A) Balancing of Accounts and Reconciliation

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

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

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

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

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

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

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

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

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

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

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

b) Draw down from Reserve

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

QUALITATIVE DISCLOSURE ON BANK'S LIQUIDITY COVERAGE RATIO

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

LCR has two components:

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

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

Definition of LCR:

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

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

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

Composition of High-Quality Liquid Assets (HQLA)

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

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

QUALITATIVE DISCLOSURE ON NET STABLE FUNDING RATIO

The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. "Available stable funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered for the NSFR, which extends to one year. The amount of stable funding required ("Required stable funding") (RSF) of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures.

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

NSFR= Available Stable Funding [ASF] > 100 %

Required Stable Funding [RSF]

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

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

Brief about NSFR of the Bank

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

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

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

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

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

e) Divergence in asset classification and provisioning

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

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

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

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

f) Disclosure of transfer of loan exposures

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

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

g) Un-hedged Foreign Currency Exposure

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

d) Disclosures regarding Priority Sector Lending Certificates (PSLCs)

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

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

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

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

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

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

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

j) Letter of Comfort (LOCs)

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

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

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

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

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

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

Arc 0 c

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

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

15.2 AS-9 Revenue Recognition

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

15.3 AS-10 Property Plant & Equipment/ Fixed Assets

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

15.4 AS 15 - Employees Benefit

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

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

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

Part B Geographical Segment:

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

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

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

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

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

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

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

15.12 AS 26 - Intangible Assets

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

15.13 Accounting Standard 28 - Impairment of Assets

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

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

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

a) Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank, or

b) Any present obligation from the past events but is not recognized because

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

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

Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

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

16. Disclosures in Terms of MSMED Act, 2006

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

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

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

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

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

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