BASEL DISCLOSURES DOCUMENT AS ON 31 st December 2014 Qualitative Disclosures (a) A summary discussion of the Bank s approach to assessing the adequacy of its capital to support current and future activities. Quantitative Disclosures (b) Capital requirements for Credit Risk under Basel II & Basel III: Portfolios subject to standardised approach Under Basel II: Under Basel III: TABLE DF-3 CAPITAL ADEQUACY As per RBI directives, our Bank has adopted Standardised Approach for Credit Risk, Standardised Duration Approach for Market risk and Basic Indicator Approach for Operational risk w.e.f. 31.03.2009. For assessment of additional Capital to support the current and future activities, the Bank follows ICAAP policy, put in place by the Bank. ICAAP is being reviewed on a half yearly basis in order to maintain adequate capital above the regulatory minimum on a continuous basis taking care of the future growth in business. (Rupees in crore) Rs. 5676.40 Rs. 5676.40 (including other assets and counterparty unhedged foreign currency exposure) Securitisation exposures NIL - as the Bank has no exposure under securitisation. (c) Capital requirements for Market Risk Standardised duration approach: Under Basel II: Interest rate risk Foreign Exchange Risk Equity Risk Under Basel III: Interest rate risk Foreign Exchange Risk Equity Risk (d) Capital requirements for Operational Risk Basic Indicator Approach Capital required: Capital Maintained: (e) and Tier 1 Capital Ratio 392.55 350.81 1.35 40.39 391.02 349.93 1.35 39.74 380.35 Basel II Basel III Min. Cap Required: 6449.30 6447.77* Capital Funds: 7759.59 7573.50 (as on 31.12.2014) *Min. Cap. Required under Basel III after cross holding compensation of Rs. 4.00 crores. Basel II Basel III For the top consolidated group For significant Bank subsidiaries CRAR as on 31.12.14: 10.83% 10.57% Common Equity Tier 1: --- 7.82% Tier 1 Capital : 7.87% 7.82% Tier 2 Capital : 2.96% 2.75% Not applicable, as our Bank has no subsidiary. Basel Disclosure document Dec. 2014 Page 1 of 6
TABLE DF-4 CREDIT RISK GENERAL DISCLOSURES Qualitative Disclosures (a) The general qualitative disclosure requirement with respect to Credit Risk, including Definitions of past due and impaired (for accounting purposes) Discussion on the Bank s Credit Risk Management Policy The Credit Risk Management Process of the Bank is driven by sound system, procedures and policies. While the Board of Directors & Risk Management Committee of the Board gives directions, the Credit Risk Management Committee headed by Chairman & Managing Director ensures its implementation. Policy guidelines for Credit Risk Management, Collateral Management and Credit Risk Mitigants (CRM), Ratings etc. are put in place, wherein the set of objectives, scope and nature of risk reporting, its measurement systems, policies, strategies to be adopted in containing / minimizing the risk through CRM, processing steps, developing monitoring and supervision mechanisms for the continuing effectiveness of mitigants have been detailed. To move towards advanced approach of Basel II norms, the Bank has taken up implementation of integrated Risk Management System through six solutions for Credit Risk Rating, Credit Risk, Market Risk, Operation Risk, ALM & FTP. The Bank s policy on IRAC (Income Recognition & Asset Classification) norms is in tune with guidelines issued by the Reserve Bank of India, as amended from time to time. Ninety days delinquency norm is being followed in classifying the assets as performing & non-performing assets. The entire IRAC data has been subjected to audit. Adequate provisions as prescribed have been made on both Standard Assets (performing) and Non-Performing Assets. Apart from these, the Bank has created a general floating provision and additional provision for restructured assets. Definition of impaired assets (for accounting purposes): An asset becomes non-performing when it ceases to generate income for the Bank when (a) interest and/or installment of the loan remains overdue (*) for a period of more than 90 days in respect of term loan (b) the account remains out of order (#) for a period of more than 90 days, in respect of operative limits such as Cash Credit (Hyp./Misc.) (c) the bill remains overdue for a period of more than 90 days in cases of bills purchased /discounted (d) the interest charged during any quarter, not fully serviced within 90 days from the end of the quarter (e) the installment of principal or interest thereon remains overdue for 2 crop seasons in the case of short duration crop loans and if installment of principal or interest thereon remains overdue for one crop season in the case of long duration crop loans, as far as agricultural loans are concerned (f) 90 days from the date of crystallization of non-fund based commitments expire. * overdue means any amount due to the Bank under any credit facility, if not paid on the due date fixed, or on crystallization of non fund based commitment. # out of order means the outstanding balance remains continuously in excess of the sanctioned limit/drawing power or if there are no requisite amount of credits continuously for 90 days or where credits in the account are not enough to cover the interest debited prior to 90 days. Basel Disclosure document Dec. 2014 Page 2 of 6
Discussions on Bank s Credit Risk Management Policy: The Bank has formulated a comprehensive Credit Risk Management Policy and constituted various committees such as Credit Risk Management Committee, Basel II Working Group etc. to address host of management techniques which help the Bank in identifying, measuring, monitoring and controlling of credit risks by taking into account both external and internal factors affecting the credit risk. The Bank has fine tuned the Risk Management Policies & Lending Policy, to include credit appraisal standard like benchmark/hurdle ratios on key financial indicators, internal ceilings, prudential norms for large credit proposals, standards for loan collateral, portfolio management, credit concentration, Loan Review Mechanism / Credit Audit, special review of high value borrowal accounts (Comprehensive Credit Monitoring Report), risk concentration / monitoring and pricing based on risk ratings, and review based on risk ratings etc, besides covering exposure ceiling for groups, ratings and sensitive sectors such as capital market, real estate and commodity sector. A comprehensive Recovery Policy of the Bank is also put in place and revised from time to time. Quantitative Disclosures (b) gross Credit Risk exposures - fund based & non-fund based Gross Credit risk exposure : Fund based Gross Credit : Rs. 79136.14 crore Investments : Rs. 29286.89 crore Other Assets : Rs. 10977.33 crore Non Fund based BG/ LC : Rs. 6631.59 crore Derivatives & CCIL/MCX : Rs. 2769.40 crore Undrawn : Rs. 10874.20 crore (c) Geographical distribution of exposures -fund based & non fund based separately Overseas Domestic Overseas: Fund based & Non fund based: Nil Domestic: : Rs. 139675.55 crore Fund based Gross Credit : Rs. 79136.14 crore Investments : Rs. 29286.89 crore Other Assets : Rs. 10977.33 crore Non Fund based BG/ LC : Rs. 6631.59 crore Derivatives & CCIL/MCX : Rs. 2769.40 crore Undrawn : Rs. 10874.20 crore : Rs. 139675.55 crore Geographic distribution of Gross credit, NFB and HTM investments is as under: (Rs. in Crs.) State Gross credit Non Fund Based HTM Investments ANDAMAN & NICOBAR 39 3-43 ANDHRA PRADESH 1999 59 100 2158 ARUNACHAL PRADESH 94 6-100 ASSAM 223 24-247 BIHAR 137 12 36 186 CHANDIGARH 155 17-173 Basel Disclosure document Dec. 2014 Page 3 of 6
State Gross credit Non Fund Based HTM Investments CHATTISGARH 199 33 44 276 DADRA&NAGAR HAVELI 8 - - 8 DELHI 12052 1102 26580 39734 GOA 147 2-149 GUJARAT 3333 367 283 3983 HARYANA 1391 39 51 1482 HIMACHAL PRADESH 33 0 43 76 JAMMU & KASHMIR 18 1 56 74 JHARKHAND 93 9-102 KARNATAKA 16842 511 379 17732 KERALA 2363 34 157 2554 MADHYA PRADESH 428 21 38 487 MAHARASHTRA 22087 2912 429 25429 MANIPUR 28 1 10 39 MEGHALAYA 88 13 18 119 MIZORAM 50 3-52 NAGALAND 85 2-87 ORISSA 158 13-171 PONDICHERRY 69 2-71 PUNJAB 942 8 145.64 1096 RAJASTHAN 2066 38 109 2213 SIKKIM 13 - - 13 TAMIL NADU 5056 432 643 6131 TELANGANA 4104 520-4624 TRIPURA 25 7-32 UTTAR PRADESH 2412 105 78.91 2596 UTTARANCHAL 77 1-79 WEST BENGAL 2321 333 87 2741 TOTAL 79136 6632 29287 115055 (d) Industry type distribution of credit (Rupees in crore) INDUSTRYWISE DEPLOYMENT OF CREDIT Industry Credit Energy 13718.5 Transport 4244.43 Communication 675.77 Social & Commercial Infrastructure 2633.39 Water & Sanitation 452.16 Steel & Engineering Industry 3583.25 Cement Industry 195.62 Textile Industry 225.63 Precious Stones and Jewellery 248.53 Electronics 925.36 Sugar Industry 161.24 Refinery 165.86 Aluminum 657.25 Automobiles & Auto Parts 178.61 Construction 1817.48 Pharmaceuticals 112.25 Agro Based 35.91 Distillery 292.53 30323.77 Basel Disclosure document Dec. 2014 Page 4 of 6
(e) Residual maturity breakdown of assets as at 31.12.2014: (Rupees in crores) Period 1 day 2-7 days 8-14 days 15-28 days 29 days - 3 Over 3 to 6 Over 6 to 12 Over 1 year to 3 years Over 3 years to 5 years Over 5 years FC Assets 235.27 136.63 11.90 7.54 48.73 60.56 11.37 512.00 Net Advances 1361.32 354.24 1177.02 647.98 4054.76 5744.22 6227.16 26997.54 12723.70 18879.44 78167.38 Investments 11794.08 685.25 490.78 827.56 7435.95 4610.98 7438.26 3574.41 6182.03 3517.33 46556.62 Position as on 31.12.2014 (Rupees in crores) (f) Amount of NPAs (Gross) Substandard Doubtful 1 Doubtful 2 Doubtful 3 Loss (g) Net NPAs (h) NPA Ratios: Gross NPAs to gross advances Net NPAs to net advances (i) Movement of NPAs (Gross): Opening balance Additions Reductions Closing balance Movement of NPA (Net) Opening balance Additions Reductions Closing balance 2311.06 1265.46 463.40 581.64 0.42 0.14 1476.10 2.92 % 1.89 % 1985.86 2033.97 1708.77 2311.06 1262.37 213.73 1476.10 (j) Movement of provisions for NPAs Opening balance Provisions made during the period Write off Write back of excess provisions Closing balance (k) Amount of Non-Performing Investments (Under HTM Category Rs. 9.25 crore) (Under AFS Category Rs. 12.05 crore) (l) Amount of provisions for depreciation on Non Performing Investments (NPI) * provision for NPI which includes Rs. 9.25 cr for NPI in HTM. (m) Movement of provisions for depreciation on Non Performing Investments (NPI): Opening balance Provisions made during the period Write off Write back of excess provisions Closing balance 709.92 675.50 563.97 821.45 21.30 16.50* 14.06 2.44 16.50 Basel Disclosure document Dec. 2014 Page 5 of 6
TABLE DF-5 CREDIT RISK: DISCLOSURES FOR PORTFOLIOS SUBJECT TO THE STANDARDISED APPROACH Qualitative disclosures (a) For portfolios under the standardised approach: Names of credit rating agencies used plus reasons for any changes The Bank has used ratings given by RBI approved external credit rating agencies, viz CRISIL / ICRA / FITCH / CARE/SMERA/Brickwork Rating only. In order to facilitate the process of external rating and enabling the customers to solicit external ratings for their exposure, the Bank has entered into a separate MOU with the credit rating agencies. Types of exposure for which each agency is used A description of the process used to transfer public issue ratings onto comparable assets in the banking book All Corporate exposure above Rs.5 Crore and exposure to public sector entities. Bank has used only bank ratings which are available in public domain. Further the Bank has not used any public issue ratings. Quantitative disclosures (b) For exposure amounts after risk mitigation subject to the standardised approach, amount of a bank s outstandings (rated and unrated) in the following three major risk buckets as well as those that are deducted: Below 100% risk weight.. 100% risk weights.. More than 100% risk weight.. Deducted - Financial collaterals.. TOTAL.. Credit exposure ** (Rupees in Crore) 84480.47 32152.80 14883.19 8159.09 ------------- 139675.55 ** Includes following off B/S exposure FB Exposure Rs.108423.03 Crs NFB Exposure Rs. 6631.59 Crs Undrawn Portion Rs. 10874.20 Crs CCIL & MCX Rs. 302.35 Crs NFB Investments Rs. 2467.05 Crs Other Assets Rs. 10977.33 Crs Basel Disclosure document Dec. 2014 Page 6 of 6