1 BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention unless otherwise stated. They conform to Generally Accepted Accounting Principles (GAAP) in India, which comprises statutory provisions, regulatory/ Reserve Bank of India (RBI) guidelines, Accounting Standards/ guidance notes issued by the Institute of Chartered Accountants of India (ICAI) and the practices prevalent in the banking industry in India. In respect of foreign offices, statutory provisions and practices prevailing in respective foreign countries are complied with.

These financial statements have been prepared in accordance with requirements under the Third Schedule of the Banking Regulation Act, 1949 and Reserve Bank of India (Commercial Banks - Financial Statements: Presentation and Disclosures) Directions, 2025 as amended from time to time.

2 USE OF ESTIMATES

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as of date of the financial statements and the reported income and expenses for the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Differences between actual results and estimates are recognised in the period in which they materialise. Any revision to the accounting estimates is recognized prospectively from the period of change unless otherwise stated.

3 INVESTMENTS AND DERIVATIVES

Classification, valuation, and operation of the Bank's investments are carried out in accordance with the Reserve Bank of India (Commercial Banks -Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025 (RBI/DOR/2025-26/162 DOR. MRG.REC.No.81/00-00-001/2025-26 dated November 28, 2025) (“RBI Investment Directions, 2025”) and such other circulars and clarifications issued by the Reserve Bank of India (“RBI”) from time to time. The Bank follows settlement-date accounting for recognising purchases and sales of investments.

3.1. Classification

The Bank classifies its entire investment portfolio (other than investments in its subsidiaries, associates, and joint ventures) into following categories:

i. Held to Maturity (HTM) - investments acquired with the intention and objective of holding them to maturity (i.e., to collect contractual cash flows), where the contractual

terms of the security give rise to cash flows that are solely payments of principal and interest on principal outstanding (“SPPI criterion”) on specified dates. HTM includes debentures and bonds which meet the SPPI criterion.

ii. Available for Sale (AFS) - investments acquired with an objective that is achieved by both collecting contractual cash flows and selling securities, where the contractual terms meet the SPPI criterion. AFS securities include, inter alia, debt securities held for Asset Liability Management purposes meeting the SPPI criterion where the Bank's intent is flexible with respect to holding to maturity or selling before maturity. At initial recognition, the Bank may make an irrevocable election to classify under AFS an equity instrument that is not held with the objective of trading.

iii. Fair Value through Profit and Loss (FVTPL) -

investments that do not qualify for inclusion in HTM or AFS. Held For Trading (“HFT”) is a separate subcategory within FVTPL and comprises instruments held for short-term resale, for profit from short-term price movements, for locking in arbitrage profits, or for hedging risks arising from such instruments, and such other instruments as are required to be included under HFT in terms of the RBI Investment Directions, 2025.

Investments in subsidiaries, associates, and joint ventures are held under a distinct category (sui generis), separate from HTM, AFS, and FVTPL.

The category of an investment is decided by the Bank before or at the time of acquisition, and such decision is properly documented.

For the purpose of disclosure in the Balance Sheet, investments are classified and disclosed under Schedule 8 (‘Investments') under six groups: (a) Government Securities, (b) Other Approved Securities, (c) Shares, (d) Debentures and Bonds, (e) Subsidiaries and/or Joint Ventures, and (f) Others.

3.2. Initial recognition

All investments are measured at fair value on initial recognition. Unless facts and circumstances suggest that the fair value is materially different from the acquisition cost, the acquisition cost is presumed to be the fair value. In respect of Government Securities acquired through auction (including devolvement), switch operations, and open market operations conducted by RBI, the price at which the security is allotted is considered to be the fair value for initial recognition.

Costs such as brokerage pertaining to investments, paid at the time of acquisition, and broken period interest, are charged to the Profit and Loss Account in accordance with RBI guidelines and are not capitalised as part of the acquisition cost.

3.3. Day 1 gain or loss

Where the fair value of an investment at initial recognition differs from the acquisition cost, the resulting Day 1 gain

or loss is accounted for as under:

i. where the fair value is based on quoted prices or other observable market inputs (Level 1 or Level 2), any Day 1 gain or loss is recognised immediately in the Profit and Loss Account, under ‘Other Income - Profit / Loss on revaluation of investments';

ii. where the fair value is determined using significant unobservable inputs (Level 3), any Day 1 loss is recognised immediately in the Profit and Loss Account. Any Day 1 gain is deferred - for debt instruments, amortised on a straight-line basis up to the maturity date (or the earliest call date, for perpetual instruments); for unquoted equity instruments, set aside as a liability until the security is listed or derecognised.

3.4. Subsequent measurement

i. Held to Maturity. Investments classified under HTM are carried at acquisition cost (or at weighted average cost where multiple lots are held). Such investments are not marked to market after initial recognition; however, they are subject to income recognition, asset classification, and provisioning norms as prescribed by RBI. Any discount or premium on the acquisition of debt securities under HTM is amortised over the remaining life of the instrument, and the amortised amount is reflected under ‘Interest Earned - Income on Investments' (with a contra in Schedule 8 - Investments).

ii. Available for Sale. AFS securities are fair valued at least on a quarterly basis. Any discount or premium on the acquisition of debt securities under AFS is amortised over the remaining life of the instrument, and the amortised amount is reflected under ‘Interest Earned -Income on Investments' (with a contra in Schedule 8 -Investments).

The Bank aggregates valuation gains and losses across all performing investments under AFS, irrespective of classification (Government Securities, Other Approved Securities, Bonds and Debentures, etc.). The net appreciation or depreciation, adjusted for the effect of applicable taxes (if any), is directly credited or debited to the ‘AFS-Reserve' without routing through the Profit and Loss Account. The AFS-Reserve is reckoned as part of Common Equity Tier 1 (CET 1) capital, subject to the restrictions specified in paragraph 3.6(b) below. Unrealised gains transferred to the AFS-Reserve are not available for any distribution, including dividends and coupons on Additional Tier 1 instruments.

AFS securities are subject to income recognition, asset classification, and provisioning norms as prescribed by RBI.

iii. Fair Value through Profit and Loss

Securities classified under the HFT sub-category within FVTPL are fair valued on a daily basis, and any valuation change is recognised in the Profit and Loss Account.

Other securities under FVTPL are fair valued at least on a quarterly basis.

Any discount or premium on the acquisition of debt securities under FVTPL is amortised over the remaining life of the instrument and reflected under ‘Interest Earned - Income on Investments'. The net gain or loss on fair valuation of FVTPL securities is credited or debited to the Profit and Loss Account.

Investments made by the Bank as a Primary Dealer in Treasury Bills are held within the HFT sub-category and are valued at carrying cost, consistent with the treatment of Treasury Bills prescribed under paragraph 75 of the RBI Investment Directions, 2025.

FVTPL securities are subject to income recognition, asset classification, and provisioning norms as prescribed by RBI.

iv. Subsidiaries, Associates, and Joint Ventures. All

investments (both debt and equity) in subsidiaries, associates, and joint ventures are carried at acquisition cost, subject to the provisions on initial recognition and Day 1 gain or loss set out above. Any discount or premium on the acquisition of debt securities of subsidiaries, associates, and joint ventures is amortised over the remaining life of the instrument and reflected under ‘Interest Earned - Income on Investments'.

The Bank evaluates its investments in subsidiaries, associates, and joint ventures for impairment at least on a quarterly basis, having regard to indicators such as: default by the investee in repayment of debt obligations; restructuring of its loans by any bank; downgrade of its credit rating to below investment grade; continuous loss for three years with consequent reduction in net worth by 25% or more; significant decline (at least 20%) in fair value vis-a-vis the carrying value for a period of six months or more; delisting or threat of delisting for noncompliance or financial reasons; and failure to achieve break-even within the originally projected gestation period. Where a determination of impairment is required, the Bank obtains a valuation from an independent registered valuer (under Section 247 of the Companies Act, 2013) and recognises the diminution, if any, as an expense in the Profit and Loss Account. Any subsequent reversal of the diminution is recognised through the Profit and Loss Account.

Investments in Regional Rural Banks are carried at acquisition cost, subject to the impairment provisions set out above.

3.5. Fair value determination

i. Quoted securities. The fair value of quoted securities is determined primarily on the basis of the prices declared by Financial Benchmarks India Private Limited (“FBIL’). Where such prices are not published by FBIL, fair value is based on quoted prices available from trades or quotes on recognised stock exchanges, reporting platforms, or trading platforms authorised by RBI / SEBI, or on prices declared by the Fixed Income Money Market and Derivatives Association of India (“FIMMDA”).

ii. Unquoted SLR securities.

Treasury Bills are valued at carrying cost.

Unquoted Central and State Government securities are valued on the basis of prices / Yield to Maturity (“YTM”) rates published by FBIL.

Other approved securities are valued applying the YTM method, marked up by 25 basis points above the yields of Central Government securities of equivalent maturity published by FBIL.

iii. Unquoted Non-SLR securities.

Unquoted debentures and bonds are valued using the YTM method with an appropriate mark-up over the YTM for Central Government securities of equivalent maturity published by FBIL / FIMMDA. The mark-up is graded by credit rating, subject to the following floors: for rated debentures / bonds, at least 50 basis points above the rate applicable to a Central Government security of equivalent maturity; for unrated debentures / bonds, not less than the mark-up applicable to rated debentures / bonds of equivalent maturity, and in any event reflective of the credit risk borne by the Bank. Where the debentures / bonds are quoted and there have been transactions within 15 days prior to the valuation date, the value adopted is not higher than the rate at which the transaction has been recorded.

Special securities directly issued by the Government of India and not carrying SLR status (including Oil Bonds, Fertiliser Bonds) are valued at a spread of 25 basis points above the corresponding yield on Central Government securities of equivalent maturity published by FBIL.

UDAY bonds are valued on the basis of prices / yields published by FBIL.

Bonds issued under DISCOM financial restructuring plans are valued as under: state-government-guaranteed bonds issued and serviced by DISCOMs

- 75 basis points above FBIL CG yields of equivalent maturity; other bonds issued and serviced by DISCOMs

- 100 basis points; bonds issued and serviced by State Government - 50 basis points.

Preference shares are valued on YTM basis with an appropriate mark-up over FBIL CG yields of equivalent maturity, subject to the preference share not being valued above its redemption value. The mark-up is graded by rating; it is non-negative (i.e., YTM not lower than CG yield of equivalent maturity), and the rate used for unrated preference shares is not less than the rate applicable to rated preference shares of equivalent maturity and appropriately reflects the credit risk borne by the Bank. Where preference dividends / coupons are in arrears, no credit is taken for accrued dividends / coupons and the value so determined is discounted further by at least 15% if arrears are for one year, by 25% if for two years, and so on (with 10% increments). Depreciation / provision on non-performing preference shares where dividends are in arrears is not set off against

appreciation on other performing preference shares. Preference shares acquired as part of project finance are valued at par for two years after commencement of production or five years after subscription, whichever is earlier.

Equity shares for which current quotations are not available, or which are classified as illiquid or unlisted, are valued at break-up value (without considering revaluation reserves, if any) as per the company's latest audited Balance Sheet. The date of such Balance Sheet shall not precede the date of valuation by more than 18 months, failing which the shares are valued at '1 per company. Valuations based on break-up value are treated as Level 3 for hierarchy disclosure.

Investments in mutual fund units are valued at the latest repurchase price declared by the mutual fund. In the case of funds with a lock-in period or where repurchase price / market quote is not available, units are valued at Net Asset Value (“NAV”) of the scheme; if NAV is not available, at cost until the end of the lock-in period.

Commercial Paper, Certificates of Deposit, and other zero-coupon discounted instruments are valued at carrying cost.

In the absence of market value, Zero-Coupon Bonds are marked to market with reference to present value, using the Zero-Coupon Yield Curve with appropriate zero-coupon spreads published by FIMMDA / FBIL.

iv. Alternative Investment Funds (AIFs).

Quoted equity shares, bonds, and units of AIFs in the Bank's portfolio are valued mutatis mutandis in accordance with the guidelines for quoted securities.

Unquoted units of AIFs are valued at the NAV disclosed by the AIF, based on the valuation of its investments by an independent valuer at the frequency mandated by the SEBI (Alternative Investment Funds) Regulations, 2012. Where the AIF fails to carry out and disclose such valuation at the mandated frequency, the units are valued at '1 per fund. Where the AIF is not registered under the SEBI (AIF) Regulations, 2012, and the latest disclosed independent valuation precedes the date of valuation by more than 18 months, the units are valued at '1 per fund.

Other unquoted equity or instruments issued by an AIF are valued in accordance with the methodology specified for such instruments in paragraphs 3.5.ii and 3.5.iii above.

v. Securitisation notes, Pass Through Certificates

Investments in securitisation notes (including Pass Through Certificates) are tested for compliance with the SPPI criterion. Tranches that meet the SPPI criterion (i.e., where the tranche's contractual terms give rise to cash flows that are solely payments of principal and interest, the underlying pool of financial instruments meets the SPPI criterion, and the credit risk of the tranche is equal to or lower than the credit risk of the combined

underlying pool) may be classified under HTM or AFS based on the objective of holding. Securitisation notes that do not meet the SPPI criterion (including the equity tranche) and instruments issued by Asset Reconstruction Companies predicated on recoveries from the underlying asset are classified under FVTPL.

vi. Security Receipts

Security Receipts (“SRs”) obtained by way of transfer of a non-performing asset to a Securitisation Company / Asset Reconstruction Company (“SC / ARC”) are recognised at the lower of (a) Net Book Value of the financial asset transferred (i.e., book value less provision held) and (b) the Redemption Value of the SR.

SRs issued by an SC / ARC are valued in accordance with the guidelines applicable to non-SLR instruments. Where the SRs are limited to the actual realisation of the financial assets assigned to the instruments in the concerned scheme, the NAV obtained from the SC / ARC is reckoned for valuation.

In terms of Reserve Bank of India (Commercial Banks -Transfer and Distribution of Credit Risk) Directions, 2025, where a loan is transferred to an ARC at a value higher than the Net Book Value and the consideration consists solely of cash and SRs guaranteed by the Government of India, any excess provision is reversed to the Profit and Loss Account in the year of transfer. Such Government-guaranteed SRs are valued periodically on the basis of the NAV declared by the ARC based on the recovery ratings received for the instrument. Investments in SRs and related instruments are otherwise governed by the RBI (Commercial Banks - Transfer and Distribution of Credit Risk) Directions, 2025.

3.6. Fair value hierarchy

In order to indicate the reliability of fair value measurement, the Bank categorises its investment portfolio into three fair value hierarchies:

i. Level 1 - valuations based substantively on unadjusted quoted prices in active markets for identical instruments accessible at the measurement date;

ii. Level 2 - valuations based on inputs other than Level 1 quoted prices that are observable for the asset, directly or indirectly;

iii. Level 3 - valuations based on significant unobservable inputs.

The Bank does not pay dividends out of net unrealised gains recognised in the Profit and Loss Account arising on fair valuation of Level 3 investments on its Balance Sheet. Further, net unrealised gains on Level 3 investments recognised in the Profit and Loss Account or in the AFS-Reserve are deducted from Common Equity Tier 1 capital, except in respect of investments that meet the SPPI criterion and are required to be risk-weighted at 50 per cent or lower for credit risk as per applicable capital adequacy instructions.

3.7. Reclassification between categories

The Bank does not reclassify investments between categories (viz., HTM, AFS, and FVTPL) without the approval of its Board and the prior approval of the Department of Supervision, RBI. Such reclassification is permitted only in rare circumstances where a significant change in the manner in which a group of investments is managed can be demonstrated. Any such reclassification, if permitted, is applied prospectively from the reclassification date, and the accounting treatment is carried out in accordance with Chapter VII of the RBI Investment Directions, 2025.

3.8. Non-Performing Investments

The criterion used to classify an asset as a NonPerforming Asset (NPA) under the RBI (Commercial Banks - Income Recognition, Asset Classification and Provisioning) Directions, 2025 is applied mutatis mutandis to classify an investment as a Non-Performing Investment (“NPI”). In particular:

i. in respect of debt instruments such as bonds or debentures and State Government Guaranteed Securities, an investment is classified as NPI where interest / instalment (including maturity proceeds) is due and remains unpaid for more than 90 days;

ii. in respect of preference shares, if the fixed dividend (cumulative or non-cumulative) is not declared or paid when due, the investment is treated as NPI;

iii. in respect of equity shares valued at '1 per company on account of unavailability of the latest Balance Sheet, such equity shares are reckoned as NPI;

iv. where any credit facility availed by the issuer is NPA, investments (including preference shares) in securities issued by the same issuer are treated as NPI, and vice versa, except that NPI classification of only the preference shares does not automatically result in classification of performing securities / credit facilities of the same issuer as NPI / NPA;

v. in the case of conversion of principal and / or interest into equity, debentures, bonds, or similar instruments, the asset classification of such instruments follows that of the underlying loan, and provision is made in accordance with RBI guidelines.

Investments in Central and State Government securities are not classified as NPI. Investments in securities guaranteed by the Central Government are not classified as NPI until the guarantee is invoked and repudiated.

Once an investment is classified as NPI, it is segregated from the rest of the portfolio and is not considered for netting valuation gains and losses. Interest on NPI is recognised only on realisation. Based on management assessment of impairment, the Bank creates additional provisions over and above the RBI-prescribed minimum, wherever considered prudent.

Upgradation of Non-Performing Investments is in line with RBI guidelines, including that (i) debt instruments are upgraded only upon satisfaction of IRACP upgradation criteria, (ii) preference shares are upgraded only upon payment of all overdue dividends where applicable, and (iii) equity instruments valued at '1 are upgraded only upon availability of the latest audited financial statements supporting valuation. Upon an account being upgraded, any provision previously recognised is reversed, and symmetric recognition of MTM gains and losses resumes.

In respect of investments held at overseas branches, classification and valuation are carried out in accordance with the RBI guidelines or those prescribed by the host-country regulator, whichever are more stringent. Where no host-country guidelines are specified, RBI guidelines are applied.

3.9. Disposal of investments

i. Sales from HTM: Sales of investments from the HTM category are undertaken in accordance with a Board-approved policy. The aggregate carrying value of investments sold out of HTM in any financial year does not exceed five per cent of the opening carrying value of the HTM portfolio. Any sale beyond this threshold requires prior approval of the Department of Supervision, RBI.

The following categories of sales are excluded from the 5% cap: (i) sales to RBI under liquidity management operations, including Open Market Operations and the Government Securities Acquisition Programme; (ii) repurchase of Government securities by Government of India under buyback or switch operations; (iii) repurchase of State Government securities by respective State Governments under buyback or switch operations; (iv) repurchase, buyback, or exercise of call option of non-SLR securities by the issuer; (v) sales of non-SLR securities following a downgrade in credit ratings or default by the counterparty; (vi) sales of securities as part of a resolution plan under the RBI (Commercial Banks - Resolution of Stressed Assets) Directions, 2025; and (vii) additional sales explicitly permitted by RBI.

Profit or loss on sale of investments from HTM is recognised in the Profit and Loss Account. The profit on sale from HTM, net of applicable taxes and the amount required to be transferred to Statutory Reserve under Section 17 of the Banking Regulation Act, 1949, is appropriated below the line to the ‘Capital Reserve Account'. Repo of securities from HTM, compliant with the Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025, is not treated as sale from HTM.

ii. Sales from AFS. Upon sale or maturity of a debt instrument under AFS, the accumulated gain or loss for that security in the AFS-Reserve is transferred from the AFS-Reserve and recognised in the Profit and Loss Account under ‘Other Income - Profit on sale of investments'. In the case of equity instruments

designated under AFS at the time of initial recognition, any gain or loss on sale of such investments is not transferred from the AFS-Reserve to the Profit and Loss Account; instead, such gain or loss is transferred from the AFS-Reserve to the Capital Reserve.

iii. Sales from FVTPL. Profit or loss on sale or maturity of investments in the FVTPL category is recognised in the Profit and Loss Account.

iv. Sale of investments in subsidiaries, associates, and joint ventures. Any gain or profit arising on the reclassification or sale of an investment in a subsidiary, associate, or joint venture is first recognised in the Profit and Loss Account and, net of applicable taxes and the amount required to be transferred to Statutory Reserve, is appropriated below the line to the ‘Capital Reserve Account'.

3.10. Short sale

The Bank undertakes short sale transactions in Central Government dated securities in accordance with the Short Sale (Reserve Bank) Directions, 2018, as amended. The short sale position is reflected in a ‘Securities Short Sold' (SSS) account specifically created for this purpose, is marked to market, and the resultant profit or loss is charged to the Profit and Loss Account. Profit or loss on settlement of the short position is recognised in the Profit and Loss Account.

3.11. Accounting for repo and reverse repo

The Bank has adopted the Uniform Accounting Procedure prescribed by RBI for accounting for Market Repo and Reverse Repo transactions (including transactions under the Liquidity Adjustment Facility) in accordance with the Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025 and related RBI circulars. Repo and reverse repo transactions are accounted for as collateralised borrowing and lending transactions with an agreement to repurchase on agreed terms. Securities sold under repo continue to be shown under investments; securities purchased under reverse repo are not included in investments. Costs and revenues are accounted as interest expenditure / income.

3.12. Investment Fluctuation Reserve

The Bank maintains an Investment Fluctuation Reserve (“IFR”) in accordance with RBI directions, with a view to building up adequate reserves to protect against an increase in yields. Transfer to IFR is the lower of

i. the net profit on sale of investments during the year, and

ii. the net profit for the year less mandatory appropriations, until the balance of IFR is at least two per cent of the AFS and FVTPL (including HFT) portfolio, on a continuing basis.

3.13. Derivatives

The Bank deals in interest rate derivatives and currency derivatives. The interest rate derivatives transacted by

the Bank comprise Rupee Interest Rate Swaps (Rupee IRS), Foreign Currency Interest Rate Swaps (FCY IRS), Forward Rate Agreements (FRAs) , Interest Rate Caps and Floors and Exchange Traded Rupee Interest Rate Futures (IRF). The currency derivatives transacted by the Bank comprise Currency Swaps (including Cross Currency Swaps), Currency Options (including Exchange Traded Currency Options), Exchange Traded Currency Futures and Foreign Exchange Forward Contracts.

The Bank undertakes derivative transactions for two distinct purposes, namely (i) market-making and proprietary trading, and (ii) hedging of on-balance sheet assets and liabilities (including foreign currency funding) and off-balance sheet exposures. Derivative contracts are categorised at inception as either trading derivatives or hedging derivatives, based on the purpose for which the contract is entered into.

Derivative transactions undertaken by the Bank are governed by the Bank's internal Policy on Integrated Treasury Operations (Domestic), which lays down the permitted types of financial derivative instruments, the scope of their use, the approval procedures, and the operational limits including open position limits, stoploss limits and counterparty exposure limits.

Hedge Designation, Documentation and Effectiveness Assessment

Where a derivative contract is designated as a hedge, the Bank, at the inception of the hedging relationship, formally documents the hedged item (asset or liability), the hedging instrument, the nature of the risk being hedged, the risk management objective and strategy for undertaking the hedge, and the methodology for assessing the effectiveness of the hedging relationship.

Hedge effectiveness is ascertained at the inception of the hedge and is reassessed periodically at each reporting date thereafter. Hedge effectiveness is measured by the degree to which changes in the fair value or cash flows of the hedged item that are attributable to the hedged risk are offset by changes in the fair value or cash flows of the hedging instrument, using various qualitative and quantitative methods.

The Bank discontinues hedge accounting prospectively when (a) the hedging instrument expires or is sold, terminated or exercised; (b) the hedge no longer meets the criteria for hedge accounting; (c) the hedged forecast transaction is no longer expected to occur; or (d) the Bank revokes the hedge designation. On discontinuance of hedge accounting, the remaining fair value adjustment to the carrying amount of the hedged item, is immediately recognized in the Profit and Loss Account.

3.14. Valuation and Accounting of Derivatives

The Bank accounts for derivative contracts in accordance with the Accounting Standard 11 (AS11) and Guidance Note on Accounting for Derivative Contracts (Revised

2021) issued by the Institute of Chartered Accountants of India (ICAI), read together with the following Reserve Bank of India (RBI) regulatory framework, as applicable from time to time:

• Reserve Bank of India (Commercial Banks -Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025 dated November 28, 2025 (which supersede the earlier RBI Master Direction -Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023);

• Master Direction - Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025 [Notification No. FMRD.DIRD.07/14.03.046/2025-26 dated December 8, 2025, effective March 1, 2026], which supersede the earlier framework on Rupee Interest Rate Derivatives issued in June 2019, in respect of rupee interest rate derivative transactions;

• Master Direction - Risk Management and Interbank Dealings dated July 5, 2016 (as updated up to April 16, 2025), read together with the RBI Directions on Hedging of Foreign Exchange Risk dated April 5, 2024, in respect of foreign exchange derivative transactions; and

• the principles laid down by the Foreign Exchange Dealers' Association of India (FEDAI), Financial Benchmarks India Pvt. Ltd. (FBIL) and the Fixed Income Money Market and Derivatives Association of India (FIMMDA), as applicable.

A. Trading (Non-Hedge) Derivatives

Derivative positions that are not designated as hedges (i.e., trading derivatives) are marked to market as at each Balance Sheet date. The resulting gains or losses are recognised in the Profit and Loss Account. Mark-to-market gains and losses on trading derivatives are presented on a gross basis (without offsetting). The positive mark-to-market value (gain) is presented as a derivative asset under Schedule 11 - ‘Other Assets', and the negative mark-to-market value (loss) is presented as a derivative liability under Schedule 5 - ‘Other Liabilities and Provisions', as separate line items, in line with the requirements of the Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025.

Income and expenditure relating to interest rate swaps are accrued on a daily basis up to the Balance Sheet date. Gains or losses on termination of trading swaps are recognised on the date of termination as immediate income or expenditure in the Profit and Loss Account.

B. Hedge Derivatives

(a) Fair Value Hedge

In the case of a fair value hedge, changes in the fair value of the hedging instrument and the corresponding changes in the fair value of the hedged item attributable to the hedged risk are recognised in the Profit and Loss Account in the period of change. Where the hedged item is otherwise carried at amortised cost, an adjustment is

made to its carrying value, in compliance with the hedge accounting requirements.

(b) Cash Flow Hedge

In the case of a cash flow hedge, the effective portion of the changes in the fair value of the hedging instrument is recognised directly in ‘Reserves and Surplus' under the head ‘Cash Flow Hedge Reserve'. The ineffective portion, if any, of an otherwise effective hedging relationship is recognised immediately in the Profit and Loss Account.

The accumulated balance in the Cash Flow Hedge Reserve is reclassified (recycled) to the Profit and Loss Account in the same period(s) in which the hedged forecast cash flows affect the Profit and Loss Account. If the hedged forecast transaction is no longer expected to occur, the cumulative gain or loss accumulated in the Cash Flow Hedge Reserve is immediately reclassified to the Profit and Loss Account.

(c) Net Investment Hedge

i. Capital remitted to Overseas branches: The hedge accounting for these derivative contracts is done under ‘net investment hedging'. The gains or losses on derivatives for hedging of the capital remitted to overseas branches are recognized in equity (Hedge Reserve) for the effective portion of the hedge, whereas the ineffective portion of the hedge is recognised in the Profit and Loss Account.

ii. Capital remitted to Overseas Subsidiaries: The hedge accounting is done under Accounting Standard 11 -‘The Effects of Changes in Foreign Exchange Rates'. As per AS 11, the premium arising at the inception of such forward exchange contract is amortised as income over the life of the contract, and exchange differences on such contracts are recognised in the Profit and Loss Account. Hence the revaluation gains or losses on exchange differences of the FX swaps/forwards for the capital remitted to overseas subsidiaries are recognized in the exchange profit. The forward premium income is amortized over the maturity of the FX swap / forward.

C. Valuation Methodology - Specific Instruments

Interest Rate Swaps (IRS) and Forward Rate Agreements (FRAs): The fair value of an IRS / FRA outstanding as at the Balance Sheet date is computed on the basis of the amount that would be receivable or payable for the period from reporting date to termination of the swap / FRA agreement, using market-observable inputs and benchmark curves published by FBIL and FIMMDA. The resulting profit or loss is presented as a derivative asset (under Schedule 11) or derivative liability (under Schedule 5), as the case may be.

Interest Rate Futures (IRF) and Currency Futures:

Exchange traded Interest Rate Futures and Currency Futures are valued on the basis of the daily settlement price of each contract provided by the relevant exchange. All open positions are marked to market

based on the daily settlement price, and the resultant mark-to-market profit or loss is settled with the exchange on a daily basis.

Currency Options: The Bank follows the option premium accounting principle prescribed by FEDAI. Premium received on options sold and premium paid on options bought are recorded in the Profit and Loss Account at the expiry or early termination of the option contract. The amounts received or paid on cancellation of option contracts are recognised as realised gains or losses on options. For valuation of over-the-counter (OTC) currency options, the premium received and premium paid are considered for arriving at the mark-to-market value. Exchange Traded Currency Options are valued using internal pricing models.

Foreign Exchange Forward Contracts: Foreign exchange forward contracts undertaken for trading and outstanding as at the Balance Sheet date are revalued at the closing spot and forward rates as notified by FEDAI / FBIL and at interpolated rates for contracts of interim maturities. Valuation is considered on a present value basis, with the forward profit or loss discounted to the valuation date using the appropriate yield curve. The resulting gains or losses are recognised in the Profit and Loss Account.

Foreign exchange forward contracts entered into for hedging and not intended for trading, that establish the amount of reporting currency required or available at the settlement date of an underlying transaction and remain outstanding at the Balance Sheet date, are accounted for in accordance with Accounting Standard (AS) 11 -‘The Effects of Changes in Foreign Exchange Rates'. Such contracts are translated at the closing spot rate, and the premium or discount arising at the inception of the contract is amortised as expense or income over the life of the contract on a straight-line basis.

Cancellation / Termination: Swap gain/loss receivable or payable and interest on outlay of funds receivable on cancellation, termination or early delivery of foreign exchange forward contracts and swaps are recognised as income or expense on the date of cancellation, termination or early delivery.

Credit Default Swaps (CDS): The Bank values its Credit Default Swap (CDS) contracts in accordance with the RBI guidelines on CDS dated February 10, 2022, under which banks are required to value CDS contracts using the daily CDS curve published by FIMMDA, or any other proprietary model if it results in a more conservative valuation. The Bank uses the FIMMDA curve for valuing CDS positions and does not use any internal proprietary model for CDS valuation. CDS positions, where outstanding, are marked to market and the resulting gains or losses are recognised in the Profit and Loss Account.

D. Fair Value Hierarchy

In compliance with the Reserve Bank of India

(Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, the Bank categorises its derivatives portfolio into three fair value hierarchies for measurement and disclosure purposes, as set out below:

The credit exposure so computed forms the basis for capital adequacy computations under the prescribed RBI framework, for monitoring of counterparty exposure limits, and for credit risk concentration analysis.

Counterparty Credit Risk Mitigation and Collateral

The Bank enters into derivative transactions with counterparties whose business standing and financial position have been evaluated and approved internally, against whom the Bank has set up appropriate credit and exposure limits. The ability of the counterparty to honour its obligations in the event of crystallisation of the exposure is assessed prior to entering into the transaction.

For non-centrally cleared foreign exchange and derivative transactions, the Bank, in line with the regulatory requirements prescribed by the Reserve Bank of India, has entered into International Swaps and Derivatives Association (ISDA) Master Agreements together with Credit Support Annex (CSA) agreements with major international counterparty banks and select Indian financial institutions. Under these arrangements, the mark-to-market exposure on covered transactions is collateralised through the exchange of margin in accordance with the terms agreed between the parties.

Where considered appropriate, the Bank stipulates credit covenants as trigger events under which the Bank may call for additional collateral or terminate the derivative transaction, in order to mitigate counterparty credit risk and minimise the consequent provisioning exposure.

F. Provisioning on Derivative Receivables

Pursuant to the extant RBI guidelines, any receivables under derivative contracts comprising crystallised receivables, as well as the positive mark-to-market value in respect of future receivables under the derivative contract, which remain overdue and unpaid for more than 90 days, are reversed through the Profit and Loss Account. Overdue receivables representing crystallised positive mark-to-market value of a derivative contract are transferred to the account of the borrower and treated as non-performing assets, if these remain unpaid for 90 days or more. Such reversed amounts, together with positive mark-to-market values pertaining to future receivables, are held in a separate suspense account under Schedule 5 - ‘Other Liabilities and Provisions' (Suspense Account - Crystallised Receivables / Suspense Account - Positive MTM).

Where a derivative counterparty has been classified as non-performing, the Bank makes provision for the entire amount of overdue and future receivables relating to the positive mark-to-market value of derivative contracts of such counterparty. Mark-to-market gains on other derivative contracts with the same counterparty, if any, are reversed through the Profit and Loss Account, in line with regulatory expectations.

G. Contingent Liabilities

Contingent liabilities on account of derivative contracts denominated in foreign currencies (including foreign exchange forward contracts, currency swaps, currency options and other off-balance sheet exposures) are reported at the closing rates of exchange notified by FEDAI as at the Balance Sheet date. Contingent liabilities in respect of guarantees, acceptances, endorsements and other obligations denominated in foreign currencies are similarly reported at the FEDAI closing rates.

H. Presentation in Financial Statements

Derivative assets and derivative liabilities are presented as separate line items under Schedule 11 - ‘Other Assets' and Schedule 5 - ‘Other Liabilities and Provisions', respectively, on a gross basis (without offsetting), in compliance with the Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025. Adjustments arising from the application of hedge accounting are made to the carrying value of the related hedged item, where applicable, in compliance with the ICAI Guidance Note on Accounting for Derivative Contracts (Revised 2021).

Initial margin, variation margin and default fund contributions placed by the Bank with recognised central counterparties - including the Clearing Corporation of India Limited (CCIL) for the forex forward, forex settlement and Rupee Derivatives (Guaranteed Settlement) segments; the National Securities Clearing Corporation Limited (NSCCIL) for the NSE Currency Derivatives segment; the Indian Clearing Corporation Limited for the BSE Currency Derivatives segment; and Multi Commodity Exchange Clearing Corporation for the MCX Currency Derivatives segment - in respect of the Bank's derivative transactions, are presented under Schedule 11 - ‘Other Assets', separately from the derivative mark-to-market positions, in line with the requirements of the Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025.

4. ADVANCES

4.1 Advances in India are classified as Standard and NPA viz. Sub-standard, Doubtful or Loss assets and provision for advances are made as per Reserve Bank of India (Commercial Banks - Income Recognition, Asset Classification and Provisioning) Directions, 2025, as amended from time to time. (“IRACP norms”) except as stated in para 4.3. Advances made by overseas branches are classified and provided for in accordance with the IRACP norms or local laws and regulations of the host country in which advances are made, whichever is more stringent.

4.2 Advances are presented net of specific loan loss provisions, interest suspense, amounts received and held in suit-filed Sundry Deposits and claims received.

4.3 Further to the provisions stipulated under the IRACP norms, as a consistent practice, the Bank has made higher provisions at rates specified below as compared to minimum prescribed under IRACP norms, in respect of the following categories:

• Provision of 20% on the Secured Sub-standard Advances as against the Regulatory requirement of 15%.

• Provisions are also made on non-fund-based facilities of NPA Borrowers by applying 50% Credit conversion factor (CCF). The provisioning percentage is based on the asset class of the related fund-based facility of the Borrowers

• Provision of 100% is made in respect of existing NPA accounts that are collateral free viz. auto loan, education loan and personal loan after 6 months from the date of NPA.

• Provision of 100% is made in respect of existing NPA accounts pertaining to loan against mortgage properties after 2 years from the date of NPA.

• Provision of 100% provision is made in respect of existing NPA accounts pertaining to loans for tractors/ tiller/ power tillers after 6 months from the date of NPA.

4.4 In respect of Restructured accounts, provision for diminution in fair value of restructured advances is measured at net present value terms as per RBI guidelines for accounts where total dues to bank are '1 crore and above. For other accounts, the provision for diminution in fair value is computed notionally at 5% of total exposure to the Bank as per RBI guidelines.

4.5 Transfer of stressed loan to Asset Reconstruction Company (ARC) is carried out in accordance with Reserve Bank of India (Commercial Banks - Transfer and Distribution of Credit Risk) Directions, 2025. In accordance with the guidelines, if stressed loan is transferred to ARC at a price below the NBV at the time of transfer, the Bank debits the shortfall to the profit and loss account for the year in which the transfer has taken place. On the other hand, when the stressed loan is transferred to an ARC for a value higher than the NBV at the time of transfer, the Bank reverses the excess provision on transfer to the profit and loss account in the year the amounts are received and only when the sum of cash received by way of initial consideration and / or redemption or transfer of Security Receipts (SR) / Pass Through Certificates (PTCs)/ other securities issued by ARCs is higher than the NBV of the loan at the time of transfer. Further, such reversal is limited to the extent to which cash received exceeds the NBV of the loan at the time of transfer.

4.6 In the case of loan accounts classified as NPAs, an account may be reclassified as a performing asset if it conforms to the guidelines prescribed by RBI.

4.7 Amounts recovered against debts written off in earlier years are recognised as revenue in the year of recovery.

4.8 Recoveries from Non-Performing Assets (NPAs) are appropriated in the manner specified under para 9.6 below

5 FLOATING PROVISIONS:

The Bank has a policy for creation and utilization of floating provisions separately for advances, investments and general purposes. The quantum of floating provisions to be created is assessed every year. The floating provisions are utilized only for contingencies under extraordinary circumstances specified in the policy with prior permission of Reserve Bank of India.

6 PROVISION FOR COUNTRY EXPOSURE

In addition to the specific provisions held according to asset classification status, provisions are also made for individual country exposures (other than the home country). Countries are categorised into seven risk categories, namely, Insignificant, Very Low, Low, Medium, High, Very High, Restricted and provisioning made as per extant RBI guidelines. If the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no provision is maintained on such country exposures.

7 FIXED ASSETS

7.1 Premises and other fixed assets are stated at historical cost (or revalued amounts, as the case may be), less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure incurred on assets put to use is capitalized only when it increases the future benefit from / functioning capability of such assets. Profit/loss on sale of immovable properties are being formed part of profit and loss account of the Bank.

7.2 Revaluation of immovable properties

The Bank revalues freehold immovable properties every three years. The increase in Net Book Value of the asset due to revaluation is credited to the Revaluation Reserve Account without routing through the Profit and Loss Account. Additional Depreciation on the revalued asset is charged to the Profit and Loss Account and appropriated from the Revaluation Reserves to General Reserve. The revalued asset is depreciated over the balance useful life of the asset as assessed at the time of revaluation.

7.3 Premises include land and building under construction.

8 RESERVES AND SURPLUS

Statutory Reserves created by foreign branches/ subsidiaries as per applicable local laws of the respective countries are included under Revenue and other Reserves.

9 REVENUE RECOGNITION

9.1 Income unless stated otherwise is generally recognized on an accrual basis. Interest on income tax refund is

recognised on receiving the refund order/s/intimation from Income Tax Department. In the case of foreign offices, income is recognized as per the local laws of the country in which the respective foreign office is located.

9.2 Income by way of Fees, all Commissions (other than on Government business and commission from sale of third party products), Commission on Guarantees, Letter of Credits, Exchange and Brokerage and Interest on Bill Past Due, Bank Guarantee (BPD-BG) Account opened against development of Letter of Credit/ invocation of Bank Guarantee are accounted for on realisation basis.

9.3 Dividend on shares in Subsidiaries, joint ventures and associates is accounted on realization basis. Income (other than valuation gain / loss) from units of mutual funds, alternative investment funds and other such pooled / collective investment funds is recognized on realisation basis

9.4 In view of uncertainty of collection of income in cases of Non-performing Asses/Investments, such income is accounted for only on realisation in terms of the RBI guidelines.

9.5 Appropriation of recoveries in NPA accounts:

Recoveries effected in the account (including recovery under Public Money Recovery Act) from time to time should be appropriated in the following order:

• towards all costs, commission, charges and expenses paid or incurred by the Bank

• towards interest, additional interest, further interest, penal interest due to the Bank

• towards payment of the principal money

Recovery in suit filed/ decreed accounts should be appropriated:

• As per the directives of the concerned Court.

• In the absence of specific directives from the Court, as applicable to non-suit filed accounts.

Recovery by settlement through compromise/NCLT Resolution:

In case of Resolution/Settlement through NCLT or compromise sanctioned account, recovery should be appropriated as per the terms of compromise sanction/ resolution settlement.

9.6 Appropriation of recoveries in Standard accounts:

The appropriation of recovery in Standard Accounts is effected as per the date of demands raised and the earliest demand is being satisfied in the following order:

• towards all costs, commission, charges and expenses paid or incurred by the Bank

• towards interest, additional interest, further interest, penal interest due to the Bank

• towards payment of the principal money

10 CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hand and ATMs, balances with the Reserve Bank of India, balances with other banks and money at call and short notice (including effect of changes in exchange rates on cash and cash equivalents in foreign currency).

11 DEPRECIATION

11.1 Depreciation on Fixed Assets in India [other than those referred in Paragraph 11.3 and 11.4] is provided in accordance with Schedule II to the Companies Act, 2013, as per following table, except in case of revalued assets, in respect of which depreciation is provided on the basis of estimated useful life of these revalued assets

11.4 Depreciation on ATMs is provided on Straight Line Method at the rate of 20% p.a.

11.5 Depreciation on additions is provided proportionately from the date of purchase/ put to use.

11.6 Cost of leasehold land and leasehold improvements are amortized over the period of lease.

11.7 The increase in Net Book Value of the asset due to the latest available revaluation is credited to the Revaluation Reserve Account without routing through the Profit and Loss Account. Additional Depreciation on the revalued asset is charged to the Profit and Loss Account and appropriated from the Revaluation Reserves to Other Revenue Reserve.

11.8 The Revalued Asset is depreciated over the balance useful life of the asset as assessed at the time of revaluation.

12 FOREIGN CURRENCY TRANSACTIONS:

12.1 Accounting for transactions involving foreign exchange is done in accordance with Accounting Standard (AS) 11,” The Effects of Changes in Foreign Exchange Rates”, issued by The Institute of Chartered Accountants of India.

12.2 As stipulated in AS-11, the foreign operations of the Bank are classified as a) Integral Operations and b) Non-Integral Operations. Foreign exchange operations of domestic business and Representative Offices are treated as Integral Operations and all Overseas Branches, Offshore Banking Units, Overseas Subsidiaries are treated as Non-Integral Operations.

12.3 Foreign currency transactions in respect of Integral Operations:

a) The transactions are initially recorded at the exchange rate between the reporting currency and the foreign currency on the date of transaction.

b) Foreign Currency Assets and Liabilities (including contingent liabilities) are translated at the closing spot rates notified by FEDAI as at every reporting date.

c) Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded are recognised as income or as expense in the period in which they arise.

12.4 Foreign currency transactions in respect of Non-Integral Operations:

a. Assets and liabilities are translated at the closing spot rates notified by FEDAI at the end of the reporting period.

b. Foreign exchange Spot and Forwards contingent liabilities outstanding as at the balance sheet date are translated at the closing spot and forward rates respectively notified by FEDAI and interpolated rates for contracts of interim maturities.

c. Income and expenses are translated at quarterly average rate notified by FEDAI at the end of the reporting period.

d. The resulting exchange differences are not recognized as income or expense for the period but accumulated in a separate account “Foreign Currency Translation Reserve” till the disposal of the net Investment.

13 EMPLOYEE BENEFITS

13.1 PROVIDENT FUND

Provident fund is a statutory obligation as per Bank of Baroda PF Rules as the Bank pays fixed contribution at pre-determined rates. The obligation of the Bank is limited to such fixed contribution. The contributions are charged to Profit and Loss Account. The fund is managed by Bank of Baroda Provident Fund Trust.

13.2 GRATUITY

Gratuity liability is a statutory obligation being higher of gratuity payment as per Bank of Baroda Gratuity Fund Rules and Regulations and Payment of Gratuity Act 1972. This is provided for on the basis of an actuarial valuation made at the end of the financial year. The gratuity liability is funded by the bank and is managed by Bank of Baroda Gratuity Fund Trust.

13.3 PENSION

Pension liability is a defined benefit obligation under Bank of Baroda Employees' Pension Regulations 1995 and is provided for on the basis of actuarial valuation made at the end of the financial year, for the employees who have joined Bank up to March 31,2010 and opted for pension. The pension liability is funded by Bank of Baroda (Employees) Pension Fund Trust.

New Pension Scheme which is applicable to employees who joined bank on or after April 1, 2010 is a defined contribution scheme, Bank pays fixed contribution at pre-determined rate and the obligation of the Bank is limited to such fixed contribution. The contribution is charged to Profit and Loss Account.

13.4 COMPENSATED ABSENCES

Accumulating compensated absences such as Privilege Leave and unavailed sick leave are provided for based on actuarial valuation.

13.5 OTHER EMPLOYEE BENEFITS

Other Employee benefits such as Leave Encashment, Leave Fare Concession and Additional Retirement Benefit on Retirement are provided for based on actuarial valuation.

In respect of overseas branches and offices, the benefits in respect of employees other than those on deputation are valued and accounted for as per laws prevailing in the respective territories.

14 SEGMENT REPORTING

The Bank recognizes the business segment as the primary reporting segment and geographical segment as the secondary reporting segment in accordance with the RBI guidelines and in compliance with the

Accounting Standard 17 issued by ICAI.

15 LEASES

Lease where risks & rewards of ownership are retained by lessor are classified as Operating Lease as per AS 19 (Leases). Lease payments for assets taken on operating lease are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term, unless the payments are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increase.

16 EARNINGS PER SHARE

The bank reports basic and diluted earnings per equity share in accordance with AS 20 (Earnings per Share) issued by the ICAI. Basic earnings per equity share are computed by dividing net profit for the period by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

17 TAXES ON INCOME

Income tax expense comprises of current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period) as determined in accordance with AS 22 (Accounting for taxes on Income) issued by ICAI.

Current tax expense is determined in accordance with the provisions of the Income Tax Act, 1961 as amended and as per Accounting Standard 22 - “Accounting for Taxes on Income” respectively after considering taxes paid at the foreign offices, which are based on the tax laws of respective jurisdictions.

Deferred tax assets and liabilities are recognized by considering the impact of timing differences between taxable income and accounting income for the current year. These are recognized and reassessed at every reporting date subject to consideration of prudence in respect of items of income and expenses those arise at one point of time and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the income statement in the period of enactment of the change.

Deferred tax assets are recognised and re-assessed at each reporting date, based upon management's judgment as to whether their realisation is considered as reasonably certain. Deferred Tax Assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future profits.

18 IMPAIRMENT OF ASSETS

The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized in Profit and Loss account in accordance with AS-28 (Impairment of Assets) issued by ICAI, wherever the carrying amount of an asset exceeds its recoverable amount.

The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Subsequently, depreciation is provided for on the revised carrying amount of the asset over remaining useful life.

19 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

As per AS 29 (Provisions, Contingent Liabilities and Contingent Assets) issued by the ICAI, the Bank recognizes provisions only when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent liability is disclosed unless the possibility of an outflow of resources embodying economic benefit is remote. These are assessed at regular intervals and only that part of

the obligation for which an outflow of resources embodying economic benefits is probable, is provided for.

Contingent Assets are not recognized in the financial statements.