Ÿ ½ ˆÅ œ III œïˆå (31 Ÿ Ä 2016) Consolidated Pillar III Disclosures (March 31, 2016)

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1 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures 1. œï ½ ˆÅ ½ ¾ œ» ú œ Äœ Scope of Application and Capital Adequacy ˆÅ ú ûå-1 À œï ½ ˆÅ ½ Table DF-1: Scope of Application ½ ˆÅ ¾ Ÿ ˆÅ Ÿ ½ˆÅ / Accounting and regulatory î ú œ ½ ôš ˆ½Å Ó½ ½ ÿˆå Ê, ½ Ê, ¾ ¾ ú Ÿ Ê ˆÅ ½ ˆÅ ½ õ ½ íº œ Æ - -œ Æ š œ ½ ˆÅ Ÿ ˆÅ ( ) 21, Ÿ ½ ˆÅ î ú µ ˆ½Å º œ ú í ˆÅ Ê ˆÅ Ÿ ½ˆÅ ˆÅ í¾. í ½Š ú Ê Ÿ Ê ½ Ê ˆÅ ½ -23, `` Ÿ ½ ˆÅ î ú µ Ê Ÿ Ê í ½Š ú Ê Ÿ Ê ½ ˆ½Å ½ ˆÅ '' ˆ½Å º ƒ Æ ú œïµ ú ½ Ö ˆÅ í¾. Ÿ ½ ˆÅ ½ˆÅœ»µ Ä Ÿ ˆÅ œ ½ ôš ˆ½Å Ó½ ½ Ÿ ½ ˆÅ ÿˆå ˆ½Å í Ÿ»í ˆ Åœ ½ úÿ ˆÅ ½ ¾ ˆÅ ú Š ¾ - î ú Š š Ê Ÿ Ê Ÿ íÿ, ˆÅ ½ Ž ½ õˆå ÿˆå ˆ½Å µ š ú ž ú Ÿ»í Ÿ íÿ. ½ ˆÅ ¾ Ÿ ˆÅ Ó½ Ê ˆ½Å Ÿ ½ ˆÅ ˆ½Å ÿˆå ˆÅú í ˆÅ ¾ í ½Š ú Ê ˆ½Å µ Ÿ º íÿ À For the purpose of financial reporting, the Bank consolidates its subsidiaries in accordance with Accounting Standard (AS) 21, Consolidated Financial Statements, on a line-by-line basis by adding together like items of assets, liabilities, income and expenditure. Investments in associates are accounted for by the equity method in accordance with AS-23, Accounting for Investments in Associates in Consolidated Financial Statements. For the purpose of consolidated prudential regulatory reporting, the consolidated Bank includes all group entities under its control, except group companies which are engaged in insurance business and any non-financial activities. Details of subsidiaries and associates of the Bank along with the status for accounting and regulatory purposes are given below: ÿ ˆ ÅŠ Ÿ»í ˆ½Å ú«ä ÿˆå ˆÅ Ÿ œ ³Åœ ½ Š» í ½ ú í¾à ƒä ú ú ƒä ÿˆå. Name of the head of the banking group to which the framework applies: IDBI Bank Ltd. Annual Report

2 î ú μ Financial Statements (i) Š ºµ Ÿ ˆÅ œïˆå / Qualitative Disclosures ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation ƒä ú ú ƒä ˆ¾Å œ Ÿ ˆ½ÄÅ Ä ½{./ ž IDBI Capital Market Services Ltd/India ƒä ú ú ƒä ½ Ÿ ¾ ½ Ÿ ½. / ž IDBI Asset Management Ltd/India Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) í  / Yes í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Š» íú / NA Š» íú / NA Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of Š» íú / NA Š» íú / NA 2 Annual Report

3 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation ƒä ú ú ƒä Ÿ ûå ï ú ˆ Åœ ú./ ž IDBI MF Trustee Company Ltd/ India Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA ƒä ú ú ƒä Ÿ ûå ï ú ˆ Åœ ú. Š ¾ - î ú í¾. ƒ ½ Ÿ»í ˆÅú Ÿ ½ ˆÅ Ÿ ˆÅ œ» ú Ÿ Ê ½ Š í¾. IDBI MF Trustee Company Ltd is a non- Financial Entity. Deducted from Consolidated Regulatory Capital of the group. Annual Report

4 î ú μ Financial Statements ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation ƒä ú ú ƒä ƒ ½ˆÅ./ ž IDBI Intech Ltd/ India ƒä ú ú ƒä ï ú œ Ä ½{./ ž IDBI Trusteeship Services Ltd/ India Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements -21, Ÿ ½ ˆÅ î ú µ ˆ½Å º Ÿ ½ ˆÅ Consolidated in accordance with AS-21, Consolidated Financial Statements Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA ƒä ú ú ƒä ƒ ½ˆÅ. Š ¾ - î ú í¾. ƒ ½ Ÿ»í ˆÅú Ÿ ½ ˆÅ Ÿ ˆÅ œ» ú Ÿ Ê ½ Š í¾. IDBI Intech Ltd is a non- Financial Entity. Deducted from Consolidated Regulatory Capital of the group. íú / No Š» íú / NA Š» íú / NA ƒä ú ú ƒä ï ú œ Š ¾ - î ú í¾. ƒ ½ Ÿ»í ˆÅú Ÿ ½ ˆÅ Ÿ ˆÅ œ» ú Ÿ Ê ½ Š í¾. IDBI Trusteeship is a non- Financial Entity. Deducted from Consolidated Regulatory Capital of the group. 4 Annual Report

5 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation Á ½ ½ˆÅ ˆ Å ½ Ä Ÿ ƒ Ÿ ½ Biotech Consortium India Limited Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -23, Ÿ ½ ˆÅ î ú µ Ê Ÿ Ê í ½Š ú Ê Ÿ Ê ½ Ê ˆ½Å ½ ˆÅ ˆ½Å º ƒ Æ ú œïµ ú ½ Ö Accounted for by the equity method in accordance with AS-23, Accounting for Investments in Associates in Consolidated Financial Statements. Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA œ» ú œ Äœ œï ½ Ê ˆ½Å ½ Ÿ ž Risk weighted for capital adequacy purposes Annual Report

6 î ú μ Financial Statements ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation ½ Æ ½ ú œ Á { ú Ÿ ½ National Securities Depository Limited Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -23, Ÿ ½ ˆÅ î ú µ Ê Ÿ Ê í ½Š ú Ê Ÿ Ê ½ Ê ˆ½Å ½ ˆÅ ˆ½Å º ƒ Æ ú œïµ ú ½ Ö Accounted for by the equity method in accordance with AS-23, Accounting for Investments in Associates in Consolidated Financial Statements. Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA œ» ú œ Äœ œï ½ Ê ˆ½Å ½ Ÿ ž Risk weighted for capital adequacy purposes 6 Annual Report

7 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation ú ƒä-š ½ô ƒ üå ïæ Ÿ ½ ( ƒä ú ƒä ) NSDL E-Governance Infrastructure Limited (NSEGIL) Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -23, Ÿ ½ ˆÅ î ú µ Ê Ÿ Ê í ½Š ú Ê Ÿ Ê ½ Ê ˆ½Å ½ ˆÅ ˆ½Å º ƒ Æ ú œïµ ú ½ Ö Accounted for by the equity method in accordance with AS-23, Accounting for Investments in Associates in Consolidated Financial Statements. Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA œ» ú œ Äœ œï ½ Ê ˆ½Å ½ Ÿ ž Risk weighted for capital adequacy purposes Annual Report

8 î ú μ Financial Statements ˆÅ. Ÿ ½ˆÅ ˆ½Å Ÿ Ÿ»í Ê ˆÅú» ú ˆÅ Ÿ / Š Ÿ ½ a. List of group entities considered for Name of the entity / Country of incorporation œ» ½Äî ˆÅ î Š Ÿ Ÿ ½ North Eastern Development Finance Corporation Limited Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under accounting scope of (yes/no) í  / Yes Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ ÊÊ Explain the method of -23, Ÿ ½ ˆÅ î ú µ Ê Ÿ Ê í ½Š ú Ê Ÿ Ê ½ Ê ˆ½Å ½ ˆÅ ˆ½Å º ƒ Æ ú œïµ ú ½ Ö Accounted for by the equity method in accordance with AS-23, Accounting for Investments in Associates in Consolidated Financial Statements. Æ ˆÅ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ ˆ½Å Š Ä Ÿ ˆÅ Š í¾ (í Â/ íú ) Whether the entity is included under regulatory scope of (yes/no) Ÿ ½ˆÅ ˆÅú œ Ö œ «ˆÅ Ê Explain the method of Ÿ ½ˆÅ ˆÅú œ Ö Ÿ Ê ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons for difference in the method of Ÿ ½ˆÅ ˆ½Å ˆ½Å ˆÅ íú ½ Ÿ Ê Ÿ ½ ˆÅ ˆÅ Š í¾ ½ ˆ½Å ˆÅ µ œ «ˆÅ Ê Explain the reasons if consolidated under only one of the scopes of íú / No Š» íú / NA Š» íú / NA œ» ú œ Äœ œï ½ Ê ˆ½Å ½ Ÿ ž Risk weighted for capital adequacy purposes * - Š» íú / * NA Not Applicable. Ÿ ½ˆÅ ˆ½Å ½ ˆÅ Ÿ ˆÅ, ½ Ê íú ½ Ê ˆ½Å Ÿ ½ˆÅ Ÿ Ê Ÿ ˆÅú Š ƒä Ÿ»í Ê ˆÅú» úà b. List of group entities not considered for both under the accounting and regulatory scope of Ÿ»í ˆÅú ½ ú ˆÅ ½ƒÄ íú í¾ ½ Ÿ ½ˆÅ ˆ½Å ½ ˆÅ Ÿ ˆÅ, ½ Ê íú ½ Ê ˆ½Å Ÿ ½ˆÅ Ÿ Ê Ÿ ˆÅ Š í ½. There are no group entities that are not considered for under both the accounting scope of and regulatory scope of. 8 Annual Report

9 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures (ii) Ÿ ˆÅ œïˆå / Quantitative Disclosures: Š. Ÿ ˆÅ Ÿ ½ˆÅ Ÿ Ê Ÿ ˆÅú Š ƒä Ÿ»í Ê ˆÅú» ú c. List of group entities considered for regulatory : ˆÅ Ÿ / Š Ÿ ½ ( ¾ ˆÅ œ (i) ˆÅ. Ÿ Ê Ä Š í¾.) Name of the entity / country of incorporation (as indicated in (i)a. above) ƒä ú ú ƒä ˆ¾Å œ Ÿ ˆ½ÄÅ Ä ½{./ ž IDBI Capital Market Services Ltd/ India ƒä ú ú ƒä ½ Ÿ ¾ ½ Ÿ Ê./ ž IDBI Asset Management Ltd/India úÿ ˆ Åœ ú ˆÅ Ÿ / Š Ÿ ½ Name of the insurance entities / country of incorporation ˆÅ Ÿ º ˆÅ ĈŠœ Principle activity of the entity ˆºÅ º œ ƒ Æ ú ( š ˆÅ ˆ½Å ½ ˆÅ º œ Ÿ Ê Ä º ) Total balance sheet equity (as stated in the accounting balance sheet of the legal entity) ( ` Ÿ Ÿ Ê / Amt. in ` Million) ˆºÅ º œ ( š ˆÅ ˆ½Å ½ ˆÅ º œ Ÿ Ê Ä º ) Total balance sheet assets (as stated in the accounting balance sheet of the legal entity) ˆÅ ½ Ÿ Ê ÁˆÅ Ï ½ ˆ ÅŠ, î ú œ Ê ˆÅ µ, Ÿ ½ô ÿ ˆ ÅŠ, ˆÅ Á œ ½ ½ íˆå ú ½ Ÿ íÿ. Business includes stock broking, distribution of financial products, merchant banking, corporate advisory services, etc. `1,281 `3,323 Ÿ ûöå ½ Ê ˆ½Å í º ƒä Š ƒä š Ê ˆ½Å ½ Ê ˆÅ œï š ˆÅ í¾. Manages investments of funds raised through MF schemes. `2,000 `1,057 ( ) ž ú í ˆÅ Ê Ÿ Ê œ» úš ˆÅ Ÿ Ê ˆÅú ˆÅ, ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ Ÿ Ê Ÿ íú ˆÅ Š í¾, Ä Ã ½ Š í ½À d. The aggregate amount of capital deficiencies in all subsidiaries which are not included in the regulatory scope of i.e. that are deducted: ˆÅ ú í ˆÅ Ÿ Ê ½ ú ˆÅ ½ƒÄ œ» úš ˆÅŸ ú íú í¾ ½ Ÿ ½ˆÅ ˆ½Å Ÿ ˆÅ ½ Ÿ Ê Ÿ íú ˆÅ Š í¾. There is no capital deficiency in any subsidiary, which is not included in the regulatory scope of. (Œ) úÿ Ê Ÿ Ê ÿˆå ˆ½Å í ˆÅú ˆÅ ( Ä Ã» íú Ÿ» ) ½ ˆÅ ½ Ÿ -š í¾à e. The aggregate amounts (e.g. current book value) of the bank s total interests in insurance entities, which are risk-weighted: ( ` Ÿ Ÿ Ê / Amt. in ` Million) ˆÅ Ÿ» ˆÅ ĈŠœ Principle activity Of the entity ˆºÅ º œ ƒ Æ ú ( š ˆÅ ˆ½Å ½ ˆÅ º œ Ÿ Ê Ä º ) Total balance sheet equity (as stated in the accounting balance sheet of the legal entity) ˆºÅ ƒ Æ ú Ÿ Ê ÿˆå ˆÅú š ˆÅ % / ½ Š š ˆÅ ˆÅ ºœ % of bank s holding in the total equity / proportion of voting power ½ Ÿ ž œ Ö œï ½Š ˆÅ ½ Ÿ œ»µ Ä ˆÅ ¾ ú œ Ö œï ½Š ˆÅ ½ ˆÅ Ÿ ˆÅ œ» ú œ Ÿ Ÿ ˆÅ œïž Quantitative impact on Regulatory capital of using risk weighting method versus using the full deduction method Annual Report

10 î ú μ Financial Statements ƒä ú ú ƒä û½å ƒûå ƒ ½ Ê ˆ Åœ ú./ ž IDBI Federal Life Insurance Company Ltd. / India ú úÿ ˆÅ ½ Life Insurance business `7, % `2, ( ) ÿ ˆ ÅŠ Ÿ»í Ÿ Ê š Ê ˆ½Å µ Ÿ ˆÅ œ» ú œ ˆÅ ú œïˆå ˆ½Å œï š ²ÅˆÅ À f. Any restrictions or impediments on transfer of funds or regulatory capital within the banking group: ÿ ˆ ÅŠ Ÿ»í Ÿ Ê š Ê ˆ½Å µ Ÿ ˆÅ œ» ú œ ˆÅ ú œïˆå ˆÅ ˆÅ ½ƒÄ œï š ²ÅˆÅ íú í¾. There are no restrictions or impediments on transfer of funds or regulatory capital within the banking group. ˆÅ ú ûå -2 À œ» ú œ Äœ / Table DF-2: Capital Adequacy ÿˆå ž í ½ Ÿ Ê ˆ½Å œï ˆºÅ ˆ½Å ³Åœ Ÿ Ê œ ½ š ˆÅ Ê, Ÿ ˆÅ Ä Ê ¾ ½ Ê ˆ½Å í Ê ˆÅ ½ º ½ ˆ½Å œ» ú í¾ ¾ ˆÅ œï š ˆÅ í¾. ÿˆå ˆÅú ž ú œ» ú ˆÅ ˆÅ ½ ƒ ˆÅú ˆÅ ½ µ ú ˆ½Å º ƒ ˆÅú «ÄˆÅ ˆÅ ½ ½ ˆ½Å ˆÅ ž Š ˆ½Å ³Åœ Ÿ Ê œï º ˆÅ í¾. ÿˆå ˆÅú ž ú œ» ú ˆÅ Ê ˆÅú Š µ ˆÅ ½ Ÿ Ê, Ÿ, ˆÅ ú ¾ ½ ˆÅƒÄ ˆÅ ˆÅ Ê œ ˆÅ ½ ˆ½Å ˆ½Å ²Å ˆ½Å ½ Ÿ Ê ˆÅú ú í¾. ƒ ˆ½Å º œ, œ ½ ÄûÅ ½ ½ Ÿ ª, ¼ Ö š ž º ƒä ¾ ½ ¼ Ÿ Ê œ ž ú ˆÅ í¾. íú úˆå ºŸ Ä ½ ˆ½Å µ ¾ ½ Š Ÿ ¾ ïæ œ ž ú ˆÅ í¾. The Bank maintains and manages capital as a cushion against the risk of probable losses and to protect its stakeholders, depositors and creditors. The future capital requirement of the Bank is projected as a part of its annual business plan, in accordance with its business strategy. To calculate the future capital requirements of the Bank a view on the market behavior is taken after considering various factors such as interest rate, exchange rate and liquidity positions. In addition, broad parameters like balance sheet composition, portfolio mix, growth rate and relevant discounting are also considered. Further, the loan composition and rating matrix is factored in to reflect precision in projections. ˆÅ 1 œï¾ 2013 ½ œïž ú ½ III ½Ä Ê ˆ½Å º ÿˆå œ ½ œ» ú ºœ Ê ˆÅú Š µ { Ä ÿˆå ˆ½Å Ÿ ¾» ½Ä Ê ˆ½Å º ˆÅ í í¾. In line with the Basel III guidelines, which are effective since April 01, 2013, the Bank has been calculating its capital ratios as per the extant RBI guidelines. ½ III Ÿ Ê ˆÅ Ÿ º š ú I œ» ú ˆÅú Š ºµ î ¾ Ÿ œ í¾ ¾ ÿˆå ˆÅú ÄŸ Ÿ Ê œ š œ» ú ˆÅú Ÿ ƒ Ÿ ˆÅ ˆÅ Ê ˆÅ ½ œ» ˆÅ ú í¾. ÄŸ Ÿ Ê ÿˆå ½Ä Ê š Ä ˆÅú Š ƒä» Ÿ ˆÅ Ê ½ ½í ˆÅ Ä- «œ ˆÅ í í¾. 31 Ÿ Ä 2016 ˆÅ ½ ÿˆå ˆÅú ˆÅ ú ˆÅú Ÿ º í¾à The main focus of Basel III norms is on the quality and quantity of Tier I capital and these regulatory requirements are currently met with the quantum of capital available with the Bank. At present the Bank is operating well above the minimum requirements as stipulated by the guidelines. The Standalone CRAR position of the Bank as on March 31, 2016, is as below: ú / CRAR ½ III / Basel III úƒä ú 1 / CET % ú 1 / Tier % ú 2/ Tier % ˆºÅ ( ú 1 + ú 2)/ Total( Tier 1 + Tier 2) % 10 Annual Report

11 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ÄŸ ž ú ½ Ÿ Ê ˆÅú œ í, Ÿ - š Ä µ ¾ ºŸ Š ½ ˆ½Å ÿˆå ½ ½ Ä ºŸ ½ ˆÅ œ» ú œ Äœ ˆÅ œï ÇÅ ( ƒä ú œ ú) ú Š» ˆÅú í¾. ƒ ú Ÿ Ê ½ ½ ½ Ÿ Ê œ ˆÅ Ä ƒä ˆÅ ½ ˆÅú œï ÇÅ, ÿˆå ˆÅú î ú œ œ õ ½ ½ ˆ½Å œïž ˆ½Å ˆÅ ˆ½Å µ ¾» úˆå µ ˆ½Å œ ºÆ µ ú ¾ ˆÅ ¾ ƒ œïˆå œ» ú ˆÅ œ Äœ Ÿ í¾. í º ˆÅ ½ ˆ½Å š ˆÅ ³Åœ ½ ƒä ú œ ú ž ˆÅ í¾ ˆÅ ÿˆå ˆ½Å œ œ ú ˆÅ ½ ú ˆÅ Ê ˆ½Å º³Åœ Ÿ ˆÅ ˆÅ Ê ˆÅ ½ œ» ˆÅ ½ ˆ½Å œ Äœ œ» ú í¾. ÿˆå ˆÅú Ÿ ½ ˆÅ œ ú µ ú ž ú í¾ Ÿ Ê Ÿ ˆÅ  Ÿ íÿ ½ ÿˆå ˆÅú ½ Ÿ ³Åœ ½ œ» ú ˆÅú œ ½ ½ Š ž ú ˆ Å º ž ú œ ˆ½Å œïž œ Ä «œï ˆÅ ½ íÿ. œ ú µ ž Ÿ ³Åœ ½ ˆÅ ½ íÿ. í ½ Ä ºŸ ½ œ ú µ ½ œ š íÿ Ÿ Ê œ ú µ œ { Ä ÿˆå ˆ½Å ˆÅ ˆ½Å ½Ä Ê ˆÅ ½ Ÿ ˆÅ Š í¾. ÿˆå ˆÅú ž œï ¾ œ» ú œ Äœ œ œ ˆ½Å œïž Ê ˆÅ ½«µ ˆÅ í¾. ƒ ž ˆ½Å œ µ Ÿ œ ºÆ ½ Ä ú Ÿ ( Ê) ˆÅ ½» ˆÅ ½ íÿ. For identification, quantification and estimation of current and future risks, the Bank has a Board approved Internal Capital Adequacy Assessment Process (ICAAP) policy. The policy covers the process for addressing such risks, measuring their impact on the financial position of the Bank and formulating appropriate strategies for their containment & mitigation; thereby maintaining an adequate level of capital. The ICAAP exercise is conducted periodically to determine that the Bank has adequate capital to meet regulatory requirements in line with its business requirements. The Bank also has a comprehensive stress test policy covering regulatory stress conditions to give an insight into the impact of severe but plausible stress scenarios on the Bank's risk profile and capital position. The stress test exercises are carried out regularly based on the board approved stress testing framework incorporating RBI guidelines on Stress testing dated December 02, The impact of stress scenarios on the profitability and capital adequacy of the Bank are analyzed. The result of the exercise is reported to the suitable board level committee(s). ˆÅ 31 Ÿ Ä 2016 ˆÅ ½ Ÿ ½ ˆÅ ú Ÿ º í¾à The Consolidated CRAR position, as on March 31, 2016 is as follows: ( ` Ÿ Ÿ Ê / Amt. in ` Million) œ» ú ˆÅ / Capital requirement µ ½ Ÿ œ» ú : / Credit Risk Capital: Ÿ ˆÅúˆ¼Å «ˆÅ ½µ ˆ½Å š ú œ ½ ÄûÅ ½ ½ / Portfolios subject to standardized approach 246, œï ž» ˆÅ µ / Securitization 1, ½ Ÿ œ» ú / Market Risk Capital: Ÿ ˆÅúˆ¼Å š «ˆÅ ½µ /Standardized duration approach 17, ½ Ÿ / Interest Rate Risk 8, ½ ú Ÿ ºÍ Ÿ ½ Ÿ ( µ Ä í ) / Foreign exchange Risk (including Gold) ƒ Æ ú ½ Ÿ / Equity Risk 8, œ ½ Ÿ œ» ú / Operational Risk Capital: Ÿ» ˆ½Å ˆÅ «ˆÅ ½µ / Basic indicator approach 13, ˆºÅ œ ½» Ÿ œ» ú / Total Minimum Capital required 278, (œï / Percentage) Ÿ ƒ Æ ú ú 1, ú 1 ˆºÅ œ» ú ˆÅ ºœ À Common Equity Tier 1, Tier 1 and Total capital ratio: úƒä ú 1 / CET % ú 1 / Tier % ú 2 / Tier % ˆºÅ ( ú 1 + ú 2) / Total( Tier 1 + Tier 2) % Annual Report

12 î ú μ Financial Statements 2. ½ Ÿ Æ œ ½ Ÿ» ˆÅ / Risk exposure and assessment ˆÅ ú ûå-3à µ ½ Ÿ À ž ú ÿˆå Ê ˆ½Å Ÿ œïˆå Table DF-3: Credit Risk: General Disclosures for All Banks: µ ½ Ÿ ˆÅ œïˆå ˆÅ í ½ Ÿ í¾ ½ œï œ ú î ú ˆÅú ½ô ˆ½Å º ˆÅú ½ Ê ˆ½Å Ê ˆÅ ½ œ» ˆÅ ½ ˆÅú»ˆÅ ˆ½Å ˆÅ µ œ í ½ ˆÅ í¾. ½ ú ˆÅ ú ž ú ˆÅ ÿˆå ˆ½Å î ú ˆÅ Ä- «œ œ œï ˆ»Å œïž œ õ í¾. ÿˆå ˆÅ ½ œ ½ š, ½ Š Ê ˆ½Å { µ ½ Ÿ ˆÅ Ÿ ˆÅ œ õ í¾. ÿˆå ˆ½Å Ÿ ½ ½ µ ½ Ÿ Ê ˆ½Å œïž ˆÅ Ÿ ˆÅ ½ ˆ½Å ˆÅ º õ ½ Ÿ ž Š í¾. í ½ Ÿ Ê ˆ½Å Ÿ ¾ œï š ˆ½Å ½ Ÿ Ê ž» Ÿ ˆÅ Ê ˆÅú œ «œ ž «ˆ½Å íú ŸŸ ½ Ê ˆÅ š Ä µ œï º ˆÅ í¾. œ ½ ôš š» œï š œïµ ú ( Ÿ ƒä ) ˆ½Å ½ Ÿ Ê œ ºÇÅŸ ˆÅ ½ œ «³Åœ ½ œ ž «ˆÅ ½ íº { ŸŸ ½ ú š Ä µ ˆÅ ½ ¾ Ÿ» Š í¾. Credit risk is the risk of loss that may occur due to default of the counterparty or from its failure to meet its obligations as per terms of the financial contract. Any such event will have an adverse effect on the financial performance of the Bank. The Bank faces credit risk through its lending, investment and contractual arrangements. To counter the effect of credit risks faced by the Bank, a robust risk governance framework has been put in place. The framework provides a clear definition of roles as well as allocation of responsibilities with regard to ownership and management of risks. Allocation of responsibilities is further substantiated by defining clear hierarchy with respect to reporting relationships and Management Information System (MIS) mechanism. ÿˆå ˆÅú µ ½ Ÿ œï š ú / Bank s Credit risk management policies ÿˆå ½ ˆÅ Ä š Ê ¾ œï ÇÅ Ÿ ˆÅ œ ½ Ê ˆÅ ½ œ «³Åœ ½ ³Å œ ˆÅ ½ ˆ½Å Ó½ ½ ž ½ Ÿ œï š ú, œï ÇÅ Ÿ ˆÅ ¾ ˆÅ Ä ˆÅ íÿ ½ ž ú š ˆÅ ½ ú Ÿ»í Ê ˆ½Å š ˆÅ ú íÿ. ÿˆå ˆÅú µ ú µ Æ œ ½ Ê ˆ½Å œ Ÿ œ, Š ú ¾ µ ˆÅ Š ºµ î œ»µ Ä µ œ ½ ÄûÅ ½ ½ ½ ½ ½ ˆ½Å Ó½ ˆ½Å í¾. í ú ˆ Åœ Ê, ˆÅ ½ Ÿ»í Ê, Ô ½Š Ê, ž ¾Š ½ ˆÅ ½ Ê ½Æ Ê Ÿ Ê œ ½ ÄûÅ ½ ½ ˆ½Å ¾ ½» Ÿ ˆÅ ˆÅ Ê œ ž ú š ½ ú í¾. í ú Ÿ ¾» ˆÅ ½ œ Ÿ ˆÅ ½ô ˆ½Å ½ˆÅ Ÿ Ê ˆÅ Á œ ½ ½ ŠÏ íˆå Ê ˆÅ ½ š ½ ½ ˆ½Å œï ÿˆå ˆÅ «ˆÅ ½µ œï Ä ˆÅ ú í¾. The Bank has defined and implemented various risk management policies, procedures and standards with an objective to clearly articulate processes and procedural requirements that are binding on all concerned Business groups. The Credit Policy of the Bank is guided by the objective to build, sustain and maintain a high quality credit portfolio by measurement, monitoring and control of the credit exposures. The policy also addresses more granular factors such as diversification of the portfolio across companies, business groups, industries, geographies and sectors. The policy reflects the Bank s approach towards lending to corporate clients in light of prevailing business environment and regulatory stipulations. ÿˆå ˆÅú µ ú ˆ½Å Š Ä ÿˆå ˆ½Å º œ ½ ÄûÅ ½ ½ ˆÅ ½ õ ½ íê ½ ½ ˆ½Å Ÿ ˆÅ, œï ÇÅ œ Ö Ä«ˆÅú Š ú íÿ. í ú ž º œ Ê ˆ½Å ¾ Æ ˆÅ œ œï ½ŠÏ Ÿ ½Ä Ê ˆ½Å œï œ ˆÅ ½ ž ú ˆÅ ú í¾. µ ú ˆÅú œ ½ ( Ÿ ˆÅ ) ˆÅú Š ˆÅú œï Ÿ Ê ˆ½Å œï ºî Ÿ Ê «ÄˆÅ Ÿ ú ˆÅú ú í¾ Ÿ Ê ÿˆå œ ˆÅ í¾ µ ú ˆÅ, ½ Ÿ í ú Ÿ Ê œ Ä ˆÅ í¾. í ú ÿˆå ˆ½Å ½ ˆÅ Ÿ ºŸ ½ í¾. The Bank s Credit Policy also details the standards, processes and systems for growing and maintaining its Retail Assets portfolio. The policy also guides the formulation of Individual Product Program Guidelines for various retail products. The Credit policy is reviewed annually in anticipation of or in response to the dynamics of the environment (regulatory & market) in which the Bank operates or to change in strategic direction, risk tolerance, etc. The policy is approved by the Board of Directors of the Bank. µ ½ Ÿ ˆ½Å ˆÊÅ͵ ½ ½ ˆ½Å, ÿˆå ½ ˆÅ š ˆÅ Ä, Ÿ»í Ê ½ š Æ œ ½ Ÿ Ê, ½ ú ½ ˆ½Å Æ œ ½ Ê, Ô ½Š Æ œ ½ ¾ œï ž» Æ œ ½ ˆ½Å ½ Ÿ Ê ˆÅ ½Ä Š» ˆÅ íÿ. ½ ˆÅ ½ œï œ ˆÅ ½ ˆ½Å ¾ ½ ŠÏ íˆå Ê ˆÅú œï ž ˆÅ ˆ½Å ž ú Ÿ Ä«ˆÅ Š íÿ. ÿˆå Š ¾ - ÿ ˆ ÅŠ î ú ˆ Åœ Ê, µ ˆÅ ½, œ» ú º ú ½ í ˆÅ ú ž ú Ô ½Š ˆÅ ½ µ ½ ½ ˆ½Å š Ÿ Ê { Ä ÿˆå, ½ ú Ÿ ˆÅ ˆÅ Ê ú ˆÅ Š ½ Ê ˆÅ œ ˆÅ í¾. ƒ ˆ½Å, ½ˆÅœ»µ Ä Ê ˆ½Å š œ ˆºÅŽ «Ê ˆ½Å ˆÅ úÿ ž ú š Ä ˆÅú Š ú íÿ. 12 Annual Report

13 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures To control concentration of credit risk, the Bank has put in place internal guidelines on exposure norms in respect of single borrower, groups, exposure to sensitive sector, industry exposure, unsecured exposures, etc. Norms have also been detailed for soliciting new business as well as for preliminary scrutiny of new clients. The Bank abides by the directives issued by RBI, SEBI and other regulatory bodies in respect of lending to any industry including NBFCs, Commercial Real Estate, Capital Markets and Infrastructure. In addition, internal limits have been prescribed for certain specific segments based on prudential considerations. ÿˆå ˆ½Å œ ½ ú Ä«ïú ÿˆå Ê Ÿ Ê Æ œ ½ ½ š œï œ ú ½ Ÿ œ ¾ ž ½ Ê Ÿ Ê µ - ½ ½ š ½ ½ Ÿ œï š œ «ú íÿ. The Bank has a specific policy on Counter Party Credit Risk pertaining to exposure on domestic & international banks and a policy on Country Risk Management pertaining to exposure on various countries. µ ½ Ÿ Ÿ» ˆÅ œï ÇÅ / Credit risk assessment process: µ œï Ê ˆÅú Ÿ» ú ½ ˆÅ Ÿ ºŸ ½ œï ½ ˆ½Å º ˆÅú ú í¾. ÿˆå œï ºÆ µ ½ Ÿ ½ Š µ œï Ê ˆÅ Ÿ» ˆÅ ˆÅ ½ ˆÅ ˆÅ Ÿ º š í¾. The sanction of credit proposals is in accordance with the delegation structure approved by the Board of Directors. Credit risk rating, used by the Bank is one of the key tools for assessing its credit proposals. ÿˆå ½ ½ œ ½ Ê ˆ½Å º³Åœ ˆÅ ½ Š Ÿ Á ½ Ÿ Ÿ» ˆÅ Ÿ Á û ( ¾Ÿ ) ˆÅ ½ ˆÅ Ä ˆÅ í¾. í ½ Š ˆ½Å ˆÅ Ÿ ú Ÿ Á û Ä Ã š š ú º š í¾. š ˆÅ Ä ˆÅú ª½µ ú ¾ ½«ˆ½Å º ž ½ Š Ÿ Á Ê ˆ½Å î ú, ˆÅ ½, œï š Ô ½Š ¾ ½ ž ½ Ÿ Ÿ Ê ˆÅ ƒ ½Ÿ ˆÅ í¾. œï ˆÅú Š ºµ î Ÿ Ÿ ˆÅ ˆÅ ú ˆÅ µ ½ Ÿ ½«ˆÅ Ÿ» ˆÅ ˆÅ í¾ ˆÅ š ˆÅ Ä ˆÅú µ ½ Š ˆÅ œ Š ˆ½Å. The Bank has implemented internal rating model Risk Assessment Module (RAM), a two - dimensional module for rating viz.; obligor and facility, in line with Basel requirements. Different risk parameters such as financial, business, management and industry are used for different rating models in accordance with the category and characteristics of the borrower. Qualitative and quantitative information of the proposal is evaluated by the credit risk analyst to ascertain the credit rating of the borrower. ˆÅ œï ž ˆÅ ½ š ˆÅ ˆ½Å œï Ê ˆÅú ½ Š ÿˆå ˆ½Å µ ½ Ÿ Ÿ»í ˆ½Å Íúˆ¼Å ³Åœ Ÿ Ê ˆÅú ú í¾. ˆÅ µ ½ Š ˆÅú ž œ º «ˆ½Å œ ºÆ Ÿ š «ˆÅ ½µ œ í¾. Ÿ Ê Ÿ Ê ÿˆå ˆ½Å «š ˆÅ ú í ½ íÿ. º œ Ê ˆ½Å µ ˆÅ ºŸ ½ œ ¼ ˆÅ º œ ½Ä ½ í ½ í¾ œï ½ˆÅ œï ˆÅ Ÿ» ˆÅ ˆÅ ½ Š Ÿ Á ˆ½Å ˆÅ í¾. Proposals over a certain threshold amount are rated centrally by rating analysts of the Bank. Suitable committee based approach is followed to validate the internal credit ratings. The committees comprise of senior officials of the Bank. Approval of credit for retail products are guided by the individual retail product paper guidelines and each proposal is appraised through a scoring model. œ ºÄÆ ˆ½Å, ˆÅ µ ½ -œ ú œï ÇÅ ž ú Š» ˆÅú Š ƒä í¾ ˆÅ Ó½ µ Ê ˆÅú Ÿ ú ˆÅ í¾ ¾ í µ Ÿ» ˆÅ, Š ú» úˆå µ œï ÇÅ ˆÅú œïž ˆÅ ˆÅ Ÿ» ˆÅ ˆÅ ½ ˆ½Å ˆÅ œïž ú š í¾. In addition to the above, a Credit audit process is in place, which aims at reviewing the loans and acts as an effective tool to evaluate the efficacy of credit assessment, monitoring and mitigation process. µ œ ½ ÄûÅ ½ ½ Š ú / Credit Portfolio Monitoring: ÿˆå ˆ½Å µ œ ½ ÄûÅ ½ ½ ˆÅú ˆÅ ¾ Ÿ ˆÅ úÿ Ê ˆÅ ºœ º ˆÅ ½ ˆ½Å ¾ º ˆÊÅ͵ ( š ˆÅ Ä Ô ½Š ) ½ ½ ˆ½Å Ÿ š œ Š ú ˆÅú ú í¾. ƒ ½ œï š ˆÅ ½ š ˆÅ š œ» ˆÅ í¾. The credit portfolio of the Bank is monitored on regular based to ensure compliance with internal and regulatory limits as well as to avoid undue concentration (borrower or Industry). The same is periodically reported to the senior management. ƒ ˆ½Å, œ ½ ÄûÅ ½ ½ ˆÅú Š ºµ î º ˆÅ ½ ˆ½Å ÿˆå ½ ½ Ÿ ú µ ú Ä Ã ˆÅú ½ˆÅ Ÿ ¾ œ ú ˆÅ Ÿ š /» ú, œ ƒä í¾. ƒ š Ÿ Ê ÿˆå ˆÅú œ ú ú í¾ Ÿ Ê Š í Š ú, Š º úä ˆÅ Ä ƒä ¾ Annual Report

14 î ú μ Financial Statements ÇÅ ºš Ÿ ˆÅ ˆÅ Ä ƒä ½ Ÿ ¾» Ÿ ˆÅ Ê ˆÅú Š ˆÅú ½ˆÅ Ÿ ¾ œ ú ˆÅú» ú/ Ÿ š ˆ½Å ½Ä ˆÅ Š íÿ. Further, to ensure high quality of the asset portfolio the Bank has adopted a two pronged strategy i.e., containment of incidence of and resolution / recovery of NPAs. In this regards, the bank has NPA policy, which sets out guidelines for restricting slippage of existing standard assets and recovery / resolution of NPA by close monitoring, constant follow-up and evolving a suitable proactive Corrective Action Plan. ÄˆÅ Ê ˆÅú œ ž «: / Definitions of non-performing assets: ÿˆå œ ½ ŠÏŸ Ê ˆÅ Š úäˆå µ { Ä ÿˆå ˆ½Å Ÿ ¾» ½Ä Ê ˆ½Å º ĈŠ¾ ĈŠª½ µ Ê Ÿ Ê ˆÅ í¾. The Bank classifies its advances into performing and non-performing advances in accordance with the extant RBI guidelines. ĈŠ( œ ú ) ½ µ ŠÏŸ í¾, í ; The non-performing asset (NPA) is a loan or an advance where; Ÿ ú ú µ ˆ½Å Ÿ Ÿ ½ Ÿ Ê ¾ / Ÿ» š ˆÅú ˆÅ 90 ½ š ˆÅ ½ ½ í ½. Interest and/ or installment of principal remains overdue for more than 90 days for a term loan, ½ ï É / ˆÅ ú µ ( ½ ú / ú ú) ˆ½Å š Ÿ Ê ` Ÿ ' í í¾. ½ Ÿ Ê ˆÅ Ÿ» úÿ / í µ š ˆÅ ½ Š š ˆÅ í ú í ½, ½ ½ ` Ÿ ' Ÿ í¾. Ÿ Ÿ Ê Ÿ Ê Ÿ º œ ½ Ÿ Ê ˆÅ Ÿ» úÿ / í µ š ˆÅ ½ ˆÅŸ í¾, ˆ Å º Ÿ Ê º œ ˆÅú ú ˆÅ Š 90 ˆÅ ˆÅ ½ƒÄ Ÿ íú í ½ ú í¾ Ÿ ˆÅú Š ƒä ƒ š ˆ½Å ¾ Ÿ ½ ˆÅ Š ˆ½Å œ Äœ íú íÿ, ½ ½ ½ Ê ˆÅ ½ ž ú ` Ÿ ' Ÿ í¾. The account remains out of order in respect of an Overdraft/Cash Credit (OD/CC). Out of order means if the account outstanding balance remains continuously in excess of the sanctioned limit/drawing power. In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period, these accounts are treated as out of order. ÇÅ ˆÅ Š ž º Š Ê ˆ½Å Ÿ Ÿ ½ Ÿ Ê 90 ½ š ˆÅ ½ ` ½ ' í ½. The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted. ˆ¼Å «µ ˆ½Å š Ÿ Ê œ š ûå Ê ˆ½Å Ÿ Ÿ ½ Ÿ Ê / Ÿ» š ˆÅú ˆÅ Ê ˆÅú Š ú ½ ûå Ÿ ¾ Ÿ ½ ½ í ½ ¾ ú Ä š ûå Ê Ÿ Ê ˆÅ ûå Ÿ ¾ Ÿ ½ ½ í ½. In respect of an agricultural loan, the interest and / or installment of principal remains overdue for two crop seasons for short duration crops and for one crop season for long duration crops. œ ú ˆÅ ½ Š ½ Ÿ ˆÅ, Šš í Ê ˆ½Å ³Åœ Ÿ Ê Š úäˆ¼å ˆÅ í¾. Ÿ ˆÅ ½ ˆÅí í¾, ½ 12 Ÿ í ƒ ½ ˆÅŸ š ½ œ ú í ½. ˆÅ ú ˆÅ ½ Šš Ÿ í¾, í Ÿ ˆÅ ˆÅú ª½µ ú Ÿ Ê 12 Ÿ í ƒ ½ š ˆÅ š ½ í ½. í ½ ˆÅí í¾ ½ ÿˆå ˆÅ / à ½ œ ú ˆÅ Ê { Ä ÿˆå ˆ½Å ú µ ˆ½Å ¾ í ˆ½Å ³Åœ Ÿ Ê ž š Ä ˆÅú Š ƒä í ½ ˆÅ º ˆÅ ½ œ»µ Ä À à ½ ½ íú Š í ½. NPAs are further classified into sub-standard, doubtful and loss assets. A substandard asset is one, which has remained as NPA for a period less than or equal to 12 months. An asset is classified as doubtful if it has remained in the substandard category for more than 12 months. A loss asset is one where loss has been identified by the Bank or by the internal / external auditors or the RBI inspection but the amount has not been written off fully. œï ž» Ê Ÿ Ê ½ ˆ½Å š Ÿ Ê, í / Ÿ» š ˆÅ í ½, ÿˆå ½ ú œï ž» Ê œ ˆÅ ½ Š µ Ÿ Ê Ÿ íú ˆÅ í¾ ½ ˆ½Å Ÿ» Ÿ Ê ˆÅŸ ú ˆ½Å { Ä ÿˆå š Ä œï š úˆå µ Ÿ Ê ˆ½Å º œï š ˆÅ í¾. In respect of investments in securities, where interest / principal is in arrears, the Bank does not reckon income on such securities and makes provisions as per provisioning norms prescribed by RBI for depreciation in the value of investments. 14 Annual Report

15 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ˆÅ. ÿˆå œ ½ ŠÏŸ Ê ˆÅ Š úäˆå µ { Ä ÿˆå ˆ½Å Ÿ ¾» ½ Ä Ê ˆ½Å º ĈŠ¾ ĈŠª½ µ Ê Ÿ Ê ˆÅ í¾. a. Total gross credit risk exposures, Fund based and Non-fund based separately. ( ` Ÿ Ÿ Ê / Amt. in ` Million) µ / Particulars š š Fund Based Š ¾ - š š Non Fund Based ˆºÅ Total ˆºÅ ˆÅ µ Æ œ ½ * Total Gross Credit Exposures* 2,790, ,368, ,159,043.3 ½ ú / Domestic 2,612, ,325, ,938,170.5 ½ ú / Overseas 177, , ,872.8 * ŠÏŸ, œ, ÿˆå Š, ƒä, úˆ¼å ¾ í Ÿ» Ÿ íÿ * includes advances, LCs, BGs, LERs, acceptances & undrawn sanctions. ˆÅ µ Æ œ ½ ½ ú«ä 20 œïˆå ˆ½Å Ô ½Š ½ ˆÅ µ - š š Š ¾ - š š b. Top 20 industry type distribution of Gross credit exposures- fund based and non-fund based Ô ½Š / Industry š š µ Æ œ ½ FB Credit Exposure ( ` Ÿ Ÿ Ê / Amt. in ` Million) Š ¾ - š š µ Æ œ ½ NFB Credit Exposure ˆºÅ µ Æ œ ½ Total Credit Exposure ½ Ê œ Æ Ê ˆÅ ½ ŠÏŸ / Advances to individuals against shares bonds ˆ¼Å «Ÿ Ö ˆÅ ĈŠœ / Agriculture & Allied Activities 229,736 1, ,684 ž ú ƒ ú ú / All Engineering 106, , ,129 Ÿ / Aviation 5,652 11,167 16,819 Ÿ» š º ¾ š º œ / Basic Metal and Metal Products 176, , ,666 œ ½ ( ¾ ˆÅ ÁûÅú ˆÅ ½ Ž ½ õˆå ) ¾ ˆ»Å / Beverages (excluding Tea & Coffee) and Tobacco 9, ,456 úÿ Ê ¾ úÿ Ê œ / Cement and Cement Products 59,073 5,267 64,340 ¾ œ / Chemicals and Chemical Products 146,887 63, ,190 µ ˆÅ ƒ ½ / Commercial Real Estate 28,774 4,709 33,483 ˆ Åœ» ÁÉ ½ / Computer Software 5,269 8,283 13,552 Ÿ ĵ / Construction 32,878 66,507 99,385 œ ž ½Æ º / Consumer Durables ǽŠˆÅ Ä œï œ / Credit Card Receivables 4-4 Annual Report

16 î ú μ Financial Statements Š. µ / Education Loans 12, ,650 Ô œï ˆÅ µ / Food Processing 90,369 25, ,158 ž»«µ / Gems and Jewellery 28,693 16,808 45,501 ˆÅ  ¾ ˆÅ  ˆ½Å Ä / Glass & Glassware 1, ,666 µ (œï Ÿ ˆÅ œï œ ½ í ) / Housing Loans (Incl priority sector housing) 284, ,652 ƒ üå ïæ / Infrastructure 646, , ,941 Ÿ õ ¾ Ÿ õ œ / Leather and Leather products 5, ,613 ¾ / Mining and Quarrying 101,747 35, ,786 ú ûöå ú / NBFCs 189,044 14, ,524 Ô ½Š / Other Industries 7,999 2,792 10,791 º µ / Other Retail Loans 48, ,581 ½ / Other Services 124,625 67, ,036 ˆÅ Š ¾ ˆÅ Š œ / Paper and Paper Products 24,338 5,282 29,620 œ ½ ï ½ Ÿ ˆÅ ½ œ ¾ œ Ÿ µ º ƒôš / Petroleum Coal Products and Nuclear Fuels 0-0 œ ½ ½ ½ / Professional services 3, ,829 «ŠÏŸ ( ˆÅ ŠÏŸ ˆ½Å Ÿ ˆ½Å ) / Residuary other advances (to tally with gross advances) 39, , ,025 õ œ ˆÅ ¾ ˆ½Å œ / Rubber Plastic and their Products 38,650 7,650 46,300 ½Æ ƒ / Textiles 72,214 19,351 91,565 œ Ä í ½ ¾ ½  / Tourism Hotel and Restaurants 2, ,046 œ / Trade 163,320 45, ,699 œ í œ ˆÅ / Transport Operators 28,936 3,139 32,075 í / Á ½ µ / Vehical/ Auto Loans 9, ,175 í, í œ º ½Ä ¾ œ ˆÅ µ / Vehicles Vehicle Parts and Transport Equipments 62,023 35,751 97,775 ˆÅ õú ˆÅ õú œ / Wood and Wood Products 3, ,062 ˆÅ µ Æ œ ½ / Gross Credit Exposure 2,790, ,368, ,159, ˆÅ µ Æ œ ½ Ÿ Ê 5% ½ š ˆÅ í ½ ½ Ô ½Š c. Industries having more than 5% of the Gross credit exposures ( ` Ÿ Ÿ Ê / Amt. in ` Million) Ô ½Š ˆÅ Ÿ % š š Š ¾ - š ˆºÅ Industry Name Fund Based š Total Non Fund Based ƒ üå ïæ / Infrastructure % 16 Annual Report

17 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures. Ÿ» š º ¾ š º œ / Basic Metal and Metal Products % µ / Housing Loans % ž ú ƒ ú ú / All Engineering % ˆ¼Å «Ÿ Ö ˆÅ ĈŠœ / Agriculture & Allied Activities % ¾ œ (, œ Ê ) / Chemicals and Chemical Products (Dyes, Paints, etc.) % Ê ˆÅú ú íºƒä Ÿ ˆÅ œ œ Æ ˆÅ ½«µ d. Residual contractual maturity breakdown of assets œ œ Æ š Maturity Buckets { Ä ÿˆå ÿˆå Ê ˆ½Å œ ˆÅ ú Ÿ ½«Cash & Balances with RBI and Other Banks ½ Investments / Assets ŠÏŸ Advances ( ` Ÿ Ÿ Ê / Amt. in ` Million) Fixed Assets & Other Assets ˆºÅ Total Assets 1 / Day 1 46, ,109 16,616 4, ,740 2 ½ 7 /2 to 7 days 18, ,988 32, ,992 8 ½ 14 / 8 to 14 days 1, ,225 3,240 31, ½ 28 / 15 to 28 days 2,993 1,402 21,927 1,221 27, ½ 3 Ÿ í ˆÅ / 29 days & upto 3 months 16,516 16, ,735 18, ,082 3 Ÿ í ½ š ˆÅ 6 Ÿ í ˆÅ / Over 3 months & upto 6 months 15,395 8,936 37,991 32,532 94,854 6 Ÿ í ½ š ˆÅ 1 «Ä ˆÅ / Over 6 months & upto 1 year 18,912 19, ,467 41, ,068 1 «Ä ½ š ˆÅ 3 «Ä ˆÅ / Over 1 year & upto 3 years 25,312 97, ,654 18, ,725 3 «Ä ½ š ˆÅ 5 «Ä ˆÅ / Over 3 years & upto 5 years 7,231 78, , , ,944 5 «Ä ½ š ˆÅ/ Over 5 yrs 13, , , ,659 1,249,064 ˆºÅ / Total 165, ,994 2,158, ,987 3,743,721 Annual Report

18 î ú μ Financial Statements Œ. 31 Ÿ Ä 2016 ˆÅ ½ ĈŠ: e. Non Performing Assets as on March 31, 2016 œ ú ˆÅú / Position of NPA ( ` Ÿ Ÿ Ê / Amt. in ` Million) 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ˆºÅ ŠÏŸ / Gross Advances 2,264, ŠÏŸ / Net Advances 2,158, ˆºÅ œ ú / Gross NPA as on 248, ˆÅ. Ÿ ˆÅ a. Substandard 98, Šš 1 b. Doubtful 1 41, Š. Šš 2 c. Doubtful 2 97, Šš 3 d. Doubtful 3 4, Œ. í e. Loss 6, œ ú œï š * / NPA Provision* 101, œ ú / Net NPA 146, œ ú ºœ / NPA Ratios ˆÅ ŠÏŸ Ê ˆÅú º Ÿ Ê ˆÅ œ ú (%) / Gross NPAs to Gross Advances ( % ) 10.98% ŠÏŸ Ê ˆÅú º Ÿ Ê œ ú (%) / Net NPAs to Net Advances ( % ) 6.78%. ĈŠ½ ( œ ú ) Ÿ ½ - õ : f. Movement of Non-Performing Assets (NPA): µ ( ˆÅ œ ú ) / Particulars ( NPA Gross) ( ` Ÿ Ÿ Ê / Amt. in ` Million) 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ž ˆÅ ½«/ Opening Balance 126, œ š Ä / Additions 190, à ½ ½ ½ Š / Write Offs 54, ˆÅ ¾ / Reductions 14, Ÿ ½«/ Closing Balances 248, Annual Report

19 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures Ž. «Ÿ œ ú œï š Ê Ÿ Ê - õ #: g. Movement of Specific & General NPA Provisions #:. ( ` Ÿ Ÿ Ê / Amt. in ` Million) µ / Particulars 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 «œï š * Specific Provisions* ž ˆÅ ½«/ Opening Balance 66, ½ õê À š ˆ½Å ¾ ˆÅ Š œï š / Add : Provision made during the period 92, À œï ÇÅú œï š úˆå µ ûå Ÿ Ê / Less : Transfer to Countercyclical Prov Buffer 0.00 À à ½ ½ ú Š ƒä / Less : Write offs 54, À Æ œï š Ê ˆÅ œ º ˆÅ / Less : Write Back of excess provision 2, Ÿ ½«/ Closing Balances 101, *œï š Ÿ Ê ` Ÿ ˆÅú œ ú œ œ ú ú í Ÿ íú í¾ *Provision amount does not include NPV loss on NPA asset of ` Millions # Ÿ œ ú œï š» í¾. # General NPA provision is Nil. à ½ ½ ú Š ƒä ¾»  ½ úš ½ µ Ÿ Ê ºˆÅ ˆÅ Š íÿ :» h. Write-offs and recoveries that have been booked directly to the income statement: Nil. 31 Ÿ Ä 2016 ˆÅ ½ ĈŠ½ Ê ( œ ú ƒä) ˆÅú i. Position of Non-Performing Investments (NPI) as on March 31, 2016 µ / Particulars 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ĈŠ½ Ê ( œ ú ƒä) ˆÅú / Amount of Non-performing Investments (NPI) 11, ĈŠ½ Ê ˆ½Å š œï š Ê ˆÅú / Amount of provisions held for Non-performing Investments 8, ½ Ê ( ½ ¾ Ê Ê í ) œ Ÿ» Ý ˆ½Å œï š Ê ˆÅ -. j. Movement of provisions for depreciation on investments (including bonds and debentures) µ / Particulars 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ž ˆÅ ½«/ Opening Balance 14, š ˆ½Å ¾ ˆÅ Š œï š / Provisions made during the period 7, Æ œï š Ê ˆÅ à ½ ½ / œï ½ / Write offs / Write Back of excess provisions 5, Ÿ ½«/ Closing Balance 17, Annual Report

20 î ú μ Financial Statements. Ô ½Š œ ú œï š ˆÅ ½ * k. Industry Wise NPA& Provision break-up * µ / Particulars 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ˆÅ œ ú Gross NPA ½«œÏ š ( œ ú ) Specific Provision (NPA) ( ` Ÿ Ÿ Ê / Amt. in ` Million Ÿ ¾» š ˆ½Å ¾ During the current Period ½«œÏ š ( œ ú ) Specific Provision (NPA) à ½ ½ ½ Š Write-Offs ú«ä 5 Ô ½Š Ê Ÿ Ê œ ú ¾ ˆÅ Š ½«œÏ š / NPAs and Specific Provisions in Top 5 Industries 135,430 55,072 27,863 5,927 * Ô ½Š Ê Ÿ Ê ˆÅ µ Æ œ ½ ˆ½Å š œ íã Ô ½Š *Industries identified based on Gross Credit Exposure to Industries # Ÿ œ ú œï š» í¾. # General NPA provision is Nil.. œ ú œï š ½ ½ ˆÅú ž ¾Š ½ ˆÅ : l. Geography based position of NPA& Provision break-up: µ / Particulars ½ ú Domestic ( ` Ÿ Ÿ Ê / Amt. in ` Million 31 Ÿ Ä 2016 ˆÅ ½ As on March 31, 2016 ½ ú Overseas ˆºÅ Total ˆÅ œ ú / Gross NPA 200, , , œ ú ˆ½Å «œï š / Specific Provision for NPA 87, , , # Ÿ œ ú œï š» í¾. # General NPA provision is Nil. ˆÅ ú ûå-4à µ ½ Ÿ - Ÿ ˆÅúˆ¼Å «ˆÅ ½µ ˆ½Å š ú œ ½ ÄûÅ ½ ½ ˆÅ œïˆå À Table DF-4: Credit Risk: Disclosures for Portfolios Subject to the Standardised approach ÿˆå œ» ú Š µ ˆ½Å œ ½ Æ œ ½ Ê œ ½ Ÿ ž ˆÅú Š µ ˆÅ ½ ˆ½Å { Ä ÿˆå Ä«à ½ Š Ê Ê œï ˆÅú Š ƒä ½ Š ˆÅ œï ½Š ˆÅ í¾. ½ ½Ä Ê ˆ½Å º³Åœ ÿˆå Ê ½ í œ ½ í¾ ˆÅ ½ ½ ú µ ½ Š Ê Ê Ä Ã ÇÅ, ˆ½Å, ƒçå, ƒ ½ Š, ψŠˆÄÅ Ÿ ½ ¾ Ä«ïú µ ½ Š Ê Ê ûå, Ÿ» ú{ ÿ Ä œ» Ä œï ˆÅú Š ƒä à ½ Š ˆÅ œ ½Š ˆÅ Ê. The Bank uses the solicited ratings assigned by the external credit rating agencies specified by RBI for calculating risk weights on its exposures for capital calculations. In line with the Basel guidelines, banks are required to use the external ratings assigned by domestic credit rating agencies viz. Crisil, CARE, ICRA, India Ratings, Brickwork and SMERA and international credit rating agencies Fitch, Moody s and Standard & Poor s. œï î ½ Š ˆÅ œï ½Š ½Ä Ê ºŸ úˆ½å ½ º œ Ÿ Ê º œ ½ ƒ œ š ú Ä š, ž ú œ Æ œ ½ Ê ˆ½Å ˆÅ í¾. ˆ½Å íú ½ Š Ê œ ˆÅ í¾, ½ Ä ˆÅ ³Åœ ½ œ š íÿ ½ Š Ê Ê ˆ½Å Ÿ ˆÅ º ½ ˆ½Å º Š» í¾. 20 Annual Report

21 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures The ratings assigned, are used for all eligible exposures; on balance sheet & off balance sheet; short term & long term in the manner permitted by the guidelines. Only those ratings which are publicly available and in force as per the monthly bulletin of the rating agencies are considered. ½ Ÿ ž ˆ½Å œï ½ í½ º œ í ½ ½ ˆ½Å ÿˆå ˆÅú µ ½ Ÿ Æ œ ½ ˆÅú œ»µ Ä ˆÅ ½ à µ ˆÅ í½ º í Ÿ Ê í¾. ÿˆå ˆÅ «Ä ƒ ½ ˆÅŸ ˆÅú Ÿ ˆÅ œ œ Æ ½ Æ œ ½ Ê ˆ½Å œ š ½ Š ˆÅ «Ä ½ š ˆÅ ½ Æ œ ½ Ê ˆ½Å ú Ä š ½ Š ˆÅ œï ½Š ˆÅ í¾. To be eligible for risk weighting purposes, the entire amount of credit risk exposure to the Bank is taken into account for external credit assessment. The Bank uses short term ratings for exposures with contractual maturity of less than or equal to one year and long term ratings for those exposures which have a contractual maturity of over one year. ˆÅ ú ˆÅ Á œ ½ ½ Æ œ ½ ˆ½Å ½ Š œï ˆÅ ½ ¾ œ ºÆ ½ Ÿ ž Š» ˆÅ ½ ˆÅú œï ÇÅ { Ä ÿˆå š Ä Ÿ ˆÅ ½Ä Ê ˆ½Å º³Åœ í¾. í  ˆÅ ú ˆÅ Á œ ½ ½ ˆ½Å ˆÅ ½ š ˆÅ ½ Š œ š íÿ, í  ½ ½ Š œ š í ½ ½ œ Ÿ ½ Š ú š ˆÅ ½ Š í ½ ½ œ ú Ÿ Ÿ ½ Š Š» ˆÅú ú í¾. 3 œïÿ º ½ Ÿ Ÿ»í Ê Ÿ Ê µ ½ Ÿ» úˆå µ ˆÅ ¾ ú ˆ½Å œ à ÿ ˆ ÅŠ íú Ÿ Ê Ê ˆÅú ˆÅ ¾ Š ¾ - š š º š Ê ˆÅ ½«µ ú ½ ú Š ƒä ˆÅ Ÿ Ê Š í¾à The process used to assign the ratings to a corporate exposure and apply the appropriate risk weight is as per the regulatory guidelines prescribed by RBI. In cases where multiple external ratings are available for a given corporate, the lower rating, where there are two ratings and the second lowest rating, where there are three or more ratings is applied. The table given below gives the breakup of net outstanding amounts of assets in Banking Book and Non Fund Based Facilities after Credit Risk Mitigation in 3 major risk buckets as well as those that are deducted: ( ` Ÿ Ÿ Ê / Amt. in ` Million) ½ Ÿ -ž / Risk Weight Æ œ ½ Net Exposure 100% ½ ˆÅŸ / Less than 100% 2,348, % œ /At 100% 1,011, % ½ š ˆÅ / More than 100% 618, œ» ú ½ ˆÅ ¾ ú / Deduction from Capital ˆºÅ / Total 3,977, ˆÅ ú ûå-5 : µ ½ Ÿ» úˆå µ À Ÿ ˆÅúˆ¼Å «ˆÅ ½µ Ê ˆÅ œïˆå Table DF-5: Credit Risk Mitigation: Disclosures for Standardised Approaches: œ ĈŠœï ž» š ˆÅ Ä µ º š ˆÅ ½ œï ž» ˆÅ ½ ˆ½Å š ˆÅ ½ œï ˆÅú Š ƒä ˆÅ š ˆÅ í¾. µ ½ Ÿ Ê ˆÅ ½ ˆÅŸ ˆÅ ½ ˆ½Å ÿˆå œ ½ ½ Ê ˆ½Å œï œ ĈŠœï ž» ½ í¾. ÿˆå ˆ½Å œ œ ĈŠœï š ¾ µ ½ Ÿ» úˆå µ ( ú Ÿ ) ˆÅ úˆå Ê œ ½ Ä ºŸ ½ ú í¾ Ÿ Ê úˆå Ä œ ĈŠœï ž» Ê ˆ½Å ½ Ÿ Ê Ÿ, ½ ½ œ ÄˆÅ Ê ˆ½Å Š úäˆå µ ¾ Ÿ» ˆÅ ˆ½Å ˆÅ Ĝϵ ú ¾ œï ÇÅ ú Š ƒä íÿ. Collateral is an asset or a right provided by the borrower to the lender to secure a credit facility. To mitigate credit risk, the Bank obtains collaterals against its exposures. The Bank has a Board approved policy on Collateral Management and Credit Risk Mitigation (CRM) Techniques, which includes norms on acceptable collaterals, procedures & processes to enable classification and valuation of such collaterals. º œ ú ½ Š µ Ê ¾ Ÿ Ê ˆÅ ú Ÿ í¾ í ÿˆå ˆ½Å œ š Ä ½ô ˆ½Å Æ «š µ š ˆÅ í ¾š ³Åœ ½ œï Ä ú ½ Š í¾. í ½ Š ú œï œ ˆÅ ˆÅú œ ĈŠœï ž» Ê œ µ Ê ˆ½Å í¾ ¾ š Ä µ ú ½ Š ˆ½Å š ú í¾. On-Balance sheet netting is confined to loans and deposits, where the Bank has legally enforceable netting arrangements, involving specific lien in addition to other stipulated conditions. The netting is only undertaken for loans against collaterals of the same counterparty and subject to identifiable netting arrangement. Annual Report

22 î ú μ Financial Statements ÿˆå ˆ½Å µ Æ œ ½ Ê ˆÅú (í½ { Š ) ˆ½Å î ú Š ¾ - î ú ½ Ê œ ĈŠœï ž» Ê ˆÅ ƒ ½Ÿ ˆÅ í¾. š ˆÅ Ä ˆ½Å œïˆå, ½ Ÿ ³Åœ ½ º š ˆÅ ½ š Ÿ Ê ½ íº ˆÅ ú œ ˆ½Å œ ºÆ œ ĈŠœï ž» ˆÅ š Ä µ ˆÅ í¾. ÿˆå úˆå ˆÅú ½ ú œïÿ º œ î ú œ ĈŠœï ž» Ê Ÿ Ê ˆÅ ú, ÿˆå ˆÅú ˆÅú Ÿ, µ Ä, «ïú œïÿ µ œ, ˆÅ ˆÅ œ, ½ «ž œ ĵ Ÿ» ˆ½Å ú úÿ œ Á ¾ ž ˆÅ Ä œï ž» Ÿ íÿ. Š ¾ - î ú œ ĈŠœï ž» Ê Ÿ Ê ž» Ÿ ž, Ÿ ú ú, ÁˆÅ, Ÿ íÿ. œ, º œ ½ ÄûÅ ½ ½ ˆ½Å Š Ä œ ĈŠœï ž» Ê ˆÅ ½ œ ˆ½Å œïˆå ˆ½Å º œ ž «ˆÅ í¾, ¾ ½ µ ˆ½Å œ ĈŠœï ž» ú š ˆÅ í ½Š ú ¾ Á ½ µ ˆ½Å í í í ½Š ú. š ˆÅ œ î ú œ ĈŠœï ž», í  ÿˆå ½ ú Ÿ ˆÅ úˆå ˆ½Å Š Ä œ» úš ž ž œï œ ˆÅ í¾, ÿˆå ˆÅú ˆÅú š Ÿ Ê ˆ½Å ³Åœ Ÿ Ê íÿ ½ µ ½ Ÿ ˆ½Å š ú íú í¾. Both financial as well as non-financial collaterals are used to hedge its credit exposures. Appropriate collateral for a product is determined after taking into account the type of borrower, the risk profile and the facility. The main types of eligible financial collaterals accepted by the Bank are Cash, Bank s own deposits, Gold, National Savings Certificates, Kisan Vikas Patra, Insurance policies with a declared surrender value and various Debt securities. The non-financial collaterals include Land & Building, Plant & Machinery, Stock, etc. However, under the retail portfolio the collaterals are defined as per the type of product e.g. collateral for housing loan would be residential mortgage and an automobile is a collateral for auto loan. Most of the eligible financial collaterals, where the Bank has availed capital benefits under CRM techniques, are in the form of Bank s own FDs which are not subject to credit or market risk. ÿˆå œ ½ Æ œ ½{ ˆÅ ½ º ˆÅ ½ ˆ½Å Š Ê œ ž ú ˆÅ í¾. œ, ˆ½Å íú Š Ê œ ˆÅ í¾ ½ œï, º œ «Ä í ½ ú íÿ. œïž º ˆÅ Ê, ˆÅ ú Ê, ÿˆå Ê, œï Ÿ ˆÅ ú Ê,» Ÿ º Ô Ÿ Ê í½ º µ Š ú š ï ( ú ú ú Ÿ ƒä), Ä µ Š ú Š Ÿ (ƒä ú ú ú) ½ Š œï œ ˆÅ Á œ ½ ½ Ê ˆÅ ½ ½ ½Ä Ê Ÿ Ê š Ä ³Åœ Ÿ Ê œ» úš ž ž œï œ ˆÅ ½ ˆ½Å ÿˆå œ Š úˆå Ä Ÿ í¾. ÿˆå œ ½ Ÿ ½ ½ ½ µ ½ Ÿ Ê ˆ½Å œïž ˆÅ ½ ˆÅŸ ˆÅ ½ ˆ½Å ž œï ÇÅ Ê ˆÅ úˆå Ê ˆÅ œï ½Š ˆÅ í¾. µ ½ Ÿ» úˆå µ ( ú Ÿ ) ˆÅ ½ š í¾ ½ œ î ú œ ĈŠœï ž» ˆ½Å Ÿ» ˆÅú úÿ ˆÅ ƒ ˆÅú œ» ú ˆÅ ˆÅú Š µ ˆÅ ½ Ÿ, œï œ ú ˆÅ ½ Š ÿˆå ˆ½Å µ Æ œ ½ ˆÅ ½ ˆÅŸ ˆÅ ½ ˆ½Å ¾ ˆÅ Š í¾. œï œ ú ˆ½Å µ Æ œ ½ ˆÅ ½ œ ºÆ Ÿ Ä Š ½ ˆ½Å œ î ú œ ĈŠœï ž» Ê ˆ½Å Ÿ» Ÿ ½ ˆÅ í¾. Ÿ» Ÿ Ê ˆÅ œ Š ½ ˆ½Å Ÿ Ä Š» ˆÅ í¾ Ÿ Ê Æ œ ½ Ê ¾ œ ĈŠœï ž» ½ Ê ˆ½Å Ÿ ºÍ º ˆ½Å ˆÅ µ í ½ ú ú ž ú Ÿ í¾. œ Š Ê ˆ½Å Š Ä œ» ú ˆÅ ž ½ ˆ½Å Æ œ ½ ˆÅú œï ž» ¾ œï ž» í Ê Ÿ Ê Â ú ú í¾. Æ œ ½ ˆÅ œï ž» í Š úˆå Ä ˆ½Å ½ Ÿ ž ˆÅ ½ Ä í¾, ˆÅ œï ž» í š š ú ˆ½Å ½ Ÿ ž ˆÅ ½ Ä í¾, ½Ä ˆÅ ½ ½Ä Ê Ÿ Ê š Ä œ ½ Ê ˆÅ ½ œ» ˆÅ. The Bank also considers guarantees for securing its exposures; however only those guarantees which are direct, explicit and unconditional are considered. Sovereigns, Public Sector Entities, Banks, Primary Dealers, Credit Guarantee fund Trust for Micro and Small Enterprises (CGTMSE), Export Credit Guarantee Corporation (ECGC) and highly rated corporate entities are considered as eligible guarantors by the Bank for availing capital benefits as stipulated in the Basel guidelines. The Bank utilizes various processes and techniques to reduce the impact of the credit risk to which it is exposed. CRM is one such tool designed to reduce the Bank s credit exposure to the counterparty while calculating its capital requirement to the extent of the value of eligible financial collateral. The credit exposure to a counter party is adjusted by the value of eligible financial collaterals after applying appropriate haircuts. The haircuts are applied to account for volatility in value, including those arising from currency mismatch for both the exposure and the collateral. For availing capital savings under eligible guarantees, the amount of exposure is divided into covered and uncovered portions. The covered portion of the exposure attracts the risk weight of guarantor, while the uncovered portion continues to attract the risk weight of the obligor subject to meeting requirements stipulated in the Basel guidelines. 22 Annual Report

23 Ÿ ½ ˆÅ œ III œïˆå Consolidated Piller III Disclosures ú Ÿ ˆÅ úˆå Ÿ Ê Ÿ ÿˆå ˆÅ Æ œ ½ Ÿ º í¾à The Bank s exposures where CRM techniques were applied are as follows: µ / Particulars ( ` Ÿ Ÿ Ê / Amt. in ` Million) š š Fund Based Š ¾ - š š * Non-Fund Based * œ î ú œ ĈŠœï ž» Ÿ Ê Ÿ ˆºÅ Æ œ ½ Total Exposures covered by eligible financial collateral 123, , œ œ ĈŠœï ž» ˆÅ ž ½ ½ ˆ½Å Æ œ ½ Exposure after taking benefit of eligible collateral 43, , * Š ¾ - Ö / * Non-Market Related { Ä ÿˆå ˆ½Å ½Ä Ê ˆ½Å º í ú Ÿ ˆÅ úˆå ˆ½Å ³Åœ Ÿ Ê ˆÅ Á œ ½ ½ Š Ê ˆÅ œï ½Š ˆÅ Š í ˆÅ 31 Ÿ Ä 2016 ˆÅ ½ Æ œ ½ ˆÅú ` Ÿ ú. The exposure covered by corporate guarantees where CRM techniques as per RBI guidelines were applied amounted to ` Million as on March 31, ú ûå-6 : œï ž» ˆÅ µ Æ œ ½ À Ÿ ˆÅúˆ¼Å «ˆÅ ½µ ˆÅ œïˆå DF-6: Securitization exposure-disclosure for Standardized Approach Š ºµ Ÿ ˆÅ œïˆå / Qualitative Disclosures ˆÅ. a. ÿˆå ˆ½Å œï ž» ˆÅ µ ˆÅ ĈŠœ Ê ˆ½Å š Ÿ Ê Ÿ Š ºµ Ÿ ˆÅ œïˆå Ÿ º íÿà The general qualitative disclosures with respect to securitization activities of the Bank are as follows: œï ž» ˆÅ µ ˆÅ ĈŠœ ˆ½Å š Ÿ Ê ÿˆå ˆÅ Ó½, úÿ í í ˆÅ ½ ˆÅ ĈŠœ Ä í œï ž» ˆ¼Å µ Ê ˆ½Å µ ½ Ÿ ˆÅ ½ ÿˆå ½ Š ˆÅ Ê ˆÅ ½ ˆÅ ½ íÿ. The Bank s objectives in relation to securitization activity, including the extent to which these activities transfer credit risk of the underlying securitized exposures away from the bank to other entities. ÿˆå ½ 31 Ÿ Ä 2016 ˆÅ ½ Ÿ œ ŽŸ íú ˆ½Å ¾ ˆÅ ú Ÿ ˆÅ µ ˆÅ ½ œï ž» ˆ¼Å íú ˆÅ í¾. À µ ½ Ÿ ˆÅ µ Š» íú í¾. œ, œï Ÿ ˆÅ œï œ ½ ˆÅ ½ š (œ ú ) ˆ½Å š Ä Ê ˆÅú œï œ Ÿ Ê ˆÅŸ ú ˆÅ ½ œ» ˆÅ ½ ˆ½Å Ó½ ½ ÿˆå ½ œ Ï» Ä û刽å (œ ú ú ú) Ä Ã ž ú ûöå ú/ Ÿ ûöå ƒä œï ž» ˆ¼Å Ê Ÿ Ê ½ ˆÅ í¾. Bank has not securitized-out any standard loans during half year ended on March 31, Hence, transfer of credit risk is not applicable. However, in order to supplement the achievement of target in Priority Sector Lending (PSL), the Bank invested in Pass Through Certificates (PTC) i.e. Assets securitized by various NBFC/MFI. Annual Report

24 î ú μ Financial Statements œï ž» ˆ¼Å Ê Ÿ Ê í ½ Ÿ Ê ˆÅ ³Åœ The nature of other risks inherent in securitized assets. œï ž» ˆÅ µ œï ÇÅ Ÿ Ê ÿˆå ž ƒä ½ ú ž ž» Ÿ ˆÅ ¾ ƒ Ÿ Ê ½ œï ½ˆÅ Ÿ Ê ÿˆå ˆÅú íž Š ˆÅ úÿ ˆÅ í¾ ƒ ˆÅ ½ ; The various roles played by the Bank in the securitization process and an indication of the extent of the bank s involvement in each of them; œï ž» ˆÅ µ Æ œ ½ Ê ˆ½Å µ ½ Ÿ Ÿ Ê œ Ä Ê ˆÅú Š ú ˆÅ ½ ˆ½Å Š» œï ÇÅ Ê ˆÅ µ. a description of the processes in place to monitor changes in the credit and market risk of securitization exposures. œï ž» ˆÅ µ Æ œ ½ Ê ˆ½Å Š Ä œï š ½ Ÿ Ê ˆÅ ½ ˆÅŸ ˆÅ ½ ˆ½Å µ ½ Ÿ» úˆå µ ˆ½Å œï ½Š ˆÅ ½ ˆÅ ½ š ú ÿˆå ˆÅú ú ˆÅ µ À a description of the bank s policy governing the use of credit risk mitigation to mitigate the risks retained through securitization exposures; Š» íú Æ Ê ˆÅ ÿˆå ½ ˆÅ ú Ÿ ˆÅ µ ˆÅ ½ œï ž» ˆÅ µ ˆ½Å í íì í¾. Not applicable as the Bank has not securitized-out any standard loans. œ ú ú ú Ÿ Ê ½ ˆ½Å Ÿ Ÿ ½ Ÿ Ê Ÿ š ˆÅ Ä Ê ½» ú Š ƒä ½ ºˆÅ ¾ ú ˆÅú ú í¾. íú, ½ Š œ š ½ Š Ê ú ˆÅ º µ ¼ Ö ž ú œ š í¾. Ÿ»í Ê Ÿ Ê í Ê ˆÅ µ ¼ Ö ½ š ˆÅ í ½ í¾, ½ í Ê ˆÅ ½ ÿˆå í ˆÅ í¾. In case of investment in PTCs, the repayment is done out of the collections from the ultimate borrowers. Further Credit Enhancement is also available as determine by Rating Agency based on the rating. If the losses in the pool exceed level of credit enhancement, the losses are to be borne by Bank. ÿˆå ½ ½ ˆÅ œï ž» ˆÅ µ Ÿ Ê µ ¼ Ö ¾ š º š œï ˆÅú ž» Ÿ ˆÅ ˆÅú í¾. 31 Ÿ Ä 2016 ˆÅ œ ºÄÆ ª½µ ú Ÿ Ê Æ œ ½ Ÿ íÿà Bank has played the role of Investor, Provider of Credit Enhancement and Liquidity Facility in Securitization. The exposures in above category as on March 31, 2016 is as under: ÇÅŸ Sr. No ˆÅú Š ƒä ž» Ÿ ˆÅ Role played ( ` Ÿ Ÿ Ê / Amt. in ` Million) ½ - ½ Ê ˆÅú Ä í Amount No. of involved transactions 1 ½ ˆÅ ( ˆÅ ) Investor (o/s) µ ¼ Ö œï ( ú í º š / š º š ) Provider of Credit enhancement (Second Loss Facility/ Liquidity Facility) ÿˆå µ ú ˆ½Å º» ú «œ, ºˆÅ ¾ ú Ÿ -œ» Ä ž ºŠ, µ ¼ Ö ˆÅ œ ½Š, Ÿ ˆÄÅ- º-Ÿ ˆ½ÄÅ, œï ž» ˆÅ µ ˆ½Å ½ œ ½ ÄûÅ ½ ½ Ÿ Ê œ» ˆÅú Ÿ º š ú ¾ Ÿ ú ½ Š ˆÅú š ˆÅ Š ú ˆÅ í¾. Bank periodically monitors the collection performance, repayments, and prepayments, utilization of Credit Enhancement, Mark to Market, due diligence and rating review of the pools in invested portfolio of Securitization as per Credit Policy. ÿˆå { Ä ÿˆå ˆ½Å ˆÅ 7 Ÿ ƒä Š 2012 ˆ½Å œ œ Ÿ Ê µ Ä º œï ž» ˆ¼Å ˆÅ Š / œ ú ú ú Ÿ Ê ½ Ê œ { Ä ÿˆå ˆ½Å Ÿ ¾» ½Ä Ê ˆÅ ºœ ˆÅ í¾. ÿˆå ½ Š Ê Ê š Ä ³Åœ Ÿ Ê œ Äœ µ ¼ Ö ˆ½Å œï ž» ˆ¼Å Ä ˆÅ í¾. The Bank follows extant RBI guidelines on Investment in securitized papers/ PTCs as outlined in RBI circular dated May 07, 2012 and August 21, The Bank acquires securitized assets with adequate Credit Enhancement as stipulated by the rating agencies. 24 Annual Report