A N N U A L R E P O R T 2 0 1 9 -2 0
experience
open
Opp. Samartheshwar Temple,
Wadia International Centre,
Registered office :
'Trishul, 3rd Floor,
Law Garden, Ellisbridge,
Ahmedabad - 380 006
Tel. No.: 079-6630 6161
Fax No.: 079-2640 9321
Email: shareholders@axisbank.com
Corporate office :
‘Axis House’, C-2,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Tel. No.: 022-2425 2525
Fax No.: 022-2425 1800
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Table of contents
Staying on Course
Statutory Reports
Financial Statements
02 Prelude
45 Directors’ Report
04 About Axis Bank
63 Management
168 Independent Auditor’s Report -
Standalone Financial Statements
Discussion and Analysis
176 Standalone Financial Statements
91 Corporate Governance
254 Independent Auditor’s Report -
133 Other Reports
Consolidated Financial Statements
262 Consolidated Financial Statements
309 Form AOC 1
310 Basel III Disclosures
08 One Axis
10 Message from MD & CEO
16 Message from ED’s
26 Board of Directors
27 Core Management Team
28 Business Highlights
30 Key Performance Indicators
32 Experience Open
44 Awards and Accolades
How we performed in Fiscal 2019-20
Total assets
`915,165 crores
14%
Total deposits
`640,105 crores
17%
Total advances
`571,424 crores
15%
Total income
`78,172 crores
15%
Net interest income
`25,206 crores
16%
Net profit
`1,627 crores
Gross NPA
4.86%
(previous year 5.26%)
Net NPA
1.56%
(previous year 2.06%)
Provision coverage ratio
69%
(previous year 62%)
Cost: Asset ratio
2.09%
(previous year 2.13%)
Net interest margin (NIM)
3.51%
(previous year 3.43%)
Capital adequacy ratio
17.53%
(previous year 15.84%)
Above are standalone figures as on/for the year ended 31 March, 2020
Growth in Fiscal 2019-20 vis-à-vis Fiscal 2018-19
openexperience
Open defines everything we
have always been.
It is a philosophy that has been part of our DNA for the last 26 years. It is the
way we organise ourselves on every front, internally and externally.
Be it our keen eye to spot opportunities and willingness to act on them.
Or our commitment to our customers that no matter what they have to say,
we are here to listen.
We are open to ideas, suggestions and even criticism. We are open to newer
ways of working, technologies, and approaches, that will shape the future
of financial services. We strive to live up to our commitment to partner
communities and the wider family of stakeholders in inclusive development.
Our business moves on the wheels of trust. We deeply value the confidence
and faith of our stakeholders, and we promise to uphold the highest standard
in delivering them. Our aim is to grow together as India’s most reliable bank.
We are Axis. We are Open.
Staying on Course
Prelude
Open has diverse facets
Open is our credo that touches all in different ways and
creates value that builds las(cid:10)ng recall. It is a journey that we
cherish, every moment of every day. Here is a closer look.
Upskilling and mo(cid:31)va(cid:31)ng
our PEOPLE
• A€rac(cid:127)ng, nurturing and developing
talent from across the board
• Driving diversity and inclusion
• Enhancing growth and career prospects
through expansion across business lines
• Refining the performance-based growth
path and reward system
Fulfilling commitment
to REGULATORS
• Relentless focus on eleva(cid:127)ng compliance
• Embedding governance as the way of life
2
at Axis
Enriching experiences
for CUSTOMERS
• Offering a wide basket of product and
services as One Axis, across all group
companies
• Enhanced ease of banking by using digital
and mobile banking channels
• Branches facilitate customer engagement
to drive stronger rela(cid:127)onships with
customers
• Simplified processes, reduced
documenta(cid:127)on requirements and
increased system-based renewals for
SMEs
2
• Created a new sales channel with focused
ver(cid:127)cals for salary, trust and socie(cid:127)es
• Improved turnaround (cid:127)me for opening
new accounts
2
Crea(cid:31)ng value for
SHAREHOLDERS
• Built a formidable franchisee over the last
10 years
Contribu(cid:31)ng to
the NATION
• Remain posi(cid:127)oned for cau(cid:127)ous,
conserva(cid:127)ve and consistent growth
• Rural franchise con(cid:127)nues to be strong
with 2,145 rural and semi-urban branches
• Transit solu(cid:127)ons for Kochi and Bangalore
Metro; POS solu(cid:127)ons at mul(cid:127)ple loca(cid:127)ons
• Managing mul(cid:127)ple schemes of
Government of India and various state
governments
• Involved in Sarva Shiksha Abhiyaan,
Mid-Day Meal, Na(cid:127)onal Food Security
Mission, Pradhan Mantri Awaas Yojna and
Rashtriya Krishi Vikas Yojna, among others
Lending hands for
COMMUNITY upli(cid:29)
• Axis Bank Founda(cid:127)on (ABF) creates
opportuni(cid:127)es for ‘Sustainable Livelihoods’
• ABF undertakes and supports various
ini(cid:127)a(cid:127)ves for poverty allevia(cid:127)on,
educa(cid:127)on and skill development, financial
inclusion and literacy, and sustainability
Prelude
Open has diverse facets
Open is our credo that touches all in different ways and
creates value that builds las(cid:10)ng recall. It is a journey that we
cherish, every moment of every day. Here is a closer look.
Enriching experiences
for CUSTOMERS
• Offering a wide basket of product and
services as One Axis, across all group
companies
• Enhanced ease of banking by using digital
and mobile banking channels
• Branches facilitate customer engagement
to drive stronger rela(cid:127)onships with
customers
• Simplified processes, reduced
documenta(cid:127)on requirements and
increased system-based renewals for
SMEs
• Created a new sales channel with focused
2
ver(cid:127)cals for salary, trust and socie(cid:127)es
• Improved turnaround (cid:127)me for opening
new accounts
Upskilling and mo(cid:31)va(cid:31)ng
our PEOPLE
• A€rac(cid:127)ng, nurturing and developing
talent from across the board
• Driving diversity and inclusion
• Enhancing growth and career prospects
through expansion across business lines
• Refining the performance-based growth
path and reward system
Fulfilling commitment
to REGULATORS
• Relentless focus on eleva(cid:127)ng compliance
• Embedding governance as the way of life
2
at Axis
Crea(cid:31)ng value for
SHAREHOLDERS
• Built a formidable franchisee over the last
10 years
Contribu(cid:31)ng to
the NATION
• Remain posi(cid:127)oned for cau(cid:127)ous,
conserva(cid:127)ve and consistent growth
• Rural franchise con(cid:127)nues to be strong
with 2,145 rural and semi-urban branches
• Transit solu(cid:127)ons for Kochi and Bangalore
Metro; POS solu(cid:127)ons at mul(cid:127)ple loca(cid:127)ons
• Managing mul(cid:127)ple schemes of
Government of India and various state
governments
• Involved in Sarva Shiksha Abhiyaan,
Mid-Day Meal, Na(cid:127)onal Food Security
Mission, Pradhan Mantri Awaas Yojna and
Rashtriya Krishi Vikas Yojna, among others
Lending hands for
COMMUNITY upli(cid:29)
• Axis Bank Founda(cid:127)on (ABF) creates
opportuni(cid:127)es for ‘Sustainable Livelihoods’
• ABF undertakes and supports various
ini(cid:127)a(cid:127)ves for poverty allevia(cid:127)on,
educa(cid:127)on and skill development, financial
inclusion and literacy, and sustainability
3
Annual Report 2019-20Experience Open About Axis Bank
Emerging stronger everyday
4
Staying on Course We are operating in one of the world’s most inspiring and promising
economies. It is also where millions of people are joining the economic
mainstream at a faster pace and demanding a better quality of life. Our
engagemnent is focussed on being a impactful enabler of change across
these sections of the society.
For over two decades, we have created one of the most
valuable banking brands in India. As one of the leading
private sector banks of the country, we offer a wide range
of products and services to corporate and retail customers
through a variety of delivery channels. We commenced our
operations in April 1994 and have grown since, in terms of
the size of our asset base and physical network of branches,
extension counters and ATMs.
Our primary business consists of commercial banking
operations for Indian corporate and retail customers.
We provide a range of commercial banking products and
services, including loan products, fee and commission‑based
products and services, deposit products and foreign
exchange and derivatives products to India’s leading
corporations, mid‑market companies and small and medium
enterprises. Our retail operations primarily consist of retail
lending and deposit taking and distribution of third‑party
insurance and investment products. We also offer
agricultural and rural banking products.
We have 10 overseas offices, with branches in Colombo,
DIFC, Hong Kong, Shanghai and Singapore and
representative offices in Dubai, Abu Dhabi, Sharjah, and
Dhaka and a subsidiary in London. We also have an offshore
banking unit at the International Financial Service Centre
located at the Gujarat International Finance Tec‑City
in Gandhinagar, India. Our foreign branches primarily
offer corporate banking, trade finance, treasury and risk
management services.
Our combination of diverse offerings and a
customer‑focused approach has enabled us to design
relevant solutions to meet evolving customer aspirations,
resulting in sustained business growth, even in a largely
volatile and uncertain market scenario.
Our strong balance sheet, culture of learning, adaptability
to change and above all, a service‑oriented mindset help us
stay ahead of the curve.
Fact box
3rd
Largest private
sector bank in
India#
7.0*
million
Credit Cards
issued
* As on 31 March, 2020
# in terms of total assets
4,500+
Branches and
Extension
Counters
24.5*
million
Debit Cards
issued
17,477*
ATMs and Cash
Deposit/Withdrawal
machines
120
SME Centres
5.2 lakhs+
POS Machines
6.92
lakhs
households/trainees
impacted
55
Annual Report 2019-20Experience Open Staying on course
About Axis Bank
Vision
To be the preferred financial solutions provider
excelling in customer delivery through insight,
empowered employees and smart use of technology
Core Values
Our deeply cherished
values set our compass in
the right direction, so that
we can sustainably create
and protect value for
all our stakeholders
Ethics
Customer Centricity
6
Staying on Course Teamwork
Transparency
Ownership
7
One Axis
Open as One Axis
We offer a universal banking platform spanning diverse business
segments and several group companies. We aspire to be a one‑stop
financial solution provider for our customers under the ‘Open’ credo.
We use our customer insight to provide tailored, integrated products
and services. The result is a wide value proposition basket that relies
on the trust of existing customer relationships and acquisition of new
customers across sectors.
Axis Finance Ltd.
NBFC catering to the varied needs of retail, corporate and institutional
customers; offerings comprise loans against securities, corporate lending, real
estate financing, and IPO funding among others. We are growing at a CAGR of
~30% in the last 5 years.
24.14%
Capital adequacy ratio
(Tier I ratio of 16.38%)#
Axis Capital Ltd.
Propelled by a strong and experienced team, Axis Capital helps customers plan
for their financial requirements and execute those plans in a hassle‑free manner.
Therefore, whether it’s Mergers & Acquisitions, IPOs, QIPs, private equity or
financial advice, Axis Capital comes first as a relevant and reliable partner.
17
Deals* concluded during Fiscal
2019‑20, highest among peers
*considering only IPOs, QIP, QFS and
Rights issue
A.Treds Ltd.
Engaged in the business of operating institutional mechanism to facilitate
financing of trade receivables of micro, small and medium enterprises
through multiple financiers.
4.9 lakhs
Invoices discounted till date with a
throughput of `7,491 crores
#As on 31 March, 2020
8
Staying on Course Axis Asset Management Company Ltd.
Aims to provide ‘risk managed investment solutions’
and not just investment products to both retail and
institutional investors.
`117,254 crores
Average assets under
management for Fiscal 2019‑20
Axis Trustee Services Ltd.
SEBI registered debenture trustee and has successfully handled
various trusteeship activities namely debenture trustee, security
trustee, security agent, lenders’ agent, trustee for securitisation and
escrow agent, among others.
`2,126,291 crores
Assets under custody#
Axis Securities Ltd.
Undertakes the business of retail broking services via multiple products to
its customers for trading in cash, derivatives and IPO segment through NSE
and BSE. Customers also have the benefits of well‑researched information
about various corporates, access to independent third‑party research, stock
research and analysis tools, apart from a host of innovative features and
functionalities. Recognised as ‘Top Equity Broker of Year 2019’ at the BSE
Commodity Equity Outlook Awards.
2.27 million
Customer base#, up 8% y‑o‑y
Freecharge Payment Technologies Private Ltd. and Accelyst
Solutions Private Ltd.
Provides digital payments and digital financial service platform, which
helps Bank acquire young, digital native customers, through co‑created
financial service offerings. It also creates a significant cross‑sell base
for us. It has emerged among the top financial services apps in India.
6 million
Monthly active users#
#As on 31 March, 2020
9
Annual Report 2019-20Experience Open
Staying on Course
Message from
MD & CEO
As the economy continues to
combat the unprecedented
uncertainty caused by
COVID‑19 pandemic outbreak
since the start of this calendar
year, we have lived up to our
promise to the nation of being
a responsible citizen, being
‘Open’ to address the needs
of our customers, employees
and communities.
- Amitabh Chaudhry Dear Shareholders,
Over the last 26 years of our operations, it has been a priority for the Bank to stand by our customers
as a trustworthy and supportive partner, helping them fulfil their financial needs and realise their life
ambitions. The Bank continues to be perceived as an approachable, caring, efficient and empathetic
institution by our customers.
Customer centricity has been one of the core values of the Bank and the spirit of openness is
reflected in every interaction which our employees have with each of our customers every day. For
us, ‘Open’ is more than a sign that is displayed at our branch doors. It is a sign of what our customers
can expect when they walk in through our doors. For their dreams and hope, our ears and minds are
open, and for their plans we promise to open every possible window of opportunity.
In fiscal 2020, the Bank successfully
raised `12,500 crores of capital
through one of the largest ever QIP
issues by a private sector issuer,
this strengthened the Bank’s capital
ratios, with total adequacy of 17.53%
and CET1 ratio of 13.34%. The
operating profitability in fiscal year
2020 continued to remain steady with
16% growth in net interest income
and 23% growth in operating profits.
The Bank’s net NPA plus BB & below
book has declined substantially to
2.7% from 3.4% at the end of last
fiscal. The provision coverage (without
considering write‑offs) increased to
69% from 62% at the start of the
year. The Bank now holds additional
provisions aggregating to `5,983
crores towards various contingencies
which are not included in the
aforementioned provision coverage.
The Governments and Central banks
across the world have responded
with massive fiscal, monetary and
regulatory measures to counter the
outbreak of virus and protect their
respective economies that have come
to a near standstill state. However, the
global economic activity will take a
long time to recover. The Government
of India and the Reserve Bank of India
have responded swiftly, announcing
wide measures to aid weaker sections
of society and facilitate credit flow
to the economy; and I expect further
measures from them to consistently
support the economy during the
prolonged recovery phase. As the
economy continues to combat the
unprecedented uncertainty caused
by COVID‑19 pandemic outbreak
since the start of this calendar year,
we have lived up to our promise to
the nation of being a responsible
citizen, being ‘Open’ to address the
needs of our customers, employees
and communities.
The Bank has been agile and
responsive to the ever changing
situation. We had proactively
strengthened the operational and
technological infrastructure needed,
to ensure continuity of normal
operations. During the lockdown
phase implemented by government,
over 96% of our ATMs and 99% of
our branches were operational. We
implemented a large‑scale ‘work from
home’ mandate with over 9,000 VPN
and VDI connections provided to
ensure business continuity and almost
100% of the critical activities were
capable of being executed by working
from home. I am immensely proud
of our team of 74,000+ who came
together as one, working fearlessly
from branches, offices and from their
homes to reach out and serve the
customers in their most difficult times.
The customer feedback and stories of
support are a strong testament to the
Axis spirit. We reached out to almost
3 lakhs customers on a daily basis
during this period.
The Bank has navigated this
unprecedented and challenging period,
well assisted by our capital position,
adequate liquidity buffers and stable
deposits franchise.
The Bank has been agile
and responsive to the ever
changing situation. We had
proactively strengthened the
operational and technological
infrastructure needed,
to ensure continuity of
normal operations.
11
11
Annual Report 2019-20Experience Open Several of the initiatives that we
implemented during the year under the
Bank’s GPS strategy helped us to be in
a better position in these trying times.
Our teams have deliberated, created
and executed on new strategies
and ways we work, to enable us to
be adequately and appropriately
be prepared to get back to work on
return to normalcy.
In fiscal year 2020, we continued
to invest in each of the core pillars
of our franchise – people, products
and technology. Our operating
performance was stable, while we
continued on our journey to be
conservative in our approach towards
building a sustainable franchise.
During the year, we have completed
the organisation restructuring and
strengthened our teams to bring
in greater business focus and drive
performance and efficiency. We
carved out the credit underwriting
functions which resided within the
business segments, to enhance
governance and further strengthen the
risk framework in the Bank.
The Bank has over the last decade,
built a strong Retail franchise that
continues to deliver healthy growth
in retail deposits, and constitutes
significantly to our overall loans
and fees. During the year, we made
changes to the organisation structure
in Retail with creation of separate
liability sales vertical to increase
focus on new customer acquisition
on the CASA (Current and Savings
Account) and Retail Term Deposit
(RTD) side even as branches focused
on deepening the relationship with
existing customers. Our focus towards
building a granular, stable and low
cost liability franchise saw sustained
momentum with 22% growth in CASA
plus RTD deposits (on cumulative daily
average basis) for the year.
Branch banking remains an integral
part of our growth strategy and we
have made significant investments
in building a high quality liability
franchise. During the fiscal year, we
opened 478 branches – our highest
in any given fiscal year. The branch
12
banking continues to focus on
deepening relationship with existing
bank customers and cross selling
of products across the Axis Group
franchise. We have also undertaken
efforts to deepen the Axis Franchise
in rural and semi‑urban areas, in order
to increase our market share in these
regions and simultaneously help in
further complementing our Priority
Sector Lending business. However,
given the uncertainty induced post
COVID‑19, we may delay branch
network expansion in the immediate
near term even as we continue
to engage in optimisation of the
branch formats to deliver enhanced
productivity, led by automation and
digitisation of service operations.
During the year, the Bank’s Retail
loan book grew by a healthy 24%
and now contributes 53% share in
total advances. Although the Bank
has significantly diversified its Retail
loan book over the years, led by
right product propositions, the book
continues to remain largely secured
with high proportion of existing to
Bank customers. The secured loans
constitute 80% to the book and more
than 80% of retail assets are sourced
from existing customers.
We would continue to focus on
secured retail lending while maximising
cross sell opportunities to the
Bank’s existing deposit customer
base and leveraging the Bank’s wide
geographical and digital infrastructure
network for cost optimisation. The
proportion of retail assets sourced
through digital means have been
steadily increasing with over 44% of
personal loans in fiscal 2020 sourced
digitally; we are now working on digital
lending solutions for the secured loan
products with digital home loans for
funding of approved projects.
The Bank’s strong data analytics engine
and robust proprietary risk scorecards
have ensured superior underwriting
across the retail portfolio and more
specifically in unsecured loans. At the
same time, our asset recognition and
provisioning standards continue to
remain best in class in the industry with
The Bank has navigated
this initial unprecedented
and challenging period,
well assisted by our
capital position, adequate
liquidity buffers and stable
deposits franchise. Several
of the initiatives that we
implemented during the year
under the Bank’s GPS strategy
have helped us to be in a better
position in these trying times.
NPA recognition on daily basis and full
provisioning on unsecured products like
personal loans and credit cards upon
asset being classified as substandard on
90 days past due basis.
Our wealth management business,
Burgundy with assets under
management of over `1,47,000 crores,
continues to do exceedingly well.
During the year, we launched Burgundy
Private, our most exclusive offering,
which caters to the distinct needs of
niche segment of high and ultra‑high
net worth clients. The Burgundy Private
proposition has scaled up rapidly
within just 4 months of its launch to
cover over 850 families across 15 key
locations with assets of nearly ₹18,000
crores as at 31 March, 2020.
The performance of our Wholesale
business continued to improve in fiscal
2020 with domestic corporate loan
growth of 13%. We have built strong
relationships with the better rated
domestic corporates and continue
to focus on gaining a higher share
of shorter tenure working capital
and transaction banking businesses.
We are also leveraging on our ‘One
Staying on Course Axis’ strategy; our ability to provide
comprehensive solutions to clients
across lending and Transaction
Banking along with our subsidiaries like
Axis Capital and Axis AMC resulted
in deepening of relationship with the
Bank’s large and strategic clients.
of the opportunity. During the year,
the Bank designed and implemented
comprehensive solutions like Bharat
Bill Payments Services, Smart City
Solutions and FASTag, thereby
providing powerful platform for users,
billers and administration to transact.
During the year, we have reviewed
and optimised our overseas operations
in line with the overall corporate
strategy. We are consolidating
the services related to corporate
banking, trade finance, treasury
and risk management solutions
through our Dubai, Singapore and
GIFT City branches.
In the commercial banking segment,
we have been cautious, and invested
throughout the last twelve months in
rebuilding the business across sales
and credit. This exercise is complete
and we feel we can capitalise on
this going forward. We continue
to focus on building a relationship
based model with high rated SME and
current account business customers.
The SME book is well diversified and
quality remains steady with 85% of
it secured by hard collaterals and
with high proportion of working
capital loans. During the year, we
further strengthened our systems and
processes to ensure that we respond
quickly to any early‑warning signals
in our portfolio.
We have strong market positioning
across most digital payments solutions
and remain committed to contribute
towards the government’s Digital
India mission. We have one of the
best rated mobile apps in the country,
and continue to remain among the
top three leading players in the
UPI ecosystem. In credit cards, we
continue to be ranked 4th in terms
of market share in card spends and
have further strengthened our card
portfolio with launch of new cards
‑ Magnus and Burgundy Private,
as well as co‑branded cards with
Flipkart and IOCL. Our market share
in the payments related to RTGS and
GST also remains strong. The Bank
foresees significant opportunity in
digital payments space, given the size
We made good progress on our Digital
Banking initiative started last year.
We now have a team of over 500
highly skilled employees working
across our digital and fintech platforms
from a dedicated and separate new
office in Mumbai. We have multiple
cross‑functional garages working
on end‑to‑end digital journeys and
value propositions. These journeys
and garages will go live in the current
financial year. Given the environment,
we have prioritised some of them
like video‑based KYC, digital savings
accounts and fixed deposits, simpler
current account on boarding alongside
digital collections; and expect them to
go live during the next few months.
We will continue to enhance our
customer experience and offerings
through new innovations on the digital
side and investments in API, cloud,
artificial intelligence and big data, we
remain cognisant of the emerging
cyber security threats and privacy
laws. We have made considerable
investments in technology and
infrastructure to strengthen the core.
During the year, the Bank won the
Best Cyber Security Project, Best
Financial AI Project and Best Risk
Management Project at The Asset
Digital Awards. The Bank also won
the award for best use of IT in Risk
Management at the Dun & Bradstreet
BFSI Summit & Awards 2020; these
awards serve as a testament of our
strong digital and IT capabilities.
We have simplified and strengthened
various process and quality gaps to
enable the Bank to deliver process
excellence and superlative customer
experience. During the year we have
reorganised our IT, Operations and
Data Science teams under the Banking
Operations and Transformation
vertical. The teams are entrusted
to transform the operations of the
Bank so that we have one of the best
systems and processes among Indian
Banks and are also ready to seamlessly
integrate the various digital journeys
that our Digital Banking teams are
building simultaneously. The success
of this initiative is visible through
the high numbers of branches and
ATMs, which have been functional,
employees working from home, digital
collection initiatives under severe
lockdown and mobility restrictions in
the past few months.
We implemented a uniform visual
brand identity for the Bank and
subsidiaries to drive consistency and
strengthen the ethos of One Axis
across the our retail, digital and offline
touch‑points. Several cross‑functional
programmes were initiated where
different teams came together to work
on common goals and this has started
to become a differentiator for us in the
market. We are beginning to see early
results in cross selling by leveraging
customer data available within One
Axis, in a fully compliant manner.
Our subsidiaries continue to deliver
strong operational performance even
as we remain focused on improving
our market share and attaining scale
in respective businesses. We have
made significant senior talent infusions
across our subsidiaries in Axis AMC,
We have strong market
positioning across most digital
payments solutions and remain
committed to contribute
towards the government’s
Digital India mission. We have
one of the best rated mobile
apps in the country, and
continue to remain among the
top three leading players in
the UPI ecosystem.
13
Annual Report 2019-20Experience Open Axis Capital, Axis Finance, and Axis
Securities, our retail brokerage
business. During the year, Axis Capital
and Axis AMC continued their market
dominance in equity capital markets
and mutual fund space, respectively.
approvals. We have always believed
in increasing participation in the
under‑penetrated life insurance space.
We value our relationship with each
of our insurance partners and will
continue to work with them.
We entered into a strategic
partnership and signed an agreement
with Max Financial Services to acquire
a 30% stake in Max Life Insurance
subject to requisite regulatory
I am pleased to state that our GPS
strategy is even more relevant in these
challenging times, and we continue our
relentless execution focus, even as we
may need to recalibrate the timeline.
In response to the COVID‑19 situation,
we launched about 15 strategic
initiatives that are aligned to GPS,
but with near‑term perspective of
60‑90 days to ensure we are well
prepared and are among the earliest
to capitalise on the opportunities.
These projects are equally distributed
focusing on business and key elements
like cost control, capital optimisation,
GPS Progress
At the start of 2019, we had outlined our medium term strategy. We continue to be guided by the ambitions we had set for
ourselves as part of that strategy under the vectors of Growth, Profitability, Sustainability, One Axis and our organisational
values. While the COVID‑19 pandemic has altered the near term business strategies we continue to maintain our focus on the
key goalposts of GPS. In order to maintain an agile response to the COVID‑19 pandemic, we developed strategic initiatives across
business and support functions, being closely monitored by senior management. We intend to come out of this crisis as a stronger
Bank by remaining committed to our strategic goals.
Growth
Profitability
Sustainability
On growth vector, our progress has
been satisfactory. In a challenging
environment, our liability franchise has
remained resilient with overall deposits
growth (on cumulative daily average
basis) of 21%.While our growth in CASA
has lagged the overall deposits growth,
we have over the course of the year
put in several enablers and initiated
multiple projects towards achieving
higher growth. The growth in deposits
continue to be driver of our loan growth
that has seen steady growth without
compromising on the risk standards.
We have also made considerable
progress on profitability vector. Our cost
to assets moderated during the year
and we continue to focus on building
cost consciousness across the Bank.
We continue to evaluate and make
decision‑making across the segments
based on RAROC, monitoring and
rectifying sub‑optimally priced accounts.
Though the retail fees has been growing
at healthy pace in last few years, the
recent economic slowdown is likely to
impact fee growth. We have taken many
new initiatives, like creating our new
third party products vertical to maintain
focus on non‑credit fee income.
We have been relentlessly focusing
on disciplined execution and building
sustainability in our business
performance and operations. During
the year, we have significantly fortified
the risk and compliance function, and
compliance culture across the Bank. We
have strengthened our credit function by
streamlining committee structures and
improving the credit processes. We have
been proactively monitoring the credit
risk by systematic reviews and have
remained conservative in our stance
when it comes to rating downgrades,
asset classification, and provisioning.
However, there are few areas where we need to improve further. The corporate slippages continued to remain elevated amid the
weak economic environment. Our CASA deposits and Wholesale fee growth has room for improvement. We are working hard
towards improving further on each of these parameters and achieving our objectives.
The current environment may delay the timeline, however I believe that we are on the right track towards our GPS strategy
aspirations. The tough environment gives us time to consolidate and be better positioned for growth while continuing to build on
sustainability.
14
Staying on Course The current environment may
delay the timeline, however
I believe that we are on the
right track towards our GPS
strategy aspirations. The
tough environment gives us
time to consolidate and be
better positioned for growth
while continuing to build on
sustainability.
efficient liquidity management,
risk mitigation and reimagining
the work culture.
Our business analytics team has
conducted detailed review of
geographies that have been opening
up so that we have the first mover
advantage in those regions. In Retail,
we are offering improved product
propositions like savings account
bundled with insurance for the mass
market customers; while our team
has also been reaching out to wealth
customers who have seen their
portfolios impacted severely, to offer
them solutions. On the wholesale side,
we are looking to increase focus and
generate higher business from sectors
that are likely to remain less affected
by the crisis, while also taking selective
bets on certain clients in the stressed
sectors for the longer term.
We are rigorously looking at efficient
liquidity management on daily basis
and looking at risk weighted average
optimisation across our portfolios
to release CET1 capital. On the cost
side, we are looking at improving
productivity and containing costs by
looking at all the major opex line items,
be it related to fees and commissions,
branch rentals or annual maintenance
contracts for IT and security.
As an organisation, we have always
believed that our long‑term success
depends on the progress of our
employees and communities while
protecting the environment we live
in. The Bank continues to invest in
strengthening and nurturing the
talent and employee capabilities
while increasing transparency and
reinforcing performance‑based,
meritocracy culture.
During the year, the Bank committed
spending `100 crores towards curbing
the spread of COVID‑19 pandemic.
Axis Bank Foundation also partnered
with NGOs to provide food and
hygiene supplies to rural communities,
while also creating awareness about
the pandemic. Axis Bank Foundation
also continued its initiatives towards
scaling up financial inclusion and
literacy, skill development and
education across the country, focusing
on the bottom of the pyramid in
rural and urban India and the SME
sector. Axis DilSe ‑ the Bank’s unique
intervention in the union territory
of Ladakh, completed its third and
final phase of building classroom
infrastructure and training for staff in
over 100 government schools.
I am proud to state that the Bank
was included in the prestigious
FTSE4Good Emerging Index for
the third consecutive year in 2019,
a demonstration of our strong
Environmental, Social and Governance
(ESG) practices.
In these challenging times, we
continue to remain cautious and
conservative in our approach, and
will focus on having adequate surplus
liquidity, be prudent in managing
credit and operations risk, conserve
capital, and even sacrifice growth
at the margin, if required. The crisis
will eventually speak to the bigger
financial institutions with healthy
operational performance and strong
capital position.
We are confident of emerging from
the current economic slowdown as
a far stronger One Axis. We have
made good progress on our journey
of transforming the Bank to be among
the best in class and expect to achieve
our medium term aspirations led by
consistent focus on execution.
I would like to thank all my colleagues
for their spirit and determination
through the ups and downs of last
year, as we collectively work towards
transforming and building a winning
Bank. I am also grateful to all the
external stakeholders for reposing
their faith and willingness to partner
with Axis Bank in its long‑term
growth journey.
Warm Regards,
Amitabh Chaudhry
MD & CEO
15
Annual Report 2019-20Experience Open Staying on Course
Message from
Executive Director
(Retail Banking)
Fiscal 2020 was another good
year for the Retail segment
with steady growth of 22% in
deposits* and 24% in advances
as we continue our relentless
focus on delivering sustainable
and profitable growth.
Executive Director
* refers to average CASA plus retail term deposits
16
Over the last five years, retail segment growth for
the Indian Banking sector has held up well led by
growing demand on back of rising consumption
and non‑discretionary spending. The financial
year 2019‑20 was no different with retail segment
growing at 15% despite series of domestic
and global macro‑economic factors leading to
investment slowdown in India.
However, the year ahead could be challenging given
the economic growth is likely to remain stagnant
on back of heightened slowdown concerns post the
outbreak of COVID‑19. This has not only impacted
the consumer confidence and consumption demand,
but poses threat to the asset quality of the banking
system that hasn’t seen any major retail credit
cycle in a decade.
As we enter these uncertain times we are better
placed than the industry given our strong liability
profile, diversified and secured nature of our
lending portfolio and strong credit underwriting
and risk management practices which have further
strengthened during the last fiscal. Over the past
decade, we have built a strong Retail franchise
with customer centricity and superlative customer
experience at the core of our diverse products and
service offerings. The fiscal 2020 was another good
year for the Retail segment with steady growth
of 22% in average CASA (current and savings
- Pralay Mondal account) plus retail term deposits and
24% in advances as we continue our
relentless focus towards delivering
sustainable and profitable growth. As
part of our strategy to achieve this
objective, we made significant strides
during the year.
One of the key initiatives that we had
taken at the start of the year was to
work towards improving the quality of
the liability franchise and drive higher
growth in retail granular deposits
through our CASA plus retail term
deposits strategy while bringing in
stability in current account deposits.
During the year, we have seen
momentum pick up on savings account
(SA) deposits with 11% growth led by
salary account balances even as retail
term deposits continued to see strong
growth at 37% on cumulative daily
average balances basis.
In order to strengthen our deposit
franchise, we had earlier this year
created a separate liability sales
vertical to drive focused and better
quality acquisition of new‑to‑bank
(NTB) customers; while the branches
have been focusing on deepening
relationships with existing deposit
customers. We have also strengthened
our corporate salary team to drive
higher NTB SA acquisitions.
The Bank has over 40,000 relations
with entities for their salary
mandates covering over 60 lakhs
customers. With the aim towards
premiumisation of the liability
franchise, we have introduced new
SA product propositions, Prestige
We continue to strengthen
and improve efficiencies across
the channels like branches,
outbound call centres and
digital platforms using
process transformation and
automation initiatives.
Savings Account that fills the segment
gap between ‘Prime’ and ‘Priority’ SA
accounts and we intend to improve the
portfolio balances by improving the
quality of accounts.
During the year, we rolled out
Burgundy Private, a differentiated
value proposition for private banking
customers which will be instrumental
in further establishing our position in
the wealth management and advisory
space. We started the ‘Deep Geo’
initiative to deepen our presence
in rural and semi urban (RuSu)
markets and have been focusing on
self‑origination of priority sector
lending opportunities and broadening
our retail liabilities franchise. We
started the pilot in 31 existing
branches in RuSu regions and have
now covered this to our 387 branches
out of over 1,500 branches that
we have targeted in regions with
high business potential. In the post
COVID‑19 environment where the
rural and semi urban markets have
been less affected, we are looking
to garner higher incremental market
share for retail asset products and
granular deposits. We currently
offer rural lending products through
584 districts across the country and
it is a widely diversified portfolio
comprising farm loans, gold loans,
rural enterprises, farm equipment
and micro finance.
We aspire to deliver seamless
omni‑channel experience to our
customers, and with this objective we
continue to strengthen and improve
efficiencies across the channels like
branches, outbound call centres
and digital platforms using process
transformation and automation
initiatives. We intend to create
‘Branch of the Future’ and take out
repetitive operations and service
out of branches, leverage them for
customer relationship management
and turn branches to ‘financial super
markets’ providing entire gamut of
financial products. During the year, we
have set up dedicated Asset Desks and
Wealth Desks at select branches that
would leverage One Axis capabilities
to provide niche offerings from the
Experience Open
Annual Report 2019-20
The digital channel is scaling
up well. Over 60% of fixed
deposits and 44% of personal
loans in fiscal 2020 were
sourced digitally.
Bank and its subsidiaries and further
reinforce our commitment of providing
an array of product and services in the
branches. We have created a new team
for Process Transformation and Service
Excellence, which has been working
on over a hundred transformation and
automation projects. We have already
made significant headway on customer
complaints and resolution turnaround
time, led by our sundown initiative.
During the year, we opened 478 new
branches which has been the highest in
any given financial year. However, we
continue to optimise the branch sizes
with emphasis on higher efficiency,
customer centricity and relationship
management to drive cross sell
opportunities from existing customers.
During the fiscal 2020, over 80% of
retail assets originations were from
the Bank’s existing customers with
branches, contributing 47% to the
overall sourcing of retail assets.
The digital channel is scaling up well
with 62% of savings account sourced
digitally through tab while over 60%
of fixed deposits too were acquired
digitally. On the retail assets side,
44% of personal loans in fiscal 2020
were sourced digitally. During the
year, the Bank has launched project
‘Aarambh’ that would further assist
the front sales team to offer real time
point‑of‑sale offers for cross sell of
multiple products to our customers.
The alternative and digital channels
have been playing a key role in the last
few months post COVID‑19 outbreak.
We have been reaching out to nearly
1717
We have further strengthened
our credit card offerings by
launching new cards ‘Magnus’
and ‘Burgundy Private’ in the
premium category.
We continue to have strong
positioning across the payments
space. In Credit Cards, where we are
the 4th largest in the industry with
over 12% market share in terms of
cards outstanding, We have further
strengthened our credit card offerings
by launching new cards ‘Magnus’ and
‘Burgundy Private’ in the premium
category. We partnered with Flipkart
and launched a Flipkart co‑branded
card to provide best‑in‑class
benefits to our customers. Strategic
partnerships is a key focus area for
the Bank and we will continue to
explore this space for identifying new
opportunities for business expansion.
In UPI, we strengthened our position
with market share of 15% and now
have 92 million VPAs (Virtual Private
Addresses) registered with us. Our
Mobile Banking platform where we
have one of the best rated financial
apps in the country, witnessed 92%
increase in mobile transaction volumes
during the year.
Leveraging on the One Axis strategy
we had embarked upon earlier
this year, we continue to provide
solutions to our clients from across
our subsidiaries that have strong
positioning in retail businesses like
consumer finance, mutual funds, retail
broking and digital payments. Given
our strong positioning with diversified
offerings and well established
partnerships in payment space, we
also intend to leverage huge customer
base for cross selling to these
known‑to‑Bank and NTB customers.
Earlier during the year, we had created
a dedicated team focusing on third
party products to boost the Bank’s
fee from distribution while offering
product choices to our customers.
The Bank has also increased focus
on retail forex products and has seen
good penetration among its existing
clients. Our new partnership with
Bajaj Allianz and strategic joint venture
with Max Life are likely to help us
deliver more value to our customers
going forward. Once the COVID‑19
situation normalises, the distribution
driven fee income should also start to
improve, which in the current scenario
remains depressed.
Given the current environment, I
believe that the banking sector will
see challenges with respect to retail
asset quality if COVID‑19 induced
slowdown in economic activity takes
longer time to recover. However those
with lesser leveraged portfolio, strong
relationship with customers, prudent
risk management framework and
better collections infrastructure would
be far better placed than competition.
We had at the start of the year,
segregated underwriting and
collections from business and have
strengthened both of these through
the year. Given the signs of economic
slowdown visible since the start of
fiscal 2020, we had recalibrated our
Leveraging on the One Axis
strategy we had embarked
upon earlier this year, we
continue to provide solutions
to our clients from across our
subsidiaries that have strong
positioning in retail businesses.
3 lakhs customers daily across the
retail Bank through various channels.
We have recently re‑launched our
digital online saving product ‘ASAP’
and are working towards launching
video KYC based digital SA and FD
opening and simpler CA on‑boarding
in the next few months to continue
strengthening the liability franchise.
Over the last six years, the Bank has
grown its retail lending book steadily
at a CAGR of 23% with significant
diversification in product mix led by its
strategy to cross sell to Bank’s existing
customers. Despite the significant
diversification, the Bank continues
to maintain a healthy proportion of
secured loans with an objective of
providing sufficient cushion to its
balance sheet. As at end of fiscal 2020,
the secured portfolio constituted 80%
with home loans, auto loans and rural
loans forming 35%, 13% and 12% of
the overall retail book, respectively.
During the year, the Bank has been
cautiously optimistic and has grown
its lending book in segments where
risk return looked attractive. On
the unsecured lending side that
constitutes around 20% of the retail
book, we have continued to focus
on cross selling of credit cards and
personal loans to the Axis Bank’s
existing customers. At the same time,
our strong data analytics engine
and robust proprietary risk models
and scorecards have helped us in
better underwriting of loans on the
unsecured side. Further, over 80% of
the unsecured book is from salaried
segment and over 80% of borrowers
are existing to bank customers.
In the post COVID‑19 environment
where the priority is towards
conserving capital, we would continue
to focus on secured lending products
like mortgages, LAP and small
business banking loans through our
branch channels; while leveraging
on cross sell opportunities for
liability and investment products to
generate fee income.
18
Staying on Course categories of unsecured products.
The Bank has over the last year also
built additional provisions toward
various contingencies including that
for COVID‑19. The overall additional
provisions held by the Bank towards
various contingencies together with
the standard asset provisions, translate
to a standard asset coverage of 1.3%
at 31 March, 2020; and does provide
strength to the Bank’s balance sheet to
mitigate the unknown risks emanating
from the COVID‑19 fallout.
For us, sustainability and conservatism
continues to remain the most
important strategy vector and we
would be able to withstand the
challenges in the near term considering
the conscious portfolio choices we
have made in favour of secured
nature of lending in the Retail with
higher share of salaried and existing
to bank customers in the unsecured
book. In the medium to long term, I
am confident that the Bank’s Retail
franchise would continue to deliver
sustainable profitable growth without
compromising on the risk standards,
given the initiatives we have taken
during the year.
Warm Regards,
Pralay Mondal
Executive Director,
Retail Banking
For us, sustainability and
conservatism continues to
remain the most important
strategy vector and we would
be able to withstand the
challenges in the near term
considering the conscious
portfolio choices we have
made in favour of secured
nature of lending in the Retail
with higher share of salaried
and existing to bank customers
in the unsecured book.
score cards and reduced the limits
across unsecured products like credit
cards and personal loans while taking
corrective actions cutting down on
the risk wherever required some 9‑12
months back. Post COVID‑19 we have
made changes to our incremental
sourcing strategy in favour of secured
products and will now be based on
our ‘macro COVID‑19 risk model’ and
‘geography micro segment score’.
As part of the RBI’s directive to all
lending institutions, we have provided
an option to our customers for
availing moratorium on payments.
During these uncertain times, the
trend among customers seems to
be to conserve cash; and nearly two
thirds of those who have availed of
the moratorium had sufficiently higher
balances than the EMI amount in
their accounts.
In Retail, we continue to have
conservative stance on provisioning
where we hold higher than RBI
mandated provisions in certain
19
Annual Report 2019-20Experience Open Staying on Course
Message from
Executive Director
(Wholesale Banking)
We as a Bank have over the
last one year taken significant
strides in not only de-risking
and diversifying the Wholesale
book but have also strengthened
our position as a full service
Wholesale Bank; which places
us in a better position for
the future.
Executive Director
20
The macro‑economic conditions in fiscal 2020
continued to remain uncertain for the Corporate
segment with trade wars followed by the global
COVID‑19 pandemic impacting businesses
worldwide. On the domestic front, it was yet
another tough year as slowdown in the economy,
ongoing deleveraging of the corporate balance
sheets along with unforeseen events like corporate
frauds continued to weigh on the banking sector
performance. As a result, the banking sector
credit growth for industrial segment in fiscal 2020
remained muted at 1% as compared to 7% in
the previous year.
Even as there wasn’t much of private capex
investments during the year, the sector saw
refinancing led growth from larger companies who
have been consolidating their banking relationships
and from those bidding for NCLT led resolution
cases that has benefitted private banks. Over the
last 5 years, the private banks have continued to
grow faster than industry, gaining on an average
60‑65% incremental market share in advances
across the business segments with their better
service and offerings.
We as a Bank have over the last one year,
taken significant strides in not only de‑risking
and diversifying the Wholesale book but have
also strengthened our position as a full service
Wholesale Bank; which places us in a better
position for the future.
Aligned to our strategic imperative of profitable and
sustainable growth, we had, at the start of the year
re‑oriented the organisation structure in Wholesale
Banking for delivering execution excellence. We
- Rajiv Anand Experience Open
Annual Report 2019-20
Strong relationship led wholesale franchise driving synergies across One Axis entities
1
Investment Banking/Capital Markets
• Debt Capital Markets (DCM)
• Equity Capital Markets (ECM)
• M&A & Advisory
• Forex & Derivative Solutions
Full Service
Wholesale
Bank
2
3
Commercial Banking
• Working Capital/Term Loans
• Letter of Credit/Bank Guarantee
• Bill/Invoice Discounting, Supply Chain financing
• Wholesale Deposits
Transaction Banking
• Cash Management Services (Collection/Payment)
• Current Accounts
• Custodial Services
• Correspondent Banking Services
AXIS CAPITAL
AXIS MUTUAL FUND
A.TREDS
AXIS TRUSTEE
4
Linkage to Retail Bank
• Wealth Management – Burgundy/Burgundy Private
• Salary Accounts of employees
AXIS FINANCE
Reliable Partner Throughout the Business Life Cycle
• We have re‑oriented Coverage Groups and strengthened Operations & Service Infrastructure
• We have leveraged ‘One Axis’ to provide comprehensive solutions to clients’.
• We offer on an average 9 products, including at least 2 products from our subsidiaries under ‘One Axis’ to our large
and strategic clients
had segregated the responsibilities
of business relationships and product
specialists to ensure sharper focus on
client coverage and product groups.
We now have focused coverage
groups not only for large corporates,
strategic clients and government,
but also for segments like MNCs,
financial institutions, mid corporates
and commercial banking. For the fiscal
2020, the Bank’s domestic corporate
growth stood at 13% as we continued
to focus on disciplined execution
with a higher rigour and rhythm of
our strategy to get our fair share of
business from customers.
During the year, we continued our
focus on de‑risking the book by
reducing concentration risk and
pivoting the same towards better rated
entities and groups. As at end of fiscal
2020, the proportion of loans to those
rated A‑ and above stood at 83%, up
from 79% in fiscal 2018 and almost all
our incremental growth in loans came
from ‘AAA’ and ‘AA’ rated clients. At
the same time, we have pivoted our
book towards shorter tenure loans
with 38% of the book being of less
than a year tenure as compared to 35%
at the end of fiscal 2018. We continue
to focus on identifying sector specific
opportunities and have diversified the
portfolio with strong growth in loans
to segments outside top 10 sectors.
The recent COVID‑19 pandemic and
the resultant lockdown has hit the
businesses across sectors hard. The
Bank had been proactive to take
requisite measures on the operational
front and had proactively developed
strategies to counter the near term
challenges. The Bank had invoked
business continuity plan weeks prior to
the lockdown and all the business and
critical operations, including Treasury
were spread over to alternative
sites and ‘work from home’ mode.
Post lockdown, our business and
21
We are entering this COVID-19
led cycle with a much de-risked
book in the SME space that is
well diversified across sectors
and geographies.
treasury teams had been continuously
engaging with clients to understand
their needs related to funding and
transaction support.
We have been working towards
strengthening our position as a
transactions‑led bank with the
clients and become their reliable
partner through the business life
cycle where we can deliver the full
capabilities of our group to them. Our
Syndication desk is well established
in the market and we are ranked
as the top arranger of Bonds in the
league tables over the last 13 years.
Leveraging our leadership position in
Debt Capital markets, we have actively
participated in the targeted long term
repo operations (TLTRO) auctions
conducted by the RBI providing
liquidity to the well rated corporates at
attractive yields.
We have built strong relationships
with corporates over the years and
have been focusing on deepening
relationships with these better rated
corporates by increasing our share
of their non‑credit businesses. Over
the last year, we have worked closely
as ‘One Axis’ and have leveraged the
leadership position of our subsidiaries
like Axis Capital, Axis MF, A.Treds,
Axis Trustee and Axis Finance in
their respective businesses to offer
comprehensive solutions to the clients.
During the year, as a conscious
strategy our overseas book as a
proportion of overall corporate book
has further come down to 14% from
24% two years ago. We have also
closed down operations at some of the
international offices and we intend to
support the Indian Corporates through
our Gift City branch and leverage the
trade and financial institutions growth
22
opportunities through our overseas
branches in Dubai and Singapore.
We continue to maintain our strong
positioning among the leading private
sector banks handling the Government
Businesses across the country. Our
government business is more oriented
towards providing solutions, around
collections and payments businesses,
which has helped us make a very
distinct place for ourselves in the
industry today. Today, we are one
of the leading private sector banks
handling the Government Businesses
across the country, across Central
and State PSUs, Central & State
Government Departments, their
entities, autonomous bodies, local
bodies and educational institutions.
The bank is in the forefront of offering
solutions in the e‑Governance, DBT,
Scheme management space right and
other business sectors like Agriculture,
Urban Local Bodies, Education, and
Health etc. spread across Local Bodies
and Gram Panchayats. The wholesale
deposits of the Bank, where the
Government business plays a key role,
have grown at 19% during the year
on a daily average basis.
In the Commercial Banking segment,
we have remained cautious over
the last year given the weakness in
underlying economy and have been
downsizing much in advance. We are
entering this COVID‑19‑led cycle with
a much de‑risked book in the SME
space that is well diversified across
sectors and geographies. Over 85% of
the SME portfolio is secured, backed
by collaterals and 78% of the book is
towards working capital financing.
At the start of the year, we had
overhauled our risk assessment
framework and tightened underwriting
standards in the wholesale segment.
The credit underwriting function has
been taken out from the businesses
and has been made an independent
function. For the fiscal 2020, 95%
of incremental sanctions were to
those rated ‘A’ and above. Also we
have reduced concentration risk
significantly with total exposure to
top 20 single borrowers as proportion
of tier 1 capital coming down from
162% in fiscal 2015 to 89% at the end
of fiscal 2020.
From a risk mitigation stand point, we
have been monitoring the wholesale
book rigorously and have carried out
stress testing of portfolio to identify
borrower segments and sectors that
may face incremental stress in the
current scenario. Post COVID‑19
related lockdown, our business teams
had reached out to all the wholesale
banking and commercial clients to
assess the impact and sustainability
of their business models. The trend
among corporates seems to be to
conserve cash and protect immediate
cash flows. However, we expect
government to come out with specific
fiscal measures for the stressed
sectors that will help in gradual
improvement in business conditions.
Looking ahead, the private capex
seems unlikely to pick up meaningfully
in the near term given the capacity
utilisation levels have moderated
post the COVID‑19 crisis. However
the better rated corporates with
established track record, resilient
business models, financial strength
and high governance standards would
be better placed and should continue
to gain share from the smaller
corporates, this trend will play out in
most organised sectors.
These are exceptionally challenging
times and we expect the economy
to take time to normalise as all
sectors will sooner or later get
impacted directly or indirectly. The
Bank is entering this phase on the
back of significant improvement in
the Wholesale book and continued
cautious outlook on SME business
during the year. I am confident that
the changes implemented over the last
few years and our strategic priorities
towards de‑risking and diversifying
the wholesale book, while being
conservative in our stance on risk
and provisioning, have made us more
nimble and better positioned to build a
sustainable and profitable Wholesale
franchise ahead.
Warm Regards,
Rajiv Anand
Executive Director,
Wholesale Banking
Staying on Course Message from
Executive Director
(Corporate Centre)
Our 74,000 plus employees
have displayed true commitment
and have walked the extra mile
to remain fully functional and
continue to serve our customers.
Executive Director
Experience Open
Annual Report 2019-20
We are all aware of the unprecedented global and
national crisis that has been brought about by the
COVID‑19 pandemic, which all of us are battling
together. Now, we are at the cross‑roads of a new
phase where economic activities are gradually
picking up. I am proud to say that all through these
difficult times, Axis Bank has firmly stood by the
country as a responsible corporate citizen.
Our 74,000 plus employees have displayed true
commitment and have walked the extra mile to
remain fully functional and continue to serve our
customers. Over 99% of our branches and 96%
of ATMs have remained operational, while our
employees have continued to reach out to over
3 lakhs customers on a daily basis to understand and
serve them in this hour of need.
Axis Bank was well prepared to handle the crisis.
We were proactive to recognise the severity of the
situation and a senior Central Emergency Response
Team (CERT) was activated over a month before the
lockdown. This was to ensure business continuity,
while taking into consideration the well‑being of our
employees, customers and other stakeholders.
Even before the lockdown was implemented,
the business continuity plan was devised for the
Bank and its subsidiaries, testing was completed
across all the major centres and infrastructure was
beefed up for continuity of operations in case of a
lockdown. This led to a smooth transitioning to a
new ‘Work‑from‑Home’ environment for a majority
23
- Rajesh Dahiya Staying on course
of our employees, keeping all the
banking services up and running. In
branches, we have been taking safety
and precautionary measures for all our
staff and customers.
The Bank has always considered the
physical and psychological well‑being
of employees and made them aware
of the precautions to be taken, issued
multiple travel and health advisories
and offered them insurance and
dedicated doctors’ assistance. The
Bank has been strictly adhering to
its risk management framework and
strengthened information security
monitoring and cyber security
risk measures to mitigate any
potential threat.
The Bank continues to place high
importance to managing compliance
risks in the Bank and its Subsidiaries.
With changes in regulatory
environment getting more frequent
and complex, the Bank’s compliance
department has been more actively
involved in implementing a group level
governance and compliance culture.
During the year, the Bank defined
several guidelines and processes
for employees to conform to our
‘Basic Responsibility Framework’ and
reinforce the culture of ethics and
compliance in dealing with clients and
other stakeholders.
During the lockdown, the Bank’s
mandated large scale work from
home has been one of the biggest
in the domestic banking industry.
Over 9,000 Virtual Private Network
(VPN) connections were provided to
employees with accessibility to
483 applications, to ensure 100% of
all critical activities getting executed
seamlessly. The Bank also enabled its
internal ‘One Axis’ App along with the
Microsoft Teams App for its employees
to collaborate and work effectively.
With a young workforce averaging
around 31 years, we have been
focusing to keep our employees
motivated, engaged and capable
of delivering on the organisational
goals. During the lockdown phase, we
also had multiple employee‑connect
initiatives with the Bank’s senior
management interacting with the
24
We are now looking to
transform the way we work
and exploring the option of
employees working remotely
for two to five days a week
from home, depending
on the criticality of the
business function.
employees online to motivate them
and maintain the rhythm around
work from home.
At Axis, we believe that on demand,
role‑relevant, modular learning will
bring in transformational results.
Our learning pedagogy is a good mix
of e‑learning along with classroom
programmes. Our top talent has
exclusive access to customised
learning solutions across 1,500
best‑in‑class e‑learning courses.
With a comprehensive library of
courses available at their fingertips,
the initiative truly democratised
learning to result in 5,000+ hours of
learning till date. Through the year,
we have worked towards promoting
meritocracy and a performance‑centric
work culture, and launched several
employee initiatives to foster a sense
of ownership and greater alignment
with the Banks overall strategy.
Our values act as a guiding force in
our strategy and hence in October,
we launched a prestigious programme
of ‘Axis Values Realizers’ to identify a
network of 950 Axis Role Models who
will passionately drive the shift from
merely knowing to living our values,
every day. The journey opened the
doors to numerous exemplary and
heart‑warming stories, culminating in
numerous winning stories recognised
at the Axis Champion Awards 2020.
We are now looking to transform the
way we work and exploring the option
of employees working remotely for
two to five days a week from home,
depending on the criticality of the
business function. We believe we
would be able to redefine the work
culture and would not only be able
to attract varied talent pool breaking
geographical boundaries, but also
enhance employee efficiency
and work‑life balance.
Axis Bank remained one of the largest
employers in the country with focus
on gender diversity and inclusion.
During the year, the new hirings both
on a gross and net basis were higher
compared to the previous fiscal
year, as we continued to strengthen
capabilities in critical functions and
subsidiaries. During the year, we
revamped our internal job portal
‘Catalyst’ that empowers employees to
manage their own careers and provide
opportunities for them to make a move
within the Axis Group to their next
desired career milestone. The Bank
is among the few in the industry to
have gone ahead with yearly appraisals
and provide variable pay‑outs to all
employees upto middle management
roles during these trying times.
As a new‑age Bank, we continue to
make investments in strengthening
our information technology and
cyber security competencies while
building new capabilities in digital and
customer excellence. We now have a
separate digital team of highly skilled
people with separate infrastructure
and set‑up in Mumbai. The team is
currently working on several digital
garages that are likely to simplify
customer journeys and improve
customer experience.
Following a Lean and Six Sigma
philosophy, our dedicated team of
process quality experts, have also
undertaken and executed large
number of process transformation
projects with a view to improve
turn‑around‑times, process
efficiencies, productivity and
operational capabilities for improved
customer experience.
All these digital transformations at
the Bank are not only going to help
us streamline our processes and
Staying on Course of the country, and aim to launch it
in the state of Manipur in the next
financial year.
The Bank remains committed to
serve our external stakeholders –
customers and community, while
ensuring progress of our internal
stakeholders – our employees ‑ our
most prized assets. As we expect
these unprecedented times to settle
down, we stay committed to follow
all precautions and ensure a smooth
transition to the ‘new normal’ which
includes enhanced health and safety
arrangements at all our offices, a
boundary‑less workspace model and
establishing new work behaviours of
ownership and productivity.
By staying true to our values, and
continually investing in building newer
capabilities, Axis is positioned well to
become the Bank of choice for all. The
challenges as well as opportunities
ahead are huge, and we are committed
to investing in our people and
capabilities to connect insights to
decisions and processes to outcomes.
On behalf of the Board of Directors
of Axis, I want to thank you for your
continued trust, confidence, and
support. Together, at Axis Bank,
we will weather the storm and
come out stronger than ever. Stay
healthy, stay safe!
Warm Regards,
Rajesh Dahiya
Executive Director,
Corporate Centre
serve our customers better, but also
grow the business manifold and
provide new world skills and tools
to our employees.
During the year, we implemented
a uniform visual brand identity for
the Bank and its subsidiaries to drive
consistency and strengthen the ethos
of ‘One Axis’ across the Bank’s retail,
digital and offline touch‑points. ‘Dil
Se Open’ our new brand philosophy
launched earlier this calendar year,
also builds on the value of customer
centricity that each of our employees
display while interacting with
customers. In the last 26 years of our
journey, our employees have been
the Bank’s strongest assets and true
ambassadors, reflecting our core
values of customer centricity, integrity
and ethics in all our actions. The Bank
has always stood by its customers not
only to meet their financial needs and
fulfil their dreams, but also contribute
significantly towards sustainable
economic and social development of
the communities around us.
We have always believed that the
communities where we serve are our
critical stakeholders and significantly
contribute to our success. The
Bank continued to play its part in
sustainable development of the
communities and environment. It
has set aside an amount of `100
crores for fighting the COVID‑19
pandemic and supporting the cause
of its stakeholders and community
at large. The Bank’s employees have
contributed a part of their salaries
towards the PM CARES Fund.
In the last 26 years of our
journey, our employees have
been the Bank’s strongest
assets and true ambassadors,
reflecting our core values of
customer centricity, integrity
and ethics in all our actions.
During the year, we
implemented a uniform visual
brand identity for the Bank
and its subsidiaries to drive
consistency and strengthen
the ethos of ‘One Axis’ across
the Bank’s retail, digital and
offline touch-points.
We have been working with various
government agencies, police
departments and others to support
them directly through hand sanitisers
and masks, thermal guns, PPE masks
and gloves. Axis Bank Foundation has
supported distressed people in 7 cities
by providing grocery kits to them with
the help of credible NGOs. Earlier this
financial year, under Axis ‘Sahaayata’
project, the Bank provided relief kits to
cyclone affected individuals in Odisha
and to those impacted by floods in
Assam, Bihar, Karnataka and Kerala,
collectively supporting close to 38,000
individuals and families.
Axis Bank Foundation has continued
its initiatives to empower the
marginalised poor and provide them
the opportunity to move up the social,
economic and ecological barriers. The
foundation is currently working with
7 lakhs families to build their skills and
earn their own livelihoods, while also
offering them access to government
schemes and formal credit, thus
ensuring long‑term sustainability.
The Foundation is now targeting a
sustainable impact by reaching out to
2 million families by 2025.
Recently, the Bank concluded its
CSR programme ‘Axis DilSe’, that
was initiated with an objective to
transform over 100 primary schools in
the remote villages in Leh and Kargil
districts of the Union Territory of
Ladakh over a period of three years.
We are very excited to take forward
Axis DilSe to other remote corners
25
Annual Report 2019-20Experience Open Board of Directors
Rakesh Makhija
Chairman
Amitabh Chaudhry
Managing Director & CEO
Rohit Bhagat
Independent Director
S. Vishvanathan
Independent Director
Ketaki Bhagwati
Independent Director
B. Babu Rao
Nominee Director
Stephen Pagliuca
Nominee Director
Girish Paranjpe
Independent Director
Rajiv Anand
Executive Director
(Wholesale Banking)
Rajesh Dahiya
Executive Director
(Corporate Centre)
Pralay Mondal
Executive Director
(Retail Banking)
26
Staying on Course Core Management Team
As on 28 April, 2020
Deepak Maheshwari
Group Executive & Chief Credit Officer
Ganesh Sankaran
Group Executive - Wholesale Banking Coverage Group
Naveen Tahilyani
Group Executive - Banking Operations & Transformation
Himadri Chatterjee
President - Retail & Wholesale Banking Operations
Rudrapriyo Ray
President & Chief Compliance Officer
Sanjay Silas
President - International Banking
Akshaya Kumar Panda
President - Large Corporate Coverage
Prashant Joshi
President - Large Corporate Credit
Balaji N
President - Business Intelligence Unit
Jagdeep Mallareddy
President - Retail Lending
Ravi Narayanan
President - Branch Banking
Neeraj Gambhir
President - Treasury & Markets
Puneet Sharma
President & Chief Financial Officer
Vivek Gupta
President - Wholesale Banking Products
Girish V. Koliyote
Company Secretary
Statutory Auditors
M/s Haribhakti & Co. LLP
Chartered Accountants
Secretarial Auditors
M/s BNP & Associates
Company Secretaries
Registrar and Share Transfer Agent
KFin Technologies Private Limited
Selenium Tower B, Plot Nos. 31 & 32
Financial District, Nanakramguda
Serilingampally Mandal
Hyderabad, Telangana ‑ 500032
India
Tel. No.: +91 40‑6716 2222
Fax No.: +91 40‑2300 1153
Registered Office
‘Trishul’, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad – 380 006
Tel. No.: 079‑66306161
Fax No.: 079‑26409321
Corporate Office
‘Axis House’, C‑2,
Wadia International Centre,
Pandurang Budhkar Marg,
Worli, Mumbai – 400 025
Tel. No.: 022‑24252525/43252525
Fax No.: 022‑24251800
Email
shareholders@axisbank.com
Website
www.axisbank.com
27
Annual Report 2019-20Experience Open Staying on Course
Staying on Course
Business Highlights
Progress during the year
DIGITAL BANKING
• Market share across payment
channels stood at ‑ GST 9%, RTGS
6.2% and NEFT 10.9%
• Emerged second largest payment
system player with over 19 crores
transactions a month
• Cash Management Services
• Started fixed deposit account
throughput stood at `102 trillion
• Witnessed 1.7 lakhs+ downloads
of mobile banking application for
corporate payments. Over 4,500
average daily login with ~20% of the
total transactions, approved on the
new Corporate Internet Banking
mobile application
opening through digital mode in
quick time and with zero issuance
fees, an industry first
• Launched Axis Voice Banking on
Alexa to assist customers to know
their account balance and credit
card bill through voice command
RETAIL LENDING
• 478 branches opened, highest in
any fiscal year
• 47% of overall Retail book is
sourced through branches
• 80% of overall sourcing is from ETB
• Launched Axis Bank Flipkart
customers, based on count
• Secured lending stood at 80% of
the book, dominated by vanilla
home loans at 35%
Credit Card, Axis Bank Magnus
Credit Card, Burgundy Private
One card and cobranded
credit card with Indian Oil
Corporation and Freecharge
• Entered into definitive agreements
to become joint venture
partner in Max Life Insurance
Company Limited
• Sourced 45% of credit cards
through paperless digital platforms
28
Experience Open
Annual Report 2019-20
TRANSACTION BANKING
• Introduced ‘One Connect’,
an industry‑first offering in
collaboration with Invoicemart
that allows customer to better
manage liquidity
• Awarded the mandate of PM Cares
Donation Fund and other State level
COVID‑19 Donation drive; the Bank
has activated various digital mode
of payments and collected over
`130 crores till end of April 2020
• Ranked 3rd in terms of FASTag
issued
• Designed a first‑of‑its‑kind Smart
City Solution under Smart Cities, a
powerful platform for citizens and
city administration to interact
and transact
WHOLESALE BANKING
• Ranked number one arranger for
rupee denominated bonds as per
Bloomberg for calendar year 2019
• CBG book is very well diversified
across the geographical regions and
consists of 35 broad sectors
• 95% of incremental sanctions in
corporate book were to those
rated ‘A’ and above
• Witnessed strong growth in loans
to ‘AAA’ and ‘AA’ rated clients
• 83% of outstanding standard
corporate book is to companies
rated ‘A‑’ and above
• Implemented Project Sankalp to
transform the SME business to
improve efficiencies, customer
experience and deliver year‑on‑year
growth
Key Performance Indicators
Delivering with resilience
Total Assets/Liabilities
` in crores
915,165
800,997
691,330
601,468
539,821
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
14%
y‑o‑y
Total Advances
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
15%
y‑o‑y
Total Deposits
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
17%
y‑o‑y
Net Interest Income (NII)
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
16%
y‑o‑y
30
15%
5 ‑ year CAGR
` in crores
571,424
494,798
439,650
373,069
338,774
15%
5 ‑ year CAGR
` in crores
640,105
548,471
453,623
414,379
357,968
15%
5 ‑ year CAGR
` in crores
25,206
21,708
18,618
18,093
16,833
12%
5 ‑ year CAGR
Shareholder’s Funds
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
27%
y‑o‑y
Retail Advances
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
24%
y‑o‑y
CASA
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
8%
y‑o‑y
Operating Revenue
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
17%
y‑o‑y
` in crores
84,948
66,676
63,445
55,763
53,165
14%
5 ‑ year CAGR
` in crores
305,400
245,812
206,465
167,993
138,521
22%
5 ‑ year CAGR
` in crores
263,706
243,394
243,852
213,050
169,445
13%
5 ‑ year CAGR
` in crores
40,743
34,838
29,585
29,784
26,204
13%
5 ‑ year CAGR
Staying on Course Operating Profit
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
23%
y‑o‑y
` in crores
23,438
19,005
15,594
17,585
16,104
12%
5 ‑ year CAGR
Earnings Per Share (Basic)*
FY19-20
FY18‑19
5.99
FY17‑18
1.13
FY16‑17
FY15‑16
18.20
15.40
Net Interest Margin (NIM)
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
`
%
34.59
3.51
3.43
3.44
3.67
3.90
Financial Ratios
Return on Equity
Return on Assets
Capital Adequacy Ratio
Tier ‑ I Capital Adequacy Ratio
Cost: Asset Ratio
Net Profit
FY19-20
FY18‑19
FY17‑18
276
FY16‑17
FY15‑16
1,627
4,677
3,679
Book Value Per Share*
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
16%
y‑o‑y
` in crores
8,224
`
301.05
259.27
247.20
232.83
223.12
10%
5 ‑ year CAGR
Gross/Net NPA ratio
%
FY19-20
FY18‑19
FY17‑18
FY16‑17
FY15‑16
1.56
2.06
0.70
2.11
1.67
3.40
4.86
5.26
5.04
6.77
Net NPA
Gross NPA
%
FY15-16
FY16-17
FY17-18
FY18-19
FY19-20
17.49
1.72
15.29
12.51
2.04
7.22
0.65
14.95
11.87
2.13
0.53
0.04
16.57
13.04
2.17
8.09
0.63
15.84
12.54
2.13
2.34
0.20
17.53
14.49
2.09
*Fiscal 2015‑16 figures have been adjusted to reflect the effect of sub‑division of one equity share of the Bank having nominal value of `10 each into
5 equity shares of nominal value `2 each.
Previous year figures have been re‑grouped wherever necessary. All above figures are standalone.
31
31
Annual Report 2019-20Experience Open experience open
While scale, stature, presence,
products and technology are
evident manifestations of
Axis Bank, one characteristic
that binds all and transcends
everything else is that we are
an institution that is warm,
friendly, empathetic and
accessible to customers and all
other stakeholders.
32
Open to delighting
CUSTOMERS
Open to
INNOVATIONS
Open to a stronger
WORKFORCE
Open to building
COMMUNITIES
33
Staying on Course
Experience Open
Open to delighting customers
Aligned to emerging trends in the banking and financial services
sector, we are implementing best‑in‑class digital interventions
to enrich customer experience.
GETTING THINGS FIRST
TIME RIGHT
We have inculcated ‘first time
right’ approach by building
system‑based validations, which
ensure that appropriate balances/
checks are conducted in real time
to avoid rejections.
34
BRINGING LARGE‑SCALE DIFFERENTIATION
• Best‑in‑class bots for first level self‑service
interactions and voice bots for interactive voice
response (IVR) eliminating wait time
• Enhanced use of machine learning/analytics to
ensure auto‑tagging of interactions
• Enriching service landscape by using natural
extension of customer habits like Whatsapp Bot
and Facebook/Instagram Chat Bots; also have
email Bot for servicing and banking
• Real‑time Speech Analytics for phone banking,
helping us identify potentially damaging
conversation between the agent and the customer
• Introduced instant debit or credit card printing
facility and platform for pre‑booking appointment
to visit branch or for doorstep services
Smarter process
We leverage big data and artificial
intelligence (AI) for instant account
opening. AI helps scrutinise the
uploaded KYC documents and
detects inaccuracies.
ENSURING CONSISTENT EXPERIENCE
ACROSS CHANNELS
• Implemented ‘Straight Through Process’ at
front‑end teams, eliminating multiple hand‑offs by
automating certain operations
• Created unified front‑end ‘Saksham’ for
a 360‑degree customer view; it acts as a
single unified frontend, which connects with
peripheral systems
• Introduced ‘Single Sign‑on’ to avoid repeat
authentication across applications
• Introduced content management tool
to ensure SOPs/guidelines are readily
available to front end for better efficiency
• 24x7 digital access, backed by digital
experience centre and audio‑video interface
Experience Open
Annual Report 2019-20
35
35
Staying on Course
Experience Open
Open to innovations
Our customers are always evolving with the
changing times. Therefore, we are thinking
afresh every time we design new products
and services for them and build better
value that lasts.
RETAIL FRANCHISE
We have built a strong Retail franchise and offer an
extensive range of products, including deposits, retail loans,
credit cards, forex cards, insurance, investment products,
wealth management and advisory services to cater to a wide
customer cross‑section.
We are focused on acquiring the right customer for the
respective offerings and subsequently increase wallet share
through higher customer engagements.
We are focusing on sourcing bulk of our customers digital
only and are in the process of enabling digital transactions
across all the online channels via mobile app and internet
banking platform.
Growing Digital Prominence*
81%
Of all financial transactions
were digital
62%
Of savings accounts were
sourced through tablets
44%
Personal loans were sourced
through digital channels
92%
Growth in registrations
on mobile banking
15%
Growth in total registered
customers on the internet
banking platform
*In Fiscal 2019‑20
~70%
Of the new digital
registration are mobile first
36
Experience Open
Annual Report 2019-20
WHOLESALE BANKING
We have re‑organised this segment, creating an integrated franchise to cater to a wide range of organisations. Moreover,
we have strengthened operations and service infrastructure to enhance our value proposition.
Empowering government entities
Cash Management Solutions
Axis Bank offers a wide range of services and solutions to
government departments, public sector units (centre and
state), autonomous bodies, educational institutions, local
governance bodies, special purpose vehicles; and other
entities to suit their banking requirements. Customised
solutions are provided both in the digital and physical mode
for collections and payments through key developmental
initiatives, such as Digital India, Direct Benefit Transfer,
E‑Procurement, E‑Mandi, E‑Nagarpalika, Online Payment
Gateways and other cashless initiatives.
Current Account
Over the last financial year, we have started the journey
of digitising the CA onboarding. We are in the process of
introducing a tablet‑based tool for on‑boarding of individual
and sole proprietor companies, thereby reducing the manual
intervention by 70%. We are working on multiple other
initiatives to digitise the CA journey.
Bank has comprehensive and customisable cash
management solutions (payments and collections) that
enable faster fund movement by leveraging our extensive
branch network and digital assets, such as PayPro, Power
Pay, At Par Payment, Dividend/Interest Payment, Power
Remote – Remote DD Printing, CMS Power Cheque other
than normal payment channels.
Seamless online trade and forex solutions
TFConnect and Online Inward Remittance platforms
have made trade and forex transactions easier, open, and
accessible to our customers which acts as a one‑stop
solution to initiate and authenticate trade finance
transactions in a paperless environment.
Evolve and grow
Over the last 6 years, the Bank has created a unique
platform Evolve – a knowledge sharing and capability
building initiative for SMEs. During Fiscal 2019-20,
the event was attended by 3,000+ participants,
encompassing 35 industry experts who were the
speakers at the events, reiterating our purpose of
knowledge sharing among our SME customers.
COMMERCIAL BANKING
Our Commercial Banking Group focuses on the SME
segment. The product basket includes lending products,
such as working capital, term loans, project lending,
lease rental discounting and unique and competitive
forex, trade and cash management solutions to meet
the individual requirements of customers. This ensures
efficiency in delivering entire business solutions to the
customer at one go.
A new loan on‑boarding and approval system is being
structured to bring in better controls from a system
perspective on TATs, building better underwriting capability
based on analytical feed and creating a digital workflow
for risk mitigation. A new digital tool is built to provide rich
customer insights to relationship managers, enabling them
to sell the right product and provide better solutions.
37
Experience Open
Open to a stronger workforce
We are dedicated to building a strong and talented pool of
people across our business segments. Our team travels the
last mile to make customers aware that there is always an
empathetic, all‑weather friend committed to serve.
FUTURE‑READY WORKFORCE
The continuous success of any organisation is determined
on how well it manages and motivates its people, as well as
how it grooms talent and the leadership team. ACElerate,
an objective performance management system linked to
the performance of businesses identifies and differentiates
employees by performance level and concludes with a 2‑day
tailored training programme.
We have also embarked on curating role‑based digital
learning journeys and foster a ‘driven‑to‑learn’ culture.
Strategic partnerships with virtual academia provide our
top talent access to a comprehensive library of courses,
available on‑demand.
13,000+
Employees were a part of the ACElerate learning
programmes, strengthening capabilities in credit
risk, process excellence and operations
38
Staying on Course PROMOTE DIVERSITY AND INCLUSION
Our culture is inclusive and respects the
contribution of each employee. As on 31 March
2020, Axis Bank’s total workforce was 74,140, of
which 23% were women employees. They span
the organisational hierarchy and geography. To
deepen diversity at the mid‑senior level, the Bank
has recruited 20 women through We Lead, our
leadership programme for women, from India’s
esteemed management institutes. Our new health
care programme also extended coverage for
partners and LGBT community.
ATTRACT, NURTURE, RETAIN
Aligned to the business strategy of building in‑depth
customer engagement, we scaled up our talent acquisition
mechanism to onboard talent catering to additional
footprint of 350 new branches. The Axis Bank Young
Bankers and Axis Sales Academy programmes support
a pool of entry level talent for our core businesses. The
Bank is investing in the skills of the future and building
capabilities in digital, engineering, credit analytics and
information security.
39
Annual Report 2019-20Experience Open Staying on Course
Experience Open
Open to building communities
For over twenty‑five years, we have focused
on widening our community interventions and
supporting sustainable livelihood creation across
the country. By being ‘Open’ to building deeper
relationships with our stakeholders, we contribute
to building resilient communities and sustainable
local economies. In the true spirit of openness,
collaborations remain an integral part of our
Corporate Social Responsibility (CSR) approach.
AXIS BANK FOUNDATION
Axis Bank Foundation (ABF), the Bank’s CSR arm, reaches out to
millions of households across rural, sub‑urban and urban India.
ABF’s work is around the core theme of ‘Sustainable Livelihoods’
wherein it works towards creating and strengthening rural livelihoods
and imparting skilling to youth, including the differently abled, in rural
and peri‑urban areas. ABF works with experienced implementation
partners with strong expertise in grassroots developmental solutions.
Under its Mission 2 Million, ABF is committed to supporting
2 million households by 2025, and has adopted a progressive
and knowledge‑based approach that is closely aligned to India’s
developmental priorities. ABF is active in 7,097 villages in 153
districts in 22 states.
DRIVING FINANCIAL INCLUSION AND LITERACY
Our CSR interventions include efforts towards financial inclusion
and literacy through both physical and digital interventions,
formation and capacity building of women‑centric, self‑help groups
and creation and expansion of rural micro‑enterprises.
INCREASING EMPLOYABILITY
In the true spirit of being ‘Open’, Axis Bank actively supports a greater
integration of persons with disabilities into the mainstream workforce
and society at large. Its interventions focus primarily on enhancing
employability of differently abled youth through specialized skilling
interventions, and increasing sensitization on the rights of PwDs in
India among various stakeholders.
6.92 lakhs
households/trainees
impacted
40
Experience Open
Annual Report 2019-20
Axis Bank stands together with the nation in our
united battle to combat the COVID-19 pandemic. We
have announced setting aside `100 crores towards
supporting our customers, employees, vendors,
government agencies and the community at large in
responding to the pandemic. We continue to work
directly with communities and vulnerable groups
towards supporting their relief and recovery.
A SECURE SOLUTION FOR YOUR
BANKING NEEDS
Keeping in mind the need for ensuring social
distancing norms during the COVID‑19 pandemic,
we activated Mobile ATM vans across 8 cities, to
ease citizens’ access to basic banking facilities.
The Vans toured multiple residential areas in
these cities, garnering a positive response from all
community members.
Through micro‑ATMs we facilitated 3.13 lakhs
financial transactions for our rural customers
totaling `64 crores in volume. 5% of these
transactions were authenticated through IRIS Scan.
EMPOWERING THROUGH EDUCATION
In Ladakh, the Axis DilSe initiative enabled the
transformation of 100+ government primary schools in
the remotest parts of both Leh and Kargil districts, a truly
inclusive and contemporary initiative.
BEING THERE WHEN IT MATTERS MOST
In response to the rising incidences of floods and natural
disasters in various parts of the country, we launched
Axis Sahaayata in 2018 to pro‑actively provide relief to
disaster victims as well as support the relief and recovery
efforts. Through Axis Sahaayta, we have helped secure
and rebuild thousands of lives across India.
ON GROUND INITIATIVES
DURING COVID‑19
Supporting quarantine centres
• Converting schools, panchayat centres and other public
infrastructure into fully equipped quarantine centres for
home‑bound migrant workers.
Health and hygiene support
• Providing sanitization kits to community members and
government agencies
• Providing PPE kits to first responders and other
front line worker
• Initiating local production of masks to
ensure steady supply
Ration distribution
• Distributing ration kits to food‑insecure households
• Providing ration support to vulnerable communities
including migrant workers
• Linking people to PDS shops for obtaining rations
41
Stories that inspire us
Open is more than
a sign on our door
Our people are our brand ambassadors who
help customers in their hour of need. They
support everyone who comes in through
our doors, build lasting bonds and their
actions speak the language of empathy.
“Only a few summers back, my wife suddenly fell sick. With my only
son abroad, I had nobody around me to help. Those days were very
tough for us. Out of panic, I reached out to my Axis Bank Relationship
Manager, Pawan Singh. He was very close to me and we shared a cordial
relationship. Pawan reached my residence almost immediately and
helped me take her to the hospital. During her stay in the hospital, he
would check up on me and my wife’s health regularly. He even made
arrangements for her chemotherapy with the hospital, besides visiting
her twice during the stay! After my wife recovered, I visited the branch,
along with her and my son to show my deep appreciation of what the
team had done for us, trademarking their ‘dil se open’ style.”
Chetla Branch Customer, Kolkata
I was never alone even during a
personal crisis.
Beyond the insurance it was the
relationship that saved me.
42
“Memories of the fateful day still haunts me. Last year in August,
I suddenly began feeling unwell and had to be hospitalised. My family
was not completely able to interpret the formalities involved in the
process, having never availed the insurance before. The Branch Head
at the Kagal branch assured my family with his knowledge, of cashless
facilities for medical tests and subsequent treatment. I was later shifted
for surgery to another hospital, where we faced procedural challenges.
He stepped in to help us again, connected with concerned hospital
authorities and simplified matters for the surgery to be conducted in time.
After recovering, I was in tears the first time I spoke to him again and told
him no words of appreciation could best describe my gratitude.”
Kagal Branch Customer, Kolhapur
Staying on Course “I will never forget that day. I think it was in the middle of October
before Diwali a few years ago, when I suddenly received a text message
requesting me to enter the OTP for a transaction I had not initiated.
I realised then that my wallet had been stolen, with my debit cards in
them. One of the debit cards was of Axis Bank and the other of a peer.
I was starting to think that I would lose all my savings. I visited the peer
bank first, but since it was after banking hours no one was ready to help
me. When I reached my Axis Bank branch at Paldi, however, the guard
outside gave my concern a patient ear. Since I was not aware of how to
report and block my card online, he directed me inside to an officer, who
sensed my distress and assured me that he would immediately help block
my card. I told him about my other debit card from a peer bank and he
took it upon himself to find the customer support helpline of the other
bank and speak to them about my concern. I was delighted with their
service and shifted my entire banking relationship to Axis Bank for their
ability to respond to even the smallest needs of customers like me.”
Paldi Branch Customer, Ahmedabad
My life’s savings were saved.
Now I have more control over my
finances and can’t be deceived.
“It happened around three years ago. Being a member of Krishna Self Help
Group, we earn our livelihood by producing infant food and further selling
it to an NGO. We are mostly occupied with our day‑to‑day work, and the
task of managing our finances and collecting payments from the NGO was
delegated to a few chosen individuals designated as Location Coordinators
(LCs). These individuals were appointed by the NGO and the prevalent
practice was for LCs to take pre‑signed cheques from us to the bank. The
LCs would then collect on our behalf the funds that we received from selling
our produce to the NGO. We trusted the LCs completely and such was
our reliance on them that we never verified our dues. However, the Bank
Manager of Axis Bank soon discovered that the money the LCs withdrew
on the SHG’s behalf, would never reach us in full. The LCs would always
pocket half the money and we were being defrauded by them. The bank
manager then came and spoke to us personally to verify if we were getting
our rightful share; and made us realise how we were victims of a fraud
perpetuated by the LCs. He immediately lodged a complaint, educated us on
the right practice and ensured that we received our actual dues. The bank
executives assisted us throughout the process and thanks to Axis Bank, I am
now confident that we will never be cheated this way again.”
Didwana Branch Customer, Rajasthan
43
43
Annual Report 2019-20Experience Open Staying on Course
Awards and Accolades
Being open has its rewards
Dun & Bradstreet BankTech Awards -
Best Use of IT and Risk Management
ET BFSI Excellence Awards -
Customer Engagement Initiative of the Year
ET Brand Equity Shark Awards -
Best use of Experiential Events
ET Government - DigiTech Conclave and Awards -
Best Mobile App for Citizen Centric Services
Finance Asia Country Awards -
Best DCM House
Finnoviti Awards -
Innovation
44
experience
open
Directors’ Report
The Board of Directors of the Bank (the Board) have the pleasure of presenting the 26th Annual Report of the Bank together
with the Audited Statement of Accounts, Auditors’ Report and the Report on the business and operations of the Bank, for the
financial year ended 31st March 2020.
Financial Performance and the State of the Bank’s Affairs:
The financial highlights for the year under review, are presented below:
Particulars
Deposits
• Savings Bank Deposits
• Current Account Deposits
Advances
• Retail Advances
• Non-retail Advances
Total Assets/Liabilities
Net Interest Income
Other Income
• Fee Income
• Trading Profit(1)
• Misc. Income
Operating Expenses
Operating Profit
Provision for Tax
Other Provisions and Write offs
Net Profit
Balance in Profit and Loss account brought forward from previous year
Amount Available For Appropriation
Appropriations
Transfer to Statutory Reserve
Transfer (from)/to Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Dividend paid (includes tax on dividend)
Transfer to Investment Fluctuation Reserve
Surplus carried over to Balance Sheet
(1)
Excluding Merchant Exchange Profit
Key Performance Indicators
Key Performance Indicators
Interest Income as a percentage of working funds*
Non-interest Income as a percentage of working funds*
Net Interest Margin
Return on Average Net Worth
Operating Profit as a percentage of working funds*
Return on Average Assets
Profit per Employee**
Business (Deposits less inter-bank deposits + Advances) per employee**
Net non-performing assets as a percentage of net customer assets***
* Working funds represent average total assets.
** Productivity ratios are based on average number of employees for the year.
*** Customer assets include advances and credit substitutes.
Previous year figures have been re-grouped wherever necessary
(` in crores)
Growth
17%
13%
1%
15%
24%
7%
14%
16%
18%
9%
149%
3%
9%
23%
43%
54%
(65%)
2019-20
640,105
173,592
90,114
571,424
305,400
266,024
915,165
25,206
15,537
11,019
2,420
2,098
17,305
23,438
3,277
18,534
1,627
24,323
25,950
407
-
341
1
289
328
24,585
2018-19
548,471
154,129
89,265
494,798
245,812
248,986
800,997
21,708
13,130
10,127
971
2,032
15,833
19,005
2,297
12,031
4,677
23,043
27,720
1,169
(103)
125
1
-
600
25,928
2019-20
7.56%
1.87%
3.51%
2.34%
2.83%
0.20%
` 2.40 lakhs
` 17.27 crores
1.56%
2018-19
7.38%
1.76%
3.43%
8.09%
2.55%
0.63%
` 7.61 lakhs
` 16.53 crores
2.06%
45
Annual Report 2019-20Experience Open Directors’ Report
Covid-19 Pandemic
The Bank has undertaken proactive steps right from the inception of the COVID – 19 Pandemic crisis. The framework of
proactive action has been focused on reducing the heightened risks arising out of the COVID – 19 Pandemic, across all facets
of risks impacting the business, safety of staff and business continuity from operational risk, likely impact on asset quality from
credit risk, trading risk due to sharp change in underlying risk factors in the investment book, liquidity pressure owing to change
in the perception of borrower on cash flows as well as deposit withdrawals, owing to disruptions under civic lockdown etc.
The actions have been taken on the following five fronts:
i.
ii.
Protecting people – issuing and implementing advisories around staff health, hygiene in office premises, quarantine and
social distancing etc.
Ensuring continuity – testing and deploying business continuity plans, including driving and scaling up work-from-
home initiative.
iii. Protecting operations – putting in place additional controls and monitoring around key operational risk parameters that
could see an increase in a lockdown and work-from-home environment.
iv. Maintaining liquidity – enhanced monitoring of liquidity position and deposit withdrawals to take pre-emptive action.
v. Conserving capital – credit advisories around originating and disbursal of new exposures with enhanced monitoring of
existing vulnerable credit exposure.
The governance around the above has been put in place under the aegis of a Central Emergency Response Team (CERT) headed
by the Executive Director (Corporate Centre) of the Bank, reporting directly to the Management Committee of the Bank. This
team has been meeting daily to review the situation in each of the said fronts, on which risk profile would be heightened and
take appropriate mitigation measures in response to the situation at the ground level.
CSR Initiatives towards COVID–19 Pandemic
The Bank continues to stand together with the country in its collective battle against COVID-19 Pandemic, and is committed to a
multi-pronged response supporting the Bank’s customers, employees, business partners, government agencies and the
community at large. The Bank is directly supporting government entities towards meeting their urgent equipment and
sanitation requirements and under Axis Cares it is supporting nearly 35,000 individuals towards meeting their food
requirements for a month.
Towards augmenting the country’s collective efforts in fighting the COVID-19 Pandemic, Axis Group has committed to contribute
to the PM CARES Fund and to GiveIndia’s India COVID Response Fund. In addition, Axis Bank Foundation, the CSR arm of the
Bank, is working closely with its implementation partners across India towards augmenting on-ground activities to address the
COVID-19 Pandemic related challenges.
Change in the Nature of Business
During the year under review, there has been no change in the nature of business of the Bank.
Capital Structure
Share Capital
During the financial year 2017-18, the Bank had issued 4,53,57,385 convertible warrants convertible into 4,53,57,385 equity
shares at a price of ` 565.00 per warrant, on a preferential basis. The allottees of the said convertible warrants were entitled
to exercise the option of converting one convertible warrant into one equity share of ` 2/- each of the Bank, within a period
of 18 months from the date of its allotment, i.e. on or before 17th June 2019.
During the year, the Bank allotted 4,53,57,385 equity shares pursuant to exercise of convertible warrants by the allottees
of the said convertible warrants. As a consequence, the paid-up share capital of the Bank increased by ` 9.07 crores and the
reserves of the Bank increased by ` 2,551.03 crores after charging off issue related expenses.
46
Statutory Reports During the year, the Bank also raised additional equity capital through allotment of 19,87,28,139 equity shares of ` 2/- each of
the Bank, pursuant to a Qualified Institutional Placement Issue. Consequently, the total issued and paid-up equity share capital
of the Bank increased by ` 39.75 crores and the Reserves of the Bank increased by ` 12,392.50 crores after charging of issue
related expenses. The said funds were raised to enhance the capital adequacy, in accordance with regulatory requirements, to
finance the growth strategy and for general corporate purposes, in accordance with applicable law. The Audit Committee of
Board of the Bank (Audit Committee) at its meeting held on 22nd January 2020, has reviewed and confirmed that the Bank has
utilized the said funds for the above-mentioned purposes and there was no deviation in utilization of the said funds.
During the year, the Bank allotted 59,47,539 equity shares of ` 2/- each of the Bank, pursuant to exercise of options by some
of its Whole Time Directors/Employees and that of the subsidiary companies of the Bank, under the various Employee Stock
Option Scheme(s).
Pursuant to the above allotments, the total issued and paid-up equity share capital of the Bank, as on 31st March 2020 increased
by ` 50.01 crores to ` 564.34 crores, as compared to ` 514.33 crores, as on 31st March 2019.
The category wise Shareholding Pattern of the Bank, as on 31st March 2020, was as under:
Sr. No. Category / Shareholder
1
2
3
4
5
6
7
8
9
10
11
Promoters
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
Life Insurance Corporation of India
General Insurance Corporation of India
The New India Assurance Company Limited
National Insurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
Foreign Investors
Overseas Investors (including FIIs/OCBs/NRIs)
Foreign Direct Investment (GDR)
Domestic Financial Institutions
Financial Institutions / Mutual Funds / Banks / NBFC / INC /AIF
Others
Total
No. of Shares held
% of total issued &
paid-up Capital
12,96,52,427
25,43,77,246
3,17,15,229
2,05,91,585
5,49,681
49,77,520
9,13,248
1,44,95,54,331
5,48,68,145
64,31,64,609
23,13,13,913
2,82,16,77,934
4.59
9.02
1.12
0.73
0.02
0.18
0.03
51.37
1.94
22.79
8.21
100.00
Debt Capital
During the year, the Bank issued and allotted 41,750 Senior Unsecured Redeemable Non-Convertible Debentures of face value
of ` 10 lakh each, aggregating to ` 4,175 crores, on a private placement basis. The said Debentures were issued for enhancing
long term resources for funding infrastructure projects and affordable housing. The Audit Committee at its meeting held on
28th April 2020, has reviewed and confirmed that the Bank has utilized the said funds for the above-mentioned purposes and
there is no deviation in utilization of the said funds.
The Equity Shares of the Bank and the Unsecured Redeemable Non-Convertible Subordinated Perpetual Debentures issued
by the Bank, on a private placement basis, are listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The
Bonds issued by the Bank under the MTN programme are listed on Singapore Stock Exchange and the Green Bonds issued by
the Bank are listed on London Stock Exchange.
Depository Receipts
The Global Depository Receipts (GDR) issued by the Bank are listed on London Stock Exchange.
The Bank has paid the listing fees to the said Stock Exchanges, in respect of the above securities, for the financial year 2019-20.
Dividend
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“Listing Regulations”), the Bank has formulated and adopted a Dividend Distribution
47
Annual Report 2019-20Experience Open
Directors’ Report
Policy with the objective of providing clarity to its stakeholders on the profit distribution strategies of the Bank. During
the year, the said Policy was reviewed by the Board and the same has been hosted on the website of the Bank at
https://www.axisbank.com/shareholders-corner/corporate-governance/Compliance-Report.
The Diluted Earnings Per Share (EPS) of the Bank for the financial year 2019-20 stood at `5.97 per equity share of ` 2/- each
as compared to ` 18.09 per equity share of ` 2/- each in the previous financial year.
The Reserve Bank of India, vide its circular dated 17th April 2020, has advised that banks shall not make any further dividend
pay-outs from profits pertaining to the financial year ended 31st March 2020 until further instructions, with a view that banks
must conserve capital in an environment of heightened uncertainty caused by COVID-19 Pandemic. Accordingly, the Board of
Directors of the Bank has not proposed any dividend for the year ended 31st March 2020.
Deposits
Being a banking company, the disclosures relating to deposits as required under Rule 8(5)(v) and (vi) of the Companies (Accounts)
Rules, 2014, read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to the Bank.
Ratings of Various Debt Instruments
The Senior Unsecured Redeemable Non-Convertible Debentures (Series 5) issued and allotted by the Bank, on a private
placement basis, during the financial year 2019-20, were rated “CRISIL AAA” by CRISIL Ltd. and “ICRA AAA” by ICRA Ltd.
The Bonds issued and alloted by the Bank under the MTN programme, on a private placement basis, during the financial year
2019-20, were rated “BBB-” by Standard & Poor’s.
The details of all credit ratings obtained by the Bank along with any revisions thereto, during the financial year 2019-20, for
all the debt instruments outstanding as on 31st March 2020, is disclosed in the Corporate Governance Report, forming part
of this report.
Board of Directors
During the year, the following changes took place in the composition of the Board:
• Dr. Sanjiv Misra ceased to be the Non-Executive (Part-Time) Chairman of the Bank, pursuant to completion of his tenure,
with effect from the close of business hours on 17th July 2019. In light of the above, Dr. Sanjiv Misra decided not to continue
as an Independent Director of the Bank for the remainder of his tenure and accordingly resigned as the Independent Director
of the Bank, with effect from the close of business hours on 17th July 2019. In accordance with Clause 7B of Schedule Ill, Part
A of the Listing Regulations, Dr. Sanjiv Misra confirmed that there was no other material reason for his resignation, other
than the above. The Board acknowledges the invaluable contributions rendered by Dr. Sanjiv Misra during his tenure as an
Independent Director of the Bank and places on record its deep appreciation for the insightful perspectives and suggestions
provided by him at the meetings of the Board/ Committee of the Bank and for his leadership, as the Non-Executive (Part-
Time) Chairman of the Bank.
• Shri Rakesh Makhija, Independent Director of the Bank, was appointed as the Non-Executive (Part-Time) Chairman of the
Bank, for a period of 3 (three) years, with effect from 18th July 2019 upto 17th July 2022 (both days inclusive), in terms of
the approval granted by the Reserve Bank of India (RBI) and by the Shareholders of the Bank at the 25th Annual General
Meeting held on 20th July 2019.
• Prof. Samir Barua ceased to be an Independent Director of the Bank, with effect from the close of business hours on
21st July 2019, upon completion of the maximum permissible tenure of 8 (eight) continuous years, in terms of the provisions
of Section 10A (2A) of the Banking Regulation Act, 1949. The Board acknowledges the invaluable contributions rendered
by Prof. Samir Barua during his tenure as an Independent Director of the Bank and places on record its deep appreciation
for the insightful perspectives and suggestions provided by him at the meetings of the Board/ Committees of the Bank.
• Shri Pralay Mondal was appointed as the Executive Director (Retail Banking) of the Bank, for a period of 3 (three) years, with
effect from 1st August 2019 upto 31st July 2022 (both days inclusive), in terms of the approval granted by the RBI and the
Shareholders of the Bank at the 25th Annual General Meeting held on 20th July 2019.
48
Statutory Reports • Shri Rajiv Anand, Executive Director (Wholesale Banking) and Shri Rajesh Dahiya, Executive Director (Corporate Centre) of
the Bank, were re-appointed as the Executive Director (Wholesale Banking) and Executive Director (Corporate Centre) of
the Bank, respectively, for a further period of 3 (three) years, with effect from 4th August 2019 upto 3rd August 2022 (both
days inclusive), in terms of the approval granted by the RBI and the Shareholders of the Bank at the 25th Annual General
Meeting held on 20th July 2019.
• Shri Som Mittal ceased to be an Independent Director of the Bank, with effect from the close of business hours on
21st October 2019, upon completion of the maximum permissible tenure of 8 (eight) continuous years, in terms of the provisions
of Section 10A (2A) of the Banking Regulation Act, 1949. The Board acknowledges the invaluable contributions rendered by
Shri Som Mittal during his tenure as an Independent Director of the Bank and places on record its deep appreciation for the
insightful perspectives and suggestions provided by him at the meetings of the Board/ Committees of the Bank.
• Smt. Usha Sangwan, Nominee Director of Life Insurance Corporation of India (LIC), Promoter of the Bank, on the Board of
the Bank, tendered her resignation as the Non-Executive (Nominee) Director of the Bank, with effect from 12th December
2019. The Board acknowledges the invaluable contributions rendered by Smt. Usha Sangwan during her tenure as the Non-
Executive (Nominee) Director of the Bank and places on record its deep appreciation for the insightful perspectives and
suggestions provided by her at the meetings of the Board/ Committees of the Bank.
• The Board of Directors of the Bank on 9th December 2019, re-appointed Shri S. Vishvanathan, as the Independent Director
of the Bank, for his second term from 11th February 2020 up to 10th February 2023 (both days inclusive) i.e. up to the expiry
of his tenure of 8 (eight) continues years, in terms of the provisions of Section 10A (2A) of the Banking Regulation Act, 1949,
taking into account the outcome of his performance evaluation and pursuant to the recommendation of the Nomination and
Remuneration Committee of Directors of the Bank (Nomination and Remuneration Committee). The said re-appointment
was approved by the Shareholders of the Bank, by means of a Special Resolution, passed through Postal Ballot on 9th
January 2020. During the said period, Shri S. Vishvanathan shall not be liable to retire by rotation, in terms of the provisions
of Section 149(13) of the Companies Act, 2013.
The Board at its meeting held on 29th April 2020, approved the proposals relating to re-appointment of Directors of the Bank:
• Re-appointment of Shri B. Baburao, as the Non-Executive (Nominee) Director of the Bank, who is liable to retire by rotation
at the ensuing Annual General Meeting, and being eligible has offered himself for re-appointment, in terms of Section 152
of the Companies Act, 2013.
• Re-appointment of Shri Rakesh Makhija, as an Independent Director of the Bank, for his second term as such, from
27th October 2020 up to 26th October 2023 (both days inclusive) i.e. up to the expiry of his tenure of 8 (eight) continuous
years in terms of the provisions of Section 10A (2A) of the Banking Regulation Act, 1949, Section 149 of the Companies Act,
2013 and the Listing Regulations, subject to the approval of the Shareholders of the Bank, at the ensuing Annual General
Meeting by means of a Special Resolution.
The ordinary/special resolution(s) in respect of re-appointment of the Directors, as aforesaid, have been included in the
Notice convening the 26th Annual General Meeting of the Bank. Brief profiles of the said Directors have been annexed to
the said Notice.
The composition of the Board, is in compliance with the applicable norms.
Selection and Appointment of Directors
The selection and appointment of Directors of the Bank is done in accordance with the relevant provisions of the Companies
Act, 2013, the relevant Rules made thereunder, the Banking Regulation Act, 1949, the Guidelines issued by the RBI and the
relevant provisions of the Listing Regulations relating to Corporate Governance, as amended, from time to time.
The Bank has formulated and adopted the Succession Planning Policy for the Board of Directors and Key Officials of the Bank
(the Policy). The objective of the Policy is to inter alia assess, identify and nominate suitable candidates to fill vacancies that
may arise for positions of the Non-Executive (Part time) Chairman, Independent Directors, Managing Director & CEO (MD &
CEO), Whole Time Directors (WTD), Group Executives, Key Managerial Personnel and other Key officials of the Bank, from
time to time, to plan for succession of the said roles and any vacancies that may arise out of impending move or retirement or
resignation or sudden exit or for any reason whatsoever in such roles, incumbent or named successors, significant changes in
role accountabilities, substantive changes in the business parameters and changes to the role holder or successor’s aspiration.
49
Annual Report 2019-20Experience Open Directors’ Report
The Policy also seeks to identify the competency requirements for the said positions, the process to identify potential
candidates and develop required competencies through planned training, development and learning initiatives and to ensure
systematic and long-term development of personnel for taking higher roles and responsibilities at the senior management
levels at the Bank or that of its subsidiary companies, which may arise due to impending move or retirement or resignation or
sudden exit or for any reason whatsoever, of the role, incumbent or named successors.
The Nomination and Remuneration Committee is responsible to the Board for leading the succession planning process in
respect of appointments/re-appointments in respect of Directors, employees in the grade of Senior Management and Key
Managerial Personnel of the Bank.
In terms of the Policy, which has been reviewed by the Nomination and Remuneration Committee and by the Board, the
succession planning process for the post of the Non-Executive (Part-Time) Chairman/ Independent Director is required to
be initiated at-least 9 (nine) months prior to the expiry of their current term or in case of unforeseen circumstances, with
immediate effect.
Further, the succession planning process for the post of the MD & CEO/WTD of the Bank is required to be initiated at-least
9 (nine) months prior to the expiry of the current term or the date of retirement or as soon as the Bank is informed of the
decision of the MD & CEO/WTD to resign from the services of the Bank or to opt for Early Retirement, as the case may be or
in case of unforeseen circumstances, with immediate effect.
The Policy also provides for the course of action to be initiated in case of delay or non-receipt of regulatory/statutory approvals,
relating to the appointment/re-appointment of the MD & CEO/WTD of the Bank or in case of a sudden vacancy in the position
of MD & CEO/WTD of the Bank, caused due to death or permanent incapacitation or for any other reason whatsoever.
The RBI has vide its circular no. RBI/2019-20/204 DoR.Appt.No.58/29.67.001/2019-20 dated 31st March 2020 on
“Appointment of Managing Director and Chief Executive Officer (MD & CEO) / CEO / Part-Time Chairperson (PTC) in Banks
– ‘Declaration and Undertaking’ and allied matters, prescribed new format for declarations/ undertakings to be submitted by
the Directors of a Bank. The Bank has accordingly, obtained the prescribed declarations / undertakings from all its Directors,
in the revised format.
The Bank adheres to the process and methodology prescribed by the RBI in respect of the ‘Fit & Proper’ criteria as applicable
to Private Sector Banks, signing of deed of covenants which binds the Directors to discharge their responsibilities to the best
of their abilities, individually and collectively in order to be eligible for being appointed/re-appointed as a Director of the Bank.
The prescribed declarations / undertakings given by the Directors other than that of the Members of the Nomination and
Remuneration Committee are placed before the Nomination and Remuneration Committee and the declarations / undertakings
given by the Members of the Nomination and Remuneration Committee are placed before the Board, for its review and noting.
The said declarations / undertakings are obtained from all the Directors on an annual basis and also at the time of their
appointment / re-appointment, in compliance with the said laws. An assessment on whether the Directors fulfil the prescribed
criteria is carried out by the Nomination and Remuneration Committee and the Board, on an annual basis and also at the time
of their appointment / re-appointment.
The Nomination and Remuneration Committee also reviews the structure, size, composition of the Board, the regional and
industry experience, track record, expertise and other relevant information and documents of all the Directors before making
appropriate recommendations to the Board with regard to their appointment / re-appointment, terms and conditions relating to
such appointment / re-appointment, including remuneration, designed to enhance the Board’s effectiveness and in compliance
with the applicable norms. Wherever necessary, the Nomination and Remuneration Committee is authorized to engage the
services of an External Consultant(s) / expert in the field of succession planning, to identify and assess the suitability of
candidates for the post of a Director of the Bank.
The Nomination and Remuneration Committee takes into account the profile, skill sets, experience, expertise, functional
capabilities etc., and identifies potential candidates from diverse backgrounds including but not limited to accountancy,
agriculture and rural economy, banking, co-operation, economics, finance, law, small-scale industry, information technology,
core industries, infrastructure sector, payment and settlement systems, human resource, risk management and business
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Statutory Reports management, thus providing the Board with Members who have diverse knowledge, practical experience and skills, to serve
the business interests of the Bank.
Declaration of Independence
All the Independent Directors of the Bank have submitted the requisite declarations stating that they meet the criteria
prescribed for independence under Section 149 of the Companies Act, 2013 and Regulation 16 of the Listing Regulations,
which were placed before the Board for their review. The Board has confirmed and taken on record the said declaration
of Independence provided by the Independent Directors, after undertaking due assessment of the veracity of the same. In
the opinion of the Board, the Independent Directors fulfill the criteria prescribed for independence and are independent of
the Management.
Certificate from a Company Secretary in Practice
In terms of Regulation 34(3) read with Schedule V of the Listing Regulations, the Bank has obtained a Certificate from BNP
& Associates, Practising Company Secretaries confirming that none of the Directors on the Board of the Bank have been
debarred or disqualified from being appointed or continuing as Directors of the Companies either by the Securities and
Exchange Board of India or the Ministry of Corporate Affairs or any other Statutory Authorities. The said certificate is annexed
as part of this report.
Key Managerial Personnel
Shri Jairam Sridharan, resigned as the Group Executive & Chief Financial Officer (CFO) and Key Managerial Personnel of the
Bank, with effect from the close of business hours on 5th March 2020. The Board places on record its appreciation for the
invaluable contributions rendered by Shri Jairam Sridharan during his tenure as the Group Executive & CFO of the Bank.
Pursuant to the vacancy caused by the resignation of Shri Jairam Sridharan, as aforesaid, and pursuant to the recommendations
of the Nomination and Remuneration Committee and the Audit Committee of the Bank, the Board at its meeting held on
27th February 2020, approved the appointment of Shri Puneet Sharma, as the Chief Financial Officer (CFO) and Key Managerial
Personnel of the Bank, with effect from 6th March 2020.
The Board at its meeting held on 29th April 2020, appointed Shri Rajiv Anand, Executive Director (Wholesale Banking), Shri
Rajesh Dahiya, Executive Director (Corporate Centre) and Shri Pralay Mondal, Executive Director (Retail Banking) as the Key
Managerial Personnel of the Bank, with effect from 29th April 2020, in terms of Section 203(1) read with Section 2(51) of the
Companies Act, 2013.
Shri Amitabh Chaudhry, Managing Director & CEO, Shri Rajiv Anand, Executive Director (Wholesale Banking), Shri Rajesh
Dahiya, Executive Director (Corporate Centre), Shri Pralay Mondal, Executive Director (Retail Banking), Shri Puneet Sharma,
CFO and Shri Girish V. Koliyote, Company Secretary are the Key Managerial Personnel of the Bank, in terms of Section 203(1)
read with Section 2(51) of the Companies Act, 2013, and the relevant Rules made thereunder.
Board Performance Evaluation
The Companies Act, 2013 and the Listing Regulations relating to Corporate Governance provides for evaluation of the
performance of the Board, its Committees, Individual Directors and the Chairman of a company.
The Nomination and Remuneration Committee is the nodal agency for conducting the said performance evaluation. The
Nomination and Remuneration Committee has reviewed and approved the manner for effective evaluation of the performance
of the Board, its Committees, its individual Directors and its Chairman and determined the criteria for conduct of such
performance evaluation. The manner in which the evaluation has been conducted and the details of the outcome of the board
performance evaluation for the financial year under reference, along with the proposed action for implementation by the Bank
during the FY 2020-21, is provided in the Report on Corporate Governance, which forms part of this report.
Meetings of the Board/Committees of the Board
The schedule in respect of the meetings of the Board / Committees thereof to be held during the next financial year and for
the ensuing Annual General Meeting is circulated in advance to all the Members of the Board. During the year, 10 meetings
of the Board were held and the gap between the said meetings did not exceed the limit of 120 days, as prescribed under the
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Annual Report 2019-20Experience Open Directors’ Report
relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to
Corporate Governance.
Audit Committee
The composition, role and functions of the Audit Committee of the Bank, is disclosed in the Report on Corporate Governance,
which forms part of this report.
Remuneration Policy
The Bank has formulated and adopted a Comprehensive Remuneration Policy for its Directors, Material Risk Takers, Key
Managerial Personnel and other Employees (the Policy), in terms of the relevant provisions of Section 178 of the Companies
Act, 2013, the relevant Rules made thereunder, the Listing Regulations relating to Corporate Governance and the Guidelines
issued by the RBI, in this regard.
The said Policy was reviewed and approved by the Nomination and Remuneration Committee and by the Board, pursuant
to the revised Guidelines dated 4th November 2019 issued by the RBI on Compensation of Whole Time Directors/ Chief
Executive Officers/ Material Risk Takers and Control Function staff.
The Nomination and Remuneration Committee reviewed the impact of the revised Guidelines to the said Policy and on the
various aspects of the compensation structure such as Fixed Pay, Variable Pay, Stock Options etc. and also inter alia took
into account, effective alignment of compensation with prudent risk taking, international scenarios, external benchmarks on
remuneration trends in the Banking/ NBFC sector in India, implications under tax laws, macro trends relating to employment
/ remuneration etc. and recommended the same for the approval of the Board.
In terms of the revised Guidelines, which is effective from 1st April 2020, the Bank formulated and adopted Remuneration
Policy for Non-Executive Chairman and Non-Executive Directors of the Board and Remuneration Policy for MD & CEO,
Whole-time Directors, Material Risk Takers, Control Function Staff and other employees of the Bank.
The details of the said Policy have been disclosed in the Report on Corporate Governance, which forms part of this report.
The said Policy has been hosted on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-
governance/Compliance-Report, in terms of the Listing Regulations.
Whistle Blower Policy and Vigil Mechanism
The details of the Whistle Blower Policy and Vigil Mechanism have been disclosed in the Report on Corporate Governance,
which forms part of this report.
Subsidiaries, Joint Ventures and Associates
As on 31st March 2020, the Bank has the following eleven unlisted subsidiary companies and one step down subsidiary;
i)
Axis Asset Management Company Ltd. undertakes the activities of managing the mutual fund business.
ii) Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual fund business.
iii) Axis Capital Ltd. provides services relating to investment banking, equity capital markets, institutional stock broking,
mergers and acquisition advisory etc.
iv) Axis Finance Ltd. is an NBFC and carries on the activities of corporate and structural lending, loan against property etc.
v) Axis Securities Ltd. is in the business of retail broking services.
vi) A.TREDS Ltd. is engaged in the business of facilitating financing of trade receivables.
vii) Axis Trustee Services Ltd. is engaged in trusteeship activities, acting as debenture trustee and as trustee to various
securitisation trusts.
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Statutory Reports viii) Freecharge Payment Technologies Private Ltd is in the business of providing Merchant acquiring services, payment
aggregation services, payment support services, and business correspondent to a Bank/Financial Institution, distribution
of Mutual Funds.
ix) Accelyst Solutions Private Ltd. is in the business of providing Online marketing and sales promotion solutions, providing
facilities to recharge online prepaid, postpaid mobile phones connections, DTH connections and data cards etc.,
distribution of mutual fund & insurance services.
x) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking.
xi) Axis Private Equity Ltd. primarily carries on the activities of managing equity investments and provides venture capital
support to businesses.
xii) Axis Capital USA, LLC. is a wholly owned subsidiary of Axis Capital Limited incorporated in USA and provides financial
services relating to equity capital market, institutional stock broking to institutional investors in USA.
Merger of Freecharge Payment Technologies Pvt. Ltd. (FCPTL) and Accelyst Solutions Pvt. Ltd (ASPL)
On 27th March 2018, the Board of Directors of ASPL and FCPTL had approved a Scheme for Amalgamation of ASPL into and with
FCPTL. ASPL and FCPTL filed the final petition for approval of the said merger before the National Company Law Tribunal (‘NCLT’).
The appointed date for amalgamation is 7th October 2017 and the effect of the said merger will be given on this date or any other
date as may be prescribed by the NCLT. Subsequent to the final hearing in the matter conducted during the year, FCPTL received
the copy of the order approved by NCLT, Delhi and the same was filed with the Ministry of Company Affairs, in November 2019.
However, in the case of ASPL, NCLT, Mumbai amended the appointed date of amalgamation from 7th October 2017 to 1st April
2018. Since the Scheme of Amalgamation filed by the FCPTL was already approved by NCLT, Delhi with the appointed date of
7th October 2017, the order of NCLT, Mumbai sanctioning the Scheme of Amalgamation could not be implemented due to
discrepancy in the appointed date, as aforesaid. Therefore, ASPL is in the process of filing a modification application before
NCLT, Mumbai to amend the appointed date from 1st April 2018 to 7th October 2017 as originally and mutually decided by
FCPTL and ASPL and as mentioned in the said Scheme of Amalgamation. Accordingly, no accounting impact of the Scheme has
been taken in the consolidated financial statements, as at 31st March 2020.
Merger of Axis Finance Ltd. and Axis Private Equity Ltd.
Axis Private Equity Ltd., is in the process of amalgamating with Axis Finance Ltd. and has submitted an application for
amalgamation before the NCLT on 13th October 2017. At the last hearing held in February 2020, the NCLT has fixed the matter
as “reserved for order” and the order is awaited, as at the Balance Sheet date.
The Bank does not have any associate company. During the year, the Bank has not entered into any joint venture.
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014, as amended, the Bank has prepared its consolidated financial statements including that of all its subsidiary
companies, which forms part of this report. The financial position and performance of each of the said subsidiary companies
are given in the Management Discussion & Analysis Report and the statement containing the salient features of the financial
statements of the said subsidiary companies of the Bank, which is annexed to this report.
In accordance with the third proviso to Section 136(1) of the Companies Act, 2013, the Annual Report of the Bank, containing
therein its standalone financial statements and the consolidated financial statements and all other documents required to
be attached thereto have also been hosted on the website of the Bank https://www.axisbank.com/shareholders-corner/
shareholders-information/annual-reports.
Further, in accordance with the fourth proviso to the said section, the audited annual accounts of each of the said subsidiary
companies of the Bank have been hosted on the website of the Bank https://www.axisbank.com/shareholders-corner/
shareholders-information/annual-reports.
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Annual Report 2019-20Experience Open Directors’ Report
Any shareholder interested in obtaining a physical copy of the said financial statements may write to the Company Secretary
at the Registered Office of the Bank. Further, please note that the said financial statements will also be available for inspection
by the shareholders of the Bank and Trustees of Debenture holders at the Registered Office of the Bank during business hours
from 11.00 a.m. to 1.00 p.m. on all working days except Saturdays, Sundays, Bank Holidays and National Holidays.
Related Party Transactions
During the year, the Bank has not entered into any materially significant transactions with its Promoters, Directors, Management,
Subsidiaries or Relatives of the Directors/Management, which could lead to potential conflict of interest between the Bank
and these parties, other than transactions entered into in the ordinary course of its business.
Transactions entered into by the Bank with related parties in the normal course of its business were placed before the Audit
Committee. There were no transactions entered with related parties, which were not in the normal course of the business of
the Bank, nor were there any transactions with related parties or others, which were not on an arm’s length basis. Accordingly,
Form AOC-2 is not applicable to the Bank. A statement giving details of all related party transactions, entered pursuant to
the omnibus approval so granted, is placed before the Audit Committee for their review. The Bank has developed a Standard
Operating Procedure for the purpose of identifying and monitoring such transactions.
During the year, the Policy on Related Party Transactions has been reviewed by the Audit Committee and the Board and the
same has been hosted on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/
Compliance-Report, in terms of the Listing Regulations, relating to Corporate Governance.
Employee Stock Option Plan (ESOP)
Since the financial year 2000-01, the Bank has formulated and adopted Employee Stock Option Schemes (ESOS) for the
benefit of the eligible Employees/Managing Director & CEO and Whole Time Directors of the Bank and that of its subsidiary
companies (“eligible Employees/Directors”), in terms of the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 / Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014, as amended. The objective of the said ESOS is to enhance employee motivation, enable
employees to participate, directly or indirectly, in the long-term growth and financial success of the Bank, to act as a retention
mechanism by enabling employee participation in the business of the Bank as its active stakeholder and to usher an ‘owner-
manager’ culture.
In terms of the said ESOS, as on date, up to 26,50,87,000 stock options are available for grant by the Bank to the eligible
Employees/Directors of the Bank and that of its subsidiary companies. The eligibility and number of stock options to be
granted to such eligible Employees/Directors is determined on the basis of the outcome of their performance evaluation and
such other criteria as may be approved by the Nomination and Remuneration Committee / Board, from time to time.
During the period from February 2001 to January 2019, the Shareholders of the Bank had approved the grant of stock options,
as aforesaid, on seven occasions. Under the first two ESOS of the Bank and in respect of the grant of stock options made by the
Bank upto 29th April 2004, the option conversion price was set at the average of the daily high-low price of the Bank’s equity
shares traded during the 52 weeks preceding the date of approval of grant by the Nomination and Remuneration Committee/
Board, prevailing on the Stock Exchange which had the maximum trading volume of the Bank’s equity share during the said
period. Thereafter, under the third and subsequent ESOS of the Bank and with effect from the said grants made by the Bank on
or after 10th June 2005, the stock option conversion price was changed to the latest available closing price of the equity shares
of the Bank, prevailing on the Stock Exchange which recorded higher trading volume, on the day prior to the date of approval
of grant by the Nomination and Remuneration Committee.
Pursuant to the sub-division of the equity shares of the Bank, the Shareholders of the Bank at the 20th Annual General Meeting
held on 27th June 2014, also approved the consequent adjustments to the stock options granted to the eligible Employees/
Directors, under the various ESOS of the Bank, such that all stock options available for grant (including lapsed and forfeited
options available for reissue) and those already granted but not vested and those vested but not exercised, as on the record
date fixed for the purpose of sub-division, were proportionately converted into options bearing equity shares of the face value
of `2/- each of the Bank and the grant price of all the outstanding stock options (unvested, vested and unexercised) as on the
54
Statutory Reports said record date for the purpose of sub-division were proportionately adjusted by dividing the existing grant price by 5. The
record date for the said sub-division was 30th July 2014.
Since 24th February 2001 up to 31st March 2020, the Nomination and Remuneration Committee / Board had out of the said
26,50,87,000 stock options, approved the grant of 28,16,13,850 stock options (including 2,80,03,497 stock options which
had lapsed and were forfeited) to the eligible Employees/Directors, in terms of the various ESOS of the Bank. The said stock
options are non-transferable and vest at rates of 30%, 30% and 40% on each of three successive anniversaries following the
date of respective grant, subject to standard vesting and other conditions as set out in the respective ESOS of the Bank. The
said stock options are required to be exercised by the concerned eligible Employees/Directors, within a period of three / five
years, from the date of its respective vesting, in terms of the respective ESOS of the Bank.
As of 31st March 2020, out of the said 28,16,13,850 stock options so granted 22,88,18,308 stock options have been vested,
out of which 20,84,44,468 stock options have been exercised and the balance 2,03,73,840 stock options remain unexercised.
Further, 2,47,92,045 stock options remained unvested and 2,80,03,497 stock options had been treated as lapsed and forfeited.
There were no material changes in the Employee Stock Option Scheme(s) of the Bank during the financial year 2019-20 and the
same is in compliance with the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended.
Statutory disclosures as mandated under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014,
as amended, have been hosted on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-
governance/compliance-report.
Corporate Governance
The Bank is committed to achieving and adhering to the highest standards of Corporate Governance and it constantly
benchmarks itself with best practices, in this regard.
The Quarterly Report on Corporate Governance has been submitted by the Bank to the Stock Exchanges, in terms of Regulation
27(2) of the Listing Regulations, relating to Corporate Governance. The said reports have been uploaded on the website of the
Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report.
The Report on Corporate Governance for the financial year 2019-20 along with the Certificate issued by the Statutory Auditors
of the Bank confirming compliance with the mandatory requirements relating to Corporate Governance as stipulated under
Chapter IV of the Listing Regulations, relating to Corporate Governance, forms part of this report.
The Corporate Governance framework of the Bank incorporates all the mandatory requirements as prescribed in the Listing
Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the Listing Regulations, as
detailed in the Report on Corporate Governance, which forms part of this report.
Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013
The Bank has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information relating to complaints
received and redressed during the financial year 2019-20 is disclosed in the Report on Corporate Governance, which forms
part of this report.
Directors’ Responsibility Statement
The Board of Directors of the Bank hereby declares and confirms the following statements, in terms of Section 134(3)(c) of the
Companies Act, 2013:
a)
That in the preparation of the annual accounts for the financial year ended 31st March 2020, the applicable accounting
standards had been followed along with proper explanation relating to material departures.
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Annual Report 2019-20Experience Open Directors’ Report
b) That such accounting policies have been selected and applied consistently and judgments and estimates have been made
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at 31st March 2020
and of the profit of the Bank for the year ended on that date.
c)
That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud
and other irregularities.
d) That the annual accounts have been prepared on a going concern basis.
e) That internal financial controls to be followed by the Bank, were in place and that the same were adequate and were
operating effectively.
f)
That proper system to ensure compliance with the provisions of all applicable laws was in place and the same were
adequate and operating effectively.
Annual Return
In accordance with the Companies (Amendment) Act, 2017, read with Section 134(3) of the Companies Act, 2013,
the Annual Return, under Section 92 (3) of the Companies Act, 2013, can be accessed on the website of the Bank at
https://www.axisbank.com/shareholders-corner/shareholders-information and the extract of the Annual Return in Form MGT
9, is provided as an annexure to this report.
Particulars of Employees
The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, in respect of Directors / Employees of the Bank, is provided as an annexure
to this report.
As on 31st March 2020, the Bank had 88 employees who were employed throughout the year and were in receipt of
remuneration of more than `1.02 crores per annum and 16 employees of the Bank who were employed for part of the year
and were in receipt of remuneration of more than `8.50 lakhs per month.
In terms of Section 136 of the Companies Act, 2013, the copy of the financial statements of the Bank, including the consolidated
financial statements, the auditor’s report and relevant annexures to the said financial statements and reports are being sent to
the Members and other persons entitled thereto, excluding the information in respect of the said 104 employees of the Bank
containing the particulars as specified in Rule 5 (2) of the said Rules, which is available for inspection by the Members at the
Registered Office of the Bank during business hours of the Bank up to the date of the ensuing Annual General Meeting. Any
Member interested in obtaining a copy thereof, may write to the Company Secretary of the Bank at its Registered Office or at
shareholders@axisbank.com.
Conservation of Energy & Technology Absorption:
Conservation of Energy
Energy and natural resource conservation have been focus areas for the Bank and conscious efforts are being made towards
improving energy performance, year on year. For Sustainable Development, Energy efficiency initiatives have been implemented
across several branches and offices through energy and resource conservation projects.
The Bank ensures strict compliance with all statutory requirements and voluntarily undertakes several sustainable steps in
order to contribute towards a better environment.
i)
The steps taken by the Bank, for utilizing alternate sources of Energy:
(a)
Implementation of Solar energy projects across select Branches / Offices, aggregating ~ 7.05 MW. (Internet of
Things) IOT based monitoring of power generated through solar plants across rooftop over 245 branch locations.
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Statutory Reports
(b) Centralised Energy Management System (CEMS) augmented to 1,493 branches from earlier 893 branches to monitor
and control energy consumption.
(c) Agreement to Procure Solar power ~1MW (3.50 lakh units p.a.) under Power Purchase Agreement Model for Banks
Business Continuity Centre (Data Centre), Bangalore.
(d) Replacement of conventional lighting to LED lights in 1,100 existing branches (reducing estimated annual power
consumption by 1.5 MW) over and above 250 plus branches already completed in previous fiscal. All new branches/
offices are provided with LED light fittings as a standard feature.
(e)
Implementation of On Grid Inverter Solution to reduce diesel consumption in rural branches augmented to 260
branches from earlier 100 branches. Estimated savings in Diesel consumption works out to ~2.22 lac litres per annum.
(f) Conversion of Food/ Wet waste at Axis House, Mumbai, into manure through compost machine for use in
landscaping/gardening.
(g) Maintenance of unity power factor through APFC panels in auto mode for optimum use of power at Axis House,
Mumbai and Noida.
(h)
Installation of Motion sensors for workstations and common area lighting at Axis House, Mumbai.
(i) Re-cycling of Dry waste at Axis House, Mumbai, into stationery items like notepads.
(j) Daily re-cycling of 150 KL of water through Sewage Treatment Plant at Axis House, Mumbai.
(k) Reduction of water consumption at Axis House, Mumbai through use of aerators.
(l) Rain Water Harvesting of ~2000 KL of water yearly at Axis House, Mumbai.
(m) Savings of water consumption by use of Bio-blocks in urinals at Select Large Offices.
(n)
Installation of sensors in washbasins to optimise flow of water at Select Large Offices.
ii) Capital Investment made on Energy Conservation Equipment:
(a) Capital Investment incurred of ~` 79 Lacs towards implementation of On Grid Inverter across rural Branches.
(b) LED light replacement project has been undertaken under amortization model over period of 5 years.
(c) CEMS project is on saving and sharing Model basis.
(d) Capital investment incurred of ~ ` 71.63 Lacs towards implementation of Internet of Thing (IoT) based remote solar
monitoring across 245 Branches.
Technology Absorption
i)
The efforts made towards technology absorption:
With the objective of making banking simple and hassle-free for customers, the Bank has undertaken various technology
driven business initiatives to deliver value through continuous technology adoption and innovation. During the year,
large scale IT transformation was undertaken augmenting the Bank’s infrastructure to further build capabilities. The Bank
continues to upgrade its core systems for better scalability, stability and enhanced security.
(a) The Bank’s Digital Lending platform has been at the forefront of the digital innovation initiatives enabling quicker
adoption of capabilities needed to develop any lending product. The Bank aims to leverage the platform and extend
its capabilities across other products like Cards, SME etc.
(b) By leveraging technology and digitisation to build a “full-stack” digital foundation, the Bank is providing customers
with a seamless payment and banking experience. The Bank’s Award winning Mobile application is one of the highest
rated banking application on Appstore. The Mobile application has been continuously evolving to provide consistent,
seamless, intuitive and contextual digital banking offerings.
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Annual Report 2019-20Experience Open
Directors’ Report
(c) Pre-approved customers can now avail ICC, a virtual credit card, which is issued instantaneously. The Bank has partnered
with Flipkart and Freecharge to offer instant credit card solution. Additionally, the Bank provides a frictionless and
time-saving experience to customers by issuing credit cards through self-service kiosk at select branch locations.
(d) The Bank continues to re-invent and re-invest in technologies including mobility, cognitive intelligence, application
programming interface (API) banking, RPA and AI/ML to develop winning propositions for its customers. In order
to drive seamless integration with partners, Bank’s Open API platform has been further enhanced to onboard
merchants thereby generating more business and driving volumes. The Bank has future scaled the adoption of
robotics process automation and Artificial Intelligence/Machine Learning augmenting operational efficiency, higher
accuracy and reduction in processing time while serving customers. To leverage customer’s historical behavior and
sharpen their product offerings, Bank is upgrading its Big Data Lake platform to provide enhanced analytics and data
processing capabilities.
(e) The Bank has also embarked on its journey of re-architecting its technology infrastructure to be Cloud native
providing the necessary agility, speed and elasticity for scale. To improve Branch network and address infrastructure
limitations in remote geographies, the Bank has empanelled multiple national level large reach providers and local
broadband providers. The Bank has also invested in software defined data centers and network which will enhance
Branch bandwidth exponentially.
(f) The Bank pursues a holistic cyber security program with a comprehensive Cyber Security Policy and Standards
based on industry best practices in compliance with regulatory guidelines. The Bank has deployed its cyber security
structure and framework based on National Institute of Standards and Technology (NIST) Standard. The Bank’s
cyber security framework is built and operated around five fundamental areas including Identify, Protect, Detect,
Respond and Recover. The Bank is compliant with ISO27001 and PCIDSS standards. The Bank has a 24x7 Security
Operations Centre and Cyber Security Operations System.
(g) Following the present COVID-19 Pandemic situation, the Bank has been committed to provide uninterrupted services
to its customers. The Bank has actively encouraged large scale Work-From-Home mandate and has provided all
enablement necessary to support its employees to efficiently perform their duties. The Bank has allocated laptops,
activated VPN/VDI connections along with application access and triggered enterprise mobility and collaborative
tools to all critical employees to enhance productivity and ensure seamless collaboration. The Bank also swiftly made
changes necessary for RBI moratorium across all applicable systems.
(h) Additionally, the Bank mobilized its service architecture and taskforce to provide necessary support to customers
and employees whilst continuing to focus on development efforts of strategic initiatives.
ii)
The benefits derived like product improvement, cost reduction, product development or import substitution:
As organization transitions to a dual-speed structure, the focus is on balancing development of new age products with
strengthening of the core applications. The dual-speed structure will address front-end and back-end needs to improve
end user experience at the same time improve time-to-market by agile, DevOps methodologies adoption.
In addition to investing in new age products and initiatives as stated above, the Bank has also undertaken several key
initiatives to upgrade its core applications like Finacle, FinnOne, Prime among others to help scale up to the requirements.
The core infrastructure is also being upgraded to deliver a 24 x 7 availability of services to end users. The Bank is looking
at monitoring the performance of all key parameters across applications to ensure a consistent and delightful customer
experience. The monitoring also provides insights into improvement areas that will continuously be worked on over a
period of time. The Bank is also actively looking at using open technology platforms which provide reliability and agility,
which will help reduce the overall cost of licensing and AMS. With Intelligent Automation the Bank has created Bot store
and AI model store while automating 300+ processes and 1700+ jobs; thereby benefiting in FTE cost savings, TAT & error
reduction and auto scale up/down to manage volume fluctuation.
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Statutory Reports
iii)
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
(a) The details of technology imported
1. No hardware procurements have been made in foreign currency.
2.
Software licenses and upgrades have been procured over the past 3 financial years, detailed as under.
(b) The year of import:
The details for the Financial Years 2017-18, 2018-19 and 2019-20, are provided below:
PO Issue Year
FY 17-18
FY 18-19
FY 19-20
Total
Currency
USD
USD
USD
(c) Whether the technology been fully absorbed:
All licenses procured have been put to use.
Paid Amount
7,34,180
17,63,702
3,75,000
28,72,882
(d)
If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: NA.
iv) The expenditure incurred on Research and Development: Nil
Foreign Exchange Earning and Outgo:
The provisions relating to Section 134(3)(m) of the Companies Act, 2013 on particulars relating to Foreign Exchange Earning
and Outgo are not applicable to a Banking Company, as such no disclosure is being made in this regard.
Management’s Discussion and Analysis Report
The Management’s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the
Listing Regulations, is provided as an annexure to this report.
Risk Management
Pursuant to Regulation 21 of the Listing Regulations, the Bank has constituted a Risk Management Committee. The details
of the said Committee and its terms of reference are set out in the Report on Corporate Governance, which forms part
of this report.
The Bank has formulated and adopted a robust Risk Management Framework. Whilst the Board is responsible for framing,
implementing and monitoring the Risk Management Framework, it has delegated its powers relating to monitoring and
reviewing of risks associated with the business of the Bank to the said Committee. The details of the Risk Management
Framework and issues related thereto have been explained in the Management’s Discussion and Analysis Report, which is
provided as an annexure to this report.
Business Responsibility Report
In terms of Regulation 34(2)(f) of the Listing Regulations, top 1000 listed entities based on their market capitalisation as on
31st March every year, are required to submit their Business Responsibility Report (BRR) as a part of their Annual Report. The
Bank’s BRR describing the initiatives taken by the Bank from an Environmental, Social and Governance perspective has been
hosted on the website of the Bank at, https://www.axisbank.com/shareholders-corner/shareholders-information/business-
responsibility-report. Any Member interested in obtaining a copy of the BRR may write to the Company Secretary of the Bank
at shareholders@axisbank.com or submit a written request to the Registered Office of the Bank.
Particulars of Loans, Guarantees and Investments
Pursuant to Section 186(11) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except
sub-section (1), do not apply to a loan made, guarantee given or security provided by a banking company in the ordinary
course of business.
59
Annual Report 2019-20Experience Open
Directors’ Report
The particulars of investments made by the Bank are disclosed in Schedule 8 of the Financial Statements as per the applicable
provisions of Banking Regulation Act, 1949.
Corporate Social Responsibility
The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the Board, in accordance with the
provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules,
2014, as amended.
The Bank has formulated and adopted a CSR Policy, in terms of the provisions of Section 135 of the Companies Act, 2013 and
the said Rules. During the year, amendments to the CSR Policy of the Bank, was reviewed and approved by the CSR Committee
and by the Board, to bring it in line with the proposed CSR norms. The said CSR Policy has been hosted on the website of the
Bank at https://www.axisbank.com/csr.
The brief outline of the CSR Policy, including overview of the programs undertaken by the Bank, the composition of the CSR
Committee, average net profits of the Bank for the past three financial years, prescribed CSR expenditure and details of the
amounts spent by the Bank on CSR activities during the year under review, have been provided as an annexure to this report.
Plan and Status of Ind As Implementation
The RBI had issued a circular in February 2016 requiring banks to implement Indian Accounting Standards (Ind AS) and prepare
standalone and consolidated Ind AS financial statements with effect from 1st April 2018. Banks were also required to report
the comparative financial statements for the financial year 2017-18, to be published along with the financial statement for the
year beginning 1st April 2018. However, the RBI in its press release issued on 5th April 2018 deferred the applicability of Ind
AS by one year (i.e. 1st April 2019) for Scheduled Commercial Banks. Further, RBI in a circular issued on 22nd March 2019 has
deferred the implementation of Ind AS till further notice.
In line with the RBI guidelines on Ind AS implementation, the Bank has formed a Steering Committee comprising members
from the concerned functional areas, headed by the Executive Director (Wholesale Banking). A quarterly progress report on
the status of Ind AS implementation in the Bank is presented to the Audit Committee. During the financial year 2016-17, the
Bank had undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS.
The Bank has also identified and evaluated data gaps, processes and system changes required to implement Ind AS. The Bank
is in the advanced stage of implementing necessary changes in its IT system and other processes. The Bank has been holding
workshops and training for its staff, which will continue in the current year. The Bank has also submitted to RBI Proforma Ind
AS financial statements for the first three quarters of the financial year 2019-20.
The Bank is also examining impact of Ind AS on business planning, budgeting, taxation, capital planning and on capital adequacy.
The Bank is in the process of preparation of proforma Ind-AS financial statements for the year ended 31st March 2020.
Statutory Auditor
At the 24th Annual General Meeting of the Shareholders of the Bank held on 20th June 2018, M/s Haribhakti & Co. LLP,
Chartered Accountants, Mumbai (Membership Number 103523W /W100048), were appointed as the Statutory Auditors of
the Bank to hold office as such from the conclusion of the 24th Annual General Meeting until the conclusion of the 28th Annual
General Meeting, subject to the approval of the Reserve Bank of India and on such remuneration, as may be approved by the
Audit Committee.
In terms of provisions of Section 30 of the Banking Regulation Act, 1949, the approval of the RBI is mandatory for appointment
of Statutory Auditors of the Bank, every year. The Bank will obtain the requisite approval of RBI for the appointment of
M/s Haribhakti & Co. LLP, Chartered Accountants, as the Statutory Auditors of the Bank, for the financial year 2020-21.
In this regard, the Bank has received a certificate from the said Statutory Auditors to the effect that the appointment, if made,
would be in accordance with the relevant provisions of Section 141 of the Companies Act, 2013.
60
Statutory Reports As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have confirmed that they have
subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a
valid certificate issued by the Peer Review Board of ICAI.
There are no qualifications, reservations or adverse remarks made by M/s. Haribhakti & Co. LLP, Chartered Accountants,
Statutory Auditors of the Bank, in their report.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the relevant provisions of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had appointed M/s. BNP & Associates,
Company Secretaries, Mumbai, to act as the Secretarial Auditor of the Bank, for the financial year 2019-20. The secretarial
audit of the Bank was conducted on a quarterly basis in respect of the matters prescribed in the said Rules and as set out in the
Secretarial Audit Report for the financial year 2019-20, which is provided as an annexure to this report.
There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor of the Bank, in its report.
In terms of SEBI circular no CIR/CFD/CMD1/27/2019 dated 8th February 2019, relating to Annual Secretarial Compliance
Report, the Bank had appointed M/s. BNP & Associates, Company Secretaries, to conduct the Secretarial Compliance for the
financial year 2019-20. The Bank will submit the Annual Secretarial Compliance Report to the Stock Exchanges within the
prescribed time limit and host the same on its website www.axisbank.com.
Maintenance of Cost Records
Being a banking company, the Bank is not required to maintain cost records under the provisions of Section 148(1) of the
Companies Act, 2013.
Reporting of Frauds by Auditors
During the financial year 2019-20, pursuant to Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor
the Secretarial Auditor of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.
Significant and Material Order Passed by Regulators or Courts or Tribunals Impacting the Going Concern Status
and Operations of the Bank
During the financial year 2019-20, no significant and/or material order was passed by any Regulator, Court or Tribunal against
the Bank, which could impact its going concern status or its future operations.
Adequacy of Internal Financial Controls Related to Financial Statements
The Board has inter alia reviewed the adequacy and effectiveness of the Bank’s internal financial controls relating to its
financial statements.
The Board has discussed with the Management of the Bank the major financial risk exposures and the steps taken by it to
monitor and control such exposures and has overseen and reviewed the functioning of the Whistle Blower Mechanism (which
is a part of the Bank’s Fraud Risk Management Policy) and the findings in respect of the investigations conducted on frauds,
which were material in nature and the actions taken by the Management, in this regard.
CEO & CFO Certification
Certificate issued by Shri Amitabh Chaudhry, Managing Director & CEO and Shri Puneet Sharma, President (Finance and
Accounts) & CFO of the Bank, for the quarter/ financial year ended 31st March 2020, was placed before the Board at its
meeting held on 28th April 2020, in terms of Regulation 17(8) of the Listing Regulations.
Material Changes and Commitments Affecting the Financial Position of the Bank
There are no material changes and commitments which affected the financial position of the Bank, which occurred between
the end of the financial year of the Bank to which the financial statements relate and up to the date of this report.
61
Annual Report 2019-20Experience Open Directors’ Report
Annexures
The following documents are annexed to the Directors’ Report:
(i) Management’s Discussion and Analysis Report of the Bank, for the financial year ended 31st March 2020.
(ii)
Independent Auditor’s Certificate on Compliance with the Corporate Governance Requirements as prescribed under the
Listing Regulations.
(iii) Report on Corporate Governance of the Bank for the financial year ended 31st March 2020.
(iv) Extract of the annual return for the financial year ended 31st March 2020, in form MGT-9.
(v) Disclosure on remuneration pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
(vi) Annual Report on CSR activities undertaken by the Bank during the financial year ended 31st March 2020.
(vii) Secretarial Audit Report of the Bank, for the financial year ended 31st March 2020.
(viii) Certificate relating to non-disqualification of Directors from being appointed or continuing as Directors, under Regulation
34(3) of the Listing Regulations.
Acknowledgements and Appreciations
The Board places on record its gratitude to the Reserve Bank of India, Ministry of Corporate Affairs, Securities and Exchange
Board of India, other Statutory and Regulatory Authorities, Financial Institutions, Stock Exchanges, Registrar and Share
Transfer Agent, Debenture Trustees, Depositories and Correspondent Banks for their continued support and guidance.
The Board also places on record its appreciation to the Shareholders of the Bank for their continued support and to its valued
customers for their continued patronage.
The Board also expresses its deep sense of appreciation to all the employees of the Bank for their strong work ethics, excellent
performance, professionalism, teamwork, commitment and initiatives which has led to the Bank reinforcing its customer
centric image and making commendable progress in today’s challenging environment.
For and on behalf of the Board of Directors
Rakesh Makhija
Chairman
Place : Pune
Date : 29th April 2020
62
Statutory Reports Management’s Discussion and Analysis
Macro-Economic Environment
Global growth continued to remain weak throughout fiscal 2020. Trade tensions between US and China and resultant slowdown
in China negatively impacted growth. Though the temporary resolution with signing of phase one of the US-China trade deal
led to a spurt of activity in December and January, the growth once again weakened in the last quarter of the fiscal 2020 on
account of the COVID-19 outbreak in China and then globally. While the primary impact of the China outbreak was disruption
in value chains, the secondary impact of what has now been classified a global pandemic is only now becoming clear in the
scale of disruption caused globally. Governments and central banks have reacted swiftly, using the entire gamut of monetary
and fiscal support tools. These will likely remain in effect for some time, with the recovery in growth also likely to be slower
and more interrupted than initially anticipated.
The domestic economy was slowing even before the COVID-19 pandemic, with growth weakening steadily since peaking in
last quarter of fiscal 2018. While the slowdown was initially linked to credit concerns at NBFCs, weak auto sales and soft capex
trends resulted in further weakening of economic conditions. The government had introduced cuts to the corporation tax rate,
and as a consequence of this structural reform, has chosen to exceed the budgeted fiscal deficit by 0.5% of GDP for fiscal 2020
(to 3.8%), using the escape clause available in FRBM (Fiscal Responsibility and Budget Management) legislation.
The Indian economy saw some growth momentum build up in January and February, but that has been undone by COVID-19
linked disruptions, with attendant downward effects on fiscal 2020 growth as well as fiscal 2021 growth expectations. Bank
credit growth has also remained soft, in line with weak activity. The hit to growth will depend on the length of the ongoing
lockdown, pace of return of migrant labours to urban centres and pick-up in economic activity after the lock down is lifted.
The Government and the RBI have acted speedily to offset the impact of pandemic related disruptions, with the latter reducing
policy repo rates by 75 bps to 4.40% in the last one month and undertaking several measures to improve liquidity, monetary
transmission and credit flows to the economy. In order to prevent the transmission of financial stress to the real economy,
central bank also provided relief on debt servicing by permitting moratorium on term loans and deferment of interest on
working capital facilities. The Government too has announced package covering cash transfers and food security for vulnerable
sections of society and further fiscal measures are likely to follow in coming months. The measures taken so far have looked
through near term constraints on inflation and fiscal slippage though.
Prospects for fiscal 2021
Global economic growth is projected to contract 3% YoY as per the latest IMF World Economic Outlook. Weaker growth is
likely to be seen across developed and emerging economies, given COVID-19 disruptions and associated value chain impacts,
with high probability of recessions in many countries. Among advanced economies, 2020 growth is projected at -6.1%, going
by the IMF. IMF expects China’s economy to decelerate further to 1.2% for calendar year 2020. Risks to the global outlook
remain on the downside and are dependent on the length of the lockdown measures.
Bank credit growth is likely to be around 5% in fiscal 2021, in line with weak trends going ahead. Bank deposits are expected
to rise 7.3% in fiscal 2021, despite a high base in fiscal 2020.
Overview of Financial Performance
Operating performance
Particulars
Net interest income
Non-interest income
Operating revenue
Operating expenses
Operating profit
Provisions and contingencies
Profit before tax
Provision for tax
Net profit
2019-20
25,206
15,537
40,743
17,305
23,438
18,534
4,904
3,277
1,627
2018-19
21,708
13,130
34,838
15,833
19,005
12,031
6,974
2,297
4,677
(` in crores)
% change
16%
18%
17%
9%
23%
54%
(30%)
43%
(65%)
63
Annual Report 2019-20Experience Open
Management’s Discussion and Analysis
Operating revenue increased by 17% YoY from `34,838 crores in fiscal 2019 to `40,743 crores in fiscal 2020. Net interest
income (NII) rose 16% from `21,708 crores in fiscal 2019 to `25,206 crores in fiscal 2020. Non-interest income consisting of
fee, trading and other income increased by 18% from `13,130 crores in fiscal 2019 to `15,537 crores in fiscal 2020.
Operating expenses rose 9% from `15,833 crores in fiscal 2019 to `17,305 crores in fiscal 2020 as the Bank continued to
invest in branch infrastructure, technology and human capital to support its business growth. Healthy growth in operating
revenues along with comparatively lower growth in operating expenses this fiscal compared to previous year led to a growth
in the Bank’s operating profit by 23% to `23,438 crores from `19,005 crores reported last year. Provisions and contingencies
increased by 54% from `12,031 crores in fiscal 2019 to `18,534 crores in fiscal 2020.
Net profit for the year ended 31 March, 2020 decreased and stood at `1,627 crores, as compared to the net profit of `4,677
crores last year, primarily on account of higher provisions and contingencies.
Net interest income
Particulars
Interest on loans
Interest on investments
Other interest income
Interest income
Interest on deposits
Other interest expense
Interest expense
Net interest income
Average interest earning assets1
Average Current account and Saving Account (CASA)1
Net interest margin
Yield on assets
Yield on advances
Yield on investments
Cost of funds
Cost of deposits
1 computed on daily average basis
(` in crores)
% change
17%
(1%)
33%
14%
24%
(16%)
12%
16%
14%
10%
2019-20
48,303
11,246
3,086
62,635
29,369
8,060
37,429
25,206
718,147
223,349
3.51%
8.72%
9.64%
7.15%
5.48%
5.23%
2018-19
41,322
11,349
2,315
54,986
23,708
9,570
33,278
21,708
632,690
202,733
3.43%
8.68%
9.44%
7.28%
5.43%
5.12%
NII constituted 62% of the operating revenue, and increased by 16% from `21,708 crores in fiscal 2019 to `25,206 crores
in fiscal 2020. The increase is primarily due to an increase in average interest earning assets on a daily average basis by 14%.
During this period, the yield on interest earning assets increased from 8.68% last year to 8.72%. The yield on advances increased
by 20 bps from 9.44% in fiscal 2019 to 9.64% in fiscal 2020 primarily due to rise in the yield on retail advances by 30 bps from
10.07% in fiscal 2019 to 10.37% in fiscal 2020. The yield on investments decreased by 13 bps during the fiscal 2020. Cost of
funds increased by 5 bps from 5.43% in fiscal 2019 to 5.48% in fiscal 2020. During the year, the Bank continued its focus on
both CASA plus Retail Term Deposits (RTD) as part of its overall deposits strategy. As a result, the cost of deposits increased
to 5.23% from 5.12% last year. CASA and RTD deposits together, on a daily average basis, reported a healthy increase of 22%
to `449,033 crores from `368,017 crores last year.
Non-interest income
Particulars
Fee income
Trading profit
Miscellaneous income
Non-interest income
64
2019-20
11,019
2,420
2,098
15,537
2018-19
10,127
971
2,032
13,130
(` in crores)
% change
9%
149%
3%
18%
Statutory Reports Non-interest income comprising fees, trading profit and miscellaneous income increased by 18% to `15,537 crores in fiscal
2020 from `13,130 crores last year and constituted 38% of the operating revenue of the Bank.
Fee income increased by 9% to `11,019 crores from `10,127
crores last year and continued to remain a significant part
of the Bank’s non-interest income. It constituted 71% of
non-interest income and contributed 27% to the operating
revenue. The share of granular fees comprising of Retail and
Transaction Banking fees witnessed improvement during the
year, and stood at 82% compared to 79% last year. Retail
card fees, Retail non-card fees and Transaction Banking fees
constituted 26%, 38% and 18%, respectively of the total fee
income in fiscal 2020. The Corporate Banking fee growth
remained subdued during the year as the Bank continued to
focus on better rated corporate clients. The share of corporate
fee in the overall fee profile stood at 11%. The rest 7% was
contributed by Treasury and SME segments.
Non-Interest Income
` in crores
FY19-20
FY18-19
FY17-18
FY16-17
FY15-16
11,019
2,420
2,098
10,127
971
2,032
8,867
1,617
483
7,882
3,400
409
7,502
1,247
623
Fee Income
Trading Profit
Misc Income
During the year, proprietary trading profits increased by 149% to `2,420 crores from `971 crores last year mainly on account
of higher profits on SLR and bond portfolio in fiscal 2020 compared to fiscal 2019.
The Bank’s miscellaneous income increased to `2,098 crores compared to `2,032 crores in fiscal 2019, comprising mainly
recoveries from written off accounts amounting to `1,553 crores in fiscal 2020. Miscellaneous income also includes dividend
from subsidiaries of `240 crores.
Operating revenue
The operating revenue of the Bank increased by 17% to `40,743 crores from `34,838 crores last year. The core income
streams (NII and fees) constituted 89% of the operating revenue, reflecting the stability of the Bank’s earnings.
Operating expenses
Particulars
Staff cost
Depreciation
Other operating expenses
Operating expenses
Cost : Income Ratio
Cost : Asset Ratio
2019-20
5,321
773
11,211
17,305
42.47%
2.09%
2018-19
4,747
710
10,376
15,833
45.45%
2.13%
(` in crores)
% change
12%
9%
8%
9%
The operating expenses growth for the Bank moderated
during the year to 9% as compared to 13% last year as the
Bank continued to focus on controlling expenses. However,
the Bank continues to invest in expanding branch network
and other infrastructure required for supporting the existing
and new businesses, as a result of which the operating
expenses increased to `17,305 crores from `15,833 crores
last year. The Operating Expenses to Assets ratio improved
to 2.09% compared to 2.13% last year.
Staff cost increased by 12% from `4,747 crores in fiscal 2019
to `5,321 crores in fiscal 2020, primarily on account of 20%
increase in employee strength from 61,940 as at end of fiscal
2019 to 74,140 as at the end of fiscal 2020.
Operating Expenses to Assets %
FY19-20
FY18-19
FY17-18
FY16-17
FY15-16
2.09
2.13
2.13
2.17
2.04
Other operating expenses increased by 8% from `10,376 crores in fiscal 2019 to `11,211 crores in fiscal 2020. The increase
is primarily due to investments in branch infrastructure and technology to support business growth. The Bank added 478
branches during fiscal 2020.
65
Annual Report 2019-20Experience Open
Management’s Discussion and Analysis
Operating profit
During the year, the operating profit of the Bank increased by 23% to `23,438 crores from `19,005 crores last year on account
of healthy growth in operating revenues along with comparatively lower growth in operating expenses.
Provisions and contingencies
Particulars
Provision for non-performing assets
Provision for restructured assets/SDR/S4A
Provision for depreciation in value of investments
Provision for country risk
Provision for standard assets including unhedged foreign currency exposure
---of which
Provision for loans under moratorium
Provision for other contingencies
---of which
Provision for Non-Banking Assets
Provision for NFB outstanding
Additional provision for COVID-19
Provisions and contingencies
2019-20
12,756
(16)
136
12
1,441
1,118
4,205
1,526
411
1,882
18,534
2018-19
10,221
(20)
300
-
829
-
701
605
-
-
12,031
(` in crores)
% change
25%
-
(55%)
-
74%
-
500%
252%
-
-
54%
During fiscal 2020, the Bank created total provisions (excluding provisions for tax) of `18,534 crores compared to `12,031
crores last year. Key items of the same are explained below -
Provisions for NPAs:
The Bank provided `12,756 crores towards non-performing assets compared to `10,221 crores last year. The increase in
provision for non-performing assets is primarily on account of higher slippages during the year as compared to previous year
and also on account of increase in provisions on existing NPAs due to ageing, deterioration of security etc. Provision for
non-performing assets also includes additional provisions required to be created under the 7 June, 2019 circular of the RBI.
On account of higher provisions for non-performing assets, the credit costs for fiscal 2020 stood at 2.15%, 24 bps higher as
compared to fiscal 2019.
Provisions for standard assets:
The Bank provided `1,441 crores for standard assets including unhedged foreign currency exposure compared to `829 crores
last year. This includes an amount of `1,118 crores towards 10% provision on loans under moratorium as per RBI guidelines on
COVID-19 regulatory package.
Provision for other contingencies:
Provisions for other contingencies for fiscal 2020 amounted to `4,205 crores as compared to `701 crores in fiscal 2019. This
increase is mainly on account of following –
•
From fiscal 2020, the Bank has started maintaining systematic provision towards non-fund based outstanding in NPAs,
prudentially written off accounts, corporate standard advances rated “BB and Below” and all SMA-2 advances as reported
to CRILC, which amounted to `411 crores for the year.
• During fiscal 2020, the Bank has made balance provision of `1,605 crores towards land held under non-banking assets
acquired in satisfaction of claims, which was adjusted from the balance in profit and loss account under reserves and
surplus in the previous year. During fiscal 2020, the Bank also sold a part of the land parcel which led to write back in the
provision amounting to `79 crores.
Further, incrementally, the Bank on a prudent basis has made an additional provision for COVID-19 of `1,882 crores,
based on an internal stress testing exercise. It is important to note that the situation is evolving and it is extremely difficult
to ascertain with certainty the exact impact on the Bank’s portfolio due to COVID-19 induced lockdown. Considering the
conscious portfolio choices of the bank in favour of secured nature of lending in the Retail and SME book and higher rated
book in Corporate, and higher share of salaried and ETB in unsecured book, the prudent provision created does provide
strength to the balance sheet. The Bank will continue to assess the stress on the portfolio on an ongoing basis and assess
impact, if any, on prudent provisioning.
•
66
Statutory Reports
Provision for tax
Provision for tax for fiscal 2020 stood at `3,277 crores as compared to `2,297 crores for last year. During the year, the Bank
has elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation
Laws (Amendment) Act, 2019. The Bank has recognised provision for income tax for fiscal 2020 in line with the above option.
This has necessitated a restatement of the opening balance of deferred tax assets as at 1 April, 2019, basis the rate prescribed
in the aforesaid section. The restatement has resulted in a write down of `2,138 crores which has been fully charged to the
Profit and Loss account during the year.
Net profit
Net profit for the year ended 31 March, 2020 decreased and stood at `1,627 crores, as compared to the net profit of `4,677
crores last year, primarily on account of higher provisions and contingencies.
Asset Quality Parameters
The asset quality metrics improved during the fiscal, with reduction in NPA ratios year on year. During the fiscal, the quantum
of low rated pool of BB and below accounts (excluding investments and non-fund based exposure) reduced and stood at `6,528
crores as compared to `7,467 crores at the end of fiscal 2019. The Bank added `11,222 crores of corporate slippages during
the year, of which 84% came from lower rated “BB and below” pool (excluding one account of `751 crores which got upgraded
during Q4 and downgraded again in same quarter due to technical reasons). Bank’s outstanding in low rated pool of “BB and
Below” investments and non-fund based accounts is `562 crores and `3,906 crores respectively as at the end of March 2020.
The Bank added `19,915 crores to Gross NPAs during the
year with the Bank’s ratio of Gross NPAs to gross customer
assets decreasing to 4.86%, at the end of March 2020 from
5.26% as at end of March 2019.
The Bank added `10,614 crores to Net NPAs after adjusting
for recoveries and upgradations of `2,715 crores and `6,586
crores respectively and the Bank’s Net NPA ratio (Net
NPAs as percentage of net customer assets) decreased to
1.56% from 2.06%.
The Bank’s provision coverage has increased during the fiscal
and stood at 83% after considering prudential write-offs and
69% excluding prudential write-offs. The Bank’s accumulated
prudential write-off pool stood at `23,844 crores as at end of
fiscal 2020 with `7,710 crores being written off during the year.
Gross and Net NPA
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
1.56
2.06
2.11
0.70
1.67
4.86
3.40
5.26
6.77
5.04
Net NPA as % to Net
customer assets
Gross NPA as % to Gross
customer assets
Key ratios
Particulars
Basic earnings per share (`)
Diluted earnings per share (`)
Book value per share (`)
Return on equity (%)
Return on assets (%)
Net interest margin (%)
Profit per employee (` lakh)
Loan to Deposit ratio (Domestic)
Loan to Deposit ratio (Global)
2019-20
5.99
5.97
301.05
2.34%
0.20%
3.51%
2.40
83%
89%
2018-19
18.20
18.09
259.27
8.09%
0.63%
3.43%
7.61
84%
90%
Basic Earnings Per Share (EPS) was `5.99 compared to `18.20 last year, while the Diluted Earnings Per Share was `5.97
compared to `18.09 last year. Return on Equity (RoE) and Return on Assets (RoA) deteriorated during the year and stood at
2.34% and 0.20% respectively. Book Value per Share increased by 16% to `301.05 from `259.27 last year. Profit per Employee
stood at `2.40 lakh.
Loan to Deposit ratio of the Bank as on 31 March, 2020 was at 89% with a domestic CD ratio of 83%.
67
Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Balance Sheet parameters
Assets
Particulars
Cash and balances with RBI
Balances with banks and money at call and short notice
Government securities
Other securities
Total investments
Retail advances
Corporate advances
SME advances
Total advances
Fixed assets
Other assets1
Total assets
2019-20
84,959
12,309
125,982
30,752
156,734
305,400
204,103
61,921
571,424
4,313
85,426
915,165
2018-19
35,099
32,106
120,239
54,730
174,969
245,812
183,402
65,584
494,798
4,037
59,988
800,997
(` in crores)
% change
142%
(62%)
5%
(44%)
(10%)
24%
11%
(6%)
15%
7%
42%
14%
1 includes Priority Sector Lending deposits of `46,463 crores (previous year `28,162 crores)
Total assets increased by 14% to `915,165 crores as on 31
March, 2020 from `800,997 crores on 31 March, 2019, driven
by 15% and 142% growth in advances and cash and balances
with RBI, respectively.
Advances
Total advances of the Bank as on 31 March, 2020 increased by
15% to `571,424 crores from `494,798 crores as on 31 March,
2019, largely driven by healthy growth in the retail segment.
Retail advances comprised 53% of total advances and grew
by 24% to `305,400 crores, corporate advances comprised
36% of total advances and grew by 11% to `204,103 crores
and SME advances constituted 11% of total advances and
de-grew by 6% to `61,921 crores.
Domestic advances of the Bank as on 31 March, 2020 grew
by 15% to `526,786 crores from `456,683 crores as on 31
March, 2019. Further, domestic corporate advances of the
Bank as on 31 March, 2020, increased by 13% to `175,087
crores from `155,421 crores as on 31 March, 2019.
The retail lending growth was led by auto loans, personal
loans, and credit cards. Mortgages continue to grow slower
than the retail lending growth. Home loans remain the largest
Composition of Retail Advances
Advances
` in crores
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
↑11% YoY
↑24% YoY
↓6% YoY
204,103
305,400
61,921
183,402
245,812
65,584
174,445
206,464
58,740
155,904
167,993
49,172
155,384
138,521
44,869
Corporate
Retail
SME
Retail Advances as % to Total Advances
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
53%
50%
47%
45%
41%
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
35%
12%
13%
13%
9%
5%
4%
9%
38%
14%
11%
12%
9%
5%
3%
8%
40%
15%
11%
10%
8%
3%4%
9%
44%
16%
10%
8%
8%
4%
2%
8%
45%
17%
9%
8%
8%
1%3%
9%
Home loans
LAP
Rural lending
CC
Auto Loans
SBB
PL
Others
retail segment and accounted for 35% of retail loans, rural
lending 12%, loans against property (LAP) 9%, personal loans
(PL) and credit cards(CC) were 18%, auto loans 13% and Small
Banking Business (SBB) loans were 4%, while non-schematic
loans comprising loan against deposits and other loans
accounted for 9%.
Investments
The investment portfolio of the Bank de-grew by 10% to
`156,734 crores. Investments in Government and approved
securities, increased by 5% to `125,982 crores. Other
68
Statutory Reports
investments, including corporate debt securities, decreased by 44% to `30,752 crores. 89% of the government securities have
been classified in the HTM category, while 84% of the bonds and debentures portfolio has been classified in the AFS category.
Other Assets
Other assets of the Bank as on 31 March, 2020 increased to `85,426 crores from `59,988 crores as on 31 March, 2019, mainly
on account of following –
•
•
Priority Sector Shortfall deposits increased to `46,463 crores as on 31 March, 2020 from `28,162 crores as at
previous year end.
Positive mark-to-market receivable on forex and derivative contracts increased from `9,498 crores as on 31 March, 2019
to `16,143 crores as on 31 March, 2020, primarily on account of movement in INR/USD exchange rate during the year.
Liabilities and shareholder’s funds
Particulars
Capital
Reserves and Surplus
Total shareholder’s funds
Deposits
- Current account deposits
Savings bank deposits
-
- CASA
- Retail term deposits
- Non-retail term deposits
- Total term deposits
Borrowings
In India
-
-
Infra bonds
- Outside India
Other liabilities and provisions
Total liabilities and shareholder’s funds
2019-20
564
84,384
84,948
640,105
90,114
173,592
263,706
253,437
122,962
376,399
147,954
92,493
20,880
55,461
42,158
915,165
2018-19
514
66,162
66,676
548,471
89,265
154,129
243,394
198,914
106,163
305,077
152,776
83,037
16,705
69,739
33,073
800,997
(` in crores)
% change
10%
28%
27%
17%
1%
13%
8%
27%
16%
23%
(3%)
11%
25%
(20%)
27%
14%
Shareholder’s funds
Shareholder’s funds of the Bank increased from `66,676 crores as on 31 March, 2019 to `84,948 crores as on 31 March, 2020.
This is mainly on account of increase in capital and reserves due to conversion of share warrants and raising of capital through
Qualified Institutional Placement (QIP).
Deposits
The total deposits of the Bank increased by 17% to `640,105 crores against `548,471 crores last year. Savings Bank deposits
reported a growth of 13% to `173,592 crores, while Current Account deposits reported increase of 1% to `90,114 crores. As
on 31 March, 2020, low-cost CASA deposits remained stable amounting to `263,706 crores, and constituted 41% of total
deposits as compared to 44% last year. Savings Bank deposits on a daily average basis, increased by 11% to `153,919 crores,
Deposits
` in crores
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
376,399
173,592
90,114
305,077
154,129
89,265
209,771
148,202 95,650
201,329
126,048 87,002
188,523
105,793 63,652
Term Deposits
` in crores
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
253,437
122,962
198,914
106,163
137,795
71,976
123,925
77,404
121,955
66,568
Term
Savings
Current
Retail
Corporate
69
Annual Report 2019-20Experience Open
Management’s Discussion and Analysis
while Current Account deposits reported a growth of 8% to `69,431 crores. The percentage share of CASA in total deposits,
on a daily average basis, was at 40% compared to 44% last year.
This year the Bank significantly ramped up its focus on retail term deposits. As on 31 March, 2020, the retail term deposits
grew 27% and stood at `253,437 crores, constituting 67% of the total term deposits compared to 65% last year. As on 31
March, 2020, CASA and retail term deposits constituted 81% of total deposits.
Borrowings
The total borrowings of the Bank decreased by 3% from `152,776 crores in fiscal 2019 to `147,954 crores in fiscal 2020.
Domestically, the Bank raised `4,175 crores through Infrastructure bonds during the fiscal. The outstanding balance in long
term infrastructure bonds as on 31 March, 2020 was `20,880 crores.
Capital Management
The Bank continues its endeavour for greater capital efficiency and shoring up its capital adequacy to enhance shareholder
value. During the year ended 31 March, 2020, the Bank allotted 45,357,385 equity shares at a price of `565 per share pursuant
to exercise of convertible share warrants by the warrant holders. As a consequence, the paid-up share capital of the Bank has
increased by `9 crores and the reserves of the Bank have increased by `2,551 crores after charging off issue related expenses.
Further, during the year ended 31 March, 2020, the Bank raised additional equity capital through a Qualified Institutional
Placement of 198,728,139 shares at a price of `629 per share. As a consequence, the paid-up share capital of the Bank
has increased by `40 crores and the reserves of the Bank have increased by `12,393 crores after charging off issue related
expenses. The funds mobilised for equity raising were utilised for enhancing the capital adequacy ratio and for general
corporate purpose.
Movement of CRAR during fiscal 2020
Capital Adequacy Ratio as on 31 March, 2019
Increase due to warrant conversion
Increase due to QIP issue
Decrease on account of consumption
Capital Adequacy Ratio as on 31 March, 2020
%
15.84
0.45
2.12
(0.88)
17.53
The Bank has also been focusing on increasing the proportion of lower Risk Weighted Assets (RWA). The Bank’s Risk Weighted
Assets (RWA) to Asset ratio improved from 69% as at the end of fiscal 2019 to 67% at the end of fiscal 2020.
During the year, the Bank’s capital consumption was modest, driven by improvement in RWA intensity. The Bank has invested
in Yes bank shares during the year, pursuant the reconstruction scheme aggregating `600 crores. The said investment has not
been treated as HTM for capital adequacy purposes. If the investment was treated as HTM, our overall capital adequacy ratio
and CET-1 would improve by 14 bps.
The Bank’s capital position continues to be strong and is sufficiently robust for it to pursue growth opportunities.
The Bank’s overall capital adequacy ratio (CAR) under Basel III stood at 17.53% at the end of the year, well above the benchmark
requirement of 9.00% stipulated by Reserve Bank of India (RBI). Of this, the Common Equity Tier I (CET I) CAR was 13.34%
(against minimum regulatory requirement of 5.50%) and Tier I CAR was 14.49% (against minimum regulatory requirement of
7.00%). As on 31 March, 2020, the Bank’s Tier II CAR under Basel III stood at 3.04%.
The following table sets forth the capital, risk-weighted assets and capital adequacy ratios computed as on 31 March, 2020
and 31 March, 2019 in accordance with the applicable RBI guidelines under Basel III.
70
Statutory Reports
Particulars
Tier I capital
Tier II capital
Out of which
- Tier II capital instruments
- Other eligible for Tier II capital
Total capital qualifying for computation of capital adequacy ratio
Total risk-weighted assets and contingencies
Total capital adequacy ratio
Out of above
- Common equity tier I capital ratio
- Tier I capital ratio
- Tier II capital ratio
2019-20
88,449
18,556
13,095
5,461
107,005
610,527
17.53%
13.34%
14.49%
3.04%
(` in crores)
2018-19
69,238
18,221
14,450
3,771
87,460
552,048
15.84%
11.27%
12.54%
3.30%
Business Overview
The Bank outlined its medium term strategy last year- GPS. The Bank’s aspiration on the key vectors of GPS are -
• Growth: Deliver above average growth of in deposits (CASA+RTD) and advances
•
•
Profitability: Deliver a consistent RoE of 18%; drive operating cost efficiencies
Sustainability: Be predictable and well managed
• One Axis: Drive a culture of unity across the Bank’s various departments, products and subsidiaries
The Post-COVID-19 scenario has altered our outlook on certain near term business strategies, however our commitment to
GPS and its goal posts remains intact. We will continue to consider Growth, Profitability and Sustainability as imperative to
all the decisions we take in the Bank.
Over the last year, we have embraced GPS across the Bank and our individual business segment performance is reflective of this.
An overview of the Bank’s various business segments along with their performance during fiscal 2020 and future strategies is
presented below:
Retail Banking
The Retail Banking segment continues to be a key driver of the Bank’s overall growth strategy. Over the years, the Bank has
maintained its focus on customer centricity with deep understanding of their financial needs and excellence in delivery of
bespoke personalised solutions. This has not only strengthened the Bank’s relationship with the customers but the customers
have also made Bank their preferred financial solutions partner.
The Retail business segment encompasses a wide array of products and services across deposits, loans, investments and
payment solutions, which are delivered through multiple physical and digital channels to the Bank’s customers.
Retail liability products include savings accounts and term deposits that are customized for certain target groups, such as high-
net-worth individuals, senior citizens, women, defence personnel, students and salaried employees.
Retail lending products include home loans, automobile loans, two wheeler loans, commercial vehicle loans, personal loans,
gold loans, education loans, credit cards, loans against term deposits, loans against securities, small business banking loans and
agriculture loans.
The Bank’s Retail Banking business unit also offers other products and services such as debit and credit cards, forex cards, bill
payment services and wealth management services. The Bank also markets third party products such as mutual funds, life and
non-life insurance policies and Government savings bonds. A wide range of liability and asset products and services are also
offered to non-resident Indians (“NRIs”).
To provide an omni-channel superlative customer experience to a larger segment of India’s population, the Bank has developed
a wide network of fully interconnected retail branches, extension counters, ATMs, asset sales centres, call centres, an Internet
banking channel and mobile banking platform.
71
Annual Report 2019-20Experience Open
Management’s Discussion and Analysis
The Bank’s deep customer relationship, focused execution, wide distribution and strong digital capabilities has helped it to
improve customer experience and gain market share over the years. During fiscal 2020, Retail segment contributed 68%, 53%
and 64% of the Bank’s deposits, advances and fee income respectively.
The Bank continues to remain one of the strongest banking brands and among the top 20 brands in the country, standing apart
from peers with a differentiated identity of being seen as an approachable and trustworthy institution. During the year, the
Bank launched new brand philosophy – Dil Se Open, which aims to cement strong brand value among the stakeholders, with
a two-fold focus on bolstering customer-facing interfaces and simplifying and strengthening various process gaps to enable
employees to deliver better customer experience on ground.
Recent challenges in the macro environment due to COVID-19 require a nimble response to the emerging situation. Bank
has identified various short and medium-term levers and crafted an action plan to help us navigate through the challenging
situation including keeping a close tab on geographies and segments as they open up. Further, Bank is using this opportunity
to re-imagine the new normal: the future of work and banking will be very different. The Bank is focusing its efforts on
accelerating digital adoption across various processes within the Bank, strengthening credit and risk policies, and proactively
managing collections.
The Bank has continued to engage with customers across various verticals leveraging Bank’s digital channels, addressing their
needs and concerns and ensuring delivery of smooth customer experience. The Bank is focusing on digital customer acquisition
and also enabling sales resources to effectively engage with the customers. The Bank has ensured that customers are guided
well while opting for the moratorium. The Bank has been focused on employee safety and education through various initiatives
including specific learning and development interventions. Specific initiatives have also been taken for making both employees
and customers more digitally active. The Bank has also facilitated DBT withdrawals for both Axis and non-Axis customers in
remote geographies. Social distancing and hygiene norms have been maintained at all our outlets while taking care of all the
financial needs of Bank’s customers.
The Bank will continue to scale up its efforts towards ensuring safety of our employees and serving customer needs in these
challenging times. The Bank’s long term strategy and ambitions remain intact, and remain focused on developing an agile
response to the current crisis which supports Bank’s strategy.
Retail Deposits
A key element of the Bank’s strategy has been the shift from a product centric to a customer centric approach with an objective
to have sharper growth in deposits from existing as well as new customers in its Retail franchise.
The growth in deposits has remained the driver of Bank’s balance sheet growth. During the year, the Bank continued its focus
on garnering higher share of Current Accounts and Savings Accounts (CASA) deposits plus retail term deposits. The Savings
Bank deposits grew by 13% while the retail term deposits grew by 27% during the year. As on 31 March, 2020, the Bank had
over 23 million savings account customers.
Building a quality liability franchise has been a key focus area for the Bank and it has taken initiatives towards improving
the quality of acquisition and deepening the relationship with its existing deposit customers. Earlier this year, the Bank had
re-organised the Retail business segment structure and created a new vertical structure in Liability Sales to drive greater
focus on new customer acquisition on the CASA and retail term deposits. To ensure that the product designs continue to
remain contemporary, competitive and engaging and to reach out to new consumer segments, the Bank also launched Prestige
Savings and Salary Account earlier during the fiscal year.
Savings Accounts segments like Priority, Prestige, Burgundy, NRI and Government savings continue to be the primary focus
areas of the Bank. In order to acquire RTD from New to Bank (NTB) customers the Bank launched Express FD, a digital Fixed
Deposit which allows fixed deposit accounts to be opened through digital mode in quick time and with zero issuance fees.
In order to serve the deposit customers better and deepen relationships with them, the Bank has organically built its branch
network over the years. The Bank undertakes a detailed study of the demographic factors of an area to assess its business
potential before setting up a branch. The Bank has an evenly distributed branch presence across various geographies catering
to the needs of diverse customer groups.
During the year, the Bank opened 478 branches, highest number of branches in any given fiscal year. As on 31 March, 2020,
the Bank had a network of 4,528 domestic branches and extension counters as compared to 4,050 domestic branches and
extension counters as at the end of 31 March, 2019.
72
Statutory Reports Back office operations are centralized at central processing units allowing the Bank’s branch network to focus on business
acquisition and expanding customer relationships. As on 31 March, 2020, the Bank had 326 central processing centres, 13
service branches, 12 extension counters and 95 specialized branches (lending centres).
The Bank was the first private sector Bank to introduce recyclers, which can both accept and dispense cash. As on 31 March,
2020, the Bank had deployed 5,433 recyclers/cash deposit machines that handled, 70% of the overall cash deposits at the
Bank, leading to efficient use of Bank’s staff. The realm of technology has changed the world’s expectations into real time
fulfilment and more so of the customers in terms of Bank’s products. Understanding the need of the hour, the Bank introduced
8 Instant Fulfilment campaigns (Credit Card onboarding, Card Portfolio products, FD/RD booking, Mutual Fund - SIP, Insurance
Renewal) for customers on its ATM channel; 6 of which are as a first ever initiative in the banking industry. This helped to
achieve 1lac+ instant sale of products in fiscal 2020.
The Bank’s geographical reach in India now extends to 35 states and union territories, covering 2,559 centres and 682 districts.
Around 16% of the Bank’s branches are in rural areas and 76% of the Bank’s rural branches are in unbanked locations.
As a part of essential service, 99% of Axis Bank branches remained operational during the lock down phase implemented by
the government to tackle COVID-19 outbreak. Moreover, Bank has ensured 96% availability of (<24 hour down) ATMs and
Recyclers for customers despite the challenges faced during lock down. The Bank through its branches and BCs facilitated
the customers for withdrawal of money received under PMGKY scheme as per Govt. directive. The Bank also enabled and
strengthened its operational processes through Digital platforms to encourage customers for using the same.
Retail Lending
The growth of retail and consumer lending in India has been a consequence of growing affluence and changing consumer
behaviour. Retail Lending is one of the Bank’s core growth areas. The Bank’s focused marketing approach, product innovation,
risk management systems and competent back-office processes have contributed to the strength of the Bank’s retail
lending strategy.
The four core components of the Bank’s retail lending strategy focus on cross-selling to existing deposit customers; focusing on
distribution through branches; continue leveraging digital platforms and advanced data analytics engine driving underwriting.
Existing to Bank advantage: As a part of the business growth plans, the penetration into the internal customer base is a critical
component of the strategy given the benefits of the customer stickiness, portfolio performance and lower acquisition cost.
The Bank continues to focus on upselling and cross selling opportunities for its products to the existing customers. Branches
play an important role in this with almost 47% of retail advances being sourced at branches.
Geographical connect: The Bank’s strong geographic presence through its robust network of branches and loan centres,
has helped to cater to a wide strata of society especially in the rural and semi urban areas. The Bank continues to focus on
deepening and expanding its presence in rural and semi-urban locations through physical and digital technological support.
Digital Edge: Digital technology has played a key role in delivering superior customer service and increased customer
transactions. During the year, the Bank launched project ‘Aarambh’ that facilitates digitally assisted sales of multiple products
through a single journey and offers real time point of sale offers for cross-sell to the Bank’s customers. The Bank will continue
to leverage various digital platforms with a view to enhance automation in lending and improving process efficiencies. The
Bank sourced 44% of the personal loans through paperless digital platforms. Further, during the year the Bank sourced 19%
of business loans digitally.
Advanced data analytics engine: The Bank‘s strategy has been to diversify its portfolio and to build a well-diversified portfolio
book without compromising on the prudent risk management. The Bank has over the years invested significantly in data
analytics. The Bank has been actively leveraging its strong Business Intelligence capabilities as a predictive analytical tool to
understand customer’s financial characteristics which help in developing robust credit decision models. This approach has also
been complemented with the effective collections set up and strategy.
The Bank has grown its Retail Lending portfolio strongly over the last decade with a CAGR growth of 31% over the last 10
years and currently stands at `305,400 crores as on 31 March, 2020, up 24% over last year. The Bank continued to increase
its share of retail loans to total advances, which stood at 53% as compared to 50% last year. While the Bank has significantly
diversified the book over the years in terms of product offerings, the book continues to remain largely secured at 80% of the
book with home and mortgage finance, automobile finance and loans against property being the major components of the
Bank’s retail lending portfolio, constituting 35%, 13% and 9% respectively. The proportion of higher yielding Retail Lending
products comprising mainly of Personal Loan, Credit Card and Small Business Banking (SBB) stood at 22% as on 31 March, 2020.
73
Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Priority Sector Lending (PSL)
Priority sector advances include loans to the agriculture sector, micro and small enterprises, financial inclusion sector,
microfinance loans, loans to certain weaker sectors, housing and education finance up to certain ceilings and loans to fund the
purchase of eligible assets and investments in eligible securitized assets. Deposits with NABARD on account of shortfall in
priority sector business targets are also eligible for priority sector lending.
The Bank continues to focus on achieving the PSL targets and sub targets prescribed by the regulator. As on 31 March, 2020,
Bank had average PSL achievement of 41.77% for fiscal 2020. Bank’s current business model generates PSL advances, which
meet the overall 40% requirement to a great extent. The Bank has also been buying PSL certificates (PSLC) to narrow the gap
between achievement and RBI mandated targets in the sub segments. During fiscal 2020 the Bank purchased PSLCs of an
aggregate amount of `48,321 crores at a cost of `611 crores.
The Bank has increased its emphasis on products that can be offered to MSMEs, Agri Sector and weaker section in order to
drive the PSL sub-target achievements. The digital lending channels have been enhanced to facilitate quicker turnaround time
for sanction and disbursement of loans to MSME borrowers. Newer platforms are being developed that will help reach out to
potential borrowers and disburse loans seamlessly. The Bank continues to focus on augmenting the small ticket size loans with
competitive features. Crop Loans to small and marginal farmers and microfinance business targeted at women borrowers from
low income households is also being scaled up for sub target achievements.
The Bank has been working towards increasing its presence in specific rural and semi-urban geographies across India, where
the Bank has lesser penetration in agricultural advances and MSME lending. The Bank continues to undertake activities that
promotes financial literacy and awareness of the banking services with an aim to cover the under banked borrowers under
this PSL drive.
Payments
As the economy continues to go digital, there has been a tremendous growth in the share of retail payments with huge jump
in the volumes of low value transactions on account of wider acceptability, convenience and government push. Though digital
payments are outgrowing cash transactions, there still remains a large opportunity to grow them further.
Digital Payments continue to be at the core to the Retail Banking strategy as it represents not only the face of the franchise
but also increases customer engagement, drives profitability and partnerships. During the year, the Bank launched Axis Bank
Flipkart Credit Card a co-branded credit card offering best-in-class benefits both on online and offline spends. The Bank also
launched co-branded credit card with Indian Oil Corporation and Freecharge. All these launches have opened up opportunities
in two new customer segments – Known to Bank (KTB) and New to Bank (NTB). The Bank believes these two segments will
have significant contribution in future sourcing.
The Bank also launched two new Credit Cards in the premium segment strengthening its position in this highly competitive
segment. Axis Bank Magnus Credit Card is a premium credit card with exclusive travel, lifestyle and health benefits. The card
comes with a complimentary travel ticket and airport concierge services, built for the luxurious traveller. Burgundy Private One
card, a first of its kind luxury three-in-one credit card was launched for high networth and ultra-high networth clients. This
card provides the customer with added benefits to withdraw cash or make international transactions at no additional cost and
also serves as debit card and forex card. During the year, the Bank partnered with Flipkart and Amazon during their festival
sales period; contributing significantly to total festive sales spends.
The Bank continues to focus on its digital first initiatives. The Bank sourced 45% of credit cards through paperless digital
platforms. The Bank continued focus on affluent segment helped improve Affluent Credit Card sourcing mix to 12% of overall
volumes in fiscal 2020 as compared to 9% for previous year.
The Bank is one of the largest debit card issuers in the country, with a base of 24.51 million as on 31 March, 2020. The Debit
Cards portfolio has seen an increase of 15% in spends from `44,610 crores in last year to `51,516 crores.
The Bank’s merchant acquiring business continues to be one of the largest acquirers in the country with a base of 5.22 lakhs
installed terminals of which 3.08 lakhs terminals are enabled for accepting contactless payments. The throughput acquired has
seen a growth of 32% YTD during the year as compared to last year.
The Bank remains committed towards promoting a less cash-focused digital economy, and enjoys a strong market position
across most digital payments spaces in India. The digital payments space also provides opportunity to attract and cross-sell to
non-Axis Bank customers.
74
Statutory Reports The Digital Payments business registered strong growth during the fiscal year. UPI transactions touched a new high with Axis
Bank powering over 22 crores UPI transactions a month, making Axis the second largest PSP player. The UPI acquiring throughput
too saw tremendous pickup during the year with 46% YOY growth and over 1 lakh merchants onboarded till date. During the
year, the Bank ventured into offline acquiring as well, partnering with Google SMB, Reliance, FBB, Innoviti and Pine Labs.
Among the key innovations this year, UPI was enabled as a mode of payment for outstanding on Axis Bank Credit Cards and
loans, and for investing in IPOs. More than 50,000 IPO mandates were set up via Axis UPI during the year. These innovations,
with a high-end tech stack, have helped Axis partner with marquee players in the market such as CRED, Amazon & Bajaj
Finserv and acquire over 9.5 crores customers VPA’s for the UPI business. The Bank gained a major share in IMPS transactions
processing over 43 million transactions a month and saw a jump in its ranking from 5th to 2nd as at end of 31 March, 2020.
Wealth
The Bank’s Wealth Management business ‘Burgundy’ continues to be among the top wealth management franchises in the
country with assets under management of over `1.47 trillion as at end of 31 March, 2020. Since its launch in 2014, the
wealth management business that offers unique and personalised wealth management advisory and solutions to the Ultra
HNI, Affluent and Emerging Affluent customers, has steadily diversified its offerings and has gained the trust of over 1.6
lakh customers.
The Bank has over the years strengthened and deepened relationship with its customers by providing a wide platform for
addressing the clients’ financial needs in partnership with the Bank’s subsidiary companies and several third party product
providers across products like Bonds, Mutual Funds, Portfolio Management Services, Alternative Investment Funds, Equity &
Derivatives, Life & General Insurance, among others.
During the year, the Bank launched the Burgundy Private proposition for high and ultra-high net-worth customer segments in
December 2019. The Burgundy Private proposition leverages the strength of ‘One Axis’ and offers the combined expertise of
the Bank and its subsidiaries to cater to the distinct and advanced wealth needs of this client segment. Within four months of
its launch, the Burgundy Private has scaled up rapidly to cover over 850 families across 15 key locations with assets of nearly
₹17,700 crores as at 31 March, 2020.
The challenging investment environment notwithstanding, the business continued on its growth trajectory last year to grow
the customer base by 14%. Since 2014, the revenues for the Burgundy business have grown at a CAGR of ~38% and AUM has
grown at CAGR of ~28%.
Retail Forex and Remittance business
The Bank offers a range of forex and remittances products to its retail customers, which include forex cards, inward and
outward wire transfers, remittance facilities through online portal as well as through collaboration with correspondent banks
and exchange houses.
The Bank continues to be one of the largest players in prepaid forex card market with its flagship offering of Multi-currency
card that allows users to load 16 currency options in one card. Additionally, the Bank offers World Traveller Forex Card in
association with Miles & More, Europe’s largest traveller loyalty programme, aimed at frequent flyers which is an industry first
in this segment.
In line with the rapid customer adoption of digital channels for banking transactions, the Bank provides convenient online
offerings across the Retail Forex and Remittance product portfolio. RemitMoney, an online remittance portal available to NRIs
across 7 geographies, provides competitive and user-friendly platform to send money to their beneficiaries in India. The Bank’s
customers can initiate outward remittances through their Internet Banking access without having to submit any paperwork.
This convenient option resulted in continued increase in the number of transactions processed through this channel on a
yearly basis. The Bank also offers instant reload facility to its account holders on their Multi-currency forex cards for travellers
on-the-go who need not worry anymore about running out of cash while abroad.
Third Party Distribution
The Bank today is one of the leading distributors of third party products including mutual fund schemes, life insurance, health
insurance and other general insurance policies. The Bank offers comprehensive investment and protection solutions, to cater
to the diverse needs of each customer segment, adopting tech-enabled delivery mechanisms across all customer touch points.
In terms of investment products, the Bank ranks among the top 4 distributors in Assets Under Management (AUM). The Bank
through its dedicated in-house research desk, identifies the best mutual fund schemes based on qualitative and quantitative
parameters. Currently, the Bank distributes Mutual Funds schemes of 18 major Asset Management Companies, through its
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
diversified branch network and digital channels based on the customers’ lifecycle and investment requirements. The Bank
has 1.4 million mutual fund customers and has earned the Wall of Fame at the UTI Mutual Fund and CNBC TV18 Financial
Advisor Awards in 2018-19, for being conferred the Best Private Bank for 2 consecutive years. The Bank also offers various
AIF products to its customers, as approved by SEBI.
The Bank offers online trading services to its customers in collaboration with Axis Securities Ltd (a 100% subsidiary of the
Bank) under the brand name Axis Direct. Through its branches, the Bank has sourced more than 2 million total customers
for Axis Direct.
For its life insurance distribution business, while the Bank already had a tie up with Life Insurance Corporation of India and Max
Life Insurance Company Limited, it entered into partnership with Bajaj Allianz Life Insurance Company Limited in November
2019. The Bank continues to focus on providing need based product options to cater to the financial security of customers and
has secured the lives of over 1.4 million customers since the inception of partnerships.
In General Insurance, the Bank continues to distribute health insurance products for TATA AIG General Insurance Company
Limited and HDFC Ergo Health Insurance Company Limited (erstwhile Apollo Munich Health Insurance Company Limited)
with a focus to offer diverse insurance solutions to retail and corporate customers, the Bank has recently tied up with
Bharti Axa General Insurance Company Limited and Aditya Birla Health Insurance Limited for general and health insurance
products respectively.
Third Party Distribution contributed 16% of total Retail Bank fee income in fiscal 2020.
Digital Banking
Customers today desire instant gratification and seamless experience across various channels. The Bank is constantly striving
towards digital excellence and has remain focused on redesigning and simplifying customer journeys to improve customer
experience in onboarding, transactions and servicing.
The Bank has taken significant steps towards increasing its digital presence by investing significantly in building enterprise level
digital capabilities. Digital technologies today allow for several innovations driven by data and technology. The Bank aims to
deliver sustainable value through digital banking and become the leader in customer experience in India by introducing new
products and segments.
With its dominant presence on conventional digital channels like Mobile Banking app and Internet Banking platform, the
Bank is strengthening its reach towards new age banking channels like Axis Aha chatbot and Alexa voice banking along with
initiatives to embrace cutting edge banking on Whatsapp and API integrated banking.
During the year, the Bank has taken several initiatives in Digital Bank to address growing customers needs and provide
superlative customer experience. The Digital team introduced smart statement which analyses the customers’ category wise
spends on Mobile App; launched Axis Voice Banking on Alexa to assist customer to know their account balance and credit card
bill through voice command. The digital initiatives with respect to journey optimization which entailed a seamless, paperless
and quick onboarding experience, along with introduction of the new journey on the mobile app also aided the growth in
online mutual funds business. The online investments platform helped the digitally active customer base to invest in different
categories of mutual funds and monitor portfolio online. The overall discoverability of investment products was also enhanced
across digital assets of the Bank.
The Bank has seen an increase of 92% in total number of registrations on Mobile Banking and a 15% growth in total registered
customers on Internet Banking platform on year on year basis which shows high customer adoption of digital channels. More
than 70% of the new digital registration are mobile first. All these efforts have culminated into making the Axis Mobile app as
one of the highest rated banking app in Playstore and Appstore. In recognition of all these initiatives, Axis Bank won the Best
Mobile App award for Citizen Centric Services at The ET Government DigiTech Conclave & Awards, 2019. The Bank also won
the Best Digital Bank award for the second consecutive year at The Financial Express ‘India’s Best Banks’ awards ceremony.
Wholesale Banking
The Bank’s Wholesale Banking business unit offers various loan and fee-based products and services to large, mid-corporate
and multi-national clients as well as commercial banking group (including small and medium enterprises as well as micro, small
and medium enterprises).
During the year, the Bank reoriented and strengthened the organization structure in Wholesale segment with an objective
to streamline and simplify functioning and bring in greater business focus, improve profitability, productivity and efficiency.
Business relationship and product specialists’ responsibilities have been segregated to ensure sharper focus on client coverage
and product groups through Wholesale Banking Coverage Group and Wholesale Banking Products Group, respectively.
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Statutory Reports Wholesale Banking Coverage Group
The Wholesale Banking Coverage Group offers various Loan Products such as Working Capital Loans, Overdrafts, Short and
Long Term Loans, Import and Export Finance that are specially designed to meet all financing requirements to Government
clients, large corporates, multi-national and mid-sized coverage clients. In an effort to create an integrated Wholesale Banking
franchise the Bank has reorganized the coverage structure in fiscal 2020, as follows:
Large Corporate
Mid Corporate
Focused Segmental
Coverage
Commercial Banking
Re-Oriented Coverage Groups
•
Large Corporates: covering all corporate clients with turnover greater than `1,000 crores;
• Mid-Corporates: covering all corporate clients with turnover between `250 crores and `1,000 crores; and
•
Focused Segmental Coverage: covering Strategic Clients, Government-owned entities, Multi-national companies and
financial institutions group companies.
•
Commercial Banking Coverage Group (CBCG): caters to businesses with turnover between `10 crores to `250 crores.
With the re-orientation of the Corporate Banking vertical of the Bank, the Wholesale Coverage Group is now augmented
to deliver “One Axis” to the customer. Besides credit products, the Coverage group also delivers trade, forex and derivative
solutions, payments and cash management systems, tax payments, salary accounts and trust services, commercial and credit
cards etc. with the support of a well-defined Wholesale Banking Products team. The Bank today presents itself as a large scale
full service Wholesale Bank through its subsidiaries across Investment Banking, Commercial Banking and Transaction Banking
with linkages to Retail. The Bank has leveraged One Axis to provide comprehensive solutions to its clients thereby deepening
the relationship further.
During the fiscal 2020, the Bank’s Corporate loan growth was up 11% over fiscal 2019. The Bank’s domestic corporate loan
book growth was strong with a YoY growth of 13%. The Bank continued to implement its strategy of de-growing the overseas
loan book aligned to the focus shift of top business houses to tap opportunities in the domestic market.
The Corporate lending business in the Bank continued to emphasise doing business with higher rated corporates focussing
on having higher share of the cash flows of these corporates through working capital facilities and cash management services
arrangements. The Bank also participated in some of the NCLT related resolution cases funding marquee groups and high
rated corporates.
During the start of the year, the credit underwriting function was taken out from the businesses and was made an independent
function. The Bank’s strategy of sectoral approach to portfolio diversification and credit continued, where the focus was on
identifying sector specific opportunities and risks; and grow accordingly. The Bank has defined industry, group and rating
based single borrower exposure limits and monitors it on a regular basis with a view to identify risk and takes proactive action
to mitigate them.
Approximately, 95% of new sanctions in the corporate book were to companies rated ‘A-‘ or better. Presently, 83% of
outstanding standard corporate book is to companies rated ‘A-’ and above. Further, portfolio diversification through a sectoral
approach to credit has helped the Bank to continue reducing the concentration risk.
Over the last couple of years, the Bank has deepened the integration into the customer value chain cutting across the value
chain. On the payments side, Bank continues to gain market share by developing unique value proposition to vendors and
other stakeholders. With the re-organisation of the Wholesale Banking Group, the focus now is more on digital innovation
with improvement in process quality at the core. These innovations have been recognized by various industrial bodies (Best
Banking Innovation of the Year- 2020- Banking Frontiers (Finnoviti, Best Banking Technology of the Year 2020 – Internet and
Mobile Association of India)). Corporate Internet Banking Mobile App had more than 1.7 lakhs downloads with more than
~20% of the transactions through the app.
Towards the end of fiscal 2020, countries across the world were hit by an unprecedented global pandemic COVID-19. As a
result of this severe crisis, it is expected that industries across the sectors will get impacted and the resultant economic and
financial impact will be spread over a much longer time. Given this development, the Bank has continued to remain cautious
and conservative in its underwriting standards.
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
The Bank continues to focus on leveraging the strong relationship the Bank enjoys with better rated corporates to focus on
gaining a higher share of shorter tenure working capital and transactions. During this period, the Bank has reached out to a
large number of clients (existing and new) in their hour of need and has developed a deeper engagement through the Targeted
Long Term Repo Operations (TLTRO).
Commercial Banking Coverage Group
With Small and Medium Enterprises (SME) expected to be a growth driver for the country over the medium term notwithstanding
the near term effects of COVID-19, the Bank continues to focus on ensuring strong presence in this segment. In order to
deepen existing relationships with SMEs, a new segment called Commercial Banking Group (CBG) was created during the year.
The Bank’s Commercial Banking business emphasizes relationship building and supporting entrepreneurs. The Bank has
created dedicated business verticals to meet the requirements of the SME market sector, namely the Small Enterprises Group
(for turnover up to `75 crores), the Medium Enterprises Group (for turnover above `75 crores to `250 crores) and the Supply
Chain Finance Group.
The SME business unit is of strategic importance to the Bank as it generates higher yields and helps to diversify risks. The SME
business unit offers a wide range of both templated and non-templated products, including term loans and working capital
finance, non-fund based facilities to meet the specific requirements of SME clients. The SME business also continues to focus
towards lending to the Priority sector (PSL) with 59% of the book qualifying for PSL lending. The Bank’s SME book is very
well diversified across the geographical regions and consists of 35 broad sectors. The Bank has a strong network across the
Country offering best in class service through 120 dedicated SME centres and more than 4,200 branches.
During fiscal 2020, given the uncertainties on the macro-economic front and the underlying weakness in the economy, the
Bank had maintained a cautious stance on SME space. The SME business saw de-growth of 6% for the fiscal 2020 as the Bank
focused on maintaining asset quality in the segment. The Bank’s SME advances stood at `61,921 crores as on 31 March, 2020
and constituted 11% of the Bank’s total advances as on 31 March, 2020.
During the year, the Bank implemented Project ‘Sankalp’, an SME digital transformation initiative to transform the SME
business to improve efficiencies, customer experience and deliver year on year growth. The project also simplifies the credit
assessment process by adapting a digital workflow based system to streamline the credit assessment process and with
improved credit model.
The Bank makes use of business analytics to identify potential borrowers across various sectors and has various Early Warning
Systems in place which help to take corrective action when necessary. The asset quality in the SME segment has remained
stable with strong focus on sourcing high rated customers.
To enable stronger, faster and leaner processes to streamline the customer journeys for onboarding, deepening and
cross-sell. A new loan onboarding and approval system is being structured to bring in better controls from a system perspective
on TATs, building better underwriting capability based on analytical feed and creating a digital workflow for risk mitigation.
A new digital tool is built to provide rich customer insights to relationship managers in order to enable them to sell the right
product and provide better solutions.
The Bank has been taking several initiatives to support the growth and development of MSME sector. The Bank organises
“Evolve” series - an educational initiative for SMEs every year that focuses on Small and Medium Enterprises (SME) in India. The
series is now regarded as a signature initiative of Axis Bank in building SME capacity. The 6th edition of Evolve was organised
this year around the concept “Gearing up for a 5 Trillion Dollar Economy” in over 25 cities across the country.
Government Business
The Government Coverage Group of the Bank offers a wide range of services to Government Departments, Public Sector
Units (Centre and State), Autonomous Bodies, Agencies, Educational Institutions, Local Governance Bodies, Special Purpose
Vehicles and other entities to suit their banking requirements. Since the year 2003, the Bank has been authorised by Reserve
Bank of India to handle all agency business transactions. Today the Bank handles all Government of India and State Government
businesses which include the following:
•
•
Collection of Direct taxes (CBDT)
Collection of GST across all branches
• Disbursement of Central Civil as well as Defence Pensions
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Statutory Reports •
Accreditation by RBI as an authorised banker for the Ministry of Urban Development, Ministry of Housing and Urban
Poverty Alleviation, Office of Controller General of Accounts and Institute of Government Accounts and Finance, under
Ministry of Finance
The Bank is a participating entity in the Government’s Public Financial Management System (PFMS). The Bank is also an active
player in Government e-Marketplace and trains both vendors and Government bodies for using the platform.
The Bank is among the leading banks in the country in digital banking and is driving partnership-driven innovation in the space,
actively contributing to India’s key developmental initiatives such as Digital India, Direct Benefit Transfer (DBT), E-Procurement,
E-Mandi, E-Nagarpalika, Online Payment Gateways and other cashless initiatives through various modes. It also continues to
work on diverse digital mandates with multiple state governments to scale up e-governance and expand e-citizen services.
The Bank is also associated with the e-Governance and e-Procurement initiatives of several states and union territories,
for example Andhra Pradesh (Me-Seva), Karnataka (Bangalore One and Karnataka One), Chandigarh UT (Sampark) and
Chhattisgarh (Chhatisgarh Online information system for Citizen Empowerment).
Transaction Banking
The Wholesale Banking Products Group focuses on transaction banking or flow businesses, i.e. current accounts, collection
& payments solutions, trade services, forex remittances and capital market solutions. It caters to corporates, SMEs, sole
proprietors, financial institutions and government segment.
The key financial deliverables of the business are current account float balances and fee income. The Bank has been focusing
on average balances in relation to current accounts, the volatility on the current account balances have declined which resulted
in increase in the growth of average balances of current account. Daily average balances in current accounts grew 8%, from
`64,006 crores in fiscal 2019 to `69,431 crores in fiscal 2020. The fee income generated for the above products was of `1,972
crores in fiscal 2020, a growth of 6% year on year.
Current Accounts
Current Accounts continue to offer a suite of product variants and continues to offer all the banking services through its
branches. With the economy slowing down, and new customer onboarding becoming more challenging, the Bank continues
to support all its customer businesses through its branches as per their need. Also, strategically, digitization will be key
focus for the year ahead, with an aim to strengthen our digital offering across products and services through innovation and
technology. Our digital strategy will play an integral part in providing customers uniform service experience across various
channels, especially during restricted times. This would also lead to better cross-sell opportunities and overall deepening of
the relationship.
Cash Management Solutions
The Bank provides comprehensive and customizable cash management solutions that enable faster fund movement by
leveraging the Bank’s extensive branch network backed by state-of-the-art technological systems. To enable corporates to
make payments on the move, the Bank has launched ‘Axis Corporate Mobile app’ The Bank has also launched an industry
first offering ‘One Connect’ an integrated payment & bill discounting solution which is a collaboration between Axis Bank &
Invoicemart. During the year, the Bank has enabled 24x7 processing of NEFT transactions. In order to extend online banking
for non-digital customers during the lockdown, the Bank has initiated the process of paperless onboarding for digital payment
channels. The Bank has been awarded the mandate of PM Cares Donation Fund and other State level COVID-19 Donation
drive wherein Bank has activated various digital modes of payment.
The Bank has been focusing on providing holistic solutions for select sectors by offering digitization of value chain along
with better liquidity management. Bank’s integrated digital dairy platform offered through TSP, has ensured end to end data
capture on milk procurement and ensured timely payments to over 7 lakhs farmers across India. With client specific auction
and procurement platforms, the Bank is able to digitize the entire Agri Value Chain helping various government agencies to
bring transparency and price discovery to stakeholders. Bank has launched Fund Disbursement Management Solution – a
product developed to provide the Government Institution a better way to manage the physical and financial progress of their
schemes with sharper visibility at all levels of the Government and direct transfer of funds to the beneficiary account. The
Bank developed a simple 3 click online process and enabled the entire branch network to issue FASTags. The Bank is currently
ranked 3rd in terms of total number of tags issued.
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Axis Bank has developed in-house BBPS (Bharat Bill Payment System) engine. The Bank has designed a comprehensive solution
for billers and aggregators whereby they can participate in the BBPS platform. Bank foresees BBPS will position us ahead of
competition as a Digital Player, help in client stickiness and generate incremental revenue.
The Bank has designed a first-of-its-kind Smart City Solution that includes a prepaid smart card/wallet, a mobile app and a
web portal which empowers citizens not only to make cashless payments but also to interact with city administration to raise
grievances and apply for services. During the current year, Bank won Tumkur Smart City, Agra Smart City (Door 2 Door Tax
Collection), Amritsar and Bhopal Smart City (digital spot fine collection) and Prayagraj Smart City.
Trade, forex and risk management services
The Bank offers a complete suite of products and solutions for domestic trade as well as international trade finance and foreign
exchange business through its designated Corporate Banking branches and Forex “B” category branches spread across the
country supported by centralised operations units.
The Bank also offers a variety of hedging solutions such as exchange and interest rate derivative structures, including
forwards, options and swaps in accordance with the regulatory guidelines and derivative policy of the Bank. In addition to the
services offered through the branch and subsidiary network spread across India, Bank also leverages its tie-ups with reputed
correspondent banks across the world to offer these services to overseas customers.
While the Bank continues to focus on offering the trade and forex services from its Corporate Banking branches and Forex “B”
category branches, the Bank has developed strong focus on offering these services through its digital channel ‘TF Connect’
which is part of Bank’s Integrated Digital Platform for corporates and SMEs, enhancing the customer experience.
The Bank is one of the few private sector banks that has been onboarded as advisory bank in Government e-Marketplace
(GeM). This tie-up enables the Bank to offer automated solutions for advising electronic performance guarantees (e-PBG) to
Government departments /organisations /PSUs with value added features like integrated responses and faster turnaround time.
The Bank was one of the first banks to facilitate presentation of trade related documents through electronic mode during the
COVID-19 lockdown where physical movement of documents was restricted. Further, to encourage the use of digital platforms
during the lockdown period, the Bank took a decision to waive the charges on trade and forex transactions received through
‘TF-Connect’ till 30 June, 2020.
Custodial and Capital Market Services
The major activities undertaken by the Capital Market Division are fund based and non-fund based credit facilities, clearing
bank activities, Professional Clearing Member Services (PCM), NSCCL custodian services, fund accounting services, IPOs,
dividend distribution and escrow services.
The Bank acts as a clearing bank and professional clearing member across exchanges in India providing clearing member
services and funds clearing solutions to exchange members. The Bank is also a SEBI registered custodian of securities, servicing
various segments of clients viz. Foreign Portfolio Investors, Foreign Direct Investors, Portfolio Management Service Providers
and Foreign Venture Capital Investors etc.
Assets under custody services as at end of fiscal 2020 stood at ~`85,000 crores, up from ~`61,000 crores in fiscal 2019.
Correspondent Banking & Payments
Correspondent Banking maintains Nostro and Vostro relationships of banks across various geographies. The Bank enters into
correspondent banking relationship to grow cross border business and offer more options to customers for inward & outward
payments. The Bank offers products and services to customers such as Retail / Non retail remittances, cheque clearing, Trade
Finance, Treasury payments etc. Currently, the Bank has relationships with over 1,000+ banks worldwide in more than 100
countries, thereby providing our customers a widespread global reach.
Treasury & Markets
The Bank’s Treasury & Markets function comprises of Asset Liability Management (ALM), Forex Trading group (including
customer forex, currency derivatives & bullion), Interest Rate Trading (IRT) (including Rupee Derivatives) & primary dealership,
Non SLR Trading (including Equity), Debt Capital Markets(DCM), Treasury product specialist and syndication business.
The ALM group manages the regulatory requirements of Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and Liquidity
Coverage Ratio (LCR). The group also manages the liquidity, interest rate and currency risks in the Bank’s portfolio, under the
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Statutory Reports guidance of the Asset Liability Committee (ALCO) of the Bank. The group is responsible for overall liquidity management of the
domestic book and longer term liquidity management of the overseas branches across geographies.
Forex Trading Group is a major participant in the foreign exchange and derivatives market. It undertakes proprietary trading
and market making in forex and derivatives products. It provides complete risk management and hedging solutions to retail and
corporate customers and services institutional clients.
The IRT desk plays an important role of market making and trading in G-Sec, OIS & other approved interest rate products. The
Bank is primary dealer of government securities. PD desk ensures mandated bidding commitments, success ratio & turnover
ratio for T-bill auctions /G Sec are achieved for the year.
The Non SLR Trading desk undertakes primary/secondary market investment in Corporate Bonds, CP/CD and Equity
instruments. Net Corporate Bond book is `21,303 crores as on 31 March, 2020.
DCM business is responsible for arranging Bond issuances of Corporates in the domestic and international market. The Bank
continues to remain a dominant player in the DCM segment. During fiscal 2020, the Bank arranged bonds and debentures of
`78,724 crores with a market share of 26% and `29,166 crores for quarter ending March 2020 with a market share of 29%. The
Bank has been ranked number one arranger for rupee denominated bonds as per Bloomberg for calendar year 2019.
Treasury products specialist team is responsible for supporting the coverage team to drive the forex and derivatives business
of the Bank. The team provides end to end customised solutions to the customers for any trade or capital account transactions.
The vertical helps manage the Treasury needs of customers and earns a substantial part of its revenues through fee income
generated from transactions customers undertake with the Bank for managing their foreign exchange and interest rate risks.
Syndication business primarily focuses on sourcing, structuring and syndicating the underwritten loan mandates in Rupee as
well as Foreign Currency to various investors i.e. banks and financial Institutions.
Process Transformation and Service Excellence
Customer centricity remains at the heart of The Bank’s ‘Open’ philosophy. During the year, the Bank has undertaken a large
number of process transformation projects with a view to improve turn-around-times, process efficiency, productivity and
operational capabilities for improved customer experience. The Bank has developed systems and capability to capture
customer experience feedback across channels, life cycle and product lines. This has helped the Bank in tracking the progress
in customer experience scores and more importantly identifying areas for improving processes and people competencies.
The Bank’s dedicated team of Process Quality experts having skill set of Lean and Six Sigma philosophy, have been instrumental
in driving these improvement projects across the Bank. The team has been using Lean Six Sigma (DMAIC framework) to drive
implementation of the projects for sustainable improvement.
Some of the key areas that have been positively impacted by these initiatives include:
•
•
•
•
•
•
Bank wide turnaround time and efficiency improvement
Project ‘Sun-down’ to drive a daily rhythm of Zero pendency by collaboration across multiple departments
Bank wide Unified Sales & Service CRM
Simplifying and delivering instant account opening process
Providing first level self -service using voice and chat bots
Empowering the front-line and back-end employees to deliver a consistent experience across channels
• Delivering a unified “One Axis” to drive customer engagement
The team also played an important role in tracking and ensuring that the business continuity plan (BCP) invoked by the Bank
before the COVID-19 related lockdown was effectively implemented. Operations team refined the BCP strategy and all
operational activities were reclassified, into Critical 1, Critical 2 & Non critical activities. A dashboard was created to have a
daily monitoring and sight on key business critical activities and appropriate measures were taken that resulted in the Bank
being able to successfully serve the customers during lockdown phase.
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Business Intelligence Unit
The Bank has an in-house Data Science and Artificial Intelligence (AI) team providing cutting edge solutions to various functions
of the Bank. The BIU team is responsible to create data assets and monetize them with time and has numerous success stories
in the area of risk management and operational optimization. The team has successfully deployed and driven adoption of
predictive solutions not only in Retail but in Corporate banking area as well. There are over 350 members in the team who
are young and techno-functional with an expertise in distributed computing and algorithms catering to big data, new age
programming language like Python and deep learning frameworks like TensorFlow, Keras etc.
BIU has invested in new age data science and engineering platforms – Big Data Lake and Analytical Work Bench to deliver value
in traditional/non-traditional use cases and there has been upward trend in the adoption rate of these platforms. BIU’s focus
in Artificial Intelligence (AI) & Machine Learning (ML) along with traditional analytics has helped to serve internal stakeholders
well in making business decision.
This year, the Unit focused on building analytical capability in operations world, which has helped the Bank to identify and
streamline processes, reduce cost and enhance governance across Retail and Corporate business segments. Also, a lot of
efforts have been put to enable real time access to data which is helping Bank take decisions way faster than earlier.
The Bank has also implemented multiple AI solutions like “AI Assisted FasTag Resolution” process based on computer vision
algorithms and created analytical micro services which are integrated to mainstream applications to nudge RMs and customers
at different touch points. The Bank is working towards making algorithms that will be able to create personalized experience
on Mobile Banking platform — predicting next best action, next best product etc.
The Bank has successfully done proof of concepts on cloud to run algorithms on scale and the Bank continues to make
investment in the areas of AI&ML, Cloud and Big Data to gain competitive advantage in servicing the customers and making
business decisions in a better manner.
Information Technology and Cyber Security
IT Department of the Bank manages all banking applications through a central team having strong domain capabilities in
banking, treasury, channels, payments and collections, along with technical capabilities. The IT operations are managed
through a cross-functional team involving functional and technical experts.
With the objective of making banking simple and hassle-free for customers, the Bank has undertaken various technology
driven business initiatives to deliver value through continuous technology adoption and innovation. The Bank has undertaken
large scale IT transformation towards augmenting infrastructure to further build capabilities. The Bank continues to upgrade
its core systems for better scalability, stability and enhanced security.
The Bank’s Digital Lending platform has been at the forefront of the digital innovation initiatives enabling quicker adoption of
capabilities needed to develop any lending product. Bank aims to leverage the platform and extend its capabilities across other
products like Cards, SME etc.
The Bank continues to re-invent and re-invest in technologies including mobility, cognitive intelligence, application
programming interface (API) banking, Robotic Process Automation and Artificial Intelligence / Machine Learning to develop
winning propositions for its customers. In order to drive seamless integration with partners, Bank’s Open API platform has
been further enhanced to onboard merchants thereby generating more business and driving volumes. The Bank has future
scaled the adoption of robotics process automation and Artificial Intelligence/Machine Learning augmenting operational
efficiency, higher accuracy and reduction in processing time while serving customers.
The Bank has also embarked on its journey to re-architecting its technology infrastructure to be Cloud native providing the
necessary agility, speed and elasticity for scale. To improve branch network and address infrastructure limitations in remote
geographies, Bank has empanelled multiple national level large reach providers and local broadband providers. Bank has also
invested in software defined data centers and network which will enhance branch bandwidth exponentially.
The Bank pursues a holistic cyber security program with a comprehensive Cyber Security Policy and Standards based on
industry best practices in compliance with regulatory guidelines. The Bank has deployed its cyber security structure and
framework based on National Institute of Standards and Technology (NIST) Standard. The Bank’s cyber security framework is
built and operated around five fundamental areas including Identify, Protect, Detect, Respond and Recover. Bank is compliant
to ISO27001 and PCIDSS standards. The Bank has a 24x7 Security Operations Centre and Cyber Security Operations System.
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Statutory Reports Following the COVID-19 pandemic, the Bank has been committed to provide uninterrupted services to its customers. The Bank
has actively encouraged large scale Work-From-Home mandate and provided all enablement necessary to support its employees
to efficiently perform their duties. The Bank has allocated laptops, activated VPN/VDI connections along with application
access and triggered enterprise mobility and collaborative tools to all critical employees to enhance productivity and ensure
seamless collaboration. The Bank also swiftly made changes necessary for RBI moratorium across all applicable systems.
Additionally, the Bank mobilized its service architecture and taskforce to provide necessary support to customers and
employees whilst continuing to focus on development efforts of strategic initiatives.
Risk Management
The Bank continues to focus on strengthening the risk management capabilities, while leveraging on advanced analytics and
frameworks, to drive risk management.
The risk management objective of the Bank is to balance the trade-off between risk and return, and ensure that the Bank
operates within the Board approved risk appetite statement. An independent risk management function ensures that the
risk is managed through a risk management architecture as well as through policies and processes approved by the Board of
Directors encompassing independent identification, measurement and management of risks across the various businesses of
the Bank. The risk management function in the Bank strives to proactively anticipate vulnerabilities at the transaction as well
as at the portfolio level, through quantitative or qualitative examination of the embedded risks. The Bank continues to focus
on refining and improving its risk measurement systems including automation of processes, not only to ensure compliance with
regulatory requirements, but also to ensure better risk-adjusted return and optimal capital utilisation. The Board reviews the
risk profile of the Bank at periodic intervals and ensures that risk levels are within the defined risk appetite.
The overall risk appetite and philosophy of the Bank is defined by its Board of Directors. The Risk Appetite Framework
provides guidance to the management on the desired level of risk for various types of risks in the long term and helps steer
critical portfolio decisions. Further, the Internal Capital Adequacy Assessment Process (ICAAP) of the Bank assesses all the
significant risks associated with various businesses. The independent risk management structure within the Bank is responsible
for managing the credit risk, market risk, liquidity risk, operational risk, other Pillar II risks like reputational risk and strategic
risk and exercising oversight on risks associated with subsidiaries. The risk management processes are guided by well-defined
policies appropriate for the various risk categories viz. credit risk, market risk, operational risk, liquidity risk, counterparty risk,
country risk, reputational risk, strategic risk and subsidiaries risk, supplemented by periodic validations of the methods used
and monitoring through the sub-committees of the Board. The Risk Management Committee (RMC), a committee constituted
by the Board, approves policies related to risk and reviews various aspects of risk arising from the businesses undertaken by
the Bank. The Committee of Directors (COD) and the Audit Committee of the Board (ACB) supervise certain functions and
operations of the Bank, which ultimately enhances the risk and control governance framework within the Bank. Various senior
Management credit and investment committees, Credit Risk Management Committee (CRMC), Asset-Liability Committee
(ALCO), Operational Risk Management Committee (ORMC), Subsidiary Management Committee (SMC), Information Systems
Security Committee (ISSC), Central Outsourcing Committee (COC) and Business Continuity Planning Management Committee
(BCPMC) operate within the broad policy framework of the Bank.
Credit Risk
Credit risk is the risk of financial loss if a client, issuer of securities that the Bank holds or any other counterparty fails to meet
its contractual obligations. Credit risk arises from all transactions that give rise to actual, contingent or potential claims against
any counterparty, borrower or obligor. The goal of credit risk management is to maintain asset quality and concentrations at
individual exposures as well as at the portfolio level.
Internal rating forms the core of the risk management process for wholesale lending businesses with internal ratings
determining the acceptability of risk, maximum exposure ceiling, sanctioning authority, pricing decisions and review frequency.
For the retail portfolio including small businesses and small agriculture borrowers, the Bank uses different product-specific
scorecards. Large, risky or complex exposures require to be independently vetted by the risk department for each incremental
transaction whereas small, templated exposures are extended within the approved product policies. Both credit and market
risk expertise are combined to manage risks arising out of traded credit products such as bonds and market related off-balance
sheet transactions.
Credit models used for risk estimation are assessed for their discriminatory power, calibration accuracy and stability
independently by a validation team.
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The Bank’s overall credit governance structure and processes have been strengthened during the year to ensure credit quality
on an ongoing basis. The operational limits are set in line and commensurate with the level of risk appetite. The key risk metrics
are monitored regularly and deviations are discussed with business to decide on the course of remedial action.
Market Risk
Market risk is the risk of losses in ‘on and off-balance sheet’ positions arising from the movements in market price as well
as the volatilities of those changes, which may impact the Bank’s earnings and capital. The risk may pertain to interest rate
related instruments (interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Market Risk
for the Bank emanates from its trading and investment activities, which are undertaken both for the customers and on a
proprietary basis. The Bank adopts a comprehensive approach to market risk management for its banking book as well as its
trading book for both its domestic and overseas operations. The market risk management framework of the Bank covers inputs
regarding the extent of market risk exposures, the performance of portfolios vis-à-vis the market risk limits and comparable
benchmarks which provide guidance to the business in optimizing the risk-adjusted rate of return of the Bank’s trading and
investment portfolio.
Market risk management is guided by clearly laid down policies, guidelines, processes and systems for the identification,
measurement, monitoring and reporting of exposures against various risk limits set in accordance with the risk appetite of
the Bank. Treasury Mid-Office independently monitors the Bank’s investment and trading portfolio in terms of risk limits
stipulated in the Market Risk Management Policy and board approved Market Risk appetite and reports deviations, if any, to the
appropriate authorities as laid down in the policy and in the Risk Appetite Statement. The Bank utilises both statistical as well
as non-statistical measures for the market risk management of its trading and investment portfolios. The statistical measures
include Value at Risk (VaR), stress tests, back tests and scenario analysis while position limits, marked-to-market (MTM),
stop-loss limits, trigger limits, gaps and sensitivities (duration, PVBP, option greeks) are used as non-statistical measures of
market risk management.
The Bank follows a historical simulation approach to calculate Value at Risk (VaR) with a 99% confidence level for a one-day
holding period in a time horizon of 250 days. VaR models for different portfolios are back-tested on an ongoing basis and the
results are used to maintain and improve the efficacy of the model. VaR measurements are supplemented with a series of
stress tests and sensitivity analysis as per a well laid out stress testing framework.
Liquidity Risk
Liquidity is a bank’s capacity to fund increase in assets and meet both expected and unexpected cash and collateral obligations
at a reasonable cost and without incurring unacceptable losses. Liquidity risk is the inability of a bank to meet such obligations
as they become due, without adversely affecting the bank’s financial condition.
The Asset Liability Management (ALM) Policy of the Bank stipulates a broad framework for liquidity risk management to
ensure that the Bank is in a position to meet its liquidity obligations as well as to withstand a period of liquidity stress from
bank-level factors, market-wide factors or a combination of both. The ALM policy captures the liquidity risk appetite of the
Bank and related governance structures as defined in the Risk Appetite Statement. The ALM policy is supplemented by other
liquidity policies relating to intraday liquidity, stress testing, contingency funding plan and liquidity policies for each of the
overseas branches.
The liquidity profile of the Bank is monitored for both domestic as well as overseas operations on a static as well as on a
dynamic basis by using the gap analysis technique supplemented by monitoring of key liquidity ratios and conduct of liquidity
stress tests periodically. Periodical liquidity positions and liquidity stress results are reviewed by the Bank’s ALCO and the Risk
Management Committee of the Board.
The Bank has integrated into its asset liability management framework the liquidity risk management guidelines issued by RBI
pursuant to the Basel III framework on liquidity standards. These include the intraday liquidity management and the Liquidity
Coverage Ratio (LCR). The Bank maintains LCR in accordance with the RBI guidelines and the defined risk appetite of the
Bank. The Bank is in readiness to adhere to the regulatory guidelines on Net Stable Funding ratio (NSFR) that are likely to be
implemented from 1 October, 2020.
Operational Risk
Operational risks may emanate from inadequate and/or missing controls in internal processes, people and systems or from
external events or a combination of all the four. The Bank has in place an Operational Risk Management (ORM) Policy to
manage the operational risk in an effective, efficient and proactive manner. The policy aims at assessing and measuring the
magnitude of risks, monitoring and mitigating them through a well-defined framework and governance structure.
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Statutory Reports The RMC at the apex level is the policy making body and is supported by the Operational Risk Management Committee (ORMC),
responsible for the implementation of the Operational Risk framework of the Bank and the management of operational risks
across the Bank.
All new products and processes, as well as changes in existing products and processes are subjected to risk evaluation
by the Operational Risk team. The overall responsibility of new products is vested with the Risk Department through the
Bank’s Product Management Committee and Change Management Committee. Outsourcing arrangements are examined and
approved by the Bank’s Outsourcing Committee after due recommendations from the Operational Risk team. The Information
System Security Committee of the Bank provides directions for mitigating operational risk in the information systems. The
Bank has set up a comprehensive Operational Risk Measurement System for documenting, assessing, and periodic monitoring
of various risks and controls linked to various processes across all business lines. Over the year, the Bank has focused on
strengthening the operational and information security risk frameworks by implementing several initiatives.
The Business Continuity Planning Management Committee (BCPMC) exercises oversight on the implementation of the
approved Business Continuity Plan (BCP) framework which has been put in place to ensure continuity of service to its large
customer base. The effectiveness of the approved Business Continuity Plan (BCP) framework is tested for all identified critical
internal activities to ensure readiness to meet various contingency scenarios. The learning from the BCP exercises are used as
inputs to further refine the framework.
Risk Management Initiatives
The Bank has an independent risk management function (Risk Department) reporting to the MD & CEO which includes,
among others, teams focusing on Credit Risk, Market Risk, Liquidity Risk, Information Security and Operations Risk. The Risk
Department is headed by the Chief Risk Officer whose roles and responsibilities are approved by the Board in line with the
requirements of the RBI. The Risk Department, in addition to formulating the Risk Appetite for approval by the Board, drives
the implementation thereof through policies, processes and guidelines. The Risk Department also monitors the risk profile
at the Bank level as well as at operational levels and reports on the same to the Board and the senior management. The
Bank has invested in, and continues to invest in, people and infrastructure to support this role. In specific, the Bank has been
strengthening the information and cyber security and technology risk domains.
During fiscal 2020, the Bank has taken additional steps to strengthen the risk management function. This includes establishing
enhanced cadence around review of credit portfolios at the Board level, conducting regular reviews of the Risk Appetite
Statement, proactive risk interventions around the retail portfolio (especially unsecured portfolio) etc.
Further, as the COVID-19 pandemic emerged around the horizon, the Bank has set up a centralised emergency response
framework, focusing across multiple facets – protecting life, ensuring business continuity, protecting operations, maintaining
liquidity and protecting capital. In deploying this, the Bank proactively issued advisories to staff, tested and scaled up
continuity plans before the lockdown, tightened controls to manage operational risk, enhanced the due diligence around new
originations and began monitoring liquidity very closely. The Bank has been able to ensure operations at branches and ATM’s
have continued with minimal disruption, liquidity is satisfactory and the health of the staff is protected to the maximum extent.
Subsidiary Governance
The oversight of Subsidiaries is an essential element for the implementation of robust corporate governance across group
entities and is an integral feature of a well-managed business, capable of creating value through enhanced reputation and
investor confidence. Towards this objective, the Bank has implemented an integrated subsidiaries governance framework
through the Subsidiaries Management Committee to align governance practices at Axis Group level which is overseen by
the Board and Board level committees. The governance framework encompasses group level alignment of key functions
such as risk, compliance, audit, human resources, finance, information technology, cyber security, corporate communication,
marketing and secretarial practices to achieve group synergy and optimally leverage business opportunities. The framework is
supplemented by a set of governance policies for operationalization of the governance framework.
Compliance
Compliance risk is being considered as one of the most significant concerns in the banking sector. The compliance starts
from the top with the Board and Top Management playing an active role in driving a robust risk and compliance culture in the
Bank. The compliance department assists the Board and Top Management in managing the compliance risk. It also identifies,
evaluates and addresses the legal and reputational risks in the Bank. The department ensures that overall business of the Bank
is conducted in strict adherence to the guidelines issued by the Reserve Bank of India and other regulators, various statutory
provisions, standards and codes prescribed by BCSBI, FEDAI, FIMMDA, etc. by evaluating the products / processes, guiding
business departments on the various regulatory guidelines with a special emphasis on better understanding of the perspective
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
/ spirit of the guidelines and regulations, regular assessment of overall compliance status in the Bank. It closely works with
operational risk and internal audit functions and monitors various activities of the Bank with more emphasis on active risk
management. The non-compliances, if any, are being appropriately remediated through root cause analysis. The department
has an oversight over Bank’s subsidiaries to ensure the adherence to applicable laws and regulations. The Bank has a robust
compliance policy and group compliance policy to manage the compliance risk in the Bank and its subsidiaries. The Bank has a
robust Anti Money Laundering (AML) policy / framework and tools to manage the AML risk.
The Compliance department has been working to improve the risk and compliance culture in the Bank by organizing different
training programs in collaboration with HR Department, conducting orientation programs with a special emphasis on
compliance specific areas and issuing advisories through various communications apart from direct interactions.
Apart from being the focal point of contact with the regulators, the Compliance department periodically apprises the Bank’s
management as well as the Board of Directors / Audit Committee of the Board on the changes in regulatory environment and
status of compliance in the Bank. The Audit Committee of the Board monitors and assess the performance of the Compliance
department periodically.
The Board and Top Management aims to maintain the highest standard of compliance within the Bank and its group.
Internal Audit
The Bank’s Internal Audit function provides an independent view to its Board of Directors and Senior Management on the
quality and efficacy of the internal controls, risk management systems, governance systems and processes in place on an
on-going basis. This is provided to primarily ensure that the business and support functions are in compliance with both
internal and regulatory guidelines. In line with the RBI’s guidelines on Risk Based Internal Audit (RBIA), the Bank has adopted
a robust internal audit policy. The Risk Based Internal Audit has been designed after factoring regulatory guidelines and also
international best practices. The policy has a well-defined architecture for conducting Risk Based Internal Audit across all audit
entities. The audit policy articulates the audit strategy in terms of a concerted focus on strategic and emerging business risks.
These inputs form a key step in the identification of the audit universe for the audit planning exercise. The audit frequencies are
in sync with the risk profile of each unit to be audited. This is in alignment with guidelines relating to Risk Based Internal Audit
(RBIA). The scope of RBIA includes examining the adequacy and effectiveness of internal control systems, external compliances
and also evaluating the risk residing at the audit entities. Further to augment the internal audit function, concurrent audit,
off-site audit and thematic audit reviews have been integrated into the internal audit process in order to make the function
more robust. Keeping pace with digitalisation in the Bank, the Internal Audit function has also initiated technological initiatives
for providing enhanced efficiency and effectiveness through system driven and analytics based audits.
The Internal Audit function of the Bank, operates independently under the supervision of the Audit Committee of the Board,
thereby ensuring its independence. The Audit Committee of the Board reviews the efficacy of the internal audit function,
effectiveness of the internal controls laid down by the Bank and compliance with internal and also regulatory guidelines.
Corporate Social Responsibility (CSR)
Since its founding in December 1993 as one of India’s first new-age private sector banks, the Bank has strived to play a leading
role in helping create an open, resilient and sustainable Indian economy, one that is capable of serving the diverse needs of its
diverse population and catalysing a robust environment for innovation and entrepreneurship.
The Bank’s CSR and sustainability strategy has continued to move from strength to strength towards catalysing positive
socio-economic and environmental value creation for stakeholders including customers, employees, the communities and
natural environment through a variety of business and non-business activities ranging from sustainable finance to CSR to
operational excellence.
Guided by the CSR Committee of the Board and aligned to CSR Policy, the Bank’s CSR interventions focus broadly on poverty
alleviation, rural sustainable livelihoods, financial inclusion and literacy, skill development, education and environmental
sustainability. The Bank continues to Implement and manage CSR activities directly as well as through the Axis Bank Foundation.
Axis Bank Foundation, established in 2006 with a mission to take forward the Bank’s community initiatives, continued to cover
ground towards its ‘Mission 2 Million’ of supporting 2 million households in India by March 2025 under the overarching theme
of Sustainable Livelihoods. The Foundation continues to be active in 205 blocks in 23 States, working with 29 NGO partners,
and has impacted over 627,000 families under its Mission.
During the year, the Bank stood by the nation in its battle against COVID-19, announcing its commitment to set aside an
amount of `100 crores to support its customers, employees, vendors, government agencies and the community at large. In
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Statutory Reports addition to adopting several customer-friendly measures aimed at offering seamless and convenient banking, the Bank also
scaled up its support to government agencies such as Municipal Corporations and Police Departments towards battling the
virus and to vulnerable communities towards helping them meet their most basic requirements. Employees from across the
Axis Group have committed to support the nation in its hour of need by donating a day’s salary towards the PM CARES Fund.
Axis Dil Se, the Bank’s unique, grassroots intervention in the union territory of Ladakh, completed its third and final phase
in over 100 government schools it covers. In the third phase, over 100 schools were provided classroom furniture and the
integration of ‘Anganwadi’ or Integrated Child Development Services (ICDS) centres were initiated, along with training for
Sarpanchs and Anganwadi workers. In addition, towards enhancing the student learning outcomes from Digilabs, which were
installed in the second phase, Block level training for headmasters and Digilabs administrators was completed.
The Bank continued to work towards scaling up financial inclusion and literacy across the country during fiscal 2020, focusing
on the Bottom of the Pyramid in rural and urban India and the SME sector. Axis Sahaayata, an initiative to directly deliver relief
measures at disaster-affected regions, was active on the ground in Odisha after Cyclone Fani, providing relief material and
other support to 17,544 beneficiaries in 3 districts. Axis Sahaayta was also active on the ground in Assam, Bihar, Karnataka
and Kerala which were impacted by severe floods, collectively supporting over 17,850 beneficiaries.
As a financial institution in India, the Bank remains aligned to the global sustainable development agenda, underlined by the
2015 Paris Agreement on Climate change and the 2015 adoption of the Sustainable Development Goals. The Bank continues
to maintain a robust sustainability-aligned portfolio, lending to sectors including renewable energy generation, mass rapid
transport and low-carbon infrastructure, while also helping marquee clients raise green funds from both within India and
Global Capital markets through Debt Capital Markets business. As a financial institution, the Bank recognizes the emerging
climate-linked risks to existing and future portfolios, and had institutionalized the Sustainable Lending Policy and Procedures
(SLPP) to better manage the environmental and social risks in lending assessments and decisions.
The Bank also released its fifth standalone sustainability report during fiscal 2020, and the second to be in alignment with the
Integrated Reporting framework of the International Integrated Reporting Council (IIRC) as well as the GRI Standards framework
of the Global Reporting Initiative (GRI). The externally assured report continues to play a central role in communicating the
Bank’s value creation across its organizational spectrum to stakeholders.
The Bank remains cognizant of the significant opportunities towards rationalizing its organizational environmental footprint.
At the Bank, diverse initiatives have been undertaken across departments, products, processes and systems that strive to
make Bank more agile and responsive to the needs of stakeholders. During the year, the Bank continued its focus on reducing
dependence on grid electricity consumption at various physical locations by consciously enhancing the adoption of renewable
energy. In addition to rooftop and ground-mounted solar installations, which stood cumulatively at 7.05 MW of installations
at 248 locations, Bank is now entering into power purchase agreements with renewable energy producers for large offices.
During the year, the Bank expanded the Centralised Energy Management System (CEMS), a cloud-based energy management
initiative, from 893 branches to 1,493 branches and has undertaken the replacement of CFL lighting to LED lighting at 1,100
branches, by 31 March, 2020.
Details on the Bank’s CSR governance, interventions and impact for the reporting year have been provided in the Annual
Report on CSR Activities as a part of this Annual Report. Additional information is also available on the Bank’s corporate
website at https://www.axisbank.com/csr and on the Foundation’s website at http://www.axisbankfoundation.org/.
It is a matter of significant pride for the Bank to have been included in the prestigious FTSE4Good Emerging Index for the
third consecutive year in 2019. The Index, created by FTSE Russell, measures and benchmarks the performance of companies
globally demonstrating strong Environment, Social and Governance (ESG) practices.
Human Resources
At Axis Bank, its employees remain the most critical drivers for growth and success.
The Bank considers its human resource function as the catalyst which builds talent readiness and strengthens the core
values of the Bank to ensure sustained business outperformance, while simultaneously building a strong value proposition
for its employees.
The Bank’s people philosophy is guided by the business strategy which pivots around the delivery of three important vectors
- Growth, Profitability, and Sustainability as well the Bank’s aspiration to become the preferred banker for all as One Axis. Key
focus areas of the human resource function of the Bank are:
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Reinforcing core values: The Axis Value Program, a two-year realization journey of the Bank’s five core values namely
Customer Centricity, Ethics, Transparency, Team Work and Ownership is a reflection of the Bank policies and serve as a guide
for Bank’s decision making. The co-creators and champions of the program, Bank’s employees were the Axis Value Realizers
(AVR) who simplified, exemplified and institutionalized its core values as winning behaviours. Over 950 AVRs championed the
engagement encouraging employees to narrate winning stories of self, of a colleague or a team that has an exemplary impact
noteworthy of recognition through Axis Champions Award, celebration of values.
Engage, Develop and Nurture
Aligned to the business strategy of building in-depth customer engagement, the Bank scaled up its talent acquisition mechanism
to onboard talent catering to additional footprint of new branches.
The Bank nurtures talent from the beginning by hiring young talent from select institutes of the country, in the field of
Management, Engineering, Design and Chartered Accountancy. This enables the Bank to build a pipeline of young leaders.
Through cadre programs like AHEAD, ABLe, and We Lead (leadership program for women), the Bank hires 150+ management
graduates and develops them to take up leadership roles in the Bank. We have also bolstered our hiring from the top engineering
institutes to strengthen our Digital and Analytics capabilities. The Axis Bank Young Bankers and Axis Sales Academy programs
support a sustainable pool of entry level talent for the core businesses. The senior leaders in the Bank also engage with
students to give them insights into the BFSI sector and establish the Bank as a thought leader and employer of choice to
build talent capabilities in Digital, Engineering, Credit Analytics and Information Technology. Over the last 10 years Axis Bank
has nurtured more than 24,000 young minds across the country. We continue to use data analytics and technology to make
sharper and smarter hiring decisions.
The Bank’s internal job portal ‘Catalyst’ empowers employees to manage their own career and provides opportunities of
progression to Axis Bankers. In fiscal 2020, 630 employees moved internally to different roles to take up cross functional
opportunities in the Bank. The Bank’s promotion process allows for the best performers to be recognized, regardless of their
age, gender, background and tenure.
Promote Diversity & Inclusion
The Bank encourages the culture to be inclusive, promoting gender balance and respecting the contribution of all employees
regardless of gender, age, race, disability or sexual orientation. As of 31 March 2020, Bank’s total workforce was 74,140, out of
which 23% are women employees. Women employees are spread across all levels of hierarchy, as well as geography. We have
27% women who represent the Bank’s non-sales workforce, and intend to bolster these numbers further. With an objective of
increasing diversity at the mid-senior level, the Bank recruited 20 women through We Lead, our leadership program for women,
from premier management institutes of the country. Our new health care program also extended coverage for Partners and
LGBT community.
Build Future Ready work force
The continuous success of any organisation is determined on how well it manages and motivates its people, as well as how
it grooms talent and the leadership team. The Bank continues with its integrated performance and capability management
philosophy. ACElerate is an objective performance management system linked to the performance of the businesses, which
identifies and differentiates employees by performance level and concludes with a 2-day functional training program custom
built basis the emerging learning themes. 13,000 employees as a part of the ACElerate learning programs were provided with
differentiated learning experience in building & strengthening capabilities in Credit Risk, Process Excellence & Operations. The
Bank institutionalizes a strong risk and compliance culture ensuring that adherence to the same is not the sole responsibility of
specific employees, but should be part of the entire organization’s culture.
Another area of focus is on personalised training and capability building to develop the right leaders and teams who are fit for
the future. The Bank has a focused approach with the objective of addressing all capability gaps and preparing its employees to
adapt to the fast changing external environment in order to meet its strategic objectives. A considerable number of employees
were certified on the Axis Competency Profiler, the Bank’s online certification platform, which assesses employees on their
functional competence and creates a pool of functionally skilled employees. Learning academies in partnership with subject
matter experts across Risk, Credit, Trade and Forex and Analytics further helped to solidify internal capabilities. The Bank has
embarked on curating role-based Digital learning journeys and foster a “Driven to learn” culture. Strategic partnerships with
virtual academia provides top talent access to comprehensive library of courses, available on-demand.
Health and Safety
In February 2020 even before the lockdown was implemented to combat the spread of COVID-19, the Bank had activated the
Central Emergency Response Team (CERT) and Business Continuity Plan was implemented. The Bank laid down the Work from
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Statutory Reports Home (WFH) framework and guidelines cohesively with IT, HR and the Risk teams. Bank’s IT & Operations teams worked round
the clock to ensure that systems and processes run seamlessly. As a pioneering initiative, Bank launched a unified enterprise
mobility & collaboration solution to enable business continuity through our personal devices from anywhere, at any time.
Consequent to the lockdown notification, Bank has mandated WFH for all non-branch employees. Branches have been operating
for lesser hours with appropriate staffing, whilst relationship managers and sales staff have stayed virtually connected with
customers through digital channels. Bank remained in continuous touch with employees conducting Interactive Webcasts,
advisories, emails and Axis Value Realisation programme.
At Axis, health and safety of employees, customers as well as larger society is at the forefront. Bank launched ‘With You
Initiative’, a psychological counselling and physical wellbeing support for employees and their families. In March, Bank advanced
the payroll cycle to ensure employees are financially self–reliant during these testing times.
Subsidiary Performance
The Bank’s subsidiaries remain central to the principle of “One Axis” and have an important role to play in the Bank’s strategy
formulated around the three vectors - growth, profitability and sustainability. In a short span of time, the Bank has established
subsidiaries covering a significant gamut of the financial services space, with some of them being leaders in their segments.
Axis Capital remains in leadership position in the ECM segment. Axis Mutual Fund maintained its position as the fastest
growing AMC amongst the Top 10 players and is now the eighth largest player with over 5% share in the industry AUM, Axis
Finance has grown its loan book at a 30% CAGR in last 5 years while delivering healthy returns. Axis is the only Bank to have
two fintech properties- A.Treds in B2B and Freecharge in B2C space.
The Bank continues to focus on further scaling up the subsidiaries so that they attain meaningful size and market share in their
respective businesses. During the year, the Bank has made significant senior talent infusions across its subsidiaries in Axis
AMC, Axis Capital, Axis Finance and Axis Securities.
During fiscal 2020, the Bank’s subsidiaries reported total income of `2,385 crores and earnings of `418 crores up 6% year on year.
Axis Capital, the Bank’s investment banking and institutional equities franchise has been the leader in equity and equity linked
deals over the last decade and had another great year with highest number of transactions (17 transactions across IPO, QIP
and Rights). Axis Capital contributed 24% to the total earnings of the subsidiaries.
Axis AMC and Axis Securities continued to contribute towards the Bank’s Retail Franchise building strategy and strengthen
the bond with its customers.
Axis AMC, that had 6 million client folios as at end of 31 March, 2020, reported strong growth in net profits by 121%.
The company manages 55 mutual fund schemes with a closing AUM of `115,936 crores as compared to closing AUM of
`87,746 crores as on 31 March, 2019. The company has improved its market share to 5% as on 31 March, 2020 and is ranked
8th amongst the mutual fund Industry in India.
During the year, Axis Securities business underwent restructuring with focus on brokerage business. The retail brokerage
firm reported 8% growth in cumulative client base to 2.27 million. The subsidiary achieved a trading volume of `3,181,051
crores thereby registering a growth of 57% in fiscal 2020. During the same period, 1.77 lacs broking accounts were opened as
compared to 2.57 lacs in the previous period.
Axis Finance Limited, the Bank’s NBFC has been diversifying its loan book mix and has made significant investments to grow
its retail team with the objective of becoming a consumer focused lending company. As a result of higher investments, Axis
Finance’s net profit decreased by 15% YoY, but contributed 46% to total earnings of the subsidiaries.
Freecharge, one of the India’s leading digital payment companies has a current user base of 79 million, GMV of `2,180 crores
and 84.50 million transactions. With Digital Payments as a hook, the Bank continues to leverage the platform for digital
distribution of retail products by targeting digitally native mobile first customers.
A.TReDs Limited, the Bank’s subsidiary that was set up in partnership with m-Junction, was one of the three entities allowed by
RBI to set up the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating cash flows for MSMEs.
The Bank’s digital invoice discounting platform ‘Invoicemart’ for MSMEs continues to do exceptionally well with market share
of over 43% among all TReDS platforms. It currently has over 5,100 participants on the platform and has clocked `7,491 crores
in financed throughput by e-discounting nearly 4.9 lakh invoices since start of its operation from July 2017.
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Annual Report 2019-20Experience Open Management’s Discussion and Analysis
Safe Harbor
Except for the historical information contained herein, statements in this Annual Report which contain words or phrases
such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”,
“plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “strategy”, “philosophy”, “project”, “should”, “will pursue” and
similar expressions or variations of such expressions may constitute “forward-looking statements”. These forward-looking
statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from
those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability
to successfully implement our strategy, future levels of non-performing loans, our growth and expansion, the adequacy of
our allowance for credit losses, our provisioning policies, technological changes, investment income, cash flow projections,
our exposure to market risks as well as other risks. Axis Bank Limited undertakes no obligation to update forward-looking
statements to reflect events or circumstances after the date thereof.
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Statutory Reports Independent Auditor’s Certificate on Compliance with the Corporate Governance requirements under SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015
To The Members of Axis Bank Limited
1. This Certificate is issued in accordance with the terms of our engagement letter dated July 29, 2019.
2. We have examined the compliance of conditions of Corporate Governance by Axis Bank Limited (‘the Bank’), for the year
ended on March 31, 2020, as stipulated in Regulations 17 to 27 and clauses (b) to (i) of regulation 46 (2) and paragraphs
C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing
Regulations”).
Management’s Responsibility
3. The Management is responsible for ensuring that the Bank complies with the conditions of Corporate Governance. This
responsibility also includes the design, implementation and maintenance of internal controls and procedures to ensure
compliance with the conditions of the Corporate Governance stipulated in the Listing Regulations.
Auditor’s Responsibility
4. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Bank for ensuring
the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the
financial statements of the Bank.
5. We have examined the books of account and other relevant records and documents maintained by the Bank for the
purpose of providing reasonable assurance on the compliance with Corporate Governance requirements by the Bank.
6. We conducted our examination in accordance with the Guidance Note on Certification of Corporate Governance issued
by the Institute of the Chartered Accountants of India (“ICAI”), the Standards on Auditing specified under Section 143(10)
of the Companies Act, 2013, in so far as applicable for the purpose of this Certificate and as per the Guidance Note on
Reports or Certificate for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements
of the Code of Ethics issued by the ICAI.
7. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control
for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services
Engagements issued by ICAI.
Opinion
8. Based on our examination, as above, and to the best of the information and explanations given to us and representations
provided by the Management, we certify that the Bank has complied with the conditions of Corporate Governance as
stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46 (2) and paragraphs C, D and E of Schedule V of the
Listing Regulations during the year ended March 31, 2020.
9. We further state that such compliance is neither an assurance as to the future viability of the Bank nor the efficiency or
effectiveness with which the management has conducted the affairs of the Bank.
Restriction on Use
10. The Certificate is addressed and provided to the members of the Bank solely for the purpose to enable the Bank to
comply with the requirement of the Listing Regulations, and it should not be used by any other person or for any other
purpose. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other
person to whom this Certificate is shown or into whose hands it may come without our prior consent in writing. We have
no responsibility to update this Certificate for any event or circumstances occurring after the date of this Certificate.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Purushottam Nyati
Partner
Membership No.118970
UDIN: 20118970AAAABQ4651
Place: Mumbai
Date: April 29, 2020
91
Annual Report 2019-20Experience Open Corporate Governance
Corporate Governance
(Part of the Directors’ Report for the year ended 31st March 2020)
(1) Philosophy on Code of Governance
Your Bank’s policy on Corporate Governance has been:
I.
To enhance the long-term interest of its shareholders, provide good management, adopt prudent risk management
techniques and comply with the required standards of capital adequacy, thereby safeguarding the interest of its
stakeholders such as shareholders, depositors, creditors, customers, suppliers and employees.
II. To institutionalize accountability, transparency and equality of treatment for all its stakeholders, as central tenets
of good corporate governance and to articulate this approach in its day-to-day functioning and in dealing with all
its stakeholders.
(2) Board of Directors
I.
Size and Composition of the Board
The composition of the Board of Directors of the Bank (the Board) is governed under the relevant provisions of the
Companies Act, 2013 read with the relevant rules made thereunder, the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), the Banking Regulation
Act, 1949, the guidelines issued by the Reserve Bank of India (RBI) and the Articles of Association of the Bank.
The Board has an optimum combination of Executive and Non-Executive Directors with Independent Directors
constituting more than one-third of its total strength. The Board has 11 Directors, comprising of 5 Independent
Directors, 1 Managing Director & CEO, 3 Executive Directors and 2 Nominee Directors.
The Board is led by Non-Executive (Part-Time) Chairman, who is an Independent Director. The Board comprises
of nominees of the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), Promoter of the
Bank and BC Asia Investments VII Limited, Integral Investments South Asia IV and BC Asia Investments III Limited
(being entities affiliated to BAIN Capital, a Global Private Equity firm). In terms of Article 90(1)(c) of the Articles of
Association of the Bank, Life Insurance Corporation of India, Promoter of the Bank, has a right to nominate one
Director on the Board of the Bank. The Board also has 1 Woman Director who is an Independent Director.
None of the Directors or their relatives are related
to each other. The Board has confirmed and taken
on record the declaration of Independence, which
has been submitted by all the Independent Directors
of the Bank, and after having undertaken a due
assessment of the veracity of the same, the Board
has formed an opinion that all the Independent
Directors fulfill the criteria/ conditions relating
to independence, as specified in the Companies
Act, 2013 and the Listing Regulations, relating
to Corporate Governance and that they are
independent of the Management.
terms of
the Companies
(Creation and
In
Maintenance of databank of
Independent
Directors) Rules, 2019 read with the Companies
(Appointment and Qualification of Directors) Fifth
Amendment Rules, 2019, all the Independent
Directors of the Bank have enrolled their names
in the online databank of Independent Directors
maintained by the Government. All the Independent
Directors of the Bank have undertaken to comply
with the requirements relating to passing of online
proficiency self-assessment test, as applicable
to them, within the timelines prescribed
in
the said Rules.
Composition
(%)
Independent Directors
Non Executive - Non-
Independent Directors
Executive Directors
46
18
36
Geographical representation
(%)
India
Overseas
73
27
92
Statutory Reports
II. Board Diversity
The Bank recognizes and embraces the importance of a diverse Board and is endowed with appropriate balance of
skills, expertise, experience and diversity of perspectives thereby ensuring effective board governance. The Board
has reviewed and adopted the Policy on Board Diversity, which sets out its approach to ensure diversity as aforesaid,
so as to enhance the Board’s effectiveness while discharging its fiduciary obligations towards the stakeholders of the
Bank. The Bank considers diversity in skills, regional and industry experience, expertise and educational background
whilst determining the composition of its Board.
the Banking Regulation Act, 1949
Section 10A(2) of
read with RBI notification no.DBR.Appt.
BC.No.38/29.39.001/2016-17 dated 24th November 2016, requires that not less than 51% of the total number
of members of the Board of Directors of a banking company should comprise of persons who shall have special
knowledge or practical experience, in respect of one or more of the matters stated hereunder, out of which not
less than two shall be persons having special knowledge or practical experience, in respect of agriculture and rural
economy, co-operation or small scale industry:
• Accountancy
• Agriculture and Rural Economy
• Banking
• Co-operation
•
•
• Human Resources
• Core Industries
Information Technology
Infrastructure Sector
• Economics
• Finance
• Small-Scale Industry
• Law
• Payment & Settlement Systems
• Risk Management
• Business Management
The Bank is in compliance with the aforesaid requirements as prescribed under Section 10A (2) of the Banking
Regulation Act, 1949. Further, the Bank periodically reviews and identifies the skills/ expertise/ competencies, which
are required to be possessed by its members, in the context of the needs of its businesses, for it to function effectively.
The Board has diverse combination of special knowledge, expertise and practical experience as relevant for the
banking business. The details of skills/ expertise/ competencies of the Directors of the Bank, as provided by them,
are detailed as under:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Name of the Director
Special Knowledge / Practical Experience
Shri Rakesh Makhija
Shri Amitabh Chaudhry
Shri Rohit Bhagat
Shri S. Vishvanathan
Smt. Ketaki Bhagwati
Shri B. Baburao
Shri Stephen Pagliuca
Shri Girish Paranjpe
Shri Rajiv Anand
Shri Rajesh Dahiya
Shri Pralay Mondal
Industry & Technology | Business Management
Finance | Banking | Insurance | Business Management | Information Technology
Finance | Risk Management
Banking | Small Scale Industry | Agriculture and Rural Economy | Risk Management | Treasury |
Capital Markets
Finance | Risk Management | Business Management
Finance | Industry & Technology | Investments | Capital Markets | Operations | Business
Management
Finance | Technology | Media | Telecommunications | Financial Services Business
Accountancy | Finance and Business Management | Information Technology
Finance | Business Management
Human Resources | Business Management | Agricultural Input Distribution & Sales | Manufacturing
Agriculture & Rural Economy | Banking | Risk Management
The brief profile of the Directors of the Bank have been uploaded on the website of the Bank https://www.
axisbank.com/about-us.
(3) Governance Structure of the Bank
The Bank has a governance structure to enhance shareholders’ value and protect the interests of its stakeholders with a
sharp focus on improving the corporate performance, through transparency, meritocracy and accountability.
The Board of Directors is the primary direct stakeholder influencing standards of corporate governance at the Bank. The
Directors of the Bank are appointed by the Shareholders and they represent the interest of the Shareholders of the Bank.
The Managing Director & CEO reports to the Board of the Bank and is entrusted with substantial powers to manage the
affairs of the Bank. The Board has constituted various Committees and routinely delegates specific matters for a more
93
Annual Report 2019-20Experience Open
Corporate Governance
focused review. The Bank has constituted/ empowered Executive Committees to inter alia deal with routine, operational,
administrative matters and to review various matters before its submission to the Board/ Committees. The Bank has
appointed officials at senior levels who are independent of the management and to provide an independent view to the
concerned Board/ Committees. This enhances the overall governance standards and helps strengthen the compliances
within the Bank.
The diagrammatic representation of the Governance structure of the Bank, is as under:
Board of Directors
MD & CEO
Board
Committees
Management
Committee
Whole-Time
Directors
(WTDs)
Audit Committee
of Board
Risk Management
Committee
Group Executives
Committee of
Directors
IT Strategy
Committee
Special Committee
for Monitoring Large
Value Frauds
Nomination &
Remuneration
Committee
Stakeholders
Relationship
Committee
Customer Service
Committee
Corporate Social
Responsibility
Committee
Review
Committee
Committee of
WTDs
Acquisitions,
Divestments, &
Mergers Committee
Executive
Committees
94
Statutory Reports
I. Duties and Responsibilities of the Board
The role of the Board is to provide effective guidance and oversight to the Management of the Bank so that it
delivers enduring sustainable value, is fully compliant with extant laws, regulations and functions in an ethical and
efficient manner.
The responsibilities of the Board include inter alia overseeing the functioning of the Bank, monitoring legal and
statutory compliance, reviewing the efficacy of internal control systems and processes, and management of risk
associated with the business of the Bank. The Board is also responsible for approving the strategic directions, plans
and priorities for the Bank, monitoring corporate performance against strategic business plans, reviewing and
approving the Bank’s financial and operating results on a periodic basis, overseeing the Bank’s Corporate Governance
framework and supervising the succession planning process for its Directors and Senior Management.
Accordingly, the Board deliberates on matters such as business strategy, risk, financial results, succession planning,
compliance, customer service, information technology and human resources as covered under the seven critical
themes prescribed by the RBI and matters as prescribed under the relevant provisions of the Companies Act, 2013,
the relevant Rules made thereunder, the Listing Regulations relating to Corporate Governance and Circulars/
Guidelines issued by the RBI, in this regard from time to time.
The Board spends considerable time perusing the information provided to them, which facilitates informed decision
making and effective participation at its meetings, leading to higher board effectiveness. Apart from quarterly review
of the performance of the Bank, the Board meets once a year specifically to review the long-term strategy of the
Bank. The Board oversees the actions and results of the Management to ensure that the long-term objectives of
enhancing shareholders value are met. The Board also has the discretion to engage the services of external experts/
advisors, as deemed appropriate.
The duties and responsibilities of the Board have been set out in its Charter formulated and adopted by the Bank,
in terms of the relevant provisions of the Companies Act, 2013, the relevant Rules made there under, the Listing
Regulations, the Banking Regulation Act, 1949, the Circulars/ Guidelines issued by the RBI, in this regard, from
time to time and the Articles of Association of the Bank. During the year, the Board has reviewed its Charter and
approved the relevant amendments to the same.
Role of Independent Directors
Shri Rakesh Makhija, Shri Rohit Bhagat, Shri S. Vishvanathan, Smt. Ketaki Bhagwati and Shri Girish Paranjpe are
the Independent Directors of the Bank. The role of an Independent Director is to help in bringing an independent
judgment to bear on the Board’s deliberations especially on the issues pertaining to strategy, performance, risk
management, resources, key appointments and standards of conduct. They bring an objective view in the evaluation
of the performance of board and management, scrutinising the performance of management in meeting agreed goals
and objectives and monitoring the outcome of performance. Independent Directors are responsible for safeguarding
the interests of all the stakeholders, particularly the minority shareholders and to balance the conflicting interest
amongst the stakeholders.
Role of Managing Director and CEO
Shri Amitabh Chaudhry is the Managing Director & CEO of the Bank. He reports to the Board of the Bank and is
vested with substantial powers for managing the affairs of the Bank, subject to the overall superintendence, control,
guidance and direction of the Board. He has the authority to enter into contracts for and on behalf of the Bank in the
ordinary course of its business and to perform all such acts, deeds, matters and things, which in the ordinary course
of its business, as the Managing Director & CEO of the Bank, he may consider necessary or appropriate to perform,
in the business interest of the Bank. He is also a Key Managerial Personnel of the Bank, pursuant to the provisions of
Section 203(1) read with Section 2(51) of the Companies Act, 2013 and Rule 8 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
Role of Whole-Time Directors
Shri Rajiv Anand, Executive Director (Wholesale Banking), Shri Rajesh Dahiya, Executive Director (Corporate Centre)
and Shri Pralay Mondal, Executive Director (Retail Banking) are the Whole-Time Directors and Key Managerial
Personnel of the Bank. They report directly to the Managing Director & CEO of the Bank. They are responsible for
specific functions as assigned to them by the Managing Director & CEO or by the Board, from time to time.
95
Annual Report 2019-20Experience Open
Corporate Governance
II. Meetings of the Board/Committees
Schedule of the meetings
The schedule of the meetings of the Board / Committees to be held during the next Financial Year and for the
ensuing Annual General Meeting, is circulated in advance to the Board.
Agenda for the meetings
The RBI vide its Circular no.DBRNo.BC.93/29.67.001/2014-15 dated 14th May 2015 has prescribed ‘Seven Critical
Themes’ to be reviewed by the Board namely business strategy, financial reports and their integrity, risk, compliance,
customer protection, financial inclusion and human resources. The agenda for Board meetings includes matters
forming part of the said critical themes, as stipulated by the RBI.
The agenda for the meetings of the Board/ Committees is prepared based on inputs received from the concerned
departments of the Bank and finalized in consultation with the Chairman of the Board / Committees. The agenda
notes for the meetings of the Board / Committees are sent to the Members of the Board / Committees in advance to
enable them to read and comprehend the matters to be dealt with and seek further information/clarification. All the
agenda notes of the Board / Committees are circulated to the Members of the Board / Committees through a secured
web-based portal to facilitate easy access of agenda on iPad/the computer. The agenda notes and presentations
are prepared and presented in a manner, which enables the Board/ Committees to take an informed decision. The
Members of the Board/ Committees are free to recommend inclusion of any item in the agenda for discussion.
Framework for Monitoring and Implementation of the Directions of the Board
The Board has approved a “Framework for Monitoring and Implementation of the Directions of the Board”. In terms
of this Framework, any actionable arising from the deliberations at the meetings is recorded in the minutes and forms
part of the Action Taken Report, to be reviewed at the subsequent meetings of the Board/Committees. The status
of implementation of all actionables relating to Board/ Committees, is reviewed by the Board, on a quarterly basis.
Minutes of the meetings
The Minutes of the meetings of the Board / Committee are circulated to the Chairman for his review and approval
and thereafter circulated to other Members of the Board/Committee for their comments, in accordance with the
Secretarial Standards on meetings of the Board of Directors (SS-1) issued by the Institute of Company Secretaries
of India (ICSI).
In case of business exigencies or urgency of matters, resolutions are also passed by the Board/Committees through
circulation. Videoconferencing facility is used extensively to facilitate participation of Directors, who are unable to
attend the meetings, in person.
In all, 10 meetings of the Board were held during the Financial Year 2019-20, i.e. on 25th April 2019, 22nd May 2019,
25th June 2019, 20th July 2019, 30th July 2019, 21st October 2019, 22nd January 2020, 27th February 2020, 13th March
2020 and 18th March 2020. The gap between two Board Meetings did not exceed the prescribed limit of 120 days.
The requisite quorum was present throughout the meetings of the Board held during the Financial Year 2019-20.
Out of the 10 Board Meetings held during the year, 9 meetings of the Board held on 25th April 2019, 22nd May
2019, 25th June 2019, 20th July 2019, 30th July 2019, 21st October 2019, 27th February 2020, 13th March 2020 and
18th March 2020 were conducted through video conference.
The Board has accepted and implemented all the recommendations, including mandatory recommendations, made
by the Committees at its meetings held during the Financial Year 2019-20.
The name, age, category of Directors, details of the Board Meetings attended by them during the Financial Year
2019-20 along with sitting fees paid to them for attending the said meetings, and their attendance at the 25th Annual
General Meeting of the Bank (AGM), are given below:
96
Statutory Reports
Sr.
No.
Name of the Director
DIN
Age
Category
Board Meetings
attended during
the year
Sitting fees
(in `)
Attendance at
last AGM (20th
July 2019)
1.
Shri Rakesh Makhija
00117692
68
2.
Dr. Sanjiv Misra1
03075797
72
Independent Director &
Non-Executive (Part-Time)
Chairman
Independent Director &
Non-Executive (Part-Time)
Chairman
10/10
10,00,000
3/3
3,00,000
Managing Director & CEO 10/10
-
4,00,000
5,00,000
9,00,000
3,00,000
10,00,000
10,00,000
10,00,000
3.
4.
5.
6.
7.
8.
9.
Shri Amitabh Chaudhry
00531120
Prof. Samir K. Barua2
00211077
55
68
Shri Som Mittal3@
00074842
68
Shri Rohit Bhagat@
02968574
56
Smt. Usha Sangwan4@
02609263
61
Shri S. Vishvanathan5
02255828
65
Smt. Ketaki Bhagwati
07367868
56
10.
Shri B. Baburao
00425793
61
11.
Shri Stephen Pagliuca@
07995547
65
12.
Shri Girish Paranjpe
02172725
62
13.
Shri Rajiv Anand6@
02541753
54
4/4
5/6
9/10
3/6
10/10
10/10
10/10
Independent Non-
Executive
Independent Non-
Executive
Independent Non-
Executive
Nominee Director – Life
Insurance Corporation of
India (LIC) [Equity Investor]
– Promoter
Independent Non-
Executive
Independent Non-
Executive
Nominee Director –
Administrator of the
Specified Undertaking
of the Unit Trust of India
(SUUTI) [Equity Investor] –
Promoter
Nominee Director –
Entities affiliated to BAIN
Capital [Equity Investor]
Independent Non-
Executive
Executive Director
(Wholesale Banking)
14.
Shri Rajesh Dahiya7@
07508488
52
15.
Shri Pralay Mondal8
00117994
54
Executive Director
(Corporate Centre)
Executive Director
(Retail Banking)
9/10
9,00,000
10/10
9/10
9/10
5/5
10,00,000
-
-
-
Yes
NA
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
NA
@ Leave of absence was granted to the concerned Directors who had expressed their inability to attend the respective meetings.
1) Ceased to be the Non-Executive (Part-Time) Chairman and Director of the Bank, w.e.f. the close of business hours on 17th July 2019.
2) Ceased to be an Independent Director of the Bank, on expiry of his tenure, w.e.f. the close of business hours on 21st July 2019.
3) Ceased to be an Independent Director of the Bank, on expiry of his tenure, w.e.f. the close of business hours on 21st October 2019.
4) Ceased to be a Nominee Director of the Bank, w.e.f. 12th December 2019.
5) Re-appointed as Independent Director of the Bank, for a period of 3 years, w.e.f. 11th February 2020.
6) Re-appointed as Executive Director (Wholesale Banking) of the Bank, for a period of 3 years w.e.f. 4th August 2019.
7) Re-appointed as Executive Director (Corporate Centre) of the Bank, for a period of 3 years w.e.f. 4th August 2019.
8) Appointed as Executive Director (Retail Banking) of the Bank, for a period of 3 years, w.e.f. 1st August 2019.
97
Annual Report 2019-20Experience Open
Corporate Governance
The details of other Directorships and Memberships / Chairmanships in Board Committees of other Companies and
the category thereof held by the Directors, as on 31st March 2020, are given below:
Designation/Category
Name of the Director
Directorship in other listed
companies, in India
Name of the Companies
& Designation
Number of other Directorships in
unlisted companies
of Indian Public
Limited Companies
of other
companies(i)
Number of
Memberships
in Board
Committees(ii)
Non-Executive (Part-Time) Chairman & Independent Director
Shri Rakesh Makhija
Castrol India Limited
(Independent Director)
NIL
Nominee Director – SUUTI
Shri B. Baburao
Nominee Director – Entities affiliated to BAIN Capital
Shri Stephen Pagliuca
Independent Directors
Shri Rohit Bhagat
Shri S. Vishvanathan
NIL
NIL
Orient Paper & Industries Limited
(Independent Director)
Bayer Crop Science Limited
(Independent Director)
CRISIL Limited
(Independent Director)
Smt. Ketaki Bhagwati
Shri Girish Paranjpe
NIL
Managing Director & CEO/Whole Time Directors
Shri Amitabh Chaudhry,
Managing Director & CEO
Shri Rajiv Anand, Executive
Director - (Wholesale Banking)
Shri Rajesh Dahiya,
Executive Director –
(Corporate Centre)
Shri Pralay Mondal
Executive Director -
(Retail Banking)
NIL
NIL
NIL
2
2
0
0
2
1
1
3
3
2
2
0
0
5
4
0
1
3
0
2
0
0
3 (1)
1(1)
0
0
4(0)
0
2(1)
0
1
0
0
i.
Includes foreign companies, private limited companies, Section 8 Companies.
ii.
Includes only Memberships of the Audit Committee and Stakeholders Relationship Committee in public limited companies.
Figures in brackets represent number of Chairmanships of the said Committees, as per the disclosure received from the concerned
Director of the Bank.
Notes:
•
•
All the Directors of the Bank, are in compliance with the applicable provisions of the Companies Act, 2013, the
relevant Rules made thereunder, the Listing Regulations, the Banking Regulation Act, 1949 and the guidelines
issued by the RBI, relating to maximum number of Directorships and Committee memberships.
All the Directors of the Bank have submitted their annual declarations as required under the Companies Act,
2013 and the relevant Rules made thereunder, the Listing Regulations, the Banking Regulation Act, 1949 and
the guidelines issued by the RBI, in this regard, from time to time.
III. Board Committees
The business of the Board is also conducted through the various Committees constituted by the Board to deal
with specific matters as per delegated powers for different functional areas of the Bank and as mandated under
the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder, the Listing Regulations,
Banking Regulation Act, 1949, Circulars/ Guidelines issued by the RBI, in this regard, from time to time and the
Articles of Association of the Bank.
During the year, pursuant to the resignation/ retirement/ appointment of Directors of the Bank and as part of the
Succession Planning Process of the Bank, the Chairman of Board and Chairman of the Nomination and Remuneration
Committee have, reviewed and approved changes to the composition of certain Board Committees.
98
Statutory Reports
The Board has constituted 12 Committees, viz., Committee of Directors (COD), Audit Committee of Board (ACB),
Risk Management Committee (RMC), Stakeholders Relationship Committee (SRC), Nomination and Remuneration
Committee (NRC), Corporate Social Responsibility Committee (CSR), Special Committee of the Board of Directors
for Monitoring of Large Value Frauds (LVF), Customer Service Committee (CSC), IT Strategy Committee (IT), Review
Committee (RC), Acquisitions, Divestments and Mergers Committee (ADAM) and Committee of Whole-time
Directors (COWTD). During the year, Charter of the said Committees were reviewed and approved by the Board,
pursuant to amendments to applicable banking, corporate and securities laws.
Further, in order to facilitate linkages between Committees, the Bank has appointed Non-Executive Directors as
common members. The Audit Committee of the Board and the Committee of Directors have Shri S. Vishvanathan
and Shri B. Baburao as common members. The Risk Management Committee and the Nomination and Remuneration
Committee have Shri Rohit Bhagat as a common member. The Audit Committee of the Board and the Special
Committee of the Board of Directors for Monitoring of Large Value Frauds have Shri. B. Baburao and Shri Rakesh
Makhija as common members. IT Strategy Committee and Customer Service Committee have Shri Girish Paranjpe,
as a common member. The Committee of Directors and the Review Committee have Shri S. Vishvanathan and
Smt. Ketaki Bhagwati, as common members. The Risk Management Committee and the Committee of Directors have
Smt. Ketaki Bhagwati, as a common member.
The table showcasing the composition of the Committees of the Bank, is given below:
Sr.
No.
Name of the Director
Category
COD ACB RMC SRC NRC LVF CSC IT
CSR
RC ADAM COWTD
1.
Shri Rakesh Makhija
Shri Amitabh
Chaudhry
Shri Rohit Bhagat
Shri S. Vishvanathan
Smt. Ketaki Bhagwati
Shri B. Baburao
Independent Non-
Executive (Part-Time)
Chairman
Managing Director &
CEO
Independent Non-
Executive
Independent Non-
Executive
Independent Non-
Executive
Nominee Director –
Administrator of the
Specified Undertaking
of Unit Trust of India
(SUUTI)
Shri Rajiv Anand
Shri Girish Paranjpe
Shri Stephen Pagliuca Nominee Director –
Entities affiliated to
BAIN Capital
Independent Non-
Executive
Executive Director
(Wholesale Banking)
Executive Director
(Corporate Centre)
Executive Director
(Retail Banking)
Shri Pralay Mondal
Shri Rajesh Dahiya
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Member
Chairman
In view of the increase in the duties, roles and responsibilities of the Non-Executive Directors and also in view of the
increase in the time commitment required, the Board at its meeting held on 22nd January 2020 approved a revision in
the sitting fees payable to the Non-Executive Directors of the Bank in respect of the following key Committees viz.
Nomination and Remuneration Committee, Audit Committee, Committee of Directors, Risk Management Committee
and IT Strategy Committee of the Board, from ` 50,000/- to ` 1,00,000/- per meeting, with effect from 1st February
2020. The sitting fees with respect to other Board Committees remain unchanged at ` 50,000/- per meeting.
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Annual Report 2019-20Experience Open
Corporate Governance
The brief description of terms of reference of the said Committees, their composition and attendance of the Members
at the meetings thereof, are detailed as under:
(1) Committee of Directors
The Committee of Directors of the Board of Director of the Bank (Committee of Directors) comprises of
5 members out of which 2 are Independent Directors.
The brief description of terms of reference of the Committee of Directors, are as under:
i)
To review loans sanctioned by Senior Management Committee (SMC), provide approvals for loans as per the
limits stipulated in the Corporate Credit Policy of the Bank, as amended, from time to time, and to discuss
strategic issues in relation to credit policy and deliberate on the quality of the credit portfolio of the Bank.
ii)
To monitor the exposures (both credit and investments) of the Bank and to consider and approve one time
compromise settlement proposals, in respect of loan accounts which have been written off.
iii) To sanction revenue expenditures relating to the Bank’s business/operations covering all its departments
and business segments, above certain stipulated limits.
iv) To review the cases of Technical Write-Off of NPA Accounts on a quarterly basis.
v) To review investment strategy, periodically review investments made and approve investment related
proposals above certain limits.
vi) To review and approve proposals relating to the Bank’s business/operations covering all its departments
and business segments.
In all 17 meetings of the Committee of Directors were held during the Financial Year 2019-20 i.e. on 24th
April 2019, 22nd May 2019, 25 th June 2019, 18th July 2019, 22nd July 2019, 26th August 2019, 9th September
2019, 16th September 2019, 26th September 2019, 15th October 2019, 31st October 2019, 19th November 2019,
19th December 2019, 24th January 2020, 13th February 2020, 9th March 2020 and 19th March 2020.
The meetings held on 18th July 2019, 22nd July 2019, 26th August 2019, 9th September 2019, 16th September
2019, 19th November 2019, 13th February 2020, 9th March 2020 and 19th March 2020, were conducted through
video conference.
The details of the meetings of the Committee of Directors attended by the Members during the year 2019-20,
are given below:
Name of the Members
Shri S. Vishvanathan, Chairman
Shri Amitabh Chaudhry@
Smt. Ketaki Bhagwati@
Shri B. Baburao
Shri Rajiv Anand@
Designation
Independent Director
Managing Director & CEO
Independent Director
Non-Executive (Nominee
Director-SUUTI)
Executive Director-(Wholesale Banking)
Attendance
17/17
13/17
16/17
17/17
12/17
(in `)
Sitting fees
10,00,000
-
9,50,000
10,00,000
-
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective meetings.
(2) Audit Committee of Board
The Audit Committee of the Board of Directors of the Bank (Audit Committee) comprises of 4 members, out
of which 3 are Independent Directors. The Members of the Audit Committee are financially literate and have
requisite accounting and financial management expertise.
Prof. Samir Barua ceased to be Member and Chairman of the Audit Committee, with effect from the close of
business hours on 21st July 2019. Shri Girish Paranjpe, Independent Director of the Bank was appointed as the
Chairman of the Audit Committee with effect from 22nd July 2019.
The brief description of terms of reference of the Audit Committee, are as under:
i)
To provide direction and to oversee the operation of the audit function.
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ii)
To review the internal audit system with special emphasis on its quality and effectiveness and status of
compliance with respect to Risk Assessment Report, Risk Mitigation Plan, Scrutiny Reports issued by RBI.
iii) To review the concurrent audit system of the Bank (including the appointment of concurrent auditors),
approve the appointment, re-appointment, remuneration and terms of appointment of statutory auditors
and payments to statutory auditors for any other services rendered by them.
iv) To oversee the Bank’s financial reporting process and the disclosure of its financial information to ensure
that the financial statement is correct, sufficient and credible.
v) To review, with the management, quarterly as well as the annual financial statements and auditor’s report
thereon before submission to the Board for approval with special emphasis on accounting policies and
practices, compliance with accounting standards, disclosure of related party transactions and other legal
requirements relating to financial statements.
vi) Oversee the implementation of Compliance Policy and review the compliance function on half-yearly and
annual basis ensuring that all compliance issues are resolved effectively.
vii) To review functioning of the Whistle Blower and Vigilance mechanism.
viii) To approve any subsequent modification of transactions of the Bank that shall involve related parties.
ix) To review the performance of Information Security Audit and the critical issues highlighted during the
Information Security Audit and provide appropriate guidance to the Bank’s Management.
x) To review all matters as specified by RBI in the circular on Calendar of Reviews as per RBI Circular dated
10th November 2010 and notifications thereto, SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Companies Act, 2013 and rules made thereunder.
The Chief Audit Executive (CAE), Chief Compliance Officer (CCO) and Chief Financial Officer of the Bank attend
the meetings of the Audit Committee. Shri Charanjit Singh is the CAE of the Bank. Shri Rudrapriyo Ray is the
CCO and Chief Vigilance Officer of the Bank. The Executive Directors are permanent invitees to the meetings
of the Audit Committee. The CAE of the Bank directly reports to the Audit Committee. The Company Secretary
of the Bank acts as the secretary to the Audit Committee. Prof. Samir Barua, the former Chairman of the Audit
Committee had attended the Twenty Fifth Annual General Meeting of the Shareholders of the Bank.
The Audit Committee discusses with the Statutory Auditors, the key highlights of the quarterly and annual
financial results of the Bank, before recommending the same to the Board of Directors of the Bank, for their
approval. The representatives of the Statutory Auditors have attended the meetings of the Audit Committee
held during the year for review of the quarterly / annual financial results of the Bank. The Audit Committee
also discusses with the Statutory Auditors the matters connected with the said financial results, without the
presence of any executives of the Bank.
In all 10 meetings of the Audit Committee were held during the Financial Year 2019-20 i.e. on 25th April 2019,
22nd May 2019, 26th June 2019, 30th July 2019, 17th September 2019, 22nd October 2019, 18th December 2019,
13th January 2020, 22nd January 2020 and 17th March 2020.
The meeting held on 17th March 2020, was conducted through video conference.
The details of the meetings of the Audit Committee attended by the Members during the year 2019-20,
are given below:
Name of the Members
Prof. Samir K. Barua, Chairman1
Shri Girish Paranjpe, Chairman@
Shri S. Vishvanathan@
Shri Rakesh Makhija
Shri B. Baburao
Designation
Independent Director
Independent Director
Independent Director
Independent Director
Non-Executive (Nominee Director-SUUTI)
Attendance
3/3
9/10
9/10
10/10
10/10
(in `)
Sitting fees
1,50,000
5,00,000
5,00,000
5,50,000
5,50,000
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective meetings.
1) Ceased to be a Member, w.e.f. the close of business hours on 21st July 2019.
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(3) Risk Management Committee
The Risk Management Committee of the Board of Directors of the Bank (Risk Management Committee)
comprises of 3 members out of which 2 are Independent Directors.
Prof. Samir Barua ceased to be a Member and Chairman of the Risk Management Committee, with effect from
the close of business hours on 21st July 2019. Smt. Ketaki Bhagwati, Independent Director of the Bank was
appointed as the Chairperson of the Risk Management Committee, with effect from 22nd July 2019.
Dr. Sanjiv Misra ceased to be a Member of the Risk Management Committee, with effect from the close of
business hours on 17th July 2019.
Smt. Usha Sangwan ceased to be a Member of the Risk Management Committee, with effect from
12th December 2019.
Shri Rajiv Anand ceased to be a Member of the Risk Management Committee, with effect from 20th January 2020.
The brief description of terms of reference of the Risk Management Committee, are as under:
i)
Framing and governing of the risk strategy and approving and reviewing the risk appetite of the Bank.
ii)
Ensuring that sound policies, procedures and practices are in place to manage its risks.
iii) Establishing a framework to set and monitor limits across risk categories such as credit risk, market risk,
operational risk etc. in order to ensure that the risk profile is adequately diversified.
iv) Reviewing the Risk Management Framework formulated and adopted by the Bank taking into account the
nature, size and complexity of the businesses undertaken by the Bank and recommending the same for the
approval of the Board.
v) To review the Risk Management Plan with respect to Cyber Security and monitor the implementation of
the measures recommended by the IT Strategy Committee of Directors of the Bank, to mitigate any risk
arising therefrom.
vi) Ensuring compliance with requirements/guidance on risk management issued by RBI and other regulators.
vii) To assess the internal and external risks, risks associated with systems, processes, individual platforms,
adopted by the Bank, from time to time etc.
The Chief Risk Officer (CRO) of the Bank reports directly to the Managing Director & CEO of the Bank. Shri
Amit Talgeri is the CRO of the Bank. The CRO of the Bank oversees the risk management function and is
responsible for developing and setting the risk management framework, developing and maintaining systems
and processes to identify, approve, measure, monitor, control and report risks, developing risk controls and
mitigation processes, ensuring adherence to the Risk Appetite established by the Board. The CRO of the Bank is
independent of the business lines and is actively involved in key decision making processes that impact the risk
profile of the Bank. The CRO of the Bank also meets the Risk Management Committee without the presence
of executive management of the Bank. The Bank has formulated and adopted a Policy defining the roles and
responsibilities of the CRO, in terms of the guidelines issued by the RBI. Shri Amit Talgeri is the CRO of the Bank.
In all, 4 meetings of the Risk Management Committee were held during the Financial Year 2019-20 i.e. on
25th June 2019, 1st August 2019, 21st October 2019 and 21st January 2020.
The meetings held on 25th June 2019 and 1st August 2019, were conducted through video conference.
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The details of the meetings of the Risk Management Committee attended by the Members during the year
2019-20, are given below:
Name of the Members
Prof. Samir K. Barua, Chairman1
Smt. Ketaki Bhagwati, Chairperson
Shri Amitabh Chaudhry
Dr. Sanjiv Misra2
Shri Rohit Bhagat
Smt. Usha Sangwan@3
Shri Rajiv Anand4
Designation
Independent Director
Independent Director
Managing Director & CEO
Independent Director
Independent Director
Non-Executive (Nominee Director – LIC)
Executive Director (Wholesale Banking)
Attendance
1/1
4/4
4/4
1/1
4/4
2/3
3/3
(in `)
Sitting fees
50,000
2,00,000
-
50,000
2,00,000
1,00,000
-
@ Leave of absence was granted to the concerned Member who had expressed her inability to attend the respective meeting.
1) Ceased to be a Member, w.e.f. the close of business hours on 21st July 2019.
2) Ceased to be a Member, w.e.f. the close of business hours on 17th July 2019.
3) Ceased to be a Member, w.e.f. 12th December 2019.
4) Ceased to be a member w.e.f. 20th January 2020.
(4)
Stakeholders Relationship Committee
The Stakeholders Relationship Committee of the Board of Directors of the Bank (Stakeholders Relationship
Committee) comprises of 3 members out of which 1 is an Independent Director.
Shri B. Baburao, Chairman of the Stakeholders Relationship Committee had attended the Twenty Fifth Annual
General Meeting of the Shareholders of the Bank. Shri Girish V. Koliyote, Company Secretary of the Bank, is the
Compliance Officer, in terms of Regulation 6 of the Listing Regulations.
The brief description of terms of reference of the Stakeholders Relationship Committee, are as under:
i)
Resolving the grievances, various aspects of interest of the security holders of the Bank, including
complaints related to transfer/transmission of shares and debentures, non-receipt of annual report,
non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
ii) Review the measures taken for effective exercise of voting rights by shareholders.
iii) Review adherence to the service standards adopted by the Bank in respect of various services being
rendered by the Registrar & Share Transfer Agent.
iv) Review of the various measures and initiatives taken by the Bank for reducing the quantum of unclaimed
dividends and ensuring timely receipt of dividend warrants/annual reports/ statutory notices by the
shareholders of the company.
v) To review such other matters, as the Committee may deem appropriate, from time to time.
1 meeting of the Stakeholders Relationship Committee was held during the Financial Year 2019-20 on
15th October 2019. No meeting of the said Committee was conducted through video conference.
The details of the meetings of the Stakeholders Relationship Committee attended by the Members during the
year 2019-20, are given below:
Name of the Members
Shri B. Baburao, Chairman
Shri S. Vishvanathan
Shri Rajesh Dahiya
Designation
Non-Executive (Nominee Director-SUUTI)
Independent Director
Executive Director (Corporate Centre)
Attendance
1/1
1/1
1/1
(in `)
Sitting fees
50,000
50,000
-
(5) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board of Directors of the Bank (Nomination and
Remuneration Committee) comprises of 3 members out of which 2 are Independent Directors.
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Shri Rohit Bhagat was appointed as the Chairman of the Nomination and Remuneration Committee with effect
from 25th June 2019.
Shri Som Mittal ceased to be a Member of the Nomination and Remuneration Committee, with effect from the
close of business hours on 21st October 2019.
Shri Rohit Bhagat, Chairman of the Nomination and Remuneration Committee attended the Twenty Fifth Annual
General Meeting of the Shareholders of the Bank.
The brief description of terms of reference of the Nomination and Remuneration Committee, are as under:
i)
To evaluate the succession planning process adopted by the Bank and recommend the appointment /
re-appointment of Individual & Independent Directors, Whole Time Directors and Senior Management
along with the terms of appointment including remuneration.
ii)
To set the goals, objectives and performance benchmarks for the Bank, Whole Time Directors & senior
management and review the performance as per the timelines.
iii) To review and recommend to the Board the overall remuneration framework and the compensation
decisions for the financial year.
iv) To review the organization structure of the Bank and recommend to the Board the talent management,
succession policy and process, creation of new positions one level below the MD & CEO of the Bank.
v)
Formulate the criteria and the manner for effective evaluation of performance of the Board as a whole, its
Committees and individual directors, including independent directors of the Bank, which may be carried
out either by the Committee or by the Board or with the help of an independent external agency and to
review its implementation, compliance and outcomes.
vi) Consider and approve the Stock based compensation for all the employees of the Bank including the
Managing Director & CEO, other Whole-time Directors, Senior Management and other eligible employees
of the Bank, in terms of the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations,
2015, as amended, from time to time.
In all, 6 meetings of the Nomination and Remuneration Committee were held during the Financial Year 2019-
20 i.e. on 25th April 2019, 14th May 2019, 24 th October, 2019, 21 st January 2020, 28th February 2020 and
18th March 2020.
The meetings held on 25th April 2019, 14th May 2019, 24 th October 2019, 21 st January 2020 and 18th March
2020, were conducted through video conference.
The details of the meetings of the Nomination and Remuneration Committee attended by the Members during
the year 2019-20, are given below:
Name of the Members
Shri Rohit Bhagat, Chairman
Shri Rakesh Makhija
Shri Som Mittal1
Shri Stephen Pagliuca@
Designation
Independent Director
Independent Director
Independent Director
Non-Executive (Nominee Director-Entities
affiliated to BAIN Capital)
Attendance
6/6
6/6
2/2
5/6
(in `)
Sitting fees
4,00,000
4,00,000
1,00,000
3,00,000
@ Leave of absence was granted to the concerned Member who had expressed his inability to attend the respective meeting.
1) Ceased to be a Member, w.e.f. the close of business hours on 21st October 2019.
(6)
Special Committee of the Board of Directors for Monitoring of Large Value Frauds
The Special Committee of the Board of Directors for Monitoring of Large Value Frauds of the Bank
(Special Committee for Monitoring of Large Value Frauds) comprises of 5 members out of which 1 is an
Independent Director.
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Statutory Reports
Prof. Samir Barua ceased to be a Member and Chairman of the Special Committee for Monitoring of Large Value
Frauds, with effect from the close of business hours on 21st July 2019. Shri B. Baburao, Non-Executive Director
of the Bank was appointed as the Chairman of the Special Committee for Monitoring of Large Value Frauds with
effect from 22nd July 2019.
Smt. Usha Sangwan ceased to be a Member of the Special Committee for Monitoring of Large Value Frauds,
with effect from 12th December 2019.
Shri Rajiv Anand, Executive Director (Wholesale Banking) was inducted as a Member of Special Committee for
Monitoring of Large Value Frauds, with effect from 18th December 2019.
The brief description of terms of reference of the Special Committee for Monitoring of Large Value
Frauds, are as under:
i)
The main objectives of the Committee are to oversee investigation of large value frauds involving amount
of `10 million and above in each case, actions taken by the Bank against the perpetrators of such frauds
and suggesting / reviewing corrective steps to plug systemic loopholes, if any.
ii) Monitor the progress in all the large value frauds and implementation of the suggestions made
by the Committee.
iii) The Committee also reviews the accounts identified as ‘Red-Flagged’ (RFA) with an exposure amounting to
`500 million and above from the Bank, Cyber frauds and functioning of Fraud Review Council.
iv) The Bank’s Policy relating to Management and Reporting of Frauds is approved by the Committee.
v) The functioning of the Committee are reviewed on a half yearly basis and their findings placed before the
Board, for its review and noting.
In all, 4 meetings of Special Committee for Monitoring of Large Value Frauds were held during the financial Year
2019-20 i.e. on 22nd May 2019, 17th September 2019, 19th December 2019 and 16th March 2020.
The meetings held on 22nd May 2019, 17 th September 2019 and 16th March 2020, were conducted through
video conference.
The details of the meetings of the Special Committee for Monitoring of Large Value Frauds attended by the
Members during the year 2019-20, are given below:
Name of the Members
Prof. Samir Barua, Chairman1
Shri B. Baburao, Chairman
Shri Amitabh Chaudhry
Shri Rakesh Makhija
Smt. Usha Sangwan2
Shri Rajesh Dahiya
Shri Rajiv Anand3
Designation
Independent Director
Non-Executive (Nominee Director-SUUTI)
Managing Director & CEO
Independent Director
Non-Executive (Nominee Director-LIC)
Executive Director (Corporate Centre)
Executive Director (Wholesale Banking)
Attendance
1/1
4/4
4/4
4/4
2/2
4/4
2/2
1) Ceased to be a Member, w.e.f. the close of business hours on 21st July 2019.
2) Ceased to be a Member, w.e.f. 12th December 2019.
3) Inducted as a member w.e.f. 18th December 2019.
(7) Customer Service Committee
(in `)
Sitting fees
50,000
2,00,000
-
2,00,000
1,00,000
-
-
The Customer Service Committee of the Board of Directors of the Bank (Customer Service Committee)
comprises of 4 members out of which 1 is an Independent Director.
Shri Som Mittal ceased to be a Member and Chairman of the Customer Service Committee, with effect from the
close of business hours on 21st October 2019. Shri Amitabh Chaudhry, Managing Director & CEO of the Bank
was appointed as the Chairman of the Customer Service Committee, with effect from 22nd October 2019.
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Smt. Usha Sangwan ceased to be a Member of the Customer Service Committee, with effect from
12th December 2019.
Shri Pralay Mondal, Executive Director (Retail Banking) was inducted as a Member of the Customer Service
Committee, with effect from 16th September 2019.
The brief description of terms of reference of the Customer Service Committee, are as under:
i) Oversee the functioning of various customer sub committees at the Bank.
ii) Review complaints and quality of service provided by the Bank & it’s subsidiaries to ensure a robust
grievance redressal mechanism.
iii) Approve policy documents and review effective implementation of RBI directives.
iv) To review progress on other regulatory matters.
v) Review the initiatives taken by the Bank to enhance customer experience.
In all, 4 meetings of the Customer Service Committee were held during the financial Year 2019-20 i.e. on
26th April 2019, 31st July 2019, 13th December 2019 and 12th February 2020.
The meetings held on 26th April 2019 and 31st July 2019, were conducted through video conference.
The details of the meetings of the Customer Service Committee attended by the Members during the year
2019-20, are given below:
Designation
Independent Director
Name of the Members
Shri Som Mittal, Chairman1
Shri Amitabh Chaudhry, Chairman Managing Director & CEO
Shri Girish Paranjpe
Smt. Usha Sangwan @2
Shri B. Baburao
Shri Pralay Mondal3
Independent Director
Non-Executive (Nominee Director-LIC)
Non-Executive (Nominee Director - SUUTI)
Executive Director (Retail Banking)
Attendance
2/2
4/4
4/4
1/2
4/4
2/2
(in `)
Sitting fees
1,00,000
-
2,00,000
50,000
2,00,000
-
@ Leave of absence was granted to Smt. Usha Sangwan, who had expressed her inability to attend the respective meeting.
1) Ceased to be a Member, w.e.f. the close of business hours on 21st October 2019.
2) Ceased to be a Member, w.e.f. 12th December 2019.
3) Inducted as a Member, w.e.f. 16th September 2019.
(8)
IT Strategy Committee
The IT Strategy Committee of the Board of Directors of the Bank (IT Strategy Committee) comprises of
3 members out of which 1 is an Independent Director.
Shri Som Mittal ceased to be a Member and Chairman of the IT Strategy Committee, with effect from the close
of business hours on 21st October 2019. Shri Girish Paranjpe, Independent Director of the Bank was appointed
as the Chairman of the IT Strategy Committee with effect from 22nd October 2019.
Shri Rajiv Anand, Executive Director (Wholesale Banking) ceased to be a Member of the IT Strategy Committee,
with effect from 16th September 2019.
Shri Pralay Mondal, Executive Director (Retail Banking) was inducted as a Member of the IT Strategy Committee,
with effect from 16th September 2019.
The brief description of terms of reference of the IT Strategy Committee, are as under:
i)
Approving IT Strategy and policies and ensuring that IT strategy is aligned with business strategy.
ii)
Ensure that IT architecture, investment, organisational structure, resources and performance measurement
parameters are geared to deliver business value and contribute to the Bank’s growth.
iii) Assessing and reviewing the strategy for addressing IT and cyber security risks.
iv) Exercise oversight to ensure effective functioning of the IT Operations of the Bank.
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Statutory Reports
v) Review the Business Continuity Plan (BCP)/Disaster Recovery (DR) Plan of the Bank and exercise
oversight over the efficacy of the BCP/DR process adopted by the Bank and recommend measures for
its improvement.
In all, 4 meetings of IT Strategy Committee were held during the Financial Year 2019-20 i.e. on 16th May 2019,
9th August 2019, 13th December 2019 and 12th February 2020.
The meeting held on 16th May 2019, was conducted through video conference.
The details of the meetings of the IT Strategy Committee attended by the Members during the year 2019-20,
are given below:
Name of the Members
Shri Som Mittal, Chairman1
Shri Girish Paranjpe, Chairman
Shri Amitabh Chaudhry
Shri Rajiv Anand2
Shri Pralay Mondal3
Designation
Independent Director
Independent Director
Managing Director & CEO
Executive Director (Wholesale Banking)
Executive Director (Retail Banking)
Attendance
2/2
4/4
4/4
2/2
2/2
1) Ceased to be a Member, w.e.f. the close of business hours on 21st October 2019.
2) Ceased to be a Member, w.e.f. 16th September 2019.
3) Inducted as a Member, w.e.f. 16th September 2019.
(in `)
Sitting fees
1,00,000
2,50, 000
-
-
-
(9) Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of the Board of Directors of the Bank (CSR Committee)
comprises of 3 members out of which 1 is an Independent Director.
Shri Som Mittal ceased to be a Member and Chairman of the CSR Committee, with effect from the close of
business hours on 21st October 2019.
Shri Rakesh Makhija, Independent Director of the Bank was inducted as a member of the CSR Committee, with
effect from 16th September 2019. He became Chairman of the Committee w.e.f. 22nd October 2019.
The brief description of terms of reference of the CSR Committee, are as under:
i)
Formulate and recommend to the Board, the CSR Strategy, themes, focus areas and review mechanism
including the CSR Policy of the Bank.
ii) Review and approve, the CSR projects/programs to be undertaken by the Bank either directly or through
Axis Bank Foundation (ABF) or through implementation partners as deemed suitable, during the financial
year and specify modalities for its execution and implementation schedules for the same, in terms of the
CSR Policy of the Bank.
iii) Recommend the amount of expenditure to be incurred on the CSR activities and undertaking a review,
monitoring and evaluation of the initiatives to ensure compliance against agreed targets.
iv) Review the amounts spent on the CSR projects/ programs during the financial year and the amounts
unspent as at the end of the financial year, ascertain reasons thereof and issue appropriate directions on
unspent CSR amounts, in terms of Section 135(5) of the Companies Act, 2013.
v)
Instituting a transparent monitoring mechanism to ensure implementation of the CSR projects/programs/
activities and conducting impact assessment of the various initiatives at periodic intervals.
vi) Reviewing and recommending the annual CSR report for the Board’s approval and for public disclosure.
vii) Periodically review the activities undertaken by the Bank to promote sustainable business/ non-business
practices and relevant disclosure in the Annual Sustainability Report of the Bank.
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The details of the CSR activities undertaken by the Bank during the year under review have been provided in
the annexure to the Directors’ report.
In all, 4 meetings of CSR Committee were held during the Financial Year 2019-20 i.e. on 16th May 2019,
16th September 2019, 19th December 2019 and 16th March 2020.
The meetings held on 16th May 2019 and 16th March 2020, were conducted through video conference.
The details of the CSR Committee meetings attended by the Members during the year 2019-20, are given below:
Name of the Members
Shri Rakesh Makhija, Chairman1
Shri Som Mittal2
Shri Rajesh Dahiya
Shri Rajiv Anand@
Designation
Independent Director
Independent Director
Executive Director (Corporate Centre)
Executive Director (Wholesale Banking)
Attendance
3/3
2/2
4/4
3/4
(in `)
Sitting fees
1,50,000
1,00,000
-
-
@ Leave of absence was granted to Shri Rajiv Anand who had expressed his inability to attend the respective meeting.
1) Inducted as a Member, w.e.f. 18th September 2019.
2) Ceased to be a Member, w.e.f. the close of business hours on 21st October 2019.
(10) Review Committee
The Review Committee of the Board of Directors of the Bank (Review Committee) comprises of 3 members out
of which 2 are Independent Directors.
The brief description of terms of reference of the Review Committee, are as under:
i)
ii)
To review and confirm the Order(s) passed by the Internal Committee identifying a borrower as a Wilful
Defaulter, in terms of Para 3 (c) of the of RBI Master Circular No. RBI/2015-16/100 DBR.No.CID.
BC.22/20.16.003/2015-16.
To review and confirm the Order(s) passed by the Internal Committee identifying a borrower as a
Non-cooperative borrower, in terms of Para 2 (d) of RBI Circular No. RBI/2014-15/362 DBR.No.CID.
BC.54/20.16.064/2014-15 dated December 22, 2014.
iii) To review the information relating to the non-cooperative borrowers to be submitted to Central Repository
of Information on Large Credits (CRILC).
iv) To put in place a system for proper and timely classification of borrowers as wilful defaulters or/as
non-cooperative borrowers. The said accounts of such borrowers shall be reviewed at-least on a
half-yearly basis, and a report thereon shall be placed before the Board for its review and noting.
In all 3 meetings of Review Committee were held during the Financial Year 2019-20 i.e. on 26th June 2019,
22nd July 2019 and 16th September 2019.
The meeting held on 16th September 2019, was conducted through video conference.
The details of the meetings of the Review Committee attended by the Members during the year 2019-20,
are given below:
Name of the Members
Shri Amitabh Chaudhry, Chairman
Shri S. Vishvanathan
Smt. Ketaki Bhagwati
Designation
Managing Director & CEO
Independent Director
Independent Director
Attendance
3/3
3/3
3/3
(in `)
Sitting fees
-
1,50,000
1,50,000
(11) Acquisitions, Divestments & Mergers Committee
The Acquisitions, Divestments and Mergers Committee of the Board of Directors of the Bank (ADAM
Committee) comprises of 4 members out of which 3 are Independent Directors.
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The brief description of the terms of reference of ADAM Committee, are as under:
i)
The main function of the Committee is to consider any idea or proposal relating to merger and acquisition.
This Committee will consider such ideas/proposals and give its in-principle approval in the matter and
recommend the same for the approval of the Board of Directors.
ii) Acquisition of business: Business takeover/acquisition as distinct from portfolio or asset purchase (If the
purchase of a portfolio is accompanied by other integral elements of the business such as manpower,
technology or a distribution franchise, a reference should be made to the Committee).
iii) Strategic investments: Acquisition of greater than 25% stake in a company or acquisition of stake in a
company where the proportion is 25% or lower but where the Bank intends to have management
participation. (These exclude cases where the stake is acquired under a loan-restructuring/CDR
arrangement or where shares are pledged to the Bank against credit facilities).
iv) Strategic divestments: Sale of an existing business of the Bank (as distinct from the sale of assets in the
normal course of business, sale to ARCs and fixed assets) or sale of stake (including minority stake) in
strategic investments/ subsidiary companies of the Bank.
In all 5 meetings of ADAM Committee were held during the Financial Year 2019-20 i.e. on 19th July 2019,
21st January 2020, 4th February 2020, 11th March 2020 and 12th March 2020.
The meetings held on 14th February 2020, 11th March 2020 and 12th March 2020, were conducted through
video conference.
The details of the meetings of the ADAM Committee attended by the Members during the year 2019-20,
are given below
Name of the Members
Shri Rohit Bhagat, Chairman
Shri Amitabh Chaudhry
Shri Rakesh Makhija
Smt. Ketaki Bhagwati
Designation
Independent Director
Managing Director & CEO
Independent Director
Independent Director
Attendance
5/5
5/5
5/5
5/5
(in `)
Sitting fees
2,50,000
-
2,50,000
2,50,000
(12)
Committee of Whole-Time Directors
The Committee of Whole-Time Directors of the Board of Directors of the Bank (COWTD) comprises of 4 members.
Shri Pralay Mondal, Executive Director (Retail Banking) was inducted as a member of the Committee of
Whole-Time Directors, with effect from 16th September 2019.
The brief description of the terms of reference of COWTD, are as under:
i)
Issuance of General/Special Power of Attorney to various officials of the Bank and the Subsidiary Companies
of the Bank to do such acts, deeds, matters and things as may be considered necessary or appropriate for
and on behalf of the Bank.
ii) Approve the allotment of equity shares pursuant to exercise of stock option by eligible employees/
directors of the Bank and that of its subsidiary companies, in terms of the relevant Employee Stock Option
Scheme(s) of the Bank.
iii) Approve the allotment of Debt Securities issued by the Bank, including, but not limited to long term bonds,
green bonds, non-convertible debentures, perpetual debt instruments, Tier II Capital Bonds or such other
Debt Securities/Securities as may be issued by the Bank.
iv) To discuss matters inter alia relating to the operations, strategies, business opportunities relating to the
Bank and/or that of its subsidiaries.
v) Annual Branch Expansion Plan approved by the Board: Substitution of Branch Centres/ Business
Correspondents - Banking outlets/ New Specialised & CPC/ Service Branches/ Rural Unbanked Centre.
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Annual Report 2019-20Experience Open
Corporate Governance
vi) Any other matter as may be authorised by the Board of Directors/Board Committees or required to be
done pursuant to any laws, rules, regulations or any internal policies of the Bank.
In all, 19 meetings of COWTD were held during the Financial Year 2019-20 i.e. on 22nd April 2019, 20th May
2019, 29th May 2019, 26th June 2019, 29th July 2019, 20th August 2019, 18th September 2019, 19th September
2019 (2 meetings), 25th September 2019 (3 meetings), 26th September 2019, 24th October 2019, 18th November
2019, 20th December 2019, 27th January 2020, 20th February 2020 and 23rd March 2020.
No meeting of COWTD was conducted through video conference.
No sitting fees are paid to the Members of the COWTD, for participating in the said meetings.
The details of the COWTD meetings attended by the Members during the year 2019-20, are given below:
Name of the Members
Shri Amitabh Chaudhry, Chairman
Shri Rajiv Anand@
Shri Rajesh Dahiya@
Shri Pralay Mondal@1
Designation
Managing Director & CEO
Executive Director (Wholesale Banking)
Executive Director (Corporate Centre)
Executive Director (Retail Banking)
Attendance
19/19
14/19
16/19
11/13
(in `)
Sitting fees
-
-
-
-
@ Leave of absence was granted to the concerned Members who had expressed their inability to attend the respective meetings.
1) Inducted as a Member, w.e.f. 16th September 2019.
IV. Management Committee
The Management Committee (MANCOM), is the key decision-making body of the Bank and has been constituted as
part of the governance and administrative structure of the Bank. The MANCOM comprises of the Managing Director
& CEO, the Executive Directors and the Group Executives of the Bank.
The MANCOM meets periodically to review matters, inter alia, relating to Business Strategy, Financial Reports, Risk,
Compliance, Customer Service, Financial Inclusion, Human Capital and Business Continuity Planning of the Bank.
The MANCOM also discusses cross-functional initiatives, debates on and respond to any material developments
(internal and external), ideates and reviews key financial, operational and human capital issues, evaluate performance
against the Balance Score Card(s) of the Bank, KRA of key personnel, Business Plans, performance of the subsidiary
companies of the Bank, ideate and execute strategies for the Bank/ Group companies, review risk assessment
reports, inspection/scrutiny reports of regulators, internal auditor, etc.
V. Executive Committees
The Bank has constituted various Executive Committees to deal with various operational, administrative and day to
day matters relating to HR, IT, Risk, Credit, Audit, Management, Customer Service, Product/Change Management,
Fraud, BCP & Crisis Management, Prevention of Sexual Harassment, Whistle blower, IND AS, Outsourcing etc.
Special Meeting of Independent Directors
In terms of Para VII to Schedule IV of the Companies Act, 2013, the Independent Directors are required to meet without the
presence of Non-Independent Directors and Executive Management, to review the matters as set out therein. During the year
under review, the Independent Directors of the Bank met on 22nd January 2020 to review the process proposed to be adopted for
conduct of Board performance evaluation as per the criteria recommended by the Nomination and Remuneration Committee.
Thereafter, the Independent Directors at its meeting held on 29th April 2020, evaluated the performance of the Non-Independent
Directors, the Board as a whole and the Chairman of the Bank after taking into account the views of the Executive and
Non-Executive Directors of the Bank and also assessed the quality, quantity and timeliness of flow of information between the
Management and the Board, in accordance with Para VII to Schedule IV of the Companies Act, 2013.
No sitting fee was paid to the Independent Directors of the Bank for participating in the said meetings.
110
Statutory Reports
Board Performance Evaluation
The performance evaluation of Board, its Committees, Chairman and Individual Directors was done in accordance with the
relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations relating to
Corporate Governance.
The Nomination and Remuneration Committee is the nodal agency for conducting the said performance evaluation. The
Nomination and Remuneration Committee approved the manner for conducting the said performance evaluation, determined
the criteria for the same and appointed an Independent external agency to administer the same.
The performance evaluation of the Board is conducted on various aspects of the Board’s functioning such as strategic planning,
identification and management of risk, succession planning and evaluation of management, audit & compliance, governance,
relationship with executive management of the Bank, etc.
The performance evaluation of the Board Committees is based on criteria such as appropriate composition, clarity in terms of
reference, regularity of meetings, quality of discussion / deliberation at its meetings, participation of members and aspects
specific to those Committees, etc.
The performance evaluation of Directors is carried out on various criteria such as attendance, participation at the meetings,
interpersonal relationship with other Directors, providing guidance, knowledge and understanding of areas relevant to the
operations of the Bank, etc.
The said performance evaluation was conducted by the Nomination and Remuneration Committee/ Board at its meeting
held on 27th April 2020 and 29th April 2020, respectively. The disclosure in terms of SEBI Circular no. SEBI/HO/CFD/CMD/
CIR/P/2018/79 dated 10th May 2018, on Board evaluation, is detailed as under:
1. Observations of board evaluation carried out for the year: 4 observations have emanated from the Board performance
evaluation for the Financial Year 2019-20. These mainly relate to sharpening of Board agenda, functioning of Committees,
continued expertise building among board members and board diversity and skills.
2. Previous year’s observations and actions taken: 8 observations had arisen from the Board performance evaluation for the
Financial Year 2018-19. These mainly relate to strategic direction for the Bank and subsidiaries alignment and integration
among multiple strategic perspectives, agenda setting of the Board/Committees, composition of Board and certain
Committees and steps to be taken to further enhance the expertise and domain knowledge of the members of the Board.
The Bank has complied with the said observations, which was also reviewed by the Board.
3. Proposed actions based on current year observations: The Bank has accepted all the observations made by the Board
emanating from the Board performance evaluation for the Financial Year 2019-20 and the same has been conveyed to the
concerned stakeholders, for appropriate action. The status of compliance with the said observations will be reviewed by
the NRC and reported to the Board.
Familiarisation Programme for Independent Directors
The Bank has conducted the familiarisation programme for its Independent and Non-Executive Directors covering the matters
as specified under Regulation 25 (7) of the Listing Regulations. The details of the same have been uploaded on the website of
the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report.
Induction Programme for new Directors
New Directors of the Bank are inducted through one to one meetings with the Managing Director & CEO, Whole Time
Directors and other members of the Senior Management on matters relating to business strategy, regulatory environment,
business plans and key performance indicators. They are also provided with information relating to the finances and operations
of the Bank, the organization structure and their roles, duties and responsibilities. On appointment, the Independent Directors
are issued a Letter of Appointment setting out the terms and conditions relating to their appointment and their duties and
responsibilities under applicable laws. The said letter is also uploaded on the website of the Bank at https://www.axisbank.
com/shareholders-corner/corporate-governance.
Remuneration Policy
The Bank’s remuneration practices are underpinned by principles of meritocracy and fairness. The remuneration system
strives to maintain the ability to attract, retain, reward and motivate talent in order to enable the Bank to attain its strategic
objectives within the increasingly competitive context in which it operates. The Bank’s pay-for- performance approach strives
to ensure that both internal and external equity are in line with the emerging market trends.
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Annual Report 2019-20Experience Open Corporate Governance
The Bank had formulated and adopted a Comprehensive Remuneration Policy for its Directors, Key Managerial Personnel and
Employees of the Bank, in terms of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder, Regulation
19 of the Listing Regulations and the Guidelines issued by the RBI, in this regard, from time to time.
The Reserve Bank of India vide its Circular dated 4th November 2019, issued revised Guidelines on Compensation of Whole
Time Directors/ Chief Executive Officers/ Material Risk Takers and Control Function staff, which is effective from 1st April 2020.
In terms of the said Guidelines, the Bank formulated and adopted the Remuneration Policy for Non-Executive Chairman and
Non-Executive Directors of the Board and the Remuneration Policy for MD & CEO, Whole-Time Directors, Material Risk
Takers, Control Function Staff and other employees of the Bank. Accordingly, the Bank modified the compensation structure
of its employees to whom the said Guidelines are applicable. The components of fixed pay and the percentage of fixed and
variable pay forming part of the total pay have been modified. The compensation structure also includes deferral arrangement.
The Bank has identified Material Risk Takers based on the qualitative and quantitative criteria prescribed by the RBI in the
said Guidelines. The Bank has also identified representative set of situations which require the Bank to invoke malus and/or
clawback clauses. Further, the Bank has specified a period during which provisions relating to malus and/or clawback can be
applied, covering at least, deferral and retention period.
Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board has reviewed and approved the
said Policies, in accordance with the said Guidelines. The said Policies are effective from 1st April 2020.
The remuneration paid to all the employees of the Bank, for the financial year 2019-20, is in accordance with the Comprehensive
Remuneration Policy of the Bank.
Remuneration of Directors
i. Dr. Sanjiv Misra was appointed as the Non-Executive (Part-time) Chairman of the Bank, for a period of three years, with
effect from 18th July 2016. Dr. Sanjiv Misra ceased to be the Non-Executive (Part-Time) Chairman of the Bank, pursuant to
the completion of his tenure, with effect from the close of business hours on 17th July 2019. The details of remuneration
paid to Dr. Sanjiv Misra, in terms of the approvals granted by the Reserve Bank of India and the Shareholders of the Bank,
for the period from 1st April 2019 upto 17th July 2019 (both days inclusive), is as under:
For the period
Remuneration
Company Car
Touring
Sitting Fees
1st April 2019 upto 17th July 2019 (both days inclusive)
` 2,75,000 per month
Free use of Bank’s Car for official and private purposes
Travelling and Official expenses to be borne by the Bank for Board functions as a Chairman
As payable to other Non-Executive Directors
ii.
Shri Rakesh Makhija was appointed as the Non-Executive (Part-Time) Chairman of the Bank, with effect from
18th July 2019. The details of remuneration paid to Shri Rakesh Makhija, in terms of the approvals granted by the Reserve
Bank of India and the Shareholders of the Bank for the period from 18th July 2019 up to 31st March 2020 (both days
inclusive, is as under:
For the period
Remuneration
Company Car
Touring
Sitting Fees
18th July 2019 up to 31st March 2020 (both days inclusive)
` 2,75,000 per month
Free use of Bank’s Car for official and private purposes
Travelling and Official expenses to be borne by the Bank for Board functions as a Chairman
As payable to other Non- Executive Directors
iii. The details of remuneration paid to Shri Amitabh Chaudhry for the period from 1st April 2019 up to 31st March 2020, in
terms of the approvals granted by the RBI and the Shareholders of the Bank, are given below in sub para ix.
Shri Amitabh Chaudhry was granted 9,80,000 stock options, under the Employee Stock Option Scheme of the Bank,
since 1st January 2019 being the date of his appointment as the Managing Director & CEO of the Bank. Out of the above,
2,94,000 stock options have been vested, no stock options have been exercised and 2,94,000 stock options remain
unexercised, as on 31st March 2020. Further, 6,86,000 stock options remain unvested, as on 31st March 2020.
iv. Shri Rajiv Anand was re-appointed as the Executive Director (Wholesale Banking) of the Bank, for a period of 3 years,
with effect from 4th August 2019 up to 3rd August 2022 (both days inclusive). The details of the remuneration paid to Shri
112
Statutory Reports
Rajiv Anand during the year under review, in terms of the approvals granted by the RBI and the Shareholders of the Bank,
are given below in sub-para ix.
Shri Rajiv Anand was granted 24,70,000 stock options, in various tranches under the various Employee Stock Option
Schemes of the Bank, since 30th March 2009 being the date of his appointment as the Managing Director & CEO of
Axis Asset Management Company Limited, subsidiary of the Bank. Out of the above, 19,59,000 stock options have been
vested, 10,52,500 stock options have been exercised and the balance 9,06,500 stock options remain unexercised, as on
31st March 2020. Further, 5,11,000 stock options remain unvested, as on 31st March 2020.
v.
Shri Rajesh Dahiya was re-appointed as the Executive Director (Corporate Centre) of the Bank, for a period of 3 years,
with effect 4th August 2019 up to 3rd August 2022 (both days inclusive). The details of the remuneration paid to Shri
Rajesh Dahiya during the year under review, in terms of the approvals granted by the RBI and the Shareholders of the
Bank, are given below in sub-para ix.
Shri Rajesh Dahiya was granted 15,87,500 stock options, in various tranches under the various Employee Stock Option
Schemes of the Bank, since 1st June 2010 being the date of his appointment as the President (Human Resources) of the
Bank. Out of the above, 11,76,500 stock options have been vested, 6,10,000 stock options have been exercised and
the balance 5,66,500 stock options remain unexercised, as on 31st March 2020. Further, 4,11,000 stock options remain
unvested, as on 31st March 2020.
vi. Shri Pralay Mondal was appointed as the Executive Director (Retail Banking) of the Bank, for a period of 3 years, with
effect 1st August 2019 up to 31st July 2022 (both days inclusive). The details of the remuneration paid to Shri Pralay
Mondal during the year under review, in terms of the approvals granted by the RBI and the Shareholders of the Bank, are
given below in sub-para ix.
Shri Pralay Mondal was granted 3,50,000 stock options under the various Employee Stock Option Schemes of the Bank,
since 1st April 2019 as much being the date of his appointment as Group Executive of the Bank. Out of the above, no stock
options have been vested, as such no stock options have been exercised and no stock options remain unexercised, as on
31st March 2020.
vii. The Bank does not grant stock options to its Non-Executive Directors. The Non-Executive Directors of the Bank are eligible
to receive sitting fees for the meetings of the Board / Committees, attended by them and to Profit Linked Commission
(except for Non-Executive (Part-Time) Chairman), in terms of the RBI circular No DBR.No.BC.97/29.67.001/2014-15
dated 1st June 2015 on Guidelines on Compensation of Non-Executive Directors of Private Sector Banks.
viii. The Whole-Time Directors of the Bank are not entitled to receive any sitting fees from the Bank or from its Subsidiary
Companies, for attending meetings of the Board and its Committees. Further, the Whole-Time Directors of the Bank are
not entitled to receive any remuneration or commission from any of the subsidiary companies of the Bank.
ix. The details of remuneration paid to the Whole-Time Directors of the Bank during the financial year 2019-20, in terms of
the approvals granted by the RBI and the Shareholders of the Bank, are as under:
Salary (Basic)
Leave Fare Concession facility
House Rent Allowance
Variable pay
(for 2018-19)
Superannuation Allowance / Fund
Perquisites (excluding ESOP)
Provident Fund (Bank Contribution)
Gratuity
Leave Encashment
Shri Amitabh Chaudhry
[1.4.2019 to
31.3.2020]
Shri Rajiv Anand
[1.4.2019 to
31.3.2020]
Shri Rajesh Dahiya
[1.4.2019 to
31.3.2020]
Shri Pralay Mondal
[1.8.2019 to
31.3.2020]
3,87,54,000
9,99,996
1,07,64,996
45,36,986
1,85,93,952
5,49,996
61,36,008
87,69,488
1,65,39,852
5,49,996
54,58,152
77,93,800
1,13,49,424
3,66,664
37,45,312
-
(in `)
38,75,400
2,04,233
12% of Basic Pay
One month’s salary
for each completed
year of service
10,00,000
18,59,400
30,98,384
12% of Basic Pay
One month’s salary
for each completed
year of service
26,09,967
16,53,983
30,95,531
12% of Basic Pay
One month’s salary
for each completed
year of service
24,41,666
11,34,944
17,08,590
12% of Basic Pay
One month’s salary
for each completed
year of service
-
113
Annual Report 2019-20Experience Open
Corporate Governance
Perquisites (evaluated as per Income Tax Rules, 1962, wherever applicable, or otherwise at actual cost to the Bank) such as
Bank’s furnished accommodation, electricity, water and furnishings, club fees, personal accident insurance, loans, use of car
and telephone at residence, medical reimbursement, travelling and halting allowances, newspapers and periodicals and others
were provided in accordance with the Rules of the Bank.
The Bank as a policy, does not pay any severance fees to its Managing Director & CEO or to its Whole-Time Directors. The
tenure of the office of the Managing Director & CEO and the Whole-Time Directors of the Bank is for a period of three years
from date of their respective appointment/re-appointment, as approved by the RBI and the same can be terminated by either
party by giving three months notice in writing, subject to compliance with the provisions of Section 35B of the Banking
Regulation Act, 1949.
x. All the Non-Executive Directors of the Bank were paid sitting fees of ` 1,00,000 for every meeting of the Board and
` 50,000 for every meeting of the Committees attended by them. However, in view of the increase in the duties, roles and
responsibilities of the Non-Executive Directors and also in view of increase in the time commitment required, the Board
at its meeting held on 22nd January 2020 approved a revision in the sitting fees payable to the Non-Executive Directors
of the Bank in respect of the following key Committees viz. Nomination and Remuneration Committee, Audit Committee,
Committee of Directors, Risk Management Committee and IT Strategy Committee of the Board, from ` 50,000/- to
` 1,00,000/- per meeting, with effect from 1st February 2020. The sitting fees with respect to other Board Committees
remain unchanged at ` 50,000/- per meeting.
xi. The details of the sitting fees paid to the Non-Executive Directors of the Bank for the meetings of the Board and
Committees, attended by them during the financial year 2019-20, are as under:
Name of the Directors
Shri Rakesh Makhija
Dr. Sanjiv Misra (Ceased to be the Non-Executive (Part-Time) Chairman of the Bank w.e.f. the close of business
hours on 17th July 2019).
Prof. Samir K. Barua (Ceased to be an Independent Director of the Bank on expiry of his tenure, w.e.f. the close of
business hours on 21st July 2019).
Shri Som Mittal (Ceased to be an Independent Director of the Bank on expiry of his tenure, w.e.f. the close of
business hours on 21st October 2019).
Shri Rohit Bhagat
Smt. Usha Sangwan (Ceased to be a Nominee Director of the Bank w.e.f. 12th December 2019)
Shri S. Vishvanathan
Smt. Ketaki Bhagwati
Shri B. Baburao
Shri Stephen Pagliuca
Shri Girish Paranjpe
Total
(in `)
Sitting Fees
25,50,000
3,50,000
6,50,000
9,00,000
17,50,000
5,50,000
27,00,000
25,50,000
30,00,000
12,00,000
19,50,000
1,81,50,000
xii. As on 31st March 2020, none of the Non-Executive Directors of the Bank or their immediate relatives held any equity
shares or convertible instruments of the Bank.
xiii. Details of Profit Linked Commission, for the financial year 2018-19, in terms of the RBI Circular No.DBR.
No.BC.97/29.67.001/2014-15 dated 1st June 2015 on Guidelines on Compensation of Non-Executive Directors of Private
Sector Banks, which was paid to them during the financial year 2019-20, are as under:
Sr. No Name of the Directors
Shri Prasad R Menon#
1.
Prof. Samir Barua
2.
Shri Som Mittal
3.
Shri Rohit Bhagat
4.
Shri S. Vishvanathan
5.
Smt. Usha Sangwan*&
6.
Shri Rakesh Makhija
7.
Smt. Ketaki Bhagwati
8.
Shri B. Baburao*
9.
114
(in `)
Profit linked Commission
5,23,288
10,00,000
10,00,000
10,00,000
10,00,000
5,33,000
10,00,000
10,00,000
10,00,000
Statutory Reports Sr. No Name of the Directors
Shri Stephen Pagliuca
10.
Shri Girish Paranjpe$
11.
(in `)
Profit linked Commission
10,00,000
4,10,959
# Shri Prasad R. Menon ceased to be an Independent Director of the Bank with effect from the close of business hours on 8th October 2018
pursuant to the expiry of his tenure as an Independent Director of the Bank and therefore was entitled to commission, for the period from
1st April 2018 up to 8th October 2018 (both days inclusive).
* The commission paid to Smt. Usha Sangwan, Nominee Director of LIC and Shri B. Baburao, Nominee Director of SUUTI has been credited to
the designated bank account of LIC and SUUTI, respectively.
& Since the attendance of Smt. Usha Sangwan at the Board/Committee meetings, during the FY 2018-19, was less than 75%, she was paid profit
linked commission in proportion to her attendance.
$ Shri Girish Paranjpe was appointed as an Independent Director of the Bank, with effect from 2nd November 2018. Accordingly, Shri Paranjpe
was paid commission, for the period from 2nd November 2018 upto 31st March 2019 (both days inclusive).
Fees paid to Statutory Auditors
The details of fees for all services availed by the Bank and its subsidiaries, on a consolidated basis, from the Statutory Auditors
M/s Haribhakti & Co. LLP and all entities in the network firm/network entity of which M/s Haribhakti & Co. LLP is part thereof,
is detailed as under:
Sr. No. Particulars
Audit Fees
1.
Fees for certification and other attest services2
2.
Total
(in `)
Amount1
1,79,00,000
3,05,10,000
4,84,10,000
1. The above fees excludes taxes, clerkage fees and out of pocket expenses.
2. Includes fees classified under share issue expenses towards certification services in respect of capital raised during the year.
The said fees have been reviewed and approved by the Audit Committee of Board of the Bank and that of the concerned
Subsidiary Companies of the Bank.
Details of utilization of funds raised through preferential allotment or qualified institutional placement
During the year, the Bank had raised ` 12,500 crores through Qualified Institutional Placement. The said funds were raised
to enhance the capital adequacy, in accordance with regulatory requirements, to finance the growth strategy and for general
corporate purposes, in accordance with applicable law.
As required under the Listing Regulations, relating to Corporate Governance, the Audit Committee of Board of the Bank
at its meeting held on 22nd January 2020 has reviewed and confirmed that the Bank has utilized the said funds for the
above-mentioned purposes and there is no deviation in utilization of the said funds.
Disclosure in terms of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Bank has formulated and adopted a Policy on Prevention of Sexual Harassment at Workplace and takes all necessary
measures to ensure a harassment-free workplace and has instituted an Internal Complaints Committee for redressal of
complaints and to prevent sexual harassment. The Bank believes that all employees, including other individuals who are dealing
with the Bank have the right to be treated with dignity.
The following is the summary of sexual harassment complaints received and disposed off by the Bank, during the
financial year 2019-20:
i. Number of complaints of sexual harassment filed during the financial year: 45
ii. Number of complaints disposed off during the financial year: 40
iii. Number of complaints pending as on the end of the financial year: 5
Number of workshops/awareness program conducted against sexual harassment: 34
Nature of action taken by the Employer or District Officer– As per the Bank’s Staff Rules.
The said Committee is empowered to take appropriate disciplinary action against the employee(s) who is found to have violated
the norms prescribed under the said Policy.
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Annual Report 2019-20Experience Open
Corporate Governance
Whistleblower Policy & Vigil Mechanism
A central tenet in the Bank’s Policy on Corporate Governance is commitment to ethics, integrity, accountability and transparency.
To ensure that the highest standards are maintained in these aspects on an on-going basis and to provide safeguards to various
stakeholders, the Bank has formulated a Whistle-blower Policy and Vigil Mechanism which is in compliance with the relevant
provisions of Section 177(9) of the Companies Act, 2013, Rules made thereunder and Regulation 4(2)(d) and Regulation 22 of
the Listing Regulations.
The Policy provides an opportunity to address serious concerns arising from irregularities, malpractices and other
misdemeanors committed by the Bank’s personnel by approaching a Committee set-up for the purpose (known as the
Whistle-blower Committee). In case, Senior Management commits an offence, the Policy enables the Bank’s staff to report
the concerns directly to the Chairman of the Audit Committee of the Board. The Policy is intended to encourage reporting
of suspected or actual occurrence of illegal, unethical or inappropriate actions, behavior or practices by staff without fear of
retribution. This Policy can be used regularly as a tool to voice concerns on irregularities, malpractices and other misdemeanors.
To ensure smooth flow and management of complaints under Whistle-blower Policy, a web-based application - ‘Corporate
Whistle-blower’ has been set up which also provides an option for anonymous reporting thereby enabling lodging of complaints
online over a secure platform without fear of revelation of identity. This would create a business culture of honesty, integrity
and compliance and would encourage speaking up so that preventive action is initiated.
It is hereby affirmed that the Bank has not denied any of its personnel access to the Chairman of the Audit Committee of the
Board and that the Policy contains adequate provisions for protecting Whistle blowers from unfair termination and other
unfair prejudicial and employment practices.
The Audit Committee of the Board has reviewed, on a quarterly basis, a synopsis of the complaints received and the resolution
thereof under the said Policy.
The details of the Whistle-blower Policy and Vigil Mechanism are available on the Bank’s website at https://axisbank.
whistleblowernetwork.net/.
Subsidiary Companies
As on 31st March 2020, the Bank does not have any unlisted Indian subsidiary company which is a material subsidiary, in terms
of Regulation 16(1)(c) of the Listing Regulations. Further, the minutes of the meetings of the Board of all the unlisted subsidiary
companies of the Bank are tabled at the meetings of the Board of the Bank, for its review. Also, the minutes of the meetings
of the Audit Committee of the Board of unlisted subsidiary companies of the Bank are tabled at the meetings of the Audit
Committee of the Bank, for its review. The Statement of significant transactions / arrangements, if any, entered into by the
unlisted subsidiary companies of the Bank are also tabled at the meetings of the Board of the Bank, for its review.
The Audit Committee also reviews the investments made by the Bank into its subsidiaries, exceeding ` 100 crores or 10% of
the asset size of the concerned subsidiary company, whichever is lower, including existing investments.
Policy for determining ‘Material’ Subsidiaries
As required under Regulation 16(1)(c) of the Listing Regulations, the Bank has formulated and adopted a Policy for determining
‘Material’ Subsidiaries. During the year, the Policy for determining ‘Material’ Subsidiaries has been reviewed by the Risk
Management Committee and the Board and the same has been hosted on the website of the Bank at https://www.axisbank.
com/shareholders-corner/corporate-governance.
Subsidiary Governance Unit
The Bank has eleven subsidiary companies and one step down subsidiary company offering a wide spectrum of financial
products and services. The Bank has consistently focused on an overarching governance mechanism for all its subsidiaries,
through a set of board approved oversight policies to ensure strategic and policy alignment across the Group besides ensuring
group level synergy. All matters relating to subsidiary governance is overseen by the Board and concered Committees and
operationalized under the aegis of Subsidiary Management Committee.
The Bank has put in place a comprehensive subsidiary engagement framework encompassing functional alignment areas viz.
risk, compliance, audit, finance, human resources, information technology and legal as well as more integrative domains viz.
cyber security, brand usage and marketing, corporate communication with the end objective of delivering ‘One Axis’ across
the Group. Progress under the subsidiary engagement framework is reviewed by the Subsidiary Governance Committee, on
a monthly basis.
116
Statutory Reports Performance of each subsidiary is reviewed by the Managing Director & CEO of the Bank, also a detailed presentation by one
subsidiary each quarter is presented to Board of Directors of the Bank. At least one member of the Management Committee
is nominated on the board of the subsidiary company. Such member is responsible to review the matters relating to strategy,
business plan and performance of the subsidiary company assigned to him.
Policy for Related Party Transactions
As required under Regulation 23 of the Listing Regulations, the Bank has formulated and adopted a Policy on dealing with
Related Party Transactions. During the year, the Policy on Related Party Transactions has been reviewed by the ACB and
the Board and the same has been hosted on the website of the Bank at https://www.axisbank.com/shareholders-corner/
corporate-governance, in terms of the Listing Regulations, relating to Corporate Governance.
Directors and Officers insurance
The Bank has in place a Directors and Officers Liability Policy (D & O Policy) for all its Directors. The Policy covers management
liability, company securities, investigation cost, non-executive Directors protection, investigation, extradition, outside
directorship, bodily injury and property damage defense costs, assets and liberty etc.
Prevention of Insider Trading
SEBI vide its Circular no. SEBI/HO/ISD/ISD/CIR/P/2019/82 dated 19th July 2019, has provided a standardized format to report
violations of the provisions of the Regulations and the Code. The Bank has been submitting the details of violations to SEBI, in
terms of the said Circular.
SEBI vide notification dated on 25th July 2019 amended certain provisions of the SEBI (Prohibition of Insider Trading)
Regulations, 2015 (the Regulations) relating to transactions that can be undertaken by Designated Persons during the closure
of trading window. Further, SEBI vide notification dated on 17th September 2019 has also amended the Regulations providing
for voluntary disclosure of suspected/alleged act of insider trading and obligation on companies to protect such informant
against victimization.
The National Stock Exchange of India Limited vide its circular NSE/CML/2019/20 dated 24th September 2019 on Disclosure
of Default / Inter Creditor Agreement (ICA) has inter alia prescribed that all participants, who have acquired confidential
information in the course of developments pertaining to defaulting borrowers and/or ICA, shall maintain the confidentiality of
such information, until the same is publicly disclosed to Stock Exchanges.
The Bank has accordingly, reviewed and amended the Share Dealing Code and the Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information (UPSI) of the Bank, in line with the said amendments.
The Bank has put in place adequate and effective systems, internal controls and processes (Institutional Mechanism) relating
to preparation, finalization, communication or procurement of UPSI relating to the Bank, in compliance with the Share Dealing
Code and the Regulations, to prevent insider trading.
Compliance Certificate
Pursuant to Regulation 17(3) of Listing Regulations, a quarterly confirmation on laws applicable to the Bank is obtained from the
relevant Heads of Departments by the Compliance Department. A report in this regard, duly signed by the Chief Compliance
Officer of the Bank is placed before the Audit Committee, on a quarterly basis, confirming compliances with applicable laws.
Secretarial Standards
The Bank is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and the Secretarial
Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India, from time to time.
Directors E-KYC
The Ministry of Corporate Affairs (MCA) has vide amendment to the Companies (Appointment and Qualification of Directors)
Rules, 2014, mandated registration of KYC of all the Directors through e-form DIR-3 KYC. All Directors of the Bank have
complied with the said requirement.
(4) Disclosures
There were no related party transactions which were of a materially significant nature undertaken by the Bank with
its promoters, directors or management, their subsidiaries or relatives that may have a potential conflict with the
interests of the Bank.
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Annual Report 2019-20Experience Open
Corporate Governance
The Members of the Senior Management of the Bank have affirmed that they have not entered into any material, financial
or commercial transaction wherein they have personal interest and which may potentially conflict with the interest of
the Bank at large.
There are no instances of non-compliance by the Bank or penalties and strictures imposed by the Stock Exchange(s) or
SEBI or other statutory authorities on any matter related to capital markets during the last three years.
The Secretarial Auditor has certified that none of the Directors of the Bank have been debarred or disqualified from
being appointed or continuing as Directors of the Bank by the SEBI/Ministry of Corporate Affairs or any other Statutory
Authority. The said certificate is annexed to this Report.
(5) Compliance with Governance Norms
The Bank has complied with all the mandatory requirements, as prescribed under the Listing Regulations relating to
Corporate Governance.
The Bank has also adopted the non-mandatory requirements relating to maintenance of Chairman’s Office at the Bank’s
expense and reimbursement of expenses incurred by the Non-Executive Chairman in performance of his duties, moving
towards a regime of financial statements with unmodified audit opinion, separation of the office of the Chairman and
Managing Director and the Chief Audit Executive directly reporting to the Audit Committee of the Board.
The Bank has obtained a certificate from M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai, (Registration
No.103523W/W100048) confirming that the Bank has complied with all the mandatory requirements as stipulated under
the Listing Regulations relating to Corporate Governance. The said certificate is annexed to the Directors’ Report.
(6) Code of Conduct
The Board has formulated and adopted the Code of Conduct and Conflict of Interest Norms for the Board of Directors
and the Code of Conduct and Ethics for the Employees and Senior Management of the Bank.
The Code of Conduct and Conflict of Interest Norms for the Board of Directors (the Board Code) provide for Do’s and
Don’ts to be followed by the Directors of the Bank and also contains norms with respect to conflict of interest, skill
development, health, confidentiality, insider trading and sexual harassment etc.
The said Code provides that prior approval of the Bank would be required before a Director accepts any role / directorship
in any entity. Further, Director of the Bank is prohibited from engaging in any activity that interferes with his / her
fiduciary responsibilities towards the Bank, or is in conflict with or prejudicial to the interest of the Bank like simultaneous
engagement or employment or directorship with client companies or its subsidiaries, or undertaking any activity which
would enhance or support a competitor’s position.
The Code of Conduct and Ethics for the Employees and Senior Management of the Bank (the Code of Ethics) is a statement
of the Bank’s commitment to integrity and the highest standards of ethical practices. It defines the standards of conduct
that is expected of all employees in order that the right decisions are taken in performing their roles and responsibilities
across various functions in the Bank.
The Code of Ethics is intended to be the charter for day-to-day work to enable employees to make the right decisions
and, therefore, serves to (1) underline the fundamental commitment to comply with the regulatory guidelines and laws of
the land (2) set forth basic parameters of ethical and acceptable social behavior (3) establish a system for detection and
reporting of known or suspected ethical or violations of regulations.
During the year, the amendments to the said Codes have been reviewed and approved by the Board of Directors of the
Bank. The said Codes have been hosted on the website of the Bank viz. https://www.axisbank.com/shareholders-corner/
corporate-governance, in compliance with the Listing Regulations relating to Corporate Governance.
The certificate issued by the Managing Director & CEO of the Bank confirming that all the Directors and Members of the
Senior Management of the Bank have complied with the said Codes, is annexed to this Report.
118
Statutory Reports
General Shareholder Information
[Pursuant to Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(Listing Regulations)]
26th Annual General Meeting (AGM)
In light of the uncertainty surrounding the lockdown, which has been imposed across India due to the onset of the COVID-19
Pandemic, the Board of Directors (the Board) at its meeting held on 29th April 2020, authorized the Managing Director & CEO
of the Bank, to decide the day, date, time and venue of the AGM under the relevant provisions of the Companies Act, 2013 and
the relevant Rules made thereunder.
Accordingly, please note that the prescribed details with respect to the AGM has not been provided and the same will be
incorporated in the Notice convening the AGM and disclosed to the Stock Exchanges, published in the newspapers and
uploaded on the websites of the Bank and of KFin Technologies Private Limited (KFIN), the Registrar and Share Transfer Agent
of the Bank, in accordance with the extant norms.
Financial Year
The Bank follows the financial year starting from 1st April to 31st March, every year.
Compliance Calendar
The schedule of the meetings of the Board to be held to inter alia review and approve the unaudited / audited financial
results of the Bank, in respect of the financial year 2020-21, in terms of Regulation 33(3)(a), (d) and (f) of the Listing
Regulations, are as under:
Purpose
Unaudited Financial Results (standalone and consolidated) of the Bank, for the
quarter ending 30th June 2020
Unaudited Financial Results (standalone and consolidated) of the Bank, for the
quarter / half year ending 30th September 2020
Unaudited Financial Results (standalone and consolidated) of the Bank, for the
quarter / nine months ending 31st December 2020
Audited Annual Financial Results (standalone and consolidated) of the Bank, for
the financial year ending 31st March 2021
Venue
Corporate Office
Tentative Date
Third week of July 2020
Corporate Office
Fourth week of October 2020
Corporate Office
Fourth week of January 2021
Corporate Office
Last week of April 2021
After the said financial results of the Bank are reviewed and approved by the Board, the same shall be disclosed to the Stock
Exchange(s), within the time limit as stipulated under Regulation 30 read with sub-para 4 of Para A of Part A of Schedule III of
the Listing Regulations.
Dividend
The Reserve Bank of India, vide its circular dated 17th April 2020, has advised that banks shall not make any further dividend
pay-outs from profits pertaining to the financial year ended 31st March 2020, until further instructions, with a view that banks
must conserve capital in an environment of heightened uncertainty caused by COVID-19 Pandemic. Accordingly, the Board
has not proposed any dividend for the financial year ended 31st March 2020.
Unclaimed Dividends
Pursuant to the provisions of Section 125 of the Companies Act, 2013 and the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the IEPF Authority Rules), the amount of unpaid dividend(s)
that are lying unclaimed for a period of 7 consecutive financial years from the date of its transfer to the unpaid dividend
account, is liable to be transferred to the Investor Education & Protection Fund Authority (IEPF Authority). Accordingly,
unclaimed dividend amounting to ` 65,71,408/- in respect of the financial year 2011-12 was transferred by the Bank to the
IEPF Authority, on 20th August 2019, in compliance with the IEPF Authority Rules.
Further, please note that the unclaimed dividend in respect of the financial year 2012-13 must be claimed by the concerned
shareholders, on or before 24th August 2020, failing which it will be transferred to the IEPF Authority, in accordance with the
IEPF Authority Rules.
119
Annual Report 2019-20Experience Open Corporate Governance
The details of the unclaimed dividends as on 31st March 2020 and the last date for claiming the same, prior to its transfer to
the IEPF Authority, are as under:
Financial year
No. of
Shareholders
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
Total
3,769
3,235
6,609
9,544
10,226
7,721
41,104
Unclaimed dividend
as on 31st March
2020 (In `)
64,45,818
73,39,300
93,88,761
1,19,63,415
1,37,62,955
21,05,024
5,10,05,273
% to total
dividend
declared
0.08
0.08
0.09
0.10
0.11
Total Amount of
Dividend Declared
(In `)
8,44,07,35,230
9,42,60,65,680
10,92,77,37,078
11,93,76,13,965
11,98,58,43,545
No Dividend Declared
0.08
0.09
261,95,95,388
55,33,75,90,868
Date of
declaration
19-07-2013
27-06-2014
24-07-2015
22-07-2016
26-07-2017
Last date for claiming
dividend prior to its
transfer to the IEPF
24-08-2020
02-08-2021
29-08-2022
28-08-2023
31-08-2024
20-07-2019
25-08-2026
Transfer of Underlying Equity Shares in respect of the Unclaimed Dividends to the IEPF Authority Account
Pursuant to the notification of the relevant provisions of Sections 124 and 125 of the Companies Act, 2013 and the relevant
provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016,
as amended, the unclaimed dividend for the financial year 2011-12 and the underlying equity shares of the Bank, in respect
of the said financial year (where the dividends have not been claimed by the concerned shareholders for seven consecutive
financial years from the date of its transfer to the unpaid dividend account), were liable to be transferred by the Bank to the
IEPF Authority, in accordance with the IEPF Authority Rules.
Accordingly, pursuant to the notification of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer
and Refund) Second Amendment Rules, 2017 (IEPF Second Amendment Rules), the Bank transferred 8,10,430 underlying
equity shares of ` 2/- each of the Bank, in respect of the said unclaimed dividend, as on 31st March 2020, to the IEPF Authority,
in compliance with the IEPF Second Amendment Rules.
The unclaimed dividend(s) for the financial year 2011-12 and the underlying equity shares, as aforesaid, can be claimed by the
concerned shareholder(s) of the Bank from the IEPF Authority, subject to compliance with the procedures as prescribed under
the said Rules and they may write to KFIN at einward.ris@kfintech.com, for any assistance, in this regard.
Unclaimed Dividends for the financial years from 2012-13 up to 2018-19
The shareholder(s) of the Bank are requested to verify details of their unclaimed dividends in respect of the financial years
from 2012-13 up to 2018-19 and lodge their claims with KFIN.
In case the unclaimed dividend(s) for the financial year 2012-13 is not claimed on or before 24th August 2020, the said unclaimed
dividend(s) along with the underlying equity share(s) of the Bank in respect of the said financial year [where the dividends have
not been claimed by the concerned shareholders for seven consecutive financial years] will be liable to be transferred by the
Bank to the account of the IEPF Authority, in accordance with the IEPF Second Amendment Rules. Concerned shareholder(s)
of the Bank may write to KFIN at einward.ris@kfintech.com, for any assistance, in this regard.
Unclaimed Equity Shares
Schedule VI of the Listing Regulations, inter alia, requires every listed company to comply with certain procedures in respect of
the equity shares issued by it in physical form pursuant to a public issue or any other issue and which have remained unclaimed
for a period of seven consecutive financial years, for any reason whatsoever. Details of the said unclaimed equity shares of the
Bank, are as under:
Particulars
Aggregate number of shareholders at the beginning of the year
Total outstanding shares in Unclaimed Suspense Account at the beginning of the year
Number of shareholders who approached the issuer for transfer of shares from Unclaimed
Suspense Account during the year
Number of shares transferred to the concerned shareholder from Unclaimed Suspense Account
during the year
Aggregate number of shareholders at the end of the year
Total outstanding shares in Unclaimed Suspense Account, as on 31st March 2020.
FY 2019-20
-
-
-
FY 2018-19
1
500
-
-
-
-
-
0
0*
*Pursuant to the notification on the IEPF Second Amendment Rules, the Bank has transferred 8,10,430 unclaimed equity shares of ` 2/- each of the
Bank (including balance 500 equity shares of ` 2/- each of the Bank, which were lying in the Unclaimed Suspense Account) to the IEPF Authority, in
accordance with the IEPF Second Amendment Rules.
120
Statutory Reports All corporate benefits accruing on the said equity shares viz. bonus shares, split, etc., if any, are also required to be credited to
the IEPF Authority. Further, voting rights in respect of the said equity shares shall remain frozen till such time, the concerned
shareholder(s) of the Bank, claims the same.
Guidelines to claim unclaimed Dividends/Shares:
Concerned Shareholders of the Bank can submit their application to claim their unclaimed dividend(s)/share(s), through the
website of the IEPF Authority (http://www.iepf.gov.in), by following the instructions given below:
1. Download the Form IEPF - 5 from the website of IEPF (http://www.iepf.gov.in). Read the instructions provided on the
instructions kit along with the e-form carefully before filling the form.
2. After filling the form save it on the computer and submit the duly filled form by following the instructions given in the
upload link on the IEPF website.
3. On successful uploading, the acknowledgment will be generated indicating the SRN. This SRN is to be used for future
tracking of the form.
4. After uploading the form, submit the following documents to Nodal Officer (IEPF) of the Bank in an envelope marked
“Claim for refund from the IEPF Authority”:
a)
Self-attested copy of e-Form.
b)
Indemnity Bond in original.
c) Copy of acknowledgment.
d) Other documents as mentioned in the Form IEPF-5.
5. The general information of the Bank, required for filing the aforesaid Form, are as under:
a) Corporate Identification Number (CIN) of Company: L65110GJ1993PLC020769.
b) Name of the Company: Axis Bank Limited.
c) Address of Registered Office of the Company: ‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden,
Ellisbridge, Ahmedabad, Gujarat – 380 006.
KFIN, has been entrusted with the task of verifying the claims received from the Shareholders of the Bank, in respect the
unclaimed dividend(s)/share(s) of the Bank, which have been transferred to the IEPF Authority, in accordance with the IEPF
Authority Rules.
KFIN, is also responsible to liaise with the claimants and ensure that the prescribed documents in original are received and
verified. After verifying the authenticity of the said documents and their claims, KFIN, will issue an entitlement letter to the
IEPF Authority, in favour of the claimant.
On receipt of the entitlement letter, the Bank will submit an online verification report to the IEFP Authority, along with scanned
copies of all the original documents submitted by the claimant. Upon receipt and verification of the said online verification
report, the IEPF Authority will proceed to process the claim.
The Bank has appointed Nodal Officer/Deputy Nodal Officer(s) to verify the claim(s) and co-ordinate with the IEFP Authority.
The details of the same have been hosted on the website of the Bank viz. https:// www. axisbank.com / shareholders-corner/
investor-contacts.
Equity Shares
The equity shares of the Bank are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The
International Security Identification Number (ISIN) in respect of the said equity shares is INE238A01034. The National
Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) are the Depositories for the
121
Annual Report 2019-20Experience Open
Corporate Governance
equity shares of the Bank. The equity shares of the Bank have not been suspended from trading on the said Stock Exchanges
or by any Regulatory / Statutory Authority.
Stock Exchange Codes
NSE – AXISBANK
National Stock Exchange of India Limited
Exchange Plaza, Plot no. C/1, G Block,
Bandra-Kurla Complex, Bandra (E)
Mumbai - 400 051.
Website: www.nseindia.com
BSE – 532215
BSE Limited
Phiroze Jeejeebhoy Towers,
Dalal Street,
Mumbai- 400 001.
Website: www.bseindia.com
Reuters Codes
Bloomberg Codes
NSE - AXBK.NS
NSE - AXSB IS
BSE- AXISBANK.BO
BSE - AXSB IB
Global Depository Receipts (GDR)
The Bank’s GDRs are listed and traded on London Stock Exchange. The ISIN for the said GDRs is US05462W1099.
Stock Exchange
London Stock Exchange
10 Paternoster Square, London EC4M 7LS, UK
Website: www.londonstockexchange.com
Code
AXB
Bonds issued under Medium Term Note Program (MTN Program)
The Bonds issued and allotted by the Bank’s MTN program are listed and traded on Singapore Stock Exchange.
Stock Exchange
Singapore Stock Exchange
Singapore Exchange Securities Trading Limited
(Attention: SGXNet Services, Operations)
11 North Buona Vista Drive #06-07
The Metropolis Tower 2
Singapore 138589
Website: www.sgx.com
Code
–
Credits Ratings
The details of the credit ratings obtained by the Bank, in respect of all debt instruments issued by it and outstanding, as on
31st March 2020 along with outlook, are as under.
Credit ratings for the Debt Instruments outstanding, as on 31st March 2020
Sr. No. Credit Rating Agency
Credit Rating
Outlook
Sr. No. Credit Rating Agency
Credit Rating
Outlook
CARE Ratings
Tier II Bonds
Infrastructure bond
Tier II (Under Basel III)
CARE AAA
CARE AAA
CARE AAA
Stable
Stable
Stable
India Rating
Tier II Bonds
Tier II (Under Basel III)
Tier I (Under Basel III)
IND AAA
IND AAA
IND AA+
Stable
Stable
Stable
2.
4.
1.
3.
5.
ICRA Ltd.
Certificate of Deposits
Tier II Bonds
Infrastructure bond
Tier II (Under Basel III)
Tier I (Basel III Compliant)
Fixed Deposit
CRISIL
Certificate of Deposits
Infrastructure bond
Tier II (Under Basel III)
Tier I (Under Basel III)
MTN (Senior Unsecured) Rating
Fitch*
Moody's
S&P
ICRA A1+
ICRA AAA
ICRA AAA
ICRA AAA
ICRA AA+
ICRA MAAA
CRISIL A1+
CRISIL AAA
CRISIL AAA
CRISIL AA+
BB+
Baa3
BBB-
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
* During FY 2019-20, Fitch Ratings have revised its outlook rating to BB+ from BBB-.
122
Statutory Reports Listing fees
The annual listing fees for the financial year 2019-20 have been paid by the Bank to the Stock Exchanges.
Debt Securities
The debt instruments issued and allotted by the Bank in the form of Additional Tier I, Bond Tier II Debt Capital Instrument
and Infrastructure Bonds, on a private placement basis are listed on NSE and BSE. The Bonds issued and allotted by the Bank
under the MTN program are listed on Singapore Stock Exchange and the Green Bonds issued by the Bank are listed on London
Stock Exchange.
Green Bonds
The Bank had issued its inaugural Green Bond of USD 500 million (ISIN XS1410341389) in June 2016. The Bond is the first
certified Green Bond by an Asian bank – Axis Bank’s Green Bond was certified under Climate Bonds Initiative standards
version 2.1. It was also the first Bond issued by an Indian company to be listed on London Stock Exchange.
The Bonds were issued under the ‘Green Bond Framework’ established by the Bank. The framework defined the use of proceeds,
criteria for selection and evaluation of projects, monitoring utilization of proceeds and reporting guidelines. The framework
was reviewed by KPMG, and provided an ‘Independent Assurance Report’ as required under the Climate Bonds Standards.
The proceeds of issue of Green Bonds, were allocated to renewable energy projects, low carbon transport projects and energy
efficient buildings. In order to monitor the proceeds, a Green Bond Committee was constituted by the Bank. Utilization of said
proceeds were tracked on a monthly basis and shortfall, if any, was parked in government securities and other money market
instruments, as per extant norms.
Market Price Data
a)
Equity Shares
The price of the Bank’s Share - High, Low as traded during the financial year 2019-20, on NSE and BSE, are as under:
Month
April, 2019
May, 2019
June, 2019
July, 2019
August, 2019
September, 2019
October, 2019
November, 2019
December, 2019
January, 2020
February, 2020
March, 2020
High (`)
783.00
822.10
827.75
819.00
697.55
733.25
750.00
763.75
765.85
759.95
760.70
713.25
NSE
Low (`)
738.55
716.10
756.55
657.80
640.10
622.65
646.70
707.25
709.05
706.60
691.00
286.00
No. of Shares traded
13,69,45,660
17,20,97,329
16,95,86,920
21,98,31,416
20,98,49,816
26,27,87,457
25,95,00,720
17,51,33,105
17,59,60,513
19,66,52,036
15,04,02,508
65,68,00,997
High (`)
783.55
821.40
826.55
819.05
696.70
736.00
750.05
763.95
765.90
760.00
760.60
712.95
BSE
Low (`)
737.60
716.40
757.00
657.65
640.50
622.60
647.25
706.95
709.30
707.00
691.30
285
No. of Shares traded
73,32,259
96,41,183
63,96,301
72,34,390
67,43,558
81,44,902
79,66,319
80,79,592
55,01,451
46,76,966
33,93,428
2,14,27,933
Graph in Comparison to Nifty & Sensex
(cid:2)(cid:1142)(cid:404)(cid:399)
(cid:2)(cid:405)(cid:404)(cid:399)
(cid:2)(cid:1141)(cid:404)(cid:399)
(cid:2)(cid:404)(cid:404)(cid:399)
(cid:2)(cid:403)(cid:404)(cid:399)
(cid:2)(cid:402)(cid:404)(cid:399)
(cid:3) (cid:114)(cid:117)(cid:330)(cid:400) (cid:406)
(cid:24) (cid:45)(cid:139)(cid:330)(cid:400) (cid:406)
(cid:19)(cid:134) (cid:109)(cid:330)(cid:400) (cid:406)
(cid:19)(cid:134)(cid:1140)(cid:330)(cid:400) (cid:406)
(cid:3) (cid:134) (cid:93)(cid:330)(cid:400) (cid:406)
(cid:34) (cid:59) (cid:114)(cid:124)(cid:330)(cid:400) (cid:406)
(cid:27) (cid:49)(cid:124)(cid:330)(cid:400) (cid:406)
(cid:25) (cid:111) (cid:136)(cid:330)(cid:400) (cid:406)
(cid:9) (cid:59)(cid:49)(cid:330)(cid:400) (cid:406)
(cid:19)(cid:45) (cid:109)(cid:330)(cid:401) (cid:399)
(cid:13) (cid:59) (cid:48)(cid:330)(cid:401) (cid:399)
(cid:24) (cid:45)(cid:117)(cid:330)(cid:401) (cid:399)
(cid:2)(cid:400)(cid:401)(cid:311)(cid:404)(cid:399)(cid:399)
(cid:2)(cid:1142)(cid:404)(cid:399)
(cid:2)(cid:400)(cid:400)(cid:311)(cid:405)(cid:404)(cid:399)
(cid:2)(cid:400)(cid:400)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:400)(cid:399)(cid:311)(cid:401)(cid:404)(cid:399)
(cid:2)(cid:406)(cid:311)(cid:404)(cid:399)(cid:399)
(cid:2)(cid:1142)(cid:311)(cid:405)(cid:404)(cid:399)
(cid:2)(cid:1142)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:405)(cid:404)(cid:399)
(cid:2)(cid:1141)(cid:404)(cid:399)
(cid:2)(cid:404)(cid:404)(cid:399)
(cid:2)(cid:403)(cid:404)(cid:399)
(cid:2)(cid:402)(cid:404)(cid:399)
(cid:3)(cid:138)(cid:98)(cid:118)(cid:2)(cid:6)(cid:45)(cid:109)(cid:104)
(cid:25)(cid:17)(cid:13)(cid:36)(cid:43)
(cid:3)(cid:138)(cid:98)(cid:118)(cid:2)(cid:6)(cid:45)(cid:109)(cid:104)
(cid:34)(cid:11)(cid:25)(cid:34)(cid:11)(cid:42)
(cid:2)(cid:403)(cid:401)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:402)(cid:1142)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:402)(cid:403)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:402)(cid:399)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:401)(cid:1141)(cid:311)(cid:399)(cid:399)(cid:399)
(cid:2)(cid:401)(cid:401)(cid:311)(cid:399)(cid:399)(cid:399)
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b) GDR
The high and low closing prices of the Bank’s GDRs as traded during the financial year 2019-20, on LSE, are as under:
Month
April, 2019
May, 2019
June, 2019
July, 2019
August, 2019
September, 2019
October, 2019
November, 2019
December, 2019
January, 2020
February, 2020
March, 2020
High (In USD)
56.29
58.78
60.20
59.05
48.85
51.90
53.00
53.20
53.80
53.40
53.20
48.64
Low (In USD)
52.50
50.80
54.50
48.30
44.55
43.90
46.30
49.15
49.75
49.80
46.95
19.24
No. of GDRs traded
5,79,160
12,22,170
4,92,100
3,51,270
7,05,110
10,89,180
7,41,500
3,54,630
5,32,240
4,27,350
6,25,200
23,89,850
Dematerialization of Shares and Liquidity
The equity shares of the Bank are to be compulsorily traded on the floor of the stock exchanges in electronic form by all
investors. The Bank has entered into agreements with NSDL and CDSL, so as to provide the Members an opportunity to hold
and trade in equity shares of the Bank in electronic form.
As on 31st March 2020, 99.83 % of the total issued and paid up equity share capital of the Bank was held by investors in
electronic form and 0.17 % of the total issued and paid up equity share capital was held in physical form.
The number of equity shares of the Bank held in physical form which were transferred / processed, during the last three
financial years, are as under:
Particulars
Number of transfer deeds
Number of equity shares transferred
2019-20
30
30,000
2018-19
85
61,500
2017-18
141
34,000
As required under Regulation 40(9) of the Listing Regulations, M/s Ahalada Rao. V & Associates, Practicing Company Secretaries,
(C. P. No. 13407), Hyderabad have examined the records relating to share transfer deeds, memorandum of transfers, registers,
files and other related documents on a half-yearly basis and has issued a certificate confirming compliance with the provisions
of the said Regulations. The certificate has been submitted to the BSE and NSE where the Bank’s equity shares are listed, in
terms of the Listing Regulations.
Distribution of Shareholding
The distribution of shareholding of the Bank as on 31st March 2020, is as under:
No. of shares held
1-5,000
5,001-10,000
10,001-20,000
20,001-30,000
30,001-40,000
40,001-50,000
50,001-1,00,000
1,00,001 and above
Total
Electronic Form
Physical Form
Total
No. of
Shareholders
5,64,301
3,481
1,565
534
288
188
447
1,454
5,72,258
No. of Shares
6,55,22,998
1,25,15,531
1,11,78,259
66,01,848
50,09,562
42,28,797
1,59,39,718
2,69,58,83,600
2,81,68,80,313
No. of
Shareholders
4,953
188
15
4
0
4
4
0
5,168
No. of Shares
37,47,171
6,64,950
1,12,600
52,500
0
95,400
1,25,000
0
47,97,621
No. of
Shareholders
5,69,254
3,669
1,580
538
288
192
451
1,454
5,77,426
No. of Shares
% to capital
6,92,70,169
1,31,80,481
1,12,90,859
66,54,348
50,09,562
43,24,197
1,60,64,718
2,69,58,83,600
2,82,16,77,934
2.45
0.47
0.40
0.24
0.18
0.15
0.57
95.54
100.00
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Statutory Reports
Shareholding pattern
Category wise shareholding pattern of the Bank as on 31st March 2020, is as under:
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
Category / Shareholder
Promoters
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
Life Insurance Corporation of India
General Insurance Corporation of India
The New India Assurance Company Limited
National Insurance Company Limited
The Oriental Insurance Company Limited
United India Insurance Company Limited
Foreign Investors
Overseas Investors (including FIIs/OCBs/NRIs)
Foreign Direct Investment (GDR)
Domestic Financial Institutions
Financial Institutions / Mutual Funds / Banks / NBFC / INC /AIF
Others
Total
Top 20 Shareholders of the Bank as on 31st March 2020, is as under:
No. of Shares held
% of total issued &
paid-up Capital
12,96,52,427
25,43,77,246
3,17,15,229
2,05,91,585
5,49,681
49,77,520
9,13,248
1,44,95,54,331
5,48,68,145
64,31,64,609
23,13,13,913
2,82,16,77,934
4.59
9.02
1.12
0.73
0.02
0.18
0.03
51.37
1.94
22.79
8.21
100.00
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name of the Shareholder
No. of Shares held
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
SBI Dual Advantage Fund Series XXV
ICICI Prudential Regular Savings Fund
HDFC Trustee Co Ltd A/C HDFC Housing Opportunities Fund-1140D November 2017 (1)
Europacific Growth Fund
Dodge and Cox International Stock Fund
BC Asia Investments VII Limited – FDI
The Bank of New York Mellon, Dr
Reliance Capital Trustee Co Ltd-A/C Nippon India ETF Nifty Bees
Kotak Equity Savings Fund
BC Asia Investments III Limited – FDI
Franklin India Equity Advantage Fund
Government of Singapore – E
Aditya Birla Sun Life Trustee Private Limited A/C Aditya Birla Sun Life Banking ETF
NPS Trust- A/C Birla Sun Life Pension Fund Scheme E- Tier I
Vanguard Total International Stock Index Fund
Integral Investments South Asia IV – FDI
General Insurance Corporation of India
UTI Nifty Index Fund
25,43,77,246
12,96,52,427
11,91,99,203
6,58,33,840
5,89,94,772
5,79,71,711
5,76,19,325
5,56,00,000
5,48,68,145
5,17,16,210
4,91,92,348
4,00,00,000
3,85,19,813
3,79,81,934
3,76,83,382
3,71,94,086
3,45,13,015
3,19,00,000
3,17,15,229
3,15,55,046
% to total issued &
paid up capital
9.02
4.59
4.22
2.33
2.09
2.05
2.04
1.97
1.94
1.83
1.74
1.42
1.37
1.35
1.34
1.32
1.22
1.13
1.12
1.12
Outstanding GDR
The Bank has in the course of international offerings to overseas investors, issued and allotted securities linked to ordinary
equity shares of the Bank in the form of Global Depository Receipts (GDRs) in March 2005, April 2005, July 2007 and
September 2009. The said GDRs are listed for trading on London Stock Exchange. The underlying equity shares represent
outstanding GDRs, which have been included in the equity share capital of the Bank. The number of equity shares representing
outstanding GDRs, as on 31st March 2020 was 5,48,68,145.
The Bank has not issued any ADRs during the financial year 2019-20.
Convertible Warrants
During the Financial Year 2017-18, the Bank had issued 4,53,57,385 convertible warrants convertible into 4,53,57,385 equity
shares at a price of ` 565.00 per warrant on a preferential basis. The convertible warrants were allotted pursuant to receipt of
25% upfront payment consideration from the allottees i.e. ` 141.25 per convertible warrant.
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Annual Report 2019-20Experience Open
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The allottees of the convertible warrants could exercise the option to convert one convertible warrant into one equity share of
` 2/- each of the Bank within a period of 18 months from the date of its allotment, i.e. on or before 17th June 2019, by paying
balance 75% of the consideration i.e. ` 423.75 per convertible warrant. In the event, allottees did not exercise their right to
convert the said warrants before the said due date, the said convertible warrants (to the extent not lodged for conversion) shall
lapse and the upfront consideration paid by the warrant holders would have been forfeited by the Bank.
During the Financial Year 2019-20, the said allottees exercised their right to convert the said warrants, by paying balance
75% of the consideration. Accordingly, the Bank has on 29th May 2019, allotted 4,53,57,385 equity shares upon conversion of
4,53,57,385 convertible warrants, which were issued on a preferential basis, in terms of the applicable provisions of the SEBI
(Issue of Capital and Disclosure Requirements) Regulations, 2009 and the applicable provisions of the SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2018, as amended, the relevant provisions of the Companies Act, 2013 and the
relevant Rules made thereunder.
As on 31st March 2020, no warrants were pending for conversion.
Investor Services
Registrar & Share Transfer Agent (RTA)
KFIN has been entrusted with the task of administering all aspects relating to investor services for and on behalf of the Bank.
KFIN has appropriate systems to ensure that requisite service is provided to the investors of the Bank in accordance with
applicable corporate and securities laws and within the adopted service standards. Listed below are the service standards
adopted by KFIN in respect of the various services rendered by them to the investors of the Bank.
Nature of service being rendered to the Investors of the Bank
Registration of Nomination
Issue of duplicate dividend warrant(s)
Revalidation of dividend warrant(s)
Revalidation of demand draft(s)
Split/ consolidation of share certificate(s)
Dematerialization of share(s)
Transfer of share(s)
Transmission of share(s)
Consolidation of folio(s)
Change/Deletion/Transposition of Name(s)
Release of unclaimed share(s)
Re-materialization of share(s)
Issue of duplicate share certificate(s)
Adopted Service Standards
5 days
5 days
5 days
5 days
7 days
7 days
7 days
7 days
7 days
7 days
7 days
10 days
10 days
Investors are requested to write to the Registered Office of the Bank or to KFIN for availing any of the said services or may
address their correspondence/ complaints to shareholders@ axisbank.com or einward.ris@kfintech.com, in terms of Regulation
34(3) read with Schedule V of the Listing Regulations.
The Company Secretary Department of the Bank regularly monitors and reviews the status of the investor correspondences /
complaints received by the Bank/ KFIN and its redressal within the said service standards.
Share Transfer System
In terms of Regulation 40(2) of the Listing Regulations, the Share Committee of the Bank comprising the Company Secretary
and executives of Company Secretary Department of the Bank has been formed to attend to matters relating to transfer of
equity shares of the Bank and matters related thereto. The resolutions passed by the Share Committee, in this regard, are
tabled at the ensuing meeting of the Board of Directors of the Bank, for its noting.
Investor Grievances
During the year under review, the Bank received 1,878 correspondences from its investors, capital market intermediaries and
Statutory / Regulatory Authorities, inter alia, in respect of the services relating to the securities issued by the Bank by post,
web-based query redressal system of KFIN and through emails addressed to designated email address viz. shareholders@
axisbank.com and einward.ris@kfintech.com.
126
Statutory Reports The details of the investor complaints received and redressed by the Bank, during the last 3 financial years, are as under:
Received from
SEBI SCORES
Stock Exchanges
NSDL / CDSL
MCA
RBI
Total No. of complaints received
Total No. of complaints redressed
No. of complaints received
2019-20
2018-19
2017-18
17
7
-
-
1
25
20
10
-
-
-
-
10
10
7
8
-
-
-
15
15
No. of complaints
unresolved as on
31st March 2020
5
-
-
-
-
-
-
There was no investor complaint that was unresolved as on 1st April 2019. During the financial year under review, the Bank
received 25 investor complaints out of which 20 investor complaints were resolved, as on 31st March 2020. Consequently, 5
investor complaints were pending for resolution as on 31st March 2020, all of which have been resolved by the Bank, as on date.
The statement highlighting the status of the investor correspondence(s)/complaint(s) received and redressed by the Bank
during the financial year 2019-20 were tabled at the meetings of the Stakeholders Relationship Committee/ Board of Directors
of the Bank, for their review and noting.
Web-based Query Redressal System
Members may avail the facility extended by KFIN for redressal of queries, by visiting https://kprism.kfintech.com/investor/
query/Correspondence.aspx for query registration through free identity registration process. Investors can submit their
queries on the above website, which would generate a registration number. For accessing the status / response to the query
submitted, the grievance registration number can be used at the option ‘Click here to track your grievance’ after 24 hours.
Investors can continue to raise queries relating to their grievance, till they get a satisfactory reply.
Nomination Facility
Section 72 of the Companies Act, 2013, provides that every holder of securities of a company may, at any time nominate, in
the prescribed manner, any person to whom the securities shall vest in the event of death. Where the securities of a company
are held by more than one person jointly, the joint holders may together nominate any person to whom all the rights in the
securities shall vest in the event of death of all the joint holders.
In view of the above, Shareholders are encouraged to avail of the Nomination Facility. The relevant Nomination Form can
be downloaded from the website of the Bank or the Shareholders may write to the Bank at its Registered Office or to
KFIN for the same.
Please note that the nomination shall be automatically rescinded on transfer / transmission / dematerialization of the securities.
Commodity Price Risk or Foreign Exchange Risk and Hedging Activities
The details with respect to commodity price risk, in terms of SEBI circular no SEBI/ HO / CFD / CMD1/CIR/P/2018/0000000141
dated 15th November 2018, are as follows:
1) Risk management policy with respect to commodities including through hedging: As the Bank is not exposed to XAU
(Gold) and XAG (Silver) price risk, the Bank does not have a Risk Management Policy for commodity price risk.
2) Exposure of the Bank to commodity and commodity risks faced by the Bank during the year is given below:
a.
Total exposure of the listed entity to commodities: Nil as on 31st March 2020.
b. Exposure of the listed entity to various commodities: Not Applicable.
c. Commodity risks faced by the listed entity during the year and how they have been managed: The Bank did not run
any trading positions in XAU (Gold) or XAG (Silver) and does not have exposure to any other commodity.
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Annual Report 2019-20Experience Open
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Payment of Dividend through electronic mode:
ECS Facility
Payment of Dividends through Electronic mode:
•
In terms of Regulation 12 and Schedule I of Listing Regulations, every listed entity is required to mandatorily make all
payments to Investors, including Dividend, by using any Reserve Bank of India (RBI) approved electronic mode of payments
viz., Direct Credit, Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Electronic Clearing
Service (ECS), National Automated Clearing House (NACH) etc. The Bank would be entitled to use the bank account
details of the shareholders available with the Depository Participant to facilitate payment through electronic mode.
•
In case of shares held in electronic form:
All shareholders of the Bank holding equity shares in electronic form are requested to provide details relating to,
their Bank Account Number, including 9 digit MICR Code and 11 digit IFSC Code, E-mail ID and mobile No(s) to their
Depository Participant(s).
•
In case of shares held in physical form:
All shareholders of the Bank are requested to provide details relating to their Bank Account Number, indicating 9
digit MICR Code and 11 digit IFSC Code, E-mail ID and mobile No(s) to KFIN at Selenium Tower – B, Plot No 31 &
32, Financial District, Nanakramguda, Serilingampally Mandal, Hyderabad – 500 032, Telangana, by quoting their
folio number and attaching a photocopy of the cheque leaf of the said Bank Account and a self-attested copy of
their PAN card.
•
In case the dividend paid through electronic mode is rejected by the corresponding bank, for any reason whatsoever, the
Bank will issue a dividend warrant and print the Bank Account details available with KFIN on the said dividend warrant to
avoid fraudulent encashment.
Green initiatives
Dispatch of documents in Electronic Form
In terms of Rule 18 of the Companies (Management and Administration) Rules, 2014, a company may give notice through
electronic mode including e-mail to those Members who have provided their e-mail address either to their Depository
Participant (DP) or to the Company.
Further, in terms of Regulation 36 of the Listing Regulations, the listed entity is required to send soft copies of its annual report
to all those shareholder(s) who have registered their email address(es) for this purpose.
Accordingly, the Notice convening the AGM, the annual report of the Bank for the financial year 2019-20 and the annexures
stated therein will be sent by e-mail to those Members who have registered their e-mail address with their DP or with KFIN.
Members who have not yet registered their e-mail address are requested to do so, at the earliest.
In case of shares held in electronic form and in case of any change in the e-mail address, Members are requested to update the
same with their DP and in case of shares held in physical form, Members are requested to update the same with KFIN.
In case a Member, whose email address has changed, fails to update the new e-mail address, the said documents will be sent
to the existing e-mail address and the said documents will be deemed to have been delivered, in compliance with the relevant
provisions of the Companies Act, 2013, the relevant Rules made thereunder and the Listing Regulations.
Please note that the said documents will also be uploaded on the Bank’s website viz. www.axisbank.com. and copies thereof
will be made available for inspection at the Registered Office of the Bank during business hours on all working days except
Saturdays, Sundays, Bank Holidays and Public Holidays up to the date of the ensuing AGM.
The Bank has also availed the services of National Securities Depository Limited (NSDL) for updating the email addresses of
those Shareholders of the Bank, who had not registered their email addresses with their Depository Participant. As part of the
said Green Initiative, Shareholders of the Bank are requested to take benefit of the said service and update their email address
with their Depository Participant, at the earliest.
We seek your support to the said Green Initiative, as it is designed to protect our fragile environment.
128
Statutory Reports
Means of Communication
After the unaudited/audited financial results of the Bank are reviewed and approved by the Board of Directors of the Bank,
the same is disclosed to the Stock Exchanges, in accordance with Regulation 30 of the Listing Regulations read with sub-para
4 of Para A of Part A of Schedule III of the Listing Regulations.
Thereafter, the said financial results of the Bank and the presentations made by the Senior Management to the Analysts /
Investors are uploaded on the Bank’s website, https://www.axisbank.com/shareholders-corner/financial-results-and-other-
information/quarterly-results, in accordance with the Listing Regulations.
The said financial results of the Bank are generally published in the Economic Times, Business Standard, Mint and Gujarat
Samachar or Divya Bhaskar after declaration of the financial results of the Bank to the Stock Exchanges, in accordance with
the Listing Regulations.
The said financial results and other information filed by the Bank, from time to time is also available on the websites of
the Exchanges, i.e., BSE at www.bseindia.com and the NSE at www.nseindia.com. NSE and BSE have online platforms for
filing of announcements and other compliance returns viz., NSE Electronic Application Processing System (NEAPS) and BSE
Listing Centre, respectively. Various compliances as required/prescribed under the Listing Regulations are filed through these
systems. Similar filings are also made to the London Stock Exchange and Singapore Stock Exchange.
For ready reference of the investors of the Bank, a list of frequently asked questions and their answers have been uploaded on
website of the Bank at https://www.axisbank.com/shareholders-corner/investor-faqs.
In order to enable a larger participation of Shareholders at the 26th AGM, the Bank will provide Webcast facility for participation
of its Members, details of which will be stated in the Notice convening the 26th AGM.
General Body Meetings
The details of the last three Annual General Meetings, are as under:
AGM
23rd
24th
25th
Date and Day
26th July 2017 – Wednesday
Time
9.30 a.m.
20th June 2018 – Wednesday
10.00 a.m.
20th July 2019 - Saturday
10.00 a.m.
Location
J. B. Auditorium, Ahmedabad Management Association, AMA Complex,
ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad, Gujarat –380 015.
J. B. Auditorium, Ahmedabad Management Association, AMA Complex,
ATIRA, Dr. Vikram Sarabhai Marg, Ahmedabad, Gujarat - 380 015.
H. T. Parekh Auditorium, AMA Complex, ATIRA, Dr. Vikram Sarabhai Marg,
Ahmedabad - 380 015
Special resolutions passed at previous three Annual General Meetings
The details of the special resolution(s) passed at the previous three Annual General Meetings, are as under:
AGM No.
23rd
Date of AGM
26th July 2017
24th
20th June 2018
Special Resolution(s)
Resolution No. 11 – Borrowing / Raising funds in Indian/Foreign Currency by issue of debt instruments
including but not limited to subordinated debt, senior unsecured long term bonds, green bonds, medium term
notes, non-convertible debentures on a private placement basis, for an amount of upto ` 35,000 crores.
Resolution No. 11 - Increase in the borrowing limits of the Bank upto ` 200,000 crores, under Section180 (1)
(c) of the Companies Act, 2013.
25th
20th July 2019
Resolution No. 12 - Borrowing / Raising funds in Indian/Foreign Currency by issue of debt instruments
including but not limited to subordinated debt, senior unsecured long term bonds, green bonds, medium term
notes, non-convertible debentures on a private placement basis, for an amount of upto ` 35,000 crores.
Resolution No. 12- Borrowing/Raising funds in Indian Currency/Foreign Currency by issue of Debt Securities
including but not limited to long term bonds, green bonds, non-convertible debentures, perpetual debt
instruments and Tier II Capital bonds or such other debt securities as may be permitted under the RBI
guidelines, from time to time, on a private placement basis, for an amount of up to ` 35,000 crores.
Procedure for Postal Ballot
In compliance with Sections 108 and 110 of the Companies Act, 2013 read with Rules 20 and 22 of the Companies (Management
and Administration) Rules, 2014 and Regulation 44 of the Listing Regulations, the Bank provides e-voting facility to all its
Members to enable them to cast their votes electronically on the matters included in Postal Ballot Notice. E-voting is optional
and all Members are eligible to vote by completing and dispatching the Postal Ballot Form by post, or through e-voting. The
Bank has engaged the services of KFIN for providing e-voting facility to its Members.
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Annual Report 2019-20Experience Open Corporate Governance
The Board of Directors of the Bank appoints a Scrutinizer for conducting the Postal Ballot process, in a fair and transparent
manner. The Postal Ballot process is conducted in accordance with the provisions of Section 110 of the Companies Act, 2013
read with Rule 22 of the Companies (Management & Administration) Rules, 2014, as amended.
The Bank dispatches the Postal Ballot Notice and relevant forms along with postage prepaid business reply envelope to those
Members whose names appear on the Register of Members / Statements of Beneficial Holders provided by the Depositories
as on the cut-off date. The Postal Ballot Notice is also sent in electronic form to those Members whose email address is
registered with their DP in case shares are held in electronic form or with KFIN in case shares are held in physical form.
The Bank also publishes a notice in the newspaper declaring the details of completion of dispatch of the Postal Ballot Notice
and other details, in accordance with the aforesaid provisions of the Companies Act, 2013 and the said Rules.
Voting rights are reckoned on the paid-up value of the shares registered in the names of the Members as on the said cut-off
date. Members desiring to exercise their votes by physical postal ballot forms are required to return the forms duly completed
and signed to the Scrutinizer at the address mentioned in the postage prepaid business reply envelope on or before the close
of voting period. Members desiring to exercise their votes by electronic mode are requested to exercise their vote using the
e-voting facility before the close of business hours on the last date of e-voting as set out in the Postal Ballot Notice.
The Scrutinizer is required to submit his report to the Chairman after verification of the records and thereafter the consolidated
results of the voting can be declared by the Chairman or by any one of the Directors of the Bank, duly authorized by the Board
of Directors, in this regard.
Subsequently, the said results along with the report of the Scrutinizer is disclosed to the Stock Exchanges within 48 hours of
such declaration, in terms of Regulation 44(3) of the Listing Regulations, uploaded on the website of the Bank and displayed
on the notice board at the Registered and Corporate Offices of the Bank, in accordance with the aforesaid provisions of the
Companies Act, 2013 and the said Rules.
The resolution, if passed by requisite majority, shall be deemed to have been passed on the last date specified by the Company
for receipt of duly completed postal ballot forms or e-voting.
No special resolution is proposed to be passed through postal ballot.
Special Resolutions passed through postal ballot during the Financial Year 2019-20:
During the year under review, approval of Shareholders of the Bank was sought for the following matters, through postal ballot
on 22nd August 2019 and 10th January 2020. The Bank had appointed Shri D. Raghavendar Rao., Practicing Company Secretary
(Membership No. ACS 35788/C.P. No. 13407) to act as the Scrutinizer for conducting the said postal ballot process, in a fair
and transparent manner.
The summary of the Postal Ballot results in respect of the special resolutions, declared on 22nd August 2019 and 10th January
2020, are as under:
August 2019:
Raising of funds through issue of equity shares/depository receipts and/or any other instruments or securities representing
either equity shares and/or convertible securities linked to equity shares including through Qualified Institutions Placement/
American Depository Receipts/Global Depository Receipts/Preferential Allotment or such other permissible mode or
combinations thereof.
No. of votes in favour
2,04,20,76,228
No. of votes against
1,37,24,598
% of votes in favor
99.33%
% of votes against
0.67%
January 2020:
Re-appointment of Shri S. Vishvanathan (DIN: 02255828) as an Independent Director of the Bank, for a period of 3 years, with
effect from 11th February 2020 up to 10th February 2023 (both days inclusive).
No. of votes in favour
2,12,19,15,016
No. of votes against
50,37,564
% of votes in favor
99.76%
% of votes against
0.24%
130
Statutory Reports Plant Locations
As the Bank is a Banking Company registered under the Banking Regulation Act, 1949, the provisions relating to disclosure
of details relating to plant location is not applicable to the Bank. The Bank operates through a network of branches spread
across the length and breadth of the country. The number of branches (including extension counters) as on 31st March 2020
stood at 4,528.
The list of branches is uploaded on the website of the Bank at https://branch.axisbank.com.
Address for Correspondence
Registered Office
Corporate Office
Registrar & Share Transfer Agent
Axis Bank Limited
[CIN: L65110GJ1993PLC020769]
‘Trishul’, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad-380 006.
Gujarat.
Tel. No.: +9179-6630 6161
Fax No.: +9179-2640 9321
Email: shareholders@axisbank.com
Debenture Trustees
IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R. Kamani Marg,
Ballard Estate, Mumbai - 400 001.
Phone No. +91 - 22 4080 7000.
Website: www.idbitrustee.com
Axis Bank Limited
‘Axis House’, C-2,
Wadia International Centre,
Pandurang Budhkar Marg, Worli,
Mumbai-400 025.
Maharashtra.
Tel. No.: +9122-2425 2525
Fax No.: +9122-2425 1800
Email: shareholders@axisbank.com
KFin Technologies Private Limited
Unit: Axis Bank Limited.
Selenium Tower – B, Plot No 31 & 32,
Financial District, Nanakramguda,
Serilingampally Mandal,
Hyderabad – 500 032. Telangana.
Tel. No.: +91 40-6716 2222
Fax No.: +91 40-2300 1153
Toll Free No.: 1800-345-4001
Email: einward.ris@kfintech.com
SBI Cap Trustee Company Limited
6th Floor, Apeejay House, 3,
Dinshaw Wachha Road,
Churchgate, Mumbai - 400 020.
Phone No. +91 - 22 - 4302 5555.
Website: www.sbicaptrustee.com
131
Annual Report 2019-20Experience Open Corporate Governance
COMPLIANCE WITH CODE OF CONDUCT AND CONFLICT OF INTEREST NORMS IN RESPECT OF
BOARD OF DIRECTORS AND THE CODE OF CONDUCT AND ETHICS FOR SENIOR MANAGEMENT OF
THE BANK, FOR THE FINANCIAL YEAR 2019-20
I confirm that for the year under review, all Directors and Members of the Senior Management of the Bank, have affirmed
compliance with the Codes, as applicable to them.
Amitabh Chaudhry
Managing Director & CEO
Place : Mumbai
Date : 29th April 2020
132
Statutory Reports Form No. MGT-9
Extract of Annual Return as on the Financial Year ended on 31st March 2020
[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014].
I. Registration and Other Details
i)
ii)
iii)
iv)
v)
CIN
Registration Date
Name of the Company
Category / Sub-Category of the Company
Address of the Registered office and contact details
vi) Whether listed company – Yes / No
vii)
Name, Address and Contact details of
Registrar and Transfer Agent
II. Principal Business Activities of the Bank
Sr. No. Name and description of main products / services
1
• Deposits
• Loans
•
Investments and foreign exchange
L65110GJ1993PLC020769
3rd December 1993
Axis Bank Limited
Company Limited by Shares
‘Trishul’ 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge, Ahmedabad,
Gujarat – 380 006.
Phone: +91-79-6630 61,61,
Fax: +91-79-2640 9321
Email: shareholders@axisbank.com
Yes
KFin Technologies Private Limited
Unit: Axis Bank Limited.
Selenium Tower-B, Plot No 31 & 32, Financial District, Nanakramguda,
Serilingampally Mandal, Hyderabad – 500 032. Telangana.
Tel. No. : +91 40-6716 2222
Fax No. : +91 40-2300 1153
Toll Free No. : 1800-345-4001
Email :einward.ris@kfintech.com
NIC Code of the Product/ service
Section K : Financial and Insurance
activities
Code : 64191
% to total turnover of the Company
Not applicable
III. Particulars of Holding, Subsidiary and Associate Companies
Sr.
No.
1
2
3
4
5
6
7
Name
Address of the Company
CIN/GLN
Holding/
Subsidiary
/ Associate
% of
shares
held
Applicable
Section
Axis Capital
Limited
Axis Private
Equity Limited
Axis Trustee
Services
Limited
Axis Asset
Management
Company
Limited
Axis Mutual
Fund Trustee
Limited
Axis Finance
Limited
Axis Securities
Limited
Axis House, 8th Floor, Wadia International
Centre Pandurang Budhkar Marg, Worli,
Mumbai - 400 025
Axis House, Bombay Dyeing Mills
Compound, Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Axis House, 2nd Floor, Bombay Dyeing
Mills Compound, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Axis House, 1st Floor, C-2, Wadia
International Centre, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Axis House, 1st Floor, C-2, Wadia
International Centre, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Axis House, Ground Floor, Wadia
International Centre, Worli,
Mumbai - 400 025
Axis House, 8th Floor, Wadia International
Centre Pandurang Budhkar Marg, Worli,
Mumbai - 400 025
U51900MH2005PLC157853
Subsidiary
99.99%
2(87)(ii)
U66020MH2006PLC165039
Subsidiary
99.99%
2(87)(ii)
U74999MH2008PLC182264
Subsidiary
99.99%
2(87)(ii)
U65991MH2009PLC189558
Subsidiary
74.99%
2(87)(ii)
U66020MH2009PLC189325
Subsidiary
74.86%
2(87)(ii)
U65921MH1995PLC212675
Subsidiary
99.99%
2(87)(ii)
U74992MH2006PLC163204
Subsidiary
99.99%
2(87)(ii)
133
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
8
9
10
4 Chilswell street, 1st Floor, London
England, EC1Y 4 UP
Axis House, C-2 Wadia International
Centre, P B Marg, Worli, Mumbai - 400
025
2nd Floor, Plot No. 25, Pusa Road, New
Delhi-110005
Axis Bank UK
Limited
A.TREDS
Limited
Freecharge
Payment
Technologies
Private Limited
Name
Address of the Company
CIN/GLN
Holding/
Subsidiary
/ Associate
Foreign Company (07554558) Subsidiary
% of
shares
held
100%
Applicable
Section
2(87)(ii)
U74999MH2016PLC281452
Subsidiary
66.99%
2(87)(ii)
U74140DL2015PTC275419
Subsidiary
99.99%
2(87)(ii)
11 Accelyst
Solutions
Private Limited
12 Axis Capital
USA, LLC.
1st floor, Corporate Park-2, Sion -
Trombay Road, Near Swastik Chambers,
Chembur, Mumbai – 400071
1675 South State Street, Suite B, Dover,
County of Kent, Delaware -19901
U72900MH2008PTC185202 Subsidiary
99.99%
2(87)(ii)
Foreign Company
Step down
Subsidiary
2(87)(ii)
100%
held by
Axis
Capital
Limited
iv. Share Holding Pattern (Equity Share Capital Breakup as Percentage of total Equity)
i.
Category-wise Share Holding
No. of Shares held at the beginning of the year
(31.03.2019)
No. of Shares held at the end of the year (31.03.2020)
Demat
Physical
Total
Demat
Physical
Total
Category of Shareholders
A. Promoter and Promoter
Group
1. Indian
a)
Individual/HUF
b) Central Govt
c) State Govt(s)
d) Bodies Corp.
e) Banks / FI
Any Others
Sub-total (A) (1):-
2. Foreign
a) NRIs - Individuals
b) Other – Individuals
c) Bodies Corp.
d) Banks / FI
Any Others
Sub-total (A) (2):-
Total shareholding of
Promoter
(A) = (A)(1)+(A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds
b) Banks / FI
c) Central Govt
d) State Govt(s)
e)
Venture Capital Funds
0
0
0
0
46,79,96,778
0
46,79,96,778
0
0
0
0
0
0
46,79,96,778
0
0
0
0
0
0
0
0
0
0
0
0
0
0
38,41,94,826
25,23,036
0
500
0
0
0
% of
Total
Shares
0.00
0.00
0.00
0.00
18.20
0.00
18.20
0.00
0.00
0.00
0.00
0.00
0.00
0
0
0
0
46,79,96,778
0
46,79,96,778
0
0
0
0
0
0
0
0
0
0
44,27,76,936
0
44,27,76,936
0
0
0
0
0
0
46,79,96,778
18.20
44,27,76,936
38,41,94,826
14.94
56,75,41,277
25,23,536
0
0
0
5,35,25,902
1,24,22,17,871
0
34
0.10
0.00
0.00
0.00
2.08
48.30
0.00
31,46,636
0
0
0
6,11,55,834
1,25,85,82,536
0
0.00
4,69,87,481
0
0
0
0
0
0
0
f)
Insurance Companies
5,35,25,902
g) FIIs
1,24,22,17,871
h)
Foreign Venture
Capital Funds
i) Other (specify)
0
34
134
%
Change
during
the
year
0.00
0.00
0.00
0.00
-2.51
0.00
-2.51
0.00
0.00
0.00
0.00
0.00
0.00
% of
Total
Shares
0.00
0.00
0.00
0.00
15.69
0.00
15.69
0.00
0.00
0.00
0.00
0.00
0.00
0
0
0
0
44,27,76,936
0
44,27,76,936
0
0
0
0
0
0
44,27,76,936
15.69
-2.51
56,75,41,277
20.11
31,46,636
0
0
0
6,11,55,834
1,25,85,82,536
0
0.11
0.00
0.00
0.00
2.17
44.60
0.00
5.17
0.01
0.00
0.00
0.00
0.09
-3.70
0.00
4,69,87,481
1.67
1.67
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Statutory Reports
Sub-total (B)(1):-
2. Non- Institutions
a) Bodies Corp.
i)
Indian
ii) Overseas
b)
Individuals
i)
Individuals holding
nominal share
capital upto ` 1
lakh
ii) Individuals holding
nominal share
capital in excess of
` 1 lakh
c) Others (specify)
HUF
Trusts
Clearing Members
Non Resident Indians
NRI Non-Repatriation
Foreign Bodies-Dr
Foreign Nationals
IEPF
NBFC
AIF
Total Public Shareholding
(B)=(B)(1)+(B)(2)
C.
Shares held by Custodian
for GDRs & ADRs
Promoter and Promoter
Group
No. of Shares held at the beginning of the year
(31.03.2019)
No. of Shares held at the end of the year (31.03.2020)
Category of Shareholders
Demat
Physical
Total
% of
Total
Shares
Demat
Physical
Total
1,68,24,61,669
500
1,68,24,62,169
65.42
1,93,74,13,764
0
1,93,74,13,764
%
Change
during
the
year
3.24
% of
Total
Shares
68.66
9,42,58,130
8,75,00,000
16,000
0
9,42,74,130
8,75,00,000
3.67
3.40
3,64,21,258
16,000
3,64,37,258
13,28,57,385
0
13,28,57,385
1.29
4.71
-2.38
1.31
7,86,77,198
55,04,806
8,41,82,004
3.28
10,28,91,184
45,45,721
10,74,36,905
3.81
0.53
4,35,12,538
0
4,35,12,538
1.69
3,08,19,847
2,33,900
3,10,53,747
1.10
-0.59
11,73,199
2,07,70,451
1,08,71,576
29,12,269
23,52,784
6,08,417
750
6,84,611
21,541
39,81,369
0
0
0
2,000
0
0
0
0
0
0
11,73,199
2,07,70,451
1,08,71,576
29,14,269
23,52,784
6,08,417
750
6,84,611
21,541
39,81,369
0.05
0.81
0.42
0.11
0.09
0.02
0.00
0.03
0.00
0.15
13.72
79.14
16,67,752
3,74,56,856
1,65,45,792
41,46,408
31,74,674
37,24,347
2,323
7,92,780
5,576
1,13,15,286
0
0
0
2,000
0
0
0
0
0
0
16,67,752
3,74,56,856
1,65,45,792
41,48,408
31,74,674
37,24,347
2,323
7,92,780
5,576
1,13,15,286
38,18,21,468
47,97,621
38,66,19,089
2,31,92,35,232
47,97,621
2,32,40,32,853
0.06
1.33
0.59
0.15
0.11
0.13
0.00
0.03
0.00
0.40
13.71
82.37
0.01
0.52
0.17
0.04
0.02
0.11
0.00
0.00
0.00
0.25
-0.01
3.23
Sub-total (B)(2):-
34,73,24,833
5,5,22,806
35,28,47,639
2,02,97,86,502
55,23,306
2,03,53,09,808
Public
6,83,38,285
0
0
0
0
0.00
0
6,83,38,285
2.66
5,48,68,145
0
0
0
0.00
0.00
5,48,68,145
1.94
Grand Total (A+B+C)
2,56,61,21,565
55,23,306
2,57,16,44,871
100.00
2,81,68,80,313
47,97,621
2,82,16,77,934
100.00
ii.
Shareholding of Promoters
Sr.
No.
Shareholder’s Name
1
2
3
4
Administrator of the
Specified Undertaking of
the Unit Trust of India -
SUUTI
Life Insurance Corporation
of India
General Insurance
Corporation of India
The New India Assurance
Company Limited
Shareholding at the beginning of the year
31/03/2019
Shareholding at the end of the year
31/03/2020
No. of Shares
% of total
Shares of
the Bank
% of Shares
Pledged /
encumbered to
total Shares
No. of
Shares
% of total
Shares of
the Bank
% of Shares
Pledged /
encumbered
to total Shares
13,68,87,639
5.32
-
12,96,52,427
4.59
27,05,83,548
10.52
3,40,62,729
1.32
2,05,91,585
0.8
-
-
-
25,43,77,246
3,17,15,229
2,05,91,585
9.02
1.12
0.73
-
-
-
-
-0.72
0.00
% change
in Share
holding
during the
year
-0.73
-1.50
-0.20
-0.07
135
Annual Report 2019-20Experience Open
Other Reports
Sr.
No.
Shareholder’s Name
5
6
7
National Insurance
Company
Limited
The Oriental Insurance
Company Limited
United India Insurance
Company Limited
Shareholding at the beginning of the year
31/03/2019
Shareholding at the end of the year
31/03/2020
No. of Shares
% of total
Shares of
the Bank
% of Shares
Pledged /
encumbered to
total Shares
No. of
Shares
% of total
Shares of
the Bank
% of Shares
Pledged /
encumbered
to total Shares
5,49,681
0.02
49,97,520
3,24,076
0.19
0.01
-
-
-
5,49,681
0.02
49,77,520
9,13,248
0.18
0.03
-
-
-
Total
46,79,96,778
18.18
44,27,76,936
15.69
% change
in Share
holding
during the
year
0.00
-0.01
0.02
-2.49
iii. Change in Promoters’ Shareholding
Shareholding at the
beginning of the Year
No of Shares
% of total
shares
of the
company
27,05,83,548
10.52
Sr.
No.
Name of the Share
Holder
1
Life Insurance
Corporation of
India
Date
Increase/
Decrease
in share
holding
Reason
31/03/2019
-3,17,825
03/05/2019
8,450
10/05/2019
-8,72,973
10/05/2019
21,000
17/05/2019
-6,15,000
17/05/2019
24/05/2019
-9,731
21/06/2019 -14,10,116
28/06/2019 -25,48,673
-16,64,045
05/07/2019
12/07/2019
-7,24,422
19/07/2019 -14,22,716
26/07/2019 -10,50,251
06/12/2019
-9,08,848
20/12/2019 -38,42,657
27/12/2019
-8,48,495
31/03/2020
31/03/2019
04/10/2019 -75,97,965
18/10/2019
3,62,753
31/03/2020
31/03/2019
24/05/2019
31/05/2019
07/06/2019
14/06/2019
20/12/2019
27/12/2019
14/02/2020
21/02/2020
28/02/2020
31/03/2020
31/03/2019
-1,00,000
-35,000
-41,521
-23,479
-6,00,000
-7,47,500
-30,000
-3,00,000
-4,70,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Cumulative Shareholding
during the Year
No of Shares
27,05,83,548
27,02,65,723
27,02,74,173
26,94,01,200
26,94,22,200
26,88,07,200
26,87,97,469
26,73,87,353
26,48,38,680
26,31,74,635
26,24,50,213
26,10,27,497
25,99,77,246
25,90,68,398
25,52,25,741
25,43,77,246
25,43,77,246
13,68,87,639
12,92,89,674
12,96,52,427
12,96,52,427
3,40,62,729
3,39,62,729
3,39,27,729
3,38,86,208
3,38,62,729
3,32,62,729
3,25,15,229
3,24,85,229
3,21,85,229
3,17,15,229
3,17,15,229
2,05,91,585
% of total
shares
of the
company
10.52
10.51
10.51
10.47
10.47
10.45
10.45
10.21
10.11
10.05
10.02
9.96
9.92
9.19
9.05
9.02
9.02
5.32
4.59
4.60
4.59
1.32
1.32
1.30
1.29
1.29
1.18
1.15
1.15
1.14
1.12
1.12
0.80
Administrator of the
Specified Undertaking
of the Unit Trust of
India
General Insurance
Corporation of India
25,43,77,246
13,68,87,639
12,96,52,427
3,40,62,729
9.02
5.32
4.59
1.32
2
3
4
136
The New India
Assurance Company
Limited
3,17,15,229
2,05,91,585
1.12
0.80
2,05,91,585
0.73
31/03/2020
2,05,91,585
0.73
Statutory Reports
Sr.
No.
Name of the Share
Holder
5
6
7
The Oriental
Insurance Company
Limited
National Insurance
Company Ltd
United India Insurance
Company Limited
Shareholding at the
beginning of the Year
No of Shares
% of total
shares
of the
company
49,97,520
0.19
49,77,520
5,49,681
5,49,681
3,24,076
0.18
0.02
0.02
0.01
9,13,248
0.03
Date
Increase/
Decrease
in share
holding
Cumulative Shareholding
during the Year
Reason
No of Shares
% of total
shares
of the
company
31/03/2019
05/04/2019
31/03/2020
31/03/2019
31/03/2020
31/03/2019
06/03/2020
13/03/2020
20/03/2020
27/03/2020
31/03/2020
-20,000
Transfer
1,29,172
1,40,000
2,70,000
50,000
Transfer
Transfer
Transfer
Transfer
49,97,520
49,77,520
49,77,520
5,49,681
5,49,681
3,24,076
4,53,248
5,93,248
8,63,248
9,13,248
9,13,248
0.19
0.19
0.18
0.02
0.02
0.01
0.02
0.02
0.03
0.03
0.03
iv) Shareholding pattern of Top Ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
1
2
Europacific Growth
Fund
6,46,12,400
2.51
SBI Dual Advantage
Fund - Series XXII
5,79,71,711
5,56,43,037
2.05
2.16
Date
Increase/
Decrease in
share holding
Reason
31/03/2019
12/04/2019
19/04/2019
12/07/2019
19/07/2019
10/01/2020
31/01/2020
31/03/2020
30/03/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
10/05/2019
10/05/2019
-25,19,868
-13,30,821
-26,20,722
-12,49,278
5,80,000
5,00,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
25,99,155
17,205
-69,617
63,981
-64,030
2,54,884
-80,001
2,59,170
4,73,451
-50,000
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Cumulative Shareholding
during the Year
No of Shares
6,46,12,400
6,20,92,532
6,07,61,711
5,81,40,989
5,68,91,711
5,74,71,711
5,79,71,711
5,79,71,711
5,56,43,037
5,82,42,192
5,82,59,397
5,81,89,780
5,82,53,761
5,81,89,731
5,84,44,615
5,83,64,614
5,86,23,784
5,90,97,235
5,90,47,235
% of total
shares
of the
company
2.51
2.41
2.36
2.22
2.17
2.04
2.06
2.05
2.16
2.26
2.27
2.26
2.26
2.26
2.27
2.27
2.28
2.30
2.30
137
Annual Report 2019-20Experience Open
Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
17/05/2019
24/05/2019
24/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
19/07/2019
19/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
11/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
06/12/2019
4,48,448
6,96,353
-3,54,008
2,41,299
1,06,656
-2,19,700
1,65,764
2,00,068
-11,00,000
7,36,267
-3
22,64,981
-5,00,076
6,30,358
4,10,529
-4,352
8,68,528
45,51,804
-56,500
36,13,885
-13,732
24,22,683
1,94,870
8,44,101
-1,19,650
15,53,137
-6
88,850
-2,04,106
6,19,000
-31
23,35,189
-18,38,524
1,64,81,163
-13,505
2,00,934
-15,04,500
44,00,015
-55,000
5,13,060
2,26,771
-4,20,384
4,64,566
-72,097
4,82,951
-8,79,002
3,83,865
-10,22,852
3,08,655
-3,03,654
18,25,030
5,72,834
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Cumulative Shareholding
during the Year
No of Shares
5,94,95,683
6,01,92,036
5,98,38,028
6,00,79,327
6,01,85,983
5,99,66,283
6,01,32,047
6,03,32,115
5,92,32,115
5,99,68,382
5,99,68,379
6,22,33,360
6,17,33,284
6,23,63,642
6,27,74,171
6,27,69,819
6,36,38,347
6,81,90,151
6,81,33,651
7,17,47,536
7,17,33,804
7,41,56,487
7,43,51,357
7,51,95,458
7,50,75,808
7,66,28,945
7,66,28,939
7,67,17,789
7,65,13,683
7,71,32,683
7,71,32,652
7,94,67,841
7,76,29,317
9,41,10,480
9,40,96,975
9,42,97,909
9,27,93,409
9,71,93,424
9,71,38,424
9,76,51,484
9,78,78,255
9,74,57,871
9,79,22,437
9,78,50,340
9,83,33,291
9,74,54,289
9,78,38,154
9,68,15,302
9,71,23,957
9,68,20,303
9,86,45,333
9,92,18,167
% of total
shares
of the
company
2.31
2.34
2.33
2.29
2.30
2.29
2.30
2.30
2.26
2.29
2.29
2.38
2.36
2.38
2.40
2.40
2.43
2.60
2.60
2.74
2.74
2.83
2.84
2.87
2.87
2.92
2.92
2.93
2.92
2.94
2.94
3.03
2.96
3.34
3.34
3.34
3.29
3.45
3.45
3.46
3.47
3.46
3.47
3.47
3.49
3.46
3.47
3.43
3.44
3.43
3.50
3.52
138
Statutory Reports Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2019
31/03/2020
31/03/2019
05/04/2019
12/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
-7,99,409
6,27,204
-97,771
4,94,348
-4,242
6,97,884
-2,00,312
3,57,701
-20,001
1,30,295
-5,720
1,36,013
-2,74,765
1,45,122
-7,008
1,50,750
-1,45,728
2,04,222
-10,965
1,77,487
-10,48,667
6,85,564
-1,20,114
93,478
-25,011
10,15,674
-3,14,558
9,53,523
5,86,841
2,36,41,652
-1,27,44,750
53,02,623
-10,60,693
14,60,369
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
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Transfer
Transfer
Transfer
Transfer
Transfer
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Transfer
Transfer
-2,71,364
-8,88,002
-1,17,722
77,450
-1,13,072
8,34,585
-32,500
1,55,128
-3,23,883
-15,241
-59,553
57,500
-2,02,597
-10,734
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
3
4
BC Asia
Investments VII
Limited - FDI
ICICI Prudential
Life Insurance
Company Limited
11,91,99,203
5,56,00,000
5,56,00,000
5,14,25,051
4.22
2.16
1.97
2.00
Cumulative Shareholding
during the Year
No of Shares
9,84,18,758
9,90,45,962
9,89,48,191
9,94,42,539
9,94,38,297
10,01,36,181
9,99,35,869
10,02,93,570
10,02,73,569
10,04,03,864
10,03,98,144
10,05,34,157
10,02,59,392
10,04,04,514
10,03,97,506
10,05,48,256
10,04,02,528
10,06,06,750
10,05,95,785
10,07,73,272
9,97,24,605
10,04,10,169
10,02,90,055
10,03,83,533
10,03,58,522
10,13,74,196
10,10,59,638
10,20,13,161
10,26,00,002
12,62,41,654
11,34,96,904
11,87,99,527
11,77,38,834
11,91,99,203
11,91,99,203
5,56,00,000
5,56,00,000
5,14,25,051
5,11,53,687
5,02,65,685
5,01,47,963
5,02,25,413
5,01,12,341
5,09,46,926
5,09,14,426
5,10,69,554
5,07,45,671
5,07,30,430
5,06,70,877
5,07,28,377
5,05,25,780
5,05,15,046
% of total
shares
of the
company
3.49
3.51
3.51
3.53
3.53
3.55
3.54
3.56
3.56
3.56
3.56
3.57
3.56
3.56
3.56
3.57
3.56
3.57
3.57
3.57
3.54
3.56
3.56
3.56
3.56
3.59
3.58
3.62
3.64
4.47
4.02
4.21
4.17
4.22
4.22
2.16
1.97
2.00
1.99
1.95
1.95
1.95
1.95
1.98
1.98
1.99
1.97
1.97
1.94
1.94
1.93
1.93
139
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
21/06/2019
28/06/2019
05/07/2019
12/07/2019
19/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
06/09/2019
13/09/2019
20/09/2019
27/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
22/11/2019
29/11/2019
06/12/2019
13/12/2019
20/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
17/01/2020
24/01/2020
31/01/2020
07/02/2020
14/02/2020
21/02/2020
28/02/2020
06/03/2020
13/03/2020
20/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2019
05/04/2019
12/04/2019
19/04/2019
-3,76,519
55,669
-1,45,887
-15,19,466
-7,34,796
-2,16,537
5,000
-82,15,710
-82,965
-8,42,509
25,112
-4,37,412
-20,767
2,733
-16,17,503
-15,30,142
22,03,898
20,000
-87,180
-10,12,941
-3,02,686
-6,85,156
-2,57,103
1,56,000
-2,57,242
-24,358
-62,551
-3,71,874
4,39,450
-12,65,652
-8,81,081
-1,90,353
-52,471
-21,793
-6,31,386
-9,74,435
-3,87,031
-9,570
-1,76,332
-91,918
-74,984
3,43,470
4,34,792
2,85,615
-12,43,061
3,14,377
1,11,977
Transfer
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22,35,849
87,701
998
Transfer
Transfer
Transfer
5
Kotak Emerging
Equity Scheme
3,01,11,768
3,07,61,992
1.07
1.20
140
Cumulative Shareholding
during the Year
No of Shares
5,01,38,527
5,01,94,196
5,00,48,309
4,85,28,843
4,77,94,047
4,75,77,510
4,75,82,510
3,93,66,800
3,92,83,835
3,84,41,326
3,84,66,438
3,80,29,026
3,80,08,259
3,80,10,992
3,63,93,489
3,48,63,347
3,70,67,245
3,70,87,245
3,70,00,065
3,59,87,124
3,56,84,438
3,49,99,282
3,47,42,179
3,48,98,179
3,46,40,937
3,46,16,579
3,45,54,028
3,41,82,154
3,46,21,604
3,33,55,952
3,24,74,871
3,22,84,518
3,22,32,047
3,22,10,254
3,15,78,868
3,06,04,433
3,02,17,402
3,02,07,832
3,00,31,500
2,99,39,582
2,98,64,598
3,02,08,068
3,06,42,860
3,09,28,475
2,96,85,414
2,99,99,791
3,01,11,768
3,01,11,768
3,07,61,992
3,29,97,841
3,30,85,542
3,30,86,540
% of total
shares
of the
company
1.91
1.92
1.91
1.85
1.82
1.82
1.82
1.50
1.50
1.47
1.47
1.45
1.45
1.45
1.39
1.33
1.31
1.32
1.31
1.28
1.27
1.24
1.23
1.24
1.23
1.23
1.23
1.21
1.23
1.18
1.15
1.15
1.14
1.14
1.12
1.09
1.07
1.07
1.06
1.06
1.06
1.07
1.09
1.10
1.05
1.06
1.07
1.07
1.20
1.28
1.29
1.29
Statutory Reports Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
19/04/2019
26/04/2019
26/04/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
12/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
30/09/2019
04/10/2019
11/10/2019
18/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
-2,28,564
18,282
-11,990
62,147
7,13,160
3,45,190
6,98,450
-18,540
4,55,535
-14,648
2,14,233
-2,228
1,16,142
-25,000
81,588
-35,498
4,75,811
-50,081
16,73,019
6,13,990
11,35,730
14,29,308
-1,66,515
11,91,435
-64,443
9,94,689
-3,163
5,51,800
1,78,096
-6,92,400
4,27,805
-32,500
12,02,292
-13
518
-12,27,662
1,06,732
-2,69,549
4,94,117
-21,81,600
9,56,963
-3,90,267
17,40,306
40,03,212
4,35,803
-1,16,424
1,97,389
-8
83,754
-5,95,104
1,12,794
-1,19,522
Transfer
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Transfer
Cumulative Shareholding
during the Year
No of Shares
3,28,57,976
3,28,76,258
3,28,64,268
3,29,26,415
3,36,39,575
3,39,84,765
3,46,83,215
3,46,64,675
3,51,20,210
3,51,05,562
3,53,19,795
3,53,17,567
3,54,33,709
3,54,08,709
3,54,90,297
3,54,54,799
3,59,30,610
3,58,80,529
3,75,53,548
3,81,67,538
3,93,03,268
4,07,32,576
4,05,66,061
4,17,57,496
4,16,93,053
4,26,87,742
4,26,84,579
4,32,36,379
4,34,14,475
4,27,22,075
4,31,49,880
4,31,17,380
4,43,19,672
4,43,19,659
4,43,20,177
4,30,92,515
4,31,99,247
4,29,29,698
4,34,23,815
4,12,42,215
4,21,99,178
4,18,08,911
4,35,49,217
4,75,52,429
4,79,88,232
4,78,71,808
4,80,69,197
4,80,69,189
4,81,52,943
4,75,57,839
4,76,70,633
4,75,51,111
% of total
shares
of the
company
1.28
1.28
1.28
1.28
1.31
1.32
1.35
1.35
1.34
1.34
1.35
1.35
1.35
1.35
1.35
1.35
1.37
1.37
1.43
1.46
1.50
1.55
1.55
1.59
1.59
1.63
1.63
1.65
1.66
1.63
1.65
1.65
1.69
1.69
1.69
1.64
1.65
1.64
1.66
1.57
1.50
1.48
1.54
1.69
1.70
1.70
1.71
1.71
1.71
1.69
1.69
1.69
141
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
06/03/2020
13/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2020
31/03/2019
05/04/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
32,185
-3,08,631
50,029
-4,67,755
1,64,878
-1,62,256
8,93,077
-21,76,782
7,97,400
-4,48,762
16,18,901
-61
1,179
-54,229
5,53,961
43,602
-63,625
840
-7,30,065
69,017
-2,84,400
1,21,309
-3,01,154
2,55,577
7,01,442
-6,74,711
6,445
-1,44,000
11,916
1,79,762
-3,63,600
2,41,705
-1,34,400
6,63,949
29,80,829
9,83,105
-22,67,117
17,974
-1,66,297
86,989
-8,82,491
3,75,204
-5,90,795
1,01,563
-1,08,759
1,05,238
-9,70,255
6,24,087
-8,34,412
7,63,568
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6
ICICI Prudential
Sensex Index Fund
4,91,92,348
4,88,47,306
1.74
1.90
142
Cumulative Shareholding
during the Year
No of Shares
4,75,83,296
4,72,74,665
4,73,24,694
4,68,56,939
4,70,21,817
4,68,59,561
4,77,52,638
4,55,75,856
4,63,73,256
4,59,24,494
4,75,43,395
4,75,43,334
4,75,44,513
4,74,90,284
4,80,44,245
4,80,87,847
4,80,24,222
4,80,25,062
4,72,94,997
4,73,64,014
4,70,79,614
4,72,00,923
4,68,99,769
4,71,55,346
4,78,56,788
4,71,82,077
4,71,88,522
4,70,44,522
4,70,56,438
4,72,36,200
4,68,72,600
4,71,14,305
4,69,79,905
4,76,43,854
5,06,24,683
5,16,07,788
4,93,40,671
4,93,58,645
4,91,92,348
4,91,92,348
4,88,47,306
4,89,34,295
4,80,51,804
4,84,27,008
4,78,36,213
4,79,37,776
4,78,29,017
4,79,34,255
4,69,64,000
4,75,88,087
4,67,53,675
4,75,17,243
% of total
shares
of the
company
1.69
1.68
1.68
1.66
1.67
1.66
1.69
1.62
1.64
1.63
1.69
1.69
1.69
1.68
1.70
1.71
1.70
1.70
1.68
1.68
1.67
1.67
1.66
1.67
1.70
1.67
1.67
1.67
1.67
1.67
1.66
1.67
1.67
1.69
1.79
1.83
1.75
1.75
1.74
1.74
1.90
1.90
1.87
1.88
1.86
1.86
1.86
1.86
1.83
1.85
1.82
1.85
Statutory Reports Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
10/05/2019
17/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
11/10/2019
18/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
-2,44,288
7,25,921
-4,76,755
4,726
-1,17,108
5,560
-6,02,899
1,635
-31,136
2,134
-11,65,399
1,83,436
-3,312
49,831
-10,46,258
5,365
-13,88,353
71,844
-2,448
7,74,962
-37,937
18,36,197
-3,34,884
59,04,413
30,76,083
-1,982
8,73,853
-1,057
5,80,050
-1,10,187
21,79,259
-11,54,309
39,08,033
-468
1,80,268
13,81,569
-48,319
7,10,858
-29,34,725
68,28,874
-252
7,36,645
-30,72,054
93,74,614
-30,708
7,20,918
-21,63,842
4,51,990
-28,10,222
1,53,098
-11,34,234
1,22,256
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Cumulative Shareholding
during the Year
No of Shares
4,72,72,955
4,79,98,876
4,75,22,121
4,75,26,847
4,74,09,739
4,74,15,299
4,68,12,400
4,68,14,035
4,67,82,899
4,67,85,033
4,56,19,634
4,58,03,070
4,57,99,758
4,58,49,589
4,48,03,331
4,48,08,696
4,34,20,343
4,34,92,187
4,34,89,739
4,42,64,701
4,42,26,764
4,60,62,961
4,57,28,077
5,16,32,490
5,47,08,573
5,47,06,591
5,55,80,444
5,55,79,387
5,61,59,437
5,60,49,250
5,82,28,509
5,70,74,200
6,09,82,233
6,09,81,765
6,11,62,033
6,25,43,602
6,24,95,283
6,32,06,141
6,02,71,416
6,71,00,290
6,71,00,038
6,78,36,683
6,47,64,629
7,41,39,243
7,41,08,535
7,48,29,453
7,26,65,611
7,31,17,601
7,03,07,379
7,04,60,477
6,93,26,243
6,94,48,499
% of total
shares
of the
company
1.84
1.87
1.85
1.85
1.84
1.81
1.79
1.79
1.79
1.79
1.74
1.75
1.75
1.75
1.71
1.71
1.66
1.66
1.66
1.69
1.69
1.76
1.75
1.97
2.09
2.09
2.12
2.12
2.14
2.14
2.22
2.18
2.33
2.33
2.33
2.39
2.39
2.41
2.30
2.38
2.38
2.41
2.30
2.63
2.63
2.65
2.58
2.59
2.49
2.50
2.46
2.46
143
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2020
31/03/2019
05/04/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
-4,07,820
3,64,650
-4,78,274
2,31,574
-8,10,542
1,64,290
-8,27,514
5,26,572
-4,85,437
6,55,644
-2,15,739
4,83,883
-11,69,103
6,900
-15,06,451
6,94,137
-48,411
1,60,288
-1,34,062
10,83,035
-87,510
2,12,999
-3,06,255
2,61,523
-25,60,391
93,223
-6,08,395
7,18,868
-41,72,688
3,37,776
-10,46,889
6,630
-4,53,132
3,40,538
-32,46,930
38,51,114
-2,142
8,44,006
-12,38,574
21,28,424
-37,848
42,39,796
-15,32,799
3,56,439
-62
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14,90,710
-14,81,532
1,47,599
-50,000
2,52,300
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7
Reliance Capital
Trustee Co. Ltd-A/C
Reliancesmall
6,58,33,840
4,64,92,062
2.33
1.81
144
Cumulative Shareholding
during the Year
No of Shares
6,90,40,679
6,94,05,329
6,89,27,055
6,91,58,629
6,83,48,087
6,85,12,377
6,76,84,863
6,82,11,435
6,77,25,998
6,83,81,642
6,81,65,903
6,86,49,786
6,74,80,683
6,74,87,583
6,59,81,132
6,66,75,269
6,66,26,858
6,67,87,146
6,66,53,084
6,77,36,119
6,76,48,609
6,78,61,608
6,75,55,353
6,78,16,876
6,52,56,485
6,53,49,708
6,47,41,313
6,54,60,181
6,12,87,493
6,16,25,269
6,05,78,380
6,05,85,010
6,01,31,878
6,04,72,416
5,72,25,486
6,10,76,600
6,10,74,458
6,19,18,464
6,06,79,890
6,28,08,314
6,27,70,466
6,70,10,262
6,54,77,463
6,58,33,902
6,58,33,840
6,58,33,840
4,64,92,062
4,79,82,772
4,65,01,240
4,66,48,839
4,65,98,839
4,68,51,139
% of total
shares
of the
company
2.45
2.46
2.44
2.45
2.42
2.43
2.40
2.42
2.40
2.43
2.42
2.43
2.39
2.39
2.34
2.36
2.36
2.37
2.36
2.40
2.40
2.41
2.40
2.41
2.31
2.32
2.30
2.32
2.17
2.18
2.15
2.15
2.13
2.14
2.03
2.17
2.16
2.19
2.15
2.23
2.22
2.38
2.32
2.33
2.33
2.33
1.81
1.87
1.81
1.81
1.81
1.82
Statutory Reports Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
10/05/2019
17/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
05/07/2019
12/07/2019
12/07/2019
19/07/2019
19/07/2019
26/07/2019
26/07/2019
02/08/2019
02/08/2019
09/08/2019
09/08/2019
16/08/2019
16/08/2019
23/08/2019
23/08/2019
30/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
13/09/2019
20/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
11/10/2019
-8,02,238
3,99,698
-1,02,132
8,72,423
-10,09,229
13,49,924
-9,28,326
2,83,771
-23,930
7,46,404
-20,34,516
3,93,998
-12,00,397
2,18,419
-13,60,281
9,89,790
-8,35,000
6,46,301
-219
21,58,581
-2
26,21,532
-3,98,146
1,68,106
-69,457
11,29,110
-2,45,022
20,09,644
-1,12,431
8,20,567
-76,033
1,22,29,946
-1,16,48,403
1,85,525
-3,63,860
3,527
-17,85,437
7,81,925
-2,265
10,84,150
-4,21,271
11,400
-80,000
7,03,612
-3,00,000
2,70,498
-35,52,289
29,30,394
25,31,371
-19,59,575
18,02,971
-10,75,490
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Cumulative Shareholding
during the Year
No of Shares
4,60,48,901
4,64,48,599
4,63,46,467
4,72,18,890
4,62,09,661
4,75,59,585
4,66,31,259
4,69,15,030
4,68,91,100
4,76,37,504
4,56,02,988
4,59,96,986
4,47,96,589
4,50,15,008
4,36,54,727
4,46,44,517
4,38,09,517
4,44,55,818
4,44,55,599
4,66,14,180
4,66,14,178
4,92,35,710
4,88,37,564
4,90,05,670
4,89,36,213
5,00,65,323
4,98,20,301
5,18,29,945
5,17,17,514
5,25,38,081
5,24,62,048
6,46,91,994
5,30,43,591
5,32,29,116
5,28,65,256
5,28,68,783
5,10,83,346
5,18,65,271
5,18,63,006
5,29,47,156
5,25,25,885
5,25,37,285
5,24,57,285
5,31,60,897
5,28,60,897
5,31,31,395
4,95,79,106
5,25,09,500
5,50,40,871
5,30,81,296
5,48,84,267
5,38,08,777
% of total
shares
of the
company
1.79
1.81
1.80
1.84
1.80
1.85
1.81
1.82
1.82
1.85
1.77
1.76
1.71
1.72
1.67
1.70
1.67
1.70
1.70
1.78
1.78
1.88
1.86
1.87
1.87
1.91
1.90
1.98
1.97
2.01
2.00
2.47
2.02
2.03
2.02
2.02
1.95
1.98
1.98
2.02
2.00
2.01
2.00
2.03
2.02
2.03
1.89
1.86
1.95
1.88
1.95
1.91
145
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
18/10/2019
18/10/2019
25/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
31/12/2019
03/01/2020
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
21/02/2020
28/02/2020
28/02/2020
06/03/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2020
8,28,023
-9,49,424
7,810
-6,85,379
1,18,314
-7,11,201
1,12,508
-22,55,013
2,64,464
-8,175
4,65,464
-8,82,434
1,00,381
-11,15,734
6,00,838
-17,47,295
1,284
-10,80,965
6,44,163
-88,164
7,99,876
-1,33,408
4,46,819
-4,35,694
2,22,759
-16,302
32,808
-10,88,847
6,66,454
-14,94,276
1,83,518
-11,72,754
7,06,356
-5,00,187
13,41,905
-20
1,50,893
-17,00,424
2,73,368
-5,62,386
89,628
-6,17,719
7,52,396
-2,00,004
2,76,747
-3,02,293
33,44,349
-10,954
33,56,693
-5,04,345
13,70,612
-9,87,600
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5,17,16,210
1.83
146
Cumulative Shareholding
during the Year
No of Shares
5,46,36,800
5,36,87,376
5,36,95,186
5,30,09,807
5,31,28,121
5,24,16,920
5,25,29,428
5,02,74,415
5,05,38,879
5,05,30,704
5,09,96,168
5,01,13,734
5,02,14,115
4,90,98,381
4,96,99,219
4,79,51,924
4,79,53,208
4,68,72,243
4,75,16,406
4,74,28,242
4,82,28,118
4,80,94,710
4,85,41,529
4,81,05,835
4,83,28,594
4,83,12,292
4,83,45,100
4,72,56,253
4,79,22,707
4,64,28,431
4,66,11,949
4,54,39,195
4,61,45,551
4,56,45,364
4,69,87,269
4,69,87,249
4,71,38,142
4,54,37,718
4,57,11,086
4,51,48,700
4,52,38,328
4,46,20,609
4,53,73,005
4,51,73,001
4,54,49,748
4,51,47,455
4,84,91,804
4,84,80,850
5,18,37,543
5,13,33,198
5,27,03,810
5,17,16,210
5,17,16,210
% of total
shares
of the
company
1.94
1.90
1.90
1.88
1.88
1.86
1.86
1.78
1.79
1.79
1.81
1.78
1.78
1.74
1.76
1.70
1.70
1.66
1.69
1.68
1.71
1.71
1.72
1.71
1.71
1.71
1.71
1.68
1.70
1.65
1.65
1.61
1.64
1.62
1.67
1.67
1.67
1.61
1.62
1.60
1.60
1.58
1.61
1.60
1.61
1.60
1.72
1.72
1.84
1.82
1.87
1.83
1.83
Statutory Reports Shareholding at the
beginning of the Year
No. of Shares
4,47,39,844
% of total
shares
of the
company
1.74
Sr.
No.
Name of the Share
Holder
8
HDFC Trustee
Co Ltd A/C
HDFC Housing
Opportunities
Date
Increase/
Decrease in
share holding
Reason
31/03/2019
05/04/2019
05/04/2019
12/04/2019
12/04/2019
19/04/2019
26/04/2019
26/04/2019
03/05/2019
03/05/2019
10/05/2019
17/05/2019
24/05/2019
24/05/2019
31/05/2019
07/06/2019
07/06/2019
14/06/2019
21/06/2019
21/06/2019
28/06/2019
28/06/2019
05/07/2019
12/07/2019
19/07/2019
26/07/2019
02/08/2019
09/08/2019
16/08/2019
23/08/2019
30/08/2019
06/09/2019
06/09/2019
13/09/2019
20/09/2019
27/09/2019
27/09/2019
30/09/2019
04/10/2019
04/10/2019
11/10/2019
11/10/2019
18/10/2019
25/10/2019
01/11/2019
01/11/2019
08/11/2019
08/11/2019
15/11/2019
15/11/2019
22/11/2019
22/11/2019
3,00,571
-12,392
3,03,797
-6,879
-4,997
7,575
-6,262
1,06,941
-2,020
23,613
15,966
2,27,071
-4,133
3,044
3,142
-6,75,000
1,10,487
5,01,054
-1,299
2,48,607
-6,170
27,918
45,967
6,64,478
4,98,161
3,75,905
9,23,058
3,50,030
7,06,792
1,81,991
9,202
-134
8,882
79,539
52,517
-2,05,703
47,71,472
3,032
-226
1,01,761
-18,526
3,46,907
13,557
2,68,774
-3,30,000
1,55,642
-3,600
908
-27,077
8,787
-6,43,200
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Cumulative Shareholding
during the Year
No of Shares
4,47,39,844
4,50,40,415
4,50,28,023
4,53,31,820
4,53,24,941
4,53,19,944
4,53,27,519
4,53,21,257
4,54,28,198
4,54,26,178
4,54,49,791
4,54,65,757
4,56,92,828
4,56,88,695
4,56,91,739
4,56,94,881
4,50,19,881
4,51,30,368
4,56,31,422
4,56,30,123
4,58,78,730
4,58,72,560
4,59,00,478
4,59,46,445
4,66,10,923
4,71,09,084
4,74,84,989
4,84,08,047
4,87,58,077
4,94,64,869
4,96,46,860
4,96,56,062
4,96,55,928
4,96,64,810
4,97,44,349
4,97,96,866
4,95,91,163
5,43,62,635
5,43,65,667
5,43,65,441
5,44,67,202
5,44,48,676
5,47,95,583
5,48,09,140
5,50,77,914
5,47,47,914
5,49,03,556
5,48,99,956
5,49,00,864
5,48,73,787
5,48,82,574
5,42,39,374
% of total
shares
of the
company
1.74
1.75
1.75
1.76
1.76
1.76
1.76
1.76
1.77
1.77
1.77
1.77
1.78
1.78
1.75
1.74
1.72
1.72
1.74
1.74
1.75
1.75
1.75
1.75
1.78
1.80
1.81
1.85
1.86
1.89
1.89
1.90
1.90
1.90
1.90
1.90
1.89
1.93
1.93
1.93
1.93
1.93
1.94
1.94
1.95
1.94
1.95
1.95
1.95
1.95
1.95
1.92
147
Annual Report 2019-20Experience Open Other Reports
Sr.
No.
Name of the Share
Holder
Shareholding at the
beginning of the Year
No. of Shares
% of total
shares
of the
company
Date
Increase/
Decrease in
share holding
Reason
29/11/2019
29/11/2019
06/12/2019
06/12/2019
13/12/2019
20/12/2019
20/12/2019
27/12/2019
27/12/2019
31/12/2019
03/01/2020
10/01/2020
10/01/2020
17/01/2020
17/01/2020
24/01/2020
24/01/2020
31/01/2020
31/01/2020
07/02/2020
14/02/2020
14/02/2020
21/02/2020
28/02/2020
06/03/2020
13/03/2020
13/03/2020
20/03/2020
20/03/2020
27/03/2020
27/03/2020
31/03/2020
31/03/2020
31/03/2020
31/03/2019
30/09/2019
31/03/2020
31/03/2020
31/03/2019
14/06/2019
31/03/2020
3,28,896
-30,000
89,358
-5,530
9,989
21,438
-3,002
16,640
-4,944
8,993
11,467
16,65,787
-25,200
14,21,216
-4,66,800
2,64,360
-10,800
2,929
-523
1,28,271
15,785
-679
11,157
2,36,914
2,41,148
2,70,800
-3,20,400
10,51,008
-5,00,000
3,09,701
-5,72,400
5,97,919
-8,100
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
Transfer
1,60,00,000
33,900
Transfer
Transfer
4,00,00,000
Transfer
9
10
Dodge And Cox
International Stock
Fund
BC Asia
Investments III
Limited - FDI
5,89,94,772
4,15,85,425
5,76,19,325
-
4,00,00,000
2.09
1.62
2.04
0.00
1.42
Note:
Cumulative Shareholding
during the Year
No of Shares
5,45,68,270
5,45,38,270
5,46,27,628
5,46,22,098
5,46,32,087
5,46,53,525
5,46,50,523
5,46,67,163
5,46,62,219
5,46,71,212
5,46,82,679
5,63,48,466
5,63,23,266
5,77,44,482
5,72,77,682
5,75,42,042
5,75,31,242
5,75,34,171
5,75,33,648
5,76,61,919
5,76,77,704
5,76,77,025
5,76,88,182
5,79,25,096
5,81,66,244
5,84,37,044
5,81,16,644
5,91,67,652
5,86,67,652
5,89,77,353
5,84,04,953
5,90,02,872
5,89,94,772
5,89,94,772
4,15,85,425
5,75,85,425
5,76,19,325
5,76,19,325
-
4,00,00,000
4,00,00,000
% of total
shares
of the
company
1.94
1.93
1.94
1.94
1.94
1.94
1.94
1.94
1.94
1.94
1.94
2.00
2.00
2.05
2.03
2.04
2.04
2.04
2.04
2.04
2.04
2.04
2.05
2.05
2.06
2.07
2.06
2.10
2.08
2.09
2.07
2.09
2.09
2.09
1.62
2.04
2.04
2.04
0.00
1.53
1.42
1) Top ten shareholders of the Bank as on March 31st 2020 have been considered, for the above disclosures.
2)
Date of change is the date of the shareholding statement i.e. the date on which the weekly statements of
beneficial ownerships are received from the Depositories.
148
Statutory Reports
v)
Shareholding of Directors and Key Managerial Personnel:
Shareholding at the
beginning of the Year
Sr.
No.
1
2
Name of the Shareholder
No. of Shares
% of total
shares
of the
company
Amitabh Chaudhry
-
-
Rajiv Anand1
3,76,069
0.01
3
Rajesh Kumar Dahiya2
4
5
6
Pralay Mondal3
Puneet M Sharma4
Jairam Shridharan5
3,93,569
0
26,395
-
-
-
-
2,19,041
0.01
0.00
0.00
-
-
-
-
0.01
7
Girish V. Koliyote
5,08,805
0
0.02
0.00
Note
:
-
0.00
Date
Increase/
Decrease
in share
holding
Cumulative Shareholding
during the Year
Reason
No. of Shares
% of total
shares
of the
company
31/03/2019
31/03/2020
31/03/2019
19/04/2019
24/05/2019
07/02/2020
06/03/2020
31/03/2020
31/03/2019
14/02/2020
06/03/2020
20/03/2020
31/03/2020
01/08/2019
31/03/2020
06/03/2020
31/03/2020
31/03/2019
03/05/2019
07/02/2020
07/02/2020
14/02/2020
28/02/2020
06/03/2020
31/03/2019
14/06/2019
09/08/2019
31/03/2020
-
-
-
-
35,000
-35,000
-35,000
52,500
Transfer
Transfer
Transfer
Transfer
60,000
-28,000
-5,605
Transfer
Transfer
Transfer
-
-
-
-
-54,800
1,64,241
-1,64,241
3,79,759
-35,195
-
Transfer
Transfer
Transfer
Transfer
Transfer
-
26,000
-26,000
Transfer
Transfer
-
-
3,76,069
4,11,069
3,76,069
3,41,069
3,93,569
3,93,569
-
60,000
32,000
26,395
26,395
-
-
-
-
2,19,041
1,64,241
3,28,482
1,64,241
5,44,000
5,08,805
5,08,805
-
26,000
-
-
-
-
0.01
0.02
0.01
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
-
-
-
-
0.01
0.01
0.01
0.01
0.02
0.02
0.02
0.00
0.00
0.00
0.00
1)
2)
3)
4)
5)
Re-appointed as Executive Director (Wholesale Banking) of the Bank, for a period of 3 years w.e.f. 4th August 2019.
Re-appointed as Executive Director (Corporate Centre) of the Bank, for a period of 3 years w.e.f. 4th August 2019.
Appointed as Executive Director (Retail Banking) of the Bank, for a period of 3 years, w.e.f. 1st August 2019.
Appointed as the Chief Financial Officer and KMP of the Bank, w.e.f. 6th March 2020.
Resigned as the Chief Financial Officer and KMP of the Bank, w.e.f. 5th March 2020.
V.
Indebtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Secured Loans
excluding deposits
Unsecured Loans
Deposits
Total Indebtedness
(` in crores)
Indebtedness at the beginning of the financial
year - 2019-2020
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial
year
Addition
14,400
-
4
14,404
1,38,376
-
3,356
1,41,732
2,48,996
1,89,529
-
-
-
-
-
-
1,52,776
-
3,359
1,56,135
4,38,525
149
Annual Report 2019-20Experience Open
Other Reports
Reduction
Rate Movement
Net Change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Notes:
Secured Loans
excluding deposits
Unsecured Loans
Deposits
Total Indebtedness
-2,51,510
17
-2,496
11,904
-
15
11,919
-1,97,102
5,247
-2,325
1,36,051
-
2,333
1,38,384
-
-
-
-
-
-
-
-4,48,611
5,265
-4,822
1,47,954
-
2,348
1,50,302
1. Deposits accepted by the Bank are in normal course of banking business and an operating activity of the Bank and
hence not included in the indebtedness disclosure.
2. Principal amount represents outstanding balance of borrowings as reported in financial statements as of the
beginning and end of the financial year.
3. Additions also include the effect of exchange rate fluctuation and net change in interest accrued but not due between
the beginning of financial year and the end of financial year.
VI. Remuneration Of Directors And Key Managerial Personnel
A. Remuneration to Managing Director, Whole-time Directors and/or Manager, for the financial year 2019-20
Sr.
No.
1.
2.
3.
4.
5.
Particulars of Remuneration
Gross salary
(a)
Salary as per provisions
contained u/s 17(1) of the
Income-tax Act, 1961
Name of MD / WTD / Manager
Shri Amitabh
Chaudhry
Shri Rajiv
Anand
Shri Rajesh
Dahiya
Shri Pralay
Mondal1
(in `)
Total Amount
6,03,06,378
3,86,50,811
3,45,69,449
1,66,84,344
15,02,10,982
(b) Value of perquisites u/s 17(2) of
2,04,233
30,98,384
30,95,531
17,08,590
81,06,738
(c)
the Income-tax Act, 1961
Profits in lieu of salary u/s 17(3)
of the Income-tax Act, 1961
Stock Options (No. of options)
Sweat Equity
Commission
- as % of profit
- others
Others
Total (A)
Ceiling as per the Act*
-
-
-
-
-
3,50,000
-
-
-
-
-
6,05,10,611
3,50,000
-
-
-
-
-
4,17,49,195
3,00,000
-
-
-
-
-
3,76,64,980
3,50,000
-
-
-
-
-
1,83,92,934
-
-
-
-
-
-
15,83,17,720
-
-
-
-
1)
Appointed as Executive Director (Retail Banking) of the Bank, for a period of 3 years, w.e.f. 1st August 2019.
* In terms of the provision of Section 35B of the Banking Regulations Act, 19,49, the provisions relating to Managerial Remuneration under
the Companies Act, 2013 and the Rules made thereunder are not applicable to a Banking company.
B. Remuneration to other Directors for the financial year 2019-20
(in `)
Sr.
No.
Particulars of
Remuneration to
Independent Directors
1
2
3
Fee for attending
Board / Committee
meetings
Commission for FY
2018-19
Others, please
specify
Total (1)
Rakesh
Makhija
Dr. Sanjiv
Misra1
Prasad R.
Menon2
Samir
Barua3
Som Mittal4
Rohit
Bhagat
Usha
Sangwan5
Total Amount
25,50,000
3,50,000
6,50,000
9,00,000
17,50,000
5,50,000
67,50,000
-
10,00,000
-
-
-
5,23,288
10,00,000
10,00,000
10,00,000
5,33,000
50,56,288
-
-
-
-
-
-
35,50,000
3,50,000
5,23,288
16,50,000
19,00,000
27,50,000
10,83,000
1,18,06,288
150
Statutory Reports
Sr.
No.
Particulars of Remuneration of
Independent /Non-Executive Directors
S.
Vishvanathan
Ketaki
Bhagwati
B. Baburao
Stephen
Pagliuca
Girish
Paranjpe
Total Amount
(in `)
1
Fee for attending Board / Committee
meetings
Commission for FY 2018-19
Others, please specify
2
3
Total (2)
Total (B)=(1+2)
Total Managerial Remuneration (A+B)
27,00,000
25,50,000
30,00,000
12,00,000
19,50,000
1,14,00,000
10,00,000
-
37,00,000
10,00,000
-
35,50,000
10,00,000
-
40,00,000
10,00,000
-
22,00,000
4,10,959
-
23,60,959
44,10,959
-
1,58,10,959
2,76,17,247
18,59,34,967
1)
2)
3)
4)
5)
Dr. Sanjiv Misra ceased to be the Non-Executive (Part-Time) Chairman of the Bank, w.e.f. the close of business hours on 17th July 2019.
Shri Prasad R. Menon ceased to be an Independent Director of the Bank from the close of business hours on 8th October 2018
pursuant to the expiry of his tenure as an Independent Director in the Bank and therefore was entitled to commission, for the period
from 1st April 2018 upto 8th October 2018 (both days inclusive).
Prof. Samir Barua ceased to be an Independent Director of the Bank, on expiry of his tenure, w.e.f. the close of business hours on
21st July 2019.
Shri Som Mittal ceased to be an Independent Director of the Bank, on expiry of his tenure, w.e.f. the close of business hours on
21st October 2019.
Smt. Usha Sangwan ceased to be a Nominee Director of the Bank, w.e.f. 12th December 2019.
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD for the financial year 2019-20
Sr.
No.
1.
2.
3.
4.
5.
Total
Particulars of Remuneration
Gross salary
(a)
Salary as per provisions contained u/s
17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) of the
(c)
Income-tax Act, 1961
Profits in lieu of salary u/s 17(3) of the
Income-tax Act, 1961
Stock Option (No. of options)
Sweat Equity
Commission
- as % of profit
- others
Others
Puneet M.
Sharma
Chief Financial
Officer1
Jairam Sridharan,
Chief Financial
Officer2
Girish V.
Koliyote,
Company
Secretary
(in `)
Total Amount
12,78,042
2,04,84,925
94,15,014
3,11,77,981
-
-
-
-
-
-
-
-
12,78,042
39,71,021
10,29,011
50,00,032
-
-
-
1,75,000
-
-
-
-
-
2,44,55,946
5,000
-
-
-
-
-
1,04,44,025
-
-
-
-
-
-
3,61,78,013
1)
2)
Appointed as the Chief Financial Officer and KMP of the Bank, w.e.f. 6th March 2020.
Resigned as the Chief Financial Officer and KMP of the Bank, w.e.f. close of business hours on 5th March 2020.
VII. Penalties / Punishment/ Compounding of Offences
Type
A. Company
Penalty
Punishment
Compounding
B. Directors
Penalty
Punishment
Compounding
C. Other Officers in Default
Penalty
Punishment
Compounding
Section of the
Companies Act
Brief
Description
Details of Penalty/
Punishment/
Compounding fees
imposed
Authority (Regional
Director/National
Company Law
Tribunal/Court)
Appeal made
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
151
Annual Report 2019-20Experience Open
Other Reports
Disclosure on Remuneration
Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The information relating to managerial remuneration, in terms of Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, are detailed as under:
(i) The ratio of the remuneration of each Director of the Bank to the median remuneration of the employees of the Bank for
the financial year 2019-20, are as under;
Name of the Executive Directors
Shri Amitabh Chaudhry, Managing Director and CEO
Shri Rajiv Anand, Executive Director (Wholesale Banking) re-appointed as Executive Director (Wholesale
Banking) of the Bank, w.e.f. 4th August 2019, on the same terms and conditions, including remuneration
w.e.f. 1st April 2019
Shri Rajesh Dahiya, Executive Director (Corporate Centre) re- appointed as Executive Director (Corporate
Centre) of the Bank, w.e.f. 4th August 2019), on the same terms and conditions, including remuneration
w.e.f. 1st April 2019
Shri Pralay Mondal (Appointed as Executive Director (Retail Banking) of the Bank, w.e.f. 1st August 2019)
Ratio of remuneration
to median remuneration
of all employees
92.2
45.7
40.8
41.9
Note: All confirmed employees (excluding front line sales force), as on 31st March 2020 have been considered.
(ii) The percentage increase in remuneration of Executive Directors, Chief Financial Officer, Chief Executive Officer and
Company Secretary or Manager, if any, in the financial year 2019-20, are as under;
Name of the Director/Key Managerial Personnel
Executive Directors
Shri Amitabh Chaudhry, Managing Director and CEO
Shri Rajiv Anand, Executive Director (Wholesale Banking)
Shri Rajesh Dahiya, Executive Director (Corporate Centre)
Shri Pralay Mondal (Appointed as Executive Director (Retail Banking) of the Bank, w.e.f. 1st August 2019)
Key Managerial Personnel
Shri Puneet M Sharma (Appointed as Chief Financial Officer of the Bank, w.e.f. 6th March 2020)
Shri Jairam Sridharan, (Ceased to be Chief Financial Officer of the Bank, w.e.f. the close business hours of
5th March 2020)
Shri Girish V. Koliyote, Company Secretary
% increase in the
remuneration in the
financial year 2019-20
7.5
12.5
12.5
NA
NA
10.0
6.0
(iii) The percentage increase in the median remuneration of the said employees of the Bank during the financial year 2019-
20, is as under:
Median remuneration of employees of the Bank increased by 8.93% in the financial year 2019-20, as compared to the
financial year 2018-19.
(iv) The number of permanent employees on the rolls of the Bank as on 31st March 2020 - The Bank had 74,140 permanent
employees on its rolls, as on 31st March 2020.
(v) Average percentile increase already made in the salaries of employees of the Bank other than its managerial personnel
(viz. Whole Time Directors of the Bank) during the last financial year and its comparison with the percentile increase in the
managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in
the managerial remuneration.
Average remuneration increase for non-managerial personnel of the Bank during the financial year 2019-20 was 8.9% and
the average remuneration increase for the said managerial personnel of the Bank was around 9.8%.
Remuneration increase is dependent on the Bank’s performance as a whole, individual performance level and also
market benchmarks.
(vi) Affirmation that the remuneration is as per the remuneration policy of the Bank.
The Comprehensive Remuneration Policy of the Bank as approved by the Nomination and Remuneration Committee of
the Board of Directors of the Bank is in line with Guidelines on Compensation of Whole Time Directors / Chief Executive
Officers / Risk takers and Control function staff, etc. dated 13th January 2012, issued by the Reserve Bank of India. We
affirm that the remuneration paid to all employees for the financial year 2019-20, is in terms of the said Policy of the Bank.
152
Statutory Reports
Annual Report on Corporate Social Responsibility (CSR) Activities
(As prescribed under Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014)
1.
A brief outline of the Company’s CSR policy, including overview of CSR projects or programs proposed to be undertaken
and a reference to the web-link to the CSR policy and CSR projects or programs.
Axis Bank Limited
Even as Axis Bank (the Bank) enters the new decade, it remains steadfastly committed to its ambition of playing a pivotal
role in India’s economy and society, contributing to the welfare of millions of its stakeholders and helping them achieve
their aspirations. The Bank is deeply ingrained in the communities where it serves, and beyond, striving to create a
positive, CSR-led impact that complements its business activities and delivers visible impact on ground.
The socio-economic and environmental transformations that the Bank’s CSR activities intended to achieve, continue to
leave deep footprints in the lives of the participants who have benefited, and we aspire to continue to impact their lives
in the future.
The Bank’s CSR philosophy aims to make meaningful and measurable impact in the lives of deprived and vulnerable
communities across the country. The Bank’s diverse CSR activities focuses on creating conditions that can nurture or
scale up sustainable livelihoods for the said communities, in both, rural and urban India.
The Bank’s CSR activities are guided by its Policy on Corporate Social Responsibility (the CSR Policy), which has been
formulated and adopted by the Bank, in terms of Section 135 of the Companies Act, 2013, the Companies (Corporate
Social Responsibility Policy) Rules, 2014 (‘the Act’) read with Schedule VII to the Act, as amended, from time to time. The
CSR Policy is hosted on the Bank’s website at www.axisbank.com.
The CSR Policy is driven by the Bank’s corporate vision and its aspiration to be the Bank of choice for its customers,
shareholders, employees and the community. The CSR Policy outlines the governance structure, operating guidelines,
monitoring mechanism, reporting framework and the CSR activities that may be undertaken, in line with the extant CSR
norms. The CSR Policy is reviewed annually by the CSR Committee/ Board, and new focus areas, as deemed necessary,
are deliberated and approved, in alignment with Schedule VII to the Act. During the year, the CSR Policy was reviewed
and approved by the CSR Committee/ Board, to inter alia strengthen the governance mechanism and align it with the
proposed CSR norms.
The Bank executes its CSR activities directly by leveraging its geographical presence across the country, through Axis
Bank Foundation (ABF), through registered NGOs, or in association with any other trusts, agencies or entities as deemed
appropriate. Wherever possible, the Bank tries to align its CSR activities with pertinent Government schemes, with an
intention to create a multiplier effect in the true spirit of the extant CSR norms.
The CSR activities undertaken by the Bank focus primarily on poverty alleviation, promoting financial literacy and enabling
financial inclusion, promoting environmental sustainability, supporting education, skill development, and sanitation
and healthcare.
The Bank stands together with the Nation in its battle against the spread of COVID-19 Pandemic, and has committed
to a multi-pronged response supporting its customers, employees, business partners, government agencies and the
community at large. The Bank is directly supporting government entities towards meeting their equipment and sanitation
requirements, and Axis Group has committed to contributing to the PM CARES Fund. Under Axis Cares, ABF is supporting
nearly 35,000 individuals towards meeting their daily food requirements for a month. ABF is also working closely
with its implementation partners towards augmenting on-ground activities, so as to address the COVID-19 Pandemic
related challenges.
During the year, various parts of the country were ravaged by natural disasters such as cyclones and floods, causing
immense loss to life and property. Under its Axis Sahaayata program, the Bank has directly supported disaster victims in
the affected states. This includes providing relief kits to cyclone-affected individuals in the state of Odisha and to those
affected by floods in parts of Assam, Bihar, Karnataka and Kerala. Through its efforts, the Bank was able to support close
to 38,000 individuals and families.
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During the year, the Bank and Bhopal Municipal Corporation (BMC) collaborated in a unique public private partnership
towards improving solid waste management in the city of Bhopal. Bhopal, already among the strongest performers in
Swachh Bharat Mission’s annual national ratings, had sought to further strengthen its solid waste management practices
by improving on-ground monitoring and supervision. Towards this, the Bank supported the BMC by equipping the Ward
‘Darogas’ in each of the city’s 85 wards, with electric scooters. The electric scooters not only provided the BMC with
zero-emission and low maintenance mobility, but also enhanced their ability to reach and monitor every nook and corner
of the city in the shortest possible time.
“
There is no tool for development more effective than the empowerment of women - Kofi Annan”. Women empowerment has
remained a key focus of the Bank’s financial inclusion and financial literacy interventions. The Bank’s direct interventions
in this space are especially focused on women from marginalized sections of the society, both in rural and urban India.
The interventions seek to nurture their entrepreneurial skills and make them financially literate to a reasonable level. The
financial literacy modules that are used include introducing financial concepts such as personal savings and investments,
responsible spending habits, importance of having health and life insurance, as well as the importance for adopting healthy
life practices for a financially secure future. At such financial literacy sessions, the participants are educated, many for the
first time, on pertinent Government Schemes that may potentially add to their financial and social security, such as the
Pradhan Mantri Jan Dhan Yojana, Atal Pension Yojana, and various public crop, health and life insurance schemes.
The Bank had launched Project Akshar in 2017, as a tool to promote financial literacy in the digital age. Using an
interactive and ‘gamified’ approach, Project Akshar aims to promote learning about personal financial responsibility, in
a friendly and interesting manner. It adopts a multi-pronged approach to learning by using lessons, blogs, quizzes, case
scenarios and interactive info-graphics. Its various learning modules include aspects such as improving credit awareness,
as well as helping demystify the financial space for a common person, viz. financial terms and jargons that often remain
misunderstood or ignored despite being an essential part of every financial contract. Since its launch in 2017, over 3 lakh
users have benefitted from the said initiative, up to 31st March 2020. The said initiative has also helped create a ripple
effect wherein its participants have in turn encouraged their families and friends to participate in the program. Project
Akshar was awarded the ‘CSR Project of the year in Banking & Finance’ at the Brand CSR Awards 2019.
The MSME sector has an immense potential to contribute towards achieving the Government of India’s vision for a
US$ 5 trillion economy. Recognizing the need to build deeper capacities within MSME sector participants, the Bank
launched ‘Evolve’ as a knowledge sharing and capacity enhancement platform by bringing MSMEs together with experts,
leaders and professionals. The theme for the 6th edition of Evolve, held during the year, was “Gearing up for the 5 Trillion
Dollar Economy”, with the series covering 26 cities in India and touching close to 3,800 MSME sector participants.
Axis ‘DilSe’ is a flagship program that aspires to promote inclusive growth in India’s remote borders through education
towards catalyzing an enduring change. Under Axis DilSe, the Bank, through its implementation partner, initiated
transformation of over 100 primary schools in remote villages in Leh and Kargil districts in the Union Territory of Ladakh,
over a period of three years beginning 2017-18.
In the first year, playground equipment were set up in the said schools, and their libraries were refurbished to include
age appropriate books in their local language. In addition, a central library called the “The Next Chapter” was established
in the city of Leh where any student could come to read or subscribe to books, and participate in various non-curricular
activities conducted by the said Library.
In the second year, ‘DigiLabs’, a digital learning intervention, was set up in each of the said schools. DigiLabs is an innovative
solution that comprises of tablets and computer systems that are powered by solar power and come bundled with curated
educational content for the benefit of the students.
In the third and final year, age-appropriate classroom furniture was installed and additional learning material was provided
to the said schools. In addition, the program initiated the integration of Aanganwadi centers (Integrated Child Development
Services (ICDS) centers) with the said schools, with an intent to further enhance the learning levels of the Aanganwadi
children. In this final phase, training was also imparted to the school teachers, Aanganwadi workers and to the village
community, towards effective collaboration and utilization of resources among all stakeholders. Additionally, block level
training was also conducted for school headmasters and DigiLabs administrators towards effective utilization of DigiLabs.
The Axis DilSe Program has been lauded by the Ladakh Autonomous Hill Development Council, who believes that
the said program could become a template for developing rest of the schools and Aanganwadi centers, in the Union
Territory of Ladakh.
154
Statutory Reports
The Parliament of India passed the Rights of Persons with Disabilities (PwD) Act 2016 (the PwD Act), as a replacement to
the PwD Act, 1995 and towards fulfilling its obligation to the UN Convention on the Rights of Persons with Disabilities,
which India ratified in 2007. There remain a significant number of PwDs in India, as well as other stakeholders such as
care givers and their families, that remain unaware of the provisions of the PwD Act and their rights and opportunities
provided therein. Towards increasing stakeholders’ sensitization on various provisions of the PwD Act, the Bank, through
its implementation partner, continued its support in conducting training workshops, seminars and knowledge events on
skilling and employment for PwDs, at various locations across the country.
The Bank recognizes the impact of its operations on the environment and is progressively investing in technology, as
well as process and product innovations that can contribute to mitigating its environmental impact. The Bank’s various
environmental sustainability initiatives focus on clean energy generation and sourcing, energy efficiency and improving
resource utilization. As on 31st March 2020, the Bank has over 5 MW of rooftop solar capacity at close to 250 locations
with a 2 MW ground-mounted solar plant at Solapur, Maharashtra, which together help the Bank avoid a significant
amount of carbon emissions in its operations.
Axis Bank Foundation:
Set up as a Public Charitable Trust in 2006, Axis Bank Foundation (ABF) is the CSR arm of the Bank, spearheading its
CSR vision and mission with a focus on creating Sustainable Livelihoods primarily in rural India around the two themes
of Rural Livelihoods and Skill Development. ABF successfully achieved its first mission of creating 1 million sustainable
livelihoods in September 2017, a target it had taken in 2012, and has embarked on its next ambition of impacting 2 million
households by 2025.
Keeping the community at the center, ABF co-creates locally feasible solutions with highly credible and experienced
implementation partners, addressing socio-economic and ecological challenges that local communities face. Under the
Rural Livelihoods theme, ABF’s interventions are aimed at improving natural resource management of local ecosystems
to create conditions leading to higher farm and agriculture-allied productivity. Through a sustained focus on watershed
development, and the subsequent improvement in availability of water, green cover for foraging, and healthier soil
quality, farming households are introduced to a basket of livelihood options that can enhance their financial security by
supplementing incomes from multiple sources as well as reducing risk of income loss due to crop failures. Sustainable
agricultural practices not only increase farm productivity with limited resources, but also build the communities’ resilience
to withstand weather shocks. The program also supports rural communities in improving livestock management as well as
introducing livestock among certain communities as a new or additional income generating stream.
Along with the farm and natural resources-linked interventions, ABF supports the creation and expansion of rural micro-
enterprises in opportune intervention regions. Organizing rural communities into people’s institutions such as water user
groups, producer organizations, self-help groups, federations, among others, maximizes community ownership as well as
value chain participation in the planning, execution and overall governance of the various interventions.
So far, ABF’s approach has focused on transformative change through knowledge sharing, capacity building, access to and
adoption of improved livelihoods best practices, and their alignment with various government schemes and programs,
which provide further opportunities to scale.
Under the skill development theme, ABF supports training of youth, including youth with disabilities, in both rural and
peri-urban areas, with a focus on enhancing employability in organized and self-employment sectors. The interventions
are primarily aimed at attaining an integrated workforce while ensuring steady income sources and uninterrupted
employability for youth with varied levels of education and competencies through a mix of both vocational and soft skills
training. Skilling interventions for youth with disabilities are aimed at creating an inclusive work space. Skilling centers run
by ABF’s implementation partners provide market-linked courses that also help participants with placements and post-
placement support, including to participants who go on to become self-employed.
During 2019-20, ABF worked with 27 implementation partners on 33 projects in 331 blocks in 153 districts in 22 states,
covering 2.48 lakh households (including trainees). As on 31st March 2020, ABF had reached 6.92 lakh households
towards its Mission 2 Million target by 2025. ABF’s footprint includes 30 of the 115 aspirational districts as identified by
the NITI Aayog.
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Annual Report 2019-20Experience Open
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An illustrative list of various programs and activities supported by ABF can be accessed at www.axisbankfoundation.org.
For more details on the Bank’s CSR efforts, please refer to the ‘Corporate Social Responsibility (CSR)’ section under ‘Management
Discussion and Analysis’ section of the Annual Report, and disclosures made in the Bank’s Sustainability Report and in ABF’s
Annual Report, for the financial year 2019-20.
2. The Composition of the CSR Committee: The Committee comprises of Shri Rakesh Makhija, Independent Director
(Chairman), Shri Rajesh Dahiya, Executive Director (Corporate Centre) and Shri Rajiv Anand, Executive Director
(Wholesale Banking) of the Bank.
3. Average net profit of the company for last three financial years: `5,030.78 crores
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): `100.62 crores
5. Details of CSR spent during the financial year:
(a) Total amount spent for the financial year (2019-20): `100.96 crores
(b) Amount unspent, if any: NIL
(c) Manner in which the amount spent during the financial year is detailed in Annexure A.
6.
In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any
part thereof, the company shall provide the reasons for not spending the amount in its Board report.
The Bank has spent more than the mandated 2% of its average net profits for the last three financial years, amounting to
`100.96 crores, earmarked for various CSR Projects, detailed as above.
7. A responsibility statement of the CSR Committee:
The CSR Committee hereby confirms that the implementation and monitoring of CSR activities of the Bank are in
compliance with the CSR Policy of the Bank, which has been formulated and adopted in terms of the Companies Act,
2013, the Companies (CSR Policy) Rules, 2014 read with Schedule VII to the Act, as amended, from time to time and the
Guidelines issued by the Government, from time to time.
Rakesh Makhija
Chairman – CSR Committee
Rajesh Dahiya
Executive Director (Corporate Centre)
Place : Mumbai
Date : 29th April 2020
156
Statutory Reports
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Annual Report 2019-20Experience Open
Other Reports
Form No. MR-3
Secretarial Audit Report
For the financial year ended March 31, 2020
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and
Remuneration Personnel) Rules, 2014]
ToThe Members
Axis Bank Limited
rd
Trishul, 3
Floor,
Opp. Samartheshwar Temple,
Law Garden Ellisbridge,
Ahmedabad – 380 006
GujaratWe have conducted a Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by Axis Bank Limited -CIN No. L65110GJ1993PLC020769 (hereinafter called the ‘Bank’) during the
financial year from 1st April 2019 to 31st March 2020, (‘the year’/ ‘audit period’/ ‘period under review’).
We conducted the Secretarial Audit in a manner that provided us a reasonable basis for evaluating the company’s corporate
conduct/statutory compliances and expressing our opinion thereon.
We are issuing this report based on :
(i) Our verification of the books, papers, minute books, and other records maintained by the Company and furnished to us,
forms/ returns filed and compliance related action taken by the Company during the year as well as after 31st March 2020
but before the issue of this audit report,
(ii) Our observations during our visits to the Corporate Office of the Company,
(iii) Compliance Certificates confirming compliance with all laws applicable to the company given by Key Managerial Personnel
/ Senior Managerial Personnel of the Company and taken on record by Audit Committee / Board of Directors, and
(iv) Representations made, documents shown and information provided by the Company, its officers, agents, and authorised
representatives during our conduct of Secretarial Audit.
We hereby report that in our opinion, during the audit period covering the financial year ended on 31st March 2020
the Company has:
(i) complied with the statutory provisions listed hereunder, and
(ii) Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting
made hereinafter.
The members are requested to read along with our letter of even date annexed to this report as Annexure - A.
1. Compliance with specific statutory provisions
We further report that:
1.1 We have examined the books, papers, minute books and other records maintained by the Company and the forms,
returns, reports, disclosures and information filed or disseminated during the year according to the applicable
provisions/ clauses of:
(i) The Companies Act, 2013 and the Rules made thereunder;
160
Statutory Reports
(ii) The Securities Contracts (Regulation) Act, 1956 and the Rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) The Foreign Exchange Management Act, 1999 and the Rules/ Regulations made thereunder to the extent of
overseas Direct Investment (FEMA);
(v) The following Regulations Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(‘SEBI Regulations’):
(a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements )
Regulations, 2015;
(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements ) Regulations, 2018;
(c) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
(d) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act,2013 and dealing with client;
(f) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(g) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(h) The Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992; and
(i) The Securities and Exchange Board of India (Banker to Issue) Regulations, 1994.
(vi) Secretarial Standards issued by The Institute of Company Secretaries of India (Secretarial Standards).
(vii) The Banking Regulation Act, 1949, as specifically applicable to the Bank.
1.2 During the period under review, and also considering the compliance related action taken by the Company after
31st March 2020 but before the issue of this report, the Company has, to the best of our knowledge and belief and
based on the records, information, explanations and representations furnished to us :
(i) Complied with the applicable provisions/clauses of the Act, Rules, SEBI Regulations and Agreements mentioned
under sub-paragraphs (ii),(iii), (v) and (vii) of paragraph 1.1 above.
(ii) Complied with the applicable provisions/ clauses of :
(a) The Act and rules mentioned under paragraph 1.1 (i);
(b) FEMA to the extent of overseas Direct Investment mentioned under paragraph 1.1(iv),and
(c ) The Secretarial Standards on meetings of the Board of Directors (SS-1) and Secretarial standards on General
Meetings (SS-2) mentioned under paragraph 1.1 (vi) above to the extent applicable to Board meetings held
during the year, the 25th Annual General Meeting held on 20th July 2019 (25th AGM) and the postal ballot
process which concluded on 22nd August 2019 and 10th January 2020.The Compliance of the provisions
of the Rules made under the Act [paragraph 1.1(i)] and SS-1 [paragraph 1.1(vi)] with regard to the Board
meetings and Committee meetings held through video conferencing during the audit period were verified
based on the minutes of the meeting provided by the Company.
161
Annual Report 2019-20Experience Open
Other Reports
1.3 We are informed that, during/ in respect of the year, the company was not required to initiate any compliance related
action in respect of the following laws/ rules/ regulations/ standards, and was consequently not required to maintain
any books, papers, minute books or other records or file any form/ returns thereunder:
(i) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; and
(ii) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
2. Board processes:
We further report that:
2.1 The Board of Directors of Company as on 31st March 2020 comprised of:
(i) Four Executive Directors;
(ii) Two Non-Executive Nominee Directors, namely Mr B. Babu Rao and Mr. Stephen Pagliuca; and
(iii) Five Non-Executive Independent Directors, namely Mr Rakesh Makhija who is Non-Executive-Independent
Chairman, Mr Rohit Bhagat, Mr S. Vishvanathan, Mr Girish Paranjpe, and Mrs Ketaki Bhagwati who is a woman
Independent Director.
2.2 The processes relating to the following changes in the composition of the board of Directors during the year were
carried out in compliance with the provisions of the Act and LODR:
(i) Re-appointment of Mrs Usha Sangwan (DIN 02609263) as Director retiring by rotation at 25th AGM who later
on resigned from the Board of Directors of the Bank on 12th December 2019,
(ii) Appointment of Mr. Rakesh Makhija (DIN 00117692) as Non-Executive (Part-time) Chairman of the Bank for a
period of 3 years wef 18th July 2019 up to 17th July 2022 at the 25th AGM
(iii) Re-appointment of Mr Rajiv Anand (DIN 02541753) and Mr. Rajesh Dhahiya (DIN 07508488) as Executive
Directors of the Bank for a period of 3 years w.e.f 4th August 2019 up to 3rd August 2022 and appointment
of Mr Pralay Mondal as Executive Director (DIN 00117994) for a period of 3 years w.e.f 1st August 2019 to
31st July 2022.
(iv) Re-appointment of Mr S. Vishvanathan (DIN 02255828) as an Independent director of the Bank for his second
term of 3 years w.e.f 11th February 2020 to 10th February 2023 at Postal Ballot concluded on 10th January 2020.
(v) Appointment of Mr. Puneet Sharma as Chief Financial Officer and Key Managerial Personnel of the Bank
w.e.f. 6th March 2020, pursuant to resignation of Mr. Jairam Sridharan.
2.3 Adequate notice was given to all the directors to enable them to plan their schedule for the Board meetings, except
for one meeting which was convened at a shorter notice to transact urgent business.
2.4 Notice of Board meetings and Committee meetings was sent to all directors at least seven days in advance for all the
meetings held during the audit period.
2.5 Agenda and detailed notes on agenda were sent to the directors at least seven days before the board meetings, other
than those which included price sensitive information.
2.6 Agenda and detailed notes on agenda for the following items were either circulated separately less than seven
days before or at the Board meetings and consent of the Board for so circulating them was duly obtained as
required under SS-1:
(i) Supplementary agenda notes and annexures in respect of unpublished price sensitive information such as
audited financial statement/ results, unaudited financial results and connected papers, and
(ii) Additional subjects/ information/ presentations and supplementary notes.
162
Statutory Reports
2.7 A system exists for directors to seek and obtain further information and clarifications on the agenda items before the
meetings and for their meaningful participation at the meetings.
2.8 We note from the minutes verified that, at the Board meetings held during the year:
(i) Majority decisions were carried through; and
(ii) No dissenting views were expressed by any Board member on any of the subject matters discussed, that were
required to be captured and recorded as part of the minutes.
3. Compliance mechanism
There are reasonably adequate systems and processes in the Company, commensurate with the Company’s size and
operations, to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
4. Specific events/ actions
4.1 During the year, the following specific events/ actions having a major bearing on the company’s affairs took place, in
pursuance of the above referred laws, rules, regulations and standards :
(i) Approval of members was accorded by way of a special resolution passed in the 25th AGM for borrowing/
raising of funds denominated in Indian rupees or any other permitted foreign currency , by issue of debt
securities including but not limited to long term bonds, green bonds, non-convertible debentures, perpetual
debt instruments and Tier II Capital Bonds or such other debt market security permitted by RBI, from time to
time, on a private placement basis and or making offers/invitations thereof in one or more tranches within a
period of one year of passing of the resolution upto a limit of ₹ 35,000 crores, in domestic and/ or overseas
market within the overall outstanding borrowing limits of the Bank.
(ii) Approval of members was accorded by way of special resolution passed through postal ballot on 21st August
2019 for raising funds through issue of equity shares/ depository receipts and/or any other instruments or
securities representing either equity shares and/or convertible securities linked to equity shares including
through Qualified Institutional Placements/ American Depository Receipts/ Global Depository Receipts/
preferential allotment or such other permissible mode/or combination thereof, in one or more tranches for an
aggregate amount not exceeding ₹ 18,000 crores.
(iii) The Committee of Whole-Time Directors at its meeting held on 26th September 2019 approved allotment
19,87,28,139 equity shares at a price of ₹629/- per equity share, pursuant to Qualified Institutional Placement in
accordance with Chapter VI of Securities Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 and Section 42 of the Companies Act, 2013 and rules made thereunder.
(iv) Approval of members was accorded by way of a special resolution passed through postal ballot on 9th January
2020 for re-appointment (Second Term) of Mr. S. Vishvanathan (DIN 02255828) as Non-Executive Independent
Director of the Company from 11th February 2020 to 10th February 2023.
(v) The Committee of Whole-Time Directors on 30th January 2020 approved allotment of 41,750 Senior Unsecured
Redeemable Non-Convertible Debentures of face value of ₹10 lakh each aggregating to ₹4,175 crores at coupon
rate of 7.65% p.a on a private placement basis.
(vi) During the audit period, the Bank has allotted equity shares under ESOS, as follows:
(a) During the Quarter 1 i.e. from April 1, 2019 to June 30, 2019 an aggregate 25,17,255 equity shares of
₹2 each were allotted.
(b) During the Quarter 2 i.e. from July 1, 2019 to September 30, 2019 an aggregate of 9,07,983 equity shares
of ₹ 2/- each were allotted.
(c) During the Quarter 3 i.e. from October 1, 2019 to December 31, 2019 an aggregate of 5,97,330 equity
shares of ₹2/- each were allotted.
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Annual Report 2019-20Experience Open
Other Reports
(d)
During the Quarter 4 i.e. from January 1, 2020 to March 31, 2020 an aggregate of 19,24,971 equity shares of
₹2/- each were allotted.
Date : 29.04.2020
Place : Mumbai
For BNP & Associate
Company Secretaries
Firm Registration. No. P2014MH037400
PR. No: 637/2019
B. Narasimhan
Partner
FCS No: 1303 / C P No: 10440
UDIN: F001303B000185652
Note: This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report
164
Statutory Reports
Annexure A
ToThe Members
Axis Bank Limited
Trishul, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden Ellisbridge,
Ahmedabad – 380 006
Gujarat
Secretarial Audit Report of even date is to be read along with this letter.
1. The Company’s management is responsible for maintenance of secretarial records and compliance with the provisions of
corporate and other applicable laws, rules, regulations and standards. Our responsibility is to express an opinion on the
secretarial records produced for our audit.
2. We have followed such audit practices and processes as we considered appropriate to obtain reasonable assurance
about the correctness of the contents of the secretarial records.
3. While forming an opinion on compliance and issuing this report, we have also considered compliance related action
taken by the company after 31st March 2020 but before the issue of this report.
4. We have considered compliance related actions taken by the company based on independent legal /professional opinion
obtained as being in compliance with law.
5. We have verified the secretarial records furnished to us on a test basis to see whether the correct facts are reflected
therein. We also examined the compliance procedures followed by the company on a test basis. We believe that the
processes and practices we followed, provides a reasonable basis for our opinion.
6. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Bank.
7. We have obtained the management’s representation about the compliance of laws, rules and regulations and happening
of events, wherever required.
8. Our Secretarial Audit Report is neither an assurance as to the future viability of the Bank nor of the efficacy or effectiveness
with which the management has conducted the affairs of the Company.
Date : 29.04.2020
Place : Mumbai
For BNP & Associate
Company Secretaries
Firm Registration. No. P2014MH037400
PR. No: 637/2019
B. Narasimhan
Partner
FCS No: 1303 / C P No: 10440
UDIN: F001303B000185652
165
Annual Report 2019-20Experience Open
Other Reports
Certificate of Non-Disqualification of Directors
(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015)
To
The Members
Axis Bank Limited
Trishul, 3rd Floor,
Opp. Samartheshwar Temple,
Law Garden Ellisbridge,
Ahmedabad – 380 006
Gujarat
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Axis Bank
Limited having Corporate Identity Number (CIN): L65110GJ1993PLC020769 and having its Registered Office at Trishul,
3rd Floor, Opp. Samartheshwar Temple, Law Garden Ellisbridge, Ahmedabad – 380 006, Gujarat (hereinafter referred to as ‘the
Company’), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3)
read with Schedule V Para-C Sub Clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number
(DIN) status at the portal of Ministry of Corporate Affairs (MCA) i.e., www.mca.gov.in) as considered necessary and explanations
furnished to us by the Company & its Officers, we hereby certify that none of the Directors on the Board of the Company
as stated below for Financial Year ending on March 31, 2020, have been debarred or disqualified from being appointed or
continuing as Directors of Companies by Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such
other Statutory Authority.
Sr. No. Name of Director
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Mr. Rakesh Makhija
Mr. Pralay Mondal
Mr. Baburao Busi
Mr. Amitabh Chaudhry
Mr. Girish Paranjpe
Mr. Srinivas Vishvanathan
Mr. Rajiv Anand
Mr. Rohit Bhagat
Ms. Ketaki Bhagwati
Mr. Rajeshkumar Dahiya
Mr. Stephen Pagliuca
DIN
00117692
00117994
00425793
00531120
02172725
02255828
02541753
02968574
07367868
07508488
07995547
Date of appointment in Company(*)
27.10.2015
01.08.2019
19.01.2016
01.01.2019
02.11.2018
11.02.2015
12.05.2016
16.01.2013
19.01.2016
12.05.2016
19.12.2017
Note: (*) The date of appointment is as per the date reflected in MCA records.
Ensuring the eligibility of / for the appointment / continuity of every Director on the Board is the responsibility of the
Management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is
neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management
has conducted the affairs of the Company.
For BNP & Associate
Company Secretaries
Firm Registration. No. P2014MH037400
PR. No: 637/2019
B. Narasimhan
Partner
FCS No: 1303 / C P No: 10440
Date : 29.04.2020
Place : Mumbai
166
Statutory Reports
Financial Statements
168 Independent Auditor’s Report - Standalone Financial Statements
176 Standalone Financial Statements
254 Independent Auditor’s Report - Consolidated Financial Statements
262 Consolidated Financial Statements
309 Form AOC 1
310 Basel III Disclosures
Standalone Financial Statements
Independent Auditor’s Report
To the Members of Axis Bank Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Axis Bank Limited (“the Bank”), which comprise the
Standalone Balance Sheet as at March 31, 2020, the Standalone Profit and Loss Account and the Standalone Cash Flow
Statement for the year then ended and notes to the standalone financial statements including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies Act, 2013
(“the Act”) in the manner so required for banking companies and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Bank as at March 31, 2020, its profit and its cash flows for
the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are independent of the Bank in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit
of the standalone financial statements under the provisions of the Act and Rules thereunder and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone
financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. Key audit matters
How our audit addressed the key audit matter
Information Technology (IT) Controls Framework
The Bank has a complex IT architecture to support
its day to day business operations. The volume
of transactions processed and recorded is huge.
Moreover, a transaction may be required to be
recorded across multiple applications depending upon
the process and each application has different rules
and a different set of user access and authority matrix.
These applications are interlinked using different
technologies so that data transfer happens in real
time or at a particular time of the day; in batches or
at a transaction level and in an automated manner or
manually. The Core Banking Solution (CBS) itself has
many interfaces. All these data streams directly affect
the financial accounting and reporting process of the
Bank.
IT audit specialists are an integral part of our engagement team. Our approach
of testing IT General Controls (ITGC) and IT Application Controls (ITAC) is risk
based and business centric.
As part of our IT controls testing, we have tested ITGC as well as ITAC. The
focus of testing of ITGCs was based on the various parameters such as
Completeness, Validity, Identification, Authentication Authorization, Integrity
and Accountability. On the other hand, focus of testing automated controls
from applications was whether the controls prevent or detect unauthorized
transactions and support financial objectives including completeness, accuracy,
authorization and validity of transactions.
We gathered a comprehensive understanding of IT applications landscape
implemented at the Bank. It was followed by process understanding, mapping
of applications to the same and understanding financial risks posed by people-
process and technology.
In ITGC testing we reviewed, on sample basis, control areas such as User
Management, Change Management, Systems Security, Incident Management,
Physical & Environmental Security, Backup and Restoration, Business Continuity
and Disaster Recovery, Service Level Agreement.
1.
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Financial Statements Sr. No. Key audit matters
How our audit addressed the key audit matter
The Bank has a process for identifying the applications
where the controls are embedded. It also has a process
to ensure that systems, processes and controls remain
relevant. The Bank’s IT control framework includes
automated, semi-automated and manual controls
designed to address identified risks. IT controls are
stated in Entity Level Controls (ELC), IT General
Controls (ITGC) and IT Application Controls (ITAC).
We have identified IT Controls Framework as a Key
Audit Matter as the Bank’s business is highly dependent
on technology, the IT environment is complex and the
design and operating effectiveness of IT controls have a
direct impact on its financial reporting process. Review
of these controls allows us to provide assurance on
the integrity and completeness of data processed
through various IT applications which are used for the
preparation of financial reports.
2.
Classification, Provisioning and Write off of
Advances
(Refer note 5.2 of schedule 17 and note 1.2, 2.1.1
and 2.1.5 of schedule 18 to the standalone financial
statements)
The Bank’s portfolio of advances to customers
amounts to ` 571,424.16 crores as at March 31, 2020
comprising of wholesale banking and Retail banking
customer.
required under
Income Recognition, Asset
As
Classification and provisioning norms (IRAC norms),
guidelines on COVID 19 related Regulatory Package
dated March 27, 2020 and April 17, 2020 issued by the
Reserve Bank of India (the “RBI”) (‘Regulatory Package’)
and other circulars, notifications and directives
issued by the RBI, the Bank classifies advances into
performing and non-performing advances which
consists of Standard, Sub-standard, Doubtful and Loss
and makes appropriate provisions.
The Bank, as per its governing framework, identifies
standard advances which require higher provision
based on its evaluation of risk and internal ratings.
The Bank also makes provisions against identified
categories of non-fund based facilities, basis the
internal assessment and evaluation. The Bank identifies
sectors wherein the Bank perceives stress and makes
higher provisions. The Bank also identifies accounts
which are to be technically written off based on the
framework approved by the Bank’s Board of Directors.
For ITAC, we carried out on sample basis, compliance tests of system
functionality in order to assess the accuracy of system calculations. We also
carried out procedures such as validations and limit checks on data entered into
applications, approvals, process dependencies and restriction on time period in
which transactions may be recorded.
We tested the control environment using various techniques such as inquiry,
review of documentation/record/reports, observation and re-performance.
We also tested few controls using negative testing technique. We had taken
adequate samples of instances for our tests.
Wherever deviations were noted either the same were explained to our
satisfaction or we tested compensating controls and performed alternate
procedures, where necessary, to draw comfort.
Our audit procedures included, but were not limited to the following:
Provisions for Corporate advances against specific individual loans (Wholesale
banking customer)
1.
Tested the key controls over borrower risk grading for wholesale
loans (larger customer exposures that are monitored individually) for
classification of such loans as performing or non-performing advances.
• Tested on sample basis, the approval of new lending facilities
against the Bank’s credit policies, the performance of annual loan
assessments, and controls over the monitoring of credit quality.
• Assessed the process for classification by the Management including
identification of non-performing assets.
• Tested loans on sample basis to form our own assessment as to
whether impairment events had occurred and to assess whether
impairments had been identified in a timely manner.
• For the selected non-performing loans, assessed Management’s
forecast and inputs of recoverable cash flows, comments of auditor
on the financial statements, valuation of underlying security and
collaterals, estimates of recoverable amounts on default and other
sources of repayment.
• Holding specific discussions with the credit and risk departments to
ascertain if there were indicators of stress or an occurrence of an
event of default in a particular loan account or any product category
which need to be considered as NPA.
This included testing controls over the identification of exposures
showing signs of stress, either due to internal factors specific to the
borrower or external macroeconomic factors, and testing the timeliness
of and the accuracy of risk assessments and risk grading against the
requirements of the Bank’s lending policies and RBI IRAC norms.
2.
The classification, provisioning and write off of
advances is a Key Audit Matter as the Bank has
significant credit risk exposure to a large number of
borrowers across a wide range of borrowers, products,
industries and geographies and there is a high degree
of complexity, uncertainty and judgement involved in
recoverability of advances, estimation of provisions
thereon and identification of accounts to be written
off.
Performed credit assessments of a sample of corporate loans managed
by a specialized group assessed as high risk or impaired, focusing on larger
exposures assessed by the Bank as showing signs of deterioration, or in
areas of emerging risk (assessed against external market conditions). We
reviewed the Bank’s risk grading of the loan, their assessment of loan
recoverability and the impact on the credit provision. To do this, we
used the information on the Borrowers loan file, discussed the case with
the concerned officials and senior management, and performed our own
assessment of recoverability.
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Annual Report 2019-20Experience Open
Standalone Financial Statements
Sr. No. Key audit matters
How our audit addressed the key audit matter
The same resulted in significant audit efforts to
address the risks around loan recoverability and the
determination of related provisions and write off.
Provisions for Retail advances against specific individual loans (Retail banking
customer)
a.
b.
c.
For retail loans (smaller customer exposures not monitored individually),
tested controls over the systems which record lending arrears,
delinquency buckets based on the number of days loans are overdue,
and calculate individual provisions.
Tested automated calculation and change Management controls and
evaluated the Bank’s oversight of the portfolios, with a focus on controls
over delinquency statistics monitoring.
Tested on sample basis the level of provisions held against different
loan products based on the delinquency profile and assumptions
made in respect of expected recoveries, primarily from collateral held.
We also carried out extensive data analytics procedures to identify
exceptions and outliers.
Provisions estimated across loan portfolios (collective provision)
1.
2.
3.
4.
5.
6.
7.
Tested the Bank’s processes for making collective provision;
Reviewed the Policy for higher provision for weak standard advances
and stressed sectors adopted by the Bank;
Reviewed
adopted by the Bank;
the Policy
for provision on non-fund
facilities
Validated the parameters used to calculate collective provisions with
reference to IRAC norms, internal policy on higher provisions on weak
standard advances, provisions on non-fund facilities;
Tested the completeness and accuracy of data transferred from
underlying source systems used for computing collective provision;
Re-performed, for a sample of retail and wholesale portfolios, the
calculation of collective provisions, to determine the accuracy of the same;
Reviewed the Bank’s process for granting moratorium to borrowers as per
the Regulatory Package announced by RBI. We tested the completeness
and accuracy of data used for computing general provision in line with
Regulatory package issued by RBI. With respect to additional provision
made by the Bank on account of the impact of Covid-19 pandemic, we
broadly reviewed the underlying assumptions and estimates used by
the management for the same but as the extent of impact is dependent
on future developments which are highly uncertain, we primarily relied
on those assumptions and estimates. These assumptions and estimates
are a subject matter of periodic review by the Bank.
Technical write off across loan portfolios
The Bank has adopted a framework for technical write off. We reviewed the
framework and understood the process for identification of loan portfolios to be
technically written off. We tested on sample basis, the accounts identified during
the year to be written off for compliance with the aforesaid framework.
Disclosure
We assessed the appropriateness and adequacy of disclosures against the
relevant RBI requirements relating to NPAs including the additional disclosures
required to be made in accordance with the Regulatory Package.
170
Financial Statements Emphasis of Matter
We draw attention to Note 1.2 of Schedule 18 to the standalone financial statements which explains that the extent to which
COVID-19 pandemic will impact the financial statements, is dependent on future developments, which are highly uncertain.
Our opinion is not modified in respect of this matter.
Other Information
The Bank’s Board of Directors is responsible for the other information. The other information comprises the information
included in the Directors’ Report and Management Discussion and Analysis forming part of the Annual Report, but does not
include the standalone financial statements, consolidated financial statements and our auditor’s report thereon and the Pillar
III Disclosures under the New Capital Adequacy Framework (Basel III disclosures). The other information is expected to be
made available to us after the date of this report.
Our opinion on the standalone financial statements does not cover the other information and the Basel III disclosures and
accordingly, we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Bank’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation
of these standalone financial statements that give a true and fair view of the financial position, financial performance and
cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting
Standards prescribed under Section 133 of the Act, read with the relevant rules issued thereunder, provision of Section 29
of the Banking Regulation Act, 1949 and the circulars, guidelines and directions issued by Reserve Bank of India (“RBI”) from
time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, Management is responsible for assessing the Bank’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless Management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this
standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
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Annual Report 2019-20Experience Open Standalone Financial Statements
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Bank has adequate internal financial controls with reference to financial statements in place and the operating effectiveness
of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made in the standalone financial statements by Management.
• Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Bank to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures,
and whether the standalone financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with the relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone financial statements of the current year and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
(1) The standalone Balance Sheet and the Standalone Profit and Loss Account have been drawn up in accordance with the
provisions of Section 29 of the Banking Regulation Act, 1949 read with Section 133 of the Act read with relevant rules
issued thereunder.
(2) As required under Section 143 (3) of the Act and Section 30 (3) of the Banking Regulation Act, 1949, we report that:
a. We have sought and obtained all the information and explanations which, to the best of our knowledge and belief,
were necessary for the purpose of our audit and have found them to be satisfactory;
b.
In our opinion, the transactions of the Bank, which have come to our notice, have been within the powers of the Bank;
c.
The financial accounting systems of the Bank are centralized and therefore, accounting returns for the purpose of
preparing financial statements are not required to be submitted by the branches; we have visited 129 branches for
the purpose of our audit;
d.
In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our
examination of those books;
172
Financial Statements
e. The standalone Balance Sheet, the standalone Profit and Loss Account and the standalone Cash Flow Statement
dealt with by this report are in agreement with the books of account;
f.
In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed
under Section 133 of the Act read with relevant rules issued thereunder to the extent they are not inconsistent with
the accounting policies prescribed by RBI;
g. On the basis of the written representations received from the directors as on March 31, 2020, and taken on record
by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a
director in terms of Section 164(2) of the Act;
h. With respect to the adequacy of the internal financial controls with reference to financial statements of the Bank
and the operating effectiveness of such controls, refer to our separate report in “Annexure”;
i. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of
Section 197(16) of the Act;
In our opinion and to the best of our information and according to the explanations given to us, requirements prescribed
under Section 197 of the Act is not applicable by virtue of Section 35B (2A) of the Banking Regulation Act, 1949.
j. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the
explanations given to us:
i.
ii.
The Bank has disclosed the impact of pending litigations on its financial position in its standalone financial
statements – Refer Schedule 12 read with note 2.2.16 of Schedule 18 - Contingent Liabilities to the standalone
financial statements;
The Bank has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative contracts - Refer schedule 5 read
with note 2.2.16 of Schedule 18 to the standalone financial statements in respect of such items as it relates
to the Bank; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Bank.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Purushottam Nyati
Partner
Membership No. 118970
UDIN No. 20118970AAAABJ7471
Place : Mumbai
Date : April 28, 2020
173
Annual Report 2019-20Experience Open
Standalone Financial Statements
Annexure to the Independent Auditor’s Report
[Referred to in paragraph 2(h) under ‘Report on Other Legal and Regulatory Requirements’ section in our Independent
Auditor’s Report of even date to the members of Axis Bank Limited on the Standalone financial statements for the year ended
March 31, 2020]
Report on the Internal Financial Controls with reference to Financial Statements under clause (i) of sub-section
3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls with reference to financial statements of Axis Bank Limited (“the Bank”) as of
March 31, 2020 in conjunction with our audit of the standalone financial statements of the Bank for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Bank’s management is responsible for establishing and maintaining internal financial controls based on the internal control
with reference to financial statements criteria established by the Bank considering the essential components of internal
control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”)
issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Act.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Bank’s internal financial controls with reference to financial statements
based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified
under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI.
Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was
established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with
reference to financial statements and their operating effectiveness.
Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal
financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected
depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the Bank’s internal financial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A Bank’s internal financial control with reference to financial statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A Bank’s internal financial control with reference to financial statements
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Bank; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with the generally accepted accounting
principles, and that receipts and expenditures of the Bank are being made only in accordance with authorisations of the
management and directors of the Bank; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the Bank’s assets that could have a material effect on the financial statements.
174
Financial Statements Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not
be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to
future periods are subject to the risk that the internal financial controls with reference to financial statements may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Bank has, in all material respects, adequate internal financial controls with reference to the financial
statements and such internal financial controls with reference to financial statements were operating effectively as at March
31, 2020, based on the internal control with reference to financial statements criteria established by the Bank considering the
essential components of internal controls stated in the Guidance Note issued by the ICAI.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Purushottam Nyati
Partner
Membership No. 118970
UDIN No. 20118970AAAABJ7471
Place : Mumbai
Date : April 28, 2020
175
Annual Report 2019-20Experience Open Standalone Financial Statements
Balance Sheet
As at 31 March, 2020
Capital and Liabilities
Capital
Reserves & Surplus
Deposits
Borrowings
Other Liabilities and Provisions
Total
Assets
Cash and Balances with Reserve Bank of India
Balances with Banks and Money at Call and Short Notice
Investments
Advances
Fixed Assets
Other Assets
Total
Contingent Liabilities
Bills for Collection
Schedule
No.
As at 31-03-2020
As at 31-03-2019
(` in Thousands)
1
2
3
4
5
6
7
8
9
10
11
5,643,356
5,143,290
843,835,072
661,619,666
6,401,049,373
5,484,713,409
1,479,541,330
1,527,757,792
421,579,030
330,731,159
9,151,648,161
8,009,965,316
849,592,391
350,990,339
123,090,412
321,056,014
1,567,343,203
1,749,692,759
5,714,241,564
4,947,979,721
43,128,970
40,366,358
854,251,621
599,880,125
9,151,648,161
8,009,965,316
12
9,229,687,554
7,557,652,685
478,427,586
519,728,573
Significant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Balance Sheet
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
176
Financial Statements Profit & Loss Account
For the year ended 31 March, 2020
I
Income
Interest earned
Other income
Total
II
Expenditure
Interest expended
Operating expenses
Provisions and contingencies
Total
III Net Profit for the year (I - II)
Balance in Profit & Loss Account brought forward from previous year
IV Amount Available for Appropriation
V
Appropriations:
Transfer to Statutory Reserve
Transfer to/(from) Investment Reserve
Transfer to Capital Reserve
Transfer to Reserve Fund
Transfer to Investment Fluctuation Reserve
Dividend paid (includes tax on dividend)
Balance in Profit & Loss Account carried forward
Total
VI
Earnings per Equity Share
(Face value `2/- per share)
Basic (in `)
Diluted (in `)
Schedule
No.
Year ended
31-03-2020
(` in Thousands)
Year ended
31-03-2019
13
14
15
16
626,351,574
549,857,707
155,365,607
131,303,394
781,717,181
681,161,101
374,289,538
332,775,970
173,046,243
158,334,077
18 (2.1.1)
218,109,246
143,284,971
765,445,027
634,395,018
16,272,154
46,766,083
243,229,953
230,430,518
259,502,107
277,196,601
4,068,038
11,691,521
-
(1,034,894)
3,405,245
1,250,935
8,502
3,280,000
2,888,581
6,280
6,000,000
-
245,851,741
259,282,759
259,502,107
277,196,601
5.99
5.97
18.20
18.09
18 (2.2.1)
18 (2.2.3)
18 (2.2.2)
18 (2.2.6)
18 (2.2.4)
Significant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Profit and Loss Account
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
177
Annual Report 2019-20Experience Open Standalone Financial Statements
Cash Flow Statement
For the year ended 31 March, 2020
Cash flow from operating activities
Net profit before taxes
Adjustments for:
Depreciation on fixed assets
Depreciation on investments
Amortisation of premium on Held to Maturity investments
Provision for Non Performing Assets (including bad debts)
Provision on standard assets
Provision on unhedged foreign currency exposure
Profit/(loss) on sale of land, buildings and other assets (net)
Provision for country risk
Year ended
31-03-2020
(` in Thousands)
Year ended
31-03-2019
49,042,266
69,740,881
7,729,508
7,097,249
1,359,912
3,000,160
3,538,847
3,207,410
127,555,268
102,214,828
14,513,249
8,097,890
(106,800)
44,813
121,721
187,900
229,014
-
Provision for restructured assets/strategic debt restructuring/sustainable structuring
(154,980)
(196,572)
Provision for other contingencies
Dividend from Subsidiaries
Adjustments for:
(Increase)/Decrease in investments
(Increase)/Decrease in advances
Increase /(Decrease) in deposits
(Increase)/Decrease in other assets
Increase/(Decrease) in other liabilities & provisions
Direct taxes paid
Net cash flow from operating activities
Cash flow from investing activities
Purchase of fixed assets
(Increase)/Decrease in Held to Maturity investments
Increase in Investment in Subsidiaries
Proceeds from sale of fixed assets
Dividend from Subsidiaries
Net cash used in investing activities
178
42,050,763
7,005,966
(2,402,561)
(1,311,000)
243,292,006
199,273,726
242,642,832
(40,070,291)
(869,492,216)
(649,869,997)
916,335,964
948,486,186
(257,994,454)
(106,579,694)
49,702,444
52,991,110
(28,353,805)
(28,561,806)
296,132,771
375,669,234
(10,719,744)
(8,316,648)
(89,455,847)
(178,957,069)
(67,000)
(1,934,115)
169,658
531,616
2,402,561
1,311,000
(97,670,372)
(187,365,216)
Financial Statements Cash flow from financing activities
Proceeds/(Repayment) from issue of subordinated debt, perpetual debt & upper Tier II instruments (net)
(20,000,000)
(17,000,000)
Year ended
31-03-2020
(` in Thousands)
Year ended
31-03-2019
Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt & upper Tier II
instruments) (net)
Proceeds from issue of share capital
Proceeds from share premium (net of share issue expenses)
Payment of dividend (including dividend distribution tax)
Net cash generated from financing activities
Effect of exchange fluctuation translation reserve
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes to the Cash Flow Statement:
1. Cash and cash equivalents includes the following
(28,216,462)
64,596,346
500,066
10,212
151,784,664
1,706,853
(2,888,581)
-
101,179,687
49,313,411
994,364
(119,982)
300,636,450
237,497,447
672,046,353
434,548,906
972,682,803
672,046,353
Cash and Balances with Reserve Bank of India (Refer Schedule 6)
849,592,391
350,990,339
Balances with Banks and Money at Call and Short Notice (Refer Schedule 7)
123,090,412
321,056,014
Cash and cash equivalents at the end of the year
2. Amount of Corporate Social Responsibility related expenses spent during the year in cash `95.61
972,682,803
672,046,353
crores (previous year `137.02 crores)
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
179
Annual Report 2019-20Experience Open Standalone Financial Statements
Schedules forming part of the Balance Sheet
As at 31 March, 2020
Schedule 1 - Capital
Authorised Capital
4,250,000,000 (Previous year - 4,250,000,000) Equity Shares of `2/- each
Issued, Subscribed and Paid-up capital
2,821,677,934 (Previous year - 2,571,644,871) Equity Shares of `2/- each fully paid-up
Schedule 2 - Reserves and Surplus
I.
II.
III.
Statutory Reserve
Opening Balance
Additions during the year
Share Premium Account
Opening Balance
Additions during the year
Less: Share issue expenses
Investment Reserve Account
Opening Balance
Additions during the year
Deductions during the year
IV. General Reserve
Opening Balance
Additions during the year
V.
Capital Reserve
Opening Balance
Additions during the year [Refer Schedule 18 (2.2.1)]
VI. Foreign Currency Translation Reserve [Refer Schedule 17 (5.6)]
Opening Balance
Additions during the year
Deductions during the year
VII. Reserve Fund
Opening Balance
Additions during the year [Refer Schedule 18 (2.2.3)]
VIII. Investment Fluctuation Reserve
Opening Balance
Additions during the year [Refer Schedule 18 (2.2.2)]
IX. Balance in Profit & Loss Account brought forward
Adjustments during the year*
Balance in Profit & Loss Account
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
8,500,000
8,500,000
5,643,356
5,143,290
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
127,451,247
4,068,038
131,519,285
259,597,373
152,488,174
(703,510)
411,382,037
-
-
-
-
3,543,100
-
3,543,100
20,923,889
3,405,245
24,329,134
792,850
994,363
-
1,787,213
81,254
8,502
89,756
6,000,000
3,280,000
9,280,000
245,851,741
16,052,806
261,904,547
843,835,072
115,759,726
11,691,521
127,451,247
257,890,520
1,706,853
-
259,597,373
1,034,894
-
(1,034,894)
-
3,543,100
-
3,543,100
19,672,954
1,250,935
20,923,889
912,832
-
(119,982)
792,850
74,974
6,280
81,254
-
6,000,000
6,000,000
259,282,759
(16,052,806)
243,229,953
661,619,666
*During the previous year ended 31 March, 2019, the Bank had made a provision amounting to `1,605.28 crores towards Land held as non-banking
asset through the reserves and surplus, as permitted by RBI. During the year ended 31 March, 2020, the said provision has been recognised as
part of provisions & contingencies in the profit and loss account with consequential reversal in the reserves and surplus, as advised by RBI. [Refer
Schedule 18 (2.1.43) ]
180
Financial Statements Schedule 3 - Deposits
A.
I.
II.
III.
B.
I.
II.
Demand Deposits
(i) From banks
(ii) From others
Savings Bank Deposits
Term Deposits
(i) From banks
(ii) From others
Total
Deposits of branches in India
Deposits of branches outside India
Total
Schedule 4 - Borrowings
I.
II.
Borrowings in India
(i) Reserve Bank of India
(ii) Other banks #
(iii) Other institutions & agencies **
Borrowings outside India
Total
Secured borrowings included in I & II above
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
38,888,253
862,256,063
1,735,916,234
47,219,608
845,433,682
1,541,288,064
343,218,323
3,420,770,500
6,401,049,373
6,357,696,472
43,352,901
6,401,049,373
232,371,412
2,818,400,643
5,484,713,409
5,466,197,810
18,515,599
5,484,713,409
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
116,190,000
650,000
808,092,100
554,609,230
1,479,541,330
119,035,398
144,000,000
2,785,000
683,583,472
697,389,320
1,527,757,792
144,000,000
# Borrowings from other banks include Subordinated Debt of `15.00 crores (previous year `35.00 crores) in the nature of Non-Convertible
Debentures and Perpetual Debt of Nil (previous year `50.00 crores) [Also refer Note 18 (2.1.2)]
** Borrowings from other institutions & agencies include Subordinated Debt of `17,490.00 crores (previous year `19,470.00 crores) in the nature of
Non-Convertible Debentures and Perpetual Debt of `7,000.00 crores (previous year `6,950.00 crores) [Also refer Note 18 (2.1.2)]
Schedule 5 - Other Liabilities and Provisions
Bills payable
Inter-office adjustments (net)
Interest accrued
Proposed dividend (includes tax on dividend) [Refer Schedule 17 (5.20) and Schedule 18 (2.2.6)]
Contingent provision against standard assets [Refer Schedule 18 (2.1.8)]
I.
II.
III.
IV.
V.
VI. Others (including provisions)
Total
Schedule 6 - Cash and Balances with Reserve Bank of India
I.
II.
Cash in hand (including foreign currency notes)
Balances with Reserve Bank of India
(i) in Current Account
(ii) in Other Accounts
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
36,897,894
-
31,008,096
-
45,197,371
308,475,669
421,579,030
37,854,366
-
45,522,438
-
30,404,383
216,949,972
330,731,159
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
79,878,972
42,132,147
209,713,419
560,000,000
849,592,391
263,858,192
45,000,000
350,990,339
181
Annual Report 2019-20Experience Open Standalone Financial Statements
Schedule 7 - Balances with Banks and Money at Call and Short Notice
I.
In India
(i) Balance with Banks
(a) in Current Accounts
(b) in Other Deposit Accounts
(ii) Money at Call and Short Notice
(a) With banks
(b) With other institutions
Total
II. Outside India
(i) in Current Accounts
(ii) in Other Deposit Accounts
(iii) Money at Call & Short Notice
Total
Grand Total (I+II)
Schedule 8 - Investments
I.
II.
Investments in India in -
(i) Government Securities ##
(ii) Other approved securities
(iii) Shares
(iv) Debentures and Bonds
(v) Investment in Subsidiaries/Joint Ventures
(vi) Others (Mutual Fund units, CD/CP, PTC etc.)
Total Investments in India
Investments outside India in -
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/or joint ventures abroad
(iii) Others (Equity Shares and Bonds)
Total Investments outside India
Grand Total (I+II)
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
605,423
25,668,577
2,419,842
31,712,577
-
-
26,274,000
-
191,610,699
225,743,118
42,990,128
725,119
53,101,165
96,816,412
123,090,412
42,478,364
5,177,257
47,657,275
95,312,896
321,056,014
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
1,219,180,739
-
11,552,354
205,529,143
18,094,821
59,704,124
1,514,061,181
40,634,795
4,833,428
7,813,799
53,282,022
1,567,343,203
1,168,229,051
-
9,594,584
392,845,209
18,027,821
112,641,005
1,701,337,670
34,164,807
4,833,428
9,356,854
48,355,089
1,749,692,759
## Includes securities costing `34,501.78 crores (previous year `29,283.94 crores) pledged for availment of fund transfer facility, clearing facility and
margin requirements
Schedule 9 - Advances
A.
B.
(i) Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii) Term loans #
Total
Secured by tangible assets $
(i)
(ii) Covered by Bank/Government Guarantees &&
(iii) Unsecured
Total
182
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
145,282,883
1,578,453,784
3,990,504,897
5,714,241,564
4,127,706,073
17,284,147
1,569,251,344
5,714,241,564
155,366,966
1,503,567,259
3,289,045,496
4,947,979,721
3,535,163,307
33,887,710
1,378,928,704
4,947,979,721
Financial Statements
C.
I.
Advances in India
(i) Priority Sector
(ii) Public Sector
(iii) Banks
(iv) Others
Total
II. Advances Outside India
(i) Due from banks
(ii) Due from others -
(a) Bills purchased and discounted
(b) Syndicated loans
(c) Others
Total
Grand Total (CI+CII)
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
1,438,593,307
134,270,813
21,809,078
3,673,182,725
5,267,855,923
1,188,930,411
65,894,406
43,110,224
3,268,892,314
4,566,827,355
25,828,342
20,815,655
28,288,691
26,001,299
366,267,309
446,385,641
5,714,241,564
23,843,213
47,840,704
288,652,794
381,152,366
4,947,979,721
#
Net of borrowings under Inter Bank Participation Certificate (IBPC) `1,500.00 crores (previous year `2,750.00 crores), includes lending under IBPC
`2,900.10 crores (previous year `3,529.50 crores)
Includes advances against book debts
$
&& Includes advances against L/Cs issued by other banks
Schedule 10 - Fixed Assets
I.
Premises
Gross Block
At cost at the beginning of the year
Additions during the year
Deductions during the year
Total
Depreciation
As at the beginning of the year
Charge for the year
Deductions during the year
Depreciation to date
Net Block
II. Other fixed assets (including furniture & fixtures)
Gross Block
At cost at the beginning of the year
Additions during the year*
Deductions during the year
Total
Depreciation
As at the beginning of the year
Charge for the year
Deductions during the year
Depreciation to date
Net Block
III. CAPITAL WORK-IN-PROGRESS (including capital advances)
Grand Total (I+II+III)
* includes movement on account of exchange rate fluctuation
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
17,917,015
460,004
-
18,377,019
1,640,399
276,438
-
1,916,837
16,460,182
60,352,942
8,243,588
(972,208)
67,624,322
38,990,122
7,453,067
(744,585)
45,698,604
21,925,718
4,743,070
43,128,970
18,330,983
169,308
(583,276)
17,917,015
1,470,027
292,302
(121,930)
1,640,399
16,276,616
52,204,387
8,999,163
(850,608)
60,352,942
32,809,459
6,804,946
(624,283)
38,990,122
21,362,820
2,726,922
40,366,358
183
Annual Report 2019-20Experience Open
Standalone Financial Statements
Schedule 11 - Other Assets
Inter-office adjustments (net)
Interest Accrued
Tax paid in advance/tax deducted at source (net of provisions)
Stationery and stamps
Non banking assets acquired in satisfaction of claims$
I.
II.
III.
IV.
V.
VI. Others #@
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
-
71,528,813
15,353,273
1,056
-
767,368,479
854,251,621
-
70,941,386
15,911,960
3,057
87,276
512,936,446
599,880,125
# Includes deferred tax assets of `7,254.97 crores (previous year `7,640.73 crores) [Refer Schedule 18 (2.2.11)]
@ Includes Priority Sector Shortfall Deposits of `46,462.92 crores (previous year `28,161.77 crores)
$ Represents balance net of provision of `2,068.24 crores on Land held as non-banking asset. (previous year represents balance net of provision of
`2,208.61 crores on Land held as non-banking asset and provision of `2.09 crores on other non banking assets)
Schedule 12 - Contingent Liabilities
I.
II.
III.
Claims against the Bank not acknowledged as debts
Liability for partly paid investments
Liability on account of outstanding forward exchange and derivative contracts:
a) Forward Contracts
b) Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest Rate Futures
c) Foreign Currency Options
Total (a+b+c)
IV. Guarantees given on behalf of constituents
In India
Outside India
Acceptances, endorsements and other obligations
V.
VI. Other items for which the Bank is contingently liable
Grand Total (I+II+III+IV+V+VI) [Refer Schedule 18 (2.2.16)]
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
17,338,059
1,387,700
6,235,275
18,000
4,559,787,377
3,015,972,169
451,140,999
8,026,900,545
3,296,537,608
2,375,871,342
464,047,739
6,136,456,689
664,796,899
74,340,067
251,649,846
193,274,438
9,229,687,554
680,528,970
75,358,146
324,394,652
334,660,953
7,557,652,685
184
Financial Statements
Schedules forming part of the Profit & Loss Account
For the year ended 31 March, 2020
Schedule 13 - Interest Earned
Interest/discount on advances/bills
Income on investments
Interest on balances with Reserve Bank of India and other inter-bank funds
I.
II.
III.
IV. Others
Total
Schedule 14 - Other Income
I.
II.
III.
IV.
Commission, exchange and brokerage
Profit/(Loss) on sale of investments (net) [Refer Schedule 18(2.2.1)]
Profit/(Loss) on sale of land, buildings and other assets (net)*
Profit on exchange/derivative transactions (net)
Income earned by way of dividends etc. from subsidiaries/companies and/or joint venture
abroad/in India
VI. Miscellaneous Income
V.
[including recoveries on account of advances/investments written off in earlier years `1,552.99
crores (previous year `1,867.45 crores) and net profit on account of portfolio sell downs/
securitisation `25.50 crores (previous year net profit of `7.96 crores)]
Total
*includes provision for diminution in value of fixed assets
Schedule 15 - Interest Expended
Interest on deposits
Interest on Reserve Bank of India/Inter-bank borrowings
I.
II.
III. Others
Total
Schedule 16 - Operating Expenses
Payments to and provisions for employees
I.
Rent, taxes and lighting
II.
Printing and stationery
III.
Advertisement and publicity
IV.
V.
Depreciation on bank’s property
VI. Directors’ fees, allowance and expenses
VII. Auditors’ fees and expenses
VIII. Law charges
IX.
X.
XI.
XII. Other expenditure
Postage, telegrams, telephones etc.
Repairs and maintenance
Insurance
Total
Year ended
31-03-2020
483,029,726
112,460,254
10,952,634
19,908,960
626,351,574
Year ended
31-03-2020
96,919,415
21,723,011
(44,813)
15,744,570
(` in Thousands)
Year ended
31-03-2019
413,220,214
113,490,713
6,933,458
16,213,322
549,857,707
(` in Thousands)
Year ended
31-03-2019
88,536,507
7,581,014
(229,013)
14,867,360
2,402,561
1,311,000
18,620,863
19,236,526
155,365,607
131,303,394
Year ended
31-03-2020
293,690,561
19,988,994
60,609,983
374,289,538
Year ended
31-03-2020
53,210,007
11,361,948
1,629,184
1,125,564
7,729,508
20,709
19,207
1,236,169
2,739,490
11,429,098
7,510,955
75,034,404
173,046,243
(` in Thousands)
Year ended
31-03-2019
237,075,125
29,543,171
66,157,674
332,775,970
(` in Thousands)
Year ended
31-03-2019
47,473,218
10,468,677
1,951,435
1,018,137
7,097,249
27,553
14,616
1,175,771
2,962,177
10,549,779
6,003,052
69,592,413
158,334,077
185
Annual Report 2019-20Experience Open
Standalone Financial Statements
17 Significant Accounting Policies
For the year ended 31 March, 2020
1 Background
Axis Bank Limited (‘the Bank’) was incorporated in 1993 and provides a complete suite of banking and financial services
including retail banking, wholesale banking and treasury operations. The Bank is primarily governed by the Banking
Regulation Act, 1949. The Bank has overseas branches at Singapore, Hong Kong, DIFC - Dubai, Shanghai and Colombo
and an Offshore Banking Unit at International Financial Service Centre (IFSC), Gujarat International Finance Tec-City
(GIFT City), Gandhinagar, India.
2 Basis of preparation
The standalone financial statements (‘financial statements’) have been prepared and presented under the historical cost
convention on the accrual basis of accounting in accordance with the generally accepted accounting principles in India,
unless otherwise stated by the Reserve Bank of India (‘RBI’), to comply with the statutory requirements prescribed
under the Third Schedule of the Banking Regulation Act, 1949, the circulars, notifications, guidelines and directives
issued by RBI from time to time and the Accounting Standards notified under Section 133 of the Companies Act, 2013
read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards)
Amendment Rules, 2016 to the extent applicable and practices generally prevalent in the banking industry in India.
Accounting policies applied have been consistent with the previous year except otherwise stated.
3 Use of estimates
The preparation of the financial statements in conformity with the generally accepted accounting principles requires
the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including
contingent liabilities) at the date of the financial statements, revenues and expenses during the reporting period. Actual
results could differ from those estimates. The Management believes that the estimates and assumptions used in the
preparation of the financial statements are prudent and reasonable. Any revisions to the accounting estimates are
recognised prospectively in the current and future periods.
4 Change in accounting policies/estimates
Provision on Non-Fund based outstanding
During the year, the Bank has adopted a policy of maintaining provision on non-funded outstanding in NPAs, prudentially
written off accounts, corporate standard advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC.
As a result, the provisions and contingencies for the year are higher by `410.52 crores with a consequent reduction to
the profit before tax.
5
Significant accounting policies
5.1 Investments
Classification
In accordance with the RBI guidelines, investments are classified at the time of purchase as:
• Held for Trading (‘HFT’);
• Available for Sale (‘AFS’); and
• Held to Maturity (‘HTM’).
Investments that are held principally for sale within a short period are classified as HFT securities. As per the RBI
guidelines, HFT securities, which remain unsold for a period of 90 days are transferred to AFS securities.
Investments that the Bank intends to hold till maturity are classified under the HTM category. Investments in the equity
of subsidiaries/joint ventures are categorised as HTM in accordance with the RBI guidelines.
All other investments are classified as AFS securities.
However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
Others. Investments made outside India are classified under three categories - Government Securities, Subsidiaries and/
or Joint Ventures abroad and Others.
186
Financial Statements
All investments are accounted for on settlement date, except investments in equity shares which are accounted
for on trade date.
Transfer of security between categories
Transfer of security between categories of investments is accounted as per the RBI guidelines.
Acquisition cost
Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the
Profit and Loss Account.
Broken period interest is charged to the Profit and Loss Account.
Cost of investments is computed based on the weighted average cost method.
Valuation
Investments classified under the HTM category: Investments are carried at acquisition cost unless it is more than the face
value, in which case the premium is amortised over the period remaining to maturity on a constant yield to maturity
basis. Such amortization of premium is adjusted against interest income under the head ‘Income from Investments’ under
Schedule 13 in Profit and Loss Account. In terms of RBI guidelines, discount on securities held under HTM category is not
accrued and such securities are held at the acquisition cost till maturity.
Investments in subsidiaries/joint ventures are categorised as HTM and assessed for impairment to determine permanent
diminution, if any, in accordance with the RBI guidelines and suitable provisions are made.
Investments classified under the AFS and HFT categories: Investments under these categories are marked to market. The
market/fair value of quoted investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the scrip as
available from the trades/quotes on the stock exchanges or prices declared by Primary Dealers Association of India
(‘PDAI’) jointly with Fixed Income Money Market and Derivatives Association of India (‘FIMMDA’)/Financial Benchmark
India Private Limited (‘FBIL’), periodically. Net depreciation, if any, within each category of each investment classification
is recognised in the Profit and Loss Account. The net appreciation if any, under each category of each investment
classification is ignored. The depreciation on securities acquired by way of conversion of outstanding loans is provided
in accordance with the RBI guidelines. The book value of individual securities is not changed consequent to the periodic
valuation of investments.
Non-performing investments are identified and provision is made thereon as per RBI guidelines. The provision on such
non-performing investments is not set off against the appreciation in respect of other performing securities. Interest on
non-performing investments is not recognised in the Profit and Loss Account until received.
Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate of Deposits being discounted instruments, are
valued at carrying cost which includes discount amortised over the period to maturity.
Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.
Market value of investments where current quotations are not available, is determined as per the norms prescribed by
the RBI as under:
• The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (‘SLR’)
securities included in the AFS and HFT categories is computed as per the rates published by FIMMDA/FBIL.
• In case of special bonds issued by Government of India that do not qualify for SLR, unquoted bonds, debentures,
preference shares where interest/dividend is received regularly (i.e. not overdue beyond 90 days), the market price is
derived based on the YTM for Government Securities as published by FIMMDA/PDAI/FBIL and suitably marked up
for credit risk applicable to the credit rating of the instrument. The matrix for credit risk mark-up for each category and
credit ratings along with residual maturity issued by FIMMDA/FBIL is adopted for this purpose.
• In case of bonds & debentures where interest is not received regularly (i.e. overdue beyond 90 days), the valuation is
in accordance with prudential norms for provisioning as prescribed by RBI.
• Pass Through Certificates (‘PTC’) and Priority Sector PTCs are valued as per extant FIMMDA guidelines.
187
Annual Report 2019-20Experience Open
Standalone Financial Statements
• Equity shares, for which current quotations are not available or where the shares are not quoted on the stock exchanges,
are valued at break-up value (without considering revaluation reserves, if any) which is ascertained from the company’s
latest Balance Sheet. In case the latest Balance Sheet is not available, the shares are valued at `1 per company.
• Units of Venture Capital Funds (‘VCF’) held under AFS category where current quotations are not available are valued
based on the latest audited financials of the fund. In case the audited financials are not available for a period beyond
18 months, the investments are valued at `1 per VCF. Investment in unquoted VCF after 23 August, 2006 may be
categorised under HTM category for the initial period of three years and are valued at cost as per RBI guidelines.
• In case of investments in security receipts on or after 1 April, 2017 which are backed by more than 50 percent of
the stressed assets sold by the Bank, provision for depreciation in value is made at the higher of - provisioning rate
required in terms of net asset value declared by the Reconstruction Company (‘RC’)/Securitisation Company (‘SC’)
or the provisioning rate as per the extant asset classification and provisioning norms as applicable to the underlying
loans, assuming that the loan notionally continued in the books of the bank. All other investments in security receipts
are valued as per the NAV obtained from the issuing RC/SCs.
Disposal of investments
Investments classified under the HTM category: Realised gains are recognised in the Profit and Loss Account and
subsequently appropriated to Capital Reserve account (net of taxes and transfer to statutory reserves) in accordance
with the RBI guidelines. Losses are recognised in the Profit and Loss Account.
Investments classified under the AFS and HFT categories: Realised gains/losses are recognised in the Profit and Loss Account.
Repurchase and reverse repurchase transactions
Repurchase and reverse repurchase transactions in government securities and corporate debt securities including those
conducted under the Liquidity Adjustment Facility (‘LAF’) and Marginal Standby Facility (‘MSF’) with RBI are accounted
as collateralised borrowing and lending respectively. Accordingly, securities given as collateral under an agreement to
repurchase them continue to be held under the investment account and the Bank continues to accrue the coupon/
discount on the security during the repo period. Further, the Bank continues to value the securities sold under repo as
per the investment classification of the security. Borrowing cost on repo transactions is accounted as interest expense
and revenue on reverse repo transactions is accounted as interest income.
Short Sales
In accordance with the RBI guidelines, the Bank undertakes short sale transactions in Central Government dated
securities. The short positions are reflected in ‘Securities Short Sold (‘SSS’) A/c’, specifically created for this purpose.
Such short positions are categorised under HFT category and netted off from investments in the Balance Sheet. These
positions are marked-to-market along with the other securities under HFT portfolio and the resultant mark-to-market
gains/losses are accounted for as per the relevant RBI guidelines for valuation of investments discussed earlier.
5.2 Advances
Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of bills rediscounted, inter-bank participation certificates, specific provisions made towards NPAs, interest in
suspense for NPAs, claims received from Export Credit Guarantee Corporation, provisions for funded interest on term
loan classified as NPAs, provisions in lieu of diminution in the fair value of restructured assets and floating provisions.
NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by the RBI. Advances held
at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of
recovery, but which are standard as per the RBI guidelines, are classified as NPAs to the extent of amount outstanding
in the host country. Provisions for NPAs are made for sub-standard and doubtful assets at rates as prescribed by the
RBI with the exception for agriculture advances and schematic retail advances. In respect of schematic retail advances,
provisions are made in terms of a bucket-wise policy upon reaching specified stages of delinquency (90 days or more of
delinquency) under each type of loan, which satisfies the RBI prudential norms on provisioning. Provisions in respect
of agriculture advances classified into sub-standard and doubtful assets are made at rates which are higher than those
prescribed by the RBI. Provisions for advances booked in overseas branches, which are standard as per the RBI guidelines
but are classified as NPAs based on host country guidelines, are made as per the host country regulations. In case of NPAs
referred to National Company Law Tribunal (‘NCLT’) under Insolvency and Bankruptcy Code (‘IBC’) where resolution
plan or liquidation order has been approved by NCLT, provision is maintained at higher of the requirement under RBI
guidelines or the likely haircut as per resolution plan or liquidation order.
Restructured assets are classified and provided for in accordance with the guidelines issued by RBI from time to time.
188
Financial Statements
Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines.
Amounts recovered against debts written off are recognised in the Profit and Loss account and included under
“Other Income”.
In case of EMI based standard retail advances, funds received from customers are appropriated in the order of chronology
as towards interest, principal, penal interest and charges. In case of other standard advances, funds received from
customers are appropriated in the order of chronology as towards charges, penal interest, interest and principal.
The Bank makes additional provisions as per RBI’s guidelines on ‘Prudential Framework on Resolution of Stressed Assets’
dated 7 June,2019 on accounts in default and with aggregate exposure above the threshold limits as laid down in the said
framework where the resolution plan is not implemented within the specified timelines.
In respect of borrowers classified as non-cooperative and wilful defaulters, the Bank makes accelerated provisions as per
extant RBI guidelines.
Loans reported as fraud are classified as loss assets, and fully provided immediately without considering the
value of security.
For entities with Unhedged Foreign Currency Exposure (‘UFCE’), provision is made in accordance with the guidelines
issued by RBI, which requires to ascertain the amount of UFCE, estimate the extent of likely loss and estimate the
riskiness of unhedged position. This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
Further, Incremental capital is maintained in respect of borrower counter parties in the highest risk category, in line with
stipulations by RBI.
The Bank maintains provisions for incremental exposure of the banking system to specified borrowers beyond Normally
Permitted Lending Limit (‘NPLL’) in proportion to Bank’s funded exposure to the specified borrowers as per RBI guidelines.
This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
The Bank maintains a general provision on standard advances at the rates prescribed by RBI other than for corporate
standard advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC, where general provision is
maintained at rates that are higher than those prescribed by RBI. In case of overseas branches, general provision on
standard advances is maintained at the higher of the levels stipulated by the respective overseas regulator or RBI. The
Bank also maintains general provision on positive Mark-to-Market (MTM) on derivatives at the rates prescribed by RBI.
The Bank maintains provision on non-funded outstanding in NPAs, prudentially written off accounts, corporate standard
advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC. This provision is classified under Schedule
5 – Other Liabilities in the Balance Sheet.
Under its home loan portfolio, the Bank offers housing loans with certain features involving waiver of Equated Monthly
Installments (‘EMIs’) of a specific period subject to fulfilment of a set of conditions by the borrower. The Bank makes
provision against the probable loss that could be incurred in future on account of waivers to eligible borrowers in respect
of such loans based on actuarial valuation conducted by an independent actuary. This provision is classified under
Schedule 5 – Other Liabilities in the Balance Sheet.
5.3 Country risk
In addition to the provisions required to be held according to the asset classification status, provisions are held for
individual country exposure (other than for home country as per the RBI guidelines). Such provisions are held only in
respect of those countries where the net funded exposure of the Bank exceeds 1% of its total assets. For this purpose
the countries are categorized into seven risk categories namely insignificant, low, moderate, high, very high, restricted
and off-credit as per RBI guidelines. Provision is made on exposures exceeding 180 days on a graded scale ranging from
0.25% to 100%. For exposures with contractual maturity of less than 180 days, 25% of the normal provision requirement
is held. If the net funded exposure of the Bank in respect of each country does not exceed 1% of the total assets, no
provision is maintained on such country exposure in accordance with RBI guidelines. This provision is classified under
Schedule 5 – Other Liabilities in the Balance Sheet.
5.4 Securitisation and transfer of assets
The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose Vehicle
(‘SPV’). In most cases, post securitisation, the Bank continues to service the loans transferred to the assignee/SPV.
The Bank also provides credit enhancement in the form of cash collaterals and/or by subordination of cash flows to
Senior Pass through Certificate holders. In respect of credit enhancements provided or recourse obligations (projected
delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale
189
Annual Report 2019-20Experience Open
Standalone Financial Statements
in accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets as notified under Section 133 of
the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016.
In accordance with RBI guidelines of 7 May, 2012, on ‘Guidelines on Securitisation of Standard Assets’, gain on
securitisation transaction is recognised over the period of the underlying securities issued by the SPV. Loss on
securitisation is immediately debited to the Profit and Loss Account.
The Bank transfers advances through inter-bank participation with and without risk. In accordance with the RBI guidelines,
in the case of participation with risk, the aggregate amount of the participation issued by the Bank is reduced from
advances and where the Bank is participating, the aggregate amount of the participation is classified under advances.
In the case of participation without risk, the aggregate amount of participation issued by the Bank is classified under
borrowings and where the Bank is participating, the aggregate amount of participation is shown as due from banks
under advances.
5.5 Priority Sector Lending Certificates
The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (‘PSLCs’). In the case of
a sale transaction, the Bank sells the fulfilment of priority sector obligation and in the case of a purchase transaction the
Bank buys the fulfilment of priority sector obligation through the RBI trading platform. There is no transfer of loan assets
in PSLC transactions.
5.6 Foreign currency transactions
In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the Balance
Sheet date at rates notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses resulting from
year end revaluations are recognised in the Profit and Loss Account.
Financial statements of foreign branches classified as non-integral foreign operations as per the RBI guidelines are
translated as follows:
• Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
exchange rates notified by FEDAI at the Balance Sheet date.
• Income and expenses are translated at the rates prevailing on the date of the transactions.
• All resulting exchange differences are accumulated in a separate ‘Foreign Currency Translation Reserve’ till the disposal
of the net investments. Any realised gains or losses on such disposal are recognised in the Profit and Loss Account.
Outstanding forward exchange contracts including tom/spot contracts (excluding currency swaps undertaken to hedge
foreign currency assets/liabilities and funding swaps which are not revalued) are revalued at year end on PV basis by
discounting the forward value till spot date and converting the FCY amount using the respective spot rates as notified by
FEDAI. The resulting gains or losses on revaluation are included in the Profit and Loss Account in accordance with RBI/
FEDAI guidelines.
Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding swaps is
recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap period.
Contingent liabilities on account of forward exchange and derivative contracts, guarantees, acceptances, endorsements
and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified by FEDAI.
5.7 Derivative transactions
Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent liabilities.
The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative contracts are
revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Profit and Loss
Account and correspondingly in other assets (representing positive Mark-to-Market) and in other liabilities (representing
negative Mark-to-Market (MTM)) on a gross basis. For hedge transactions, the Bank identifies the hedged item (asset or
liability) at the inception of transaction itself. The effectiveness is ascertained at the time of inception of the hedge and
periodically thereafter. Hedge swaps are accounted for on accrual basis except in case of swaps designated with an asset
or liability that is carried at market value or lower of cost or market value in the financial statements. In such cases the
swaps are marked-to-market with the resulting gain or loss recorded as an adjustment to the market value of designated
asset or liability. Hedge transactions that are entered after 26 June, 2019 through rupee interest rate derivatives are
accounted for as per the guidance note issued by ICAI on accounting for derivative contracts. Pursuant to the RBI
190
Financial Statements
guidelines any receivables under derivative contracts comprising of crystallised receivables as well as positive Mark-to-
Market (MTM) in respect of future receivables which remain overdue for more than 90 days are reversed through the
Profit and Loss account and are held in separate Suspense Account.
Premium on options is recognized as income/expense on expiry or early termination of the transaction.
Currency futures contracts are marked-to-market using daily settlement price on a trading day, which is the closing
price of the respective futures contracts on that day. While the daily settlement price is computed based on the last
half an hour weighted average price of such contracts, the final settlement price is taken as the RBI reference rate on
the last trading day of the futures contracts or as may be specified by the relevant authority from time to time. All open
positions are marked-to-market based on the settlement price and the resultant marked-to-market profit/loss is daily
settled with the exchange.
Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price of each
individual option provided by the exchange and valuation of Interest Rate Futures (IRF) is carried out on the basis of the
daily settlement price of each contract provided by the exchange.
5.8 Revenue recognition
Interest income is recognised on an accrual basis in accordance with AS–9, Revenue Recognition as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014,
the Companies (Accounting Standards) Amendment Rules, 2016 and the RBI guidelines, except in the case of interest
income on non-performing assets where it is recognised on receipt basis if overdue for more than 90 days. Income on
non-coupon bearing discounted instruments or low-coupon bearing instruments is recognised over the tenor of the
instrument on a constant yield basis.
Guarantee commission is recognized on a pro-rata basis over the period of the guarantee. Locker rent and annual fees for
credit cards are recognised on a straight-line basis over the period of contract. Arrangership/syndication fee is accounted
for on completion of the agreed service and when right to receive is established. Other fees and commission income are
recognised when due, where the Bank is reasonably certain of ultimate collection.
Interest income on investments in discounted PTCs is recognized on a constant yield basis.
Dividend is accounted on an accrual basis when the right to receive the dividend is established.
Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.
Fees paid for purchase of Priority Sector Lending Certificates (‘PSLC’) is amortised on straight-line basis over the tenor
of the certificate as ‘Other Expenditure’ under Schedule 16 of Profit and Loss Account. Fees received on sale of PSLC is
amortised on straight-line basis over the tenor of the certificate as ‘Miscellaneous Income’ under Schedule 14 of Profit
and Loss Account.
In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book
value (i.e. book value less provisions held), the shortfall is charged to the Profit and Loss Account. If the sale is for a
value higher than the net book value, the excess provision is credited to the Profit and Loss Account in the year the
amounts are received.
The Bank deals in bullion business on a consignment basis. The difference between the price recovered from customers
and cost of bullion is accounted for at the time of sale to the customers. The Bank also deals in bullion on a borrowing
and lending basis and the interest paid/received is accounted on an accrual basis.
5.9 Fixed assets and depreciation/impairment
Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes initial
handling and delivery charges, duties, taxes and incidental expenses related to the acquisition and installation of the
asset. Subsequent expenditure incurred on assets put to use is capitalised only when it increases the future economic
benefit / functioning capability from / of such assets.
Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes advances
paid to acquire fixed assets.
Depreciation is provided over the estimated useful life of a fixed asset on the straight-line method from the date of
addition. The management believes that depreciation rates currently used, fairly reflect its estimate of the useful lives and
residual values of fixed assets based on historical experience of the Bank, though these rates in certain cases are different
191
Annual Report 2019-20Experience Open
Standalone Financial Statements
from lives prescribed under Schedule II of Companies Act, 2013. Whenever there is a revision of the estimated useful life
of an asset, the unamortised depreciable amount is charged over the revised remaining useful life of the said asset.
Asset
Leased Land
Owned premises
Locker cabinets/cash safe/strong room door
EPABX, telephone instruments
Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment
UPS, VSAT, fax machines
Cheque book/cheque encoder, currency counting machine, fake note detector
Application software
Electronic Data Capture (EDC)/ Point of Sale (POS) machines
Vehicles
Computer hardware including printers
CCTV and video conferencing equipment
Assets at staff residence
Mobile phone
All other fixed assets
Estimated useful life
As per the term of the agreement
60 years
10 years
8 years
5 years
5 years
5 years
5 years
5 years
4 years
3 years
3 years
3 years
2 years
10 years
Assets costing less than `5,000 individually are fully depreciated in the year of purchase.
Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till
the date of sale.
Gain or losses arising from the retirement or disposal of Fixed Assets are determined as the difference between the net
disposal proceeds and the carrying amount of assets and recognised as income or expense in the Profit and Loss Account.
Further, profit on sale of premises is appropriated to Capital Reserve account (net of taxes and transfer to statutory
reserve) in accordance with RBI instructions.
The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an
asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted
average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life.
5.10 Non-banking assets
Non-banking assets (‘NBAs’) acquired in satisfaction of claims include land. In the case of land, the Bank creates provision
and follows the accounting treatment as per specific RBI directions.
5.11 Lease transactions
Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are
classified as operating lease. 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. Lease income from assets given on operating lease is
recognized as income in profit and loss account on a straight line basis over the lease term.
5.12 Retirement and other employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged to
the Profit and Loss Account of the year when the contributions to the fund are due and when services are rendered by
the employees. Further, an actuarial valuation is conducted by an independent actuary using the Projected Unit Credit
Method as at 31 March each year to determine the deficiency, if any, in the interest payable on the contributions as
compared to the interest liability as per the statutory rate. Actuarial gains/losses are immediately taken to the Profit and
Loss Account and are not deferred.
Gratuity
The Bank contributes towards gratuity fund (defined benefit retirement plan) administered by various insurers for eligible
employees. Under this scheme, the settlement obligations remain with the Bank, although various insurers administer
the scheme and determine the contribution premium required to be paid by the Bank. The plan provides a lump sum
192
Financial Statements
payment to vested employees at retirement or termination of employment based on the respective employee’s salary
and the years of employment with the Bank. Liability with regard to gratuity fund is accrued based on actuarial valuation
conducted by an independent actuary using the Projected Unit Credit Method as at 31 March each year. In respect of
employees at overseas branches (other than expatriates) liability with regard to gratuity is provided on the basis of a
prescribed method as per local laws, wherever applicable. Actuarial gains/losses are immediately taken to the Profit and
Loss Account and are not deferred.
Compensated Absences
Compensated absences are short term in nature for which provision is held on accrual basis.
Superannuation
Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either under
a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan, the Bank
contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC, which undertakes to
pay the lump sum and annuity benefit payments pursuant to the scheme. Superannuation contributions are recognised
in the Profit and Loss Account in the period in which they accrue.
New Pension Scheme (‘NPS’)
In respect of employees who opt for contribution to the ‘NPS’, the Bank contributes certain percentage of the total
basic salary of employees to the aforesaid scheme, a defined contribution plan, which is managed and administered by
pension fund management companies. NPS contributions are recognised in the Profit and Loss Account in the period in
which they accrue.
5.13 Reward points
The Bank runs a loyalty program which seeks to recognize and reward customers based on their relationship with
the Bank. Under the program, eligible customers are granted loyalty points redeemable in future, subject to certain
conditions. In addition, the Bank continues to grant reward points in respect of certain credit cards (not covered under
the loyalty program). The Bank estimates the probable redemption of such loyalty/reward points using an actuarial
method at the Balance Sheet date by employing an independent actuary, which includes assumptions such as mortality,
redemption and utilization. Provision for the said reward points is then made based on the actuarial valuation report as
furnished by the said independent actuary.
5.14 Taxation
Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined in
accordance with the relevant provisions of Income tax Act, 1961 and considering the material principle set out in Income
Computation and Disclosure Standards to the extent applicable. Deferred income taxes reflect the impact of current
year timing differences between taxable income and accounting income for the year and reversal of timing differences
of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet
date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off assets against
liabilities representing current tax and the deferred tax assets and deferred tax liabilities relate to the taxes on income
levied by same governing taxation laws.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be realised. The impact of changes in the deferred
tax assets and liabilities is recognised in the Profit and Loss Account.
Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s judgement
as to whether 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 asset can be realised against future profits.
5.15 Share issue expenses
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
5.16 Corporate Social Responsibility
Expenditure towards corporate social responsibility, in accordance with Companies Act, 2013, is recognised as operating
expenditure or capital expenditure as applicable.
193
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Standalone Financial Statements
5.17 Earnings per share
The Bank reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and
the Companies (Accounting Standards) Amendment Rules, 2016. Basic earnings per share is computed by dividing the
net profit after tax by the weighted average number of equity shares outstanding for the year.
Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity
shares were exercised or converted during the year. Diluted earnings per share is computed using the weighted average
number of equity shares and dilutive potential equity shares outstanding at the year end except where the results are
anti-dilutive.
5.18 Employee stock option scheme
The 2001 Employee Stock Option Scheme (‘the Scheme’) provides for grant of stock options on equity shares of the Bank
to employees and Directors of the Bank and its subsidiaries. The Scheme is in accordance with the Securities and Exchange
Board of India (SEBI) (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the
Guidelines’). These Guidelines have been repealed in the month of October, 2014 and were substituted by Securities
and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Scheme is in compliance with the
said regulations. The Bank follows the intrinsic value method to account for its stock based employee compensation
plans as per the Guidelines. Options are granted at an exercise price, which is equal to/less than the fair market price of
the underlying equity shares. The excess of such fair market price over the exercise price of the options as at the grant
date, if any, is recognised as a deferred compensation cost and amortised on a straight-line basis over the vesting period
of such options.
The fair market price is the latest available closing price, prior to the date of grant, on the stock exchange on which the
shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock exchange where
there is highest trading volume on the said date is considered.
5.19 Provisions, contingent liabilities and contingent assets
In accordance with AS-29 “Provisions, Contingent Liabilities and Contingent Assets”, provision is recognised when the
Bank has a present obligation as a result of past event where it is probable that an outflow of resources will be required
to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present
value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
A disclosure of contingent liability is made when there is:
• a possible obligation arising from a past event, the existence of which will be confirmed by occurrence or non-
occurrence of one or more uncertain future events not within the control of the Bank; or
• a present obligation arising from a past event which is not recognised as it is not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
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.
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually
and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in
the period in which the change occurs.
5.20 Accounting for dividend
As per AS-4 ‘Contingencies and Events occurring after the Balance sheet date’ as notified by the Ministry of Corporate
Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated 30 March, 2016, the
Bank does not account for proposed dividend (including tax) as a liability through appropriation from the profit and loss
account. The same is recognised in the year of actual payout post approval of shareholders. However, the Bank reckons
proposed dividend in determining capital funds in computing the capital adequacy ratio.
5.21 Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call
and short notice.
194
Financial Statements
18 Notes forming part of the Financial Statements
For the year ended 31 March, 2020
1.1 During the year ended 31 March, 2020, the Bank allotted 45,357,385 equity shares at a price of ` 565 per share pursuant
to exercise of convertible share warrants by the warrant holders. As a consequence, the paid-up share capital of the Bank
has increased by `9.07 crores and the reserves of the Bank have increased by `2,551.03 crores after charging off issue
related expenses.
Further, during the year ended 31 March, 2020, the Bank raised additional equity capital through a Qualified Institutional
Placement of 198,728,139 shares at a price of `629 per share. As a consequence, the paid-up share capital of the Bank
has increased by `39.75 crores and the reserves of the Bank have increased by `12,392.50 crores after charging off issue
related expenses. The funds mobilised from equity raising were utilised for enhancing the capital adequacy ratio and for
general corporate purpose.
1.2 COVID-19 virus, a global pandemic has affected the world economy including India leading to significant decline and
volatility in financial markets and decline in economic activities. On 24 March, 2020, the Indian Government announced
a strict 21-day lock-down which was further extended by 19 days across the country to contain the spread of the virus.
The extent to which the COVID-19 pandemic will impact the Bank’s provision on assets will depend on the future
developments, which are highly uncertain, including among the other things any new information concerning the severity
of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government mandated or
elected by the Bank.
The RBI on 27 March, 2020 and 17 April, 2020, announced ‘COVID-19 Regulatory Package’ on asset classification and
provisioning. In terms of the RBI guidelines, the lending institutions have been permitted to grant a moratorium of three
months on payment of all instalments/interest, as applicable, falling due between 1 March, 2020 and 31 May, 2020
(‘moratorium period’). As such, in respect of all accounts classified as standard as on 29 February, 2020, even if overdue,
the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due
for the purpose of asset classification under RBI’s Income Recognition and Asset Classification norms. The Bank holds
provisions as at 31 March, 2020 against the potential impact of COVID-19 based on the information available at this point
in time. The provisions held by the Bank are in excess of the RBI prescribed norms.
2.1 Statutory disclosures as per RBI
2.1.1
‘Provisions and contingencies’ recognised in the Profit and Loss Account comprise of:
For the year ended
Provision for income tax
- Current tax
- Deferred tax1 (Refer 2.2.11)
Provision for non-performing assets (including bad debts written off and write backs)
Provision for restructured assets/strategic debt restructuring/sustainable structuring
Provision towards standard assets2
Provision for depreciation in value of investments
Provision for unhedged foreign currency exposure
Provision for country risk
Provision for other contingencies3
Total
(` in crores)
31 March, 2020
31 March, 2019
2,891.25
385.76
3,277.01
12,755.53
(15.50)
1,451.32
135.99
(10.68)
12.17
4,205.08
21,810.92
3,009.84
(712.36)
2,297.48
10,221.48
(19.66)
809.79
300.02
18.79
-
700.60
14,328.50
1. The Bank has elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by the
Taxation Laws (Amendment) Act, 2019. The Bank has recognised provision for income tax for the year ended 31 March, 2020 in
line with the above option. This has necessitated a restatement of the opening balance of deferred tax assets as at 1 April, 2019,
basis the rate prescribed in the aforesaid section. The restatement has resulted in a write down of `2,137.59 crores which has
been fully charged to the Profit and Loss account during the year
2. including provision on loans under moratorium as per RBI guidelines on COVID-19 regulatory package of `1,117.72 crores
3. includes provision for non-banking assets, legal cases, other contingencies and provision of `1,882.28 crores for COVID-19 over
and above regulatory requirement
195
Annual Report 2019-20Experience Open
Standalone Financial Statements
2.1.2
The capital adequacy ratio of the Bank, calculated as per the RBI guidelines (under Basel III) is set out below:
(` in crores)
For the year ended
31 March, 2020
31 March, 2019
Common Equity Tier I
Tier I
Tier II
Total capital
Total risk weighted assets and contingents
Capital ratios
Common Equity Tier I
Tier I
Tier II
CRAR
Amount of equity capital raised
Amount of additional Tier I capital raised of which:
Perpetual Non-Cumulative Preference Shares (PNCPS)
Perpetual Debt Instruments (PDI) (details given below)
Amount of Tier II capital raised of which:
Debt capital instrument (details given below)
Preferential capital instrument
*excluding securities premium of `15,013.88 crores
81,449.04
88,449.04
18,556.08
107,005.12
610,527.33
13.34%
14.49%
3.04%
17.53%
48.82*
-
-
-
-
62,238.37
69,238.37
18,221.21
87,459.58
552,048.06
11.27%
12.54%
3.30%
15.84%
-
-
-
-
-
During the year ended 31 March, 2020 and 31 March, 2019, the Bank has not raised debt instruments eligible
for Tier-I/Tier-II capital.
During the year ended 31 March, 2020, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital,
the details of which are set out below:
Instrument
Subordinated debt
Capital
Tier II
Date of maturity
Period
Coupon
Amount
16 June, 2019
120 months
9.15%p.a.
`2,000 crores
During the year ended 31 March, 2019, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital,
the details of which are set out below:
Instrument
Subordinated debt
Subordinated debt
Capital
Tier II
Tier II
Date of maturity
Period
Coupon
Amount
7 November, 2018
28 March, 2019
120 months
120 months
11.75% p.a.
9.95%p.a.
`1,500 crores
`200 crores
2.1.3
The key business ratios and other information is set out below:
As at
Interest income as a percentage to working funds#
Non-interest income as a percentage to working funds#
Operating profit$$ as a percentage to working funds#
Return on assets (based on working funds#)
Business (deposits less inter-bank deposits plus advances) per employee**
Profit per employee**
Net non-performing assets as a percentage of net customer assets *
31 March, 2020
31 March, 2019
%
7.56
1.87
2.83
0.20
`17.27 crores
`2.40 lacs
1.56
%
7.38
1.76
2.55
0.63
`16.53 crores
`7.61 lacs
2.06
#
Working funds represent average of total assets as reported to RBI in Form X under Section 27 of the Banking Regulation Act,
1949 during the year
$$ Operating profit represents total income as reduced by interest expended and operating expenses
** Productivity ratios are based on average employee numbers for the year
* Net Customer assets include advances and credit substitutes
196
Financial Statements
2.1.4
The provisioning coverage ratio of the Bank computed in terms of the RBI guidelines as on 31 March, 2020 was
82.69% (previous year 76.78%).
2.1.5
Asset Quality
i) Net non-performing advances to net advances is set out below:
Net non-performing advances as a percentage of net advances
ii) Movement in gross non-performing assets is set out below:
31 March, 2020
31 March, 2019
%
1.62
%
2.20
Gross NPAs as at the beginning of the year
Intra Category Transfer
Additions (fresh NPAs) during the year
Sub-total (A)
Less:-
(i) Upgradations
(ii) Recoveries (excluding recoveries made from upgraded
accounts)#
(iii) Technical/Prudential Write-offs
(iv) Write-offs other than those under (iii) above
Sub-total (B)
Gross NPAs as at the end of the year (A-B)
# including sale of NPAs
Gross NPAs as at the beginning of the year
Intra Category Transfer
Additions (fresh NPAs) during the year
Sub-total (A)
Less:-
(i) Upgradations
(ii) Recoveries (excluding recoveries made from upgraded
accounts)#
(iii) Technical/Prudential Write-offs
(iv) Write-offs other than those under (iii) above#
Sub-total (B)
Gross NPAs as at the end of the year (A-B)
# including sale of NPAs
iii)
Movement in net non-performing assets is set out below:
Advances
27,146.45
-
17,350.64
44,497.09
6,411.62
2,462.83
7,503.38
1,515.16
17,892.99
26,604.10
Advances
30,876.32
(2.60)
13,510.75
44,384.47
4,982.66
3,977.11
6,655.40
1,622.85
17,238.02
27,146.45
31 March, 2020
Investments
2,642.99
-
2,564.37
5,207.36
174.52
252.39
206.49
944.24
1,577.64
3,629.72
31 March, 2019
Investments
3,372.32
2.60
360.34
3,735.26
90.94
50.13
843.46
107.74
1,092.27
2,642.99
31 March, 2020
Investments
400.84
Opening balance at the beginning of the year
246.62
Additions during the year
8.84
Effect of exchange rate fluctuation
(660.04)
Reductions during the year
112.16
Interest Capitalisation – Restructured NPA Accounts
Closing balance at the end of the year#
108.42
# net of balance outstanding in interest capitalisation-restructured NPA accounts amounting to `70.73 crores
Advances
10,874.76
7,418.38
(236.26)
(8,785.05)
(19.84)
9,251.99
(` in crores)
Total
29,789.44
-
19,915.01
49,704.45
6,586.14
2,715.22
7,709.87
2,459.40
19,470.63
30,233.82
(` in crores)
Total
34,248.64
-
13,871.09
48,119.73
5,073.60
4,027.24
7,498.86
1,730.59
18,330.29
29,789.44
(` in crores)
Total
11,275.60
7,665.00
(227.42)
(9,445.09)
92.32
9,360.41
197
Annual Report 2019-20Experience Open
Standalone Financial Statements
Opening balance at the beginning of the year
Additions during the year
Effect of exchange rate fluctuation
Reductions during the year
Interest Capitalisation – Restructured NPA Accounts
Closing balance at the end of the year#
Advances
16,004.42
3,958.27
(76.29)
(9,120.94)
109.30
10,874.76
31 March, 2019
Investments
587.29
(63.98)
(8.74)
(142.36)
28.63
400.84
# net of balance outstanding in interest capitalisation-restructured NPA accounts amounting to `163.05 crores
iv) Movement in provisions for non-performing assets is set out below:
Opening balance at the beginning of the year
Intra-Category Transfer
Provisions made during the year
Effect of exchange rate fluctuation
Transfer from restructuring provision
Write-offs/(write back) of excess provision*
Closing balance at the end of the year
* includes provision utilised for sale of NPAs amounting to `408.93 crores
Opening balance at the beginning of the year
Intra-Category Transfer
Provisions made during the year
Effect of exchange rate fluctuation
Transfer from restructuring provision
Write-offs/(write back) of excess provision*
Closing balance at the end of the year
Advances
16,253.17
-
9,926.33
236.26
5.93
(9,107.94)
17,313.75
31 March, 2020
Investments
2,097.62
-
2,317.75
(8.84)
-
(917.60)
3,488.93
Advances
14,744.08
(2.60)
9,552.47
76.29
-
(8,117.07)
16,253.17
31 March, 2019
Investments
2,611.87
2.60
424.32
8.74
-
(949.91)
2,097.62
* includes provision utilised for sale of NPAs amounting to `469.58 crores
v) Movement in technical/prudential written off accounts is set out below:
(` in crores)
Total
16,591.71
3,894.29
(85.03)
(9,263.30)
137.93
11,275.60
(` in crores)
Total
18,350.79
-
12,244.08
227.42
5.93
(10,025.54)
20,802.68
(` in crores)
Total
17,355.95
-
9,976.79
85.03
-
(9,066.98)
18,350.79
(` in crores)
Opening balance at the beginning of the year
Add: Technical/Prudential write-offs during the year
Add: Effect of exchange rate fluctuation
Sub-total (A)
Less: Recovery made from previously technical/prudential written-off accounts during
the year
Less: Sacrifice made from previously technical/prudential written-off accounts during
the year
Sub-total (B)
Closing balance at the end of the year (A-B)
31 March, 2020
31 March, 2019
18,771.85
7,709.87
416.42
26,898.14
1,384.03
13,221.26
7,498.86
192.23
20,912.35
1,724.46
1,670.04
416.04
3,054.07
23,844.07
2,140.50
18,771.85
vi)
Total exposure (funded and non-funded) to top four non-performing assets is given below:
(` in crores)
31 March, 2020
31 March, 2019
Total exposure (funded and non-funded) to top four NPA accounts
4,060.55
4,513.63
198
Financial Statements
vii) Sector-wise advances:
Sr. No. Sector
31 March, 2020
31 March, 2019
Outstanding
Total
Advances
Gross
NPAs
% of Gross
NPAs to Total
Advances
in that sector
Outstanding
Total Advances
Gross NPAs
(` in crores)
% of Gross
NPAs to Total
Advances
in that sector
A
1
2
3
4
B
1
2
3
4
Priority Sector
Agriculture and allied
activities
Advances to industries sector
eligible as priority sector
lending
-Chemical & Chemical products
-Basic Metal & Metal Products
-Infrastructure
Services
-Banking and Finance other than
NBFCs and MFs
-Non-banking financial companies
(NBFCs)
-Commercial Real Estate
-Trade
Personal loans
-Housing*
-Vehicle Loans
Sub-total (A)
Non Priority Sector
Agriculture and allied
activities
Industry
-Chemical & Chemical products
-Basic Metal & Metal Products
-Infrastructure
Services
-Banking and Finance other than
NBFCs and MFs
-Non-banking financial companies
(NBFCs)
-Commercial Real Estate
-Trade
Personal loans
-Housing*
-Vehicle Loans
Sub-total (B)
Total (A+B)
32,454.55
1,575.93
4.86%
27,829.60
1,533.92
5.51%
27,953.55
1,237.85
4.43%
26,871.04
901.97
3.36%
2,306.23
2,346.61
561.94
21,240.75
62.74
56.34
41.55
874.42
2.72%
2.40%
7.39%
4.12%
2,539.72
2,585.52
618.69
21,122.23
54.26
28.08
33.49
707.41
1,617.28
13.46
0.83%
2,082.82
14.64
371.68
-
-
1,091.99
-
270.22
11,074.55
64,190.85
45,987.55
11,654.72
145,839.70
15.54
718.76
525.20
272.12
211.28
4,213.40
377.24
5.75%
12,464.07
6.49%
44,740.94
0.82%
36,873.80
0.59%
1.81%
4,496.31
2.89% 120,563.81
18.82
564.13
376.42
271.41
60.98
3,519.72
166.08
18.19
10.95%
-
-
163,800.40 16,248.24
1,264.78
969.21
7,514.69
4,923.83
19,451.17
21,677.64
53,712.35
95,904.00
9.92% 145,127.78 18,512.21
1,304.13
18,345.25
6.50%
20,510.98
4.47%
1,095.61
44,367.96 10,863.83
13.99%
3,912.57
91,160.11
5.13%
27,135.89
316.51
1.17%
27,735.77
190.55
16,502.49
182.31
1.10%
14,374.90
5.49
17,279.94
13,641.42
183,087.52
87,433.64
20,234.86
1,698.52
795.41
1,200.44
701.70
186.58
442,958.00 22,390.70
588,797.70 26,604.10
1,689.73
15,925.72
9.83%
378.75
10,852.94
5.83%
1,201.95
0.66% 154,244.74
753.18
78,327.84
0.80%
0.92%
164.77
19,371.98
5.05% 390,532.63 23,626.73
4.52% 511,096.44 27,146.45
2.14%
1.09%
5.41%
3.35%
0.70%
-
4.99%
4.53%
0.84%
0.74%
1.36%
2.92%
-
12.76%
7.11%
5.34%
24.49%
4.29%
0.69%
0.04%
10.61%
3.49%
0.78%
0.96%
0.85%
6.05%
5.31%
* includes loan against property
Classification of advances into sector is based on Sector wise Industry Bank Credit return submitted to RBI
Figures in italics represent sub-sectors where the outstanding advance exceeds 10% of total outstanding advance to that sector.
viii) Divergence in Asset Classification and Provisioning for NPAs
In terms of the RBI circular no. DBR.BP.BC.No.32/21.04.018/2018-19 dated 1 April, 2019, banks are
required to disclose the divergences in asset classification and provisioning consequent to RBI’s annual
supervisory process in their notes to accounts to the financial statements, wherever either or both of the
following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 10
per cent of the reported profit before provisions and contingencies for the reference period and (b) the
199
Annual Report 2019-20Experience Open
Standalone Financial Statements
additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for
the reference period.
Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is
required with respect to RBI’s annual supervisory process for the year ended 31 March, 2019.
ix) Disclosure with regard to accounts where moratorium has been granted under COVID-19
Regulatory Package
For the year ended
Respective amounts in SMA/overdue categories, where the moratorium/deferment was extended*$
Respective amount where asset classification benefit is extended as on 31 March, 2020
Provisions made as on 31 March, 2020
Provisions adjusted during the respective accounting periods against slippages
Residual provisions as on 31 March, 2020
(` in crores)
31 March, 2020
11,177.22
735.10
1,117.72
-
1,117.72
* represents total outstanding as on 31 March, 2020
$ amounts covered relate to cases where asset classification benefit would have been availed over the moratorium period, based on
interpretation of extant regulatory requirements on the date of adoption of financial statements by the Board
2.1.6
During the years ended 31 March, 2020 and 31 March, 2019 none of the loans and advances held at overseas
branches of the Bank have been classified as NPA by any host banking regulator for reasons other than
record of recovery.
2.1.7
Movement in floating provision is set out below:
For the year ended
31 March, 2020
31 March, 2019
(` in crores)
Opening balance at the beginning of the year
Provisions made during the year
Draw down made during the year
Closing balance at the end of the year
2.1.8
Provision on Standard Assets:
Provision towards Standard Assets [includes provision on loans under moratorium as
per RBI guidelines on COVID-19 regulatory package of `1,117.72 crores (previous year
Nil); also includes `68.30 crores (previous year `38.14 crores) of standard provision on
derivative exposures]
2.1.9
Details of Investments are set out below:
i)
Value of Investments:
1) Gross value of Investments
a) In India
b) Outside India
2) (i) Provision for Depreciation
a) In India
b) Outside India
(ii) Provision for Non-Performing Investments
a) In India
b) Outside India
3) Net value of Investments
a) In India
b) Outside India
200
3.25
-
-
3.25
3.25
-
-
3.25
(` in crores)
31 March, 2020
31 March, 2019
4,519.74
3,040.44
(` in crores)
31 March, 2020
31 March, 2019
155,333.07
5,539.37
172,597.47
5,029.73
(642.44)
(6.76)
(3,284.52)
(204.41)
(560.31)
-
(1,903.39)
(194.22)
151,406.12
5,328.20
170,133.77
4,835.51
Financial Statements
ii) Movement of provisions held towards depreciation on investments:
Opening balance
Add: Provisions made during the year*
Less: Write offs/write back of excess provisions during the year
Closing balance
*including transfer from interest capitalization account
iii) Details of category wise investments are set out below:
(` in crores)
31 March, 2020
31 March, 2019
560.31
185.90
(97.01)
649.20
254.54
326.46
(20.69)
560.31
(` in crores)
Particulars
31 March, 2020
31 March, 2019
Government
Securities
Other approved
Securities
Shares
Debentures and
Bonds
Subsidiary/Joint
Ventures
Others
Total
HTM
AFS
HFT
Total
HTM
AFS
HFT
Total
111,999.63
11,159.20
2,822.72 125,981.55 104,003.78
15,286.85
948.75 120,239.38
-
-
-
1,186.24
-
-
-
1,186.24
591.42
17,805.40
2,906.47
21,303.29
-
-
-
-
1,010.84
-
-
-
1,010.84
31,807.51
8,361.32
40,168.83
2,292.82
-
-
2,292.82
2,286.12
-
-
2,286.12
1.60
114,885.47
5,893.90
36,044.74
74.92
5,804.11
5,970.42
156,734.32
3.86
106,293.76
5,689.50
53,794.70
5,570.75
14,880.81
11,264.11
174,969.28
2.1.10
A summary of lending to sensitive sectors is set out below:
As at
A.
1)
Exposure to Real Estate Sector
Direct Exposure
(i) Residential mortgages
- of which housing loans eligible for inclusion in priority sector advances
(ii) Commercial real estate
(iii) Investments in Mortgage Backed Securities (MBS) and other securtised
exposures -
a. Residential
b. Commercial real estate
2)
B.
1.
2.
3.
Indirect Exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) and
Housing Finance Companies (HFCs)
Total Exposure to Real Estate Sector
Exposure to Capital Market
Direct investments in equity shares, convertible bonds, convertible debentures
and units of equity-oriented mutual funds the corpus of which is not exclusively
invested in corporate debt*
Advances against shares/bonds/debentures or other securities or on clean basis
to individuals for investment in shares (including IPOs/ESOPs), convertible
bonds, convertible debentures, and units of equity-oriented mutual funds
Advances for any other purposes where shares or convertible bonds or
convertible debentures or units of equity-oriented mutual funds are taken as
primary security
(` in crores)
31 March, 2020
31 March, 2019
134,268.89
41,706.24
26,155.61
123,297.28
33,799.67
23,982.81
-
-
-
75.00
20,093.82
26,232.39
180,518.32
173,587.48
2,003.55
1,726.94
3.20
4.68
1,554.52
1,414.36
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Annual Report 2019-20Experience Open
Standalone Financial Statements
As at
4.
5.
6.
7.
8.
Advances for any other purposes to the extent secured by the collateral security
of shares or convertible bonds or convertible debentures or units of equity-
oriented mutual funds i.e. where primary security other than shares/convertible
bonds/convertible debentures/units of equity-oriented mutual funds does not
fully cover the advances
Secured and unsecured advances to stockbrokers and guarantees issued on
behalf of stockbrokers and market makers
Loans sanctioned to corporates against the security of shares/bonds/debentures
or other securities or on clean basis for meeting promoter’s contribution to the
equity of new companies in anticipation of raising resources
Bridge loans to companies against expected equity flows/issues
Underwriting commitments taken up in respect of primary issue of shares or
convertible bonds or convertible debentures or units of equity-oriented mutual
funds
Financing to stock brokers for margin trading
9.
10. All exposures to Venture Capital Funds (both registered and unregistered)
Total exposure to Capital Market (Total of 1 to 10)
(` in crores)
31 March, 2020
31 March, 2019
242.45
2,566.92
6,208.70
5,115.79
-
-
-
10.83
1.44
-
-
161.43
10,173.85
-
112.45
10,953.41
* excludes investment in equity shares on account of conversion of debt into equity as part of restructuring amounting to `991.59
crores as on 31 March, 2020 (previous year `1,694.02 crores) which are exempted from exposure to Capital Market
2.1.11
As on 31 March, 2020, outstanding receivables acquired by the Bank under factoring stood at `591.17 crores
(previous year `419.39 crores) which are reported under ‘Bills Purchased and Discounted’ in Schedule 9 of
the Balance Sheet.
2.1.12 During the years ended 31 March, 2020 and 31 March, 2019 there are no unsecured advances for which intangible
securities such as charge over the rights, licenses, authority etc. have been taken as collateral by the Bank.
2.1.13 Details of Non-SLR investment portfolio are set out below:
i)
Issuer composition as at 31 March, 2020 of non-SLR investments*:
No.
Issuer
Total Amount
Extent of private
placement
(1)
i.
ii.
iii.
iv.
v.
vi.
vii.
viii
(2)
Public Sector Units
Financial Institutions
Banks
Private Corporates
Subsidiaries
Others
Provision
depreciation on investments
Provision held towards non
performing investments
Total
towards
held
(3)
6,300.05
2,002.19
1,089.35
16,874.54
2,292.82
10,395.43
(649.20)
(3,488.93)
(4)
4,735.07
1,402.80
981.04
13,222.36
2,292.82
6,441.03
N.A.
N.A.
Extent of “below
investment
grade” securities
(5)
154.70
77.24
-
2,067.37
-
-
N.A.
N.A.
Extent of
“unrated”
securities
(6)
-
-
-
601.14
-
-
N.A.
N.A.
(` in crores)
Extent of
“unlisted”
securities
(7)
13.62
-
88.91
5,034.88
2,292.82
6,597.07
N.A.
N.A.
34,816.25
29,075.12
2,299.31
601.14
14,027.30
Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.
202
Financial Statements
Issuer composition as at 31 March, 2019 of non-SLR investments*:
No.
Issuer
Total Amount
Extent of private
placement
Extent of “below
investment
grade” securities
Extent of
“unrated”
securities
(1)
i.
ii.
iii.
iv.
v.
vi.
vii.
viii
(2)
Public Sector Units
Financial Institutions
Banks
Private Corporates
Subsidiaries
Others
Provision
depreciation on investments
Provision held towards non
performing investments
Total
towards
held
(3)
9,489.66
5,400.64
1,716.72
33,243.43
2,286.12
8,667.72
(560.31)
(2,097.61)
(4)
5,411.68
3,883.90
1,151.67
22,749.72
2,286.12
5,676.37
N.A.
N.A.
(5)
657.56
50.30
-
1,059.05
-
-
N.A.
N.A.
(6)
0.98
-
-
753.04
-
-
N.A.
N.A.
(` in crores)
Extent of
“unlisted”
securities
(7)
2,038.79
26.87
14.00
9,365.44
2,286.12
5,787.92
N.A.
N.A.
58,146.37
41,159.46
1,766.91
754.02
19,519.14
Amounts reported under columns (4), (5), (6) and (7) above are not mutually exclusive.
*excludes investments in non-SLR government securities amounting to `5,000.00 (previous year `42.54 crores)
ii) Movement in non-performing non SLR investments are set out below:
Opening balance
Additions during the year
Reductions during the year
Closing balance
Total provisions held
(` in crores)
31 March, 2020
31 March, 2019
2,642.99
2,564.37
(1,577.64)
3,629.72
3,488.93
3,372.32
362.94
(1,092.27)
2,642.99
2,097.62
2.1.14 Details of securities sold/purchased (in face value terms) under repos/reverse repos including LAF and MSF
transactions (including triparty repos):
Year ended 31 March, 2020
Securities sold under repos
i. Government Securities
ii. Corporate debt Securities
Securities purchased under reverse repos
i. Government Securities
ii. Corporate debt Securities
Minimum
outstanding during
the year
Maximum
outstanding during
the year
Daily Average
outstanding during
the year
(` in crores)
As at 31-03-2020
-
-
342.65
-
14,761.55
2,261.12
56,973.93
25.00
1,386.37
732.34
14,186.14
0.07
11,269.61
363.19
52,656.69
-
There have been no defaults in making the same set of securities available at the time of 2nd leg settlement of
the Term Reverse Repo during the year ended 31 March, 2020.
Year ended 31 March, 2019
Securities sold under repos
i. Government Securities
ii. Corporate debt Securities
Securities purchased under reverse repos
i. Government Securities
ii. Corporate debt Securities
Minimum
outstanding during
the year
Maximum
outstanding during
the year
Daily Average
outstanding during
the year
(` in crores)
As at 31-03-2019
-
-
-
-
14,687.58
-
23,514.53
100.00
1,219.73
-
5,109.53
0.31
14,687.58
-
23,514.53
-
There have been no defaults in making the same set of securities available at the time of 2nd leg settlement of
the Term Reverse Repo during the year ended 31 March, 2019.
203
Annual Report 2019-20Experience Open
Standalone Financial Statements
2.1.15 Details of financial assets sold to Securitisation/Reconstruction companies for Asset Reconstruction:
Number of accounts*
Aggregate value (net of provisions) of accounts sold
Aggregate consideration
Additional consideration realised in respect of accounts transferred in earlier years
Aggregate net gain/(loss) over net book value
*Excludes 1 account already written-off (previous year 3 accounts)
(` in crores)
31 March, 2020
31 March, 2019
3
7.92
28.80
-
20.88
5
159.29
236.61
-
77.32
Excess provision reversed to the profit and loss account from sale of NPAs amounts to `20.88 crores (previous
year `85.83 crores)
Particulars
Backed by NPAs sold by the Bank as
underlying
Backed by NPAs sold by other
banks/financial institutions/non-
banking financial companies as
underlying
(` in crores)
Total
Book value of investments in
Security Receipts (‘SRs’)
As on
31 March, 2020
As on
31 March, 2019
As on
31 March, 2020
As on
31 March, 2019
As on
31 March, 2020
As on
31 March, 2019
2,197.31
2,908.00
2.26
2.26
2,199.57
2,910.26
Particulars
(i)
(ii)
Book value of SRs backed by NPAs sold by
the bank as underlying
Provisions held against (i)*
Book value of SRs backed by NPAs sold by
other banks / financial institutions / non-
banking financial companies as underlying
Provisions held against (ii)*
Total (i) + (ii), net of provisions
As at 31 March, 2020
(` in crores)
SRs issued within
past 5 years
SRs issued more
than 5 years ago
but within past 8
years
SRs issued more
than 8 years ago
Total
1,953.26
243.72
0.33
2,197.31
(183.20)
0.22
(241.52)
1.38
-
1,770.28
(0.29)
3.29
(0.33)
0.66
(0.66)
-
(425.05)
2.26
(0.95)
1,773.57
(` in crores)
* represents provision for depreciation on SRs and is net off appreciation, if any against other SRs
Particulars
(i)
(ii)
Book value of SRs backed by NPAs sold by
the bank as underlying
Provisions held against (i)*
Book value of SRs backed by NPAs sold by
other banks / financial institutions / non-
banking financial companies as underlying
Provisions held against (ii)*
Total (i) + (ii), net of provisions
As at 31 March, 2019
SRs issued within
past 5 years
SRs issued more
than 5 years ago
but within past 8
years
SRs issued more
than 8 years ago
Total
2,664.02
243.98
-
2,908.00
-
0.22
(220.83)
1.38
-
0.66
(220.83)
2.26
-
2,664.24
-
24.53
(0.66)
-
(0.66)
2,688.77
* represents provision for depreciation on SRs and is net off appreciation, if any against other SRs
204
Financial Statements
2.1.16 Details of the Non-Performing Financial Assets sold to other banks
(excluding securitisation/
reconstruction companies):
Number of accounts sold
Aggregate outstanding*
Aggregate consideration received
*Represents principal outstanding as on date of sale
(` in crores)
31 March, 2020
31 March, 2019
1
616.93
170.55
4
755.39
481.52
During the years ended 31 March, 2020 and 31 March, 2019 there were no Non-Performing Financial Assets
purchased by the Bank from other banks (excluding securitisation/reconstruction companies).
2.1.17 Details of securitisation transactions undertaken by the Bank are as follows:
Sr. No. Particulars
31 March, 2020
31 March, 2019
(` in crores)
1
2
3
4
No. of SPVs sponsored by the bank for securitisation transactions
Total amount of securitised assets as per books of the SPVs sponsored by the
Bank
Total amount of exposures retained by the bank to comply with MRR as on the
date of balance sheet
a) Off-balance sheet exposures
First loss
Others
b) On-balance sheet exposures
First loss
Others
Amount of exposures to securitisation transactions other than MRR
a) Off-balance sheet exposures
i) Exposure to own securitizations
First loss
Loss
ii) Exposure to third party securitisations
First loss
Others
b) On-balance sheet exposures
i) Exposure to own securitizations
First loss
Loss
ii) Exposure to third party securitisations
First loss
Others
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.1.18
The information on concentration of deposits is given below:
Total deposits of twenty largest depositors
Percentage of deposits of twenty largest depositors to total deposits
(` in crores)
31 March, 2020
31 March, 2019
58,674.60
9.17
64,899.05
11.83
205
Annual Report 2019-20Experience Open
Standalone Financial Statements
2.1.19
The information on concentration of advances* is given below:
(` in crores)
31 March, 2020
31 March, 2019
Total advances to twenty largest borrowers
Percentage of advances to twenty largest borrowers to total advances of the Bank
74,849.03
8.65
62,677.26
8.56
* Advances represent credit exposure (funded and non-funded) including derivative exposure as defined by RBI
2.1.20
The information on concentration of exposure* is given below:
Total exposure to twenty largest borrowers/customers
Percentage of exposures to twenty largest borrowers/customers to total exposure on
borrowers/customers
(` in crores)
31 March, 2020
31 March, 2019
92,264.51
10.08
84,341.85
10.55
* Exposure includes credit exposure (funded and non-funded), derivative exposure, investment exposure (including underwriting
and similar commitments) and deposits placed for meeting shortfall in Priority Sector Lending
2.1.21 During the year ended 31 March, 2020 and 31 March, 2019 , the Bank’s credit exposure to single borrower and
group borrowers was within the prudential exposure limits prescribed by RBI.
2.1.22
Details of Risk Category wise Country Exposure:
Risk Category
Insignificant
Low
Moderate
High
Very High
Restricted
Off-Credit
Total
Exposure (Net) as
at 31 March, 2020
Provision Held as at
31 March, 2020
Exposure (Net) as
at 31 March, 2019
Provision Held as
at 31 March, 2019
(` in crores)
-
19,223.10
5,304.97
95.91
1,219.26
1.69
-
25,844.93
-
12.17
-
-
-
-
-
12.17
-
22,233.01
2,948.18
1,038.47
2,827.57
-
-
29,047.23
-
-
-
-
-
-
-
-
2.1.23 A maturity pattern of certain items of assets and liabilities at 31 March, 2020 and 31 March, 2019 is set out below:
As at 31 March, 2020
Deposits1
Advances1,2
Investments1
Borrowings1
1 day
2 days to 7 days
8 days to 14 days
15 days to 30 days
31 days and upto 2 months
Over 2 months and upto 3 months
Over 3 months and upto 6 months
Over 6 months and upto 1 year
Over 1 year and upto 3 years
Over 3 years and upto 5 years
Over 5 years
Total
9,393.22
29,764.93
15,065.83
18,598.50
27,305.18
24,411.64
53,506.32
83,932.89
23,586.16
2,688.28
351,851.99
640,104.94
4,373.19
4,380.02
3,956.05
10,947.57
15,526.78
15,015.80
30,319.38
51,919.47
114,606.88
69,495.45
250,883.57
571,424.16
34,818.51
1,510.13
4,695.30
4,399.54
4,419.81
3,538.71
6,743.15
10,037.31
15,369.43
7,207.81
63,994.62
156,734.32
-
72.06
463.34
6,302.02
7,814.64
4,412.42
17,592.82
26,182.68
50,425.65
13,783.50
20,905.00
147,954.13
Foreign
Currency
Assets3
8,783.77
5,827.00
628.87
4,683.82
2,669.03
3,233.05
8,109.22
15,510.51
12,960.38
3,911.41
31,522.80
97,839.86
(` in crores)
Foreign
Currency
Liabilities3
319.49
3,477.56
667.67
2,548.11
9,095.83
6,854.61
18,744.94
30,201.76
15,689.63
3,846.53
7,114.42
98,560.55
Includes foreign currency balances
For the purpose of disclosing the maturity pattern, advances that have been subject to risk participation vide Inter-Bank
Participation Certificates (‘IBPCs’) and Funded Risk Participation (‘FRPs’) have been classified in the maturity bucket
1.
2.
206
Financial Statements
corresponding to the contractual maturities of such underlying loans and advances gross of any risk participation. The IBPC
and FRP amounts have been classified in the respective maturities of the corresponding underlying loans.
3. Maturity profile of foreign currency assets & liabilities excludes off balance sheet items.
4.
5.
The maturity profile disclosed above does not factor in the effect of changes due to postponement of cash flows on account of
loans under 3 months moratorium period as permitted under RBI’s COVID-19 Regulatory Package notified on 27 March, 2020.
During the year ended 31 March, 2020, pursuant to the approval of the Board of Directors, the Bank changed the behavioural
methodology for determining the maturity pattern of term deposits of ticket size less than `2 crores from account level to
constituent level. As a result, the above figures for deposits are strictly not comparable with the previous year. Further, the
Bank reports core deposits largely as part of ‘over 5 years’ bucket based on the results of the behavioural analysis.
As at 31 March, 2019
1 day
2 days to 7 days
8 days to 14 days
15 days to 30 days
31 days and upto 2 months
Over 2 months and upto 3 months
Over 3 months and upto 6 months
Over 6 months and upto 1 year
Over 1 year and upto 3 years
Over 3 years and upto 5 years
Over 5 years
Total
Deposits1
Advances1,2
Investments1
Borrowings1
8,854.09
22,294.97
15,394.97
19,159.42
36,696.06
35,984.16
55,550.20
107,987.13
37,116.54
10,036.96
199,396.84
548,471.34
3,179.52
5,234.97
5,107.99
13,573.13
9,656.92
14,524.37
22,578.92
29,784.41
94,599.36
59,808.46
236,749.92
494,797.97
31,440.58
4,660.62
8,025.69
6,803.41
7,569.10
7,972.16
10,247.36
20,195.62
23,031.65
9,773.49
45,249.60
174,969.28
-
15,062.95
1,024.36
5,275.12
10,457.24
11,602.82
16,315.61
22,525.88
29,480.21
17,369.91
23,661.68
152,775.78
Foreign
Currency
Assets3
9,025.92
4,964.20
3,041.63
7,739.23
2,218.20
3,146.91
5,867.26
4,102.00
8,148.93
8,329.96
41,488.00
98,072.24
(` in crores)
Foreign
Currency
Liabilities3
245.77
1,418.32
1,294.73
4,116.12
10,542.55
11,797.01
14,577.87
28,803.38
14,285.41
6,562.59
4,528.35
98,172.10
1.
2.
Includes foreign currency balances
For the purpose of disclosing the maturity pattern, advances that have been subject to risk participation vide Inter-Bank
Participation Certificates (‘IBPCs’) and Funded Risk Participation (‘FRPs’) have been classified in the maturity bucket
corresponding to the contractual maturities of such underlying loans and advances gross of any risk participation. The IBPC
and FRP amounts have been classified in the respective maturities of the corresponding underlying loans.
3. Maturity profile of foreign currency assets & liabilities excludes off balance sheet items.
Classification of assets and liabilities under the different maturity buckets is based on the same estimates and
assumptions as used by the Bank for compiling the return submitted to the RBI, which has been relied upon
by the auditors.
2.1.24 Disclosure on Restructured Assets
Details of loans subjected to restructuring during the year ended 31 March, 2020 are given below:
Type of Restructuring
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Asset Classification
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
Restructured
accounts as on
April 1 of the
FY (Opening
Balance)
No. of borrowers
4
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
267.63
0.55
Provision thereon
6.06
-
-
-
-
4
4
12
467.93
97.86
833.42
89.42
35.76
125.73
-
-
6.06
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
207
Annual Report 2019-20Experience Open
Standalone Financial Statements
Type of Restructuring
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Asset Classification
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
No. of borrowers
-
Fresh
Restructuring
during the year 1,2
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
0.54
141.80
2.39
-
-
-
-
(1)
(4.08)
-
(0.26)
(2)
(125.17)
(142.35)
Provision thereon
(8.19)
Upgradation
to restructured
standard category
during the FY
Restructured
Standard
Advances
which cease to
attract higher
provisioning and/
or additional risk
weight at the end
of FY
Downgradation
of restructured
accounts during
the FY3
208
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
32.29
10.16
42.99
4.72
27.14
173.66
-
-
-
-
-
-
-
-
-
-
(1)
3
(275.52)
400.69
80.68
61.67
(8.19)
-
2.39
-
-
-
-
(1)
(4.08)
-
(0.26)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial Statements Type of Restructuring
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
Asset Classification
Standard
Sub-
Standard
Doubtful
Loss
Total
Standard
Sub-
Standard
Doubtful
Loss
Total
(` in crores)
No. of borrowers
-
Write-offs of
restructured
accounts during
the FY4,5,6
Restructured
accounts as on
March 31 of
the FY (closing
figures)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
(138.32)
-
1
0.60
-
-
-
-
-
-
-
-
-
(1)
-
(1)
(99.52)
(13.11)
(250.95)
(32.46)
2
-
7
(32.46)
10
125.18
495.60
621.38
142.36
124.57
266.93
8.19
-
8.19
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Type of Restructuring
Others
Total
(` in crores)
Asset Classification
Restructured
accounts as on
April 1 of the FY
(Opening Balance)
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
Fresh Restructuring
during the year1,2
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Standard
745
Sub-
Standard
103
Doubtful
Loss
Total
Standard
33
5
886
749
Sub-
Standard
103
Doubtful
Loss
Total
37
9
898
690.09
16.79
3,284.63
159.69
4,151.20
957.72
16.79
3,752.56
257.55
4,984.62
19.47
0.14
1,310.61
85.02
1,415.24
20.02
0.14
1,400.03
120.78
1,540.97
10.54
249
-
-
2.08
-
-
-
12.62
249
16.60
249
-
-
2.08
-
-
-
18.68
249
121.14
1.96
76.57
18.93
218.60
121.68
1.96
108.86
29.09
261.59
72.74
0.02
24.07
14.47
111.30
214.54
0.02
28.79
41.61
284.96
Provision thereon
2.48
-
(2.08)
-
0.40
4.87
-
(2.08)
-
2.79
209
Annual Report 2019-20Experience Open
Standalone Financial Statements
Type of Restructuring
Others
Total
(` in crores)
Doubtful
Loss
Total
Standard
-
-
-
-
-
-
-
-
-
-
-
-
Sub-
Standard
(15)
15
1.94
(1.94)
-
-
-
-
Doubtful
Loss
Total
-
-
-
-
-
-
-
-
-
-
-
-
(48)
(49)
(49)
No. of borrowers
Standard
15
Sub-
Standard
(15)
Asset Classification
Upgradation
to restructured
standard category
during the FY
1.94
(1.94)
-
-
(48)
-
-
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Restructured
Standard Advances
which cease to
attract higher
provisioning and/
or additional risk
weight at the end
of FY
(249.86)
(33.93)
(8.86)
(96)
11
81
4
(11.76)
(3.45)
14.07
1.14
(5.41)
5.19
0.22
-
(1)
-
(5)
-
(33)
-
-
(3)
(249.86)
(253.94)
(33.93)
(33.93)
(8.86)
-
-
-
-
(42)
(9.12)
(98)
11
80
7
(136.93)
(3.45)
(261.45)
401.83
(147.76)
5.19
80.90
61.67
(8.19)
(1)
-
(5)
8.19
(34)
-
(3)
(253.94)
(33.93)
(9.12)
-
-
-
-
(43)
(51.22)
(2.16)
(1,752.36)
(71.24)
(1,876.98)
(189.54)
(2.16)
(1,851.88)
(84.35)
(2,127.93)
(0.75)
(0.05)
(853.48)
(9.29)
(863.57)
(0.75)
(0.05)
(885.94)
(9.29)
(896.03)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Downgradation
of restructured
accounts during
the FY3
Write-offs of
restructured
accounts during
the FY4,5,6
210
Financial Statements Type of Restructuring
Asset Classification
No. of borrowers
Restructured
accounts as on
March 31 of the FY
(closing figures)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Standard
864
Sub-
Standard
94
Others
Doubtful
81
(` in crores)
Total
Loss
6
Total
Standard
1,045
865
Sub-
Standard
94
Doubtful
83
Loss
13
Total
1,055
500.33
11.20
1,622.91
108.52
2,242.96
500.93
11.20
1,748.09
604.12
2,864.34
52.12
5.30
481.42
90.20
629.04
52.12
5.30
623.78
214.77
895.97
Provision thereon
4.16
-
-
-
4.16
4.16
-
8.19
-
12.35
Amount outstanding under restructuring facilities and other facilities is as on 31 March, 2020:
1. Amount reported here represents outstanding as on 31 March, 2020. Actual amount subjected to restructuring
determined as on the date of approval of restructuring proposal is `38.06 crores for the FY 2019-20
2.
3.
4.
Includes `3.13 crores of fresh/additional sanction to existing restructured accounts (entirely under restructured facility)
Includes accounts which were not attracting higher provisioning and/or additional risk weight at the beginning of FY
Includes accounts partially written-off during the year
5. Amount outstanding under restructuring facilities and other facilities is as on the date of write-off in the books
6.
7.
8.
Includes `148.39 crores of reduction from existing restructured accounts by way of sale/recovery (`144.28 crores from
restructured facility and `4.11 crores from other facility)
The cumulative value of net restructured advances after reducing the provision held for diminution in fair value and
balance in interest capitalization account upto 31 March, 2020 aggregated `472.14 crores
Information appearing under substandard, doubtful and loss category also include accounts slipped into NPAs from
restructured standard advances along with restructured NPAs
Details of loans subjected to restructuring during the year ended 31 March, 2019 are given below:
Type of Restructuring
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
(` in crores)
Asset Classification
Restructured
accounts as on
April 1 of the FY
(Opening Balance)
No. of borrowers
Standard
7
Sub-
Standard
-
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
427.80
279.33
11.28
-
-
-
Doubtful
Loss
Total
Standard
18
6
31
1,370.79
124.65
1,923.24
350.31
34.10
663.74
28.37
-
39.65
-
-
-
-
Sub-
Standard
-
-
-
-
Doubtful
Loss
Total
-
-
-
-
-
-
-
-
-
-
-
-
211
Annual Report 2019-20Experience Open Standalone Financial Statements
Type of Restructuring
Asset Classification
No. of borrowers
Movement in
balance for
accounts appearing
under opening
balance
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Fresh Restructuring
during the year 1,2
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Upgradation
to restructured
standard category
during the FY
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Restructured
Standard Advances
which cease to
attract higher
provisioning and/
or additional risk
weight at the end
of FY
Standard
-
Sub-
Standard
-
8.72
-
0.64
-
-
-
-
1
15.97
-
0.18
(4)
-
-
-
-
-
-
-
-
-
-
-
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
(178.19)
(278.78)
(6.05)
212
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
(` in crores)
Sub-
Standard
-
-
-
-
-
-
-
-
-
-
-
-
Doubtful
Loss
Total
Standard
-
11.69
-
-
-
20.41
10.50
23.97
34.47
(28.19)
-
-
-
-
(1)
(15.97)
-
(0.18)
-
-
-
-
-
-
-
-
-
(27.55)
-
-
-
-
-
-
-
-
(4)
(178.19)
(278.78)
(6.05)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Doubtful
Loss
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial Statements Type of Restructuring
Under CDR Mechanism
Under SME Debt Restructuring Mechanism
(` in crores)
Asset Classification
Standard
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Downgradation
of restructured
accounts during
the FY3
Write-offs of
restructured
accounts during
the FY4,5,6
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
No. of borrowers
Restructured
accounts as on
March 31 of the FY
(closing figures)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
-
-
-
-
-
(6.67)
-
4
267.63
0.55
6.06
Sub-
Standard
-
-
-
-
-
-
-
-
-
-
-
Doubtful
Loss
Total
Standard
(1)
1
(22.74)
22.74
(5.51)
5.51
-
-
-
-
(12)
-
(3)
-
(15)
(875.84)
(49.54)
(932.05)
(265.88)
(27.82)
(293.70)
4
4
12
467.93
97.86
833.42
89.42
35.76
125.73
-
-
6.06
-
-
-
-
-
-
-
-
-
-
-
Sub-
Standard
-
-
-
-
-
-
-
-
-
-
-
Doubtful
Loss
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Type of Restructuring
Others
Total
(` in crores)
Asset Classification
Standard
No. of borrowers
516
Restructured
accounts as on
April 1 of the FY
(Opening Balance)
Sub-
Standard
18
Doubtful
Loss
Total
Standard
191
87
812
523
Sub-
Standard
18
Doubtful
Loss
Total
209
93
843
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
757.33
4.55
3,902.96
151.90
4,816.74
1,185.13
4.55
5,273.75
276.55
6,739.98
268.82
0.33
1,390.05
3.75
1,662.95
548.15
0.33
1,740.36
37.85
2,326.69
7.35
-
36.97
-
44.32
18.63
-
65.34
-
83.97
213
Annual Report 2019-20Experience Open Standalone Financial Statements
Type of Restructuring
Others
Total
(` in crores)
Asset Classification
Standard
No. of borrowers
-
Sub-
Standard
-
Doubtful
Loss
Total
Standard
-
-
-
-
Sub-
Standard
-
Doubtful
Loss
Total
-
-
-
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Movement
in balance
for accounts
appearing under
opening balance
Fresh
Restructuring
during the year1,2
Upgradation
to restructured
standard category
during the FY
Restructured
Standard
Advances
which cease to
attract higher
provisioning and/
or additional risk
weight at the end
of FY
214
0.85
(0.17)
(2.31)
457
-
-
-
1
67.59
(1.23)
67.21
9.57
5.74
(26.69)
5
5.57
(0.17)
(29.00)
463
(1.67)
457
79.28
(1.23)
87.62
16.24
23.97
40.04
-
-
-
1
(54.88)
5
-
-
-
-
-
-
-
-
-
-
289.27
0.01
0.20
18.84
0.01
0.01
-
32
-
(22)
-
(10)
338.52
(5.16)
(333.36)
0.25
(0.09)
(0.16)
8.19
(90)
-
(8.19)
289.48
289.27
0.01
0.20
18.86
18.84
0.01
0.01
-
-
-
-
-
33
-
(22)
-
(11)
354.49
(5.16)
(349.33)
0.25
(0.09)
(0.16)
-
(90)
8.37
(94)
-
(8.37)
-
-
-
-
-
-
-
-
-
(56.55)
463
289.48
18.86
-
-
-
-
-
(94)
(715.45)
(514.48)
(8.75)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
(537.26)
(235.70)
(2.70)
(537.26)
(715.45)
(235.70)
(514.48)
(2.70)
(8.75)
Financial Statements Type of Restructuring
Others
Total
(` in crores)
Doubtful
Loss
Total
Standard
Doubtful
Loss
Total
50
6
(163)
49
7
Sub-
Standard
107
Asset Classification
Standard
No. of borrowers
(163)
Downgradation
of restructured
accounts during
the FY3
Sub-
Standard
107
(154.37)
17.59
(23.92)
160.70
(32.46)
(0.04)
(52.25)
85.02
(154.37)
17.59
(46.66)
183.44
(32.46)
(0.04)
(58.03)
90.53
-
-
-
-
-
-
Write-offs of
restructured
accounts during
the FY4,5,6
Restructured
accounts as on
March 31 of
the FY (closing
figures)
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
No. of borrowers
Amount
Outstanding –
Restructured
facility
Amount
Outstanding –
Other facility
Provision thereon
-
(7)
-
(1)
-
(203)
-
(88)
-
(299)
-
(7)
-
(1)
-
(215)
-
(91)
-
(314)
(4.24)
(0.20)
(328.83)
(151.67)
(484.94)
(10.91)
(0.20)
(1,204.67)
(201.21)
(1,416.99)
(0.11)
(0.07)
(32.52)
(3.75)
(36.45)
(0.11)
(0.07)
(298.40)
(31.57)
(330.15)
745
103
33
5
886
749
103
37
9
898
690.09
16.79
3,284.63
159.69
4,151.20
957.72
16.79
3,752.56
257.55
4,984.62
19.47
0.14
1,310.61
85.02
1,415.24
20.02
0.14
1,400.02
120.78
1,540.96
10.54
-
2.08
-
12.62
16.60
-
2.08
-
18.67
Amount outstanding under restructuring facilities and other facilities is as on 31 March, 2019:
1. Amount reported here represents outstanding as on 31 March, 2019. Actual amount subjected to restructuring
determined as on the date of approval of restructuring proposal is `285.58 crores for the FY 2018-19
2.
Includes `12.56 crores of fresh/additional sanction to existing restructured accounts (entirely under restructured facility)
3.
Includes accounts which were not attracting higher provisioning and/or additional risk weight at the beginning of FY
4.
Includes accounts partially written-off during the year
5. Amount outstanding under restructuring facilities and other facilities is as on the date of write-off in the books
6.
7.
8.
Includes `212.80 crores of reduction from existing restructured accounts by way of sale/recovery (`151.00 crores from
restructured facility and `61.80 crores from other facility)
The cumulative value of net restructured advances after reducing the provision held for diminution in fair value and
balance in interest capitalization account upto 31 March, 2019 aggregated `886.54 crores
Information appearing under substandard, doubtful and loss category also include accounts slipped into NPAs from
restructured standard advances along with restructured NPAs
215
Annual Report 2019-20Experience Open Standalone Financial Statements
2.1.25 Details of MSME advances subjected to restructuring:
Particulars
No. of accounts restructured
Amount outstanding
(` in crores)
As at
31 March, 2020
As at
31 March, 2019
9
16.35
-
-
2.1.26 Disclosure with regard to implementation of resolution plan as required under RBI circular of 7 June, 2019 on
Prudential Framework for Resolution of Stressed Assets:
Particulars
No. of borrowers where timeline for implementation of resolution plan
was before 31 March, 2020 (without reckoning the extended resolution
period provided through the RBI circular of 17 April, 2020)
Fund based outstanding as on 31 March, 2020*
Additional provisions held as per RBI circular of 7 June, 2019
(` in crores)
Resolution plan
implemented
Resolution plan not
implemented
6
35
640.09
8,185.42
474.89
* excluding outstanding for cases which have been subject to prudential write-off and outstanding in equity shares
2.1.27 Disclosure in respect of Interest Rate Swaps (‘IRS’), Forward Rate Agreement (‘FRA’) and Cross Currency Swaps
(‘CCS’) outstanding is set out below:
An ‘IRS’ is a financial contract between two parties exchanging or swapping a stream of interest payments for
a ‘notional principal’ amount on multiple occasions during a specified period. The Bank deals in interest rate
benchmarks like Mumbai Inter-Bank Offered Rate (MIBOR), Indian Government Securities Benchmark Rate
(INBMK), Mumbai Inter-Bank Forward Offer Rate (MIFOR) and LIBOR of various currencies.
A ‘FRA’ is a financial contract between two parties to exchange interest payments for ‘notional principal’ amount
on settlement date, for a specified period from start date to maturity date. Accordingly, on the settlement date
cash payments based on contract rate and the settlement rate, which is the agreed bench-mark/reference rate
prevailing on the settlement date, are made by the parties to one another. The benchmark used in the FRA
contracts of the Bank is London Inter-Bank Offered Rate (LIBOR) of various currencies.
A ‘CCS’ is a financial contract between two parties exchanging interest payments and principal, wherein
interest payments and principal in one currency would be exchanged for an equally valued interest payments
and principal in another currency.
Sr.
No.
Items
i)
ii)
iii)
iv)
v)
Notional principal of swap agreements
Losses which would be incurred if counterparties failed to fulfill their obligations
under the agreements
Collateral required by the Bank upon entering into swaps
Concentration of credit risk arising from the swaps
Maximum single industry exposure with Banks (previous year with Banks)
- Interest Rate Swaps/FRAs
- Cross Currency Swaps
Fair value of the swap book (hedging & trading)
- Interest Rate Swaps/FRAs
- Currency Swaps
(` in crores)
As at
31 March, 2020
As at
31 March, 2019
301,276.40
6,935.72
236,685.35
4,223.33
837.94
523.97
3,890.55
4,196.42
(588.68)
907.85
2,201.10
3,112.72
(794.06)
1,475.34
216
Financial Statements
The nature and terms of the IRS as on 31 March, 2020 are set out below:
(` in crores)
Nature
Hedging
Hedging
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal
Benchmark
Terms
30
2
217
825
646
11
289
890
363
28
4
4
3,309
LIBOR
12,446.90
LIBOR
3,783.25
34,240.79
LIBOR
41,163.33 MIBOR
42,574.00 MIFOR
INBMK
1,000.00
41,341.57
LIBOR
42,921.23 MIBOR
26,472.00 MIFOR
LIBOR
LIBOR
LIBOR
8,852.81
64.69
64.69
254,925.26
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Fixed Receivable v/s Floating Payable
Fixed Receivable v/s Floating Payable
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Floating Payable
Pay Cap
Receive Cap
The nature and terms of the IRS as on 31 March, 2019 are set out below:
(` in crores)
Nature
Hedging
Hedging
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
Notional Principal
Benchmark
Terms
33
2
3
250
564
380
18
285
597
183
16
4
4
2,339
12,413.32 LIBOR
1,901.76 LIBOR
175.00 INBMK
36,486.34 LIBOR
34,822.66 MIBOR
20,724.00 MIFOR
1,559.00 INBMK
43,149.73 LIBOR
30,858.54 MIBOR
9,945.00 MIFOR
3,679.05 LIBOR
106.33 LIBOR
111.51 LIBOR
195,932.24
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Fixed Receivable v/s Floating Payable
Fixed Receivable v/s Floating Payable
Fixed Receivable v/s Floating Payable
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Floating Payable
Pay Cap
Receive Cap
The nature and terms of the FRA as on 31 March, 2020 are set out below:
Nature
-
Nos.
Notional Principal
Benchmark
Terms
-
-
-
-
-
-
The nature and terms of the FRA as on 31 March, 2019 are set out below:
Nature
-
Nos.
Notional Principal
Benchmark
Terms
-
-
-
-
-
-
The nature and terms of the CCS as on 31 March, 2020 are set out below:
(` in crores)
(` in crores)
(` in crores)
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
77
85
69
29
38
13
311
Notional Principal
Benchmark
Terms
8,094.31 Principal & Coupon Swap
8,709.42 LIBOR
13,381.28 LIBOR
10,380.16 LIBOR/MIFOR/ MIBOR
4,197.61 Principal Only
1,588.36 Principal Only
46,351.14
Fixed Payable v/s Fixed Receivable
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Floating Payable
Fixed Receivable
Fixed Payable
217
Annual Report 2019-20Experience Open
Standalone Financial Statements
The nature and terms of the CCS as on 31 March, 2019 are set out below:
(` in crores)
Nature
Trading
Trading
Trading
Trading
Trading
Trading
Nos.
93
74
70
13
48
32
330
Notional Principal
Benchmark
Terms
7,416.32 Principal & Coupon Swap
7,294.53 LIBOR
11,333.58 LIBOR
6,694.33 LIBOR/MIFOR/ MIBOR
4,932.27 Principal Only
3,082.09 Principal Only
Fixed Payable v/s Fixed Receivable
Fixed Receivable v/s Floating Payable
Floating Receivable v/s Fixed Payable
Floating Receivable v/s Floating Payable
Fixed Receivable
Fixed Payable
40,753.12
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2020 are set out below:
Sr. No. Particulars
i)
ii)
iii)
iv)
Notional principal amount of exchange traded interest rate derivatives undertaken during the year
EDM9 – 90 Days Euro Futures – June 2019
TUM9 – 2 years US Note – June 2019
FVM9 – 5 years US Note – June 2019
TYM9 – 10 years US Note – June 2019
TUU9 – 2 years US Note – September 2019
FVU9 – 5 years US Note – September 2019
TYU9 – 10 years US Note – September 2019
TUZ9 – 2 years US Note – December 2019
FVZ9 – 5 years US Note – December 2019
TYZ9 – 10 years US Note – December 2019
TUH0 – 2 years US Note – March 2020
FVH0 – 5 years US Note – March 2020
TYH0 – 10 years US Note – March 2020
TUM0 – 2 years US Note – June 2020
FVM0 – 5 years US Note – June 2020
TYM0 – 10 years US Note – June 2020
EDM0 – 90 Days Euro Futures – June 2020
Notional principal amount of exchange traded interest rate derivatives outstanding as on
31 March, 2020
TUM0 – 2 Years US Note – June 2020
FVM0 – 5 Years US Note – June 2020
TYM0 – 10 Years US Note – June 2020
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31
March, 2020 and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives outstanding as on 31 March,
2020 and “not highly effective”
(` in crores)
As at
31 March, 2020
1,513.30
1,876.49
3,238.46
2,148.89
1,059.31
1,436.12
272.39
251.21
768.76
295.09
142.25
567.49
606.83
27.24
308.71
172.52
1,543.57
16,228.63
27.24
151.33
142.25
320.82
N.A.
N.A.
Details of Exchange Traded Interest Rate Derivatives for the year ended 31 March, 2019 are set out below:
Sr. No. Particulars
i)
Notional principal amount of exchange traded interest rate derivatives undertaken during the
year
717GS2028 – 7.17% GOI 2028
FVM8 – 5 years US Note – June 2018
TYM8 – 10 years US Note – June 2018
FVU8 – 5 years US Note – September 2018
TYU8 – 10 years US Note – September 2018
TYZ8 – 10 years US Note – December 2018
(` in crores)
As at
31 March, 2019
77.28
69.15
345.77
459.19
1,136.91
1,569.82
218
Financial Statements
Sr. No. Particulars
FVZ8 – 5 years US Note – December 2018
EDZ8 – 90 Days Euro Futures – December 2018
EDM9 – 90 Days Euro Futures – June 2019
TUZ8 – 2 years US Note – December 2018
EDZ9 – 90 Days Euro Futures – December 2019
TYH9 – 10 years US Note – March 2019
FVH9 – 5 Years US Note – March 2019
TUH9 – 2 Years US Note – March 2019
TUM9 – 2 Years US Note – June 2019
FVM9 – 5 Years US Note – June 2019
TYM9 – 10 Years US Note – June 2019
EDZ0 – 90 Days Euro Futures – December 2020
ii)
iii)
iv)
Notional principal amount of exchange traded interest rate derivatives outstanding as on
31 March, 2019
FVM9 – 5 Years US Note – June 2019
TUM9 – 2 Years US Note – June 2019
Notional principal amount of exchange traded interest rate derivatives outstanding as on 31
March, 2019 and “not highly effective”
Mark-to-market value of exchange traded interest rate derivatives outstanding as on 31 March,
2019 and “not highly effective”
(` in crores)
As at
31 March, 2019
1,064.99
5,532.40
2,863.02
276.62
9,681.70
3,380.30
7,898.88
926.68
110.65
2,636.19
207.46
2,766.20
41,003.21
818.79
82.99
901.78
N.A.
N.A.
The Bank has not undertaken any transactions in Credit Default Swaps (CDS) during the year ended 31 March,
2020 and 31 March, 2019.
2.1.28 Disclosure on risk exposure in Derivatives
Qualitative disclosures:
(a) Structure and organisation for management of risk in derivatives trading, the scope and nature of risk
measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating risk and
strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:
Derivatives are financial instruments whose characteristics are derived from an underlying asset, or from
interest and exchange rates or indices. The Bank undertakes over the counter and Exchange Traded
derivative transactions for Balance Sheet management and also for proprietary trading/market making
whereby the Bank offers OTC derivative products to the customers to enable them to hedge their interest
rate and currency risks within the prevalent regulatory guidelines.
Proprietary trading includes Exchange Traded Currency Options, Interest Rate Futures, Currency Futures
and Rupee Interest Rate Swaps under different benchmarks (viz. MIBOR, MIFOR and INBMK), Currency
Options and Currency Swap. The Bank also undertakes transactions in Cross Currency Swaps, Principal
Only Swaps, Coupon Only Swaps, Currency Option, Interest Rate Swap and Long Term Forex Contracts
(LTFX) for hedging its Balance Sheet and also offers them to its customers. These transactions expose
the Bank to various risks, primarily credit, market, legal, reputation and operational risk. The Bank has
adopted the following mechanism for managing risks arising out of the derivative transactions.
There is a functional separation between the Treasury Front Office, Treasury Mid Office and Treasury Back
Office to undertake derivative transactions. The customer and interbank related derivative transaction
are originated by Derivative sales and Treasury Front Office team respectively which ensures compliance
with the trade origination requirements as per the bank’s policy and the RBI guidelines. The Market Risk
Group within the Bank’s Risk Department independently identifies measures and monitors the market
risks associated with derivative transactions and apprises the Asset Liability Management Committee
(ALCO) and the Risk Management Committee of the Board (RMC) on the compliance with the risk limits.
The Treasury Back Office undertakes activities such as trade validation, confirmation, settlement, ISDA
documentation, accounting, valuation and other MIS reporting.
219
Annual Report 2019-20Experience Open
Standalone Financial Statements
The derivative transactions are governed by the Derivative policy, Suitability and Appropriateness
Policy for derivative products, Market risk management policy, Hedging policy and the Asset Liability
Management (ALM) policy of the Bank as well as by the extant RBI guidelines. The Bank has implemented
policy on customer suitability & appropriateness to ensure that derivatives transactions entered into
are appropriate and suitable to the customer. The Bank has put in place a detailed process flow on
documentation for customer derivative transactions for effective management of operational/reputation/
compliance risk.
Various risk limits are set up and actual exposures are monitored vis-à-vis the limits allocated. These
limits are set up taking into account market volatility, risk appetite, business strategy and management
experience. Risk limits are in place for risk parameters viz. PV01, VaR, Stop Loss, Delta, Gamma and
Vega. Actual positions are monitored against these limits on a daily basis and breaches, if any, are dealt
with in accordance with board approved Risk Appetite Statement. Risk assessment of the portfolio is
undertaken periodically. The Bank ensures that the Gross PV01 (Price value of a basis point) position
arising out of all non-option rupee derivative contracts are within 0.25% of net worth of the Bank as on
Balance Sheet date.
Hedging transactions are undertaken by the Bank to protect the variability in the fair value or the cash
flow of the underlying Balance Sheet item. These deals are accounted on an accrual basis except the
swap designated with an asset/liability that is carried at market value or lower of cost or market value. In
that case, the swap is marked to market with the resulting gain or loss recorded as an adjustment to the
market value of designated asset or liability. These transactions are tested for hedge effectiveness and in
case any transaction fails the test, the same is re-designated as a trading deal and appropriate accounting
treatment is followed.
(b) Accounting policy for recording hedge and non-hedge transactions, recognition of income, premiums and
discounts, valuation of outstanding contracts
The Hedging Policy of the Bank governs the use of derivatives for hedging purpose. Subject to the
prevailing RBI guidelines, the Bank deals in derivatives for hedging fixed rate and floating rate coupon
or foreign currency assets/liabilities. Transactions for hedging and market making purposes are recorded
separately. For hedge transactions, the Bank identifies the hedged item (asset or liability) at the inception
of the transaction itself. The effectiveness is ascertained at the time of inception of the hedge and
periodically thereafter. Hedge derivative transactions are accounted for in accordance with the hedge
accounting principles. Derivatives for market making purpose are marked to market and the resulting
gain/loss is recorded in the Profit and Loss Account. The premium on option contracts is accounted for
as per FEDAI guidelines. Derivative transactions are covered under International Swaps and Derivatives
Association (ISDA) master agreements with respective counterparties. The exposure on account of
derivative transactions is computed as per the RBI guidelines and is marked against the credit limits
approved for the respective counterparties.
(c) Provisioning, collateral and credit risk mitigation
Derivative transactions comprise of swaps, FRAs, futures, forward contracts and options which are
disclosed as contingent liabilities. Trading swaps/FRAs/futures/options/forward contracts are revalued
at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Profit and Loss
Account and correspondingly in other assets or other liabilities respectively. Hedged swaps are accounted
for as per the RBI guidelines. In accordance with RBI guidelines, any receivables (crystallised receivables
and positive MTM) under derivatives contracts, which remain overdue for more than 90 days, are reversed
through the Profit and Loss Account and are held in a separate Suspense account.
Collateral requirements for derivative transactions are laid down as part of credit sanction terms on a case
by case basis. Such collateral requirements are determined, based on usual credit appraisal process. The
Bank retains the right to terminate transactions as a risk mitigation measure in certain cases.
The credit risk in respect of customer derivative transactions is sought to be mitigated through a laid
down policy on sanction of Loan Equivalent Risk (LER) limits, monitoring mechanism for LER limits and
trigger events for escalation/margin calls/termination.
220
Financial Statements
Quantitative disclosure on risk exposure in derivatives 1:
Sr.
No.
Particulars
1
2
3
4
5
Derivatives (Notional Principal Amount)
a) For hedging
b) For trading
Marked to Market Positions 2
a) Asset (+)
b) Liability (-)
Credit Exposure 3
Likely impact of one percentage change
in interest rate (100*PV01)
(as at 31 March, 2020)
a) on hedging derivatives
b) on trading derivatives
Maximum and Minimum of 100*PV01
observed during the year
a) on hedging
i) Minimum
ii) Maximum
b) on Trading
i) Minimum
ii) Maximum
1. only Over The Counter derivatives included
2. only on trading derivatives
3. includes accrued interest
4. excluding Tom/Spot contracts
Sr.
No.
Particulars
1
2
3
4
5
Derivatives (Notional Principal Amount)
a) For hedging
b) For trading
Marked to Market Positions 2
a) Asset (+)
b) Liability (-)
Credit Exposure 3
Likely impact of one percentage change
in interest rate (100*PV01)
(as at 31 March, 2019)
a) on hedging derivatives
b) on trading derivatives
Maximum and Minimum of 100*PV01
observed during the year
a) on hedging
i) Minimum
ii) Maximum
b) on Trading
i) Minimum
ii) Maximum
1. only Over The Counter derivatives included
2. only on trading derivatives
3. includes accrued interest
4. excluding Tom/Spot contracts
Forward
Contracts 4
43,612.28
412,366.46
7,665.93
(7,228.49)
21,166.53
12.33
12.31
3.94
12.33
0.30
12.31
Forward
Contracts 4
56,970.61
272,683.15
3,764.51
(3,907.80)
13,477.22
3.81
8.76
1.02
12.34
0.56
8.76
As at 31 March, 2020
Currency Derivatives
CCS
Options
(` in crores)
Interest rate
Derivatives
-
46,351.14
3,077.72
(2,169.87)
7,811.75
-
45,114.10
1,676.86
(1,620.33)
1,373.69
16,230.14
238,695.12
3,692.90
(4,428.26)
6,428.92
-
5.77
-
-
2.25
10.79
-
13.02
-
-
10.67
57.72
1.32
52.98
1.27
31.49
52.33
68.11
As at 31 March, 2019
Currency Derivatives
CCS
Options
(` in crores)
Interest rate
Derivatives
-
40,753.12
2,698.28
(1,222.94)
6,709.64
-
46,404.77
1,485.72
(1,425.22)
1,603.96
14,315.09
181,617.15
1,509.36
(2,146.16)
3,743.38
-
2.56
-
-
2.46
5.71
-
298.94
-
-
20.91
306.14
49.80
57.93
29.67
60.55
53.63
78.97
221
Annual Report 2019-20Experience Open
Standalone Financial Statements
The outstanding notional principal amount of Exchange Traded Currency Options as at 31 March, 2020 was Nil
(previous year Nil) and the mark-to-market value was Nil (previous year Nil).
2.1.29 Details of penalty/stricture levied by RBI:
No penalty/stricture has been imposed by RBI on the Bank during the year ended 31 March, 2020.
Details of penalty/stricture levied by RBI during the year ended 31 March, 2019 is as under:
Amount (` in crores)
Reason for stricture issued/ levy of penalty by RBI
2.00
0.20
-
Non-compliance of RBI guidelines related to ‘Collection of Account
Payee Cheques – Prohibition on Crediting proceeds to Third Party
Account’ and Master Directions on ‘Frauds- Classification and Reporting
by commercial banks and select FIs’. Penalty was imposed in terms of
Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation
Act, 1949
Non-compliance of RBI guidelines related to ‘Detection and Impounding
of Counterfeit Notes’ and ‘Sorting of Notes – Installation of Note Sorting
Machines’. Penalty was imposed in terms of Section 47A(1)(c) read with
Section 46(4)(i) of the Banking Regulation Act, 1949
Caution letter issued by RBI on 25 February, 2019 for non compliance
of RBI directives on time bound implementation and strengthening of
SWIFT related operational controls
Date of payment of
penalty
16 February, 2019
5 February, 2019
-
2.1.30 Disclosure of customer complaints
(a) Disclosure of customer complaints relating to Bank’s customers on Bank’s ATMs
a.
b.
c.
d.
No. of complaints pending at the beginning of the year
No. of complaints received during the year
No. of complaints redressed during the year
No. of complaints pending at the end of the year
31 March, 2020
31 March, 2019
-
55,475
55,475
-
284
115,737
116,021
-
(b) Disclosure of customer complaints relating to Bank’s customers on other bank’s ATMs
a.
b.
c.
d.
No. of complaints pending at the beginning of the year
No. of complaints received during the year
No. of complaints redressed during the year
No. of complaints pending at the end of the year
31 March, 2020
31 March, 2019
-
80,699
80,699
-
2,360
105,110
107,470
-
(c) Disclosure of customer complaints other than ATM transaction complaints
a.
b.
c.
d.
No. of complaints pending at the beginning of the year
No. of complaints received during the year
No. of complaints redressed during the year
No. of complaints pending at the end of the year
31 March, 2020
31 March, 2019
1,217
64,310
64,562
965
24,456
78,442
101,681
1,217
222
Financial Statements
(d) Total customer complaints
a.
b.
c.
d.
No. of complaints pending at the beginning of the year
No. of complaints received during the year
No. of complaints redressed during the year
No. of complaints pending at the end of the year
31 March, 2020
31 March, 2019
1,217
200,484
200,736
965
27,100
299,289
325,172
1,217
The above information does not include complaints redressed within 1 working day and is as certified by the
Management and relied upon by the auditors.
2.1.31 Disclosure of Awards passed by the Banking Ombudsman
a.
b.
c.
d.
No. of unimplemented awards at the beginning of the year
No. of awards passed by the Banking Ombudsman during the year
No. of awards implemented during the year
No. of unimplemented awards at the end of the year
31 March, 2020
31 March, 2019
-
-
-
-
-
-
-
-
The above information is as certified by the Management and relied upon by the auditors.
2.1.32 Draw Down from Reserves
During the year ended 31 March, 2020 the Bank has not undertaken any draw from reserves, except towards
issue expenses incurred for equity raising through Qualified Institutional Placement and conversion of share
warrants, which has been adjusted against the share premium account.
During the year ended 31 March, 2019 the Bank has made a draw down out of the Investment Reserve account
towards depreciation on investments in AFS and HFT categories in terms of RBI guidelines.
2.1.33
Letter of Comfort
The Bank has not issued any Letter of Comfort on behalf of its subsidiaries during the current and previous year.
2.1.34 Disclosure on Remuneration
Qualitative disclosures
a)
Information relating to the bodies that oversee remuneration:
Name, composition and mandate of the main body overseeing remuneration:
The Nomination and Remuneration Committee of the Board oversees the framing, review and
implementation of the compensation policy of the Bank on behalf of the Board. The Committee
works in close co-ordination with the Risk Management Committee of the Bank, in order to achieve
effective alignment between remuneration and risks.
As at 31 March, 2020, the Nomination and Remuneration Committee comprises of the following
Non-Executive Directors:
1.
Shri Rohit Bhagat - Chairman
2.
Shri Rakesh Makhija
3.
Shri Stephen Pagliuca
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Standalone Financial Statements
In respect of Remuneration/HR matters, the Nomination and Remuneration Committee of the Board,
functions with the following main objectives:
a.
Review and recommend to the Board for approval, the overall remuneration framework and
associated policy of the Bank (including remuneration policy for Directors and key managerial
personnel) including the level and structure of fixed pay, variable pay, perquisites, bonus pool,
stock-based compensation and any other form of compensation as may be included from time
to time to all the employees of the Bank including the Managing Director & CEO (MD & CEO),
other Whole-Time Directors (WTD) and senior managers one level below the Board.
b.
Recommend to the Board the compensation payable to the Chairman of the Bank.
c.
d.
e.
Review and recommend to the Board for approval, the talent management and succession
policy and process in the Bank for ensuring business continuity, especially at the level of MD &
CEO, the other WTDs, senior managers’ one level below the Board and other key roles and their
progression to the Board.
Formulate the criteria and the manner for effective evaluation of performance of the Board as
a whole, its Committees and individual directors, including independent directors of the Bank,
which may be carried out either by the Committee or by the Board or with the help of an
independent external agency and to review its implementation, compliance and outcomes.
Set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, WTDs
and Group Executives for the financial year and over the medium to long term. Review adequacy
and appropriateness of HR strategy of the Bank in the broader areas of code of conduct, ethics,
conflict of interest, succession planning, talent management, performance management,
remuneration and HR risk management.
f.
Review and recommend to the Board for approval:
the creation of new positions one level below MD & CEO
appointments, promotions and exits of senior managers one level below the MD & CEO
g.
Set the goals, objectives and performance benchmarks for the Bank and for MD & CEO, WTDs
and Group Executives for the financial year and over the medium to long term.
h. Review the performance of the MD & CEO and other WTDs at the end of each year.
i.
Perform such other duties as may be required to be done under any law, statute, rules, regulations
etc. enacted by Government of India, Reserve Bank of India or by any other regulatory or
statutory body.
External consultants whose advice has been sought, the body by which they were commissioned,
and in what areas of the remuneration process:
The Nomination and Remuneration Committee has commissioned Aon Hewitt, a globally renowned
compensation benchmarking firm, to conduct market benchmarking of employee compensation. The
Bank participates in the salary benchmarking survey conducted by Aon Hewitt every year. Aon Hewitt
collects data from multiple private sector peer banks across functions, levels and roles which is then
used by the Bank to assess market competitiveness of remuneration offered to Bank employees.
A description of the scope of the Bank’s remuneration policy, including the extent to which it is
applicable to foreign subsidiaries and branches:
The Committee monitors the remuneration policy for both domestic and overseas branches
of the Bank on behalf of the Board. However, it does not oversee the compensation policy for
subsidiaries of the Bank.
224
Financial Statements
A description of the type of employees covered and number of such employees:
Employees are categorised into following three categories from remuneration structure and
administration standpoint:
Category 1
MD & CEO and WTDs. This category includes 4 employees.
Category 2
All the employees in the Grade of Vice President and above engaged in the functions of Risk Control
and Compliance. This category includes 34 employees.
Category 3: Other Staff
‘Other Staff’ has been defined as a “group of employees who pose a material risk”. This category
includes all the employees of the Bank in the grade of Executive Vice President (EVP) and above and
also few other key business roles in case they are below the grade of Executive Vice President. This
category includes 46 employees.
b)
Information relating to the design and structure of remuneration processes:
An overview of the key features and objectives of remuneration policy:
The compensation philosophy of the Bank aims to attract, retain and motivate professionals in order
to enable the Bank to attain its strategic objectives and develop a strong performance culture in the
competitive environment in which it operates. To achieve this, the following principles are adopted:
-
Affordability: Pay to reflect productivity improvements to retain cost-income competitiveness
- Maintain competitiveness on fixed pay in talent market
-
-
-
Pay for performance to drive meritocracy through variable pay
Employee Stock Options for long-term value creation
Benefits and perquisites to remain aligned with market practices and provide flexibility
Apart from the above, the compensation structure for MD & CEO and WTDs is aligned to RBI’s
guidelines for sound compensation practices (effective FY 2012-13) and addresses the general
principles of:
-
-
Effective and independent governance and monitoring of compensation
Alignment of compensation with prudent risk-taking through well designed and consistent
compensation structures
-
Clear and timely disclosure to facilitate supervisory oversight by all stakeholders
Accordingly, the compensation policy for MD & CEO and WTDs seeks to:
a)
b)
Ensure that the compensation, in terms of structure and total amount, is in line with the best
practices, as well as competitive vis-à-vis that of peer banks
Establish the linkage of compensation with individual performance as well as achievement of
the corporate objectives of the Bank
225
Annual Report 2019-20Experience Open
Standalone Financial Statements
c)
Include an appropriate variable pay component tied to the achievement of pre-established
objectives in line with Bank’s scorecard while ensuring that the compensation is aligned with
prudent risk taking
d)
Encourage attainment of long term shareholder returns through inclusion of equity linked long-
term incentives as part of compensation
Compensation is structured in terms of fixed pay, variable pay and employee stock options (for
selective employees), with a strong linkage of variable pay to performance. The compensation
policy of the Bank is approved by the Nomination and Remuneration Committee. Additional
approval from Shareholders and RBI is obtained specifically for compensation of MD
& CEO and WTDs.
Whether the remuneration committee reviewed the firm’s remuneration policy during the past year,
and if so, an overview of any changes that were made:
There were no changes made in the remuneration policy for FY 2019-20.
A discussion of how the Bank ensures that risk and compliance employees are remunerated
independently of the businesses they oversee:
The Bank ensures that risk and compliance employees are remunerated independently of the
businesses they oversee and is guided by the individual employee performance. The remuneration
is determined on the basis of relevant risk measures included in the Balanced Scorecard / key
deliverables of staff in these functions. The parameters reviewed for performance based rewards
are independent of performance of the business area they oversee and commensurate with their
individual role in the Bank. Additionally, the ratio of fixed and variable compensation is weighed
towards fixed compensation.
c)
Description of the ways in which current and future risks are taken into account in the remuneration
processes:
An overview of the key risks that the Bank takes
remuneration measures:
into account when
implementing
The business activity of the Bank is undertaken within the limits of the following risk measures to
achieve the financial plan. The Financial Perspective in the Bank’s BSC contains metrics pertaining
to growth, profitability and asset quality. These metrics along with other metrics in customer,
internal process and compliance and people perspective are taken into account while arriving at the
remuneration decisions. The metrics on internal process and compliance ensure due weightage to
non – financial risk that bank may be exposed to.
An overview of the nature and type of key measures used to take account of these risks, including
risk difficult to measure:
The Bank has a robust system of measuring and reviewing these risks. The risk parameters are a part
of the Balanced Scorecard used for setting of performance objectives and for measuring performance
which includes, besides financial performance, adherence to internal processes, compliance and
people perspectives. Weightage is placed on not only financial or quantitative achievement of
objectives but also on qualitative aspects detailing how the objectives were achieved.
A discussion of the ways in which these measures affect remuneration:
The relevant risk measures are included in the scorecards of MD & CEO and WTDs. Inclusion of
the above mentioned measures ensures that performance parameters are aligned to risk measures
at the time of performance evaluation. The Nomination and Remuneration Committee takes into
consideration all the above aspects while assessing organisational and individual performance and
making compensation related recommendations to the Board.
A discussion of how the nature and type of these measures have changed over the past year and
reasons for the changes, as well as the impact of changes on remuneration:
226
Financial Statements
The Bank continued to track key metrics across financial, customer, internal process and compliance
and people perspective as part of FY20 BSC. During FY2019-20, metrics on digitizing customer
journeys and strengthening of internal processes were incorporated to reinforce focus on delivering
superior customer experience. Further, critical deliverables were included to drive progress on the
Bank’s GPS strategy.
d) Description of the ways in which the Bank seeks to link performance during a performance measurement
period with levels of remuneration:
The Bank’s performance management and compensation philosophies are structured to support the
achievement of the Bank’s on-going business objectives by rewarding achievement of objectives linked
directly to its strategic business priorities. These strategic priorities are cascaded through annualised
objectives to the employees.
The Bank follows the Balanced Scorecard approach in designing its performance management system.
Adequate attention is given to the robust goal setting process to ensure alignment of individual
objectives to support the achievement of business strategy, financial and non-financial goals across and
through the organisation. The non-financial goals for employees includes customer service, process
improvement, adherence to risk and compliance norms, operations and process control, learning and
knowledge development.
An overview of main performance metrics for Bank, top level business lines and individuals:
The Bank follows a Balanced Scorecard approach for measuring performance for the Bank, top
business lines and individuals. The approach broadly comprises financial, customer, internal processes,
compliance, and people perspectives and includes parameters on revenue and profitability, business
growth, customer initiatives, operational efficiencies, regulatory compliance, risk management and
people management.
A discussion of how amounts of individual remuneration are linked to the Bank-wide and
individual performance:
The Bank’s remuneration practices are underpinned by principles of meritocracy and fairness. The
remuneration system strives to maintain the ability to attract, retain, reward and motivate the talent
in order to enable the Bank to attain its strategic objectives within the increasingly competitive
context in which it operates. The Bank’s pay-for-performance approach strives to ensure both
internal and external equity in line with emerging market trends. However, the business model and
affordability form the overarching boundary conditions.
The Bank follows a Balanced Scorecard approach for measuring performance at senior levels. The
Balanced Scorecard parameters for individuals are cascaded from the Bank’s Balanced Scorecard.
The Management Committee or the Nomination and Remuneration Committee reviews the
achievements against the set of parameters which determines the performance of the individuals. For
all other employees, performance appraisals are conducted annually and initiated by the employee
with self-appraisal. The immediate supervisor reviews the appraisal ratings in a joint consultation
meeting with the employee and assigns the performance rating. The final ratings are discussed
by a Moderation Committee comprising of senior officials of the Bank. Both relative and absolute
individual performances are considered for the moderation process. Individual fixed pay increases,
variable pay and ESOPs are linked to the final performance ratings.
A discussion of the measures the Bank will in general implement to adjust remuneration in the event
that performance metrics are weak:
In cases where the performance metrics are weak or not well defined to measure the performance
effectively, the Bank uses discretion to reward such employees. The remuneration is then influenced by
the operational performance parameters of the Bank along with individual performance achievement.
Whilst determining fixed and variable remuneration, relevant risk measures are included in scorecards
of senior employees. The Financial Perspective in the Bank’s BSC contains metrics pertaining to
227
Annual Report 2019-20Experience Open
Standalone Financial Statements
growth, profitability and asset quality. These metrics along with other metrics in customer, internal
process and compliance and people perspective are taken into account while arriving at the
remuneration decisions. The metrics on internal process and compliance ensure due weightage to
non – financial risk that bank may be exposed to.
As a prudent measure, a portion of variable pay if it exceeds a certain threshold is deferred and
is paid proportionately over a period of 3 years. The deferred variable pay amount of reference
year would be held back in case of any misrepresentation or gross inaccuracy resulting in a wrong
risk assessment.
e) Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer
term performance:
A discussion of the Bank’s policy on deferral and vesting of variable remuneration and, if the fraction
of variable remuneration that is deferred differs across employees or groups of employees, a
description of the factors that determine the fraction and their relative importance:
The deferral of the Variable Pay for the three categories of employees as stated earlier is given below:
Category 1: MD & CEO and WTDs
Variable Pay will not exceed 70% of the Fixed Pay
To ensure that risk measures do not focus only on achieving short term goals, variable payout
is deferred. If the variable pay exceeds 40% of fixed pay, 45% of the variable pay to be deferred
proportionately over a period of three years.
Category 2: All the employees in the Grade of Vice President and above engaged in the functions of
Risk Control and Compliance
-
-
-
-
-
Variable Pay will be paid on the basis of laid down risk control, compliance and process
improvement parameters in the balanced scorecard / key deliverables of staff in this function
The parameters will be independent of performance of the business area they oversee and will
commensurate with their key role in the Bank
The ratio of fixed and variable compensation will be weighed towards fixed compensation
Percentage of variable pay to be capped at 70% of fixed pay
Appropriate deferral structure as approved by the Nomination and Remuneration Committee
will be applicable to this category of employees
Category 3: Other Staff
-
-
-
Variable Pay will be paid on the basis of performance against key deliverables and overall
business performance for the financial year
Percentage of variable pay to be capped at 70% of fixed pay
Appropriate deferral structure as approved by the Nomination and Remuneration Committee
will be applicable to this category of employees
A discussion of the Bank’s policy and criteria for adjusting deferred remuneration before vesting and
(if permitted by national law) after vesting through claw back arrangements:
The deferred portion of the variable pay may be delayed in the event of an enquiry determining gross
negligence or breach of integrity. The deferred portion is withheld by the Bank till the completion of
such enquiries, if any. As a result, no claw back arrangements are made on the deferred portion of
the variable pay.
228
Financial Statements
f) Description of the different forms of variable remuneration that the Bank utilizes and the rationale for
using these different forms:
An overview of the forms of variable remuneration offered:
•
•
Variable Pay: Variable Pay is linked to corporate performance, business performance and
individual performance and ensures differential pay based on the performance levels of employees
Employee Stock Options (ESOPs): ESOPs are given to selective set of employees at senior levels
based on their level of performance and role. ESOP scheme has an inbuilt deferred vesting
design which helps in directing long term performance orientation among employees
A discussion of the use of different forms of variable remuneration and, if the mix of different forms
of variable remuneration differs across employees or group of employees, a description of the factors
that determine the mix and their relative importance:
Variable pay in the form of performance based bonus is paid out annually and is linked to performance
achievement against balanced performance measures and aligned with the principles of meritocracy.
The proportion of variable pay in total pay shall be higher at senior management levels. The payment
of all forms of variable pay is governed by the affordability of the Bank and based on profitability and
cost income ratios. At senior management levels (and for certain employees with potential to cause
material impact on risk exposure), a portion of variable compensation may be paid out in a deferred
manner in order to drive prudent behaviour as well as long term & sustainable performance orientation.
Long term variable pay is administered in the form of ESOPs with an objective of enabling employee
participation in the business as an active stakeholder and to usher in an ‘owner-manager’ culture. The
quantum of grant of stock options is determined and approved by the Nomination and Remuneration
Committee, in terms of the said Regulations and in line with best practices, subject to the approval of
RBI. The current ESOP design has an inbuilt deferral intended to spread and manage risk.
Quantitative disclosures
a)
The quantitative disclosures pertaining to the MD & CEO, Whole Time Directors and other risk takers
for the year ended 31 March, 2020 and 31 March, 2019 are given below. Other risk takers include all
employees in the grade of Executive Vice President (EVP) and above and also cover certain select roles in
case they are below the grade of EVP.
a.
b.
c.
d.
e.
f.
g.
h.
i) Number of meetings held by the Remuneration Committee (main body
overseeing remuneration) during the financial year
ii) Remuneration paid to its members (sitting fees)
Number of employees having received a variable remuneration award
during the financial year
Number and total amount of sign-on awards made during the financial year
Number and total amount of guaranteed bonus awarded during the
financial year, if any
Details of severance pay, in addition to accrued benefits, if any
Total amount of outstanding deferred remuneration, split into cash, shares
and share-linked instruments and other forms
Total amount of deferred remuneration paid out in the financial year
Breakdown of amount of remuneration awards for the financial year to
show fixed and variable, deferred and non-deferred, different forms used
31 March, 2020
31 March, 2019
6
16
`1,200,000
36*
`2,950,000
29*
N.A.
N.A.
N.A.
-
Nil
Fixed - `66.53
crores#
Variable - `14.23
crores*
Deferred – Nil
Non-deferred -
`14.23 crores*
Number of stock
options granted
during the financial
year – 3,718,000
N.A.
N.A.
N.A.
-
`0.34 crores
Fixed - `49.80
crores#
Variable - `9.41
crores*
Deferred – Nil
Non-deferred -
`9.41 crores*
Number of stock
options granted
during the financial
year – 2,479,000
229
Annual Report 2019-20Experience Open
Standalone Financial Statements
i.
j.
k.
Total amount of outstanding deferred remuneration and retained
remuneration exposed to ex-post explicit and/or implicit adjustments
Total amount of reductions during the financial year due to ex- post explicit
adjustments
Total amount of reductions during the financial year due to ex- post implicit
adjustments
31 March, 2020
31 March, 2019
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
* pertains to FY 2018-19 paid to MD & CEO, WTDs and other risk takers (previous years pertains to FY 2016-17 paid to MD
& CEO and WTDs and for FY 2017-18 paid to other risk takers)
# Fixed Remuneration includes basic salary, fixed allowance, leave fare concession, house rent allowance, super annuation
allowance, certain other allowances, gratuity payout, leave encashment and contribution towards provident fund and
superannuation fund. Payments in nature of reimbursements have been excluded from fixed remuneration.
b) Disclosure for compensation of Non-executive Directors (Except Part-time Chairman):
a.
Amount of remuneration paid during the year
(pertains to preceding year)
(` in crores)
31 March, 2020
31 March, 2019
0.95
-
2.1.35
The details of fees / brokerage earned in respect of insurance broking, agency and bancassurance business
undertaken by the Bank are as under:
(` in crores)
Sr.
No.
1.
2.
3.
4.
Nature of Income
31 March, 2020
31 March, 2019
For selling life insurance policies
For selling non-life insurance policies
For selling mutual fund products
Others (wealth advisory, RBI and other bonds etc.)
Total
692.02
76.17
291.94
57.07
1,117.20
640.50
68.62
416.09
99.11
1,224.32
2.1.36
The Bank has not sponsored any special purpose vehicle which is required to be consolidated in the consolidated
financial statements as per accounting norms.
2.1.37
Amount of total assets, non-performing assets and revenue of overseas branches is given below:
Particulars
Total assets
Total NPAs
Total revenue
(` in crores)
31 March, 2020
31 March, 2019
53,673.52
4,420.07
2,058.04
47,941.15
3,727.06
3,416.09
2.1.38 During the years ended 31 March, 2020 and 31 March, 2019 the value of sales/transfers of securities to/from
HTM category (excluding one-time transfer of securities and sales to RBI under OMO auctions) did not exceed
5% of the book value of investments held in HTM category at the beginning of the year.
2.1.39 Disclosure on transfers to Depositor Education and Awareness Fund (DEAF)
Particulars
Opening balance of amounts transferred to DEAF
Add : Amounts transferred to DEAF during the year
Less : Amounts reimbursed by DEAF towards claims
Closing balance of amounts transferred to DEAF
(` in crores)
31 March, 2020
31 March, 2019
161.53
73.92
(2.94)*
232.51
97.14
66.85
(2.46)*
161.53
*includes
`0.38 crores (previous year `0.16 crores) of claim raised and pending settlement with RBI
230
Financial Statements
2.1.40 Disclosure on Intra-Group Exposures
Particulars
Total amount of intra-group exposures
Total amount of top-20 intra-group exposures
Percentage of intra-group exposures to total exposure of the Bank on borrowers/
customers
(` in crores)
31 March, 2020
31 March, 2019
3,377.94
3.377.89
0.31
6,895.64
6,895.64
0.85
During the years ended 31 March, 2020 and 31 March, 2019, the intra-group exposures were within the limits
specified by RBI.
The above information is as certified by the Management and relied upon by the auditors.
2.1.41 Unhedged Foreign Currency Exposure
The Bank’s Corporate Credit Policy lays down the framework to manage credit risk arising out of unhedged
foreign currency exposures of the borrowers. Both at the time of initial approval as well as subsequent
reviews/renewals, the assessment of credit risk arising out of foreign currency exposure of the borrowers
include details of imports, exports, repayments of foreign currency borrowings, as well as hedges done by
the borrowers or naturally enjoyed by them vis-a-vis their intrinsic financial strength, history of hedging
and losses arising out of foreign currency volatility. The extent of hedge/cover required on the total foreign
currency exposure including natural hedge and hedged positions, is guided through a matrix of internal ratings.
The hedging policy is applicable for existing as well as new clients with foreign currency exposures above
a predefined threshold. The details of un-hedged foreign currency exposure of customers for transactions
undertaken through the Bank are monitored periodically. The Bank also maintains additional provision and
capital, in line with RBI guidelines.
During the year ended 31 March, 2020, the Bank made write back of provision of `10.68 crores (previous year
provision made of `18.79 crores) towards un-hedged foreign currency exposures. As on 31 March, 2020, the
Bank held cumulative provision towards un-hedged foreign currency exposures of `120.21 crores (previous
year `130.89 crores).
As on 31 March, 2020, the Bank held incremental capital of `490.15 crores (previous year `191.52 crores)
towards borrowers having un-hedged foreign currency exposures.
2.1.42 Disclosure on provisioning pertaining to fraud accounts*
Particulars
Number of frauds reported during the year**
Amounts involved
Provisions held at the beginning of the year
Provisions made during the year
Balance held in interest capitalisation accounts
Provisions held at the end of the year
Unamortised provision debited from ‘other reserves’ as at the end of the year
*
disclosure covers only frauds relating to advances
(` in crores)
31 March, 2020
31 March, 2019
52
2,030.60
752.23
1,272.93
5.44
2,030.60
-
145
529.04
353.96
172.45
2.63
529.04
-
** excluding 72 cases (previous year 22 cases) amounting to `2,515.37 crores (previous year `540.46 crores) reported as fraud
during the year and subsequently prudentially written off within the financial year
2.1.43 Disclosure on provisioning pertaining to Land held under ‘Non-Banking assets acquired in satisfaction of claims’
Particulars
Amount of Land held under ‘Non-Banking assets acquired in satisfaction of claims’*
Provisions made during the year by debiting profit and loss account
Provisions reversed during the year*
Provisions held at the end of the year by debiting profit and loss account
Unamortised provision debited from ‘Balance in profit and loss account’ under
‘Reserves and Surplus’
* during the year Bank sold a parcel of land with a book value of `140.37 crores
(` in crores)
31 March, 2020
31 March, 2019
2,068.24
1,605.28
(140.37)
2,068.24
-
2,208.61
603.33
-
603.33
1,605.28
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Annual Report 2019-20Experience Open
Standalone Financial Statements
2.1.44 Detail of Priority Sector Lending Certificates (PSLC) purchased by the Bank are set out below:
Category
PSLC – Small & Micro Farmers
PSLC – General
PSLC – Micro Enterprises
PSLC – Agriculture
Total
Details of PSLCs sold by the Bank are set out below:
Category
PSLC – General
PSLC - Micro Enterprises
Total
2.1.45 Disclosure on Liquidity Coverage Ratio
(` in crores)
31 March, 2020
31 March, 2019
23,830.00
9,900.00
8,790.50
5,800.00
48,320.50
-
17,470.00
2,375.00
-
19,845.00
(` in crores)
31 March, 2020
31 March, 2019
44,320.00
4,000.00
48,320.00
385.00
-
385.00
Qualitative disclosure
The Bank has adopted the Basel III framework on liquidity standards as prescribed by RBI and has put in place
requisite systems and processes to enable periodical computation and reporting of the Liquidity Coverage
Ratio (LCR). The mandated regulatory threshold is embedded into the Risk Appetite Statement of the Bank
thus subjecting LCR maintenance to Board oversight and periodical review. The Bank computes the LCR and
reports the same to the Asset Liability Management Committee (ALCO) every month for review as well as to
the Risk Management Committee of the Board.
The Bank computes LCR on a daily basis and in accordance with RBI guidelines the quarterly disclosures of LCR
contain data on the simple average calculated on daily observations over a period of 90 days.
The Bank follows the criteria laid down by RBI for calculation of High Quality Liquid Assets (HQLA), gross
outflows and inflows within the next 30-day period. HQLA predominantly comprises Government securities
viz. Treasury Bills, Central and State Government securities. A relatively smaller part of HQLA is accounted for
by the corporate bonds with mandated haircuts applied thereto.
The Bank monitors the concentration of funding sources from significant counterparties, significant
instruments/products as part of the asset liability management framework. The Bank adheres to the regulatory
and internal limits on Inter-bank liability and call money borrowings which form part of the ALM policy. The
Bank’s funding sources are fairly dispersed across sources and maturities.
Expected derivative cash outflows and inflows are calculated for outstanding contracts in accordance
with laid down valuation methodologies. Cash flows, if any, from collaterals posted against derivatives are
not considered.
Apart from the LCR position in all currencies put together, the Bank monitors the LCR in US Dollar currency
which qualifies as a significant currency as per RBI guidelines.
The liquidity risk management of the Bank is undertaken by the Asset Liability Management group in the
Treasury in accordance with the Board approved policies and ALCO approved funding plans. The Risk
department measures and monitors the liquidity profile of the Bank with reference to the Board approved
limits, for both domestic as well as overseas operations, on a static as well as on a dynamic basis by using
the gap analysis technique supplemented by monitoring of key liquidity ratios and periodical liquidity stress
testing. Periodical reports are placed before the Bank’s ALCO for perusal and review.
All significant outflows and inflows determined in accordance with RBI guidelines are included in the prescribed
LCR computation template.
232
Financial Statements
Quantitative disclosure
High Quality Liquid Assets
1
Total High Quality Liquid Assets
(HQLAs)
Cash Outflows
2
Retail Deposits and deposits from
small business customers, of which:
Stable Deposits
Less Stable Deposits
Unsecured wholesale funding, of
which :
(i)
(ii)
3
Quarter ended 31 March, 2020
Quarter ended
31 December, 2019
Quarter ended
30 September, 2019
Quarter ended
30 June, 2019
Total
Unweighted
Value (average)
Total Weighted
Value (average)
Total
Unweighted
Value (average)
Total Weighted
Value (average)
Total
Unweighted
Value (average)
Total Weighted
Value (average)
Total
Unweighted
Value (average)
Total Weighted
Value (average)
(` in crores)
1,53,367.16
136,689.42
131,204.91
131,403.54
343,438.06
29,290.56
332,402.80
30,483.28
316,993.94
29,016.38
308,585.60
28,213.84
101,064.99
242,373.07
188,919.86
5,053.25
24,237.31
106,484.32
55,139.77
277,263.03
173,900.62
2,756.99
27,726.29
87,383.69
53,660.26
263,333.68
158,269.16
2,683.01
26,333.37
79,179.07
52,894.53
255,691.07
163,736.68
2,644.73
25,569.11
82,229.45
(i) Operational deposits (all
12,446.47
3,091.07
40,926.39
10,219.61
40,975.45
10,232.28
45,252.80
11,301.58
counterparties)
(ii) Non-operational deposits (all
176,473.39
103,393.25
132,974.23
77,164.08
117,293.71
68,946.79
118,483.88
70,927.87
counterparties)
(iii) Unsecured debt
Secured wholesale funding
Additional requirements, of which:
(i) Outflows related to derivative
exposures and other collateral
requirements
-
41,661.37
35,283.57
-
205.42
37,484.42
35,283.57
-
29,064.70
20,856.03
-
30.76
23,845.67
20,856.03
-
29,973.51
19,769.56
-
-
24,432.21
19,769.56
-
31,272.56
24,356.76
-
-
25,562.49
24,356.76
(ii) Outflows related to loss of funding
-
-
-
-
-
-
-
-
on debt products
(iii) Credit and liquidity facilities
Other contractual funding
obligations
Other contingent funding
obligations
Total Cash Outflows
8
Cash Inflows
9
10
Secured lending (eg. reverse repo)
Inflows from fully performing
exposures
Other cash inflows
Total Cash Inflows
6,377.80
5,186.45
2,200.85
5,186.45
8,208.67
5,329.08
2,989.64
5,329.08
10,203.95
5,567.56
4,662.65
5,567.56
6,915.80
5,993.94
1,205.73
5,993.94
259,508.03
10,958.57
260,446.40
10,975.47
263,394.18
11,116.33
240,539.04
9,882.59
189,609.74
158,047.95
149,311.55
151,882.31
28,920.03
29,834.23
-
20,486.21
15,742.82
26,837.93
-
18,100.37
6,085.12
29,440.23
-
21,375.26
7,475.08
32,929.08
-
23,639.66
33,896.15
92,650.41
33,896.15
54,382.36
19,463.48
62,044.23
19,463.48
37,563.85
18,595.27
54,120.62
18,595.27
39,970.53
23,694.78
64,098.94
23,694.78
47,334.44
Total adjusted Value
Total adjusted Value
Total adjusted Value
Total adjusted Value
Total HQLA
Total Net Cash Outflows
Liquidity Coverage Ratio %
153,367.16
135,227.38
113.41%
136,689.42
120,484.10
113.45%
131,204.91
109,341.02
120.00%
131,403.54
104,547.87
125.69%
4
5
6
7
11
12
21
22
23
Notes:
1) Average for all the quarters is simple average of daily observations for the quarter.
2) Classification of inflows and outflows for determining the run off factors is based on the same estimates and assumptions
as used by the Bank for compiling the return submitted to the RBI, which has been relied upon by the auditors.
3)
In compliance with the RBI directive received, the Bank has computed LCR as per the revised definition of ‘Operational
Deposits’ with effect from 20 December, 2019. As a result, the LCR for the quarter ended 31 March, 2020 is strictly not
comparable with the LCR reported for previous quarters.
233
Annual Report 2019-20Experience Open Standalone Financial Statements
Quarter ended
31 March, 2019
Quarter ended
31 December, 2018
Quarter ended
30 September, 2018
Quarter ended
30 June, 2018
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
Total Unweighted
Value (average)
Total Weighted
Value (average)
(` in crores)
122,173.58
112,336.65
98,417.24
82,905.66
High Quality Liquid Assets
1
Total High Quality
Liquid Assets (HQLAs)
Cash Outflows
2
(i)
(ii)
Retail Deposits and
deposits from small
business customers, of
which:
Stable Deposits
Less Stable Deposits
Unsecured wholesale
funding, of which :
(i) Operational deposits
(all counterparties)
(ii) Non-operational
deposits (all
counterparties)
(iii) Unsecured debt
Secured wholesale
funding
Additional
requirements, of which:
(i) Outflows related to
derivative exposures
and other collateral
requirements
(ii) Outflows related to
loss of funding on debt
products
8
Cash Inflows
9
facilities
Other contractual
funding obligations
Other contingent
funding obligations
Total Cash Outflows
Secured lending (eg.
reverse repo)
Inflows from fully
performing exposures
Other cash inflows
Total Cash Inflows
Total HQLA
Total Net Cash
Outflows
Liquidity Coverage
Ratio %
3
4
5
6
7
10
11
12
21
22
23
288,756.01
26,298.55
276,752.92
25,082.62
262,954.38
23,773.05
250,441.74
22,587.17
51,541.11
237,214.90
156,131.98
2,577.06
23,721.49
79,803.19
51,853.44
224,899.48
147,846.47
2,592.67
22,489.95
74,665.27
50,447.68
212,506.70
138,551.93
2,522.38
21,250.67
71,267.03
49,140.03
201,301.71
133,534.29
2,457.00
20,130.17
68,572.86
45,839.18
11,448.44
45,614.30
11,396.72
42,070.15
10,511.43
41,286.10
10,315.38
110,292.80
68,354.75
102,232.17
63,268.55
96,481.78
60,775.60
92,248.19
58,257.48
-
-
-
-
-
489.13
-
-
-
-
-
1,315.08
33,663.94
22,274.62
44,959.20
31,958.57
39,442.47
27,091.98
37,859.76
25,588.32
20,690.63
20,690.63
30,309.69
30,309.69
25,518.93
25,518.93
23,839.39
23,839.39
35.28
35.28
112.93
112.93
179.59
179.59
136.23
136.23
5,481.21
5,481.21
5,347.92
5,347.92
4,303.74
4,241.13
4,115.59
4,025.59
229,362.92
9,296.33
232,701.55
9,189.17
236,628.98
9,380.16
226,614.14
8,914.06
143,153.90
146.732.68
135,753.34
131,003.08
9,018.11
-
4,657.91
-
3,172.41
-
2,130.44
-
34,209.85
24,150.15
34,751.35
24,671.71
36,368.55
24,909.84
31,469.06
20,819.65
20,164.89
63,392.85
Total adjusted Value
20,164.89
44,315.04
30,454.88
69,864.14
Total adjusted Value
30,454.88
55,126.59
25,478.59
65,019.55
Total adjusted Value
25,478.59
50,388.43
23,503.92
57,103.42
Total adjusted Value
23,503.92
44,323.57
122,173.58
98,838.86
123.61%
112,336.65
91,606.09
122.63%
98,417.24
85,364.91
115.29%
82,905.66
86,679.51
95.65%
(iii) Credit and liquidity
12,938.03
1,548.71
14,536.58
1,535.95
13,743.95
1,393.46
13,884.14
1,612.70
Notes:
1) Average for all the quarters is simple average of daily observations for the quarter.
2) Classification of inflows and outflows for determining the run off factors is based on the same estimates and assumptions
as used by the Bank for compiling the return submitted to the RBI, which has been relied upon by the auditors.
234
Financial Statements 2.2 Other disclosures
2.2.1
2.2.2
2.2.3
During the year, the Bank has appropriated `340.46 crores (previous year `124.93 crores) to the Capital
Reserve, net of taxes and transfer to Statutory Reserve, being the gain on sale of HTM investments in
accordance with RBI guidelines. As advised by RBI, the Bank has also appropriated `0.06 crores (previous year
`0.16 crores) to the Capital Reserve, net of taxes and transfer to Statutory Reserve, being the profit on sale of
immovable property.
During the year, the Bank has appropriated `328.00 crores (previous year `600.00 crores) to the Investment
Fluctuation Reserve in accordance with RBI guidelines.
During the year, the Bank has appropriated `0.85 crores (previous year `0.63 crores) to Reserve Fund account
towards statutory reserve in accordance with guidelines issued by Central Bank of Sri Lanka in respect of
Colombo branch operations.
2.2.4
Earnings Per Share (‘EPS’)
The details of EPS computation is set out below:
Category
31 March, 2020
31 March, 2019
Basic and Diluted earnings for the year (Net profit after tax) (` in crores)
Basic weighted average no. of shares (in crores)
Add: Equity shares for no consideration arising on grant of stock options under ESOP
(in crores)
Diluted weighted average no. of shares (in crores)
Basic EPS (`)
Diluted EPS (`)
Nominal value of shares (`)
1,627.22
271.51
0.98
272.49
5.99
5.97
2.00
4,676.61
256.90
1.58
258.48
18.20
18.09
2.00
Dilution of equity is on account of 8,395,776 stock options and 1,420,559 warrants (previous year 9,813,655
stock options and 6,033,509 warrants).
2.2.5
Employee Stock Options Scheme (‘the Scheme’)
Pursuant to the approval of the shareholders in February 2001, the Bank approved an Employee Stock Option
Scheme under which eligible employees are granted an option to purchase shares subject to vesting conditions.
Over the period till March 2020, pursuant to the approval of the shareholders, the Bank approved ESOP
schemes for options aggregating 265,087,000 that vest in a graded manner over 3 years. The options can be
exercised within three/five years from the date of the vesting as the case may be. Within the overall ceiling of
265,087,000 stock options approved for grant by the shareholders as stated earlier, the Bank is authorised to
issue options to eligible employees and Whole Time Directors of the subsidiary companies.
259,613,700 options have been granted under the Schemes till the previous year ended 31 March, 2019.
Pursuant to the approval of the Nomination and Remuneration Committee on 27 March, 2019, the Bank
granted 8,650,150 stock options (each option representing entitlement to one equity share of the Bank) to
its eligible employees/directors of the Bank/subsidiary companies at a grant price of `757.10. Further, during
FY2019-20, the Bank granted stock options (each option representing entitlement to one equity share of the
Bank) to its eligible employees/directors of the Bank/subsidiary companies, the details of which are as under:
Date of grant
25 April, 2019
29 July, 2019
21 January, 2020
No. of options
granted
Grant price
(` per option)
430,000
90,000
330,000
752.85
729.85
727.20
235
Annual Report 2019-20Experience Open
Standalone Financial Statements
Stock option activity under the Scheme for the year ended 31 March, 2020 is set out below:
Options outstanding
Range of exercise
prices (`)
Weighted
average exercise
price (`)
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
30,132,874
9,500,150
(1,018,650)
(950)
(5,947,539)
32,665,885
20,373,840
288.96 to 619.60
727.20 to 757.10
306.54 to 757.10
288.96
288.96 to 535.00
306.54 to 757.10
306.54 to 757.10
465.06
755.61
623.71
288.96
397.02
557.01
505.98
The weighted average share price in respect of options exercised during the year was `715.09.
Stock option activity under the Scheme for the year ended 31 March, 2019 is set out below:
Options outstanding
Range of exercise
prices (`)
Weighted
average exercise
price (`)
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
29,554,909
6,455,000
(748,700)
(22,400)
(5,105,935)
30,132,874
17,138,224
217.33 to 535.00
504.85 to 619.60
306.54 to 535.00
288.96
217.33 to 535.00
288.96 to 619.60
288.96 to 535.00
432.45
516.05
500.67
288.96
336.29
465.06
436.22
The weighted average share price in respect of options exercised during the year was `623.15.
Weighted average
remaining
contractual life
(Years)
4.13
-
-
-
-
4.15
3.03
Weighted average
remaining
contractual life
(Years)
4.22
-
-
-
-
4.13
2.87
Fair Value Methodology
On applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’
the impact on reported net profit and EPS would be as follows:
in net
income
included
Net Profit (as reported) (` in crores)
Add: Stock based employee compensation expense
(` in crores)
Less: Stock based employee compensation expense determined under fair value based
method (proforma) (` in crores)
Net Profit (Proforma) (` in crores)
Earnings per share: Basic (in ` )
As reported
Proforma
Earnings per share: Diluted (in `)
As reported
Proforma
31 March, 2020
31 March, 2019
1,627.22
-
4,676.61
-
(137.07)
(95.04)
1,490.15
4,581.57
5.99
5.49
5.97
5.47
18.20
17.83
18.09
17.77
During the years ended, 31 March, 2020 and 31 March, 2019, no cost has been incurred by the Bank on ESOPs
issued to the employees of the Bank and employees of subsidiaries under the intrinsic value method.
236
Financial Statements
The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing
model, with the following assumptions:
Dividend yield
Expected life
Risk free interest rate
Volatility
31 March, 2020
31 March, 2019
0.54%
1.82-3.82 years
5.99% to 6.96%
0.76%
2.57-4.57 years
7.07% to 7.63%
28.07% to 28.60% 28.78% to 30.82%
Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a
period. The measure of volatility used in the Black-Scholes options pricing model is the annualised standard
deviation of the continuously compounded rates of return on the stock over a period of time. For calculating
volatility, the daily volatility of the stock prices on the National Stock Exchange, over a period prior to the date
of grant, corresponding with the expected life of the options has been considered.
The weighted average fair value of options granted during the year ended 31 March, 2020 is `200.15
(previous year `164.10).
On 18 March, 2020, the Nomination and Remuneration Committee of the Board of Directors of the Bank has
approved the grant of upto 12,500,000 stock options to eligible employees. As on 31 March, 2020, there have
been no allotments of options under this grant. Accordingly, these options have not been considered in the
above disclosure and for disclosure of proforma net profit and EPS under fair value method for FY 2019-20.
2.2.6
Proposed Dividend
The Reserve Bank of India, vide its circular dated 17 April, 2020, has advised that banks shall not make any
further dividend payouts from profits pertaining to the financial year ended 31 March, 2020 until further
instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused
by COVID-19. Accordingly, the Board of Directors of the Bank has not proposed any dividend for the year
ended 31 March, 2020.
2.2.7
Segmental reporting
The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking
and Other Banking Business. These segments have been identified based on the RBI’s revised guidelines on
Segment Reporting issued on 18 April, 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The
principal activities of these segments are as under.
Segment
Treasury
Retail Banking
Principal Activities
Treasury operations include investments in sovereign and corporate debt, equity and mutual funds,
trading operations, derivative trading and foreign exchange operations on the proprietary account
and for customers. The Treasury segment also includes the central funding unit.
Constitutes lending to individuals/small businesses through the branch network and other delivery
channels subject to the orientation, nature of product, granularity of the exposure and the quantum
thereof. Retail Banking activities also include liability products, card services, internet banking,
mobile banking, ATM services, depository, financial advisory services and NRI services.
Corporate/Wholesale
Banking
Includes corporate relationships not included under Retail Banking, corporate advisory services,
placements and syndication, project appraisals, capital market related services and cash
management services.
Other Banking Business
Includes para banking activities like third party product distribution and other banking transactions
not covered under any of the above three segments.
Unallocated assets and liabilities - All items which are reckoned at an enterprise level are classified under this
segment such as deferred tax, money received against share warrants, tax paid in advance net of provision, etc.
Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and
interest income on the investment portfolio. The principal expenses of the segment consist of interest expense
237
Annual Report 2019-20Experience Open
Standalone Financial Statements
on funds borrowed from external sources and other internal segments, premises expenses, personnel costs,
other direct overheads and allocated expenses.
Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given
to customers falling under this segment and fees arising from transaction services and merchant banking
activities such as syndication and debenture trusteeship. Revenues of the Retail Banking segment are derived
from interest earned on loans classified under this segment, fees for banking and advisory services, ATM
interchange fees and cards products. Expenses of the Corporate/Wholesale Banking and Retail Banking
segments primarily comprise interest expense on deposits and funds borrowed from other internal segments,
infrastructure and premises expenses for operating the branch network and other delivery channels, personnel
costs, other direct overheads and allocated expenses.
Segment income includes earnings from external customers and from funds transferred to the other segments.
Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any,
for that segment. Segment-wise income and expenses include certain allocations. Inter segment interest income
and interest expense represent the transfer price received from and paid to the Central Funding Unit (CFU)
respectively. For this purpose, the funds transfer pricing mechanism presently followed by the Bank, which
is based on historical matched maturity and internal benchmarks, has been used. Operating expenses other
than those directly attributable to segments are allocated to the segments based on an activity-based costing
methodology. All activities in the Bank are segregated segment-wise and allocated to the respective segment.
Effective 1 April, 2019, the Bank has reported inter segment revenue and inter segment expense in the Central
Funding Unit (which forms part of Treasury segment) on a net basis as against earlier practice of reporting
revenue and expenses on a gross basis. Accordingly, segmental revenue numbers for the previous period have
been restated to make them comparable with current period numbers. There is no impact of this change on the
segmental profit before tax.
Segmental results are set out below:
Segment Revenue
Gross interest income (external customers)
Other income
Total income as per Profit and Loss Account
Add/(less) inter segment interest income
Total segment revenue
Less: Interest expense (external customers)
Less: Inter segment interest expense
Less: Operating expenses
Operating profit
Less: Provision for non-performing assets/others*
Less: Unallocated Provision for other contingencies#
Segment result
Less: Provision for tax
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Net assets
Capital expenditure for the year
Depreciation on fixed assets for the year
Corporate/
Wholesale
Banking
18,538.09
3,852.72
22,390.81
6,524.53
28,915.34
1,241.93
14,464.23
4,413.50
8,795.68
9,726.06
31 March, 2020
Retail
Banking
29,522.85
6,453.32
35,976.17
25,323.09
61,299.26
19,841.31
19,896.23
12,267.84
9,293.88
4,325.55
Other
Banking
Business
-
1,242.36
1,242.36
0.01
1,242.37
-
0.66
321.19
920.52
0.38
Treasury
14,574.22
3,988.16
18,562.38
4,813.04
23,375.42
16,345.72
2,299.55
302.09
4,428.06
2,599.64
1,828.42
(930.38)
4,968.33
920.14
320,153.31
257,557.11
328,156.61
283.88
291,911.84
132,443.67
403,812.82
63.49
28,241.47
6.89
6.12
125,113.44
229.82
204.10
(75,656.21)
624.99
555.04
220.39
8.66
7.69
(` in crores)
Total
62,635.16
15,536.56
78,171.72
36,660.67
114,832.39
37,428.96
36,660.67
17,304.62
23,438.14
16,651.63
1,882.28
4,904.23
3,277.01
-
1,627.22
906,150.91
9,013.91
915,164.82
828,231.82
1,985.15
830,216.97
84,947.85
870.36
772.95
* represents material non-cash items other than depreciation
# represents provision for COVID-19 over and above regulatory requirement, per extant guidelines as on date of adoption of
financial statements by the Board
238
Financial Statements
Segment Revenue
Gross interest income (external customers)
Other income
Total income as per Profit and Loss Account
Add/(less) inter segment interest income
Total segment revenue
Less: Interest expense (external customers)
Less: Inter segment interest expense
Less: Operating expenses
Operating profit
Less: Provision for non-performing assets/others*
Segment result
Less: Provision for tax
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Net assets
Capital expenditure for the year
Depreciation on fixed assets for the year
Corporate/
Wholesale
Banking
17,439.94
4,320.54
21,760.48
6,175.11
27,935.59
1,170.08
13,520.57
3,800.03
9,444.91
9,026.31
418.60
31 March, 2019
Retail
Banking
23,697.43
5,224.37
28,921.80
20,249.77
49,171.57
15,222.58
16,536.06
11,265.40
6,147.53
2,248.59
3,898.94
Treasury
13,848.40
2,355.65
16,204.05
6,680.96
22,885.01
16,884.94
3,048.35
414.52
2,537.20
690.12
1,847.08
Other
Banking
Business
-
1,229.78
1,229.78
0.01
1,229.79
-
0.87
353.45
875.47
66.00
809.47
283,985.76
238,692.89
268,642.17
337.05
274,441.80
129,036.23
329,975.67
53.89
9,543.96
15.52
12.17
109,656.66
200.43
157.17
(61,333.50)
674.32
528.78
283.16
14.80
11.60
*represents material non-cash items other than depreciation
Geographic Segments
(` in crores)
Total
54,985.77
13,130.34
68,116.11
33,105.85
101,221.96
33,277.60
33,105.85
15,833.40
19,005.11
12,031.02
6,974.09
2,297.48
-
4,676.61
791,657.87
9,338.66
800,996.53
733,507.59
812.64
734,320.23
66,676.30
905.07
709.72
(` in crores)
Domestic
International
Total
31 March,
2020
76,113.68
861,491.30
869.05
771.16
31 March,
2019
64,700.02
753,055.38
902.89
707.05
31 March,
2020
2,058.04
53,673.52
1.31
1.79
31 March,
2019
3,416.09
47,941.15
2.18
2.67
31 March,
2020
78,171.72
915,164.82
870.36
772.95
31 March,
2019
68,116.11
800,996.53
905.07
709.72
Revenue
Assets
Capital Expenditure for the year
Depreciation on fixed assets for
the year
2.2.8
Related party disclosure
The related parties of the Bank are broadly classified as:
a)
Promoters
The Bank has identified the following entities as its Promoters.
• Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
• Life Insurance Corporation of India (LIC)
• General Insurance Corporation, New India Assurance Co. Limited, National Insurance Co. Limited,
United India Insurance Co. Limited and The Oriental Insurance Co. Limited.
239
Annual Report 2019-20Experience Open
Standalone Financial Statements
b) Key Management Personnel
• Mr. Amitabh Chaudhry (MD & CEO)
• Ms. Shikha Sharma (MD & CEO) (upto 31 December, 2018)
• Mr. V. Srinivasan (Deputy Managing Director) (upto 20 December, 2018)
• Mr. Rajesh Dahiya [Executive Director (Corporate Centre)]
• Mr. Rajiv Anand [Executive Director (Wholesale Banking)]
• Mr. Pralay Mondal [Executive Director (Retail Banking)] (w.e.f. 1 August, 2019)
c) Relatives of Key Management Personnel
Ms. Preeti Chaudhry, Mr. Anagh Chaudhry, Mr. Aruj Chaudhry, Mr. Aryan Chaudhry, Ms. Chhavi Kharb,
Mr. Om Singh Chaudhry, Ms. Kusum Chaudhry, Mr. Sanjaya Sharma, Ms. Usha Bharadwaj, Mr. Tilak
Sharma, Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr. Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena
Bharadwaj, Ms. Gayathri Srinivasan, Mr. V. Satish, Ms. Camy Satish, Ms. Ananya Srinivasan, Ms. Anagha
Srinivasan, Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr. S. Ranganathan, Mr. R. Narayan, Ms. Gitanjali
Anand, Ms. Tara Anand, Ms. Nandita Anand, Mr. P.L. Narain, Mr. P. Srinivas, Ms. Ratna Rao Shekar, Ms. P.
Kamashi, Ms. Hemant Dahiya, Ms. Arooshi Dahiya, Ms. Mallika Dahiya, Ms. Jal Medha, Ms. Pooja Rathi,
Mr. Jai Prakash Dahiya, Ms. Mahasweta Mondal, Ms. Pritha Mondal, Ms. Trina Mondal, Mr. Biplab Mondal,
Ms. Anima Mondal.
d)
Subsidiary Companies
• Axis Capital Limited
• Axis Private Equity Limited
• Axis Trustee Services Limited
• Axis Asset Management Company Limited
• Axis Mutual Fund Trustee Limited
• Axis Bank UK Limited
• Axis Finance Limited
• Axis Securities Limited
• A.Treds Limited
• Accelyst Solutions Private Limited
• Freecharge Payment Technologies Private Limited
e)
Step down subsidiary companies
• Axis Capital USA LLC
Based on RBI guidelines, details of transactions with step down subsidiaries are not disclosed since there
is only one entity/party in this category.
240
Financial Statements
The details of transactions of the Bank with its related parties during the year ended 31 March, 2020
are given below:
Items/Related Party
Promoters
Key
Management
Personnel
Dividend paid
Dividend received
Interest paid
Interest received
Investment of the Bank
Investment in non-equity instruments of related
party
Investment of related party in the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Remuneration paid
Contribution to employee benefit fund
Repayment of security deposits by related party
Non-funded commitments (issued)
Call/Term lending to related party
Repayment of Call/Term lending by related party
Swaps/Forward contracts
Advance granted (net)
Advance repaid
Purchase of loans
Sell down of loans (including undisbursed loan
commitments)
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Royalty received
Other reimbursements from related party
Other reimbursements to related party
46.04
-
551.48
0.19
-
-
-
55.00
-
1,318.04
-
-
15.42
-
-
-
-
-
-
5.31
-
-
202.74
29.38
-
-
-
0.19
0.04
-
1.07
0.26
-
-
5.44
-
-
-
-
15.84
-
-
-
-
-
-
-
6.01
-
-
-
0.01
1.48
-
-
-
Relatives
of Key
Management
Personnel#
-
-
0.15
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.03
-
-
-
(` in crores)
Subsidiaries
Total
-
240.26
15.57
53.95
6.70
45.00
-
-
369.16
-
12.87
-
-
-
-
55.61
55.61
79.34
0.45
86.47
-
-
178.55
50.60
-
3.03
37.77
10.53
46.08
240.26
568.27
54.40
6.70
45.00
5.44
55.00
369.16
1,318.04
12.87
15.84
15.42
-
-
55.61
55.61
79.34
0.45
97.79
-
-
381.29
79.99
1.51
3.03
37.77
10.72
# Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank.
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2020 are given below:
Items/Related Party
Promoters
Call/Term lending to related party
Deposits with the Bank
Placement of security deposits
Advances
Investment of the Bank
Investment in non-equity instruments of related
party
Investment of related party in the Bank
Non-funded commitments
Investment of related party in Hybrid capital/Bonds
of the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
-
7,119.06
0.31
1.31
-
-
88.56
3.32
2,760.00
-
-
-
Key
Management
Personnel
-
16.01
-
4.85
-
-
0.08
-
-
-
-
-
Relatives
of Key
Management
Personnel#
-
5.99
-
0.03
-
-
-
-
-
-
-
-
(` in crores)
Subsidiaries
Total
-
565.88
-
351.56
2,292.82
-
-
-
-
-
6.13
26.64
-
7,706.94
0.31
375.75
2,292.82
-
88.64
3.32
2,760.00
-
6.13
26.64
# Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank.
241
Annual Report 2019-20Experience Open
Standalone Financial Statements
The maximum balances payable to/receivable from the related parties of the Bank during the year ended
31 March, 2020 are given below:
Items/Related Party
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment of related party in the Bank
Investment in non-equity instruments of related
party
Non-funded commitments
Call lending
Swaps/Forward contracts
Investment of related party in Hybrid Capital/Bonds
of the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
16,652.92
0.31
11.51
-
93.60
290.05
3.33
-
-
2,815.00
-
-
-
Key
Management
Personnel
20.86
-
10.99
-
0.09
-
-
-
-
-
-
-
-
(` in crores)
Relatives
of Key
Management
Personnel
5.99
-
0.06
-
-
-
Subsidiaries
Total
1,106.09
-
1,473.93
2,292.82
-
-
17,785.86
0.31
1,496.49
2,292.82
93.69
290.05
-
-
-
-
-
-
-
-
55.61
1.51
-
-
17.94
88.19
3.33
55.61
1.51
2,815.00
-
17.94
88.19
The details of transactions of the Bank with its related parties during the year ended 31 March, 2019
are given below:
Items/Related Party
Promoters
Dividend paid
Dividend received
Interest paid
Interest received
Investment of the Bank
Investment in non-equity instruments of related party
Investment of related party in the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Management contracts
Remuneration paid
Contribution to employee benefit fund
Repayment of security deposits by related party
Non-funded commitments (issued)
Repayment of Call/Term lending by related party
Swaps/Forward contracts
Advance granted (net)
Advance repaid
Purchase of loans
Sell down of loans (including undisbursed loan
commitments)
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Other reimbursements from related party
Other reimbursements to related party
-
-
554.78
0.13
-
341.26
-
1,510.00
205.00
857.07
-
-
16.53
0.12
-
-
-
-
0.45
-
-
120.46
27.88
-
-
0.66
Key
Management
Personnel
-
-
0.41
1.09
-
-
17.93
-
-
-
-
18.49
-
-
-
-
-
-
7.38
-
-
-
0.03
1.35
-
-
Relatives
of Key
Management
Personnel#
-
-
0.12
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.01
-
-
(` in crores)
Subsidiaries
Total
-
131.10
17.41
22.19
197.17
50.00
-
-
-
-
18.64
-
-
-
-
352.14
138.31
22.15
621.41
-
-
969.90
195.79*
-
22.68
1.09
-
131.10
572.72
23.41
197.17
391.26
17.93
1,510.00
205.00
857.07
18.64
18.49
16.53
0.12
-
352.14
138.31
22.15
629.24
-
-
1,090.36
223.70
1.36
22.68
1.75
#
Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank
* Net of reversal of `46 crores towards fees receivable from Axis Asset Management Company Limited, pursuant to change in
SEBI guidelines
242
Financial Statements
The balances payable to/receivable from the related parties of the Bank as on 31 March, 2019 are given below:
Items/Related Party
Call/Term lending to related party
Deposits with the Bank
Placement of security deposits
Advances
Investment of the Bank
Investment in non-equity instruments of related
party
Investment of related party in the Bank
Non-funded commitments
Investment of related party in Hybrid capital/Bonds
of the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
-
9,146.04
0.31
6.62
-
290.05
93.60
3.33
2,790.00
-
-
-
Key
Management
Personnel
-
13.91
-
10.90
-
-
0.08
-
-
-
-
-
(` in crores)
Relatives
of Key
Management
Personnel#
-
0.55
-
0.03
-
-
Subsidiaries
Total
-
378.75
-
437.58
2,286. 12
-
-
9,539.25
0.31
455.13
2,286. 12
290. 05
-
-
-
-
-
-
-
-
-
93.68
3.33
2,790.00
-
17.94
88.19
-
17.94
88.19
# Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank.
The maximum balances payable to/receivable from the related parties of the Bank during the year ended
31 March, 2019 are given below:
Items/Related Party
Deposits with the Bank
Placement of deposits
Advances
Investment of the Bank
Investment of related party in the Bank
Investment in non-equity instruments of related
party
Non-funded commitments
Call lending
Swaps/Forward contracts
Investment of related party in Hybrid Capital/Bonds
of the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
17,078.36
0.43
154.79
-
135.32
290.05
3.35
-
-
4,300.00
-
-
-
Key
Management
Personnel
22.86
-
19.66
-
0.52
-
-
-
-
-
3.70
-
-
Relatives
of Key
Management
Personnel
5.49
-
0.17
-
-
-
-
-
-
-
-
-
-
(` in crores)
Subsidiaries
Total
890.52
-
1,172.33
2,286.12
-
-
0.05
340.78
3.03
-
-
55.02
88.19
17,997.23
0.43
1,346.95
2,286.12
135.84
290.05
3.40
340.78
3.03
4,300.00
3.70
55.02
88.19
The transactions with Promoters and Key Management Personnel excluding those under management
contracts are in nature of the banker-customer relationship.
Details of transactions with Axis Mutual Fund the fund floated by Axis Asset Management Company Ltd., the
Bank’s subsidiary has not been disclosed since the entity does not qualify as Related Parties as defined under
the Accounting Standard 18, Related Party Disclosure, as notified under Section 2(2) and Section 133 of the
Companies Act, 2013 and as per RBI guidelines.
The significant transactions between the Bank and related parties during the year ended 31 March, 2020 and
31 March, 2019 are given below. A specific related party transaction is disclosed as a significant related party
transaction wherever it exceeds 10% of the aggregate value of all related party transactions in that category:
243
Annual Report 2019-20Experience Open
Standalone Financial Statements
Particulars
Dividend paid
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
Dividend received
Axis Securities Limited
Axis Bank UK Limited
Axis Finance Limited
Axis Capital Limited
Axis Trustee Services Limited
Interest paid
Life Insurance Corporation of India
Interest received
Axis Finance Limited
Axis Bank UK Limited
Investment in Subsidiaries
A Treds Limited
Axis Bank UK Limited
Investment in non-equity instruments of related party
United India Insurance Co. Limited
Oriental Insurance Co. Limited
Axis Finance Limited
Investment of related party in the Bank
Ms. Shikha Sharma
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Purchase of Investments
Axis Bank UK Limited
Oriental Insurance Co. Limited
Redemption of Hybrid capital/Bonds of the Bank
Life Insurance Corporation of India
General Insurance Corporation Co. Limited
National Insurance Co. Limited
United India Insurance Co. Limited
Sale of investments
New India Assurance Co. Limited
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
Oriental Insurance Co. Limited
Management contracts
Axis Securities Limited
A Treds Limited
Axis Capital Limited
Axis Trustee Services Limited
Remuneration paid
Mr. Amitabh Chaudhry
Ms. Shikha Sharma
Mr. V. Srinivasan
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Mr. Pralay Mondal
Contribution to employee benefit fund
Life Insurance Corporation of India
Repayment of Call/Term lending by related party
Axis Bank UK Limited
Swaps/Forward contracts
Axis Bank UK Limited
244
(` in crores)
Year ended
31 March, 2020
Year ended
31 March, 2019
26.32
13.69
33.23
31.07
120.19
42.26
13.50
-
-
-
-
-
117.60
13.50
433.28
503.97
52.28
0.06
6.70
-
-
-
45.00
N.A.
2.62
2.82
369.16
-
-
10.00
20.00
25.00
490.00
556.00
112.18
99.85
3.97
4.52
2.09
2.29
6.26
N.A.
N.A.
4.16
3.75
1.67
15.42
55.61
79.34
10.93
10.12
13.40
183.77
241.26
100.00
50.00
8.67
4.05
5.22
-
205.00
1500.00
-
-
10.00
195.00
335.02
141.29
145.76
6.61
6.53
2.68
2.80
1.28
6.83
4.53
3.18
2.68
N.A.
16.53
352.14
138.31
Financial Statements
Particulars
Advance granted (net)
Axis Capital Limited
Accelyst Solutions Private Limited
Axis Asset Management Company Limited
Axis Securities Limited
Advance repaid
Axis Capital Limited
Axis Bank UK Limited
Axis Finance Limited
Receiving of services
New India Assurance Co. Limited
Oriental Insurance Co. Limited
Freecharge Payment Technologies Private Limited
Accelyst Solutions Private Limited
Axis Securities Limited
Rendering of services
Life Insurance Corporation of India
Axis Securities Limited
Axis Asset Management Company Limited
Sale of foreign exchange currency to related party
Ms. Shikha Sharma
Mr. Amitabh Chaudhry
Mr. Rajiv Anand
Mr. Pralay Mondal
Royalty received
Axis Asset Management Company Limited
Axis Capital Limited
Axis Finance Limited
Other reimbursements from related party
Axis Securities Limited
Axis Capital Limited
Accelyst Solutions Private Limited
Other reimbursements to related party
Axis Securities Limited
Life Insurance Corporation of India
Axis Capital Limited
Axis Bank UK Limited
(` in crores)
Year ended
31 March, 2020
Year ended
31 March, 2019
-
-
0.37
0.08
19.54
-
64.32
88.90
93.87
109.67
46.09
10.39
28.22
10.95
24.75
N.A.
0.40
0.36
0.72
0.70
0.36
1.51
29.10
3.90
0.49
5.85
0.19
0.26
4.40
19.43
2.60
-
-
0.02
183.77
427.61
52.72
55.84
84.79
0.33
878.80
26.60
1.32
226.47
1.14
0.15
0.06
N.A.
-
-
-
0.44
3.90
14.40
0.13
0.66
0.22
0.57
2.2.9
Leases
Disclosure in respect of assets taken on operating lease
This comprise of office premises/ATMs, cash deposit machines, staff quarters, electronic data capturing
machines and IT equipment.
Future lease rentals payable as at the end of the year:
- Not later than one year
- Later than one year and not later than five years
- Later than five years
Total of minimum lease payments recognised in the Profit and Loss Account for the
year
Total of future minimum sub-lease payments expected to be received under
non-cancellable subleases
Sub-lease payments recognised in the Profit and Loss Account for the year
(` in crores)
31 March, 2020
31 March, 2019
850.65
2,787.14
3,008.19
775.07
2,444.94
2,235.49
914.17
833.95
28.51
1.33
5.50
2.08
245
Annual Report 2019-20Experience Open
Standalone Financial Statements
The Bank has sub-leased certain of its properties taken on lease.
There are no provisions relating to contingent rent.
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar
agreements. There are generally no undue restrictions or onerous clauses in the agreements.
Disclosure in respect of assets given on operating lease
Gross carrying amount of premises at the end of the year
Accumulated depreciation at the end of the year
Total depreciation charged to profit and loss account for the year
Future lease rentals receivable as at the end of the year:
- Not later than one year
- Later than one year and not later than five years
- Later than five years
There is no provision relating to contingent rent.
(` in crores)
31 March, 2020
31 March, 2019
157.91
11.26
2.63
29.50
118.16
65.36
157.91
8.63
0.65
28.99
116.54
100.08
2.2.10 Movement in fixed assets capitalised as application software (included in other Fixed Assets)
Particulars
At cost at the beginning of the year
Additions during the year*
Deductions during the year
Accumulated depreciation as at 31 March
Closing balance as at 31 March
Depreciation charge for the year
*includes movement on account of exchange rate fluctuation
(` in crores)
31 March, 2020
31 March, 2019
1,610.96
207.34
(26.92)
(1,260.53)
530.85
224.28
1,291.64
319.54
(0.22)
(1,056.47)
554.49
198.72
2.2.11
The major components of deferred tax assets and deferred tax
differences are as under:
liabilities arising out of timing
As at
Deferred tax assets on account of provisions for loan losses
Deferred tax assets on account of amortisation of HTM investments
Deferred tax assets on account of provision for employee benefits
Deferred tax assets on account of other items
Deferred tax assets
Deferred tax liabilities on account of depreciation on fixed assets
Deferred tax liabilities on account of other items
Deferred tax liabilities
Net Deferred tax assets
(` in crores)
31 March, 2020
31 March, 2019
5,932.33
5.01
9.05
1,366.12
7,312.51
43.41
14.13
57.54
7,254.97
7,072.93
8.35
97.12
547.26
7,725.66
61.14
23.79
84.93
7,640.73
The Bank has elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as
introduced by the Taxation Laws (Amendment) Act, 2019. The Bank has recognised provision for Income tax
for the year ended 31 March, 2020 in line with the above option. This has necessitated a restatement of the
opening balance of deferred tax assets as at 1 April, 2019, basis the rate prescribed in the aforesaid section.
The restatement has resulted in a write down of `2,137.59 crores which has been fully charged to the Profit
and Loss account during the year.
246
Financial Statements
2.2.12
Employee Benefits
Provident Fund
The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable
to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the
Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other
reason, then the deficiency shall be made good by the Bank. Based on an actuarial valuation conducted by an
independent actuary, there is no deficiency as at the Balance Sheet date.
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss
Account and funded status and amounts recognised in the Balance Sheet for the Provident Fund benefit plan
(including staff deputed at subsidiaries).
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost*
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
(` in crores)
31 March, 2020
31 March, 2019
109.92
168.87
(205.73)
36.86
109.92
173.11
98.60
159.70
(189.59)
29.89
98.60
132.30
* includes contribution of `0.40 crores towards staff deputed at subsidiaries (previous year `0.52 crores)
Balance Sheet
Details of provision for provident fund
Fair Value of Plan Assets
Present Value of Funded Obligations
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Asset
Changes in the present value of the defined benefit obligation are as follows:
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Employees Contribution
Liability transferred from/to other companies
Benefits Paid
Closing Defined Benefit Obligation
(` in crores)
31 March, 2020
31 March, 2019
2,494.37
(2,494.37)
-
2,245.71
(2,245.71)
-
-
-
-
-
-
-
(` in crores)
31 March, 2020
31 March, 2019
2,245.71
109.92
168.87
4.24
276.90
(14.90)
(296.37)
2,494.37
2,006.65
98.60
159.70
(27.40)
217.42
(16.45)
(192.81)
2,245.71
247
Annual Report 2019-20Experience Open
Standalone Financial Statements
Changes in the fair value of plan assets are as follows:
Opening Fair Value of Plan Assets
Expected Return on Plan Assets
Actuarial Gains/(Losses)
Employer contribution during the period
Employee contribution during the period
Assets transferred from/to other companies
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments
(` in crores)
31 March, 2020
31 March, 2019
2,245.71
205.73
(32.62)
109.92
276.90
(14.90)
(296.37)
2,494.37
2,006.65
189.59
(57.29)
98.60
217.42
(16.45)
(192.81)
2,245.71
(` in crores)
31 March, 2020
31 March, 2019
31 March, 2018
31 March, 2017
31 March, 2016
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan Assets
2,494.37
2,494.37
-
4.24
(32.62)
2,245.71
2,245.71
-
(27.40)
(57.29)
2,006.65
2,006.65
-
12.10
(30.95)
1,688.78
1,688.78
-
20.83
0.58
1,439.02
1,439.02
-
12.08
(6.16)
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
Government securities
Bonds, debentures and other fixed income instruments
Equity shares
Others
Discount rate for the term of the obligation
Average historic yield on the investment portfolio
Discount rate for the remaining term to maturity of the investment portfolio
Expected investment return
Guaranteed rate of return
31 March, 2020
31 March, 2019
(in percentage)
55
15
4
26
(in percentage)
56
40
3
1
31 March, 2020
31 March, 2019
6.45%
8.83%
6.85%
8.43%
8.50%
7.65%
8.88%
7.55%
8.98%
8.65%
The contribution to the employee’s provident fund (including Employee Pension Scheme) amounted to `197.75
crores (previous year `161.28 crores) for the year.
The Hon’ble Supreme Court of India (“SC”) by an order dated 28 February, 2019 in one case, set out the
principles based on which allowances paid to the employees should be identified for inclusion in basic wages
for the purposes of computation of Provident Fund contribution. Basis subsequent clarification provided by
the Employees’ Provident Fund Organisation on the said order and an independent legal opinion, the Bank has
implemented the principles laid down in the order effective 1 April, 2019.
Superannuation
The Bank contributed `15.24 crores (previous year `16.29 crores) to the employees’ superannuation
plan for the year.
248
Financial Statements
National Pension Scheme (NPS)
During the year, the Bank contributed `6.35 crores (previous year `5.19 crores) to the NPS for employees who
have opted for the scheme.
Leave Encashment
The liability of compensated absences of accumulated privileged leave of employees of the Bank is given below:
Liability – Privilege Leave
Total included in “Employee Benefit Expense” [Schedule 16(I)]
(` in crores)
31 March, 2020
31 March, 2019
58.10
(8.99)
247.35
46.62
Gratuity
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss
Account and funded status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Past Service Cost
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
Balance Sheet
Details of provision for gratuity
Fair Value of Plan Assets
Present Value of Funded Obligations
Unrecognised past service cost
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Liability (included under Schedule 5 – Other Liabilities)
Changes in the present value of the defined benefit obligation are as follows:
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Past service cost
Benefits Paid
Closing Defined Benefit Obligation
(` in crores)
31 March, 2020
31 March, 2019
50.81
32.95
(29.60)
40.95
0.78
95.89
22.86
44.67
29.15
(24.61)
7.86
-
57.07
33.97
(` in crores)
31 March, 2020
31 March, 2019
467.75
(469.30)
1.55
-
-
-
-
391.91
(402.15)
2.33
(7.91)
7.91
-
(7.91)
(` in crores)
31 March, 2020
31 March, 2019
402.15
50.81
32.95
34.21
-
(50.82)
469.30
342.56
44.67
29.15
17.22
2.33
(33.78)
402.15
249
Annual Report 2019-20Experience Open
Standalone Financial Statements
Changes in the fair value of plan assets are as follows:
Opening Fair Value of Plan Assets
Expected Return on Plan Assets
Actuarial Gains/(Losses)
Contributions by Employer
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments
(` in crores)
31 March, 2020
31 March, 2019
391.91
29.60
(6.74)
103.80
(50.82)
467.75
323.72
24.61
9.36
68.00
(33.78)
391.91
(` in crores)
31 March, 2020
31 March, 2019
31 March, 2018
31 March, 2017
31 March, 2016
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan Assets
469.30
467.75
(1.55)
(8.33)
(6.74)
402.15
391.91
(10.24)
7.50
9.36
342.56
323.72
(18.84)
4.39
4.59
284.83
279.65
(5.18)
6.64
(1.64)
232.55
232.56
0.01
2.78
(5.36)
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets
Government securities
Bonds, debentures and other fixed income instruments
Money market instruments
Equity shares
Others
Principal actuarial assumptions at the Balance Sheet date:
Discount Rate
Expected Rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 18 to 30 (age in years)
- 31 to 44 (age in years)
- 45 & above (age in years)
31 March, 2020
31 March, 2019
(in percentage)
30
42
2
2
24
(in percentage)
38
48
5
2
7
31 March, 2020
31 March, 2019
6.45% p.a.
7.50% p.a.
7.00% p.a.
24.00%
14.00%
8.00%
7.65% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority,
promotion and other relevant factors.
The expected rate of return on plan assets is based on the average long-term rate of return expected on
investments of the Fund during the estimated term of the obligations.
As the contribution expected to be paid to the plan during the annual period beginning after the balance sheet
date is based on various internal/external factors, a best estimate of the contribution is not determinable.
The above information is as certified by the actuary and relied upon by the auditors.
250
Financial Statements
2.2.13
Provisions and contingencies
a) Movement in provision for frauds included under other liabilities is set out below:
Opening balance at the beginning of the year
Additions during the year
Reductions on account of payments during the year
Reductions on account of reversals during the year
Closing balance at the end of the year
(` in crores)
31 March, 2020
31 March, 2019
53.58
25.10
(1.02)
-
77.66
60.98
0.78
-
(8.18)
53.58
b) Other liabilities include provision for reward points made on actuarial basis, the movement of which
is set out below:
Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year
c) Movement in provision for other contingencies is set out below:
Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year
(` in crores)
31 March, 2020
31 March, 2019
205.90
214.56
(154.36)
266.10
143.94
127.22
(65.26)
205.90
(` in crores)
31 March, 2020
31 March, 2019
187.99
2,655.00
-
2,842.99
150.66
655.26
(617.93)
187.99
Closing provision includes provision for legal cases, other contingencies and provision for COVID-19 over
and above regulatory requirement .
2.2.14
Small and Micro Enterprises
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2 October,
2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have
been no reported cases of delays in payments to micro and small enterprises or of interest payments due to
delays in such payments. The above is based on the information available with the Bank which has been relied
upon by the auditors.
2.2.15 Corporate Social Responsibility (CSR)
a) Amount required to be spent by the Bank on CSR during the year `100.62 crores (previous year
`127.94 crores).
b) Amount spent towards CSR during the year and recognized as expense in the statement of profit and loss
on CSR related activities is `100.96 crores (previous year `137.59 crores), which comprise of following –
Construction/ acquisition of any asset
On purpose other than above
31 March, 2020
Yet to be paid
in cash (i.e.
provision)
Total
In cash
-
5.35
0.28
100.68
11.89
125.13
31 March, 2019
Yet to be paid
in cash (i.e.
provision)
-
0.57
In cash
0.28
95.33
(` in crores)
Total
11.89
125.70
251
Annual Report 2019-20Experience Open
Standalone Financial Statements
2.2.16 Description of contingent liabilities
a) Claims against the Bank not acknowledged as debts
These represent claims filed against the Bank in the normal course of business relating to various legal
cases currently in progress. These also include demands raised by income tax authorities and disputed
by the Bank. In addition, the Bank holds provision of `68.88 crores as on 31 March, 2020 (previous year
`56.06 crores) towards claims assessed as probable.
b)
Liability for partly paid investments
This represents amounts remaining unpaid towards liability for partly paid investments.
c)
Liability on account of forward exchange and derivative contracts
The Bank enters into foreign exchange contracts, currency options/swaps, interest rate/currency futures
and forward rate agreements on its own account and OTC for customers. Forward exchange contracts
are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps
are commitments to exchange cash flows by way of interest/principal in two currencies, based on ruling
spot rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows.
Interest rate futures are standardised, exchange-traded contracts that represent a pledge to undertake a
certain interest rate transaction at a specified price, on a specified future date. Forward rate agreements
are agreements to pay or receive a certain sum based on a differential interest rate on a notional amount
for an agreed period. A foreign currency option is an agreement between two parties in which one
grants to the other the right to buy or sell a specified amount of currency at a specific price within a
specified time period or at a specified future time. An Exchange Traded Currency Option contract is a
standardised foreign exchange derivative contract, which gives the buyer the right, but not the obligation,
to exchange money denominated in one currency into another currency at a pre-agreed exchange rate
on a specified date on the date of expiry. Currency Futures contract is a standardised, exchange-traded
contract, to buy or sell a certain underlying currency at a certain date in the future, at a specified price.
The amount of contingent liability represents the notional principal of respective forward exchange and
derivative contracts.
d) Guarantees given on behalf of constituents
As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their
credit standing. Guarantees represent irrevocable assurances that the Bank will make payments in the
event of the customer failing to fulfill its financial or performance obligations.
e) Acceptances, endorsements and other obligations
These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the
Bank’s customers that are accepted or endorsed by the Bank.
f) Other items
Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of
contracts remaining to be executed on capital account, notional principal on account of outstanding Tom/
Spot foreign exchange contracts, contracts for purchase of investments where settlement is due post
balance sheet date, commitments towards underwriting and investment in equity through bids under
Initial Public Offering (IPO) of corporates as at the year end, demands raised by statutory authorities
(other than income tax) and disputed by the Bank and amount transferred to Depositor Education and
Awareness Fund (DEAF).
During earlier years, the Bank, through one of its overseas branches, had arranged Trade Credit (Buyers
Credit loans) against Letters of Undertaking (LOUs) issued by Punjab National Bank (PNB), which were
subsequently alleged as fraudulent by PNB. Prior to this declaration by PNB, such buyer’s credit loans
were sold down in the secondary market by the overseas branch to various participating banks under Risk
Participation Agreements. As on 31 March, 2020, there is no funded exposure outstanding in the overseas
branch pursuant to such sell down. PNB has repaid the aggregate amount of all LOUs due upto 31 March,
252
Financial Statements
2020, pursuant to an undertaking issued to PNB, and made remittance to the overseas branch which has
been passed on for onward payment to the participating banks. Based on the facts and circumstances of
the case, internal findings and legal opinion, the Bank does not expect PNB has any valid right at this point
in time, for refund by the Bank of the aggregate amount paid by PNB towards LOUs due upto 31 March,
2020. However, as a matter of prudence, the aggregate amount of LOUs issued by PNB to the overseas
branch against which buyer’s credit was extended, aggregating to `4,466.83 crores has been disclosed as
part of Contingent Liabilities in the Balance Sheet.
The Bank has a process whereby periodically all long term contracts (including derivative contracts) are
assessed for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate
provision as required under any law/accounting standards for material foreseeable losses on such long term
contracts (including derivative contracts) in the books of account and disclosed the same under the relevant
notes in the financial statements, where applicable.
2.2.17
Previous year figures have been regrouped and reclassified, where necessary to conform to current
year’s presentation.
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
253
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Independent Auditor’s Report
To the Members of Axis Bank Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of Axis Bank Limited (hereinafter referred to as “the Bank”)
and its subsidiaries (the Bank and its subsidiaries together referred to as “the Group”), comprising of the Consolidated Balance
Sheet as at March 31, 2020, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year
then ended, and notes to the consolidated financial statements including a summary of the significant accounting policies and
other explanatory information (hereinafter referred to as “consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of
reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the aforesaid
consolidated financial statements give the information required by the Banking Regulation Act, 1949 as well as the Companies
Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally
accepted in India, of the consolidated state of affairs of the Group as at March 31, 2020, their consolidated profit and their
consolidated cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the
consolidated financial statements under the provisions of the Act and Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. Key audit matters
How our audit addressed the key audit matter
Information Technology (IT) Controls
Framework
The Bank has a complex IT architecture to support
its day to day business operations. The volume
of transactions processed and recorded is huge.
Moreover, a transaction may be required to be
recorded across multiple applications depending upon
the process and each application has different rules
and a different set of user access and authority matrix.
These applications are interlinked using different
technologies so that data transfer happens in real
time or at a particular time of the day; in batches or
at a transaction level and in an automated manner or
manually. The Core Banking Solution (CBS) itself has
many interfaces. All these data streams directly affect
the financial accounting and reporting process of the
Bank.
IT audit specialists are an integral part of our engagement team. Our approach
of testing IT General Controls (ITGC) and IT Application Controls (ITAC) is risk
based and business centric.
As part of our IT controls testing, we have tested ITGC as well as ITAC. The
focus of testing of ITGCs was based on the various parameters such as
Completeness, Validity, Identification, Authentication Authorization, Integrity
and Accountability. On the other hand, focus of testing automated controls
from applications was whether the controls prevent or detect unauthorized
transactions and support financial objectives including completeness, accuracy,
authorization and validity of transactions.
We gathered a comprehensive understanding of IT applications landscape
implemented at the Bank. It was followed by process understanding, mapping
of applications to the same and understanding financial risks posed by people-
process and technology.
In ITGC testing we reviewed, on sample basis, control areas such as User
Management, Change Management, Systems Security, Incident Management,
Physical & Environmental Security, Backup and Restoration, Business Continuity
and Disaster Recovery, Service Level Agreement.
1.
254
Financial Statements Sr. No. Key audit matters
How our audit addressed the key audit matter
The Bank has a process for identifying the applications
where the controls are embedded. It also has a process
to ensure that systems, processes and controls remain
relevant. The Bank’s IT control framework includes
automated, semi-automated and manual controls
designed to address identified risks. IT controls are
stated in Entity Level Controls (ELC), IT General
Controls (ITGC) and IT Application Controls (ITAC).
We have identified IT Controls Framework as a Key
Audit Matter as the Bank’s business is highly dependent
on technology, the IT environment is complex and
the design and operating effectiveness of IT controls
have a direct impact on its financial reporting process.
Review of these controls allows us to provide assurance
on the integrity and completeness of data processed
through various IT applications which are used for the
preparation of financial reports.
2.
Classification, Provisioning and Write off of
Advances
(Refer note 5.2 of schedule 17 and note 1.2, 2.1.1 and
2.1.5 of schedule 18 to the Consolidated Financial
Statements)
The Bank’s portfolio of advances to customers
amounts to Rs 571,424.16 crores as at March 31,
2020 comprising of Wholesale Banking and Retail
Banking customer.
required under
As
Income Recognition, Asset
Classification and provisioning norms (IRAC norms),
guidelines on COVID 19 related Regulatory Package
dated March 27, 2020 and April 17, 2020 issued by the
Reserve Bank of India (the “RBI”) (‘Regulatory Package’)
and other circulars, notifications and directives
issued by the RBI, the Bank classifies advances into
performing and non-performing advances which
consists of Standard, Sub-standard, Doubtful and Loss
and makes appropriate provisions.
The Bank, as per its governing framework, identifies
standard advances which require higher provision
based on its evaluation of risk and internal ratings.
The Bank also makes provisions against identified
categories of non-fund based facilities, basis the
internal assessment and evaluation. The Bank identifies
sectors wherein the Bank perceives stress and makes
higher provisions. The Bank also identifies accounts
which are to be technically written off based on the
framework approved by the Bank’s Board of Directors.
The classification, provisioning and write off of
advances is a Key Audit Matter as the Bank has
significant credit risk exposure to a large number of
borrowers across a wide range of borrowers, products,
industries and geographies and there is a high degree
of complexity, uncertainty and judgment involved in
recoverability of advances, estimation of provisions
thereon and identification of accounts to be written
off.
2.
For ITAC, we carried out on sample basis, compliance tests of system
functionality in order to assess the accuracy of system calculations. We also
carried out procedures such as validations and limit checks on data entered into
applications, approvals, process dependencies and restriction on time period in
which transactions may be recorded.
We tested the control environment using various techniques such as inquiry,
review of documentation/record/reports, observation and re-performance.
We also tested few controls using negative testing technique. We had taken
adequate samples of instances for our tests
Wherever deviations were noted either the same were explained to our
satisfaction or we tested compensating controls and performed alternate
procedures, where necessary, to draw comfort.
Our audit procedures included, but were not limited to the following:
Provisions for Corporate advances against specific individual loans (Wholesale
Banking customer)
1.
Tested the key controls over borrower risk grading for wholesale
loans (larger customer exposures that are monitored individually) for
classification of such loans as performing or non-performing advances.
• Tested on sample basis, the approval of new lending facilities
against the Bank’s credit policies, the performance of annual loan
assessments, and controls over the monitoring of credit quality.
• Assessed the process for classification by the Management including
identification of non-performing assets.
• Tested loans on sample basis to form our own assessment as to
whether impairment events had occurred and to assess whether
impairments had been identified in a timely manner.
• For the selected non-performing loans, assessed Management’s
forecast and inputs of recoverable cash flows, comments of auditor
on the financial statements, valuation of underlying security and
collaterals, estimates of recoverable amounts on default and other
sources of repayment.
• Holding specific discussions with the credit and risk departments to
ascertain if there were indicators of stress or an occurrence of an
event of default in a particular loan account or any product category
which need to be considered as NPA.
This included testing controls over the identification of exposures
showing signs of stress, either due to internal factors specific to the
borrower or external macroeconomic factors, and testing the timeliness
of and the accuracy of risk assessments and risk grading against the
requirements of the Bank’s lending policies and RBI IRAC norms.
Performed credit assessments of a sample of corporate loans managed
by a specialized group assessed as high risk or impaired, focusing on larger
exposures assessed by the Bank as showing signs of deterioration, or in
areas of emerging risk (assessed against external market conditions). We
reviewed the Bank’s risk grading of the loan, their assessment of loan
recoverability and the impact on the credit provision. To do this, we
used the information on the Borrowers loan file, discussed the case with
the concerned officials and senior management, and performed our own
assessment of recoverability.
255
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Sr. No. Key audit matters
How our audit addressed the key audit matter
The same resulted in significant audit efforts to
address the risks around loan recoverability and the
determination of related provisions and write off.
Provisions for Retail advances against specific individual loans (Retail banking
customer)
a.
b.
c.
For retail loans (smaller customer exposures not monitored individually),
tested controls over the systems which record lending arrears,
delinquency buckets based on the number of days loans are overdue,
and calculate individual provisions.
Tested automated calculation and change Management controls and
evaluated the Bank’s oversight of the portfolios, with a focus on controls
over delinquency statistics monitoring.
Tested on sample basis the level of provisions held against different
loan products based on the delinquency profile and assumptions
made in respect of expected recoveries, primarily from collateral held.
We also carried out extensive data analytics procedures to identify
exceptions and outliers.
Provisions estimated across loan portfolios (collective provision)
1.
2.
3.
4.
5.
6.
7.
Tested the Bank’s processes for making collective provision;
Reviewed the Policy for higher provision for weak standard advances
and stressed sectors adopted by the Bank;
Reviewed
adopted by the Bank;
the Policy
for provision on non-fund
facilities
Validated the parameters used to calculate collective provisions with
reference to IRAC norms, internal policy on higher provisions on weak
standard advances, provisions on non-fund facilities;
Tested the completeness and accuracy of data transferred from
underlying source systems used for computing collective provision;
Re-performed, for a sample of retail and wholesale portfolios, the
calculation of collective provisions, to determine the accuracy of the same;
Reviewed the Bank’s process for granting moratorium to borrowers as per
the Regulatory Package announced by RBI. We tested the completeness
and accuracy of data used for computing general provision in line with
Regulatory package issued by RBI. With respect to additional provision
made by the Bank on account of the impact of Covid-19 pandemic, we
broadly reviewed the underlying assumptions and estimates used by
the management for the same but as the extent of impact is dependent
on future developments which are highly uncertain, we primarily relied
on those assumptions and estimates. These assumptions and estimates
are a subject matter of periodic review by the Bank.
Technical write off across loan portfolios
The Bank has adopted a framework for technical write off. We reviewed the
framework and understood the process for identification of loan portfolios to be
technically written off. We tested on sample basis, the accounts identified during
the year to be written off for compliance with the aforesaid framework.
Disclosure
We assessed the appropriateness and adequacy of disclosures against the
relevant RBI requirements relating to NPAs including the additional disclosures
required to be made in accordance with the Regulatory Package.
Emphasis of Matter
We draw attention to Note 1.2 of schedule 18 to the consolidated financial statements which explains that the extent to which
COVID-19 pandemic will impact the financial statements, is dependent on future developments, which are highly uncertain.
Our opinion is not modified in respect of this matter.
256
Financial Statements Other Information
The Bank’s Board of Directors is responsible for the other information. The other information comprises the information included
in the Directors’ Report and Management Discussion and Analysis forming part of the Annual Report, but does not include the
consolidated financial statements, standalone financial statements and our auditor’s report thereon and the Pillar III Disclosures
under the New Capital Adequacy Framework (Basel III disclosures). The other information is expected to be made available to us
after the date of this auditors report.
Our opinion on the consolidated financial statements does not cover the other information and the Basel III disclosures and
accordingly, we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
The Bank’s Board of Directors is responsible for the preparation and presentation of these consolidated financial statements in
terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial
performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India,
including the Accounting Standards prescribed under Section 133 of the Act, read with the relevant rules issued thereunder,
provision of Section 29 of the Banking Regulation Act, 1949 and the circulars, guidelines and directions issued by Reserve Bank
of India (“RBI”) from time to time. The respective Board of Directors of the entities included in the Group are responsible for
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group
and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial
statements by the Directors of the Bank, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the entities included in the Group are
responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
The respective Board of Directors of the entities included in the Group are responsible for overseeing the financial reporting
process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Bank and its subsidiary companies, which are companies incorporated in India, have adequate internal financial controls
with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made in consolidated financial statements by management.
257
Annual Report 2019-20Experience Open Consolidated Financial Statements
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group of which we are the independent auditors, to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the audit of the financial statements of such entities
included in the consolidated financial statements of which we are the independent auditors. For the other entities
included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain
responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible
for our audit opinion.
We communicate with those charged with governance of the Bank and such other entities included in the consolidated financial
statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
(a) We did not audit the financial statements of 10 subsidiaries, whose financial statements reflects total assets of Rs. 14,442.28
crores and net assets of Rs 3,163.79 crores as at March 31, 2020, total revenues of Rs. 2,116.49 crores and net cash outflows
amounting to Rs. 88.17 crores for the year ended on that date, as considered in the consolidated financial statements. These
financial statements have been audited by other auditors whose reports have been furnished to us by the management and
our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect
of these subsidiaries and our report in terms of Section 143(3) of the Act, in so far as it relates to the aforesaid subsidiaries,
is based solely on the reports of the other auditors.
One of the above subsidiary is located outside India whose financial statements have been prepared in accordance with
accounting principles generally accepted in that country and which has been audited by other auditor under generally
accepted auditing standards applicable in that country. The Bank’s management has converted the financial statements of
such subsidiary located outside India from accounting principles generally accepted in that country to accounting principles
generally accepted in India. We have audited these conversion adjustments made by the Bank’s management. Our opinion in
so far as it relates to the balances and affairs of such subsidiary located outside India is based on the report of other auditor
and the conversion adjustments prepared by the management of the Bank and audited by us.
(b) We did not audit the financial statements of 1 step down subsidiary, whose financial statements reflects total assets of Rs.
4.16 crores and net assets of Rs. 3.98 crores as at March 31, 2020, total revenues of Rs. 1.44 crores and net cash inflows
amounting to Rs. 0.10 crores for the year ended on that date, as considered in the consolidated financial statements. These
financial statements are unaudited and have been furnished to us by the management and our opinion on the consolidated
financial statements, in so far as it relates to the amounts and disclosures included in respect of this step down subsidiary,
and our report in terms of Section 143(3) of the Act, in so far as it relates to the aforesaid step down subsidiary, is based
solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us
by the management, these financial statements are not material to the Group.
Our opinion on the consolidated financial statements and our report on Other Legal and Regulatory Requirements below, is not
modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and
the financial statements certified by the management.
258
Financial Statements
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of reports of the other auditors on separate
financial statements and the other financial information of subsidiaries, as noted in the Other Matters section above, we report,
to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit of the aforesaid consolidated financial statements;
b)
In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial
statements have been kept so far as it appears from our examination of those books and the reports of the other auditors;
c) The Consolidated Balance Sheet, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement dealt
with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the
consolidated financial statements;
d)
In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards prescribed under
Section 133 of the Act read with relevant rules issued thereunder to the extent they are not inconsistent with accounting
policies prescribed by RBI;
e) On the basis of the written representations received from the directors of the Bank as on March 31, 2020 taken on record
by the Board of Directors of the Bank and the reports of the statutory auditors of its subsidiary companies, incorporated in
India, none of the directors of the Group companies, incorporated in India, is disqualified as on March 31, 2020 from being
appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Bank and its
subsidiary companies incorporated in India and the operating effectiveness of such controls, refer to our separate report in
the “Annexure”;
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of Section
197(16) of the Act:
In our opinion and to the best of our information and according to the explanations given to us and the reports of the
statutory auditors of the subsidiary companies incorporated in India, the remuneration paid/ provided by those subsidiaries
to their directors during the year is in accordance with the provisions of Section 197 of the Act. Further, Section 197 of the
Act is not applicable to the Bank by virtue of Section 35B (2A) of the Banking Regulation Act, 1949.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i.
ii.
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position
of the Group - Refer Schedule 12 Contingent Liabilities read with note 2.1.16 of Schedule 18 to the consolidated
financial statements;
Provision has been made in the consolidated financial statements, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Schedule
5 read with note 2.1.16 of Schedule 18 to the consolidated financial statements in respect of such items as it relates to
the Group; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Bank and its subsidiary companies incorporated in India,
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Purushottam Nyati
Partner
Membership No. 118970
UDIN No. 20118970AAAABK1949
Place : Mumbai
Date : April 28, 2020
259
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Annexure to the Independent Auditor’s Report
[Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements’ section in our Independent Auditor’s
Report of even date to the members of Axis Bank Limited on the consolidated financial statements for the year ended
March 31, 2020]
Report on the Internal Financial Controls with reference to Financial Statements under clause (i) of
sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of Axis Bank Limited (“the Bank”) as of and for the year
ended March 31, 2020, we have audited the internal financial controls with reference to consolidated financial statements of the
Bank and its subsidiary companies, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Bank and its subsidiary companies, which are companies incorporated in India, are
responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial
statements criteria established by the Bank considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered
Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including
adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors,
the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required
under the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls with reference to consolidated financial statements
of the Bank and its subsidiary companies, which are companies incorporated in India, based on our audit. We conducted our
audit in accordance with the Guidance Note and the Standards on Auditing specified under Section 143(10) of the Act, to the
extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls with reference to consolidated financial statements was established and maintained and if
such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with
reference to consolidated financial statements and their operating effectiveness. Our audit of internal financial controls with
reference to consolidated financial statements included obtaining an understanding of internal financial controls with reference
to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including
the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors, in terms of their
reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion
on the internal financial controls with reference to consolidated financial statements of the Bank and its subsidiary companies.
Meaning of Internal Financial Controls with reference to Financial Statements
A company’s internal financial control with reference to consolidated financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements
for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control with
reference to consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have
a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be
260
Financial Statements detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future
periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on consideration of
reporting of other auditors as mentioned in Other Matters paragraph below, the Bank and its subsidiary companies, which are
companies incorporated in India, have, in all material respects, adequate internal financial controls with reference to consolidated
financial statements and such internal financial controls with reference to consolidated financial statements were operating
effectively as at March 31, 2020, based on the internal control with reference to consolidated financial statements criteria
established by the respective companies considering the essential components of internal control stated in the Guidance Note
issued by the ICAI.
Other Matters
Our aforesaid reports under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial
controls with reference to consolidated financial statements in so far as it relates to 9 subsidiary companies, which are companies
incorporated in India, is based on the corresponding reports of the auditors of such companies incorporated in India.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Purushottam Nyati
Partner
Membership No. 118970
UDIN No. 20118970AAAABK1949
Place : Mumbai
Date : April 28, 2020
261
Annual Report 2019-20Experience Open Consolidated Financial Statements
Consolidated Balance Sheet
As at 31 March, 2020
Capital and Liabilities
Capital
Reserves & Surplus
Minority Interest
Deposits
Borrowings
Other Liabilities and Provisions
Total
Assets
Cash and Balances with Reserve Bank of India
Balances with Banks and Money at Call and Short Notice
Investments
Advances
Fixed Assets
Other Assets
Total
Contingent Liabilities
Bills for Collection
Schedule
No.
As at 31-03-2020
As at 31-03-2019
(` in Thousands)
1
2
2A
3
4
5
6
7
8
9
10
11
5,643,356
5,143,290
857,760,934
672,882,898
1,135,557
846,147
6,421,572,086
5,507,459,351
1,551,801,659
1,612,498,292
440,804,466
341,629,698
9,278,718,058
8,140,459,676
849,592,711
350,990,403
128,405,033
329,052,679
1,552,816,344
1,740,558,546
5,829,588,354
5,066,561,244
43,943,385
41,298,823
874,372,231
611,997,981
9,278,718,058
8,140,459,676
12
9,250,067,577
7,582,289,751
478,427,586
519,728,573
Significant Accounting Policies and Notes to Accounts
17 & 18
Schedules referred to above form an integral part of the Consolidated Balance Sheet
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
262
Financial Statements Consolidated Profit & Loss Account
For the year ended 31 March, 2020
Schedule
No.
Year ended
31-03-2020
(` in Thousands)
Year ended
31-03-2019
I
II
III
IV
V
VI
Income
Interest earned
Other income
Total
Expenditure
Interest expended
Operating expenses
13
14
15
16
Provisions and contingencies
18 (2.1.1)
Total
Net Profit For The Year
Minority interest
Consolidated Net Profit Attributable To Group
Balance in Profit & Loss Account brought forward from previous year
Amount Available For Appropriation
Appropriations:
Transfer to Statutory Reserve
Transfer to Reserve Fund u/s 45 IC of RBI Act, 1934
Transfer to/(from) Investment Reserve
Transfer to Capital Reserve
Transfer to General Reserve
Transfer to Investment Fluctuation Reserve
Transfer to/(from) Reserve Fund
Dividend paid (includes tax on dividend)
VII
Balance in Profit & Loss Account carried forward
Total
Earnings Per Equity Share
(Face value ` 2/- per share)
Basic (in `)
Diluted (in `)
Significant Accounting Policies and Notes to Accounts
18 (2.1.6)
18 (2.1.4)
17 & 18
Schedules referred to above form an integral part of the Consolidated Profit and Loss Account
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
637,156,804
163,419,937
560,436,523
141,887,538
800,576,741
702,324,061
379,959,407
338,834,746
180,657,585
221,172,201
781,789,193
18,787,548
(256,409)
18,531,139
251,175,230
167,201,872
145,816,536
651,853,154
50,470,907
(85,018)
50,385,889
235,543,472
269,706,369
285,929,361
4,068,038
11,691,521
386,500
421,100
-
(1,034,894)
3,405,245
1,251,323
34,138
96,508
3,280,000
6,000,000
8,502
6,280
3,318,569
255,205,377
269,486
267,228,037
269,706,369
285,929,361
6.83
6.80
19.61
19.49
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
263
Annual Report 2019-20Experience Open Consolidated Financial Statements
Consolidated Cash Flow Statement
For the year ended 31 March, 2020
Cash flow from operating activities
Net profit before taxes
Adjustments for:
Depreciation on fixed assets
Depreciation on investments
Amortisation of premium on Held to Maturity investments
Provision for Non Performing Assets (including bad debts)
Provision on standard assets
Profit/(loss) on sale of land, buildings and other assets (net)
Provision for country risk
Provision for restructured assets/strategic debt restructuring
Provision on unhedged foreign currency exposure
Provision for other contingencies
Adjustments for:
(Increase)/Decrease in investments
(Increase)/Decrease in advances
Increase /(Decrease) in deposits
(Increase)/Decrease in other assets
Increase/(Decrease) in other liabilities & provisions
Direct taxes paid
Net cash flow from operating activities
Cash flow from investing activities
Purchase of fixed assets
(Increase)/Decrease in Held to Maturity investments
Proceeds from sale of fixed assets
Net cash used in investing activities
264
(` in Thousands)
Year ended
31-03-2020
Year ended
31-03-2019
52,544,043
75,835,511
8,060,735
7,371,694
1,359,912
2,965,368
3,546,142
3,231,548
128,352,954
102,721,131
15,341,633
8,143,122
50,818
247,690
121,721
-
(154,980)
(196,572)
(106,800)
187,900
42,244,858
6,545,966
251,361,036
207,053,358
244,324,699
(41,551,810)
(867,031,134)
(667,024,418)
914,112,735
950,881,709
(265,223,513)
(93,650,319)
56,982,825
46,760,283
(30,370,292)
(31,216,324)
304,156,356
371,252,479
(11,042,694)
(8,803,657)
(85,819,362)
(178,658,506)
273,426
547,233
(96,588,630)
(186,914,930)
Financial Statements Cash flow from financing activities
Proceeds/(Repayment) from issue of subordinated debt, perpetual debt & upper Tier II instruments (net)
(20,000,000)
(17,000,000)
(` in Thousands)
Year ended
31-03-2020
Year ended
31-03-2019
Increase/(Decrease) in borrowings (excluding subordinated debt, perpetual debt & upper Tier II
instruments) (net)
Proceeds from issue of share capital
Proceeds from share premium (net of share issue expenses)
Payment of dividend (including dividend distribution tax)
Increase in minority interest
Net cash generated from financing activities
Effect of exchange fluctuation translation reserve
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes to the Cash Flow Statement:
1. Cash and cash equivalents includes the following
(40,696,631)
71,827,368
500,066
10,212
151,877,064
1,706,853
(3,318,569)
(269,486)
289,410
151,018
88,651,340
56,425,965
1,735,596
171,437
297,954,662
240,934,951
680,043,082
439,108,131
977,997,744
680,043,082
Cash and Balances with Reserve Bank of India (Refer Schedule 6)
849,592,711
350,990,403
Balances with Banks and Money at Call and Short Notice (Refer Schedule 7)
128,405,033
329,052,679
Cash and cash equivalents at the end of the year
977,997,744
680,043,082
2. Amount of Corporate Social Responsibility related expenses spent during the year in cash
`108.63 crores (previous year `148.80 crores)
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
265
Annual Report 2019-20Experience Open Consolidated Financial Statements
Schedules forming part of the Consolidated Balance Sheet
As at 31 March, 2020
Schedule 1 - Capital
Authorised Capital
4,250,000,000 (Previous year - 4,250,000,000) Equity Shares of `2/- each
Issued, Subscribed and Paid-up capital
2,821,677,934 (Previous year - 2,571,644,871) Equity Shares of `2/- each fully paid-up
Schedule 2 - Reserves and Surplus
I.
II.
III.
Statutory Reserve
Opening Balance
Additions during the year
Share Premium Account
Opening Balance
Additions during the year
Less: Share issue expenses
Investment Reserve Account
Opening Balance
Additions during the year
Deductions during the year
IV. General Reserve
Opening Balance
Additions during the year
V.
Capital Reserve
Opening Balance
Additions during the year
VI. Foreign Currency Translation Reserve [Refer Schedule 17 (5.6)]
Opening Balance
Additions during the year
Deductions during the year
VII. Reserve Fund
Opening Balance
Additions during the year
VIII. Reserve Fund u/s 45 IC of RBI Act, 1934
Opening Balance
Additions during the year
IX.
Investment Fluctuation Reserve
Opening Balance
Additions during the year
266
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
8,500,000
8,500,000
5,643,356
5,143,290
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
127,451,247
4,068,038
131,519,285
115,759,726
11,691,521
127,451,247
259,821,526
152,488,174
(611,111)
411,698,589
258,114,673
1,706,853
-
259,821,526
-
-
-
-
4,040,677
34,138
4,074,815
20,924,276
3,405,245
24,329,521
1,692,088
1,735,596
-
3,427,684
81,254
8,502
89,756
1,696,600
386,500
2,083,100
6,000,000
3,280,000
9,280,000
1,034,894
-
(1,034,894)
-
3,944,169
96,508
4,040,677
19,672,953
1,251,323
20,924,276
1,520,651
171,437
-
1,692,088
74,974
6,280
81,254
1,275,500
421,100
1,696,600
-
6,000,000
6,000,000
Financial Statements X. Balance in Profit & Loss Account brought forward
Adjustments during the year*
Balance in Profit & Loss Account
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
255,205,377
16,052,807
271,258,184
857,760,934
267,228,037
(16,052,807)
251,175,230
672,882,898
* During the previous year ended 31 March, 2019, the Bank had made a provision amounting to `1,605.28 crores towards Land held as non-banking
asset through the reserves and surplus, as permitted by RBI. During the year ended 31 March, 2020, the said provision has been recognised as part of
provisions & contingencies in the profit and loss account with consequential reversal in the reserves and surplus, as advised by RBI.
Schedule 2A - Minority Interest
I. Minority Interest
Opening Balance
Increase during the year
Closing Minority Interest
Schedule 3 - Deposits
A.
I.
Demand Deposits
From banks
(i)
(ii) From others
Savings Bank Deposits
II.
III. Term Deposits
(i)
From banks
(ii) From others
Total
Deposits of branches in India
I.
II. Deposits of branches/subsidiaries outside India
B.
Total
Schedule 4 - Borrowings
I.
II.
Borrowings in India
(i) Reserve Bank of India
(ii) Other banks #
(iii) Other institutions & agencies **
Borrowings outside India
Total
Secured borrowings included in I & II above
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
846,147
289,410
1,135,557
695,129
151,018
846,147
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
38,887,703
858,619,416
1,735,926,032
47,199,015
844,939,199
1,541,290,515
343,218,323
3,444,920,612
6,421,572,086
6,352,037,738
69,534,348
6,421,572,086
232,371,412
2,841,659,210
5,507,459,351
5,462,410,325
45,049,026
5,507,459,351
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
116,190,000
23,582,947
845,265,217
566,763,495
1,551,801,659
157,821,977
144,000,000
27,139,984
722,206,785
719,151,523
1,612,498,292
183,811,250
# Borrowings from other banks include Subordinated Debt of `15.60 crores (previous year `35.60 crores) in the nature of Non-Convertible Debentures
and Perpetual Debt of Nil (previous year `50.00 crores) [Also refer Note 18 (2.1.2)]
** Borrowings from other institutions & agencies include Subordinated Debt of `17,989.40 crores (previous year `19,969.40 crores) in the nature of
Non-Convertible Debentures and Perpetual Debt of `7,000 crores (previous year `6,950 crores) [Also refer Note 18 (2.1.2)]
267
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Schedule 5 - Other Liabilities and Provisions
Bills payable
Inter-office adjustments (net)
Interest accrued
Proposed dividend (includes tax on dividend) [Refer Schedule 17 (5.22) & Schedule 18 (2.1.6)]
Contingent provision against standard assets
I.
II.
III.
IV.
V.
VI. Others (including provisions)
Total
Schedule 6 - Cash and Balances with Reserve Bank of India
I.
II.
Cash in hand (including foreign currency notes)
Balances with Reserve Bank of India:
(i)
(ii)
Total
in Current Account
in Other Accounts
Schedule 7 - Balances with Banks and Money at Call and Short Notice
I.
In India
(i)
Balance with Banks
(a)
(b)
in Current Accounts
in Other Deposit Accounts
(ii) Money at Call and Short Notice
(a) With banks
(b) With other institutions
Total
II. Outside India
in Current Accounts
in Other Deposit Accounts
(i)
(ii)
(iii) Money at Call & Short Notice
Total
Grand Total (I+II)
Schedule 8 - Investments
I.
II.
Investment in Joint Ventures
Investments in India in -
(i) Government Securities ##
(ii) Other approved securities
(iii) Shares
(iv) Debentures and Bonds
(v)
(vi) Others (Mutual Fund units, CD/CP, PTC etc.)
Total Investments in India
Investments outside India in -
(i) Government Securities (including local authorities)
(ii) Subsidiaries and/or joint ventures abroad
(iii) Others (Equity Shares and Bonds)
Total Investments outside India
Grand Total (I+II)
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
36,897,894
-
34,122,863
-
46,353,188
323,430,521
440,804,466
37,854,366
-
47,617,940
-
30,800,051
225,357,341
341,629,698
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
79,879,291
42,132,211
209,713,420
560,000,000
849,592,711
263,858,192
45,000,000
350,990,403
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
645,598
28,903,094
2,477,663
34,498,933
-
-
29,548,692
-
191,610,699
228,587,295
45,030,057
725,119
53,101,165
98,856,341
128,405,033
47,630,852
5,177,257
47,657,275
100,465,384
329,052,679
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
1,219,180,739
-
11,552,855
206,439,143
-
64,490,000
1,501,662,737
1,168,229,051
-
9,595,084
393,845,209
-
115,709,188
1,687,378,532
42,819,430
-
8,334,177
51,153,607
1,552,816,344
38,260,202
-
14,919,812
53,180,014
1,740,558,546
## Includes securities costing `34,501.78 crores (previous year `29,283.94 crores) pledged for availment of fund transfer facility, clearing facility and
margin requirements
268
Financial Statements
Schedule 9 - Advances
A.
B.
C.
(i) Bills purchased and discounted
(ii) Cash credits, overdrafts and loans repayable on demand
(iii) Term loans #
Total
(i)
(ii) Covered by Bank/Government Guarantees &&
(iii) Unsecured
Total
I.
Secured by tangible assets $
Advances in India
(i) Priority Sector
(ii) Public Sector
(iii) Banks
(iv) Others
Total
II. Advances Outside India
(i) Due from banks
(ii) Due from others -
(a) Bills purchased and discounted
(b) Syndicated loans
(c) Others
Total
Grand Total [CI+CII]
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
145,282,883
1,580,313,876
4,103,991,595
5,829,588,354
4,234,489,317
19,316,246
1,575,782,791
5,829,588,354
155,366,967
1,504,923,908
3,406,270,369
5,066,561,244
3,648,665,829
36,063,289
1,381,832,126
5,066,561,244
1,438,593,307
134,270,813
21,809,078
3,747,137,021
5,341,810,219
1,188,930,411
65,894,406
43,110,224
3,345,917,806
4,643,852,847
25,828,342
20,815,655
28,288,691
31,671,905
401,989,197
487,778,135
5,829,588,354
23,843,213
58,113,336
319,936,193
422,708,397
5,066,561,244
# Net of borrowings under Inter Bank Participation Certificate (IBPC) `1,500.00 crores (previous year `2,750.00 crores), includes lending under IBPC
`2,900.10 crores (previous year `3,529.50 crores)
$ Includes advances against book debts
&& Includes advances against L/Cs issued by other banks
Schedule 10 - Fixed Assets
I.
Premises
Gross Block
At cost at the beginning of the year
Additions during the year*
Deductions during the year
Total
Depreciation
As at the beginning of the year
Charge for the year
Deductions during the year
Depreciation to date
Net Block
II. Other fixed assets (including furniture & fixtures)
Gross Block
At cost at the beginning of the year
Additions on acquisition
Additions during the year*
Deductions during the year
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
17,917,464
460,004
-
18,377,468
1,640,431
276,446
-
1,916,877
16,460,591
62,344,017
-
8,630,828
(1,231,550)
69,743,295
18,331,432
169,308
(583,276)
17,917,464
1,470,051
292,310
(121,930)
1,640,431
16,277,033
53,911,389
-
9,375,302
(942,674)
62,344,017
269
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Depreciation
As at the beginning of the year
Additions on acquisition
Charge for the year
Deductions during the year
Depreciation to date
Net Block
III. Capital Work-in-Progress (including capital advances)
Grand Total (I+II+III)
* includes movement on account of exchange rate fluctuation
Schedule 11 - Other Assets
Inter-office adjustments (net)
Interest Accrued
Tax paid in advance/tax deducted at source (net of provisions)
Stationery and stamps
Non banking assets acquired in satisfaction of claims&
I.
II.
III.
IV.
V.
VI. Others #@$
Total
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
40,199,808
-
7,780,867
(894,153)
47,086,522
22,656,773
4,826,021
43,943,385
33,802,484
-
7,079,384
(682,060)
40,199,808
22,144,209
2,877,581
41,298,823
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
-
72,554,289
16,696,759
1,056
-
785,120,127
874,372,231
-
71,428,760
17,095,247
3,057
87,276
523,383,641
611,997,981
# Includes deferred tax assets of `7,363.79 crores (previous year `7,687.68 crores) [Refer Schedule 18 (2.1.11)]
@ Includes Priority Sector Shortfall Deposits of `46,462.92 crores (previous year `28,161.77 crores)
$ Includes goodwill on consolidation of `289.24 crores (previous year `289.24 crores)
& Represents balance net of provision of `2,068.24 crores on Land held as non-banking asset. (previous year represents balance net of provision of
`2,208.61 crores on Land held as non-banking asset and provision of `2.09 crores on other non banking assets)
Schedule 12 - Contingent Liabilities
I.
II.
III.
Claims against the Group not acknowledged as debts
Liability for partly paid investments
Liability on account of outstanding forward exchange and derivative contracts :
a) Forward Contracts
b)
c) Foreign Currency Options
Total (a+b+c)
Interest Rate Swaps, Currency Swaps, Forward Rate Agreement & Interest Rate Futures
IV. Guarantees given on behalf of constituents
In India
Outside India
V.
Acceptances, endorsements and other obligations
VI. Other items for which the Group is contingently liable
Grand Total (I+II+III+IV+V+VI) [Refer Schedule 18 (2.1.16)]
(` in Thousands)
As at 31-03-2020
As at 31-03-2019
17,432,034
1,387,700
6,275,310
18,000
4,559,787,377
3,033,699,904
451,140,999
8,044,628,280
3,296,537,608
2,396,504,945
464,047,739
6,157,090,292
664,796,899
74,715,368
251,657,421
195,449,875
9,250,067,577
680,528,970
75,480,355
324,474,560
338,422,264
7,582,289,751
270
Financial Statements Schedules forming part of the Consolidated Profit & Loss Account
For the year ended 31 March, 2020
Schedule 13 - Interest Earned
Interest/discount on advances/bills
Income on investments
Interest on balances with Reserve Bank of India and other inter-bank funds
I.
II.
III.
IV. Others
Total
Schedule 14 - Other Income
I.
II.
III.
IV.
V.
Commission, exchange and brokerage
Profit/(Loss) on sale of investments (net)
Profit/(Loss) on sale of land, buildings and other assets (net)*
Profit on exchange/derivative transactions (net)
Income earned by way of dividends etc. from subsidiaries/companies and/or joint venture
abroad/in India
VI. Miscellaneous Income
[including recoveries on account of advances/investments written off in earlier years `1,553.14
crores (previous year `1,902.24 crores) and profit on account of portfolio sell downs/securitisation
`25.50 crores (previous year net profit of `7.96 crores)]
Total
*includes provision for diminution in value of fixed assets
Schedule 15 - Interest Expended
Interest on deposits
Interest on Reserve Bank of India/Inter-bank borrowings
I.
II.
III. Others
Total
Schedule 16 - Operating Expenses
Payments to and provisions for employees
I.
Rent, taxes and lighting
II.
Printing and stationery
III.
Advertisement and publicity
IV.
V.
Depreciation on Group’s property
VI. Directors’ fees, allowance and expenses
VII. Auditors’ fees and expenses
VIII. Law charges
IX.
X.
XI.
XII. Other expenditure
Postage, telegrams, telephones etc.
Repairs and maintenance
Insurance
Total
Year ended
31-03-2020
493,233,034
112,793,394
10,987,124
20,143,252
637,156,804
Year ended
31-03-2020
107,527,475
21,872,948
(50,818)
15,806,073
(` in Thousands)
Year ended
31-03-2019
423,225,782
113,756,581
6,990,108
16,464,052
560,436,523
(` in Thousands)
Year ended
31-03-2019
99,581,861
7,928,093
(247,690)
15,150,700
-
-
18,264,259
19,474,574
163,419,937
141,887,538
Year ended
31-03-2020
294,108,051
20,440,779
65,410,577
379,959,407
Year ended
31-03-2020
58,199,622
11,714,178
1,664,909
1,347,600
8,060,735
34,419
35,984
1,237,449
2,887,728
11,860,447
7,518,405
76,096,109
180,657,585
(` in Thousands)
Year ended
31-03-2019
237,400,132
30,217,595
71,217,019
338,834,746
(` in Thousands)
Year ended
31-03-2019
59,898,715
10,875,319
1,988,746
1,629,794
7,371,694
42,943
29,896
1,180,869
3,121,993
10,932,230
6,011,683
64,117,990
167,201,872
271
Annual Report 2019-20Experience Open Consolidated Financial Statements
17 Significant Accounting Policies
For the year ended 31 March, 2020
1. Principles of Consolidation
The consolidated financial statements comprise the financial statements of Axis Bank Limited (‘the Bank’) and its subsidiaries,
which together constitute ‘the Group’. The Bank has overseas branches at Singapore, Hong Kong, DIFC - Dubai, Shanghai
and Colombo and an Offshore Banking Unit at International Financial Service Centre (IFSC), Gujarat International Finance
Tec-City (GIFT City), Gandhinagar, India.
The Bank consolidates its subsidiaries in accordance with AS 21, Consolidated Financial Statements notified under Section
133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016 on a line-by-line basis by adding together the like items of assets, liabilities,
income and expenditure. All significant inter-company accounts and transactions are eliminated on consolidation.
2. Basis of preparation
a)
The consolidated financial statements have been prepared and presented under the historical cost convention on the
accrual basis of accounting in accordance with the generally accepted accounting principles in India, unless otherwise
stated by the Reserve Bank of India (‘RBI’), to comply with the statutory requirements prescribed under the Third
Schedule of the Banking Regulation Act, 1949, the circulars, notifications, guidelines and directives issued by RBI from
time to time and the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with
paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules,
2016 to the extent applicable and practices generally prevalent in the banking industry in India. Accounting policies
applied have been consistent with the previous year except otherwise stated.
b) The consolidated financial statements present the accounts of Axis Bank Limited with its following subsidiaries:
Name
Axis Capital Ltd.
Axis Private Equity Ltd.
Axis Trustee Services Ltd.
Axis Mutual Fund Trustee Ltd.
Axis Asset Management Company Ltd.
Axis Finance Ltd.
Axis Securities Ltd.
Freecharge Payment Technologies Pvt. Ltd.
Accelyst Solutions Pvt. Ltd.
A.Treds Ltd.
Axis Bank UK Ltd.
Axis Capital USA LLC
Relation
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Step down subsidiary
Country of
Incorporation
Ownership Interest
India
India
India
India
India
India
India
India
India
India
U.K.
USA
100.00%
100.00%
100.00%
75.00%
75.00%
100.00%
100.00%
100.00%
100.00%
67.00%
100.00%
100.00%
c)
The financial statements of certain subsidiaries have been prepared in accordance with notified Indian Accounting
Standards (‘Ind-AS’). The financial statements of such subsidiaries used for consolidation of the consolidated financial
statements are special purpose financial statements prepared in accordance with Generally Accepted Accounting
Principles in India (‘GAAP’) specified under section 133 of the Companies Act, 2013 read together with paragraph 7 of
the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.
d) The audited financial statements of the above subsidiaries and the unaudited financial statements of the step down
subsidiary have been drawn up to the same reporting date as that of the Bank, i.e. 31 March, 2020.
e) The financial statements of the Bank’s foreign subsidiary, Axis Bank UK Ltd. (‘the Company’) are drawn up in accordance
with International Financial Reporting Standards (‘IFRSs’) and interpretations issued by the International Financial
Reporting Interpretations Committee (‘IFRIC’), as adopted by the European Union. In January 2020, following a strategic
review of operations, the Board of Axis Bank UK Limited approved the decision to exit the UK market and wind down
272
Financial Statements
operations. Accordingly, the financial statements of the Company have been prepared on a basis other than that of
a going concern. These financial statements have been converted to Indian GAAP for the purpose of consolidated
financial statements of the Group.
f)
Axis Private Equity Ltd., is in the process of amalgamation with Axis Finance Ltd. and has submitted an application for
amalgamation before the National Company Law Tribunal on 13 October, 2017. At the last hearing in February 2020,
the NCLT has fixed the matter as reserved for order and the same is awaited as at the Balance Sheet date.
g) On 27 March, 2018, the Board of Directors of Accelyst Solutions Pvt. Ltd (‘ASPL’) and Freecharge Payment
Technologies Pvt. Ltd. (‘FCPTL’) approved a scheme for amalgamation of ASPL into and with FCPTL. ASPL and FCPTL
filed final petition for approval of merger before the National Company Law Tribunal (‘NCLT’). The appointed date
for amalgamation is 7 October, 2017 and the effect of merger will be given on this date or any other date as may be
prescribed by the NCLT. Subsequent to the final hearing in the matter conducted during the year, FCPTL received the
copy of the order approved by NCLT, Delhi and has filed the same with the Ministry of Company Affairs in November
2019. However, in the case of ASPL, the NCLT, Mumbai order amended the appointed date of amalgamation from 7
October, 2017 to 1 April, 2018. Since the Scheme filed by the FCPTL was already approved by NCLT, Delhi with the
appointed date of 7 October, 2017, the order of NCLT, Mumbai sanctioning the scheme cannot be implemented due
to discrepancy in appointed date. Therefore, ASPL is in the process of filing a modification application in NCLT, Mumbai
to amend the appointed date from 1 April, 2018 to 7 October, 2017 as originally mutually decided by FCPTL and ASPL
and as mentioned in the scheme of amalgamation. Accordingly, no accounting impact of the Scheme is taken in the
consolidated financial statements as at 31 March, 2020.
3. Use of estimates
The preparation of the financial statements in conformity with the generally accepted accounting principles requires the
Management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including
contingent liabilities) at the date of the financial statements, revenues and expenses during the reporting period. Actual results
could differ from those estimates. The Management believes that the estimates and assumptions used in the preparation of
the financial statements are prudent and reasonable. Any revisions to the accounting estimates are recognised prospectively
in the current and future periods.
4. Change in accounting policies/estimates
Provision on Non-Fund based outstanding
During the year, the Bank has adopted a policy of maintaining provision on non-funded outstanding in NPAs, prudentially
written off accounts, corporate standard advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC. As a
result, the provisions and contingencies for the year are higher by `410.52 crores with a consequent reduction to the profit
before tax.
5. Significant accounting policies
5.1 Investments
Axis Bank Ltd.
Classification
In accordance with the RBI guidelines, investments are classified at the time of purchase as:
• Held for Trading (‘HFT’);
• Available for Sale (‘AFS’); and
• Held to Maturity (‘HTM’).
Investments that are held principally for sale within a short period are classified as HFT securities. As per the RBI
guidelines, HFT securities, which remain unsold for a period of 90 days are transferred to AFS securities.
Investments that the Bank intends to hold till maturity are classified under the HTM category. Investments in the
equity of subsidiaries/joint ventures are categorised as HTM in accordance with the RBI guidelines.
All other investments are classified as AFS securities.
However, for disclosure in the Balance Sheet, investments in India are classified under six categories - Government
Securities, Other approved securities, Shares, Debentures and Bonds, Investment in Subsidiaries/Joint Ventures and
273
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Others. Investments made outside India are classified under three categories - Government Securities, Subsidiaries
and/or Joint Ventures abroad and Others.
All investments are accounted for on settlement date, except investments in equity shares which are accounted for on
trade date.
Transfer of security between categories
Transfer of security between categories of investments is accounted as per the RBI guidelines.
Acquisition cost
Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the
Profit and Loss Account.
Broken period interest is charged to the Profit and Loss Account.
Cost of investments is computed based on the weighted average cost method.
Valuation
Investments classified under the HTM category: Investments are carried at acquisition cost unless it is more than the face
value, in which case the premium is amortised over the period remaining to maturity on a constant yield to maturity
basis. Such amortization of premium is adjusted against interest income under the head ‘Income from Investments’
under Schedule 13 in Profit and Loss Account In terms of RBI guidelines, discount on securities held under HTM
category is not accrued and such securities are held at the acquisition cost till maturity.
Investments classified under the AFS and HFT categories: Investments under these categories are marked to market.
The market/fair value of quoted investments included in the ‘AFS’ and ‘HFT’ categories is the market price of the
scrip as available from the trades/quotes on the stock exchanges or prices declared by Primary Dealers Association
of India (‘PDAI’) jointly with Fixed Income Money Market and Derivatives Association of India (‘FIMMDA’)/ Financial
Benchmark India Private Limited (‘FBIL’), periodically. Net depreciation, if any, within each category of each investment
classification is recognised in the Profit and Loss Account. The net appreciation if any, under each category of each
investment classification is ignored. The depreciation on securities acquired by way of conversion of outstanding loans
is provided in accordance with the RBI guidelines. The book value of individual securities is not changed consequent to
the periodic valuation of investments.
Non-performing investments are identified and provision is made thereon as per RBI guidelines. The provision on such
non-performing investments is not set off against the appreciation in respect of other performing securities. Interest
on non-performing investments is not recognised in the Profit and Loss Account until received.
Treasury Bills, Exchange Funded Bills, Commercial Paper and Certificate of Deposits being discounted instruments, are
valued at carrying cost which includes discount amortised over the period to maturity.
Units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund.
Market value of investments where current quotations are not available, is determined as per the norms prescribed by
the RBI as under:
The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio
(‘SLR’) securities included in the AFS and HFT categories is computed as per the rates published by FIMMDA/
FBIL.
In case of special bonds issued by Government of India that do not qualify for SLR, unquoted bonds, debentures,
preference shares where interest/dividend is received regularly (i.e. not overdue beyond 90 days), the market
price is derived based on the YTM for Government Securities as published by FIMMDA/PDAI/FBIL and suitably
marked up for credit risk applicable to the credit rating of the instrument. The matrix for credit risk mark-up for
each category and credit ratings along with residual maturity issued by FIMMDA/FBIL is adopted for this purpose.
In case of bonds & debentures where interest is not received regularly (i.e. overdue beyond 90 days), the valuation
is in accordance with prudential norms for provisioning as prescribed by RBI.
•
•
•
274
Financial Statements
•
•
•
•
Pass Through Certificates (‘PTC’) and Priority Sector PTCs are valued as per extant FIMMDA guidelines.
Equity shares, for which current quotations are not available or where the shares are not quoted on the stock
exchanges, are valued at break-up value (without considering revaluation reserves, if any) which is ascertained
from the company’s latest Balance Sheet. In case the latest Balance Sheet is not available, the shares are valued
at `1 per company.
Units of Venture Capital Funds (‘VCF’) held under AFS category where current quotations are not available are
valued based on the latest audited financials of the fund. In case the audited financials are not available for
a period beyond 18 months, the investments are valued at `1 per VCF. Investment in unquoted VCF after 23
August, 2006 may be categorised under HTM category for the initial period of three years and are valued at cost
as per RBI guidelines.
In case investments in security receipts on or after 1 April, 2017 which are backed by more than 50 percent of
the stressed assets sold by the Bank, provision for depreciation in value is made at the higher of - provisioning
rate required in terms of net asset value declared by the Reconstruction Company (‘RC’)/Securitisation Company
(‘SC’) or the provisioning rate as per the extant asset classification and provisioning norms as applicable to the
underlying loans, assuming that the loan notionally continued in the books of the bank. All other investments in
security receipts are valued as per the NAV obtained from the issuing RC/SCs.
Disposal of investments
Investments classified under the HTM category: Realised gains are recognised in the Profit and Loss Account and
subsequently appropriated to Capital Reserve account (net of taxes and transfer to statutory reserves) in accordance
with the RBI guidelines. Losses are recognised in the Profit and Loss Account.
Investments classified under the AFS and HFT categories: Realised gains/losses are recognised in the Profit and Loss
Account.
Repurchase and reverse repurchase transactions
Repurchase and reverse repurchase transactions in government securities and corporate debt securities including
those conducted under the Liquidity Adjustment Facility (‘LAF’) and Marginal Standby Facility (‘MSF’) with RBI are
accounted as collateralised borrowing and lending respectively. Accordingly, securities given as collateral under an
agreement to repurchase them continue to be held under the investment account and the Bank continues to accrue
the coupon/discount on the security during the repo period. Further, the Bank continues to value the securities sold
under repo as per the investment classification of the security. Borrowing cost on repo transactions is accounted as
interest expense and revenue on reverse repo transactions is accounted as interest income.
Short Sales
In accordance with the RBI guidelines, the Bank undertakes short sale transactions in Central Government dated
securities. The short positions are reflected in ‘Securities Short Sold (‘SSS’) A/c’, specifically created for this purpose.
Such short positions are categorised under HFT category and netted off from investments in the Balance Sheet. These
positions are marked-to-market along with the other securities under HFT portfolio and the resultant mark-to-market
gains/losses are accounted for as per the relevant RBI guidelines for valuation of investments discussed earlier.
Subsidiaries
Investments are initially recognised at cost which comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Investments which are readily realisable and intended to be held for not more than one year from the date on which
such investments are made, are classified as current investments. All other investments are classified as long term
investments.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual
investment basis. Any reduction in the carrying amount and any reversal of such reductions are charged or credited to
the Profit and Loss Account.
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Long term investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value
of such investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or
credited to the Profit and Loss Account.
5.2 Advances
Axis Bank Ltd.
Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of bills rediscounted, inter-bank participation certificates, specific provisions made towards NPAs, interest in
suspense for NPAs, claims received from Export Credit Guarantee Corporation, provisions for funded interest on term
loan classified as NPAs, provisions in lieu of diminution in the fair value of restructured assets and floating provisions.
NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by the RBI. Advances
held at the overseas branches that are identified as impaired as per host country regulations for reasons other
than record of recovery, but which are standard as per the RBI guidelines, are classified as NPAs to the extent of
amount outstanding in the host country. Provisions for NPAs are made for sub-standard and doubtful assets at rates
as prescribed by the RBI with the exception for agriculture advances and schematic retail advances. In respect of
schematic retail advances, provisions are made in terms of a bucket-wise policy upon reaching specified stages of
delinquency (90 days or more of delinquency) under each type of loan, which satisfies the RBI prudential norms on
provisioning. Provisions in respect of agriculture advances classified into sub-standard and doubtful assets are made at
rates which are higher than those prescribed by the RBI. Provisions for advances booked in overseas branches, which
are standard as per the RBI guidelines but are classified as NPAs based on host country guidelines, are made as per the
host country regulations. In the case of NPAs referred to National Company Law Tribunal (‘NCLT’) under Insolvency
and Bankruptcy Code (‘IBC’) where resolution plan or liquidation order has been approved by NCLT, provision is
maintained at higher of the requirement under RBI guidelines or the likely haircut as per resolution plan or liquidation
order.
Restructured assets are classified and provided for in accordance with the guidelines issued by RBI from time to time.
Loss assets and unsecured portion of doubtful assets are provided/written off as per the extant RBI guidelines.
Amounts recovered against debts written off are recognised in the Profit and Loss account and included under “Other
Income”.
In case of EMI based standard retail advances, funds received from customers are appropriated in the order of
chronology as towards interest, principal, penal interest and charges. In case of other standard advances, funds received
from customers are appropriated in the order of chronology as towards charges, penal interest, interest and principal.
The Bank makes additional provisions as per RBI’s guidelines on ‘Prudential Framework on Resolution of Stressed
Assets’ dated 7 June, 2019 on accounts in default and with aggregate exposure above the threshold limits as laid down
in the said framework where the resolution plan is not implemented within the specified timelines.
In respect of borrowers classified as non-cooperative and willful defaulters, the Bank makes accelerated provisions as
per extant RBI guidelines.
Loans reported as fraud are classified as loss assets, and fully provided immediately without considering the value of
security.
For entities with Unhedged Foreign Currency Exposure (‘UFCE’), provision is made in accordance with the guidelines
issued by RBI, which requires to ascertain the amount of UFCE, estimate the extent of likely loss and estimate the
riskiness of unhedged position. This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
Further, Incremental capital is maintained in respect of borrower counter parties in the highest risk category, in line
with stipulations by RBI.
The Bank maintains provisions for incremental exposure of the banking system to specified borrowers beyond
Normally Permitted Lending Limit (‘NPLL’) in proportion to Bank’s funded exposure to the specified borrowers as per
RBI guidelines. This provision is classified under Schedule 5 – Other Liabilities in the Balance Sheet.
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The Bank maintains a general provision on standard advances at the rates prescribed by RBI other than for corporate
standard advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC, where general provision is
maintained at rates that are higher than those prescribed by RBI. In case of overseas branches, general provision on
standard advances is maintained at the higher of the levels stipulated by the respective overseas regulator or RBI. The
Bank also maintains general provision on positive Mark-to-Market (MTM) on derivatives at the rates prescribed by RBI.
The Bank maintains provision on non-funded outstanding in NPAs, prudentially written off accounts, corporate
standard advances rated ‘BB and Below’ and all SMA-2 advances as reported to CRILC. This provision is classified
under Schedule 5 – Other Liabilities in the Balance Sheet.
Under its home loan portfolio, the Bank offers housing loans with certain features involving waiver of Equated Monthly
Installments (‘EMIs’) of a specific period subject to fulfilment of a set of conditions by the borrower. The Bank makes
provision against the probable loss that could be incurred in future on account of waivers to eligible borrowers in
respect of such loans based on actuarial valuation conducted by an independent actuary. This provision is classified
under Schedule 5 – Other Liabilities in the Balance Sheet.
Axis Finance Ltd.
Advances are classified into performing and non-performing advances (‘NPAs’) as per the RBI guidelines and are stated
net of specific provisions made towards NPAs. Further, NPAs are classified into sub-standard, doubtful and loss assets
based on the criteria stipulated by the RBI.
Non-performing loans are written off / provided for, as per management estimates, subject to the minimum provision
required as per Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit
taking Company (Reserve Bank) Directions, 2016.
Provisions for standard assets and NPAs are made at rates as prescribed under the RBI guidelines.
Axis Bank UK Ltd.
In the case of the Bank’s UK subsidiary, the impairment loss is measured using the Expected Credit Loss (‘ECL’) model
based on a three-stage approach as follows:
Stage 1 - the recognition of 12 month ECL, that is the portion of lifetime expected credit losses from default events
that are expected within 12 months of the reporting date, if credit risk has not increased significantly since initial
recognition;
Stage 2 - lifetime expected credit losses for financial instruments for which credit risk has increased significantly since
initial recognition; and
Stage 3 - lifetime expected credit losses for financial instruments which are credit impaired.
As a result the amount of the allowance is affected by changes in the expectations of loss driven by changes in
associated credit risk. The measurement of ECL is calculated using three main components: (i) probability of default
(‘PD’), (ii) loss given default (‘LGD’) and (iii) the exposure at default (‘EAD’). The ECL is calculated by multiplying the
PD, LGD and the EAD. The PDs represent the probability of default over 12 months or lifetime of the instrument for
stage 1 and stage 2/stage3 respectively. The EAD represents the expected balance at default, taking into account
the repayment of principal and interest from the balance sheet date to the default event together with any expected
drawdowns of committed facilities. The LGD represents expected losses on the EAD given the event of default, taking
into account.
5.3 Country risk
Axis Bank Ltd.
In addition to the provisions required to be held according to the asset classification status, provisions are held for
individual country exposure (other than for home country as per the RBI guidelines). Such provisions are held only in
respect of those countries where the net funded exposure of the Bank exceeds 1% of its total assets. For this purpose
the countries are categorized into seven risk categories namely insignificant, low, moderate, high, very high, restricted
and off-credit as per RBI guidelines. Provision is made on exposures exceeding 180 days on a graded scale ranging
from 0.25% to 100%. For exposures with contractual maturity of less than 180 days, 25% of the normal provision
requirement is held. If the net funded exposure of the Bank in respect of each country does not exceed 1% of the
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total assets, no provision is maintained on such country exposure in accordance with RBI guidelines. This provision is
classified under Schedule 5 – Other Liabilities in the Balance Sheet.
5.4 Securitisation and transfer of assets
Axis Bank Ltd.
The Bank enters into purchase/sale of corporate and retail loans through direct assignment/Special Purpose Vehicle
(‘SPV’). In most cases, post securitisation, the Bank continues to service the loans transferred to the assignee/SPV.
The Bank also provides credit enhancement in the form of cash collaterals and/or by subordination of cash flows to
Senior Pass through Certificate holders. In respect of credit enhancements provided or recourse obligations (projected
delinquencies, future servicing etc.) accepted by the Bank, appropriate provision/disclosure is made at the time of sale
in accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets as notified under Section 133 of
the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies
(Accounting Standards) Amendment Rules, 2016.
In accordance with RBI guidelines of 7 May, 2012 on ‘Guidelines on Securitisation of Standard Assets’, gain on
securitisation transaction is recognised over the period of the underlying securities issued by the SPV. Loss on
securitisation is immediately debited to the Profit and Loss Account.
The Bank transfers advances through inter-bank participation with and without risk. In accordance with the RBI
guidelines, in the case of participation with risk, the aggregate amount of the participation issued by the Bank is
reduced from advances and where the Bank is participating, the aggregate amount of the participation is classified
under advances. In the case of participation without risk, the aggregate amount of participation issued by the Bank is
classified under borrowings and where the Bank is participating, the aggregate amount of participation is shown as due
from banks under advances.
5.5 Priority Sector Lending Certificates
Axis Bank Ltd.
The Bank enters into transactions for the sale or purchase of Priority Sector Lending Certificates (‘PSLCs’). In the case
of a sale transaction, the Bank sells the fulfilment of priority sector obligation and in the case of a purchase transaction
the Bank buys the fulfilment of priority sector obligation through the RBI trading platform. There is no transfer of loan
assets in PSLC transactions.
5.6 Foreign currency transactions
Group
In respect of domestic operations, transactions denominated in foreign currencies are accounted for at the rates
prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are translated at the Balance
Sheet date at rates notified by Foreign Exchange Dealers Association of India (‘FEDAI’). All profits/losses resulting from
year end revaluations are recognised in the Profit and Loss Account.
Financial statements of foreign operations classified as non-integral foreign operations as per the RBI guidelines are
translated as follows:
•
•
•
Assets and liabilities (both monetary and non-monetary as well as contingent liabilities) are translated at closing
exchange rates notified by FEDAI at the Balance Sheet date.
Income and expenses are translated at the rates prevailing on the date of the transactions.
All resulting exchange differences are accumulated in a separate ‘Foreign Currency Translation Reserve’ till the
disposal of the net investments. Any realised gains or losses on such disposal are recognised in the Profit and Loss
Account.
Outstanding forward exchange contracts including tom/spot contracts (excluding currency swaps undertaken to hedge
foreign currency assets/liabilities and funding swaps which are not revalued) are revalued at year end on PV basis by
discounting the forward value till spot date and converting the FCY amount using the respective spot rates as notified
by FEDAI. The resulting gains or losses on revaluation are included in the Profit and Loss Account in accordance with
RBI/FEDAI guidelines.
Premium/discount on currency swaps undertaken to hedge foreign currency assets and liabilities and funding swaps is
recognised as interest income/expense and is amortised on a pro-rata basis over the underlying swap period.
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Contingent liabilities on account of forward exchange and derivative contracts, guarantees, acceptances, endorsements
and other obligations denominated in foreign currencies are disclosed at closing rates of exchange notified by FEDAI.
5.7 Derivative transactions
Axis Bank Ltd.
Derivative transactions comprise of forward contracts, swaps and options which are disclosed as contingent liabilities.
The forwards, swaps and options are categorised as trading or hedge transactions. Trading derivative contracts are
revalued at the Balance Sheet date with the resulting unrealised gain or loss being recognised in the Profit and Loss
Account and correspondingly in other assets (representing positive Mark-to-Market) and in other liabilities ( representing
negative Mark-to-Market (MTM)) on a gross basis . For hedge transactions, the Bank identifies the hedged item (asset
or liability) at the inception of transaction itself. The effectiveness is ascertained at the time of inception of the hedge
and periodically thereafter. Hedge swaps are accounted for on accrual basis except in case of swaps designated with
an asset or liability that is carried at market value or lower of cost or market value in the financial statements. In
such cases the swaps are marked-to-market with the resulting gain or loss recorded as an adjustment to the market
value of designated asset or liability. Hedge transactions that are entered after 26 June, 2019 through rupee interest
rate derivatives are accounted for as per the guidance note issued by ICAI on accounting for derivative contracts.
Pursuant to the RBI guidelines any receivables under derivative contracts comprising of crystallised receivables as well
as positive Mark-to-Market (MTM) in respect of future receivables which remain overdue for more than 90 days are
reversed through the Profit and Loss account and are held in separate Suspense Account.
Premium on options is recognized as income/expense on expiry or early termination of the transaction.
Currency futures contracts are marked-to-market using daily settlement price on a trading day, which is the closing
price of the respective futures contracts on that day. While the daily settlement price is computed based on the last
half an hour weighted average price of such contract, the final settlement price is taken as the RBI reference rate on
the last trading day of the futures contract or as may be specified by the relevant authority from time to time. All open
positions are marked-to-market based on the settlement price and the resultant marked-to-market profit/loss is daily
settled with the exchange.
Valuation of Exchange Traded Currency Options (ETCO) is carried out on the basis of the daily settlement price of each
individual option provided by the exchange and valuation of Interest Rate Futures (IRF) is carried out on the basis of
the daily settlement price of each contract provided by the exchange.
5.8 Revenue recognition
Axis Bank Ltd.
Interest income is recognised on an accrual basis in accordance with AS–9, Revenue Recognition as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014,
the Companies (Accounting Standards) Amendment Rules, 2016 and the RBI guidelines except in the case of interest
income on non-performing assets where it is recognised on receipt basis if overdue for more than 90 days. Income on
non-coupon bearing discounted instruments or low-coupon bearing discounted instruments is recognised over the
tenor of the instrument on a constant yield basis.
Guarantee commission is recognised on a pro-rata basis over the period of the guarantee. Locker rent and annual fees
for credit cards are recognised on a straight-line basis over the period of contract. Arrangership/syndication fee is
accounted for on completion of the agreed service and when right to receive is established. Other fees and commission
income are recognised when due, where the Bank is reasonably certain of ultimate collection.
Interest income on investments in discounted PTCs is recognized on a constant yield basis.
Dividend is accounted on an accrual basis when the right to receive the dividend is established.
Gain/loss on sell down of loans and advances through direct assignment is recognised at the time of sale.
Fees paid for purchase of Priority Sector Lending Certificates (‘PSLC’) is amortised on straight-line basis over the tenor
of the certificate as ‘Other Expenditure’ under Schedule 16 of Profit and Loss Account. Fees received on sale of PSLC is
amortised on straight-line basis over the tenor of the certificate as ‘Miscellaneous Income’ under Schedule 14 of Profit
and Loss Account.
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In accordance with RBI guidelines on sale of non-performing advances, if the sale is at a price below the net book value
(i.e. book value less provisions held), the shortfall is charged to the Profit and Loss Account. If the sale is for a value
higher than the net book value, the excess provision is credited to the Profit and Loss Account in the year the amounts
are received.
The Bank deals in bullion business on a consignment basis. The difference between the price recovered from customers
and cost of bullion is accounted for at the time of sale to the customers. The Bank also deals in bullion on a borrowing
and lending basis and the interest paid/received is accounted on an accrual basis.
Subsidiaries
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured. Fee income is recognised on the basis of accrual when all the services are performed
and there is reasonable certainty of ultimate collection.
Interest income is recognised on an accrual basis.
Dividend income is recognised when the right to receive payment is established by the balance sheet date.
Income from sale of investments is determined on weighted average basis and recognised on the trade date basis.
Axis Capital Limited
Brokerage income in relation to stock broking activity is recognised as per contracted rates at the execution of
transactions on behalf of the customers on a trade date basis. Gains/losses on dealing in securities are recognised on
a trade date basis.
Revenue from issue management, loan syndication, and financial advisory services is recognised based on the stage of
completion of assignments and terms of agreement with the client.
Selling commissions/brokerage generated from primary market operations i.e. procuring subscriptions from investors
for public offerings of companies, mutual funds, etc. are recorded on determination of the amount due to the Company,
once the allotment of securities are completed.
Axis Trustee Services Limited
Annual Fees for trusteeship services and servicing fees are recognised, on a straight line basis, over the period when
services are performed. Initial acceptance fee is recognised as and when the ‘Offer Letter’ for the services to be
rendered is accepted by the customer.
A provision for doubtful debts is recognized where, in the case of Initial Acceptance Fees, the receivables are not
realized within 90 days from the date of invoice, and in the case of Annual Fees, the receivables are not received within
90 days from the end of the period for which the invoice is issued. Where doubtful debt remains unrecovered till the
end of the year, the same is written off and reversed from the debtors account. Specific provisions are created in certain
cases where recovery is assessed as doubtful even before the due date.
Realised gains and losses on mutual funds are dealt with in the Profit and Loss Account. The cost of units in mutual
fund sold are determined on weighted average basis for the purpose of calculating gains or losses on sale/redemption
of such units.
Axis Asset Management Company Limited
Management fees are recognised on accrual basis. The fees charged are in accordance with the terms of scheme
information documents of respective schemes and are in line with the provisions of SEBI (Mutual Funds) Regulations,
1996 as amended from time to time.
Management fees from Portfolio Management Services, Alternate Investment Fund and Investment advisory
fees-offshore are recognized on an accrual basis as per the terms of the contract with the customers.
Axis Mutual Fund Trustee Limited
Trustee fee is recognised on accrual basis, at the specific rates/amount approved by the Board of Directors of the
Company, within the limits specified under the Deed of Trust, and is applied on the net assets of each scheme of Axis
Mutual Fund.
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Financial Statements
Axis Finance Limited
Interest and other dues are accounted on accrual basis except in the case of non-performing loans where it is recognised
upon realisation, as per the income recognition and asset classification norms prescribed by the RBI.
Income on discounted instruments is recognised over the tenure of the instrument on a straight-line method.
Front end fees on processing of loans are recognised upfront as income.
Axis Securities Limited
Business sourcing and resource management fees are recognised on accrual basis when all the services are performed.
Income from subscription plan to the extent of account opening fees is recognised upfront and balance is amortised
over the validity of plan.
Selling commissions/brokerage generated from primary market operations i.e. procuring subscriptions from investors
for public offerings of companies, mutual funds etc. are recorded on determination of the amount due to the company,
once the allotment of securities are completed.
Brokerage income on securities is recognised as per contracted rates at the execution of transactions on behalf of the
customers on the trade date. Gains/losses on dealing in securities are recognised on trade date basis.
Depository fees are recognised on completion of the transaction.
Portfolio management fees are accounted on accrual basis as follows:
•
•
In case of fees based on fixed percentage of the corpus/fixed amount, income is accrued at the end of the quarter/
month.
In case of fees, based on the returns of the portfolio, income is accounted on each anniversary as per the
agreement.
A. Treds Ltd.
Onboarding Fee is a one-time fee and is recognized at the time of onboarding of Buyer, Seller or financier. Transaction
fee is recurring in nature and is recognised on time proportion basis over the tenure of transaction. Transaction fees
received from sellers is recognised upfront on the date of transaction. The company follows recognition of annual fee
on time proportion basis over the tenure of one year.
Freecharge Payment Technologies Private Ltd.
Revenue from commission income
Merchant check out fee from wallet transaction is recognised on the basis of successful pay-out of wallet usage to the
respective merchants. The transactions are settled on a daily basis with the merchant, net of MDR revenue. The taxes
(GST) collected on behalf of the government are excluded from revenue.
Revenue from payment and storage service
The revenue from payment & storage service is recognised for providing PG aggregation service and as a payments
platform for transactions of the merchant executed through payment gateway. The Company collects revenue on the
basis of the payment gateway transactions routed through its payment platform on a monthly basis.
Other operating revenue
Revenues from ancillary activities like convenience fee, commission income etc. are recognised upon rendering of
services.
Unbilled revenue
Receivables are generally carried at the original invoiced amount, less an allowance for doubtful receivables where
there is objective evidence that balances will not be recovered in full. Unbilled receivables is recognised to the extent
for the services not billed at the reporting date.
Accelyst Solutions Private Ltd.
Revenue from commission income
Revenue from operating an internet portal providing recharge and bill payment services is recognised upon successful
recharge / payment confirmation for the transactions executed. The taxes (GST) collected on behalf of the government
are excluded from revenue.
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Miscellaneous revenue
Revenues from ancillary activities e.g. freefund code generation fees, convenience fee, mutual fund commission, sale
of coupons and bus ticketing etc. is recognised upon rendering of services. Upon expiry of validity of freefund codes
sold by the company, income is recognised to the extent of value of such codes.
Unbilled revenue
Receivable are generally carried at the original invoiced amount, less an allowance for doubtful receivables where there
is objective evidence that balances will not be recovered in full. Unbilled receivables is recognized to the extent for the
services not billed at the reporting date.
5.9 Scheme expenses
Axis Asset Management Company Ltd.
New fund offer expenses
Expenses relating to new fund offer of Axis Mutual Fund are charged to the Profit and Loss Account in the year in which
they are incurred.
Brokerage
Claw-backable brokerages paid by the Company in advance are charged to the Profit and Loss account over the claw-
back period/tenure of the respective scheme. The unamortized portion of the claw-backable brokerage is carried
forward as prepaid expense.
Upfront brokerage on close ended and fixed tenure schemes is amortized over the tenure of the respective scheme and
in case of Equity Linked Saving Scheme (ELSS), upfront brokerage is amortized over 3 years. The unamortized portion
of the brokerage is carried forward as prepaid expense. Any other brokerage is expensed out in the year in which they
are incurred.
Brokerage paid on certain PMS products are amortised over the exit load period. Unamortised portion of brokerage is
carried forward as prepaid expenses.
Brokerage paid on Alternate Investment Fund schemes is amortized over the minimum tenure of the scheme. The
unamortized portion of the brokerage is carried forward as prepaid expense.
Other direct expenses
Expenses directly incurred for the scheme of Axis Mutual fund are charged to the Profit and Loss Account under
respective heads unless considered recoverable from schemes in accordance with the provisions of SEBI (Mutual fund)
regulations 1996.
5.10 Fixed assets and depreciation/impairment
Group
Fixed assets are carried at cost of acquisition less accumulated depreciation and impairment, if any. Cost includes initial
handling and delivery charges, duties, taxes and incidental expenses related to the acquisition and installation of the
asset. Subsequent expenditure incurred on assets put to use is capitalised only when it increases the future economic
benefit / functioning capability from / of such assets.
Capital work-in-progress includes cost of fixed assets that are not ready for their intended use and also includes
advances paid to acquire fixed assets.
Depreciation is provided over the estimated useful life of a fixed asset on the straight-line method from the date of
addition. The management believes that depreciation rates currently used, fairly reflect its estimate of the useful lives
and residual values of fixed assets based on historical experience of the Group, though these rates in certain cases
are different from lives prescribed under Schedule II of Companies Act, 2013. Whenever there is a revision of the
estimated useful life of an asset, the unamortised depreciable amount is charged over the revised remaining useful life
of the said asset.
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Financial Statements
Asset
Leased Land
Owned premises
Locker cabinets/cash safe/strong room door
EPABX, telephone instruments
Modem, scanner, routers, hubs, switches, racks/cabinets for IT equipment
UPS, VSAT, fax machines
Cheque book/cheque encoder, currency counting machine, fake note detector
Application software
Electronic Data Capture (EDC)/ Point of Sale (POS) machines
Vehicles
Computer hardware including printers
CCTV and video conferencing equipment
Assets at staff residence
Mobile phone
All other fixed assets
Estimated useful life
As per the term of the agreement
60 years
10 years
8 years
5 years
5 years
5 years
5 years
5 years
4 years
3 years
3 years
3 years
2 years
10 years
Assets costing less than `5,000 individually are fully depreciated in the year of purchase.
Depreciation on assets sold during the year is recognised on a pro-rata basis to the Profit and Loss Account till the date
of sale.
Gain or losses arising from the retirement or disposal of Fixed Assets are determined as the difference between the
net disposal proceeds and the carrying amount of assets and recognised as income or expense in the Profit and Loss
Account. Further, in case of Bank, profit on sale of premises is appropriated to Capital Reserve account (net of taxes
and transfer to statutory reserve) in accordance with RBI instructions.
The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain if there is any indication of
impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an
asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted
average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life.
5.11 Non-banking assets
Axis Bank Ltd.
Non-banking assets (‘NBAs’) acquired in satisfaction of claims include land. In the case of land, the Bank creates
provision and follows the accounting treatment as per specific RBI directions.
5.12 Lease transactions
Group
Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are
classified as operating lease. 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. Lease income from assets given on operating lease
is recognized as income in profit and loss account on a straight line basis over the lease term.
5.13 Retirement and other employee benefits
Provident Fund
Axis Bank Ltd.
Retirement benefit in the form of provident fund is a defined benefit plan wherein the contributions are charged to
the Profit and Loss Account of the year when the contributions to the fund are due and when services are rendered by
the employees. Further, an actuarial valuation is conducted by an independent actuary using the Projected Unit Credit
Method as at 31 March each year to determine the deficiency, if any, in the interest payable on the contributions as
compared to the interest liability as per the statutory rate. Actuarial gains/losses are immediately taken to the Profit
and Loss Account and are not deferred.
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Subsidiaries
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation,
other than the contribution payable to the provident fund. The Company recognises contribution payable to the
provident fund scheme as an expenditure, when an employee renders the related service.
Gratuity
Axis Bank Ltd.
The Bank contributes towards gratuity fund (defined benefit retirement plan) administered by various insurers for
eligible employees. Under this scheme, the settlement obligations remain with the Bank, although various insurers
administer the scheme and determine the contribution premium required to be paid by the Bank. The plan provides
a lump sum payment to vested employees at retirement or termination of employment based on the respective
employee’s salary and the years of employment with the Bank. Liability with regard to gratuity fund is accrued based on
actuarial valuation conducted by an independent actuary using the Projected Unit Credit Method as at 31 March each
year. In respect of employees at overseas branches (other than expatriates) liability with regard to gratuity is provided
on the basis of a prescribed method as per local laws, wherever applicable. Actuarial gains/losses are immediately taken
to the Profit and Loss Account and are not deferred.
Subsidiaries
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation using Projected
Unit Credit Method made at the end of each financial year. Actuarial gains/losses are immediately taken to the Profit
and Loss Account and are not deferred.
Compensated Absences
Axis Bank Ltd.
Compensated absences are short term in nature for which provision is held on accrual basis.
Subsidiaries
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee
benefit. The expected cost of such absences is measured as the additional amount that is expected to be paid as a
result of the unused entitlement that has accumulated at the reporting date.
Accumulated leave expected to be carried forward beyond twelve months is treated as long-term employee benefit
for measurement purposes. Such compensated absences are provided for based on the actuarial valuation using the
projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit
and loss and are not deferred.
Superannuation
Axis Bank Ltd.
Employees of the Bank are entitled to receive retirement benefits under the Bank’s Superannuation scheme either
under a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan
the Bank contributes annually a specified sum of 10% of the employee’s eligible annual basic salary to LIC, which
undertakes to pay the lumpsum and annuity benefit payments pursuant to the scheme. Superannuation contributions
are recognised in the Profit and Loss Account in the period in which they accrue.
New Pension Scheme (‘NPS’)
Group
In respect of employees who opt for contribution to the ‘NPS’, the Group contributes certain percentage of the total
basic salary of employees to the aforesaid scheme, a defined contribution plan, which is managed and administered by
pension fund management companies. NPS contributions are recognised in the Profit and Loss Account in the period
in which they accrue.
Long term deferred variable pay structure
Axis Capital Ltd.
As part of its variable pay structure, the company operates long term deferred variable pay structure plan in which
it defers a part of the entitlement which is to be settled in installments over a period of three years at an amount
which would be equivalent to the prevailing price of equity share of Axis Bank at the time of settlement. The costs of
providing benefits under this plan is determined on the basis of actuarial valuation at the year-end using the Projected
Unit Credit Method.
284
Financial Statements
5.14 Long Term Incentive Plan (LTIP)
Axis Asset Management Company Ltd.
The Company has initiated Axis AMC - Long Term Incentive plan. The points granted to employees as per the guidelines
laid down in the plan are encashable after they are held for a specified period as per the terms of the plan. The
Company accounts for the liability arising on points granted proportionately over the period from the date of grant till
the end of the exercise window. The present value of the obligation under such plan is determined based on actuarial
valuation.
5.15 Reward points
Axis Bank Ltd.
The Bank runs a loyalty program which seeks to recognize and reward customers based on their relationship with
the Bank. Under the program, eligible customers are granted loyalty points redeemable in future, subject to certain
conditions. In addition, the Bank continues to grant reward points in respect of certain credit cards (not covered under
the loyalty program). The Bank estimates the probable redemption of such loyalty/reward points using an actuarial
method at the Balance Sheet date by employing an independent actuary, which includes assumptions such as mortality,
redemption and utilization. Provision for the said reward points is then made based on the actuarial valuation report as
furnished by the said independent actuary.
5.16 Taxation
Group
Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined
in accordance with the relevant provisions of Income tax Act, 1961 and considering the material principle set out in
Income Computation and Disclosure Standards to the extent applicable. In case of overseas subsidiary the local tax
laws prevailing in that country are followed. Deferred income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance
Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off assets
against liabilities representing current tax and the deferred tax assets and deferred tax liabilities relate to the taxes on
income levied by same governing taxation laws.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be realised. The impact of changes in the deferred
tax assets and liabilities is recognised in the Profit and Loss Account.
Deferred tax assets are recognised and reassessed at each reporting date, based upon the Management’s judgement
as to whether 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 asset can be realised against future profits.
5.17 Share issue expenses
Group
Share issue expenses are adjusted from Share Premium Account in terms of Section 52 of the Companies Act, 2013.
5.18 Corporate Social Responsibility
Group
Expenditure towards corporate social responsibility, in accordance with Companies Act, 2013, is recognised as
operating expenditure or capital expenditure as applicable
5.19 Earnings per share
Group
The group reports basic and diluted earnings per share in accordance with AS-20, Earnings per Share, as notified under
Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and
the Companies (Accounting Standards) Amendment Rules, 2016. Basic earnings per share is computed by dividing the
net profit after tax by the weighted average number of equity shares outstanding for the year.
Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity
shares were exercised or converted during the year. Diluted earnings per share is computed using the weighted average
285
Annual Report 2019-20Experience Open
Consolidated Financial Statements
number of equity shares and dilutive potential equity shares outstanding at the year end except where the results are
anti-dilutive.
5.20 Employee stock option scheme
Axis Bank Ltd.
The 2001 Employee Stock Option Scheme (‘the Scheme’) provides for grant of stock options on equity shares of the
Bank to employees and Directors of the Bank and its subsidiaries. The Scheme is in accordance with the Securities and
Exchange Board of India (SEBI) (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 (‘the Guidelines’). These Guidelines have been repealed in the month of October, 2014 and were substituted
by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Scheme is in
compliance with the said regulations. The Bank follows the intrinsic value method to account for its stock based
employee compensation plans as per the Guidelines. Options are granted at an exercise price, which is equal to/less
than the fair market price of the underlying equity shares. The excess of such fair market price over the exercise price of
the options as at the grant date, if any, is recognised as a deferred compensation cost and amortised on a straight-line
basis over the vesting period of such options.
The fair market price is the latest available closing price, prior to the date of grant, on the stock exchange on which the
shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock exchange where
there is highest trading volume on the said date is considered.
5.21 Provisions, contingent liabilities and contingent assets
Group
In accordance with AS-29 “Provisions, Contingent Liabilities and Contingent Assets” provision is recognised when
the Group has a present obligation as a result of past event where it is probable that an outflow of resources will be
required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to
its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
A disclosure of contingent liability is made when there is:
•
•
a possible obligation arising from a past event, the existence of which will be confirmed by occurrence or
non-occurrence of one or more uncertain future events not within the control of the Group; or
a present obligation arising from a past event which is not recognised as it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be
made.
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.
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually
and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in
the period in which the change occurs.
5.22 Accounting for dividend
Group
As per AS-4 ‘Contingencies and Events occurring after the Balance sheet date’ as notified by the Ministry of Corporate
Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated 30 March, 2016,
the Group does not account for proposed dividend (including tax) as a liability through appropriation from the Profit
and Loss Account. The same is recognised in the year of actual payout post approval of shareholders. However, the
Bank reckons proposed dividend in determining capital funds in computing the capital adequacy ratio.
5.23 Cash and cash equivalents
Group
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and
short notice.
286
Financial Statements
18 Notes forming part of the Consolidated Financial Statements
For the year ended 31 March, 2020
1.1 During the year ended 31 March, 2020, the Bank allotted 45,357,385 equity shares at a price of `565 per share pursuant to
exercise of convertible share warrants by the warrant holders. As a consequence, the paid-up share capital of the Bank has
increased by `9.07 crores and the reserves of the Bank have increased by `2,551.03 crores after charging off issue related
expenses.
Further, during the year ended 31 March, 2020, the Bank raised additional equity capital through a Qualified Institutional
Placement of 198,728,139 shares at a price of `629 per share. As a consequence, the paid-up share capital of the Bank has
increased by `39.75 crores and the reserves of the Bank have increased by `12,392.50 crores after charging off issue related
expenses. The funds mobilised from equity raising were utilised for enhancing the capital adequacy ratio and for general
corporate purpose.
1.2 COVID-19 virus, a global pandemic has affected the world economy including India leading to significant decline and
volatility in financial markets and decline in economic activities. On 24 March, 2020, the Indian Government announced a
strict 21-day lock-down which was further extended by 19 days across the country to contain the spread of the virus. The
extent to which the COVID-19 pandemic will impact the Bank’s provision on assets will depend on the future developments,
which are highly uncertain, including among the other things any new information concerning the severity of the COVID-19
pandemic and any action to contain its spread or mitigate its impact whether government mandated or elected by the Bank.
The RBI on 27 March, 2020 and 17 April, 2020, announced ‘COVID-19 Regulatory Package’ on asset classification and
provisioning. In terms of the RBI guidelines, the lending institutions have been permitted to grant a moratorium of three
months on payment of all instalments/interest, as applicable, falling due between 1 March, 2020 and 31 May, 2020
(‘moratorium period’). As such, in respect of all accounts classified as standard as on 29 February, 2020, even if overdue,
the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due
for the purpose of asset classification under RBI’s Income Recognition and Asset Classification norms. The Bank holds
provisions as at 31 March, 2020 against the potential impact of COVID-19 based on the information available at this point
in time. The provisions held by the Bank are in excess of the RBI prescribed norms.
2.1 Disclosures
2.1.1
‘Provisions and contingencies’ recognised in the Profit and Loss Account comprise of:
For the year ended
Provision for income tax
- Current tax
- Deferred tax1 (Refer 1.1.11)
Provision for non-performing assets (including bad debts written off and write backs)
Provision for restructured assets/strategic debt restructuring/ sustainable structuring
Provision towards standard assets2
Provision for depreciation in value of investments
Provision for unhedged foreign currency exposure
Provision for country risk
Provision for other contingencies3
Total
(` in crores)
31 March, 2020
31 March, 2019
3,076.88
324.41
3,401.29
12,835.30
(15.50)
1,534.16
135.99
(10.68)
12.17
4,224.49
22,117.22
3,271.12
(726.16)
2,544.96
10,272.11
(19.66)
814.31
296.54
18.79
-
654.60
14,581.65
1. The Group has elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as introduced by the
Taxation Laws (Amendment) Act, 2019. The Group has recognised provision for income tax for the year ended 31 March, 2020 in
line with the above option. This has necessitated a restatement of the opening balance of deferred tax assets as at 1 April, 2019,
basis the rate prescribed in the aforesaid section.
2. including provision on loans under moratorium as per RBI guidelines on COVID-19 regulatory package of `1,117.72 crores.
3. includes provision for non-banking assets, legal cases, other contingencies and provision of `1,882.28 crores for COVID-19 over
and above regulatory requirement.
287
Annual Report 2019-20Experience Open
Consolidated Financial Statements
2.1.2
During the years ended 31 March, 2020 and 31 March 2019, the Bank has not raised debt instruments eligible for
Tier-I/Tier-II capital.
During the year ended 31 March, 2020, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital, the
details of which are set out below:
Instrument
Subordinated debt
Capital
Tier II
Date of maturity
16 June, 2019
Period
120 months
Coupon
9.15%p.a.
Amount
`2000 crores
During the year ended 31 March, 2019, the Bank redeemed debt instruments eligible for Tier-I/Tier-II capital, the
details of which are set out below:
Instrument
Subordinated debt
Subordinated debt
Capital
Tier II
Tier II
Date of maturity
7 November, 2018
28 March, 2019
Period
120 months
120 months
Coupon
11.75% p.a.
9.95%p.a.
Amount
`1,500 crores
`200 crores
2.1.3
Divergence in Asset Classification and Provisioning for NPAs
In terms of the RBI circular no. DBR.BP.BC.No.32/21.04.018/2018-19 dated 1 April, 2019, banks are required to
disclose the divergences in asset classification and provisioning consequent to RBI’s annual supervisory process
in their notes to accounts to the financial statements, wherever either or both of the following conditions are
satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit
before provisions and contingencies for the reference period and (b) the additional Gross NPAs identified by RBI
exceed 15 per cent of the published incremental Gross NPAs for the reference period.
Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is required with
respect to RBI’s annual supervisory process for the year ended 31 March, 2019.
2.1.4
Earnings Per Share (‘EPS’)
The details of EPS computation is set out below:
As at
Basic and Diluted earnings for the year (Net profit after tax) (` in crores)
Basic weighted average no. of shares (in crores)
Add: Equity shares for no consideration arising on grant of stock options under ESOP
(in crores)
Diluted weighted average no. of shares (in crores)
Basic EPS (`)
Diluted EPS (`)
Nominal value of shares (`)
31 March, 2020
31 March, 2019
1,853.11
271.51
5,038.59
256.90
0.98
272.49
6.83
6.80
2.00
1.58
258.48
19.61
19.49
2.00
Dilution of equity is on account of 8,395,776 stock options and 1,420,559 warrants (previous year 9,813,655
stock options and 6,033,509 warrants)
2.1.5
Employee Stock Options Scheme (‘the Scheme’)
Pursuant to the approval of the shareholders in February 2001, the Bank approved an Employee Stock Option
Scheme under which eligible employees are granted an option to purchase shares subject to vesting conditions.
Over the period till March 2020, pursuant to the approval of the shareholders, the Bank approved ESOP schemes
for options aggregating 265,087,000 that vest in a graded manner over 3 years. The options can be exercised
within three/five years from the date of the vesting as the case may be. Within the overall ceiling of 265,087,000
stock options approved for grant by the shareholders as stated earlier, the Bank is also authorised to issue options
to eligible employees and Whole Time Directors of the subsidiary companies.
259,613,700 options have been granted under the Schemes till the previous year ended 31 March, 2020.
Pursuant to the approval of the Nomination and Remuneration Committee on 27 March, 2019, the Bank granted
288
Financial Statements
8,650,150 stock options (each option representing entitlement to one equity share of the Bank) to its eligible
employees/directors of the Bank/subsidiary companies at a grant price of `757.10. Further, during FY2019-20,
the Bank granted stock options (each option representing entitlement to one equity share of the Bank) to its
eligible employees/directors of the Bank/subsidiary companies, the details of which are as under:
Date of grant
25 April, 2019
29 July, 2019
21 January, 2020
No. of options granted
Grant price (` per option)
430,000
90,000
330,000
752.85
729.85
727.20
Stock option activity under the Scheme for the year ended 31 March, 2020 is set out below:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
Options
outstanding
Range of exercise
prices (`)
30,132,874
9,500,150
(1,018,650)
(950)
(5,947,539)
32,665,885
20,373,840
288.96 to 619.60
727.20 to 757.10
306.54 to 757.10
288.96
288.96 to 535.00
306.54 to 757.10
306.54 to 757.10
Weighted
average exercise
price (`)
465.06
755.61
623.71
288.96
397.02
557.01
505.98
Weighted average
remaining contractual
life (Years)
4.13
-
-
-
-
4.15
3.03
The weighted average share price in respect of options exercised during the year was `715.09.
Stock option activity under the Scheme for the year ended 31 March, 2019 is set out below:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
Options
outstanding
Range of exercise
prices (`)
29,554,909
6,455,000
(748,700)
(22,400)
(5,105,935)
30,132,874
17,138,224
217.33 to 535.00
504.85 to 619.60
306.54 to 535.00
288.96
217.33 to 535.00
288.96 to 619.60
288.96 to 535.00
Weighted
average exercise
price (`)
432.45
516.05
500.67
288.96
336.29
465.06
436.22
Weighted average
remaining contractual
life (Years)
4.22
-
-
-
-
4.13
2.87
The weighted average share price in respect of options exercised during the year was `623.15.
Fair Value Methodology
On applying the fair value based method in Guidance Note on ‘Accounting for Employee Share-based Payments’
the impact on reported net profit and EPS would be as follows:
Net Profit (as reported) (` in crores)
Add: Stock based employee compensation expense included in net income (` in crores)
Less: Stock based employee compensation expense determined under fair value based
method (proforma) (` in crores)
Net Profit (Proforma) (` in crores)
Earnings per share: Basic (in ` )
As reported
Proforma
Earnings per share: Diluted (in `)
As reported
Proforma
31 March, 2020
31 March, 2019
1,853.11
-
(137.07)
1,716.04
6.83
6.32
6.80
6.30
5,038.59
-
(95.04)
4,943.55
19.61
19.24
19.49
19.18
During the years ended, 31 March, 2020 and 31 March, 2019, no cost has been incurred by the Bank on ESOPs
issued to the employees of the Bank and employees of subsidiaries under the intrinsic value method.
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Annual Report 2019-20Experience Open
Consolidated Financial Statements
The fair value of the options is estimated on the date of the grant using the Black-Scholes options pricing model,
with the following assumptions:
Dividend yield
Expected life
Risk free interest rate
Volatility
31 March, 2020
31 March, 2019
0.54%
1.82-3.82 years
5.99% to 6.96%
28.07% to 28.60%
0.76%
2.57-4.57 years
7.07% to 7.63%
28.78% to 30.82%
Volatility is the measure of the amount by which a price has fluctuated or is expected to fluctuate during a period.
The measure of volatility used in the Black-Scholes options pricing model is the annualised standard deviation
of the continuously compounded rates of return on the stock over a period of time. For calculating volatility,
the daily volatility of the stock prices on the National Stock Exchange, over a period prior to the date of grant,
corresponding with the expected life of the options has been considered.
The weighted average fair value of options granted during the year ended 31 March, 2020 is `200.15 (previous
year `164.10).
On 18 March, 2020, the Nomination and Remuneration Committee of the Board of Directors of the Bank has
approved the grant of upto 12,500,000 stock options to eligible employees. As on 31 March, 2020, there have
been no allotments of options under this grant. Accordingly, these options have not been considered in the above
disclosure and for disclosure of proforma net profit and EPS under fair value method for FY 2019-20.
2.1.6
Proposed Dividend
The Reserve Bank of India, vide its circular dated 17 April, 2020, has advised that banks shall not make any further
dividend payouts from profits pertaining to the financial year ended 31 March, 2020 until further instructions,
with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19.
Accordingly, the Board of Directors of the Bank has not proposed any dividend for the year ended 31 March,
2020.
2.1.7
Segmental reporting
The business of the Bank is divided into four segments: Treasury, Retail Banking, Corporate/Wholesale Banking
and Other Banking Business. These segments have been identified and based on RBI’s revised guidelines on
Segment Reporting issued on 18 April 2007 vide Circular No. DBOD.No.BP.BC.81/21.04.018/2006-07. The
principal activities of these segments are as under.
Segment
Treasury
Retail Banking
Corporate/Wholesale Banking
Other Banking Business
Principal Activities
Treasury operations include investments in sovereign and corporate debt, equity and
mutual funds, trading operations, derivative trading and foreign exchange operations
on the proprietary account and for customers. The Treasury segment also includes the
central funding unit.
Constitutes lending to individuals/small businesses through the branch network and
other delivery channels subject to the orientation, nature of product, granularity of
the exposure and the quantum thereof. Retail Banking activities also include liability
products, card services, internet banking, mobile banking, ATM services, depository,
financial advisory services and NRI services.
Includes corporate relationships not included under Retail Banking, corporate advisory
services, placements and syndication, project appraisals, capital market related services
and cash management services.
Includes para banking activities like third party product distribution and other banking
transactions not covered under any of the above three segments.
Unallocated assets and liabilities - All items which are reckoned at an enterprise level are classified under this
segment such as deferred tax, money received against share warrants, tax paid in advance net of provision etc.
290
Financial Statements
Business segments in respect of operations of the subsidiaries have been identified and reported taking into
account the customer profile, the nature of product and services and the organisation structure.
Revenues of the Treasury segment primarily consist of fees and gains or losses from trading operations and
interest income on the investment portfolio. The principal expenses of the segment consist of interest expense
on funds borrowed from external sources and other internal segments, premises expenses, personnel costs, other
direct overheads and allocated expenses.
Revenues of the Corporate/Wholesale Banking segment consist of interest and fees earned on loans given to
customers falling under this segment and fees arising from transaction services and merchant banking activities
such as syndication and debenture trusteeship. Revenues of the Retail Banking segment are derived from interest
earned on loans classified under this segment and fees for banking and advisory services, ATM interchange
fees and cards products. Expenses of the Corporate/Wholesale Banking and Retail Banking segments primarily
comprise interest expense on deposits and funds borrowed from other internal segments, infrastructure and
premises expenses for operating the branch network and other delivery channels, personnel costs, other direct
overheads and allocated expenses.
Segment income includes earnings from external customers and from funds transferred to the other segments.
Segment result includes revenue as reduced by interest expense and operating expenses and provisions, if any,
for that segment. Segment-wise income and expenses include certain allocations. Inter segment interest income
and interest expense represent the transfer price received from and paid to the Central Funding Unit (CFU)
respectively. For this purpose, the funds transfer pricing mechanism presently followed by the Bank, which is based
on historical matched maturity and internal benchmarks, has been used. Operating expenses other than those
directly attributable to segments are allocated to the segments based on an activity-based costing methodology.
All activities in the Bank are segregated segment-wise and allocated to the respective segment.
Effective 1 April, 2019, the Bank has reported inter segment revenue and inter segment expense in the Central
Funding Unit (which forms part of Treasury segment) on a net basis as against earlier practice of reporting
revenue and expenses on a gross basis. Accordingly, segmental revenue numbers for the previous period have
been restated to make them comparable with current period numbers. There is no impact of this change on the
segmental profit before tax.
Segmental results are set out below:
Segment Revenue
Gross interest income (external customers)
Other income
Total income as per Profit and Loss Account
Add/(less) inter segment interest income
Total segment revenue
Less: Interest expense (external customers)
Less: Inter segment interest expense
Less: Operating expenses
Operating profit
Less: Provision for non-performing
assets/others*
Less:Unallocated provision for other contingencies#
Segment result
Less: Provision for tax
Treasury
14,600.09
3,753.53
18,353.62
4,813.04
23,166.66
16,399.83
2,299.55
314.37
4,152.91
Corporate/
Wholesale
Banking
19,562.72
4,210.47
23,773.19
6,524.53
30,297.72
1,710.98
14,464.23
4,722.25
9,400.26
31 March, 2020
Retail
Banking
29,552.87
6,615.30
36,168.17
25,323.09
61,491.26
19,885.13
19,896.23
12,435.38
9,274.52
2,599.64
-
1,553.27
9,908.08
-
(507.82)
4,325.55
-
4,948.97
Other
Banking
Business
-
1,762.69
1,762.69
0.01
1,762.70
-
0.66
593.76
1,168.28
0.38
-
1,167.90
(` in crores)
Total
63,715.68
16,341.99
80,057.67
36,660.67
116,718.34
37,995.94
36,660.67
18,065.76
23,995.97
16,833.65
1,882.28
5,280.04
3,401.29
291
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Net Profit before minority interest and
earnings from Associate
Less: Minority Interest
Add: Share of Profit in Associate
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities(1)
Total liabilities
Net assets
Capital Expenditure for the year
Depreciation on fixed assets for the year
Treasury
Corporate/
Wholesale
Banking
31 March, 2020
Retail
Banking
Other
Banking
Business
Total
318,397.82
-
270,594.74
-
329,047.96
-
803.57
-
293,396.41
139,537.68
406,283.36
214.92
25,001.42
6.89
6.12
131,057.06
246.81
214.37
(77,235.40)
641.73
571.53
588.65
13.65
14.05
1,878.75
25.64
-
-
1,853.11
918,844.09
9,027.72
927,871.81
839,432.37
2,099.01
841,531.38
86,340.43
909.08
806.07
(1) includes minority interest of `113.56 crores
* represents material non-cash items other than depreciation
# represents provision for COVID-19 over and above regulatory requirement, per extant guidelines as on date of adoption of financial
statements by the Board.
Segment Revenue
Gross interest income (external customers)
Other income
Total income as per Profit and Loss Account
Add/(less) inter segment interest income
Total segment revenue
Less: Interest expense (external customers)
Less: Inter segment interest expense
Less: Operating expenses
Operating profit
Less: Provision for non-performing
assets/others*
Segment result
Less: Provision for tax
Net Profit before minority interest and
earnings from Associate
Less: Minority Interest
Add: Share of Profit in Associate
Extraordinary profit/loss
Net Profit
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities(1)
Total liabilities
Net assets
Capital Expenditure for the year
Depreciation on fixed assets for the year
(1) includes minority interest of `84.61 crores
* represents material non-cash items other than depreciation
Treasury
13,874.76
2,254.14
16,128.90
6,680.96
22,809.86
16,956.96
3,048.35
425.22
2,379.33
686.64
1,692.69
283,240.38
276,546.85
6,693.53
15.63
12.48
Corporate/
Wholesale
Banking
18,442.28
4,686.91
23,129.19
6,175.11
29,304.30
1,661.64
13,520.57
4,048.91
10,073.18
31 March, 2019
Retail
Banking
23,726.61
5,447.93
29,174.54
20,249.77
49,424.31
15,264.87
16,536.06
11,459.17
6,164.21
Other
Banking
Business
-
1,799.77
1,799.77
0.01
1,799.78
-
0.87
786.89
1,012.02
9,081.46
991.72
2,248.59
3,915.62
20.00
992.02
251,253.06
269,476.17
535.04
135,914.54
332,680.34
154.52
115,338.52
205.48
161.62
(63,204.17)
695.24
545.56
380.52
26.33
17.50
(` in crores)
Total
56,043.65
14,188.75
70,232.40
33,105.85
103,338.25
33,883.47
33,105.85
16,720.19
19,628.74
12,036.69
7,592.05
2,544.96
5,047.09
8.50
-
-
5,038.59
804,504.65
9,541.32
814,045.97
745,296.25
947.10
746,243.35
67,802.62
942.68
737.16
292
Financial Statements
Geographic Segments
Revenue
Assets
Capital Expenditure for the year
Depreciation on fixed assets for
the year
2.1.8
Related party disclosure
Domestic
International
Total
31 March,
2020
31 March,
2019
77,791.87
869,479.51
907.17
66,514.42
760,394.09
939.95
31 March,
2020
2,265.80
58,392.30
1.91
31 March,
2019
3,717.98
53,651.87
2.73
31 March,
2020
31 March,
2019
80,057.67
927,871.81
909.08
70,232.40
814,045.96
942.68
(` in crores)
800.63
733.00
5.44
4.16
806.07
737.16
The related parties of the Group are broadly classified as:
a)
Promoters
The Bank has identified the following entities as its Promoters.
•
•
Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI)
Life Insurance Corporation of India (LIC)
• General Insurance Corporation, New India Assurance Co. Limited, National Insurance Co. Limited,
United India Insurance Co. Limited and The Oriental Insurance Co. Limited.
b) Key Management Personnel
• Mr. Amitabh Chaudhry (MD & CEO)
• Ms. Shikha Sharma (MD & CEO) (upto 31 December, 2018)
• Mr. V. Srinivasan (Deputy Managing Director) (upto 20 December, 2018)
• Mr. Rajesh Dahiya [Executive Director (Corporate Centre)]
• Mr. Rajiv Anand [Executive Director (Wholesale Banking)]
• Mr. Pralay Mondal [Executive Director (Retail Banking)] (w.e.f. 1 August, 2019)
c) Relatives of Key Management Personnel
Ms. Preeti Chaudhry, Mr. Anagh Chaudhry, Mr. Aruj Chaudhry, Mr. Aryan Chaudhry, Ms. Chhavi Kharb,
Mr. Om Singh Chaudhry, Ms. Kusum Chaudhry, Mr. Sanjaya Sharma, Ms. Usha Bharadwaj, Mr. Tilak Sharma,
Ms. Tvisha Sharma, Dr. Sanjiv Bharadwaj, Dr. Prashant Bharadwaj, Dr. Brevis Bharadwaj, Dr. Reena Bharadwaj,
Ms. Gayathri Srinivasan, Mr. V. Satish, Ms. Camy Satish, Ms. Ananya Srinivasan, Ms. Anagha Srinivasan,
Ms. Geetha N., Ms. Chitra R., Ms. Sumathi N., Mr. S. Ranganathan, Mr. R. Narayan, Ms. Gitanjali Anand,
Ms. Tara Anand, Ms. Nandita Anand, Mr. P.L. Narain, Mr. P. Srinivas, Ms. Ratna Rao Shekar, Ms. P. Kamashi,
Ms. Hemant Dahiya, Ms. Arooshi Dahiya, Ms. Mallika Dahiya, Ms. Jal Medha, Ms. Pooja Rathi, Mr. Jai Prakash
Dahiya, Ms. Mahasweta Mondal, Ms. Pritha Mondal, Ms. Trina Mondal, Mr. Biplab Mondal, Ms. Anima
Mondal.
The details of transactions of the Group with its related parties during the year ended 31 March, 2020 are
given below:
Items/Related Party
Dividend paid
Interest paid
Interest received
Investment in non-equity instrument of related party
Investment of related party in the Bank
Investment of related party in Hybrid capital/Bonds of
the Bank
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel#
46.04
551.48
0.19
-
-
-
0.04
1.07
0.26
-
5.44
-
-
0.15
-
-
-
-
(` in crores)
Total
46.08
552.70
0.45
-
5.44
-
293
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Items/Related Party
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Remuneration paid
Contribution to employee benefit fund
Repayment of security deposits by related party
Non-funded commitments (issued)
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Other reimbursements from related party
Other reimbursements to related party
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel#
55.00
-
1,318.04
-
15.42
-
-
-
5.31
206.94
29.68
-
-
0.19
-
-
-
15.84
-
-
-
-
6.01
-
0.01
1.48
-
-
-
-
-
-
-
-
-
-
-
-
-
0.03
-
-
Total
55.00
-
1,318.04
15.84
15.42
-
-
-
11.32
206.94
29.69
1.51
-
0.19
# Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank.
The balances payable to/receivable from the related parties of the Group as on 31 March, 2020 are given
below:
Items/Related Party
Deposits with the Bank
Placement of security deposits
Advances
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
Investment of related party in Hybrid capital/ Bonds of
the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
7,119.06
16.01
5.99
7,141.06
0.31
1.31
0.02
88.56
3.32
2,760.00
-
0.04
-
-
4.85
-
0.08
-
-
-
-
-
-
0.03
-
-
-
-
-
-
-
0.31
6.19
0.02
88.64
3.32
2,760.00
-
0.04
-
The maximum balances payable to/receivable from the related parties of the Group during the year ended
31 March, 2020 are given below:
Items/Related Party
Deposits with the Bank
Placement of security deposits
Advances
Investment of related party in the Bank
Investment in non-equity instrument of related party
Non-funded commitments
Investment of related party in Hybrid capital/Bonds of
the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
16,652.92
0.31
11.51
93.60
290.07
3.33
2,815.00
-
0.32
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
(` in crores)
Total
20.86
-
10.99
0.09
-
-
-
-
-
-
5.99
16,679.77
-
0.06
-
-
-
-
-
-
-
0.31
22.56
93.69
290.07
3.33
2,815.00
-
0.32
-
294
Financial Statements
The details of transactions of the Group with its related parties during the year ended 31 March, 2019 are given
below:
Items/Related Party
Promoters
Key
Management
Personnel
Relatives of Key
Management
Personnel#
Dividend paid
Interest paid
Interest received
Investment in non-equity instrument of related party
Investment of related party in the Bank
Investment of related party in Hybrid capital/Bonds
of the Bank
Redemption of Hybrid capital/Bonds of the Bank
Purchase of investments
Sale of investments
Remuneration paid
Contribution to employee benefit fund
Repayment of security deposits by related party
Non-funded commitments (issued)
Advance granted (net)
Advance repaid
Receiving of services
Rendering of services
Sale of foreign exchange currency to related party
Other reimbursements from related party
Other reimbursements to related party
-
554.78
0.13
341.26
-
-
1,510.00
205.00
857.07
-
17.00
0.12
-
-
0.45
128.91
28.04
-
0.10
0.66
-
0.41
1.09
-
17.93
-
-
-
-
18.49
-
-
-
-
7.38
-
0.10
1.35
-
-
-
0.12
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.01
-
-
(` in crores)
Total
-
555.31
1.22
341.26
17.93
-
1,510.00
205.00
857.07
18.49
17.00
0.12
-
-
7.83
128.91
28.14
1.36
0.10
0.66
# Details of transactions of the Bank with relatives of KMP are for the period during which the KMP are related parties of the Bank.
The balances payable to/receivable from the related parties of the Group as on 31 March, 2019 are given below:
Items/Related Party
Deposits with the Bank
Placement of security deposits
Advances
Investment in non-equity instruments of related party
Investment of related party in the Bank
Non-funded commitments
Investment of related party in Hybrid capital/ Bonds of
the Bank
Payable under management contracts
Other receivables (net)
Other payables (net)
Promoters
9,146.04
0.31
6.62
290.05
93.60
3.33
2,790.00
-
-
-
Key
Management
Personnel
Relatives of Key
Management
Personnel
13.91
-
10.90
-
0.08
-
-
-
-
-
0.55
-
0.03
-
-
-
-
-
-
-
(` in crores)
Total
9,160.50
0.31
17.55
290.05
93.68
3.33
2,790.00
-
-
-
295
Annual Report 2019-20Experience Open
Consolidated Financial Statements
The maximum balances payable to/receivable from the related parties of the Group during the year ended 31
March, 2019 are given below:
Items/Related Party
Deposits with the Bank
Placement of security deposits
Advances
Investment of related party in the Bank
Investment in non-equity instrument of related party
Non-funded commitments
Investment of related party in Hybrid capital/Bonds of
the Bank
Payable under management contracts
Other receivables (net)
Promoters
17,078.36
0.43
154.79
135.32
290.05
3.35
4,300.00
-
0.03
Key
Management
Personnel
Relatives of Key
Management
Personnel
22.86
-
19.66
0.52
-
-
-
3.70
-
5.49
-
0.17
-
-
-
-
-
-
(` in crores)
Total
17,106.72
0.43
174.62
135.84
290.05
3.35
4,300.00
3.70
0.03
The significant transactions between the Group and related parties during the year ended 31 March, 2020 and
31 March, 2019 are given below. A specific related party transaction is disclosed as a significant related party
transaction wherever it exceeds 10% of the aggregate value of all related party transactions in that category:
Particulars
Dividend paid
Life Insurance Corporation of India
Administrator of the Specified Undertaking of the Unit Trust of India
Interest paid
Life Insurance Corporation of India
Interest received
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Life Insurance Corporation of India
New India Assurance Co. Limited
Investment in non-equity instruments of related party
United India Insurance Co. Limited
The Oriental Insurance Co. Limited
Investment of related party in the Bank
Ms. Shikha Sharma
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Redemption of Hybrid capital/Bonds of the Bank
General Insurance Corporation Co. Limited
National Insurance Co. Limited
United India Insurance Co. Limited
Life Insurance Corporation of India
Purchase of investments
The Oriental Insurance Co. Limited
Sale of investments
New India Assurance Co. Limited
General Insurance Corporation Co. Limited
United India Insurance Co. Limited
The Oriental Insurance Co. Limited
(` in crores)
Year ended
31 March, 2020
Year ended
31 March, 2019
26.32
13.69
-
-
433.28
503.97
0.15
0.11
0.19
-
-
-
N.A.
2.62
2.82
10.00
20.00
25.00
-
-
490.00
556.00
112.18
99.85
0.74
0.35
-
0.13
241.26
100.00
8.67
4.05
5.22
-
-
10.00
1500.00
205.00
195.00
335.02
141.29
145.76
296
Financial Statements
Particulars
Remuneration paid
Mr. Amitabh Chaudhry
Ms. Shikha Sharma
Mr. V. Srinivasan
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Mr. Pralay Mondal
Contribution to employee benefit fund
Life Insurance Corporation of India
Advance repaid
Life Insurance Corporation of India
Mr. Rajiv Anand
Mr. Rajesh Dahiya
Receiving of services
The Oriental Insurance Co. Limited
New India Assurance Co. Limited
Life Insurance Corporation of India
Rendering of services
Life Insurance Corporation of India
General Insurance Corporation Co. Limited
Sale of foreign exchange currency to related party
Ms. Shikha Sharma
Mr. Amitabh Chaudhry
Mr. Rajiv Anand
Mr. Pralay Mondal
Other reimbursements to related party
Life Insurance Corporation of India
Other reimbursements from related party
New India Assurance Co. Limited
(` in crores)
Year ended
31 March, 2020
Year ended
31 March, 2019
6.26
N.A.
N.A.
4.16
3.75
1.67
1.28
6.83
4.53
3.18
2.68
N.A.
15.42
16.53
5.31
5.61
0.40
95.83
90.13
13.53
28.22
0.13
N.A.
0.40
0.36
0.72
0.19
-
0.45
2.13
5.23
55.84
52.72
11.42
26.60
0.07
1.14
0.15
0.06
N.A.
0.66
0.10
2.1.9
Leases
Disclosure in respect of assets taken on operating lease
This comprise of office premises/ATMs, cash deposit machines, electronic data capturing machines and IT
equipment.
Future lease rentals payable as at the end of the year:
- Not later than one year
- Later than one year and not later than five years
- Later than five years
Total of minimum lease payments recognised in the Profit and Loss Account for the
year
There are no provisions relating to contingent rent.
(` in crores)
31 March, 2020
31 March, 2019
863.02
2,798.53
3,011.82
805.03
2,531.53
2,249.34
940.10
864.08
The terms of renewal/purchase options and escalation clauses are those normally prevalent in similar agreements.
There are generally no undue restrictions or onerous clauses in the agreements.
297
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Disclosure in respect of assets given on operating lease
Gross carrying amount of premises at the end of the year
Accumulated depreciation at the end of the year
Total depreciation charged to profit and loss account for the year
Future lease rentals receivable as at the end of the year:
- Not later than one year
- Later than one year and not later than five years
- Later than five years
There is no provision relating to contingent rent.
(` in crores)
31 March, 2020
31 March, 2019
157.91
11.26
2.63
29.50
118.16
65.36
157.91
8.63
0.65
28.99
116.54
100.08
(` in crores)
2.1.10 Movement in fixed assets capitalised as application software (included in other Fixed Assets)
Particulars
31 March, 2020
31 March, 2019
At cost at the beginning of the year
Additions during the year*
Deductions during the year
Accumulated depreciation as at 31 March
Closing balance as at 31 March
Depreciation charge for the year
*includes movement on account of exchange rate fluctuation
1,681.48
229.86
(29.12)
(1,316.13)
566.09
235.37
1,349.22
332.49
(0.23)
(1,101.01)
580.47
207.32
2.1.11
The major components of deferred tax assets and deferred tax liabilities arising out of timing differences are as
under:
As at
Deferred tax assets on account of provisions for doubtful debts
Deferred tax assets on account of amortisation of HTM investments
Deferred tax assets on account of provision for employee benefits
Deferred tax assets on account of other items
Deferred tax assets
Deferred tax liability on account of depreciation on fixed assets
Deferred tax liabilities on account of other items
Deferred tax liabilities
Net deferred tax asset
(` in crores)
31 March, 2020
31 March, 2019
5,968.35
5.01
26.69
1,423.68
7,423.74
44.23
15.72
59.95
7,363.79
7,086.15
8.35
128.42
554.71
7,777.63
62.31
27.64
89.95
7,687.68
The Group has elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 as
introduced by the Taxation Laws (Amendment) Act, 2019. The Group has recognised provision for Income tax
for the year ended 31 March, 2020 in line with the above option. This has necessitated a restatement of the
opening balance of deferred tax assets as at 1 April, 2019, basis the rate prescribed in the aforesaid section. The
restatement has resulted in a write down of `2,150.62 crores which has been fully charged to the Profit and Loss
account during the year.
2.1.12
Employee Benefits
Group
Provident Fund
The contribution to the employee’s provident fund (including Employee Pension Scheme) of the Group amounted
to `210.89 crores for the year ended 31 March, 2020 (previous year `189.55 crores).
298
Financial Statements
Axis Bank Ltd.
The rules of the Bank’s Provident Fund administered by a Trust require that if the Board of Trustees are unable
to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 of the
Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for any other
reason, then the deficiency shall be made good by the Bank. Based on an actuarial valuation conducted by an
independent actuary, there is no deficiency as at the Balance Sheet date for the Bank.
The following tables summarise the components of net benefit expenses recognised in the Profit and Loss Account
and funded status and amounts recognised in the Balance Sheet for the Provident Fund benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost*
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Total included in “Employee Benefit Expense” [Schedule 16(I)]
Actual Return on Plan Assets
(` in crores)
31 March, 2020
31 March, 2019
109.92
168.87
(205.73)
36.86
109.92
173.11
98.60
159.70
(189.59)
29.89
98.60
132.30
* includes contribution of `0.40 crores towards staff deputed at subsidiaries (previous year `0.52 crores)
Balance Sheet
Details of provision for provident fund
Fair Value of Plan Assets
Present Value of Funded Obligations
Net Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Asset
Changes in the present value of the defined benefit obligation are as follows:
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Employees Contribution
Liability transferred from/to other companies
Benefits Paid
Closing Defined Benefit Obligation
(` in crores)
31 March, 2020
31 March, 2019
2,494.37
(2,494.37)
2,245.71
(2,245.71)
-
-
-
-
-
-
-
-
(` in crores)
31 March, 2020
31 March, 2019
2,245.71
2,006.65
109.92
168.87
4.24
276.90
(14.90)
(296.37)
2,494.37
98.60
159.70
(27.40)
217.42
(16.45)
(192.81)
2,245.71
299
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Changes in the fair value of plan assets are as follows:
Opening Fair Value of Plan Assets
Expected Return on Plan Assets
Actuarial Gains/(Losses)
Employer contribution during the period
Employee contribution during the period
Assets transferred from/to other companies
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments
(` in crores)
31 March, 2020
31 March, 2019
2,245.71
2,006.65
205.73
(32.62)
109.92
276.90
(14.90)
(296.37)
2,494.37
189.59
(57.29)
98.60
217.42
(16.45)
(192.81)
2,245.71
(` in crores)
31 March, 2020
31 March, 2019
31 March, 2018
31 March, 2017
31 March, 2016
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan
Assets
2,494.37
2,494.37
-
2,245.71
2,245.71
-
2,006.65
2,006.65
-
4.24
(27.40)
12.10
(32.62)
(57.29)
(30.95)
1,688.78
1,688.78
-
20.83
0.58
1,439.02
1,439.02
-
12.08
(6.16)
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets:
Government securities
Bonds, debentures and other fixed income instruments
Equity shares
Others
Principal actuarial assumptions at the balance sheet date:
Discount rate for the term of the obligation
Average historic yield on the investment portfolio
Discount rate for the remaining term to maturity of the investment portfolio
Expected investment return
Guaranteed rate of return
31 March, 2020
31 March, 2019
(in percentage)
(in percentage)
55
15
4
26
56
40
3
1
31 March, 2020
31 March, 2019
6.45%
8.83%
6.85%
8.43%
8.50%
7.65%
8.88%
7.55%
8.98%
8.65%
The Hon’ble Supreme Court of India (“SC”) by an order dated 28 February, 2019 in one case, set out the principles
based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes
of computation of Provident Fund contribution. Basis subsequent clarification provided by the Employees’
Provident Fund Organisation on the said order and an independent legal opinion, the Bank has implemented the
principles laid down in the order effective 1 April, 2019.
Superannuation
The Bank contributed `15.39 crores to the employee’s superannuation plan for the year ended 31 March, 2020
(previous year `16.51 crores).
300
Financial Statements
National Pension Scheme (NPS)
During the year, the Bank has contributed `6.37 crores (previous year `5.22 crores) to the NPS for employees who
had opted for the scheme.
Group
Leave Encashment
The liability of compensated absences of accumulated privileged leave of the employees of the Group is given
below.
31 March, 2020
(` in crores)
Liability -
Privilege Leave
Total Expenses
included under
Schedule 16(I)
58.10
0.20
(0.54)
1.50
0.75
0.17
2.88
0.26
(8.99)
0.13
1.97
(0.69)
0.78
0.24
1.45
0.16
Assumptions
Discount Rate
-
Salary escalation
rate
-
6.59% p.a.
7.00% p.a.
-
-
-
-
-
-
6.65% p.a.
5.70% p.a.
5.89% p.a.
10.00% p.a.
12.00% p.a.
12.00% p.a.
31 March, 2019
(` in crores)
Liability -
Privilege Leave
Total Expenses
included under
Schedule 16(I)
247.35
0.08
1.23
Nil
0.70
0.14
1.86
0.13
46.62
Nil
Nil
1.29
0.36
0.13
(0.37)
(0.09)
Assumptions
Discount Rate
-
6.48% p.a.
7.65% p.a.
-
7.77% p.a.
7.65% p.a.
6.80% p.a.
6.75% p.a.
Salary escalation
rate
-
7.00% p.a.
10.00% p.a.
-
7.00% p.a.
10.00% p.a.
12.00% p.a.
12.00% p.a.
Axis Bank Ltd.
Axis Capital Ltd.*
Axis Securities Ltd.
Axis Asset Management Co. Ltd.
Axis Finance Ltd.
A.Treds Ltd.*
FreeCharge Payment Technologies Pvt. Ltd.*
Accelyst Solutions Pvt. Ltd.*
* based on actuarial valuation
Axis Bank Ltd.
Axis Capital Ltd.*
Axis Securities Ltd.*
Axis Asset Management Co. Ltd.
Axis Finance Ltd.*
A.Treds Ltd.*
FreeCharge Payment Technologies Pvt. Ltd.*
Accelyst Solutions Pvt. Ltd.*
* based on actuarial valuation
Group
Gratuity
The following tables summarize the components of net benefit expenses recognised in the Profit and Loss Account
and the funded status and amounts recognised in the Balance Sheet for the Gratuity benefit plan.
Profit and Loss Account
Net employee benefit expenses (recognised in payments to and provisions for employees)
Current Service Cost
Interest on Defined Benefit Obligation
Expected Return on Plan Assets
Net Actuarial Losses/(Gains) recognised in the year
Past Service Cost
Total included in “Employee Benefit Expense” [Schedule 16(1)]
Actual Return on Plan Assets
(` in crores)
31 March, 2020
31 March, 2019
55.65
34.77
(30.48)
40.99
0.78
101.71
23.20
49.02
30.88
(25.49)
7.02
0.03
61.45
34.95
301
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Balance Sheet
Details of provision for gratuity
Present Value of Funded Obligations
Present Value of un-funded Obligations
Fair Value of Plan Assets
Unrecognised Past Service Cost
Net (Liability)/Asset
Amounts in Balance Sheet
Liabilities
Assets
Net Liability (included under Schedule 5 – Other Liabilities)
Changes in the present value of the defined benefit obligation are as follows:
Opening Defined Benefit Obligation
Current Service Cost
Interest Cost
Actuarial Losses/(Gains)
Past Service Cost
Liabilities Assumed on Acquisition
Liabilities transferred in/(out)
Benefits Paid
Closing Defined Benefit Obligation
Changes in the fair value of plan assets are as follows:
Opening Fair Value of Plan Assets
Expected Return on Plan Assets
Actuarial Gains/(Losses)
Contributions by Employer
Assets transferred in
Benefits Paid
Closing Fair Value of Plan Assets
Experience adjustments:
(` in crores)
31 March, 2020
31 March, 2019
(490.42)
(3.79)
484.98
1.55
(7.68)
7.68
-
(7.68)
(417.44)
(6.97)
403.44
2.33
(18.65)
18.65
-
(18.65)
(` in crores)
31 March, 2020
31 March, 2019
424.41
366.99
55.65
34.77
33.72
-
0.11
(0.27)
(54.18)
494.21
49.02
30.88
16.57
2.33
0.14
0.19
(41.71)
424.41
(` in crores)
31 March, 2020
31 March, 2019
403.44
30.48
(7.28)
112.02
0.09
(53.77)
484.98
336.33
25.49
9.55
73.16
-
(41.10)
403.44
(` in crores)
31 March, 2020
31 March, 2019
31 March, 2018
31 March, 2017
31 March, 2016
Defined Benefit Obligations
Plan Assets
Surplus/(Deficit)
Experience Adjustments on Plan
Liabilities
Experience Adjustments on Plan
Assets
494.21
484.98
(9.23)
(10.14)
(7.28)
424.41
403.44
(20.97)
6.70
9.55
366.99
336.33
(30.66)
2.90
(4.91)
301.45
290.11
(11.34)
7.09
(1.68)
246.84
243.00
(3.84)
2.98
(5.28)
302
Financial Statements
Axis Bank Ltd.
Major categories of plan assets (managed by Insurers) as a percentage of fair value of total plan assets:
Government securities
Bonds, debentures and other fixed income instruments
Money market instruments
Equity shares
Others
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 18 to 30 (age in years)
- 31 to 44 (age in years)
- 45 to 59 (age in years)
31 March, 2020
31 March, 2019
(in percentage)
(in percentage)
30
42
2
2
24
38
48
5
2
7
31 March, 2020
31 March, 2019
6.45% p.a.
7.50% p.a.
7.00% p.a.
24.00%
14.00%
8.00%
7.65% p.a.
7.50% p.a.
7.00% p.a.
20.00%
10.00%
5.00%
The estimates of future salary increases considered take into account the inflation, seniority, promotion and other
relevant factors.
The expected rate of return on plan assets is based on the average long-term rate of return expected on
investments of the Fund during the estimated term of the obligations.
As the contribution expected to be paid to the plan during the annual period beginning after the balance sheet
date is based on various internal/external factors, a best estimate of the contribution is not determinable.
The above information is as certified by the actuary and relied upon by the auditors.
Axis Capital Ltd.
The major categories of plan assets* as a percentage of fair value of total plan assets
– Insurer Managed Funds
*composition of plan assets is not available
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
100.00%
100.00%
31 March, 2020
31 March, 2019
6.59% p.a.
6.59% p.a.
7.00% p.a.
10.00%
7.48% p.a.
7.48% p.a.
7.00% p.a.
10.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date,
applicable to the period over which the obligation is to be settled.
303
Annual Report 2019-20Experience Open
Consolidated Financial Statements
Axis Asset Management Company Ltd.
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
5.76% p.a.
7.00%p.a.
7.23% p.a.
N.A.
12.00% p.a.
11.00% p.a.
15.00% - 20.00%
10.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
Axis Securities Ltd.
The major categories of plan assets* as a percentage of fair value of total plan assets
– Insurer Managed Funds
*composition of plan assets is not available
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 21 to 44 (age in years) (managerial)
- 21 to 44 (age in years) (non managerial)
- 45 to 59 (age in years)
31 March, 2020
31 March, 2019
100.00%
100.00%
31 March, 2020
31 March, 2019
6.30% p.a.
7.25% p.a.
7.75% p.a.
20.00%
60.39%
1.00%
7.00% p.a.
7.50% p.a.
7.64% p.a.
20.00%
60.39%
1.00%
The estimates of future salary increases considered take into account the inflation, seniority, promotion and other
relevant factors.
The expected rate of return on plan assets is based on the average long-term rate of return expected on
investments of the Fund during the estimated term of the obligations.
Axis Finance Ltd.
The major categories of plan assets* as a percentage of fair value of
total plan assets – Insurer Managed Funds
*composition of plan assets is not available
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
100.00%
100.00%
31 March, 2020
31 March, 2019
6.84% p.a.
6.84% p.a.
7.00% p.a.
5.00%
7.77% p.a.
7.77% p.a.
7.00% p.a.
10.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
304
Financial Statements
Axis Trustee Services Ltd.
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
5.21% p.a.
N.A.
8.00% p.a.
30.00%
6.66% p.a.
N.A.
10.00% p.a.
30.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
A. Treds Ltd.
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
- 21 to 30 (age in years)
- 31 to 44 (age in years)
- 45 to 59 (age in years)
31 March, 2020
31 March, 2019
6.65% p.a.
7.50% p.a.
7.65% p.a.
7.50% p.a.
10.00% p.a.
10.00% p.a.
24.00%
14.00%
8.00%
20.00%
10.00%
5.00%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
Accelyst Solution Pvt Ltd.
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
5.89% p.a.
6.75% p.a.
N.A.
N.A.
12.00% p.a.
12.00% p.a.
25.00%
31.07%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
FreeCharge Payment Technologies Pvt Ltd.
Principal actuarial assumptions at the balance sheet date:
Discount Rate
Expected rate of Return on Plan Assets
Salary Escalation Rate
Employee Turnover
31 March, 2020
31 March, 2019
5.70% p.a.
6.80% p.a.
N.A.
N.A.
12.00% p.a.
12.00% p.a.
30.00%
28.40%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
305
Annual Report 2019-20Experience Open
Consolidated Financial Statements
2.1.13
Small and Micro Enterprises
Axis Bank Ltd.
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2 October,
2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have
been no reported cases of delays in payments to micro and small enterprises or of interest payments due to delays
in such payments. The above is based on the information available with the Bank which has been relied upon by
the auditors.
Subsidiaries
Particulars
The Principal amount and the interest due thereon remaining unpaid to any supplier
The amount of interest paid by the buyer in terms of Section 16, along with the amount
of the payment made to the supplier beyond the due date
The amount of interest due and payable for the period of delay in making payment
(which have been paid but beyond the due date during the year) but without adding the
interest specified under MSMED Act, 2006
The amount of interest accrued and remaining unpaid
The amount of further interest remaining due and payable even in the succeeding years,
until such date when the interest dues as above are actually paid to the small enterprise,
for the purpose of disallowed as a deductible expenditure under Section 23
2.1.14
Corporate Social Responsibility (CSR)
(` in crores)
31 March, 2020
31 March, 2019
0.26
0.02
0.03
0.03
-
0.02
-
0.02
0.02
-
a) Amount required to be spent by the Group on CSR during the year `113.64 crores (previous year `139.72
crores).
b) Amount spent towards CSR during the year and recognized as expense in the statement of profit and loss on
CSR related activities (including capital expenditure) is `113.98 crores (previous year `149.37 crores), which
comprise of following –
In cash
0.28
31 March, 2020
Yet to be paid
in cash (i.e.
provision)
-
Total
In cash
0.28
11.89
31 March, 2019
Yet to be paid
in cash (i.e.
provision)
-
(` in crores)
Total
11.89
108.35
5.35
113.70
136.91
0.57
137.48
Construction/ acquisition of any
asset
On purpose other than above
2.1.15
Provisions and contingencies
a)
Movement in provision for frauds included under other liabilities is set out below:
Opening balance at the beginning of the year
Additions during the year
Reductions on account of payments during the year
Reductions on account of reversals during the year
Closing balance at the end of the year
(` in crores)
31 March, 2020
31 March, 2019
53.58
25.10
(1.02)
-
77.66
60.98
0.78
-
(8.18)
53.58
306
Financial Statements
b) Other liabilities include provision for reward points made on actuarial basis, the movement of which is set out
below:
Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year
c) Movement in provision for other contingencies is set out below:
Opening provision at the beginning of the year
Provision made during the year
Reductions during the year
Closing provision at the end of the year
(` in crores)
31 March, 2020
31 March, 2019
205.90
214.56
(154.36)
266.10
143.94
127.22
(65.26)
205.90
(` in crores)
31 March, 2020
31 March, 2019
141.99
2,674.41
-
2,796.99
150.66
609.26
(617.93)
141.99
Closing provision includes provision for legal cases, other contingencies and provision for COVID-19 over and
above regulatory requirement.
2.1.16 Description of contingent liabilities
a) Claims against the Group not acknowledged as debts
These represent claims filed against the Group in the normal course of business relating to various legal
cases currently in progress. These also include demands raised by income tax authorities and disputed by the
Group. In addition, the Group holds provision of `69.49 crores as on 31 March, 2020 (previous year `56.06
crores) towards claims assessed as probable.
b)
Liability for partly paid investments
This represents amounts remaining unpaid towards liability for partly paid investments.
c)
Liability on account of forward exchange and derivative contracts
The Group enters into foreign exchange contracts, currency options/swaps, interest rate/currency
futures and forward rate agreements on its own account and for customers. Forward exchange contracts
are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps
are commitments to exchange cash flows by way of interest/principal in two currencies, based on ruling
spot rates. Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows.
Interest rate futures are standardised, exchange-traded contracts that represent a pledge to undertake a
certain interest rate transaction at a specified price, on a specified future date. Forward rate agreements
are agreements to pay or receive a certain sum based on a differential interest rate on a notional amount
for an agreed period. A foreign currency option is an agreement between two parties in which one grants
to the other the right to buy or sell a specified amount of currency at a specific price within a specified time
period or at a specified future time. An Exchange Traded Currency Option contract is a standardised foreign
exchange derivative contract, which gives the owner the right, but not the obligation, to exchange money
denominated in one currency into another currency at a pre-agreed exchange rate on a specified date on the
date of expiry. Currency Futures contract is a standardised, exchange-traded contract, to buy or sell a certain
underlying currency at a certain date in the future, at a specified price. The amount of contingent liability
represents the notional principal of respective forward exchange and derivative contracts.
d) Guarantees given on behalf of constituents
As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their
credit standing. Guarantees represent irrevocable assurances that the Bank will make payments in the event
of the customer failing to fulfill its financial or performance obligations.
307
Annual Report 2019-20Experience Open
Consolidated Financial Statements
e) Acceptances, endorsements and other obligations
These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the
Bank’s customers that are accepted or endorsed by the Bank.
f) Other items for which the Group is contingently liable
Other items represent outstanding amount of bills rediscounted by the Bank, estimated amount of contracts
remaining to be executed on capital account, notional principal on account of outstanding Tom/Spot foreign
exchange contracts, contracts for purchase of investments where settlement is due post balance sheet date,
commitments towards underwriting and investment in equity through bids under Initial Public Offering
(IPO) of corporates as at the year end, demands raised by statutory authorities (other than income tax) and
disputed by the Group and the amount transferred to Depositor Education and Awareness Fund (DEAF).
During earlier years, the Bank, through one of its overseas branches, had arranged Trade Credit (Buyers
Credit loans) against Letters of Undertaking (LOUs) issued by Punjab National Bank (PNB), which were
subsequently alleged as fraudulent by PNB. Prior to this declaration by PNB, such buyer’s credit loans
were sold down in the secondary market by the overseas branch to various participating banks under Risk
Participation Agreements. As on 31 March, 2020, there is no funded exposure outstanding in the overseas
branch pursuant to such sell down. PNB has repaid the aggregate amount of all LOUs due upto 31 March,
2020, pursuant to an undertaking issued to PNB, and made remittance to the overseas branch which has
been passed on for onward payment to the participating banks. Based on the facts and circumstances of the
case, internal findings and legal opinion, the Bank does not expect PNB has any valid right at this point in
time, for refund by the Bank of the aggregate amount paid by PNB towards LOUs due upto 31 March, 2020,
However, as a matter of prudence, the aggregate amount of LOUs issued by PNB to the overseas branch
against which buyer’s credit was extended, aggregating to `4,466.83 crores has been disclosed as part of
Contingent Liabilities in the Balance Sheet.
The Group has a process whereby periodically all long term contracts (including derivative contracts) are assessed
for material foreseeable losses. At the year end, the Bank has reviewed and recorded adequate provision as
required under any law/accounting standards for material foreseeable losses on such long term contracts
(including derivative contracts) in the books of account and disclosed the same under the relevant notes in the
financial statements, where applicable.
2.1.17
Comparative Figures
Previous year figures have been regrouped and reclassified, where necessary to conform to current year’s
presentation.
In terms of our report attached.
For Haribhakti & Co. LLP
Chartered Accountants
Firm Registration No.: 103523W/W100048
For Axis Bank Ltd.
Rakesh Makhija
Chairman
Purushottam Nyati
Partner
Membership No.: 118970
S. Vishvanathan
Director
Girish Paranjpe
Director
B. Babu Rao
Director
Amitabh Chaudhry
Managing Director & CEO
Date : 28 April, 2020
Place : Mumbai
Girish V. Koliyote
Company Secretary
Puneet Sharma
Chief Financial Officer
308
Financial Statements
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P
Annual Report 2019-20Experience Open
Basel III Disclosures
As at 31 March, 2020
In accordance with RBI circular DBR.No.BP.BC.1/21.06.201/2015-16 dated 1 July, 2015 on ‘Basel III Capital Regulations’ and
RBI circular DBR.No.BP.BC.80/21.06.201/2014-15 dated 31 March, 2020 on ‘Prudential Guidelines on Capital Adequacy and
Liquidity Standards Amendments’, banks are required to make Pillar 3 disclosures including leverage ratio and liquidity coverage
ratio under the Basel III framework. The Bank has made these disclosures which are available on its website under the ‘Regulatory
Disclosure’ section at the following link:
http://www.axisbank.com/investor-corner/baselIII-disclosures.aspx
310
NOTES
NOTES
openexperience A N N U A L R E P O R T 2 0 1 9 -2 0
experience
open
Registered office :
'Trishul, 3rd Floor,
’
Opp. Samartheshwar Temple,
Law Garden, Ellisbridge,
Ahmedabad - 380 006
Tel. No.: 079-6630 6161
Fax No.: 079-2640 9321
Email: shareholders@axisbank.com
Corporate office :
‘Axis House’, C-2,
Wadia International Centre,
Pandurang Budhkar Marg,
Worli, Mumbai - 400 025
Tel. No.: 022-2425 2525
Fax No.: 022-2425 1800
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