“Licensed to post under prepayment of postage in cash system under License No.MR/Tech/ICICI Bank/A.R./Prepaid/2013 “
19th Annual Report and Accounts 2012-2013
Spine to be
adjusted by printer
Promoting Inclusive Growth
ICICI BANK LIMITED
ICICI Bank Towers
Bandra-Kurla Complex
Mumbai 400 051
www.icicibank.com
1
9
t
h
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
2
-
2
0
1
3
Spine to be
adjusted by printer
A network that spans
the rural hinterland
Fostering savings and
building rural wealth
Promoting Inclusive Growth
Inclusive growth has to encompass all segments
of the population not only by income but by
where they live – be it urban India or rural India.
The penetration of financial services is low in rural
India, and enhancing access to financial services
is an important pillar of inclusive growth.
Today, rural India is evolving rapidly and is
changing in character. It has diversified from just
agriculture to manufacturing and services sectors.
Rural India has demonstrated the potential to be a
sustainable growth engine for the economy.
Our rural and inclusive banking strategy is to
rapidly expand in the rural markets, leverage
our strengths in technology and deliver relevant
products and services to the rural and unbanked
population through a multi-channel network.
Spine to be
adjusted by printer
Spine to be
adjusted by printer
Vision
To be the leading provider of financial
services in India and enhance our
positioning among global banks
through sustainable value creation.
Mission
To create value for our stakeholders by:
• being the financial services provider
of first choice for our customers by
delivering high quality, world-class
products and services
• playing a proactive role in the full
realisation of India’s potential and
contributing positively in all markets
where we operate
• maintaining high standards of governance
and ethics; and balancing growth,
profitability and risk to deliver and sustain
healthy returns on capital
Credit services for
strengthening the value chain
Facilitating remittances in
rural areas
Contents
02
Message from the Chairman ................................................................
04
Message from the Managing Director & CEO ......................................
06
Board of Directors .................................................................................
Board Committees ................................................................................
06
Directors’ Report ................................................................................... 07
39
Auditors’ Certificate on Corporate Governance ....................................
40
Business Overview................................................................................
52
Management’s Discussion and Analysis ..............................................
75
Key Financial Indicators .........................................................................
FINANCIALS
Independent Auditors’ Report............................................................... F1
F2
Balance Sheet .......................................................................................
F3
Profit and Loss Account ........................................................................
F4
Cash Flow Statement ............................................................................
Schedules ..............................................................................................
F5
Statement pursuant to Section 212 of the
Companies Act, 1956 ............................................................................ F52
Consolidated Financial Statements of
ICICI Bank Limited and its Subsidiaries ................................................ F53
BASEL II - Pillar 3 Disclosures (Consolidated) ...................................... F95
Glossary ................................................................................................ F132
PromotINg INCLuSIve growth ........................... P1
eNCLoSureS
Notice
Attendance Slip and Form of Proxy
REGISTERED OFFICE
Landmark
Race Course Circle
Vadodara 390 007
Tel : +91-265-6617260
Fax : +91-265-6617341
CORPORATE OFFICE
ICICI Bank Towers
Bandra-Kurla Complex
Mumbai 400 051
Tel : +91-22-26531414
Fax : +91-22-26531122
STATUTORY AUDITORS
S. R. Batliboi & Co. LLP,
Chartered Accountants
14th Floor, The Ruby,
29, Senapati Bapat Marg,
Dadar (W)
Mumbai 400 028
REGISTRAR AND
TRANSFER AGENTS
3i Infotech Limited
International Infotech Park
Tower 5, 3rd Floor
Vashi Railway Station Complex
Vashi, Navi Mumbai 400 703
Message
from the Chairman
Fiscal 2013 has been a challenging year for the Indian
economy. Growth has slowed to levels lower than we
have seen in a long time. The current account deficit
has increased substantially, which along with other
factors has put pressure on the currency. Credit and
deposit growth have moderated, and interest rates
remain high, albeit lower than a year ago. While policy
measures by the Government during the second
half of the year, most notably the reining in of the
fiscal deficit, have begun to address the economic
challenges, there continues to be widespread
pessimism about India’s future economic prospects
and our ability to get back to 8% GDP growth. In my
view, we do have the ability to get back on a high
growth path, if we understand the causes of the
current slowdown and address them appropriately.
Economic growth has been impacted by a slowdown
in investment activity. This is largely attributable
to delays in execution and cash flow generation in
existing projects under implementation, primarily
arising out of issues around access to land and natural
resources, and administrative and environmental
clearances. The hectic pace of investment activity
in earlier years has led to concerns that interests of
local stakeholders and environmental issues have
not been given due attention. There is indeed a need
to have a robust policy framework that balances the
priorities of investment with other considerations.
What is important is for us to put this in place quickly
and maintain its stability so that the rules of doing
business are clear and are consistently followed.
Consumption demand and consumer-related sectors
have also been impacted by inflation and high
interest rates. The moderation in core inflation and
the progress on fiscal consolidation have given the
monetary authorities the space to reduce interest
rates, and this process has commenced. Going
2
K.V. KAMATH Chairman
forward, one would hope for a continued reduction
in interest rates to help create conditions for growth.
Both the manufacturing and domestic services
sectors will benefit from the above sets of measures,
given the close inter-linkages across various parts
of the economy. The rural economy has already
made significant gains in terms of diversification of
activity and increase in incomes, and continues to
have the potential for robust growth. The export-
oriented knowledge-based services sector will need
to continue to evolve to meet the changing needs of
the global consumers of their services, focusing on
value addition and building capabilities in emerging
areas of information technology. This sector has
demonstrated
its ability to capitalise on new
opportunities in the past, and I believe will continue
to do so.
Further, a number of long-term measures are under
consideration or implementation that will boost
the efficiency and productivity of the economy.
These include the rollout of Aadhaar, the introduction
of direct benefit
to beneficiaries’
transfers
bank accounts and the introduction of goods &
services tax.
In summary, the Indian economy continues to have
the potential for sustained high growth. There has
been positive movement in some areas, with the fiscal
deficit being contained and inflation moderating,
though the current account deficit continues to be
high. Creating the right policy framework for capital
formation and further easing of interest rates would
be the immediate priorities, even as long-term
policy initiatives are taken to enhance economic
efficiency. With these enablers in place, the natural
entrepreneurial mindset and aspirational energy
of the country will move us quickly back to a high
growth path.
every year. These trends, coupled with dropping costs
and the rollout of Aadhaar, offer the opportunity for
new paradigms in business, education, healthcare
and other areas.
The ICICI Group under its able executive management
team is focused on strengthening its franchise,
capitalising on new opportunities and investing in
growth while exercising prudence where required
in the context of challenges in the environment. I
believe this strategic approach will drive continued
strong performance in the years ahead.
Even as we in India focus on addressing the domestic
issues at hand, we must not lose sight of the
transformational changes taking place globally and
the opportunities they create for us. These changes
are being driven by technology, which has already
in just the last decade changed the way we live and
work. The increasing computing power and dropping
costs of mobile devices, and expanding access to
affordable bandwidth, means that an ever-growing
number of people have in their hands a device with
great functionality that they can use to access and
share information as well as transact business. And
this is not a one-way street – each person is becoming
an information node that feeds into a global data
pool. Increasingly sophisticated techniques are being
developed to mine this data pool for a diverse range
of applications – designing products & services,
increasing sales, improving the quality of education,
preventing disease, protecting the environment,
enhancing
solving
unanswered scientific questions – the list is long.
India already has the fifth largest smartphone user
base globally, mobile internet access has overtaken
desktop access in terms of share of traffic and the
number of mobile internet users is almost doubling
empowerment,
economic
With best wishes,
K.V. Kamath
Annual report 2012-2013 3
Message from
the Managing Director
& CEO
followed a
fiscal 2013, we
In
three-pronged
strategy of balancing growth, profitability and risk
management. Through this approach, we achieved
several key milestones, thereby further strengthening
our platform for profitable growth.
The year witnessed several challenges
in the
operating and business environment. Even as
the global economic environment continued to
be subdued, we saw a significant slowdown in
economic growth in India. While India’s long-term
economic fundamentals and growth potential are
strong, the current challenges have had implications
for business sentiment, corporate profitability and
banking sector growth & asset quality. I am happy
to report that despite these developments, our
strategy of balancing growth, profitability and risk
management has enabled us to make continued
progress on our strategic path.
Let me take this opportunity to share with you some
of our key achievements during fiscal 2013:
• In fiscal 2013 was the first full year where ICICI
Bank achieved full year net interest margins of
above 3.0%. This is the result of our consistent
efforts to improve our funding profile as well as
spreads in both our domestic and international
businesses. Our strong deposit franchise
is
reflected in our current & savings account (CASA)
ratio of about 42% at March 31, 2013, despite the
low growth in demand deposits for the system.
• The focus on operating efficiency continued into
fiscal 2013, with equal emphasis on controlling
costs and generating higher revenues. This
resulted in a reduction in the cost-to-income ratio
for the Bank from 42.9% in fiscal 2012 to 40.5% in
fiscal 2013.
• The trends in asset quality for the banking sector
have not been encouraging in fiscal 2013. The
banking sector has seen significant additions to
non-performing assets (NPA) and restructured
loans during the year. Despite these systemic
trends, ICICI Bank’s asset quality continued to
4
CHANDA KOCHHAR Managing Director & CEO
remain stable. Our net NPA ratio at March 31, 2013
was 0.64% compared to 0.62% at March 31, 2012.
In fiscal 2013, we restructured loans aggregating
about ` 17.00 billion - significantly lower than the
loan restructuring of about ` 36.00 billion in the
previous financial year. As a result of the above,
we were able to contain total provisions as a
percentage of average loans at 66 basis points in
fiscal 2013 - marginally lower than the levels seen
in fiscal 2012.
• Fiscal 2013 also saw a significant improvement in
our retail lending growth – a key target that we had
set for ourselves since fiscal 2012. Our organic
retail loan growth reached 25% on a year-on-year
basis at March 31, 2013. This sets the base for
continued momentum in this area going forward.
On an overall basis, our domestic loan growth of
18% year-on-year at March 31, 2013 was ahead of
overall banking system credit growth.
• The combined effect of improvement in profitability
parameters and growth in business volumes was
reflected in a 29% growth in ICICI Bank’s profit
after tax to ` 83.25 billion in fiscal 2013. This
translates into an increase of over 20 basis points
in the Bank’s return on assets to 1.66%.
• During fiscal 2013, we continued to see healthy
improvement in our consolidated profit after
tax, with a growth of 26% to ` 96.04 billion. The
consolidated return on equity (RoE) improved
from 13.0% in fiscal 2012 to 14.7% in fiscal 2013.
• We continued to maintain a very strong capital
position that will support growth in the coming
years. We are focused on further enhancing RoE
by evaluating capital deployment across our
businesses to enhance the efficiency of capital
utilization, and pursuing profitable growth. As part
of this process, ICICI Bank received aggregate
capital repatriation of USD 100 million from its UK
subsidiary in fiscal 2013.
While achieving improved financial performance, we
continued our efforts to strengthen our franchise and
build capabilities for future growth. During the year,
we continued to focus on enhancing our customer
proposition through a combination of physical &
technology platforms and innovative product offerings.
In fiscal 2013, we added 348 branches and 1,475
ATMs to our network, taking our branch and ATM
network to 3,100 and 10,481 respectively at March
31, 2013. We also focused on increasing convenience
for customers by expanding our technology-based
offerings, including 24x7 electronic branches and tab
banking. We introduced innovative product features
such as the “MySavings Rewards” programme and the
“iWish” flexible recurring deposit product. With over
2.0 million fans at March 31, 2013, our Facebook page
not only had the largest fan base, but also the highest
engagement rates in comparison to other Indian banks.
Our endeavour, going forward, will be to continue to
build on these improvements and leverage our strong
capital base and franchise to further enhance the
returns that we generate for our shareholders.
We also continued to play a proactive role in nation
building. The ICICI Group’s current activities in this
regard range from financial inclusion to working in
the areas of education, healthcare and sustainable
livelihoods. During fiscal 2013, we substantially
expanded our presence in rural markets through a
combination of branches and business correspondent
channels. We established 152
rural branches
(including 127 low cost branches in unbanked
villages), representing over 40% of our total branch
additions during the year. At March 31, 2013, we
had about 14.9 million financial inclusion accounts
with over 13,500 villages under the coverage of our
financial inclusion plan. Our strategy is to provide a
comprehensive product suite encompassing savings,
credit and remittances to customers in rural India,
through a multi-channel network.
Our initiatives in education, healthcare and livelihoods
are delivered through the ICICI Foundation for
Inclusive Growth. In the area of elementary education,
we have partnered with the state governments of
Rajasthan and Chhattisgarh to improve teaching
and learning outcomes in the state-run schools.
This includes designing syllabi, developing new
textbooks and providing teacher training modules
for the state-run schools. In the area of healthcare,
we achieved success in our pilot programme to
provide insured outpatient care to the poor. The
Government has therefore decided in principle to
incorporate outpatient care into the flagship Rashtriya
Swasthya Bima Yojana. In the area of livelihoods, we
strengthened the functioning and reach of our rural
self-employment training institutes in Rajasthan. We
have identified skill building among the youth as a
key priority, and are working on creating a large-scale
initiative in this area.
the
Going forward, we will continue to strengthen our
franchise to position ourselves to take advantage
long-term growth opportunities arising
of
out of India’s economic growth, while navigating
the short term economic cycles. The milestones
that we achieved in fiscal 2013 are reflective of
this approach. Our focus will be to build on these
achievements and deliver sustainable value creation
for all our stakeholders. As always, I look forward to
your continued support in this endeavour.
With best wishes,
Chanda Kochhar
Annual report 2012-2013 5
Board of Directors
K. V. Kamath
Chairman
Chanda Kochhar
Managing Director & CEO
Dileep Choksi
Homi Khusrokhan
Arvind Kumar
Swati Piramal
M. S. Ramachandran
Tushaar Shah
V. Sridar
N. S. Kannan
Executive Director & CFO
K. Ramkumar
Executive Director
Rajiv Sabharwal
Executive Director
Presidents
Vijay Chandok
Zarin Daruwala
Senior General Managers
Sandeep Batra
Group Compliance Officer
& Company Secretary
Sudhir Dole
Mukeshkumar Jain
K.M. Jayarao
Rakesh Jha
Maninder Juneja
Shilpa Kumar
Anita Pai
Kumar Ashish
Suresh Badami
Sanjay Chougule
Sujit Ganguli
Ajay Gupta
Anil Kaul
Sanjeev Mantri
Ravi Narayanan
Amit Palta
Sanker Parameswaran
Murali Ramakrishnan
Supritha Shetty
Saurabh Singh
G. Srinivas
Sriram H
T. K. Srirang
Rahul Vohra
6
Board
Committees
Audit Committee
Homi Khusrokhan, Chairman
Dileep Choksi, Alternate Chairman
M. S. Ramachandran
V. Sridar
Board Governance, Remuneration &
Nomination Committee
K. V. Kamath, Chairman
Homi Khusrokhan
M. S. Ramachandran
Corporate Social Responsibility Committee
M. S. Ramachandran, Chairman
Arvind Kumar
Tushaar Shah
Chanda Kochhar
Credit Committee
K.V. Kamath, Chairman
Homi Khusrokhan
M. S. Ramachandran
Chanda Kochhar
Customer Service Committee
K. V. Kamath, Chairman
M. S. Ramachandran
V. Sridar
Chanda Kochhar
Fraud Monitoring Committee
V. Sridar, Chairman
K. V. Kamath
Dileep Choksi
Homi Khusrokhan
Arvind Kumar
Chanda Kochhar
Rajiv Sabharwal
Information Technology Strategy
Committee
Homi Khusrokhan, Chairman
K. V. Kamath
V. Sridar
Chanda Kochhar
Risk Committee
K. V. Kamath, Chairman
Dileep Choksi
Homi Khusrokhan
Arvind Kumar
V. Sridar
Chanda Kochhar
Share Transfer & Shareholders’/
Investors’ Grievance Committee
Homi Khusrokhan, Chairman
V. Sridar
N. S. Kannan
Committee of Executive Directors
Chanda Kochhar, Chairperson
N. S. Kannan
K. Ramkumar
Rajiv Sabharwal
Directors’ Report
Your Directors have pleasure in presenting the Nineteenth Annual Report of ICICI Bank Limited along with
the audited statement of accounts for the year ended March 31, 2013.
FINANCIAL HIGHLIGHTS
The financial performance for fiscal 2013 is summarised in the following table:
` billion, except percentages
Fiscal 2012
Fiscal 2013
% change
Net interest income and other income
Operating expenses
Provisions & contingencies1
Profit before tax
Profit after tax
1. Excludes provision for taxes.
` billion, except percentages
Consolidated profit after tax
182.36
78.50
15.83
88.03
64.65
222.12
90.13
18.02
113.97
83.25
21.8%
14.8%
13.8%
29.5%
28.8%
Fiscal 2012
Fiscal 2013
% change
76.43
96.04
25.7%
Appropriations
The profit after tax of the Bank for fiscal 2013 is ` 83.25 billion after provisions and contingencies of
` 18.02 billion, provision for taxes of ` 30.72 billion and all expenses. The disposable profit is ` 153.79
billion, taking into account the balance of ` 70.54 billion brought forward from the previous year. In
accordance with the guidelines prescribed by Reserve Bank of India (RBI) and the dividend policy adopted
by the Bank, your Directors have recommended a dividend at the rate of ` 20.00 per equity share of face
value ` 10 for the year and have appropriated the disposable profit as follows:
` billion
Fiscal 2012
Fiscal 2013
To Statutory Reserve, making in all ` 110.74 billion
To Special Reserve created and maintained in terms of Section 36(1)(viii)
of the Income-tax Act, 1961, making in all ` 45.79 billion
To Capital Reserve, making in all ` 22.17 billion
To Revenue and other reserves, making in all ` 49.90 billion1
Dividend for the year (proposed)
16.17
6.50
0.38
0.02
20.82
7.60
0.33
0.03
– On equity shares @ ` 20.00 per share (@ ` 16.50 per share for
19.02
23.07
fiscal 2012)2
– On preference shares (`)
– Corporate dividend tax
Leaving balance to be carried forward to the next year
35,000
35,000
2.20
70.54
2.92
99.02
1. Includes transfer to Reserve Fund and Investment Fund account ` 27.8 million for fiscal 2013 (` 10.7 million for
fiscal 2012) in accordance with regulations applicable to Sri Lanka branch. No amount was transferred to General
Reserve in fiscal 2013 (` 3.2 million for fiscal 2012).
2. Includes dividend for the prior year paid on shares issued after the balance sheet date and prior to the
record date.
Annual report 2012-2013 7
A network that spans the rural hinterland
In order to support the growth of the rural markets, it is imperative that we are
present at the heart of rural India. We have therefore expanded our reach and
access through a strong network of rural branches and Business Correspondents.
Today we have 464 rural branches including 131 Gramin branches in unbanked
villages. ICICI Bank’s Gramin branches are specially designed to offer services
which are required in these unbanked areas. Through these branches, the Bank
facilitates banking services to customers in the villages and also facilitates payment
of government benefits to beneficiaries.
To further reach out to the rural population, ICICI Bank has also tied up with over
25 business correspondents and has a network of over 7,500 customer service
points (CSPs). Through its network of branches and business corespondents, the
Bank covers over 13,500 villages. Going forward, we will continue to expand our
rural network.
8
Directors’ Report
“During fiscal 2013, we
continued to focus on
enhancing our financial
performance through
an improvement in net
interest margins, better
treasury performance,
reduction in cost ratios
and stability in asset
quality trends. We
leveraged opportunities
for growth in the
domestic market with
increasing growth
momentum in retail
lending, while maintaining
our low cost funding
profile. We have
continued to invest in
expanding our network
and customer offerings
& servicing capabilities,
which combined with
our strong capital base,
position us well for future
growth and for delivering
improved returns to our
shareholders.”
N. S. KANNAN
Executive Director and
Chief Financial Officer
SUBSIDIARY COMPANIES
At March 31, 2013, ICICI Bank had 17 subsidiaries as listed in the
following table:
Domestic Subsidiaries
International Subsidiaries
ICICI Prudential Life Insurance
Company Limited
ICICI Lombard General Insurance
Company Limited
ICICI Prudential Asset
Management
Company Limited
ICICI Prudential Trust Limited
ICICI Bank UK PLC
ICICI Bank Canada
ICICI Bank Eurasia
Limited Liability Company
ICICI Securities Holdings Inc.2
ICICI Securities Limited
ICICI Securities Inc.3
ICICI International Limited
ICICI Securities Primary
Dealership Limited
ICICI Venture Funds Management
Company Limited
ICICI Home Finance Company
Limited
ICICI Investment Management
Company Limited
ICICI Trusteeship Services Limited
ICICI Prudential Pension Funds
Management Company Limited1
1. Subsidiary of ICICI Prudential Life Insurance Company Limited.
2. Subsidiary of ICICI Securities Limited.
3. Subsidiary of ICICI Securities Holdings Inc.
The Ministry of Corporate Affairs (MCA) vide its Circular No.51/12/2007-
CL-III dated February 8, 2011 has granted general exemption under
Section 212(8) of the Companies Act, 1956 to companies from
attaching the accounts of their subsidiaries in their annual reports
subject to fulfilment of certain conditions prescribed. Pursuant to the
requirements of the above Circular, the Board of Directors of the Bank
at its Meeting held on April 26, 2013 passed the necessary resolution
granting the requisite approvals for not attaching the balance sheet,
profit & loss account, report of the board of directors and report of
the auditors of each of the subsidiary companies to the accounts of
the Bank. The Bank will make available these documents/details upon
request by any Member of the Bank. These documents/details will be
Annual report 2012-2013 9
Directors’ Report
“In our continuing
endeavour to make
Khayaal Aapka come
alive to our customers,
we have rolled out 24x7
fully electronic branches
and electronic lobbies.
They are the first of
their kind in India. They
give our customers the
convenience and freedom
to transact around the
clock. In addition, our
segmented approach
to business has been
designed to offer the
best in class experience
in banking, across
customer segments.
All our employees have
internalised the Khayaal
Aapka spirit. They look
forward to making
every engagement
with our customers an
enriching and satisfying
experience.”
K. RAMKUMAR
Executive Director
available on the Bank’s website (www.icicibank.com) and will also be
available for inspection by any Member of the Bank at its Registered
Office and Corporate Office and also at the registered offices of the
concerned subsidiaries. As required by Accounting Standard-21 (AS-
21) issued by the Institute of Chartered Accountants of India, the
Bank’s consolidated financial statements included in this Annual Report
incorporate the accounts of its subsidiaries and other consolidating
entities. A summary of key financials of the Bank’s subsidiaries is also
included in this Annual Report.
During fiscal 2013, ICICI Bank formed a joint venture with Bank of
Baroda, Citicorp Finance and Life Insurance Corporation of India, to
incorporate India Infradebt Limited, India’s first infrastructure debt fund
structured as a non-banking finance company.
DIRECTORS
Pursuant to the provisions of the Banking Regulation Act, 1949, Sridar
Iyengar retired from the Board effective April 30, 2013 on completion
of eight years as a non-executive Director. The Board placed on record
its deep appreciation and gratitude for his guidance and contribution
to the Bank.
The Board, at its Meeting held on April 26, 2013, appointed Dileep
Choksi, a chartered accountant and former Joint Managing Partner of
Deloitte in India as an additional Director effective April 26, 2013. Dileep
Choksi holds office upto the date of the forthcoming Annual General
Meeting (AGM) and is eligible for appointment.
In terms of the provisions of the Companies Act, 1956 and the
Articles of Association of the Bank, K. V. Kamath, Tushaar Shah and
Rajiv Sabharwal would retire by rotation at the forthcoming AGM and
are eligible for re-appointment. K. V. Kamath, Tushaar Shah and Rajiv
Sabharwal have offered themselves for re-appointment.
The Members of the Company previously by way of postal ballot in
February 2009, approved the appointment of K. V. Kamath as non-
executive Chairman of the Bank effective May 1, 2009 upto April 30,
2014 and the re-appointment of Chanda Kochhar as Joint Managing
Director & CFO effective April 1, 2009 upto April 30, 2009 and her
appointment as Managing Director & CEO effective May 1, 2009 upto
March 31, 2014.
10
Fostering savings and building rural wealth
Easier access to financial services for the rural population will empower them to attain their full
income potential and plan for their future. This will also help them benefit from and contribute
to the nation’s growth.
ICICI Bank through its rural and Gramin branches and business correspondents has facilitated
the opening of about 14.9 million basic savings bank deposit accounts. Our branches partner
with business correspondents to deliver savings related services to our low-income customers.
We offer micro-savings accounts, recurring deposits, insurance policies and electronic benefit
transfer for Social Security Pension (SSP) and the Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS).
These products are specially designed to combine convenience with security along with
minimal paperwork. Our rural customers can make frequent deposits in small variable amounts
with easy access.
As savings grow, the aspirations of the rural population will also rise giving a further boost to
India’s economic and social development.
Annual report 2012-2013 11
Credit services for strengthening
the value chain
The rural value chain, which extends from ‘farm to fork’, involves multiple stakeholders that
straddle across villages and towns, comprising large companies, small agricultural enterprises
and individuals such as farmers, agricultural traders, processors and rural entrepreneurs.
The efficiency and success of this value chain depends on each of the stakeholders being given
adequate support and relevant credit facilities. This support will help them utilise agricultural
inputs in a better manner, improve their farm production and make better use of the marketing
infrastructure to sell their products.
To support sustainable growth of different stakeholders in the value chain, ICICI Bank offers a
wide gamut of services and products to these entities. These offerings include working capital for
farmers (Kisan Credit Card), agriculture term loans for purchase of cattle and irrigation equipment,
loans against gold jewellery, finance against agricultural produce, credit facilities to rural
entrepreneurs, finance for farm mechanisation and for transportation of agricultural produce.
The benefits that will accrue to the stakeholders from these solutions and services will contribute
to their growth as well as to the holistic growth of the rural economy.
12
Directors’ Report
“We will continue to
innovate and leverage
technology to meet
the changing needs
of our customers. Our
products and services
will address customers
across age groups, as
we strive to remain their
preferred bank for life.
Our various channels of
branch banking, mobile
banking, internet, ATMs
and social media will
continue to offer the
best in class experience.
We will further increase
our commitment to rural
India by increasing our
branch footprint and
business correspondent
network.”
RAJIV SABHARWAL
Executive Director
The Members at the Annual General Meeting (AGM) held on June
29, 2009 approved the appointment of N. S. Kannan as Executive
Director (designated as Executive Director & CFO) for a period of five
years effective May 1, 2009 upto April 30, 2014 and K. Ramkumar as
Executive Director for a period of five years effective February 1, 2009
upto January 31, 2014.
The requisite approvals have been received from RBI for all the aforesaid
appointments.
The Board at its Meeting held on April 26, 2013 (based on the
recommendations of
the Board Governance, Remuneration &
Nomination Committee) approved the re-appointment of the following
Directors of the Bank subject to the approval of Members and RBI for a
further period of five years as given below:
I. K. V. Kamath as non-executive Chairman of the Bank for a period of
five years effective May 1, 2014 upto April 30, 2019,
II. Chanda Kochhar as Managing Director & CEO of the Bank for a
period of five years effective April 1, 2014 upto March 31, 2019,
III. N. S. Kannan as Executive Director (designated as Executive Director
& CFO) of the Bank for a period of five years effective May 1, 2014
upto April 30, 2019 and
IV. K. Ramkumar as Executive Director of the Bank for a period of five
years effective February 1, 2014 upto January 31, 2019.
The resolution for the re-appointments are proposed to the Members in
the Notice of the current AGM vide item nos. 10-13 and the explanatory
statements for these items include the duration and terms of re-
appointment as well as remuneration. You are requested to consider
the re-appointment of the above Directors.
The Members approved the appointment of Rajiv Sabharwal as
Executive Director for a period of five years effective June 24, 2010 upto
June 23, 2015 at the AGM held on June 28, 2010. RBI has approved the
appointment of Rajiv Sabharwal as an Executive Director for a period of
three years effective June 24, 2010 upto June 23, 2013. An application
has been made to RBI seeking approval for re-appointment of Rajiv
Sabharwal as an Executive Director for a further period of two years
effective June 24, 2013 upto June 23, 2015.
AUDITORS
The Members are informed that while the registration number of the
statutory auditors continues to remain the same, the name of the
Annual report 2012-2013 13
Directors’ Report
statutory auditors which was formerly S. R. Batliboi & Co., Chartered Accountants has been changed to
S. R. Batliboi & Co. LLP, Chartered Accountants with effect from April 1, 2013 consequent to their
conversion into a limited liability partnership.
The auditors, S. R. Batliboi & Co. LLP, Chartered Accountants will retire at the ensuing AGM. As
recommended by the Audit Committee, the Board has proposed the appointment of S. R. Batliboi &
Co. LLP, Chartered Accountants as statutory auditors for fiscal 2014. Their appointment is subject to
the approval of RBI. The appointment of the auditors is proposed to the Members in the Notice of the
current AGM vide item no.7. The explanatory statement to the notice sets out the facts with respect to
the change in name. You are requested to consider their appointment.
PERSONNEL
The statement containing particulars of employees as required under Section 217(2A) of the Companies
Act, 1956 and the rules hereunder is given in an Annexure and forms part of this report. In terms of
Section 219(1)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the
aforesaid Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the
Company Secretary at the Registered Office of the Bank.
BUSINESS RESPONSIBILITY REPORTING
Securities and Exchange Board of India (SEBI) through a circular dated August 13, 2012 has mandated the
inclusion of Business Responsibility (BR) Report as part of the Annual Report for the top 100 listed entities
based on their market capitalisation on Bombay Stock Exchange and National Stock Exchange at March
31, 2012. The SEBI circular is effective from financial year ending on or after December 31, 2012. In line
with the press release and FAQ’s dated May 10, 2013 issued by SEBI, the BR Report has been hosted
on the website of the Bank http://www.icicibank.com/aboutus/annual.html. Any shareholder interested
in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of
the Bank.
RISK MANAGEMENT FRAMEWORK
The Bank’s risk management strategy is based on a clear understanding of various risks, disciplined
risk assessment and measurement procedures and continuous monitoring. The policies and procedures
established for this purpose are continuously benchmarked with international best practices. The Board of
Directors has oversight on all the risks assumed by the Bank. Specific Committees have been constituted
to facilitate focused oversight of various risks, as follows:
• The Risk Committee of the Board reviews risk management policies of the Bank pertaining to credit,
market, liquidity, operational, outsourcing and reputation risks, business continuity plan and disaster
recovery plan. The Committee also reviews the risk management framework with respect to Enterprise
Risk Management and risk appetite, Internal Capital Adequacy Assessment Process (ICAAP) and stress
testing. The stress testing framework includes a wide range of Bank-specific and market (systemic)
scenarios. Linkage of macroeconomic factors to stress test scenarios is also documented as a part
of the ICAAP. The ICAAP exercise covers the domestic and overseas operations of the Bank, banking
subsidiaries and material non-banking subsidiaries. The Committee reviews migration to the advanced
14
Facilitating remittances in rural areas
An economist once said that it is not just the volume of money, but also the timeliness and
accuracy of its movement that are equally important for spurring the growth of an economy.
Following RBI’s regulations permitting domestic remittances for non-account holders,
ICICI Bank was among the first banks to commence its ‘cash to account’ transfer facility through
its Business Correspondents. Within six months of its launch, the Bank was able to service
1,00,000 customers for transferring over ` 1 billion to their family members in an instant,
convenient and secure manner.
We have innovated on different platforms that facilitate remittance services. Our ‘Mobile Money’
platform offered in conjunction with leading telecom providers enables customers to transfer
money safely through their mobile phones.
Further, through Mobile Money, a gamut of financial services such as deposits and cash
withdrawals, money transfer to third parties, prepaid mobile recharge and various utility bill
payments are offered.
This platform is a big step forward towards making financial inclusion a reality across India.
Annual report 2012-2013 15
Directors’ Report
approaches under Basel II and implementation of Basel III, risk return profile of the Bank, outsourcing
activities, compliance with RBI guidelines pertaining to credit, market and operational risk management
systems and the activities of the Asset Liability Management Committee. The Committee reviews
the level and direction of major risks pertaining to credit, market, liquidity, operational, compliance,
group, management and capital at risk as part of risk profile templates. In addition, the Committee has
oversight on risks of subsidiaries covered under the Group Risk Management Framework. The Risk
Committee also reviews the Liquidity Contingency Plan (LCP) for the Bank and the threshold limits.
• Apart from sanctioning credit proposals, the Credit Committee of the Board reviews developments in
key industrial sectors and the Bank’s exposure to these sectors as well as to large borrower accounts
and borrower groups. The Credit Committee also reviews the major credit portfolios, non-performing
loans, accounts under watch, overdues and incremental sanctions.
• The Audit Committee of the Board provides direction to and monitors the quality of the internal audit
function and also monitors compliance with inspection and audit reports of Reserve Bank of India,
other regulators and statutory auditors.
• The Asset Liability Management Committee is responsible for managing liquidity and interest rate risk
and reviewing the asset-liability position of the Bank.
Summaries of reviews conducted by these Committees are reported to the Board on a regular basis.
Policies approved from time to time by the Board of Directors/Committees of the Board form the
governing framework for each type of risk. The business activities are undertaken within this policy
framework. Independent groups and sub-groups have been constituted across the Bank to facilitate
independent evaluation, monitoring and reporting of various risks. These groups function independently
of the business groups/sub-groups.
The Bank has dedicated groups, namely, the Risk Management Group, Compliance Group, Corporate
Legal Group, Internal Audit Group and the Financial Crime Prevention & Reputation Risk Management
Group, with a mandate to identify, assess and monitor all of the Bank’s principal risks in accordance with
well-defined policies and procedures. The Risk Management Group is further organised into the Credit
Risk Management Group, Market Risk Management Group and Operational Risk Management Group.
These groups are completely independent of all business operations and coordinate with representatives
of the business units to implement ICICI Bank’s risk management policies and methodologies. The
internal audit and compliance groups are responsible to the Audit Committee of the Board.
CORPORATE GOVERNANCE
The corporate governance framework at ICICI Bank is based on an effective independent Board, the
separation of the Board’s supervisory role from the executive management and the constitution of Board
Committees, generally comprising a majority of independent Directors and chaired by independent
Directors, to oversee critical areas.
I. Philosophy of Corporate Governance
ICICI Bank’s corporate governance philosophy encompasses regulatory and legal requirements, such
as the terms of listing agreements with stock exchanges which aims at a high level of business ethics,
effective supervision and enhancement of value for all stakeholders. The corporate governance framework
adopted by the Bank already encompasses a significant portion of the recommendations contained
in the ‘Corporate Governance Voluntary Guidelines 2009’ issued by the Ministry of Corporate Affairs,
Government of India.
16
Whistle Blower Policy
ICICI Bank has formulated a Whistle Blower Policy. The policy comprehensively provides an opportunity
for any employee of the Bank to raise any issue concerning breaches of law, accounting policies or any
act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy
provides for a mechanism to report such concerns to the Audit Committee through specified channels.
The policy has been periodically communicated to the employees and also posted on the Bank’s intranet.
ICICI Bank Code of Conduct for Prevention of Insider Trading
In accordance with the requirements of the Securities and Exchange Board of India (SEBI) (Prohibition
of Insider Trading) Regulations, 1992, ICICI Bank has instituted a comprehensive code of conduct for
prevention of insider trading.
Group Code of Business Conduct and Ethics
The Group Code of Business Conduct and Ethics for Directors and employees of the ICICI Group aims at
ensuring consistent standards of conduct and ethical business practices across the constituents of the
ICICI Group. This Code is reviewed on an annual basis and the latest Code is available on the website of
the Bank (www.icicibank.com). Pursuant to Clause 49 of the Listing Agreement, a confirmation from the
Managing Director & CEO regarding compliance with the Code by all the Directors and senior management
forms part of the Annual Report.
CEO/CFO Certification
In terms of Clause 49 of the Listing Agreement, the certification by the Managing Director & CEO and
Executive Director & CFO on the financial statements and internal controls relating to financial reporting
has been obtained.
Covering letter of annual audit report to be filed with stock exchanges
In terms of Clause 31(a) of the Listing Agreement, the covering letter of the annual audit report to be
filed with the stock exchanges (Form A) duly signed by the Managing Director & CEO, Executive Director
& CFO, Auditors of the company and Chairman of the Audit Committee would be filed with the stock
exchanges alongwith the copies of the Annual Reports.
Board of Directors
ICICI Bank has a broad-based Board of Directors, constituted in compliance with the Banking Regulation
Act, 1949, the Companies Act, 1956 and listing agreements entered into with stock exchanges, and in
accordance with good corporate governance practices. The Board functions either as a full Board or
through various committees constituted to oversee specific operational areas. The Board has constituted
ten committees, namely, Audit Committee, Board Governance, Remuneration & Nomination Committee,
Corporate Social Responsibility Committee, Credit Committee, Customer Service Committee, Fraud
Monitoring Committee, Information Technology Strategy Committee, Risk Committee, Share Transfer
& Shareholders’/Investors’ Grievance Committee and Committee of Executive Directors. These Board
Committees other than the Committee of Executive Directors currently comprise majority of independent
Directors and are chaired by independent Directors.
At March 31, 2013, the Board of Directors consisted of 12 members. There were five Meetings of the
Board during fiscal 2013 - on April 27, July 27, and October 26 in 2012 and January 31 and February 22
in 2013. The names of the Directors, their attendance at Board Meetings during the year, attendance at
Annual Report 2012-2013 17
Directors’ Report
the last AGM and the number of other directorships and board committee memberships held by them at
March 31, 2013 are set out in the following table:
Name of Director
Independent Directors
K. V. Kamath, Chairman
(Non-executive Director upto April 30,
2012 and Independent Director w.e.f.
May 1, 2012)
Sridar Iyengar
Homi Khusrokhan
Arvind Kumar(a)
Swati Piramal
M. S. Ramachandran
Tushaar Shah
V. Sridar
Wholetime Directors
Chanda Kochhar
N. S. Kannan
K. Ramkumar
Rajiv Sabharwal
Board
Meetings
attended
during
the year
Attendance
at last
AGM
(June 25,
2012)
Number of other
directorships
Of other
companies2
Of Indian
public
limited
companies1
Number
of other
committee3
memberships
5/5
Present
5/5
5/5
2/5
2/5
4/5
5/5
5/5
5/5
5/5
5/5
5/5
Present
Present
Absent
Present
Present
Absent
Present
Present
Present
Present
Present
1
5
5
2
4
4
-
8
4
4
2
2
1
6
3
-
17
1
-
2
3
2
-
-
-
4(2)
4(1)
1(1)
-
1
-
4(2)
-
1
1
-
(a) Nominee of Government of India.
1. Comprises public limited companies incorporated in India.
2. Comprises private limited companies incorporated in India and foreign companies but excludes Section 25
companies and not for profit foreign companies.
3. Comprises only Audit Committee and Share Transfer & Shareholders’/Investors’ Grievance Committee of Indian
public limited companies. Figures in parentheses indicate committee chairpersonships.
In terms of Clause 49 of the Listing Agreement, the number of Committees (Audit Committee and Share
Transfer & Shareholders’/Investors’ Grievance Committee) of public limited companies in which a Director
is a member/chairman were within the limits provided under Clause 49, for all the Directors of the Bank.
The terms of reference of the ten Board Committees as mentioned earlier, their composition, and
attendance of the respective Members at the various Committee Meetings held during fiscal 2013 are
set out below. Pursuant to the appointment of Dileep Choksi as a non-executive Director on the Board of
the Bank effective April 26, 2013 and in anticipation of the completion of tenure of Sridar Iyengar effective
April 30, 2013, certain Committees have been re-constituted by the Board at its Meeting held on April 26,
2013. The re-constitution of the said Committees is effective April 30, 2013 and the details of the same
are mentioned in the sections relating to the respective Committees.
18
II. Audit Committee
Terms of Reference
The Audit Committee provides direction to the audit function and monitors the quality of internal and
statutory audit. The responsibilities of the Audit Committee include overseeing the financial reporting
process to ensure fairness, sufficiency and credibility of financial statements, recommendation of
appointment and removal of central and branch statutory auditors and chief internal auditor and fixation
of their remuneration, approval of payment to statutory auditors for other permitted services rendered
by them, review of functioning of Whistle Blower Policy, review of the quarterly and annual financial
statements before submission to the Board, review of the adequacy of internal control systems and the
internal audit function, review of compliance with inspection and audit reports and reports of statutory
auditors, review of the findings of internal investigations, review of statement of significant related party
transactions, review of management letters/letters on internal control weaknesses issued by statutory
auditors, reviewing with the management, the statement of uses/application of funds raised through
an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for the
purposes other than those stated in the offer document/prospectus/notice and the report submitted
by the monitoring agency, monitoring the utilisation of proceeds of a public or rights issue and making
appropriate recommendations to the Board to take steps in this matter, discussion on the scope of
audit with external auditors and examination of reasons for substantial defaults, if any, in payment to
stakeholders. The Audit Committee is also empowered to appoint/oversee the work of any registered
public accounting firm, establish procedures for receipt and treatment of complaints received regarding
accounting and auditing matters and engage independent counsel as also provide for appropriate funding
for compensation to be paid to any firm/advisors. In addition, the Audit Committee also exercises oversight
on the regulatory compliance function of the Bank. The Audit Committee is also empowered to approve
the appointment of the CFO (i.e., the whole-time Finance Director or any other person heading the finance
function or discharging that function) after assessing the qualifications, experience and background, etc.
of the candidate.
Composition
The Audit Committee currently comprises four independent Directors and at March 31, 2013 was chaired
by Sridar Iyengar, an independent Director. There were eight Meetings of the Committee during the year.
The details of the composition of the Committee and attendance at its Meetings are set out in the
following table:
Name of Member
Number of meetings attended
Sridar Iyengar, Chairman (upto April 29, 2013)
Homi Khusrokhan, Alternate Chairman
M. S. Ramachandran
V. Sridar
8/8
8/8
7/8
7/8
The Board of Directors at its Meeting held on April 26, 2013 re-constituted the Audit Committee effective
April 30, 2013 pursuant to which Homi Khusrokhan was appointed as Chairman of the Committee in place
of Sridar Iyengar and Dileep Choksi was appointed as a Member as well as the Alternate Chairman of the
Committee.
III. Board Governance, Remuneration & Nomination Committee
Terms of Reference
The functions of the Committee include recommendation of appointments to the Board, evaluation of the
performance of the Managing Director & CEO and wholetime Directors on predetermined parameters,
recommendation to the Board of the remuneration (including performance bonus and perquisites) to
wholetime Directors, approval of the policy for and quantum of bonus payable to the members of the
staff, framing of guidelines for the Employees Stock Option Scheme and recommendation of grant of
Annual Report 2012-2013 19
Directors’ Report
ICICI Bank stock options to the employees and wholetime Directors of ICICI Bank and its subsidiary
companies.
Composition
The Board Governance, Remuneration & Nomination Committee currently comprises three independent
Directors and at March 31, 2013 was chaired by Sridar Iyengar, an independent Director. There were
three Meetings of the Committee during the year. The details of the composition of the Committee and
attendance at its Meetings are set out in the following table:
Name of Member
Number of meetings attended
Sridar Iyengar, Chairman (upto April 29, 2013)
K. V. Kamath
Homi Khusrokhan
3/3
3/3
3/3
The Board of Directors at its Meeting held on April 26, 2013 re-constituted the Board Governance
Remuneration & Nomination Committee effective April 30, 2013 pursuant to which K. V. Kamath was
appointed as Chairman of the Committee in place of Sridar Iyengar and M. S. Ramachandran was
appointed as a Member of the Committee.
Remuneration policy
The Board Governance, Remuneration & Nomination Committee determines and recommends to
the Board the amount of remuneration, including performance bonus and perquisites, payable to the
wholetime Directors.
The following table sets out the details of remuneration (including perquisites and retiral benefits) paid to
wholetime Directors for fiscal 2013.
Details of Remuneration (`)
Basic
Performance bonus for fiscal 20131
Allowances and perquisites2
Contribution to provident fund
Contribution to superannuation fund
Contribution to gratuity fund
Stock options (Numbers)3
Fiscal 20131
Fiscal 2012
Fiscal 2011
K. Ramkumar
Rajiv
Sabharwal
Chanda
Kochhar
15,249,000
17,989,541
14,882,587
1,829,880
-
1,270,242
N. S.
Kannan
10,074,000
12,058,511
9,881,711
1,208,880
1,511,100
839,164
10,074,000
12,058,511
10,001,345
1,208,880
1,511,100
839,164
250,000
210,000
210,000
125,000
105,000
105,000
125,000
105,000
105,000
9,522,000
10,358,810
8,773,530
1,142,640
1,428,300
793,183
125,000
105,000
105,000
1. Subject to RBI approval. Bonus will be deferred in line with RBI’s guidelines on compensation with only 60% of
the bonus paid on approval and the balance deferred equally over three years.
2. Allowances and perquisites exclude valuation of the employee stock options exercised during fiscal 2013 as it
does not constitute remuneration for the purposes of Companies Act, 1956.
3. Excludes special grant of stock options approved by RBI on January 17, 2011 aggregating to 250,000 for Chanda
Kochhar and 150,000 each for N. S. Kannan, K. Ramkumar and Rajiv Sabharwal.
Perquisites (evaluated as per Income-tax rules wherever applicable and otherwise at actual cost to the
Bank) such as the benefit of the Bank’s furnished accommodation, gas, electricity, water and furnishings,
club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu
20
thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund,
superannuation fund and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable
from time to time. In line with the staff loan policy applicable to specified grades of employees who fulfill
prescribed eligibility criteria to avail loans for purchase of residential property, the wholetime Directors are
also eligible for housing loans subject to approval of RBI.
The Board, at its Meeting held on April 26, 2013, approved a revision in the remuneration payable to
wholetime Directors subject to the approval of the Members. In terms of the revised remuneration terms,
the monthly basic salary for Chanda Kochhar, Managing Director & CEO would be within the range of
` 1,350,000 – ` 2,600,000, N. S. Kannan, Executive Director & CFO and K. Ramkumar, Executive Director
would be within the range of ` 950,000 – ` 1,700,000 and Rajiv Sabharwal, Executive Director would be
within the range of ` 900,000 – ` 1,600,000 effective April 1, 2013. The Board would from time to time
within the above ranges determine the monthly salary to be paid to the Directors subject to approval
of RBI.
The present supplementary allowance being paid to the above Directors is in the nature of a fixed amount.
The Board at its above Meeting also approved a minimum and maximum range of monthly supplementary
allowance within which supplementary allowance as determined by the Board from time to time may be paid
to the Directors subject to the approval of RBI. Consequently the monthly supplementary allowances for
the Managing Director & CEO, would be within the range of ` 1,000,000 – ` 1,800,000, for
N. S. Kannan, Executive Director & CFO and K. Ramkumar, Executive Director would be within the range
of ` 675,000 - ` 1,225,000 and for Rajiv Sabharwal, Executive Director would be within the range of
` 650,000 - ` 1,200,000 effective April 1, 2013.
The resolution for the revision in remuneration is proposed to the Members in the Notice of the current
AGM vide item nos. 11-14 and the explanatory statement for these items includes the terms of re-
appointment where applicable as well as remuneration of the aforesaid Directors. You are requested to
consider the revision in remuneration terms of the above Directors.
As provided under Article 132 of the Articles of Association of the Bank, the fees payable to a Director
(other than to the nominee of Government of India) for attending a Meeting of the Board or Committee
thereof are decided by the Board of Directors from time to time within the limits prescribed by the
Companies Act, 1956 or the Central Government. The Board of Directors has approved the payment of
` 20,000 as sitting fees for each Meeting of Board or Committee attended. This amount is within the limits
prescribed by the Ministry of Corporate Affairs vide its Notification dated July 24, 2003. Approval of the
Members for payment of sitting fees to the Directors was obtained at the AGM held on August 20, 2005.
The Board of Directors has approved payment of remuneration of ` 2,000,000 per annum to K. V. Kamath
plus payment of sitting fees, maintaining a Chairman’s office at the Bank’s expense, bearing expenses
for travel on official visits and participation in various forums (both in India and abroad) as Chairman of the
Bank and bearing travel/halting/other expenses and allowances for attending to his duties as Chairman
of the Bank. The Members of the Company vide Resolution passed by way of postal ballot the result
of which was declared on February 13, 2009 had approved the above payment of remuneration for a
period of five years from May 1, 2009. RBI and the Central Government have vide their letters dated
March 12, 2009 and January 8, 2010 respectively approved the payment of the above remuneration.
RBI while approving the re-appointment of Chairman for a further period of two years from May 1, 2012
upto April 30, 2014 has confirmed the terms and conditions of re-appointment which includes the above
payment. In line with the above approvals K. V. Kamath was paid a remuneration of ` 2,000,000 per annum
for fiscal 2013.
The Board at its Meeting held on April 26, 2013 based on the recommendations of the Board Governance,
Remuneration & Nomination Committee and subject to the approval of the Members, RBI and such other
approvals as may be necessary, approved a revision in the remuneration payable to K. V. Kamath. In terms
of the revised remuneration, K. V. Kamath is entitled to be paid a remuneration of upto ` 5,000,000 per
Annual Report 2012-2013 21
Directors’ Report
annum subject to necessary approvals as mentioned earlier. This remuneration limit will be effective,
May 1, 2014 – April 30, 2019, being the period for which K. V. Kamath is proposed to be re-appointed
as Chairman. The re-appointment as well as revised remuneration is proposed to the Members in the
Notice of the current AGM vide item no. 10 alongwith an explanatory statement detailing the terms of
remuneration. You are requested to consider the revision in remuneration terms of the Chairman.
Information on the total sitting fees paid to each non-executive Director during fiscal 2013 for attending
Meetings of the Board and its Committees is set out in the following table:
Name of Director
K. V. Kamath
Sridar Iyengar
Homi Khusrokhan
Swati Piramal
M. S. Ramachandran
Tushaar Shah
V. Sridar
Total
Amount (`)
920,000
460,000
880,000
40,000
740,000
140,000
700,000
3,880,000
The details of shares and convertible instruments of the Bank, held by the non-executive Directors as on
March 31, 2013 are set out in the following table:
Name of Director
K. V. Kamath
Sridar Iyengar
Homi Khusrokhan
Arvind Kumar
Swati Piramal
M. S. Ramachandran
Tushaar Shah
V. Sridar
Instrument
No. of shares held
Equity
—
Equity
—
—
Equity
-—
-—
490,000
-—
7781
-—
—
375
-—
-—
1. 778 shares held jointly with relatives.
RBI vide its Circular DBOD No. BC. 72/29.67.001/2011-12 dated January 13, 2012 has issued guidelines on
“Compensation of Whole Time Directors/Chief Executive Officers/Risk takers and Control function staff
etc.” for implementation by private sector banks and foreign banks from the financial year 2012-13. In
terms of the requirement of the said circular the Bank adopted a Compensation Policy as required by RBI
in January 2012. The said circular also requires the Bank to make following disclosures on remuneration
on an annual basis in their Annual Report:
COMpeNSATION pOlICy AND pRACTICeS
(A) Qualitative disclosures
a)
The Board Governance, Remuneration & Nomination Committee (BGRNC) comprises three independent
Information relating to the composition and mandate of the Remuneration Committee
22
Directors. The functions of the Committee include recommendation of appointments of Directors to the
Board, evaluation of the performance of the wholetime Directors (including the Managing Director & CEO)
on predetermined parameters, recommendation to the Board of the remuneration (including performance
bonus and perquisites) to wholetime Directors, approval of the policy for and quantum of bonus payable
to the members of the staff, framing of guidelines for the Employees Stock Option Scheme (ESOS) and
recommendation of grant of the Bank’s stock options to employees and wholetime Directors of the Bank
and its subsidiary companies.
b) Information relating to design and structure of remuneration processes and the key features and
objectives of remuneration policy
The Bank has under the guidance of the Board and the BGRNC, followed compensation practices
intended to drive meritocracy within the framework of prudent risk management. This approach has been
incorporated in the Compensation Policy approved by the Board on January 31, 2012, pursuant to the
guidelines issued by RBI.
The key elements of the Bank’s compensation practices are:
• Effective governance of compensation: The BGRNC has oversight over compensation. The Committee
defines Key Performance Indicators (KPIs) for wholetime Directors and equivalent positions and the
organisational performance norms for bonus based on the financial and strategic plan approved
by the Board. The KPIs include both quantitative and qualitative aspects. The BGRNC assesses
organisational performance as well as the individual performance for wholetime Directors and
equivalent positions. Based on its assessment, it makes recommendations to the Board regarding
compensation for wholetime Directors and equivalent positions and bonus for employees.
• Alignment of compensation philosophy with prudent risk taking: The Bank seeks to achieve a
prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and
no guaranteed bonuses. Compensation is sought to be aligned to both financial and non-financial
indicators of performance including aspects like risk management and customer service. In addition,
the Bank has an employee stock option scheme aimed at aligning compensation to long term
performance through stock option grants that vest over a period of time. Compensation of staff in
financial and risk control functions is independent of the business areas they oversee and depends
on their performance assessment.
c) Description of the ways in which current and future risks are taken into account in the
remuneration processes including the nature and type of the key measures used to take account
of these risks
The Board approves the risk framework for the Bank and the business activities of the Bank are
undertaken within this framework to achieve the financial plan. The risk framework includes the Bank’s
risk appetite, limits framework and policies and procedures governing various types of risk. KPIs of
wholetime Directors & equivalent positions, as well as employees, incorporate relevant risk management
related aspects. For example, in addition to performance targets in areas such as growth and profits,
performance indicators include aspects such as the desired funding profile and asset quality. The BGRNC
takes into consideration all the above aspects while assessing organisational and individual performance
and making compensation-related recommendations to the Board.
d) Description of the ways in which the Bank seeks to link performance during a performance
measurement period with levels of remuneration
The level of performance bonus, increments in salary and allowances and grant of stock options are
determined based on the assessment of performance as described above.
Annual Report 2012-2013 23
Directors’ Report
e) Discussion of the Bank’s policy on deferral and vesting of variable remuneration and the Bank’s
policy and criteria for adjusting deferred remuneration before vesting and after vesting
The quantum of bonus for an employee does not exceed a certain percentage (as stipulated in the
compensation policy) of the total fixed pay in a year. Within this percentage, if the quantum of bonus
exceeds a predefined threshold percentage of the total fixed pay, a part of the bonus is deferred and paid
over a period.The deferred portion is subject to malus, under which the Bank would prevent vesting of all
or part of the variable pay in the event of an enquiry determining gross negligence or breach of integrity.
In such cases, variable pay already paid out is subject to clawback arrangements.
f) Description of the different forms of variable remuneration that the Bank utilises and the rationale
for using these different forms
The Bank pays performance linked retention pay (PLRP) to its front-line staff and junior management
and performance bonus to its middle and senior management. PLRP aims to reward front line and junior
managers, mainly on the basis of skill maturity attained through experience and continuity in role which is
a key differentiator for customer service. The Bank also pays variable pay to sales officers and relationship
managers in wealth management roles. The Bank ensures higher variable pay at senior levels and lower
variable pay for front-line staff and junior management levels.
(B) Quantitative disclosures
The following table sets forth, for the period indicated, the details of quantitative disclosure for
remuneration of wholetime Directors and equivalent positions.
` in million except numbers
year ended
March 31, 2013
particulars
Number of meetings held by the BGRNC
Remuneration paid to its members (sitting fees)
Number of employees having received a variable remuneration award
Number and total amount of sign-on awards made
Details of guaranteed bonus paid as joining/sign on bonus
Details of severance pay, in addition to accrued benefits
Total amount of outstanding deferred remuneration at March 31, 2013
Cash
Shares
Shares-linked instruments1 (nos.)
Other forms
Total amount of deferred remuneration paid out
Breakdown of amount of remuneration awards
Fixed2
Variable3
Deferred4
Non-deferred
Total amount of outstanding deferred remuneration and retained remuneration
exposed to ex-post explicit and/or implicit adjustments at March 31, 2013
Total amount of reductions due to ex-post explicit adjustments
Total amount of reductions due to ex-post implicit adjustments
1. Pursuant to grant of options under ESOS. Of these options, 75,000 options granted to a President who retired
subsequently, will vest fully in one year from April 27, 2012.
24
3
0.2
7
Nil
Nil
Nil
54.7
Nil
2,533,000
Nil
Nil
133.8
74.6
29.9
44.8
54.7
Nil
Nil
2. Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and
gratuity fund by the Bank.
3. Variable pay for the year ended March 31, 2013 was awarded in the month of April 2013 and is subject to
approval from RBI.
In line with the Bank’s compensation policy, the stipulated percentage of performance bonus is deferred.
4.
IV. Corporate Social Responsibility Committee
Terms of Reference
The functions of the Committee include review of corporate social responsibility initiatives undertaken
by the ICICI Group and the ICICI Foundation for Inclusive Growth, making recommendations to the Board
with respect to the corporate social responsibility initiatives, policies and practices of the ICICI Group and
to review and implement, if required, any other matter related to corporate social responsibility initiatives
as recommended/suggested by RBI or any other body.
Composition
The Corporate Social Responsibility Committee currently comprises four Directors including three
independent Directors and the Managing Director & CEO. The Committee is chaired by M. S. Ramachandran,
an independent Director. Two Meetings of the Committee were held during fiscal 2013. The details of the
composition of the Committee and attendance at its Meetings are set out in the following table:
Name of Member
M. S. Ramachandran, Chairman
Arvind Kumar
Tushaar Shah
Chanda Kochhar
Number of meetings attended
2/2
0/2
2/2
2/2
V. Credit Committee
Terms of Reference
The functions of the Committee include review of developments in key industrial sectors, major credit
portfolios and approval of credit proposals as per the authorisation approved by the Board.
Composition
The Credit Committee currently comprises four Directors including three independent Directors and the
Managing Director & CEO. The Committee is chaired by K. V. Kamath, an independent Director. There were
eighteen Meetings of the Committee during the year. The details of the composition of the Committee
and attendance at its Meetings are set out in the following table:
Name of Member
K. V. Kamath, Chairman1
Homi Khusrokhan1
M. S. Ramachandran
Chanda Kochhar
1. Participated in one Meeting through tele-conference.
Number of meetings attended
17/18
14/18
18/18
17/18
VI. Customer Service Committee
Terms of Reference
The functions of this Committee include review of customer service initiatives, overseeing the functioning
of the Customer Service Council and evolving innovative measures for enhancing the quality of customer
service and improvement in the overall satisfaction level of customers.
Annual Report 2012-2013 25
Directors’ Report
Composition
The Customer Service Committee currently comprises four Directors including three independent
Directors and the Managing Director & CEO. It is chaired by K. V. Kamath, an independent Director. There
were six Meetings of the Committee during the year. The details of the composition of the Committee
and attendance at its Meetings are set out in the following table:
Name of Member
K. V. Kamath, Chairman
M. S. Ramachandran
V. Sridar
Chanda Kochhar
Number of meetings attended
6/6
6/6
6/6
5/6
VII. Fraud Monitoring Committee
Terms of Reference
The Committee monitors and reviews all the frauds involving an amount of ` 10.0 million and above
with the objective of identifying the systemic lacunae, if any, that facilitated perpetration of the fraud
and put in place measures to rectify the same. The Committee is also empowered to identify the reasons
for delay in detection, if any, and report to top management of the Bank and RBI on the same. The
progress of investigation and recovery position is also monitored by the Committee. The Committee also
ensures that staff accountability is examined at all levels in all the cases of frauds and action, if required,
is completed quickly without loss of time. The role of the Committee is also to review the efficacy of
the remedial action taken to prevent recurrence of frauds, such as strengthening of internal controls
and put in place other measures as may be considered relevant to strengthen preventive measures
against frauds.
Composition
The Fraud Monitoring Committee at March 31, 2013 comprised six Directors including four independent
Directors. The Committee is chaired by V. Sridar, an independent Director. There were six Meetings of
the Committee during the year. The details of the composition of the Committee and attendance at its
Meetings are set out in the following table:
Name of Member
V. Sridar, Chairman
K. V. Kamath
Homi Khusrokhan
Arvind Kumar
Chanda Kochhar
Rajiv Sabharwal
Number of meetings attended
6/6
4/6
6/6
0/6
5/6
4/6
The Fraud Monitoring Committee currently comprises seven Directors including the Managing Director &
CEO as the Board of Directors at its Meeting held on April 26, 2013 re-constituted the Fraud Monitoring
Committee effective April 30, 2013 pursuant to which Dileep Choksi has been appointed as a Member of
the Committee effective April 30, 2013.
VIII. Information Technology Strategy Committee
Terms of Reference
The Committee is empowered to approve strategy for Information Technology (IT) and policy documents,
ensuring that IT strategy is aligned with business strategy, review IT risks, ensure proper balance of IT
investments for sustaining the Bank’s growth, oversee the aggregate funding of IT at a Bank-level and
26
ascertain if the management has resources to ensure the proper management of IT risks and review
contribution of IT to businesses.
Composition
The IT Strategy Committee currently comprises four Directors including three independent Directors and
the Managing Director & CEO. The Committee is chaired by Homi Khusrokhan, an independent Director.
Four Meetings of the Committee were held during fiscal 2013. The details of the composition of the
Committee and attendance at its Meeting is set out in the following table:
Name of Member
Homi Khusrokhan, Chairman
K. V. Kamath
Sridar Iyengar (upto April 29, 2013)
Chanda Kochhar
Number of meetings attended
4/4
4/4
3/4
2/4
The Board of Directors at its Meeting held on April 26, 2013 re-constituted the Information Technology
Strategy Committee effective April 30, 2013 pursuant to which V. Sridar has been appointed as a Member
of the Committee effective April 30, 2013 in place of Sridar Iyengar.
IX. Risk Committee
Terms of Reference
The Committee is empowered to review ICICI Bank’s risk management policies pertaining to credit,
market, liquidity, operational, outsourcing, reputation risks, business continuity and disaster recovery
plan. The Committee is also empowered to review the Enterprise Risk Management framework of the
Bank, risk appetite, stress testing framework, Internal Capital Adequacy Assessment Process (ICAAP) and
framework for capital allocation. The Committee is empowered to review the status of Basel II and Basel
III implementation, risk return profile of the Bank, outsourcing activities, compliance with RBI guidelines
pertaining to credit, market and operational risk management systems and the activities of Asset Liability
Management Committee. The Committee also reviews the risk profile template and key risk indicators
pertaining to various risks. In addition, the Committee has oversight on risks of subsidiaries covered
under the Group Risk Management Framework.
Composition
The Risk Committee at March 31, 2013 comprised five Directors including four independent Directors
and the Managing Director & CEO. It is chaired by K. V. Kamath, an independent Director. There were
seven Meetings of the Committee during the year. The details of the composition of the Committee and
attendance at its Meetings are set out in the following table:
Name of Member
K. V. Kamath, Chairman
Sridar Iyengar1
Arvind Kumar
V. Sridar
Chanda Kochhar
Number of meetings attended
7/7
4/7
0/7
7/7
7/7
1. Participated in two Meetings through tele-conference.
The Risk Committee currently comprises six Directors including the Managing Director & CEO as the
Board of Directors at its Meeting held on April 26, 2013 re-constituted the Risk Committee effective April
30, 2013 pursuant to which Homi Khusrokhan and Dileep Choksi (in place of Sridar Iyengar) have been
appointed as Members of the Committee effective April 30, 2013.
Annual Report 2012-2013 27
Directors’ Report
X. Share Transfer & Shareholders’/Investors’ Grievance Committee
Terms of Reference
The functions and powers of the Committee include approval and rejection of transfer or transmission
of equity shares, preference shares, bonds, debentures and securities, issue of duplicate certificates,
allotment of shares and securities issued from time to time, review and redressal of shareholders’ and
investors’ complaints, delegation of authority for opening and operation of bank accounts for payment of
interest, dividend and redemption of securities and the listing of securities on stock exchanges.
Composition
The Share Transfer & Shareholders’/Investors’ Grievance Committee currently comprises three Directors
including two independent Directors. It is chaired by Homi Khusrokhan, an independent Director. There
were four Meetings of the Committee during the year. The details of the composition of the Committee
and attendance at its Meetings are set out in the following table:
Name of Member
Homi Khusrokhan, Chairman
V. Sridar
N. S. Kannan
Number of meetings attended
4/4
4/4
3/4
Sandeep Batra, Senior General Manger is the Group Compliance Officer & Company Secretary. 127 shareholder
complaints received in fiscal 2013 were processed. At March 31, 2013, no complaints were pending.
XI. Committee of executive Directors
Terms of reference
The powers of the Committee include approval/renewal of credit proposals, restructuring and settlement
as per authorisation approved by the Board, approvals of detailed credit norms related to individual
business groups, approvals to facilitate introduction of new products and product variants, program
lending within each business segment and asset or liability category, including permissible deviations
and delegation of the above function(s) to any committee or individual. The Committee also approves
and reviews from time to time limits on exposure to any group or individual company as well as approves
underwriting assistance to equity or equity linked issues and subscription to equity shares or equity
linked products or preference shares. The Committee also exercises powers in relation to borrowings and
treasury operations as approved by the Board, empowers officials of the Bank and its group companies
through execution of Power of Attorney, if required under the Common Seal of the Bank, and further
exercises powers in relation to premises and property-related matters.
Composition
The Committee of Executive Directors currently comprises all four wholetime Directors and is chaired by
Chanda Kochhar, Managing Director & CEO. The other Members are N. S. Kannan, K. Ramkumar and Rajiv
Sabharwal.
XII. Other Committees
In addition to the above, the Board has from time to time constituted various committees, namely,
Asset Liability Management Committee, Committee for Identification of Wilful Defaulters, Grievance
Redressal Committee for borrowers identified as Wilful Defaulters, Committee of Senior Management
(comprising certain wholetime Directors and executives) and Committee of Executives, Compliance
Committee, Product & Process Approval Committee, Regional Committees for India and overseas
operations, Outsourcing Committee, Operational Risk Management Committee and other Committees
28
(all comprising executives). These committees are responsible for specific operational areas like asset
liability management, approval of credit proposals, approval of products and processes and management
of operational risk, under authorisation/supervision of the Board and its Committees.
XIII. General Body Meetings
The details of General Body Meetings held in the last three years are given below:
General Body Meeting
Day, Date
Time
Venue
Extra-ordinary General
Meeting
Monday, June 21, 2010
1.30 p.m. Professor Chandravadan Mehta
Auditorium, General Education
Sixteenth AGM
Monday, June 28, 2010
1.30 p.m.
Centre, Opposite D. N. Hall Ground,
Seventeenth AGM
Monday, June 27, 2011
1.30 p.m.
The Maharaja Sayajirao University,
Eighteenth AGM
Monday, June 25, 2012 12.15 p.m.
Pratapgunj, Vadodara 390 002
The details of the Special Resolutions passed in the General Meetings held in the previous three years
are given below:
General Body Meeting
Day, Date
Resolution
Extra-ordinary General
Meeting
Monday, June 21, 2010 Merger of The Bank of Rajasthan Limited
with ICICI Bank Limited under Section 44A of
the Banking Regulation Act, 1949 and RBI’s
guidelines for merger/amalgamation of private
sector banks dated May 11, 2005 (passed by
requisite majority as provided under Section
44A of the Banking Regulation Act, 1949)
Annual General Meeting
Monday, June 25, 2012
Enhancement of limit for Employee Stock
Options to ten percent of aggregate of the
number of issued equity shares of the Bank
and consequent approval to create, offer, issue
and allot equity shares under Employee Stock
Option Scheme to:
• permanent employees and Directors of the
Bank
• permanent employees and Directors of the
subsidiaries of the Bank
postal Ballot
At present, no special resolution is proposed to be passed through postal ballot. No resolution was
passed through postal ballot during fiscal 2013.
XIV. Disclosures
1. There are no materially significant transactions with related parties i.e., directors, management,
subsidiaries, or relatives conflicting with the Bank’s interests. The Bank has no promoter.
2. Penalties or strictures imposed on the Bank by any of the stock exchanges, the Securities & Exchange
Annual Report 2012-2013 29
Directors’ Report
Board of India (SEBI) or any other statutory authority, for any non-compliance on any matter relating
to capital markets, during the last three years are detailed:
• No penalties or strictures have been imposed on the Bank by any of the stock exchanges or SEBI
for any non-compliance on any matter relating to capital markets during the last three years.
• RBI, vide letter dated April 26, 2011, has imposed a penalty of ` 1.5 million on the Bank along with
18 other banks for violation of the guidelines on derivatives and extant instructions thereunder.
3. In terms of the Whistle Blower Policy of the Bank, no employee of the Bank has been denied access
to the Audit Committee.
XV. Means of Communication
It is ICICI Bank’s belief that all stakeholders should have access to complete information regarding its
position to enable them to accurately assess its future potential. ICICI Bank disseminates information on
its operations and initiatives on a regular basis. ICICI Bank‘s website (www.icicibank.com) serves as a
key awareness facility for all its stakeholders, allowing them to access information at their convenience.
It provides comprehensive information on ICICI Bank’s strategy, financial performance, operational
performance and the latest press releases.
ICICI Bank’s dedicated investor relations personnel respond to specific queries and play a proactive role
in disseminating information to both analysts and investors. In accordance with SEBI and Securities
Exchange Commission (SEC) guidelines, all information which could have a material bearing on ICICI
Bank’s share price is released through leading domestic and global wire agencies. The information is
also disseminated to the National Stock Exchange of India Limited (NSE), the Bombay Stock Exchange
Limited (BSE), New York Stock Exchange (NYSE), Singapore Stock Exchange, Japan Securities Dealers
Association and SIx Swiss Exchange AG from time to time.
The financial and other information filed by the Bank from time to time is also available on the
Corporate Filing and Dissemination System maintained by BSE and NSE and can be accessed on the URL
www.corpfiling.co.in. NSE has introduced a NSE Electronic Application Processing (NEAP) System
and as intimated by NSE from time to time, various compliances as required/prescribed under the
Listing Agreement executed with the Stock Exchanges are also filed through this system in addition to
dissemination of information by email or fax.
ICICI Bank’s quarterly financial results are published either in the Financial Express (Mumbai, Pune,
Ahmedabad, New Delhi, Lucknow, Chandigarh, Kolkata, Chennai, Bangalore, Hyderabad, Kochi editions)
or the Business Standard (Ahmedabad, Bangalore, Bhubaneshwar, Chandigarh, Chennai, Hyderabad,
Kochi, Kolkata, Lucknow, Mumbai, New Delhi and Pune editions), and Vadodara Samachar (Vadodara).
The financial results, official news releases, analyst call transcripts and presentations are also available
on the Bank’s website.
The Management’s Discussion & Analysis forms part of the Annual Report.
General Shareholder Information
General Body Meeting
Day, Date & Time
Venue
Nineteenth AGM
Monday, June 24, 2013
1.15 p.m.
Sir Sayajirao Nagargruh, Vadodara Mahanagar
Seva Sadan, Near GEB Colony, Old Padra
Road, Akota, Vadodara 390 020
Financial Calendar
Book Closure
Dividend Payment Date
:
:
:
April 1 to March 31
June 1, 2013 to June 24, 2013
June 25, 2013
30
Listing of equity shares/ADSs on Stock Exchanges (with stock code)
Stock exchange
Code for ICICI Bank
Bombay Stock Exchange Limited (BSE)
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001
National Stock Exchange of India Limited (NSE)
Exchange Plaza, Bandra-Kurla Complex
Bandra (East), Mumbai 400 051
New York Stock Exchange (ADSs)2
11, Wall Street, New York, NY 10005, United States of America
1. FII segment of BSE.
2. Each ADS of ICICI Bank represents two underlying equity shares.
532174
&
6321741
ICICIBANK
IBN
ICICI Bank has paid annual listing fees on its capital for the relevant periods to BSE and NSE where its
equity shares are listed and NYSE where its ADSs are listed.
Market Price Information
The reported high and low closing prices and volume of equity shares of ICICI Bank traded during fiscal
2013 on BSE and NSE are set out in the following table:
Month
April 2012
May 2012
BSe
NSe
High `
low `
Volume
High `
low `
Volume
Total Volume
on BSe and
NSe
907.55
838.65
9,669,521
908.20
838.40
83,928,790
93,598,311
881.70
784.30
9,874,946
882.05
783.25
89,320,954
99,195,900
June 2012
899.60
781.70
9,084,504
899.50
781.70
77,042,567
86,127,071
July 2012
964.30
893.95
10,615,761
964.50
894.40
87,378,444
97,994,205
August 2012
974.00
909.30
7,749,190
975.20
902.15
68,205,405
75,954,595
September 2012 1,070.90
879.55
8,958,819 1,070.95
879.65
78,899,973
87,858,792
October 2012
1,086.15 1,042.05
7,033,054 1,087.15 1,043.25
63,137,673
70,170,727
November 2012
1,098.60 1,018.55
6,114,820 1,099.85 1,018.30
50,162,152
56,276,972
December 2012
1,148.75 1,102.25
4,548,769 1,148.95 1,102.30
47,390,366
51,939,135
January 2013
1,214.25 1,159.15
6,133,375 1,212.70 1,158.45
59,937,122
66,070,497
February 2013
1,182.05 1,040.30
4,794,407 1,181.75 1,040.40
52,683,584
57,477,991
March 2013
1,138.65 1,001.60
7,214,746 1,139.30 1,001.55
75,742,672
82,957,418
Fiscal 2013
1,214.25
781.70
91,791,912 1,212.70
781.70
833,829,702
925,621,614
Annual Report 2012-2013 31
Directors’ Report
The reported high and low closing prices and volume of ADSs of ICICI Bank traded during fiscal 2013 on
the NYSE are given below:
Month
April 2012
May 2012
June 2012
July 2012
August 2012
September 2012
October 2012
November 2012
December 2012
January 2013
February 2013
March 2013
Fiscal 2013
High (US$)
low (US$)
Number of ADS traded
35.80
34.07
32.41
35.25
35.49
40.15
41.90
41.54
44.91
46.98
47.76
45.15
47.76
32.26
28.15
27.99
32.40
32.53
32.34
39.25
37.36
41.14
43.94
41.71
40.12
27.99
36,261,627
47,197,186
41,617,543
34,877,257
26,974,592
39,855,709
25,925,051
26,390,992
24,599,523
23,279,468
28,062,865
26,874,610
381,916,423
The performance of the ICICI Bank equity share relative to the S&P BSE Sensitive Index (Sensex), S&P BSE
Bank Index (Bankex) and NYSE Financial Index during the period April 1, 2012 to March 31, 2013 is given
in the following chart:
140.00
130.00
120.00
110.00
100.00
90.00
80.00
32
2
1
-
r
p
A
2
1
-
y
a
M
2
1
-
n
u
J
2
1
-
l
u
J
2
1
-
g
u
A
2
1
-
p
e
S
2
1
-
t
c
O
2
1
-
v
o
N
2
1
-
c
e
D
3
1
-
n
a
J
3
1
-
b
e
F
3
1
-
r
a
M
Sensex
Bankex
NYSE Financial Index
ICICI Bank
Share Transfer System
ICICI Bank’s investor services are handled by 3i Infotech Limited (3i Infotech). 3i Infotech is a SEBI
registered Category I – Registrar to an Issue & Share Transfer (R&T) Agent. 3i Infotech is a global
information technology company providing technology solutions and in addition to R&T services provides
software products, managed IT Services, application software development & maintenance, payment
solutions, business intelligence, document imaging & digitisation, IT consulting and various transaction
processing services. 3i Infotech’s quality certifications include SEI CMMI Level 5 for software business,
ISO 9001:2000 for BPO (including R&T) and ISO 27001:2005 for infrastructure services.
ICICI Bank’s equity shares are traded mainly in dematerialised form. During the year, 415,842 equity
shares involving 4,780 certificates were dematerialised. At March 31, 2013, 99.34% of paid-up equity
share capital (including equity shares represented by ADS constituting 29.18% of the paid-up equity
share capital) are held in dematerialised form.
Physical share transfer requests are processed and the share certificates are returned normally within
a period of seven days from the date of receipt, if the documents are correct, valid and complete in all
respects.
The number of equity shares of ICICI Bank transferred during the last three years (excluding electronic
transfer of shares in dematerialised form) is given below:
Number of transfer deeds
Number of shares transferred
Fiscal 2011
Fiscal 2012
Fiscal 2013
2,429
368,234
1,392
86,423
1,144
89,962
As required under Clause 47(c) of the listing agreements entered into by ICICI Bank with stock exchanges,
a certificate is obtained every six months from a practising Company Secretary that all transfers have
been completed within the stipulated time. The certificates are forwarded to BSE and NSE.
In terms of SEBI’s circular no. D&CC/FITTC/CIR-16 dated December 31, 2002, as amended vide circular
no. CIR/MRD/DP/30/2010 dated September 6, 2010 an audit is conducted on a quarterly basis by a firm
of Chartered Accountants, for the purpose of, inter alia, reconciliation of the total admitted equity share
capital with the depositories and in the physical form with the total issued/paid up equity share capital
of ICICI Bank. Certificates issued in this regard are placed before the Share Transfer & Shareholders’/
Investors’ Grievance Committee and forwarded to BSE and NSE, where the equity shares of ICICI Bank
are listed as well as to the two Depositories viz, NSDL and CDSL.
physical Share Disposal Scheme
With a view to mitigate the difficulties experienced by physical shareholders in disposing of their shares,
ICICI Bank, in the interest of investors holding shares in physical form (upto 50 shares) has instituted a
Physical Share Disposal Scheme. The scheme was started in November 2008 and continues to remain
open. Interested shareholders may contact the R&T Agent, 3i Infotech Limited for further details.
Registrar and Transfer Agents
The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited. Investor services related queries/
requests/complaints may be directed to S. R. Ramesh at the address as under:
Annual Report 2012-2013 33
Directors’ Report
3i Infotech limited
International Infotech Park
Tower 5, 3rd Floor
Vashi Railway Station Complex
Vashi, Navi Mumbai 400 703
Maharashtra, India
Tel No.
Fax No.
E-mail
: +91-22-6792 8000
: +91-22-6792 8099
:
investor@icicibank.com
Queries relating to the operational and financial performance of ICICI Bank may be addressed to:
Rakesh Jha/Anindya Banerjee/Rakesh Mookim
ICICI Bank Limited
ICICI Bank Towers
Bandra-Kurla Complex
Mumbai 400 051
Tel No.
Fax No.
E-mail
: +91-22-2653 1414
: +91-22-2653 1175
:
ir@icicibank.com
Information on Shareholding
Shareholding pattern of ICICI Bank at March 31, 2013
Shareholder Category
Deutsche Bank Trust Company Americas (Depository for ADS holders)
FIIs, NRIs, Foreign Banks, Foreign Companies, OCBs and Foreign Nationals
Insurance Companies
Bodies Corporate (including Government Companies)
Banks & Financial Institutions
Mutual Funds
Individuals, HUF and Trusts
Total
Shares
336,587,762
441,594,973
175,270,896
35,984,442
1,117,526
100,739,644
62,286,472
1,153,581,715
% holding
29.18
38.28
15.19
3.12
0.10
8.73
5.40
100.00
Shareholders of ICICI Bank with more than one per cent holding at March 31, 2013
Name of the Shareholder
Deutsche Bank Trust Company Americas (Depository for ADS holders)
Life Insurance Corporation of India
Government of Singapore
Europacific Growth Fund
Aberdeen Global Indian Equity Fund Mauritius Limited
Carmignac Gestion A/c Carmignac Patrimoine
SBI Life Insurance Company Limited
Bajaj Allianz Life Insurance Company Limited
Total
No. of shares % to total no.
of shares
29.18
7.20
2.15
1.58
1.57
1.54
1.17
1.10
45.49
336,587,762
83,100,911
24,773,024
18,278,406
18,080,000
17,792,910
13,538,365
12,655,640
524,807,018
34
Distribution of shareholding of ICICI Bank at March 31, 2013
Range - Shares
Upto 1,000
1,001 to 5,000
5,001 – 10,000
10,001 – 50,000
50,001 & above
Total
No. of Folios
636,342
4,428
581
722
881
642,954
% No. of Shares
45,780,246
8,938,276
4,156,152
17,388,945
1,077,318,096
1,153,581,715
98.97
0.69
0.09
0.11
0.14
100.00
Disclosure with respect to shares lying in suspense account
particulars
Aggregate number of shareholders and the outstanding shares in the
suspense account lying at the beginning of the year
Number of shareholders who approached ICICI Bank for transfer of
shares from suspense account during the year
Number of shareholders to whom shares were transferred from
suspense account during the year
Aggregate number of shareholders and the outstanding shares in the
suspense account lying at the end of the year
Shareholders
594
28
26
%
3.97
0.77
0.36
1.51
93.39
100.00
Shares
31,201
1588
1488
568
29,713
The voting rights on the shares lying in suspense account are frozen till the rightful owner of such
shares claims the shares
Outstanding GDRs/ADSs/Warrants or any Convertible Debentures, conversion date and likely
impact on equity
ICICI Bank has 168.29 million ADS (equivalent to 336.59 million equity shares) outstanding, which
constituted 29.18% of ICICI Bank’s total equity capital at March 31, 2013. Currently, there are no
convertible debentures outstanding.
Plant Locations – Not applicable
Address for Correspondence
Sandeep Batra
Group Compliance Officer & Company Secretary
or
Ranganath Athreya
General Manager & Joint Company Secretary
ICICI Bank Limited
ICICI Bank Towers
Bandra-Kurla Complex
Mumbai 400 051
Tel No. :
Fax No. :
E-mail :
+91-22-2653 1414
+91-22-2653 1230
companysecretary@icicibank.com
The Bank has complied with the mandatory and majority of non-mandatory requirements mentioned in
the listing agreement, with respect to corporate governance.
Annual Report 2012-2013 35
Directors’ Report
ANAlySIS OF CUSTOMeR COMplAINTS
a) Customer complaints in fiscal 2013
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
b) Awards passed by the Banking Ombudsman in fiscal 2013
Number of unimplemented awards at the beginning of the year
Number of awards passed by the Banking Ombudsman during the year
Number of awards implemented during the year
Number of unimplemented awards at the end of the year
3,837
101,408
102,617
2,628
Nil
Nil
Nil
Nil
COMplIANCe CeRTIFICATe OF THe AUDITORS
ICICI Bank has annexed to this report, a certificate obtained from the statutory auditors, S. R. Batliboi & Co.
LLP, Chartered Accountants, regarding compliance of conditions of Corporate Governance as stipulated
in Clause 49 of the listing agreement.
eMplOyee STOCK OpTION SCHeMe
In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme (ESOS) to enable the employees
and Directors of ICICI Bank and its subsidiaries to participate in future growth and financial success of
the Bank. The ESOS aims at achieving the twin objectives of (i) aligning employee interest to that of the
shareholders; and (ii) retention of talent. Through employee stock option grants, the Bank seeks to foster
a culture of long-term sustainable value creation. As per the ESOS, as amended from time to time, the
maximum number of options granted to any employee/Director in a year is limited to 0.05% of ICICI
Bank’s issued equity shares at the time of the grant, and the aggregate of all such options is limited to
10% of ICICI Bank’s issued equity shares on the date of the grant (equivalent to 115.36 million shares at
April 26, 2013).
The Bank has upto April 26, 2013 granted 60.80 million stock options from time to time aggregating to
5.27% of the issued equity capital of the Bank at April 26, 2013.
Options granted for fiscal 2003 and earlier years vest in a graded manner over a three year period, with
20%, 30% and 50% of the grants vesting in each year, commencing not earlier than 12 months from the
date of the grant. Options granted from fiscal 2004 to 2008, vest in a graded manner over a four year
period, with 20%, 20%, 30% and 30% of the grants vesting in each year commencing from the end of
12 months from the date of grant.
Options granted in April 2009 vest in a graded manner over a five year period with 20%, 20%, 30% and
30% of the grant vesting in each year, commencing from the end of 24 months from the date of the
grant. Out of the options, the grant of which was approved by the Board at its Meeting held on October
29, 2010 (for which RBI approval for grant to wholetime Directors was received in January 2011), 50%
of the options granted vest on April 30, 2014 and the balance 50% on April 30, 2015. Options granted in
September 2011 vest in a graded manner over a five year period with 15%, 20%, 20% and 45% of the
grant vesting in each year, commencing from end of 24 months from the date of grant. The other stock
options granted during the period April 2010 to April 2012 vest in a graded manner over a four year period
with 20%, 20%, 30% and 30% of the grant vesting in each year commencing from the end of 12 months
from the date of grant.
The Board at its Meeting held on April 26, 2013 approved a grant of approximately 4.64 million options for
fiscal 2013 to eligible employees and wholetime Directors (options granted to wholetime Directors being
subject to RBI approval). Each option confers on the employee a right to apply for one equity share of face
value of ` 10 of ICICI Bank at ` 1,177.35 which was closing price on the stock exchange which recorded
36
the highest trading volume in ICICI Bank shares on April 25, 2013. These options would vest over a four
year period, with 20%, 20%, 30% and 30% respectively of the grant of vesting in each year commencing
from the end of 12 months from the date of grant.
Options can be exercised within 10 years from the date of grant or five years from the date of vesting,
whichever is later. The price of the options granted prior to June 30, 2003 is the closing market price
on the stock exchange, which recorded the highest trading volume on the date of grant. The price for
options granted on or after June 30, 2003 till July 21, 2004 is equal to the average of the high and low
market price of the equity shares in the two week period preceding the date of grant of the options, on
the stock exchange which recorded the highest trading volume during the two week period. The price for
options granted on or after July 22, 2004 (other than the grants approved by the Board at its Meeting held
on October 29, 2010 where the grant price was the average closing price of the ICICI Bank stock on the
stock exchange during the six months upto October 28, 2010) is equal to the closing price on the stock
exchange which recorded the highest trading volume preceding the date of grant of options. The above
disclosure is in line with the SEBI guidelines, as amended from time to time.
Particulars of options granted by ICICI Bank upto April 26, 2013 are given below:
Options granted till April 26,20131 (excluding options forfeited/lapsed)
Options forfeited/lapsed
Options exercised
Total number of options in force
Options vested
Number of shares allotted pursuant to exercise of options
Extinguishment or modification of options
Amount realised by exercise of options (`)
1.
Includes options granted to wholetime Directors pending RBI approval.
60,797,697
10,348,808
30,449,369
30,348,328
46,657,623
30,449,369
Nil
7,621,815,613
No employee was granted options during any one year equal to or exceeding 0.05% of the issued equity
shares of ICICI Bank at the time of the grant.
The diluted earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in
accordance with AS-20 was ` 71.93 in fiscal 2013 compared to basic EPS of ` 72.20. The Bank recognised
a compensation cost of ` 21.0 million in fiscal 2013 based on the intrinsic value of options. However, if
ICICI Bank had used the fair value of options based on the binomial tree model, compensation cost in
fiscal 2013 would have been higher by ` 1,865.9 million and proforma profit after tax would have been
` 81.39 billion. On a proforma basis, ICICI Bank’s basic and diluted earnings per share would have been
` 70.58 and ` 70.32 respectively.
The key assumptions used to estimate the fair value of options granted during fiscal 2013 are given
below:
Risk-free interest rate
Expected life
Expected volatility
Expected dividend yield
7.99% to 8.87%
6.35 years
48.99% to 49.55%
1.52% to 1.96%
The weighted average fair value of options granted during fiscal 2013 is ` 434.91 (March 31, 2012:
` 592.52).
CONSeRVATION OF eNeRGy, TeCHNOlOGy ABSORpTION, FOReIGN eXCHANGe
eARNINGS AND OUTGO, UNDeR SeCTION 217(1)(e) OF THe COMpANIeS ACT, 1956.
The provisions of Section 217(1)(e) of the Companies Act, 1956 relating to conservation of energy and
technology absorption do not apply to the Bank. The Bank has, however, used information technology
extensively in its operations.
Annual Report 2012-2013 37
Directors’ Report
IMpleMeNTATION OF CIRCUlAR ISSUeD By MINISTRy OF CORpORATe AFFAIRS ON
“GReeN INITIATIVeS IN CORpORATe GOVeRNANCe”
The Bank has implemented the ‘Green Initiative’ as per Circular No. 17/2011 dated April 21, 2011 and
Circular No. 18/2011 dated April 29, 2011 issued by the Ministry of Corporate Affairs (MCA) to enable
electronic delivery of notices/documents and annual reports to shareholders and effected electronic
delivery of Notice of Annual General Meeting (AGM) and Annual Reports for the years ended March
31, 2011 and March 31, 2012 to those shareholders whose email addresses were registered with the
respective Depository Participants (DPs) and downloaded from the depositories, namely, National
Securities Depository Limited (NSDL)/Central Depository Services (India) Limited (CDSL). Securities and
Exchange Board of India (SEBI) have also in line with the MCA circulars and as provided in Clause 32 of
the Listing Agreement executed with the stock exchanges, permitted listed entities to supply soft copies
of full annual reports to all those shareholders who have registered their email addresses for the purpose.
Your Directors are thankful to the shareholders for actively participating in the green initiative and seek
your continued support for implementation of the green initiative.
DIReCTORS’ ReSpONSIBIlITy STATeMeNT
The Directors confirm:
1. that in the preparation of the annual accounts, the applicable accounting standards have been
followed, along with proper explanation relating to material departures;
2. that they have selected such accounting policies and applied them consistently and made judgements
and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs
of the Bank at the end of the financial year and of the profit of the Bank for that period;
3. that they have taken proper and sufficient care for the maintenance of adequate accounting records, in
accordance with the provisions of the Banking Regulation Act, 1949 and the Companies Act, 1956 for
safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; and
4. that they have prepared the annual accounts on a going concern basis.
ACKNOWleDGeMeNTS
ICICI Bank is grateful to the Government of India, RBI, SEBI, IRDA and overseas regulators for their
continued co-operation, support and guidance. ICICI Bank wishes to thank its investors, the domestic and
international banking community, rating agencies and stock exchanges for their support.
ICICI Bank would like to take this opportunity to express sincere thanks to its valued clients and customers
for their continued patronage. The Directors express their deep sense of appreciation of all the employees,
whose outstanding professionalism, commitment and initiative has made the organisation’s growth and
success possible and continues to drive its progress. Finally, the Directors wish to express their gratitude
to the Members for their trust and support.
For and on behalf of the Board
May 13, 2013
K. V. Kamath
Chairman
Compliance with the Group Code of Business Conduct and ethics
I confirm that all Directors and members of the senior management have affirmed compliance with Group
Code of Business Conduct and Ethics for the year ended March 31, 2013.
Chanda Kochhar
Managing Director & CEO
May 13, 2013
38
Auditor’s Certificate
on Corporate Governance
To The Members of ICICI Bank Limited
We have examined the compliance of conditions of corporate governance by ICICI Bank Limited (‘the
Bank’), for the year ended on March 31, 2013, as stipulated in Clause 49 of the Listing Agreement of the
said Bank with stock exchange(s).
The compliance of conditions of corporate governance is the responsibility of the management. Our
examination was limited to 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.
In our opinion and to the best of our information and according to the explanations given to us, we certify
that the Bank has complied with the conditions of Corporate Governance as stipulated in the above
mentioned Listing Agreement.
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.
Mumbai
May 9, 2013
For S. R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm registration number: 301003E
per Shrawan Jalan
Partner
Membership No.: 102102
Annual Report 2012-2013 39
Business Overview
ECONOMIC OUTLOOK
During fiscal 2013, the economic environment remained challenging with growth slowing down globally.
India was impacted by both global and domestic events that led to moderation in economic activity. India’s
gross domestic product (GDP) grew by 5.0% during the first nine months of fiscal 2013 as compared to
6.6% during the corresponding period of fiscal 2012. The Central Statistical Organisation, in its advance
estimates, has projected GDP to grow by 5.0% during fiscal 2013 compared to growth of 6.2% in fiscal
2012. Banking sector non-food credit growth moderated from 16.8% at March 23, 2012 to 14.0% at
March 22, 2013. Deposit growth remained subdued at 14.3% with demand deposits recording a growth
of 5.9% at March 22, 2013. Amidst these short term challenges, the Bank continued to stay focused on
the long-term prospects of the Indian economy and build capabilities for future growth. We believe that
the strong underlying fundamentals of the Indian economy with a young population will support strong
growth over the medium to long term, and our strategy revolves around prudently managing short term
challenges while being prepared to meet the needs of a vibrant economy.
For a discussion of recent economic and regulatory developments, please refer to “Management’s
Discussion & Analysis”.
BUSINESS REVIEW
During fiscal 2013, the Bank’s strategy focused on balancing growth, profitability and risk management
while continuing to invest in growing its franchise and enhancing customer convenience. Despite a
challenging macroeconomic environment we made significant progress with sustained improvements in
our net interest margins, higher return on assets and healthy loan growth with a balanced funding mix.
Retail Banking
We continued to focus on our strategy of “Khayaal Aapka” and building long-term relationship with our
customers. During the year, we launched a loyalty programme “MySavings Rewards”. This programme allows
customers to accumulate reward points on a host of savings account transactions such as bill pay, online
shopping, EMI payments and many more. The programme already has over one million customers who have
started earning reward points. Further, we set up 24x7 fully electronic branches during the year aimed at
providing simple, effortless and convenient banking to our customers. These branches enable customers to
undertake real time transactions like cash deposits, cash withdrawals, cheque deposit, fund transfer, opening
fixed deposits, generating bank statement and other transactions. These branches are also equipped with
video conferencing facility which allows with customer service staff interaction when required.
During the year, we harnessed digital channels innovatively for customer acquisition, customer
interactions and cross selling of products and strengthened our presence in this space. We enhanced
the product suite offered through our internet banking platform and customised it to meet requirements
of different customer segments. Our mobile banking application has also grown and currently has over
one million customers. We have emerged as the market leader in mobile transactions in value terms. We
also pioneered social media-linked products during fiscal 2013 like Facebook banking and iWish, an online
flexible recurring deposit. iWish is an innovatively designed product, launched for the first time in India,
where a customer saves funds to fulfil a future desire or goal. The customer has the flexibility to decide
on when and how much to save for the particular goal. They can also share their goals on Facebook with
friends and family who may choose to contribute towards the purpose. Further, for customers who prefer
to transact online, we enhanced our savings account portfolio with the offering of “b2”, a fully online
savings account. b2 targets the rapidly growing internet savvy Indian population and offers an effortless
banking experience.
40
We also continued to invest in building robust sales processes to provide a quicker and error-free banking
experience to our customers. The sales team in major cities today offer “Tab Banking”, wherein we are
able to open bank accounts using tablets in less than 24 hours. These tablets are also equipped with
product videos introducing customers to various product features. Further, “E-Locker”, an online service
for storing important documents, was introduced for wealth and privilege banking customers.
Customer convenience, superior banking experience, technology innovations and a large network of
branches and ATMs continue to differentiate us in the banking industry. We have the largest branch
network among private sector banks. The National Payments Corporation of India (NPCI) awarded us the
“Best ATM Operational Excellence Award, 2012” for the second consecutive year in fiscal 2013. During
fiscal 2013, we added 348 branches and 1,475 ATMs to our network, taking our branch and ATM count to
3,100 and 10,481 respectively at March 31, 2013. This includes 54 dedicated branches and 25 dedicated
lounges for wealth segment customers. Our “May I Help You” desks at every branch are now equipped
to provide across-the-counter information related to transactions, cheque deposits and account details.
We continue to use advanced analytics to build customer relationships and gain a deeper understanding
of services and product needs of our customers. Analytics-based trigger frameworks also play a critical
role in the area of risk management and transaction monitoring.
These initiatives helped us achieve robust growth in our retail business during fiscal 2013. There was a
healthy growth in our retail asset disbursements primarily contributed by secured assets. Our mortgage
loan and passenger car loan disbursements grew by 66% and 22% respectively in fiscal 2013. We also
continued to see strong momentum in retail customer acquisition and growth in the retail deposit base
across both savings and term deposits.
India’s growth potential is underscored by its young population and rising incomes. At ICICI Bank, we
believe that with 50% of India’s population under the age of 25 years, banking in the years to come will
be led by technology and customer convenience. We will continue to focus on introducing new products,
channels and innovative payment modes that blend with a young and changing India.
Small & Medium Enterprises
Small & medium enterprises (SMEs) are an important constituent of India’s economy. Their role is critical
in not only contributing to growth but also meeting the aspirations of a developing economy. At ICICI
Bank, we have partnered with SMEs not only in terms of finance, but also by providing support in other
areas like transaction banking and investment needs of SMEs. We offer complete banking solutions
to SMEs across industry segments with a suite of products customised to their business needs. We
adopt a cluster-based financing approach for SMEs with a homogeneous profile in industries such as
infrastructure, engineering, information technology, education, life sciences and agri-based industries, to
partner their growth ambitions. We also offer supply chain financing solutions to the channel partners of
large corporates. We have set up dedicated desks in 364 branches specializing in SME banking. We have
also re-organised the business banking services at our branches with dedicated current account desks
at select branches. We have also introduced doorstep banking and enhanced internet banking for SME
customers.
Fiscal 2013 was a challenging period for SMEs due to the moderation in economic activity. While being
cognizant of the subdued economic environment, we focused on judicious portfolio growth by adopting
a granular approach and maintaining a cautious outlook on some sectors. We continued to focus on
strengthening our delivery capabilities for SME customers.
Annual Report 2012-2013 41
Business Overview
A strong SME sector is fundamental to building a resilient and dynamic corporate sector. ICICI Bank has
always viewed the SME segment as integral to India’s growth and will continue to partner with them
while building a healthy portfolio.
Wholesale Banking
Collaborating with our corporate customers by providing comprehensive and customised financial
solutions for doing business in India and key geographies overseas has been the core strategy of our
Wholesale Banking Group. The Group manages relationships with a number of large and mid-sized Indian
corporates and multinational companies operating in India. The Group services the financial requirements
of clients through a bouquet of products ranging from working capital finance, export finance, trade and
commercial banking products to rupee and foreign currency term loans, and structured finance products.
Our Corporate Banking Group is the front-end relationship team which services client requirements across
businesses. The relationship team works closely with specific teams like project finance, structured
finance, loan syndication, commercial banking and markets group to develop suitable products that fulfill
specific needs of clients.
The Structured Finance Group designs innovative and customised products to meet the complex needs
of our global clientele in synergy with the Corporate Banking Group and International Banking Group.
The Structured Finance Group has been recognised as one of the leading arrangers and underwriters of
structured finance transactions in India, deriving strength from its underwriting capabilities combined
with the Bank’s extensive experience, industry expertise and global presence.
The Syndications Group is a leading player in the loan syndication market. It specialises in structuring
and syndicating large loans. Its knowledge and experience facilitates timely response and seamless
execution of corporate and project finance transactions. The diversified pool of clients enables us to align
the unique requirements of clients with the varying requirements of investors.
The Mid-Markets Group was created recognising the unique credit requirements of the mid-sized
corporate segment and the need to give distinct attention to clients in this segment to enable them to
eventually become large sized corporates. The Group aims to be a partner in the growth of these clients,
identifying business needs and offering tailor-made banking services including term loans, export and
working capital finance, trade and transactional services and cash management services. The target
segment of this Group comprises corporates that have transitioned beyond the SME segment and need
more complex banking services.
The Commercial Banking Group offers comprehensive banking products and services to meet the
trade, transaction banking and cash management needs of companies. The Group works closely with
the Corporate Banking Group to diversify the revenue streams from corporate clients and enhance the
granularity and stability of revenues for the Bank. Superior customer service levels combined with quick
turnaround offered through our mega branches have helped in growing our transaction banking business.
The relationship teams also work with the Markets Group to assist customers in addressing currency and
market risk in their businesses by offering relevant products.
Fiscal 2013 was a challenging period for the Indian corporate sector due to significant slowdown in new
investment opportunities and asset quality concerns in some areas. During the year, we actively managed
our portfolio while pursuing selective new lending opportunities. At the same time, we continued to
explore and identify sustainable revenue possibilities in synergy with our commercial banking strategy.
We will continue to offer comprehensive financial services across a spectrum of financial products to our
clients and partner them while judiciously growing our portfolio.
Project Finance
While the momentum in infrastructure investments slowed down during fiscal 2013, certain policy
initiatives were taken during the year that have improved the prospects for investments in infrastructure
in the coming years.
42
The Government has proposed modifications to the existing standard bid documents to make fuel a pass
through for tariffs which would encourage new investments in the power sector. There are also initiatives
towards granting approvals for coal mines. Further, the Government is also actively working on improving
the fuel availability for various power projects. The proposal to take up coal mining in partnership with
the private sector will improve availability of coal. These measures are expected to ensure the viability
of investments in power generation assets. With greater private sector participation, projects in regional
and inter-regional transmission corridors are expected which would strengthen the national grid. The
renewable energy segment has gained momentum with more states formulating policies to encourage
new investments in this segment.
In roads and ports sectors, we expect to see an increase in activity during fiscal 2014 with new projects
likely to be awarded. The National Highway Authority of India (NHAI) is planning to award up to 4,000 km of
roads through engineering, procurement & construction (EPC) contracts during the year. The Government
has also decided to constitute a regulatory authority for the road sector to expedite development and
address challenges faced by the sector. In the port sector, about 30 port projects are expected to be
awarded. The railway sector is also expected to witness increased investment in logistics development,
track infrastructure (including dedicated freight corridors) and rolling stock, enabling higher movement
of rakes.
In the oil and gas sector, most of the activity is expected to be linked to demand for natural gas. The
demand for gas from priority sectors such as power and fertiliser is likely to continue, maintaining
pressure on domestic supplies of gas. Significant additions to LNG import capacity have been announced
with commissioning expected over the next four to five years. With the announcement of a new fertiliser
policy, the urea sector is also expected to see capacity additions.
Our long experience in project finance, deep sectoral expertise and innovative structuring capabilities
have placed us in a position to capitalise on these opportunities and cater to the long-term financing
requirements of Indian corporates. Infrastructure development is a critical area to improve the economic
potential of the country, and we remain committed to partnering with companies in promoting viable
projects.
International Banking
Our international banking strategy is focused on providing end-to-end solutions for the international
banking requirements of our Indian corporate clients, leveraging economic corridors between India and
the rest of the world and establishing ICICI Bank as the preferred bank for non-resident Indians in key
global markets. Further, during fiscal 2013, despite the volatile economic environment, India remained an
attractive market for most major global corporations, and ICICI Bank’s International Banking Group seeks
to partner them as they expand in India. We also seek to build stable international funding sources and
strong syndication capabilities to support our corporate and investment banking business, and to expand
private banking operations for India-centric asset classes.
Our international footprint consists of subsidiaries in the United Kingdom, Russia and Canada, branches
in the United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre
and Qatar Financial Centre and representative offices in the United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. The Bank’s wholly owned subsidiary ICICI Bank UK PLC
has eleven branches in the United Kingdom and a branch each in Belgium and Germany. ICICI Bank
Canada has nine branches. ICICI Bank Eurasia, our Russian subsidiary, is headquartered in Moscow with
a branch in St. Petersburg. We opened our second retail branch in Hong Kong in fiscal 2013.
During fiscal 2013, the global economic environment was characterised by slow and prolonged recovery
in advanced economies and growth slowdown in emerging economies. In this environment, we continued
to focus on managing the risks to growth in our international operations. We also focused on diversifying
the mix of our funding profile in our international operations. We continued to focus on expanding our
trade finance business and our relationships with global corporates doing business in India.
Annual Report 2012-2013 43
Business Overview
India continues to remain the largest remittance receiving country in the world and ICICI Bank has a
significant market share in remittances. This has been made possible through our diversified products
and service offerings to meet the requirements of the widely dispersed NRI diaspora. The emphasis
in fiscal 2013 was on further expanding access to remittance services through new partnerships and
channels and delivering a superior customer service experience. ICICI Bank received the Best Remittance
Business Award 2012, at Asia’s prestigious retail banking event, Excellence in Retail Financial Services
Convention, organised by the Asian Banker.
Rural & Inclusive Banking
At the ICICI Group, we view expanding access to banking and other financial services as a critical element
of inclusive growth. During fiscal 2013, we focused on expanding our outreach to rural and semi-urban
markets and providing complete financial solutions to customers in this segment.
We improved our presence in rural markets by expanding our branch and business correspondent network.
During the year, we added 152 rural branches and 85 semi-urban branches, taking the total count of
branches in the rural and semi urban areas to 1,453 at March 31, 2013. This includes 131 low cost Gramin
branches opened in unbanked villages across ten states. These branches provide credit and deposit
products (including 127 Gramin branches opened in fiscal 2013) specifically catering to rural customers.
Our business correspondent network includes over 25 business correspondents with a network of over
7,500 customer service points. We provide micro-savings, remittance and deposit products through this
channel. Technology has been a critical contributor to the success of the business correspondent model,
with the use of innovative technology solutions such as biometric enabled Point of Sale (POS) devices
and mobile handsets. We now cover over 13,500 villages through our branches and business
correspondent network.
At March 31, 2013, we had 14.9 million basic savings bank deposit accounts (also known as no-frills
savings accounts) compared to 9.8 million basic savings bank deposit accounts at March 31, 2012. Apart
from savings products, our rural banking strategy also includes providing a range of asset products like
kisan credit cards, jewel loans, self-help group (SHG) loans, commodity financing to farmers, business
credit for rural enterprises, farm equipment loans and commercial vehicle loans.
We emerged as a leading provider of electronic benefit transfer (EBT) services during fiscal 2013. By
March 31, 2013, we had initiated EBT payment facilities in 48 districts across 11 states. The Bank was
also among the first to implement Direct Benefit Transfer (DBT), wherein government social benefits are
directly transferred to the beneficiaries using the Aadhaar platform. DBT payments have been successfully
processed for schemes like Social Security Pension (SSP), Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS), Janani Suraksha Yojna (JSY) and National Rural Health Mission (NRHM)
across four states.
We also made significant progress in scaling up our SHG Bank Linkage Programme. We have differentiated
our offering in this segment by significantly reducing the turnaround time in providing credit. We work
with over 200 entities in this area and have provided credit linkage to about 300,000 individuals, primarily
women, through loans to over 25,000 SHGs, of which over 50% were credit-linked for the first time. Our
progress has been recognised by several agencies including the National Bank for Agriculture and Rural
Development (NABARD).
In urban India, there is a large low-income migrant population which requires customised, low-cost
products that can help them transfer funds to their home towns/villages. To fulfill this need, we have
set up remittance outlets in over 50 major urban centers including Delhi, Mumbai, Surat, Ahmedabad
and Ludhiana. Through these outlets, we have processed over 3,77,000 transactions for over 1,00,000
customers. During the year, we also launched “Mobile Money” in association with telecom companies
like Aircel, Tata Teleservices and Vodafone which targets the urban unbanked population. “Mobile Money”
can be operated through a simple set of instructions using various access channels. It aims at improving
financial inclusion by offering a gamut of financial services such as deposits and cash withdrawals, money
transfer to third parties, recharging of prepaid mobile credit and payment of utility bills.
44
Going forward, we will continue to focus on expanding our rural and semi-urban outreach and providing a
comprehensive range of products and services customised to the needs of different customer segments
in these markets.
Treasury
Our treasury operations are structured into three verticals: proprietary trading group, customer related
markets business and the asset-liability management group.
Our proprietary trading business saw an increase in trading activity and profits during fiscal 2013. The
Bank also continued to focus on opportunities in corporate bond markets and was ranked second in
overall league table rankings for debt private placement according to Prime database. During the year, the
Bank won the Finance Asia Country Award under “Best Bond House – India” category.
In its customer related business, the Bank provides foreign exchange and derivative solutions to clients
and continues to be a major player in this segment. These products and services are aimed at managing
customers’ foreign exchange and risk hedging needs through forwards, swaps, options and bullion
services. The Bank hedges market risks related to these products with banking counterparties.
The balance sheet management function continued to actively manage the Bank’s liquidity and the
government securities portfolio held for compliance with Statutory Liquidity Ratio (SLR) norms to optimise
the yield on this portfolio, while maintaining an appropriate portfolio duration given the volatile interest
rate environment.
RISK MANAGEMENT
Risk is an integral part of the banking business and we aim at delivering superior shareholder value by
achieving an appropriate trade-off between risk and returns. Key risks include credit, market, liquidity,
operational, legal, compliance and reputation risks. Our risk management strategy is based on a clear
understanding of various risks, disciplined risk assessment and measurement procedures and continuous
monitoring.
The Board of Directors has oversight on all the risks assumed by the Bank. Specific Committees of the
Board have been constituted to facilitate focused oversight of various risks. Policies approved from time
to time by the Board of Directors or Committees of the Board form the governing framework for each
type of risk. The business activities are undertaken within this policy framework. Independent groups and
sub-groups have been constituted across the Bank to facilitate independent evaluation, monitoring and
reporting of various risks. These groups function independently of the business groups.
Our Risk Committee approves, every year, a detailed calendar of reviews. The calendar of reviews includes
reviews of risk management policies in relation to various risks, risk profile of the Bank, its overseas
banking subsidiaries and key non-banking subsidiaries, assessment of capital adequacy based on the risk
profile of the balance sheet, status with respect to implementation of advanced approaches under the
Basel framework and review of regulatory compliance issues. Our Credit Committee also approves every
year a detailed calendar of reviews covering the Bank’s exposure to particular industries and outlook for
those industries, analysis of non-performing loans, overdues, incremental sanctions and specific review
of each portfolio. A summary of the reviews carried out by the Credit Committee and Risk Committee
is reported to the Board of Directors. Our Asset Liability Management Committee is responsible for
managing the balance sheet within the risk parameters laid down by the Board and Risk Committee and
reviewing our asset-liability position.
We have dedicated groups, namely the Risk Management Group, Compliance Group, Corporate Legal
Group, Internal Audit Group and Financial Crime Prevention and Reputation Risk Management Group,
with a mandate to identify, assess and monitor the Bank’s principal risks in accordance with well-defined
policies and procedures. These groups are independent of all business operations and coordinate with
representatives of the business units to implement ICICI Bank’s risk management methodologies. The
Internal Audit Group and Compliance Group are responsible to the Audit Committee of the Board.
Annual Report 2012-2013 45
Business Overview
Credit Risk: Credit risk is the risk that a borrower is unable to meet its financial obligations to the lender.
All credit risk related aspects are governed by a credit and recovery policy which outlines the type of
products that can be offered, customer categories, targeted customer profile and the credit approval
process and limits. The credit and recovery policy is approved by our Board of Directors.
In order to assess the credit risk associated with any corporate financing proposal, we assess a variety
of risks related to the borrower and the relevant industry. We have a structured and standardised credit
approval process which includes a well established procedure of comprehensive credit appraisal and
credit rating. We have developed internal credit rating methodologies for rating obligors. The borrower
rating accounts for quantitative and qualitative issues as well as credit enhancement features specific to
the transaction. The rating serves as a key input in the approval as well as post-approval credit processes.
A risk based asset review framework has also been put in place wherein the frequency of asset review
would be higher for cases with higher exposure and/or lower credit rating. Industry knowledge is constantly
updated through field visits and interactions with clients, sector regulators and industry experts.
We have a strong framework for the appraisal and execution of project finance transactions that involves
a detailed evaluation of technical, commercial, financial, marketing and management factors and the
sponsor’s financial strength and experience. The Bank identifies the project risks, mitigating factors and
residual risks associated with the project. As a part of the due diligence process, we appoint consultants,
including technical advisors, business analysts, legal counsel and insurance consultants, wherever
considered necessary, to advise the lenders. Risk mitigating factors in these financings include creation
of debt service reserves and channelling project revenues through a trust and retention account. The
Bank’s project finance loans are generally fully secured and have full recourse to the borrower. In some
cases, we also take additional credit comforts such as corporate or personal guarantees from one or more
sponsors of the project or a pledge of the sponsors’ equity holding in the project company. The Bank’s
practice is to normally disburse funds after the entire project funding is committed and all necessary
contractual arrangements have been entered into.
In case of retail loans, sourcing and approval are segregated to achieve independence. The Credit Risk
Management Group has oversight on the credit risk issues for retail assets including vetting of all credit
policies and operating notes proposed for approval by the Board of Directors or forums authorised by
the Board of Directors. The Credit Risk Management Group is also involved in portfolio monitoring for
all retail assets and suggesting and implementing policy changes. The Retail Credit and Policy Group
is an independent unit which focuses on policy formulation and portfolio tracking and monitoring. This
group also includes the Credit Administration Unit that services various retail business units for credit
underwriting. In addition, we also have a Business Intelligence Unit to provide support for analytics, score
card development and database management.
Our credit officers evaluate retail credit proposals on the basis of the product policy approved by
the Committee of Executive Directors and the risk assessment criteria defined by the Credit Risk
Management Group. These criteria vary across product segments but typically include factors like the
borrower’s income, the loan-to-value ratio and demographic parameters. The technical valuations in case
of residential mortgages are carried out by empanelled valuers or technical teams. External agencies such
as field investigation agencies and credit processing agencies are used to facilitate a comprehensive
due diligence process including visits to offices and homes in the case of loans to individual borrowers.
Before disbursements are made, the credit officer checks a centralised delinquent database and reviews
the borrower’s profile. In making our credit decisions, we also draw upon reports from credit information
bureaus. We also use the services of certain fraud control agencies operating in India to check applications
before disbursement.
In addition, the Credit and Treasury Middle Office Groups and the Operations Group monitor operational
adherence to regulations, policies and internal approvals. We have centralised operations to manage
operational risk in most back office processes of the Bank’s retail loan business. The Fraud Prevention
Group manages fraud related risks through forensic audits and recovery of fraud losses. The segregation
of responsibilities and oversight by groups external to the business groups ensure adequate checks
and balances.
46
Our credit approval authorisation framework is laid down by our Board of Directors. We have established
several levels of credit approval authorities for our corporate banking activities like the Credit Committee
of the Board of Directors, the Committee of Executive Directors, the Committee of Senior Management,
the Committee of Executives (Credit) and the Regional Committee (Credit). Retail Credit Forums, Small
Enterprise Group Forums and Corporate Agriculture Group Forums have been created for approval of
retail loans and credit facilities to small enterprises and agri based enterprises respectively. Individual
executives have been delegated with powers in case of policy based retail products to approve financial
assistance within the exposure limits set by our Board of Directors.
Market Risk: Market risk is the possibility of loss arising from changes in the value of a financial instrument
as a result of changes in market variables such as interest rates, exchange rates and other asset prices.
Our exposure to market risk is a function of our trading and asset-liability management activities and our
role as a financial intermediary in customer-related transactions. The Bank is exposed to exchange rate
risk, interest rate risk, equity price risk, basis risk and credit spread risk. Besides, the Bank is also exposed
to liquidity or funding risk. These risks are controlled through limits such as duration of equity, earnings at
risk, value-at-risk, stop loss, net overnight open position and liquidity gap limits. The limits are stipulated
in our Investment Policy, Asset Liability Management Policy and Derivatives Policy which are reviewed
and approved by our Board of Directors.
The Asset Liability Management Committee, which comprises wholetime Directors and senior executives,
meets periodically and reviews the positions of trading groups, interest rate and liquidity gap positions
on the banking book, sets deposit and benchmark lending rates, reviews the business profile and its
impact on asset liability management and determines the asset liability management strategy, as deemed
fit, in light of the current and expected business environment. The Market Risk Management Group
recommends changes in risk policies and controls and the processes and methodologies for quantifying
and assessing market risks. Risk limits including position limits and stop loss limits for the trading book
are monitored by the Treasury Middle Office Group and reviewed periodically. Foreign exchange risk is
monitored through the net overnight open position limit. Interest rate risk is measured through the use
of re-pricing gap analysis and duration analysis. Interest rate risk is further monitored through interest
rate risk limits approved by the Asset Liability Management Committee. Risks on trading positions
are monitored and managed by setting value-at-risk limits and stipulating daily and cumulative
stop-loss limits.
The Bank uses various tools for measurement of liquidity risk including the statement of structural
liquidity, dynamic liquidity gap statements, liquidity ratios and stress testing. We maintain diverse sources
of liquidity to facilitate flexibility in meeting funding requirements. Incremental operations in the domestic
market are principally funded by accepting deposits from retail and corporate depositors. The deposits
are augmented by borrowings in the short-term inter-bank market and through the issuance of bonds.
Loan maturities and sale of investments also provide liquidity. Our international branches are primarily
funded by debt capital market issuances, lines of financing from export credit agencies, syndicated loans,
bilateral loans and bank lines, while our international subsidiaries raise deposits in their local markets.
Operational Risk: Operational risk is the risk of loss resulting from inadequate or failed internal processes,
people or systems, or from external events. Operational risk includes legal risk but excludes strategic and
reputational risks. Operational risk is inherent in the Bank’s business activities in both domestic as well
as overseas operations and covers a wide spectrum of issues. Operational risk can result from a variety
of factors, including failure to obtain proper internal authorisations, improperly documented transactions,
failure of operational and information security procedures, computer systems, software or equipment,
fraud, inadequate training and employee errors. Operational risk in the Bank is managed through a
comprehensive system of internal controls, systems and procedures to monitor transactions, key backup
procedures and undertaking regular contingency planning. The control framework is designed based on
categorisation of functions into front-office comprising business groups, middle office comprising credit
and treasury middle offices, back-office comprising operations, corporate and support functions.
The Bank’s operational risk management governance and framework is defined in the Operational Risk
Management (ORM) Policy approved by the Board of Directors. The Policy is applicable across the
Annual Report 2012-2013 47
Business Overview
Bank including overseas branches, ensuring a clear accountability and responsibility for management
and mitigation of operational risk, developing a common understanding of operational risk and helping
the business and operation groups to improve internal controls, thereby reducing the probability and
potential impact of losses from operational risks. The Bank has also constituted an Operational Risk
Management Committee (ORMC) to oversee the operational risk management in the Bank. The ORM
Policy specifies the composition, roles and responsibilities of the ORMC. While the Policy provides a
broad framework, detailed standard operating procedures for operational risk management processes
have been established. Operational risk management framework in the Bank comprises identification
and assessment of risks and controls, new products and process approval framework, measurement
through incidents and exposure reporting, monitoring through key risk indicators and mitigation through
process and control enhancement and insurance. The Bank has formed an independent Operational
Risk Management Group for design, implementation and enhancement of operational risk management
framework and to support business and operations groups in the operational risk management on an
on-going basis.
Other executive level committees that oversee operational risk related aspects are Product and Process
Approval Committee, Outsourcing Committee, Information Security Committee and Business Continuity
Management Steering Committee.
We seek to ensure that our capital position is commensurate with the risks in our business and our future
growth plans through a robust capital management framework. This includes a comprehensive internal
capital adequacy assessment process conducted annually, which determines the adequate level of
capitalisation necessary to meet regulatory norms and current and future business needs, including under
stress scenarios. We believe we are well-placed to comply with RBI’s guidelines on the implementation
of the Basel III framework in India. We are also working towards migration to the advanced approaches
under the Basel II framework over the medium term, subject to applicable RBI guidelines and approvals.
HUMAN RESOURCES
Our employees are our core resource and the Bank has continuously evolved policies to strengthen
its employee value proposition. The “Saath Aapka” initiative of the Bank, which was started in fiscal
2011, was further strengthened during the year through various new initiatives that focused on providing
a more enabling workplace and ensuring employee well-being. A key programme started during the
year was the launch of a unique emergency helpline for employees in distress. The helpline provides
round the clock access to emergency care through access to qualified medical assistance and critical
services such as ambulance over telephone. This service is available to the employees and their family
members. The Bank has tied up with 70 hospitals across 40 locations to facilitate prompt admission and
treatment of employees or their family members without the payment of any advance deposit amount at
these hospitals. Further, to reinforce the safety and security of our employees, especially of our women
colleagues, a special 24X7 helpline has been created which can be used to access assistance in an
emergency.
The Bank continued to invest towards creating a pre-trained resource pool through its industry academia
initiatives. This year the Bank launched the ICICI Bank Sales Academy in partnership with the Institute of
Technology Management (ITM), Raipur and Institute of Finance, Banking and Insurance (IFBI). The course
offers a month long residential classroom programme followed by a two month on-the-job internship in
order to equip sales officers with knowledge of products, processes and selling skills required to make
them more effective in their roles. The Academy has the capacity to train 1,100 sales officers every month.
Further, during the year, the curriculum of the Probationary Officers Programme was revamped to include
several case studies derived from experiences at branches on sales, service, compliance and regulation.
This programme continues to train 2,400 probationary officers every year. The Bank also continues to
invest in ICICI Business Leadership Programmes (in partnership with NIIT University and National Institute
of Securities Markets) to provide pre-trained resources for middle management positions in specialized
areas like corporate banking, risk management, information technology, treasury and securities markets.
To strengthen the philosophy of ‘Khayaal Aapka’, new staff joining the branches undergo a practice
oriented programme called “skill through drill”.
48
During the year, we took a special initiative to recognise the contribution made by our long-serving
employees. These employees were presented with a personalised letter signed by the Managing Director
and CEO. Around 15,500 employees who have spent more than five years with the Bank were recognised
and felicitated during the year.
The Bank continues to leverage technology for offering knowledge and learning products to its employees.
This year, we launched mobile phone based performance support tools for relationship managers in the
small and medium enterprises group and in the commercial banking group. These performance support
tools help retrieve critical product/process information and assist relationship managers in customer
profiling and services while on the move. The Bank continued to offer other learning and development
platforms such as classroom training and e-learning initiatives to help upgrade employees’ knowledge
and skills. This year the Bank launched 22 new e-learning modules.
The industrial relations environment for the Bank remained cordial and conducive for achieving the
organisation’s objectives.
INFORMATION TECHNOLOGY
Technology has been central to ICICI Bank’s initiatives in enhancing the banking experience for our
customers. We have enhanced the technology platform to continuously augment functionalities in all
channels including ATMs, phone banking, internet banking and mobile banking and also strengthen
delivery capabilities and technology infrastructure. Our pioneering steps focused on understanding
customer requirements, improving customer convenience and reducing turnaround time have kept us
ahead as a technology leader in Indian banking for over a decade.
During the year, our technology strategy was aligned towards meeting the ‘Khayaal Aapka’ promise to
our customers. We introduced a range of services like 24X7 electronic branches, video-conferencing
from branches, Money2India on mobile, Tab Banking and Bank-on-the-move to enhance customer
convenience. Taking forward the philosophy of delivering value to our customers, we offered products
such as iBizz (a mobile-based processing system for corporate customers), Facebook banking, iWish (a
goal-based savings product) and tailored offerings for customers in the wealth segment. We also took
up collaborative initiatives including iSurepay (fees, premium and tax collections for third party), UID
authentication for Aadhaar-based payments and enabling corporates to pay state taxes online.
During the year we also remained focused on ensuring superior technology in conjunction with rapid
expansion in our business, technology platform and delivery capabilities. With a view to creating a robust
technology infrastructure, we undertook a number of migration projects during the course of the year
involving upgradations and relocation of critical facilities. We also ensured optimal utilisation of technology
infrastructure already deployed. Steps in this direction include leveraging the ATM channel for wider
offerings and enhancing the scope and reach of our Trade Online platform. During the year, we received
several accolades for our technology offerings. We received the “Best Technology Bank of the Year”
award in the private sector banks category by the Indian Banks’ Association and also received two awards
from the Institute for Development and Research in Banking Technology (IDRBT) for IT implementation
and for managing IT risks.
The technology landscape is undergoing significant changes driven by rapid growth in mobility, cloud
computing and big data analytics. We will continue to invest in innovations and ensure that our technology
systems evolve in line with new trends and deliver value to our customers.
KEY SUBSIDIARIES
ICICI Prudential Life Insurance Company (ICICI Life)
ICICI Life successfully maintained its leadership amongst private players in new business premium on
retail weighted basis with a market share of 7.0% in fiscal 2013. ICICI Life’s total premium for fiscal
2013 was ` 135.38 billion and new business annualised premium equivalent premium was ` 35.32
billion. ICICI Life’s unaudited new business profit in fiscal 2013 was ` 5.29 billion. The profit after tax was
` 14.96 billion in fiscal 2013 compared to ` 13.84 billion in fiscal 2012. The total sum assured by ICICI Life,
Annual Report 2012-2013 49
Business Overview
including the group insurance business, increased by 14.1% from ` 2,416.86 billion at March 31, 2012 to
` 2,757.71 billion at March 31, 2013.
ICICI Lombard General Insurance Company (ICICI General)
ICICI General maintained its leadership in the private sector with an overall market share of 9.5% in fiscal
2013. ICICI General’s gross written premium grew by 19.8% from ` 53.58 billion in fiscal 2012 to ` 64.20
billion during fiscal 2013. The profit after tax was ` 3.06 billion in fiscal 2013 compared to a loss of ` 4.16
billion in fiscal 2012. The loss in fiscal 2012 was due to the recognition of additional losses related to the
third party motor pool (a multilateral reinsurance arrangement covering all third party risk of commercial
vehicles) in accordance with the Insurance Regulatory and Development Authority order dated March 22,
2012 applicable to all general insurance companies.
ICICI Prudential Asset Management Company (ICICI AMC)
ICICI AMC is the third largest asset management company in India with average mutual fund assets under
management of ` 878.35 billion for the quarter ended March 31, 2013. ICICI AMC achieved a profit after
tax of ` 1.10 billion in fiscal 2013 compared to ` 0.88 billion in fiscal 2012.
ICICI Venture Funds Management Company (ICICI Venture)
ICICI Venture, despite a challenging environment for alternate asset managers, maintained its leadership
position as a specialist alternative asset manager based in India through its presence in diversified asset
classes of private equity, infrastructure, real estate and special situations. ICICI Venture achieved a profit
after tax of ` 0.20 billion in fiscal 2013 compared to a profit after tax of ` 0.68 billion in fiscal 2012.
ICICI Securities (I-Sec)
Market conditions in fiscal 2013 continued to be difficult for capital market related entities. I-Sec continued
to expand its client base across various business segments, assisting its customers in meeting their
financial goals by providing them with research, advisory and execution services. I-Sec maintained its
market leadership in the retail broking business. The company achieved a profit of ` 0.68 billion in fiscal
2013 compared to ` 0.77 billion in fiscal 2012.
ICICI Securities Primary Dealership (I-Sec PD)
I-Sec PD’s corporate debt placement volumes rose to cross ` 900.00 billion in fiscal 2013. During the year
I-Sec PD was awarded the “Best Bond House – India” by Euromoney. I-Sec PD achieved a profit after tax
of ` 1.22 billion in fiscal 2013 compared to ` 0.86 billion in fiscal 2012.
ICICI Bank UK plc (ICICI Bank UK)
ICICI Bank UK’s profit after tax for fiscal 2013 was US$ 14.4 million compared to US$ 25.4 million in fiscal
2012. At March 31, 2013, ICICI Bank UK plc had total assets of US$ 3.6 billion compared to US$ 4.1 billion
at March 31, 2012. Its capital position was strong with a capital adequacy ratio of 30.8% at March 31,
2013 compared to 32.4% at March 31, 2012.
During fiscal 2013, ICICI Bank UK repatriated US$ 100 million of aggregate capital to the Bank, which
included redemption of US$ 50 million of preference share capital and return of US$ 50 million of equity
capital, after receiving requisite approvals.
ICICI Bank Canada
ICICI Bank Canada’s profit after tax for fiscal 2013 was CAD 43.6 million compared to CAD 34.4 million in
fiscal 2012. At March 31, 2013, ICICI Bank Canada had total assets of CAD 5.4 billion compared to CAD
5.2 billion at March 31, 2012. ICICI Bank Canada had a capital adequacy ratio of 33.2% at March 31, 2013
compared to 31.7% at March 31, 2012.
50
CREDIT RATING
ICICI Bank’s credit ratings by various credit rating agencies at March 31, 2013 are given below:
Agency
Moody’s Investor Service (Moody’s)
Standard & Poor’s (S&P)
Credit Analysis & Research Limited (CARE)
Investment Information and Credit Rating Agency (ICRA)
CRISIL Limited
Japan Credit Rating Agency (JCRA)
1. Senior foreign currency debt ratings
Rating
Baa21
BBB-1
CAREAAA
[ICRA]AAA
CRISIL AAA
BBB+1
PUBLIC RECOGNITION
The Bank received several awards and recognitions during fiscal 2013 in India and abroad including the
following:
• Most trusted brand in the Private Sector and Foreign Banks category by Brand Equity. Most Trusted
Brands 2012; ranked 15th among the Top 50 Service Brands
• Ranked fifth among Indian companies and 288th globally, in the Forbes Global 2000 list
• Ranked second among India’s 50 Biggest Financial Companies in BW Real 500 by Businessworld
• Best Technology Bank of the year award in the Private Sector Bank category by Indian Banks’
Association (IBA)
• Special IT Innovation Award by Lenovo - NASSCOM and CNBC-TV18
• Loyalty Award for My Savings Rewards by Aimia, a global leader in loyalty management
• Best Private Sector Bank in Global Business Development, Rural Reach and SME Financing categories
by Dun & Bradstreet-Polaris Financial Technology Banking Awards
• Best Foreign Exchange Bank (India) and Best Bond House (India) by Finance Asia
• Best SME Bank for Treasury and Working Capital (India) by The Asset Triple A
• Best Trade Finance House and Best Cash Management House by The Corporate Treasurer’s Alliance
Awards
• Best Trade Finance Bank in India by GTR Asia Leaders in Trade Awards 2012
• Low Cost/Small Budget Marketing Initiative Award by Rural Marketing Association of India (RMAI) for
Gram Samvad programme
• NFS Operational Excellence Awards in the MNC and Private Sector Bank Category from National
Payments Corporation of India (NPCI)
• Dataquest Technology Innovation Awards 2012 for data center migration by Dataquest
• Best Remittance Product award from the Asian Banker
Annual Report 2012-2013 51
Management’s Discussion & Analysis
BUSINESS ENVIRONMENT
Economic activity in India continued to moderate during fiscal 2013. Global economic conditions also
remained weak with slowdown in growth in developed and emerging economies. While a supportive
policy environment in developed economies prevented any crisis situation, uncertainty around revival in
global growth remained a concern through the year.
India’s gross domestic product (GDP) grew by 5.0% during the first nine months of fiscal 2013 compared
to a growth of 6.6% in the corresponding period of fiscal 2012. The services sector grew by 6.7% during
the first nine months of fiscal 2013 compared to 8.5% during the first nine months of fiscal 2012. The
industrial sector grew by 3.2% and agriculture sector by 4.0% during the first nine months of fiscal
2013 compared to a growth of 4.0% and 4.3% respectively in the corresponding period of fiscal 2012.
Private consumption growth moderated to 2.9% during the first nine months of fiscal 2013 compared to
a growth of 7.4% in the corresponding period of fiscal 2012. Investments, as measured by gross fixed
capital formation, grew by 0.1% during the first nine months of fiscal 2013 compared to a growth of 5.0%
in the corresponding period of fiscal 2012. The Central Statistical Organisation has estimated GDP growth
for fiscal 2013 at 5.0% compared to 6.2% in fiscal 2012 and 9.3% in fiscal 2011.
Inflation, measured by the Wholesale Price Index (WPI), remained above 7.0% between April 2012 and
January 2013, and subsequently eased to 6.0% in March 2013. The moderation in inflation was driven
by the manufactured products segment where inflation increased from 5.3% in April 2012 to 6.5% in
September 2012 before easing to 4.1% in March 2013. Inflation in food articles remained high through the
year with the average inflation at 9.9% in fiscal 2013 compared to 7.3% in fiscal 2012. Fuel inflation which
initially eased picked up in the later part of the year due to hike in petrol prices and partial deregulation of
diesel prices. Core inflation (defined as manufactured products excluding food products) reduced from
5.0% in March 2012 to 3.4% in March 2013. Average inflation for fiscal 2013 was 7.3% compared to 8.9%
in fiscal 2012.
The Reserve Bank of India (RBI) undertook a calibrated easing of monetary policy during the year. During
fiscal 2013, the repo rate was reduced by 100 basis points from 8.50% to 7.50% with a 50 basis points
cut in April 2012 followed by a 25 basis points reduction each in January 2013 and March 2013. The cash
reserve ratio (CRR) was reduced by 75 basis points during the year from 4.75% to 4.00%, with a 25 basis
point cut each effective in September 2012, November 2012 and February 2013. Further, in August 2012,
the statutory liquidity ratio was reduced by 100 basis points from 24.0% to 23.0%.
Liquidity in the system continued to remain in deficit through fiscal 2013. Average borrowing by banks
under the liquidity adjustment facility window of RBI increased from ` 798.78 billion in fiscal 2012 to
` 841.16 billion in fiscal 2013. The average borrowing by banks under the liquidity adjustment facility
window was over ` 960.00 billion in the second half of fiscal 2013. In view of the tight liquidity conditions,
RBI injected liquidity through open market operations aggregating around ` 1,550.00 billion during fiscal
2013 in addition to the reduction in CRR. The yields on the benchmark 10-year government securities
decreased by about 58 basis points from 8.54% at March 30, 2012 to 7.96% at March 28, 2013.
A series of policy measures were announced by the Government during the later part of fiscal 2013.
The key developments included approval of the Banking Laws (Amendment) Bill 2011 by both houses of
Parliament, announcement of fiscal consolidation roadmap by the Government, approval of 51% foreign
52
direct investment in multi-brand retail, formation of the Cabinet Committee on Investments to expedite
investments in projects, partial deregulation of diesel prices, increase in petrol prices and railway
passenger fares and deferral of General Anti Avoidance Rules (GAAR) implementation to fiscal 2017.
These announcements had a positive impact on market sentiment.
The Indian equity markets improved due to favourable global liquidity conditions and domestic events.
The extraordinary liquidity support announced by the US, EU and Japan had a positive impact on global
financial markets. This was further supported by gradual improvement in US economic indicators. The
benchmark equity index, the BSE Sensex, increased by 8.2% during fiscal 2013, rising from 17,404 at
March 31, 2012 to a peak of 20,104 at January 25, 2013, before moderating to 18,835 at March 28, 2013.
Foreign institutional investment (FII) flows were significantly higher during the year, with net inflows of
USD 29.00 billion during fiscal 2013 compared to USD 16.81 billion inflows during fiscal 2012. Foreign
direct investments moderated to USD 21.10 billion and external commercial borrowings to USD 4.72
billion during the first nine months of fiscal 2013 compared to USD 28.74 billion and USD 6.89 billion
respectively during the corresponding period of fiscal 2012. During the first nine months of fiscal 2013, a
steeper decline in India’s exports compared to imports led to a rise in the current account deficit to 5.3% of
GDP. However, India’s balance of payments had a marginal surplus of USD 1.15 billion during the first nine
months of fiscal 2013 as against a deficit of USD 7.09 billion during the corresponding period of fiscal 2012,
reflecting strong portfolio investment inflows. The rupee depreciated by 6.3% against the US dollar from
` 51.16 per US dollar at March 30, 2012 to ` 54.39 per US dollar at March 28, 2013.
Non-food credit growth moderated during fiscal 2013 from 16.8% at March 23, 2012 to 14.0% at March
22, 2013. Based on sector-wise data, year-on-year growth in credit to industry was 15.7% and to the
services sector was 13.6% at March 22, 2013. Credit to the infrastructure sector grew by 16.5% year-on-
year at March 22, 2013 compared to an 20.5% increase at March 23, 2012 and a 37.8% increase at March
25, 2011. Retail loan growth increased to 14.5% year-on-year at March 22, 2013 compared to 12.9% at
March 23, 2012. Deposit growth remained muted during the year recording year-on-year growth of 14.3%
at March 22, 2013 compared to 13.5% growth at March 23, 2012. Demand deposit growth was 5.9%
year-on-year at March 22, 2013.
First year retail premium underwritten in the life insurance sector increased (on weighted received
premium basis) to ` 389.56 billion in fiscal 2013 from ` 382.54 billion in fiscal 2012. Gross premium of
the non-life insurance sector (excluding specialised insurance institutions) grew by 18.4% to ` 647.07
billion during fiscal 2013 from ` 546.45 billion during fiscal 2012. The average assets under management
of mutual funds increased by 22.8% from ` 6,647.92 billion in March 2012 to ` 8,166.57 billion in March
2013.
Some key regulatory developments in the Indian financial sector during fiscal 2013 include:
• In May 2012, RBI’s final guidelines on implementation of Basel III capital regulations were released.
These guidelines require, among other things, higher levels of Tier-1 capital and common equity,
capital conservation buffers, higher deductions from common equity and Tier-1 capital for investments
in subsidiaries and changes in the structure of non-equity instruments eligible for inclusion in Tier-1
capital. The guidelines are to be fully implemented by March 2018. While the initial date for commencing
implementation was January 1, 2013, it was later deferred to April 1, 2013.
Annual Report 2012-2013 53
Management’s Discussion & Analysis
• In June 2012, RBI prohibited foreclosure charges and pre-payment penalties on home loans on a
floating interest rate basis.
• In July 2012, RBI issued revised guidelines on priority sector lending requirements. While keeping the
lending targets unchanged, the revised guidelines made certain changes to the categories of lending
that would be eligible for classification as priority sector lending and its sub-segments. The guidelines
aim to increase direct agricultural lending by banks to individuals. The guidelines also stipulate that
investments by banks in securitised assets and outright purchases of loans and assignments would
be eligible for classification under the priority sector. The guidelines also increased the priority sector
lending requirements for foreign banks in India that have 20 or more branches, in order to bring them
on par with domestic banks. In October 2012, RBI announced revisions to the priority sector lending
norms. Loans up to ` 20.0 million to partnership firms, cooperatives and corporates directly engaged
in agricultural activities were made eligible for classification under direct agriculture lending. Also,
loans to housing finance companies for on-lending for housing up to ` 1.0 million per borrower were
included under priority sector lending.
• In November 2012, the RBI increased the general provisioning on restructured standard accounts
from 2.00% to 2.75%.
• In November 2012, RBI released draft guidelines on liquidity risk management and the Basel III
framework on liquidity standards. The draft guidelines provide for monitoring and reporting of a
liquidity coverage ratio, which is designed to ensure that a bank maintains an adequate level of liquid
assets to survive an acute liquidity stress scenario lasting one month, and a net stable funding ratio
designed to ensure a minimum amount of funding that is expected to be stable over a one-year time
horizon.
• In December 2012, Parliament passed the Banking Laws (Amendment) Bill, which, inter alia, permits
all banking companies to issue preference shares that will not carry any voting rights; mandates
prior approval of RBI for the acquisition of more than 5.0% of a banking company’s paid-up capital or
voting rights by any individual or firm or group; empowers RBI, after consultations with the Central
Government, to supersede the board of a private sector bank for a total period not exceeding 12
months, during which time RBI will have the power to appoint an administrator to manage the
bank; empowers RBI to inspect affiliates of banking entities (affiliates include subsidiaries, holding
companies or any joint ventures of banks); and eases the restrictions on voting rights by making them
proportionate to the shareholding up to a cap of 26% in case of private sector banks (earlier 10%), and
10% in the case of public sector banks (earlier 1%).
• In December 2012, the Lok Sabha passed the Companies Bill 2011 which would amend the Companies
Act 1956. The provisions of the Bill include making independent directors more accountable and
improving corporate governance practices. The Bill also seeks to make corporate social responsibility
mandatory for companies above a certain size and require them to spend a minimum of 2% of the
average net profits of the preceding three years for corporate social responsibility initiatives. Any
shortfall in this regard is required to be explained in the annual report. The Bill is pending approval of
the Rajya Sabha.
• In January 2013, the RBI issued draft guidelines on restructuring of advances. The draft guidelines
propose that with effect from April 1, 2015, loans that are restructured (other than in the infrastructure
sector) would be classified as non-performing. The general provision required on restructured standard
accounts would increase to 3.75% from March 31, 2014 and to 5.0% from March 31, 2015. General
provisions on standard accounts restructured after April 1, 2013 would be at 5.0%.
• RBI through a notification issued on January 31, 2013 mandated banks to disclose further details on
restructured accounts in their annual reports. This includes disclosing restructured accounts on a
cumulative basis excluding the standard restructured accounts which cease to attract higher provision
and/or higher risk weight, the provisions made on restructured accounts under various categories and
details of movement of restructured accounts.
54
• In February 2013, RBI issued guidelines on the entry of new banks in the private sector including
eligibility criteria, structure, capital requirements, shareholding structure and corporate governance
practices. Select entities or groups in the private sector, entities in the public sector and non-banking
financial companies with a successful track record of at least ten years would be eligible to promote
banks. The initial minimum capital requirement for these entities is ` 5.00 billion, with foreign
shareholding not exceeding 49.0% for the first five years. Applications for setting up of new banks
have been sought by July 1, 2013.
• In March 2013, the Insurance Regulatory and Development Authority issued guidelines on non-
linked life insurance products which include limits on the commission rates payable by insurance
companies, introduction of minimum guaranteed surrender value and minimum death benefits. The
new guidelines would require life insurance companies to modify existing non-linked products which
do not comply with the revised guidelines.
STANDALONE FINANCIALS AS PER INDIAN GAAP
Summary
During fiscal 2013, we focused on sustainable value creation by balancing growth, profitability and risk
management.
Our profit after tax increased by 28.8% from ` 64.65 billion in fiscal 2012 to ` 83.25 billion in fiscal 2013.
The increase in profit after tax was mainly due to 29.2% increase in net interest income and 11.3%
increase in non-interest income offset, in part, by a 14.8% increase in non-interest expenses and 13.9%
increase in provisions and contingencies (excluding provisions for tax). Net interest income increased by
29.2% from ` 107.34 billion in fiscal 2012 to ` 138.66 billion in fiscal 2013, reflecting an increase of 38
basis points in net interest margin and an increase of 13.5% in average interest-earning assets.
Non-interest income increased by 11.3% from ` 75.02 billion in fiscal 2012 to ` 83.46 billion in fiscal 2013.
The increase in non-interest income was primarily due to a gain of ` 4.95 billion from treasury-related
activities in fiscal 2013 compared to a loss of ` 0.13 billion in fiscal 2012 and an increase in dividend
income from subsidiaries from ` 7.36 billion in fiscal 2012 to ` 9.12 billion in fiscal 2013. Fee income
increased by 2.9% from ` 67.07 billion in fiscal 2012 to ` 69.01 billion in fiscal 2013.
Non-interest expenses increased by 14.8% from ` 78.50 billion in fiscal 2012 to ` 90.13 billion in fiscal
2013 primarily due to an increase in employee expenses and other administrative expenses. Provisions
and contingencies (excluding provisions for tax) increased by 13.9% from ` 15.83 billion in fiscal 2012 to
` 18.03 billion in fiscal 2013. The increase in provisions and contingencies (excluding provisions for tax)
was primarily due to an increase in provisions for non-performing and restructured loans in the Small &
Medium Enterprises (SME) and corporate loan portfolio.
Total assets increased by 9.8% from ` 4,890.69 billion at March 31, 2012 to ` 5,367.95 billion at March 31,
2013. Total deposits increased by 14.5% from ` 2,555.00 billion at March 31, 2012 to ` 2,926.14 billion at
March 31, 2013. Savings account deposits increased by 12.6% from ` 760.46 billion at March 31, 2012
to ` 856.51 billion at March 31, 2013. The current and savings account (CASA) ratio was 41.9% at March
31, 2013 compared to 43.5% at March 31, 2012. Term deposits increased by 17.7% from ` 1,444.81
billion at March 31, 2012 to ` 1,700.37 billion at March 31, 2013. Total advances increased by 14.4% from
` 2,537.28 billion at March 31, 2012 to ` 2,902.49 billion at March 31, 2013 primarily due to an increase
in the domestic corporate and retail loan book. The net non-performing asset ratio increased marginally
from 0.62% at March 31, 2012 to 0.64% at March 31, 2013.
We continued to expand our branch network in India. Our branch network in India increased from 2,752
branches and extension counters at March 31, 2012 to 3,100 branches and extension counters at March
31, 2013. We also increased our ATM network from 9,006 ATMs at March 31, 2012 to 10,481 ATMs at
March 31, 2013.
Annual Report 2012-2013 55
Management’s Discussion & Analysis
The total capital adequacy ratio of ICICI Bank on a standalone basis at March 31, 2013 in accordance with
RBI guidelines on Basel II was 18.74% with a Tier-1 capital adequacy ratio of 12.80% compared to a total
capital adequacy ratio of 18.52% and Tier-1 capital adequacy ratio of 12.68% at March 31, 2012.
Operating results data
The following table sets forth, for the periods indicated, the operating results data.
` in billion, except percentages
Fiscal 2012
` 335.42
228.08
107.34
Fiscal 2013
` 400.75
262.09
138.66
Particulars
Interest income
Interest expense
Net interest income
Non-interest income
- Fee income1
- Treasury income
- Dividend from subsidiaries
- Other income (including lease income)
Operating income
Operating expenses2
Operating profit
Provisions, net of write-backs
Profit before tax
Tax, including deferred tax
Profit after tax
1.
2. Operating expenses include lease depreciation and direct marketing agency expenses.
3. All amounts have been rounded off to the nearest ` 10.0 million.
4. Prior period figures have been re-grouped/re-arranged, where necessary.
69.01
4.95
9.12
0.38
222.12
90.13
131.99
18.03
113.96
30.71
` 83.25
Includes merchant foreign exchange income and margin on customer derivative transactions.
67.07
(0.13)
7.36
0.72
182.36
78.50
103.86
15.83
88.03
23.38
` 64.65
% change
19.5%
14.9
29.2
2.9
-
23.9
(47.2)
21.8
14.8
27.1
13.9
29.5
31.4
28.8%
Key ratios
The following table sets forth, for the periods indicated, the key financial ratios.
Particulars
Return on average equity (%)1
Return on average assets (%)2,3
Earnings per share (`)
Book value per share (`)
Fee to income (%)
Cost to income (%)4
Fiscal 2012
11.09
1.44
56.11
524.03
36.86
42.91
Fiscal 2013
12.94
1.66
72.20
578.25
31.11
40.49
1. Return on average equity is the ratio of the net profit after tax to the quarterly average equity share capital and
reserves.
2. Return on average assets is the ratio of net profit after tax to average assets. The average balances are the
averages of daily balances, except averages of foreign branches which are calculated on a fortnightly basis.
3. We have modified our presentation of mark-to-market gains and losses on foreign exchange and derivative
transactions to gross basis, which was previously on net basis. Accordingly, for fiscal 2012 and fiscal 2013, the
average total assets/total liabilities have been grossed up.
4. Cost represents operating expense excluding lease depreciation. Income represents net interest income and
non-interest income and is net of lease depreciation.
56
Net interest income and spread analysis
The following table sets forth, for the periods indicated, the net interest income and spread analysis.
` in billion, except percentages
Interest income
Interest expense
Net interest income
Average interest-earning assets1
Average interest-bearing liabilities1
Net interest margin
Average yield
Average cost of funds
Interest spread
1. The average balances are the averages of daily balances, except averages of foreign branches which are
Fiscal 2013
` 400.75
262.09
138.66
4,465.40
` 4,073.47
3.11%
8.97%
6.43%
2.54%
Fiscal 2012
` 335.42
228.08
107.34
3,932.59
` 3,603.51
2.73%
8.53%
6.33%
2.20%
% change
19.5%
14.9
29.2
13.5
13.0%
—
—
—
—
calculated on a fortnightly basis.
2. All amounts have been rounded off to the nearest ` 10.0 million.
Net interest income increased by 29.2% from ` 107.34 billion in fiscal 2012 to ` 138.66 billion in fiscal
2013 reflecting an increase in net interest margin from 2.73% in fiscal 2012 to 3.11% in fiscal 2013 and a
13.5% increase in the average volume of interest-earning assets.
The yield on interest-earning assets increased from 8.53% in fiscal 2012 to 8.97% in fiscal 2013 offset,
in part, by an increase in the cost of funds from 6.33% in fiscal 2012 to 6.43% in fiscal 2013. The interest
spread increased from 2.20% in fiscal 2012 to 2.54% in fiscal 2013. Net interest margin increased from
2.73% in fiscal 2012 to 3.11% in fiscal 2013.
The following table sets forth, for the periods indicated, the trend in yield, cost, spread and margin.
Yield on interest-earning assets
- On advances
- On investments
- On SLR investments
- On other investments
- On other interest-earning assets
Cost of interest-bearing liabilities
- Cost of deposits
- Current and savings account (CASA) deposits
- Term deposits
- Cost of borrowings
Interest spread
Net interest margin
Fiscal 2012
8.53%
9.55
7.24
7.34
7.10
6.21
6.33
6.12
2.87
8.21
6.71
2.20
2.73%
Fiscal 2013
8.97%
9.94
7.73
7.80
7.62
5.96
6.43
6.38
2.97
8.47
6.54
2.54
3.11%
Yield on interest-earning assets increased from 8.53% in fiscal 2012 to 8.97% in fiscal 2013 primarily due
to the following factors:
• Yield on average advances increased from 9.55% in fiscal 2012 to 9.94% in fiscal 2013 primarily
due to an increase in yield on domestic and overseas corporate loans as a result of incremental
disbursements at higher lending rates and the full impact of increase in our base rate during fiscal
2012. However, subsequently we reduced our base rate to 9.75% with effect from April 23, 2012 in
response to a decrease in repo rate by 50 basis points in April 2012.
Annual Report 2012-2013 57
Management’s Discussion & Analysis
• Yield on average interest-earning investments increased from 7.24% in fiscal 2012 to 7.73% in fiscal
2013. The yield on Statutory Liquidity Ratio (SLR) securities increased from 7.34% in fiscal 2012 to
7.80% in fiscal 2013 primarily due to investments in longer duration SLR securities at higher yields
and maturities of low yielding securities. The yield on average interest-earning non-SLR investments
increased from 7.10% in fiscal 2012 to 7.62% in fiscal 2013.
• Interest income also includes interest on income tax refund of ` 2.58 billion in fiscal 2013 compared
to ` 0.80 billion in fiscal 2012. The receipt, amount and timing of such income depends on the nature
and timing of determinations by tax authorities and is not consistent or predictable.
• During fiscal 2013, the impact on interest income of losses on securitised pools of assets (including
credit losses on existing pools) was ` 0.28 billion compared to ` 2.02 billion in fiscal 2012.
• RBI reduced the CRR by 200 basis points in phases during fiscal 2012 and fiscal 2013. CRR was 6.00%
at September 30, 2011, 4.75% at March 31, 2012 and 4.00% at March 31, 2013. As CRR balances
do not earn any interest income, the reduction had a positive impact on the yield on interest-earning
assets during fiscal 2013.
The cost of funds increased from 6.33% in fiscal 2012 to 6.43% in fiscal 2013 primarily due to the
following factors:
• The cost of deposits increased from 6.12% in fiscal 2012 to 6.38% in fiscal 2013. The cost of average
term deposits increased by 26 basis points from 8.21% in fiscal 2012 to 8.47% in fiscal 2013, reflecting
the full impact of the systemic increase in deposit rates in fiscal 2012. This was partly offset by
decrease in the cost of borrowings from 6.71% in fiscal 2012 to 6.54% in fiscal 2013.
Net interest margin of overseas branches improved from 1.23% for fiscal 2012 to 1.34% for fiscal 2013
primarily due to increase in yield on advances. Yield on overseas advances increased primarily due to
new disbursements at higher interest rates. Further, during fiscal 2012, there were repayments and
prepayments of low yielding loans. The full impact of the reduction in low yielding loans was reflected
during fiscal 2013. The increase in yield on advances was offset, in part, by the impact of higher liquidity
maintained in the international operations during the year.
The reduction of CRR by 75 basis points to 4.00% and reduction in repo rate by 100 basis points to 7.50%
by RBI during fiscal 2013, indicates a reversal in policy stance. While the interest rates in the system
are believed to have peaked, the extent and timing of decline in interest rates will depend on systemic
liquidity, the future movement of inflation as well as on the evolving fiscal situation.
The following table sets forth, for the period indicated, the trend in average interest-earning assets and
average interest-bearing liabilities:
Advances
Interest-earning investments
Other interest-earning assets
Total interest-earning assets
Deposits
Borrowings3
Total interest-bearing liabilities
1. Average investments and average borrowings include average short-term re-purchase transactions.
2. Average balances are the averages of daily balances, except averages of foreign branches which are calculated
` in billion, except percentages
% change
18.8%
6.5
3.9
13.5
13.4
12.4
13.0%
Fiscal 2013
` 2,751.19
1,424.90
289.31
4,465.40
2,648.48
1,424.99
` 4,073.47
Fiscal 2012
` 2,316.69
1,337.46
278.44
3,932.59
2,335.93
1,267.58
` 3,603.51
on a fortnightly basis.
3. Borrowings exclude preference share capital.
The average volume of interest-earning assets increased by 13.5% from ` 3,932.59 billion in fiscal 2012 to
` 4,465.40 billion in fiscal 2013. The increase in average interest-earning assets was primarily on account
of an increase in average advances by ` 434.50 billion and average interest-earning investments by
` 87.44 billion.
58
Average advances increased by 18.8% from ` 2,316.69 billion in fiscal 2012 to ` 2,751.19 billion in fiscal
2013 primarily on account of increase in domestic corporate and retail advances and overseas corporate
advances.
Average interest-earning investments increased by 6.5% from ` 1,337.46 billion in fiscal 2012 to
` 1,424.90 billion in fiscal 2013, primarily due to an increase in average interest-earning SLR investments
by 6.3% from ` 804.51 billion in fiscal 2012 to ` 855.54 billion in fiscal 2013. Average interest earning non-
SLR investments increased by 6.8% from ` 532.94 billion in fiscal 2012 to ` 569.36 billion in fiscal 2013.
Interest-earning non-SLR investments primarily include investments in corporate bonds and debentures,
certificates of deposits, commercial paper, Rural Infrastructure Development Fund (RIDF) and related
investments and investments in liquid mutual funds.
Average interest-bearing liabilities increased by 13.0% from ` 3,603.51 billion in fiscal 2012 to ` 4,073.47
billion in fiscal 2013 on account of an increase of ` 312.55 billion in average deposits and an increase of
` 157.41 billion in average borrowings. The ratio of average CASA deposits to average deposits was at
38.0% in fiscal 2013 compared to 39.1% in fiscal 2012.
Non-interest income
The following tables set forth, for the periods indicated, the principal components of non-interest income.
` in billion, except percentages
Fee income1
Income from treasury-related activities
Dividend from subsidiaries
Other income (including lease income)
Total non-interest income
Fiscal 2012
` 67.07
(0.13)
7.36
0.72
` 75.02
Fiscal 2013
` 69.01
4.95
9.12
0.38
` 83.46
% change
2.9%
-
23.9
(47.2)
11.3%
1.
Includes merchant foreign exchange income and income on customer derivative transactions.
Non-interest income primarily includes fee and commission income, income from treasury-related
activities, dividend from subsidiaries and other income including lease income. The non-interest income
increased by 11.3% from ` 75.02 billion in fiscal 2012 to ` 83.46 billion in fiscal 2013. The increase in non-
interest income was primarily on account of gain from treasury-related activities in fiscal 2013 compared
to a loss in fiscal 2012, and an increase in dividend income from subsidiaries.
Fee income
Fee income primarily includes fees from corporate clients such as loan processing fees and transaction
banking fees and fees from retail customers such as loan processing fees, fees from credit cards business,
account service charges and third party referral fees.
Fee income increased by 2.9% from ` 67.07 billion in fiscal 2012 to ` 69.01 billion in fiscal 2013 primarily
due to an increase in fee income from transaction banking fees, credit card fees, fee income from forex
and derivative products and third party referral fees, offset, in part, by decrease in loan processing fees.
Profit/(loss) on treasury-related activities (net)
Income from treasury-related activities includes income from sale of investments and revaluation of
investments on account of changes in unrealised profit/(loss) in the fixed income, equity and preference
share portfolio, units of venture funds and security receipts.
Profit from treasury-related activities was ` 4.95 billion in fiscal 2013 compared to a loss of ` 0.13 billion
in fiscal 2012. Treasury income for fiscal 2013 primarily included gain on government securities and
Annual Report 2012-2013 59
Management’s Discussion & Analysis
other fixed income positions, profit on security receipts and other gains, offset, in part, by mark-to-
market losses on equity and preference share portfolio. Loss from treasury-related activities in fiscal
2012 primarily included realised/mark-to-market provision on security receipts, offset, in part, by reversal
of mark-to-market loss/realised gain on investments in government of India securities and other fixed
income positions and gain on equity/preference investments.
During fiscal 2013 the mark-to-market gain on the credit derivatives portfolio was ` 0.06 billion compared
to ` 0.56 billion in fiscal 2012.
At March 31, 2013, we had an outstanding net investment of ` 11.47 billion in security receipts issued by
asset reconstruction companies in relation to sale of non-performing loans. Security receipts issued by
asset reconstruction companies are valued as per net asset value obtained from the asset reconstruction
company from time to time. During fiscal 2013, the impact of these security receipts on the income from
treasury-related activities was a gain of ` 0.45 billion compared to a loss of ` 4.08 billion in fiscal 2012.
Dividend from subsidiaries
Dividend from subsidiaries increased by 23.9% from ` 7.36 billion in fiscal 2012 to ` 9.12 billion in fiscal
2013. In fiscal 2013, dividend from subsidiaries included dividend of ` 3.27 billion received from ICICI
Prudential Life Insurance Company Limited, ` 1.67 billion received from ICICI Bank Canada and ` 1.31
billion received from ICICI Bank UK.
Non-interest expense
The following table sets forth, for the periods indicated, the principal components of non-interest expense.
` in billion, except percentages
Payments to and provisions for employees
Depreciation on own property (including non
banking assets)
Other administrative expenses
Total non-interest expense (excluding lease depreciation)
Depreciation (net of lease equalisation) on leased assets
Total non-interest expense
Fiscal 2012
Fiscal 2013
% change
` 35.15
` 38.93
10.8%
4.82
38.11
78.08
0.42
` 78.50
4.57
46.30
89.80
0.33
` 90.13
(5.2)
21.5
15.0
(21.4)
14.8%
Non-interest expenses primarily include employee expenses, depreciation on assets and other
administrative expenses. In fiscal 2013, non-interest expenses increased by 14.8% from ` 78.50 billion in
fiscal 2012 to ` 90.13 billion in fiscal 2013 primarily due to an increase in employee expenses and other
administrative expenses.
Payments to and provisions for employees
Employee expenses increased by 10.8% from ` 35.15 billion in fiscal 2012 to ` 38.93 billion in fiscal 2013.
Employee expenses increased due to annual increments and increase in the number of employees.
The number of employees increased from 58,276 at March 31, 2012 to 62,065 at March 31, 2013. The
employee base includes sales executives, employees on fixed term contracts and interns.
Depreciation
Depreciation on owned property decreased by 5.2% from ` 4.82 billion in fiscal 2012 to ` 4.57 billion in
fiscal 2013. Depreciation on leased assets decreased from ` 0.42 billion in fiscal 2012 to ` 0.33 billion in
fiscal 2013.
60
Other administrative expenses
Other administrative expenses primarily include rent, taxes and lighting, advertisement and publicity,
repairs and maintenance and other expenditure. Other administrative expenses increased by 21.5% from
` 38.11 billion in fiscal 2012 to ` 46.30 billion in fiscal 2013. The increase in other administrative expenses
was primarily due to increase in our branch and ATM network. The number of branches and extension
counters (excluding foreign branches and offshore banking units) increased from 2,752 at March 31, 2012
to 3,100 at March 31, 2013. We also increased our ATM network from 9,006 ATMs at March 31, 2012 to
10,481 ATMs at March 31, 2013. The increase in other administrative expenses was offset, in part, by a
decrease in collection expenses.
Provisions and contingencies (excluding provisions for tax)
The following tables set forth, for the periods indicated, the components of provisions and contingencies.
` in billion, except percentages
Provision for investments (including credit substitutes) (net)
Provision for non-performing and other assets1
Provision for standard assets
Others
Total provisions and contingencies
(excluding provisions for tax)
1.
Includes restructuring related provision.
Fiscal 2012
` 4.13
9.93
—
1.77
Fiscal 2013
` 1.26
13.95
1.44
1.38
% change
(69.5)%
40.5
—
(22.0)
` 15.83
` 18.03
13.9%
Provisions are made by us on standard, sub-standard and doubtful assets at rates prescribed by RBI.
Loss assets and unsecured portions of doubtful assets are provided/written off as required by extant
RBI guidelines. Provisions on retail non-performing loans are made at the borrower level in accordance
with our retail assets provisioning policy, subject to the minimum provisioning levels prescribed by RBI.
The specific provisions on retail loans held by us were higher than the minimum regulatory requirement.
In addition to the specific provision on NPAs, we maintain a general provision on performing loans and
advances at rates prescribed by RBI. For performing loans and advances in overseas branches, the general
provision is made at higher of host country regulations requirement and RBI requirement.
Provisions and contingencies (excluding provisions for tax) increased by 13.9% from ` 15.83 billion in
fiscal 2012 to ` 18.03 billion in fiscal 2013 primarily due to an increase in provisions on non-performing
and restructured loans in the SME and corporate loan portfolio. This was, offset, in part, by write-backs
primarily on the unsecured retail asset portfolio and lower provision on investments.
Provision for investments decreased from ` 4.13 billion in fiscal 2012 to ` 1.26 billion in fiscal 2013. In
fiscal 2012, the provision for investments of ` 4.13 billion was primarily due to permanent diminution
recognised on certain investments.
The provision coverage ratio at March 31, 2013 computed as per the RBI guidelines was 76.8%.
Additional general provision of ` 1.44 billion was made on standard assets during fiscal 2013 reflecting an
increase in the loan portfolio. We held a cumulative general provision of ` 16.24 billion at March 31, 2013
compared to the general provision of ` 14.80 billion held at March 31, 2012.
Tax expense
The income tax expense (including wealth tax) increased by 31.4% from ` 23.38 billion in fiscal 2012 to
` 30.71 billion in fiscal 2013 reflecting an increase in profit before tax and higher effective tax rate of
26.9% in fiscal 2013 compared to 26.6% in fiscal 2012.
Annual Report 2012-2013 61
Management’s Discussion & Analysis
Financial condition
Assets
The following table sets forth, at the dates indicated, the principal components of assets.
Assets
At March 31, 2012 At March 31, 2013 % change
` in billion, except percentages
Cash and bank balances
Investments
- Government and other approved investments1
- RIDF and other related investments2
- Equity investment in subsidiaries
- Other investments
Advances
- Domestic
- Overseas branches
Fixed assets (including leased assets)
Other assets
Total assets
` 362.29
1,595.60
869.48
181.03
124.53
420.56
2,537.28
1,843.25
694.03
46.15
349.37
` 4,890.69
` 414.18
1,713.94
923.76
201.98
123.22
464.98
2,902.49
2,168.92
733.57
46.47
290.87
` 5,367.95
14.3%
7.4
6.2
11.6
(1.1)
10.6
14.4
17.7
5.7
0.7
(16.7)
9.8%
1. Banks in India are required to maintain a specified percentage, currently 23.0%, of their net demand and time
2.
liabilities by way of liquid assets like cash, gold or approved unencumbered securities.
Investments made in Rural Infrastructure Development Fund and other such entities pursuant to shortfall in the
amount required to be lent to certain specified sectors called priority sector as per RBI guidelines.
3. All amounts have been rounded off to the nearest ` 10.0 million.
Total assets increased by 9.8% from ` 4,890.69 billion at March 31, 2012 to ` 5,367.95 billion at March
31, 2013, primarily due to an increase in advances and investments. Net advances increased by 14.4%
from ` 2,537.28 billion at March 31, 2012 to ` 2,902.49 billion at March 31, 2013. Investments increased
by 7.4% from ` 1,595.60 billion at March 31, 2012 to ` 1,713.94 billion at March 31, 2013.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and balances with RBI and other banks, including money
at call and short notice. Cash and cash equivalents increased from ` 362.29 billion at March 31, 2012 to
` 414.18 billion at March 31, 2013. The increase was primarily due to an increase in term and call money
lending. The balances with RBI decreased from ` 157.92 billion at March 31, 2012 to ` 143.75 billion at
March 31, 2013 primarily due to reduction in CRR.
Investments
Total investments increased by 7.4% from ` 1,595.60 billion at March 31, 2012 to ` 1,713.94 billion
at March 31, 2013, primarily due to an increase in investment in government securities by ` 54.28
billion, Rural Infrastructure Development Fund and other related investments (pursuant to shortfall in
achievement of directed lending requirements) by ` 20.96 billion, pass through certificates by ` 35.20
billion and commercial paper and certificates of deposit by ` 34.87 billion. The investment in mutual
funds decreased by ` 21.54 billion and corporate bonds and debentures decreased by ` 20.36 billion
during fiscal 2013. At March 31, 2013, we had an outstanding net investment of ` 11.47 billion in security
receipts issued by asset reconstruction companies in relation to sale of non-performing loans compared
to ` 18.32 billion at March 31, 2012. At March 31, 2013, we had notional non-funded credit derivatives
outstanding of ` 3.07 billion compared to ` 10.25 billion at March 31, 2012. We had no funded credit
derivatives outstanding at March 31, 2013.
Advances
Net advances increased by 14.4% from ` 2,537.28 billion at March 31, 2012 to ` 2,902.49 billion at March
31, 2013 primarily due to increase in the domestic corporate and retail loan book. Net retail advances
62
increased by 11.4% from ` 963.63 billion at March 31, 2012 to ` 1,073.59 billion at March 31, 2013. Net
advances of overseas branches (including offshore banking unit) decreased in USD terms by 0.7% from
US$ 13.6 billion at March 31, 2012 to US$ 13.5 billion at March 31, 2013. In rupee terms, net advances of
overseas branches (including offshore banking unit) increased by 5.7% from ` 694.03 billion at March 31,
2012 to ` 733.57 billion at March 31, 2013.
Fixed and other assets
Net fixed assets increased marginally from ` 46.15 billion at March 31, 2012 to ` 46.47 billion at March
31, 2013. Other assets decreased by 16.7% from ` 349.37 billion at March 31, 2012 to ` 290.87 billion at
March 31, 2013.
At March 31, 2013, we have presented mark-to-market on forex and derivatives trading transactions
(including revaluation on outstanding funding swaps) and interest accrual on hedge swaps on gross basis.
Accordingly, the gross positive mark-to-market amounting to ` 113.24 billion has been included in Other
assets at March 31, 2013. Consequent to the change, Other assets have increased by ` 154.22 billion at
March 31, 2012. This was previously presented on a net basis and the net positive mark-to-market was
recorded in ‘Other Assets’ and the net negative mark-to-market was recorded in ‘Other Liabilities’.
Liabilities
The following table sets forth, at the dates indicated, the principal components of liabilities (including
capital and reserves).
` in billion, except percentages
At March 31, 2012 At March 31, 2013 % change
0.1%
10.6
14.5
12.6
5.6
17.7
` 11.53
592.52
2,555.00
760.46
349.73
1,444.81
` 11.54
655.52
2,926.14
856.51
369.26
1,700.37
Liabilities
Equity share capital
Reserves
Deposits
- Savings account deposits
- Current account deposits
- Term deposits
Borrowings (excluding subordinated debt and
preference share capital)
- Domestic
- Overseas branches
Subordinated debt (included in Tier-1 and
Tier-2 capital)1
- Domestic
- Overseas branches
Preference share capital1
Other liabilities
Total liabilities
1.
Included in Schedule 4 - “Borrowings” of the balance sheet.
2. All amounts have been rounded off to the nearest ` 10.0 million.
1,022.00
377.38
644.62
376.15
358.90
17.25
3.50
329.99
` 4,890.69
1,053.29
402.98
650.31
396.62
378.21
18.41
3.50
321.34
` 5,367.95
3.1
6.8
0.9
5.4
5.4
6.7
0.0
(2.6)
9.8%
Total liabilities (including capital and reserves) increased by 9.8% from ` 4,890.69 billion at March 31, 2012 to
` 5,367.95 billion at March 31, 2013, primarily due to an increase in borrowings and deposits. Deposits
increased by 14.5% from ` 2,555.00 billion at March 31, 2012 to ` 2,926.14 billion at March 31, 2013.
Borrowings increased from ` 1,401.65 billion at March 31, 2012 to ` 1,453.41 billion at March 31, 2013.
Deposits
Deposits increased by 14.5% from ` 2,555.00 billion at March 31, 2012 to ` 2,926.14 billion at March 31,
2013. Term deposits increased from ` 1,444.81 billion at March 31, 2012 to ` 1,700.37 billion at March
31, 2013, while savings deposits increased from ` 760.46 billion at March 31, 2012 to ` 856.51 billion
at March 31, 2013 and current deposits increased from ` 349.73 billion at March 31, 2012 to ` 369.26
Annual Report 2012-2013 63
Management’s Discussion & Analysis
billion at March 31, 2013. Total deposits at March 31, 2013 were 66.9% of the funding (i.e. deposits and
borrowings, other than preference share capital). The current and savings account deposits increased
from ` 1,110.19 billion at March 31, 2012 to ` 1,225.77 billion at March 31, 2013.
Borrowings (including subordinated debt and preference share capital)
Borrowings increased by 3.7% from ` 1,401.65 billion at March 31, 2012 to ` 1,453.41 billion at March
31, 2013. The borrowings of overseas branches (including offshore banking unit) decreased in USD terms
by 5.4% from US$ 13.0 billion at March 31, 2012 to US$ 12.3 billion at March 31, 2013. In rupee terms,
borrowings of overseas branches (including offshore banking unit) increased by 0.7% from ` 663.91
billion at March 31, 2012 to ` 668.72 billion at March 31, 2013. The capital-eligible borrowings, other than
preference share capital, increased from ` 376.15 billion at March 31, 2012 to ` 396.62 billion at March
31, 2013.
Equity share capital and reserves
Equity share capital and reserves increased from ` 604.05 billion at March 31, 2012 to ` 667.06 billion at
March 31, 2013 primarily due to annual accretion to reserves out of profit.
Other liabilities
Other liabilities decreased from ` 329.99 billion at March 31, 2012 to ` 321.34 billion at March 31, 2013.
At March 31, 2013, we have presented mark-to-market on forex and derivatives trading transactions
(including revaluation on outstanding funding swaps) and interest accrual on hedge swaps on gross
basis. Accordingly, the gross negative mark-to-market amounting to ` 108.26 billion has been included in
Other liabilities at March 31, 2013. Consequent to the change, Other liabilities have increased by ` 154.22
billion at March 31, 2012.
Off balance sheet items, commitments and contingencies
The following table sets forth, for the periods indicated, the principal components of contingent liabilities.
` in billion
Assets
Claims against the Bank, not acknowledged as debts
Liability for partly paid investments
Notional principal amount of outstanding forward
exchange contracts
Guarantees given on behalf of constituents
Acceptances, endorsements and other obligations
Notional principal amount of currency swaps
Notional principal amount of interest rate swaps and currency
options and interest rate futures
Other items for which the Bank is contingently liable
At March 31, 2012 At March 31, 2013
` 29.31
0.13
` 36.37
0.13
3,560.05
2,838.50
955.01
568.86
616.40
3,362.01
62.88
944.17
621.18
565.47
2,855.94
38.13
Total
` 9,154.65
` 7,899.89
We enter into foreign exchange forwards, options, swaps and other derivative products to enable customers
to transfer, modify or reduce their foreign exchange and interest rate risk and to manage our own interest
rate and foreign exchange positions. We manage our foreign exchange and interest rate risk with reference
to limits set by RBI as well as those set internally. An interest rate swap does not entail exchange of notional
principal and the cash flow arises on account of the difference between interest rate pay and receive legs
64
of the swaps which is generally much smaller than the notional principal of the swap. With respect to the
transactions entered into with customers, we generally enter into off-setting transactions in the inter-bank
market. This results in generation of a higher number of outstanding transactions and hence a large value
of gross notional principal of the portfolio, while the net market risk is low. For example, if a transaction
entered into with a customer is covered by an exactly opposite transaction entered into with counter-party,
the net market risk of the two transactions will be zero whereas the notional principal which is reflected as
an off-balance sheet item will be the sum of both the transactions.
As a part of project financing and commercial banking activities, we have issued guarantees to support
regular business activities of clients. These generally represent irrevocable assurances that we will make
payments in the event that the customer fails to fulfill its financial or performance obligations. Financial
guarantees are obligations to pay a third party beneficiary where a customer fails to make payment
towards a specified financial obligation. Performance guarantees are obligations to pay a third party
beneficiary where a customer fails to perform a non-financial contractual obligation. The guarantees are
generally for a period not exceeding ten years. The credit risks associated with these products, as well
as the operating risks, are similar to those relating to other types of financial instruments. Cash margins
available to us to reimburse losses realised under guarantees amounted to ` 44.29 billion at March 31,
2013 and ` 31.63 billion at March 31, 2012. Other property or security may also be available to us to cover
losses under guarantees.
Claims against the Bank, not acknowledged as debts represents demands made in certain tax and legal
matters against the Bank in the normal course of business. In accordance with our accounting policy and
Accounting Standard 29, we have reviewed and classified these items as possible obligation based on
legal opinion/judicial precedents/assessment by the Bank. No provision in excess of provisions already
made in the financial statements is considered necessary.
We are obligated under a number of capital contracts. Capital contracts are job orders of a capital nature,
which have been committed. Estimated amounts of contracts remaining to be executed on capital
account in domestic operations aggregated to ` 3.55 billion at March 31, 2013 compared to ` 4.33 billion
at March 31, 2012.
Capital resources
We actively manage our capital to meet regulatory norms and current and future business needs
considering the risks in our businesses, expectations of rating agencies, shareholders and investors and
the available options for raising capital. Our capital management framework is administered by the Finance
Group and the Risk Management Group under the supervision of the Board and the Risk Committee. The
capital adequacy position and assessment is reported to the Board and the Risk Committee periodically.
Regulatory capital
We are subject to the Basel II capital adequacy guidelines stipulated by RBI with effect from March 31,
2008. RBI guidelines on Basel II require us to maintain a minimum capital to risk-weighted assets ratio of
9.0% and a minimum Tier-1 capital adequacy ratio of 6.0% on an ongoing basis. Under Pillar 1 of the RBI
guidelines on Basel II, we follow the Standardised approach for measurement of credit and market risks
and Basic Indicator approach for measurement of operational risk.
Annual Report 2012-2013 65
Management’s Discussion & Analysis
The following table sets forth, at the dates indicated, the capital adequacy ratios computed in accordance
with the RBI guidelines on Basel II.
Tier-1 capital
Tier-2 capital
Total capital
Credit Risk — Risk Weighted Assets (RWA)
Market Risk — RWA
Operational Risk — RWA
Total RWA
Total capital adequacy ratio
Tier-1 capital adequacy ratio
Tier-2 capital adequacy ratio
` in billion, except percentages
At March 31, 2012 At March 31, 2013
` 505.18
232.95
738.13
3,468.74
268.66
248.46
` 565.62
262.74
828.36
3,894.82
254.68
269.94
` 3,985.86
` 4,419.44
18.52%
12.68%
5.84%
18.74%
12.80%
5.94%
Movement in our capital funds and risk weighted assets from March 31, 2012 to March 31, 2013
During fiscal 2013, capital funds (net of deductions) increased by ` 90.23 billion from ` 738.13 billion
at March 31, 2012 to ` 828.36 billion at March 31, 2013. The increase in the capital funds was due
to accretion to retained earnings, issuance of lower Tier-2 capital instruments, lower deduction from
capital funds on account of securitisation exposures and repatriation of capital from an overseas banking
subsidiary.
Credit risk RWA increased by ` 426.08 billion from ` 3,468.74 billion at March 31, 2012 to ` 3,894.82 billion
at March 31, 2013 primarily due to increase of ` 369.53 billion in RWA for on-balance sheet exposures,
offset, in part, by decrease of ` 56.55 billion in RWA for off-balance sheet credit exposures.
Market risk RWA decreased by ` 13.98 billion from ` 268.66 billion at March 31, 2012 to ` 254.68 billion
at March 31, 2013. The general market risk RWA decreased by ` 11.44 billion (capital charge of ` 1.03
billion).
The operational risk RWA at March 31, 2013 was ` 269.94 billion (capital charge of ` 24.29 billion). The
operational risk capital charge is computed based on 15% of average of previous three financial years’
gross income and is revised on an annual basis at June 30.
Internal assessment of capital
Our capital management framework includes a comprehensive internal capital adequacy assessment
process conducted annually, which determines the adequate level of capitalisation necessary to meet
regulatory norms and current and future business needs, including under stress scenarios. The internal
capital adequacy assessment process is formulated at both standalone bank level and the consolidated
group level. The internal capital adequacy assessment process encompasses capital planning for a four
year time horizon, identification and measurement of material risks and the relationship between risk
and capital.
The capital management framework is complemented by the risk management framework, which includes
a comprehensive assessment of material risks. Stress testing, which is a key aspect of the internal capital
adequacy assessment process and the risk management framework, provides an insight on the impact
66
of extreme but plausible scenarios on our risk profile and capital position. Based on our Board-approved
stress testing framework, we conduct stress tests on our various portfolios and assess the impact on our
capital ratios and the adequacy of capital buffers for current and future periods. We periodically assess and
refine our stress tests in an effort to ensure that the stress scenarios capture material risks as well as reflect
possible extreme market moves that could arise as a result of market conditions. The business and capital
plans and the stress testing results of the group entities are integrated into the internal capital adequacy
assessment process.
Based on the internal capital adequacy assessment process, we determine the level of capital that needs
to be maintained by considering the following in an integrated manner:
• strategic focus, business plan and growth objectives;
• regulatory capital requirements as per the RBI guidelines;
• assessment of material risks and impact of stress testing;
• perception of credit rating agencies, shareholders and investors;
• future strategy with regard to investments or divestments in subsidiaries; and
• evaluation of options to raise capital from domestic and overseas markets, as permitted by RBI from
time to time.
Basel III
In order to strengthen the resilience of the banking sector to potential future shocks, together with
ensuring adequate liquidity in the banking system, the Basel Committee on Banking Supervision issued
the Basel III proposals in fiscal 2010. Following a consultation phase on these proposals, the final set of
Basel III rules were issued in fiscal 2011. The Basel III rules on capital consist of measures on improving
the quality, consistency and transparency of capital, enhancing risk coverage, introducing a supplementary
leverage ratio, reducing pro-cyclicality and promoting countercyclical buffers, and addressing systemic
risk and interconnectedness.
During fiscal 2013, RBI issued the final guidelines on the Basel III capital regulations. The implementation
of this framework would commence from April 1, 2013 in a phased manner through till March 31, 2018.
In May 2012, RBI lowered the minimum leverage ratio requirement from 5.0% to 4.5%.
In January 2013, RBI issued the draft guidelines on the composition of capital disclosure requirements,
in addition to the existing Pillar 3 guidance. Along with this, RBI prescribed different treatments for
capitalisation of bank’s exposures to qualifying and non qualifying central counter-parties on account of
derivatives and securities financing transactions.
RBI, through its circular in March 2013, deferred the introduction of credit value adjustment risk capital
charge for over the counter derivatives. Credit value adjustment captures risk of mark-to-market losses
due to deterioration in the credit worthiness of counterparty. Credit value adjustment risk capital charges
would become effective from January 1, 2014.
We continue to monitor further developments and believe that our current robust capital adequacy
position and demonstrated track record of access to domestic and overseas markets for capital raising
will enable us to adapt to the Basel III framework.
Annual Report 2012-2013 67
Management’s Discussion & Analysis
ASSET QUALITY AND COMPOSITION
Loan concentration
We follow a policy of portfolio diversification and evaluate our total financing in a particular sector in light
of our forecasts of growth and profitability for that sector.
Our Credit Risk Management Group monitors all major sectors of the economy and specifically tracks
sectors in which we have loans outstanding. We seek to respond to any economic weakness in an
industrial segment by restricting new exposures to that segment and any growth in an industrial segment
by increasing new exposures to that segment, resulting in active portfolio management.
The following tables set forth, at the dates indicated, the composition of our gross advances (net of
write-offs).
` in billion, except percentages
March 31, 2012
March 31, 2013
Total
advances
% of total
advances
Total
advances
% of total
advances
Retail finance1
` 1,028.71
39.3%
` 1,124.11
37.7%
Road, ports, telecom, urban development
and other infrastructure
Services – non-finance
Power
Iron/steel and products
Services – finance
Crude petroleum/refining and
petrochemicals
Mining
Construction
Food and beverages
Cement
Electronics and engineering
Wholesale/retail trade
Shipping
Metal & products (excluding iron & steel)
Chemical and fertilizers
Other industries2
Total
181.66
192.65
141.14
121.59
151.25
70.68
84.02
57.48
65.71
39.75
55.80
46.29
42.35
48.05
34.26
259.37
6.9
7.4
5.4
4.6
5.8
2.7
3.2
2.2
2.5
1.5
2.1
1.8
1.6
1.8
1.3
9.9
216.91
203.52
186.06
161.88
159.62
88.64
80.73
70.51
69.52
66.64
66.27
55.75
45.10
44.05
37.10
7.3
6.8
6.2
5.4
5.4
3.0
2.7
2.4
2.3
2.2
2.2
1.9
1.5
1.5
1.2
307.75
10.3
` 2,620.76
100.0%
` 2,984.16
100.0%
1.
Includes home loans, commercial business loans, automobile loans, business banking, credit cards, personal
loans, rural loans, loans against securities and dealer financing portfolio.
2. Other industries primarily include developer financing portfolio, automobiles, manufacturing products (excluding
metal), textile, drugs and pharmaceuticals, gems and jewellery and FMCG.
3. From March 31, 2013, we have changed the classification of the domestic loan portfolio to better reflect the
nature of the underlying loans. Accordingly, our loan portfolio at March 31, 2012 is also reclassified.
68
The following table sets forth, at the dates indicated, the composition of our gross (net of write-offs)
outstanding retail finance portfolio.
Home loans
Commercial business
Automobile loans
Business banking
Credit cards
Personal loans
Loans against securities and others1
Total retail finance portfolio
` in billion, except percentages
March 31, 2012
March 31, 2013
Total retail
advances
` 489.40
180.70
94.71
56.52
45.96
29.52
131.90
` 1,028.71
% of
total retail
advances
47.6%
17.5
9.2
5.5
4.5
2.9
12.8
100.0%
Total retail
advances
` 578.63
151.25
115.85
43.85
36.39
31.75
166.39
` 1,124.11
% of
total retail
advances
51.5%
13.5
10.3
3.9
3.2
2.8
14.8
100.0%
1. Include dealer financing portfolio and rural loans.
2. From March 31, 2013, we have changed the classification of the domestic loan portfolio to better reflect the
nature of the underlying loans. Accordingly, our loan portfolio at March 31, 2012 is also reclassified.
There was a healthy growth in our organic retail loan portfolio during fiscal 2013. Our retail loan portfolio,
excluding buyouts and inter-bank participation certificates, grew by 25.6% during the year.
Directed lending
RBI requires banks to lend to certain sectors of the economy. Such directed lending comprises priority
sector lending and export credit.
RBI guideline on priority sector lending requires the banks to lend 40.0% of their adjusted net bank credit
(ANBC) to certain activities carried out by the specified borrowers. The definition of ANBC includes certain
investments and is computed with reference to the respective amounts at March 31 of the previous year.
Priority sector includes lending to agricultural sector, food and agri-based industries, small enterprises/
businesses, housing finance up to certain limits and lending to borrowers belonging to weaker sections.
Out of the 40.0%, banks are required to lend a minimum of 18.0% of their ANBC to the agriculture sector
and the balance to certain specified sectors. The banks are also required to lend 10.0% of their ANBC to
the weaker sections.
We are required to comply with the priority sector lending requirements prescribed by RBI from time to
time. The shortfall in the amount required to be lent to the priority sectors and weaker sections may be
required to be deposited with government sponsored Indian development banks like the National Bank
for Agriculture and Rural Development, the Small Industries Development Bank of India and the National
Housing Bank based on the allocations made by RBI. These deposits have a maturity of up to seven years
and carry interest rates lower than market rates. At March 31, 2013, our total investment in such bonds
was ` 201.98 billion.
At March 31, 2013, our priority sector lending was ` 674.88 billion, constituting about 87.5% of our
requirements. At that date, the qualifying agriculture loans were ` 191.86 billion constituting about 55.3%
of our requirements. Our advances to weaker sections were ` 48.63 billion constituting about 25.2% of
our requirements.
Annual Report 2012-2013 69
Management’s Discussion & Analysis
Classification of loans
We classify our assets as performing and non-performing in accordance with the RBI guidelines. Under
the RBI guidelines, an asset is classified as non-performing if any amount of interest or principal remains
overdue for more than 90 days, in respect of term loans. In respect of overdraft or cash credit, an asset
is classified as non-performing if the account remains out of order for a period of 90 days and in respect
of bills, if the account remains overdue for more than 90 days.
RBI has separate guidelines for restructured loans. A fully secured standard asset can be restructured by
re-schedulement of principal repayments and/or the interest element, but must be separately disclosed as
a restructured asset. The diminution in the fair value of the loan, if any, measured in present value terms,
is either written off or a provision is made to the extent of the diminution involved. Similar guidelines
apply to sub-standard loans.
The following table sets forth, at the dates indicated, information regarding the asset classification of our
gross non-performing assets (net of write-offs, interest suspense and derivative income reversals).
Non-performing assets
Sub-standard assets
Doubtful assets
Loss assets
Total non-performing assets1
March 31, 2012
March 31, 2013
` in billion
14.49
73.35
7.79
` 95.63
18.72
67.91
9.84
` 96.47
1.
Include advances, lease receivables and credit substitutes like debentures and bonds. Exclude preference shares.
The following table sets forth, at the dates indicated, information regarding our non-performing
assets (NPAs).
Year ended
Gross NPA1
` in billion, except percentages
Net NPA Net customer
assets
% of net NPA to net
customer assets2
March 31, 2011
March 31, 2012
March 31, 2013
` 101.14
` 95.63
` 96.47
` 24.58
` 18.94
` 22.34
` 2,628.16
` 3,059.84
` 3,517.62
0.94%
0.62%
0.64%
1. Net of write-offs, interest suspense and derivatives income reversal.
2.
3. All amounts have been rounded off to the nearest ` 10.0 million.
Include advances, lease receivables and credit substitutes like debentures and bonds. Exclude preference shares.
At March 31, 2013, the gross NPAs (net of write-offs, interest suspense and derivatives income reversal)
were ` 96.47 billion compared to ` 95.63 billion at March 31, 2012. Net NPAs were ` 22.34 billion at March
31, 2013 compared to ` 18.94 billion at March 31, 2012. The ratio of net NPAs to net customer assets
increased marginally from 0.62% at March 31, 2012 to 0.64% at March 31, 2013. During fiscal 2013, we
wrote-off NPAs, including retail NPAs, with an aggregate outstanding of ` 16.46 billion compared to ` 11.83
billion during fiscal 2012.
Our provision coverage ratio (i.e. total provisions made against NPAs as a percentage of gross NPAs) at
March 31, 2013 was 76.8%. At March 31, 2013, total general provision held against standard assets was
` 16.24 billion compared to ` 14.80 billion at March 31, 2012.
70
The following table sets forth, at March 31, 2012 and March 31, 2013, the composition of gross non-
performing assets by industry sector.
March 31, 2012
March 31, 2013
` in billion, except percentages
Retail finance1
Road, ports, telecom, urban development
and other infrastructure
Services – non-finance
Power
Iron/steel and products
Services – finance
Crude petroleum/refining and
petrochemicals
Mining
Construction
Food and beverages
Cement
Electronics and engineering
Wholesale/retail trade
Shipping
Amount
` 76.73
0.15
0.37
0.09
0.91
0.00
0.05
0.00
0.89
1.54
-
1.81
1.15
0.45
Metal & products (excluding iron & steel)
1.11
Chemical and fertilizers
Other industries2
Total
1.52
8.86
%
Amount
%
80.2%
` 58.14
60.3%
0.2
0.4
0.1
0.9
0.0
0.0
0.0
0.9
1.6
-
1.9
1.2
0.5
1.2
1.6
9.3
0.14
8.77
0.09
1.99
0.00
0.04
0.20
2.24
1.94
-
2.59
4.16
0.38
1.06
1.33
13.40
0.1
9.1
0.1
2.1
0.0
0.0
0.2
2.3
2.0
-
2.7
4.3
0.4
1.1
1.4
13.9
` 95.63
100.0%
` 96.47
100.0%
1.
Includes home loans, commercial business loans, automobile loans, business banking, credit cards, personal
loans, rural loans, loans against securities and dealer financing portfolio.
2. Other industries primarily include developer financing portfolio, automobiles, manufacturing products (excluding
metal), textile, drugs and pharmaceuticals, gems and jewellery and FMCG.
3. From March 31, 2013, we have changed the classification of the domestic loan portfolio to better reflect the
nature of the underlying loans. Accordingly, our loan portfolio at March 31, 2012 has also been reclassified.
At March 31, 2013, the net non-performing loans in the retail portfolio were 0.72% of net retail loans as
compared with 1.22% at March 31, 2012. The decrease in the ratio was primarily on account of sharp
decline in accretion to retail NPAs.
Our aggregate investments in security receipts issued by asset reconstruction companies were ` 11.47
billion at March 31, 2013 as compared to ` 18.32 billion at March 31, 2012.
RBI has issued guidelines revising the format of disclosures on restructured loans. The revised format
requires banks to disclose the movement of the borrower level outstanding of borrowers whose
loans were restructured. During fiscal 2013, standard loans of ` 16.78 billion of 23 borrowers were
Annual Report 2012-2013 71
Management’s Discussion & Analysis
restructured as compared to ` 35.95 billion of 28 borrowers during fiscal 2012. Net principal outstanding
of standard restructured borrowers increased from ` 45.54 billion at March 31, 2012 to ` 53.15 billion at
March 31, 2013.
Segment information
RBI in its guidelines on “segmental reporting” has stipulated specified business segments and their
definitions, for the purposes of public disclosures on business information for banks in India.
The standalone segmental report for fiscal 2013, based on the segments identified and defined by RBI,
has been presented as follows:
• Retail Banking includes exposures of the Bank, which satisfy the four qualifying criteria of ‘regulatory
retail portfolio’ as stipulated by the RBI guidelines on the Basel II framework.
• Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies,
by the Bank which are not included in the Retail Banking segment, as per the RBI guidelines for the
Bank.
• Treasury includes the entire investment portfolio of the Bank.
• Other Banking includes leasing operations and other items not attributable to any particular business
segment of the Bank.
Framework for transfer pricing
All liabilities are transfer priced to a central treasury unit, which pools all funds and lends to the business
units at appropriate rates based on the relevant maturity of assets being funded after adjusting for
regulatory reserve requirement and directed lending requirements.
Retail banking segment
The profit before tax of the retail banking segment increased from ` 5.50 billion in fiscal 2012 to ` 9.55
billion in fiscal 2013 primarily due to write-back/lower provisions for loan losses in the retail asset portfolio
and increase in non-interest income offset, in part, by increase in non-interest expenses.
Net interest income increased by 10.3% from ` 38.15 billion in fiscal 2012 to ` 42.09 billion in fiscal 2013
primarily due to increase in average current account and savings account deposits of the retail banking
segment.
Non-interest income increased by 18.1% from ` 25.76 billion in fiscal 2012 to ` 30.42 billion in fiscal 2013,
primarily due to higher level of foreign exchange and transaction banking fees, third party referral fees,
and fees from the credit card portfolio.
Non-interest expenses increased by 11.9% from ` 56.52 billion in fiscal 2012 to ` 63.22 billion in fiscal
2013, primarily due to increase in employee expenses, expansion in branch network offset, in part, by
reduction in collection expenses.
In fiscal 2013, there was write-back of ` 0.24 billion compared to provisions of ` 1.88 billion in fiscal 2012
primarily due to write-back/lower provisions for loan losses in the retail asset portfolio.
Wholesale banking segment
Profit before tax of the wholesale banking segment increased from ` 62.07 billion in fiscal 2012 to
` 66.19 billion in fiscal 2013 primarily due to increase in net interest income offset, in part, by increase in
provisions and decrease in non-interest income.
72
Net interest income increased by 38.7% from ` 49.37 billion in fiscal 2012 to ` 68.46 billion in fiscal 2013
primarily driven by loan growth in the wholesale banking segment. Non-interest income decreased by
6.8% from ` 41.01 billion in fiscal 2012 to ` 38.22 billion in fiscal 2013, primarily due to moderation in
lending linked fee income offset, in part, by increase in foreign exchange and transaction banking related
fees from corporate clients. Provisions were higher primarily due to higher non-performing loans and the
impact of restructuring of loans during the year.
Treasury segment
Profit before tax of the treasury segment increased from ` 20.81 billion in fiscal 2012 to ` 36.54 billion
in fiscal 2013 primarily due to increase in non-interest income offset, in part, by increase in non-interest
expenses. The non-interest income was higher primarily due to higher level of dividend income from
subsidiaries, realised gain on government securities portfolio and other fixed income positions and
foreign exchange trading gains.
Other banking segment
Profit before tax of other banking segment in fiscal 2013 was ` 1.69 billion compared to a loss of ` 0.35
billion in fiscal 2012 primarily due to higher interest on income-tax refunds.
CONSOLIDATED FINANCIALS AS PER INDIAN GAAP
The consolidated profit after tax including the results of operations of our subsidiaries and other
consolidating entities increased by 25.7% from ` 76.43 billion in fiscal 2012 to ` 96.04 billion in fiscal
2013 primarily due to increase in the profit of ICICI Bank and profit of ICICI Lombard General Insurance
Company Limited (ICICI General). In fiscal 2012, ICICI General had a loss of ` 4.16 billion due to the impact
of additional provision for Indian Motor Third Party Pool (the Pool) losses. The consolidated return on
average equity increased from 13.00% in fiscal 2012 to 14.66% in fiscal 2013.
Profit after tax of ICICI Life increased from ` 13.84 billion in fiscal 2012 to ` 14.96 billion in fiscal 2013 due
to increase in investment income and lower operating expenses as well as the continued income stream
from business sold in prior years. Investment income increased primarily due to increase in average
non-linked assets under management and higher yields on debt portfolio. The increase was offset, in
part, by increase in claims and benefits paid and commission expenses. New business annual premium
equivalent increased by 13.3% from ` 31.18 billion during fiscal 2012 to ` 35.32 billion during fiscal 2013.
ICICI General made profit after tax of ` 3.06 billion in fiscal 2013 compared to loss of ` 4.16 billion in fiscal
2012 primary due to the impact of additional provision of the Pool losses during fiscal 2012 and due to
higher premium income, investment income and commission income during fiscal 2013. In accordance
with Insurance Regulatory and Development Authority guidelines, ICICI General, together with all other
general insurance companies participated in the Pool, administered by the General Insurance Corporation
of India covering third party risks of commercial vehicles, from April 1, 2007. As per Insurance Regulatory
and Development Authority direction effective March 31, 2012, the Pool was dismantled on a clean cut
basis and general insurance companies were required to recognise the Pool liabilities as per loss ratios
estimated by GAD UK with the option to recognise the same over a three year period. ICICI General had
decided to recognise the additional liabilities of the Pool during fiscal 2012 and therefore, the loss of ICICI
General of ` 4.16 billion for fiscal 2012 included impact of additional Pool losses of ` 6.85 billion. During
fiscal 2013, the Appointed Actuary carried out re-assessment of liabilities relating to policies underwritten
by ICICI General for risks commencing from fiscal 2008 to fiscal 2012. Based on the re-assessment, ICICI
General has recognised additional provision of ` 1.02 billion for fiscal 2013.
Profit after tax of ICICI Bank Canada increased from ` 1.66 billion (CAD 34.4 million) in fiscal 2012 to
` 2.37 billion (CAD 43.6 million) in fiscal 2013 primarily due to increase in net interest income and lower
provisions. The increase in net interest income was due to increase in net interest margin.
Annual Report 2012-2013 73
Management’s Discussion & Analysis
Profit after tax of ICICI Bank UK PLC decreased from ` 1.22 billion (USD 25.4 million) in fiscal 2012 to
` 0.78 billion (USD 14.4 million) in fiscal 2013 primarily due to decrease in net interest income and higher
provisions offset, in part, by higher mark-to-market gains on derivatives in fiscal 2013 and decrease in
realised loss on sale of investments. The decrease in net interest income was on account of decline in
average volume of interest-earning assets.
Profit after tax of ICICI Bank Eurasia Limited Liability Company increased from ` 0.21 billion in fiscal 2012 to
` 0.33 billion in fiscal 2013.
Profit after tax of ICICI Securities Primary Dealership Limited increased from ` 0.86 billion in fiscal 2012 to
` 1.22 billion in fiscal 2013 due to increase in trading gains. Trading gains increased in fiscal 2013 on
account of higher trading opportunities as yield on 10-year government securities declined in fiscal 2013
compared to an increase during fiscal 2012.
Profit after tax of ICICI Securities Limited decreased from ` 0.77 billion in fiscal 2012 to ` 0.64 billion in
fiscal 2013 primarily due to increase in staff cost and administrative expenses offset, in part, by increase
in net interest income.
Profit after tax of ICICI Home Finance Company Limited decreased from ` 2.60 billion in fiscal 2012
to ` 2.20 billion in fiscal 2013 primarily due to decrease in net interest income offset, in part, by lower
provision on loans.
Profit after tax of ICICI Prudential Asset Management Company increased from ` 0.88 billion in fiscal 2012
to ` 1.10 billion in fiscal 2013 primarily due to increase in fee income on account of increase in average
assets under management.
Profit after tax of ICICI Venture Funds Management Company Limited decreased from ` 0.68 billion in
fiscal 2012 to ` 0.20 billion in fiscal 2013 primarily due to decrease in management fees and decrease in
distribution of income from venture capital funds.
Consolidated assets of the Bank and its subsidiaries and other consolidating entities increased from
` 6,192.87 billion at March 31, 2012 to ` 6,748.22 billion at March 31, 2013 primarily due to increase
in assets of ICICI Bank, ICICI Life, ICICI Bank Canada and ICICI Securities Primary Dealership Limited.
Consolidated advances of the Bank and its subsidiaries increased from ` 2,921.25 billion at March 31,
2012 to ` 3,299.74 billion at March 31, 2013.
The following table sets forth, for the periods indicated, the profit/(loss) of our principal subsidiaries.
Company
ICICI Prudential Life Insurance Company Limited
ICICI Lombard General Insurance Company Limited
ICICI Bank Canada
ICICI Bank UK PLC
ICICI Bank Eurasia Limited Liability Company
ICICI Securities Primary Dealership Limited
ICICI Securities Limited
ICICI Home Finance Company Limited
ICICI Prudential Asset Management Company Limited
ICICI Venture Funds Management Company Limited
74
Fiscal 2012
Fiscal 2013
` in billion
` 13.84
(4.16)
1.66
1.22
0.21
0.86
0.77
2.60
0.88
` 0.68
` 14.96
3.06
2.37
0.78
0.33
1.22
0.64
2.20
1.10
` 0.20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FY
2004
2005 2006 2007 2008 2009 2010 2011 2012 2013 FY
Profit After Tax
Dividend Per Share
Key Financial Indicators:
Last Ten Years
Profit After Tax
` in billion
83.25
64.65
51.51
37.58
40.25
41.58
31.10
16.37 20.05
25.40
90
80
70
60
50
40
30
20
10
0
3500
3000
2500
2000
1500
1000
500
0
Deposits
` in billion
Dividend Per Share
`
25
20
15
10
5
0
20.00
16.50
11.00 11.00
7.50
8.50
8.50
10.00
14.00
12.00
For fiscal 2013, represents proposed dividend.
Advances
` in billion
3500
3000
2500
2000
1500
1000
500
0
2,902.49
2,537.28
2,183.11
1,812.06
2,163.66
2,256.16
1,958.66
1,461.63
914.05
626.48
2,305.10
2,444.31
2,183.48
2,926.13
2,555.00
2,256.02
1,650.83
2,020.17
998.19
681.09
2004
2005 2006 2007 2008 2009 2010 2011 2012 2013 FY
2004
2005 2006 2007 2008 2009 2010 2011 2012 2013 FY
Deposits
Advances
At year–end fiscal
` in billion, except per share data
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
21.85
29.32
39.07
56.37
73.04
83.67
81.14
90.17
107.34
138.66
26.66
27.55
32.49
34.84
39.39
33.76
36.14
45.27
56.11
72.20
26.44
27.33
32.15
34.64
39.15
33.70
35.99
45.06
55.95
71.93
Net interest
income
Earnings per
share (Basic)
Earnings per
share (Diluted)
Total assets
1,252.29 1,676.59 2,513.89 3,446.58 3,997.95 3,793.01 3,634.00 4,062.34 4,890.69 5,367.95
Equity capital &
reserves
Total capital
adequacy ratio
80.1 125.50
222.06
243.13
464.71
495.33 516.18
550.91
604.05 667.06
10.4% 11.8% 13.4% 11.7% 14.0%1
15.5%1
19.4%1
19.5%1
18.5%1
18.7%1
1. Total capital adequacy ratio has been calculated as per Basel II framework.
Annual Report 2012-2013 75
financials
independent auditors’ report
To the Members of ICICI Bank Limited
Report on the Financial Statements
1. We have audited the attached Balance Sheet of ICICI Bank Limited (the ‘Bank’) as at 31 March 2013 and also the Statement of
Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other
explanatory information. Incorporated in the said financial statements are the returns of the Singapore, Bahrain, Hong Kong,
Dubai, Qatar, Sri Lanka and New York-USA branches of the Bank, audited by other auditors.
Management’s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Bank in accordance with accounting principles generally accepted in
India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (‘the Act’)
read with guidelines issued by the Reserve Bank of India insofar as they are applicable to the Bank and in conformity with
Form A and B (revised) of the Third Schedule to the Banking Regulation Act, 1949 as applicable. This responsibility includes
the design, implementation and maintenance of internal control 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.
Auditor’s Responsibility
3.
4.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the Bank’s preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
6.
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give
the information required by the Banking Regulation Act, 1949 and 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:
(a)
(b)
(c)
in the case of the Balance Sheet, of the state of affairs of the Bank as at 31 March 2013;
in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7.
The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provision of section 29 of the
Banking Regulation Act, 1949 read with section 211 of the Act.
8. We report that:
(a) We have 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;
In our opinion, the transactions of the Bank which have come to our notice have been within its powers;
(b)
(c) The financial accounting systems of the Bank are centralised and therefore, accounting returns for the purpose of preparing
financial statements are not required to be submitted by the branches; we have visited 98 branches for the purpose of our audit;
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Act.
9.
10. We further report that:
(a)
In our opinion, proper books of account as required by law have been kept by the Bank so far as appears from our
examination of those books;
(b) The Balance Sheet, Profit and Loss Account, and Cash Flow Statement dealt with by this Report are in agreement with the
books of account;
(c) On the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board
of Directors, none of the directors is disqualified as on 31 March 2013, from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
Other Matter
11. We did not audit the financial statements of Singapore, Bahrain, Hong Kong, Dubai, Qatar, Sri Lanka and New York-USA branches,
whose financial statements reflect total assets of Rs. 1,270,195 million as at 31 March 2013, the total revenue of Rs. 60,882 million
for the year ended 31 March 2013 and net cash flows amounting to Rs. 84,228 million for the year ended 31 March 2013. These
financial statements have been audited by other auditors, duly qualified to act as auditors in the country of incorporation of the
said branches, whose reports have been furnished to us, and our opinion is based solely on the report of other auditors.
For S.R. Batliboi & Co. LLP
Firm registration number: 301003E
Chartered Accountants
per Shrawan Jalan
Partner
Membership No.: 102102
Place: Mumbai
Date: April 26, 2013
F1
balance sheet
at March 31, 2013
Schedule
At
31.03.2013
(` in ‘000s)
At
31.03.2012
CAPITAL AND LIABILITIES
Capital ............................................................................................
Employees stock options outstanding .........................................
Reserves and surplus ....................................................................
Deposits .........................................................................................
Borrowings ....................................................................................
Other liabilities and provisions .....................................................
TOTAL CAPITAL AND LIABILITIES ..............................................
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 ...................................................................................
1
2
3
4
5
6
7
8
9
10
11
11,536,362
11,527,683
44,835
23,854
655,478,392
592,500,885
2,926,136,257
2,554,999,561
1,453,414,944
1,401,649,073
321,336,021
329,986,915
5,367,946,811
4,890,687,971
190,527,309
204,612,935
223,647,879
157,680,199
1,713,935,993
1,595,600,430
2,902,494,351
2,537,276,579
46,470,587
46,146,870
290,870,692
349,370,958
TOTAL ASSETS .............................................................................
5,367,946,811
4,890,687,971
Contingent liabilities ......................................................................
12
7,899,893,146
9,154,651,059
Bills for collection ..........................................................................
123,945,258
75,720,571
Significant accounting policies and notes to accounts ...............
17 & 18
The Schedules referred to above form an integral part of the Balance Sheet.
As per our Report of even date.
For and on behalf of the Board of Directors
FOR S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.:102102
Place : Mumbai
Date : April 26, 2013
F2
K. V. KAMATH
Chairman
SRIDAR IYENgAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
balance sheet
profit and loss account
for the year ended March 31, 2013
(` in ‘000s)
Schedule
Year ended
31.03.2013
Year ended
31.03.2012
I.
II.
III.
INCOME
Interest earned .......................................................................
Other income .........................................................................
TOTAL INCOME ....................................................................
EXPENDITURE
Interest expended .................................................................
Operating expenses ..............................................................
Provisions and contingencies (refer note 18.35)..................
TOTAL EXPENDITURE ..........................................................
PROFIT/(LOSS)
Net profit for the year ............................................................
Profit brought forward ...........................................................
TOTAL PROFIT/(LOSS) .........................................................
IV. APPROPRIATIONS/TRANSFERS
Transfer to Statutory Reserve ...............................................
Transfer to Reserve Fund ......................................................
Transfer to Capital Reserve ...................................................
Transfer to/(from) Investment Reserve Account ..................
Transfer to Revenue and other reserves ..............................
Transfer to Special Reserve ..................................................
Dividend (including corporate dividend tax) for the
previous year paid during the year ......................................
Proposed equity share dividend ...........................................
Proposed preference share dividend ...................................
Corporate dividend tax ........................................................
Balance carried over to balance sheet .................................
TOTAL ....................................................................................
Significant accounting policies and notes to accounts ................
Earnings per share (refer note 18.1)
Basic (`) .................................................................................
Diluted (`) ..............................................................................
Face value per share (`) ................................................................
13
14
15
16
17 & 18
400,755,969
83,457,012
484,212,981
262,091,848
90,128,837
48,737,569
400,958,254
83,254,727
70,542,323
153,797,050
20,820,000
27,775
330,000
—
—
7,600,000
2,491
23,072,271
35
2,921,604
99,022,874
153,797,050
72.20
71.93
10.00
335,426,522
75,027,598
410,454,120
228,084,964
78,504,433
39,212,151
345,801,548
64,652,572
50,181,837
114,834,409
16,170,000
10,665
380,000
—
3,154
6,500,000
4,284
19,020,400
35
2,203,548
70,542,323
114,834,409
56.11
55.95
10.00
The Schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report of even date.
For S.R. Batliboi & Co. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
Place : Mumbai
Date : April 26, 2013
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENgAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
F3
cash flow statement
for the year ended March 31, 2013
Year ended
31.03.2013
(` in ‘000s)
Year ended
31.03.2012
113,966,897
88,034,223
Cash flow from operating activities
Profit before taxes ...........................................................................................
Adjustments for :
Depreciation and amortisation .......................................................................
Net (appreciation)/depreciation on investments ............................................
Provision in respect of non-performing assets .............................................
Prudential provision for standard assets ........................................................
Provision for contingencies & others ..............................................................
Income from subsidiaries, joint ventures and consolidated entities ............
(Profit)/loss on sale of fixed assets .................................................................
Employees stock options grants ....................................................................
Adjustments for :
(Increase)/decrease in investments ................................................................
(Increase)/decrease in advances ....................................................................
Increase/(decrease) in deposits ......................................................................
(Increase)/decrease in other assets ................................................................
Increase/(decrease) in other liabilities and provisions ..................................
5,709,115
4,647,716
13,948,385
1,439,082
1,376,106
(9,416,200)
(352,510)
20,981
131,339,572
(22,717,062)
(380,239,011)
371,136,697
12,992,477
30,496,358
11,669,459
Refund/(payment) of direct taxes ...................................................................
Net cash flow from/(used in) operating activities .......................................
Cash flow from investing activities
Investments in subsidiaries and/or joint ventures (including application money)
Income from subsidiaries, joint ventures and consolidated entities ............
Purchase of fixed assets..................................................................................
Proceeds from sale of fixed assets .................................................................
(Purchase)/sale of held to maturity securities ................................................
Net cash used in investing activities ............................................................
Cash flow from financing activities
Proceeds from issue of share capital (including ESOPs) ...............................
Net proceeds/(repayment) of borrowings ......................................................
Dividend and dividend tax paid ......................................................................
Net cash generated from/(used in) financing activities ..............................
Effect of exchange fluctuation on translation reserve ................................
Net increase/(decrease) in cash and cash equivalents (A)+(B)+(C)+(D)
Cash and cash equivalents at beginning of the year1 ..................................
Cash and cash equivalents at end of the year1 ............................................
(A)
(31,988,940)
111,020,091
4,050,772
9,416,200
(5,883,595)
1,241,898
(103,140,846)
(94,315,571)
447,516
50,676,148
(21,226,474)
29,897,190
5,280,344
51,882,054
362,293,134
414,175,188
(B)
(C)
(D)
6,016,209
11,007,862
9,931,796
—
1,766,718
(7,625,631)
16,876
20,925
109,168,978
(127,636,008)
(388,801,703)
298,978,483
(34,417,248)
11,538,969
(240,337,507)
(21,211,450)
(152,379,979)
—
7,625,631
(4,530,919)
90,174
(125,986,553)
(122,801,667)
591,128
305,079,424
(18,152,914)
287,517, 638
9,056,310
21,392,302
340,900,832
362,293,134
Significant accounting policies and notes to accounts (refer schedule 17 & 18).
1. Refer item no. 15 in Schedule 17 Significant accounting policies.
The Schedules referred to above form an integral part of the Balance Sheet.
As per our Report of even date.
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
Place : Mumbai
Date : April 26, 2013
F4
K. V. KAMATH
Chairman
SRIDAR IYENgAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
schedules
forming part of the Balance Sheet
SCHEDULE 1 - CAPITAL
Authorised capital
(` in ‘000s)
At
31.03.2013
At
31.03.2012
1,275,000,000 equity shares of ` 10 each
(March 31, 2012: 1,275,000,000 equity shares of ` 10 each) ............................................
12,750,000
12,750,000
15,000,000 shares of ` 100 each
(March 31, 2012: 15,000,000 shares of ` 100 each)1 .........................................................
1,500,000
1,500,000
350 preference shares of ` 10 million each
(March 31, 2012: 350 preference shares of ` 10 million each)2 .......................................
3,500,000
3,500,000
Equity share capital
Issued, subscribed and paid-up capital
1,152,714,442 equity shares of ` 10 each
(March 31, 2012: 1,151,772,372 equity shares) ....................................................................
11,527,144
11,517,723
Add: 867,273 equity shares of ` 10 each
(March 31, 2012: 942,070 equity shares) issued pursuant to exercise
of employee stock options .................................................................................................
Less: Calls unpaid ..............................................................................................................
Add: 111,603 equity shares of ` 10 each forfeited
(March 31, 2012: 111,603 equity shares) ..............................................................................
8,673
9,421
11,535,817
11,527,144
(225)
770
(231)
770
TOTAL CAPITAL ..................................................................................................................
11,536,362
11,527,683
1.
2.
These shares will be of such class and with such rights, privileges, conditions or restrictions as may be determined by the Bank
in accordance with the Articles of Association of the Bank and subject to the legislative provisions in force for the time being in
that behalf.
Pursuant to RBI circular no. DBOD.BP.BC No.81/21.01.002/2009-10, the issued and paid-up preference shares are grouped under
Schedule 4 - “Borrowings”.
F5
schedules
forming part of the Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
SCHEDULE 2 - RESERVES AND SURPLUS
I.
Statutory reserve
Opening balance .............................................................................................
Additions during the year ...............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
Special reserve
Opening balance .............................................................................................
Additions during the year .............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
II.
III. Securities premium
IV.
V.
Opening balance .............................................................................................
Additions during the year1 ..............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
Investment reserve account
Opening balance .............................................................................................
Additions during the year ...............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
Capital reserve
Opening balance .............................................................................................
Additions during the year2 ..............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
VI. Foreign currency translation reserve
Opening balance .............................................................................................
Additions during the year .............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
VII. Reserve fund
Opening balance .............................................................................................
Additions during the year3 ..............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
VIII. Revenue and other reserves
Opening balance .............................................................................................
Additions during the year4 ..............................................................................
Deductions during the year ............................................................................
Closing balance ...............................................................................................
IX. Balance in profit and loss account ..................................................................
TOTAL RESERVES AND SURPLUS ........................................................................
89,916,519
20,820,000
—
110,736,519
38,190,000
7,600,000
—
45,790,000
313,591,445
438,837
—
314,030,282
—
—
—
—
21,842,500
330,000
—
22,172,500
8,545,620
5,280,344
—
13,825,964
21,944
27,775
—
49,719
49,850,534
—
—
49,850,534
99,022,874
73,746,519
16,170,000
—
89,916,519
31,690,000
6,500,000
—
38,190,000
313,009,799
581,646
—
313,591,445
—
—
—
—
21,462,500
380,000
—
21,842,500
(510,690)
9,056,310
—
8,545,620
11,279
10,665
—
21,944
49,797,000
53,534
—
49,850,534
70,542,323
655,478,392
592,500,885
1.
2.
3.
Includes ` 435.1 million (March 31, 2012: ` 471.9 million) on exercise of employee stock options.
Includes appropriations made for profit on sale of investments in held-to-maturity category, net of taxes and transfer to Statutory
Reserve and profit on sale of land and buildings, net of taxes and transfer to Statutory Reserve.
Includes appropriations made to Reserve Fund and Investment Fund Account in accordance with regulations applicable to Sri Lanka
branch.
4. At March 31, 2012 includes:
a) ` 50.4 million transferred in terms of RBI circular no. DBOD.No.BP.BC.26/21.04.048/2008-2009 dated July 30, 2008, on Agricultural
Debt Waiver and Debt Relief Scheme, 2008.
b) Outstanding unreconciled credit balance of individual value less than US$ 2,500 or equivalent lying in nostro accounts appropriated
in terms of RBI circular no. DBOD.BP.BC.No. 133/21.04.018/2008-09 dated May 11, 2009.
F6
schedules
forming part of the Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
SCHEDULE 3 - DEPOSITS
A.
I. Demand deposits
From banks ...................................................................................................
i)
ii) From others ...................................................................................................
II. Savings bank deposits .........................................................................................
III. Term deposits
20,385,877
348,869,273
856,507,376
19,678,455
330,052,077
760,463,132
From banks ...................................................................................................
i)
ii) From others ...................................................................................................
TOTAL DEPOSITS ..............................................................................................................
117,888,455
1,582,485,276
2,926,136,257
98,704,681
1,346,101,216
2,554,999,561
B.
I. Deposits of branches in India ..............................................................................
II. Deposits of branches outside India .....................................................................
TOTAL DEPOSITS ..............................................................................................................
2,750,258,700
175,877,557
2,926,136,257
2,423,717,728
131,281,833
2,554,999,561
SCHEDULE 4 - BORROWINGS
Borrowings in India
I.
i) Reserve Bank of India ..........................................................................................
ii) Other banks ..........................................................................................................
iii) Other institutions and agencies
a) government of India .....................................................................................
b) Financial institutions .....................................................................................
iv) Borrowings in the form of bonds and debentures
(excluding subordinated debt) ............................................................................
v) Application money-bonds ...................................................................................
vi) Capital instruments
a)
Innovative Perpetual Debt Instruments (IPDI)
(qualifying as Tier l capital)...........................................................................
b) Hybrid debt capital instruments issued as bonds/debentures
156,250,000
18,714,125
170,550,000
18,815,625
—
60,590,413
15,517,800
—
52,813
45,750,069
4,770,338
—
13,010,000
13,010,000
(qualifying as upper Tier II capital) ...............................................................
98,174,210
98,181,421
c) Redeemable Non-Cumulative Preference Shares (RNCPS)
(350 RNCPS of ` 10 million each issued to preference share
holders of erstwhile ICICI Limited on amalgamation,
redeemable at par on April 20, 2018) ..........................................................
d) Unsecured redeemable debentures/bonds
3,500,000
3,500,000
(subordinated debt included in Tier II capital) .............................................
TOTAL BORROWINGS IN INDIA .......................................................................................
218,168,041
583,924,589
201,923,361
556,553,627
II.
Borrowings outside India
i) Capital instruments
a)
Innovative Perpetual Debt Instruments (IPDI)
(qualifying as Tier l capital)...........................................................................
b) Hybrid debt capital instruments issued as bonds/debentures
18,413,008
17,244,895
(qualifying as upper Tier II capital) ...............................................................
ii) Bonds and notes ..................................................................................................
iii) Other borrowings1................................................................................................
TOTAL BORROWINGS OUTSIDE INDIA ...........................................................................
TOTAL BORROWINGS .......................................................................................................
48,856,500
306,197,996
496,022,851
869,490,355
1,453,414,944
45,787,500
342,580,657
439,482,394
845,095,446
1,401,649,073
1.
Includes borrowings guaranteed by government of India for the equivalent of ` 15,815.0 million (March 31, 2012: ` 16,538.1
million).
2. Secured borrowings in I and II above amount to Nil (March 31, 2012: Nil) except borrowings of ` 150,003.7 million (March 31, 2012:
` 169,667.4 million) under Collateralised Borrowing and Lending Obligation, market repurchase transactions with banks and financial
institutions and transactions under Liquidity Adjustment Facility with RBI.
F7
schedules
forming part of the Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I.
II.
Bills payable ................................................................................................................
39,160,376
35,556,356
Inter-office adjustments (net) .....................................................................................
1,347,187
3,076,441
III.
Interest accrued ..........................................................................................................
29,178,174
30,693,392
IV. Sundry creditors .........................................................................................................
62,336,969
34,537,725
V.
Provision for standard assets.....................................................................................
16,235,086
14,796,004
VI. Others1,2 ......................................................................................................................
173,078,229
211,326,997
TOTAL OTHER LIABILITIES AND PROVISIONS ...............................................................
321,336,021
329,986,915
1.
2.
Includes:
a) Proposed dividend amounting to ` 23,072.3 million. (March 31, 2012: ` 19,020.4 million).
b) Corporate dividend tax payable amounting to ` 2,921.6 million. (March 31, 2012: ` 2,203.5 million).
The Bank has presented the mark-to-market (MTM) gain or loss on forex and derivative transactions on gross basis. Accordingly, the
gross negative MTM amounting to ` 108,263.2 million has been included in Other liabilities. Consequent to the change, Other liabilities
have increased by ` 154,217.1 million at March 31, 2012.
SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I.
II.
Cash in hand (including foreign currency notes) ......................................................
46,774,823
46,696,165
Balances with Reserve Bank of India in current accounts ........................................
143,752,486
157,916,770
TOTAL CASH AND BALANCES WITH RESERVE BANK OF INDIA ................................
190,527,309
204,612,935
SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
I.
In India
i) Balances with banks
a)
In current accounts .......................................................................................
3,462,734
2,828,505
b)
In other deposit accounts .............................................................................
36,008,368
36,822,361
ii) Money at call and short notice
a) With banks ....................................................................................................
53,000,000
b) With other institutions ..................................................................................
—
5,087,500
4,568,688
TOTAL ...............................................................................................................................
92,471,102
49,307,054
II. Outside India
i)
In current accounts ..............................................................................................
19,249,648
23,470,339
ii)
In other deposit accounts ....................................................................................
87,128,213
35,029,254
iii) Money at call and short notice ............................................................................
24,798,916
49,873,552
TOTAL ...............................................................................................................................
131,176,777
108,373,145
TOTAL BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE .........
223,647,879
157,680,199
F8
schedules
forming part of the Balance Sheet (Contd.)
(` in ‘000s)
SCHEDULE 8 - INVESTMENTS
I.
Investments in India [net of provisions]
i) government securities ........................................................................................
ii) Other approved securities ...................................................................................
iii) Shares (includes equity and preference shares) ................................................
iv) Debentures and bonds ........................................................................................
v) Subsidiaries and/or joint ventures ......................................................................
vi) Others (commercial paper, mutual fund units, pass through certificates,
security receipts, certificate of deposits, Rural Infrastructure Development
Fund deposits and other related investments) ...................................................
At
31.03.2013
At
31.03.2012
923,762,915
—
25,050,852
174,775,171
65,482,766
869,480,205
4,250
22,922,636
195,135,236
64,796,927
447,127,306
361,872,334
TOTAL INVESTMENTS IN INDIA ......................................................................................
1,636,199,010
1,514,211,588
II.
Investments outside India [net of provisions]
i) government securities ........................................................................................
ii) Subsidiaries and/or joint ventures abroad
(includes equity and preference shares) ............................................................
iii) Others (equity shares, bonds and certificate of deposits) .................................
TOTAL INVESTMENTS OUTSIDE INDIA ..........................................................................
6,574,742
4,399,569
62,475,493
8,686,748
77,736,983
66,864,257
10,125,016
81,388,842
TOTAL INVESTMENTS ......................................................................................................
1,713,935,993
1,595,600,430
B.
A.
Investments in India
gross value of investments .......................................................................................
Less: Aggregate of provision/depreciation/(appreciation) .......................................
Net investments..........................................................................................................
Investments outside India
gross value of investments .......................................................................................
Less: Aggregate of provision/depreciation/(appreciation) .......................................
Net investments..........................................................................................................
TOTAL INVESTMENTS ......................................................................................................
SCHEDULE 9 - ADVANCES [net of provisions]
A.
i) Bills purchased and discounted ..........................................................................
ii) Cash credits, overdrafts and loans repayable on demand ................................
iii) Term loans ............................................................................................................
TOTAL ADVANCES ............................................................................................................
i) Secured by tangible assets (includes advances against book debts) ...............
B.
ii) Covered by bank/government guarantees .........................................................
iii) Unsecured ............................................................................................................
TOTAL ADVANCES ............................................................................................................
C.
I. Advances in India
i) Priority sector ................................................................................................
ii) Public sector ..................................................................................................
iii) Banks .............................................................................................................
iv) Others ............................................................................................................
TOTAL ADVANCES IN INDIA ............................................................................................
II. Advances outside India
1,663,577,178
27,378,168
1,636,199,010
77,981,759
244,776
77,736,983
1,713,935,993
61,532,333
451,092,674
2,389,869,344
2,902,494,351
2,471,296,382
22,221,201
408,976,768
2,902,494,351
597,940,480
13,438,496
187,857
1,557,357,190
2,168,924,023
1,539,777,243
25,565,655
1,514,211,588
81,826,347
437,505
81,388,842
1,595,600,430
48,693,815
334,851,948
2,153,730,816
2,537,276,579
2,138,141,465
13,869,020
385,266,094
2,537,276,579
592,856,433
11,968,345
154,618
1,238,268,015
1,843,247,411
i) Due from banks ............................................................................................
ii) Due from others
18,107,068
22,280,480
a) Bills purchased and discounted .............................................................
b) Syndicated and term loans .....................................................................
c) Others ......................................................................................................
TOTAL ADVANCES OUTSIDE INDIA ................................................................................
TOTAL ADVANCES ............................................................................................................
17,437,061
680,864,553
17,161,646
733,570,328
2,902,494,351
5,098,400
647,151,172
19,499,116
694,029,168
2,537,276,579
F9
schedules
forming part of the Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
38,625,073
1,124,842
(927,636)
(7,543,258)
31,279,021
38,319,238
4,521,473
(2,526,697)
(27,470,762)
12,843,252
17,299,544
—
—
(14,951,230)
2,348,314
46,470,587
SCHEDULE 10 - FIXED ASSETS
I.
Premises
At cost at March 31 of preceding year .....................................................................
Additions during the year ..........................................................................................
Deductions during the year .......................................................................................
Depreciation to date1 ..................................................................................................
Net block .....................................................................................................................
II. Other fixed assets (including furniture and fixtures)
At cost at March 31 of preceding year .....................................................................
Additions during the year ..........................................................................................
Deductions during the year .......................................................................................
Depreciation to date2 ..................................................................................................
Net block ....................................................................................................................
III. Assets given on lease
At cost at March 31 of preceding year .....................................................................
Additions during the year ..........................................................................................
Deductions during the year .......................................................................................
Depreciation to date, accumulated lease adjustment and provisions3 ....................
Net block .....................................................................................................................
TOTAL FIXED ASSETS .......................................................................................................
1.
2.
3.
Includes depreciation charge amounting to ` 1,137.0 million (March 31, 2012: ` 1,230.9 million).
Includes depreciation charge amounting to ` 3,436.4 million (March 31, 2012: ` 3,591.8 million).
Includes depreciation charge/lease adjustment amounting to ` 328.2 million (March 31, 2012: ` 422.6 million).
SCHEDULE 11 - OTHER ASSETS
Inter-office adjustments (net) .....................................................................................
I.
II.
Interest accrued ..........................................................................................................
III. Tax paid in advance/tax deducted at source (net) ....................................................
IV.
Stationery and stamps ...............................................................................................
Non-banking assets acquired in satisfaction of claims1 ...........................................
V.
VI. Advances for capital assets ......................................................................................
VII. Deposits ......................................................................................................................
VIII. Deferred tax asset (net) ..............................................................................................
IX. Others2 ........................................................................................................................
TOTAL OTHER ASSETS ......................................................................................................
—
44,902,010
36,098,478
10,045
576,833
1,154,106
10,868,027
24,793,018
172,468,175
290,870,692
37,997,195
690,890
(63,012)
(6,916,047)
31,709,026
35,777,378
2,997,878
(456,018)
(26,275,723)
12,043,515
17,300,087
—
(543)
(14,905,215)
2,394,329
46,146,870
—
42,175,150
34,161,502
10,308
600,575
1,344,889
10,669,329
25,453,167
234,956,038
349,370,958
1.
2.
Includes certain non-banking assets acquired in satisfaction of claims which are in the process of being transferred in the Bank’s name.
The Bank has presented the mark-to-market (MTM) gain or loss on forex and derivative transactions on gross basis. Accordingly, the
gross positive MTM amounting to ` 113,239.6 million has been included in Other assets. Consequent to the change, Other assets have
increased by ` 154,217.1 million at March 31, 2012.
SCHEDULE 12 - CONTINGENT LIABILITIES
I.
II.
III.
IV. guarantees given on behalf of constituents
Claims against the Bank not acknowledged as debts ..............................................
Liability for partly paid investments ..........................................................................
Liability on account of outstanding forward exchange contracts1 ...........................
a) In India ....................................................................................................................
b) Outside India ..........................................................................................................
Acceptances, endorsements and other obligations .................................................
V.
VI. Currency swaps1 .........................................................................................................
Interest rate swaps, currency options and interest rate futures1 .............................
VII.
VIII. Other items for which the Bank is contingently liable ..............................................
TOTAL CONTINGENT LIABILITIES ...................................................................................
1. Represents notional amount.
36,373,051
128,050
2,838,503,955
29,310,352
128,050
3,560,050,874
717,848,338
226,321,011
621,180,725
565,474,647
2,855,937,706
38,125,663
7,899,893,146
720,946,196
234,068,666
568,856,614
616,403,680
3,362,012,187
62,874,440
9,154,651,059
F10
schedules
forming part of the Profit and Loss Account
(` in ‘000s)
Year ended
31.03.2013
Year ended
31.03.2012
SCHEDULE 13 - INTEREST EARNED
I.
Interest/discount on advances/bills ...........................................................................
273,411,095
221,298,923
Income on investments ..............................................................................................
110,092,680
Interest on balances with Reserve Bank of India and other inter-bank funds .........
IV. Others1,2 ......................................................................................................................
5,429,767
11,822,427
96,840,240
4,911,364
12,375,995
TOTAL INTEREST EARNED ...............................................................................................
400,755,969
335,426,522
1.
2.
Includes interest on income tax refunds amounting to ` 2,575.5 million (March 31, 2012: ` 801.1 million).
Includes interest and amortisation of premium on non-trading interest rate swaps and foreign currency swaps.
SCHEDULE 14 - OTHER INCOME
I.
II.
Commission, exchange and brokerage ....................................................................
Profit/(loss) on sale of investments (net) ...................................................................
54,616,556
5,651,026
III. Profit/(loss) on revaluation of investments (net) .......................................................
(1,286,689)
Profit/(loss) on sale of land, buildings and other assets (net)1 .................................
352,510
54,351,128
3,313,505
(4,053,393)
(16,876)
Profit/(loss) on exchange transactions (net) ..............................................................
13,330,644
12,589,981
VI.
Income earned by way of dividends, etc. from subsidiary companies and/or joint
ventures abroad/in India ............................................................................................
VII. Miscellaneous income (including lease income) .....................................................
9,117,637
1,675,328
7,364,045
1,479,208
TOTAL OTHER INCOME ....................................................................................................
83,457,012
75,027,598
1.
Includes profit/(loss) on sale of assets given on lease.
SCHEDULE 15 - INTEREST EXPENDED
Interest on deposits ....................................................................................................
168,889,489
143,040,614
Interest on Reserve Bank of India/inter-bank borrowings ........................................
III. Others (including interest on borrowings of erstwhile ICICI Limited) .....................
20,865,555
72,336,804
14,692,117
70,352,233
TOTAL INTEREST EXPENDED ...........................................................................................
262,091,848
228,084,964
SCHEDULE 16 - OPERATING EXPENSES
Payments to and provisions for employees .............................................................
38,932,853
35,152,766
II.
III.
IV.
V.
I.
II.
I.
II.
III.
Rent, taxes and lighting1 ...........................................................................................
Printing and stationery ..............................................................................................
IV. Advertisement and publicity .....................................................................................
V.
Depreciation on Bank's property .............................................................................
VI. Depreciation (including lease equalisation) on leased assets ................................
VII. Directors' fees, allowances and expenses................................................................
VIII. Auditors' fees and expenses .....................................................................................
IX.
X.
Law charges ...............................................................................................................
Postages, telegrams, telephones, etc. ......................................................................
XI. Repairs and maintenance ........................................................................................
XII.
Insurance ...................................................................................................................
XIII. Direct marketing agency expenses .........................................................................
XIV. Other expenditure ....................................................................................................
TOTAL OPERATING EXPENSES .......................................................................................
1.
Includes lease payment of ` 5,065.8 million (March 31, 2012: ` 4,478.1 million).
7,368,037
1,175,023
1,891,608
4,573,380
328,220
3,985
29,288
405,906
2,188,627
6,661,542
2,243,842
3,464,848
6,756,357
1,000,743
1,324,783
4,822,742
422,579
4,154
25,142
374,653
1,902,982
5,629,537
2,234,700
1,604,439
20,861,678
90,128,837
17,248,856
78,504,433
F11
schedules
forming part of the Accounts
SCHEDULE 17
SIGNIFICANT ACCOUNTING POLICIES
OVERVIEW
ICICI Bank Limited (ICICI Bank or the Bank), incorporated in Vadodara, India is a publicly held banking company engaged in
providing a wide range of banking and financial services including commercial banking and treasury operations. ICICI Bank is
a banking company governed by the Banking Regulation Act, 1949. The Bank also has overseas branches in Bahrain, Dubai,
Hong Kong, Qatar, Sri Lanka, Singapore, United States of America and Offshore Banking Unit.
Basis of preparation
The financial statements have been prepared in accordance with requirements prescribed under the Third Schedule of the
Banking Regulation Act, 1949. The accounting and reporting policies of ICICI Bank used in the preparation of these financial
statements conform to generally Accepted Accounting Principles in India (Indian gAAP), the guidelines issued by Reserve
Bank of India (RBI) from time to time, the Accounting Standards (AS) issued by the Institute of Chartered Accountants of
India (ICAI) and notified under the Companies (Accounting Standards) Rules, 2006 to the extent applicable and practices
generally prevalent in the banking industry in India. The Bank follows the historical cost convention and the accrual method
of accounting, except in the case of interest income on non-performing assets (NPAs) where it is recognised upon realisation.
The preparation of financial statements requires the management to make estimates and assumptions that are considered in
the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management believes that the estimates used in the preparation
of the financial statements are prudent and reasonable. Future results could differ from these estimates.
SIGNIFICANT ACCOUNTING POLICIES
1.
Revenue recognition
a)
b)
Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing assets
(NPAs) where it is recognised upon realisation, as per the income recognition and asset classification norms of RBI.
Income from leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding
on the lease over the primary lease period. Finance leases entered into prior to April 1, 2001 have been accounted
for as per the guidance Note on Accounting for Leases issued by ICAI. The finance leases entered post April 1, 2001
have been accounted for as per Accounting Standard 19 - Leases issued by ICAI.
Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis.
c)
d) Dividend income is accounted on an accrual basis when the right to receive the dividend is established.
e) Loan processing fee is accounted for upfront when it becomes due.
f) Project appraisal/structuring fee is accounted for on the completion of the agreed service.
g) Arranger fee is accounted for as income when a significant portion of the arrangement/syndication is completed.
h) Commission received on guarantees issued is amortised on a straight-line basis over the period of the guarantee.
i) All other fees are accounted for as and when they become due.
j) Net income arising from sell-down/securitisation of loan assets prior to February 1, 2006 has been recognised
upfront as interest income. With effect from February 1, 2006, net income arising from securitisation of loan assets
is amortised over the life of securities issued or to be issued by the special purpose vehicle/special purpose entity
to which the assets are sold. Net income arising from sale of loan assets through direct assignment with recourse
obligation is amortised over the life of underlying assets sold and net income from sale of loan assets through direct
assignment, without any recourse obligation, is recognised at the time of sale. Net loss arising on account of the
sell-down/securitisation and direct assignment of loan assets is recognised at the time of sale.
k) The Bank deals in bullion business on a consignment basis. The difference between price recovered from customers
and cost of bullion is accounted for at the time of sales to the customers. The Bank also deals in bullion on a
borrowing and lending basis and the interest paid/received is accounted on accrual basis.
Investments
Investments are accounted for in accordance with the extant RBI guidelines on investment classification and valuation
as given below.
a) All investments are classified into ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Reclassifications, if
any, in any category are accounted for as per RBI guidelines. Under each classification, the investments are further
categorised as (a) government securities, (b) other approved securities, (c) shares, (d) bonds and debentures, (e)
subsidiaries and joint ventures and (f) others.
‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over
the face value. Any premium over the face value of fixed rate and floating rate securities acquired is amortised over
the remaining period to maturity on a constant yield basis and straight line basis respectively.
‘Available for Sale’ and ‘Held for Trading’ securities are valued periodically as per RBI guidelines. Any premium
over the face value of fixed rate and floating rate investments in government securities, classified as ‘Available for
b)
c)
2.
F12
schedules
forming part of the Accounts (Contd.)
Sale’, is amortised over the remaining period to maturity on constant yield basis and straight line basis respectively.
Quoted investments are valued based on the trades/quotes on the recognised stock exchanges, subsidiary general
ledger account transactions, price list of RBI or prices declared by Primary Dealers Association of India jointly with
Fixed Income Money Market and Derivatives Association (FIMMDA), periodically.
The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (SLR)
securities included in the ‘Available for Sale’ and ‘Held for Trading’ categories is as per the rates published by
FIMMDA. The valuation of other unquoted fixed income securities wherever linked to the Yield-to-Maturity (YTM)
rates, is computed with a mark-up (reflecting associated credit risk) over the YTM rates for government securities
published by FIMMDA.
Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available, or at ` 1, as per RBI
guidelines.
Securities are valued scrip-wise and depreciation/appreciation is aggregated for each category. Net appreciation
in each category, if any, being unrealised, is ignored, while net depreciation is provided for. Non-performing
investments are identified based on the RBI guidelines.
d) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged
to the profit and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO) method.
e) Equity investments in subsidiaries/joint ventures are categorised as ‘Held to Maturity’ in accordance with RBI
guidelines. The Bank assesses these investments for any permanent diminution in value and appropriate provisions
are made.
f) Profit/loss on sale of investments in the ‘Held to Maturity’ category is recognised in the profit and loss account and
profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to Capital Reserve.
Profit/loss on sale of investments in ‘Available for Sale’ and ‘Held for Trading’ categories is recognised in the profit
and loss account.
g) Market repurchase and reverse repurchase transactions are accounted for as borrowing and lending transactions
respectively in accordance with the extant RBI guidelines. The transactions with RBI under Liquidity Adjustment
Facility (LAF) are accounted for as borrowing and lending transactions.
h) Broken period interest (the amount of interest from the previous interest payment date till the date of purchase/sale
of instruments) on debt instruments is treated as a revenue item.
i) At the end of each reporting period, security receipts issued by the asset reconstruction companies are valued in
accordance with the guidelines applicable to such instruments, prescribed by RBI from time to time. Accordingly,
in cases where the cash flows from security receipts issued by the asset reconstruction companies are limited
to the actual realisation of the financial assets assigned to the instruments in the concerned scheme, the Bank
reckons the net asset value obtained from the asset reconstruction company from time to time, for valuation of such
investments at each reporting period end.
j) The Bank follows trade date method of accounting for purchase and sale of investments, except for government of
India and state government securities where settlement date method of accounting is followed in accordance with
RBI guidelines.
Provision/write-offs on loans and other credit facilities
a)
All credit exposures, including loans and advances at the overseas branches and overdues arising from crystallised
derivative contracts, are classified as per RBI guidelines, into performing and NPAs. Loans and advances held at
the overseas branches that are identified as impaired as per host country regulations but which are standard as per
the extant RBI guidelines are identified as NPAs at borrower level. Further, NPAs are classified into sub-standard,
doubtful and loss assets based on the criteria stipulated by RBI.
In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets at rates
prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided/written-off as per the
extant RBI guidelines. For loans and advances booked in overseas branches, which are standard as per the extant
RBI guidelines but are classified as NPAs based on host country guidelines, provisions are made as per the host
country regulations. For loans and advances booked in overseas branches, which are NPAs as per the extant RBI
guidelines and as per host country guidelines, provisions are made at the higher of the provisions required under
RBI regulations and host country regulations. Provisions on homogeneous retail loans and advances, subject to
minimum provisioning requirements of RBI, are assessed at a borrower level, on the basis of the ageing of the loans
in the non-performing category.
The Bank holds specific provisions against non-performing loans and advances, general provision against performing
loans and advances and floating provision taken over from erstwhile Bank of Rajasthan upon amalgamation. The
assessment of incremental specific provisions is made after taking into consideration the existing specific provision
held. The specific provisions on retail loans and advances held by the Bank are higher than the minimum regulatory
requirements.
b) Provision on loans and advances restructured/rescheduled is made in accordance with the applicable RBI guidelines
on restructuring of loans and advances by Banks.
3.
F13
schedules
forming part of the Accounts (Contd.)
In respect of non-performing loans and advances accounts subjected to restructuring, the account is upgraded to
standard only after the specified period i.e. a period of one year after the date when first payment of interest or of
principal, whichever is earlier, falls due, subject to satisfactory performance of the account during the period.
c) Amounts recovered against debts written-off in earlier years and provisions no longer considered necessary in the
d)
e)
context of the current status of the borrower are recognised in the profit and loss account.
In addition to the specific provision on NPAs, the Bank maintains a general provision on performing loans and
advances at rates prescribed by RBI. For performing loans and advances in overseas branches, the general provision
is made at higher of host country regulations requirement and RBI requirement.
In addition to the provisions required to be held according to the asset classification status, provisions are held for
individual country exposures including indirect country risk (other than for home country exposure). The countries
are categorised into seven risk categories namely insignificant, low, moderate, high, very high, restricted and off-
credit and provisioning 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, provision is required to be held at 25% of the rates
applicable to exposures exceeding 180 days. The indirect exposures will be reckoned at 50% of the exposure. If the
country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no
provision is required on such country exposure.
4.
Transfer and servicing of assets
The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are
de-recognised and gains/losses are accounted for only if the Bank surrenders the rights to benefits specified in the
underlying securitised loan contract. Recourse and servicing obligations are accounted for net of provisions.
In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006, the Bank
accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium arising from
securitisation is amortised over the life of the securities issued or to be issued by the special purpose vehicle to which
the assets are sold. In the case of loans sold to an asset reconstruction company, the excess provision is not reversed
but is utilised to meet the shortfall/loss on account of sale of other financial assets to securitisation company (SC)/
reconstruction company (RC).
In accordance with the RBI guidelines dated May 7, 2012 for securitisation of standard assets, with effect from May 7,
2012, the Bank accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium
arising from securitisation is amortised over the life of the transaction based on the method prescribed by RBI guidelines.
5.
Fixed assets and depreciation
Premises and other fixed assets are carried at cost less accumulated depreciation. Cost includes freight, duties, taxes and
incidental expenses related to the acquisition and installation of the asset. Depreciation is charged over the estimated
useful life of a fixed asset on a straight-line basis. The rates of depreciation for fixed assets, which are not lower than the
rates prescribed in Schedule XIV of the Companies Act, 1956, are given below.
Asset
Premises owned by the Bank
Improvements to leasehold premises
ATMs
Plant and machinery like air conditioners, photo-copying
machines, etc.
Computers
Furniture and fixtures
Motor vehicles
Others (including Software and system development expenses)
Depreciation Rate
1.63%
1.63% or over the lease period, whichever is higher
12.50%
10.00%
33.33%
15.00%
20.00%
25.00%
a. Depreciation on leased assets and leasehold improvements is recognised on a straight-line basis using rates
determined with reference to the primary period of lease or rates specified in Schedule XIV to the Companies Act,
1956, whichever is higher.
b. Assets purchased/sold during the year are depreciated on a pro-rata basis for the actual number of days the asset
has been put to use.
Items costing upto ` 5,000/- are depreciated fully over a period of 12 months from the date of purchase.
c.
d. Assets at residences of Bank’s employees are depreciated at 20% per annum.
e.
In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with
reference to revised assets values.
6.
Transactions involving foreign exchange
Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing
on the date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are
F14
schedules
forming part of the Accounts (Contd.)
7.
8.
9.
translated at daily closing rates, and income and expenditure items of non-integral foreign operations (foreign branches
and offshore banking units) are translated at quarterly average closing rates.
Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing
exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) at the balance sheet date and the
resulting profits/losses are included in the profit and loss account.
Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated
at closing exchange rates notified by FEDAI at the balance sheet date and the resulting profits/losses from exchange
differences are accumulated in the foreign currency translation reserve until the disposal of the net investment in the
non-integral foreign operations.
The premium or discount arising on inception of forward exchange contracts that are entered into to establish the
amount of reporting currency required or available at the settlement date of a transaction is amortised over the life of the
contract. All other outstanding forward exchange contracts are revalued based on the exchange rates notified by FEDAI
for specified maturities and at interpolated rates for contracts of interim maturities. The contracts of longer maturities
where exchange rates are not notified by FEDAI, are revalued based on the forward exchange rates implied by the swap
curves in respective currencies. The resultant gains or losses are recognised in the profit and loss account.
Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currencies
are disclosed at the closing exchange rates notified by FEDAI at the balance sheet date.
Accounting for derivative contracts
The Bank enters into derivative contracts such as foreign currency options, interest rate and currency swaps, credit
default swaps and cross currency interest rate swaps.
The swap contracts entered to hedge on-balance sheet assets and liabilities are structured such that they bear an
opposite and offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments
is correlated with the movement of underlying assets and accounted pursuant to the principles of hedge accounting.
Hedged swaps are accounted for on an accrual basis.
Foreign currency and rupee derivative contracts entered into for trading purposes are marked to market and the resulting
gain or loss (net of provisions, if any) is accounted for in the profit and loss account. Pursuant to RBI guidelines, any
receivables under derivative contracts which remain overdue for more than 90 days and mark-to-market gains on other
derivative contracts with the same counter-parties are reversed through profit and loss account.
Employee Stock Option Scheme (ESOS)
The Employees Stock Option Scheme (the Scheme) provides for grant of option on equity shares of the Bank to
wholetime directors and employees of the Bank and its subsidiaries. The Scheme provides that employees are granted
an option to subscribe to equity shares of the Bank that vest in a graded manner. The options may be exercised within
a specified period. The Bank follows the intrinsic value method to account for its stock-based employee compensation
plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the
exercise price on the grant date and amortised over the vesting period. The fair market price is the latest closing price,
immediately prior to the grant date, which is generally the date of the Board of Directors meeting in which the options
are granted, 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.
Staff Retirement Benefits
Gratuity
The Bank pays gratuity to employees who retire or resign after a minimum prescribed period of continuous service and
in case of employees at overseas locations as per the rules in force in the respective countries.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Actuarial valuation of the gratuity liability is determined by an actuary appointed by the Bank. Actuarial valuation of
gratuity liability is determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff
attrition as per the projected unit credit method.
Superannuation Fund
The Bank contributes 15.0% of the total annual basic salary of certain employees to a superannuation fund for its
employees. The Bank also gives an option to its employees, allowing them to receive the amount contributed by the
Bank along with their monthly salary during their employment.
The amount so contributed/paid by the Bank to the superannuation fund or to employee during the year is recognised
in the profit and loss account.
Pension
The Bank provides for pension, a deferred retirement plan covering certain employees of erstwhile Bank of Madura,
erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The plan provides for pension payment including dearness relief
on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the
Bank and applicable salary.
F15
schedules
forming part of the Accounts (Contd.)
Actuarial valuation of the pension liability is determined by an actuary appointed by the Bank. Actuarial valuation of pension
liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as
per the projected unit credit method.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan.
Provident Fund
The Bank is statutorily required to maintain a provident fund as a part of retirement benefits to its employees. Each
employee contributes a certain percentage of his or her basic salary and the Bank contributes an equal amount. The
funds are invested according to the rules prescribed by the government of India.
Actuarial valuation for the interest rate guarantee on the provident fund balances is determined by an actuary appointed
by the Bank.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Leave encashment
The Bank provides for leave encashment benefit, which is a long-term benefit scheme, based on actuarial valuation
conducted by an independent actuary.
10.
Income Taxes
Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Bank. The current tax
expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act, 1961 and as per
Accounting Standard 22 - Accounting for Taxes on Income respectively. Deferred tax adjustments comprise changes in the
deferred tax assets or liabilities during the year. Deferred tax assets and liabilities are recognised by considering the impact
of timing differences between taxable income and accounting income for the current year, and carry forward losses.
Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively
enacted at the balance sheet date. The impact of changes in deferred tax assets and liabilities is recognised in the profit
and loss account. Deferred tax assets are recognised and re-assessed at each reporting date, based upon management’s
judgement as to whether their realisation is considered as reasonably/virtually certain.
11.
Impairment of Assets
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset with future net discounted cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment is recognised by debiting the profit and loss account and is
measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
12. Provisions, contingent liabilities and contingent assets
The Bank estimates the probability of any loss that might be incurred on outcome of contingencies on the basis of
information available up to the date on which the financial statements are prepared. A provision is recognised when
an enterprise has a present obligation as a result of a past event and 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 determined based
on management estimates of amounts required to settle the obligation at the balance sheet date, supplemented by
experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current
management estimates. In cases where the available information indicates that the loss on the contingency is reasonably
possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the financial
statements. In case of remote possibility neither provision nor disclosure is made in the financial statements. The Bank
does not account for or disclose contingent assets, if any.
13. Earnings per share (EPS)
Basic and diluted earnings per share are computed in accordance with Accounting Standard-20 – Earnings per share.
Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share reflect the potential dilution that could occur if contracts to issue equity shares were exercised
or converted during the year. Diluted earnings per equity share is computed using the weighted average number of
equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive.
14. Lease transactions
Lease payments for assets taken on operating lease are recognised as an expense in the profit and loss account over
the lease term on straight line basis.
15. 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.
F16
schedules
forming part of the Accounts (Contd.)
SCHEDULE 18
notES Forming part oF tHE aCCoUntS
The following additional disclosures have been made taking into account the requirements of Accounting Standards (ASs)
and Reserve Bank of India (RBI) guidelines in this regard.
1. Earnings per share
Basic and diluted earnings per equity share are computed in accordance with AS 20–Earnings per share. Basic earnings
per equity share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding
during the year. The diluted earnings per equity share is computed using the weighted average number of equity shares
and weighted average number of dilutive potential equity shares outstanding during the year.
The following table sets forth, for the periods indicated, the computation of earnings per share.
` in million, except per share data
Year ended
Year ended
march 31, 2013
March 31, 2012
Basic
Weighted average no. of equity shares outstanding .........................................
1,153,066,422
1,152,338,322
Net profit ..............................................................................................................
Basic earnings per share (`) ...............................................................................
83,254.7
72.20
64,652.6
56.11
Diluted
Weighted average no. of equity shares outstanding .........................................
1,157,455,610
1,155,591,617
Net profit ..............................................................................................................
83,254.7
64,652.6
Diluted earnings per share (`) ............................................................................
Nominal value per share (`) ................................................................................
71.93
10.00
55.95
10.00
The dilutive impact is due to options granted to employees by the Bank.
2. Business/information ratios
The following table sets forth, for the periods indicated, the business/information ratios.
(i)
Interest income to working funds1 ............................................................
(ii) Non-interest income to working funds1 ....................................................
(iii) Operating profit to working funds1 ............................................................
(iv) Return on assets2 ........................................................................................
(v)
Profit per employee3 (` in million) .............................................................
(vi) Business (average deposits plus average advances)
per employee3, 4 (` in million) .....................................................................
Year ended
march 31, 2013
Year ended
March 31, 2012
8.17%
1.70%
2.69%
1.70%
1.4
73.5
7.79%
1.74%
2.41%
1.50%
1.1
70.8
1.
2.
3.
4.
For the purpose of computing the ratio, working funds represent the monthly average of total assets as reported in Form X to RBI
under Section 27 of the Banking Regulation Act, 1949.
For the purpose of computing the ratio, assets represent monthly average of total assets as reported in Form X to RBI under
Section 27 of the Banking Regulation Act, 1949.
The number of employees includes sales executives, employees on fixed term contracts and interns.
The average deposits and the average advances represent the simple average of the figures reported in Form A to RBI under
Section 42(2) of the Reserve Bank of India Act, 1934.
3. Capital adequacy ratio
The Bank is subject to the Basel II capital adequacy guidelines stipulated by RBI with effect from March 31, 2008. The RBI
guidelines on Basel II require the Bank to maintain a minimum capital to risk-weighted assets ratio (CRAR) of 9.0% and a
minimum Tier I CRAR of 6.0% on an ongoing basis.
F17
schedules
forming part of the Accounts (Contd.)
RBI has also stipulated that banks shall maintain capital at higher of the minimum capital required as per Basel II or 80%
of the minimum capital requirement under Basel I. At March 31, 2013, the prudential floor at 80% of the minimum capital
requirement under Basel I was ` 359,052.2 million and was lower than the minimum capital requirement of ` 397,749.2
million under Basel II. Hence, the Bank has maintained capital adequacy at March 31, 2013 as per the Basel II norms.
The following table sets forth, for the dates indicated, computation of capital adequacy.
as per Basel i framework
as per Basel ii framework
at
march 31, 20131
At
March 31, 2012
at
march 31, 20131
At
March 31, 2012
` in million
Tier I capital ..............................................................
Lower Tier I ...............................................................
Tier II capital ..............................................................
Upper Tier II ...............................................................
Lower Tier II subordinated debt ...............................
Total capital ................................................................
Total risk weighted assets .........................................
CRAR (%) ...................................................................
CRAR – Tier I capital (%) ..........................................
CRAR – Tier II capital (%) .........................................
Amount raised by issue of Innovative Perpetual
Debt Instruments (IPDI) during the year ..................
Amount raised by issue of upper Tier II
Instruments during the year ....................................
Amount of subordinated debt raised as Tier II
capital during the year .............................................
573,361.5
31,423.0
269,371.0
146,958.5
176,506.1
842,732.5
4,986,835.6
16.90%
11.50%
5.40%
—
—
512,158.7
30,254.9
238,563.6
143,889.5
155,206.3
750,722.3
4,618,042.1
16.26%
11.09%
5.17%
—
—
565,615.9
31,423.0
262,739.2
146,958.5
176,506.1
828,355.1
4,419,435.0
18.74%
12.80%
5.94%
—
—
505,182.8
30,254.9
232,946.4
143,889.5
155,206.3
738,129.2
3,985,857.8
18.52%
12.68%
5.84%
—
—
38,000
16,000.0
38,000
16,000.0
4.
information about business and geographical segments
Business Segments
Pursuant to the guidelines issued by RBI on Accounting Standard 17-(Segment Reporting)- Enhancement of Disclosures
dated April 18, 2007, effective from year ended March 31, 2008, the following business segments have been reported.
•
retail Banking includes exposures which satisfy the four criteria of orientation, product, granularity and low value
of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision document
“International Convergence of Capital Measurement and Capital Standards: A Revised Framework”.
• Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies, which are
not included under Retail Banking.
treasury includes the entire investment and derivative portfolio of the Bank.
other Banking includes leasing operations and other items not attributable to any particular business segment.
•
•
Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to
segments on a systematic basis.
All liabilities are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate
rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements.
The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the
transfer pricing mechanism prevailing for the respective reporting periods.
F18
schedules
forming part of the Accounts (Contd.)
The following tables set forth, for the periods indicated, the business segment results on this basis.
particulars
retail
Banking
For the year ended march 31, 2013
Wholesale
Banking
treasury
Revenue .......................................................................
1
Less: Inter-segment revenue ......................................
2
Total revenue (1)–(2) ....................................................
3
Segment results ..........................................................
4
Unallocated expenses .................................................
5
Operating profit (4)-(5) ................................................
6
Income tax expenses (including deferred tax) ...........
7
net profit (6)-(7) ..........................................................
8
9
Segment assets ...........................................................
10 Unallocated assets1 .....................................................
total assets (9)+(10) ...................................................
11
12 Segment liabilities ......................................................
13 Unallocated liabilities ..................................................
14
total liabilities (12)+(13) ............................................
15 Capital expenditure .....................................................
16 Depreciation ................................................................
1.
2.
225,856.3
313,687.6
355,862.8
9,545.5
66,188.6
36,539.2
729,750.3 2,269,628.7 2,274,859.6
2,043,187.5 1,071,994.1 2,243,734.82
1,188.2
991.8
Includes tax paid in advance/tax deducted at source (net) and deferred tax asset (net).
Includes share capital and reserves and surplus.
4,426.2
3,540.8
10.8
18.4
For the year ended march 31, 2012
particulars
retail
Banking
Wholesale
Banking
treasury
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
1.
2.
5,499.9
62,077.3
197,112.7
261,713.1
Revenue .......................................................................
Less: Inter-segment revenue ......................................
Total revenue (1)–(2) ....................................................
Segment results ..........................................................
Unallocated expenses .................................................
Operating profit (4)-(5) ................................................
Income tax expenses (Including deferred tax) ...........
net profit (6)-(7) ..........................................................
Segment assets ...........................................................
Unallocated assets1 .....................................................
total assets (9)+(10) ...................................................
Segment liabilities ......................................................
Unallocated liabilities ..................................................
total liabilities (12)+(13) ............................................
462.7
Capital expenditure .....................................................
1,236.3
Depreciation ................................................................
Includes tax paid in advance/tax deducted at source (net) and deferred tax asset (net).
Includes share capital and reserves and surplus.
697,767.7 1,940,355.9
3,215.5
3,544.7
1,766,275.9
876,508.2
301,414.2
20,806.8
2,169,280.2
2,237,806.9
6.2
21.2
` in million
total
other
Banking
Business
6,238.4
1,693.6
901,645.1
417,432.1
484,213.0
113,966.9
—
113,966.9
30,712.2
83,254.7
32,816.7 5,307,055.3
60,891.5
5,367,946.8
9,030.4 5,367,946.8
—
5,367,946.8
5,646.3
4,901.6
21.1
350.6
` in million
total
other
Banking
Business
2,821.8
(349.7)
763,061.8
352,607.7
410,454.1
88,034.3
—
88,034.3
23,381.7
64,652.6
23,669.5 4,831,073.3
59,614.7
4,890,688.0
10,097.0 4,890,688.0
—
4,890,688.0
3,688.8
5,245.3
4.4
443.1
geographical segments
The Bank reports its operations under the following geographical segments.
•
Domestic operations comprise branches in India
•
Foreign operations comprise branches outside India and offshore banking unit in India.
The following table sets forth, for the periods indicated, geographical segment revenues.
revenue
Domestic operations ............................................................................................
Foreign operations ................................................................................................
total ......................................................................................................................
Year ended
march 31, 2013
437,287.2
46,925.8
484,213.0
` in million
Year ended
March 31, 2012
366,126.5
44,327.6
410,454.1
F19
schedules
forming part of the Accounts (Contd.)
The following table sets forth, for the periods indicated, geographical segment assets.
assets
Domestic operations ............................................................................................
Foreign operations ...............................................................................................
total ......................................................................................................................
at
march 31, 2013
4,371,958.3
935,097.0
5,307,055.3
` in million
At
March 31, 2012
3,956,024.2
875,049.1
4,831,073.3
The following table sets forth, for the periods indicated, capital expenditure and depreciation thereon for the geographical
segments.
Capital expenditure incurred during
Depreciation provided during
Year ended
march 31, 2013
5,566.3
80.0
5,646.3
Year ended
March 31, 2012
3,616.0
72.8
3,688.8
Year ended
march 31, 2013
4,863.2
38.4
4,901.6
Year ended
March 31, 2012
5,211.8
33.5
5,245.3
` in million
Domestic operations ........................
Foreign operations ...........................
total ..................................................
5. maturity pattern
In compiling the information of maturity pattern, certain estimates and assumptions have been made by the management.
Assets and liabilities in foreign currency exclude off-balance sheet assets and liabilities.
•
•
The following table sets forth, the maturity pattern of assets and liabilities of the Bank at March 31, 2013.
` in million
maturity buckets
Loans &
advances 1
investment
securities1
Day 1 ..................................................
2 to 7 days .........................................
8 to 14 days .......................................
15 to 28 days .....................................
29 days to 3 months ..........................
3 to 6 months .....................................
6 months to 1 year ............................
1 to 3 years ........................................
3 to 5 years ........................................
Above 5 years ....................................
total ...................................................
Includes foreign currency balances.
1.
Includes borrowings in the nature of subordinated debts and preference shares.
2.
total foreign
currency
liabilities
6,857.7
24,006.9
55,617.7
25,583.6
107,712.0
151,527.4
199,375.4
212,432.6
163,472.9
189,654.3
2,902,494.4 1,713,936.0 2,926,136.3 1,453,414.9 1,025,475.1 1,136,240.5
Deposits1 Borrowings1,2 total foreign
currency
assets
31,676.4
57,443.0
41,757.7
29,492.2
84,484.9
71,474.5
59,533.2
206,040.3
194,085.6
249,487.3
9,112.9
17,209.7
14,952.5
56,985.4
185,648.6
204,592.9
319,463.0
1,185,745.7
493,899.9
414,883.8
—
156,492.0
31,737.6
8,271.2
84,903.6
126,686.4
158,589.4
208,659.0
232,053.6
446,022.1
48,665.0
216,271.1
66,915.8
117,812.7
98,700.0
77,242.1
158,405.5
241,872.3
212,552.0
475,499.5
27,643.7
88,557.0
64,225.5
78,776.1
303,018.0
265,480.7
459,085.7
442,488.6
600,623.9
596,237.1
The following table sets forth the maturity pattern of assets and liabilities of the Bank at March 31, 2012.
maturity buckets
Loans &
advances1
investment
securities1
` in million
Deposits1 Borrowings1,2 total foreign
total foreign
currency
currency
liabilities
assets
2,688.8
30,222.0
9,310.3
69,821.6
7,216.8
10,671.6
25,492.3
21,209.7
114,905.9
67,038.9
129,864.6
73,969.8
241,781.4
95,326.5
197,466.2
172,330.3
140,532.7
147,925.4
281,977.9
178,630.3
970,493.7 1,047,889.3
—
174,543.1
2,543.6
26,841.4
80,937.6
141,606.5
223,622.4
173,520.5
197,146.0
380,888.0
2,537,276.6 1,595,600.4 2,554,999.6 1,401,649.1
7,738.5
13,041.4
13,191.0
39,001.7
142,209.3
188,828.5
336,379.4
1,043,883.5
388,469.1
364,534.2
35,284.9
217,729.6
49,505.7
95,723.5
77,392.4
87,627.9
149,466.7
245,244.2
152,923.0
484,702.5
19,792.9
44,612.6
54,744.2
97,134.4
273,131.8
288,254.6
452,112.8
690,126.6
228,550.3
406,539.4
Day 1 ..................................................
2 to 7 days .........................................
8 to 14 days .......................................
15 to 28 days .....................................
29 days to 3 months ..........................
3 to 6 months .....................................
6 months to 1 year ............................
1 to 3 years ........................................
3 to 5 years ........................................
Above 5 years ....................................
total ..................................................
1.
2.
F20
Includes foreign currency balances.
Includes borrowings in the nature of subordinated debts and preference shares.
schedules
forming part of the Accounts (Contd.)
6. preference shares
Certain government securities amounting to ` 2,749.9 million at March 31, 2013 (March 31, 2012: ` 2,578.1 million) have
been earmarked against redemption of preference shares issued by the Bank, which fall due for redemption on April 20,
2018, as per the original issue terms.
7. Employee Stock option Scheme (ESoS)
In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial
year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of
all such options granted to the eligible employees shall not exceed 10% of the aggregate number of the issued equity
shares of the Bank on the date(s) of the grant of options. Under the stock option scheme, eligible employees are entitled
to apply for equity shares. Options granted for fiscal 2003 vest in a graded manner over a three-year period, with 20%,
30% and 50% of the grants vesting in each year commencing from the end of 12 months from the date of grant. Options
granted from fiscal 2004 vest in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants
vesting in each year commencing from the end of 12 months from the date of grant. Options granted in April 2009 vest
in a graded manner over a five year period with 20%, 20%, 30% and 30% of grant vesting each year, commencing from
the end of 24 months from the date of grant. Options granted in September, 2011 vest in a graded manner over a five
years period with 15%, 20%, 20% and 45% of grant vesting each year, commencing from the end of 24 months from
the date of the grant. The options can be exercised within 10 years from the date of grant or five years from the date of
vesting, whichever is later. The exercise price of Bank’s options was the last closing price on the stock exchange, which
recorded highest trading volume preceding the date of grant of options. Hence, there was no compensation cost based
on intrinsic value of options.
In February, 2011, the Bank granted 3,035,000 options to eligible employees and whole-time Directors of ICICI Bank and
certain of its subsidiaries at an exercise price of ` 967. Of these options granted, 50% would vest on April 30, 2014 and
the balance 50% would vest on April 30, 2015. The options can be exercised within 10 years from the date of grant or
five years from the date of vesting, whichever is later. Based on intrinsic value of options, compensation cost of ` 21.0
million was recognised during the year ended March 31, 2013 (March 31, 2012: ` 21.0 million).
If ICICI Bank had used the fair value of options based on binomial tree model, compensation cost in the year ended
March 31, 2013 would have been higher by ` 1,865.9 million and proforma profit after tax would have been ` 81.39
billion. On a proforma basis, ICICI Bank’s basic and diluted earnings per share would have been ` 70.58 and ` 70.32
respectively. The key assumptions used to estimate the fair value of options granted during the year ended March 31,
2013 are given below.
Risk-free interest rate ..................................................................................................................
7.99% to 8.87%
Expected life ...............................................................................................................................
Expected volatility.......................................................................................................................
6.35 years
48.99% to 49.55%
Expected dividend yield .............................................................................................................
1.52% to 1.96%
The weighted average fair value of options granted during the year ended March 31, 2013 is ` 434.91 (March 31, 2012: `
592.52).
The following table sets forth, for the period indicated, the summary of the status of the Bank’s stock option plan.
` except number of options
Stock options outstanding
Year ended march 31, 2013
Year ended March 31, 2012
particulars
number of
options
Weighted
average
Exercise price
Outstanding at the beginning of the year ..........................
23,199,545
Add: Granted during the year .............................................
4,450,200
Less: Lapsed during the year, net of re-issuance ................
Less: Exercised during the year .........................................
802,019
867,273
Outstanding at the end of the year ......................................
25,980,453
Options exercisable .............................................................
13,597,383
846.94
844.53
929.35
511.63
855.18
793.57
Number of
options
20,529,387
4,060,600
448,372
942,070
23,199,545
12,019,655
Weighted
Average
Exercise Price
779.72
1,104.82
798.77
510.94
846.94
745.26
In terms of the Scheme, 25,980,453 options (March 31, 2012: 23,199,545 options) granted to eligible employees were
outstanding at March 31, 2013.
F21
schedules
forming part of the Accounts (Contd.)
The following table sets forth, the summary of stock options outstanding at March 31, 2013.
range of exercise price (` per share)
number of shares
arising out of options
Weighted average
exercise price
(` per share)
Weighted average
remaining contractual
life (number of years)
105-299 ..................................................................
12,675
300-599 ..................................................................
5,229,338
600-999 ..................................................................
16,827,750
132.05
470.26
917.10
1,000-1,399 ............................................................
3,910,690
1,105.80
0.07
3.35
6.66
8.06
The following table sets forth, the summary of stock options outstanding at March 31, 2012.
range of exercise price (` per share)
number of shares
arising out of options
Weighted average
exercise price
(` per share)
Weighted average
remaining contractual
life (number of years)
105-299 .................................................................
300-599 .................................................................
28,925
6,048,620
600-999 .................................................................
13,122,000
132.05
471.10
942.79
1,000-1,399 ...........................................................
4,000,000
1,106.03
1.07
4.35
6.80
9.04
The options were exercised regularly throughout the period and weighted average share price as per NSE price volume
data during the year ended March 31, 2013 was ` 1,000.21 (March 31, 2012: ` 922.76).
8. Subordinated debt
During the year ended March 31, 2013, the Bank raised subordinated debt qualifying for Tier II capital amounting to
` 38,000.0 million. The following table sets forth, the details of these bonds.
` in million
particulars
Date of issue
Coupon rate (%)
tenure
amount
Lower Tier II ................................................
December 31, 2012
9.15% (annually)
10 years
38,000.0
total ............................................................
38,000.0
During the year ended March 31, 2012, the Bank raised subordinated debt qualifying for Tier II capital amounting to
` 16,000.0 million. The following table sets forth, the details of these bonds.
` in million
particulars
Date of issue
Coupon rate (%)
tenure
amount
Lower Tier II ................................................
March 16, 2012
9.20% (semi-annually)
6 years
16,000.0
total ................................................................
16,000.0
F22
schedules
forming part of the Accounts (Contd.)
9. repurchase transactions
The following tables set forth for the period indicated, the details of securities sold and purchased under repo and
reverse repo transactions respectively including transactions under Liquidity Adjustment Facility (LAF).
Government Securities ........................................
Corporate Debt Securities ....................................
Securities sold under Repo and LAF
i)
ii)
Securities purchased under Reverse Repo and LAF
i)
ii)
Government Securities ........................................
Corporate Debt Securities ....................................
minimum
outstanding
balance
during the
maximum
outstanding
balance
during the
Daily average
outstanding
balance
during the
outstanding
balance at
march 31,
2013
Year ended march 31, 2013
` in million
1.1
—
—
—
189,003.7
—
50,211.3
—
93,603.4
—
150,003.7
—
4,475.4
—
50,211.3
—
1.
Amounts reported are based on face value of securities under repo, reverse repo and LAF.
Government Securities .......................................
Corporate Debt Securities ...................................
Securities sold under Repo and LAF
i)
ii)
Securities purchased under Reverse Repo and LAF
i)
ii)
Government Securities .......................................
Corporate Debt Securities ...................................
minimum
outstanding
balance
during the
maximum
outstanding
balance
during the
Daily average
outstanding
balance
during the
outstanding
balance at
march 31,
2012
Year ended march 31, 2012
` in million
1.3
—
—
—
169,551.0
645.0
36,750.0
—
67,461.6
5.3
169,551.0
—
1,524.6
—
2,630.0
—
1.
2.
Amounts reported are based on face value of securities under repo, reverse repo and LAF.
LAF transactions were accounted as borrowing and lending transactions from the three months ended March 31, 2012.
10. investments
The following table sets forth, for the periods indicated, the details of investments and the movement of provision held
towards depreciation on investments of the Bank.
particulars
1.
(i)
(ii)
Value of investments
Gross value of investments
a)
In India ....................................................................................................
b) Outside India ...........................................................................................
Provision for depreciation
a)
In India ....................................................................................................
b) Outside India ...........................................................................................
(iii) Net value of investments
a)
In India ....................................................................................................
b) Outside India ...........................................................................................
2. movement of provisions held towards depreciation on investments
(i)
Opening balance ...........................................................................................
(ii) Add: Provisions made during the year ........................................................
(iii)
Less: Write-off/(write back) of excess provisions during the year ..............
(iv) Closing balance .............................................................................................
` in million
at
march 31, 2013
At
March 31, 2012
1,663,577.2
77,981.8
(27,378.2)
(244.8)
1,636,199.0
77,737.0
26,003.2
1,925.3
(305.5)
27,623.0
1,539,777.2
81,826.4
(25,565.7)
(437.5)
1,514,211.5
81,388.9
20,064.1
8,129.7
(2,190.6)
26,003.2
F23
schedules
forming part of the Accounts (Contd.)
11. investment in securities, other than government and other approved securities (non-SLr investments)
i)
issuer composition of investments in securities, other than government and other approved securities
The following table sets forth, the issuer composition of investments of the Bank in securities, other than government
and other approved securities at March 31, 2013.
Sr.
no.
issuer
amount
Extent of
private
placement2
(a)
Extent of ‘below
investment grade’
securities
(b)
Extent of
‘unrated’
securities3,4
(c)
PSUs .......................................................
FIs ...........................................................
Banks ......................................................
Private corporates .................................
Subsidiaries/Joint ventures ..................
Others5,6 .................................................
Provision held towards depreciation ....
total .......................................................
59,394.0
42,987.8
141,396.9
129,135.3
133,339.4
303,717.9
(26,372.9)
783,598.4
42,261.8
33,325.5
111,926.2
109,980.9
—
95,849.9
—
393,344.3
—
—
—
2,788.2
—
20,343.0
—
23,131.2
—
—
—
5,477.8
—
—
—
5,477.8
` in million
Extent of
‘unlisted’
securities3,4
(d)
4.8
—
—
8,263.6
—
—
—
8,268.4
Amounts reported under columns (a), (b), (c) and (d) above are not mutually exclusive.
Includes ` 26,075.7 million of application money towards corporate bonds/debentures and pass through certificates.
Excludes investments, amounting to ` 4,738.4 million, in preference shares of subsidiaries and ` 5,381.2 million in subordinated
bonds of subsidiaries, namely ICICI Bank UK PLC and ICICI Bank Canada.
Excludes equity shares, units of equity-oriented mutual fund, units of venture capital fund, pass through certificates, security receipts,
commercial papers, certificates of deposit, Non Convertible Debentures (NCDs) with original or initial maturity up to one year issued
by corporate (including NBFCs), unlisted convertible debentures and securities acquired by way of conversion of debt.
“Others” include deposits under RIDF/RHDF deposit schemes amounting to ` 201,983.2 million.
Excludes investments in non-Indian government securities by overseas branches amounting to ` 6,574.7 million.
The following table sets forth, the issuer composition of investments of the Bank in securities, other than government
and other approved securities at March 31, 2012.
Sr.
no.
issuer
amount
PSUs ......................................................
FIs ..........................................................
Banks .....................................................
Private corporates ................................
Subsidiaries/Joint ventures .................
Others 6,7,8 ..............................................
Provision held towards depreciation ...
total ......................................................
48,803.2
28,032.9
118,691.4
163,469.5
136,753.3
250,651.9
(24,589.7)
721,812.5
Extent of
private
placement3
(a)
45,156.0
21,649.8
107,676.0
143,623.3
—
39,950.8
—
358,055.9
Extent of ‘below
investment grade’
securities
(b)
—
—
809.4
283.1
—
25,568.7
—
26,661.2
Extent of
‘unrated’
securities4,5
(c)
—
—
—
6,944.0
—
—
—
6,944.0
` in million
Extent of
‘unlisted’
securities4,5
(d)
9.6
—
—
14,521.8
—
—
—
14,531.4
Amounts reported under columns (a), (b), (c) and (d) above are not mutually exclusive.
Collateralised debt obligations securities have been included in the above data based on the arranger of such instruments.
Includes ` 2,619.0 million of application money towards corporate bonds/debentures.
Excludes investments amounting to ` 7,086.1 million, in preference shares of subsidiaries and ` 5,092.1 million in subordinated
bonds of subsidiaries, namely ICICI Bank UK PLC and ICICI Bank Canada.
Excludes equity shares, units of equity-oriented mutual fund, units of venture capital fund, pass through certificates, security
receipts, commercial papers, certificates of deposit, unlisted convertible debentures and securities acquired by way of conversion
of debt.
Other investments include deposits under RIDF/RHDF deposit schemes amounting to ` 181,025.1 million.
Excludes investments in non-Indian government securities by overseas branches amounting to ` 4,402.4 million.
Others include non-SLR Indian government securities of ` 96.1 million.
1
2
3
4
5
6
7
1.
2.
3.
4.
5.
6.
1
2
3
4
5
6
7
1.
2.
3.
4.
5.
6.
7.
8.
F24
schedules
forming part of the Accounts (Contd.)
ii) non-performing investments in securities, other than government and other approved securities
The following table sets forth, for the periods indicated, the movement in gross non-performing investments in
securities, other than government and other approved securities.
particulars
Opening balance ...................................................................................................
Additions during the year .....................................................................................
Reduction during the year ....................................................................................
Closing balance .....................................................................................................
Total provision held ...............................................................................................
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
5,428.4
913.5
(1,405.5)
4,936.4
4,661.4
4,923.8
1,790.9
(1,286.3)
5,428.4
4,606.3
12. Sales and transfers of securities to/from Held to maturity (Htm) category
During the year ended March 31, 2013, the value of sales and transfers of securities to/from HTM category (excluding
one time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken
by banks at the beginning of the accounting year and sale to RBI under pre-announced Open Market Operation auctions)
have not exceeded 5% of the book value of the investments held in HTM category at the beginning of the year.
13. CBLo transaction
Collateralised Borrowing and Lending Obligation (CBLO) is a discounted money market instrument, developed by The
Clearing Corporation of India Limited (CCIL) and approved by RBI, which involves secured borrowings and lending
transactions. At March 31, 2013, the Bank had outstanding borrowings amounting to Nil (March 31, 2012: Nil) and
outstanding lending of Nil (March 31, 2012: Nil) in the form of CBLO. The amortised book value of securities given as
collateral by the Bank to CCIL for availing the CBLO facility was ` 86,752.0 million at March 31, 2013 (March 31, 2012:
` 22,491.9 million).
14. Derivatives
ICICI Bank is a major participant in the financial derivatives market. The Bank deals in derivatives for balance sheet
management and market making purposes whereby the Bank offers derivative products to its customers, enabling them
to hedge their risks.
Dealing in derivatives is carried out by identified groups in the treasury of the Bank based on the purpose of the transaction.
Derivative transactions are entered into by the treasury front office. Treasury middle office conducts an independent
check of the transactions entered into by the front office and also undertakes activities such as confirmation, settlement,
accounting, risk monitoring and reporting and ensures compliance with various internal and regulatory guidelines.
The market making and the proprietary trading activities in derivatives are governed by the Investment Policy and
Derivative policy of the Bank, which lays down the position limits, stop loss limits as well as other risk limits. The Risk
Management Group (RMG) lays down the methodology for computation and monitoring of risk. The Risk Committee
of the Board (RCB) reviews the Bank’s risk management policy in relation to various risks including credit and recovery
policy, investment policy, derivative policy, ALM policy and operational risk management policy. The RCB comprises
independent directors and the Managing Director and CEO.
The Bank measures and monitors risk of its derivatives portfolio using such risk metrics as Value at Risk (VAR), stop
loss limits and relevant greeks for options. Risk reporting on derivatives forms an integral part of the management
information system.
The use of derivatives for hedging purposes is governed by the hedge policy approved by Asset Liability Management
Committee (ALCO). Subject to prevailing RBI guidelines, the Bank deals in derivatives for hedging fixed rate, floating
rate 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 hedge itself. The
effectiveness is assessed at the time of inception of the hedge and periodically thereafter.
Hedge derivative transactions are accounted for pursuant to the principles of hedge accounting. 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 Foreign Exchange Dealers Association of India (FEDAI) guidelines.
Derivative transactions are covered under International Swaps and Derivatives Association (ISDA) master agreements
with the respective counter parties. The exposure on account of derivative transactions is computed as per RBI guidelines
and is marked against the credit limits approved for the respective counter-parties.
F25
schedules
forming part of the Accounts (Contd.)
The following table sets forth, for the periods indicated, the details of derivative positions.
` in million
Sr.
no.
particulars
at march 31, 2013
Currency
derivatives1
interest rate
derivatives2
1
2
3
4
5
1.
2.
3.
4.
5.
6.
9,542.3
960,781.2
289,235.8
2,162,061.6
40,132.1
(38,894.3)
103,047.2
Derivatives (notional principal amount)
a) For hedging ..............................................................................................
b) For trading ...............................................................................................
marked to market positions3
a) Asset (+) ..................................................................................................
b) Liability (-) ................................................................................................
Credit exposure4 ..........................................................................................
Likely impact of one percentage change in interest rate (100*pV01)5
a) On hedging derivatives6 ..........................................................................
b) On trading derivatives .............................................................................
maximum and minimum of 100*pV01 observed during the year
a) On hedging6
Maximum .................................................................................................
Minimum ..................................................................................................
b) On trading
Maximum .................................................................................................
2,145.2
796.1
Minimum ..................................................................................................
Exchange traded and Over the Counter (OTC) options, cross currency interest rate swaps and currency futures are included in
currency derivatives.
Interest rate swaps, forward rate agreements, swaptions and exchange traded interest rate derivatives are included in interest rate
derivatives.
For trading portfolio including accrued interest. Represents net positions.
Includes accrued interest and has been computed based on Current Exposure method.
Amounts given are absolute values on a net basis, excluding options.
The swap contracts entered into for hedging purpose would have an opposite and offsetting impact with the underlying on-balance
sheet items.
25,141.2
(21,768.6)
73,436.3
(11,690.5)
(14,194.8)
(243.9)
(1,395.5)
13,248.2
1,060.9
(44.4)
(226.0)
211.7
364.8
The following table sets forth, for the period indicated, the details of derivative positions.
` in million
Sr.
no.
particulars
Derivatives (notional principal amount)
a) For hedging ............................................................................................
b) For trading .............................................................................................
marked to market positions3
a) Asset (+) ................................................................................................
b) Liability (-) ..............................................................................................
Credit exposure4 ........................................................................................
Likely impact of one percentage change in interest rate (100*pV01)5
a) On hedging derivatives6 ........................................................................
b) On trading derivatives ...........................................................................
maximum and minimum of 100*pV01 observed during the year
a) On hedging6
Maximum ...............................................................................................
Minimum ................................................................................................
b) On trading
Maximum ...............................................................................................
Minimum ................................................................................................
at march 31, 2012
Currency
derivatives1
5,062.2
1,214,603.2
interest rate
derivatives2
312,533.7
2,446,693.6
59,517.3
(46,244.0)
118,689.8
45.3
1,038.9
(1.3)
(50.8)
(620.3)
(1,270.0)
28,323.4
(26,520.7)
80,110.9
11,751.7
2,752.9
(9,523.0)
(13,444.8)
2,956.8
1,899.8
Exchange traded and Over the Counter (OTC) options, cross currency interest rate swaps and currency futures are included in
currency derivatives.
Interest rate swaps, forward rate agreements, swaptions and exchange traded interest rate derivatives are included in interest rate
derivatives.
For trading portfolio including accrued interest. Represents net positions.
Includes accrued interest and has been computed based on Current Exposure method.
Amounts given are absolute values on a net basis, excluding options.
The swap contracts entered into for hedging purpose would have an opposite and offsetting impact with the underlying on-balance
sheet items.
1
2
3
4
5
1.
2.
3.
4.
5.
6.
F26
schedules
forming part of the Accounts (Contd.)
The Bank has exposure in credit derivative instruments including credit default swaps (CDS), credit linked notes,
collateralised debt obligations and principal protected structures. The notional principal amount of these credit derivatives
outstanding at March 31, 2013 was Nil (March 31, 2012: Nil) in funded instrument and ` 3,065.6 million (March 31, 2012:
` 10,349.9 million) in non-funded instruments. The profit and loss impact on the above portfolio on account of mark-to-
market and realised gain/losses during the year ended March 31, 2013 was net profit of ` 75.0 million (March 31, 2012:
net profit ` 561.0 million). At March 31, 2013, the total outstanding mark-to-market position of the above portfolio was
a net gain of ` 10.8 million (March 31, 2012: net loss of ` 59.6 million). Non Rupee denominated credit derivatives are
marked to market by the Bank based on counter-party valuation quotes, or internal models using inputs from market
sources such as Bloomberg/Reuters, counter-parties and FIMMDA. Rupee denominated credit derivatives are marked to
market by the Bank based on FIMMDA guidelines.
The Bank offers deposits to customers of its offshore branches with structured returns linked to interest, forex, credit or
equity benchmarks. The Bank covers these exposures in the inter-bank market. At March 31, 2013, the net open position
on this portfolio was Nil (March 31, 2012: Nil) with mark-to-market position of ` 13.9 million (March 31, 2012: ` 24.8
million). The profit and loss impact on account of mark-to-market and realised profit and loss during the year ended
March 31, 2013 was a net loss of ` 18.7 million (March 31, 2012: net loss of ` 5.2 million).
The notional principal amount of forex contracts classified as non-trading at March 31, 2013 amounted to ` 526,615.8
million (March 31, 2012: ` 745,722.2 million). For these non-trading forex contracts, at March 31, 2013, marked to market
position was asset of ` 2,855.4 million (March 31, 2012: ` 22,528.9 million) and liability of ` 6,652.4 million (March 31,
2012: ` 12,843.6 million), credit exposure of ` 16,131.9 million (March 31, 2012: ` 42,639.4 million) and likely impact of
one percentage change in interest rate (100*PV01) was ` 52.3 million (March 31, 2012: ` 81.6 million).
The notional principal amount of forex contracts classified as trading at March 31, 2013 amounted to ` 2,311,888.1
million (March 31, 2012: ` 2,814,328.7 million). For these trading forex contracts, at March 31, 2013, marked to market
position was asset of ` 38,526.6 million (March 31, 2012: ` 70,164.7 million) and liability of ` 32,462.9 million (March 31,
2012: ` 66,449.6 million), credit exposure of ` 97,274.0 million (March 31, 2012: ` 135,371.9 million) and likely impact of
one percentage change in interest rate (100*PV01) was ` 58.9 million (March 31, 2012: ` 90.1 million). The net overnight
open position at March 31, 2013 was ` 573.8 million (March 31, 2012: ` 299.1 million).
15. Exchange traded interest rate derivatives and currency options
Exchange traded interest rate derivatives
The Bank had no outstanding exchange traded interest rate derivatives March 31, 2013 (March 31, 2012: Nil).
Exchange traded currency options
The following table sets forth, for the periods indicated, the details of exchange traded currency options.
particulars
i)
ii)
Notional principal amount of exchange traded currency options
undertaken during the year ...........................................................................
Notional principal amount of exchange traded currency options
outstanding ....................................................................................................
iii) Notional principal amount of exchange traded currency options
outstanding and not “highly effective” .........................................................
iv) Mark-to-market value of exchange traded currency options outstanding
and not “highly effective” .............................................................................
` in million
at
march 31, 2013
At
March 31, 2012
257,249.4
434,623.3
2,084.3
12,587.8
n.a.
n.a.
N.A.
N.A.
16. Forward rate agreement (Fra)/interest rate swaps (irS)
The Bank enters into FRA and IRS contracts for balance sheet management and market making purposes whereby the
Bank offers derivative products to its customers to enable them to hedge their interest rate risk within the prevalent
regulatory guidelines.
A FRA is a financial contract between two parties to exchange interest payments for a ’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.
F27
schedules
forming part of the Accounts (Contd.)
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.
These contracts are subject to the risks of changes in market interest rates as well as the settlement risk with the
counterparties.
The following table sets forth, for the periods indicated, the details of the forward rate agreements/interest rate swaps.
particulars
` in million
at
march 31, 2013
At
March 31, 2012
i)
ii)
The notional principal of FRA/IRS ................................................................
Losses which would be incurred if all counter parties failed to fulfil their
obligations under the agreement1 ...............................................................
31,219.3
iii)
—
Collateral required by the Bank upon entering into FRA/IRS ......................
iv) Concentration of credit risk2 ........................................................................
3,261.6
v)
The fair value of FRA/IRS3 .............................................................................
25,235.5
For trading portfolio both mark-to-market and accrued interest have been considered and for hedging portfolio, only accrued
1.
interest has been considered.
Credit risk concentration is measured as the highest net receivable under swap contracts from a particular counter party.
Fair value represents mark-to-market including accrued interest.
24,232.5
—
1,971.2
21,530.0
2,603,143.0
2,368,069.4
2.
3.
17. advances
The following table sets forth, for the periods indicated, the details of movement of gross non-performing assets (NPAs),
net NPAs and provisions.
particulars
net npas (funded) to net advances (%) ...................................................
i)
ii) movement of npas (gross)
c)
a) Opening balance1 ................................................................................
b) Additions: Fresh NPAs during the year2 ................................................
Sub-total (1) .........................................................................................
Reductions during the year2
• Upgradations ...................................................................................
• Recoveries (excluding recoveries made from upgraded accounts)
• Write-offs .........................................................................................
Sub-total (2) ...............................................................................................
d) Closing balance1 (1-2) ..........................................................................
iii) movement of net npas
a) Opening balance1 ................................................................................
b) Additions during the year2 ..................................................................
Reductions during the year2 ...............................................................
c)
d) Closing balance1 .................................................................................
iv) movement of provision for npas (excluding provision on standard assets)
a) Opening balance1 ................................................................................
b) Addition during the year2 ....................................................................
Sub-total (1) .........................................................................................
c) Write-off/(write-back) of excess provisions2
• Write-back of excess provision on account of upgradations ........
• Write-back of excess provision on account of reduction in NPAs
• Provision utilised for write-offs .......................................................
Sub-total (2) .........................................................................................
d) Closing balance1 (1-2) ..........................................................................
Year ended
march 31, 2013
0.77%
` in million
Year ended
March 31, 2012
0.73%
94,753.3
35,870.6
130,623.9
(6,600.8)
(11,486.7)
(16,458.9)
(34,546.4)
96,077.5
18,608.4
20,469.0
(16,771.8)
22,305.6
76,144.9
22,513.4
98,658.3
(1,543.3)
(7,072.7)
(16,270.4)
(24,886.4)
73,771.9
100,342.6
29,861.2
130,203.8
(7,381.1)
(16,234.5)
(11,834.9)
(35,450.5)
94,753.3
24,073.6
13,311.6
(18,776.8)
18,608.4
76,269.0
20,872.5
97,141.5
(2,177.8)
(7,724.3)
(11,094.5)
(20,996.6)
76,144.9
1.
2.
Net of write-off.
For NPAs in credit cards, the difference between the opening and closing balances (other than accounts written off during the
year) is included in additions/(reductions) during the year.
F28
schedules
forming part of the Accounts (Contd.)
The revision in the policy for loan classification and provisioning for non-performing loans held at the overseas branches,
as detailed in Schedule 17 Significant Accounting Policies para 1a, does not have significant impact on the loan loss
provisions made by the Bank at March 31, 2013.
18. provision on standard assets
The Bank has made provision amounting to ` 1,439.1 million during the year ended March 31, 2013 (March 31, 2012: Nil)
as per applicable RBI guidelines.
The provision on standard assets held by the Bank at March 31, 2013 is ` 16,235.1 million (March 31, 2012: ` 14,796.0
million).
19. provision Coverage ratio
The provision coverage ratio of the Bank at March 31, 2013 computed as per the extant RBI guidelines is 76.8%
(March 31, 2012: 80.4%).
20. Securitisation
The Bank sells loans through securitisation and direct assignment. The following tables set forth, for the periods indicated,
the information on securitisation and direct assignment activity of the Bank as an originator till May 7, 2012.
` in million, except number of loans securitised
Total number of loan assets securitised .............................................................
Total book value of loan assets securitised ........................................................
Sale consideration received for the securitised assets .....................................
Net gain/(loss) on account of securitisation1 ......................................................
Year ended
march 31, 2013
—
—
—
(283.7)
Year ended
March 31, 2012
—
—
—
(2,016.2)
1.
Includes gain/(loss) on deal closures, gain amortised during the year and expenses relating to utilisation of credit enhancement.
` in million
At
March 31, 2012
5,228.0
327.1
(92.4)
2,750.5
Outstanding credit enhancement (funded) ..............................................................
Outstanding liquidity facility ....................................................................................
Net outstanding servicing asset/(liability) .................................................................
Outstanding subordinate contributions ...................................................................
at
march 31, 2013
4,970.4
—
(88.9)
3,017.8
The outstanding credit enhancement in the form of guarantees amounted to ` 8,234.1 million at March 31, 2013 (March
31, 2012: ` 11,833.0 million).
Outstanding credit enhancement in the form of guarantees for third party originated securitisation transactions amounted
to ` 8,132.0 million at March 31, 2013 (March 31, 2012: ` 9,161.5 million) and outstanding liquidity facility for third party
originated securitisation transactions amounted to Nil at March 31, 2013 (March 31, 2012: Nil).
The following table sets forth, for the periods indicated, the details of provision for securitisation and direct assignment
transactions.
particulars
Opening balance ....................................................................................................
Additions during the year ...................................................................................
Deductions during the year ................................................................................
Closing balance ...................................................................................................
Year ended march
31, 2013
1,786.7
1,688.6
(1,422.8)
2,052.5
` in million
Year ended March
31, 2012
2,363.8
1,696.7
(2,273.8)
1,786.7
The information on securitisation and direct assignment activity of the Bank as an originator as per RBI guidelines
“Revisions to the Guidelines on Securitisation Transactions” dated May 7, 2012.
a. The Bank, as an originator, had not sold any loan through securitisation after May 7, 2012.
F29
schedules
forming part of the Accounts (Contd.)
b. The following table sets forth, for the period indicated, the information on the loans sold through direct assignment after
May 7, 2012.
particulars
Total amount of assets sold through direct assignment during the year ended March 31, 2013
Total amount of exposures retained by the Bank to comply with
Minimum Retention Requirement (MRR)
a) Off-balance sheet exposures
• First loss ...........................................................................................................
• Others ..............................................................................................................
b) On-balance sheet exposures
• First loss ...........................................................................................................
• Others ..............................................................................................................
` in million
at
march 31, 2013
731.3
—
—
—
73.1
21. Financial assets transferred during the year to securitisation company (SC)/reconstruction company (rC)
The Bank has transferred certain assets to Asset Reconstruction Companies (ARCs) in terms of the guidelines issued by
RBI governing such transfer. For the purpose of the valuation of the underlying security receipts issued by the underlying
trusts managed by ARCs, the security receipts are valued at their respective NAVs as advised by the ARCs.
The following table sets forth, for the periods indicated, the details of the assets transferred.
Number of accounts1............................................................................................
Aggregate value (net of provisions) of accounts sold to SC/RC ........................
Aggregate consideration ......................................................................................
Additional consideration realised in respect of accounts transferred in earlier years2
Aggregate gain/(loss) over net book value .........................................................
` in million, except number of accounts
Year ended
March 31, 2012
2
44.4
94.1
—
49.7
Year ended
march 31, 2013
4
82.9
116.5
—
33.6
1.
2.
Excludes accounts previously written-off.
During the year ended March 31, 2013, asset reconstruction companies have not fully redeemed any of the security receipts.
Gain/loss during the year ended March 31, 2013 amounted to Nil (March 31, 2012: net loss of ` 950.6 million).
22. Details of non-performing assets purchased/sold, excluding those sold to SC/rC
The Bank has not purchased any non-performing assets in terms of the guidelines issued by the RBI circular no. DBOD.
No.BP.BC.16/21.04.048/2005-06 dated July 13, 2005. The Bank has sold certain non-performing assets in terms of the
above RBI guidelines.
The following table sets forth, for the periods indicated, details of non-performing assets sold, excluding those sold to
SC/RC.
No. of accounts ....................................................................................................
Aggregate value (net of provisions) of accounts sold, excluding those sold to SC/RC
Aggregate consideration ......................................................................................
Aggregate gain/(loss) over net book value .........................................................
` in million, except number of accounts
Year ended
March 31, 2012
1
642.0
641.0
(1.0)
Year ended
march 31, 2013
2
78.8
100.1
21.3
F30
schedules
forming part of the Accounts (Contd.)
s
t
n
u
o
c
c
a
f
o
r
e
b
m
u
n
t
p
e
c
x
e
,
n
o
i
l
l
i
m
n
i
`
l
a
t
o
t
s
s
o
L
l
u
f
t
b
u
o
D
-
b
u
S
d
r
a
d
n
a
t
S
l
a
t
o
t
s
s
o
L
l
u
f
t
b
u
o
D
-
b
u
S
d
r
a
d
n
a
t
S
s
l
i
a
t
e
D
n
o
i
t
a
c
i
f
i
s
s
a
l
C
t
e
s
s
a
m
s
i
n
a
h
c
e
m
g
n
i
r
u
t
c
u
r
t
s
e
r
t
b
e
D
E
m
S
r
e
d
n
U
m
s
i
n
a
h
c
e
m
r
D
C
r
e
d
n
U
g
n
i
r
u
t
c
u
r
t
s
e
r
f
o
e
p
y
t
.
g
n
i
r
u
t
c
u
r
t
s
e
r
o
t
d
e
t
c
e
b
u
s
j
s
t
e
s
s
a
n
a
o
l
f
o
s
l
i
a
t
e
d
,
d
e
t
a
c
d
n
i
i
s
d
o
i
r
e
p
e
h
t
r
o
f
,
h
t
r
o
f
t
e
s
l
s
e
b
a
t
g
n
w
o
i
l
l
o
f
e
h
T
s
t
e
s
s
a
d
e
r
u
t
c
u
r
t
s
e
r
f
o
t
c
e
p
s
e
r
n
i
n
o
i
t
a
m
r
o
f
n
i
.
3
2
)
e
(
8
8
.
2
3
5
6
.
1
9
1
—
—
—
—
—
—
1
9
.
6
9
9
.
6
9
4
7
.
4
9
8
.
3
2
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
)
d
(
)
c
(
)
b
(
d
r
a
d
n
a
t
S
)
a
(
3
1
.
2
1
1
—
—
—
—
—
—
—
)
e
(
2
3
)
d
(
1
)
c
(
6
1
)
b
(
d
r
a
d
n
a
t
S
)
a
(
4
2
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
2
1
0
2
,
1
l
i
r
p
a
t
a
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
.
1
.
r
S
.
o
n
3
.
3
3
8
,
8
2
0
.
7
1
3
.
9
0
2
,
1
9
.
4
5
1
1
.
2
5
4
,
7
2
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
0
.
8
9
3
,
4
0
.
7
1
1
.
5
0
7
3
.
8
2
1
6
.
7
4
5
,
3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
4
1
2
.
9
1
8
1
.
2
8
0
,
0
1
—
—
—
—
—
—
—
—
—
4
1
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
1
.
2
8
0
,
0
1
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
2
.
9
1
8
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
1
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
y
r
o
g
e
t
a
c
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
o
t
s
n
o
i
t
a
d
a
r
g
p
U
.
3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
g
n
i
r
u
t
c
u
r
t
s
e
r
h
s
e
r
F
.
2
3
1
0
2
,
1
3
h
c
r
a
m
t
a
t
h
g
i
e
w
k
s
i
r
l
a
n
o
i
t
i
d
d
a
r
o
/
d
n
a
i
g
n
n
o
i
s
i
v
o
r
p
r
e
h
g
h
i
t
c
a
r
t
t
a
o
t
e
s
a
e
c
h
c
i
h
w
,
2
1
0
2
,
1
l
i
r
p
a
t
a
s
e
c
n
a
v
d
a
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
.
4
)
1
(
)
1
.
0
(
)
2
.
1
6
(
—
2
.
A
N
.
2
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
1
0
.
8
5
0
.
8
5
)
1
(
)
1
(
)
9
.
6
7
(
)
9
.
6
7
(
5
1
.
5
1
2
0
.
1
1
2
1
0
.
8
5
0
.
8
5
.
A
N
.
.
A
N
.
.
A
N
.
)
1
(
)
0
.
8
5
(
)
5
.
4
1
(
—
—
3
0
.
3
5
1
0
.
3
5
1
.
A
N
.
.
A
N
.
.
A
N
.
)
1
(
)
1
.
0
(
)
2
.
1
6
(
—
—
—
—
—
—
—
—
—
—
—
—
—
1
1
.
4
—
—
—
—
—
2
.
A
N
.
2
.
A
N
.
3
1
0
2
,
1
l
i
r
p
a
t
a
s
e
c
n
a
v
d
a
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
s
a
n
w
o
h
s
e
b
t
o
n
d
e
e
n
e
c
n
e
h
d
n
a
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
—
—
—
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
1
0
.
9
9
0
.
9
9
5
)
1
(
)
5
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
5
.
1
9
1
,
2
)
9
.
4
5
1
(
)
3
.
4
5
0
,
2
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
0
.
6
8
1
,
1
)
3
.
8
2
1
(
)
6
.
7
7
1
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
1
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
f
o
s
n
o
i
t
a
d
a
r
g
n
w
o
D
.
5
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
f
o
s
f
f
o
-
e
t
i
r
W
.
6
3
4
)
2
(
)
1
.
8
5
1
(
—
—
2
9
)
2
(
)
1
.
8
5
1
(
4
.
8
7
6
,
8
3
1
.
0
2
1
2
.
1
0
2
,
3
5
.
9
1
8
,
5
1
.
0
2
1
6
.
4
6
0
,
2
—
—
—
—
—
—
—
2
3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
3
1
0
2
,
1
3
h
c
r
a
m
t
a
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
.
7
1
.
7
5
3
,
5
3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
8
.
4
3
6
,
3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
e
h
t
s
t
n
e
s
e
r
p
e
r
d
e
t
e
e
d
l
s
a
n
w
o
h
s
t
n
u
o
m
a
e
h
t
,
n
o
i
t
a
c
i
f
i
s
s
a
c
l
t
e
s
s
a
r
e
w
o
l
o
t
d
e
d
a
r
g
n
w
o
d
s
e
s
a
c
n
i
d
n
a
y
r
o
g
e
t
a
c
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
o
t
d
e
d
a
r
g
p
u
s
e
s
a
c
n
I
.
l
i
N
e
r
a
s
r
e
w
o
r
r
o
b
f
o
r
e
b
m
u
n
e
h
t
s
a
d
e
t
n
e
s
e
r
p
t
o
n
e
r
a
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
p
e
h
t
d
n
a
g
n
d
n
a
t
s
t
u
o
s
t
n
u
o
m
a
i
e
h
T
.
3
1
0
2
,
1
3
h
c
r
a
M
i
t
a
g
n
d
n
a
t
s
t
u
o
s
t
n
e
s
e
r
p
e
r
n
o
i
t
i
d
d
a
n
i
n
w
o
h
s
t
a
h
t
d
n
a
2
1
0
2
,
1
3
h
c
r
a
M
i
t
a
g
n
d
n
a
t
s
t
u
o
.
1
.
2
F31
schedules
forming part of the Accounts (Contd.)
6
2
9
.
0
1
1
,
2
4
.
8
7
3
,
0
2
—
2
.
A
N
.
2
.
A
N
.
—
—
—
—
—
—
1
.
8
3
5
,
5
5
9
.
3
1
1
6
.
8
1
6
,
4
4
.
4
9
7
,
7
9
.
3
1
1
7
.
6
3
9
,
2
3
.
2
3
7
9
.
4
1
2
9
.
8
2
5
,
4
8
.
4
0
2
,
3
3
.
3
7
0
,
0
5
0
.
2
7
1
,
6
2
1
1
.
7
8
3
1
.
7
8
3
2
3
2
2
1
9
.
8
5
1
9
.
4
6
5
,
1
7
.
1
9
2
,
1
5
.
1
5
8
,
1
8
.
9
3
1
,
8
1
3
.
6
9
2
,
0
1
—
—
—
—
—
—
1
1
.
7
8
3
1
.
7
8
3
2
9
9
.
8
5
1
7
.
5
4
7
5
.
1
5
8
,
1
7
.
7
5
0
,
8
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
5
.
5
8
0
,
3
4
.
7
7
5
1
.
9
0
5
,
2
2
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
9
.
6
3
1
,
2
6
.
6
8
3
.
1
8
9
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
g
n
i
r
u
t
c
u
r
t
s
e
r
h
s
e
r
F
.
2
s
t
n
u
o
c
c
a
f
o
r
e
b
m
u
n
t
p
e
c
x
e
,
n
o
i
l
l
i
m
n
i
`
l
a
t
o
t
s
s
o
L
l
u
f
t
b
u
o
D
-
b
u
S
d
r
a
d
n
a
t
S
l
a
t
o
t
s
s
o
L
l
u
f
t
b
u
o
D
-
b
u
S
d
r
a
d
n
a
t
S
s
l
i
a
t
e
D
n
o
i
t
a
c
i
f
i
s
s
a
l
C
t
e
s
s
a
l
a
t
o
t
s
r
e
h
t
o
g
n
i
r
u
t
c
u
r
t
s
e
r
f
o
e
p
y
t
3
7
5
2
4
0
5
4
)
e
(
)
d
(
)
c
(
)
b
(
d
r
a
d
n
a
t
S
)
a
(
3
6
3
3
5
4
9
4
3
)
e
(
)
d
(
)
c
(
)
b
(
d
r
a
d
n
a
t
S
)
a
(
6
3
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
2
1
0
2
,
1
l
i
r
p
a
t
a
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
.
1
.
r
S
.
o
n
F32
—
2
.
A
N
.
2
.
A
N
.
—
—
4
1
.
8
3
1
1
.
8
3
1
—
—
4
)
7
(
.
A
N
.
)
6
.
8
5
4
,
2
(
.
A
N
.
)
6
.
7
1
1
(
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
)
7
(
)
6
(
.
A
N
.
)
6
.
8
5
4
,
2
(
)
4
.
7
9
3
,
2
(
.
A
N
.
)
6
.
7
1
1
(
)
5
.
7
1
1
(
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
.
A
N
.
)
6
(
)
5
.
7
1
1
(
)
4
.
7
9
3
,
2
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
3
1
0
2
,
1
l
i
r
p
a
t
a
s
e
c
n
a
v
d
a
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
s
a
n
w
o
h
s
e
b
t
o
n
d
e
e
n
e
c
n
e
h
d
n
a
3
1
0
2
,
1
3
h
c
r
a
m
t
a
t
h
g
i
e
w
k
s
i
r
l
a
n
o
i
t
i
d
d
a
r
o
/
d
n
a
i
g
n
n
o
i
s
i
v
o
r
p
r
e
h
g
h
i
t
c
a
r
t
t
a
o
t
e
s
a
e
c
h
c
i
h
w
,
2
1
0
2
,
1
l
i
r
p
a
t
a
s
e
c
n
a
v
d
a
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
.
4
1
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
f
o
s
n
o
i
t
a
d
a
r
g
n
w
o
D
.
5
)
8
4
1
(
)
7
.
2
3
2
(
)
5
.
9
2
1
(
—
—
—
1
.
6
8
4
1
0
.
7
9
1
—
2
.
A
N
.
2
.
A
N
.
—
—
—
)
8
4
1
(
)
7
.
2
3
2
(
)
5
.
9
2
1
(
—
—
—
1
.
6
8
4
1
0
.
7
9
1
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
1
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
y
r
o
g
e
t
a
c
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
o
t
s
n
o
i
t
a
d
a
r
g
p
U
.
3
—
2
.
A
N
.
2
.
A
N
.
6
1
.
5
9
2
1
.
5
9
2
8
2
2
)
6
3
(
4
.
0
8
2
,
2
)
2
.
4
1
2
(
)
0
.
1
8
4
(
7
.
8
7
8
,
4
)
9
.
7
2
7
(
)
0
.
6
3
5
,
4
(
4
2
3
)
1
3
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
2
.
5
4
7
,
2
)
0
.
3
7
5
(
)
7
.
1
8
4
,
2
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
9
.
8
0
1
,
1
)
9
.
5
8
(
)
4
.
3
0
3
(
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
3
1
0
2
,
1
3
h
c
r
a
m
d
e
d
n
e
r
a
e
y
e
h
t
g
n
i
r
u
d
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
f
o
s
f
f
o
-
e
t
i
r
W
.
6
)
3
(
)
1
(
)
2
(
)
0
.
5
3
2
(
)
9
.
6
7
(
)
1
.
8
5
1
(
4
8
4
7
5
9
2
—
—
8
—
—
4
7
1
6
3
4
—
—
3
8
2
—
—
8
—
—
1
4
1
2
.
5
3
5
,
1
1
2
.
6
1
3
6
.
5
5
9
,
5
6
.
9
5
1
8
.
3
0
1
,
5
7
.
4
0
5
,
5
1
.
8
3
1
0
.
8
3
7
,
3
6
.
9
5
1
0
.
9
6
4
,
1
1
.
9
2
4
,
9
6
2
.
6
1
3
8
.
4
0
0
,
9
9
.
5
5
8
,
1
2
.
2
5
2
,
8
5
6
.
5
3
5
,
0
3
1
.
8
3
1
6
.
0
5
6
,
5
9
.
5
5
8
,
1
0
.
1
9
8
,
2
2
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
P
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
s
r
e
w
o
r
r
o
b
f
o
.
o
N
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
i
g
n
d
n
a
t
s
t
u
o
t
n
u
o
m
A
3
1
0
2
,
1
3
h
c
r
a
m
t
a
s
t
n
u
o
c
c
a
d
e
r
u
t
c
u
r
t
s
e
r
.
7
e
h
t
s
t
n
e
s
e
r
p
e
r
d
e
t
e
e
d
l
s
a
n
w
o
h
s
t
n
u
o
m
a
e
h
t
,
n
o
i
t
a
c
i
f
i
s
s
a
c
l
t
e
s
s
a
r
e
w
o
l
o
t
d
e
d
a
r
g
n
w
o
d
s
e
s
a
c
n
i
d
n
a
y
r
o
g
e
t
a
c
d
r
a
d
n
a
t
s
d
e
r
u
t
c
u
r
t
s
e
r
o
t
d
e
d
a
r
g
p
u
s
e
s
a
c
n
I
.
l
i
N
e
r
a
s
r
e
w
o
r
r
o
b
f
o
r
e
b
m
u
n
e
h
t
s
a
d
e
t
n
e
s
e
r
p
t
o
n
e
r
a
n
o
e
r
e
h
t
n
o
i
s
i
v
o
r
p
e
h
t
d
n
a
g
n
d
n
a
t
s
t
u
o
s
t
n
u
o
m
a
i
e
h
T
.
3
1
0
2
,
1
3
h
c
r
a
M
i
t
a
g
n
d
n
a
t
s
t
u
o
s
t
n
e
s
e
r
p
e
r
n
o
i
t
i
d
d
a
n
i
n
w
o
h
s
t
a
h
t
d
n
a
2
1
0
2
,
1
3
h
c
r
a
M
i
t
a
g
n
d
n
a
t
s
t
u
o
.
1
.
2
schedules
forming part of the Accounts (Contd.)
24. Floating provision
Bank holds floating provision of ` 1.9 million at March 31, 2013 (March 31, 2012: ` 1.9 million) taken over from erstwhile
Bank of Rajasthan on amalgamation.
25. Concentration of Deposits, advances, Exposures and npas
(i) Concentration of deposits, advances, exposures and npas
Concentration of deposits
` in million
at
march 31, 2013
At
March 31, 2012
Total deposits of twenty largest depositors ...............................................
280,257.1
212,175.1
Deposits of twenty largest depositors as a percentage of total deposits
of the Bank ...................................................................................................
Concentration of advances1
9.58%
8.30%
` in million
at
march 31, 2013
At
March 31, 2012
Total advances to twenty largest borrowers (including banks) ................
1,095,316.4
1,032,621.4
Advances to twenty largest borrowers as a percentage of total advances
of the Bank ..................................................................................................
15.44%
15.40%
1. Represents credit exposure (funded and non-funded) including derivatives exposures as per RBI guidelines on exposure
norms.
Concentration of exposures1
` in million
at
march 31, 2013
At
March 31, 2012
Total exposure to twenty largest borrowers/customers (including banks)
1,126,427.8
1,066,030.1
Exposures to twenty largest borrowers/customers as a percentage of
total exposure of the Bank .........................................................................
1. Represents credit and investment exposures as per RBI guidelines on exposure norms.
14.85%
14.94%
Concentration of npas
Total exposure1 to top four NPA accounts .................................................
1. Represents gross exposure (funded and non-funded).
(ii) Sector-wise npas
Sr.
no. Sector
1. Agriculture and allied activities1 ...........................................
2.
Industry (Micro & small, medium and large) ........................
3. Services .................................................................................
Personal loans2 ......................................................................
4.
total .......................................................................................
at
march 31, 2013
12,511.3
` in million
At
March 31, 2012
5,657.3
percentage of npas to total
advances in that sector
at
march 31, 2013
net
0.75%
0.70%
1.05%
0.56%
0.77%
Gross
4.78%
2.02%
0.92%
9.18%
3.62%
At
March 31, 2012
Net
1.25%
0.69%
0.24%
1.26%
0.73%
gross
3.60%
2.28%
2.47%
5.80%
3.22%
1. Represents loans towards agriculture and allied activities that qualify for priority sector lending.
2.
Excludes retail loans towards agriculture and allied activities that qualify for priority sector lending. Excludes commercial
business loans, developer financing and dealer funding.
F33
schedules
forming part of the Accounts (Contd.)
(iii) overseas assets, npas and revenue
particulars
` in million
Year ended
March 31, 2012
Total assets1 .................................................................................................
875,049.1
508.1
Total NPAs (net) ...........................................................................................
Total revenue1 ..............................................................................................
44,327.6
1. Represents the total assets and total revenue of foreign operations as reported in Schedule 18 notes to accounts note no. 4
Year ended
march 31, 2013
935,097.0
3,624.0
46,925.8
on information about business and geographical segments, of the financial statements.
(iV) off-balance sheet special purpose vehicles (SpVs) sponsored (which are required to be consolidated as per
accounting norms)
(a) The following table sets forth, the names of SPVs/trusts sponsored by the Bank/subsidiaries which are consolidated.
Sr.
no.
a.
name of the SpV sponsored1
Domestic
1.
2.
3.
4.
5.
ICICI Eco-net Internet and Technology Fund
ICICI Equity Fund
ICICI Emerging Sectors Fund
ICICI Strategic Investments Fund
ICICI Venture Value Fund
B. overseas
None
1. The nature of business of the above entities is venture capital fund.
(b) The following table sets forth, the names of SPVs/trusts which are not sponsored by the Bank/subsidiaries and
are consolidated.
name of the SpV1
Sr.
no.
a. Domestic
1. Rainbow Fund
B. overseas
None
1. The nature of business of the above entities is venture capital fund.
26. Exposure to sensitive sectors
The Bank has exposure to sectors, which are sensitive to asset price fluctuations. The sensitive sectors include capital
markets and real estate.
The following table sets forth, for the periods indicated, the position of exposure to capital market sector.
i
ii
iii
Capital market sector
Direct investment 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 .............................................................................................
F34
` in million
at
march 31, 2013
At
March 31, 2012
16,345.8
14,654.4
11,791.5
12,102.9
30,736.6
13,900.4
schedules
forming part of the Accounts (Contd.)
iv
v
vi
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 the 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 corporate 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 .............................................................................................................
vii
Bridge loans to companies against expected equity flows/issues ..............
viii Underwriting commitments taken up by the Bank in respect of primary
issue of shares or convertible bonds or convertible debentures or units of
equity oriented mutual funds ............................................................................
ix
x
xi
Financing to stockbrokers for margin trading ................................................
All exposures to Venture Capital Funds (both registered and unregistered)
Others ...................................................................................................................
total Exposure to Capital market ...................................................................
` in million
at
march 31, 2013
At
March 31, 2012
—
—
40,716.7
40,623.6
—
—
—
—
—
—
—
—
9,415.4
83,448.4
192,454.4
9,608.7
112,518.7
203,408.7
The following table sets forth, for the periods indicated, the summary of exposure to real estate sector.
real estate sector
i
Direct exposure ......................................................................................
i) Residential mortgages ......................................................................
of which: individual housing loans eligible for priority sector advances
ii) Commercial real estate1 ...................................................................
iii) Investments in mortgage backed securities (MBS) and other
securitised exposure ........................................................................
a. Residential..................................................................................
b. Commercial real estate..............................................................
ii
indirect exposure ...................................................................................
Fund based and non-fund based exposures on National Housing
i)
Bank (NHB) and Housing Finance Companies (HFCs) ....................
ii) Others ...............................................................................................
total Exposure to real Estate Sector2..................................................
at
` in million
At
march 31, 2013
March 31, 2012
890,029.8
607,569.0
164,309.0
278,036.8
4,424.0
4,424.0
—
74,283.0
73,046.0
1,237.0
964,312.8
735,286.5
491,314.1
177,313.3
237,900.1
6,072.3
6,072.3
—
78,930.8
77,476.4
1,454.4
814,217.3
1.
2.
Commercial real estate exposure include loans to individuals against non-residential premises, loans given to land and building
developers for construction, corporate loans for development of special economic zone, loans to borrowers where servicing of
loans is from a real estate activity and exposures to mutual funds/venture capital funds/private equity funds investing primarily in
the real estate companies.
Excludes non-banking assets acquired in satisfaction of claims.
F35
schedules
forming part of the Accounts (Contd.)
27. risk category-wise country exposure
As per the extant RBI guidelines, the country exposure of the Bank is categorised into various risk categories listed in the
following table. The funded country exposure (net) of the Bank as a percentage of total funded assets for Singapore was
1.45% (March 31, 2012: 1.54%) and United Kingdom was 1.34% (March 31, 2012: 1.23%). As the net funded exposure
to Singapore and United Kingdom exceeds 1.0% of total funded assets, the Bank held a provision of ` 230.0 million on
country exposure at March 31, 2013 (March 31, 2012: ` 240.0 million) based on RBI guidelines.
The following table sets forth, for the periods indicated, the details of exposure (net) and provision held by the bank.
risk category
Insignificant ................................................
Low .............................................................
Moderate....................................................
High ............................................................
Very High ...................................................
Restricted ...................................................
Off-Credit ...................................................
Exposure (net) at
march 31, 2013
provision held at
march 31, 2013
Exposure (net) at
March 31, 2012
Provision held at
March 31, 2012
` in million
546,787.0
184,890.4
41,721.0
1,906.7
—
—
—
230.0
—
—
—
—
—
—
529,612.7
186,098.7
23,462.4
0.1
—
—
—
240.0
—
—
—
—
—
—
total ...........................................................
775,305.1
230.0
739,173.9
240.0
28. Details of Single Borrower Limit and Borrower group Limit exceeded by the Bank
During the year ended March 31, 2013 and March 31, 2012, the Bank has complied with the Reserve Bank of India
guidelines on single borrower and borrower group limit.
29. Unsecured advances against intangible assets
The Bank had not made advances against intangible collaterals of the borrowers, which are classified as ‘unsecured’ in
its financial statements at March 31, 2013 (March 31, 2012: Nil) and the estimated value of the intangible collaterals was
Nil at March 31, 2013 (March 31, 2012: Nil).
30. Fixed assets
The following table sets forth, for the periods indicated, the movement in software acquired by the Bank, as included in fixed assets.
` in million
particulars
At cost at March 31st of preceding year ..............................................................
Additions during the year .....................................................................................
Deductions during the year ..................................................................................
Depreciation to date ..............................................................................................
Net block ................................................................................................................
at
march 31, 2013
At
March 31, 2012
7,055.2
1,462.3
(9.5)
(6,379.5)
2,128.5
6,589.6
465.6
—
(5,637.0)
1,418.2
F36
schedules
forming part of the Accounts (Contd.)
31. Description of contingent liabilities
The following table describes the nature of contingent liabilities of the Bank.
Sr.
no.
1.
2.
3.
4
5
6
Contingent liability
Brief Description
Claims against
the Bank, not
acknowledged as
debts
This item represents certain demands made in certain tax and legal matters against the
Bank in the normal course of business and customer claims arising in fraud cases. In
accordance with the Bank’s accounting policy and Accounting Standard 29, the Bank
has reviewed and classified these items as possible obligations based on legal opinion/
judicial precedents/assessment by the Bank.
Liability for partly paid
investments
This item represents amounts remaining unpaid towards purchase of investments.
These payment obligations of the Bank do not have any profit/loss impact.
Liability on account of
outstanding forward
exchange contracts
The Bank enters into foreign exchange contracts in its normal course of business,
to exchange currencies at a pre-fixed price at a future date. This item represents the
notional principal amount of such contracts, which are derivative instruments. With
respect to the transactions entered into with its customers, the Bank generally enters
into off-setting transactions in the inter-bank market. This results in generation of a
higher number of outstanding transactions, and hence a large value of gross notional
principal of the portfolio, while the net market risk is lower.
Guarantees given on
behalf of constituents,
acceptances,
endorsements and
other obligations
This item represents the guarantees and documentary credits issued by the Bank in
favour of third parties on behalf of its customers, as part of its trade finance banking
activities with a view to augment the customers’ credit standing. Through these
instruments, the Bank undertakes to make payments for its customers’ obligations,
either directly or in case the customer fails to fulfill their financial or performance
obligations.
Currency swaps,
interest rate swaps,
currency options and
interest rate futures
Other items for
which the Bank is
contingently liable
This item represents the notional principal amount of various derivative instruments
which the Bank undertakes in its normal course of business. The Bank offers these
products to its customers to enable them to transfer, modify or reduce their foreign
exchange and interest rate risks. The Bank also undertakes these contracts to manage
its own interest rate and foreign exchange positions. With respect to the transactions
entered into with its customers, the Bank generally enters into off-setting transactions
in the inter-bank market. This results in generation of a higher number of outstanding
transactions, and hence a large value of gross notional principal of the portfolio, while
the net market risk is lower.
Other items for which the Bank is contingently liable primarily include the amount of
Government securities bought/sold and remaining to be settled on the date of financial
statements. This also includes the value of sell down options and other facilities
pertaining to securitisation the notional principal amounts of credit derivatives, amount
applied in public offers under Application Supported by Blocked Amounts (ASBA) and
the amount that the Bank is obligated to pay under capital contracts. Capital contracts
are job orders of a capital nature which have been committed.
32. Bancassurance
The following table sets forth, for the periods indicated, the break-up of income derived from bancassurance business.
Sr.
no.
1.
2.
3.
nature of income
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
Income from selling life insurance policies ..................................................
Income from selling non life insurance policies ..........................................
Income from selling mutual fund/collective investment scheme products
3,786.6
466.0
1,004.3
3,004.1
369.1
693.1
F37
schedules
forming part of the Accounts (Contd.)
33. Staff retirement benefits
pension
The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation,
fair value of plan assets and other details for pension benefits.
particulars
opening obligations ............................................................................................
Service cost ..........................................................................................................
Interest cost ..........................................................................................................
Actuarial (gain)/loss ..............................................................................................
Liabilities extinguished on settlement .................................................................
Benefits paid .........................................................................................................
obligations at the end of year ............................................................................
opening plan assets, at fair value ......................................................................
Expected return on plan assets ...........................................................................
Actuarial gain/(loss) ..............................................................................................
Assets distributed on settlement .........................................................................
Contributions ........................................................................................................
Benefits paid .........................................................................................................
Closing plan assets, at fair value ........................................................................
Fair value of plan assets at the end of the year ..................................................
Present value of the defined benefit obligations at the end of the year ............
Amount not recognised as an asset (limit in Para 59(b)) ....................................
asset/(liability) ....................................................................................................
Cost for the year
Service cost ..........................................................................................................
Interest cost ..........................................................................................................
Expected return on plan assets ...........................................................................
Actuarial (gain)/loss ..............................................................................................
Curtailments & settlements (gain)/loss ................................................................
Effect of the limit in para 59(b) .............................................................................
net cost ................................................................................................................
Actual return on plan assets ................................................................................
Expected employer’s contribution next year ......................................................
investment details of plan assets
Insurer Managed Funds1 .....................................................................................
Government of India securities ............................................................................
Corporate Bonds ..................................................................................................
Others ...................................................................................................................
assumptions
Interest rate ...........................................................................................................
Salary escalation rate:
On Basic Pay .........................................................................................................
On Dearness Relief ...............................................................................................
Estimated rate of return on plan assets ..............................................................
1. Majority of the funds are invested in Government of India securities and corporate bonds.
F38
Year ended
march 31, 2013
9,602.7
250.6
793.7
2,017.8
(1,960.1)
(312.2)
10,392.5
` in million
Year ended
March 31, 2012
8,842.9
251.6
707.8
2,329.8
(2,268.7)
(260.7)
9,602.7
9,379.5
728.5
102.3
(2,177.9)
1,806.6
(312.2)
9,526.8
9,526.8
10,392.5
—
(865.7)
250.6
793.7
(728.5)
1,915.5
217.8
—
2,449.1
828.7
670.0
77.74%
7.62%
9.31%
5.33%
8.00%
1.50%
7.00%
8.00%
8,467.4
652.9
51.7
(2,413.5)
2,881.7
(260.7)
9,379.5
9,379.5
9,602.7
—
(223.2)
251.6
707.8
(652.9)
2,278.2
144.8
—
2,729.5
704.6
150.0
78.93%
8.59%
9.40%
3.08%
8.35%
1.50%
7.00%
8.00%
schedules
forming part of the Accounts (Contd.)
Estimated rate of return on plan assets is based on our expectation of the average long-term rate of return on investments
of the Fund during the estimated term of the obligations.
Experience adjustment
particulars
Plan assets .....................................................................
Defined benefit obligations ...........................................
Amount not recognised as an asset (limit in para 59(b)
Surplus/(deficit) .............................................................
Experience adjustment on plan assets .........................
Experience adjustment on plan liabilities .....................
Year ended
march 31,
2013
9,526.8
10,392.5
—
(865.7)
102.3
1,525.2
Year ended
March 31,
2012
9,379.5
9,602.7
—
(223.2)
51.7
2,692.3
Year ended
March 31,
2011
8,467.4
8,842.9
—
(375.5)
69.1
689.7
Year ended
March 31,
2010
1,839.9
1,748.7
7.7
83.5
(130.7)
196.9
` in million
Year ended
March 31,
2009
2,145.3
1,932.2
51.2
161.9
144.8
6.6
particulars
Year ended
march 31, 2013
5,247.2
3.8
5,251.0
368.8
428.1
267.2
0.6
4.1
(676.7)
5,643.1
5,027.4
375.8
34.4
764.6
5.0
(676.7)
5,530.5
5,530.5
5,643.1
—
(112.6)
gratuity
The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation,
fair value of plan assets and other details for gratuity benefits.
` in million
Year ended
March 31, 2012
5,082.7
5.8
5,088.5
379.7
419.5
(57.4)
—
10.1
(593.2)
5,247.2
5,182.4
395.5
20.1
12.8
9.8
(593.2)
5,027.4
5,027.4
5,247.2
—
(219.8)
opening obligations .............................................................................................
Add: Adjustment for exchange fluctuation on opening obligations .......................
adjusted opening obligations ..............................................................................
Service cost ..........................................................................................................
Interest cost ..........................................................................................................
Actuarial (gain)/loss ...............................................................................................
Past service cost ...................................................................................................
Liability assumed on acquisition/(settled on divestiture) .......................................
Benefits paid .........................................................................................................
obligations at the end of the year ........................................................................
opening plan assets, at fair value ........................................................................
Expected return on plan assets .............................................................................
Actuarial gain/(loss) ...............................................................................................
Contributions ........................................................................................................
Assets acquired on acquisition/(distributed on divestiture) ...................................
Benefits paid .........................................................................................................
Closing plan assets, at fair value ..........................................................................
Fair value of plan assets at the end of the year ......................................................
Present value of the defined benefit obligations at the end of the year .................
Amount not recognised as an asset (limit in Para 59(b)) ........................................
asset/(liability) .....................................................................................................
Cost for the year
Service cost ..........................................................................................................
Interest cost ..........................................................................................................
Expected return on plan assets .............................................................................
Actuarial (gain)/loss ...............................................................................................
Past service cost ...................................................................................................
Exchange fluctuation loss/(gain) ............................................................................
Losses/(Gains) on “Acquisition/Divestiture” ...........................................................
Effect of the limit in para 59(b) ..............................................................................
net cost ................................................................................................................
Actual return on plan assets ..................................................................................
Expected employer’s contribution next year .........................................................
investment details of plan assets
Insurer Managed Funds ........................................................................................
Government of India securities .............................................................................
Corporate Bonds ...................................................................................................
Special Deposit schemes ......................................................................................
Equity ....................................................................................................................
Others ...................................................................................................................
assumptions
Interest rate ...........................................................................................................
Salary escalation rate ............................................................................................
Estimated rate of return on plan assets .................................................................
368.8
428.1
(375.8)
232.8
0.6
3.8
—
—
658.3
410.2
403.9
9.95%
28.07%
27.81%
5.26%
12.89%
16.02%
7.95%
7.00%
8.00%
379.7
419.5
(395.5)
(77.5)
—
5.8
0.3
—
332.3
415.5
253.6
50.70%
7.77%
18.46%
5.78%
9.73%
7.56%
8.30%
7.00%
8.00%
Estimated rate of return on plan assets is based on our expectation of the average long-term rate of return on investments of the Fund
during the estimated term of the obligations.
F39
schedules
forming part of the Accounts (Contd.)
Experience adjustment
particulars
Plan assets ................................................................
Defined benefit obligations ......................................
Amount not recognised as an asset
(limit in para 59(b)) ...................................................
Surplus/(deficit) ........................................................
Experience adjustment on plan assets ....................
Experience adjustment on plan liabilities ................
Year ended
march 31,
2013
5,530.5
5,643.1
Year ended
March 31,
2012
5,027.4
5,247.2
Year ended
March 31,
2011
5,182.4
5,082.7
Year ended
March 31,
2010
2,507.5
2,310.5
` in million
Year ended
March 31,
2009
2,272.1
2,195.7
—
(112.6)
34.4
153.6
—
(219.8)
20.1
44.1
—
99.7
(63.2)
79.0
47.9
149.1
168.8
(0.8)
7.9
68.5
(118.0)
(4.1)
The estimates of future salary increases, considered in actuarial valuation, take into consideration inflation, seniority,
promotion and other relevant factors.
provident Fund (pF)
As there is no liability towards interest rate guarantee on exempt provident fund on the basis of actuarial valuation, Bank
has made no provision for the year ended March 31, 2013 (March 31, 2012: ` 17.9 million).
The following tables set forth, for the periods indicated, reconciliation of opening and closing balance of the present
value of the defined benefit obligation for provident fund.
particulars
opening obligations ...............................................................................................................................
Service cost .............................................................................................................................................
Interest cost .............................................................................................................................................
Actuarial (gain)/loss .................................................................................................................................
Employees contribution ..........................................................................................................................
Liabilities assumed on acquisition ..........................................................................................................
Benefits paid ............................................................................................................................................
obligations at end of the year ...............................................................................................................
opening plan assets ...............................................................................................................................
Expected return on plan assets ..............................................................................................................
Actuarial gain/(loss) .................................................................................................................................
Employer contributions ..........................................................................................................................
Employees contributions .......................................................................................................................
Assets acquired on Acquisition/(Distributed on Divestiture) ................................................................
Benefits paid ............................................................................................................................................
Closing plan assets .................................................................................................................................
Plan assets at the end of the year ...........................................................................................................
Present value of the defined benefit obligations at the end of the year ...............................................
asset/(liability) .......................................................................................................................................
Cost for the year
Service cost .............................................................................................................................................
Interest cost .............................................................................................................................................
Expected return on plan assets ..............................................................................................................
Actuarial (gain)/loss .................................................................................................................................
net cost ...................................................................................................................................................
Actual Return on Plan Assets..................................................................................................................
Expected employer's contribution next year .........................................................................................
investment details of plan assets
Government of India securities ...............................................................................................................
Corporate bonds .....................................................................................................................................
Special deposit scheme ..........................................................................................................................
Others ......................................................................................................................................................
assumption
Discount rate ...........................................................................................................................................
Expected rate of return on assets ...........................................................................................................
Discount rate for the remaining term to maturity of investments ........................................................
Average historic yield on the investment...............................................................................................
Guaranteed rate of return .......................................................................................................................
F40
` in million
Year ended
march 31, 2013
12,147.6
783.4
1,003.8
(26.4)
1,380.7
104.8
(1,674.4)
13,719.5
12,129.8
1,017.2
(22.0)
783.4
1,380.7
104.8
(1,674.4)
13,719.5
13,719.5
13,719.5
—
783.4
1,003.8
(1,017.2)
(4.4)
765.6
995.2
838.2
39.20%
50.14%
3.87%
6.79%
7.95%
8.45%
8.05%
8.55%
8.50%
schedules
forming part of the Accounts (Contd.)
Experience adjustment
particulars
Plan assets ...............................................................................................................................................
Defined benefit obligations .....................................................................................................................
Amount not recognised as an asset (limit in para 59(b)) .......................................................................
Surplus/(deficit) .......................................................................................................................................
Experience adjustment on plan assets ...................................................................................................
Experience adjustment on plan liabilities ...............................................................................................
` in million
Year ended
march 31, 2013
13,719.5
13,719.5
—
—
(22.1)
(26.4)
Bank has contributed employer’s contribution of ` 1,244.6 million to provident fund for the year ended March 31, 2013
(March 31, 2012: ` 1,115.3 million), which includes compulsory contribution made towards employee pension scheme
under Employees Provident Fund and Miscellaneous Provisions Act, 1952
Superannuation Fund
Bank has contributed employer’s contribution of ` 100.5 million for the year March 31, 2013 (March 31, 2012: ` 114.8
million) to superannuation fund.
34. movement in provision for credit card/debit card/savings account reward points
The following table sets forth, for the periods indicated, movement in provision for credit card/debit card/savings account
reward points.
particulars
Opening provision for reward points .................................................................
Provision for reward points made during the year ............................................
Utilisation/write-back of provision for reward points ........................................
Closing provision for reward points1 .................................................................
Year ended
march 31, 2013
712.5
637.1
(603.7)
745.9
` in million
Year ended
March 31, 2012
462.5
769.7
(519.7)
712.5
1.
The closing provision is based on the actuarial valuation of accumulated credit/debit card/savings account reward points. This
amount will be utilised towards redemption of the credit/debit card/savings accounts reward points.
35. provisions and contingencies
The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in profit
and loss account.
Provisions for depreciation of investments .......................................................
Provision towards non-performing and other assets ........................................
Provision towards income tax ............................................................................
Deferred tax adjustment .....................................................................................
Provision towards wealth tax ..............................................................................
Other provisions and contingencies1 .................................................................
total provisions and contingencies ...................................................................
Year ended
march 31, 2013
1,261.8
13,948.4
29,982.0
660.2
70.0
2,815.2
48,737.6
` in million
Year ended
March 31, 2012
4,132.0
9,931.8
21,874.2
1,446.5
61.0
1,766.6
39,212.1
1.
Includes provision towards standard assets amounting to ` 1,439.1 million (March 31, 2012: Nil)
36. provisions for income tax
The provision for income tax (including deferred tax) for the year ended March 31, 2013 amounted to ` 30,642.2 million
(March 31, 2012: ` 23,320.7 million).
The Bank has a comprehensive system of maintenance of information and documents required by transfer pricing
legislation under section 92-92F of the Income-tax Act, 1961. Finance Act, 2012 has enhanced the scope of transfer pricing
to specified transaction with domestic related parties. The Bank is of the opinion that all transactions with international
and domestic related parties are primarily at arm’s length so that the above legislation do not have material impact on
the financial statements.
37. Deferred tax
At March 31, 2013, the Bank has recorded net deferred tax asset of ` 24,793.0 million (March 31, 2012: ` 25,453.2 million),
which has been included in other assets.
F41
schedules
forming part of the Accounts (Contd.)
The following table sets forth, for the periods indicated, the break-up of deferred tax assets and liabilities into major items.
Deferred tax asset
Provision for bad and doubtful debts ..................................................................
Capital loss ............................................................................................................
Others ...................................................................................................................
total deferred tax asset .......................................................................................
Deferred tax liability
Depreciation on fixed assets ................................................................................
total deferred tax liability ...................................................................................
Deferred tax asset/(liability) pertaining to foreign branches ..............................
total net deferred tax asset/(liability) ................................................................
at
march 31, 2013
` in million
At
March 31, 2012
27,146.3
63.1
2,265.4
29,474.8
4,682.5
4,682.5
0.7
24,793.0
27,348.8
79.5
2,299.3
29,727.6
4,275.1
4,275.1
0.7
25,453.2
38. Dividend distribution tax
For the purpose of computation of dividend distribution tax on the proposed dividend, the Bank has reduced the dividend
received from its Indian subsidiaries, on which dividend distribution tax has been paid by the subsidiaries as per the
provisions of Section 115-O of the Income Tax Act, 1961.
39. related party transactions
The Bank has transactions with its related parties comprising subsidiaries, associates/joint ventures/other related entities,
key management personnel and relatives of key management personnel.
Subsidiaries
ICICI Bank UK PLC, ICICI Bank Canada, ICICI Bank Eurasia Limited Liability Company, ICICI Prudential Life Insurance
Company Limited1, ICICI Lombard General Insurance Company Limited1, ICICI Prudential Asset Management Company
Limited1, ICICI Securities Limited, ICICI Securities Primary Dealership Limited, ICICI Home Finance Company Limited,
ICICI Venture Funds Management Company Limited, ICICI International Limited, ICICI Trusteeship Services Limited, ICICI
Investment Management Company Limited, ICICI Securities Holdings Inc., ICICI Securities Inc., ICICI Prudential Trust
Limited1 and ICICI Prudential Pension Funds Management Company Limited1.
1. Jointly controlled entities.
associates/joint ventures/other related entities
ICICI Equity Fund1, ICICI Eco-net Internet and Technology Fund1, ICICI Emerging Sectors Fund1, ICICI Strategic Investments
Fund1, ICICI Kinfra Limited1, FINO PayTech Limited (formerly known as Financial Inclusion Network & Operations Limited),
TCW/ICICI Investment Partners Limited, I-Process Services (India) Private Limited, NIIT Institute of Finance, Banking and
Insurance Training Limited, ICICI Venture Value Fund1, Comm Trade Services Limited, ICICI Foundation for Inclusive Growth,
I-Ven Biotech Limited1, Rainbow Fund, ICICI Merchant Services Private Limited, Mewar Aanchalik Gramin Bank, India Infradebt
Limited2.
1.
2.
Entities consolidated as per Accounting Standard (AS) 21 on ‘Consolidated Financial Statements’.
This entity was incorporated and identified as a related party during the three months ended December 31, 2012.
Key management personnel
Ms. Chanda Kochhar, Mr. N. S. Kannan, Mr. K. Ramkumar, Mr. Rajiv Sabharwal.
relatives of key management personnel
Mr. Deepak Kochhar, Mr. Arjun Kochhar, Ms. Aarti Kochhar, Mr. Mahesh Advani, Ms. Varuna Karna, Ms. Sunita R. Advani,
Ms. Rangarajan Kumudalakshmi, Ms. Aditi Kannan, Mr. Narayanan Raghunathan, Mr. Narayanan Rangarajan, Mr. Narayanan
Krishnamachari, Mr. R. Shyam, Ms. R. Suchithra, Mr. K. Jayakumar, Mr. R. Krishnaswamy, Ms. J. Krishnaswamy, Ms. Sangeeta
Sabharwal.
The following were the significant transactions between the Bank and its related parties for the year ended March 31,
2013. A specific related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of
all related party transactions in that category.
F42
schedules
forming part of the Accounts (Contd.)
insurance services
During the year ended March 31, 2013, the Bank paid insurance premium to insurance subsidiaries amounting to ` 969.6
million (March 31, 2012: ` 957.9 million). The material transactions for the year ended March 31, 2013 were payment of
insurance premium to ICICI Lombard General Insurance Company Limited amounting to ` 871.8 million (March 31, 2012:
` 775.8 million) and to ICICI Prudential Life Insurance Company Limited amounting to ` 97.8 million (March 31, 2012: `
182.1 million).
During the year ended March 31, 2013, the Bank’s insurance claims (including the claims received by the Bank on
behalf of key management personnel) from the insurance subsidiaries amounted to ` 503.6 million (March 31, 2012: `
411.5 million). The material transactions for the year ended March 31, 2013 were with ICICI Lombard General Insurance
Company Limited amounting to ` 444.3 million (March 31, 2012: ` 355.2 million) and with ICICI Prudential Life Insurance
Company Limited amounting to ` 59.3 million (March 31, 2012: ` 56.3 million).
Fees and commission income
During the year ended March 31, 2013, the Bank received fees from its subsidiaries amounting to ` 4,726.6 million (March
31, 2012: ` 3,841.2 million), from its associates/joint ventures/other related entities amounting to ` 13.9 million (March
31, 2012: ` 19.9 million) and from relatives of key management personnel amounting to ` 0.1 million (March 31, 2012:
Nil). The material transactions for the year ended March 31, 2013 were with ICICI Prudential Life Insurance Company
Limited amounting to ` 3,860.1 million (March 31, 2012: ` 3,077.0 million) and with ICICI Lombard General Insurance
Company Limited amounting to ` 516.6 million (March 31, 2012: ` 421.0 million).
During the year ended March 31, 2013, the Bank received commission on bank guarantees from its subsidiaries
amounting to ` 41.8 million (March 31, 2012: ` 32.4 million). The material transactions for the year ended March 31, 2013
were with ICICI Bank UK PLC amounting to ` 35.1 million (March 31, 2012: ` 24.8 million) and with ICICI Bank Eurasia
Limited Liability Company amounting to ` 5.6 million (March 31, 2012: ` 5.6 million).
Lease of premises, common corporate and facilities expenses
During the year ended March 31, 2013, the Bank recovered from its subsidiaries an amount of ` 1,099.3 million (March
31, 2012: ` 1,112.1 million), from its associates/joint ventures/other related entities an amount of ` 147.9 million (March
31, 2012: ` 38.4 million) and from its key management personnel an amount of ` 0.1 million (March 31, 2012: Nil) for
lease of premises, common corporate and facilities expenses. The material transactions for the year ended March 31,
2013 were with ICICI Home Finance Company Limited amounting to ` 273.3 million (March 31, 2012: ` 258.6 million),
ICICI Securities Limited amounting to ` 229.1 million (March 31, 2012: ` 272.0 million), ICICI Prudential Life Insurance
Company Limited amounting to ` 164.0 million (March 31, 2012: ` 162.6 million), ICICI Bank UK PLC amounting to ` 151.2
million (March 31, 2012: ` 125.1 million), ICICI Merchant Services Private Limited amounting to ` 147.9 million (March 31,
2012: ` 38.4 million) and with ICICI Lombard General Insurance Company Limited amounting to ` 143.6 million (March
31, 2012: ` 138.4 million).
Secondment of employees
During the year ended March 31, 2013, the Bank recovered towards deputation of employees from its subsidiaries an
amount of ` 52.2 million (March 31, 2012: ` 37.9 million) and from its associates/joint ventures/other related entities an
amount of ` 6.6 million (March 31, 2012: ` 7.0 million). The material transactions for the year ended March 31, 2013 were
with ICICI Investment Management Company Limited amounting to ` 35.6 million (March 31, 2012: ` 28.2 million), ICICI
Securities Limited amounting to ` 14.5 million (March 31, 2012: ` 11.4 million) and with I-Process Services (India) Private
Limited amounting to ` 6.6 million (March 31, 2012: ` 7.0 million).
purchase of investments
During the year ended March 31, 2013, the Bank purchased certain investments from its subsidiaries amounting to
` 23,702.1 million (March 31, 2012: ` 5,757.0 million). The material transactions for the year ended March 31, 2013 were
with ICICI Securities Primary Dealership Limited amounting to ` 17,330.7 million (March 31, 2012: ` 3,927.5 million), ICICI
Lombard General Insurance Company Limited amounting to ` 3,314.5 million (March 31, 2012: ` 154.1 million) and with
ICICI Prudential Life Insurance Company Limited amounting to ` 3,056.9 million (March 31, 2012: ` 1,675.4 million).
During the year ended March 31, 2013, the Bank invested in the equity shares of India Infradebt Limited amounting to
` 900.0 million (March 31, 2012: Nil), in the share application money for equity shares of ICICI Lombard General Insurance
Company Limited amounting to ` 740.0 million (March 31, 2012: Nil), in the share application money for equity shares of
Mewar Aanchalik Gramin Bank amounting to ` 18.6 million (March 31, 2012: Nil) and in equity warrants of FINO PayTech
Limited amounting to Nil (March 31, 2012: ` 40.0 million).
F43
schedules
forming part of the Accounts (Contd.)
Sale of investments
During the year ended March 31, 2013, the Bank sold certain investments to its subsidiaries amounting to ` 12,119.1
million (March 31, 2012: ` 9,532.7 million) and to its associates/joint ventures/other related entities amounting to Nil
(March 31, 2012: ` 48.7 million). The material transactions for the year ended March 31, 2013 were with ICICI Securities
Primary Dealership Limited amounting to ` 6,459.7 million (March 31, 2012: ` 2,783.6 million), ICICI Prudential Life
Insurance Company Limited amounting to ` 4,088.0 million (March 31, 2012: ` 5,097.7 million) and with ICICI Lombard
General Insurance Company Limited amounting to ` 1,321.2 million (March 31, 2012: ` 1,560.3 million).
investment in Certificate of Deposits (CDs)/bonds issued by iCiCi Bank
During the year ended March 31, 2013, subsidiaries have invested in CDs/bonds issued by the Bank amounting to
` 1,914.0 million (March 31, 2012: ` 4,622.5 million). The material transactions for the year ended March 31, 2013 were
with ICICI Prudential Life Insurance Company Limited amounting to ` 1,407.2 million (March 31, 2012: ` 3,165.6 million)
and with ICICI Securities Primary Dealership Limited amounting to ` 506.8 million (March 31, 2012: ` 1,002.5 million).
redemption/buyback of investments
During the year ended March 31, 2013, the Bank received a consideration from ICICI Bank UK PLC amounting to ` 5,428.5
million (equivalent to USD 100.0 million) (March 31, 2012: Nil) on account of buyback of equity/preference shares by ICICI
Bank UK PLC.
During the year ended March 31, 2013, the Bank received a consideration from ICICI Emerging Sectors Fund amounting
to Nil (March 31, 2012: ` 1,396.8 million) on account of redemption of units and distribution of gain/loss on units by ICICI
Emerging Sectors Fund.
reimbursement of expenses to subsidiaries
During the year ended March 31, 2013, the Bank reimbursed expenses to its subsidiaries amounting to ` 29.6 million
(March 31, 2012: ` 40.6 million). The material transactions for the year ended March 31, 2013 were with ICICI Home
Finance Company Limited amounting to ` 16.5 million (March 31, 2012: Nil), ICICI Bank Canada amounting to ` 7.3 million
(March 31, 2012: ` 6.7 million) and with ICICI Bank UK PLC amounting to ` 5.8 million (March 31, 2012: ` 33.9 million).
reimbursement of expenses to the Bank
During the year ended March 31, 2013, subsidiaries reimbursed expenses to the Bank amounting to ` 29.1 million
(March 31, 2012: ` 19.0 million). The material transactions for the year ended March 31, 2013 were with ICICI Bank UK
PLC amounting to ` 18.0 million (March 31, 2012: ` 13.4 million), ICICI Home Finance Company Limited amounting to `
6.1 million (March 31, 2012: ` 0.2 million) and with ICICI Bank Canada amounting to ` 5.0 million (March 31, 2012: ` 5.4
million).
Brokerage, fees and other expenses
During the year ended March 31, 2013, the Bank paid brokerage, fees and other expenses to its subsidiaries amounting
to ` 557.3 million (March 31, 2012: ` 491.5 million) and to its associates/joint ventures/other related entities amounting
to ` 2,653.2 million (March 31, 2012: ` 1,832.5 million). The material transactions for the year ended March 31, 2013
were with ICICI Merchant Services Private Limited amounting to ` 1,305.2 million (March 31, 2012: ` 953.9 million),
I-Process Services (India) Private Limited amounting to ` 1,045.2 million (March 31, 2012: ` 606.5 million), ICICI Home
Finance Company Limited amounting to ` 373.7 million (March 31, 2012: ` 349.8 million) and with FINO PayTech Limited
amounting to ` 258.4 million (March 31, 2012: ` 259.0 million).
income on custodial services
During the year ended March 31, 2013, the Bank recovered custodial charges from its subsidiaries amounting to
` 5.1 million (March 31, 2012: ` 3.5 million) and from its associates/joint ventures/other related entities amounting to
` 0.9 million (March 31, 2012: ` 1.4 million). The material transactions for the year ended March 31, 2013 were with
ICICI Securities Primary Dealership Limited amounting to ` 4.8 million (March 31, 2012: ` 3.3 million) and with ICICI
Strategic Investments Fund amounting to ` 0.3 million (March 31, 2012: ` 0.6 million).
interest expenses
During the year ended March 31, 2013, the Bank paid interest to its subsidiaries amounting to ` 390.9 million (March 31,
2012: ` 336.4 million), to its associates/joint ventures/other related entities amounting to ` 272.5 million (March 31, 2012:
` 160.5 million), to its key management personnel amounting to ` 2.9 million (March 31, 2012: ` 2.0 million) and to relatives
of key management personnel amounting to ` 1.7 million (March 31, 2012: ` 1.1 million). The material transactions for
the year ended March 31, 2013 were with ICICI Securities Limited amounting to ` 184.5 million (March 31, 2012: ` 111.6
million), Mewar Aanchalik Gramin Bank amounting to ` 162.4 million (March 31, 2012: ` 128.9 million), ICICI Prudential Life
Insurance Company Limited amounting to ` 148.4 million (March 31, 2012: ` 129.1 million) and with India Infradebt Limited
amounting to ` 84.5 million (March 31, 2012: Nil).
F44
schedules
forming part of the Accounts (Contd.)
interest income
During the year ended March 31, 2013, the Bank received interest from its subsidiaries amounting to ` 1,781.2 million
(March 31, 2012: ` 1,686.8 million), from its associates/joint ventures/other related entities amounting to ` 95.1 million
(March 31, 2012: ` 49.1 million), from its key management personnel amounting to ` 0.4 million (March 31, 2012: ` 0.5
million) and from relatives of key management personnel amounting to ` 0.7 million (March 31, 2012: ` 0.7 million). The
material transactions for the year ended March 31, 2013 were with ICICI Home Finance Company Limited amounting to
` 1,202.0 million (March 31, 2012: ` 1,181.4 million) and with ICICI Bank Eurasia Limited Liability Company amounting to
` 245.9 million (March 31, 2012: ` 210.9 million).
other income
The Bank undertakes derivative transactions with its subsidiaries, associates, joint ventures and other related entities.
The Bank manages its foreign exchange and interest rate risks arising from these transactions by covering them in the
market. During the year ended March 31, 2013, the net gain of the Bank on forex and derivative transactions entered with
subsidiaries was ` 304.5 million (March 31, 2012: net loss of ` 337.3 million). The material transactions for the year ended
March 31, 2013 were gain of ` 235.7 million (March 31, 2012: loss of ` 620.0 million) with ICICI Bank UK PLC, gain of
` 170.4 million (March 31, 2012: gain of ` 352.9 million) with ICICI Bank Canada, loss of ` 162.5 million (March 31, 2012:
gain of ` 168.4 million) with ICICI Home Finance Company Limited and gain of ` 31.6 million (March 31, 2012: loss of
` 242.2 million) with ICICI Securities Primary Dealership Limited.
While the Bank within its overall position limits covers these transactions in the market, the above amounts represent
only the transactions with its subsidiaries, associates, joint ventures and other related entities and not the offsetting/
covering transactions.
Dividend income
During the year ended March 31, 2013, the Bank received dividend from its subsidiaries amounting to ` 9,117.6 million
(March 31, 2012: ` 7,364.1 million). The material transactions for the year ended March 31, 2013 were with ICICI Prudential
Life Insurance Company Limited amounting to ` 3,271.5 million (March 31, 2012: ` 2,321.7 million), ICICI Bank Canada
amounting to ` 1,666.2 million (March 31, 2012: ` 283.0 million), ICICI Home Finance Company Limited amounting to
` 1,389.9 million (March 31, 2012: ` 1,714.1 million) and with ICICI Bank UK PLC amounting to ` 1,307.3 million (March
31, 2012: ` 1,216.9 million).
Dividend paid
During the year ended March 31, 2013, the Bank paid dividend to its key management personnel amounting to
` 6.7 million (March 31, 2012: ` 4.5 million). The dividend paid during the year ended March 31, 2013 to Ms. Chanda
Kochhar was ` 5.1 million (March 31, 2012: ` 3.8 million), to Mr. N. S. Kannan was ` 1.2 million (March 31, 2012: ` 0.7
million) and to Mr. K. Ramkumar was ` 0.4 million (March 31, 2012: Nil).
remuneration to whole-time directors
Remuneration paid to the whole-time directors of the Bank during the year ended March 31, 2013 was ` 154.9 million
(March 31, 2012: ` 111.3 million). The remuneration paid for the year ended March 31, 2013 to Ms. Chanda Kochhar was
` 54.2 million (March 31, 2012: ` 37.7 million), to Mr. N. S. Kannan was ` 32.2 million (March 31, 2012: ` 25.0 million), to Mr.
K. Ramkumar was ` 42.7 million (March 31, 2012: ` 25.4 million) and to Mr. Rajiv Sabharwal was ` 25.8 million (March 31,
2012: ` 23.2 million).
Sale of fixed assets
During the year ended March 31, 2013, the Bank sold fixed assets to its subsidiaries amounting to ` 2.1 million (March 31,
2012: ` 18.4 million) and to its key management personnel amounting to ` 0.7 million (March 31, 2012: Nil). The material
transactions for the year ended March 31, 2013 were with ICICI Securities Limited amounting to ` 1.9 million (March
31, 2012: ` 1.0 million), ICICI Venture Funds Management Company Limited amounting to Nil (March 31, 2012: ` 14.7
million), ICICI Lombard General Insurance Company Limited amounting to Nil (March 31, 2012: ` 2.7 million) and with
Mr. K. Ramkumar amounting to ` 0.7 million (March 31, 2012: Nil).
purchase of fixed assets
During the year ended March 31, 2013, the Bank purchased fixed assets from its subsidiaries amounting to ` 2.6 million
(March 31, 2012: ` 9.4 million). The material transactions for the year ended March 31, 2012 were with ICICI Venture
Funds Management Company Limited amounting to ` 1.8 million (March 31, 2012: Nil), ICICI Prudential Asset Management
Company Limited amounting to ` 0.8 million (March 31, 2012: Nil), ICICI Lombard General Insurance Company Limited
amounting to Nil (March 31, 2012: ` 4.6 million) and with ICICI Prudential Life Insurance Company Limited amounting to Nil
(March 31, 2012: ` 4.2 million).
F45
schedules
forming part of the Accounts (Contd.)
Sale of gold coins
During the year ended March 31, 2013, the Bank sold gold coins to ICICI Prudential Life Insurance Company Limited
amounting to ` 1.7 million (March 31, 2012: ` 45.4 million).
Donation
During the year ended March 31, 2013, the Bank has given donation to ICICI Foundation for Inclusive Growth amounting
to ` 80.0 million (March 31, 2012: ` 239.7 million).
purchase of loan
During the year ended March 31, 2013, the Bank purchased loans from ICICI Bank UK PLC amounting to Nil (March 31,
2012: ` 12,870.5 million).
Sale of loan
During the year ended March 31, 2013, the Bank sold a loan to ICICI Bank UK PLC amounting to ` 1,357.1 million (March
31, 2012: ` 2,543.8 million).
purchase of bank guarantees
Bank guarantees issued by ICICI Bank UK PLC on behalf of its clients were transferred to the Bank amounting to
` 12,221.2 million during the year ended March 31, 2013 (March 31, 2012: ` 1,279.2 million).
Letters of Comfort
The Bank has issued letters of comfort on behalf of its banking subsidiaries. The details of the letters are given below.
on behalf of
ICICI Bank UK PLC
ICICI Bank Canada
to
purpose
Financial Services
Authority, UK (‘FSA’)
Financially support ICICI Bank UK PLC to ensure that it
meets all of its obligations as they fall due.
Canada Deposit
Insurance Corporation
(‘CDIC’)
To comply with the Bank Act and the CDIC regulations
or by-laws thereunder and to indemnify CDIC against
all losses, damages, reasonable costs and expenses
arising from failure of ICICI Bank Canada in performing
the same.
The Bank has issued an undertaking on behalf of ICICI Securities Inc. for Singapore dollar 10.0 million (currently equivalent
to ` 437.2 million) to the Monetary Authority of Singapore (MAS), has executed indemnity agreement on behalf of ICICI
Bank Canada to its independent directors for a sum not exceeding Canadian dollar 2.5 million (currently equivalent to
` 133.6 million) each, aggregating to Canadian dollar 15.0 million (currently equivalent to ` 801.6 million). The Bank has
furnished an undertaking on behalf of ICICI Bank Eurasia Limited Liability Company, for an amount of US$ 19.0 million
(currently equivalent to ` 1,031.4 million) in relation to its borrowing. The aggregate amount of ` 2,270.2 million at March
31, 2013 (March 31, 2012: ` 915.2 million) is included in the contingent liabilities.
During the year, the Bank has issued an undertaking on behalf of ICICI Bank Eurasia LLC and to two independent directors
on behalf of ICICI Bank Canada.
As per the assessment done, there is no likely financial impact of the above letters issued to overseas regulators or of
the indemnity agreements at March 31, 2013.
In addition to the above, the Bank has also issued letters of comfort in the nature of letters of awareness on behalf
of banking and non-banking subsidiaries in respect of their borrowings made or proposed to be made and for other
incidental business purposes. As they are in the nature of factual statements or confirmation of facts, they do not create
any financial impact on the Bank.
The letters of comfort in the nature of letters of awareness that are outstanding at March 31, 2013 issued by the Bank
on behalf of its subsidiaries, aggregate to ` 18,640.5 million (March 31, 2012: ` 24,238.9 million). During the year ended
March 31, 2013, borrowings pertaining to letters of comfort aggregating ` 5,598.4 million were repaid.
related party balances
The following table sets forth, the balance payable to/receivable from subsidiaries/joint ventures/associates/other related
entities/key management personnel and relatives of key management personnel at March 31, 2013.
F46
schedules
forming part of the Accounts (Contd.)
items/related party
Subsidiaries
Deposits with ICICI Bank ........
Deposits of ICICI Bank ...........
Call/term money lent ..............
Call/term money
Borrowed ................................
Advances ................................
Investments of ICICI Bank ......
Investments of related parties
in ICICI Bank ............................
Receivables1 ............................
Payables1 .................................
Guarantees/letter of credit/
indemnity ................................
Swaps/forward contracts
(notional amount) ...................
Employee stock options
outstanding (Numbers) ..........
Employee stock options
exercised2 ...............................
8,365.4
100.4
—
—
18,982.0
133,339.4
430.7
929.0
56.5
9,273.4
133,492.5
—
—
associates/ joint
ventures/other
related entities
5,166.5
—
—
Key
management
personnel
60.5
—
—
relatives of Key
management
personnel
23.6
—
—
—
305.5
3,862.3
15.0
—
1,199.9
1,689.7
—
—
—
—
5.7
—
4.1
—
—
—
—
3,172,500
0.5
—
6.9
—
—
—
—
—
—
—
—
` in million
total
13,616.0
100.4
—
—
19,303.1
137,201.7
449.8
929.0
1,256.4
10,963.1
133,492.5
3,172,500
0.5
1.
2.
Excludes mark-to-market on outstanding derivative transactions.
During the year ended March 31, 2013, 54,000 employee stock options were exercised, which have been reported at face value.
The following table sets forth, the maximum balance payable to/receivable from subsidiaries/joint ventures/associates/
other related entities/key management personnel and relatives of key management personnel during the year ended
March 31, 2013.
items/ related party
Subsidiaries
Deposits with ICICI Bank ..........
Deposits of ICICI Bank .............
Call/term money lent ................
Call/term money borrowed ......
Advances .................................
Investments of ICICI Bank ........
Investments of related parties
in ICICI Bank1 .............................
Receivables ...............................
Payables1 ...................................
Guarantees/letter of credit/
indemnity .................................
Swaps/forward contracts
(notional amount) .....................
8,365.4
1,245.2
10,068.7
—
24,544.5
137,689.2
1,285.0
1,759.1
56.5
13,635.1
191,242.6
associates/ joint
ventures/other
related entities
5,170.1
—
—
—
2,004.5
4,157.4
15.0
0.41
1,199.9
1,689.7
—
Key
management
personnel
relatives of Key
management
personnel
74.3
—
—
—
10.4
—
4.1
—
—
—
—
44.6
—
—
—
7.9
—
—
—
—
—
—
` in million
total
13,654.4
1,245.2
10,068.7
—
26,567.3
141,846.6
1,304.1
1,759.5
1,256.4
15,324.8
191,242.6
1. Maximum balances are determined based on comparison of the total outstanding balances at each quarter end during the
financial year.
F47
schedules
forming part of the Accounts (Contd.)
The following table sets forth, the balance payable to/receivable from subsidiaries/joint ventures/associates/other related
entities/key management personnel and relatives of key management personnel at March 31, 2012.
items/ related party
Subsidiaries
Deposits with ICICI Bank ..........
Deposits of ICICI Bank .............
Call/term money lent ................
Call/term money
Borrowed ..................................
Advances ..................................
Investments of ICICI Bank ........
Investments of related parties
in ICICI Bank ..............................
Receivables1 ..............................
Payables1 ...................................
Guarantees/letter of credit .......
Swaps/forward contracts
(notional amount) .....................
Employee stock options
outstanding (Numbers) ............
Employee stock options
exercised2 ................................
11,536.6
717.9
4,568.7
—
18,766.7
136,699.1
310.3
637.0
27.3
13,546.8
168,433.0
—
—
associates/joint
ventures/other
related entities
Key
management
personnel
relatives of Key
management
personnel
` in million
total
2,089.8
—
—
—
1,004.8
3,484.7
15.0
0.2
202.8
0.1
—
—
—
41.0
—
—
—
9.2
—
4.1
—
—
—
—
2,701,500
0.9
19.8
13,687.2
—
—
—
7.4
—
—
—
—
—
—
—
—
717.9
4,568.7
—
19,788.1
140,183.8
329.4
637.2
230.1
13,546.9
168,433.0
2,701,500
0.9
1.
2.
Excludes mark-to-market on outstanding derivative transactions.
During the year ended March 31, 2012, 86,500 employee stock options were exercised, which have been reported at face value.
The following table sets forth, the maximum balance payable to/receivable from subsidiaries/joint ventures/associates/
other related entities/key management personnel and relatives of key management personnel during the year ended
March 31, 2012.
items/related party
Subsidiaries
associates/ joint
ventures/other
related entities
Key
management
personnel
relatives of Key
management
personnel
` in million
total
Deposits with ICICI Bank ........
11,536.6
3,150.6
Deposits of ICICI Bank ...........
Call/term money lent ..............
Call/term money borrowed ....
Advances ...............................
Investments of ICICI Bank ......
Investments of related parties
in ICICI Bank1 ...........................
Receivables .............................
Payables1 .................................
Guarantees/ letter of credit ...
Swaps/forward contracts
(notional amount) ...................
3,375.0
7,068.7
670.5
19,168.7
137,086.6
407.9
2,941.9
84.8
13,649.2
308,575.2
—
—
—
1,004.8
7,513.0
15.0
154.11
266.7
0.1
—
64.0
—
—
—
10.7
—
4.1
—
—
—
—
27.3
14,778.5
—
—
—
9.2
—
—
—
—
—
—
3,375.0
7,068.7
670.5
20,193.4
144,599.6
427.0
3,096.0
351.5
13,649.3
308,575.2
1. Maximum balances are determined based on comparison of the total outstanding balances at each quarter end during the financial year.
F48
schedules
forming part of the Accounts (Contd.)
40. Small and micro enterprises
Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 which came into force from October
2, 2006, certain disclosures are required to be made relating to enterprises covered under the Act. During the year ended
March 31, 2013, the amount paid after the due date to vendors registered under the MSMED Act, 2006 was ` 6.0 million
(March 31, 2012: ` 7.1 million). An amount of ` 0.2 million (March 31, 2012: ` 0.1 million) has been charged to profit &
loss account towards accrual of interest on these delayed payments.
41. penalties/fines imposed by rBi and other banking regulatory bodies
The penalty imposed by RBI and other banking regulatory bodies during the year ended March 31, 2013 was ` 3.1 million
(March 31, 2012: ` 1.5 million).
During the the year ended March 31, 2013, RBI imposed a penalty of ` 66,000 through letter dated May 2, 2012, with
regard to bouncing of two Subsidiary General Ledger deals of the clients of ` 60.0 million and ` 6.0 million on March 28,
2012. On October 9, 2012, a penalty of ` 3.0 million was levied by RBI for non compliance with Know Your Customer
(KYC) directions issued by RBI. The Bank has paid these penalties to RBI.
42. Disclosure on remuneration
Compensation policy and practices
(a) Qualitative disclosures
a)
information relating to the composition and mandate of the remuneration Committee
The Board Governance, Remuneration & Nomination Committee (BGRNC) comprises three independent
Directors. The functions of the Committee include recommendation of appointments of Directors to the Board,
evaluation of the performance of the Managing Director & CEO (MD & CEO) and other wholetime Directors (WTDs)
on predetermined parameters, recommendation to the Board of the remuneration (including performance
bonus and perquisites) to WTDs, approval of the policy for and quantum of bonus payable to the members of
the staff, framing of guidelines for the Employees Stock Option Scheme (ESOS) and recommendation of grant
of the Bank’s stock options to employees and WTDs of the Bank and its subsidiary companies.
b)
information relating to design and structure of remuneration processes and the key features and objectives
of remuneration policy
The Bank has under the guidance of the Board and the BGRNC, followed compensation practices intended to
drive meritocracy within the framework of prudent risk management. This approach has been incorporated in
the Compensation Policy approved by the Board on January 31, 2012, pursuant to the guidelines issued by RBI.
The key elements of the Bank’s compensation practices are:
• Effective governance of compensation: the BGRNC has oversight over compensation. The Committee
defines Key Performance Indicators (KPIs) for wholetime Directors and equivalent positions and the
organisational performance norms for bonus based on the financial and strategic plan approved by the
Board. The KPIs include both quantitative and qualitative aspects. The BGRNC assesses organisational
performance as well as the individual performance for wholetime Directors and equivalent positions.
Based on its assessment, it makes recommendations to the Board regarding compensation for wholetime
Directors and equivalent positions and bonus for employees.
• Alignment of compensation philosophy with prudent risk taking: the Bank seeks to achieve a prudent
mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed
bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance
including aspects like risk management and customer service. In addition, the Bank has an employee stock
option scheme aimed at aligning compensation to long term performance through stock option grants that
vest over a period of time. Compensation of staff in financial and risk control functions is independent of
the business areas they oversee and depends on their performance assessment.
c) Description of the ways in which current and future risks are taken into account in the remuneration
processes including the nature and type of the key measures used to take account of these risks.
The Board approves the risk framework for the Bank and the business activities of the Bank are undertaken
within this framework to achieve the financial plan. The risk framework includes the Bank’s risk appetite,
limits framework and policies and procedures governing various types of risk. KPIs of wholetime Directors
& equivalent positions, as well as employees, incorporate relevant risk management related aspects. For
example, in addition to performance targets in areas such as growth and profits, performance indicators
F49
schedules
forming part of the Accounts (Contd.)
include aspects such as the desired funding profile and asset quality. The BGRNC takes into consideration
all the above aspects while assessing organisational and individual performance and making compensation-
related recommendations to the Board.
d) Description of the ways in which the Bank seeks to link performance during a performance measurement
period with levels of remuneration
The level of performance bonus, increments in salary and allowances and grant of stock options is determined
based on the assessment of performance as described above.
e) Discussion of the Bank’s policy on deferral and vesting of variable remuneration and the Bank’s policy and
criteria for adjusting deferred remuneration before vesting and after vesting
The quantum of bonus for an employee does not exceed a certain percentage (as stipulated in the compensation
policy) of the total fixed pay in a year. Within this percentage, if the quantum of bonus exceeds a predefined
threshold percentage of the total fixed pay, a part of the bonus is deferred and paid over a period. The deferred
portion is subject to malus, under which the Bank would prevent vesting of all or part of the variable pay in the
event of an enquiry determining gross negligence or breach of integrity. In such cases, variable pay already
paid out is also subject to clawback arrangements.
f) Description of the different forms of variable remuneration that the Bank utilises and the rationale for using
these different forms
The Bank pays performance linked retention pay (PLRP) to its front-line staff and junior management and
performance bonus to its middle and senior management. PLRP aims to reward front line and junior managers,
mainly on the basis of skill maturity attained through experience and continuity in role which is a key differentiator
for customer service. The Bank also pays variable pay to sales officers and relationship managers in wealth
management roles. The Bank ensures higher variable pay at senior levels and lower variable pay for front-line
staff and junior management levels.
(B) Quantitative disclosures
The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of WTDs
(including MD & CEO) and Presidents.
` in million, except numbers
particulars
Number of meetings held by the BGRNC .............................................................................................
Remuneration paid to its members (sitting fees) ..................................................................................
Number of employees having received a variable remuneration award ............................................
Number and total amount of sign-on awards made ............................................................................
Details of guaranteed bonus paid as joining/sign on bonus .................................................................
Details of severance pay, in addition to accrued benefits .....................................................................
Total amount of outstanding deferred remuneration at March 31, 2013
Cash .........................................................................................................................................................
Shares .....................................................................................................................................................
Shares-linked instruments1 (nos.) ...........................................................................................................
Other forms .............................................................................................................................................
Total amount of deferred remuneration paid out .................................................................................
Breakdown of amount of remuneration awards
Fixed2 .......................................................................................................................................................
Variable3 ..................................................................................................................................................
Deferred4 .................................................................................................................................................
Non-deferred ..........................................................................................................................................
Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post
explicit and/or implicit adjustments at March 31, 2013 .........................................................................
Total amount of reductions due to ex-post explicit adjustments ..........................................................
Total amount of reductions due to ex-post implicit adjustments ..........................................................
Year ended
march 31, 2013
3
0.2
7
nil
nil
nil
54.7
nil
2,533,000
nil
nil
133.8
74.6
29.9
44.8
54.7
nil
nil
1.
2.
3.
4.
Pursuant to grant of options under ESOS. Of these options, 75,000 options granted to a President who retired subsequently, will
vest fully in one year from April 27, 2012.
Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and gratuity fund by
the Bank.
Variable pay for the year ended March 31, 2013 was awarded in the month of April 2013 and is subject to approval from RBI.
In line with the Bank’s compensation policy, the stipulated percentage of performance bonus is deferred.
F50
schedules
forming part of the Accounts
43. Disclosure of complaints
The following table sets forth, for the periods indicated, the movement of the outstanding number of complaints.
particulars
a) No. of complaints pending at the beginning of the year ...............................
b) No. of complaints received during the year ....................................................
c) No. of complaints redressed during the year ................................................
d) No. of complaints pending at the end of the year .........................................
1.
The following table sets forth, for the periods indicated, the details of awards during the year.
Does not include complaints redressed within 1 working day.
Year ended
march 31, 2013
3,837
101,408
102,617
2,628
Year ended
March 31, 2012
3,024
155,115
154,302
3,837
particulars
a) No. of unimplemented awards at the beginning of the year ........................
b) No. of awards passed by the Banking Ombudsmen during the year ...........
c) No. of awards implemented during the year .................................................
d) No. of unimplemented awards at the end of the year ...................................
Year ended
march 31, 2013
—
—
—
—
Year ended
March 31, 2012
—
—
—
—
44. Drawdown from reserves
There has been no draw down from reserves during the year ended March 31, 2013 (March 31, 2012: Nil).
45. Comparative figures
Figures of the previous year have been re-grouped to conform to the current year presentation.
Signatures to Schedules 1 to 18
FOR S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENGAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
Place : Mumbai
Date : April 26, 2013
SANDEEP BATRA
Group Compliance Officer &
RAKESH JHA
Deputy Chief
Company Secretary
Financial Officer
F51
section 212
Statement pursuant to Section 212 of the Companies act, 1956, relating to subsidiary companies
Name of the subsidiary company
Financial year of the
subsidiary ended on
No. of equity shares held by ICICI Bank and/or its nominees in
the subsidiary at March 31, 2013
ICICI Securities Primary Dealership Limited
March 31, 2013
15,634 equity shares of ` 100,000 each fully paid up
ICICI Securities Limited
March 31, 2013
805,353,500 equity shares of ` 2 each, fully paid up
ICICI Securities Holdings Inc.3
March 31, 2013
16,640,000 common stock of USD 1 each fully paid up held by
ICICI Securities Limited
ICICI Securities Inc.3
March 31, 2013
12,980,000 common stock of USD 1 each fully paid up held by
ICICI Securities Holdings Inc.
ICICI Venture Funds Management Company Limited
March 31, 2013
1,000,000 equity shares of ` 10 each fully paid up
ICICI International Limited4
March 31, 2013
90,000 ordinary shares of USD 10 each fully paid up
ICICI Home Finance Company Limited
March 31, 2013
1,098,750,000 equity shares of ` 10 each fully paid up.
ICICI Trusteeship Services Limited
March 31, 2013
50,000 equity shares of ` 10 each fully paid up
ICICI Investment Management Company Limited
March 31, 2013
10,000,700 equity shares of ` 10 each fully paid up
ICICI Prudential Life Insurance Company Limited
March 31, 2013
1,055,310,907 equity shares of ` 10 each fully paid up
ICICI Lombard General Insurance Company Limited
March 31, 2013
320,635,518 equity shares of ` 10 each fully paid up
Extent of
interest of
ICICI Bank
in capital of
subsidiary
Net aggregate amount of profits/
(losses) of the subsidiary so far as it
concerns the members of ICICI Bank
and is not dealt with in the accounts
of ICICI Bank 1
Net aggregate amount of profits/
(losses) of the subsidiary so far as
it concerns the members of ICICI
Bank dealt with or provided for in
the accounts of ICICI Bank 2
` in '000s
` in '000s
For the financial
year ended
March 31, 2013
For the previous
financial years
of the subsidiary
since it became
a subsidiary
For the
financial
year ended
March 31,
2013
For the previous
financial years
of the subsidiary
since it became a
subsidiary
100.0%
100.0%
—
—
100.0%
100.0%
100.0%
100.0%
100.0%
73.9%
73.4%
618,861
7,170,901
598,001
7,838,045
381,903
1,765,140
300,236
4,166,637
(1,356)
(143,892)
(37,768)
(515,837)
Nil
Nil
Nil
15,635
183,335
2,529,859
15,000
4,310,979
2,060
36,938
Nil
15,782
812,270
3,906,775
1,389,919
6,067,308
472
8,976
3,099
43,459
Nil
Nil
Nil
Nil
7,776,304
(11,549,004)
3,271,207
2,321,255
2,243,475
(2,351,759)
Nil
2,117,208
ICICI Bank UK PLC4
March 31, 2013
495,000,000 ordinary shares of USD 1 each and 50,002 ordinary
shares of 1 GBP each
100.0%
(527,266)
7,057,798
1,309,626
1,879,480
ICICI Bank Canada5, 8
December 31, 2012 839,500,000 common shares of Canadian Dollar (CAD) 1 each
ICICI Bank Eurasia Limited Liability Company #,6,8
December 31, 2012 Not Applicable #
ICICI Prudential Asset Management Company Limited March 31, 2013
9,002,573 equity shares of ` 10 each, fully paid up
ICICI Prudential Trust Limited
March 31, 2013
51,157 equity shares of ` 10 each, fully paid up
ICICI Prudential Pension Funds Management Company
Limited 7
March 31, 2013
27,000,000 equity shares of ` 10 each, fully paid up held by
ICICI Prudential Life Insurance Company Limited
100.0%
100.0%
51.0%
50.8%
—
316,011
240,483
793
(769)
631,093
3,684,956
1,691,620
209,951
Nil
862,361
425,517
833,404
321,527
1,432,029
1,985
(468)
639
Nil
3,222
Nil
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
#
1.
2.
3.
4.
5.
6.
7.
8.
The shares in the authorised capital of ICICI Bank Eurasia Limited Liability Company are registered without issue of equity shares due to the legal form of the subsidiary.
The above companies (other than ICICI Bank UK PLC, ICICI Bank Canada, ICICI Bank Eurasia Limited Liability Company, ICICI Prudential Asset Management Company Limited, ICICI Prudential Trust Limited and ICICI Prudetial Pension Funds
Management Company Limited) which were subsidiaries of erstwhile ICICI Limited have become subsidiaries of the Bank consequent to the merger of erstwhile ICICI Limited with ICICI Bank.
The amount received by erstwhile ICICI Limited upto March 29, 2002 as dividend has also been included in the reserves of ICICI Bank.
ICICI Securities Holdings Inc. is a wholly owned subsidiary of ICICI Securities Limited. ICICI Securities Inc. is a wholly owned subsidiary of ICICI Securities Holdings Inc.
The profits of ICICI Bank UK PLC and ICICI International Limited for the year ended March 31, 2013 have been translated into Indian Rupees at the rate of 1 USD = ` 54.3940.
The profits of ICICI Bank Canada for the year ended December 31, 2012 have been translated into Indian Rupees at the rate of 1 CAD = ` 54.5174.
The profits of ICICI Bank Eurasia Limited Liability Company for the year ended December 31, 2012 have been translated into Indian Rupees at the rate of 1 RUB = ` 1.7310.
ICICI Prudential Pension Funds Management Company Limited, a wholly owned subsidiary of ICICI Prudential Life Insurance Company Limited, was incorporated on April 22, 2009.
The information furnished for ICICI Bank Canada and ICICI Bank Eurasia Limited Liability Company is for the period January 1, 2012 to December 31, 2012, being their financial year.
The key financial parameters of the following companies at March 31, 2013 and their movement from December 31, 2012 are given below.
Particulars
Fixed assets
Investments
Advances
Borrowingsa
ICICI Bank Canadab
ICICI Bank Eurasia Limited Liability Companyc
At March 31, 2013
At December 31, 2012
Movement
At March 31, 2013
At December 31, 2012
68,393
59,345,067
215,097,241
97,171,422
74,546
61,156,518
224,742,586
92,031,662
(6,153)
(1,811,451)
(9,645,345)
5,139,760
44,105
653,655
9,075,794
6,386,125
47,512
676,238
9,169,977
6,973,728
` in ‘000s
Movement
(3,407)
(22,583)
(94,183)
(587,603)
a. Since it is not possible to identify the amount borrowed to meet the current liabilities, the amount shown above represents the total borrowings. The borrowings include subordinate debts and exclude preferred shares.
b. The financial parameters of ICICI Bank Canada have been translated into Indian Rupees at 1 CAD = ` 53.4375 at March 31, 2013 and 1 CAD = ` 55.2600 at December 31, 2012.
c. The financial parameters of ICICI Bank Eurasia Limited Liability Company have been translated into Indian Rupees at 1 RUB =` 1.74908 at March 31, 2013 and 1 RUB = ` 1.79392 at December 31, 2012.
K. V. KAMATH
Chairman
N. S. KANNAN
Executive Director & CFO
SANDEEP BATRA
Group Compliance Officer &
Company Secretary
SRIDAR IYENGAR
Director
K. RAMKUMAR
Executive Director
RAKESH JHA
Deputy Chief
Financial Officer
For and on behalf of the Board of Directors
CHANDA KOCHHAR
Managing Director & CEO
RAJIV SABHARWAL
Executive Director
Place: Mumbai
Date : April 26, 2013
F52
Consolidated financial statements of
ICICI Bank Limited and
its subsidiaries
independent auditors’ report
To the Board of Directors of ICICI Bank Limited on the Consolidated Financial
Statements of ICICI Bank Limited and its Subsidiaries, Associates and Joint Ventures.
We have audited the accompanying consolidated financial statements of ICICI Bank Limited (“the Bank”) and its subsidiaries,
associates and joint ventures (the ‘ICICI Group’), which comprise the consolidated Balance Sheet as at March 31, 2013, and
the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation of these consolidated financial statements 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 accounting principles generally accepted in India. This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those
Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. 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. In making those risk
assessments, the auditor considers internal control relevant to the Group’s preparation and presentation of the consolidated
financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, based on our audit and on consideration of reports of other auditors and branches auditors on separate
financial statements and other financial information of the components, and the consideration of the un-audited financial
statements, and to the best of our information and according to the explanations given to us, the consolidated financial
statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(a)
(b)
(c)
in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2013;
in the case of the consolidated Statement of Profit and Loss, of the profit for the year ended on that date; and
in the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
Other Matter
We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of ` 610,074
million as at March 31, 2013, total revenue of ` 76,855 million and cash flows amounting to ` 31,828 million for the year then
ended. These financial statements and other financial information have been audited by other auditors whose reports have
been furnished to us, and our opinion is based solely on the report of other auditors.
We did not audit the financial statements of Singapore, Bahrain, Hong Kong, Dubai, Qatar, Sri Lanka and New York-USA
branches, whose financial statements reflect total assets of ` 1,270,195 million as at March 31, 2013, the total revenue of
` 60,882 million for the year ended March 31, 2013 and net cash flows amounting to ` 84,228 million for the year ended
F54
independent auditors’ report
independent auditors’ report
March 31, 2013. These financial statements have been audited by other auditors, duly qualified to act as auditors in the
country of incorporation of the said branches, whose reports have been furnished to us, and our opinion is based solely on
the report of other auditors.
We have also relied on the un-audited financial statements of certain subsidiaries, associates and joint ventures, whose
financial statements reflect total assets of ` 28,372 million as at March 31, 2013, total revenues of ` 7,460 million and net cash
flows amounting to ` (1,221) million for the year then ended.
We have jointly audited, with other auditor, the financial statements of subsidiary which reflect total assets of ` 753,501 million
as at March 31, 2013, total revenue of ` 173,760 million and cash flows amounting to ` 475 million for the year then ended.
For the purpose of the consolidated financial statements, we have relied upon the work of other auditors.
The actuarial valuation of liabilities for life policies in force is the responsibility of the ICICI Group’s life insurance subsidiary’s
appointed actuary (the Appointed Actuary). The actuarial valuation of these liabilities as at March 31, 2013 has been duly
certified by the Appointed Actuary and in his opinion the assumptions for such valuation are in accordance with the guidelines
and norms issued by the Insurance Regulatory and Development authority (‘IRDA’) and the Actuarial Society in concurrence
with the IRDA. The statutory auditors of ICICI Prudential Life Insurance Company Limited have relied upon appointed Actuary’s
certificate in this regard.
The actuarial valuation of liability in respect of claims incurred but not reported (‘IBNR’) and those incurred but not enough
reported (‘IBNER’) are the responsibility of the ICICI Group’s general insurance subsidiary’s appointed actuary (the Appointed
Actuary). The actuarial valuation of these liabilities as at March 31, 2013 has been duly certified by the Appointed Actuary and
in his opinion the assumptions for such valuation are in accordance with the guidelines and norms issued by the IRDA and the
Actuarial Society in concurrence with the IRDA. The statutory auditors of ICICI Lombard General Insurance Company Limited
have relied upon appointed Actuary’s certificate in this regard.
For S.R. BATLIBOI & CO. LLP
Chartered Accountants
Firm registration number: 301003E
per Shrawan Jalan
Partner
Membership No.: 102102
Place: Mumbai
Date: April 26, 2013
F55
consolidated balance sheet
at March 31, 2013
(` in ‘000s)
Schedule
At
31.03.2013
At
31.03.2012
CAPITAL AND LIABILITIES
Capital ..............................................................................................
Employees stock options outstanding ...........................................
Reserves and surplus ......................................................................
1
2
11,536,362
11,527,683
44,835
23,854
676,042,933
601,213,423
Minority interest ..............................................................................
2A
17,057,595
14,277,247
Deposits ............................................................................................
Borrowings ......................................................................................
Liabilities on policies in force ..........................................................
Other liabilities and provisions .......................................................
TOTAL CAPITAL AND LIABILITIES .................................................
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 .....................................................................................
3
4
5
6
7
8
9
10
11
3,147,705,357
2,819,504,736
1,728,882,194
1,612,966,218
689,105,371
662,294,640
477,842,496
471,061,155
6,748,217,143
6,192,868,956
193,062,020
207,281,806
300,646,550
204,281,077
2,556,666,786
2,398,640,912
3,299,741,265
2,921,254,179
54,734,587
54,319,822
343,365,935
407,091,160
TOTAL ASSETS ................................................................................
6,748,217,143
6,192,868,956
Contingent liabilities ........................................................................
12
9,139,712,204
10,375,591,283
Bills for collection ............................................................................
124,534,781
76,129,947
Significant accounting policies and notes to accounts .................
17 & 18
The schedules referred to above form an integral part of the Balance Sheet.
As per our Report of even date.
FOR S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
Place : Mumbai
Date : April 26, 2013
F56
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENGAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
Group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
consolidated balance sheet
consolidated profit and loss account
for the year ended March 31, 2013
(` in ‘000s)
Schedule
Year ended
31.03.2013
Year ended
31.03.2012
13
14
15
16
I.
II.
III.
INCOME
Interest earned ........................................................................
Other income ..........................................................................
TOTAL INCOME ......................................................................
EXPENDITURE
Interest expended ...................................................................
Operating expenses ...............................................................
Provisions and contingencies (refer note 18.7) ....................
TOTAL EXPENDITURE ...........................................................
PROFIT/(LOSS)
Net profit for the year .............................................................
Less: Minority interest ............................................................
Net profit after minority interest ............................................
Profit/(loss) brought forward ..................................................
TOTAL PROFIT/(LOSS) ..........................................................
IV. APPROPRIATIONS/TRANSFERS
Transfer to Statutory Reserve ................................................
Transfer to Reserve Fund .......................................................
Transfer to Capital Reserve ....................................................
Transfer to/(from) Investment Reserve Account ...................
Transfer to Special Reserve ...................................................
Transfer to Revenue and other reserves ...............................
Dividend (including corporate dividend tax) for the
previous year paid during the year ........................................
Proposed equity share dividend ............................................
Proposed preference share dividend ....................................
Corporate dividend tax ..........................................................
Balance carried over to balance sheet ..................................
TOTAL .....................................................................................
448,845,894
293,198,074
742,043,968
282,854,093
302,070,495
55,820,531
640,745,119
101,298,849
5,262,724
96,036,125
68,048,685
164,084,810
20,820,000
27,775
330,000
—
8,041,000
4,556,213
2,491
23,072,271
35
3,940,400
103,294,625
164,084,810
379,948,587
286,634,177
666,582,764
250,132,455
295,520,458
41,553,508
587,206,421
79,376,343
2,946,988
76,429,355
40,077,613
116,506,968
16,170,000
10,665
380,000
—
7,020,000
1,877,920
4,284
19,020,400
35
3,257,185
68,766,479
116,506,968
Significant accounting policies and notes to accounts ..................
Earnings per share (refer note 18.1)
Basic (`) ..................................................................................
Diluted (`) ................................................................................
Face value per share (`) ..................................................................
17 & 18
83.29
82.84
10.00
66.33
66.06
10.00
The schedules referred to above form an integral part of the Profit and Loss Account.
As per our Report of even date.
For S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
Place : Mumbai
Date : April 26, 2013
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENGAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
Group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
F57
consolidated cash flow statement
for the year ended March 31, 2013
(` in ‘000s)
Particulars
Cash flow from operating activities
Profit before taxes ..........................................................................................
Adjustments for :
Depreciation and amortisation ....................................................................
Net (appreciation)/depreciation on investments .........................................
Provision in respect of non-performing assets ............................................
Prudential provision on standard assets ......................................................
Provision for contingencies & others ............................................................
(Profit)/loss on sale of fixed assets ...............................................................
Employee stock options grants ....................................................................
Adjustments for :
(Increase)/decrease in investments ..............................................................
(Increase)/decrease in advances ..................................................................
Increase/(decrease) in deposits ....................................................................
(Increase)/decrease in other assets ..............................................................
Increase/(decrease) in other liabilities and provisions ................................
Refund/(payment) of direct taxes .................................................................
Net cash flow from/(used in) operating activities .....................................
Cash flow from investing activities
Purchase of fixed assets ................................................................................
Proceeds from sale of fixed assets ...............................................................
(Purchase)/sale of held to maturity securities ..............................................
Net cash used in investing activities ...........................................................
Cash flow from financing activities
Proceeds from issue of share capital (including ESOPs) .............................
Net proceeds/(repayment) of borrowings ....................................................
Dividend and dividend tax paid ....................................................................
Net cash generated from financing activities..............................................
Effect of exchange fluctuation on translation reserve ................................
Net increase/(decrease) in cash and cash equivalents (A)+(B)+(C)+(D) ......
Cash and cash equivalents at the beginning of the year ..........................
Cash and cash equivalents at end of the year ...........................................
(A)
(B)
(C)
(D)
Significant accounting policies and notes to accounts (refer schedule 17 & 18).
Refer item no. 12 in schedule 17 significant accounting policies.
The schedules referred to above form an integral part of the Balance Sheet.
Year ended
31.03.2013
Year ended
31.03.2012
130,904,932
103,919,499
7,309,535
4,964,954
15,513,824
1,349,872
2,370,283
(339,276)
98,647
162,172,771
53,888,779
(394,857,560)
328,200,621
19,276,308
43,960,881
50,469,029
(37,702,018)
174,939,782
(6,249,292)
700,038
(185,928,901)
(191,478,155)
447,515
114,579,019
(22,194,629)
92,831,905
5,852,155
82,145,687
411,562,883
493,708,570
7,546,097
7,773,019
10,510,044
279,057
2,100,543
37,180
93,240
132,258,679
(126,076,483)
(335,829,069)
228,444,687
(24,703,198)
83,850,256
(174,313,807)
(26,082,984)
(68,138,112)
(6,054,398)
180,758
(206,755,330)
(212,628,970)
591,128
312,815,320
(19,013,434)
294,393,014
4,084,332
17,710,264
393,852,619
411,562,883
As per our Report of even date.
For S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
Place : Mumbai
Date : April 26, 2013
F58
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENGAR
CHANDA KOCHHAR
Director Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
SANDEEP BATRA
Group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
consolidated cash flow statement
schedules
forming part of the Consolidated Balance Sheet
SCHEDULE 1 - CAPITAL
Authorised capital
1,275,000,000 equity shares of ` 10 each
(March 31, 2012: 1,275,000,000 equity shares of ` 10 each) ..............................
15,000,000 shares of ` 100 each
(March 31, 2012: 15,000,000 shares of ` 100 each)1 ............................................
350 preference shares of ` 10 million each
(March 31, 2012: 350 preference shares of ` 10 million each)2 ..........................
Equity share capital
Issued, subscribed and paid-up capital
1,152,714,442 equity shares of ` 10 each
(March 31, 2012: 1,151,772,372 equity shares) ...................................................
Add: 867,273 equity shares of ` 10 each (March 31, 2012: 942,070 equity shares)
issued pursuant to exercise of employee stock options ...........................................
At
31.03.2013
(` in ‘000s)
At
31.03.2012
12,750,000
12,750,000
1,500,000
1,500,000
3,500,000
3,500,000
11,527,144
11,517,723
8,673
11,535,817
(225)
9,421
11,527,144
(231)
Less: Calls unpaid .................................................................................................
Add: 111,603 equity shares of ` 10 each forfeited
770
(March 31, 2012: 111,603 equity shares) ...............................................................
TOTAL CAPITAL ....................................................................................................
11,527,683
1. These shares will be of such class and with such rights, privileges, conditions or restrictions as may be determined by
the Bank in accordance with the Articles of Association of the Bank and subject to the legislative provisions in force for
the time being in that behalf.
770
11,536,362
2. Pursuant to RBI circular no. DBOD.BP.BC No.81/21.01.002/2009-10, the issued and paid-up preference shares are grouped
under Schedule 4- “Borrowings”.
SCHEDULE 2 - RESERVES AND SURPLUS
I. Statutory reserve
Opening balance ...........................................................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
II. Special reserve
Opening balance ...........................................................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
III. Securities premium
Opening balance ...........................................................................................
Additions during the year1 .............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
IV. Investment reserve account
Opening balance ............................................................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Closing balance ...............................................................................................
V. Unrealised investment reserve2
Opening balance ............................................................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
89,916,519
20,820,000
—
110,736,519
40,571,700
8,041,000
—
48,612,700
313,975,852
516,502
—
314,492,354
—
—
—
—
85,451
12,400
61,611
36,240
73,746,519
16,170,000
—
89,916,519
33,551,700
7,020,000
—
40,571,700
313,321,891
653,961
—
313,975,852
—
—
—
—
(1,537,717)
1,749,967
126,799
85,451
F59
schedules
forming part of the Consolidated Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
VI. Capital reserve
Opening balance ...........................................................................................
Additions during the year3 .............................................................................
Deductions during the year ...........................................................................
Closing balance4 .............................................................................................
VII. Foreign currency translation reserve
Opening balance ............................................................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
VIII. Reserve fund
Opening balance ............................................................................................
Additions during the year5 .............................................................................
Deductions during the year ...........................................................................
Closing balance ..............................................................................................
IX. Revenue and other reserves
Opening balance ...........................................................................................
Additions during the year6 .............................................................................
Deductions during the year ...........................................................................
Closing balance7,8 ...........................................................................................
X. Balance in profit and loss account ................................................................
Addition/(deductions): Adjustments9 ............................................................
Balance in profit and loss account .................................................................
TOTAL RESERVES AND SURPLUS
22,087,857
330,000
—
22,417,857
10,402,534
5,852,155
—
16,254,689
21,944
27,775
—
49,719
56,102,881
6,166,874
2,121,525
60,148,230
103,294,625
—
103,294,625
676,042,933
21,707,857
380,000
—
22,087,857
6,345,887
10,995,811
6,939,164
10,402,534
11,279
10,665
—
21,944
54,278,794
3,331,588
1,507,501
56,102,881
68,766,479
(717,794)
68,048,685
601,213,423
1.
Includes ` 435.1 million (March 31, 2012: ` 471.9 million) on exercise of employee stock options.
2. Represents unrealised profit/(loss) pertaining to the investments of venture capital funds.
3.
4.
5.
Includes appropriations made for profit on sale of investments in held-to-maturity category, net of taxes and transfer to Statutory Reserve and profit on
sale of land and buildings, net of taxes and transfer to Statutory Reserve.
Includes capital reserve on consolidation amounting to ` 82.2 million (March 31, 2012: ` 82.2 million).
Includes appropriations made to Reserve Fund and Investment Fund Account in accordance with regulations applicable to Sri Lanka branch.
6. At March 31, 2012 includes:
a) ` 50.4 million transferred in terms of RBI circular no. DBOD.No.BP.BC.26/21.04.048/2008-09 dated July 30, 2008, on Agricultural Debt Waiver and Debt
Relief Scheme, 2008.
b) Outstanding unreconciled credit balance of individual value less than US$ 2,500 or equivalent lying in nostro accounts appropriated in terms of RBI
circular no. DBOD.BP.BC.No. 133/21.04.018/2008-09 dated May 11, 2009.
7.
Includes unrealised profit/(loss), net of tax, of ` (882.9) million [March 31, 2012: ` (2,037.9) million] pertaining to the investments in the available for sale
category of ICICI Bank UK PLC.
8.
Includes restricted reserve of ` 2,453.0 million (March 31, 2012: ` 4,753.8 million) primarily relating to lapsed contracts of the life insurance subsidiary.
9. Represents the impact on account of transition of the financial statements of ICICI Bank Canada from Canadian GAAP to International Financial Reporting
Standards (IFRS).
F60
schedules
forming part of the Consolidated Balance Sheet (Contd.)
SCHEDULE 2A - MINORITY INTEREST
Opening minority interest .......................................................................................
Subsequent increase/(decrease) ............................................................................
CLOSING MINORITY INTEREST ............................................................................
SCHEDULE 3 - DEPOSITS
I. Demand deposits
A.
From banks .......................................................................................
i)
ii) From others .......................................................................................
II. Savings bank deposits ............................................................................
III. Term deposits
From banks ........................................................................................
i)
ii) From others ......................................................................................
TOTAL DEPOSITS ...................................................................................................
I. Deposits of branches in India .................................................................
B.
II. Deposits of branches/subsidiaries outside India ...................................
TOTAL DEPOSITS ...................................................................................................
SCHEDULE 4 - BORROWINGS
I. Borrowings in India
Reserve Bank of India ..............................................................................
i)
ii) Other banks .............................................................................................
iii) Other institutions and agencies
a) Government of India .......................................................................
Financial institutions/others ............................................................
b)
iv) Borrowings in the form of
a) Deposits ...........................................................................................
Commercial paper ...........................................................................
b)
Bonds and debentures (excluding subordinated debt) .................
c)
v) Application money-bonds .......................................................................
vi) Capital instruments
a)
Innovative Perpetual Debt Instruments (IPDI)
(qualifying as Tier I capital) .................................................................
b) Hybrid debt capital instruments issued as
bonds/debentures (qualifying as upper Tier II capital) ...................
c) Redeemable Non-Cumulative Preference Shares (RNCPS)
(350 RNCPS of ` 10 million each issued to preference
share holders of erstwhile ICICI Limited on amalgamation,
redeemable at par on April 20, 2018) ...............................................
d) Unsecured redeemable debentures/bonds
(subordinated debt included in Tier II capital) ................................
TOTAL BORROWINGS IN INDIA
II. Borrowings outside India
i)
Innovative Perpetual Debt Instruments (IPDI)
Capital instruments
a)
(qualifying as Tier I capital) ..................................................................
b) Hybrid debt capital instruments issued as
bonds/debentures (qualifying as upper Tier II capital) ...................
c) Unsecured redeemable debentures/bonds
(subordinated debt included in Tier II capital) ........................................
Bonds and notes ......................................................................................
ii)
iii) Other borrowings1 ...................................................................................
TOTAL BORROWINGS OUTSIDE INDIA ...............................................................
TOTAL BORROWINGS ...........................................................................................
At
31.03.2013
14,277,247
2,780,348
17,057,595
20,192,733
359,512,610
921,659,854
117,888,455
1,728,451,705
3,147,705,357
2,743,209,597
404,495,760
3,147,705,357
(` in ‘000s)
At
31.03.2012
13,582,218
695,029
14,277,247
19,679,064
339,015,263
829,071,333
98,704,681
1,533,034,395
2,819,504,736
2,416,126,468
403,378,268
2,819,504,736
171,688,500
55,276,764
183,985,000
45,759,565
—
96,037,351
3,815,378
6,093,554
39,645,665
—
52,813
85,884,260
5,945,563
13,033,986
14,030,626
—
13,010,000
13,010,000
98,174,210
98,181,421
3,500,000
3,500,000
223,261,041
710,502,463
206,416,361
669,799,595
18,413,008
17,244,895
53,348,947
49,944,301
12,224,275
315,107,768
619,285,733
1,018,379,731
1,728,882,194
12,271,840
342,264,313
521,441,274
943,166,623
1,612,966,218
1. Includes borrowings guaranteed by Government of India for the equivalent of ` 15,815.0 million (March 31, 2012: ` 16,538.1 million).
2. Secured borrowings in I and II above amount to ` 106,283.5 million (March 31, 2012: ` 77,175.5 million) except borrowings under Collateralised
Borrowing and Lending Obligation, market repurchase transactions with banks and financial institutions and transactions under Liquidity
Adjustment Facility with RBI.
F61
schedules
forming part of the Consolidated Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS
I.
II.
III.
IV.
V.
Bills payable ..................................................................................................
43,210,852
37,974,191
Inter-office adjustments (net) .......................................................................
1,347,187
3,076,441
Interest accrued .............................................................................................
32,556,410
34,553,656
Sundry creditors ............................................................................................
164,667,776
111,053,333
Provision for standard assets ........................................................................
19,095,238
17,529,163
VI. Others1, 2 .........................................................................................................
216,965,033
266,874,371
TOTAL OTHER LIABILITIES AND PROVISIONS ...................................................
477,842,496
471,061,155
1. Includes:
a) Proposed dividend amounting to ` 23,072.3 million (March 31, 2012: ` 19,020.4 million).
b) Corporate dividend tax payable amounting to ` 3,308.7 million (March 31, 2012: ` 2,524.3 million).
2. The Bank has presented the mark-to-market (MTM) gain or loss on forex and derivative transactions on gross basis. Accordingly, the gross negative
MTM of the Bank amounting to ` 108,263.2 million has been included in Other liabilities. Consequent to the change, Other liabilities have increased by
` 150,954.8 million at March 31, 2012.
SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA
I. Cash in hand (including foreign currency notes) ..........................................
49,292,687
49,362,026
II. Balances with Reserve Bank of India in current accounts ............................
143,769,333
157,919,780
TOTAL CASH AND BALANCES WITH RESERVE BANK OF INDIA .....................
193,062,020
207,281,806
SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
I.
In India
i)
Balances with banks
a)
b)
in current accounts ......................................................................
4,294,956
3,901,946
in other deposit accounts ...........................................................
63,975,193
56,200,514
ii) Money at call and short notice
a) with banks ....................................................................................
53,000,000
b) with other institutions .................................................................
1,944,203
5,087,500
7,231,647
TOTAL ....................................................................................................................
123,214,352
72,421,607
II. Outside India
i)
ii)
in current accounts ...............................................................................
55,358,220
in other deposit accounts ....................................................................
87,295,053
iii) Money at call and short notice ............................................................
34,778,925
25,520,589
35,288,381
71,050,500
TOTAL .....................................................................................................................
177,432,198
131,859,470
TOTAL BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE
300,646,550
204,281,077
F62
schedules
forming part of the Consolidated Balance Sheet (Contd.)
(` in ‘000s)
SCHEDULE 8 - INVESTMENTS
I.
Investments in India (net of provisions)
Government securities ........................................................................
i)
Other approved securities ..................................................................
ii)
Shares (includes equity and preference shares)1 ..............................
iii)
iv) Debentures and bonds ........................................................................
Assets held to cover linked liabilities of life insurance business .......
v)
vi) Others (commercial paper, mutual fund units, pass through
certificates, security receipts, certificate of deposits, Rural
Infrastructure Development Fund deposits and other related
investments) ........................................................................................
TOTAL INVESTMENTS IN INDIA ..........................................................................
II.
Investments outside India (net of provisions)
i)
ii)
Government securities ........................................................................
Others (equity shares, bonds and certificate of deposits) .................
TOTAL INVESTMENTS OUTSIDE INDIA ..............................................................
TOTAL INVESTMENTS ..........................................................................................
At
31.03.2013
At
31.03.2012
1,097,604,436
—
51,197,259
264,433,133
575,208,274
993,524,949
4,250
41,536,762
254,442,730
578,173,746
472,423,718
2,460,866,820
410,125,260
2,277,807,697
48,086,185
47,713,781
95,799,966
2,556,666,786
67,140,077
53,693,138
120,833,215
2,398,640,912
A.
Investments in India
Gross value of investments2 .........................................................................
Less: Aggregate of provision/depreciation/(appreciation) ..........................
Net investments.............................................................................................
2,485,525,836
24,659,016
2,460,866,820
2,305,164,599
27,356,902
2,277,807,697
B.
Investments outside India
Gross value of investments ..........................................................................
Less: Aggregate of provision/depreciation/(appreciation) ..........................
Net investments.............................................................................................
TOTAL INVESTMENTS ..........................................................................................
95,528,312
(271,654)
95,799,966
2,556,666,786
123,846,674
3,013,459
120,833,215
2,398,640,912
1.
2.
Includes acquisition cost of investment in associates amounting to ` 1,443.5 million (March 31, 2012: ` 494.9 million).
Includes appreciation amounting to ` 39,321.6 million (appreciation at March 31, 2012: ` 27,322.5 million) on investments held to cover linked
liabilities of life insurance business.
SCHEDULE 9 - ADVANCES (net of provisions)
A.
i)
Bills purchased and discounted ............................................................
ii) Cash credits, overdrafts and loans repayable on demand ..................
iii) Term loans .............................................................................................
TOTAL ADVANCES ........................................................................................................
i)
Secured by tangible assets [includes advances against book debts]
B.
ii) Covered by bank/government guarantees ...........................................
iii) Unsecured ..............................................................................................
TOTAL ADVANCES .......................................................................................................
C.
Advances in India
Priority sector .........................................................................................
i)
ii)
Public sector ...........................................................................................
iii) Banks ......................................................................................................
iv) Others ....................................................................................................
TOTAL ADVANCES IN INDIA ........................................................................................
I.
69,689,970
455,660,112
2,774,391,183
3,299,741,265
2,777,704,336
22,221,201
499,815,728
3,299,741,265
593,479,333
13,438,496
187,857
1,613,882,876
2,220,988,562
59,774,883
339,590,153
2,521,889,143
2,921,254,179
2,426,141,317
13,869,020
481,243,842
2,921,254,179
592,856,433
11,968,345
154,618
1,290,662,186
1,895,641,582
II.
Advances outside India
i)
ii) Due from others
Due from banks ......................................................................................
17,492,429
27,655,594
a) Bills purchased and discounted ...................................................
b) Syndicated and term loans ..........................................................
c) Others ...........................................................................................
TOTAL ADVANCES OUTSIDE INDIA ............................................................................
TOTAL ADVANCES ........................................................................................................
21,068,811
885,757,203
154,434,260
1,078,752,703
3,299,741,265
6,357,136
845,174,352
146,425,515
1,025,612,597
2,921,254,179
F63
schedules
forming part of the Consolidated Balance Sheet (Contd.)
(` in ‘000s)
At
31.03.2013
At
31.03.2012
SCHEDULE 10 - FIXED ASSETS
I. Premises
At cost at March 31 of preceding year .........................................................
Additions during the year .............................................................................
Deductions during the year ..........................................................................
Depreciation to date1 .....................................................................................
Net block .......................................................................................................
II. Other fixed assets (including furniture and fixtures)
At cost at March 31 of preceding year .........................................................
Additions during the year .............................................................................
Deductions during the year ..........................................................................
Depreciation to date2 .....................................................................................
Net block .......................................................................................................
III. Assets given on Lease
At cost at March 31 of preceding year ..........................................................
Additions during the year ..............................................................................
Deductions during the year ...........................................................................
Depreciation to date, accumulated lease adjustment and provisions3 ........
Net block .........................................................................................................
TOTAL FIXED ASSETS ...........................................................................................
46,967,168
1,710,528
(1,497,657)
(9,896,489)
37,283,550
45,135,661
5,449,314
(2,933,551)
(32,548,701)
15,102,723
17,509,544
—
—
(15,161,230)
2,348,314
54,734,587
1. Includes depreciation charge amounting to ` 1,638.8 million for FY2013 (FY2012: ` 1,863.0 million).
2. Includes depreciation charge amounting to ` 4,590.9 million for FY2013 (FY2012: ` 4,550.2 million).
3. Includes depreciation charge/lease adjustment amounting to ` 328.2 million for FY2013 (FY2012: ` 422.6 million).
SCHEDULE 11 - OTHER ASSETS
I. Inter-office adjustments (net) .......................................................................
II.
Interest accrued ............................................................................................
III. Tax paid in advance/tax deducted at source (net) ......................................
IV. Stationery and stamps .................................................................................
V. Non-banking assets acquired in satisfaction of claims1 ..............................
VI. Advance for capital assets ...........................................................................
VII. Deposits ........................................................................................................
VIII. Deferred tax asset (net) ................................................................................
—
55,093,457
41,873,082
10,045
576,833
1,358,102
12,256,273
26,805,959
IX. Others2,3 .........................................................................................................
TOTAL OTHER ASSETS .........................................................................................
205,392,184
343,365,935
45,902,791
1,656,184
(591,807)
(9,383,551)
37,583,617
41,441,024
4,441,598
(746,961)
(30,793,785)
14,341,876
17,510,087
—
(543)
(15,115,215)
2,394,329
54,319,822
—
53,644,915
38,176,875
10,308
600,575
1,494,098
12,144,123
28,033,693
272,986,573
407,091,160
1.
2.
3.
Includes certain non-banking assets acquired in satisfaction of claims which are in the process of being transferred in the Bank’s name.
Includes goodwill on consolidation amounting to ` 1,432.3 million (March 31, 2012: ` 1,432.3 million).
The Bank has presented the mark-to-market (MTM) gain or loss on forex and derivative transactions on gross basis. Accordingly, the gross positive
MTM of the Bank amounting to ` 113,239.6 million has been included in Other assets. Consequent to the change, Other assets have increased
by ` 150,954.8 million at March 31, 2012.
SCHEDULE 12 - CONTINGENT LIABILITIES
I. Claims against the Group not acknowledged as debts ................................
II. Liability for partly paid investments ..............................................................
III. Liability on account of outstanding forward exchange contracts1 ...............
IV. Guarantees given on behalf of constituents .................................................
a)
In India .......................................................................................................
b) Outside India ..............................................................................................
V. Acceptances, endorsements and other obligations .....................................
VI. Currency swaps1 .............................................................................................
Interest rate swaps, currency options and interest rate futures1 .................
VII.
VIII. Other items for which the Group is contingently liable ...............................
TOTAL CONTINGENT LIABILITIES ........................................................................
53,721,418
128,050
2,984,263,552
718,450,966
235,173,947
623,110,066
563,086,874
3,924,345,424
37,431,907
9,139,712,204
34,360,751
128,050
3,672,103,795
721,472,153
243,307,639
569,297,814
629,205,403
4,441,277,345
64,438,333
10,375,591,283
1. Represents notional amount.
F64
schedules
forming part of the Consolidated Profit and Loss Account
(` in ‘000s)
SCHEDULE 13 - INTEREST EARNED
I.
Interest/discount on advances/bills ................................................................
II.
Income on investments ..................................................................................
III.
Interest on balances with Reserve Bank of India and other inter-bank funds ....
IV. Others1,2 ...........................................................................................................
TOTAL INTEREST EARNED ...................................................................................
Year ended
31.03.2013
Year ended
31.03.2012
295,624,597
133,188,599
7,566,271
12,466,427
448,845,894
246,201,222
113,762,938
7,005,946
12,978,481
379,948,587
1. Includes interest on income tax refunds amounting to ` 2,704.0 million (March 31, 2012: ` 846.4 million).
2. Includes interest and amortisation of premium on non-trading interest rate swaps and foreign currency swaps.
SCHEDULE 14 - OTHER INCOME
Commission, exchange and brokerage .........................................................
I.
II.
Profit/(Loss) on sale of investments (net) ......................................................
III. Profit/(Loss) on revaluation of investments (net) ..........................................
IV. Profit/(Loss) on sale of land, buildings and other assets (net)1 ....................
V.
Profit/(Loss) on exchange transactions (net) .................................................
VI. Premium and other operating income from insurance business .................
VII. Miscellaneous income (including lease income)2 .........................................
TOTAL OTHER INCOME ........................................................................................
1. Includes profit/(loss) on sale of assets given on lease.
2. Includes share of profit/(loss) from associates.
SCHEDULE 15 - INTEREST EXPENDED
Interest on deposits ......................................................................................
I.
II.
Interest on Reserve Bank of India/inter-bank borrowings ..........................
III. Others (including interest on borrowings of erstwhile ICICI Limited) ........
TOTAL INTEREST EXPENDED ...............................................................................
SCHEDULE 16 - OPERATING EXPENSES
I. Payments to and provisions for employees ................................................
II. Rent, taxes and lighting ................................................................................
III. Printing and stationery .................................................................................
IV. Advertisement and publicity ........................................................................
V. Depreciation on property .............................................................................
VI. Depreciation (including lease equalisation) on leased assets ....................
VII. Directors’ fees, allowances and expenses ..................................................
VIII. Auditors’ fees and expenses ........................................................................
IX. Law charges ..................................................................................................
X. Postages, telegrams, telephones, etc. .........................................................
XI. Repairs and maintenance ............................................................................
XII. Insurance ......................................................................................................
XIII. Direct marketing agency expenses .............................................................
XIV. Claims and benefits paid pertaining to insurance business .......................
XV. Other expenses pertaining to insurance business ......................................
XVI. Other expenditure ........................................................................................
TOTAL OPERATING EXPENSES ...........................................................................
62,767,457
10,291,501
(1,148,007)
339,276
14,850,316
203,944,026
2,153,505
293,198,074
175,836,375
23,598,608
83,419,110
282,854,093
56,290,867
9,975,234
1,505,995
5,544,774
5,926,565
328,220
41,630
167,191
1,222,079
3,211,547
7,756,885
2,080,482
3,992,592
43,170,439
130,346,902
30,509,093
302,070,495
63,154,629
6,510,262
(3,776,816)
(37,180)
14,174,661
204,877,907
1,730,714
286,634,177
152,730,907
19,575,112
77,826,436
250,132,455
51,012,713
9,413,874
1,407,335
4,264,149
6,291,795
422,579
36,126
159,975
842,420
2,881,332
6,705,334
2,131,595
2,573,896
39,449,052
139,805,254
28,123,029
295,520,458
F65
schedules
forming part of the Consolidated Accounts (Contd.)
SCHEDULE 17
Significant accounting policies
OVERVIEW
ICICI Bank Limited, together with its subsidiaries, joint ventures and associates (collectively, the Group), is a diversified financial
services group providing a wide range of banking and financial services including commercial banking, retail banking, project and
corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury
products and services.
ICICI Bank Limited (the Bank), incorporated in Vadodara, India is a publicly held banking company governed by the Banking Regulation
Act, 1949.
Principles of consolidation
The consolidated financial statements include the financials of ICICI Bank, its subsidiaries, associates and joint ventures.
Entities, in which the Bank holds, directly or indirectly, through subsidiaries and other consolidating entities, more than 50.00% of
the voting rights or where it exercises control, over the composition of board of directors/governing body, are fully consolidated on
a line-by-line basis in accordance with the provisions of AS 21. Investments in entities where the Bank, has the ability to exercise
significant influence are accounted for under the equity method of accounting and the pro-rata share of their profit/(loss) is included
in the consolidated profit and loss account. Assets, liabilities, income and expenditure of jointly controlled entities are consolidated
using the proportionate consolidation method. Under this method, the Bank’s share of each of the assets, liabilities, income and
expenses of the jointly controlled entity is reported in separate line items in the consolidated financial statements. The Bank does
not consolidate entities where the significant influence/control is intended to be temporary or entities which operate under severe
long-term restrictions that impair their ability to transfer funds to parent/investing entity. All significant inter-company accounts and
transactions are eliminated on consolidation.
Basis of preparation
The accounting and reporting policies of the Group used in the preparation of the consolidated financial statements conform to
Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by the Reserve Bank of India (RBI), Securities
and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), National Housing Bank (NHB), the
Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) and notified under the Companies
(Accounting Standards) Rules, 2006 from time to time, as applicable to relevant companies and practices generally prevalent in
the banking industry in India. In the case of the foreign subsidiaries, Generally Accepted Accounting Principles as applicable to the
respective foreign subsidiaries are followed. The Group follows the accrual method of accounting except where otherwise stated,
and the historical cost convention. In case the accounting policies followed by a subsidiary or joint venture are different from those
followed by the Bank, the same have been disclosed in the respective accounting policy.
The preparation of consolidated financial statements requires the management to make estimates and assumptions that are
considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the consolidated financial
statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the
preparation of the consolidated financial statements are prudent and reasonable. Future results could differ from these estimates.
The consolidated financial statements include the results of the following entities in addition to the Bank.
Name of the entity
ICICI Bank UK PLC
ICICI Bank Canada
Country of
incorporation
United Kingdom Subsidiary
Nature of
relationship
Canada
Sr.
no.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
F66
ICICI Bank Eurasia Limited Liability Company Russia
ICICI Securities Limited
ICICI Securities Holdings Inc.
ICICI Securities Inc.
ICICI Securities Primary Dealership Limited
ICICI Venture Funds Management Company
Limited
ICICI Home Finance Company Limited
ICICI Trusteeship Services Limited
India
USA
USA
India
India
India
India
ICICI Investment Management Company Limited India
Nature of business
Banking
Banking
Banking
Securities broking
and merchant banking
Holding company
Securities broking
Securities investment, trading
and underwriting
Private equity/venture capital
fund management
Housing finance
Trusteeship services
Asset management
Ownership
interest
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Name of the entity
ICICI International Limited
Country of
incorporation
Mauritius
Nature of
relationship
Subsidiary
Nature of business
Asset management
Ownership
interest
100.00%
schedules
forming part of the Consolidated Accounts (Contd.)
Sr.
no.
12.
13.
14.
15.
16.
17.
18.
ICICI Prudential Pension Funds Management
Company Limited1
ICICI Prudential Life Insurance Company
Limited
ICICI Lombard General Insurance Company
Limited
ICICI Prudential Asset Management
Company Limited
ICICI Prudential Trust Limited
ICICI Eco-net Internet and Technology Fund
19.
ICICI Equity Fund
20.
ICICI Emerging Sectors Fund
21.
ICICI Strategic Investments Fund
22.
ICICI Kinfra Limited
23.
ICICI Venture Value Fund
24.
I-Ven Biotech Limited
India
India
India
India
India
India
India
India
India
India
India
India
25. TCW/ICICI Investment Partners Limited2
Mauritius
26. Rainbow Fund3
27.
28.
FINO PayTech Limited (Formerly known as
Financial Inclusion Network & Operations
Limited)3
I-Process Services (India) Private Limited3
29. NIIT Institute of Finance Banking and
Insurance Training Limited3
ICICI Merchant Services Private Limited3
30.
31. Mewar Aanchalik Gramin Bank3
32.
India Infradebt Limited3
India
India
India
India
India
India
India
Subsidiary
Pension fund management
100.00%
Subsidiary
Life insurance
Subsidiary
General insurance
73.85%
73.37%
Subsidiary
Asset management company
51.00%
Subsidiary
Trustee company
Venture capital fund
50.80%
92.12%
Consolidated as
per AS 21
Consolidated as
per AS 21
Consolidated as
per AS 21
Consolidated as
per AS 21
Consolidated as
per AS 21
Consolidated as
per AS 21
Consolidated as
per AS 21
Jointly
controlled entity
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Unregistered venture capital fund 100.00%
Venture capital fund
99.31%
Unregistered venture capital fund 100.00%
Infrastructure development
consultancy
Unregistered venture capital fund 54.35%
76.00%
Investment in research and
development of biotechnology
Asset management
100.00%
50.00%
Unregistered venture capital fund 23.98%
Support services for financial
inclusion
27.25%
Services related to back end
operations
Education and training in
banking and finance
Merchant servicing
Banking
Infrastructure finance
19.00%
18.79%
19.00%
35.00%
31.00%
1.
2.
3.
ICICI Prudential Pension Funds Management Company Limited is a wholly owned subsidiary of ICICI Prudential Life Insurance Company
Limited.
The entity has been consolidated as per the proportionate consolidation method as prescribed by AS 27 on ‘Financial Reporting of
Interests in Joint Ventures’. The entity is in the process of liquidation.
These entities have been accounted as per the equity method as prescribed by AS 23 on ‘Accounting for Investments in Associates in
Consolidated Financial Statements’.
The financial statements of Comm Trade Services Limited have not been consolidated under AS 21, since the investment is
temporary in nature. Investment in 3i Infotech Limited (3i Infotech) in which the Group holds 26.74% equity shares has not been
accounted as per equity method under AS 23 at March 31, 2013 based on the severe long-term restrictions on 3i Infotech under
restructuring arrangement that impair the ability of 3i Infotech to transfer funds to its investors and the Group’s intention to
reduce the stake in 3i Infotech below 20.00% in the near future.
F67
schedules
forming part of the Consolidated Accounts (Contd.)
SIGNIFICANT ACCOUNTING POLICIES
1.
Transactions involving foreign exchange
The consolidated financial statements of the Group are reported in Indian rupees (`), the national currency of India.
Foreign currency income and expenditure items are translated as follows:
•
For domestic operations, at the exchange rates prevailing on the date of the transaction with the resultant gain or
loss accounted for in the profit and loss account.
For integral foreign operations, at weekly average closing rates with the resultant gain or loss accounted for in
the profit and loss account. An integral foreign operation is a subsidiary, associate, joint venture or branch of the
reporting enterprise, the activities of which are based or conducted in a country other than the country of the
reporting enterprise but are an integral part of the reporting enterprise.
For non-integral foreign operations, at the quarterly average closing rates with the resultant gains or losses
accounted for as foreign currency translation reserve.
•
•
Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing
exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) at the balance sheet date and the
resulting profits/losses are included in the profit and loss account.
Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated
at closing exchange rates notified by FEDAI at the balance sheet date and the resulting profits/losses from exchange
differences are accumulated in the foreign currency translation reserve until the disposal of the net investment in the
non-integral foreign operations.
The premium or discount arising on inception of forward exchange contracts in domestic operations that are entered
to establish the amount of reporting currency required or available at the settlement date of a transaction is amortised
over the life of the contract. All other outstanding forward exchange contracts are revalued based on the exchange rates
notified by FEDAI for specified maturities and at interpolated rates for contracts of interim maturities. The contracts of
longer maturities where exchange rates are not notified by FEDAI, are revalued, based on the forward exchange rates
implied by the swap curves for respective currencies. The resultant gains or losses are recognised in the profit and loss
account.
Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currency
are disclosed at the closing exchange rates notified by FEDAI at the balance sheet date.
Revenue recognition
•
Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing
assets (NPAs) where it is recognised upon realisation, as per the income recognition and asset classification norms
of RBI/NHB.
Income from leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding
on the lease over the primary lease period. Finance leases entered into prior to April 1, 2001 have been accounted
for as per the Guidance Note on Accounting for Leases issued by ICAI. The finance leases entered post April 1, 2001
have been accounted for as per Accounting Standard 19 on ‘leases’ issued by ICAI.
Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis.
Dividend income is accounted on an accrual basis when the right to receive the dividend is established.
Loan processing fee is accounted for upfront when it becomes due except in the case of foreign banking subsidiaries,
where it is amortised over the period of the loan.
Project appraisal/structuring fee is accounted for on the completion of the agreed service.
Arranger fee is accounted for as income when a significant portion of the arrangement/syndication is completed.
Commission received on guarantees issued is amortised on a straight-line basis over the period of the guarantee.
All other fees are accounted for as and when they become due.
The Bank deals in bullion business on a consignment basis. The difference between 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 accrual basis.
Income from securities brokerage activities is recognised as income on the trade date of the transaction. Brokerage
income in relation to public or other issuances of securities is recognised based on mobilisation and terms of
agreement with the client.
Life insurance premium is recognised as income when due. Premium on lapsed policies is recognised as income
when such policies are reinstated. Top-up premiums are considered as single premium. For linked business,
premium is recognised when the associated units are created. Income from linked funds, which includes fund
management charges, policy administration charges, mortality charges etc. are recovered from the linked fund in
accordance with the terms and conditions of the policy and are recognised when due.
•
•
•
•
•
•
•
•
•
•
•
2.
F68
schedules
forming part of the Consolidated Accounts (Contd.)
•
•
•
In the case of general insurance business, premium is recorded for the policy period at the commencement of risk
and for instalment cases, it is recorded on instalment due dates. Premium earned is recognised as income over
the period of the risk or the contract period based on 1/365 method, whichever is appropriate, on a gross basis,
net of service tax. Any subsequent revision to premium is recognised over the remaining period of risk or contract
period. Adjustments to premium income arising on cancellation of policies are recognised in the period in which
the policies are cancelled. Commission on re-insurance ceded is recognised as income in the period of ceding the
risk. Profit commission under re-insurance treaties, wherever applicable, is recognised as income in the period of
final determination of profits and combined with commission on reinsurance ceded.
In the case of general insurance business, insurance premium on ceding of the risk is recognised in the period in
which the risk commences. Any subsequent revision to premium ceded is recognised in the period of such revision.
Adjustment to re-insurance premium arising on cancellation of policies is recognised in the period in which they are
cancelled. In case of life insurance business, cost of reinsurance ceded is accounted for at the time of recognition
of premium income in accordance with the treaty or in-principle arrangement with the reinsurer. Profit commission
on reinsurance ceded is netted off against premium ceded on reinsurance.
In the case of general insurance business, premium deficiency is recognised when the sum of expected claim costs
and related expenses and maintenance costs exceed the reserve for unexpired risks and is computed at a business
segment level.
3.
ICICI Bank Limited
ICICI Prudential Life Insurance Company Limited
ICICI Lombard General Insurance Company Limited
Stock based compensation
The following entities within the group have granted stock options to their employees:
•
•
•
The Employees Stock Option Scheme (the Scheme) provides for grant of option on equity shares of the Bank to
wholetime directors and employees of the Bank and its subsidiaries. The Scheme provides that employees are granted
an option to subscribe to equity shares of the Bank that vest in a graded manner. The options may be exercised within
a specified period. ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company have also
formulated similar stock option schemes for their employees for grant of equity shares of their respective companies.
The Group follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation
cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant
date and amortised over the vesting period. The fair market price is the latest closing price, immediately prior to the
grant date, which is generally the date of the Board of Directors meeting in which the options are granted, 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. In the case of ICICI Prudential Life
Insurance Company and ICICI Lombard General Insurance Company, the fair value of the shares is determined based on
an external valuation report. The banking subsidiaries namely, ICICI Bank UK and ICICI Bank Canada account for the cost
of the options granted to employees by ICICI Bank using the fair value method based on binomial tree model.
4.
Income taxes
Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Group. The current
tax expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act, 1961
and as per Accounting Standard 22 - Accounting for Taxes on Income, respectively. Deferred tax adjustments comprise
changes in the deferred tax assets or liabilities during the year.
Deferred tax assets and liabilities are recognised by considering the impact of timing differences between taxable
income and accounting income for the current year, and carry forward losses. Deferred tax assets and liabilities are
measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The
impact of changes in the deferred tax assets and liabilities is recognised in the profit and loss account.
Deferred tax assets are recognised and re-assessed at each reporting date, based upon the management’s judgement
as to whether their realisation is considered as reasonably certain. However, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation
of such assets.
In the consolidated financial statements, deferred tax assets and liabilities are computed at an individual entity level and
aggregated for consolidated reporting.
5.
Claims and benefits paid
In the case of general insurance business, claims incurred comprise claims paid, estimated liability for outstanding
claims made following a loss occurrence reported and estimated liability for claims incurred but not reported (IBNR) and
claims incurred but not enough reported (IBNER). Further, claims incurred also include specific claim settlement costs
F69
schedules
forming part of the Consolidated Accounts (Contd.)
6.
7.
8.
such as survey/legal fees and other directly attributable costs. Claims (net of amounts receivable from re-insurers/co-
insurers) are recognised on the date of intimation based on estimates from surveyors/insured in the respective revenue
account. Estimated liability for outstanding claims at the balance sheet date is recorded net of claims recoverable
from/payable to co-insurers/re-insurers and salvage to the extent there is certainty of realisation. Estimated liability for
outstanding claim is determined by the entity on the basis of ultimate amounts likely to be paid on each claim based on
the past experience. These estimates are progressively revalidated on availability of further information. Claims IBNR
represent that amount of claims that may have been incurred during the accounting period but have not been reported
or claimed. The claims IBNR provision also includes provision, if any, required for claims IBNER. Estimated liability for
claims IBNR/claims IBNER is based on an actuarial estimate duly certified by the appointed actuary of the entity.
In the case of life insurance business, claims other than maturity claims are accounted for on receipt of intimation.
Survival benefit and maturity claims are accounted when due. Withdrawals and surrenders under linked policies are
accounted in the respective schemes when the associated units are cancelled/redeemed. Re-insurance recoveries on
claims are accounted for, in the same period as the related claims.
Liability for life policies in force
In the case of life insurance business, liability for life policies in force and also policies in respect of which premium has
been discontinued but a liability exists, is determined by the appointed actuary as per the gross premium method in
accordance with accepted actuarial practice, requirements of the IRDA and the Actuarial Society of India.
Reserve for unexpired risk
Reserve for unexpired risk is recognised net of re-insurance ceded and represents premium written that is attributable
and to be allocated to succeeding accounting periods for risks to be borne by the entity under contractual obligations
on contract period basis or risk period basis, whichever is appropriate. It is calculated on a daily pro-rata basis subject to
a minimum of 50.00% of the aggregated premium, written on policies during the twelve months preceding the balance
sheet date for fire, marine, cargo and miscellaneous business and 100.00% for marine hull business, on all unexpired
policies at balance sheet date, in accordance with the provisions of the Insurance Act, 1938.
Actuarial method and valuation
In the case of life insurance business, the actuarial liability on both participating and non-participating policies is calculated using
the gross premium method, using assumptions for interest, mortality, expense and inflation, and in the case of participating
policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are
determined as prudent estimates at the date of valuation with allowances for adverse deviations. No allowance is made for
expected lapses.
The greater of liability calculated using discounted cash flows and unearned premium reserves are held for the unexpired
portion of the risk for the general fund liabilities of linked business and attached riders. An unearned premium reserve is held
for one year renewable group term insurance.
The unit liability in respect of linked business has been taken as the value of the units standing to the credit of policyholders,
using the Net Asset Value (NAV) prevailing at the valuation date. The adequacy of charges under unit linked policies to meet
future expenses has been tested and provision made as appropriate. Provision has also been made for the cost of guarantee
under unit linked products that carry a guarantee. The units held in respect of lapsed policies are divided into a revival reserve,
which contributes to liabilities, and a fund for future appropriation, which contributes to regulatory capital.
The interest rates used for valuing the liabilities are in the range of 4.43% to 6.26% per annum (previous year – 4.93% to
6.02% per annum).
Mortality rates used are based on the published IALM (94 – 96) Ultimate Mortality Table for assurances and LIC 96-98 table
for annuities, adjusted to reflect expected experience while morbidity rates used are based on CIBT 93 table, adjusted for
expected experience, or on risk rates supplied by reinsurers.
Expenses are provided for at current levels, in respect of renewal expenses, with no allowance for future improvements. Per
policy renewal expenses for regular premium policies are assumed to inflate at 5.41% (previous year – 5.20%).
9.
Acquisition costs for insurance business
Acquisition costs are those costs that vary with and are primarily related to the acquisition of insurance contracts and
are expensed in the period in which they are incurred.
10. Staff retirement benefits
Gratuity
The Group pays gratuity to employees who retire or resign after a minimum prescribed period of continuous service and in
the case of employees at the overseas locations as per the rules in force in the respective countries.
F70
schedules
forming part of the Consolidated Accounts (Contd.)
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Actuarial valuation of the gratuity liability is determined by an appointed actuary. Actuarial valuation of gratuity liability is
determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the
projected unit credit method.
Superannuation fund
The Bank contributes 15.00% of the total annual basic salary of certain employees to a superannuation fund for its
employees. The Bank also gives an option to its employees, allowing them to receive the amount contributed by it along
with their monthly salary during their employment.
The amount so contributed/paid by the Bank to the superannuation fund or to employee during the year is recognised
in the profit and loss account.
ICICI Prudential Life Insurance Company, ICICI Prudential Asset Management Company and ICICI Venture Funds
Management Company have accrued for superannuation liability based on a percentage of basic salary payable to
eligible employees for the period of service.
Pension
The Bank provides for pension, a deferred retirement plan covering certain employees of erstwhile Bank of Madura,
erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The plan provides for pension payment including dearness relief
on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the
Bank and applicable salary.
Actuarial valuation of the pension liability is determined by an actuary appointed by the Bank. Actuarial valuation of
pension liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff
attrition as per the projected unit credit method.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan.
Provident fund
The Group is statutorily required to maintain a provident fund as a part of retirement benefits to its employees. Each
employee contributes a certain percentage of his or her basic salary and the Group contributes an equal amount. The
funds are invested according to the rules prescribed by the Government of India.
Actuarial valuation for the interest rate guarantee on the provident fund balances is determined by an actuary.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Leave encashment
The Group provides for leave encashment benefit, which is a long-term benefit scheme, based on actuarial valuation
conducted by an independent actuary.
11. Provisions, contingent liabilities and contingent assets
The Group estimates the probability of any loss that might be incurred on outcome of contingencies on the basis
of information available upto the date on which the consolidated financial statements are prepared. A provision is
recognised when an enterprise has a present obligation as a result of a past event and 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
determined based on management estimates of amounts required to settle the obligation at the balance sheet date,
supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted
to reflect the current management estimates. In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is
made in the consolidated financial statements. In case of remote possibility, neither provision nor disclosure is made in
the consolidated financial statements. The Group does not account for or disclose contingent assets, if any.
12. 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.
13.
Investments
i)
Investments of the Bank are accounted for in accordance with the extant RBI guidelines on investment classification
and valuation as given below.
F71
schedules
forming part of the Consolidated Accounts (Contd.)
b)
All investments are classified into ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Reclassifications, if
any, in any category are accounted for as per the RBI guidelines.
Under each classification, the investments are further categorised as (a) government securities, (b) other approved
securities, (c) shares, (d) bonds and debentures and (e) others
a)
‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium
over the face value. Any premium over the face value of fixed rate and floating rate securities acquired is
amortised over the remaining period to maturity on a constant yield basis and straight line basis respectively.
‘Available for Sale’ and ‘Held for Trading’ securities are valued periodically as per RBI guidelines. Any
premium over the face value of fixed rate and floating rate investments in government securities, classified
as ‘Available for Sale’, is amortised over the remaining period to maturity on constant yield basis and straight
line basis respectively. Quoted investments are valued based on the trades/quotes on the recognised stock
exchanges, subsidiary general ledger account transactions, price list of RBI or prices declared by Primary
Dealers Association of India jointly with Fixed Income Money Market and Derivatives Association (FIMMDA),
periodically.
The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio
(SLR) securities included in the ‘Available for Sale’ and ‘Held for Trading’ categories is as per the rates published
by FIMMDA. The valuation of other unquoted fixed income securities wherever linked to the Yield-to-Maturity
(YTM) rates, is computed with a mark-up (reflecting associated credit risk) over the YTM rates for government
securities published by FIMMDA.
Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available or at ` 1 as per
RBI guidelines.
Securities are valued scrip-wise and depreciation/appreciation is aggregated for each category. Net appreciation
in each category, if any, being unrealised, is ignored, while net depreciation is provided for. Non-performing
investments are identified based on the RBI guidelines.
c) Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are
charged to the profit and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO)
method.
d) Profit/loss on sale of investments in the ‘Held to Maturity’ category is recognised in the profit and loss account
and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to Capital
Reserve. Profit/loss on sale of investments in ‘Available for sale’ and ‘Held for Trading’ categories is recognised
in the profit and loss account.
e) Market repurchase and reverse repurchase transactions, are accounted for as borrowing and lending transactions
respectively in accordance with the extant RBI guidelines. The transactions with RBI under Liquidity Adjustment
Facility (LAF) are accounted for as borrowing and lending transactions.
Broken period interest (the amount of interest from the previous interest payment date till the date of purchase/
sale of instruments) on debt instruments is treated as a revenue item.
f)
g) At the end of each reporting period, security receipts issued by asset reconstruction companies are valued
in accordance with the guidelines applicable to such instruments, prescribed by RBI from time to time.
Accordingly, in cases where the cash flows from security receipts issued by asset reconstruction companies
are limited to the actual realisation of the financial assets assigned to the instruments in the concerned scheme,
the Bank reckons the net asset value, obtained from the asset reconstruction company from time to time, for
valuation of such investments at each reporting period end.
h) The Bank follows trade date method of accounting for purchase and sale of investments, except for government
of India and state government securities where settlement date method of accounting is followed in accordance
with RBI guidelines.
ii) The Bank’s consolidating venture capital funds carry investments at fair values, with unrealised gains and temporary
losses on investments recognised as components of investors’ equity and accounted for in the unrealised
investment reserve account. The realised gains and losses on investments and units in mutual funds and unrealised
gains or losses on revaluation of units in mutual funds are accounted for in the profit and loss account. Provisions
are made in respect of accrued income considered doubtful. Such provisions as well as any subsequent recoveries
are recorded through the profit and loss account. Subscription to/purchase of investments are accounted at the
cost of acquisition inclusive of brokerage, commission and stamp duty. Bonus shares and right entitlements are
recorded when such benefits are known. Quoted investments are valued on the valuation date at the closing
market price. Quoted investments that are not traded on the valuation date but are traded during the two months
prior to the valuation date are valued at the latest known closing price. An appropriate discount is applied where
the asset management company considers it necessary to reflect restrictions on disposal. Quoted investments
not traded during the two months prior to the valuation date are treated as unquoted. Unquoted investments are
valued at their estimated fair values by applying appropriate valuation methods. Where there is a decline, other
F72
schedules
forming part of the Consolidated Accounts (Contd.)
than temporary in the carrying amounts of investments, the resultant reduction in the carrying amount is charged
to the profit and loss account during the period in which such decline is identified.
iii) The Bank’s primary dealership and securities broking subsidiaries classifies the securities held with the intention of
holding for short-term and trading as stock-in-trade and are valued at lower of cost or market value. The securities
acquired with the intention of holding till maturity or for a longer period are classified as investments and are
carried at cost. Appropriate provision is made for other than temporary diminution in the value of investments.
Commission earned in respect of securities acquired upon devolvement is reduced from the cost of acquisition.
iv) The Bank’s housing finance subsidiary classifies its investments as current investments and long-term investments.
Investments that are readily realisable and intended to be held for not more than a year are classified as current
investments, which are carried at the lower of cost and net realisable value. All other investments are classified as
long-term investments, which are carried at their acquisition cost or at amortised cost, if acquired at a premium
over the face value. Any premium over the face value of the securities acquired is amortised over the remaining
period to maturity on a constant yield basis. However, a provision for diminution in value is made to recognise any
other than temporary decline in the value of such long-term investments. Costs such as brokerage, commission etc.
paid at the time of acquisition of investments are included in the investment cost.
vi)
v) The Bank’s overseas banking subsidiaries account for unrealised gain/loss, net of tax, on investment in ‘Available
for Sale’ category directly in their reserves. Further, in the case of the Bank’s United Kingdom and Canadian banking
subsidiaries, unrealised gain/loss on investment in ‘Held for Trading’ category is accounted directly in the profit and
loss account.
In the case of life and general insurance businesses, investments are made in accordance with the Insurance Act,
1938, the IRDA (Investment) Regulations, 2000, and various other circulars/notifications issued by the IRDA in this
context from time to time.
In the case of life insurance business, valuation of investments (other than linked business) is done on the following basis:
a. All debt securities and redeemable preference shares are considered as ‘Held to Maturity’ and accordingly
stated at historical cost, subject to amortisation of premium or accretion of discount in the profit or loss
account over the period of maturity/holding on a straight line basis.
Listed equity shares are stated at fair value being the last quoted closing price on the National Stock Exchange
(NSE) [in case of securities not listed on NSE, the last quoted closing price on the Bombay Stock Exchange
(BSE) is used].
b.
c. Mutual fund units at the balance sheet date are valued at the latest available net asset values of the respective
fund.
Unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual fund units are
taken to ’Revenue and other reserves’ in the balance sheet for life insurance business.
In the case of general insurance business, valuation of investments is done on the following basis:
a. All debt securities including government securities and non-convertible preference shares are considered
as ‘Held to Maturity’ and accordingly stated at amortised cost determined after amortisation of premium or
accretion of discount on a straight line basis over the holding/maturity period.
Listed equities and convertible preference shares at the balance sheet date are stated at fair value, being the
lowest of last quoted closing price on NSE or BSE.
b.
c. Mutual fund investments (other than venture capital fund) are stated at fair value, being the closing net asset
value at balance sheet date.
Investments other than mentioned above are valued at cost.
d.
Unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual fund units are
taken to ’Revenue and other reserves’ in the balance sheet for general insurance business.
The general insurance subsidiary assesses at each balance sheet date whether there is any indication that any
investment in equity or units of mutual fund may be impaired. If any such indication exists, the carrying value of
such investment is reduced to its recoverable amount and the impairment loss is recognised in the revenue(s)/
profit and loss account.
The total proportion of investments for which subsidiaries have applied accounting policies different from the Bank as
mentioned above, is approximately 15.75% of the total investments at March 31, 2013.
14. Provisions/write-offs on loans and other credit facilities
i)
Loans and other credit facilities of the Bank are accounted for in accordance with the extant RBI guidelines as given below:
a) All credit exposures, including loans and advances at the overseas branches and overdues arising from crystallised
derivative contracts, are classified as per RBI guidelines, into performing and NPAs. Loans and advances held at
the overseas branches that are identified as impaired as per host country regulations but which are standard as per
the extant RBI guidelines are identified as NPAs at a borrower level. Further, NPAs are classified into sub-standard,
doubtful and loss assets based on the criteria stipulated by RBI.
F73
schedules
forming part of the Consolidated Accounts (Contd.)
forming part of the Consolidated Accounts (Contd.)
In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets at rates
prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided/written-off as per the
extant RBI guidelines. For loans and advances booked in overseas branches, which are standard as per the extant
RBI guidelines but are classified as NPAs based on host country guidelines, provisions are made as per the host
country regulations. For loans and advances booked in overseas branches, which are NPAs as per the extant RBI
guidelines and as per host country guidelines, provisions are made at the higher of the provisions required under RBI
regulations and host country regulations. Provisions on homogeneous retail loans and advances, subject to minimum
provisioning requirements of RBI, are assessed at a borrower level, on the basis of the ageing of the loans in the non-
performing category.
The Bank holds specific provisions against non-performing loans and advances, general provision against performing
loans and advances and floating provision taken over from erstwhile Bank of Rajasthan upon amalgamation. The
assessment of incremental specific provisions is made after taking into consideration the existing specific provision
held. The specific provisions on retail loans and advances held by the Bank are higher than the minimum regulatory
requirements.
b) Provision on loan and advances restructured/rescheduled is made in accordance with the applicable RBI guidelines
on restructuring of loans and advances by Banks.
In respect of non-performing loans and advances accounts subjected to restructuring, the account is upgraded to
standard only after the specified period i.e. a period of one year after the date when first payment of interest or of
principal, whichever is earlier, falls due, subject to satisfactory performance of the account during the period.
c) Amounts recovered against debts written off in earlier years and provisions no longer considered necessary in the
d)
e)
ii)
iii)
context of the current status of the borrower are recognised in the profit and loss account.
In addition to the specific provision on NPAs, the Bank maintains a general provision on performing loans and
advances at rates prescribed by RBI. For performing loans and advances in overseas branches, the general provision
is made at higher of host country regulations requirement and RBI requirement.
In addition to the provisions required to be held according to the asset classification status, provisions are held for
individual country exposures including indirect country risk (other than for home country exposure). The countries
are categorised into seven risk categories namely insignificant, low, moderate, high, very high, restricted and
off-credit and provisioning is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to
100.00%. For exposures with contractual maturity of less than 180 days, provision is required to be held at 25.00%
of the rates applicable to exposures exceeding 180 days. The indirect exposures may be reckoned at 50.00% of the
exposure. If the country exposure (net) of the Bank in respect of each country does not exceed 1.00% of the total
funded assets, no provision is required on such country exposure.
In the case of the Bank’s housing finance subsidiary, loans and other credit facilities are classified as per the NHB
guidelines into performing and non-performing assets. Further, NPAs are classified into sub-standard, doubtful and
loss assets based on criteria stipulated by NHB. Additional provisions are made against specific non-performing
assets over and above what is stated above, if in the opinion of the management, increased provisions are necessary.
In the case of the Bank’s overseas banking subsidiaries, loans are stated net of allowance for credit losses. Loans
are classified as impaired and impairment losses are incurred only if there is objective evidence of impairment as
a result of one or more events that occurred after the initial recognition on the loan (a loss event) and that loss
event (or events) has an impact on the estimated future cash flows of the loans that can be reliably estimated. An
allowance for impairment losses is maintained at a level that management considers adequate to absorb identified
credit related losses as well as losses that have occurred but have not yet been identified.
The total proportion of loans for which subsidiaries have applied accounting policies different from the Bank as
mentioned above, is approximately 10.66% of the total loans at March 31, 2013.
15. Transfer and servicing of assets
The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are
de-recognised and gains/losses are accounted for only if the Bank surrenders the rights to benefits specified in the
underlying securitised loan contract. Recourse and servicing obligations are accounted for net of provisions.
In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006, the Bank
accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium arising from
securitisation is amortised over the life of the securities issued or to be issued by the special purpose vehicle to which
the assets are sold. In the case of loans sold to an asset reconstruction company, the excess provision is not reversed
but is utilised to meet the shortfall/loss on account of sale of other financial assets to securitisation company (SC)/
reconstruction company (RC).
In accordance with the RBI guidelines dated May 7, 2012 for securitisation of standard assets, with effect from May 7,
2012, the Bank accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium
arising from securitisation is amortised over the life of the transaction based on the method prescribed by RBI guidelines.
The Canadian subsidiary has entered into securitisation arrangements in respect of its originated and purchased mortgages.
F74
schedules
forming part of the Consolidated Accounts (Contd.)
ICICI Bank Canada either retains substantially all the risk and rewards or retains control over these mortgages, hence
these arrangements do not qualify for de-recognition accounting under their local accounting standards. It continues
to recognise the mortgages securitised in the book of accounts and the amounts received through securitisation are
recognised as “Other borrowings”.
16. Fixed assets and depreciation
Premises and other fixed assets are carried at cost less accumulated depreciation. Cost includes freight, duties, taxes and
incidental expenses related to the acquisition and installation of the asset. Depreciation is charged over the estimated
useful life of a fixed asset on a straight-line basis. The rates of depreciation for fixed assets, which are not lower than the
rates prescribed in Schedule XIV of the Companies Act, 1956.
Depreciation on leased assets and leasehold improvements is recognised on a straight-line basis using rates determined
with reference to the primary period of lease or rates specified in Schedule XIV of the Companies Act, 1956, whichever
is higher.
Assets purchased/sold during the period are depreciated on a pro-rata basis for the actual number of days the asset has
been put to use.
In case of the Bank, items costing up to ` 5,000/- are depreciated fully over a period of 12 months from the date of
purchase.
In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with reference
to revised assets values.
17. Accounting for derivative contracts
The Group enters into derivative contracts such as foreign currency options, interest rate and currency swaps, credit
default swaps and cross currency interest rate swaps.
The swap contracts entered to hedge on-balance sheet assets and liabilities are structured such that they bear an
opposite and offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments
is correlated with the movement of underlying assets and accounted pursuant to the principles of hedge accounting.
Hedged swaps are accounted for on an accrual basis except in the case of the Bank’s United Kingdom and Canadian
banking subsidiaries, where the hedging transactions and the hedged items (for the risks being hedged) are measured
at fair value with changes recognised in the profit and loss account.
Foreign currency and rupee derivative contracts entered into for trading purposes are marked to market and the resulting
gain/loss, (net of provisions, if any) is accounted for in the profit and loss account. Pursuant to RBI guidelines, any
receivables under derivative contracts which remain overdue for more than 90 days and mark-to-market gains on other
derivative contracts with the same counter-parties are reversed through the profit and loss account.
18.
Impairment of assets
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset with future net discounted cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment is recognised by debiting the profit and loss account and is
measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
19. Lease transactions
Lease payments for assets taken on operating lease are recognised as an expense in the profit and loss account over the lease
term on straight line basis.
20. Earnings per share
Basic and diluted earnings per share are computed in accordance with Accounting Standard 20 – Earnings per share
issued by ICAI.
Basic Earnings Per Share is calculated by dividing the net profit or loss after tax for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share reflect the potential dilution that could occur if contracts to issue equity shares were exercised
or converted during the year. Diluted earnings per equity share is computed using the weighted average number of
equity shares and dilutive potential equity shares issued by the group outstanding during the year, except where the
results are anti-dilutive.
F75
schedules
forming part of the Consolidated Accounts (Contd.)
SCHEDULE 18
NotES FormiNg part oF tHE aCCoUNtS
The following additional disclosures have been made taking into account the requirements of Accounting Standards
(ASs) and Reserve Bank of India (RBI) guidelines in this regard.
1.
Earnings per share
Basic and diluted earnings per equity share are computed in accordance with AS 20–Earnings per share. Basic earnings
per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding
during the year. The diluted earnings per equity share is computed using the weighted average number of equity shares
and weighted average number of dilutive potential equity shares outstanding during the year.
The following table sets forth, for the periods indicated, the computation of earnings per share.
Basic
Weighted average no. of equity shares outstanding .......................................
Net profit .............................................................................................................
Basic earnings per share (`) ..............................................................................
Diluted
Weighted average no. of equity shares outstanding .......................................
Net profit .............................................................................................................
Diluted earnings per share (`) ...........................................................................
Nominal value per share (`) ...............................................................................
The dilutive impact is mainly due to options granted to employees by the Group.
` in million, except per share data
Year ended
march 31, 2013
Year ended
March 31, 2012
1,153,066,422
96,036.1
83.29
1,157,455,610
95,886.2
82.84
10.00
1,152,338,322
76,429.2
66.33
1,155,591,617
76,338.7
66.06
10.00
2.
related party transactions
The Group has transactions with its related parties comprising associates/other related entities and key management
personnel and their relatives.
associates/other related entities
FINO PayTech Limited (formerly known as Financial Inclusion Network & Operations Limited), I-Process Services (India)
Private Limited, NIIT Institute of Finance Banking and Insurance Training Limited, Comm Trade Services Limited, ICICI
Foundation for Inclusive Growth, Rainbow Fund, ICICI Merchant Services Private Limited, Mewar Aanchalik Gramin
Bank, India Infradebt Limited1.
1. This entity was incorporated and identified as a related party during the three months ended December 31, 2012.
Key management personnel
Ms. Chanda Kochhar, Mr. N. S. Kannan, Mr. K. Ramkumar, Mr. Rajiv Sabharwal.
relatives of key management personnel
Mr. Deepak Kochhar, Mr. Arjun Kochhar, Ms. Aarti Kochhar, Mr. Mahesh Advani, Ms. Varuna Karna,
Ms. Sunita R. Advani, Ms. Rangarajan Kumudalakshmi, Ms. Aditi Kannan, Mr. Narayanan Raghunathan,
Mr. Narayanan Rangarajan, Mr. Narayanan Krishnamachari, Mr. R. Shyam, Ms. R. Suchithra, Mr. K. Jayakumar,
Mr. R. Krishnaswamy, Ms. J. Krishnaswamy, Ms. Sangeeta Sabharwal, Mr. Sanjiv Sabharwal.
The following were the significant transactions between the Group and its related parties for the year ended
March 31, 2013. A specific related party transaction is disclosed as a material related party transaction wherever it
exceeds 10% of all related party transactions in that category.
insurance services
During the year ended March 31, 2013, the Group received insurance premium from associates/other related entities
amounting to ` 25.2 million (March 31, 2012: ` 17.8 million), from key management personnel of the Bank amounting to
` 1.3 million (March 31, 2012: ` 1.1 million) and from relatives of key management personnel amounting to ` 0.3 million
(March 31, 2012: ` 0.1 million). The material transaction for the year ended March 31, 2013 was with FINO PayTech
Limited amounting to ` 20.5 million (March 31, 2012: ` 15.1 million).
F76
schedules
forming part of the Consolidated Accounts (Contd.)
During the year ended March 31, 2013, the Group paid insurance claims to associates/other related entities amounting
to ` 0.12 million (March 31, 2012: ` 0.4 million). The material transactions for the year ended March 31, 2013 were with
I-Process Services (India) Private Limited amounting to ` 0.07 million (March 31, 2012: ` 0.4 million) and with FINO
PayTech Limited amounting to ` 0.05 million (March 31, 2012: Nil).
Fees, commission and other income
During the year ended March 31, 2013, the Group received fees from its associates/other related entities amounting to
` 13.9 million (March 31, 2012: ` 21.8 million), from key management personnel of the Bank amounting to ` 0.3 million
(March 31, 2012: ` 0.3 million) and from relatives of key management personnel of the Bank amounting to ` 0.1 million
(March 31, 2012: Nil). The material transaction for the year ended March 31, 2013 was with ICICI Merchant Services
Private Limited amounting to ` 13.1 million (March 31, 2012: ` 18.7 million).
Lease of premises, common corporate and facilities expenses
During the year ended March 31, 2013, the Group recovered from its associates/other related entities an amount
of ` 167.8 million (March 31, 2012: ` 38.4 million) and from key management personnel of the Bank an amount of
` 0.1 million (March 31, 2012: Nil) for lease of premises, common corporate and facilities expenses. The material
transactions for the year ended March 31, 2013 were with ICICI Merchant Services Private Limited amounting
to ` 147.9 million (March 31, 2012: ` 38.4 million) and with FINO PayTech Limited amounting to ` 19.9 million
(March 31, 2012: Nil).
Secondment of employees
During the year ended March 31, 2013, the Group recovered towards deputation of employees from I-Process Services
(India) Private Limited amounting to ` 6.6 million (March 31, 2012: ` 7.0 million).
Brokerage, fees and other expenses
During the year ended March 31, 2013, the Group paid brokerage/fees and other expenses to its associates/
other related entities amounting to ` 3,357.3 million (March 31, 2012: ` 2,551.8 million). The material transactions
for the year ended March 31, 2013 were with ICICI Merchant Services Private Limited amounting to ` 1,305.2 million
(March 31, 2012: ` 953.9 million), I-Process Services (India) Private Limited amounting to ` 1,045.2 million
(March 31, 2012: ` 606.5 million) and with FINO PayTech Limited amounting to ` 962.6 million (March 31, 2012:
` 978.3 million).
purchase of investments
During the year ended March 31, 2013, the Group invested in the equity shares of India Infradebt Limited amounting
to ` 930.0 million (March 31, 2012: Nil), applied for equity shares of Mewar Aanchalik Gramin Bank amounting to
` 18.6 million (March 31, 2012: Nil) and invested in equity warrants of FINO PayTech Limited amounting to Nil
(March 31, 2012: ` 40.0 million).
Sale of investments
During the year ended March 31, 2013, the Group sold certain investments to Mewar Aanchalik Gramin Bank amounting
to Nil (March 31, 2012: ` 48.7 million).
interest expenses
During the year ended March 31, 2013, the Group paid interest to its associates/other related entities amounting to
` 265.1 million (March 31, 2012: ` 156.6 million), to its key management personnel amounting to ` 2.9 million
(March 31, 2012: ` 2.0 million) and to relatives of key management personnel amounting to ` 1.7 million
(March 31, 2012: ` 1.1 million). The material transactions for the year ended March 31, 2013 were with Mewar Aanchalik
Gramin Bank amounting to ` 162.4 million (March 31, 2012: ` 128.9 million), India Infradebt Limited amounting to
` 84.5 million (March 31, 2012: Nil) and with ICICI Merchant Services Private Limited amounting to ` 7.6 million
(March 31, 2012: ` 17.0 million).
interest income
During the year ended March 31, 2013, the Group received interest from its associates/other related entities amounting
to ` 97.7 million (March 31, 2012: ` 51.6 million), from its key management personnel amounting to ` 0.4 million
(March 31, 2012: ` 0.5 million) and from relatives of key management personnel amounting to ` 0.7 million
(March 31, 2012: ` 0.7 million). The material transactions for the year ended March 31, 2013 were with ICICI Merchant
Services Private Limited amounting to ` 47.5 million (March 31, 2012: ` 48.0 million) and with Mewar Aanchalik Gramin
Bank amounting to ` 47.2 million (March 31, 2012: Nil).
F77
schedules
forming part of the Consolidated Accounts (Contd.)
Dividend paid
During the year ended March 31, 2013, the Bank paid dividend to its key management personnel amounting to
` 6.7 million (March 31, 2012: ` 4.5 million). The dividend paid during the year ended March 31, 2013 to
Ms. Chanda Kochhar was ` 5.1 million (March 31, 2012: ` 3.8 million), to Mr. N. S. Kannan was ` 1.2 million (March 31, 2012:
` 0.7 million) and to Mr. K. Ramkumar was ` 0.4 million (March 31, 2012: Nil).
remuneration to whole-time directors
Remuneration paid to the whole-time directors of the Bank during the year ended March 31, 2013 was ` 154.9 million
(March 31, 2012: ` 111.3 million). The remuneration paid for the year ended March 31, 2013 to Ms. Chanda Kochhar was
` 54.2 million (March 31, 2012: ` 37.7 million), to Mr. N. S. Kannan was ` 32.2 million (March 31, 2012: ` 25.0 million),
to Mr. K. Ramkumar was ` 42.7 million (March 31, 2012: ` 25.4 million) and to Mr. Rajiv Sabharwal was ` 25.8 million
(March 31, 2012: ` 23.2 million).
Sale of fixed assets
During the year ended March 31, 2013, the Bank sold fixed assets to its key management personnel amounting to
` 0.7 million (March 31, 2012: Nil). The material transaction for the year ended March 31, 2013 was with Mr. K. Ramkumar
amounting to ` 0.7 million (March 31, 2012: Nil).
Donation
During the year ended March 31, 2013, the Group has given donation to ICICI Foundation for Inclusive Growth amounting
to ` 104.0 million (March 31, 2012: ` 259.0 million).
related party balances
The following table sets forth, for the periods indicated, the balance payable to/receivable from its associates/other
related entities.
items
Deposits with the Group ....................................................................................
Advances ............................................................................................................
Investments of the Group in related parties .....................................................
Investments of related parties in the Group .....................................................
Payables ..............................................................................................................
Guarantees issued by the Group .......................................................................
at
march 31, 2013
5,084.8
305.5
1,903.6
15.0
1,279.2
0.1
` in million
At
March 31, 2012
2,011.1
1,004.8
955.0
15.0
264.7
0.1
The following table sets forth, for the periods indicated, the balance payable to/receivable from key management
personnel:
` in million, except number of shares
items
Deposits ..............................................................................................................
Advances ............................................................................................................
Investments ........................................................................................................
Employee Stock Options Outstanding (Numbers) ...........................................
Employee Stock Options Exercised1 .................................................................
at
march 31, 2013
60.5
5.7
4.1
3,172,500
0.5
At
March 31, 2012
41.0
9.2
4.1
2,701,500
0.9
1. During the year ended March 31, 2013, 54,000 employee stock options were exercised by the key management personnel of the
Bank (March 31, 2012: 86,500), which have been reported at face value.
F78
schedules
forming part of the Consolidated Accounts (Contd.)
The following table sets forth, for the periods indicated, the balance payable to/receivable from relatives of key
management personnel:
items
Deposits ..............................................................................................................
Advances ............................................................................................................
` in million
at
march 31, 2013
At
March 31, 2012
23.6
6.9
19.8
7.4
The following table sets forth, for the periods indicated, the maximum balance payable to/receivable from key
management personnel:
items
Deposits .............................................................................................................
Advances ..........................................................................................................
Investments .......................................................................................................
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
74.3
10.4
4.1
64.0
10.7
4.1
1. Maximum balances are determined based on comparison of the total outstanding balances at each quarter end during the
financial year.
The following table sets forth, for the periods indicated, the maximum balance payable to/receivable from relatives of
key management personnel:
items
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
Deposits .............................................................................................................
Advances ...........................................................................................................
44.6
7.9
29.3
9.2
3.
Employee Stock option Scheme (ESoS)
In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial
year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of
all such options granted to the eligible employees shall not exceed 10% of the aggregate number of the issued equity
shares of the Bank on the date(s) of the grant of options. Under the stock option scheme, eligible employees are entitled
to apply for equity shares. Options granted for fiscal 2003 vest in a graded manner over a three-year period, with 20%,
30% and 50% of the grants vesting in each year commencing from the end of 12 months from the date of grant. Options
granted from fiscal 2004 vest in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants
vesting in each year commencing from the end of 12 months from the date of grant. Options granted in April 2009 vest
in a graded manner over a five year period with 20%, 20%, 30% and 30% of grant vesting each year, commencing from
the end of 24 months from the date of grant. Options granted in September, 2011 vest in a graded manner over a five
years period with 15%, 20%, 20% and 45% of grant vesting each year, commencing from the end of 24 months from
the date of the grant. The options can be exercised within 10 years from the date of grant or five years from the date of
vesting, whichever is later. The exercise price of ICICI Bank’s options was the last closing price on the stock exchange,
which recorded highest trading volume preceding the date of grant of options. Hence, there was no compensation cost
based on intrinsic value of options.
In February, 2011, the Bank granted 3,035,000 options to eligible employees and whole-time Directors of ICICI Bank
and certain of its subsidiaries at an exercise price of ` 967. Of these options granted, 50% would vest on April 30, 2014
and the balance 50% would vest on April 30, 2015. The options can be exercised within 10 years from the date of grant
or five years from the date of vesting, whichever is later. Based on intrinsic value of options, compensation cost of
` 21.0 million was recognised during the year ended March 31, 2013 (March 31, 2012: ` 21.0 million).
F79
schedules
forming part of the Consolidated Accounts (Contd.)
If ICICI Bank had used the fair value of options based on binomial tree model, compensation cost in the year
ended March 31, 2013 would have been higher by ` 1,865.9 million and proforma profit after tax would have been
` 81.39 billion. On a proforma basis, ICICI Bank’s basic and diluted earnings per share would have been ` 70.58 and
` 70.32 respectively. The key assumptions used to estimate the fair value of options granted during the year ended
March 31, 2013 are given below.
Risk-free interest rate ..........................................................................................................................
Expected life ........................................................................................................................................
Expected volatility ...............................................................................................................................
Expected dividend yield .....................................................................................................................
7.99% to 8.87%
6.35 years
48.99% to 49.55%
1.52% to 1.96%
The weighted average fair value of options granted during the year ended March 31, 2013 is ` 434.91 per option
(March 31, 2012: ` 592.52).
A summary of the status of the Bank’s stock option plan is given below.
particulars
Outstanding at the beginning of the year .......................
Add: Granted during the year .........................................
Less: Lapsed during the year, net of re-issuance ..........
Less: Exercised during the year ......................................
Outstanding at the end of the year .................................
Options exercisable .........................................................
`, except number of options
Stock options outstanding
Year ended march 31, 2013
Weighted
Number of
average
options
Exercise price
846.94
844.53
929.35
511.63
855.18
793.57
23,199,545
4,450,200
802,019
867,273
25,980,453
13,597,383
Year ended March 31, 2012
Weighted
Number of
Average
options
Exercise Price
779.72
1,104.82
798.77
510.94
846.94
745.26
20,529,387
4,060,600
448,372
942,070
23,199,545
12,019,655
In terms of the Scheme, 25,980,453 options (March 31, 2012: 23,199,545 options) granted to eligible employees were
outstanding at March 31, 2013.
A summary of stock options outstanding at March 31, 2013 is given below.
range of exercise price
(` per share)
Number of shares
arising out of
options
Weighted average
exercise price
(` per share)
105-299
300-599
600-999
1,000-1,399
12,675
5,229,338
16,827,750
3,910,690
132.05
470.26
917.10
1,105.80
A summary of stock options outstanding at March 31, 2012 is given below.
range of exercise price
(` per share)
Number of shares
arising out of
options
Weighted average
exercise price
(` per share)
105-299
300-599
600-999
1,000-1,399
28,925
6,048,620
13,122,000
4,000,000
132.05
471.10
942.79
1,106.03
Weighted average
remaining
contractual life
(Number of years)
0.07
3.35
6.66
8.06
Weighted average
remaining
contractual life
(Number of years)
1.07
4.35
6.80
9.04
The options were exercised regularly throughout the period and weighted average share price as per NSE price volume
data during the year ended March 31, 2013 was ` 1,000.21 (March 31, 2012: ` 922.76).
F80
schedules
forming part of the Consolidated Accounts (Contd.)
iCiCi Life:
ICICI Prudential Life Insurance Company has formulated various ESOS schemes, namely Founder I, Founder II,
2004-2005, 2005-2006, 2006-2007 and 2007-2008.
For ICICI Prudential Life Insurance Company there is no compensation cost for the year ended March 31, 2013 based
on the intrinsic value of options. If the entity had used the fair value approach for accounting of options, based on the
binomial tree model, compensation cost for the year ended March 31, 2013 would have been higher by ` 2.4 million
(March 31, 2012: ` 34.3 million).
The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI
Prudential Life Insurance Company.
particulars
`, except number of options
Stock options outstanding
Year ended march 31, 2013
Weighted
Number of
average
shares
Exercise price
Year ended March 31, 2012
Weighted
Number of
Average
shares
Exercise Price
Outstanding at the beginning of the year .......................
12,778,898
211.43
13,565,154
210.87
Add: Granted during the year .........................................
Less: Forfeited/lapsed during the year ...........................
Less: Exercised during the year ......................................
—
401,169
90,125
—
275.60
70.00
—
398,281
387,975
Outstanding at the end of the year .................................
12,287,604
210.60
12,778,898
Options exercisable .........................................................
12,287,604
210.60
11,256,348
—
302.84
94.00
211.43
185.89
The following table sets forth, summary of stock options outstanding of ICICI Prudential Life Insurance Company at
March 31, 2013.
range of exercise price
(` per share)
Number of shares
arising out of
options
(Number of shares)
Weighted average
exercise price
(` per share)
Weighted average
remaining
contractual life
(Number of years)
30-400
12,287,604
210.60
4.10
iCiCi general:
ICICI Lombard General Insurance Company has formulated various ESOS schemes for their employees. There is no
compensation cost for the year ended March 31, 2013 based on the intrinsic value of options. If the entity had used the
fair value approach for accounting of options, based on the binomial tree model, compensation cost for the year ended
March 31, 2013 would have been higher by ` 7.5 million (March 31, 2012: ` 167.2 million).
F81
schedules
forming part of the Consolidated Accounts (Contd.)
The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI
Lombard General Insurance Company.
particulars
Outstanding at the beginning of the year .......................
Add: Granted during the year .........................................
Less: Forfeited/lapsed during the year ...........................
Less: Exercised during the year ......................................
Outstanding at the end of the year .................................
11,097,924
Options exercisable .........................................................
9,235,704
`, except number of options
Stock options outstanding
Year ended march 31, 2013
Weighted
Number of
average
shares
Exercise price
99.33
12,449,262
Year ended March 31, 2012
Weighted
Number of
Average
shares
Exercise Price
98.72
13,644,522
—
854,912
496,426
—
722,900
118.57
1,100,770
43.68
91.05
98.95
817,390
12,449,262
8,713,800
109.00
134.13
47.23
99.33
87.23
The following table sets forth, summary of stock options outstanding of ICICI Lombard General Insurance Company
at March 31, 2013.
range of exercise price
(` per share)
Number of shares
arising out of
options
(Number of shares)
Weighted average
exercise price
(` per share)
Weighted average
remaining
contractual life
(Number of years)
35-200
11,097,924
91.05
6.78
If the Group had used the fair value of options based on the binomial tree model, the compensation cost for the year
ended March 31, 2013 would have been higher by ` 1,795.5 million (March 31, 2012: ` 1,891.9 million) and the proforma
consolidated profit after tax would have been ` 94.24 billion (March 31, 2012: ` 74.54 billion). On a proforma basis, the
Group’s basic earnings per share would have been ` 81.73 (March 31, 2012: ` 64.68) and diluted earnings per share
would have been ` 81.29 (March 31, 2012: ` 64.42).
4.
Fixed assets
The following table sets forth, for the periods indicated, the movement in software acquired by the Group, as included
in fixed assets.
particulars
At cost at March 31 of preceding year .................................................................
Additions during the year .....................................................................................
Deductions during the year ..................................................................................
Depreciation to date ..............................................................................................
Net block ...............................................................................................................
at
march 31, 2013
10,166.5
` in million
At
March 31, 2012
8,994.9
2,092.9
(157.1)
(8,813.9)
3,288.4
1,206.3
(34.7)
(7,709.6)
2,456.9
5.
assets on lease
assets taken under operating lease
The following table sets forth, for the periods indicated, the details of future rentals payable on operating leases.
particulars
Not later than one year .........................................................................................
Later than one year and not later than five years ................................................
Later than five years ..............................................................................................
total .......................................................................................................................
F82
at
march 31, 2013
732.3
1,940.1
165.9
2,838.3
` in million
At
March 31, 2012
916.9
2,359.0
487.5
3,763.4
schedules
forming part of the Consolidated Accounts (Contd.)
6.
preference shares
Certain government securities amounting to ` 2,749.9 million at March 31, 2013 (March 31, 2012: ` 2,578.1 million)
have been earmarked against redemption of preference shares issued by the Bank, which fall due for redemption on
April 20, 2018, as per the original issue terms.
7.
provisions and contingencies
The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in profit
and loss account.
particulars
Provision for depreciation of investments ...........................................................
Provision towards non-performing and other assets ..........................................
Provision towards income tax ..............................................................................
Deferred tax adjustment .......................................................................................
Provision towards wealth tax ................................................................................
Other provision and contingencies1 .....................................................................
total provisions and contingencies ....................................................................
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
1,717.7
15,513.8
33,701.4
1,096.2
71.2
3,720.1
55,820.5
1,173.7
10,510.0
25,711.4
1,717.2
61.5
2,379.7
41,553.5
1. Includes provision towards standard assets amounting to ` 1,349.9 million (March 31, 2012: ` 279.1 million)
8.
Staff retirement benefits
pension
The Bank provides for pension, a deferred retirement plan covering certain employees of erstwhile Bank of Madura,
erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The Bank purchases annuities from LIC and ICICI Prudential Life
Insurance Company Limited for payment of pension to retired employees.
The following table sets forth the status of the defined benefit pension plan as per actuarial valuation by the independent
actuary appointed by the Bank.
particulars
opening obligations .............................................................................................
Service cost ..........................................................................................................
Interest cost ..........................................................................................................
Actuarial (gain)/loss ..............................................................................................
Liabilities extinguished on settlement .................................................................
Benefits paid .........................................................................................................
obligations at the end of the year ......................................................................
opening plan assets, at fair value .......................................................................
Expected return on plan assets ...........................................................................
Actuarial gain/(loss) ..............................................................................................
Assets distributed on settlement .........................................................................
Contributions ........................................................................................................
Benefits paid .........................................................................................................
Closing plan assets, at fair value .........................................................................
Fair value of plan assets at the end of the year ..................................................
Present value of the defined benefit obligations at the end of the year ............
Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee
benefits’) ...............................................................................................................
asset/(liability)......................................................................................................
pension
Year ended
march 31, 2013
9,602.7
250.6
793.7
2,017.8
(1,960.1)
(312.2)
10,392.5
` in million
Year ended
March 31, 2012
8,842.9
251.6
707.8
2,329.8
(2,268.7)
(260.7)
9,602.7
9,379.5
728.5
102.3
(2,177.9)
1,806.6
(312.2)
9,526.8
9,526.8
(10,392.5)
—
(865.7)
8,467.4
652.9
51.7
(2,413.5)
2,881.7
(260.7)
9,379.5
9,379.5
(9,602.7)
—
(223.2)
F83
schedules
forming part of the Consolidated Accounts (Contd.)
particulars
Cost for the year
Service cost ...........................................................................................................
Interest cost ..........................................................................................................
Expected return on plan assets ...........................................................................
Actuarial (gain)/loss ..............................................................................................
Curtailments & settlements (gain)/loss ...............................................................
Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ .......................
Net cost .................................................................................................................
Actual Return on Plan Assets ...............................................................................
Expected employer’s contribution next year ......................................................
investment details of plan assets
Insurer Managed Funds1 .....................................................................................
Government of India securities ............................................................................
Corporate Bonds ..................................................................................................
Others ...................................................................................................................
assumptions
Interest rate ...........................................................................................................
Salary escalation rate
On Basic Pay .........................................................................................................
On Dearness Relief ...............................................................................................
Estimated rate of return on plan assets ..............................................................
` in million
pension
Year ended
march 31, 2013
Year ended
March 31, 2012
250.6
793.7
(728.4)
1,915.4
217.8
—
2,449.1
828.7
670.0
77.74%
7.62%
9.31%
5.33%
8.00%
1.50%
7.00%
8.00%
251.6
707.8
(652.9)
2,278.2
144.8
—
2,729.5
704.6
150.0
78.93%
8.59%
9.40%
3.08%
8.35%
1.50%
7.00%
8.00%
1. Majority of the funds are invested in Government of India securities and corporate bonds.
Estimated rate of return on plan assets is based on our expectation of the average long-term rate of return on investments
of the Fund during the estimated term of the obligations.
Experience adjustment
particulars
Plan assets .........................................................................
Defined benefit obligations ...............................................
Amount not recognised as an asset
(limit in para 59(b) of AS 15 on ‘employee benefits’) ......
Surplus/(deficit) .................................................................
Experience adjustment on plan assets .............................
Experience adjustment on plan liabilities .........................
gratuity
Year ended
march 31,
2013
9,526.8
10,392.5
Year ended
March 31,
2012
9,379.5
9,602.7
Year ended
March 31,
2011
8,467.4
8,842.9
Year ended
March 31,
2010
1,839.9
1,748.7
` in million
Year ended
March 31,
2009
2,145.3
1,932.2
—
(865.7)
102.3
1,525.2
—
(223.2)
51.7
2,692.3
—
(375.5)
69.1
689.7
7.7
83.5
(130.7)
196.9
51.2
161.9
144.8
6.6
The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation,
fair value of plan assets and other details for gratuity benefits of the Group.
particulars
Defined benefit obligation liability
opening obligations ............................................................................................
Add: Adjustment for exchange fluctuation on opening obligation ....................
Adjusted opening obligations ..............................................................................
Service cost ..........................................................................................................
Interest cost ...........................................................................................................
` in million
gratuity
Year ended
march 31, 2013
Year ended
March 31, 2012
6,257.9
3.8
6,261.7
522.9
519.1
5,943.4
5.9
5,949.3
549.3
497.4
F84
schedules
forming part of the Consolidated Accounts (Contd.)
particulars
Actuarial (gain)/loss ..............................................................................................
Past service cost ...................................................................................................
Liability assumed on acquisition/(settled on divestiture) ...................................
Benefits paid .........................................................................................................
obligations at the end of year ............................................................................
opening plan assets, at fair value ......................................................................
Expected return on plan assets ............................................................................
Actuarial gain/(loss) ..............................................................................................
Contributions .........................................................................................................
Asset acquired on acquisition/(distributed on divestiture) ..................................
Benefits paid ..........................................................................................................
Closing plan assets, at fair value .........................................................................
Fair value of plan assets at the end of the year ...................................................
Present value of the defined benefit obligations at the end of the year .............
Unrecognised past service cost............................................................................
Amount not recognised as an asset
(limit in para 59(b) of AS 15 on ‘employee benefits’) ..........................................
asset/(liability)......................................................................................................
Cost for the year
Service cost ...........................................................................................................
Interest cost ...........................................................................................................
Expected return on plan assets ............................................................................
Actuarial (gain)/loss ...............................................................................................
Past service cost ...................................................................................................
Losses/(gains) on “Acquisition/Divestiture” .........................................................
Exchange fluctuation loss/(gain) ...........................................................................
Transitional obligation/(Asset) ..............................................................................
Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ ........................
Net cost .................................................................................................................
Actual Return on Plan Assets ...............................................................................
Expected employer’s contribution next year ......................................................
investment details of plan assets
Insurer Managed Funds1 .......................................................................................
Government of India securities ............................................................................
Corporate Bonds ..................................................................................................
Special Deposit schemes .....................................................................................
Equity ....................................................................................................................
Others ...................................................................................................................
assumptions
Interest rate ............................................................................................................
Salary escalation rate ............................................................................................
Estimated rate of return on plan assets ...............................................................
gratuity
Year ended
march 31, 2013
362.1
0.6
10.5
(789.6)
6,887.3
5,724.3
427.6
51.0
970.1
11.5
(789.6)
6,394.9
6,394.9
(6,887.3)
—
` in million
Year ended
March 31, 2012
(83.9)
—
23.5
(677.7)
6,257.9
5,855.8
438.7
23.1
63.5
20.9
(677.7)
5,724.3
5,724.3
(6,257.9)
10.8
(0.5)
(492.9)
522.9
519.1
(427.6)
311.1
11.4
—
3.8
—
(0.7)
940.0
478.6
666.9
22.06%
24.28%
24.05%
4.55%
11.15%
13.91%
(1.2)
(524.0)
549.3
497.4
(438.7)
(107.0)
14.7
0.2
5.9
(0.3)
(3.6)
517.9
461.7
398.6
56.68%
6.82%
16.21%
5.08%
8.54%
6.67%
7.80%-8.23%
5.00%-10.00%
7.50%-8.00%
8.25%- 9.10%
5.00%-10.00%
7.50%-8.00%
1. Majority of the funds are invested in Government of India securities and corporate bonds
Estimated rate of return on plan assets is based on our expectation of the average long-term rate of return on investments
of the Fund during the estimated term of the obligations.
F85
schedules
forming part of the Consolidated Accounts (Contd.)
Experience adjustment
particulars
Year ended
march 31,
2013
Year ended
March 31,
2012
Year ended
March 31,
2011
Year ended
March 31,
2010
Year ended
March 31,
2009
` in million
Plan assets ..............................................................
Defined benefit obligations ....................................
Amount not recognised as an asset (limit in para
59(b) of AS 15 on ‘employee benefits’) .....................
Surplus/(deficit) ......................................................
Experience adjustment on plan assets ..................
Experience adjustment on plan liabilities ..............
6,394.9
6,887.3
5,724.3
6,257.9
5,855.8
5,943.4
3,073.2
3,089.6
0.5
—
51.0
—
(533.6)
23.1
216.0 119.4
—
(87.7)
(90.5)
(72.8)
47.9
(64.3)
194.8
(21.2)
2,521.7
2,813.8
7.9
(300.0)
(149.3)
(22.3)
The estimates of future salary increases, considered in actuarial valuation, take into consideration inflation, seniority,
promotion and other relevant factors.
provident Fund (pF)
As there is no liability towards interest rate guarantee on exempt provident fund on the basis of actuarial valuation,
Group has made a provision for the year ended March 31, 2013 amounting to Nil (March 31, 2012: ` 17.8 million).
particulars
opening obligations .....................................................................................................................................
Service cost ..................................................................................................................................................
Interest cost ..................................................................................................................................................
Actuarial (gain)/loss ......................................................................................................................................
Employees contribution ...............................................................................................................................
Liabilities assumed on acquisition ...............................................................................................................
Benefits paid .................................................................................................................................................
obligations at the end of the year ..............................................................................................................
opening plan assets .....................................................................................................................................
Expected return on plan assets ...................................................................................................................
Actuarial gain/(loss) ......................................................................................................................................
Employer contributions during the year .....................................................................................................
Employees contributions during the year ...................................................................................................
Assets acquired on Acquisition/(Distributed on Divestiture) .....................................................................
Benefits paid .................................................................................................................................................
Closing plan assets .......................................................................................................................................
Plan assets at the end of the year ................................................................................................................
Present value of the defined benefit obligations at the end of the year ....................................................
asset/(liability)..............................................................................................................................................
Cost for the year
Service cost ..................................................................................................................................................
Interest cost ..................................................................................................................................................
Expected return on plan assets ...................................................................................................................
Actuarial (gain)/loss ......................................................................................................................................
Net cost .........................................................................................................................................................
investment details of plan assets
Insurer Managed Funds ...............................................................................................................................
Government of India Securities ...................................................................................................................
Corporate Bonds ..........................................................................................................................................
Special Deposit Scheme ..............................................................................................................................
Others ...........................................................................................................................................................
` in million
Year ended
march 31, 2013
14,285.9
931.3
1,180.3
24.2
1,626.0
62.3
(1,973.2)
16,136.8
14,267.4
1,205.7
17.3
931.3
1,626.0
62.3
(1,973.2)
16,136.8
16,136.8
(16,136.8)
—
931.3
1,180.3
(1,205.7)
6.8
912.7
0.00%
40.14%
48.77%
3.31%
7.78%
F86
schedules
forming part of the Consolidated Accounts (Contd.)
particulars
Actual Return on Plan Assets .......................................................................................................................
Expected employer's contribution next year ..............................................................................................
assumptions
Discount rate ................................................................................................................................................
Expected rate of return on assets ................................................................................................................
Discount rate for the remaining term to maturity of investments .............................................................
Average historic yield on the investment ....................................................................................................
Guaranteed rate of return ............................................................................................................................
Experience adjustments
on plan assets ...............................................................................................................................................
on defined benefit obligations .....................................................................................................................
Experience adjustment
particulars
Plan assets ....................................................................................................................................................
` in million
Year ended
march 31, 2013
1,223.1
1,097.4
7.80%-8.00%
8.26%-8.95%
7.91%-8.05%
8.30%-8.86%
8.50%
17.3
24.2
` in million
at
march 31, 2013
16,136.8
Defined benefit obligations ..........................................................................................................................
16,136.8
Amount not recognised as an asset (limit in para 59(b)) ............................................................................
Surplus/(deficit) ............................................................................................................................................
Experience adjustment on plan assets ........................................................................................................
Experience adjustment on plan liabilities ....................................................................................................
—
—
17.3
24.2
The Group has contributed ` 1,731.5 million to provident fund including Government of India managed employees
provident fund for the year ended March 31, 2013 (March 31, 2012: ` 1,558.2 million), which includes compulsory
contribution made towards employee pension scheme under Employees Provident Fund and Miscellaneous Provisions
Act, 1952.
9.
provision for income tax
The provision for income tax (including deferred tax) for the year ended March 31, 2013 amounted to ` 34,797.6 million
(March 31, 2012: ` 27,428.6 million).
The Group has a comprehensive system of maintenance of information and documents required by transfer pricing
legislation under sections 92-92F of the Income Tax Act, 1961. The management is of the opinion that all international
transactions are at arm’s length so that the above legislation will not have material impact on the financial statements.
10. Deferred tax
At March 31, 2013 the Group has recorded net deferred tax asset of ` 26,806.0 million (March 31, 2012: ` 28,033.7
million), which has been included in other assets.
The following table sets forth, for the periods indicated, the break-up of deferred tax assets and liabilities into major
items.
particulars
Deferred tax asset
` in million
at
march 31, 2013
At
March 31, 2012
Provision for bad and doubtful debts .................................................................
28,150.5
28,072.1
Capital loss ...........................................................................................................
63.1
79.5
Others ..................................................................................................................
2,871.8
3,853.9
F87
schedules
forming part of the Consolidated Accounts (Contd.)
particulars
` in million
at
march 31, 2013
At
March 31, 2012
total deferred tax asset ......................................................................................
31,085.4
32,005.5
Deferred tax liability
Depreciation on fixed assets ...............................................................................
4,744.2
4,331.8
Others ..................................................................................................................
18.5
47.8
total deferred tax liability ..................................................................................
4,762.7
4,379.6
Net deferred tax asset/(liability) pertaining to foreign branches/foreign
subsidiaries ..........................................................................................................
483.3
407.8
total net deferred tax asset/(liability) ...............................................................
26,806.0
28,033.7
At March 31, 2013, ICICI Prudential Life Insurance Company has created deferred tax asset on carry forward unabsorbed
losses amounting to ` 12.8 million (March 31, 2012: ` 860.3 million) which can be set off against future taxable income.
11.
information about business and geographical segments
a. Business segments for the year ended march 31, 2013
The primary segment for the Group has been presented as follows:
1.
retail banking includes exposures which satisfy the four criteria of orientation, product, granularity and low value of
individual exposures for retail exposures laid down in Basel Committee on Banking Supervision document “International
Convergence of Capital Measurement and Capital Standards: A Revised Framework”.
2. Wholesale banking includes all advances to trusts, partnership firms, companies and statutory bodies, which are not
included under Retail Banking.
3.
treasury includes the entire investment portfolio of the Bank, ICICI Eco-net Internet and Technology Fund, ICICI Equity
Fund, ICICI Emerging Sectors Fund, ICICI Strategic Investments Fund and ICICI Venture Value Fund.
4. other banking includes hire purchase and leasing operations and other items not attributable to any particular business
segment of the Bank. Further, it includes the Bank’s banking subsidiaries i.e. ICICI Bank UK PLC, ICICI Bank Canada and
ICICI Bank Eurasia LLC.
5.
Life insurance represents results of ICICI Prudential Life Insurance Company Limited.
6. general insurance represents results of ICICI Lombard General Insurance Company Limited.
7. others includes ICICI Home Finance Company Limited, ICICI Venture Funds Management Company Limited, ICICI
International Limited, ICICI Securities Primary Dealership Limited, ICICI Securities Limited, ICICI Securities Holdings
Inc., ICICI Securities Inc., ICICI Prudential Asset Management Company Limited, ICICI Prudential Trust Limited, ICICI
Investment Management Company Limited, ICICI Trusteeship Services Limited, TCW/ICICI Investment Partners Limited,
ICICI Kinfra Limited, I-Ven Biotech Limited and ICICI Prudential Pension Funds Management Company Limited.
Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to
segments on a systematic basis.
The liabilities of the Bank are transfer priced to a central treasury unit, which pools all funds and lends to the business
units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve
requirements.
The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the
transfer pricing mechanism prevailing for the respective reporting periods.
The results of reported segments for the year ended March 31, 2013 are not comparable with that of reported segments
for the year ended March 31, 2012 to the extent entities have been discontinued from consolidation.
F88
schedules
forming part of the Consolidated Accounts (Contd.)
n
o
i
l
l
i
m
n
i
`
.
3
1
0
2
,
1
3
h
c
r
a
M
d
e
d
n
e
r
a
e
y
e
h
t
r
o
f
s
t
l
u
s
e
r
t
n
e
m
g
e
s
s
s
e
n
i
s
u
b
e
h
t
,
h
t
r
o
f
s
t
e
s
l
e
b
a
t
g
n
w
o
i
l
l
o
f
e
h
T
l
a
t
o
t
-
r
e
t
n
i
s
r
e
h
t
o
l
a
r
e
n
e
g
e
f
i
L
t
n
e
m
g
e
s
s
t
n
e
m
t
s
u
d
a
j
e
c
n
a
r
u
s
n
i
e
c
n
a
r
u
s
n
i
r
e
h
t
o
g
n
i
k
n
a
b
s
s
e
n
i
s
u
b
y
r
u
s
a
e
r
t
e
l
a
s
e
l
o
h
W
l
i
a
t
e
r
g
n
i
k
n
a
b
g
n
i
k
n
a
b
s
r
a
l
u
c
i
t
r
a
p
.
r
S
.
o
n
0
.
4
4
0
,
2
4
7
6
.
7
6
1
,
6
3
1
—
8
.
8
6
8
,
4
3
6
.
7
6
1
,
6
3
1
8
.
8
9
2
,
1
0
1
)
5
.
0
2
9
,
8
(
)
9
.
8
8
9
,
5
3
4
(
0
.
8
6
9
,
9
2
3
.
7
1
8
,
7
8
.
6
1
8
,
2
0
.
3
3
4
,
0
5
5
.
6
9
6
,
5
1
1
.
0
1
4
,
6
3
.
0
6
7
,
3
7
1
2
.
6
4
3
,
8
2
3
.
3
1
6
,
6
3
5
.
1
8
9
,
5
5
3
6
.
8
8
1
,
6
6
5
.
5
4
5
,
9
6
.
7
8
6
,
3
1
3
3
.
6
5
8
,
5
2
2
0
.
9
7
6
,
8
6
1
.
7
1
2
,
8
4
7
,
6
1
.
8
3
5
,
9
7
6
,
6
)
0
.
6
0
5
,
2
8
1
(
5
.
9
5
2
,
1
9
1
4
.
2
6
9
,
5
1
1
8
.
0
7
9
,
1
5
7
9
.
6
5
1
,
8
2
5
5
.
5
1
3
,
5
7
2
,
2
7
.
8
2
6
,
9
6
2
,
2
3
.
0
5
7
,
9
2
7
8
.
9
5
1
,
7
8
.
4
5
2
,
6
—
1
.
7
1
2
,
8
4
7
,
6
)
8
.
5
2
(
)
6
.
7
8
1
(
9
.
3
7
8
2
.
5
4
3
0
.
0
8
3
0
.
8
8
4
7
.
9
1
3
8
.
9
0
4
6
.
8
4
1
6
.
6
8
4
8
.
0
1
4
.
8
1
8
.
1
9
9
2
.
8
8
1
,
1
2
.
6
2
4
,
4
8
.
0
4
5
,
3
1
.
7
1
2
,
8
4
7
,
6
)
0
.
6
0
5
,
2
8
1
(
3
8
.
4
8
4
,
4
9
1
3
9
.
6
8
6
,
8
1
1
3
5
.
0
0
5
,
3
5
7
3
5
.
7
3
6
,
4
0
5
3
8
.
1
3
2
,
4
4
2
,
2
1
.
4
9
9
,
1
7
0
,
1
5
.
7
8
1
,
3
4
0
,
2
t
e
n
(
/
)
t
e
n
(
s
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
I
)
3
(
–
)
2
(
t
i
f
o
r
p
g
n
i
t
a
r
e
p
O
s
e
s
n
e
p
x
e
d
e
t
a
c
o
l
l
a
n
U
s
t
l
u
s
e
r
t
n
e
m
g
e
S
e
u
n
e
v
e
R
)
4
(
-
)
3
(
-
)
2
(
1
t
i
f
o
r
p
t
e
N
)
t
i
d
e
r
c
x
a
t
d
e
r
r
e
f
e
d
)
7
(
+
)
6
(
s
t
e
s
s
a
l
a
t
o
T
2
s
t
e
s
s
a
d
e
t
a
c
o
l
l
a
n
U
s
e
i
t
i
l
i
b
a
i
l
t
n
e
m
g
e
S
s
e
i
t
i
l
i
b
a
i
l
d
e
t
a
c
o
l
l
a
n
U
n
o
i
t
a
m
r
o
f
n
i
r
e
h
t
o
s
t
e
s
s
a
t
n
e
m
g
e
S
)
0
1
(
+
)
9
(
s
e
i
t
i
l
i
b
a
i
l
l
a
t
o
T
e
r
u
t
i
d
n
e
p
x
e
l
a
t
i
p
a
C
i
n
o
i
t
a
c
e
r
p
e
D
.
)
t
e
n
(
t
e
s
s
a
x
a
t
d
e
r
r
e
f
e
d
,
)
t
e
n
(
e
c
r
u
o
s
t
a
d
e
t
c
u
d
e
d
x
a
t
/
e
c
n
a
v
d
a
n
i
i
d
a
p
x
a
t
,
s
t
n
e
m
g
e
s
e
h
t
f
o
y
n
a
o
t
d
e
t
a
c
o
l
l
a
y
l
l
a
c
i
f
i
c
e
p
s
e
b
t
o
n
n
a
c
h
c
h
w
s
t
e
s
s
a
i
s
e
d
u
c
n
l
I
l
.
s
r
e
d
o
h
e
r
a
h
s
y
t
i
r
o
n
m
i
f
o
t
i
f
o
r
p
t
e
n
f
o
e
r
a
h
s
s
e
d
u
c
n
l
I
l
.
s
u
p
r
u
s
d
n
a
s
e
v
r
e
s
e
r
d
n
a
l
a
t
i
p
a
c
e
r
a
h
s
s
e
d
u
c
n
l
I
1
2
3
4
5
6
7
8
9
0
1
1
1
2
1
3
1
4
1
.
1
.
2
.
3
F89
schedules
forming part of the Consolidated Accounts (Contd.)
—
5
.
6
6
8
,
6
0
1
2
.
0
9
4
,
7
2
3
.
6
7
3
,
9
7
5
.
6
6
8
,
6
0
1
)
7
.
3
7
3
,
5
(
6
.
8
0
1
,
8
)
1
.
2
5
9
,
3
(
2
.
7
3
1
,
4
1
2
.
8
2
9
,
3
1
.
1
4
4
,
2
2
3
.
7
7
0
,
2
6
9
.
9
9
4
,
5
8
.
2
8
5
,
6
6
6
)
3
.
3
5
4
,
8
6
3
(
1
.
8
9
6
,
9
2
6
.
1
0
3
,
3
4
5
.
3
0
2
,
6
7
1
6
.
8
3
1
,
5
2
5
.
8
6
8
,
1
0
3
1
.
3
1
7
,
1
6
2
7
.
2
1
1
,
7
9
1
6
.
0
1
2
,
6
6
1
.
4
1
9
,
1
4
0
,
6
5
.
3
0
7
,
5
7
9
,
5
)
5
.
3
8
9
,
4
8
1
(
1
.
5
0
1
,
4
7
1
1
.
0
7
3
,
3
0
1
2
.
7
0
5
,
4
1
7
1
.
8
4
7
,
5
1
5
9
.
2
3
8
,
4
1
0
,
2
9
.
5
5
3
,
0
4
9
,
1
7
.
7
6
7
,
7
9
6
1
.
4
1
9
,
1
4
0
,
6
)
5
.
3
8
9
,
4
8
1
(
3
4
.
9
9
9
,
6
7
1
3
5
.
1
5
2
,
5
0
1
3
7
.
3
4
5
,
6
1
7
3
2
.
8
1
9
,
1
0
5
3
7
.
0
0
4
,
3
8
0
,
2
2
.
8
0
5
,
6
7
8
9
.
5
7
2
,
6
6
7
,
1
)
3
(
–
)
2
(
t
i
f
o
r
p
g
n
i
t
a
r
e
p
O
s
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
I
s
e
s
n
e
p
x
e
d
e
t
a
c
o
l
l
a
n
U
s
t
l
u
s
e
r
t
n
e
m
g
e
S
e
u
n
e
v
e
R
)
x
a
t
d
e
r
r
e
f
e
d
g
n
d
u
c
n
I
(
l
i
)
4
(
-
)
3
(
-
)
2
(
1
t
i
f
o
r
p
t
e
N
n
o
i
t
a
m
r
o
f
n
i
r
e
h
t
o
s
t
e
s
s
a
t
n
e
m
g
e
S
2
s
t
e
s
s
a
d
e
t
a
c
o
l
l
a
n
U
)
7
(
+
)
6
(
s
t
e
s
s
a
l
a
t
o
T
s
e
i
t
i
l
i
b
a
i
l
t
n
e
m
g
e
S
8
.
7
9
0
,
6
4
.
4
1
7
,
6
—
1
.
4
1
9
,
1
4
0
,
6
—
)
7
.
2
2
(
0
.
2
7
2
8
.
6
5
3
2
.
5
6
7
8
.
5
4
4
8
.
5
5
5
2
.
2
5
0
,
1
0
.
4
2
3
5
.
6
7
5
2
.
6
2
.
1
2
7
.
2
6
4
3
.
6
3
2
,
1
5
.
5
1
2
,
3
7
.
4
4
5
,
3
)
0
1
(
+
)
9
(
s
e
i
t
i
l
i
b
a
i
l
l
a
t
o
T
s
e
i
t
i
l
i
b
a
i
l
d
e
t
a
c
o
l
l
a
n
U
e
r
u
t
i
d
n
e
p
x
e
l
a
t
i
p
a
C
i
n
o
i
t
a
c
e
r
p
e
D
.
)
t
e
n
(
t
e
s
s
a
x
a
t
d
e
r
r
e
f
e
d
,
)
t
e
n
(
e
c
r
u
o
s
t
a
d
e
t
c
u
d
e
d
x
a
t
/
e
c
n
a
v
d
a
n
i
i
d
a
p
x
a
t
,
s
t
n
e
m
g
e
s
e
h
t
f
o
y
n
a
o
t
d
e
t
a
c
o
l
l
a
y
l
l
a
c
i
f
i
c
e
p
s
e
b
t
o
n
n
a
c
h
c
h
w
s
t
e
s
s
a
i
s
e
d
u
c
n
l
I
l
.
s
r
e
d
o
h
e
r
a
h
s
y
t
i
r
o
n
m
i
f
o
t
i
f
o
r
p
t
e
n
f
o
e
r
a
h
s
s
e
d
u
c
n
l
I
l
.
s
u
p
r
u
s
d
n
a
s
e
v
r
e
s
e
r
d
n
a
l
a
t
i
p
a
c
e
r
a
h
s
s
e
d
u
c
n
l
I
n
o
i
l
l
i
m
n
i
`
s
t
n
e
m
t
s
u
d
a
j
e
c
n
a
r
u
s
n
i
e
c
n
a
r
u
s
n
i
s
s
e
n
i
s
u
b
g
n
i
k
n
a
b
l
a
t
o
t
t
n
e
m
g
e
s
-
r
e
t
n
i
s
r
e
h
t
o
l
a
r
e
n
e
g
e
f
i
L
g
n
i
k
n
a
b
r
e
h
t
o
y
r
u
s
a
e
r
t
e
l
a
s
e
l
o
h
W
g
n
i
k
n
a
b
l
i
a
t
e
r
s
r
a
l
u
c
i
t
r
a
p
.
r
S
.
o
n
1
2
3
4
5
6
7
8
9
0
1
1
1
2
1
3
1
4
1
.
1
.
2
.
3
.
2
1
0
2
,
1
3
h
c
r
a
M
d
e
d
n
e
r
a
e
y
e
h
t
r
o
f
s
t
l
u
s
e
r
t
n
e
m
g
e
s
s
s
e
n
i
s
u
b
e
h
t
,
h
t
r
o
f
s
t
e
s
l
e
b
a
t
g
n
w
o
i
l
l
o
f
e
h
T
F90
schedules
forming part of the Consolidated Accounts (Contd.)
B. geographical segments
The Group has reported its operations under the following geographical segments.
• Domestic operations comprise branches and subsidiaries/joint ventures in India.
• Foreign operations comprise branches and subsidiaries/joint ventures outside India and offshore banking unit in India.
The Group conducts transactions with its customers on a global basis in accordance with their business requirements,
which may span across various geographies.
The following tables sets forth, for the periods indicated, the geographical segment results.
revenue
` in million
Year ended
march 31, 2013
Year ended
March 31, 2012
Domestic operations ...........................................................................................
676,240.8 600,630.9
Foreign operations ...............................................................................................
65,803.2 65,951.9
total ......................................................................................................................
742,044.0
666,582.8
assets
` in million
at
march 31, 2013
At
March 31, 2012
Domestic operations ............................................................................................
5,321,569.2
4,825,055.3
Foreign operations ...............................................................................................
1,357,968.9
1,301,603.1
total ......................................................................................................................
6,679,538.1
6,126,658.4
Note: Segment assets do not include tax paid in advance/tax deducted at source (net) and deferred tax asset (net).
The following table sets forth, for the periods indicated, capital expenditure and depreciation thereon for the geographical
segments.
Capital expenditure incurred
during the year ended
Depreciation provided on
capital expenditure during
the year ended
march 31, 2013 March 31, 2012 march 31, 2013 March 31, 2012
` in million
Domestic operations ...........................................
6,952.3
5,703.3
6,078.9
Foreign operations ...............................................
207.5
394.5
175.9
total ....................................................................
7,159.8
6,097.8
6,254.8
6,543.1
171.3
6,714.4
F91
schedules
forming part of the Consolidated Accounts (Contd.)
12. penalties/fines imposed by rBi and other banking regulatory bodies
The penalty imposed by RBI and other banking regulatory bodies during the year ended March 31, 2013 was ` 3.1
million (March 31, 2012: ` 1.5 million).
During the year ended March 31, 2013, RBI imposed a penalty of ` 66,000 through letter dated May 2, 2012, with regard
to bouncing of two Subsidiary General Ledger deals of the clients of ` 60.0 million and ` 6.0 million on March 28, 2012.
On October 9, 2012, a penalty of ` 3.0 million was levied by RBI for non-compliance with Know Your Customer (KYC)
directions issued by RBI. The Bank has paid these penalties to RBI.
13. Small and micro industries
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006,
certain disclosures are required to be made relating to enterprises covered under the Act. During the year ended March
31, 2013, the amount paid after the due date to vendors registered under the MSMED Act, 2006 was ` 6.0 million (March
31, 2012: ` 7.1 million). An amount of ` 0.2 million (March 31, 2012: ` 0.1 million) has been charged to profit & loss account
towards accrual of interest on these delayed payments.
14. Contribution to indian motor third party insurance pool by iCiCi Lombard general insurance Company Limited (iCiCi
general)
In accordance with IRDA guidelines, ICICI General, together with all other general insurance companies participated in the
Indian Motor Third Party Insurance Pool (‘the Pool’), administered by the General Insurance Corporation of India (‘GIC’)
covering third party risks of commercial vehicles, from April 1, 2007. The Pool was dismantled on a clean cut basis as per
IRDA direction effective March 31, 2012.
During the year ended March 31, 2013, the Appointed Actuary has carried out re-assessment of liabilities relating
to policies underwritten by ICICI General for risks incepted between April 1, 2007 and March 31, 2012. Based on the
re-assessment, ICICI General has recognised additional provision of ` 1,018.6 million for the year ended March 31, 2013
in respect of claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported (‘IBNER’) liabilities
on policies earlier ceded to the Pool.
Further, during the year ended March 31, 2013, ICICI General has also recognized the balance portion of motor pool
liabilities of ` 1,092.9 million relating to underwriting year 2011-12 as the premiums are earned over the contract period
and liabilities are recognised accordingly.
During the year ended March 31, 2012, IRDA had directed all general insurance companies to recognise the Pool liabilities
as per the loss ratios estimated by GAD UK (‘GAD Estimates’) for underwriting years commencing from the year ended
March 31, 2008 to year ended March 31, 2012. ICICI General had recognised the additional liabilities of the Pool in the year
ended March 31, 2012 and accordingly, the Bank’s consolidated net profit after tax for the year ended March 31, 2012
included impact of additional Pool losses of ` 5,030.3 million in line with the Bank’s shareholding in ICICI General.
F92
schedules
forming part of the Consolidated Accounts (Contd.)
15. additional disclosure
Additional statutory information disclosed in the separate financial statements of the Bank and subsidiaries having no
material bearing on the true and fair view of the consolidated financial statements and the information pertaining to the
items which are not material have not been disclosed in the consolidated financial statements.
16. Comparative figures
Figures of the previous year have been re-grouped to conform to the current year presentation.
SigNatUrES to SCHEDULES 1 to 18
For S.R. BATLIBOI & CO. LLP
Firm’s Registration no.: 301003E
Chartered Accountants
SHRAWAN JALAN
Partner
Membership no.: 102102
For and on behalf of the Board of Directors
K. V. KAMATH
Chairman
SRIDAR IYENGAR
Director
CHANDA KOCHHAR
Managing Director & CEO
N. S. KANNAN
Executive Director & CFO
K. RAMKUMAR
Executive Director
RAJIV SABHARWAL
Executive Director
Place : Mumbai
Date : April 26, 2013
SANDEEP BATRA
Group Compliance Officer &
Company Secretary
RAKESH JHA
Deputy Chief
Financial Officer
F93
schedules
Financial information of subsidiary companies for the year ended March 31, 2013
n
o
i
l
l
i
m
n
i
`
l
a
i
t
n
e
d
u
r
P
I
C
C
I
I
s
d
n
u
F
i
n
o
s
n
e
P
t
n
e
m
e
g
a
n
a
M
I
C
C
I
I
t
e
s
s
A
l
a
i
t
n
e
d
u
r
P
y
n
a
p
m
o
C
2
d
e
t
i
m
L
i
.
0
0
7
2
)
6
1
(
.
.
0
8
7
2
.
6
9
.
1
2
1
.
1
0
)
0
1
(
.
.
0
0
)
0
1
(
.
.
5
6
7
1
d
e
t
i
m
L
i
y
n
a
p
m
o
C
t
n
e
m
e
g
a
n
a
M
.
3
6
8
6
1
,
.
0
3
7
3
3
,
.
2
0
1
5
1
,
.
9
8
7
0
1
,
.
5
3
1
8
3
,
.
1
3
4
6
1
,
.
1
1
4
5
.
0
2
0
1
1
,
l
i
N
.
5
7
9
6
t
s
u
r
T
d
e
t
i
m
L
i
0
1
.
.
6
0
1
.
5
8
1
.
9
6
1
8
.
0
5
.
.
9
3
.
1
1
.
8
2
.
1
2
I
C
C
I
I
l
a
i
t
n
e
d
u
r
P
.
1
5
1
5
1
5
,
.
5
6
3
0
3
,
.
5
7
7
4
4
,
.
0
0
6
8
.
2
5
9
5
4
9
2
,
.
7
2
2
4
3
1
,
.
6
2
0
6
8
3
2
,
.
5
6
5
1
1
6
,
.
2
6
2
5
9
,
.
2
6
7
6
.
4
9
2
1
2
1
,
.
3
1
1
1
1
,
.
2
5
9
1
3
,
.
9
0
4
8
.
3
4
5
3
2
,
.
7
4
1
7
1
,
.
6
9
9
3
.
1
2
7
.
5
7
2
3
l
i
N
.
2
6
7
8
6
2
,
.
4
8
9
8
6
,
.
9
6
3
7
4
9
1
,
.
3
2
6
9
0
6
1
,
.
2
5
3
5
8
2
,
.
8
2
3
5
9
,
.
2
9
5
2
.
8
0
8
7
.
0
0
4
0
1
,
.
6
9
0
3
1
,
.
r
a
e
y
.
9
8
4
.
4
1
4
.
1
5
9
8
4
.
#
.
0
9
3
2
2
.
2
0
.
0
2
.
l
i
N
l
i
a
c
n
a
n
i
f
.
2
0
7
3
4
,
.
4
9
8
2
4
1
,
.
0
0
1
.
9
7
7
9
3
1
,
.
3
9
5
3
5
2
,
.
3
2
5
8
1
,
.
0
7
8
6
8
1
1
,
.
6
3
4
2
2
5
7
,
.
5
1
0
8
2
,
.
0
0
0
1
.
4
2
5
.
7
7
6
1
.
9
8
3
3
0
0
1
,
.
9
4
9
5
2
1
7
,
.
2
9
3
9
.
3
5
1
5
0
.
6
3
.
2
4
.
1
0
.
.
7
0
9
0
4
6
,
.
4
2
8
3
5
3
1
,
.
8
4
0
1
1
,
.
8
6
1
8
2
,
.
1
6
9
6
5
1
,
.
)
0
1
4
2
(
.
7
6
3
7
.
8
7
5
0
3
,
.
4
9
5
9
4
1
,
.
2
3
9
2
.
3
5
9
.
9
7
9
1
.
0
0
5
.
4
0
1
4
1
.
0
9
.
l
i
N
.
9
9
3
6
5
,
.
4
7
1
l
i
N
4
0
.
6
0
.
1
0
.
5
0
.
l
i
N
r
i
e
h
t
i
g
n
e
b
,
2
1
0
2
,
1
3
r
e
b
m
e
c
e
D
o
t
2
1
0
2
,
1
y
r
a
u
n
a
J
d
o
i
r
e
p
e
h
t
r
o
f
s
i
k
n
a
B
I
C
C
I
I
,
7
1
a
d
a
n
a
C
i
a
s
a
r
u
E
d
e
t
i
m
L
i
y
t
i
l
i
b
a
L
i
k
n
a
B
I
C
C
I
I
,
8
1
y
n
a
p
m
o
C
6
C
L
P
K
U
k
n
a
B
I
C
C
I
I
I
C
C
I
I
6
d
e
t
i
l
a
n
o
i
t
a
n
r
e
t
n
I
I
C
C
I
I
d
r
a
b
m
o
L
m
L
i
l
a
r
e
n
e
G
e
c
n
a
r
u
s
n
I
9
d
e
t
i
m
L
i
y
n
a
p
m
o
C
I
C
C
I
I
l
a
i
t
n
e
d
u
r
P
e
c
n
a
r
u
s
n
I
y
n
a
p
m
o
C
2
d
e
t
i
m
L
i
e
r
u
t
n
e
V
I
C
C
I
I
I
C
C
I
I
s
d
n
u
F
e
f
i
L
t
n
e
m
e
g
a
n
a
M
d
e
t
i
m
L
i
y
n
a
p
m
o
C
d
e
t
i
m
L
i
y
n
a
p
m
o
C
t
n
e
m
t
s
e
v
n
I
t
n
e
m
e
g
a
n
a
M
I
C
C
I
I
d
e
t
i
m
L
i
i
s
e
c
v
r
e
S
i
p
h
s
e
e
t
s
u
r
T
I
C
C
I
I
e
m
o
H
d
e
t
i
m
L
i
e
c
n
a
n
F
i
y
n
a
p
m
o
C
.
5
7
8
9
0
1
,
.
3
8
5
6
3
,
.
9
4
2
0
2
7
,
.
1
9
7
3
7
5
,
I
C
C
I
I
2
.
c
n
I
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
s
e
i
t
i
r
u
c
e
S
2
.
c
n
I
i
s
g
n
d
o
H
l
.
7
1
7
5
.
2
8
2
7
.
)
6
8
3
5
(
.
)
6
7
2
1
(
.
3
0
0
1
.
1
1
0
6
.
3
7
6
5
0
.
.
2
6
1
8
5
,
.
0
6
2
6
0
0
1
,
d
n
a
l
a
t
i
p
a
c
i
g
n
d
u
c
x
e
(
l
s
t
n
e
m
t
s
e
v
n
I
)
s
e
v
r
e
s
e
r
I
C
C
I
I
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
s
e
i
t
i
r
u
c
e
S
2
d
e
t
i
m
L
i
y
r
a
m
i
r
P
.
7
0
1
1
2
,
d
e
t
i
m
L
i
.
4
3
6
5
1
,
.
7
7
5
1
1
,
.
1
7
2
2
5
,
.
6
4
8
0
9
,
.
5
6
1
4
7
0
1
,
i
p
h
s
r
e
a
e
D
l
3
l
a
t
i
p
a
c
e
r
a
h
s
p
u
-
d
a
P
i
s
e
i
t
i
l
i
b
a
i
l
l
a
t
o
T
s
t
e
s
s
a
l
a
t
o
T
s
e
v
r
e
s
e
R
l
s
r
a
u
c
i
t
r
a
P
F94
.
0
3
9
1
9
,
.
7
8
2
0
3
,
.
5
6
2
8
.
2
2
0
2
2
,
.
5
6
2
0
7
.
.
)
6
7
3
(
2
0
.
.
)
8
7
3
(
)
9
0
(
.
5
0
.
)
4
1
(
.
.
4
8
7
3
7
,
.
9
6
5
2
8
,
.
4
5
3
0
1
,
.
1
7
1
8
1
,
m
o
r
f
e
m
o
c
n
i
s
s
o
r
G
(
)
s
n
o
i
t
a
r
e
p
o
r
e
v
o
n
r
u
T
x
a
t
e
r
o
f
e
b
t
i
f
o
r
P
i
4
)
s
e
i
r
a
d
s
b
u
s
i
n
i
.
3
3
5
3
.
1
2
8
6
.
3
0
0
6
n
o
i
t
a
x
a
t
r
o
f
i
i
n
o
s
v
o
r
P
.
8
6
1
2
1
,
x
a
t
r
e
t
f
a
t
i
f
o
r
P
i
d
a
p
d
n
e
d
v
D
i
i
e
t
a
r
o
p
r
o
c
i
g
n
d
u
c
n
i
(
l
.
6
1
4
6
1
,
l
i
N
l
i
N
.
8
8
2
4
.
0
6
3
6
5
)
x
a
t
d
n
e
d
v
d
i
i
n
o
i
l
l
i
m
1
0
.
n
a
h
t
s
s
e
l
t
n
u
o
m
a
#
:
s
e
t
o
N
.
2
5
2
0
5
7
,
.
8
7
0
0
7
3
7
,
.
1
6
9
4
1
,
.
6
1
2
1
1
2
.
.
0
9
6
0
3
,
l
i
N
l
i
N
.
6
6
7
.
5
5
3
0
7
9
,
s
t
n
e
m
t
s
e
v
n
i
i
g
n
d
u
c
x
e
(
l
.
0
5
8
2
4
5
`
=
D
S
U
1
f
o
3
1
0
2
,
1
3
h
c
r
a
M
n
o
e
t
a
r
i
g
n
s
o
c
l
e
h
t
t
a
s
e
e
p
u
R
n
a
d
n
i
I
o
t
n
i
l
d
e
t
a
s
n
a
r
t
n
e
e
b
e
v
a
h
d
e
t
i
m
L
i
l
a
n
o
i
t
a
n
r
e
t
n
I
I
C
C
I
I
d
n
a
C
L
P
K
U
k
n
a
B
I
I
C
C
I
.
0
0
6
2
5
5
`
=
D
A
C
1
f
o
2
1
0
2
,
1
3
r
e
b
m
e
c
e
D
t
a
e
t
a
r
i
g
n
s
o
c
l
e
h
t
t
a
s
e
e
p
u
R
n
a
d
n
i
I
o
t
n
i
l
d
e
t
a
s
n
a
r
t
n
e
e
b
e
v
a
h
a
d
a
n
a
C
k
n
a
B
i
g
n
s
o
c
l
e
h
t
t
a
s
e
e
p
u
R
n
a
d
n
i
I
o
t
n
i
l
d
e
t
a
s
n
a
r
t
n
e
e
b
e
v
a
h
y
n
a
p
m
o
C
y
t
i
l
i
b
a
L
i
d
e
t
i
m
L
i
i
a
s
a
r
u
E
k
n
a
B
I
I
I
C
C
I
I
C
C
I
f
o
n
o
i
t
a
m
r
o
f
n
i
l
i
a
c
n
a
n
i
f
e
h
T
f
o
f
o
n
o
i
t
a
m
r
o
f
n
i
l
i
a
c
n
a
n
i
f
e
h
T
n
o
i
t
a
m
r
o
f
n
i
l
i
a
c
n
a
n
i
f
e
h
T
l
.
y
e
v
i
t
c
e
p
s
e
r
n
o
i
l
l
i
.
m
4
4
2
1
5
`
d
n
a
,
n
o
i
l
l
i
.
m
0
0
0
5
`
f
o
l
a
t
i
p
a
c
e
r
a
h
s
e
c
n
e
r
e
f
e
r
p
p
u
-
d
a
p
i
s
e
d
u
c
n
l
i
a
d
a
n
a
C
k
n
a
B
I
C
C
I
I
d
n
a
d
e
t
i
m
L
i
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
f
o
l
a
t
i
p
a
c
e
r
a
h
s
p
u
-
d
a
p
i
e
h
T
.
e
d
a
r
t
n
i
k
c
o
t
s
s
a
l
d
e
h
s
e
i
t
i
r
u
c
e
s
e
d
u
c
n
l
i
s
t
n
e
m
t
s
e
v
n
I
.
s
e
r
a
h
s
e
c
n
e
r
e
f
e
r
p
n
o
i
d
a
p
d
n
e
d
v
d
i
i
d
n
a
d
n
e
d
v
d
i
i
d
e
s
o
p
o
r
p
s
e
d
u
c
n
l
i
i
d
a
p
d
n
e
d
v
D
i
i
.
d
e
t
i
m
L
i
y
n
a
p
m
o
C
e
c
n
a
r
u
s
n
I
e
f
i
L
l
a
i
t
n
e
d
u
r
P
I
C
C
I
I
f
o
i
y
r
a
d
s
b
u
s
i
d
e
n
w
o
y
l
l
o
h
w
a
s
i
d
e
t
i
m
L
i
y
n
a
p
m
o
C
t
n
e
m
e
g
a
n
a
M
s
d
n
u
F
i
n
o
s
n
e
P
l
a
i
t
n
e
d
u
r
P
I
C
C
I
I
.
c
n
I
i
l
s
g
n
d
o
H
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
f
o
i
y
r
a
d
s
b
u
s
i
d
e
n
w
o
y
l
l
o
h
w
a
s
i
.
c
n
I
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
.
d
e
t
i
m
L
i
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
f
o
i
y
r
a
d
s
b
u
s
i
d
e
n
w
o
y
l
l
o
h
w
a
s
i
.
c
n
I
i
l
s
g
n
d
o
H
s
e
i
t
i
r
u
c
e
S
I
C
C
I
I
y
n
a
p
m
o
C
y
t
i
l
i
b
a
L
i
d
e
t
i
m
L
i
i
a
s
a
r
u
E
k
n
a
B
I
C
C
I
I
d
n
a
a
d
a
n
a
C
k
n
a
B
I
I
C
C
I
f
o
n
o
i
t
a
m
r
o
f
n
i
l
i
a
c
n
a
n
i
f
e
h
T
.
y
e
n
o
m
n
o
i
t
a
c
i
l
p
p
a
e
r
a
h
s
e
d
u
c
n
l
i
t
o
n
s
e
o
d
l
a
t
i
p
a
c
e
r
a
h
s
p
u
i
d
a
P
.
1
.
2
.
3
.
4
.
5
.
6
.
7
.
8
.
9
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
L
A
W
R
A
H
B
A
S
V
J
A
R
I
R
A
H
H
C
O
K
A
D
N
A
H
C
O
E
C
&
r
o
t
c
e
r
i
D
g
n
g
a
n
a
M
i
s
r
o
t
c
e
r
i
D
f
o
d
r
a
o
B
e
h
t
f
o
f
l
a
h
e
b
n
o
d
n
a
r
o
F
r
o
t
c
e
r
i
D
R
A
G
N
E
Y
I
R
A
D
R
S
I
R
A
M
U
K
M
A
R
.
K
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
A
H
J
H
S
E
K
A
R
.
.
2
9
3
9
7
1
`
=
B
U
R
1
f
o
2
1
0
2
,
1
3
r
e
b
m
e
c
e
D
t
a
e
t
a
r
r
e
c
i
f
f
O
l
i
a
c
n
a
n
F
i
i
f
e
h
C
y
t
u
p
e
D
n
a
m
r
i
a
h
C
H
T
A
M
A
K
V.
.
K
N
A
N
N
A
K
.
S
.
N
O
F
C
&
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
A
R
T
A
B
P
E
E
D
N
A
S
y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C
&
r
e
c
i
f
f
O
e
c
n
a
i
l
p
m
o
C
p
u
o
r
G
3
1
0
2
,
6
2
l
i
r
p
A
:
e
t
a
D
i
a
b
m
u
M
:
e
c
a
P
l
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
ICICI Bank is subject to the Basel II framework with effect from March 31, 2008 as stipulated by the Reserve Bank of
India (RBI). The Basel II framework consists of three-mutually reinforcing pillars:
(i) Pillar 1: Minimum capital requirements for credit risk, market risk and operational risk
(ii) Pillar 2: Supervisory review of capital adequacy
(iii) Pillar 3: Market discipline
Market discipline (Pillar 3) comprises set of disclosures on the capital adequacy and risk management framework of the
Bank. These disclosures have been set out in the following sections.
1. SCopE oF appLiCatioN
Pillar 3 disclosures apply to ICICI Bank Limited and its consolidated entities, wherein ICICI Bank Limited is the
controlling entity in the group.
Basis of consolidation for capital adequacy
Consolidation for capital adequacy is based on consolidated financial statements of ICICI Bank and its subsidiaries
in line with the guidelines for consolidated accounting and other quantitative methods issued by RBI.
The entities considered for consolidation for capital adequacy include subsidiaries, associates and joint ventures of
the Bank, which carry on activities of banking or financial nature as stated in the scope for preparing consolidated
prudential reports as prescribed by RBI. Entities engaged in insurance business and businesses not pertaining to
financial services are excluded from consolidation for capital adequacy. Investment above 30% in paid-up equity
capital of financial entities which are not consolidated for capital adequacy (including insurance entities) and
investments in other instruments eligible for regulatory capital status in those entities are deducted to the extent
of 50% from Tier-1 and 50% from Tier-2 capital.
The following table lists ICICI Bank’s financial and non-financial subsidiaries, associates, joint ventures and other
entities consolidated for preparation of consolidated financial statements and their treatment in consolidated
capital adequacy computations.
Name of the entity
Sr.
No.
Nature of business & consolidation status
1
2
3
4
5
6
7
8
9
10
11
12
13
ICICI Bank UK PLC
ICICI Bank Canada
Banking – fully consolidated
Banking – fully consolidated
ICICI Bank Eurasia Limited Liability Company
Banking – fully consolidated
ICICI Securities Limited
ICICI Securities Inc.
ICICI Securities Holdings Inc.
ICICI Securities Primary Dealership Limited
ICICI Venture Funds Management Company Limited
Securities broking and merchant banking – fully
consolidated
Securities broking – fully consolidated
Holding company of ICICI Securities Inc. – fully
consolidated
Securities investment, trading and underwriting –
fully consolidated
Private equity/venture capital fund management –
fully consolidated
ICICI Home Finance Company Limited
Housing finance – fully consolidated
ICICI Trusteeship Services Limited
Trusteeship services – fully consolidated
ICICI Investment Management Company Limited
Asset management – fully consolidated
ICICI International Limited
Asset management – fully consolidated
ICICI Prudential Pension Funds Management
Company Limited
Pension fund management – fully consolidated
F95
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
Sr.
No.
14
Name of the entity
Nature of business & consolidation status
ICICI Eco-net Internet and Technology Fund1
Venture capital fund – fully consolidated
15
ICICI Equity Fund1
16
17
ICICI Emerging Sectors Fund1
ICICI Strategic Investments Fund1
18
ICICI Kinfra Limited1
19
ICICI Venture Value Fund1
20
I-Ven Biotech Limited1
21
ICICI Prudential Life Insurance Company Limited
22
ICICI Lombard General Insurance Company Limited
23
ICICI Prudential Asset Management Company Limited
24
ICICI Prudential Trust Limited
Unregistered venture capital fund – fully
consolidated
Venture capital fund – fully consolidated
Unregistered venture capital fund – fully
consolidated
Infrastructure development consultancy –
consolidated for financial reporting but not for
capital adequacy
Unregistered venture capital fund – fully
consolidated
Investment in research and development of
biotechnology – fully consolidated
Life insurance – consolidated for financial reporting
but not for capital adequacy and deducted from
capital for capital adequacy
General Insurance – consolidated for financial
reporting but not for capital adequacy and deducted
from capital for capital adequacy
Asset management company for ICICI Prudential
Mutual Fund – fully consolidated
Trustee company for ICICI Prudential Mutual Fund –
fully consolidated
TCW/ICICI Investment Partners Limited
Asset management – proportionately consolidated
25
26
Rainbow Fund
27
Financial Inclusion Network & Operations Limited
28
I-Process Services (India) Private Limited
29 NIIT Institute of Finance, Banking and Insurance
Training Limited
30
ICICI Merchant Services Private Limited
31 Mewar Aanchalik Gramin Bank
32
India Infradebt Limited
1.
Consolidating entities under Accounting Standard 21.
F96
Unregistered venture capital fund – consolidated
by equity method for financial reporting but not
consolidated for capital adequacy
Support services for financial inclusion –
consolidated by equity method for financial
reporting but not consolidated for capital adequacy
Services related to back end operations –
consolidated by equity method for financial
reporting but not consolidated for capital adequacy
Education and training in banking and finance
– consolidated by equity method for financial
reporting but not consolidated for capital adequacy
Merchant servicing – consolidated by equity method
for financial reporting but not consolidated for
capital adequacy
Banking - consolidated by equity method for
financial reporting and deducted from capital for
capital adequacy
Infrastructure finance - consolidated by equity
method for financial reporting and deducted from
capital for capital adequacy
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
a. Capital deficiencies
Majority owned financial entities that are not consolidated for capital adequacy purposes and for which the
investment in equity and other instruments eligible for regulatory capital status are deducted from capital,
meet their respective regulatory capital requirements at all times. There is no deficiency in capital in any of
the subsidiaries of the Bank at March 31, 2013. ICICI Bank maintains an active oversight on its subsidiaries
through its representation on their respective Boards. On a periodic basis the capital adequacy/solvency
position of subsidiaries (banking, non-banking and insurance subsidiaries), as per the applicable regulations,
is reported to their respective Boards as well as to the Board of the Bank.
b. Bank’s interest in insurance entities
The book value of the Bank’s total interest in its insurance subsidiaries at March 31, 2013, which is deducted
from capital for capital adequacy under Basel II, is detailed in the following table.
Name of the entity
Country of
incorporation
ownership
interest
Book value of
investment
` in billion
ICICI Prudential Life Insurance Company Limited
ICICI Lombard General Insurance Company Limited
India
India
73.85%
73.37%
35.93
14.22
The quantitative impact on regulatory capital of using risk weighted investments method versus using the
deduction method at March 31, 2013 is set out in the following table.
method
Deduction method
Capital at 9% based on risk weighted assets
2. CapitaL StrUCtUrE
` in billion
Quantitative impact
50.15
4.51
a. Summary information on main terms and conditions/features of capital instruments
As per the RBI capital adequacy norms, ICICI Bank’s regulatory capital is classified into Tier-1 capital and Tier-
2 capital.
Tier-1 capital includes paid-up equity capital, statutory reserves, other disclosed free reserves, capital
reserves and innovative perpetual debt instruments (Tier-1 bonds) eligible for inclusion in Tier-1 capital that
comply with requirement specified by RBI.
Tier-2 capital includes revaluation reserves (if any), general provision and loss reserve, investment reserve,
upper Tier-2 instruments (upper Tier-2 bonds) and subordinate debt instruments (lower Tier-2 bonds) eligible
for inclusion in Tier-2 capital.
ICICI Bank and its subsidiaries have issued debt instruments that form a part of Tier-1 and Tier-2 capital.
The terms and conditions that are applicable for these instruments comply with the stipulated regulatory
requirements and where required an independent legal opinion has been obtained for inclusion of these
instruments in capital.
Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years. Interest on Tier-
1 bonds is payable either annually or semi-annually. These Tier-1 bonds have a step-up clause on interest
payment ranging up to 100 basis points.
The upper Tier-2 bonds are cumulative and have an original maturity of 15 years with call option after 10
years. The interest on upper Tier-2 bonds is payable either annually or semi-annually. Some of the upper
Tier-2 debt instruments have a step-up clause on interest payment ranging up to 100 basis points.
F97
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
The lower Tier-2 bonds (subordinated debt) are cumulative and have an original maturity between 5 to 15
years. The interest on lower Tier-2 capital instruments is payable quarterly, semi-annually or annually.
RBI through its circular dated January 20, 2011 stipulated that henceforth capital instruments issued with
step-up option will not be eligible for inclusion in the capital funds. Capital issuances with step-up option prior
to the release of the above-mentioned circular would continue to remain eligible for inclusion in regulatory
capital. The Bank is in compliance with this stipulation and the existing Tier-1 and Tier-2 capital instruments
with step-up option have all been issued prior to January 20, 2011.
All instruments issued on or after January 1, 2013 will have to comply with RBI guidelines on Basel III to be
eligible for capital treatment.
b. amount of tier-1 capital (march 31, 2013)
tier-1 capital elements
Paid-up share capital1
Reserves2
Innovative Tier-1 capital instruments
Minority interest
gross tier-1 capital
Deductions:
Investments in instruments eligible for regulatory capital of financial subsidiaries/
associates
Securitisation exposures including credit enhancements
Deferred tax assets
Others3
Minority interest not eligible for inclusion in Tier-1 capital
Net tier-1 capital
` in billion
amount
12.48
647.17
31.43
0.93
692.01
25.58
10.66
26.22
2.07
0.49
626.99
1.
2.
Includes preference shares permitted by RBI for inclusion in Tier-1 capital.
Includes statutory reserves, disclosed free reserves, capital reserves and special reserves (net of tax payable).
3.
Includes goodwill and adjustments for less liquid positions.
c. amount of tier-2 capital (march 31, 2013)
tier-2 capital elements
General provisions
Upper Tier-2 capital instruments
Lower Tier-2 capital instruments
gross tier-2 capital
Deductions:
Investments in instruments eligible for regulatory capital of financial
subsidiaries/associates
Securitisation exposures including credit enhancements
Net tier-2 capital
` in billion
amount
21.21
151.57
192.98
365.76
25.58
10.66
329.52
F98
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
d. Debt capital instruments eligible for inclusion in tier-1 and tier-2 capital
Total amount outstanding at March 31, 2013
Of which, amounts raised during the year
Amount eligible to be reckoned as capital funds
at March 31, 2013
e. total eligible capital (march 31, 2013)
Tier-1 capital
Tier-2 capital
total eligible capital
3. CapitaL aDEQUaCY
a. Capital management
Objective
` in billion
Lower tier-1 Upper tier-2
Lower tier-2
31.42
-
31.42
151.57
-
151.57
231.24
38.85
192.98
` in billion
amount
626.99
329.52
956.51
The Bank actively manages its capital to meet regulatory norms and current and future business needs
considering the risks in its businesses, expectation of rating agencies, shareholders and investors, and the
available options of raising capital.
Organisational set-up
The capital management framework of the Bank is administered by the Finance Group and the Risk
Management Group (RMG) under the supervision of the Board and the Risk Committee.
Regulatory capital
The Bank is subject to the capital adequacy norms stipulated by the RBI guidelines on Basel II. The RBI
guidelines on Basel II require the Bank to maintain a minimum ratio of total capital to risk weighted assets
of 9.0%, with a minimum Tier-1 capital adequacy ratio of 6.0%. The total capital adequacy ratio of the Bank
at a standalone level at March 31, 2013 as per the RBI guidelines on Basel II is 18.74% with a Tier-1 capital
adequacy ratio of 12.80%. The total capital adequacy ratio of the ICICI Group (consolidated) at March 31,
2013 as per the RBI guidelines on Basel II is 19.69% with a Tier-1 capital adequacy ratio of 12.91%.
Under Pillar 1 of the RBI guidelines on Basel II, the Bank follows the Standardised approach for credit and
market risk and basic indicator approach for operational risk.
Internal assessment of capital
The Bank’s capital management framework includes a comprehensive internal capital adequacy assessment
process (ICAAP) conducted annually which determines the adequate level of capitalisation for the Bank to
meet regulatory norms and current and future business needs, including under stress scenarios. The ICAAP is
formulated at both standalone bank level and the consolidated group level. The ICAAP encompasses capital
planning for a four year time horizon, identification and measurement of material risks and the relationship
between risk and capital.
The capital management framework is complemented by the risk management framework, which includes a
comprehensive assessment of material risks.
F99
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
Stress testing, which is a key aspect of the ICAAP and the risk management framework, provides an insight
on the impact of extreme but plausible scenarios on the Bank’s risk profile and capital position. Based on
the Board-approved stress testing framework, the Bank conducts stress tests on its various portfolios and
assesses the impact on its capital ratios and the adequacy of capital buffers for current and future periods.
The Bank periodically assesses and refines its stress tests in an effort to ensure that the stress scenarios
capture material risks as well as reflect possible extreme market moves that could arise as a result of market
conditions. The business and capital plans and the stress testing results of the group entities are integrated
into the ICAAP.
regulatory capital requirements as per the RBI guidelines;
Bank’s strategic focus, business plan and growth objectives;
Based on the ICAAP, the Bank determines the level of capital that needs to be maintained by considering the
following in an integrated manner:
•
•
•
•
•
•
evaluation of options to raise capital from domestic and overseas markets, as permitted by RBI from time
to time.
future strategy with regard to investments or divestments in subsidiaries; and
perception of credit rating agencies, shareholders and investors;
assessment of material risks and impact of stress testing;
Monitoring and reporting
The Board of Directors of ICICI Bank maintains an active oversight over the Bank’s capital adequacy levels. On
a quarterly basis an analysis of the capital adequacy position and the risk weighted assets and an assessment
of the various aspects of Basel II on capital and risk management as stipulated by RBI, are reported to the
Board. Further, the capital adequacy position of the banking subsidiaries and the significant non-banking
subsidiaries based on the respective host regulatory requirements is also reported to the Board. In line with
the RBI requirements for consolidated prudential report, the capital adequacy position of the ICICI Group
(consolidated) is reported to the Board on a half-yearly basis.
Further, the ICAAP which is an annual process also serves as a mechanism for the Board to assess and
monitor the Bank’s and the Group’s capital adequacy position over a four year time horizon.
Capital adequacy of the subsidiaries
Each subsidiary in the Group assesses the adequate level of capitalisation required to meet its respective
host regulatory requirements and business needs. The Board of each subsidiary maintains oversight over the
capital adequacy framework for the subsidiary either directly or through separately constituted committees.
Basel III
In order to strengthen the resilience of the banking sector to potential future shocks, together with ensuring
adequate liquidity in the banking system, the Basel Committee on Banking Supervision (BCBS) issued the
Basel III proposals in fiscal 2010. Following a consultation phase on these proposals, the final set of Basel III
rules were issued in fiscal 2011. The Basel III rules on capital consist of measures on improving the quality,
consistency and transparency of capital, enhancing risk coverage, introducing a supplementary leverage
ratio, reducing pro-cyclicality and promoting countercyclical buffers and addressing systemic risk and
interconnectedness.
During the year, RBI issued the final guidelines on the Basel III capital regulations. The implementation of this
framework would commence from April 1, 2013 in a phased manner through till March 31, 2018.
In May 2012, RBI lowered the minimum leverage ratio requirement from 5% to 4.5%.
In January 2013, RBI issued the draft guidelines on the composition of capital disclosure requirements, in
addition to the existing Pillar 3 guidance. Along with this, RBI prescribed different treatments for capitalisation
F100
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
of bank’s exposures to qualifying and non qualifying central counter-parties on account of derivatives and
securities financing transactions.
RBI, through its circular issued in March 2013, deferred the introduction of credit value adjustment risk capital
charge for over the counter derivatives. Credit value adjustment captures risk of mark-to-market losses due
to deterioration in the credit worthiness of counterparty. Credit value adjustment risk capital charges would
become effective from January 1, 2014.
The Bank continues to monitor further developments and believes that its current robust capital adequacy
position and demonstrated track record of access to domestic and overseas markets for capital raising will
enable us to adapt to the Basel III framework.
b. Capital requirements for various risk areas (march 31, 2013)
As required by RBI guidelines on Basel II, the Bank’s capital requirements have been computed using the
Standardised approach for credit risk, Standardised Duration method for market risk and Basic Indicator
approach for operational risk. The minimum capital required to be held at 9.00% for credit, market and
operational risks is given below:
i. Capital required for credit risk
- for portfolio subject to Standardised approach
- for securitisation exposure
ii. Capital required for market risk
- for interest rate risk2
- for foreign exchange (including gold) risk
- for equity position risk
iii. Capital required for operational risk
total capital requirement (i+ii+iii)
total capital funds of the Bank
total risk weighted assets
Capital adequacy ratio
1.
2.
Includes all entities considered for Basel II capital adequacy computation.
Includes capital required of ` 1.43 billion for securitisation exposure.
` in billion
amount1
377.18
376.44
0.74
32.46
26.65
0.79
5.02
27.49
437.13
956.51
4,856.98
19.69%
The capital ratios of the Bank and its banking subsidiaries at March 31, 2013 are as follows:
Capital ratios
Tier-1 capital ratio
Total capital ratio
iCiCi Bank Ltd
(consolidated)1
iCiCi Bank Ltd
(standalone)1
iCiCi Bank UK
pLC1
iCiCi Bank
Canada1, 2
iCiCi Bank
Eurasia LLC1, 3
12.91%
19.69%
12.80%
18.74%
19.26%
30.78%
31.81%
33.22%
n.a.
27.04%
1.
Computed as per capital adequacy guidelines issued by regulators of respective jurisdictions.
2. As per OSFI Basel III guidelines
3.
Tier-1 capital ratio is not required to be reported in line with regulatory norms stipulated by the Central Bank of Russia.
4. riSK maNagEmENt FramEWorK
As a financial intermediary, the Bank is exposed to various types of risks including credit, market, liquidity,
operational, legal, compliance and reputation risks. The objective of the risk management framework at the Bank
is to ensure that various risks are understood, measured and monitored and that the policies and procedures
established to address these risks are strictly adhered to.
F101
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
The key principles underlying the risk management framework at the Bank are as follows:
1. The Board of Directors has oversight on all the risks assumed by the Bank. Specific Committees of the
Board have been constituted to facilitate focused oversight of various risks. The Risk Committee reviews
the risk management policies, the Bank’s compliance with risk management guidelines stipulated by the
RBI and the status of implementation of the advanced approaches under the Basel framework. It reviews
key risk indicators covering areas such as credit risk, interest rate risk, liquidity risk, foreign exchange risk,
operational and outsourcing risks and the limits framework, including stress test limits for various risks. The
Risk Committee also reviews the risk profile of the overseas banking subsidiaries. Credit Committee reviews
developments in key industrial sectors and the Bank’s exposure to these sectors and various portfolios on
a periodic basis. Audit Committee provides direction to and also monitors the quality of the internal audit
function.
2. Policies approved from time to time by the Board of Directors/Committees of the Board form the governing
framework for each type of risk. The business activities are undertaken within this policy framework.
3.
Independent groups and sub-groups have been constituted across the Bank to facilitate independent
evaluation, monitoring and reporting of various risks. These control groups function independently of the
business groups/sub-groups.
The risk management framework forms the basis of developing consistent risk principles across the Bank,
overseas branches and overseas banking subsidiaries.
Material risks are identified, measured, monitored and reported to the Board of Directors and Board level
committees through the following:
a. risk profile templates
Bank-wide risk dashboard covering various risks of the Bank is presented to the Risk Committee on a
periodic basis and to the Board on a quarterly basis. The risk dashboard provides the level and the
direction of risk at Bank level with a comparison to the previous quarter. The level and direction of risk are
arrived at based on pre-determined parameters. Additionally, the key risk indicators for different risks are
also presented to the Risk Committee as part of the risk profile templates on a periodic basis.
b. iCaap/stress testing
As part of ICAAP, the Bank conducts stress testing under various historical and hypothetical scenarios
to assess the impact of stress on current and projected capital positions. The methodology for stress
testing is approved by the Board of Directors. The results of stress testing are reported to the Board of
Directors and submitted to RBI annually as part of the ICAAP. As detailed in the ICAAP, stress test results
are reported periodically for various risks to the Asset Liability Management Committee (ALCO).
c. Stress tolerance limits
In line with various risk limits applicable for the Bank’s portfolios, stress tolerance limits have been
formulated for various risks. The actual position/utilisation against the limits is periodically reported to
Board level committees/ALCO.
d. other reviews by Credit Committee
Apart from sanctioning proposals, the Credit Committee carries out reviews of the credit quality of the
portfolio at regular intervals. The Committee also reviews specific cases that need special attention,
details of credit sanctions, irregularity reports and movement in non-performing loans. Further, the
Committee reviews developments in industrial sectors and specific strategies of the Bank with respect to
the exposure to various industries.
e. reporting against prudential exposure norms
Status of actual position against prudential exposure limits set by the Board or stipulated by RBI is reported
periodically to respective committees.
measurement of risks for capital adequacy purposes
Under Pillar 1 of the extant RBI guidelines on Basel II, the Bank currently follows the Standardised approach for
credit and market risk and basic indicator approach for operational risk.
F102
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
5. CrEDit riSK
The Bank is exposed to credit risk in its lending operations. Credit risk is the risk of loss that may occur from the
failure of any counterparty to abide by the terms and conditions of any financial contract with the Bank, principally
the failure to make required payments as per the terms and conditions of the contracts.
policies and processes
All credit risk related aspects are governed by Credit and Recovery Policy (Credit Policy). Credit Policy outlines the
type of products that can be offered, customer categories, target customer profile, credit approval process and
limits. The Credit Policy is approved by the Board of Directors.
The delegation structure for approval of credit limits is approved by the Board of Directors. All credit proposals
other than retail products, program lending and certain other specified products are rated internally by the Risk
Management Group (RMG) prior to approval by the appropriate forum.
Credit facilities with respect to retail products are provided as per approved product policies. All retail products
and policies require the approval of the Committee of Executive Directors (COED).
• Within the retail operations, there is segregation of the sourcing, verification, approval and disbursement of
retail credit exposures to achieve independence.
• Program lending involves a cluster based approach wherein a lending program is implemented for a
homogeneous group of individuals/business entities which comply with certain laid down parameterised
norms. The approving authority as per the Board approved authorisation lays down these parameters.
• For certain products including dealer funding, builder finance and facilities fully collateralised by cash and
cash equivalents, the delegation structure approved by the Board of Directors may permit exemption from
the stipulation pertaining to internal rating, up to a certain loan amount. Credit approval limits with respect to
such products are laid out in the delegation structure approved by the Board of Directors.
A risk based asset review framework has been put in place wherein the frequency of asset review would be higher
for cases with higher outstanding and/or lower credit rating.
Structure and organisation
RMG is responsible for rating of the credit portfolio, tracking trends in various industries and periodic reporting of
portfolio-level changes. RMG is segregated into sub-groups for corporate, small enterprises, rural and agri-linked
banking group and retail businesses.
The overseas banking subsidiaries of the Bank have also established broadly similar structures to ensure adequate
risk management, factoring in the risks particular to the respective businesses and the regulatory and statutory
guidelines. The risk heads of all overseas banking subsidiaries have a reporting relationship to the Head - RMG,
in addition to reporting to the Chief Executive Officer of the respective subsidiaries.
Credit risk assessment process
There is a structured and standardised credit approval process including a comprehensive credit risk assessment
process, which encompasses analysis of relevant quantitative and qualitative information to ascertain credit
rating of the borrower.
The credit rating process involves assessment of risk emanating from various sources such as industry risk,
business risk, financial risk, management risk, project risk and structure risk.
In respect of retail advances, the Bank’s credit officers evaluate credit proposals on the basis of the operating
notes approved by the COED and the risk assessment criteria defined by RMG.
Credit approval authorisation structure
The Board of Directors has delegated the approving authority to committees such as the Credit Committee
(comprising a majority of independent Directors), the Committee of Executive Directors (COED) (comprising whole
time Directors), the Committee of Senior Management (comprising Whole Time Directors and Group Executives/
Presidents and select Senior General Managers), the Committee of Executives, the Regional Committee, Small
and Medium Enterprise and Corporate Agriculture Forums (SMEAG forums) and Retail Credit Forums (RCF
forums) (comprising designated executives) and also to individual executives (under joint delegation). SMEAG
forums, RCF forums and individual executives (under joint delegation) can approve proposals under program
norms approved by the COED. The above authorities can approve financial assistance within certain individual
and group exposure limits set by the Board of Directors. The authorisation is based on the level of risk and
the quantum of exposure, to ensure that the transactions with higher exposure and level of risk are put up to
correspondingly higher forum/committee for approval.
F103
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
In respect of retail loans, all exposures are approved under operating notes or programs approved by the COED.
This involves a cluster-based approach for a particular product or for homogeneous group of individuals/business
entities that comply with certain laid down parameterised norms. The norms vary across product segments/
customer profile, but typically include factors such as the borrower’s income, the loan-to-value ratio and
demographic parameters. The individual credit proposals are evaluated and approved by executives on the basis
of the product policies.
Credit risk monitoring process
For effective monitoring of credit facilities, a post-approval authorisation structure has been laid down. For
corporate, small enterprises and rural and agriculture linked banking business, Credit Middle Office Group verifies
adherence to the terms of the approval prior to commitment and disbursement of credit facilities.
The Bank has established centralised operations to manage operational risk in the various back office processes
of the Bank’s retail loan business except for a few operations, which are decentralised to improve turnaround
time for customers. The fraud prevention and control group manages fraud-related risks through fraud prevention
and through recovery of fraud losses. The fraud control group evaluates various external agencies involved in
the retail finance operations, including direct marketing associates, external verification associates and collection
agencies.
The Bank has a collections unit structured along various product lines and geographical locations, to manage
delinquency levels. The collections unit operates under the guidelines of a standardised recovery process.
The segregation of responsibilities and oversight by groups external to the business groups ensure adequate
checks and balances.
reporting and measurement
Credit exposure for the Bank is measured and monitored using a centralised exposure management system. The
analysis of the composition of the portfolio is presented to the Risk Committee on a periodic basis.
The Bank complies with the norms on exposure stipulated by RBI for both single borrower as well as borrower
group at the consolidated level. Limits have been set as a percentage of the Bank’s consolidated capital funds and
are regularly monitored. The utilisation against specified limits is reported to the COED and Credit Committee on
a periodic basis.
Credit concentration risk
Credit concentration risk arises mainly on account of concentration of exposures under various categories
including industry, products, geography, sensitive sectors, underlying collateral nature and single/group borrower
exposures.
Limits have been stipulated on single borrower, borrower group, industry and longer tenure exposure to a
borrower group. Exposure to top 10 borrowers and borrower groups, exposure to capital market segment and
unsecured exposures for the ICICI Group (consolidated) are reported to the senior management committees on a
quarterly basis. Limits on countries and bank counterparties have also been stipulated.
Definition and classification of non-performing assets (Npas)
The Bank classifies its advances (loans and credit substitutes in the nature of an advance) into performing and
non-performing loans in accordance with the extant RBI guidelines.
an Npa is defined as a loan or an advance where:
i)
interest and/or installment of principal remain overdue for more than 90 days in respect of a term loan. Any
amount due to the bank under any credit facility is ‘overdue’ if it is not paid on the due date fixed by the Bank;
ii)
if the interest due and charged during a quarter is not serviced fully within 90 days from the end of the quarter;
iii) the account remains ‘out of order’ in respect of an overdraft/cash credit facility. An account is treated as ‘out
of order’ if:
a. the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90
days; or
b. where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing
power, but there are no credits continuously for 90 days as on the date of the balance sheet; or
F104
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
c. credits in the account are not enough to cover the interest debited during the accounting period; or
d. drawings have been permitted in the account for a continuous period of 90 days based on drawing power
computed on the basis of stock statements that are more than three months old even though the unit may
be working or the borrower’s financial position is satisfactory; or
e. the regular/ad hoc credit limits have not been reviewed/renewed within 180 days from the due date/date
of ad hoc sanction.
iv) a bill purchased/discounted by the Bank remains overdue for a period of more than 90 days;
v)
interest and/or installment of principal in respect of an agricultural loan remains overdue for two crop seasons
for short duration crops and one crop season for long duration crops;
vi) In respect of a securitisation transaction undertaken in terms of the RBI guidelines on securitisation, the
amount of liquidity facility remains outstanding for more than 90 days;
vii) In respect of derivative transactions, if the overdue receivables representing positive mark-to-market value of
a derivative contract, remain unpaid for a period of 90 days from the specified due date for payment.
Irrespective of payment performance, the Bank identifies a borrower account as a NPA even if it does not meet
any of the above mentioned criteria, where:
•
•
• project does not commence commercial operations within the timelines permitted under the RBI guidelines
loans availed by a borrower are repeatedly restructured unless otherwise permitted by regulations;
loans availed by a borrower are classified as fraud;
in respect of the loans extended to a borrower for the purpose of implementing a project; and
• any security in nature of debenture/bonds/equity shares issued by a borrower and held by the Bank is
classified as non-performing investment.
Further, NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. A
sub-standard asset is one, which has remained a NPA for a period less than or equal to 12 months. An asset is
classified as doubtful if it has remained in the sub-standard category for more than 12 months. A loss asset is one
where loss has been identified by the Bank or internal or external auditors or during RBI inspection but the amount
has not been written off fully.
restructured assets
As per RBI guidelines, a fully secured standard loan can be restructured by rescheduling principal repayments
and/or the interest element, but must be separately disclosed as a restructured loan in the year of restructuring.
Similar guidelines apply to restructuring of sub-standard and doubtful loans.
A restructured loan will be upgraded to the standard category only after the borrower demonstrates satisfactory
payment performance over a period of time and after the loan reverts to the normal level of standard asset
provisions and risk weights. RBI has specified the period to be one year from the date when the instalment/
interest falls due as per the restructuring scheme.
a. Credit risk exposures (march 31, 2013)
Credit risk exposures (excluding specific risk on available-for-sale and held-for-trading portfolio) include all
credit exposures as per RBI guidelines on exposure norms and investments in the held-to-maturity category.
Exposures to regulatory capital instruments of subsidiaries that are deducted from the capital funds have
been excluded.
Category
Fund-based facilities1
Non-fund based facilities
Total2
1.
2.
Includes investment in government securities held under held-to-maturity category.
Includes all entities considered for Basel II capital adequacy computation.
` in billion
Credit exposure
5,871.08
2,799.49
8,670.57
F105
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
b. geographic distribution of exposures (march 31, 2013)
Category
Domestic
Overseas
total2
Fund-based
facilities1
4,545.68
1,325.40
5,871.08
1.
2.
Includes investment in government securities held under held-to-maturity category.
Includes all entities considered for Basel II capital adequacy computation.
c.
industry-wise distribution of exposures (march 31, 2013)
industry
Retail finance1
Electronics and engineering
Bank2
Services - finance
Crude petroleum/refining and petrochemicals
Power
Road, ports, telecom, urban development and other
infrastructure
Services – non-finance
Iron/steel and products
Construction
Metal and products (excluding iron and steel)
Wholesale / retail trade
Food and beverages
Mutual funds
Automobiles
Chemical and fertilisers
Mining
Cement
Shipping
Drugs and pharmaceuticals
Manufacturing products (excluding metal)
Textile
Gems and jewellery
FMCG
Venture capital funds
Other industries3
grand total5
Fund-based
facilities
1,536.52
113.26
327.45
497.91
211.16
264.32
304.25
286.44
214.20
89.24
81.82
88.37
113.93
166.05
84.10
66.20
94.43
78.60
48.61
50.14
44.11
36.76
39.53
8.44
1.28
1,023.964
5,871.08
` in billion
Non-fund based
facilities
2,367.41
432.08
2,799.49
` in billion
Non-fund based
facilities
18.94
553.56
304.91
96.94
288.54
183.85
136.77
142.01
183.33
227.61
131.16
100.42
52.40
0.03
50.26
65.98
37.71
29.65
42.53
26.65
24.19
22.45
17.34
8.09
0.00
54.17
2,799.49
1.
Includes home loans, commercial business loans, rural loans, automobile loans, business banking, credit cards, personal
loans, loans against securities and dealer financing portfolio.
Includes balances with banks.
2.
3. Other industries include developer financing portfolio.
4.
Includes investment in government securities held under held-to-maturity category.
5.
Includes all entities considered for Basel II capital adequacy computation.
F106
29.20
16.95
35.16
10.02
12.91
2.48
0.85
0.18
390.69
195.09
245.95
354.79
349.94
544.19
1,570.95
861.18
-
-
0.00
0.00
2.38
0.06
maturity buckets
Day 1
2 to 7 days
15 to 28 days
29 days to 3
months
3 to 6 months
6 months to 1 year
1 to 3 years
3 to 5 years
Above 5 years
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
d. maturity pattern of assets (march 31, 2013)1
The maturity pattern of assets at March 31, 2013 is detailed in the table below:
investments
Loans &
advances
Fixed
assets
other
assets
` in billion
total
Cash &
balances
with rBi
Balances
with banks
& money
at call and
short notice
64.00
64.25
150.12
9.52
-
9.53
297.42
4.55
103.40
235.61
17.93
(0.00)
8 to 14 days
3.70
55.89
75.24
43.30
4.15
11.56
134.43
60.65
11.49
15.46
103.90
213.91
0.02
10.55
18.51
18.16
23.16
32.62
18.59
80.03
227.86
1.57
0.88
0.00
0.01
160.57
361.05
242.74 1,305.94
231.13
606.65
353.78
452.71
45.46
177.00
1,061.52
total
190.88
271.61
1,767.54 3,299.51
47.93
294.30
5,871.77
1.
Consolidated figures for the Bank and its banking subsidiaries, ICICI Home Finance Company, ICICI Securities Primary
Dealership Limited and ICICI Securities Limited and its subsidiaries. The maturity pattern of assets for the Bank is based on
methodology used for reporting positions to the RBI on asset-liability management. The maturity pattern of assets for the
subsidiaries is based on similar principles.
e. amount of non-performing loans (NpLs) (march 31, 2013)
NpL classification
Sub-standard
Doubtful
- Doubtful 11
- Doubtful 21
- Doubtful 31
Loss
total2, 3
NpL ratio4
gross NpLs
22.47
73.70
20.66
34.03
19.01
10.43
106.60
3.13%
` in billion
Net NpLs
17.27
11.82
8.16
3.42
0.24
0.02
29.11
0.88%
1.
2.
3.
4.
Loans classified as NPLs for 456-820 days are classified as Doubtful 1, 821-1,550 days as Doubtful 2 and above 1,550 days
as Doubtful 3.
Identification of loans as non-performing/impaired is in line with the guidelines issued by regulators of respective subsidiaries.
Includes advances portfolio of the Bank and its banking subsidiaries and ICICI Home Finance Company.
Gross NPL ratio is computed as a ratio of gross NPLs to gross advances. Net NPL ratio is computed as a ratio of net NPLs to
net advances.
F107
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
f. movement of NpLs
Opening balance at April 1, 2012
Additions during the year1
Reductions/write-offs during the year1
Closing balance at march 31, 20132
gross NpL
106.07
38.86
(38.33)
106.60
` in billion
Net NpL
26.92
22.80
(20.61)
29.11
1.
The difference between the opening and closing balances (other than accounts written off during the year) of NPLs in credit
cards is included in additions during the year.
2.
Includes advances portfolio of the Bank and its banking subsidiaries and ICICI Home Finance Company.
g. movement of provisions for NpLs
Opening balance at April 1, 2012
Provisions made during the year1
Write-offs during the year
Write-back of excess provisions during the year
Closing balance at march 31, 20132
` in billion
amount
79.16
24.22
(16.90)
(8.99)
77.49
1.
The difference between the opening and closing balances (other than accounts written off during the year) of provisions
on credit cards is included in provisions made during the year.
2.
Includes advances portfolio of the Bank and its banking subsidiaries and ICICI Home Finance Company.
h. amount of non-performing investments (Npis) in securities, other than government and other approved
securities
Gross NPIs at March 31, 2013
Total provisions held on NPIs
Net Npis at march 31, 20131
1.
Includes NPIs of the Bank and its banking subsidiary.
i. movement of provisions for depreciation on investments1
Opening balance at April 1, 2012
Provision/depreciation (net) made during the year
Write-off/write back of excess provision during the year
Closing balance at march 31, 20132
1. After considering movement in appreciation on investments.
2.
Includes all entities considered for Basel II capital adequacy computation.
F108
` in billion
amount1
5.95
(4.84)
1.11
` in billion
amount
28.25
3.14
(3.42)
27.97
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
6. CrEDit riSK: portFoLioS SUBJECt to tHE StaNDarDiSED approaCH
a. External ratings
The Bank uses the Standardised approach to measure the capital requirements for credit risk. As per the
Standardised approach, regulatory capital requirements for credit risk on corporate exposures is measured
based on external credit ratings assigned by External Credit Assessment Institutions (ECAI) specified by
RBI in its guidelines on Basel II. As stipulated by RBI, the risk weights for resident corporate exposures are
assessed based on the external ratings assigned by domestic ECAI and the risk weights for non-resident
corporate exposures are assessed based on the external ratings assigned by international ECAI. For this
purpose, at March 31, 2013, the domestic ECAI specified by RBI were CRISIL Limited, Credit Analysis &
Research Limited, ICRA Limited, Fitch India, SME Rating Agency of India Limited and Brickwork Ratings
India Private Limited, and the international ECAI specified by RBI were Standard & Poor’s, Moody’s and
Fitch. Further, the RBI’s Basel II framework stipulates guidelines on the scope and eligibility of application
of external ratings. The Bank reckons the external rating on the exposure for risk weighting purposes, if the
external rating assessment complies with the guidelines stipulated by RBI.
The key aspects of the Bank’s external ratings application framework are as follows:
•
•
The Bank uses only those ratings that have been solicited by the counterparty.
Foreign sovereign and foreign bank exposures are risk-weighted based on issuer ratings assigned to
them.
• The risk-weighting of corporate exposures based on the external credit ratings includes the following:
i. The Bank reckons external ratings of corporates either at the credit facility level or at the borrower
(issuer) level. The Bank considers the facility rating where both the facility and the borrower rating are
available given the more specific nature of the facility credit assessment.
ii. The Bank ensures that the external rating of the facility/borrower has been reviewed at least once by
the ECAI during the previous 15 months and is in force on the date of its application.
iii. When a borrower is assigned a rating that maps to a risk weight of 150%, then this rating is applied
on all the unrated facilities of the borrower and risk weighted at 150%.
iv. Unrated short-term claim on counterparty is assigned a risk weight of at least one level higher than
the risk weight applicable to the rated short term claim on that counterparty.
• The RBI guidelines outline specific conditions for facilities that have multiple ratings. In this context, the
lower rating, where there are two ratings and the second-lowest rating where there are three or more
ratings are used for a given facility.
b. Credit exposures by risk weights
At March 31, 2013, the credit exposures subject to the Standardised approach after adjusting for credit risk
mitigation by risk weights were as follows:
Exposure category
Less than 100% risk weight3
100% risk weight
More than 100% risk weight
Deducted from capital
total2, 3
` in billion
amount outstanding1
3,065.38
4,839.48
604.50
21.32
8,530.68
1.
2.
3.
Credit risk exposures include all exposures, as per RBI guidelines on exposure norms, subject to credit risk and investments
in held-to-maturity category.
Includes all entities considered for Basel II capital adequacy computation.
Includes investment in government securities held under held-to-maturity category.
F109
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
7. CrEDit riSK mitigatioN
a. Collateral management and credit risk mitigation
The Bank has a Board approved policy framework for collateral management and credit risk mitigation
techniques, which include among other aspects guidelines on acceptable types of collateral, ongoing
monitoring of collateral including the frequency and basis of valuation and application of credit risk mitigation
techniques.
Collateral management
Overview
The Bank defines collateral as the assets or rights provided to the Bank by the borrower or a third party in
order to secure a credit facility. The Bank would have the rights of secured creditor in respect of the assets/
contracts offered as security for the obligations of the borrower/obligor. The Bank ensures that the underlying
documentation for the collateral provides the bank appropriate rights over the collateral or other forms of
credit enhancement including the right to liquidate retain or take legal possession of it in a timely manner in
the event of default by the counterparty. The Bank also endeavours to keep the assets provided as security to
the Bank under adequate insurance during the tenor of the Bank’s exposure. The collateral value is monitored
periodically.
Collateral valuation
As stipulated by the RBI guidelines, the Bank uses the comprehensive approach for collateral valuation. Under
this approach, the Bank reduces its credit exposure to counterparty when calculating its capital requirements
to the extent of risk mitigation provided by the eligible collateral as specified in the Basel II guidelines.
The Bank adjusts the value of any collateral received to adjust for possible future fluctuations in the value of
the collateral in line with the requirements specified by RBI guidelines. These adjustments, also referred to as
‘haircuts’, to produce volatility-adjusted amounts for collateral, are reduced from the exposure to compute
the capital charge based on the applicable risk weights.
Types of collateral taken by the Bank
The Bank determines the appropriate collateral for each facility based on the type of product and risk profile of
the counterparty. In case of corporate and small and medium enterprises financing, fixed assets are generally
taken as security for long tenor loans and current assets for working capital finance. For project finance,
security of the assets of the borrower and assignment of the underlying project contracts is generally taken.
In addition, in some cases, additional security such as pledge of shares, cash collateral, charge on receivables
with an escrow arrangement and guarantees is also taken.
For retail products, the security to be taken is defined in the product policy for the respective products.
Housing loans and automobile loans are secured by the security of the property/automobile being financed.
The valuation of the properties is carried out by an empanelled valuer at the time of sanctioning the loan.
The Bank also offers products which are primarily based on collateral such as shares, specified securities,
warehoused commodities and gold jewellery. These products are offered in line with the approved product
policies, which include types of collateral, valuation and margining.
The Bank extends unsecured facilities to clients for certain products such as derivatives, credit cards and
personal loans. The limits with respect to unsecured facilities have been approved by the Board of Directors.
The decision on the type and quantum of collateral for each transaction is taken by the credit approving
authority as per the credit approval authorisation approved by the Board of Directors. For facilities provided
as per approved product policies, collateral is taken in line with the policy.
F110
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
Credit risk mitigation techniques
The RBI guidelines on Basel II allow the following credit risk mitigants to be recognised for regulatory capital
purposes:
• Eligible financial collateral, which include cash (deposited with the Bank), gold (including bullion and
jewellery, subject to collateralised jewellery being benchmarked to 99.99% purity), securities issued by
Central and State Governments, Kisan Vikas Patra, National Savings Certificates, life insurance policies
with a declared surrender value issued by an insurance company, which is regulated by the insurance
sector regulator, certain debt securities, mutual fund units where daily net asset value is available in
public domain and the mutual fund is limited to investing in the instruments listed above.
• on-balance sheet netting, which is confined to loans/advances and deposits, where banks have legally
enforceable netting arrangements, involving specific lien with proof of documentation.
• guarantees, where these are direct, explicit, irrevocable and unconditional. Further, the eligible guarantors
would comprise:
- Sovereigns, sovereign entities stipulated in the RBI guidelines on Basel II, bank and primary dealers
with a lower risk weight than the counterparty; and
- Other entities, which are rated AA(-) or better.
The Bank reckons the permitted credit risk mitigants for obtaining capital relief only when the credit risk
mitigant fulfills the conditions stipulated for eligibility and legal certainty by RBI in its guidelines on Basel II.
Concentrations within credit risk mitigation
The RBI guidelines, among its conditions for eligible credit risk mitigants, require that there should not be
a material positive correlation between the credit quality of the counterparty and the value of the collateral
being considered. RMG conducts the assessment of the aspect of material positive correlation on cases
referred to it and accordingly evaluates the eligibility of the credit risk mitigant for obtaining capital relief.
Currently, the Bank does not have any concentration risk within credit risk mitigation.
b. portfolio covered by eligible financial collateral (march 31, 2013)
Exposures fully covered by eligible financial collateral, after application of haircut
1.
Includes all entities considered for Basel II capital adequacy computation.
` in billion
amount1
180.25
The processes for capital computation and credit risk mitigation based on Basel II guidelines are consistent
across subsidiaries of the Bank.
8. SECUritiSatioN
a. Securitisation objectives, roles played by the Bank and the risks
objectives
The Bank’s primary objective of securitisation activities is to increase the efficiency of capital and enhance the
return on capital employed by diversifying sources of funding. The Bank also invests in third party originated
securitisation transactions to meet its priority sector lending requirements.
roles played by the Bank
In securitisation transactions backed by assets either originated by the Bank or third parties, the Bank plays
the following major roles:
F111
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
• Underwriter: allowing un-subscribed portions of securitised debt issuances, if any to devolve on the
Bank, with the intent of selling at a later stage.
•
investor/trader/market-maker: acquiring investment grade securitised debt instruments backed by
financial assets originated by third parties for purposes of investment/trading/market-making with the
aim of developing an active secondary market in securitised debt.
• Structurer: structuring appropriately in a form and manner suitably tailored to meet investor requirements,
while being compliant with extant regulations.
• provider of liquidity facilities: addressing temporary mismatches on account of the timing differences
between the receipt of cash flows from the underlying performing assets and the fulfillment of obligations
to the beneficiaries.
•
provider of credit enhancement facilities: addressing delinquencies associated with the underlying
assets, i.e. bridging the gaps arising out of credit considerations between cash flows received/collected
from the underlying assets and the fulfillment of repayment obligations to the beneficiaries.
• provider of collection and processing services: collecting and/or managing receivables from underlying
obligors, contribution from the investors to securitisation transactions, making payments to counterparties/
appropriate beneficiaries, reporting the collection efficiency and other performance parameters and
providing other services relating to collections and payments as may be required for the purpose of the
transactions.
risks in securitisation
The major risks inherent in the securitised transactions are:
•
Credit risk: Risk arising on account of payment delinquencies from underlying obligors/borrowers in the
assigned pool.
• market risk:
i)
Liquidity risk: Risk arising on account of lack of secondary market to provide ready exit options to the
investors/participants.
ii) Interest rate risk: Mark to market risks arising on account of interest rate fluctuations.
• operational risk:
i) Co-mingling risk: Risk arising on account of co-mingling of funds belonging to investor(s) with that
of the originator and/or collection and processing servicer, when there exists a time lag between
collecting amounts due from the obligors and payment made to the investors.
ii) Performance risk: Risk arising on account of the inability of a Collection and Processing Agent to
collect monies from the underlying obligors as well as operational difficulties in processing the
payments.
iii) Regulatory and legal risk: Risk arising on account of
•
•
non-compliance of the transaction structures with the extant applicable laws which may result in
the transaction(s) being rendered invalid;
conflict between the provisions of the transaction documents with those of the underlying
financial facility agreements; and
F112
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
•
non-enforceability of security/claims due to imperfection in execution of the underlying facility
agreements with the borrower(s).
•
reputation risk: Risk arising on account of
i) rating downgrade of a securitised instrument due to unsatisfactory performance of the underlying
asset pool; and
ii) inappropriate practices followed by the collection and processing agent.
In addition to the above, securitised assets are exposed to prepayment and pipeline and warehousing risks.
Prepayment risk arises on account of prepayment of dues by obligors/borrowers in the assigned pool either
in part or full. Pipeline and warehousing risks refer to the event where originating banks are unable to off-load
assets, which were originated with an intention of selling thus potentially exposing them to losses arising
on declining values of these assets. The Bank does not follow the “originate to distribute” model in the
domestic market and hence is not exposed to the pipeline and warehousing risks in the domestic market. In
the overseas markets, where the Bank executes certain transactions on a “originate to distribute/syndicate”
model, the Bank has established an appropriate risk management and mitigation framework to assess and
manage any risks associated with such transactions.
processes in place to monitor change in risks of securitisation exposures
The Bank has established appropriate risk management processes to monitor the risks on securitisation
exposures, which include:
i) monitoring credit risk
The Bank in the capacity of collection and processing agent prepares monthly performance reports which
are circulated to investors/assignees/rating agencies. The securitised pools are continuously monitored
and those requiring attention are subjected to specific interventions (e.g. focused collection efforts in
affected geographies etc.) to improve their performance.
The risk assessment of the pools is done continuously by the rating agencies based on amortisation
level, collection efficiency, credit enhancement utilisation levels and credit cover available for balance
deal tenor.
ii) monitoring market risk
The Bank ascertains market value of the securitisation exposures based on extant norms, which is
compared with their book value to assess the marked to market impact of these exposures monthly.
Bank’s policy governing the use of credit risk mitigation to mitigate the risks retained through securitisation
exposures
The Bank has not used credit risk mitigants to mitigate retained risks.
b. Summary of the Bank’s accounting policies for securitisation activities
Whether the transactions are treated as sales or financings
The Bank transfers commercial and consumer loans through securitisation transactions. The transferred
loans are de-recognised and gains/losses are accounted for only if the Bank surrenders the rights to benefits
specified in the underlying securitised loan contract. Recourse and servicing obligations are accounted for
net of provisions.
In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006,
the Bank accounts for any loss arising from securitisation immediately at the time of sale and the profit/
F113
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
premium arising from securitisation is amortised over the life of the securities issued or to be issued by the
special purpose vehicle to which the assets are sold.
In accordance with the RBI guidelines dated May 7, 2012 for securitisation of standard assets, with effect from
May 7, 2012, the Bank accounts for any loss arising from securitisation immediately at the time of sale and the
profit/premium arising from securitisation is amortised over the life of the transaction based on the method
prescribed in RBI guidelines.
methods and key assumptions (including inputs) applied in valuing positions retained or purchased
The valuation of the retained interests in the form of pass-through certificates (PTCs) is based on the projected
cash flows as received from the issuer, which are present valued using the Yield-to-Maturity (YTM) rates,
which are computed with a mark-up (reflecting associated credit risk) over the YTM rates for government
securities as published by Fixed Income Money Market and Derivatives Association (FIMMDA).
The retained/purchased interests in the form of subordinate contributions are carried at book value.
There is no change in the methods and key assumptions applied in valuing retained/purchased interests from
previous year.
policies for recognising liabilities on the balance sheet for arrangements that could require the bank to
provide financial support for securitised assets
The Bank provides credit enhancements in the form of cash deposits or guarantees in its securitisation
transactions. The Bank makes appropriate provisions for any delinquency losses assessed at the time of sale
as well as over the life of the securitisation transactions in accordance with the RBI guidelines.
c. rating of securitisation exposures
Ratings obtained from ECAIs stipulated by RBI (as stated above) are used for computing capital requirements
for securisation exposures. Where the external ratings of the Bank’s investment in securitised debt
instruments/PTCs are at least partly based on unfunded support provided by the Bank, such investments are
treated as unrated and deducted from the capital funds.
d. Details of securitisation exposures in the banking book
i. total outstanding exposures securitised by the Bank and the related unrecognised gains/(losses)
(march 31, 2013)
Exposure type
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
total
outstanding1
` in billion
Unrecognised
gains/(losses)
-
-
6.71
-
-
-
1.82
-
-
-
8.53
-
1. The amounts represent the total outstanding principal at March 31, 2013 for securitisation deals and include direct
assignments in the nature of sell-downs. Credit enhancements and liquidity facilities are not included in the above
amounts. During the year ended March 31, 2013, the Bank had not securitised any assets as an originator.
F114
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
ii. Break-up of securitisation gains/(losses) (net)
Exposure type
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
total
` in billion
Year ended
march 31,
20131
(0.62)
0.09
0.03
-
0.22
(0.28)
1. The amounts include gain amortised during the year and expenses relating to utilisation of credit enhancements.
iii. assets to be securitised within a year at march 31, 2013
Amount of assets intended to be securitised within a year
iv. Securitisation exposures retained or purchased (march 31, 2013)
` in billion
amount
64.13
` in billion
Exposure type1
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
total
on-balance
sheet
1.25
12.91
0.44
1.66
3.28
19.54
off-balance sheet
total
1.69
0.27
1.10
8.13
9.51
20.70
2.94
13.18
1.54
9.79
12.79
40.24
1. Securitisation exposures include but are not restricted to liquidity facilities, other commitments and credit enhancements
such as interest only strips, cash collateral accounts and other subordinated assets as well as direct assignments in the
nature of sell-downs. The amounts are net of provisions. Credit enhancements have been stated at gross levels and not
been adjusted for their utilisation.
v. risk weight bands break-up of securitisation exposures retained or purchased (march 31, 2013)
Exposure type1
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
total
total capital charge
<100% risk
weight
0.03
3.47
-
8.13
4.18
15.81
0.38
1.
Includes direct assignments in the nature of sell-downs.
100% risk
weight
-
3.91
-
0.18
-
4.09
0.37
>100% risk
weight
-
-
-
-
-
-
-
` in billion
total
0.03
7.38
-
8.31
4.18
19.90
0.75
F115
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
vi. Securitisation exposures deducted from capital (march 31, 2013)
Exposure type1
Exposures deducted
entirely from
tier-1 capital
Credit enhancing
interest-only strips
deducted from
total capital2
` in billion
other exposures
deducted from
total capital3
Vehicle/equipment loans
-
-
2.92
Home and home equity loans
-
0.74
5.06
Personal loans
Corporate loans
Mixed asset pool
total
-
-
-
1.55
-
1.47
-
0.01
8.59
-
0.75
19.59
1.
Includes direct assignments in the nature of sell-downs.
2.
3.
Includes subordinate contribution amount deducted from capital.
Includes credit enhancements (excluding interest only strips). Credit enhancements have been stated at gross levels and
not been adjusted for their utilisation. The amounts are net of provisions.
e. Details of securitisation exposures in the trading book
i. aggregate amount of exposures securitised for which the Bank has retained some exposures subject
to market risk (march 31, 2013)
Exposure type
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
Small enterprise loans
Micro credit
total
1. The amounts represent the outstanding principal at March 31, 2013 for securitisation deals.
` in billion
total1
-
1.53
-
-
-
-
-
1.53
F116
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
ii. Securitisation exposures retained or purchased (march 31, 2013)
Exposure type1
Vehicle / equipment loans
Home & home equity loans
Personal loans
Corporate loans
Mixed Asset
Small enterprise loans
Micro credit
total
on-balance
sheet
47.64
13.60
-
0.09
0.72
6.28
2.31
70.64
off-balance sheet
` in billion
total
-
-
-
-
-
-
-
-
47.64
13.60
-
0.09
0.72
6.28
2.31
70.64
1. Securitisation exposures include PTCs originated by the Bank as well as PTCs purchased in case of third party originated
securitisation transactions.
iii. risk weight bands break-up of securitisation exposures retained or purchased and the related capital
charge (march 31, 2013)
<100% risk weight
100% risk weight
>100% risk weight
total
` in billion
Exposure Capital charge1
1.43
69.75
-
-
-
-
1.43
69.75
1. Represents capital required to be maintained at 9.00% as per RBI guidelines.
vi. Securitisation exposures deducted from capital (march 31, 2013)
Exposure type
Exposures deducted
entirely from
tier-1 capital
Vehicle/equipment loans
Home and home equity loans
Personal loans
Corporate loans
Mixed asset pool
Small enterprise loans
Micro credit
total
-
-
-
-
-
-
-
-
Credit enhancing
interest-only strips
deducted from
total capital
-
-
-
-
-
-
-
-
` in billion
other exposures
deducted from
total capital1
-
0.26
-
-
0.73
-
-
0.99
1. PTCs originated by the Bank whose external credit ratings are at least partly based on unfunded support provided by the
Bank have been treated as unrated and deducted from the capital funds at their book values.
F117
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
9. marKEt riSK iN traDiNg BooK
a. market risk management policy
risk management policies
Market risk is the possibility of loss arising from changes in the value of a financial instrument as a result of
changes in market variables such as interest rates, exchange rates, credit spreads and other asset prices.
The market risk for the Bank is managed in accordance with the Investment Policy and Derivatives Policy
which are approved by the Board. The policies ensure that operations in securities, foreign exchange and
derivatives are conducted in accordance with sound and acceptable business practices and are as per the
extant regulatory guidelines, laws governing transactions in financial securities and the financial environment.
The policies contain the limit structure that governs transactions in financial instruments. The policies are
reviewed periodically to incorporate changed business requirements, economic environment and changes
in regulations.
risk management objectives
The Bank manages its market risk with the broad objectives of:
1. Management of market risk such as interest rate risk, currency risk, equity risk and credit spread risk
arising from the investments and derivatives portfolio.
2. Proper classification, valuation and accounting of investments and derivatives portfolio.
3. Adequate and proper reporting of investments and derivative products.
4. Compliance with regulatory requirements.
5. Effective control over the operation and execution of market related transactions.
Structure and organisation of the market risk management function
The Market Risk Management Group (MRMG), which is an independent function reports to the Head - RMG.
MRMG exercises independent control over the process of market risk management and recommends
changes in policies and methodologies for measuring market risk. There is clear functional separation of:
• Trading i.e. front office; and
• Monitoring, control, settlements and accounting i.e. Treasury Middle Office Group (TMOG).
Strategies and processes
Internal control system
Treasury operations warrant elaborate control procedures. Keeping this in view, the following guidelines are
followed for effective control of the treasury operations:
1. Monitoring
TMOG is responsible for an independent check of the transactions entered into by the front office. It also
monitors all limits laid down in the Investment Policy.
2. System controls
The system used for recording, processing, monitoring and accounting of treasury transactions have
adequate data integrity controls. The process for enabling/disabling role-based access is also documented.
3. Delegation and Exception handling processes
Keeping in view the size of the investment portfolio and the variety of securities that the Bank deals
in, authority for investment decisions has been delegated to various dealers depending on business
requirements.
F118
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
The Investment Policy sets out deal-size limits for various products. Various coherence checks have
been inserted in the system for ensuring that the appropriate deal size limits are enforced to minimise
exceptions.
The Investment Policy lists the value-at-risk (VaR) limits and stop loss limits for different groups. It also
defines the approval mechanism in case of breach of these limits.
Scope and nature of risk reporting and/or measurement systems
Reporting
The Bank periodically reports on the various investments and their related risk measures to the senior
management and the committees of the Board. The Bank also periodically submits the reports to the regulator
as per the regulatory reporting requirements.
Measurement
The Bank has devised various risk metrics for different products and investments. These risk metrics are
measured and reported to the senior management independently by TMOG. Some of the risk metrics
adopted by the Bank for monitoring its risks are VaR, price value of basis point (PV01) and stop loss amongst
others. Limits are placed on various risk metrics, which are monitored on a periodic basis.
Hedging and mitigation
Limits on positions that can be maintained are laid out in the relevant policies. All business groups are
required to operate within these limits. Hedge transactions for banking book transactions are periodically
assessed for hedge effectiveness.
Frameworks in overseas banking subsidiaries
Frameworks that are broadly similar to the above framework have been established at each of the overseas
banking subsidiaries of the Bank to manage market risk. The frameworks are established considering host
country regulatory requirements as applicable.
b. Capital requirements for market risk
The capital requirements for market risk (general and specific) at March 31, 2013 were:
Capital required
- for interest rate risk2
- for foreign exchange (including gold) risk
- for equity position risk
1.
2.
Includes all entities considered for Basel II capital adequacy computation.
Includes capital required of ` 1.43 billion for securitisation exposure.
10. opEratioNaL riSK
a. operational risk management framework
` in billion
amount1
32.46
26.65
0.79
5.02
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people or systems,
or from external events. Operational risk includes legal risk but excludes strategic and reputation risk.
Operational risk is inherent in the Bank’s business activities in both domestic as well as overseas operations
and covers a wide spectrum of issues.
objectives
The objective of the Bank’s operational risk management is to manage and control operational risks in a cost
effective manner within targeted levels of operational risk consistent with the Bank’s risk appetite as specified
F119
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
in the Operational Risk Management Policy (the Policy) approved by the Board of Directors. The Policy
aims to:
• Define Bank level operational risk appetite;
• Establish clear ownership and accountability for management and mitigation of operational risk;
• Help business and operations to improve internal controls, reduce likelihood of occurrence of operational
risk incidents and minimise potential impact of losses;
• Minimise losses and customer dissatisfaction due to failure in processes;
• Develop comprehensive operational risk loss database for effective mitigation;
• Meet regulatory requirements as set out in the guidance note on management of operational risk issued
by the RBI; and
• Compute capital charge for operational risk as per the guidelines issued by the RBI.
operational risk management governance and framework
The Bank has a comprehensive risk governance structure in line with the RBI guidelines. Further, the Bank is
in compliance with the corporate governance requirements of Securities and Exchange Board of India (SEBI),
Companies Act and Sarbanes Oxley (SOX) Act (USA).
The Board level committees that undertake supervision and review of operational risk aspects are the Risk
Committee (RC), Fraud Monitoring Committee (FMC), Audit Committee (AC) and Information Technology
Strategy Committee (ITSC).
The executive level committees that undertake supervision and review of operational risk aspects are the
Operational Risk Management Committee (ORMC), Outsourcing Committee (OCM), Information Security
Committee (ISC), Business Continuity Management Steering Committee (BCMC), and Product and Process
Approval Committee (PAC),
The Board and the Risk Committee reviews the operational risk level and direction and the material operational
risk exposures. The Fraud Monitoring Committee reviews the fraud risk aspects. The Information Technology
Strategy Committee reviews IT risk aspects. The Audit Committee supervises the audit and compliance
related aspects. Internal Audit Department carries out audit according to the Risk Based Audit Plan and
reports the findings to the Audit Committee.
In line with the RBI guidelines, an independent Operational Risk Management Group (ORMG) was set up
in the year 2006. The Bank’s operational risk management governance and framework is defined in the
Policy. While the Policy provides a broad framework, detailed standard operating procedures for operational
risk management processes have been established. For the purpose of robust quality of operational risk
management across the Bank, the operational risk management processes of the Bank have been certified
for ISO 9001:2008 standard.
The Policy also specifies the composition, roles and responsibilities of Operational Risk Management
Committee (ORMC). ORMC is responsible for overseeing all material operational risks, responses to risk
issues and the adequacy and effectiveness of controls within a given operational risk control area.
The key elements in the operational risk management framework as defined in the Policy include:
•
Identification and assessment of operational risks and controls;
• New product and processes approval framework;
• Measurement through incident and exposure reporting;
F120
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
• Monitoring through key risk indicators; and
• Mitigation through process and controls enhancement and insurance.
The Bank has implemented Outsourcing Policy approved by the Board of Directors, which specifies the
composition, roles and responsibilities of Outsourcing Committee. The Outsourcing Committee is
responsible for:
• Assessing the risk and ensure mitigation for the same for all material outsourced activities;
• Approving new outsourced activities;
• Ensuring that periodic review of outsourced agencies is conducted by the business/operations group;
and
• Putting in place a central database on outsourcing.
identification and assessment
Operational risks and controls across the Bank are documented and updated regularly. Each business
and operations group in the Bank has business operational risk managers within the group. ORMG along
with these managers facilitates the business and operation groups for carrying out risk and control self-
assessments on a periodic basis as per the plan approved by the ORMC. Risk mitigation plans are monitored
to ensure timely mitigation of risks. Internal controls are tested by Internal Audit Group in the Bank. The
testing results are incorporated in the operational risk assessment. The Bank has a comprehensive Product
and Process Approval framework along with the detailed operating guidelines for effective new product and
process risk management. As per the framework, Bank has a Product and Process Approval Committee (PAC)
in place. The role of PAC is to assess the proposed product offering/process improvement from the business
and operational perspective, examine the feasibility of system requirements for supporting the product/
process and ascertain that adequate risk mitigation, legal and compliance measures are considered. All the
new products and processes including modifications thereof are reviewed by the control groups such as risk,
compliance, legal and audit, prior to being placed before the Committee for approval.
measurement, monitoring, mitigation and reporting
Operational risk incidents are reported regularly and transactions resulting in losses are routed through
operational risk account. Root cause analysis is carried out for the significant operational risk incidents
reported and corrective actions are incorporated back into respective processes. The Bank has implemented
incident reporting systems, which facilitate capturing of operational risk incidents by the employees of the
Bank.
The operational risk losses and incident analysis are submitted to the Risk Committee and to the Board on a
periodic basis. Operational risk exposures (risk and control self assessment results, operational risk incidents
analysis, key risk indicators and open risks) are monitored by the ORMC on a regular basis and reported to
the business heads in the form of dashboards on a periodic basis.
The Bank has initiated steps to adopt advanced approaches for operational risk capital computation. The
Bank had filed an application with the RBI for migration to The Standardised Approach (TSA). The Bank has
been estimating Operational Value at Risk (OpVaR) for the purpose of Internal Capital Adequacy Assessment
Process (ICAAP). The OpVaR is estimated based on the principles of AMA by using internal loss data, scenario
analysis and external loss data. The OpVaR is stress tested on a quarterly basis to ensure adequacy of the
capital provided for operational risk and is compared with trends of actual losses.
For facilitating effective operational risk management, the Bank has implemented a comprehensive operational
risk management system. The application software comprises five modules namely incident management,
risk and control self-assessment, key indicators, scenario analysis and issues and action.
F121
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
operational risk management in overseas branches and banking subsidiaries
ORMG is responsible for design, development and continuous enhancement of the operational risk
management framework across the Bank including overseas banking subsidiaries and overseas branches.
While the common framework is adopted, suitable modifications in the processes are carried out depending
upon the requirements of the local regulatory guidelines. ORMG exercises oversight through the process of
periodic review of operational risk management in the international locations.
operational risk management in other subsidiaries
The Bank has designed Group Operational Risk Management Policy. The Policy document describes the
approach towards the management of operational risk within ICICI Group. While the common framework
is adopted, suitable modifications in the processes are carried out depending upon the requirements of the
regulatory guidelines of the respective companies.
b. Capital requirement for operational risk (march 31, 2013)
As per the RBI guidelines on Basel II, the Bank has adopted Basic Indicator approach for computing capital
charge for operational risk. The capital required for operational risk at March 31, 2013 was ` 27.49 billion.
11. iNtErESt ratE riSK iN tHE BaNKiNg BooK (irrBB)
a. risk management Framework for irrBB
Interest rate risk is the risk of potential variability in earnings and capital value resulting from changes in
market interest rates. IRRBB refers to the risk of deterioration in the positions held on the banking book of an
institution due to movement in interest rates over time. The Bank holds assets, liabilities and off balance sheet
items across various markets with different maturity or re-pricing dates and linked to different benchmark
rates, thus creating exposure to unexpected changes in the level of interest rates in such markets.
organisational set-up
ALCO is responsible for management of the balance sheet of the Bank with a view to manage the market
risk exposure assumed by the Bank within the risk parameters laid down by the Board of Directors/Risk
Committee. The Asset Liability Management Group (ALMG) at the Bank monitors and manages the risk
under the supervision of ALCO. Further, the Asset Liability Management (ALM) groups in overseas branches
manage the risk at the respective branches, in coordination with the Bank’s ALMG.
The ALM Policy of the Bank contains the prudential limits on liquidity and interest rate risk, as prescribed
by the Board of Directors/Risk Committee/ALCO. Any amendments to the ALM Policy can be proposed by
business group(s), in consultation with the market risk and compliance teams and are subject to approval
from ALCO/Risk Committee/Board of Directors, as per the authority defined in the Policy. The amendments
so approved by ALCO are presented to the Board of Directors/Risk Committee for information/approval.
TMOG is an independent group responsible for preparing the various reports to monitor the adherence to
the prudential limits as per the ALM Policy. These limits are monitored on a regular basis at various levels of
periodicity. Breaches, if any, are duly reported to ALCO/Risk Committee/Board of Directors, as may be required
under the framework defined for approvals/ratification. Upon review of the indicators of IRRBB and the impact
thereof, ALCO may suggest necessary corrective actions in order to realign the exposure with the current
assessment of the markets.
risk measurement and reporting framework
The Bank proactively manages impact of IRRBB as a part of its ALM activities. ALM policy defines the different
types of interest rates risks that are to be monitored, measured and controlled. ALCO decides strategies for
managing IRRBB at the desired level. Further, ALCO periodically gives direction for management of interest
F122
bAsel ii – pillAr 3 disClosures (ConsolidAted)
at March 31, 2013
rate risk on the basis of its expectations of future interest rates. Based on the guidance, ALMG manages the
IRRBB with the help of various tools i.e. gap analysis, earning at risk (EaR), duration of equity (DoE), stress
testing for basis risk etc. These tools are as follows:
•
gap analysis: The interest rate gap or mismatch risk is measured by calculating gaps over different
time intervals at a given date for domestic and overseas operations. Gap analysis measures mismatches
between rate sensitive liabilities (RSL) and rate sensitive assets (RSA) (including off-balance sheet
positions). The report is prepared by grouping rate sensitive liabilities, assets and off-balance sheet
positions into time buckets according to residual maturity or next re-pricing period, whichever is earlier.
For non-maturity assets/liabilities (for instance, working capital facilities on the assets side and current and
savings account deposits on the liabilities side) grouping into time buckets is done based on behavioral
studies or by making certain assumptions. The difference between RSA and RSL for each time bucket
signifies the gap in that time bucket. The direction of the gap indicates whether net interest income is
positively or negatively impacted by a change in the direction of interest rates and the extent of the gap
approximates the change in net interest income for that given interest rate shift. The ALM Policy of the
Bank stipulates bucket-wise limits on Rupees interest rate gaps for the domestic operations of the Bank,
linked to the networth of the Bank.
• Ear: From an EaR perspective, the gap reports indicate whether the Bank is in a position to benefit
from rising interest rates by having a positive gap (RSA > RSL) or whether it is in a position to benefit
from declining interest rates by a negative gap (RSL > RSA). The Bank monitors the EaR with respect to
net interest income (NII) based on a 100 basis points adverse change in the level of interest rates. The
magnitude of the impact over a one year period, as a percentage of the NII of the previous four quarters
gives a fair measure of the earnings risk that the Bank is exposed to. The EaR computations include the
banking book as well as the trading book.
For some of the products, Bank provides its depositors and borrowers an option to terminate the deposit/
loan pre-maturely. These products may or may not provide for a penalty for premature termination. In
case of pre-mature terminations, the Bank faces a risk of re-pricing of the assets/liabilities at the current
rates and the resultant impact on the NII (adjusted for the penalty), over and above the impact as estimated
through EAR. However, the re-pricing/re-investment risk is partly mitigated on account of the premature
termination option in wholesale term deposits and term loans being captured through the behavioral
studies implemented in the interest rate gap statement as mentioned in the earlier paragraphs
• DoE: Change in the interest rates also have a long-term impact on the market value of equity of the
Bank, as the economic value of the Bank’s assets, liabilities and off-balance sheet positions is impacted.
Duration is a measure of interest rate sensitivity of assets, liabilities and also equity. It may be defined as
the percentage change in the market value of an asset or liability (or equity) for a given change in interest
rates. Thus DoE is a measure of change in the market value of equity of a firm due to the identified
change in the interest rates. The Bank uses DoE as a part of framework to manage IRRBB for its domestic
and overseas operations and DoE is computed for the overall Bank and banking book separately. The
ALM Policy stipulates a limit on the overall DoE of the Bank and the banking book separately in order to
monitor and manage IRRBB. The utilisation against these limits is computed for appropriate interest rate
movements and monitored periodically.
• Stress test for basis risk: The assets and liabilities on the balance sheet are priced based on multiple
benchmarks and when interest rates fluctuate, all these different yield curves may not necessarily
move in tandem exposing the balance sheet to basis risk. Therefore, over and above the EaR, the Bank
measures the impact of differential movement in interest rates across benchmark curves. For the domestic
operations various scenarios of interest rate movements (across various benchmark yield curves) are
identified and the worst-case impact is measured as a percentage of the aggregate of Tier-1 and Tier-2
capital. These scenarios take into account the magnitude as well as the timing of various interest rate
F123
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
movements (across curves). Currently, the scenarios provide for differential movements in each yield
curve but the movement in each curve is assumed to be parallel. Further, for the overseas operations of
the Bank, assets and liabilities are primarily linked to LIBOR and the basis risk is computed for a parallel
shift in LIBOR as well as the spread over LIBOR. The basis risk for the overall Bank is a summation of the
basis risk arising from domestic and overseas operations.
Most of the other banking entities in the Group, wherever applicable, also monitor IRRBB through similar
tools and limit framework.
Marked-to-market (MTM) on the trading book
In addition to the above, the price risk of the trading book is monitored through a framework of VaR and
cumulative stop loss limits. The management of price risk of the trading book is detailed in the Investment
Policy.
Hedging policy
Depending on the underlying asset or liability and prevailing market conditions, the Bank enters into hedge
transactions for identified assets or liabilities. The Bank has a policy for undertaking hedge transactions.
These hedges are periodically assessed for hedge effectiveness as per the applicable financial guidelines.
The hedges that meet the effectiveness requirements are accounted for on a basis similar to the underlying
asset/liability.
Frameworks in overseas banking subsidiaries
Frameworks that are broadly similar to the above framework have been established at each of the overseas
banking subsidiaries of the Bank to manage interest rate risk in the banking book. The frameworks are
established considering host country regulatory requirements as applicable.
b. Level of interest rate risk
The following table sets forth one possible prediction of the impact on the net interest income of changes in
interest rates on interest sensitive positions for the year ending March 31, 2013, assuming a parallel shift in
the yield curve:
Currency
INR
USD
JPY
GBP
EURO
CHF
CAD
Others
Total
` in million
Change in interest rates1
-100 basis points +100 basis points
(4,873.8)
4,873.8
(811.7)
811.7
(6.8)
6.8
(108.7)
108.7
(154.6)
154.6
(3.1)
(253.7)
(145.0)
3.1
253.7
145.0
(6,357.4)
6,357.4
1. Consolidated figures for ICICI Bank and its banking subsidiaries, ICICI Home Finance Company, ICICI Securities Primary
Dealership Limited and ICICI Securities and its subsidiaries.
F124
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
The following table sets forth one possible prediction of the impact on economic value of equity of changes in
interest rates on interest sensitive positions at March 31, 2013, assuming a parallel shift in the yield curve:
Currency
INR
USD
JPY
GBP
EURO
CHF
CAD
Others
Total
` in million
Change in interest rates1, 2
-100 basis points +100 basis points
21,474.7
(21,474.7)
1,652.5
(1,652.5)
(138.5)
138.5
92.5
(92.5)
(567.9)
567.9
5.1
(5.1)
490.8
(266.4)
(490.8)
266.4
22,742.8
(22,742.8)
1.
For INR, coupon and yield of Indian government securities and for other currencies, coupon and yield of currency-wise
Libor/swap rates have been assumed across all time buckets that are closest to the mid point of the time buckets.
2. Consolidated figures for ICICI Bank and its banking subsidiaries, ICICI Home Finance Company, ICICI Securities Primary
Dealership Limited and ICICI Securities and its subsidiaries.
12. LIQUIDITY RISK
Liquidity risk is the risk of inability to meet financial commitments as they fall due, through available cash flows
or through sale of assets at fair market value. It is the current and prospective risk to the Bank’s earnings and
equity arising out of inability to meet the obligations as and when they become due. It includes both, the risk of
unexpected increases in the cost of funding an asset portfolio at appropriate maturities as well as the risk of being
unable to liquidate a position in a timely manner at a reasonable price.
The goal of liquidity risk management is to be able, even under adverse conditions, to meet all liability repayments
on time and to fund all investment opportunities by raising sufficient funds either by increasing liabilities or by
converting assets into cash expeditiously and at reasonable cost.
Organisational set-up
The Bank manages liquidity risk in accordance with its ALM Policy. This policy is framed as per the extant regulatory
guidelines and is approved by the Board of Directors. The ALM Policy is reviewed periodically to incorporate
changes as required by regulatory stipulation or to realign with changes in the economic landscape. The ALCO
of the Bank formulates and reviews strategies and provides guidance for management of liquidity risk within the
framework laid out in the ALM Policy. The Risk Committee of the Board has oversight on the ALCO.
Risk measurement and reporting framework
The Bank proactively manages liquidity risk as a part of its ALM activities. The Bank uses various tools for
measurement of liquidity risk including the statement of structural liquidity (SSL), dynamic liquidity gap statements,
liquidity ratios and stress testing through scenario analysis.
The SSL is used as a standard tool for measuring and managing net funding requirements and assessment of
surplus or shortfall of funds in various maturity buckets in the future. The cash flows pertaining to various assets,
F125
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
liabilities and off-balance sheet items are placed in different time buckets based on their contractual or behavioural
maturity. For non-maturity assets/liabilities, e.g. working capital facilities on the assets side and current account
& savings account deposits on the liabilities side, grouping into time buckets is done based on the assumptions/
behavioral studies. The SSL for domestic operations as well as international operations of the Bank is prepared
on a regular basis. The utilisation against gap limits laid down for each bucket is reviewed by ALCO of the bank/
branch.
The Bank also prepares dynamic liquidity gap statements, which in addition to scheduled cash flows, also
considers the liquidity requirements pertaining to incremental business and the funding thereof. The dynamic
liquidity gap statements are prepared in close coordination with the business groups, and cash flow projections
based on the same are presented to ALCO periodically. As a part of the stock and flow approach, the Bank also
monitors various liquidity ratios, and limits are laid down for these ratios under the ALM Policy.
Further, the Bank has a Board approved liquidity stress testing framework, as per which the Bank gauges its
liquidity position under a range of stress scenarios. These scenarios cover Bank specific and market-wide stress
situations and have been designed for the domestic and the international operations of the Bank. The potential
impact on the Bank’s financial position for meeting the stress outflows under these scenarios is measured and
is subject to a stress tolerance limit specified by the Board. The results of liquidity stress testing are reported to
ALCO on a monthly basis.
The Bank has also framed a Liquidity Contingency Plan (LCP), which serves as a framework for early identification
and calibrated action in the event of tight liquidity conditions. The LCP includes various indicators which are
monitored regularly, and lays down the mechanism for escalation, remedial action and crisis management until
return to normalcy.
Liquidity management
The Bank has diverse sources of liquidity to allow for flexibility in meeting funding requirements. For the domestic
operations, current accounts and savings deposits payable on demand form a significant part of the Bank’s funding
and the Bank is working with a concerted strategy to sustain and grow this segment of deposits along with retail
term deposits. These deposits are augmented by wholesale deposits, borrowings and through issuance of bonds
and subordinated debt from time to time. Loan maturities and sale of investments also provide liquidity. The Bank
holds unencumbered, high quality liquid assets to protect against stress conditions.
For domestic operations, the Bank also has the option of managing liquidity by borrowing in the inter-bank market
on a short-term basis. The overnight market, which is a significant part of the inter-bank market, is susceptible
to volatile interest rates. To limit the reliance on such volatile funding, the ALM Policy has stipulated limits for
borrowing and lending in the inter-bank market. The Bank also has access to refinancing facilities extended by the
RBI.
For the overseas operations too, the Bank has a well-defined borrowing program. The US dollar is the base
currency for the overseas branches of the Bank, apart from the branches where the currency is not freely
convertible. In order to maximise the borrowings at reasonable cost, liquidity in different markets and currencies
is targeted. The wholesale borrowings are in the form of bond issuances, syndicated loans from banks, money
market borrowings, inter-bank bilateral loans and deposits, including structured deposits. The Bank also raises
refinance from banks against the buyer’s credit and other forms of trade assets. The loans that meet the criteria
of the Export Credit Agencies are refinanced as per the agreements entered with these agencies. Apart from
the above the Bank is also focused on increasing the share of retail deposit liabilities at overseas branches, in
accordance with the regulatory framework at the host countries.
Frameworks that are broadly similar to the above framework have been established at each of the overseas
banking subsidiaries of the Bank to manage liquidity risk. The frameworks are established considering host
F126
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
country regulatory requirements as applicable. Besides, as per local regulatory requirements, ICICI Bank UK PLC
has implemented its Individual Liquidity Adequacy Assessment (ILAA) framework, which stipulates the level of
liquidity required to meet the UK regulatory requirements and the liquidity commensurate with the risks identified
in its portfolio and strategic plans.
In summary, the Bank has in place robust governance structure, policy framework and review mechanism to
ensure availability of adequate liquidity even under stressed market conditions.
13. RISK MANAGEMENT FRAMEWORK OF ICICI SECURITIES PRIMARY DEALERSHIP LIMITED
The Board of Directors of the Company maintains oversight on the risk management framework of the Company
and approves all major risk management policies and procedures. The Risk Management Committee of the
Board is responsible for analysing and monitoring the risks associated with the different business activities of the
Company and ensuring adherence to the risk and investment limits set by the Board of Directors.
The risk management function in the Company is managed by the Corporate Risk Management Group within the
broad framework of risk policies and guidelines established by the Risk Management Committee.
The risk control framework is through an effective management information system, which tracks the investments
as well as the VaR reports for portfolios. Valuation of instruments is carried out by mid-office as per guidelines
issued by RBI/FIMMDA and other applicable regulatory agencies.
14. RISK MANAGEMENT FRAMEWORK OF ICICI HOME FINANCE COMPANY LIMITED
The Board of Directors of the Company is responsible for the oversight and control of the functioning of the
Company and approves all major policies and procedures of the Company. The Board of Directors has oversight
of all the risks assumed by the company. The Board delegates authority to various committees responsible for
managing the day-to-day activities such as:
a) Audit and Risk Management Committee
b) Management Committee
c) Asset Liability Management Committee
d) Committee of Directors
e) Committee of Executives
f) Product & Processes Approval Committee
g) Banking Operations and Premises Committee
The policies approved by the Board of Directors form the governing framework for overall risk management.
The key policies in this regard are Asset Liability Management Policy, Investment Policy, Anti-Money Laundering
Policy, Risk Management Policy, Credit & Recovery Policy, Credit Approval Authorisation Manual, Operational Risk
Management Policy and Outsourcing Policy. Business activities are undertaken within this framework. Independent
support groups such as Compliance and Policy & Risk have been constituted to facilitate independent evaluation,
monitoring and reporting of various risks. Additionally, independent functions such as internal audit & legal are
supported by the Internal Audit Department & Corporate Legal Group of ICICI Bank under the oversight & monitoring
of the Audit Committee of the Board of ICICI Home Finance Company. These support groups function independent
of the business groups and represent themselves at the various committees.
The Company’s balance sheet is exposed to liquidity and interest rate risks arising out of borrowing and lending
business. The Asset Liability Management Committee has overall responsibility of monitoring and managing the
structural liquidity and interest rate risk. The Asset Liability Management Committee on a periodic basis (at least
F127
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
once in quarter and more often if required) reviews the asset liability management position. The company also has
in place Liquidity Contingency Plan that defines the minimum threshold level of liquidity to be maintained. Interest
rate risk may arise due to change in interest rate environment.
15. RISK MANAGEMENT FRAMEWORK OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED
The risk governance structure consists of the Board, Board Risk Management Committee (BRMC), Executive
Risk Committee (ERC) and its sub committees. The BRMC comprises non-executive directors. The Board, on
recommendation of BRMC, has approved the following risk policies:
• Board Market Risk Policy;
• Board Credit Risk Policy;
• Board Liquidity Risk Policy;
• Board Insurance Risk Policy;
• Board Operational Risk Policy;
• Board Reinsurance Risk Policy;
• Board Underwriting Risk Policy; and
• Board Outsourcing Risk Policy.
The risk policies set out the governance structure for risk management in the Company. The ERC is responsible
for assisting the Board and the BRMC in their risk management duties and, in particular, is responsible for assisting
the Board and the BRMC in their risk management duties and, in particular, is responsible for the approval of all
new products launched by the Company.
The Investment Risk Committee assists the ERC in identification, measurement, monitoring and control of market,
liquidity and credit risks. This includes asset liability management through regular monitoring of the equity
backing ratios and asset liability duration mismatch. The Company has a liquidity contingency plan in place. The
Insurance Risk Committee assists the ERC in identification, measurement, monitoring and control of insurance
risks i.e. persistency, mortality, morbidity and expense risks.
The Operational Risk Committee assists the ERC in identification, measurement, monitoring and control of
operational risks i.e. risk of loss resulting from inadequate or failed internal processes, people and systems, or
from external events. The Outsourcing Committee reports to the ERC on management of outsourcing risk i.e.
risk due to using the services of a third party to perform activities on a continuous basis that would have been
normally undertaken by the Company.
The risk management model of the Company comprises a four stage continuous cycle, namely identification and
assessment, measurement, monitoring and control of risks. The Company’s Risk Policies detail the strategy and
procedures adopted to follow the risk management cycle at the enterprise level. A risk report detailing the key risk
exposures faced by the Company and mitigation measures is placed before the BRMC on a periodic basis.
16. RISK MANAGEMENT FRAMEWORK OF ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
The objective of the Risk Management Framework of the Company is to ensure that various risks are identified,
measured, mitigated and that policies, procedures and standards are established to address these risks for
systemic response and adherence.
F128
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
The Company has identified enterprise wide risks, which are categorized under 5 broad categories viz. Credit Risk,
Market Risk, Underwriting Risk, Operational Risk and Strategic Risk. The broad structure of the framework is as
follows:
• Risk identification, assessment and mitigation process;
• Risk management and oversight structure; and
• Risk monitoring and reporting mechanism.
As part of the Enterprises Risk Management exercise, critical risks along with the detailed mitigation plan are
presented to the Risk Committee. The risk mitigation plans are monitored regularly by the Company to ensure their
timely and appropriate execution. A Risk Register is maintained to capture inventory of risks that the Company is
exposed to along with mitigation and corrective action plans. The Risk Committee is updated on the progress on
a quarterly basis.
The senior management of the Company is responsible for periodic review of the risk management process to
ensure that the process initiatives are aligned to the desired objectives. The Management Reassurance Function is
responsible for review of risk management processes within the Company and for the review of self-assessments
of risk management activities. Further, compliance testing is done on a periodic basis and the Risk Committee is
kept appraised of the outcome of the same.
The Company’s reinsurance program defines the retention limit for various classes of products. Further, the
Company has in place a retention reinsurance philosophy, which defines the product-wise retention limits on
a per-risk basis as well as a retention limit on a per-event basis. The Underwriting Policy defines product-wise
approval limits for various underwriters. The Investment Policy lays down the asset allocation strategy to ensure
financial liquidity, security and diversification. The Company also has in place a Capital Adequacy and Liquidity
Management Framework and an Asset Liability Management Policy. These policies ensure maintenance of
adequate level of capital at all times to meet diverse risk related to market and operations. The Operational
Risk policy defines the tolerance limits and lays down the framework for monitoring, supervision, reporting and
management of operational risks for the Company.
Stress testing is conducted on a periodic basis to identify and quantify the overall impact of different stress
scenarios on the Company’s financial position. These tests do not predict what will happen, but are useful for
examining what might happen.
The Risks Management Framework of the Company is overseen by the Risk Committee of the Board. The Company
has a Chief Risk Officer who is responsible for the implementation and monitoring of the framework.
17. RISK MANAGEMENT FRAMEWORK OF ICICI SECURITIES LIMITED
The Board of Directors of ICICI Securities has constituted a Risk Management Committee for identifying and
assessing risks, framing risk management policies and methodologies, ensuring compliance of the same,
managing various risks, analysing and monitoring various products/processes/policies from an operational risk
perspective and suggesting risk controls to ensure that the residual risk of various business activities is within
tolerable limits. The Risk Management Committee meets at least once in a quarter.
The risk management function in the Company is performed by the Internal Controls team within the broad
framework as contained in the Corporate Risk and Investment Policy (CRIP). The CRIP is approved by the RMC.
The Corporate Risk Management Group along with Operations Risk Management Group aims at anticipating risks,
proactively planning for managing such risks and being better equipped for handling/managing any uncertainties.
F129
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
The finance team works under the broad framework of Asset Liability Management Policy to ensure maintenance
of adequate level of economic capital at all times.
Further, the following committees also contribute to the operational efficiency and risk management of the
company:
• Audit Committee;
• Product & Processes Approval Committee;
• Compliance Committee;
•
Investment Committee;
• Commitment Committee; and
•
Information Technology (IT) Risk & Customer Service Committee.
In addition to the above, various other policies including Prevention of Money Laundering Policy, Oversight Policy,
Whistle Blower Policy, Fraud Risk Management Policy and Prevention of Insider Trading Policy (Code of Conduct)
help in mitigating various risks faced by the Company. Further, activities such as internal audit of various business
units and corporate services, risk based compliance monitoring, risk and controls self assessment, operational risk
reviews and SEBI mandated internal audit of broking operations ensure the independent evaluation, monitoring and
reporting of the risks.
18. RISK MANAGEMENT FRAMEWORK OF ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED
The policies approved by the Board of Directors form the governing framework for overall risk management. The
key policies in this regard are Anti-money laundering policy, Insider Trading Policy, Chinese Wall Policy, Conflict
Resolution Policy, Arm’s Length Policy, Anti-Bribery & Anti-Corruption Policy. Business activities are undertaken
within this framework. Independent groups such as Compliance and Operational Risk have been constituted to
facilitate independent evaluation, monitoring and reporting of various risks. These groups function independent
of the business groups and represent themselves at the Audit Committee of the Board of the company and also
interface with the corresponding groups at ICICI Bank for a Group level oversight.
The Operational Risk Management function was created during fiscal 2011 to establish an operational risk
management framework in the company. The framework includes the Operational Risk Management Policy, Board-
approved process manuals and Operational Risk Management Committee. A Risk Register has also been created
and maintained as a part of the Risk and Control Self Assessment exercise involving all the departments in the
company. The Register contains an inventory of risks that the company is exposed to along with existing controls.
The Operational Risk Management Committee overviews the functioning of operational risk management within
the company.
19. RISK MANAGEMENT FRAMEWORK OF ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY LIMITED
ICICI Prudential AMC has in place a Risk Management Policy detailing the philosophy and procedure adopted
to identify, measure, monitor and treat/mitigate risk at the enterprise level. As per the policy, the management
reviews the risk levels and action plans at a Risk Management Committee meeting, which is convened on a
quarterly basis.
The Risk Management Committee addresses a wide range of issues such as operational risk, investment risk,
reputation risk and strategic risk. Also a key risk report summarising the key risks faced by the enterprise is
placed before the Audit & Risk Committee (which is a board-level committee) and Risk Management Committee
periodically.
The risk management team carries out operational risk assessment across all business processes/lines and
appraises the Risk Committee on the key operational risk areas and suggested action plans if any to mitigate
the risks.
F130
basel ii – pillar 3 disclosures (consolidated)
at March 31, 2013
Investment Risk oversight forms an integral part of the overall risk management framework and is guided by the
Equity Investment and Debt Investment policy for mutual funds. The process of assessment of investment risk
includes portfolio construction/asset allocation, analysis of performance of funds, review of credit/counterparty/
concentration risk, monitoring of liquidity risk in debt funds (major money market & short term funds), stress testing
of liquidity risk & impact review of trade price vs Volume-weighted average price etc. To sensitise management
regarding any exceptions in the area of investments, the investment risk oversight reporting forms part of the Risk
Management Committee agenda.
The company has in place various policies to manage operational risk such as the business continuity plan,
information technology security policy, product and process approval guidelines, procedure manuals etc.
F131
glossary
Glossary of terms
Working funds
Average deposits
Average advances
Business
Average total assets
Operating profit
Number of employees
Earnings per share
Average of total assets as reported in form X to Reserve Bank
of India
Average of deposits as reported in form A to Reserve Bank
of India
Average of advances as reported in form A to Reserve Bank
of India
Total of average deposits plus average advances
Averages of total assets as reported in from X to Reserve Bank
of India
Profit before provisions and contingencies
Quarterly average of number of employees. The number of
employees includes sales executives, employees on fixed term
contracts and interns
Net profit after tax divided by weighted average number of
equity shares outstanding during the year
Interest income to working funds
Interest income divided by working funds
Non-interest income to working funds Non-interest income divided by working funds
Operating profit to working funds
Operating profit divided by working funds
Return on assets
Profit per employee
Business per employee
Average equity
Average assets
Net profit after tax divided by average total assets
Net profit after tax divided by number of employees
Average deposits plus average advances divided by number
of employees
Quarterly average of equity share capital and reserves
Averages of daily balances, except averages of foreign branches
which are fortnightly averages
Return on average equity
Net profit after tax divided by average equity
Return on average assets
Net profit after tax divided by average assets
Net interest margin
Total interest earned less total interest paid divided by average
interest earning assets
Average yield
Yield on interest earning assets
Average cost of funds
Cost of interest bearing liabilities
Interest spread
Book value per share
Average yield less average cost of funds
Capital plus reserves divided by outstanding number of
equity shares
F132
Promoting Inclusive Growth
IcIcI foundATIon for InclusIve
GrowTh
Inclusive Growth
ICICI Foundation for
(ICICI
Foundation) was set up by the ICICI Group in
early 2008 with a view to carry forward and build
upon its legacy of promoting inclusive growth.
ICICI Foundation works primarily with government
authorities and specialised grassroot organisations
to support developmental work in identified focus
areas.
In fiscal 2012, ICICI Foundation moved its focus
from being just a donor to becoming a key
stakeholder in design, implementation and impact
evaluation of its programmes and projects. During
fiscal 2013, ICICI Foundation further strengthened
- Elementary
identified areas
its efforts
Education, Sustainable Livelihoods, Primary Health
and Financial Inclusion. All of ICICI Foundation’s
activities are focused around building capabilities
and developing innovative models that can be
replicated and scaled up in the future.
in
Mr. Kapil Sibal, Union Minister of Communications &
Information Technology, and Ms. Chanda Kochhar, MD & CEO,
ICICI Bank at the Inclusive India Awards function
AreAs of focus
1. elementary education
(i) school and Teacher education reform
Programme (sTerP), rajasthan:
ICICI Foundation’s flagship education programme,
STERP, is being implemented through a six-year
partnership with the Government of Rajasthan. The
programme endeavours to deliver a child-centric
learning environment in Government elementary
schools with the aim of instilling critical thinking
and meaningful learning among students. In its
second year now, STERP aims to bring about a
strategic shift in the State’s elementary education
system and bring it in line with the National
Curriculum Framework (NCF) 2005, the National
Curriculum Framework for Teacher Education
(NCFTE) 2009 and the Right to Education (RtE)
Act 2009.
The STERP programme has four key objectives,
the progress of which are as below:
(a) revision and renewal of curriculum, syllabus
guidelines and development of new textbooks:
During fiscal 2013, the curricula and syllabi for
Classes I to VIII have been revised and new
English textbooks for Classes VI, VII and VIII have
been developed. Publication of 13 new textbooks
has also since been approved, taking the total
number of new textbooks developed to 16.
(b) education and training of in-service teachers:
At least 300,000 in-service teachers in Rajasthan
need proper training to professionally develop
themselves in line with NCF 2005, NCFTE
2009 and RtE 2009. The training is being
conducted on a ‘cascade’ model through a
two-tier structure involving 250 Key Resource
Persons (KRPs) and 2,500 Master Trainers
(MTs). Training modules for English textbooks
(Class VI to VIII) were developed and training
was conducted by 70 KRPs and 500 MTs for
25,000 in-service teachers.
Annual Report 2012-2013 P1
Promoting Inclusive Growth
The curriculum and syllabus for the Basic
School Training Certificate (BSTC) programme
have also been revised, approved and placed
in the public domain for feedback.
(c) Governance and Institutional Accountability:
The RtE Act 2009 specifies that every child
in the age group of 6 to 14 years has a right
to good quality and free education. The RtE
also mandates recruitment and training of an
adequate number of trained teachers to be
able to meet the required ratio of one teacher
for every 30 students. Apart from training
teachers, STERP also supports professional
development of administrative functionaries,
including District Education Officers, Block
Education Officers and District Project
Coordinators.
Through STERP, ICICI Foundation aims to cover
the issues impacting the learning environment.
At the district level, Teacher Support Units
(TSUs) have been created within the District
Institute of Education and Training (DIET).
150 demonstration schools from the districts
of Baran, Churu and Jaipur in Rajasthan have
been taken up as part of the endeavour for
capacity building and making the schools RtE
compliant.
This
includes establishment of School
Management Committees (SMCs) comprising
community-based groups of parents and
stakeholders to oversee on these schools.
TSUs provide
to on-ground
full support
resource personnel delivering academic inputs
and support to school teachers.
Work is continuing with SMCs having been
constituted in 127 schools. Further, 40 Nodal
Head Masters have completed training. They
will be responsible for management of a cluster
of schools.
(d) Impact Assessment:
The programme seeks to assess the impact of
its intervention continuously. An independent
baseline study identified poor knowledge and
learning indicators of teachers and students.
Some insights from this study were taken
P2
A meeting of State Steering Committee, comprising national
and state-level educationists, government education
functionaries and specialist organisations
into account while developing the textbooks
and the training programme. Steps have also
been initiated for documenting the entire
process of ICICI Foundation’s intervention.
This highlights various stages in the evolution
of this programme with the aim of delivering
quality education.
HIGHLIGHTS
• Process for development of new
textbooks has been achieved through a
national consultative mechanism
• A Teacher Educator Group (TEG) has
been formed, comprising about 500
experts and academicians from the
state and national educational agencies,
educational institutions and universities
to develop textbooks
• Sub-groups of TEG assess the content
through multiple stages of evaluation
before presenting it to the State
Steering Committee (SSC) for its final
approval
• Upon approval, the material is placed in
the public domain inviting suggestions
from the public at large
Promoting Inclusive Growth
ii) school and Teacher education reform
Programme, chhattisgarh:
In 2002, keeping in mind the specific socio-
cultural background of the newly formed state
of Chhattishgarh, ICICI Bank and its partners
developed new curricula and textbooks for Classes
I to VIII.
These textbooks have been in use since 2007
benefitting around five million children. Further, in
2012, the Foundation signed a MoU for School and
Teacher Education Reform Programme with the
Government of Chhattisgarh to enable qualitative
improvement in teaching-learning processes in
coordination with the State Council for Educational
Research and Training (SCERT) by:
• Revising State Curriculum Framework, 2007 in
line with RtE, 2009, instituting a mechanism
for periodic review of textbooks
• Pre-service and in-service teacher education
(including 40,000 untrained teachers)
• Developing four District Institutes of Education
& Training (DIETs) as subject specific centres of
excellence
• Developing 100 schools in Chattisgarh as RtE
compliant model schools
iii) english relay Programme, Assam:
ICICI Foundation has successfully completed the
English Relay Programme (ERP) pilot project in 100
government schools in Kamrup district, Assam. The
pilot project aims to enhance teachers’ capacities
and students’ competencies in basic language
skills, such as Listening, Speaking, Reading and
Writing (LSRW) through the ERP kits. These
kits were distributed across 100 pilot schools in
Kamrup district with 239 English Teachers being
trained and 14,000 students in Classes I-V being
benefitted from the programme.
2. Primary health
i) outpatient healthcare Programme, odisha
& Gujarat:
The Rashtriya Swasthya Bima Yojana (RSBY) unit
of Ministry of Labour and Employment (MoLE), in
partnership with Microinsurance Innovation Facility
of International Labour Organisation (ILO) and ICICI
Foundation, successfully launched the Outpatient
Healthcare Pilot project. The project has sought
to provide outpatient benefits to the marginalised
people belonging to the Below Poverty Line (BPL)
segment. The pilot was initiated in the districts of
Puri in Odisha and Mehsana in Gujarat. It had the
following objectives:
• To improve health seeking behaviour among
people belonging to BPL and other marginalised
segments
• To ensure delivery of quality healthcare to them
• To reduce out-of-pocket expenses for quality
healthcare
A Master Trainer of the English Relay Programme
demonstrating alternative teaching methods to improve
learning effectiveness among children
Under the pilot more than 91,400
beneficiaries in Puri and around 49,000 in
Mehsana have utilised RSBY outpatient
services, till February 2013. With high
satisfaction levels among beneficiaries and
the healthcare providers, the initiative is
proposed to be scaled-up in the
coming months.
Annual Report 2012-2013 P3
Implemented by ICICI Lombard General Insurance
Company (ICICI General) on an insurance model in
partnership with Central and State Governments,
the programme uses the RSBY platform for
technology and infrastructure.
ICICI Foundation, which funds the insurance
programme, is the Chief Learning Partner and is
responsible for the research and evaluation of this
project. Based on the encouraging outcome of the
pilot project, the Central Government has decided,
in principle, to incorporate outpatient care in the
RSBY programme.
Encouraged by the success of the outpatient
healthcare pilot project, states such as Punjab,
Uttarakhand, Mizoram and Andhra Pradesh have
carried out similar experiments. The decision to
extend outpatient healthcare facilities in all the
RSBY hospitals will add a new dimension to the
scheme.
ii) strengthening convergent Action
for
reducing child undernutrition (scArcu),
rajasthan:
For the past 35 years, India has been fighting
against malnutrition through the Integrated Child
Development Scheme (ICDS). However, under-
nutrition still continues to remain unacceptably high
especially in rural and tribal areas. Improvement
in child nutrition can only be achieved by working
Inaugural ceremony of ICICI Foundation’s Strengthening
Convergent Action for Reducing Child Undernutrition
programme, in partnership with Government of Rajasthan
P4
on a comprehensive model
for prevention,
management and treatment of malnutrition and
childhood illnesses.
ICICI Foundation has been working on a three-
year convergent health and nutrition project in
Baran, Rajasthan. The SCARCU programme of
the Foundation works with active involvement
ICDS and National Rural Health Mission
of
(NRHM) departments along with the Health
Department, Government of Rajasthan. This is
being implemented in 253 Anganwadi Centres
(AWC) across Shahabad and Kishanganj blocks of
Baran district, in partnership with Department of
Women and Child Development (WCD) and the
Medical Health and Family Welfare Department,
Government of Rajasthan.
HIGHLIGHTS
• Capacity building of the Anganwadi
Workers
• Severely Acute Malnourished (SAM)
children are being identified and
referred to either Primary Health
Centres (PHC) or Malnutrition Treatment
Centres (MTC) for treatment
• Under the programme, health of these
children is continuously monitored even
after discharge
• Poshan Marg©, an Information and
Communications Technology (ICT)
based interactive platform for data
collection and analysis, is being
implemented across the 253 AWCs
covered under the programme
iii) Apna clinic:
Apna Clinic, an ICICI Foundation initiative, provides
healthcare and counselling on health, hygiene and
road safety to truckers passing through Transport
Nagar at Nigdi in Pune, Maharashtra. Commenced
in 2011, Apna Clinic is a three-year pilot project
which strives to increase health-seeking behaviour
Promoting Inclusive Growth among long route truck drivers and improve their
knowledge on road safety. The clinic provides
a friendly environment for truck drivers to visit
and interact with fellow truckers and to receive
counselling from qualified doctors and health and
hygiene specialists. Apart from clinical services,
yoga and training sessions are also conducted at
the clinic premises for these truckers.
Truckers availing services on healthcare, hygiene and road
safety at Apna Clinic
Since its launch in 2011, the project has touched
the lives of 20,000 truckers through various
activities. Around 10,830 truckers have availed
treatment at the clinic for illnesses like viral
fever and malaria. Those suffering from chronic
problems are referred to doctors and hospitals in
the referral list where they receive treatment at
nominal charges. Under this initiative:
• 2,000 truckers have undergone diagnostic
tests
• 83 health camps were conducted that reached
out to 1,634 truckers
• 347 yoga sessions have been conducted for
2,729 truckers
• 691 health games have been conducted for
15,550 truckers
• 463 street plays have been conducted
3. sustainable livelihoods
rural self-employment Training Institute
(rseTI):
The RSETIs at Udaipur and Jodhpur districts were
taken over by ICICI Bank in May 2010 after the
merger of Bank of Rajasthan with ICICI Bank. ICICI
Foundation has been managing these RSETIs on
behalf of ICICI Bank since 2011. Both the RSETIs
adhere to guidelines issued by National Institute
of Rural Development
(NIRD) by conducting
training programmes primarily for the rural and
marginalised youth. Like other RSETIs, these are
monitored by the National Academy of RUDSETI
(Rural Development and Self Employment Training
Institute), also referred to as NAR.
intensive short-term
residential
RSETIs offer
training and on-location training courses in various
vocations. Some of these programmes are mobile
repairing, electrical wiring, masonry,
leather
goods manufacturing, dairy management, vermin
composting, food preservation, tailoring, hand
embroidery, bag making, beauty parlour training
and bamboo products manufacturing. The focus
of the programme is on market demand-based
training, wherein requirement of various local
employers is mapped for developing relevant and
contextual curricula for training of the youth. This
initiative has ensured better employability of the
youth trained by the RSETIs. ICICI Foundation
also provides placement support to the trainees.
Another initiative is the introduction of Satellite
Centres which brings ‘training-at-doorstep’ model
to the youth. Several such centres have already
A joint initiative between RSETI and Department of Forests,
Rajasthan provides sustainable livelihoods options in
bamboo-based enterprises
Annual Report 2012-2013 P5
been set up. The vocational training courses are
further enriched to include sessions on financial
literacy, yoga and physical education. Over 70%
of the trainees are already placed in jobs. Credit
linkages are also being provided to entrepreneurs
wishing to start their own enterprises.
HIGHLIGHTS
5. other Programmes
i) IcIcI fellows:
Initiated in 2010, ICICI Fellows is a pioneering
youth leadership programme which aims to create
socially responsible leaders with a passion for
development. The programme includes a mix of
classroom training and on-the-job project internship
with NGOs working in rural areas. The development
interspersed with
projects with NGOs are
modules on management training and leadership
development as well. It targets graduates in the age
group of 21-28 years who have displayed a good
academic record and leadership qualities. The
third batch of ICICI Fellows is undergoing training.
ICICI Foundation will continue to train and mentor
them to help them bring about positive change in
their chosen fields.
•
NAR has commended both RSETIs for
outstanding performance
• RSETIs and Satellite Centres in Udaipur
and Jodhpur districts are currently
training our 350 beneficiaries
per month
• The training capacity is being scaled up
4. financial Inclusion
Under ICICI Foundation, the Financial Literacy
Programme has been rolled out as an integral
part of the RSETI courses in Udaipur and Jodhpur.
Financial
literacy modules have also been
developed for women members of Self Help
Groups (SHGs) and students of Classes XI and
XII in Baran district, Rajasthan. The programme
aims to reach out to all the 10,000 members of
the selected SHGs and 2,500 school students. It
focusses on imparting awareness about the basics
of finance and the usage of organised banking
and insurance channels.
Ms Chanda Kochhar, MD & CEO of ICICI Bank with the first
batch of ICICI Fellows at their convocation ceremony in
June 2012
ii) Blood donation:
ICICI Foundation partnered with the State Blood
Transfusion Council (SBTC) to organise blood
donation drives at ICICI Bank offices across the
Mumbai Metropolitan Region. The blood donated
by the Bank’s employees is supplied to SBTC’s
premier blood bank, Mahanagar Rakthpedhi,
which provides safe blood at nominal price to
people of all socio-economic backgrounds in
P6
Promoting Inclusive Growth schemes and the urban poor. Around 47% of the
Bank’s branches are in rural and semi-urban areas.
The Bank’s rural branch network is being extended
to unbanked villages. The Bank has opened 131
Gramin branches at unbanked villages in the
states of Punjab, Rajasthan, Madhya Pradesh,
Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu,
Odisha, West Bengal and Karnataka. The Bank is
working with over 25 Business Correspondents
(BCs) who have a network of over 7,500 Customer
Service Points (CSPs), covering more than 13,500
villages across India.
Through its branches and BC network, the Bank
has facilitated the opening of about 14.9 million
basic savings bank deposit accounts. The branches
partner with BCs to deliver savings products to
low-income customers. The Bank’s micro savings
products include micro savings accounts, fixed
insurance and
deposits,
electronic benefit transfer of different Government
subsidies and payments.
recurring deposits,
A key pillar of the FI plan is the Bank’s ability to
innovate platforms to facilitate remittance services.
Its ‘Mobile Money’ platform, offered in conjunction
with leading telecom network providers, has been
specifically designed for the unbanked population.
This enables customers to transfer money in a
safe, secure and instant manner through their
mobile phones without getting connected to data
services.
2. Payroll Giving
Since 2003, ICICI Bank has been facilitating
employee donations to various social causes to
make a difference through monthly contributions.
This has been enabled through GiveIndia, an
e-platform where one can choose from a wide
range of social causes espoused by more than
150 charities. During fiscal 2013, 6,500 employees
participated
in the payroll-giving programme
and contributed around ` 10 million. Employees
contribute a part of their monthly salary to various
charities through GiveIndia by participating in the
payroll giving programme. The Bank’s employees
Annual Report 2012-2013 P7
A total of 2,662 ICICI Bank employees participated in the
blood donation camps
Mumbai. Commenced in 2011, a total of 2,662
employees have so far participated in these blood
donation camps.
iii) Inclusive India series:
In order to create awareness about inclusive growth
across the country, ICICI Foundation partnered
CNBC TV18 to create a programme called ‘Inside
India - Ideas for Inclusive Growth’. This three-part
initiative included the Inside India TV series, the
Inside India Summit in New Delhi and the Inclusive
India Awards in Mumbai. A viewership market
survey conducted by Nielsen to assess the impact
of the social sector programmes supported by the
ICICI Group has shown positive results.
IcIcI BAnk
1. financial Inclusion
ICICI Bank’s initiative on Financial Inclusion (FI)
aims to provide banking services to the unbanked
and underbanked population. The FI strategy
hinges on three key pillars: providing basic banking
services to villagers and urban poor, increasing
penetration of credit products for these customers
and innovative use of technology solutions to
reduce costs of providing these services.
The Bank has been providing basic financial
services to the unbanked and underbanked
population comprising small and marginal farmers,
daily wage labourers, beneficiaries of government
also celebrated the ‘Joy of Giving Week’ during
October 2-8, 2012 in partnership with GiveIndia.
IcIcI PrudenTIAl lIfe InsurAnce
comPAny (IcIcI lIfe)
At ICICI Life, sustainability is an integral part of
business. ICICI Life serves over eight million
customers and fulfills their needs for protection,
health and
through a
retirement solutions
gamut of savings and investment products. Its
Corporate Social Responsibility (CSR) policy is also
committed towards supporting the under-served
communities by protecting their livelihood and
healthcare needs, while also supporting children
and the elderly.
During fiscal 2013, ICICI Life has taken ahead the
goal of financial inclusion by way of distribution of
its micro insurance product, Sarva Jana Suraksha.
The product was distributed through a wide
network of over 60 partners to more than 296,000
rural customers spread across 10 states.
The Company also partnered with a hospital to offer
subsidised/free dialysis treatment to over 3,300
diabetic patients near Bangalore. Additionally,
support was extended towards the education of
650 underprivileged children through scholarships
and mid-day meal programmes in Mumbai and
Hyderabad. A key aspect of its CSR vision is to
let the employees embrace the spirit of giving.
The Company runs a payroll giving programme
and encourages employee volunteering, such as
offering fellowship for the Teach for India initiative.
IcIcI lomBArd GenerAl InsurAnce
(IcIcI GenerAl)
ICICI General has been working actively towards
the achievement of Financial Inclusion through
various Government-funded mass
health
insurance schemes. In fiscal 2013, ICICI General
covered 5.4 million families in 65 districts across
seven states and union territories under the RSBY
programme. It also provided insurance to 1.8
million handloom weavers and ancillary workers
under a designated health insurance scheme.
Apart from mass health insurance schemes, ICICI
General also provides weather insurance. It has
pioneered an index-based crop insurance, covering
nearly three million farmers across 81 districts in
12 states.
P8
Promoting Inclusive Growth A network that spans
the rural hinterland
Fostering savings and
building rural wealth
Promoting Inclusive Growth
Inclusive growth has to encompass all segments
of the population not only by income but by
where they live – be it urban India or rural India.
The penetration of financial services is low in rural
India, and enhancing access to financial services
is an important pillar of inclusive growth.
Today, rural India is evolving rapidly and is
changing in character. It has diversified from just
agriculture to manufacturing and services sectors.
Rural India has demonstrated the potential to be a
sustainable growth engine for the economy.
Our rural and inclusive banking strategy is to
rapidly expand in the rural markets, leverage
our strengths in technology and deliver relevant
products and services to the rural and unbanked
population through a multi-channel network.
Spine to be
adjusted by printer
Spine to be
adjusted by printer
Vision
To be the leading provider of financial
services in India and enhance our
positioning among global banks
through sustainable value creation.
Mission
To create value for our stakeholders by:
• being the financial services provider
of first choice for our customers by
delivering high quality, world-class
products and services
• playing a proactive role in the full
realisation of India’s potential and
contributing positively in all markets
where we operate
• maintaining high standards of governance
and ethics; and balancing growth,
profitability and risk to deliver and sustain
healthy returns on capital
“Licensed to post under prepayment of postage in cash system under License No.MR/Tech/ICICI Bank/A.R./Prepaid/2013 “
19th Annual Report and Accounts 2012-2013
Spine to be
adjusted by printer
Promoting Inclusive Growth
ICICI BANK LIMITED
ICICI Bank Towers
Bandra-Kurla Complex
Mumbai 400 051
www.icicibank.com
1
9
t
h
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
2
-
2
0
1
3
Spine to be
adjusted by printer