Notes to Accounts of Punjab & Sind Bank

Mar 31, 2025

A) Balancing of Accounts and Reconciliation

i. In certain Branches, the balancing t reconcil i alien o fed) trial accounts with subsidiary ledgers is in progress.

ii. Initial matching of debit and credit outstanding ofoid entries in Inter Branch Account tlBR DD), pertains prior to CBS System. Adjustments! including old outstanding caitrics.) have been done up to 31.03.2025 and reconciliation is in progress.

iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGK/NHFT (Suspense) is in progress. Previsions have been made as per RBI norms. ReconcilititionorNosdro accounts has been done as on 31.03.2025.

In the opinion of the managem qnt the impact of the above para (i) to tiii), if any, on the Profit & Loss Account and Balance Sheet

though riot quantifiable, will not be materia].

iv. In terms of Reserve Bank oil ndia guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up Ur 30.09.202d und remained outstanding as on 31.0321025 has been done which has resulted in cither net Debit in some heads, or net credit in other heads. Provision is to be made in respect of Net Debit Lnlrics outstanding Ibr peritid exceeding 6 months. Similar guidelines have been followed for imprest clearing Account also.

In Inter Brunch Account there is net credit balance hence no provision is required to be made.

v. Credit entries outstanding in Blocked Unci aimed Deposit Account (New Blocked account) for the period 01.01.2015 to 31.03.2015 amounting to Rs.58_T E1 5 have been transferred to DF.AF account during fiscal year ended March 2025.

Further, the department transfers unreconciled entries pertaining to more than ill years to DF,AF aecnunl onquarlerly basis.

As on 31.03.2025, un reconciled credit entries amo anting to Rs. 8644$ pertaining to the period Irom 01.04,2014to31.03.2016 are

oulsianding formnTe than 3 years and hence ihcsc entries were transferred to B! ticked Unclaimed Deposit Account (New Blocked

Account).

B) Legal ibrmalitics are yel to be completed in respect of 2 Bank''s properties having original value of Rs 2.87 crore und Revalued value (Gross) of Rs. 74.23 crore and Accumulated depreciation of Rs 1.32 crore as on 3 1.03.2025. (Previous year 2 Bank''s properties having original cost of Rs.2.87 crore and Revaluation amount of Rs. 74.23 crore).

*Capital Adequacy Ratio (BASEL Il[) is arrived tiller considering the Nef present value (NPVi of Non Interest bearing Recapitalization Bonds infused as capital bv the tkrvt. of India during KY 2020 2t & 2021 22. Further, [lie effect of proposed di vidend has been reckoned in determining capita] funds in the computation or capita] adequacy ratio as at 3 1" March 2024 and 3 i" March 2025.

* Bank has raised Equity Share Capital (including Share Premium) of K.s.1219.39 crorc through Qualified Institutional Placements on March 27, 2025. The Bank has issued and allotted 31.77,98,773 equity shares of Rs. 10 each at a premium of Rs.2fl.j7 per share. Accordingly, the shareholding of Go von merit of India in the Bank has been reduced to ^tf’.ft5''M, as on March 31.2025.

h) Dnnt tiimn from Kesurvt?

A Sum ol Ks.Nil during liitanctal year ended 31.03.2025 (Rs. NIL ¦ RY 31.03.2024 (has been drawn fro in lire General Reserve on account of payment ID the claimant of old entries.

DaLu is presented as simple averages ofdaily observation sever the previous quarter (Lq. the average is calculated over a period of 90 days). The simple average are calculated on daily observations over the previous quarters. The ur weighted value of inflows and outflows are calculated as the outstanding bal antes of various categories or types of liabilities, oTf balance sheet items or contractual receivables. The weighted value oT HQ LA arc calculated as the value after haircuts arc applied. The weighted value Tor inflows and outflows arc calculated as the value alter the inflow and outflow rates arc applied. Total HQLA and total net cash outflows arc disclosed as the adjusted value, where the adjusted value of HQLA is the value of total HQLA alter the application of both haircuts and anv applicable caps on Level 2R and Level 2 assets as indicated in this Framework. The adjusted value of net cash outflows is calculated alter the capon inflows is applied, il''applicablc.

QUALITATIVE DISCLOSURE ON BANK’S LIQUIDITY COVE RAGE RATIO

Liquidity Coverage Ratio: The LCR standard aims to ensure that a hank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs} that can be readily converted inti) cash at Jitllc/no loss ol"value to meet its liquidity needs Ibra 30 calendar day Lime horizon under a liquidity stress scenario.

LCR has two components:

i. The value of the stock o l"H igh QualityLiqai d Assets (HQ L A} as a N umcrator.

ii. Total Net Cash Outflows: Total expected cash outflows minus Total expected cash inflows, in stress scenario, fur the subsequent 30 calendar days as a denominator.

Defi n ii io n n f Liq u id it y Cu verage Ratio (LC R}:

Stock of high quality liquid assets (HQLAs) > 100% (w.c.rOl .01.20211 Total net cash out flows ov er the next 30 calendar days

The Liquidity Coverage Ratio arrived lor the quarter ended March 2025 was I35.t>5% Rhi basis of simple averages oT daily observations during the period 01 01 2025 to 31 03 2 025) against the regulatory requirement oTl 00%.

The main drivers aJ''LCR of the bark arc High Quality Liquid Assets (HQ LAs} to meet liquidity needs of the bank at all times and basic funding from retail and small business customers.

i) Main driversoTLCFt:

The Bank cm a consolidated basis, during the quarter ended 31st March 2025, had maintained average HQLA (alter haircut) of Rs.28,63b.25 Crore. The HQLA is primarily driven by Government securities in excess ol"m ini mum SLR, Government securities within mandatory SLR requirement, to the extent allowed by RBI under MSF and the facility to avail liquidity lor Liquidity coverage ratio. Also, cash, excessCRR maintained with RBI are important factors Tor Level I HQLA.

Level 2 H QL As prim ari !y consisted of corporate debt securities includi ng commercial papers.

ii) Intra period changes as well as changes over lime:

Lt''R were 12S.''25^tK.j, 142.fi4% and 149.14% tor the months ending January 2025, February 2025 and March 2025 respectively as

against regulatory requirement ofl 1)0%. i) Composition of H teh-Qunlky Liquid AssetsiHQLAj

HQLAx comprise of Level I and Level 2 assets. Level 2 assets are further divided into Level 2Aand Level 2B assets, keeping in view their marketability and pritc volatility. Total weighted value (average) of HQL A tor Lhc quarter ended Marth 2025 is Rs„ 2H,636.25 Crore

The net tosh outflows are calculated by applying RBI prescribed outflow factors lo the various categories oflliabiti ties (deposits, unsecured and secured wholesale borrowings), as well as lo undrawn commitments and derivative related exposures, netted by inflows from assets maturing within 30 days. Average LCR on a daily basis for the quarter ended 31st March 2025 is 135,105%, above RBI prescribed minimum requirement oT 100%.

vv j Concentration of binding sources:

A significant counter party Li defined as a single counter party or group oI"connected or affiliated counter parties accounting in aggregate for more than 1% of the bunk’s total liabilities. Top 20 depositors (other than Ccriilicatc or Deposits) of the Bank constitute 9.43% n Tour tola I deposits wh ich is well within timitof25% as per ALM Policy.

v) Derivative exposures and potential collateral calls:

Derivative exposure is shown as Net Derivative cash inflows within 20 days. Inflows from derivative exposure arose due to maturing forwards.

vi) Currency rntsma [eh i n the LC R

As per the RBI guidelines while Lhe LCR standard is required to be met tin one single currency, in order to better capLunc potential currency mismatch the LCR in each currency needs to be monitored. Accordingly, Bark is maintaining LCR on daily basis in INR and the same is compared against the regulatory requincmcnt. Further bank docs not have exposure to any other significant currencies*, hence LCR is prepared lor I MR currency.

f*A significant currency is one where aggregate liabilities denominated in the currency amount to 5®/u or more of the bank''s total liabilities).

vii) A descript ion of the degree of central iyaliononiquidily management and interaction between the group''s units: NIL

The liquidity management Tor the bank on enterprise wide basis is the responsibility of the Hoard ofDireetarK. Board of Directors has delegated its responsibilities !? a Committee of the Board called as the “Risk Management Committee of Board". The committee is responsible lor overseeing Lhc inter linkages between difFcrentlypcsorrisk and itsimpacLon liquidity.

Bank has ALM policy which provides the broad guidelines under which all the entities within the group operate in terms of liquidity and interest rate risk.

LCR is computed and monitored on daily basis by the Bank and the same is shared with Treasury/Mid office for liquidity management and discussed i n I nvcslmenl commi ttcc.

Further LCR lor the latest month along with oompari son o Fprev ious months is plated be fore ALCO on monthly basis. Moreover, LC R position a long w ith other 1 iquidi ty parameters is also placed bclbrc RMC.

Cu 111 pus i I i on of H igh -f^ua I ily Liqu i U A ssct> (H QLA)

HtJLAs comprise oTLevel I and Level 2 assets. Level 2 assets are further divided mlo Level 2A and Level 21J asset., keeping in view their markeLability and price volatility. Total weighted value (average) ofHQLA for the quarter ended

Qi] a i .jTATiy k msri miihkcinwet stable funding ratio

The NSF''R is defined an the amount of available stable funding relative to the amount of required stable funding. ““Available stable funding" fASF) is defined as the portion of capital and liabilities expected to be reliable over the lime horizon considered Ihrlhe NSFR, which extends to one year. The amount of stable funding required ("Required stable lunding") (RSF) ofa 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. Minimum Requirement of NSFR should be equal to at least 100% on an ongoing basis.

N5FR= Availabl c Stable Funding | ASF | >100%

Required Stable Funding |RSF|

The minimum NSFR requirement set out in the RBI guideline for the standalone Rank and for Group is L0lf% w.e.f 1st October 2021.

As on 31st March 2025.PSB maintained weighted Available Stable Funding (ASF) ofRs. I 14080.83 crore against the weighted Required Stable Funding (RSF) of Rs. 88723.64 crore. The NSFR Tor ibe quarter ended March 31st, 2025, was at 128.58%.

As on 31 st March 2024. PSB maintained weighted Available Stable Funding I ASF) orRs. 10422338crore against the weighted Required Stable Fun ding (RSF) of Rs. 86928-39 erore. The NSFR for ihe quarter ended March 31 st, 2024, was at 1 19.90%.

Brief about NSFR of the Bank

The Available Stable Funding (ASF) mainly constitutes of the capital base, retail deposit base and binding from non financial companies and long term Funding from institutional clients. A Rev applying the relevant we ights. the capital base remained around Ll.53%. retail deposits (including deposit from small sized business customers) remained 70.02% and wholesale funding remained 14.72 % of flic total Available Stable Funding! ASF).

Required Stable Funding (RSF) consists of34_33% from ‘“Other uneneumbered performing loans with risk weights greater than 35% under the Standardized Approach and residual maturities of one year or more, excluding loans to financial institutions” line item.

Main drivers uf NSFR:

The Bank as on 31 si March 2025, had maintained ASF of Rs. 114080.33 cr. ASF consists offiS.93% from less stable non maturity departs and term deposits with residual maturity oTIcss than one year provided by retail and small business customers and 0.83 % from Stable non maturity (demand) deposits and term deposits with residual maturity oriests than one year provided by retail and small business customers.

RSFconsists or34.33% from “Other unencumbered performing loans with risk weights greater than 35% under the Standardized Approach and residual maturities ofone yearor more, excluding loans to financial institutions” line item.

NSFR for the quarter ended31st March2025 is 128.58%, above RB! proscribed minimum requirement, of 100%.

NSFR has increased from L 19.90% as qF3 1.03.2024 to 128.58% as ol''31.03 22025 mainly due to increase in capital base ofbank by

lUitcLudK an amitunl of R%. 256.02 Crorc transtcrrei! (ju General Reserve during, iransiliun un implementation of RBI''s revised valuation guidelines dated l2.Dt.2D23

*Cnrrying value less net depreciation (ignoring net appreciation) i.e.lhe net amount relleeted in the balance sheet. Amount transferred to Investment Fluctuation Reserve during the year 2024-25 is Rs. 72.44.87.2K5/-a) Sale and transfers tu/from HTM category

i| During the year ended .3 I si March 2025 bank has not shifted securities from Held to Maturity lu Available for Sale category and vice versa except those reclassified as part uf transiti on to RBI’s revised valuation guidelines onO I.04.2025.

During the year ended 31st March 2024 hank has shifted Government securities amounting to Rs 700.00 crone Face Value (Rs 7S4.01 erorc Book Value) from Held to Maturity to Available Tor Sale category, whereas no security has been transferred from Available lor Sale to Held to Maturity category. Gain on shilling of securities (tom HTM to AFR was not booked up Iron andgain/loss was recognized or sale of such securities during Lhc year.

ii)Thc value eifsht fling.'''' sales Irem HTM category (excluding onetime shilling at the beginning of year and sale under pre announced (Upen Market Ope rati nns auctions) during the year docs noL exceed 5% of the book value of investments held in HTM category at the beginning of the year.

As per RBI Masler Direction No. DOR.ACC.RI''C.No.J5/2E.04 .018/2021 22 daRd 30.08.2021 (updated on I5J I J.021, further updated on 01 .04 .2024 as per financial statements presentation and disclosure, divergence in [he asset classification and provisioning, Hanks should disclose divergences in the asset classification and provisioning. Hanks should disclose divergence, ifeilhcrorbolh of the folio wing conditions are satisfied:

(a''l the additional provisioning forNPAs assessed by RBI as part of its supervisory process exceeds 5 percent ol’thc reported profit before provisions and contingencies for the reference period, and fbf the additional Gross NPAs identified by RBI as part o fils supervisory process exceed 5 percent of the reported incremental Gross NPAs for the reference period.

Divergences are within threshold Limits in I he Bank as .specified above. Hence no disclosure is required with respet: t to RBTs annua [supervisory process for FY 2023 2d.

f| Disci nsuriruf transfer of loan exposures

(1) In accordance with RBI circular no. DOR.STR.RIiC.51/21.04. M 8/2021 22 dated September 24,2021; iu respect of the details oflouns transferred''¹ acquired during the year ended 3 I^J March 2025 arc given bclowr

in terms of RBI Circular No. RBT/DOR.2024 25, 135 DOR.STRRFC.72/21.04.048/2024 25 dated 29lb March. 2025 on ’Revised norms ibr GovcrmrtCIfl Guaranteed Security Receipts {SRsV, Bank has nceopni/cd Security Recci pts guaranteed by Govern men t oi~ I ndia as per cx.tan L guidelines.

This has resulted in an increase in Other Income and Interest Income by Rs. 145.10 trure and Rs. 254.X2 Cmrc respectively for the year ended 3 I si March 2025 in respect cd''lhe Government Guaranteed Security Receipts (SRs) id''R.s. 399.92 C’norc received against transferofloan exposures during current year.

The Ban''ll has estimated the liability towards Unhedged Foreign Currency Exposure in terms of RBI (Unhedged foreign Currency Exposure} Directions, 2022 videeireulsr DOR.MRG.REC.7(i/O0 00 007/2022 23 dated October L1,2022 and is hold in g a proyis ion o ITts. 0.5 2 cnorc as an 3 I “ March 2025. (Rs .0.3 8 erorc as on 31.03.2023

Mui hud to asrertai n t he a mmi nf ti f l.~ ei hedged F a roign C u rrc n cy E x posii re (U FCEJ:

The information, on Ue hedged Foreign Currency Exposure (UFCE) is obtained from customer on quarterly basis and is measured by obtaining the information from the clients in two parts i) where Exposure of borrower is up to

Rs.50 cnorca with ull the bants taken together and, ii) where Exposure of borrower is rr me than Rs.dO emirs with all the banks taken together.

The tnlal un hedged exposure in foreign currency is converted to INR or FF.DAI spot rate as on las! working day of the corresponding quarter.

Flanks shall assess the Ur hedged Foreign Currency Exposure (UFOi) of entities with FCE by obtaining information (in UFCE Imm the concerned entity. Provided that the information on UFCE shall be obtained from entities on a (|uarterly basis based on statutory audil, internal audit or self declaration by the concerned entity. Provided further that L^rFCE in formation shall be a ads ted a nd verti tied by the statutory audi tors ofthe entity, at leas t on an annual bus is.

M cthod to estimate the gafent of likely loss:

Reserve Bank oflndia Circular DBOD.No.BP.BC I! (vl 1.06.200; 2013 14 un Capital and Provisioning requirements for exposure to exilities with un hedged foreign currency exposure slating about the guidelines lor USD/INR annualized volatility and directed FKDAJ to publish the USD/INR annual volatility based on the RBI reference rale which has la be used Ibr computation oflikcly loss.

F EOAI a n n ou nces th e 1Q-yea r {120 months rolling j LAV rates on th e last working day of every month. On these rates, the bank calculates the likely loss (rate as given by FEDAI}, current rate 12_23% of total Un-hedged Exposure of the entity with all the banks taken together.

dj Disclosures regarding Priority Sector Lending Certificates (PSLCs)

Bank has purebsd Priority Stetor Lending (’crtiliL''alc (PSLf) Aijricullurc itl Rs. 1600 Crone and Rs. 2f)95 Crorc during the quarter and year ended March 3 1,2025 respectively and Priority Sector Lending.Certificate< PSLC} Small & MaigmatFannersorRs. 800 Cmre during year ended March? 1,2025.

Bank has wild 1200 un its under Pri ori ly See tor Lendi ng eerti ticat.cs (PS LCs) to the tune o f Rs 300.00 crorc under Smal 1 & Marginal [armcra and earned commission income ol''Rsh.75 rrore during year ended 3 I “March 2024.

Bank has sold 3400 units under Priority Sector Lending certificates (''PSLCs) to the tune (if Rs.8 50.00 crore under Smal I & marginal J aimers and co mod commission income of R s.⁴?. 74 Crore duri ng the year ended 31.03 202 3.

Further, Bank has purchased 20440 units (12000 units in Agriculture and 8440 units in small & Marginal Farmers} urderAgrieulture and Smal I & Marginal farmers and incurred cost o I Rs. 23.23 erorc{Rs. 8.99 c rore in Agriculture and Rs. 14.24crorcin Small & Marginal farmers''} during year ended 3 1“ March 202 4.

Hank ts complying with the’reporting requirements ofslalultiry authorities in relation lulNIJ AK/niePrulorma I nil AS I'' inane sal Slnfeiacnts arc being submitted to RU1 on ha if yearly basis. Bunk lins on boarded a consultant having considerableexperience in the field oftmplemcnliili&rt oTlNO-AS The consultant is assisting the bank in devising a road map with rosped.^ smooth imp Lenten tut ion oflnd AS.

h) Disclosure of facilities granted to directors and f heir re la lives : Not Applicable to bark

E) Disclosure cut amortization of expenditure on account of enhance mem in family pension nf

em p loyetrs of ha nks

The estimated additional Pens ion liability on account of revision in family pension was Rs236.H4 crone. RBI vide its Circular RB1/202 1 22/105 DOR-ACC.RE^57/21.04.01 K/2Q21 22 dated $ October 2021, had permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 3J^T March 2022. subject to a minimum of l/5''^h of the toLaL amount being eltarged every year. The Bank is amortizing the said liability over a period, not exceeding 5 years commencing from the linancial year ended 31''March 2022, subject to a minimum of Rs 47.37 crorc every year. Balance unamortized amount as on 31" Manch2024 was Rs.94.73 crorc. Accordingly, the Bank has charged an amount of Rs. 11.37 cnorc and Rs.47.37 crore to the Profit & Loss account during current ij tiarter and year ended 31 "March 2025 respectively and the balance unamortized amount of Rh.47.37 crorc has been carried forward. Had the Bank charged the entire additional liability to [ho Profit and Loss Account the net profit {offer tax) For the quarter and year ended 3 t^J March 2025 would have been lower by Rs.30.S2 crorc.

j) Disclusureu[Ea''IIlturCuntfurl{LOCii)issiR''dhy Bunk*

During FY2G24 25, Letter of Com ion [LoC) issued amounting to Rs. Nil against credit facility including Non Fund facility taken fiver from other banks.

Letter ol''Com fort (LOti) amounting in Rs. 3.15 crore, issuedlu other Banks [orNon fund credit facilities. which arc a part o i''tota! credit facilities (Funded/Nnn funded) issued to the borrow eng JWfl outstanding as on 31.03.2021.

tv) Items under the head “Schedule 1 1(VI) Other Assets ¦ “Others"exceeding 1 %(oTtcpcrccnL)ofTotii] Assets 15. Hist insure u pcrAccBOilliig^iudiird (AS)

15.1 AS-3 Cash Flow Statement

The Bank prepares cash flow statement in line with requirements of AS-3 using indirect method.

15.2 AS-5.Ni‘t Pm lit or Loss for the period, Prior Periud Henistoid Changes in Accuunliug Puli ties

15.2. I Dicrcm; no materia! prior period Llems included in Prolit Je Loss Account required io he disclosed as

per AH-5 revad with RBI guide fines except those disclosed elsewhere in the DfillS.

15.3 AS-''J Rl''mmiul Recognition

Certain items of income are recognized im realization basis as disclosed at poinL no. D. I - "Revenue Recognition” of Stated ale 17 - Significant Accounting Policies. However, In fettmorUfil guidelines, the said income is not considered to be material.

15.4 AS-11) Property Plant it Equipment/ Fixed Assets

The bank lias eondue ted revaluation of its immovable properties during the previous year 2 02 3 -24 based on the reports obtained from the external rn dependent valuers. I''lie e losing balance of Re va! nation Reserve as (in JI.03.2U25 (Net ot amount transferred lo revenue reserve! is Ks. 1063.46 emre (Previous year Rs. lUfth.JO cruft).

Premises includes Capital work m progress of Rs. b.25 Cnure as on 3l.U3_Z025 (in the previous year as on JI .03.2U24, Rs. 37,26 Crate).

15.5 AS 15- employee* Ueiiclit

Provisions for Pension, \ 5) Employees Benefits issued by ihe ICAI.

The summarized position of post-employment benefits recognized m the Pro tit A Loss A/c and Balance Sheet is us under

IN ole: For the purpose of-segment reporting i n terms of AS J 7 pflCA.] and as prescribed in RBJ guidelines, the business of the Bank has been classified into four segments i.e. a) Treasury Operations. b| Corppratc/Wti o! c sa Ic Banking, e} Retail Bank ing( further cl ass died into Digital Banking and Other Retail banking and d \ Other Banking Operations.

tegmental Revenue. ResulLs, Assets iS: Liabilities in respect of Corporate > Wholesale and Retail Banking segment have been hifurea ted on the basi r -of c* posure to these segments.

Part B Ceogruphleal Segment:

Since the Bank docs not have any overseas branch, reporting under Geographic Segment is not applicable.

IS.ID AS 21 - Cansdjjdafed Financial Statement

I lie Hank di*es nol haw :uiy s''libiidiary/assoeiale and as sud: AS 21 is not applicable.

15.11 AS 22 - Accounting Pur Taxes on Income

IS. 11.1 The Battle has accounted lur Income Fax incompliance with Accounting SUmdard-22 ''Accounting lor taxes lhi Income’ issued by ICA1 15.1 U Provision ibr Income Tax and Deferred Tax held by the Bank is considered adequate faking into account the opinion oflcgal experts and favourable judicial pronouncements.

15.11.4 Review of Deferred Tax Assets has been earried oul based nn Bank management''s estimate of passible tax benefits againsi timing difference lit accordance with Accounting Standard 22 “Accounting for Taxes on income" issued hy The institute of Chartered Acctmnlanls of India and Wei Deferred Tax Assets of Rs.129B.52 erore is rooogn i/ed as at 31 si Match 202 51 Rs. I fi20.23 erore us at 31 si March 2024).

15.11.5 No provision has heen considered necessary in respect ofdispu ted demands of lax ItLigution aggregating to Rs_977_18 erore (Previous year Rs. 887.01 erore J in view of decisions of appcllale authorities / judicial pronnuneements / opinions of legal experts.

15.11 .(i The Government ol’India, vide the Taxation Laws (Amendment | Act. 2019, inserted seel ion 11 ABA A in the Income Tax Act 19b I w.eT. April J, 2019. The Bank has evaluated the oplians available under section II5BAA of The Ineomc Tax Act, I9t;i and opted to continue to recognize the Taxeson Income for the year ended 31.03.202 5 as per the earlier pravisions.

15.12AS 23 Accounting for Inv estments in Associates in consolidated Financial Slalemcnts

The Bank dues not have any subsidiary.''¹ associate and us such AS 23 is not applicable.

t5.13AS It Intangible Asm

The application software in use in the Bank has been developed in house and has evolved over a period rtf time. Hcnce_T the eosLs of soft ware is essentially pari ol" Bank''s operational ex ponses like Wages cle. and as such are changed K} the respective heads of expenditure in the Profit and LossAccotmL

tS.l-l Accounting Standard 28 - Impairment uT Assets

fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Genera liny l-nits¹ as defined by AS 2R. Tti the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 3l.0d.2025/31.03.202-T requiring recognition In lermsoi''AS 28 issued by the JC AI. The impairment of other assets including advances has beer provided foras per Prudential Norms prescribed by the Reserve Bank oflndia.

13.1 S A ecu timing, Standard 29- Provisions, C untingent Liability and C oiilmgcnt Assets

15.15,(As per AS 29 Provisions. Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Aecoun [ants orindiu. the Bank recognizes no provision lor

ei } Any possible obligation that arises from past events and the existence of which will be continued only by the occurrence or non oceurrcncc ol’oneor more uncertain iulurc even l& not wholly within the control of the Bank, or

b) Any present obligation from lhc past events but is not reeogjiijccd because

* It is not probable that an outflow « resources embodying economic benefits will be required to settle the obligation; or

* A reliable estimate cT the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually and only thal pari 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.

16. Disclosures in Terms of MSIYIED Act 2006

Guideline given in Micro, 5mall and Medium [Enterprises Development Act 2006 have been complied with Tor purchases made during FY 2024 25 and payments have been made lo the vendors in time as per Ac L Since there had been no delay in payment, therefore no penal interest had been paid during FY 2024 25.

17. AS per the Reserve Bank of I ndia d ircc tie ns Ibr i niliating Instil veney Process Pro-vis i uni n g Norms, vide Idler No. DBR. No. DP: 15 [99/21.04.048/2016 J7 dated June 23, 2017, and DGR.No.BP 1907/21.04.048/2017 18 dated August 28, 20 L 7, the bank is holding the provisioning ofRs.230.05 Crnrc (3 1st March, 2024 Rs. 230.05 Crorc) as against I he balance outstanding of Rs 230.05 ertm: (3 1st March, 2024 Rs 230.05 crone) as on 31 st March, 2025 in respect ol''NPAborrowal accounts referred in aforesaid circular.

19.The bank has funded exposure of Rs.99.98 enure in two borrower''s accounts which are under litigation and respective adjudicating authorities have granted slay on downgrading. The bank has made adequate provisions Ibr the accounts.

21).Pursuant to the RBI circular dated 19th December 2023. in respect of investment in Alternate Investment Fund (A IF)-. NILtRs. 0.50 emre for FY 1023 24) prevision is required during the quarter/ year ended 31 st March 2025 and the same has been provided.

21. The Board of the Bank has proposed dividend fit} ft.70% i.e. of ^ 0.07 per equity share (Face Value of? 10/ per share) for the Financial Year 202 4 25 i.c. Rs. 0.20 per equity share Ibr FY 2023 24) in Board Meeting dated April,29,2025 subject lo requisite approval from Shareholders.

22. The Bank is carrying a provision of Rs. 8.51 ere re as on 31 si March, 2025 (Rx. 9.21 Choreas on 31 ‘ March 2024) being5%ol"oulstandLng food credit availed by the Slate Government ofPunjab as per the RBI letter no. DRR(FtP) No. 7201.21.04.132/2017 18 da ted 08.02.2018 issued to SB!, the lead bank.

23. The financial statements for the yearended 3 I” March, 2025 have been prepared following the same accounting policies and practices as those followed in the earlier year ended 31'' March, 2024 except for:

a.Thc classification and valuation of in vestments which is as per the Master Direction No. RB l/DOR/2023 24/104 DOR.MRG.30/21.04.141/2023 24 on Classifiealion. Valuation and Operation of Investment Portfolio or Commercial Banks (Directions), 2023 dated 12“’ September. 2023 issued by Reserve Bank oflndia and applicable from0[“April, 2024.

On transition to the Ihuncwork on 0 3 April. 2024. the net dilTcrencc of Rs.4,249.54 cron: (debit), net of ins impact, between the revised carrying value and the previous carrying value of the investment pen folio has been adjusted / debited in the General Reserve in accordance with this framework. Also, the balances in Invest men t Reserve Account I IRA | asnl''31''¹ March, 202-1 amounting LoR.s253.32crore has been irans I erred to the Revenue/General Reserve since Bank meets the minimum regulatory requirementsaMFR. Funber. there is increase in ineomc on investments and AFS Reserve by R.s. 454.72 Crorcand Rs.7b.fi-2 ercrcs during the current year ended 3 I" March, 2025 respectively, b. As per the Accounting Policy till 31 st March, 2024. the recovery in non performing assets (other than the eases covered under special schemes introduced by RBI, Strategic Debt Restructuring, Flexible Structuring ot''Long Term Project Loans. Change in Ownership of Borrowing f\ntitics_T Outside Strategic Debt Restructuring Scheme where subsequently the account turns NPA) was appropriated first towards principal and thereafter towards interest and charges. To ensure belter financial presentation and in consonance with industry practice, the Bank during the current year 2024 25 has changed the said appropriation policy from the beginning of the year i.c. from 1st April, 2024 and accordingly has appropriated Ibe recovery in the non performing assets (NPA) first towards Charges, Costs etc., thereafter towards Interest irregularities ¦''?certicd InECTCsl and then towards the principal. The same has resulted in increase in interest income and NPA by Rs.48.07 crone for the year ended 3 1st March. 2025 and increase in provision by Rs.23. J 5 cnorc lor the year ended 31 st March, 2025.

24. Accounting Standard 11 The IifTects of Changes in foreign exchange rates: Net income on account of exchange differences credited to Profit and Loss aceounL for the year is Rs. L 1..95 crore (Rs.20.91 crate).

25. The figures of previous period have been regrouped and reclassified wherever considered necessary in under to make them comparahte with the figures of the current period.

---

Mar 31, 2024

A) Balancing of Accounts and Reconciliation

i. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

ii. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), pertains prior to CBS System. Adjustments (including old outstanding entries) have been done up to 31.03.2024 and reconciliation is in progress.

iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) is in progress. Provisions have been made as per RBI norms. Reconciliation of Nostro accounts has been done as on 31.03.2024.

In the opinion of the management, the impact of the above para (i) to (iii), if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

iv. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2023 and remained outstanding as on 31.03.2024 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision has been made in respect of Net Debit Entries outstanding for period exceeding 6 months. Similar guidelines have been followed for imprest clearing Account also.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

v. Credit entries outstanding in Blocked Unclaimed Deposit Account (New Blocked account) for the period 01.01.2014 to 31.03.2014 amounting to Rs 17121 have been transferred to DEAF account during the year ended March 2024.

Further, the Bank transfers unreconciled entries pertaining to more than 10 years to DEAF account on quarterly basis.

As on 31.03.2024, un-reconciled credit entries amounting to Rs. 20.02 lakh pertaining to the period from 01.04.2014 to 31.03.2016 are outstanding for more than 3 years and hence these entries were transferred to Blocked Unclaimed Deposit Account (New Blocked account).

B) Legal formalities are yet to be completed in respect of 2 Bank''s properties having original value of Rs 2.87 crore and Revalued value (Gross) of Rs. 74.23 crore as on 31.03.2024. (Previous year 2 Bank''s properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore).

*Capital Adequacy Ratio (BASEL III) is arrived after considering the Net present value (NPV) of NonInterest bearing Recapitalization Bonds infused as capital by the Govt. of India during FY 2020-21 & 2021-22. Further, the effect of proposed dividend has been reckoned in determining capital funds in the computation of capital adequacy ratio as at 31^st March 2023 and 31^st March 2024.

b) Draw down from Reserve

A sum of Rs Nil during financial year ended 31.03.2024 (Rs. NIL - PY 31.03.2023) has been drawn from the General Reserve on account of payment to the claimant of old entries.

QUALITATIVE DISCLOSURE ON BANK''S LIQUIDITY COVERAGE RATIO

Liquidity Coverage Ratio: The LCR standard aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be readily converted into cash at little/no loss of value to meet its liquidity needs for a 30-calendar daytime horizon under a liquidity stress scenario.

LCR has two components:

i. The value of the stock of High-Quality Liquid Assets (HQLA) as a Numerator.

ii. Total Net Cash Outflows: Total expected cash outflows minus Total expected cash inflows, in stress scenario, for the subsequent 30 calendar days as a denominator.

Definition of LCR:

Stock of high-quality liquid assets (HQLAs) > 100% (w.e.f. 01.04.2021) Total net cash outflows over the next 30 calendar days.

The Liquidity Coverage Ratio arrived for the quarter ended March 2024 was 125.36% (on basis of simple averages of daily observations during the period 01-01-2024 to 31-03- 2024) against the regulatory requirement of 100%.

The main drivers of LCR of the bank are High Quality Liquid Assets (HQLAs) to meet liquidity needs of the bank at all times and basic funding from retail and small business customers.

Composition of High-Quality Liquid Assets (HQLA)

HQLAs comprise of Level 1 and Level 2 assets. Level 2 assets are further divided into Level 2A and Level 2B assets, keeping in view their market ability and price volatility. Total weighted value (average) of HQLA for the quarter ended March 2024 is Rs. 27307.61 crore.

Break-up of daily observation Average HQLA during quarter ended March 31, 2024, is given here under:

QUALITATIVE DISCLOSURE ON NET STABLE FUNDING RATIO

The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. "Available stable funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered for the NSFR, which extends to one year. The amount of stable funding required ("Required stable funding") (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.

Minimum Requirement of NSFR should be equal to at least 100% on an ongoing basis.

NSFR= Available Stable Funding [ASF] > 100 %

Required Stable Funding [RSF]

The minimum NSFR requirement set out in the RBI guideline for the standalone Bank and for Group is 100% w.e.f 1st October 2021.

As on 31st March 2024, PSB maintained weighted Available Stable Funding (ASF) of Rs. 104223.38 crore against the weighted Required Stable Funding (RSF) of Rs. 86928.39 crore. The NSFR for the quarter ended March 31st, 2024, was at 119.90%.

Brief about NSFR of the Bank

The Available Stable Funding (ASF) mainly constitutes of the capital base, retail deposit base and funding from non-financial companies and long-term funding from institutional clients. After applying the relevant weights, the capital base remained around 15.52%, retail deposits (including deposit from small sized business customers) remained 71.38% and wholesale funding remained 12.09% of the total Available Stable Funding (ASF).

The Required Stable Funding mainly comprises lending to corporates, retail clients and financial institutions which contributed 61.30% of the total RSF after applying the relevant weights. The stock of High Quality Liquid Assets, which majorly includes cash and reserve balances with the RBI, Govt. Debt issuances attracted no or low amount of stable funding due to their high quality and liquid characteristic. Accordingly, the HQLA and deposits held for operational purpose constituted only 1.61% of the required stable funding after applying the relevant weights. Other assets and Contingent Funding obligations, such as committed credit facilities, guarantees and letters of credit constituted 36.05% of the Required Stable Funding.

*Carrying value less net depreciation (ignoring net appreciation) i.e .the net amount reflected in the balance sheet.Amount transferred to Investment Fluctuation Reserve during the year 2023-24 is Rs. 47,71,08,707.00c) Sale and transfers to/from HTM category

i) During the year ended 31st March 2024 bank has shifted Government securities amounting to Rs 790.00 crore Face Value (Rs 794.01 crore Book Value) from Held to Maturity to Available for Sale category, whereas no security has been transferred from Available for Sale to Held to Maturity category. Gain on shifting of securities from HTM to AFS was not booked upfront and gain/loss was recognized on sale of such securities during the year.

ii) The value of shifting/ sales from HTM category (excluding onetime shifting at the beginning of year and sale under pre - announced Open Market Operations auctions) during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

e) Divergence in asset classification and provisioning

As per RBI Master Direction No DOR.ACC.REC.No.45/21.04.018/2021-22 dated 30.08.2021 (updated on 15.11.2021, further updated on 25.10.2023 as per financial statements - presentation and disclosure , divergence in the asset classification and provisioning, Banks should disclose divergences in the asset classification and provisioning, Banks should disclose divergence, if either or both of the following conditions are satisfied:

(a) the additional provisioning for NPAs assessed by RBI as part of its supervisory process exceeds 5 percent of the reported profit before provisions and contingencies for the reference period, and

(b) the additional Gross NPAs identified by RBI as part of its supervisory process exceed 5 percent of the reported incremental Gross NPAs for the reference period.

Divergences are within threshold limits in the Bank as specified above. Hence, no disclosure is required with respect to RBI''s annual supervisory process for FY 2022-23.

f) Disclosure of transfer of loan exposures

(i) In accordance with RBI circular no.DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021; in respect of the details of loans transferred/acquired during the year ended 31^st March 2024 are given below:

(a) The bank has not transferred and acquired Special Mention Account (SMA) during the quarter / year ended 31^st March 2024. (31^st March 2023 - Nil)

g) Un-hedged Foreign Currency Exposure

The Bank has estimated the liability towards Unhedged Foreign Currency Exposure in terms of RBI (Unhedged Foreign Currency Exposure) Directions, 2022 vide circular DOR.MRG.REC.76/00-00-007/2022-23 dated October 11, 2022 and is holding a provision of Rs 0.38 crore as on 31^st March 2024. (Rs.0.04 crore as on 31.03.2023)

d) Disclosures regarding Priority Sector Lending Certificates (PSLCs)

Bank has sold 1200 units under Priority Sector Lending Certificates (PSLCs) to the tune of Rs 300.00 crore under Small & Marginal farmers and earned commission income of Rs 6.75 crore during year ended 31^st March 2024.

Bank has sold 3400 units under Priority Sector Lending certificates (PSLCs) to the tune of Rs.850.00 crore under Small & marginal farmers and earned commission income of Rs.9.74 Crore during the year ended 31.03.2023

Further, Bank has purchased 20440 units (12000 units in Agriculture and 8440 units in Small & Marginal Farmers) under Agriculture and Small & Marginal farmers and incurred cost of Rs 23.23 crore (Rs 8.99 crore in Agriculture and Rs 14.24 crore in Small & Marginal farmers) during year ended 31^st March 2024.

f) Implementation of IFRS converged Indian Accounting Standards (Ind AS)

Bank is complying with the reporting requirements of statutory authorities in relation to IND-AS. Bank has on boarded a consultant having considerable experience in the field of implementation of IND-AS. The consultant is assisting the bank in devising a road map with respect to smooth implementation of Ind AS.

h) Disclosure of facilities granted to directors and their relatives : Not Applicable to banki) Disclosure on amortization of expenditure on account of enhancement in family pension of employees of bank

The estimated additional Pension liability on account of revision in family pension was Rs 236.84 crore. RBI vide its Circular RBI/2021-22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated 4^th October 2021, had permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 31^st March 2022, subject to a minimum of 1/5^th of the total amount being charged every year. The Bank is amortizing the said liability over a period, not exceeding 5 years commencing from the financial year ended 31^st March 2022, subject to a minimum of Rs 47.37 crore every year. Balance unamortized amount as on 31^st March 2023 was Rs.142.10 crore. Accordingly, the Bank has charged an amount of Rs.11.37 crore and Rs.47.37 crore to the Profit & Loss account during current quarter and year ended 31^st March 2024 respectively and the balance unamortized amount of Rs.94.73 crore has been carried forward. Had the Bank charged the entire additional liability to the Profit and Loss Account, the net profit (after tax) for the quarter and year ended 31^st March 2024 would have been lower by Rs.61.63 crore.

j) Letter of Comfort (LOCs)

Letter of Comfort (LOC) amounting to Rs. 3.45 crore, issued to other Banks for Non fund credit facilities, which are a part of total credit facilities (Funded/Non funded) issued to the borrowers and outstanding as on 31.03.2024.

k) Disclosure in terms of RBI circular no.DOR.STR.REC.91/21.04.018/2021-22 dated December 13, 2022:

i) Items under the subhead "Miscellaneous Income" under the head "Schedule 14 - Other Income" exceeding 1% of Total Income.

ii) Items under the subhead "Other Expenditure" under the head "Schedule 16 - Operating Expenses" exceeding 1% of Total Income : NIL.

iii) Items under the head "Schedule 5(IV) - Other Liabilities and Provisions- "Others (including provisions)" exceeding 1% of Total Assets: NIL

iv) Items under the head "Schedule 11(VI) - Other Assets - "Others" exceeding 1% (one percent) of Total

Arc 0 c

15. Disclosure as per Accounting Standard (AS)15.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

15.1.1 There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

15.2 AS-9 Revenue Recognition

Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

15.3 AS-10 Property Plant & Equipment/ Fixed Assets

The bank has conducted revaluation of its immovable properties during the FY 2023-24 based on the reports obtained from the external independent valuers. The closing balance of Revaluation Reserve as on 31.03.2024 (Net of amount transferred to revenue reserve) is Rs. 1066.39 crore (Previous year Rs. 912.22 crore).

15.4 AS 15 - Employees Benefit

Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) Employees Benefits issued by the ICAI.

Note: For the purpose of segment reporting in terms of AS-17 of ICAI and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e. a) Treasury Operations, b) Corporate/ Wholesale Banking, c) Retail Banking (further classified into Digital Banking and Other Retail banking) and d) Other Banking Operations.

Segmental Revenue, Results, Assets & Liabilities in respect of Corporate / Wholesale and Retail Banking segment have been bifurcated on the basis of exposure to these segments.

Part B Geographical Segment:

Since the Bank does not have any overseas branch, reporting under Geographic Segment is not applicable.

15.10.3 Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favourable judicial pronouncements.

15.10.4 Review of Deferred Tax Assets has been carried out based on Bank management''s estimate of possible tax benefits against timing difference in accordance with Accounting Standard - 22 "Accounting for Taxes on income" issued by The Institute of Chartered Accountants of India and Net Deferred Tax Assets of Rs 1620.23 crore is recognized as at 31st March 2024 (Rs. 1844.25 crore as at 31st March 2023).

15.10.5 No provision has been considered necessary in respect of disputed demands of Income aggregating to Rs.887.01 crore (Previous year Rs. 709.31 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

15.10.6 The Government of India, vide the Taxation Laws (Amendment) Act, 2019, inserted section 115BAA in the Income Tax Act 1961 w.e.f. April 1, 2019. The Bank has evaluated the options available under section 115BAA of The Income Tax Act, 1961 and opted to continue to recognize the Taxes on Income for the year ended 31.03.2024 as per the earlier provisions.

15.11 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary/associate and as such AS 23 is not applicable.

15.12 AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence, the costs of software is essentially part of Bank''s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

15.13 Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generating Units'' as defined by AS-28. In the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 31.03.2024, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets including advances has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

15.14 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

15.14.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

15.14.2 Movement of Provision against Contingent Liabilities:							(Rs. in crore)
Particulars	Opening Balance		Additions during the year		Reduction during the year		Closing Balance
	2023-24	2022-23	2023-24	2022-23	2023-24	2022-23	2023-24	2022-23
Claims against the Bank not acknowledged as Debt	26.96	25.53	2.71	1.92	0.04	0.49	29.63	26.96
Invoked Bank Guarantees	7.65	7.63	0.38	0.02	Nil	Nil	8.03	7.65
L.C Devolved	Nil

15.15 Other significant accounting policies has been disclosed at the appropriate places in the Notes forming part of the accounts.

16. Disclosures in Terms of MSMED Act, 2006

Guideline given in Micro, Small and Medium Enterprises Development Act, 2006 have been complied with for purchases made during FY 2023-24 and payments have been made to the vendors in time as per Act. Since there had been no delay in payment, therefore no penal interest had been paid during FY 2023-24.

17. As per the Reserve Bank of India directions for initiating Insolvency Process- Provisioning Norms, vide letter No. DBR. No. BP:15199/21.04.048/2016-17 dated June 23, 2017, and DBR. No.BP.1907/21.04.048/2017-18 dated August 28, 2017, the bank is holding the provisioning of Rs 230.05 crore (31st March, 2023- Rs 265.44 crore) as against the balance outstanding of Rs 230.05 crore (31st March, 2023 - Rs 265.44 crore) as on 31st March, 2024 in respect of NPA borrowal accounts referred in aforesaid circular.

19. The bank has funded exposure of Rs 119.28 crore in two borrower''s accounts which are under litigation and respective adjudicating authorities have granted stay on downgrading. The bank has made adequate provisions for the accounts.

20. The Bank has made a total provision of Rs 334.50 crore towards wage revision w.e.f 1^st November 2022 as per provision of 12^th bipartite wage settlement and 9^th joint note dated 8^th March 2024.

21. Pursuant to the RBI circular dated 19th December 2023, in respect of investment in Alternate Investment Fund (AIF), Rs 0.50 crore provision is required during the quarter/ year ended 31st March 2024 and the same has been provided.

22. The figures of previous period have been regrouped and reclassified wherever considered necessary in order to make them comparable with the figures of the current period.

---

Mar 31, 2023

A) Balancing of Accounts and Reconciliation

i. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

ii. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), pertains prior to CBS System. Adjustments (including old outstanding entries) have been done up to 31.03.2023 and reconciliation is in progress.

iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) is in progress. Provisions have been made as per RBI norms. Reconciliation of Nostro accounts has been done as on 31.03.2023.

In the opinion of the management, the impact of the above para (i) to (iii), if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

iv. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2022 and remained outstanding as on 31.03.2023 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months. Similar guidelines have been followed for imprest clearing Account also.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

v. Credit entries outstanding in Blocked Unclaimed Deposit Account (New Blocked account) for the period

01.04.2012 to 31.03.2013 amounting to Rs 1.32 lakh have been transferred to DEAF account during the year ended March 2023.

Further, the unreconciled entries pertaining to more than 10 years is transferred to DEAF account on quarterly basis.

As on 31.03.2023, un-reconciled credit entries amounting to Rs. 54.98 lakh pertaining to the period from

01.04.2013 to 31.03.2016 are outstanding for more than 3 years and hence these entries were transferred to Blocked Unclaimed Deposit Account (New Blocked account).

B) Legal formalities are yet to be completed in respect of 2 Bank''s properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore as on 31.03.2023. (Previous year 2 Bank''s properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore).

1.	REGULATORY CAPITAL
a)	Composition of Regulatory Capital
				(Rs. in crore)
	S. No.	Particulars	2022 - 2023	2021 - 2022
	i)	Common Equity Tier 1 capital (CET 1)*	7990.22	6306.61
	ii)	Additional Tier 1 capital*	0.00	1000.00
	iii)	Tier 1 capital (i ii)	7990.22	7306.61
	iv)	Tier 2 capital	1553.31	1849.13
	v)	Total capital (Tier 1 Tier 2)	9543.31	9155.74
	vi)	Total Risk Weighted Assets (RWAs)	55815.43	49380.53
	vii)	CET 1 Ratio (CET 1 as a percentage of RWAs)* (%)	14.32	12.77
	viii)	Tier 1 Ratio (Tier 1 capital as a percentage of RWAs) (%)	14.32	14.80
	ix)	Tier 2 Ratio (Tier 2 capital as a percentage of RWAs) (%)	2.78	3.74
	x)	Capital to Risk Weighted Assets Ratio (CRAR) (Total Capital as a percentage of RWAs) (%)	17.10	18.54
	xi)	Leverage Ratio* (%)	5.88	6.03
	xii)	Percentage of the shareholding of Government of India (%)	98.25	98.25
	xiii)	Amount of paid-up equity capital raised during the year	0.00	2725.12

*Capital Adequacy Ratio (BASEL III) is arrived after considering the Net present value (NPV) of Non-Interest bearing Recapitalization Bonds infused as capital by the Govt. of India during FY 2020-21 & 2021-22. Further, the effect of proposed dividend has been reckoned in determining capital funds in the computation of capital adequacy ratio as at 31^st March 2022 and 31^st March 2023.

b) Draw down from Reserve

A sum of Rs. Nil during Financial year ended 31.03.2023 has been drawn from the General Reserve on account of payment to the claimant of old entries.

Sale and transfers to/from HTM category

i) During the year ending March-2023, Bank has shifted Govt. Securities amounting to Rs.3980.00 crore Face Value (Rs.3995.06 crore Book Value) from Held For Trading to Available For Sale category where as no security has been transferred from Available for Sale to Held to Maturity category. Gain on shifting of securities from HTM to AFS was not booked upfront and gain/loss was recognized on sale of such securities during the year.

ii) The value of shifting/ sales from HTM category (excluding onetime shifting at the beginning of year and sale under pre-announced OMO auctions) during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

Non-SLR investment portfolio

i) Non-performing non-SLR investments

Divergence in asset classification and provisioning

As per RBI Master Direction No DOR.ACC.REC.No.46/21.04.018/2021-22 dated 30.08.2021 (updated on 20.02.2023) on financial statements - presentation and disclosure, divergence in the asset classification and provisioning, Banks should disclose divergences in the asset classification and provisioning, if either or both of the following conditions are satisfied:

(a) The additional provisioning for NPAs assessed by RBI exceeds 10 percent of the reported profit before provisions and contingencies for the reference period, and

(b) The additional Gross NPAs identified by RBI as part of its supervisory process exceed 15 percent of the published incremental Gross NPAs for the reference period.

Divergences are within threshold limits in the Bank as specified above. Hence, no disclosure is required with respect to RBI'' Annual Supervisory Process for FY 2021-22.

(ii) In accordance with RBI circular no.DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021, in respect of the details of loans transferred/acquired during the period ended March 31, 2023, the Bank has not transferred and acquired NPA and Special Mention Account (SMA).

Disclosure under Resolution Framework for COVID-19-related Stress

i) Details of resolution plan implemented under the Resolution Framework for COVID-19 related stress as per RBI Circular dated August 6, 2020 (RF 1.0) and May 05,2021 (RF 2.0)are given below:-

Disclosures on risk exposure in derivatives Qualitative disclosures

Bank has not entered into any derivative transactions in respect of Forward rate agreement/Interest Rate Swap Exchange Traded Interest Rate Derivatives during the year 2022-23. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

Bank is complying with the reporting requirements of statutory authorities in relation to IND-AS. Post issuance of discussion paper on ECL by the regulator, Bank will be appointing a consultant with considerable experience in the field of implementation of I ND-AS. Further, it is also planned to give specialized training to staff so as to build relevant expertise, which would ultimately result in smooth implementation of IND-AS as and when implemented.

Disclosure of facilities granted to directors and their relatives : Not Applicable to bankDisclosure on amortization of expenditure on account of enhancement in family pension of employees of banks

The estimated additional Pension liability on account of revision in family pension was Rs.236.84 crore. RBI vide its Circular RBI/2021-22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated 4^th October 2021, has permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 31^st March 2022, subject to a minimum of 1/5^thof the total amount being charged every year. The Bank will amortize the said liability over a period, not exceeding 5 years commencing from the financial year ending 31^stMarch 2022, subject to a minimum of Rs.47.37 crore every year. Accordingly, the Bank has charged an amount of Rs.47.37 crore to the Profit & Loss account for the current financial year ended 31^st March 2023 and the balance unamorti''zed amount of Rs.142.10 crore as on 31^st March 2023, has been carried forward.

Disclosure in terms of RBI circular no.DOR.STR.REC.91/21.04.018/2021-22 dated December 13, 2022:15.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

15.1.1 There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

15.2 AS-9 Revenue Recognition

Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

15.3 AS-10 Property Plant & Equipment

The bank had last revalued immovable properties during the FY 2021-22, based on the reports obtained from the external independent valuer. The closing balance of revaluation reserve as on 31.03.2023 (Net of amount transferred to revenue reserve) is Rs.912.22 crore (Previous year Rs.919.90 crore).

Out of 59 properties owned by bank (excluding lease hold properties having a lease term up to 30 years), cost of 38 properties are segregated into land and superstructure.

15.4 AS 15 - Employees Benefit

Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) Employees Benefits issued by the ICAI.

The summarized position of post-employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

Note: For the purpose of segment reporting in terms of AS-17 of ICAI and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e. a) Treasury Operations, b) Corporate/Wholesale Banking, c) Retail Banking (further classified into Digital Banking and Other retail banking and d) Other Banking Operations.

Segmental Revenue, Results, Assets & Liabilities in respect of Corporate / Wholesale and Retail Banking segment have been bifurcated on the basis of exposure to these segments.

Part B Geographical Segment:

Since the Bank does not have any overseas branch, reporting under Geographic Segment is not applicable.

15.8 AS 21 - Consolidated Financial Statement

The Bank does not have any subsidiary/associate and as such AS 21 is not applicable.

15.9 AS 22 - Accounting for Taxes on Income

15.9.1 The Bank has accounted for Income Tax in compliance with Accounting Standard-22 ''Accounting for taxes on Income'' issued by ICAI

15.9.3 Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favourable judicial pronouncements.

15.9.4 Review of Deferred Tax Assets has been carried out based on Bank management''s estimate of possible tax benefits against timing difference in accordance with Accounting Standard - 22 "Accounting for Taxes on income" issued by The Institute of Chartered Accountants of India and Net Deferred Tax Assets of Rs.1844.25 crore is recognized as at 31st March 2023 (Rs.2168.34 crore as at 31st March 2022).

15.9.5 No provision has been considered necessary in respect of disputed demands of Income aggregating to Rs.709.31 crore (Previous year Rs.541.82 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

15.9.6 The Government of India, vide the Taxation Laws (Amendment) Act, 2019, inserted section 115BAA in the Income Tax Act 1961 w.e.f. April 1, 2019. The Bank has evaluated the options available under section 115BAA of The Income Tax Act, 1961 and opted to continue to recognize the Taxes on Income for the year ended 31.03.2023 as per the earlier provisions.

15.10 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary/associate and as such AS 23 is not applicable.

15.11 AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence, the costs of software is essentially part of Bank''s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

15.12 Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generating Units'' as defined by AS-28. In the

opinion of the Management, there is no impairment of the '' Fixed Assets'' of material amount as of 31.03.2023, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

15.13 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

15.13.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

15.14 Other significant accounting policies has been disclosed at the appropriate places in the Notes forming part of the accounts.

16. Disclosures in Terms of MSMED Act 2006

Guideline given in Micro, Small and Medium Enterprises Development Act 2006 have been complied with for purchases made during FY 2022-23 and payments have been made to the vendors in time as per Act. Since there had been no delay in payment, therefore no penal interest had been paid during FY 2022-23.

17. The LCR is computed with existing methodology for the 90 days average period (quarter) for the period ended 31^st March, 2023 and arrived at 206.19%. The management has approved conservative methodology i.e considering total outstanding deposit balance for wholesale funding as outflow instead of wholesale deposit having residual maturity of 30 days. Based on the new methodology, the bank has arrived LCR at 113.56% as at 31^st March, 2023 i.e for a day. Since the Bank has not used the same methodology for the previous 90 days, it is not comparable with previously reported LCR numbers. The comparative figure for previous quarters/ year (90 days average) could not be carried out due to voluminous & complexity of data involved. However, revised methodology is being used for LCR calculation henceforth.

18. In terms of Reserve Bank of India (RBI) circular, Banks are required to make Pillar 3 disclosures including Leverage ratio, Liquidity coverage ratio and Net Stable funding Ratio (NSFR) under the Basel III capital regulations. These Disclosures are made available on the Bank''s website:https://puniabandsindbank.co.in. The Disclosures have not been subjected to audit by Statutory Central Auditors of the Bank.

19. As per the Reserve Bank of India directions for initiating Insolvency Process- Provisioning Norms, vide letter No. DBR. No. BP:15199/21.04.048/2016-17 dated June 23, 2017, and DBR.No.BP.1907/21.04.048/2017-18 dated August 28, 2017, the bank is holding the provisioning of Rs.265.44.crores (Previous Year - Rs.281.56 crores) as against the balance outstanding of Rs.265.44 crores (Previous Year - Rs.281.56 crores) as on 31^st March, 2023 in respect of NPA borrowal accounts referred in aforesaid circular.

21. The bank has funded exposure of Rs.87.49 crore in one account which is under litigation and Hon''able High court has granted

stay on downgrading. The bank has made provisions of 40% for the account which is higher than the required provisions as per IRAC norms.

22. Pending settlement of the Bipartite agreement on wage revision (due from November 2022), an adhoc amount of Rs.59.44 crore has been provided upto 31.03.2023.

23. The figures of the previous year have been re-grouped / re-arranged wherever necessary except where information was not available.

---

Mar 31, 2022

A) Balancing of Accounts and Reconciliation

i. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

ii. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), pertains prior to CBS System. Adjustments (including old outstanding entries) have been done up to 31.03.2022 and reconciliation is in progress.

iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) is in progress. Provisions have been made as per RBI norms. Reconciliation ofNostro accounts has been done as on 31.03.2022.

In the opinion of the management, the impact of the above para (i) to (iii), if any, on the Profit & Loss Account and Balance Sheet though notquantifiable, will not be material.

iv. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2021 and remained outstanding as on 31.03.2022 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months. Similar guidelines have been followed for imprest clearingAccountalso.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

v. Credit entries outstanding in Nostro accounts from 01.10.2011 to 31.12.2011 amounting to Rs. 27,310/- shown in Sundry Creditors Unclaimed (Blocked) Account, Blocked Nostro Sundry account and Blocked Unclaimed Deposit Account (New Blocked account) has been transferred to DEAF account during December 2021 Quarterly closing. Credit entries outstanding in Blocked Unclaimed Deposit Account (New Blocked account) forthe period 01.01.2012 to 31.03.2012 amounting to Rs31191/- has been transferred to DEAFaccount during quarter ended March 2022.

Further, the department transfers unreconciled entries pertaining to more than 10 years to DEAFaccount on quarterly basis.

As on 31.03.2022, un-reconciled credit entries amounting to Rs. 52.26 lakh pertain to the period from 01.04.2012 to 31.03.2016 are outstanding for more than 3 years and hence these entries were transferred to Blocked Unclaimed Deposit Account (New Blocked account).

B ) Legal formalities are yet to be completed in respect of 2 Bank''s properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 62.98 crore as on 31.03.2022.

C ) Capital

During the financial year ended March 31, 2022 Government of India infused Rs.4600 crore towards preferential allotment of Equity shares. Accordingly, the bank has allotted 2,72,51,18,483 equity shares of Rs.10/- each fully paid up for cash at an issue price of Rs.16.88 per equity share (including premium of Rs.6.88 per equity share). Government ofIndia''sholdinginthe bank has increased to98.25% as on 31st March, 2022.

*Capital Adequacy Ratio (BASEL III) is arrived after considering the Net present value (NPV) of Non-Interest bearing Recapitalizaton Bonds infused as capital by the Govt. of India during FY 2020-21 & 2021-22 without considering the said adjustment the CRAR is 30.05%(CET 1 rato 24.48%)as on 31st March 2022.Further, th effect of proposed dividend has been reckoned in determining capital funds in the computaton of capital adequacy rato as at 31st March 2022.

b) Draw down from Reserve

A sum of Rs Nil during Financial year ended 31.03.2022 has been drawn from the General Reserve on account of payment to the claimant of old entries.

c) Sale and transfers to/from HTM category

i) During the year ending March, 22 the Bank has shifted Govt. securities amounting to Rs.1972.66crore(Face value) (Rs.1951.78 Cr B.V) from "Held till Maturity (HTM)" to "Available for Sale (AFS)" category and Rs. 1769.31 crore (Face Value) (Rs.1808.59 Cr B.V) from "Available for Sale (AFS)" to "Held till Maturity (HTM)" category. During the period, MTM loss of Rs.19.21 crore was booked upfront on shifting of securites from AFS to HTM. However, gain on shifting of securites from HTM to AFS was not booked upfront and gain/loss was recognized on sale of such securites during the year.

ii) The value of shifting/ sales from HTM category (excluding onetme shifting at the beginning of year and sale under pre - announced OMO auctons) during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

iii) Gross profit (without netting of Taxes) on sale of securites under HTM categories are transferred to Capital Reserve Account

Disclosure under Resolution Framework for COVID-19-related Stress

I) A special window under the Prudential Framework was extended vide circular DOR.No.BP.BC/3/21.04.048/2020-21 dated August 6, 2020 to enable the lenders to implement a resolution plan in respect of eligible corporate exposures, and personal loans, while classifying such exposures as Standard. Banks shall make disclosures in the format prescribed below every half-year, i.e., in the financial statements as on September 30 and March 31, starting from the half-year ending September 30, 2021 till all exposures on which resolution plan was implemented are either fully extinguished or completely slip into NPA, whichever is earlier.

As part of the Banks strategy to implement IND-AS, Bank had appointed a consultant with considerable experience in the field of implementation of IND-AS. The appointment terms, interalia, also require them to provide guidance to the Bank in matters related to IND-AS and also assist the Bankto comply with the provisions and reporting requirements of statutory authorities in relation to Ind AS. Further, it is also planned to give specialized training to staff so as to build relevant expertise whichwould ultimatelyresultin smooth implementation of IND-AS as and when implemented.

I) Disclosure on amortization of expenditure on account of enhancement in family pension of employees of banks

The estimated additional Pension liability on account of revision in family pension was Rs.236.84 crore. RBI vide its Circular RBI/2021-22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated 4thOctober 2021, has permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 31stMarch 2022, subject to a minimum of 1/5thof the total amount being charged every year. The Bank will amortize the said liability over a period, not exceeding 5 years commencing from the financial year ending 31stMarch 2022, subject to a minimum of Rs.47.37 crore every year. Accordingly, the Bank has charged an amount of Rs.47.37 crore to the Profit & Loss account for the current financial year ended 31st March 2022 and the balance unamortized amount of Rs.189.47 crore has been carried forward.

15.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

15.1.1 There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

15.2 AS-9 Revenue Recognition

Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

15.3 AS-10 Property Plant & Equipment

During the year 31.03.2022, bank has revalued immovable properties based on the reports obtained from the external independent valuer. The closing balance of revaluation reserve as on 31.03.2022 (Net of amount transferred to revenue reserve) is Rs.919.90 crore (Previous year Rs.918.44 crore)

Out of 59 properties owned by the bank (excluding leasehold properties having a lease term up to 30years), cost of 38 properties are segregated into land and superstructure.

15.4 AS 15 - Employees Benefit

Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) Employees Benefits issued by the ICAI.

15.9.3 Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorable judicial pronouncements.

15.9.4 Review made by the bank on reasonable certainty of availability of future taxable income on which timing differences arising on account of provision for bad and doubtful debt, that can be realized and accordingly during the year 2021-22, the Bank has recognized Deferred Tax Asset of Rs. 68.89 crore on the above tming differences.

15.9.5 No provision has been considered necessary in respect of disputed demands of Income aggregatng to Rs.541.82 crore (Previous year Rs.595.48 crore) in view of decisions of appellate authorites / judicial pronouncements / opinions of legal experts.

15.9.6 The Government of India, vide the Taxaton Laws (Amendment) Act, 2019, inserted secton 115BAAinthe Income Tax Act 1961 w.e.f. April 1, 2019. The Bank has evaluated the optons available under secton 115BAAof The Income Tax Act, 1961 and opted to contnue to recognize the Taxes on Income for the quarter and year ended 31.03.2022 as per the earlier provisions.

15.10 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary/associate and as such AS 23 is not applicable.

15.11 AS 26 - Intangible Assets

The applicaton software in use in the Bank has been developed in house and has evolved over a period of t me. Hence ,the costs of software is essentally part of Bank''s operatonal expenses like wages etc. and as such are charged to the respectve heads of expenditure in the Profit and Loss Account.

15.12 Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generatng Units'' as defined by AS-28. In the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 31.03.2022, requiring recogniton in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudental Norms prescribed by the Reserve Bankof India.

15.13 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

15.13.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision fora) 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 from the past events but is not recognized because

• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

• A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

17. Disclosures in Terms of MSMED Act 2006

Guideline given in Micro, Small and Medium Enterprises Development Act 2006 have been complied with for purchases made during FY 2021-22 and payments have been made to the vendors in time as per Act. Since there had been no delay in payment, therefore no penal interest had been paid during FY 2021-22.

18. In terms of Reserve Bank of India (RBI) circular DBR.No.BP.BC.1/21.06.201/2015-16, dated July 1, 2015, on ''Basel III Capital Adequacy'' and RBI circulars DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 on ''Prudential Guidelines on Capital Adequacy and Liquidity Standard Amendments'', Banks are required to make Pillar 3 disclosures including leverage ratio and liquidity coverage ratio under the Basel III framework which are being made available on the Bank''s website. The Disclosures have not been subjected to audit by Statutory Central Auditors of the Bank. These details are being made available on our website htts://punjabandsindbank.co.in

19. As per the Reserve Bank of India directions for initiating Insolvency Process- Provisioning Norms, vide letter No. DBR. No. BP:15199/21.04.048/2016-17 dated June 23, 2017, and DBR.No.BP.1907/21.04.048/2017-18 dated August 28, 2017, the bank is holding the provisioning of Rs.281.56 crores (Previous Year - Rs.481.59 crores) as against the balance outstanding of Rs.281.56 crores (Previous Year - Rs.481.59 crores) as on 31st March, 2022 in respect of NPA borrowal accounts referred in aforesaid circular.

20. The spread of COVID-19 pandemic across the globe has resulted in decline in economic activities. In this situation, bank is gearing up itself on all fronts to meet the challenges. Major challenges for the Bank could be from extended working capital cycles, fluctuating cash flow trends and probable inability of the borrowers to meet their repayment obligations. A definitive assessment of the impact of COVID-19 is dependent upon circumstances and uncertainties as they evolve in the subsequent period. To absorb the shock of impact on its Profit & Loss Account in ensuing quarters, the bank has proactively made an additional provision of Rs.70.65 crore during the quarter ended March 31, 2022. The aforesaid provisions are in addition to the provisions held as per RBI guidelines as regards loan provisions.

22. In terms of Ministry of Finance, Department of Financial Services notification no.CG-DL-E-23032020-218862 dated March 23, 2020 amending the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1980, Bank has appropriated accumulated losses of Rs.3577.55 crore from its available share premium account on 23.08.2021 after complying with the regulatory requirements and after obtaining all necessary approvals.

23. During the year ended March 31, 2022, Government of India vide Gazette Notification No. F. No. 4(17)-B (W&M)/2020 dated 23.02.2022 has infused Rs. 4600 Crore towards Preferential allotment of equity share capital. Further, the bank subscribed an equivalent amount to Non- Interest bearing (Non-Transferable) Special GOI Security which was issued at par and having date of maturity from February 24, 2032 to February 24, 2037 and held under HTM category as per GOI Notification dated 23.02.2022. The aforesaid securities would not be considered as an eligible investment which the bank is required to make in Government securities in pursuance of any statutory provisions or directions applicable to the bank.

24. The bank has exposure of Rs.75.10 crore in one account which is under litigation and Hon''ble Delhi High court has granted stay on downgrading. The bank has made a provision of 25% for the account which is higher than the required provisions as per IRAC norms.

25. The figures of the previous year have been re-grouped / re-arranged wherever necessary except where information was not available.

---

Mar 31, 2018

1 Balancing of Books and Reconciliation

1.1 In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), prior to CBS System. Adjustments (including old outstanding entries) has been done up to 31.03.2018 and reconciliation is in progress.

1.3 Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) etc. is in progress. Provisions have been made as per RBI norms. Reconciliation of Nostro accounts has been done as on 31.03.2018.

In the opinion of the management, the impact of the above para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet is not quantifiable.

1.4 In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2017 and remained outstanding as on 31.03.2018 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

1.5 Aggregate net credit position in respect of outstanding NOSTRO Accounts relating to the period up to 31st March 1996 amounting to Rs. 3.78 crores (previous year Rs 3.70 crores) has been transferred to Blocked Nostro Sundry Creditors Account out of which Rs. 1.77 crores for period prior to 14.11.1989 is being carried at old book value. Credit entries for the period after 1st April 1996 remaining outstanding for more than 3 years amounting to Rs. 5.15 crores (previous year Rs.4.81 crores) have been segregated and kept in Blocked Unclaimed Nostro New Account.

2.1 There is no change in the Accounting Policies in preparation of the financial statements as were followed in the annual financial statements for the year ended 31.03.2017.

3. Capital

3.1 During the year, Bank has issued 16,45,01,257 Equity Shares of Rs.10/ each to Government of India by way of Preferential Issue at a price of Rs.47.72 per share determined as per SEBI ICDR Regulation after taking necessary approval from RBI/ MOF. Accordingly, the Equity Share Capital of the Bank has increased by Rs.164.50 crore to Rs.564.91 crore and Share Premium has increased by Rs.619.51 crore (after adjusting Share Issue Expenses of Rs.0.99 crore) to Rs.1937.55 crore.

4.1 Spreading of MTM losses

RBI vide its circular DBR.No.BP.BC.102/21.04.048/2017-18 dated April 2, 2018 granted an option to spread provisioning for mark to market (MTM) losses on investments held in AFS and HFT for the quarters ended December 31, 2017 and March 31, 2018. Accordingly, the bank has charged Rs.76.49 crore related to quarter ended December 2017 and Rs.15.99 crore for quarter March 2018 and spread the losses to the tune Rs.76.49 crore related to December 2017 quarter and Rs.47.97 crores related to March 31, 2018 to the subsequent quarters of ensuing Financial Year.

4.2 Repo / Reverse Repo Transactions (in face value terms)

4.2.1 Accounting for Repos/Reverse Repo

Repurchase and reverse repurchase transactions - Securities sold under agreements to repurchase (Repos) and securities purchased under agreements to resell (Reverse Repos) are accounted as collateralized borrowing and lending transactions respectively. The difference between the consideration amount of the first leg and the second leg of the repo is recognized as interest income or interest expense over the period of the transaction.

4.3 Derivatives

Bank has not entered into any derivative transactions (Forward rate agreement/interest Rate Swap/ Exchange Traded Interest Rate Derivatives) during the year 2017-18. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

4.4 During the year, the Bank shifted securities worth Rs. 875 crore (face value) from “Held till Maturity” to “Available for Sale Category”.

4.5.1 The value of shifting/ sales from HTM category(excluding one time transfer and sale under pre-announced OMO auctions and repurchase of Government securities by Government of India) during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

4.5.2 Gross profit (without nettng ofTaxes) on sale of securities under HTM categories are transferred to Capital Reserve Account.

5.1 DICGC / CGTMSE/ ECGC claim eligible, lodged and re-lodged have been considered as security for provisioning on advances on the basis that such claims are valid / realizable.

5.2.1 As per RBI directions for initiating Insolvency Process-Provisioning Norms vide letter DBR No.BP:15199/21.04.048/2016-17 dated June 23,2017 in respect of 6 borrowal accounts covered under the provision of Insolvency and Bankruptcy Code(IBC),the Bank was required to make additional provision. Similarly, as per RBI direction vide letter DBR.No.BP. 1906/21.04.048/2017-18 dated August 28,2017 in respect of 5 borrowal accounts covered under the process of Insolvency and Bankruptcy Code (IBC),the Bank was required to make additional provision. Further as per RBI communication DBR.BP.8756/21.04.048/2017-18 dated April 2,2018, the provisioning requirement in respect of NCLT account has been reduced from 50% of secured portion to 40% of secured portion as on March 31,2018. The bank has however, not exercised the option of dispensation available in respect of old accounts in which provision of 50% was already held by bank upto Dec 2017 quarter. The Bank has availed the option of provisioning requirement in respect of 2 NCLT accounts admitted during the quarter ending March 2018 by providing 40% Provision in said accounts.

5.2.2 RBI vide circular DBR No. BP.BC.101/21.04.048/2017-18 dated February 12,2018 issued a revised framework for resolution of stressed assets, which supercedes the existing guidelines of SDR ,Change in ownership outside SDR(except projects under implementation) and S4A with immediate effect. However, under the revised framework, there was no account where any of these scheme had been invoked but not yet fully implemented.

5.2.3 RBI vide circular RBI/2017-18/129 DBR.No.BP.BC.100/21.04.048/2017-18 dated February 07, 2018 regarding Relief for MSME Borrowers registered under Goods and Services Tax (GST), the bank has classified the eligible accounts as standard for the purpose of classification and has accordingly made accelerated provision of 5% amounting to Rs.0.59 crore as on 31.03.2018.

5.2.4 In compliance of RBI directions, Bank is maintaining provisions of Rs. 36.42 Crore under Food Credit availed by State Government of Punjab.

5.3 In view of fraud reported during the year in certain banks in respect of one Gems and Jewellery borrower, the Bank has classified the account as Non Performing Assets and provided fully.

6.1 Risk Category wise Country Exposure

The net country-wise funded exposure of the Bank in respect of Foreign Exchange Transactions in respect of each country is within 1% of the total assets of the Bank. Hence, no provision is required as per RBI guidelines.

6.2 Details of Single Borrower Limit (SGL), Group Borrower Limit (GBL) exceeded by the Bank

During the year 2017-18, the Bank has not exceeded the prudential exposure limits set by RBI to single borrower/ group borrower, except in the following case, which has been approved by the Board:

6.3 Inter-Bank-Participation Certificate (IBPC)

In terms of RBI Guidelines DBOD No. BP.BC.57/62-88 dated December 31,1988, Inter-Bank-Participation Certificate (IBPC) of Rs. 2000 crore has been issued on 18.02.2018 on risk sharing basis for maximum period of 180 days.

7 Disclosure as per Accounting Standard (AS)

7.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

7.1.1 There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

7.1.2 AS-6 Depreciation Accounting

Break-up of total depreciation for each class of assets

7.2 Pursuant to Accounting Standard - 10, (revised 2016) on Property Plant & Equipment, applicable from 1^st April 2017, depreciation of Rs.26.26 crore for the year on revalued portion of fixed assets has been transferred from Revaluation Reserve to Revenue Reserve during the current year instead of crediting to Profit and Loss Account resulting decrease in profit by Rs.26.26 crore.

7.3 AS-9 Revenue Recognition

7.3.1 Certain items of income are recognized on realization basis as disclosed at point no. 8 - “Revenue Recognition” of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

7.4 AS 15 - Employees Benefit

7.4.1 Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS -15) issued by the ICAI.

RBI vide its letter DBR No. BP.BC. 9730/21.4.018/2017-18 dated April 27,2018 has given the option to Banks to spread additional liability on account of the enhancement of gratuity limits from Rs. 10 Lakh to Rs. 20 Lakh from 29.03.2018 under the Payment of Gratuity Act,1972,over four quarters beginning with the quarter ended March 31,2018.The Bank has excercised the option and charged Rs. 18.00 crore during the quarter ended March 31,2018 and deferred Rs. 54.00 crore to subsequent three quarter of the ensuing financial year.

7.4.2 The summarized position of post employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

7.4.3 An ad-hoc provision of Rs. 50.00 crore has been made to meet the likely liability arising on account of Wage Revision effective from November 2017. In absence of requisite information, liability could not be ascertained and has been provisionally provided for.

Note: For the purpose of segment reporting in terms of AS-17 of ICAI and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e. a) Treasury Operations, b) Corporate/Wholesale Banking, c) Retail Banking and d) Other Banking Operations.

Segmental Revenue, Results, Assets & Liabilities in respect of Corporate / Wholesale and Retail Banking segment have been bifurcated on the basis of exposure to these segments.

Assets & Liabilities wherever directly related to segments have been accordingly allocated to segments and wherever not directly related have been allocated on the basis of pro-rata segment revenue.

Part B : Geographical Segment :

Since the Bank does not have any overseas branch, reporting under Geographic Segment is not applicable.

c) Name of Related Party: Satluj Gramin Bank (An Associate)

Para 9 of AS 18 - Related Party Disclosures exempts state controlled enterprises from making any disclosures pertaining to their transactions with other related parties which are also state controlled. Hence, the transactions with the associated bank have not been disclosed.

7.4 AS 21 - Consolidated Financial Statement

The Bank does not have any subsidiary/associate and as such AS 21 is not applicable.

7.5 AS 22 - Accounting for Taxes on Income

7.6.1 The Bank has accounted for Income Tax in compliance with Accounting Standard-22 ‘Accounting for taxes on Income’ issued by ICAI.

7.6.2 Major components of deferred tax assets/liabilities are as under:

7.6.3 Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorablejudicial pronouncements.

7.6.4 Review made by the bank on reasonable certainty of availability of future taxable income on which timing differences arising on account of provision for bad and doubtful debt, Regulatory provision for performing loan assets, that can be realized and accordingly during the year 2017-18,the Bank has recognized deferred Tax Asset of Rs.365.55 Crore on the above timing differences.

7.6.5 No provision has been considered necessary in respect of disputed demands of Income and Interest Tax aggregating to Rs.84.86 crore (Previous year Rs.84.86 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

7.6.6 Hitherto, till the assessment year 2017-18, the bank had been claiming deduction under section 36(l)(vii) of the Income Tax Act, 1961 in respect of write off of non-rural advances without adjusting the same with the unexhausted provision outstanding under section 36(l)(viia) of the Income Tax Act, 1961. However, the bank has preferred to revise the returns for the assessment years 2016-17 and 2017-18 and has accordingly provided additional tax liability.

7.7 AS 23-Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary/associate and as such AS 23 is not applicable.

7.8 AS26-lntangibleAssets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence ,the costs of software is essentially part of Bank’s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

7.9 Accounting Standard 28 - Impairment ofAssets

Fixed Assets possessed by Bank are treated as ‘Corporate Assets’ and not ‘Cash Generating Units’ as defined by AS-28. In the opinion of the Management, there is no impairment of the ‘Fixed Assets’ of material amount as of 31.03.2018, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

7.10 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

7.10.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

- It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

- A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

7.11 There are capital commitments to tune of Rs.76.70 crore as on 31.03.2018 for projects under execution/construction.

7.12 Other significant accounting policies has been disclosed at the appropriate places in the Notes forming part of the accounts.

8.1 Draw down from Reserve

A sum of Rs. NIL lacs (previous year Rs. NIL lacs) has been drawn from the General Reserve on account of payment to the claimant of old entries.

*Banks may also disclose in the format above, sub sectors where the outstanding advances exceeds 10 percent of the outstanding total advances to that sector. For instance, if a bank’s outstanding advances to the mining industry exceed 10 percent of the outstanding total advances to ‘Industry’ sector it should disclose details of its outstanding advances to mining separately in the format above under the ‘Industry’ sector.

Un-Hedged Foreign Currency Exposure

8.2 During the year, in terms of RBI Circular No. DBOD.No. BP.BC.85/21.06.200/2013-14 dt. 15.01.2014, the Bank has provided an amount of Rs.0.30 cr. (Previous Year Rs.0.46 cr.) towards Unhedged Foreign currency Exposure Based on the details furnished by the constituents.

9. In term of RBI circular DBR NO.BP.BC1/21.06.201/2015-15 July 1,2015, banks are required to make pillar 3 disclosures under BASEL III capital regulations. These details are being made available on our website www.psbindia.com. These disclosures have not been subjected to audit by the auditors.

10. The figures of the previous year have been re-grouped / re-arranged wherever necessary except where information was not available.

---

Mar 31, 2017

1 Balancing of Books and Reconciliation.

2. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

3. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), prior to CBS System. Adjustments (including old outstanding entries) has been done up to 31.03.2017 and reconciliation is in progress.

4. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) etc. is in progress. Provisions have been made as per RBI norms.

In the opinion of the management, the impact of the above para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

5. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2016 and remained outstanding as on 31.03.2017 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

6. Aggregate net credit position in respect of outstanding NOSTRO Accounts relating to the period up to 31st March 1996 amounting to Rs. 3.70 Crores (previous year Rs 3.78 Crores) has been transferred to Blocked Nostro Sundry Creditors Account out of which Rs. 1.77 Crores for period prior to 14.11.1989 is being carried at old book value. Credit entries for the period after 1st April 1996 remaining outstanding for more than 3 years amounting to Rs. 4.81 Crores (previous year Rs.4.75 Crores) have been segregated and kept in Blocked Unclaimed Nostro New Account.

7. Legal formalities are yet to be completed in respect of 3 Bank''s properties having original cost of Rs.193.35 Lacs as on 31.03.2017 (Previous year 6 properties costing Rs.4.17 crore).

8. Inter-Bank-Participation Certificate (IBPC)

In terms of RBI Guidelines DBOD No. BP.BC.57/62-88 dated December 31, 1988, Inter-Bank-Participation Certificate (IBPC) of Rs. 3030.54 crore has been issued on risk sharing basis for maximum period of 180 days, thereby reducing the Bank''s Total Advances as on 31.03.2017 to same extent.

9. Disclosure as per Accounting Standard (AS)

10. AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

11. There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

12. AS-6 Depreciation Accounting

Break-up of total depreciation for each class of assets

13. AS-9 Revenue Recognition

14. Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

15. AS 15 - Employees Benefit

16. Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) issued by the ICAI.

17. The summarized position of post employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

18. The difference between scrip-wise and category-wise valuation of securities to the tune of Rs.1009 crore has been taken into account for arriving at the current tax provisions so as to comply with the provisions of Income Tax Disclosure Standards (ICDS).

19. Provision for Income Tax and Deferred Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorable judicial pronouncements.

20. No provision has been considered necessary in respect of disputed demands of Income and Interest Tax aggregating to Rs.84.86 crore (Previous year Rs.257.41 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

21. Based on the opinion of tax expert, the bank has claimed the deduction under section 36(1)(vii) of the Income Tax Act, 1961 in respect of write off of non-rural advances of Rs.487.40 crore (previous year Rs.332.04 crore) without adjusting the same with the unexhausted provision outstanding under section 36(1)(viia) of the Income Tax Act, 1961 holding that proviso read with Explanation-2 to section 36(1)(vii) is not applicable to the bad debts written off of non-rural advances.

21. AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary and as such AS 23 is not applicable.

22. AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence ,the costs of software is essentially part of Bank''s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

23. Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generating Units'' as defined by AS-28. In the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 31.03.2017, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

24. Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

25. As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision for -

26. 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

27. Any present obligation from the past events but is not recognized because

- It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

- A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

---

Mar 31, 2016

1 Balancing of Books and Reconciliaton.

1.1 In certain Branches, the balancing / reconciliaton of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), prior to CBS System. Adjustments (including old outstanding entries) has been done up to 31.03.2016 and reconciliation is in progress.

1.3 Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) etc. is in progress. Provisions have been made as per RBI norms.

In the opinion of the management, the impact of the above para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

1.4 In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2015 and remained outstanding as on 31.03.2016 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

1.5 Aggregate net credit position in respect of outstanding NOSTRO Accounts relating to the period up to 31st March 1996 amounting to Rs 3.78 Crores as compared to previous year of Rs.3.64 Crores has been transferred to Blocked Nostro Sundry Creditors A/C out of which Rs 1.77 crores for period prior to 14.11.1989 is being carried at old book value. Credit entries for the period after 1st April 1996 remaining outstanding for more than 3 years amounting to Rs 4.75 Crores as compared to previous year of Rs.4.43 Crores have been segregated and kept in Blocked Unclaimed Nostro New A/C.

2.1 Legal formalities are yet to be completed in respect of 6 Bank''s properties having original cost of Rs.4.17 crore as on 31.03.2016 (Previous year 5 properties costing Rs.3.74 crore).

3. Derivatives

Bank has not entered into any derivative transactions (Forward rate agreement/Interest Rate Swap/ Exchange Traded Interest Rate Derivatives) during the year 2015-16. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

4. During the year, the Bank shifted securities worth Rs.826.02 crore (face value) from "Held till Maturity" to "Available for Sale Category".

5. The value of shifting/ sales from HTM category during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

6. Risk Category wise Country Exposure

The net country-wise funded exposure of the Bank in respect of Foreign Exchange Transactions in respect of each country is within 1% of the total assets of the Bank. Hence, no provision is required as per RBI guidelines.

7. Disclosure as per Accounting Standard (AS)

7.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

8. There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

8.1 AS-6 Depreciation Accounting

Break-up of total depreciation for each class of assets

8.2 AS-9 Revenue Recognition

8.4 Certain items of income are recognized on realization basis as disclosed at point no. 8 – "Revenue Recognition" of Schedule 17 – Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

8.5 AS15 - Employees Benefit

8.6 Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) issued by the ICAI.

9. The summarized position of post employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

10. AS 21 – Consolidated Financial Statement

The Bank does not have any subsidiary and as such AS 21 is not applicable.

11. AS 22 – Accounting for Taxes on Income

11.1 The Bank has accounted for Income Tax in compliance with Accounting Standard-22 ''Accounting for taxes on Income'' issued by ICAI.

11.2 Based on the opinion of tax expert, the bank has considered the difference between accounting income and computation of taxable income on valuation of securities as permanent and accordingly, deferred tax liability of Rs. 355.05 crore (Previous Year Rs.379.26 crore) has not been considered necessary.

11.3 Provision for Income Tax, Deferred Tax and Fringe Benefit Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorable judicial pronouncements.

11.4 No provision has been considered necessary in respect of disputed demands of Income Tax, Fringe Benefit Tax and Interest Tax aggregating to Rs. 257.41 crore (Previous year Rs.293.19 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

11.5 Based on the opinion of tax expert, the bank has claimed the deduction under section 36(1)(vii) of the Income Tax Act, 1961 in respect of write of non-rural advances of Rs.332.04 crore (previous year Rs.249.17 crore) without adjusting the same with the unexhausted provision outstanding under section 36(1)(viia) of the Income Tax Act, 1961 holding that proviso read with Explanaton-2 to section 36(1)(vii) is not applicable to the bad debts written of non-rural advances.

11.6 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary and as such AS 23 is not applicable.

12. AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence ,the costs of software is essentially part of Bank''s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

13. Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generating Units'' as defined by AS-28. In the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 31.03.2016, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

14. Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

15. As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

- It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

- A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

16. Movement of other significant provisions has been disclosed at the appropriate places in the Notes forming part of the accounts.

17. During the year, in terms of RBI Circular No. DBOD.No. BP.BC.85/21.06.200/2013-14 dt. 15.01.2014, the Bank has provided an amount of Rs.1.07 cr. (Previous Year Rs.0.51 cr.) towards Unhedged Foreign currency Exposure Based on the details furnished by the constituents.

18. The figures of the previous year have been re-grouped / re-arranged wherever necessary except where information was not available.

---

Mar 31, 2015

1 Balancing of Books and Reconciliation.

1.1 In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding entries in Inter Branch Account (IBR DD) Adjustments (including old outstanding entries) has been done up to 31.01.2015 and reconciliation is in progress.

1.3 Reconciliation of Drafts / TT payable, Dividend Warrants paid / payable, Debit Note Receivable/ Payable, RTGS (Suspense) etc. is in progress. Provisions have been made as per RBI norms.

In the opinion of the management, the impact of the above Para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

1.4 In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2014 and remained outstanding as on 31.03.2015 has been done which has resulted in either net debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit entries outstanding for the period exceeding six months.

In Inter Branch Account there is net credit balance hence no provision is required to be made.

1.5 Aggregate net credit position in respect of outstanding NOSTRO Accounts relating to the period up to 31st March 1996 amounting to Rs.3.64 crore (previous year Rs 3.69 crore) has been transferred to Blocked Nostro Sundry Creditors Account out of which Rs1.77 crore for period prior to 14.11.1989 is being carried at old book value. Credit entries for the period after 1st April 1996 remaining outstanding for more than 3 years amounting to Rs.4.43 crore (previous year Rs.4.63 crore) have been segregated and kept in Blocked Unclaimed Nostro New Account.

2.1 Legal formalities are yet to be completed in respect of 5 (five) Bank''s properties having original cost of Rs.3.74 crore as on

31.03.2015 (Previous year 5 properties costing Rs.3.47 crore).

3. Capital

During the year, Bank has issued 3,04,36,252 Equity Shares of Rs.10/ each to Life Insurance Corporation of India by way of Preferential Issue at a price of Rs.59.14 per share determined as per SEBI ICDR Regulation after taking necessary approval from RBI/ MOF.

Perpetual Non Cumulative Preference Shares (PNCPS) of Rs.200 crore, Perpetual Cumulative Preference Shares (PCPS) of Rs.200 crore and Innovative Perpetual Debt Instruments (IPDI) of Rs.160 crore held by Government of India have been converted into 9,46,90,563 Equity Shares of Rs.10/ each by way of Preferential Issue at a price of Rs.59.14 per share determined as per SEBI ICDR Regulation after taking necessary approval from RBI/ MOF.

Accordingly the Equity Share Capital of the Bank has increased by Rs.125.13 crore to Rs.400.41 crore and Share Premium has increased by Rs.614.06 crore (Share Premium Received Rs.614.87 crore minus Share Issue Expenses Rs.0.81 crore) to Rs.1318.04 crore.

4. Derivatives

Bank has not entered into any derivative transactions (Forward rate agreement/Interest Rate Swap/ Exchange Traded Interest Rate Derivatives) during the year 2014-15. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

5. Risk Category wise Country Exposure

The net country-wise funded exposure of the Bank in respect of Foreign Exchange Transactions in respect of each country is within 1% of the total assets of the Bank. Hence, no provision is required as per RBI guidelines.

6 Disclosure as per Accounting Standard (AS)

6.1 AS-5 Net Profit or Loss for the period, prior period items and changes in accounting policies

6.1.1There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

6.3 AS-9 Revenue Recognition

6.3.1 Certain items of income are recognized on realization basis as disclosed at point no. 8 - "Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.

6.4 AS15 - Employees Benefit

6.4.1 Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) issued by the ICAI. However, the additional liability towards re-opening of pension option and amendment in the Gratuity Act, 1972 has been dealt in accordance with the provisions contained in Reserve Bank of India circular no. DB0D.BP.BC.80/21.04.018/2010-11 dated 9th February 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limit. Accordingly the Bank has amortized the balance amount of Rs. 146.12 Crores on account of Pension and Rs. 26.57 Crores on account of Gratuity.

6.4.2 The summarized position of post employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:

6.8 AS 21 - Consolidated Financial Statement

The Bank does not have any subsidiary and as such AS 21 is not applicable.

6.9 AS 22 - Accounting for Taxes on Income

6.9.1 The Bank has accounted for Income Tax in compliance with Accounting Standard-22 ''Accounting for taxes on Income'' issued by ICAI.

6.9.3 Based on the opinion of tax expert, the bank has considered the difference between accounting income and computation of taxable income on valuation of securities as permanent and accordingly, deferred tax liability of Rs 379.26 crore (Previous Year Rs.403.80 crore) has not been considered necessary.

6.9.4 Provision for Income Tax, Deferred Tax and Fringe Benefit Tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorable judicial pronouncements.

6.9.5 No provision has been considered necessary in respect of disputed demands of Income Tax, Fringe Benefit Tax and Interest Tax aggregating to Rs. 293.19 crore (Previous year Rs.477.79 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

6.9.6 In computing the provision for Income Tax for the current Financial Year, based on the opinion of tax consultant, the bank has claimed the deduction under section 36(1)(vii) of the Income Tax Act 1961 in respect of write off of non-rural advances of Rs.249.17 crore (previous year Rs.216.70 crore) without adjusting the same with the unexhausted provision outstanding under section 36(1)(viia) of the Income Tax Act 1961 holding that proviso read with Explanation-2 to section 36(1)(vii) is not applicable to the bad debts written off of non-rural advances. This has resulted into increase in Profit after Tax, MAT credit entitlement by Rs.74.27 crore (previous year Rs.68.10 crore) and creation of Deferred Tax Liability of Rs.59.61 crore (previous year Deferred Tax Asset of Rs.59.61 crore). The management is hopeful of enforcing its claim of above referred deduction in tax litigation.

6.10 AS 23 - Accounting for Investments in Associates in consolidated Financial Statements

The Bank does not have any subsidiary and as such AS 23 is not applicable.

6.11 AS 26 - Intangible Assets

The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence ,the costs of software is essentially part of Bank''s operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.

6.12 Accounting Standard 28 - Impairment of Assets

Fixed Assets possessed by Bank are treated as ''Corporate Assets'' and not ''Cash Generating Units'' as defined by AS-28. In the opinion of the Management, there is no impairment of the ''Fixed Assets'' of material amount as of 31.03.2015, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.

6.13 Accounting Standard 29 - Provisions, Contingent Liability and Contingent Assets

6.13.1 As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

* It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

* A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually 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.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

6.13.2 Movement of Provision against Contingent Liabilities:

(Rs. in crore)

Opening Balance Additions Reduction Closing Particulars during during Balance the year the year

2014 2013 2014 2013 2014 2013 2014 2013 -15 -14 -15 -14 -15 -14 -15 -14 Claims against 26.61 18.16 0.75 8.70 0.61 0.25 26.75 26.61 the Bank not acknowledged as Debt

Invoked Bank 6.44 3.87 3.00 6.38 0.43 0.06 6.44

L.C Devolved Nil Nil Nil Nil Nil Nil Nil NII

6.13.3 Movement of other significant provisions has been disclosed at the appropriate places in the Notes forming part of the accounts.

7. Draw down from Reserve

A sum of Rs. Nil lacs (previous year Rs. Nil lacs) has been drawn from the General Reserve on account of payment to the claimant of old entries.

---

Mar 31, 2014

1 Balancing of Books and Reconciliation.

1.1 In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding entries in Inter Branch Account (IBR DD) Adjustments (including old outstanding entries) has been done up to 28.02.2014 and reconciliation is in progress.

1.3 Reconciliation of Drafts / TT payable, Dividend Warrants paid / payable, Debit Note Receivable/ Payable, NEFT/RTGS (Suspense) etc. is in progress. Provisions have been made as per RBI norms.

In the opinion of the management, the impact of the above Para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.

1.4 AS 15 - Employees Benefit

1.4.1 Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) issued by the ICAI. However, the additional liability towards re-opening of pension option and amendment in the Gratuity Act, 1972 has been dealt in accordance with the provisions contained in Reserve Bank of India circular no. DBOD.BP.BC.80/21.04.018/2010-11) dated 9th February 2011 on Re-opening of Pension Option to Employees of Public Sector Banks and Enhancement in Gratuity Limit. Accordingly the Bank has amortized Rs. 146.12 Crores on account of Pension and Rs. 26.57 Crores on account of Gratuity. The balance amount carried forward on account of Pension Rs. 146.12 Crores and Rs. 26.57 Crores shall be carried forward to be amortized in next year i.e 2014-15.

1.5 AS 22 – Accounting for Taxes on Income

1.6 Based on the opinion of tax expert, the bank has considered the difference between accounting income and computation of taxable income on valuation of securities as permanent and accordingly, deferred tax liability of Rs 403.80 crore (Previous Year Rs.277.77 crore) has not been considered necessary.

1.7 No provision has been considered necessary in respect of disputed demands of Income Tax, Fringe Benefit Tax and Interest Tax aggregating to Rs 477.79 crore Previous year (Rs.261.07 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

1.8 Pursuant to Reserve Bank of India''s (RBI''s) Circular No. DBOD. No. BP. BC.77/ 21.04.018/2013-

1.9 dated 20.12.2013, Deferred Tax Liability on Special Reserve under section 36(1)(viii) of the Income Tax Act, 1961 has been created. As required by the said RBI Circular, the expenditure, amounting to Rs.22.43 crore due to creation of DTL on Special Reserve as at March 31, 2013, not previously charged to Profit & Loss Account, has now been adjusted directly from the Reserves. Had this amount been charged to Proft & Loss Account in accordance with the generally accepted accounting principles in India, the amount of Profit for the year had been lower for the year by such amount.

1.10 In computing the provision for Income Tax for the current Financial Year, based on the opinion of tax consultant, the bank has claimed the deduction under section 36(1)(vii) of the Income Tax Act 1961 in respect of write off of non-rural advances of Rs. 216.70 crore without adjusting the same with the unexhausted provision outstanding under section 36(1)(viia) of the Income Tax Act 1961 holding that proviso read with Explanation-2 to section 36(1)(vii) is not applicable to the bad debts written off of non-rural advances. This has resulted into increase in Profit after Tax, MAT credit entitlement by Rs.68.10 crore and Deferred Tax Asset by Rs.59.61 crore. The management is hopeful of enforcing its claim of above referred deduction in tax litigation.

---

Mar 31, 2013

1 Balancing of Books and Reconciliation.

1.1 In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding entries in Inter Branch Account (IBR DD) Adjustments(including old out- standing entries) has been done up to 28.02.2013.and reconciliation is in progress.

1.3 Reconciliation of accounts with banks, NOSTRO, Drafts / TT payable, Dividend Warrants paid / payable, Debit Note Receiv- able/ Payable, NEFT/RTGS (Suspense) etc. is in progress. Provisions have been made as per RBI norms.

In the opinion of the management, the impact of the above para 1.1 to 1.3, if any, on the Profit & Loss Account and Balance Sheet is not quantifiable.

---

Mar 31, 2011

1 Balancing of Books and reconciliation.

1.1 In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.

1.2 Initial matching of debit and credit outstanding entries in various heads of accounts included in Inter office Adjustments(including old outstanding entries) has been done up to 28.02.2011 and reconciliation is in progress.

1.3 reconciliation of accounts with banks, NOSTRO, drafts / TT payable, dividend Warrants paid / payable, debit note receivable/ payable, NEFT/RTGS (Suspense) etc. is in progress. provisions have been made as per RBI norms. In the opinion of the management, the impact of the above para 1.1 to 1.3, if any, on the profit & loss Account and Balance Sheet though not quantifiable, will not be material.

1.4 In terms of reserve Bank of India guidelines, segregation of debit and credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2010 and remaining outstanding as on 31.03.2011 has been done which has resulted in either net debit in some heads or net credit in other heads. provision is made in respect of net debit entries outstanding for the period exceeding six months.

1.5 Aggregate net credit position in respect of un- reconciled NOSTRO Accounts relating to the period up to 31st March 1996 amounting to Rs 3.22 crore (previous year Rs 3.20 crore) has been transferred to Blocked Nostro Sundry creditors Account out of which Rs.1.77 crore for period prior to 14.11.1989 is being carried at old book value. un-reconciled credit entries for the period after 1st April 1996 remaining outstanding for more than 3 years amounting to Rs 2.89 crore (previous year Rs. 2.63 crore) have been segregated and kept in Blocked unclaimed Nostro new Account.

2. Revaluation of properties

2.1 Legal formalities are yet to be completed in respect of five Banks properties having original cost of Rs.3.88 crore (previous year 6 properties costing Rs.4.09 crore).

2.2 During the year, Bank has revalued its premises on 31.03.2011 at Rs. 782.33 crore against cost of Rs. 29.29 crore (WDV of Rs. 15.73 crore) on the basis of valuation made by an independent qualified external valuer. consequently, an incremental amount of Rs. 766.60 crore has been debited to Fixed Assets and correspondingly credited to

Revaluation reserve. the appreciation on account of revaluation carried out on 31.03.2008 (present outstanding amounting to Rs. 537.52 crore) has been reversed during the year.

3. Capital

During the current Year, Bank has come out with an Initial public offering of 4 crore equity Shares of Rs.10 /- each at a price of Rs.120/- per share for non-Institutional & QIB bidders & Rs.114/- per share for retail individual bidders & eligible employees. Accordingly, the equity Share capital of the Bank has increased by Rs.40 crore to Rs.223.05 crore and Share premium has been credited by Rs.430.82 crore. the public Issue expenses of Rs.9.18 crore have been adjusted against the Share premium received in accordance with the Accounting policy of the Bank.

4.2.2 Repo / Reverse Repo Transactions (Corporate Debt Securities)

(Rupees in crore) Particulars Minimum Maximum Daily Average Balance as on Outstanding Outstanding Outstanding 31.03.2011

Securities sold under Nil Nil Nil Nil Repos

Securities purchased Nil Nil Nil Nil under Reverse Repos

4.3 detail of bouncing of SGL transfer Forms and Quantum of Penalty paid to reserve Bank of India :

2010-11

number of instances when the SGL transfer NIL form bounced for want of either funds or the securities.

Penalty paid to RBI on account of bouncing of NIL SGl transfer form

4.6 Derivatives

Bank has not entered into any derivative transactions (Forward rate Agreement/ Interest rate Swap/ exchange traded Interest rate Derivatives) during the year 2010-11. Accordingly, qualitative and quantitative disclosures under RBI guidelines with respect to derivative transactions are not required.

4.7 Restructured / Rescheduled / renegotiated– Investments during the year

(Rupees in crore)

Particulars 2010-11 2009-10

Standard assets subjected to NIL NIL restructuring etc.

Sub-standard assets subjected to NIL NIL restructuring etc.

Doubtful assets subjected to NIL NIL restructuring etc.

Total amount of assets subjected to NIL NIL restructuring etc.

4.8 During the year, the Bank shifted securities worth Rs. 1326.71 crore (face value) from "Available for Sale" to "Held till Maturity" and Rs. 365.00 crore (face value) from "Held till Maturity" to "Available for Sale" after providing depreciation of Rs. 71.67 crore to the provisions already held by the Bank.

4.9 the value of sales from HTM category during the year does not exceed 5% of the book value of investments held in HTM category at the beginning of the year.

5.2 DICGC / CGTMSE/ ECGC claim eligible, lodged and re-lodged have been considered as security for provisioning on advances on the basis that such claims are valid / realizable.

5.5 details of non-performing financial assets purchased / sold:

A. details of non-performing financial assets purchased:

(Rupees in crore)

Particulars 2010-11 2009-10

1. (a) No. of accounts Nil Nil purchased during the year

(b) Aggregate outstanding Nil Nil

2. (a) of these, number of Nil Nil accounts restructured during the year

(b) Aggregate outstanding Nil Nil

B. details of non-performing financial assets sold:

(Rupees in crore

Particulars 2010-11 2009-10

1. No. of accounts sold Nil Nil

2. Aggregate outstanding Nil Nil

3. Aggregate consideration Nil Nil received

5.7 The Government of India has notified Agricultural Debt Waiver and Debt relief Scheme – 2008 for grant of Debt Waiver to " Small & Marginal Farmers" and Debt relief to " other farmers" who have availed direct Agricultural loans. Final claims in respect of Agriculture Debt Waiver scheme amounting to Rs.47.72 Crores and the claims amounting to Rs.14.13 Crores in respect of accounts settled under Agricultural Debt relief Scheme till 31.12.2009 have been lodged with reserve Bank of India after due verification by the Central Statutory Auditors of the Bank. the said claim have been received by the Bank.

The claims amounting to Rs. 2.33 crore in respect of accounts settled under Agriculture Debt relief Scheme during the period from 1.1.2010 to 30.6.2010 has been lodged with reserve Bank of India after due verification by the Central Statutory Auditors of the Bank.

8.3 Risk category wise country exposure

The net country-wise funded exposure of the Bank in respect of Foreign exchange transactions in respect of each country is within 1% of the total assets of the Bank. Hence, no provision is required as per RBI guidelines.

8.4 Details of single Borrower limit (SGL), Group Borrower limit (GBl) exceeded by the Bank

During the year 2010-11, the Bank has not exceeded the prudential exposure limits set by RBI to single borrower/ group borrower, except in the following case, which has been approved by the Board:

9.1 Disclosure of Penalties imposed by reserve Bank of India

2010-11 2009-10

A. Penalty imposed by RBI on Bank Nil Nil

B. Strictures or Directions by Nil Nil RBI on the basis of adverse findings

10 Disclosure as per Accounting standard (As)

10.1 there are no material prior period items included in profit & loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.

10.2 Accounting standard 15–employees Benefit

10.2.1 provisions for pension, gratuity, leave encashment and other long term benefits have been made in accordance with the revised Accounting Standard (AS–15) issued by the ICAI. A sum of Rs. 86.63 crore representing one fifth of transitional liability on account of other long term employee benefits i.e. pension Fund and accumulated compensating sick leave has been charged to profit & loss A/c during the year. the balance unrecognized liability amounting to Rs. 86.63 crore will be charged off by 31st March, 2012.

10.2.2 "During the year, the Bank reopened the pension option for such of its employees who had not opted for the pension scheme earlier. As a result of exercise of which by 3821 number of employees has opted the same and the bank has incurred an additional liability of Rs. 811.78 crore as calculated by the Actuary. Further, during the year, the limit of gratuity payable to the employees of the banks was also enhanced to Rs. 10.00 lacs from Rs. 3.5 lacs pursuant to the amendment to the payment of Gratuity Act, 1972. As a result of the such amendment gratuity liability of the Bank has increased by Rs. 139.81 crore.

In terms of the requirements of the Accounting Standard (AS) 15, employee Benefits, the full amount of Rs. 951.59 crore (ie. Rs.811.78 + Rs. 139.81) is required to be charged to the profit and loss Account. However, the reserve Bank of India has issued a circular no. DBOD.Bp.BC.80/21.04.018/2010-11 dated 9th February 2011 on re-opening of pension option to employees of public Sector Banks and enhancement in Gratuity limits – prudential regulatory treatment. In accordance with the provisions of the said Circular, the Bank would amortize the amount of Rs. 951.59 crore over a period of five years. Accordingly, Rs. 190.32 crore (representing one-fifth of Rs. 951.59 crore) has been charged to the profit and loss Account on account of additional liability for re-opening of pension option and amendment of the Gratuity Act, 1972. In terms of the requirements of the aforesaid RBI circular and the unamortized balance amounting to Rs. 761.27 crore (Rs. 951.59 crore – Rs. 190.32 crore) has been deferred which will be amortized over the period of next four years. the aforesaid amount does not include any amount relating to separated/ retired employees. Had such a circular not been issued by the RBI, the profit of the bank would have been lower by Rs. 761.27 crore pursuant to application of the requirements of AS 15 & AS 26"

10.2.3 The employees joining on or after 01.04.2010, are being covered under the new pension Scheme.

10.2.4 The summarized position of post employment benefits are recognized in the profit & loss A/c and Balance Sheet as under:

10.2.5 changes in the present value of the obligation

10.2.13 Basis of Actuarial Assumption considered

Particulars Basis of assumption

Discount rate Discount rate has been determined by reference to market yield on the balance sheet date on Government Bonds of term consistent with estimated term of the obligation

Expected rate The expected return on Plan assets is based on market of return on expectation, at the beginning of the period, for plan assets returns over the entire life of the related obligation.

Rate of The estimates of future salary increases considered in escalation actuarial valuation take account of inflation, in salary seniority, promotion, and other relevant factor, such as supply and demand in employee market.

Attrition rate Attrition rate has been determined by reference to past and expected future experience and includes all type of withdrawals other than death but including those due to disability.

Note: For the purpose of segment reporting in terms of AS-17 of ICAI and as prescribed in RBI guidelines, the business of the Bank has been classified into four segments i.e. a) treasury operations, b) Corporate/ Wholesale Banking, c) retail Banking and d) other Banking operations.

Segmental revenue, results, Assets & liabilities in respect of Corporate / Wholesale and retail Banking segment have been bifurcated on the basis of exposure to these segments.

Assets & liabilities wherever directly related to segments have been accordingly allocated to segments and wherever not directly related have been allocated on the basis of pro-rata segment revenue.

Part B : Geographical segment :

Since the Bank does not have any overseas branch, reporting under Geographic Segment is not applicable.

10.4 Accounting standards 18 – related Party disclosures

Key Managerial personnel:

Mr. G.S. Vedi Chairman and Managing Director (up to 30.06.2010)

Mr. P.K Anand Executive Director

b) Loans granted to Key Managerial Personnel & their relatives:

Particulars As on 31.03.2011 As on 31.03.2010

Loans outstanding NIL NIL

10.6. Accounting standard 22 – Accounting for taxes on Income

10.6.1 the Bank has accounted for Income tax in compliance with Accounting Standard-22 Accounting for taxes on Income issued by ICAI.

10.6.3 Based on the opinion of tax expert, the bank has considered the difference between accounting income and computation of taxable income on valuation of securities as permanent difference and accordingly, deferred tax liability of Rs. 204.25 crore (previous Year Rs. 171.59 crore) has not been considered necessary.

10.6.4 provision for Income tax, Deferred tax and Fringe Benefit tax held by the Bank is considered adequate taking into account the opinion of legal experts and favorable judicial pronouncements.

10.6.5 no provision has been considered necessary in respect of disputed demands of Income tax, Fringe Benefit tax and Interest tax aggregating to Rs. 130.76 crore (previous year Rs 177.22 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.

10.7 Accounting standard 28–Impairment of Assets

Fixed Assets possessed by Bank are treated as Corporate Assets and not Cash Generating units as defined by AS-28. In the opinion of the Management, there is no impairment of the Fixed Assets of material amount as of 31.03.2011, requiring recognition in terms of AS-28 issued by the ICAI. the impairment of other assets have been provided for as per prudential norms prescribed by the reserve Bank of India.

10.8 Accounting standard 29-Provisions, contingent liability and contingent Assets

As per AS-29–provisions, Contingent liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision 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 from the past events but is not recognized because

. It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

. A reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. these are assessed continually 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.

Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

11.2 Movement of Floating Provisions

(Rupees. in crore)

2010-11 2009-10

opening Balance Nil Nil

Additions during the year Nil Nil

Draw down during the year Nil Nil

Closing Balance Nil Nil

11.3 Draw down from reserve

A sum of Rs.0.10 lacs (previous year rs. 3.32 lacs) has been drawn from the General reserve on account of payment to the claimant of old

11.10 Off-Balance sheet SPVs sponsored

(Rupees. in crore)

Name of the SPV sponsored

Domestic Overseas

31.03.2011 31.03.2010 31.03.2011 31.03.2010

Nil Nil Nil Nil

The revised provisioning norms will have prospective effect on the fresh slippage (i.e. Accounts which slip into NPA category on or after 01.01.2011) and further deterioration in the existing NPAs. However, the provisions already made in any existing NPA account will not be reduced/ reversed. the provision for Non performing Assets would have been higher by Rs.29.90 crores,had the previous norms followed by the bank would have been applied. 13. the figures of the previous year have been re- grouped / re-arranged wherever necessary except where information was not available.