Provisions, contingent liabilities and contingent assets

The Bank creates a provision when there is present obligation as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made
when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When
there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no
provision or disclosure is made.

Loss contingencies arising from claims, litigations, assessment fines, penalties etc. are recorded when it is probable that a liability
has been incurred and the amount can be reasonably estimated.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable
that the outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it
is virtually certain that an economic benefit will arise, the asset and related income are recognised in the period in which the
change occurs.

12. Provision for bad and doubtful debts

The Bank creates 100% provision against all receivables outstanding for more than 180 days or earlier where recovery is
considered doubtful.

13. Cash and cash equivalents

Cash and cash equivalents include cash in hand, balances with RBI, balances with other Bank's and money at call and short

notice.

14. Employee benefits

Post employment benefits

Defined contribution plan

The Bank makes specified monthly contributions towards employee provident fund to Government administered provident fund
scheme which is a defined contribution plan. The Bank's contribution is recognised as an expense in the Profit and Loss Account

during the period in which the employee renders the related service.

Defined benefit plan

The Bank's gratuity benefit scheme is a defined benefit plan. The Bank's net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and
prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value
of any plan assets are deducted. The calculation of the Bank's obligation under the plan is performed quarterly by a qualified
actuary using the projected unit credit method.

The Bank recognises all actuarial gains and losses arising from defined benefit plans immediately in the Profit and Loss Account.

All expenses related to defined benefit plans are recognised in employee benefits expense in the Profit and Loss Account. When
the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognised in
Profit and Loss Account on a straight-line basis over the average period until the benefits become vested. The Bank recognises
gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.

Compensated absences

Compensated absences balance upto 7 days are encashed at the end of financial year on the basic salary. Encashment of more
than 7 days of leave is not permitted. Leave balance over 7 days will lapse at the end of financial year.

15. Segment Information

The disclosure relating to segment information is in accordance with AS-17, Segment Reporting and as per guidelines issued by
RBI.

16. Share Issue Expenses

As per the section 52 (2) (c) of the Companies Act 2013, securities premium account may be utilised for writing off the expenses/
commission paid/discount allowed on, any issue of shares or debentures by a company. Further, as per RBI DBOD mailbox
clarification dated October 9, 2007 on 'Prudential Norms - Utilisation of Share Premium Account', banks can utilise share premium

account for meeting the expenses relating to the issue of shares.

17. Employee Stock Option Scheme

Employee stock compensation cost for stock options is recognised as per the Guidance Note on Accounting for Employee Share-
based Payments, issued by the Institute of Chartered Accountants of India. The Bank measures compensation cost relating to
the employee stock options using the fair value method. The compensation cost, if any, is amortised uniformly over the vesting

period of the options.