Previous year Rs.22,991.22 crore) were issued on risk sharing basis for a maximum period of 120 days ending July 30, 2018, thereby reducing the Bankâs Total Advances as on March 31, 2018 to same extent.
(vii) Sale and transfer to / from HTM category
During the year ended Mar 312018 the value of sales and transfers of securities to/from HTM category (excluding one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year sale to RBI under pre-announced Open Market Operation auctions and repurchase of Government securities by the government of India) had exceeded 5% of the book value of the investments held in HTM category at the beginning of the year. The market value of investments held in the HTM category was Rs.69226 crore whose book value is Rs.69556 crore as on March 31 2018 which includes investments in subsidiaries/ joint ventures carried at cost. Hence excess of book value over market value is Rs.330 crore for which provision has not been made.
7. Disclosure of penalties imposed by RBI
RBI has imposed a penalty of Rs.0.91 crore (pevious year Rs.0.12 crore) in terms of Section 47A(1)(a) read with Section 46(4)(i) of the Banking Regulation Act 1949 for non-compliance of RBI norms.
8. The following information is disclosed in terms of Accounting Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 9
Certain items of income are recognized on realization basis as per significant accounting policy No. 8. However the said income is not considered to be material.
b) Accounting Standard - 15 (Revised)
Defined Contribution Plan:
National Pension Scheme (NPS):-
During the year Bank has recognized Rs.18.06 crore ( Previous year Rs.15.49 crore) as contribution to NPS in profit & loss account.
Defined Benefit Plan:
Reconciliation of opening and closing balance of the present value of the defined benefit obligation for pension and gratuity benefits as per actuarial valuations is given below:
Other long term benefits:
During the year bank has recognized expenses of Rs.72.94 crore (Pervious year â NIL) towards leave encashment expenses based on actuarial valuation.
c) Accounting Standard 17 - Segment Reporting
As per the revised guidelines of Reserve Bank of India the Bank has recognised Treasury Operations Corporate/ Wholesale Banking Retail Banking and other Banking business as primary reporting segments. There are no secondary reporting segments.
* Segment Revenue and Expenses have been apportioned on the basis of the segment assets wherever direct allocation is not possible. Figures have been regrouped wherever considered necessary to conform to current year classification.
ii) Treasury Operations include dealing in Government and Other Securities Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit of Rs.5 crore (including Fund Based and Non Fund Based exposures) subject to orientation product granularity criteria and individual exposures.
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/ Partnership Firms Companies and statutory bodies which are not included under Retail Banking.
v) The other Banking Segment includes all other Banking operations not covered under the above three categories.
vi) Retail Banking Segment is the Primary resource mobilizing unit and Treasury Segment compensates the Retail Banking Segment for funds lent by it to them taking into consideration the average cost of deposits incurred by it.
f) Accounting Standard 22 -Accounting for Taxes on Income
Keeping in view the significant provisioning requirements and revision in guidelines of Deferred Tax Assets (DTA) in CET1 calculation by RBI tax review based on managementâs estimate of possible tax benefits against timing difference has been carried out and Rs.5368.03 Crore has been recognized as Deferred Tax Assets as at 31st March 2018. Component of deferred tax assets/ liabilities as on 31st March 2018 are as under:
Net increase in Deferred tax assets for the year 2017-18 is Rs.3014.35 crore (Previous year Rs.1265.40 crore) has been recognized in profit & loss account.
g) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bankâs assets comprise financial assets to which Accounting Standard-28 on impairment of assets is not applicable. In the opinion of the Management there is no material impairment on Other Assets other than financial assets as at March 31 2018 requiring recognition in terms of the Standard.
h) Accounting Standard - 29 on Provisions Contingent Liabilities and Contingent Assets (i) Provisions and Contingencies
9. Provisioning Coverage Ratio (PCR)
The PCR (ratio of Provisioning to Gross NPA) stood at 63.31 % (Previous Year 58.43%)
10. As per the information compiled by the Management the Vendors whose services are utilized and from whom purchases were made by the Bank are not registered under Micro Small and Medium Enterprises Development Act 2006. This is relied upon by the Auditors.
11. Unhedged Foreign Currency exposure:
Unhedged Foreign Currency exposure as on 31.03.2018: Rs.4310.81 Crores (As on 31.03.2017 Rs.18322.28 crore)
Provisions held as on 31.03.2018: Rs.3.00 Crore (As on 31.03.2017 Rs.41.53 Crore)
12. Credit Default Swaps
Bank has not taken any position in Credit Default Swap in the financial year 2017-18.
13. Implementation of the Guidelines on Information Security Electronic Banking Technology Risk Management and Cyber Frauds
The bank has formulated policies as per RBI circular RBI/2010-11/494 DBS.CO.ITC.BC.No.6/31.02.008/2010-11dated April 29 2011. These policies are being reviewed by the management of the bank on periodical basis. The policies were last reviewed by the Board of Directors in the meeting held on 17.03.2018.
14. RBI vide its circular DBR.No.BP.BC.101/21.01.18/2017-18 dated February 12 2018 issued a revised framework for resolution of Stressed Assets which supersedes the existing guidelines of SDR, Corporate Debt Restructuring Scheme, Flexible Structuring of existing long term project loans, Change in Ownership Outside SDR and S4A with immediate effect. Under the revised framework, the benefits for accounts where any of these Schemes had been invoked but not yet fully implemented were revoked and accordingly, all accounts have been downgraded as per extant RBI norms on Income Recognition and Asset Classification.
S4A scheme was invoked and implemented in six accounts with outstanding balance of Rs.559.18 crore. As such bank has kept provision of Rs.105.84 crore against such six S4A implemented borrower accounts as on 31.03.2018.
15. Disclosure with respect to NCLT provisions:-
As per RBI Circular Nos. DBR No. BP.15199/21.04.048/2016-17 and DBR No.BP.1906/ 21.04.048/2017-18 dated 23.06.2017 and 28.08.2017 respectively in respect of NPA Accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC) the Bank has made additional provision of Rs.1435 crore during the year ended March 31, 2018. Further as per RBI communication No. BP.8756/21.04.048/2017-18 dated April 2, 2018 with respect to spreading of the provisions in accounts covered in 1 & 2 list covered under the Insolvency and Bankruptcy Code (IBC) the Bank has availed the option of dispensation available and additional provisions of Rs.627.46 crore will be provided in the quarter ending June 2018.
16. Disclosure of Divergence in Asset Classification and Provisioning for NPAs
As the additional provisioning requirements and additional Gross NPA assessed by RBI for FY 2016-17 exceeded 15% of the published Net Loss after Tax and incremental Gross NPA respectively the following disclosure is made pursuant to RBI circular no. DBR.BP.BC.No. 63/21.04.018/2016-17 dated 18.04.2017 regarding Divergence in Asset Classification and Provisioning for NPAs:
The Bank had duly recorded the impact of the above in its working results for the year ended March 31, 2018.
17. In respect of two Gems and Jewellery borrower group where fraud was declared by some banks, the Bank has classified these accounts as NPA and fully provided for the entire funded exposure of Rs.378.96 crore during the year ended March 31, 2018.
18. Disclosure with respect to spreading of MTM Losses
As per RBI Circular No.DBR.No.BP.BC.102/21.04.048/2017-18 dated April 2, 2018 RBI grants the banks an option to spread provisioning for MTM Losses on investments in AFS and HFT portfolio for the quarters ended 31st December 2017 and 31st March 2018 equally over the four quarters commencing with the quarter in which the loss has been incurred. The bank has availed this option and accordingly the Bank has charged depreciation of Rs.346.21 crore related to quarter ended December 31, 2017 and March 31, 2018 and MTM losses to the tune of Rs.450.82 crore is spread over to the subsequent quarters of ensuing financial year.
19. Previous year figures have been re-grouped / re-classified wherever considered necessary to confirm to current yearâs classification.
Mar 31, 2015
(000''s Omitted)
PARTICULARS AS AT 31/03/2015 AS AT 31/03/2014
SCHEDULE 1 : CONTINGENT LIABILITIES
I. (a) Claims against the Bank not 1,094,250 1,196,346
acknowledged as Debts
(b)Disputed income tax demands
under appeals, 18,134,088 14,005,895
revisions, etc
II. Liability for partly paid Investments
III. Liability on account of outstanding forward
exchange contracts 667,746,178 640,602,389
IV. Guarantees given on behalf of constituents
a) In India 104,223,884 103,363,304
b) Outside India 10,854,478 5,673,489
115,078,362 109,036,793
V. Acceptances, Endorsements
and Other 99,123,833 112,332,617
Obligations
VI. Other item for which the bank is
contingently 7,750,000 8,351,107
liable
TOTAL 908,926,711 885,525,147
1. Capital:
Paid up Equity Share Capital of the Bank as on 31.03.2015 is Rs.1658.27
crore increased from Rs. 1350.44 crore of previous year by issue of fresh
equity shares of Rs. 10/- each as detailed below:
1. Issue of equity share for Rs. 71.08 crore at a premium of Rs. 71.83 per
share on 1st August 2014.
2. Issue of equity share for Rs. 82.89 crore at a premium of Rs. 65.55 per
share on 1st January 2015.
3. Issue of equity shares for Rs. 153.86 crore at a premium of Rs. 95.09
per share to Government of India on 24th March 2015 by conversion of
1617000000 Perpetual Non-cumulative Preference Shares of the value of Rs.
10/- each held by Government of India aggregating up to Rs. 1617.00
crores
2. Balancing of Books / Reconciliation:
- The reconciliation of the following items are in progress :
- Inter Branch/Office Balance
- Inter Bank Accounts
- System Suspense Account
- Suspense Accounts
- Clearing & other Adjustment Accounts
- Balances related to ATM
- Certain balances in nominal account
- NOSTRO Accounts
- Mirror Accounts maintained by Centralcard Department
The management is of the opinion that the overall impact, if any, on
the accounts will not be significant.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs. 1813.41 crore (previous
year Rs. 1400.59 crore) towards disputed Income Tax paid by the Bank or
adjusted by the Income Tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank on the basis of
various judicial pronouncements and favourable decisions in Bank''s
own case.
4. Premises:
Premises owned by the Bank include properties costing Rs. 32.06 crore
(Previous Year Rs. 55.22 crore) for which registration formalities are
still in progress.
5. Advances / Provisions:
5.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers'' assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
5.2 In accordance with the guidelines issued by Reserve Bank of India,
the Bank has utilized the Floating Provision of Rs. 100.56 crore
(previous year Rs. 103.09 crore) and Countercyclical Provision of Rs. 47.34
crore (previous year Rs. 46.63 crore) being 50% (previous year 33%) of
amount outstanding in these accounts towards specific provision for
NPAs. The Bank has netted the balance Floating Provision amount of Rs.
100.56 crores (previous year Rs. 209.34 crore) and Countercyclical
Provision amount of Rs. 47.34 crore (previous year Rs. 94.67 crore) from
gross NPAs to arrive at net NPAs.
6. The following information is disclosed in terms of guidelines issued
by Reserve Bank of India :
Disclosures on risk exposure in Derivatives
iii) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the
use of derivative instruments to hedge/trade is in place.
- The investment portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank has also
Tier II bonds hedged for coupon swaps. The policy permits hedging the
interest rate risk on this liability as well.
- Policy for Forward Rate Agreement, Interest Rate Swaps, currency
futures and Interest Rate Futures for hedging the interest rate risk in
the investment portfolio and also for market making is in place.
- The risk management policies and major control limits like stop
loss limits, counter party exposure limits etc. as approved by the
Board of Directors are in place. The risks are monitored and reviewed
regularly. MIS reports are submitted periodically to Risk Management
Committee.
Hedge Positions
- Accrual on account of interest expenses/income on the IRS are
accounted and recognized as income/expense.
- If the swap is terminated before maturity, the Mark to Market (MTM)
loss/gain and accrual till such date are accounted as expense/income
under interest paid/received on IRS.
Trading positions
- Currency future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
Exchange.
- MTM profit/loss is accounted by credit/debit to the margin account
on daily basis and the same is accounted in bankRs.s profit & loss
account on final settlement.
- Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate
income/expense under the above head
(v) Statement of Loans and Advances secured by Intangible Assets viz.,
Rights, Licenses, Authorizations etc. which is shown as unsecured in
Schedule-9.
Advances amounting to Rs. Nil (previous year Rs. Nil) against charge over
intangible security such as Rights, Licences, Authorisation etc. are
considered as unsecured..
The value of intangible security is Rs. Nil (previous year Rs. Nil)
7. Disclosure of penalties imposed by RBI
RBI has imposed a penalty of Rs. 4.92 crore in terms of Section 47A(1)(a)
read with Section 46(4)(i) of the Banking Regulation Act 1949 for
non-compliance of RBI norms.
8. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 5
There is no change in the accounting policy of the Bank during the
year.
b) Accounting Standard - 9
Certain items of income are recognized on realization basis as per
principal accounting policy No. 8. However, the said income is not
considered to be material.
c) Accounting Standard - 15 (Revised)
In the year 2010-11, in accordance with circular No. DBOD No.
BP.BC.80/21.04.018/2010-11, dated 09-02-2011 issued by Reserve Bank of
India, the Bank had opted to amortize the additional liability on
account of re-opening of Pension option for existing employees who had
not opted for pension earlier, as well as the liability on enhancement
in Gratuity limit, over a period of five years beginning with the
financial year ended 31st March, 2011. Accordingly, out of the
unamortized amount of Rs.295.38 crore as on 1st April, 2014, the Bank has
fully amortized Rs.239.98 crore for Pension and Rs.55.40 crore for Gratuity
being the balance amount during the year ended March 31,2015.
d) Accounting Standard 17 - Segment Reporting
i) As per the revised guidelines of Reserve Bank of India, the Bank has
recognised Treasury Operations, Corporate/ Wholesale Banking, Retail
Banking and other Banking business as primary reporting segments. There
are no secondary reporting segments.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual
exposures
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms, Companies and statutory bodies, which are not
included under Retail Banking.
v) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
vi) General Banking operations are the main resource mobilizing unit
and Treasury Segment compensates the former for funds lent to it by
taking into consideration the average funds used.
vii) Allocation of Costs:
a) Expenses directly attributable to a particular segment are allocated
to the relative segment
b) Expenses not directly attributable to a specific segment are
allocated on rational basis.
(C) No disclosure is required in respect of related parties, which are
state controlled enterprises as per Paragraph 9 of AS- 18. Further, in
terms of Paragraph 5 of AS-18, transactions in the nature of
banker-customer relationship have not been disclosed including those
with Key Managerial Personnel & relatives of Key Managerial Personnel.
c) Accounting Standard 22 -Accounting for Taxes on Income
The Bank has recognized Deferred Tax Assets/ Liabilities.
Major components of Deferred Tax Assets and Deferred Tax Liabilities
are as under:
d) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bank''s assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31,2015, requiring
recognition in terms of the Standard.
e) Accounting Standard - 29 on Provisions, Contingent Liabilities and
Contingent Assets
9. Provisioning Coverage Ratio (PCR)
The PCR (ratio of Provisioning to Gross NPA) stood at 55.16% (Previous
Year 50.68%)
10. As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
11. Implementation of the Guidelines on Information Security,
Electronic Banking, Technology Risk Management and Cyber Frauds
The Bank has formulated policies on Cyber Frauds in CBS system as per
RBI circular RBI/2010-11/494 DBS.CO.ITC. BC.No.6/31.02.008/2010-11
dated April 29, 2011. These policies are being reviewed by the
management of the bank on periodical basis.
12. Previous year figures have been re-grouped/ re-classified wherever
considered necessary to conform to current year''s classification.
Mar 31, 2014
1. Capital:
Paid up Equity Share Capital of the Bank as on 31.03.2014 is Rs. 1350.44
crore increased from Rs. 1044.58 crore of previous year by issue of fresh
equity shares of Rs. 305.86 crore at a premium of Rs. 58.85/- per share to
Government of India.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items is in progress : Inter
Branch/Office Balance
Accounts for Govt. transactions (Central & State)
Inter Bank Accounts
System Suspense Account
Suspense Account
Clearing & other Adjustment Accounts
Balances related to ATM
Certain balances in nominal account
NOSTRO Accounts
Mirror Accounts maintained by Central card Department
Disclosure on particulars of restructured accounts Note No. 6d (ii) The
management is of the opinion that the overall impact, if any, on the
accounts will not be significant.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs. 1400.59 crore (previous
year Rs. 912.60 crore) towards disputed Income Tax paid by the Bank or
adjusted by the Income Tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank on the basis of
various judicial decisions/ counsel''s opinion on such issues.
3.3 Out of Rs. 1400.59 crore (previous year Rs. 912.60 crore)of tax paid
under dispute which relate to various Assessment Years, involving tax
element of Rs. 490.98 crore (previous year Rs. 5.98 crore)have been
decided by the Appellate authorities in favor of the Bank. The appeal
effect for the same is pending.
4. Premises:
Premises owned by the Bank include properties costing Rs. 55.22 crore
(Previous Year Rs. 39.93 crore) for which registration formalities are
still in progress.
5. Advances / Provisions:
5.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers'' assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
5.2 In accordance with the guidelines issued by Reserve Bank of India,
the Bank has utilized the Floating Provision of Rs. 103.09 crore and
Countercyclical Provision of Rs. 46.63 crore being 33% of amount
outstanding in these accounts towards specific provision for NPAs. The
Bank has netted the balance Floating Provision amount of Rs. 209.34
crores (previous year Rs. 312.43 crore) and Countercyclical Provision
amount of Rs. 94.67 crore (previous year Rs. 141.30 crore ) from gross
NPAs to arrive at net NPAs.
5.3 Advances considered good and secured includes investment of Rs. 2200
crore (Previous Year Rs. 2515 crore) in IBPCs (Inter Bank Participation
Certificate) governed by the Uniform Code Governing Inter Bank
Participations issued by IBA (Non Priority Sector) and investment in
IBPCs issued by RRBs aggregating Rs. 2200 crore (Previous Year Rs. 2515
crore) of Priority Sector Advance/ Direct Agriculture.
Disclosures on Risk Exposure in Derivatives
iii) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the use
of derivative instruments to hedge/ trade is in place.
- The investment portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating interest
rates and is subject to interest rate risk. The Bank has also Tier II
bonds hedged for coupon swaps. The policy permits hedging the interest
rate risk on this liability as well.
- Policy for Forward Rate Agreement, Interest Rate Swaps, currency
futures and Interest Rate Futures for hedging the interest rate risk in
the investment portfolio and also for market making is in place.
- The risk management policies and major control limits like stop loss
limits, counter party exposure limits etc. as approved by the Board of
Directors are in place. The risks are monitored and reviewed regularly.
MIS reports are submitted periodically to Risk Management Committee.
Hedge Positions
- Accrual on account of interest expenses/income on the IRS are
accounted and recognized as income/ expense.
- If the swap is terminated before maturity, the Mark to Market (MTM)
loss/gain and accrual till such date are accounted as expense/income
under Interest paid/received on IRS.
Trading positions
- Currency future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
Exchange.
- MTM profit/loss is accounted by credit/debit to the margin account on
daily basis and the same is accounted in bank''s profit & loss account on
final settlement.
- Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate
income/expense under the above head.
(v) Statement of Loans and Advances secured by Intangible Assets viz.,
Rights, Licenses, Authorizations etc. which is shown as unsecured in
Schedule-9.
Advances amounting to Rs. Nil (previous year Rs. 495.74 crore) against
charge over intangible security such as Rights, Licences, Authorisation
etc. are considered as unsecured.
The value of intangible security is Rs. NIL (previous year Rs. 232.74
crore)
6. Disclosure of penalties imposed by RBI
RBI has imposed a penalty of Rs. 305.27 lacs in terms of Section
47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act 1949
for non-compliance of RBI norms.
7. Disclosure regarding concentration of Deposits, Advances, Exposures
and NPAs:
8. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 5 Recovery in NPA:
- Due to change in accounting policy No. 5.2 regarding appropriation of
recoveries in NPAs frost towards principal irregularity as against first
towards interest w.e.f. 01.07.2013, the interest income for the year
and advances are lower and loss for the year is more by Rs. 223.50 crore.
- In view of the RBI circular No. RBI/2013-14/502 dated 26.02.2014, in
case of sale to SCRC for a value higher than NBV, the excess provision
to the extent of cash recovery amounting to Rs. 77 crore has been taken
to the credit of profit & Loss Account which as per the extant
accounting policy would have been retained in excess provision. The
resultant impact is that the profit for the year is more by Rs. 77 crore
and provision is less to that extent.
b) Accounting Standard - 9
Certain items of income are recognized on realization basis as per
principal accounting policy No. 8. However, the said income is not
considered to be material.
c) Accounting Standard - 15 (Revised)
In the year 2010-11, in accordance with circular No. DBOD No.
BP.BC.80/21.04.018/2010-11, dated 09-02-2011 issued by Reserve Bank of
India, the Bank had opted to amortize the additional liability on
account of re-opening of Pension option for existing employees who had
not opted for pension earlier, as well as the liability on enhancement
in Gratuity limit, over a period of five years beginning with the
financial year ended 31st March, 2011. Accordingly, out of the
unamortized amount of Rs. 590.77 crore as on 1st April, 2013, the Bank
has amortized Rs. 239.99 crore for Pension and Rs. 55.40 crore for Gratuity
being proportionate amount during the year ended March 31, 2014. The
balance amount to be amortized in future periods for Pension is Rs.
239.98 crore and for Gratuity is Rs. 55.40 crore.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual
exposures
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms, Companies and statutory bodies, which are not
included under Retail Banking.
v) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
vi) General Banking operations are the main resource mobilizing unit
and Treasury Segment compensates the former for funds lent to it by
taking into consideration the average funds used.
vii) Allocation of Costs:
a) Expenses directly attributable to a particular segment are allocated
to the relative segment
b) Expenses not directly attributable to a specific segment are
allocated on rational basis.
e) Related Party disclosures as per Accounting Standard 18 - Related
Party
(b) Subsidiaries -
i) Cent Bank Home Finance Ltd.
ii) Cent Bank Financial & Custodial Services Ltd.
(c) Associates
(I) Regional Rural Banks Â
i) Central Madhya Pradesh Gramin Bank ii) Uttar Bihar Gramin Bank,
Muzzaffarpur iii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar
(II) Indo  Zambia Bank Ltd.
Pursuant to Reserve Bank of India''s (RBI''s) circular No. DBOD
No.BP.BC.77/ 21.04.018/2013-14 dated 20.12.2013, the bank has created
Deferred Tax Liability on the Special Reserve under Section 36(1)(viii)
of the Income Tax Act, 1961. As required by said RBI Circular, the
expenditure amounting to Rs. 33.99 crore due to the creation of DTL on
Special Reserve as at March 31, 2013 not previously charged to the
profit and Loss Account has now been adjusted directly from the
Reserves.
h) Accounting Standard  28 ÂImpairment of Assets
A substantial portion of Bank''s assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2014, requiring
recognition in terms of the Standard.
9. Provisioning Coverage Ratio (PCR)
The PCR (ratio of Provisioning to Gross NPA) stood at 50.68% (Previous
Year 40.62%)
10. As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
11. Implementation of the Guidelines on Information Security,
Electronic Banking, Technology Risk Management and Cyber Frauds
The bank has formulated policies on Cyber Frauds in CBS system as per
RBI circular RBI/2010-11/494 DBS.CO.ITC. BC.No.6/31.02.008/2010-11
dated April 29, 2011. These policies are being reviewed by the
management of the bank on periodical basis.
(000''s Omitted)
PARTICULARS AS AT 31/03/2014 AS AT 31/03/2013
Rs. Rs.
SCHEDULE 12 : CONTINGENT LIABILITIES
I. (a) Claims against the
Bank not acknowledged 1,196,346 635,671
as Debts
(b) Disputed income tax
demands under 14,005,895 9,126,021
appeals, revisions, etc
II. Liability for partly paid
Investments
III. Liability on account of
outstanding forward
exchange contracts 640,602,389 357,696,828
IV. Guarantees given on behalf
of constituents
a) In India 103,363,304 92,483,533
b) Outside India 5,673,489 8,313,332
109,036,793 100,796,865
V. Acceptances, Endorsements
and Other 112,332,617 126,372,490
Obligations
VI. Other item for which the
bank is contingently 8,351,107 562,464
liable
TOTAL 885,525,147 595,190,339
13. Previous year figures have been re-grouped/ re-classified wherever
considered necessary to conform to current year''s classification.
Mar 31, 2013
1. Capital:
Paid up Equity Share Capital of the Bank as on 31.03.2013 is Rs.
1044.58 crore increased from Rs. 736.11 crore of previous year by issue
of fresh equity shares of Rs. 308.47 crore at a premium of Rs. 68/- per
share to Government of India.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items is in progress :
- Inter Branch/Office Balance
- Accounts for Govt. transactions (Central & State)
- Inter Bank Accounts
- System Suspense Account
- Suspense Account
- Clearing & other Adjustment Accounts
- Balances related to ATM
- Certain balances in nominal account
- NOSTRO Accounts
The management is of the opinion that the overall impact, if any, on
the accounts will not be significant.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs. 912.60 crore (previous
year Rs.1424.58 crore) towards disputed Income Tax paid by the Bank or
adjusted by the Income Tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank on the basis of
various judicial decisions/ counsel''s opinion on such issues.
3.3 Out of Rs.912.60 crore of tax paid under dispute which relate to
various Assessment Years, involving tax element of Rs.5.98 crore have
been decided by the Appellate authorities in favour of the Bank. The
appeal effect for the same is pending.
4. Premises:
Premises owned by the Bank include properties costing Rs. 39.93 crore
(Previous Year Rs. 9.95 crore) revalued value Rs. 130.02 crore
(Previous Year Rs. 122.31 crore) for which registration formalities are
still in progress.
5. Advances / Provisions:
5.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers'' assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
5.2 In accordance with the guidelines issued by Reserve Bank of India,
the Bank has netted the Floating Provision amounting to Rs.312.42 crore
(previous year Rs. 312.42 crore) and Countercyclical Provisioning
Buffer amounting to Rs. 141.30 (previous year Rs. 141.30 crore) from
Gross NPAs to arrive at Net NPAs.
5.3 Advances considered good and secured includes investment of Rs.
2515 crore (Previous Year Rs. 3000 crore) in IBPCs (Inter Bank
Participation Certificate) governed by the Uniform Code Governing Inter
Bank Participations issued by IBA (Non Priority Sector) and investment
in IBPCs issued by RRBs aggregating Rs. 2515 crore (Previous Year Rs.
2080 crore) of Priority Sector Advance/ Direct Agriculture.
6. Innovative Perpetual Debt Instruments:
During the year, Bank has raised Rs. 500 crore by issue of Innovative
Perpetual Debt Instruments taking the balance to Rs.1083.00 crore.
The above data has been compiled on the basis of guidelines of Reserve
Bank of India and estimates in respect of certain Off Balance Sheet
items, made by the management and relied upon by the Auditors. In
respect of Basel II, the system deficiencies/ data errors noticed /
reported were addressed at Central Office. Based on the extensive
exercise undertaken, Bank is of the view that, unrectified
deficiencies, if any, will not have a significant impact on the overall
reported Capital Adequacy.
Disclosures on Risk Exposure in Derivatives
iii) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the
use of derivative instruments to hedge/ trade is in place.
- The investment portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank has also
Tier II bonds hedged for coupon swaps. The policy permits hedging the
interest rate risk on this liability as well.
- Policy for Forward Rate Agreement, Interest Rate Swaps, currency
futures and Interest Rate Futures for hedging the interest rate risk in
the investment portfolio and also for market making is in place.
- The risk management policies and major control limits like stop
loss limits, counter party exposure limits etc. as approved by the
Board of Directors are in place. The risks are monitored and reviewed
regularly. MIS reports are submitted periodically to Risk Management
Committee.
- Hedge Positions
- Accrual on account of interest expenses/income on the IRS are
accounted and recognized as income/ expense.
- If the swap is terminated before maturity, the Mark to Market (MTM)
loss/gain and accrual till such date are accounted as expense/income
under Interest paid/received on IRS.
- Trading positions
- Currency future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
Exchange.
- MTM profit/loss is accounted by credit/debit to the margin account on
daily basis and the same is accounted in bank''s profit & loss account
on final settlement.
Figures of Movement of Net NPAs as on 31.03.2012 has been recasted.
- after netting Rs. 84.00 crores held in nominal towards amount
received from ECGC and Court Borrowers pending adjustment
-- excluding floating provision of Rs. 312.43 crore (previous year Rs.
312.43crore) & Countercyclical provision of Rs. 141.30 crore (previous
year Rs.141.30 crore)
(v) Statement of Loans and Advances secured by Intangible Assets viz.,
Rights, Licenses, Authorizations etc. which is shown as unsecured in
Schedule-9.
Advances amounting to Rs. 495.74 crore (previous year Rs. 291.52 crore)
against charge over intangible security such as Rights, Licences,
Authorisation etc. are considered as unsecured.
The value of intangible security is Rs. 232.74 crore.
7. Disclosure of Penalties imposed by RBI
RBI has imposed a penal interest of Rs.28.85 lacs on the Bank under
Section 46(4) of the Banking Regulation Act, 1949.
8. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 5
Accounting for LAF Repo with Reserve Bank of India
Hitherto the bank was following the policy of deducting the net amount
of borrowings under LAF repo from gross value of investments for the
purpose of year end accounting. Due to change in accounting policy
effective from the current accounting year, bank has shown net amount
due to RBI under LAF repo as borrowing from RBI. In case the accounting
treatment of the preceding year had been followed, the loans and
investments would have been less by Rs.5500 crores. There is no impact
on the profit for the year due to this change.
b) Accounting Standard - 9
Certain items of income are recognized on realization basis as per
principal accounting policy No. 8. However, the said income is not
considered to be material.
c) Accounting Standard - 15 (Revised)
In the year 2010-11, in accordance with circular No. DBOD No.
BP.BC.80/21.04.018/2010-11, dated 09-02- 2011 issued by Reserve Bank of
India, the Bank had opted to amortize the additional liability on
account of re- opening of Pension option for existing employees who had
not opted for pension earlier, as well as the liability on enhancement
in Gratuity limit, over a period of five years beginning with the
financial year ended 31st March, 2011. Accordingly, out of the
unamortized amount Rs.886.15 crore as on 1st April, 2012, the Bank has
amortized Rs.239.98 crore for Pension and Rs. 55.40 crore for Gratuity
being proportionate amount during the year ended March 31, 2013. The
balance amount to be amortized in future periods for Pension is
Rs.479.97 crore and for Gratuity is Rs. 110.80 crore.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual
exposures.
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms, Companies and statutory bodies, which are not
included under Retail Banking.
iv) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
v) General Banking operations are the main resource mobilizing unit and
Treasury Segment compensates the former for funds lent to it by taking
into consideration the average funds used.
vii) Allocation of Costs:
a Expenses directly attributable to a particular segment are allocated
to the relative segment. b Expenses not directly attributable to a
specific segment are allocated on rational basis. e) Related Party
disclosures as per Accounting Standard 18 - Related Party 1 List of
Related Parties:
(a) Key Managerial Personnel -
(b) Subsidiaries -
i) Cent Bank Home Finance Ltd.
ii) Cent Bank Financial & Custodial Services Ltd.
(c) Associates -
(I) Regional Rural Banks -
i) Central Madhya Pradesh Gramin Bank,
ii) Surguja Kshetriya Gramin Bank, Ambikapur
ii) Uttar Bihar Gramin Bank, Muzzaffarpur
iv) Vidharbha Konkan Gramin Bank,
v) Ballia Etawah Gramin Bank, Ballia
vi) Hadoti Kshetriya Gramin Bank, Kota
vii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar
(II) Indo - Zambia Bank Ltd.
Note: Vide notification No. F.No. 7/9/2011-RRB (Maharashtra) dated
February 28, 2013 issued by Government of India, Ministry of Finance,
approved the amalgamation of Vidarbha KGB sponsored by Central Bank of
India with Wainganga Krishna Gramin Bank sponsored by Bank of India.
Also, vide notification dated April 01, 2013 issued by Government of
India, Ministry of Finance, approved amalgamation of Balia Etawah KGB
sponsored by Central Bank of India with Purvanchal Gramin Bank
sponsored by State Bank of India.
Pending completion of merger formalities and financial transactions,
the said investments continue to be shown in our books of accounts.
(c) No disclosure is required in respect of related parties, which are
state controlled enterprise as per Paragraph 9 of AS-18. Further, in
terms of Paragraph 5 of AS-18, transactions in the nature of
banker-customer relationship have not been disclosed including those
with Key Management Personnel & relatives of Key Management Personnel.
h) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bank''s assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2013,
requiring recognition in terms of the Standard.
9. Provisioning Coverage Ratio (PCR)
The PCR (ratio of Provisioning to Gross NPA) stood at 47.75% (Previous
Year 40.62%)
10. As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
11. Implementation of the Guidelines on Information Security,
Electronic Banking, Technology Risk Management and Cyber Frauds as
required in terms of Para F of RBI Circular
DBS.CO.IT.BC.No.6/31.02.008/2010-11 dated April 29, 2011.
The bank has formulated policies on Cyber Frauds in CBS system as per
RBI circular RBI/2010-11/494 DBS.CO.ITC. BC.No.6/31.02.008/2010-11
dated April 29, 2011. These policies are being reviewed by the
management of the bank on periodical basis.
12. Acceptances, Endorsements and other Obligations under contingent
liabilities include certain invocation of Stand by Letters of Credit
before the actual due date of the relevant Letter of Credit extended to
Merchant Exporters and manufacturers of Diamond/Jewellery. In the
opinion of the Management, there is no indication as on date that there
would be any consequential financial impact on the Bank.
13. Previous year figures have been re-grouped/ re-classified wherever
considered necessary to conform to current year''s classification.
Mar 31, 2012
1. Capital:
The Authorized Capital of the Bank is Rs.3000 crore.
The paid-up Capital of the Bank is Rs.2353.11 crore increased from
Rs.2021.14 crore by issue of equity shares by way of Rights issue to the
tune of Rs.242.46 crores to the existing share holders at a premium of
Rs.93/- per share, which was allotted to the share holders in April 2011.
Further, the Bank raised equity by way of Preferential Issue of Equity
Shares to Government of India and Life Insurance Corporation of India
on March 31, 2012 to the tune of Rs.89.51 crore at a premium of Rs.95.61
per share.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items is in progress :
- Inter Branch/Office Balance
- Accounts for Govt. transactions (Central & State)
- Inter Bank Accounts
- System Suspense Account
- Suspense Account
- Clearing & other Adjustment Accounts
- Balances related to ATM
- Certain balances in nominal account
The management is of the opinion that the overall impact, if any, on
the accounts will not be significant.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues, net of reversal of excess provision of earlier
years Rs.112.38 crore (Refer Note 8(b)).
3.2 Other Assets [Schedule 11 (ii)] includes Rs.1424.58 crore (previous
year Rs.601.64 crore) towards disputed Income Tax paid by the Bank or
adjusted by the Income Tax department. Provision for disputed amount of
taxation is not considered necessary by the Bank in respect of above
disputed demands based on various judicial decisions/ counsel's opinion
on such disputed issues.
3.3 Out of Rs.1424.58 crore of tax paid under dispute, disputes relating
to various Assessment Years, involving tax element of Rs.4.82 crore have
been decided by the Appellate authorities in favour of the Bank. The
appeal effect for the same is pending.
4. Share Issue Expenses:
Unamortized amount of Rs.1.31 crore (Previous Year Rs.6.72 crore) towards
share issue expenses are included in Other Assets.
5. Premises:
5.1 The premises of the Bank were revalued during financial year
2007-08 to reflect the market value as at March 31, 2008. The
appreciation amounting to Rs.1565.97 crore is included in Revaluation
Reserve Account.
5.2 Premises owned by the Bank include properties costing Rs.9.95 crore
(Previous Year Rs.12.21 crore) revalued at Rs.122.31 crore (Previous Year
Rs.198.46 crore) for which registration formalities are still in
progress.
6. Advances / Provisions:
6.1 Advances to units which have become sick including those under
nursing / rehabilitation / restructuring programme and other advances
classified as doubtful / loss assets have been considered secured /
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers' assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
6.2 In the current year, in accordance with the guidelines issued by
Reserve Bank of India, the Bank has netted the Floating Provision
amounting to Rs.312.42 crore (previous year Rs.312.42 crore) from Gross
NPAs to arrive at Net NPAs.
6.3 Advances considered good and secured includes investment of Rs.3000
crore (Previous Year Rs.2000 crore) in IBPCs (Inter Bank Participation
Certificate) governed by the Uniform Code Governing Inter Bank
Participations issued by IBA (Non Priority Sector) and investment in
IBPCs issued by RRBs aggregating Rs.2080 crore (Previous Year Rs.1440
crore) of Priority Sector Advance / Direct Agriculture.
7. Subordinated Debt:
During the year, Bank has raised Rs.500 crore by issue of Unsecured
Redeemable Bonds under Tier II Capital (Subordinate Debt) taking the
balance to Rs.2637.30 crore (Previous Year Rs.2137.30 crore) and Upper
Tier II Bonds stands at Rs.2885.00 crore (Previous Year Rs.2885.00 crore)
The above data has been compiled on the basis of guidelines of Reserve
Bank of India and estimates in respect of certain Off Balance Sheet
items, made by the management and relied upon by the Auditors. In
respect of Basel II, the system deficiencies / data errors noticed /
reported were addressed at Central Office. Based on the extensive
exercise undertaken, Bank is of the view that, unrectified
deficiencies, if any, will not have a significant impact on the overall
reported Capital Adequacy.
b. Provisions and Contingencies:
The break up of 'Provisions and Contingencies' appearing in the Profit
and Loss Account is as under:
Disclosures on Risk Exposure in Derivatives
iii) Qualitative Disclosures
- Risk Management Policy approved by the Board of Directors for the use
of derivative instruments to hedge/trade is in place.
- The investment portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank has also
Tier II bonds hedged for coupon swaps. The policy permits hedging the
interest rate risk on this liability as well.
- Policy for Forward Rate Agreement, Interest Rate Swaps, currency
futures and Interest Rate Futures for hedging the interest rate risk in
the investment portfolio and also for market making is in place.
- The risk management policies and major control limits like stop loss
limits, counter party exposure limits etc approved by the Board of
Directors are in place. The risks are monitored and reviewed regularly.
MIS reports are submitted periodically to Risk Management Committee.
- Hedge Positions
- Accrual on account of interest expenses/income on the IRS are
accounted and recognized as income/ expense.
- If the swap is terminated before maturity, the Mark to Market (MTM
loss/gain and accrual till such date are accounted as expense/income
under Interest paid/received on IRS.
- Trading positions
- Currency future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
Exchange.
- MTM profit/loss are accounted by credit/debit to the margin account
on daily basis and the same is accounted in bank's profit & loss
account on final settlement.
- Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate
income/expense under the above head.
(v) Statement of Loans and Advances secured by Intangible Assets viz.,
Rights, Licenses, Authorizations etc. which is shown as unsecured in
Schedule-9.
Advances amounting to Rs. 291.52 crore (previous year Rs.231.22 crore)
for which charge over intangible security such as Rights, Licences,
Authorisation etc. has been considered as unsecured.
(vi) Balance outstanding under credit exposure to telecom companies as
at the year-end amounts to Rs.2038.15 crore and in the opinion of the
management the same are considered good for recovery. There are no
credit exposures towards acquisition of 2G Licences. In addition,
investment in the form of Shares, Bonds, Debentures etc. of the bank in
telecom companies aggregates Rs.1355.51 crore as at the year-end.
8. Disclosure of Penalties imposed by RBI
RBI has not imposed any penalty on the Bank under Section 46(4) of the
Banking Regulation Act, 1949.
9. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 9
Certain items of income are recognized on realization basis as per
principal accounting policy No. 8. However, the said income is not
considered to be material.
b) Accounting Standard - 15 (Revised)
In previous year, in accordance with circular No. DBOD No.
BP.BC.80/21.04.018/2010-11, dated 09-02-2011 issued by Reserve Bank of
India, the Bank had opted to amortize the additional liability on
account of re-opening of Pension option for existing employees who had
not opted for pension earlier, as well as the liability on enhancement
in Gratuity limit, over a period of five years beginning with the
financial year ended 31st March, 2011. Accordingly, out of the
unamortized amount Rs.1181.53 crore as on 1st April, 2011, the Bank has
amortized Rs.239.98 crore for Pension and Rs.55.40 crore for Gratuity
being proportionate amount during the year ended March 31, 2012. The
balance amount to be amortized in future periods for Pension is Rs.
719.95 crore and for Gratuity is Rs.166.20 crore. Had such an accounting
treatment not been approved by the RBI, the profit of the bank would
have been lower by Rs.886.15 crore pursuant to application of the
requirements of AS-15.
Employee Benefits:
Reconciliation of opening and closing balance of the present value of
the defined benefit obligation for pension and gratuity benefits as per
actuarial valuations is given below:
b) Accounting Standard 17 - Segment Reporting
i) As per the revised guidelines of Reserve Bank of India, the Bank has
recognised Treasury Operations, Corporate/ Wholesale Banking, Retail
Banking and other Banking business as primary reporting segments. There
are no secondary reporting segments.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs.5 crore (including Fund Based and Non Fund Based exposures) subject
to orientation, product, granularity criteria and individual exposures.
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms Companies and statutory bodies, which are not
included under Retail Banking.
iv) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
v) General Banking operations are the main resource mobilizing unit and
Treasury Segment compensates the former for funds lent to it by taking
into consideration the average funds used.
vii) Allocation of Costs:
a Expenses directly attributable to a particular segment are allocated
to the relative segment.
b Expenses not directly attributable to a specific segment are
allocated in proportion to the funds employed.
(e) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Bank's assets comprise financial assets to
which Accounting Standard-28 on Impairment of Assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2012,
requiring recognition in terms of the Standard.
The above mentioned Letters of Comfort are issued within the sanctioned
Trade Credit Limits.
10. As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
11. Previous year figures have been re-grouped / re-classified
wherever considered necessary to conform to current year's
classification.
Mar 31, 2011
These Financial Statements which were approved by the Board of
Directors on 06th May 2011 and authenticated by the Auditors have
undergone a change due to appropriation of additional amount towards
proposed dividend for the shares allotted under Rights Issue which was
opened on March 24, 2011 and closed on April 07, 2011. The allotment
was made on April 19, 2011 on pari passu basis. The effect of this
change in Financial Statements is an increase in proposed dividend on
equity capital by Rs. 36.37 crore and dividend tax by Rs. 5.90 crore and
consequent decrease in Revenue reserve by Rs. 42.27 crore.
1.1 Capital:
The Authorised Capital of the Bank is Rs. 3000 crore.
The paid-up Capital of the Bank is Rs. 2021.14 crore i.e. increased from
Rs. 1771.14 crore to Rs. 2021.14 crore by issue of Perpetual Non-cumulative
Preference Shares [PNCPS] to the tune of Rs. 250 crore to Government of
India.
During the year, the Bank has come out with Right Issue of Rs. 2497.38
Crore comprising of 24,24,84,876 nos fully paid up equity shares of Rs.
10 each at premium of Rs. 93. The issue opened on 24th March 2011 and was
closed on 7th April 2011. A sum of Rs. 2025.68 Crore has been received
till 31st March 2011 and the same has been shown as Share Application
Money. The said money is parked in account with Reserve Bank of India
maintained by our Bank.
1.2 The proposed dividend of Rs. 137.41 crore on Equity Capital includes
Rs. 36.37 crore payable on shares allotted under Rights Issue, subject to
approval by AGM. Proposed dividend includes interim dividend paid Rs.
40.41 crore as declared by the Board on October 26, 2010, on the
existing Capital, on the relevant record date.
2. Balancing of Books / Reconciliation:
The reconciliation of the following items is in progress at various
stages on ongoing basis and consequential impact arising on account of
such reconciliation is unascertained.
- Inter Branch/Office Balance
- Accounts for Govt. transactions (Central & State)
- Inter Bank Accounts
- System Suspense Account
- Suspense Account
- Clearing & other Adjustment Accounts
The management is of the opinion that the overall impact, if any, on
the accounts will not be significant.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs. 601.64 crore (previous
year Rs. 1507.45 crore) towards disputed Income Tax paid by the Bank/
adjusted by the authorities. Provision for taxation is not considered
necessary by the Bank in respect of above disputed demands based on
various judicial decisions/ counsels opinion on such disputed issues.
3.3 Out of Rs. 601.64 crore of tax paid under dispute, disputes relating
to various Assessment Years, involving tax element of Rs. 21.46 crore
have been decided by the Appellate Authorities in favour of the Bank.
The appeal effect for the same is pending.
4. Share Issue Expenses:
Unamortized amount of Rs. 6.72 crore towards share issue expenses are
included in Other Assets.
5. Premises:
5.1 The premises of the Bank were revalued during financial year
2007-08 to reflect the market value as at March 31, 2008. The
additional appreciation amounting to Rs. 1565.97 crore have been credited
to Revaluation Reserve Account.
5.2 Premises owned by the Bank include properties costing Rs. 12.21 crore
revalued at Rs. 198.46 crore for which registration formalities are still
in progress.
7. Advances / Provisions:
7.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
7.2 In the current year, in accordance with the guidelines issued by
Reserve Bank of India, the Bank has opted to utilize the Floating
Provision amounting to Rs. 312.42 crore (previous year Rs. 312.42 crore)
for netting off from Gross NPAs to arrive at Net NPAs.
7.3 Advances considered good and secured includes investment of Rs. 2000
crore in IBPCs governed by the Uniform Code Governing Inter Bank
Participations issued by IBA (Non Priority Sector) and investment in
IBPCs issued by RRBs aggregating Rs. 1440 crore (Priority Sector Advance/
Direct Agriculture).
8 Agricultural Debt Waiver and Debt Relief Scheme, 2008
In terms of the Reserve Bank of India Circular Ref RBI:2009-10/371/
DBOD.No.BP.BC.82/21.04.048/2009-10 dated March 30, 2010 and vide
Government of India Notification No.3/3/208-AC dated April 5, 2010,
Bank has extended the Debt Relief Scheme to all eligible farmers upto
June 30, 2010. Banks claim of Rs. 147.77 crore under Debt Relief Scheme
for the period ended 31/12/2009 is fully reimbursed during the month of
February 2011. Claim for the extended period i.e. 1/01/2010 to
30/06/2010 (grievance redressal up to 31/07/2010) of Rs. 54.26 crore is
pending to be lodged with Reserve Bank of India up to 30/06/2011 as per
Reserve Bank of India guidelines.
9. Upper Tier II Debt Instrument:
During the year, Bank has raised Upper Tier II Debt to the tune of
Rs.1300.00 crore (previous year Rs. 1000.00 crore) by issue of Unsecured
Redeemable Bonds under Upper Tier II Debt and the amount is shown in
Schedule 4 "Borrowings" of the Balance Sheet.
The above data has been compiled on the basis of guidelines of Reserve
Bank of India and estimates in respect of certain Off Balance Sheet
items, made by the management and relied upon by the Auditors. In
respect of Basel II, the system deficiencies/ data errors noticed /
reported were addressed at Central Office. Based on the extensive
exercise undertaken, Bank is of the view that, unrectified
deficiencies, if any, will not have a significant impact on the overall
reported Capital Adequacy.
Disclosures on Risk Exposure in Derivatives
iii) Qualitative Disclosures
. Risk Management Policy approved by the Board of Directors for the use
of derivative instruments to hedge/ trade is in place.
. The investment portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank has also
Tier II bonds hedged for coupon swaps. The policy permits hedging the
interest rate risk on this liability as well.
. Policy for Forward Rate Agreement, Interest Rate Swaps, currency
futures and Interest Rate Futures for hedging the interest rate risk in
the investment portfolio and also for market making is in place.
. The risk management policies and major control limits like stop loss
limits, counter party exposure limits etc approved by the Board of
Directors are in place. The risks are monitored and reviewed regularly.
MIS reports are submitted periodically to Risk Management Committee.
a) Accounting policy. Hedge Positions
. Accrual on account of interest expenses/income on the IRS are
accounted and recognized as income/ expense.
. If the swap is terminated before maturity, the Marked to Market (MTM
loss/gain and accrual till such date are accounted as expense/income
under Interest paid/received on IRS.
Trading positions
. Currency future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX, NSE and United Stock
Exchange.
. MTM profit/loss are accounted by credit/debit to the margin account
on daily basis and the same is accounted in Banks Profit & Loss
Account on final settlement.
. Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.
. Gains or losses on termination of swaps are recorded as immediate
income/expense under the above head.
(b) During the year, 219 accounts under SME were subjected to
Restructuring and the balance outstanding as on March 31, 2011 was Rs.
27.45 crore (Previous Year 349 accounts à Amount Rs. 170.95 crore).
12 b Gold Coins - During the year the Bank has sold 61.612 kgs. and the
total sale consideration is Rs. 1337 lacs. The Profit accrued on the sale
of Gold Coins is Rs. 46.00 lacs and is accounted for in Misc. Income.
12 c The Provisioning Coverage Ratio (PCR) of the Bank is 67.64%.
13. Disclosure of Penalties imposed by RBI
RBI has not imposed any penalty on the Bank under Section 46(4) of the
Banking Regulation Act, 1949.
14. The following information is disclosed in terms of Accounting
Standards issued by The Institute of Chartered Accountants of India:
a) Accounting Standard - 15 (Revised)
During the year, the Bank reopened the pension option for such of its
employees who had not opted for the pension scheme earlier. In
accordance with RBI circular No.DBOD No. BP.BC.80/21.04.018/2010-11,
dated 09-02-2011, for second option for pension, one-fifth of
additional liability of Rs. 239.98 crore towards pension fund for 13494
serving employees and 100% of such liability of Rs. 569.62 crore for 4046
retired/separated employees aggregating to Rs. 809.60 crore has been
charged to Profit & Loss Account for the year. The unrecognized pension
liability for second option for pension for serving employees is Rs.
959.93 crore.
In accordance with RBI circular No.DBOD No. BP.BC.80/21.04.018/2010-11,
dated 09/02/2011, an amount of Rs. 55.40 crore has been charged to Profit
& Loss Account for the year, being 1/5th of additional Gratuity
liability due to amendment of Payment of Gratuity Act 1972. The
unrecognized Gratuity liability is Rs. 221.60 crore.
Had such a circular not been issued by the RBI, the profit of the bank
would have been lower by Rs. 1181.53 crore pursuant to application of the
requirements of AS-15.
b) Accounting Standard 17 Ã Segment Reporting
i) As per the revised guidelines of Reserve Bank of India, the Bank has
recognised Treasury Operations, Corporate/ Wholesale Banking, Retail
Banking and other Banking business as primary reporting segments. There
are no secondary reporting segments.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs. 5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual
exposures.
iv) The Corporate/ Wholesale Segment consist of all advances to Trusts/
Partnership Firms Companies and statutory bodies, which are not
included under Retail Banking.
iv) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
v) General Banking operations are the main resource mobilizing unit and
Treasury Segment compensates the former for funds lent to it by taking
into consideration the average funds used.
vii) Allocation of Costs:
a Expenses directly attributable to a particular segment are allocated
to the relative segment.
b Expenses not directly attributable to a specific segment are
allocated in proportion to the funds employed.
(b) Subsidiaries Ã
i) Cent Bank Home Finance Ltd.
ii) Centbank Financial Services Ltd.
(c) Associates Ã
(I) Regional Rural Banks -
i) Satpura Narmada Kshetriya Gramin Bank, Chhindwara
ii) Surguja Kshetriya Gramin Bank, Ambikapur
iii) Uttar Bihar Gramin Bank, Muzzaffarpur
iv) Vidharbha Kshetriya Gramin Bank, Akola
v) Ballia Etawah Gramin Bank, Ballia
vi) Hadoti Kshetriya Gramin Bank, Kota
vii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar
(e) Accounting Standard à 28 ÃImpairment of Assets
A substantial portion of Banks assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2011,
requiring recognition in terms of the Standard.
17 As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
18. Previous year figures have been re-grouped / re-classified wherever
considered necessary to conform to current years classification.
Mar 31, 2010
1. Capital:
The Authorised Capital of the Bank was Rs.1500 crore as on April 01,
2009. The Board of Directors vide Resolution dated July 27, 2009
recommended to increase the Authorized Capital of the Bank from the
present Rs.1500 crore to Rs.3000 crore for the approval of shareholders
of the Bank and the shareholders in the Annual General Meeting held on
August 4, 2009 approved the same.
The Government of India by its official Gazette Notification dated
November 27, 2009 increased the authorized Capital from Rs.1500 crore
to Rs.3000 crore.
The paid-up Capital of the Bank is increased from Rs.1321.14 crore to
Rs.1771.14 crore by issue of Perpetual Non- cumulative preference
shares (PNCPS) to the tune of Rs.450 crore to Government of India.
2. Balancing of Books / Reconciliation:
Reconciliation of Inter-Branch Accounts is in progress. Balancing of
Subsidiary Ledgers and reconciliation with General Ledger is also in
progress at some branches. Pending final clearance of the above, the
overall impact, if any, on the accounts, in the opinion of the
management will not be significant.
The bank is in the process covering all of its branches under the CBS
platform. During the year, an additional 324 branches have come under
the CBS platform. Certain migration errors in the master data and
inherent bugs in the system were noticed in branches remedial action
was initiated by the banks IT department and the service provider. The
management is of the opinion that this does not have any material
impact on the Financial Statements.
3. Income Tax / Deferred Tax:
3.1 Provision for Income Tax for the year is arrived at after due
consideration of relevant statutory provisions and judicial decisions
on disputed issues.
3.2 Other Assets [Schedule 11 (ii)] includes Rs.1507.45 crore (previous
year Rs.1366.17 crore) towards disputed Income Tax paid by the Bank/
adjusted by the authorities. Provision for taxation is not considered
necessary by the Bank in respect of above disputed demands based on
various judicial decisions/ counsels opinion on such disputed issues.
3.3 Out of Rs. 1507.45 crore of tax paid under dispute, disputes
relating to various Assessment Years, involving tax element of Rs.7.06
crore have been decided by the Appellate authorities in favour of the
Bank. The appeal effect for the same is pending.
4. Share Issue Expenses:
Unamortized amount of Rs. 12.12 crore towards share issue expenses are
included in Other Assets.
5. Premises:
5.1 The premises of the Bank were revalued during financial year
2007-08 to reflect the market value as at March 31, 2008. The
additional appreciation amounting to Rs.1565.97 crore have been
credited to Revaluation Reserve Account.
5.2 Premises owned by the Bank include properties costing Rs.10.94
crore revalued at Rs.306.85 crore for which registration formalities
are still in progress.
6.2 in terms of the Guidelines of Reserve Bank of India, the profit of
Rs.46.62 crore (net of taxes and statutory reserves) on sale/
redemption of investments in the "Held to Maturity" category has been
appropriated to the Investment Reserve.
7. Advances / Provisions:
7.1 Advances to units which have become sick including those under
nursing/ rehabilitation/ restructuring programme and other advances
classified as doubtful/ loss assets have been considered secured/
recoverable to the extent of estimated realizable value of securities
carrying first or second charge based on valuers assessment of
properties/ assets mortgaged to the Bank and other data available with
the Bank.
7.2 Last year the Bank considered the Floating Provision of Rs.312.43
crore as part of Tier II Capital. In the current year, in accordance
with the guidelines issued by Reserve Bank of India the Bank has opted
to utilize the Floating Provision for netting off from Gross NPAs to
arrive at Net NPAs.
8 Agricultural Debt Waiver and Debt Relief Scheme, 2008
8.1 Government of India has notified "Agricultural Debt Waiver & Debt
Relief Scheme 2008" for Debt Waiver to marginal and small farmers and
Relief to other farmers, which has been implemented by the bank. Claims
have been preferred with RBI for Agricultural Debt Waiver amounting to
Rs.978.54 crore (inclusive of additional claim of Rs.3.71 crore). The
Bank has received Rs.631.06 crore being 64.49% of the Claim amount.
8.2 In terms of Government of India, Ministry of Finance, Department of
Financial Services, Notification dated October 16, 2008 and Reserve
Bank of India circular dated November 11, 2008, Interest amounting to
Rs.38.05 crore (previous year Rs.15.33 crore) on the amount outstanding
under Agricultural Debt Waiver Scheme, 2008, for the period April 2009
to March, 2010, have been accounted in the books as Interest Income.
8.3 In terms of the Reserve Bank of India Circular Ref RBI:2009-10/371/
DBOD.No.BP.BC.82/21.04.048/2009-10 dated March 30, 2010 and vide
Government of India Notification No.3/3//208-AC dated April 5, 2010,
Bank has extended the Debt Relief Scheme to all eligible farmers upto
June 30, 2010. Provision of Rs.6.17 crore is made by the Bank for the
loss in present value terms for all receivables from the Borrowers.
Claim for reimbursement of 25% Government share is subject to
verification by the Statutory Central Auditors.
9. Upper Tier II Debt Instrument:
During the year, Bank has raised Upper Tier II Debt to the tune of
Rs.1000.00 crore (previous year Rs.585.00 crore) by issue of Unsecured
Redeemable Bonds under Upper Tier II Debt and the amount is shown in
Schedule 4 "Borrowings" of the Balance Sheet.
Disclosures on Risk Exposure in Derivatives (iii) Qualitative
Disclosures
The Treasury Risk Management Policy, approved by the Board of
Directors, on the use of derivative instruments to hedge/ trade is in
place.
a) The Investment Portfolio of the Bank consists of assets with
characteristics of fixed interest rate, zero coupon and floating
interest rates and is subject to interest rate risk. The Bank has also
Tier II bonds hedged for Interest rate swaps which do not have exit
option. The policy permits hedging the interest rate risk on this
liability as well.
Forward Rate Agreement, Interest Rate Swaps, Currency Futures and
Interest Rate Futures are used not only for hedging the interest rate
risk in the investment portfolio but also for market making.
b) The risk management policies and major control limits like stop loss
limits, counter party exposure limits etc. approved by the Board of
Directors are in place. These risks are monitored and reviewed
regularly. MIS/ Reports are submitted periodically to Risk Management
Committee. The hedge effectiveness of the outstanding derivative deals
is monitored in relation to the underlying asset/ liability on an
ongoing basis.
c) Accounting Policy
Hedge Positions
- Accrual on account of interest expenses/ income on the IRS are
accounted and recognised as income/ expense.
- Hedge effectiveness of the outstanding derivative deals is monitored
in relation to the fair value of the swap and underlying asset/
liability. If the hedge is not effective, hedge swaps is accounted as
trading swaps. If the swap is terminated before maturity, the Marked to
Market (MTM) loss/ gain and accrual till such data are accounted as
expense/ income under Interest paid/ received on IRS.
- Trading positions
- Currency Future and Interest Rate Future are marked to market on
daily basis as per exchange guidelines of MCX-SX and NSE.
- MTM profit/ loss are accounted by credit/ debit to our margin account
on daily basis and the same is accounted in banks Profit & Loss
account on daily basis.
- Trading swaps are marked to market at frequent intervals. Any MTM
losses are booked and gains if any are ignored.
- Gains or losses on termination of swaps are recorded as immediate
income expense under the above head.
(Iv) Nostro/Mirror Credit Balances:
The Bank has transferred Rs. 20.01 Crores to Profit & Loss account
during the financial year 2009-10 as net credit balances from
unreconciled Nostro/Mirror accounts and appropriated Rs. 9.91
Crores(Net of Tax and Statutory Reserves) towards General Reserves.
10 a Fees/ remunerations received in respect of the Bancassurance
Business during the current year is Rs. 15.56 crores.
10 b Miscellaneous Income includes Rs.31.51 crore being write back of
excess depreciation made in the earlier years on Premises.
10 c Gold Coins - During the year the Bank has sold 37,900 Gold Coins
along with velvet boxes for a total price of Rs.6746.52 lakhs. The cost
of the coins with boxes amounted to Rs.6663.61 lakhs inclusive of
Rs.0.95 lakhs VAT paid on purchase of boxes. The Profit accrued on the
sale of Gold Coins is Rs.82.91 lakhs, and is accounted for in misc.
income.
11. Wage Revision -
The Bank has made a Provision of Rs.200 crore during the current year
on adhoc basis towards Wage Revision of Employees.
12. Disclosure of Penalties imposed by RBI
RBI has not imposed any penalty on the Bank under Section 46(4) of the
Banking Regulation Act, 1949.
ii) Treasury Operations include dealing in Government and Other
Securities, Money Market operations and Forex operations.
iii) The Retail Banking Segment consists of all exposures upto a limit
of Rs.5 crore (including Fund Based and Non Fund Based exposures)
subject to orientation, product, granularity criteria and individual
exposures.
iv) The Corporate/ Wholesale Segment consists of all advances to
Trusts/ Partnership Firms Companies and statutory bodies, which are not
included under Retail Banking.
iv) The other Banking Segment includes all other Banking operations not
covered under the above three categories.
v) General Banking operations are the main resource mobilizing unit and
Treasury Segment compensates the former for funds lent to it by taking
into consideration the average funds used.
vii) Allocation of Costs:
a. Expenses directly attributable to a particular segment are
allocated to the relative segment.
b. Expenses not directly attributable to a specific segment are
allocated in proportion to the funds employed.
(b) Subsidiaries -
i) Cent Bank Home Finance Ltd.
ii) Cent Bank Financial Services Ltd.
(c) Associates -
(I) Regional Rural Banks -
0 Satpura Narmada Kshetriya Gramin Bank, Chhindwara.
ii) Surguja Kshetriya Gramin Bank, Ambikapur.
iii) Uttar Bihar Gramin Bank, Muzzaffarpur
iv) Vidharbha Kshetriya Gramin Bank, Akola
v) Ballia Etawah Gramin Bank, Ballia.
vi) Hadoti Kshetriya Gramin Bank, Kota.
vii) Uttarbanga Kshetriya Gramin Bank, Cooch Behar
(e) Accounting Standard - 28 -Impairment of Assets
A substantial portion of Banks assets comprise financial assets to
which Accounting Standard-28 on impairment of assets is not applicable.
In the opinion of the management, there is no material impairment on
Other Assets other than financial assets as at March 31, 2010,
requiring recognition in terms of the Standard.
13. As per the information compiled by the Management, the Vendors,
whose services are utilized and from whom purchases were made by the
Bank, are not registered under Micro, Small and Medium Enterprises
Development Act, 2006. This is relied upon by the Auditors.
14. Previous year figures have been re-grouped/ re-classified wherever
considered necessary to conform to current years classification.
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