A-2 b)(ii) Qualitative Disclosure:

From 1st January 2015, the bank has implemented guidelines on Liquidity coverange Ratio (LCR) of the Reserve Bank of India.

The LCR standard aims to ensure that a bank maintains an adequate level of unencumbered HQLAs that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly severe liquidity stress scenario. The LCR are applicable for Indian banks initially w.e.f. 1st January 2015 on a stand-alone basis including overseas operations through branches and subsequently at consolidated basis w.e.f. 1st January 2016 i.e. including domestic and overseas subsidiaries.

"The LCR has two components:

(i) The value of the stock of high-quality liquid assets (HQLA) in stressed conditions.

(ii) Total net cash outflows: The term “Total net cash outflows” is defined as “Total expected cash outflows” minus “Total expected cash inflows” in the specified stress scenario for the subsequent 30 calendar days (the stressed period)."

Lcr = Stock of high quality liquid assets (HQLAs) _> ^

Total net cash outflows over the next 30 calendar days ^_

As per the RBI guidelines dated 31st March 2014, the Bank has made LCR disclosure on solo basis from the financial year ending March 2016. In terms of extant guidelines, disclosure on consolidated basis was applicable to the Indian banking system from 1st January 2016. Starting from January 2017, the bank had to disclose LCR on daily average basis .Hence the bank has computed LCR on daily average basis both for Solo and Consolidated Level since March 2017. As per the RBI guidelines on LCR dated 9th June 2014, the bank has to maintain minimum LCR of 100% with effect from January 01, 201 9.

Composition of HQLA

Based on daily averages for the quarter ended March 2023, Facility to Avail Liquidity for Liquidity Coverage Ratio constitutes the highest portion of HQLA i.e. 65.81% followed by Government Securities in excess of minimum SLR requirement which constitute 14.24%. Level 2 assets which are lower in quality as compared to Level 1 assets, constitute nominally 0.14% of total stock of HQLA against maximum mandated level of 40%.

Main drivers of LCR:

The Bank on a consolidated basis, during the three months ended March 31, 2023, had maintained average HQLA (after haircut) of ' 2,51,571.30 Crs as against the average minimum requirement of ' 1,72,565.09 Crs for maintaining regulatory minimum LCR at 100%. The HQLA is primarily driven by government securities in excess of minimum SLR, Government securities within the mandatory SLR requirement, to the extent allowed by RBI under MSF and the Facility to Avail Liquidity for Liquidity Coverage Ratio. Also, cash, excess CRR maintained with RBI and other overseas central banks, securities issued by foreign sovereigns are important factors of HQLA. Level 2 HQLA primarily consisted of AA- and above rated corporate bonds and commercial papers.

Intra-period changes as well as changes over time:

LCR on consolidated basis were 143.30%, 142.34% and 135.36% for the months ending January 2023, February 2023 and March 2023 respectively as against the regulatory requirement of 100%.

Concentration of funding sources

A significant counterparty is defined as a single counterparty or group of connected or affiliated counterparties accounting in aggregate for more than 1% of the bank’s total liabilities. There was no significant counterparty Deposit as of 31st March 2023.

A "significant instrument/product" is defined as a single instrument/product of group of similar instruments/products which in aggregate amount to more than 1% of the bank's total liabilities. Example of funding instruments/products -wholesale deposits, certificates of deposits, long term bonds, etc. Significant instrument/product of Domestic Operations as of March 31, 2023 were Wholesale Deposits i.e. 11.35% of Global Liabilities, Retail Term Deposits i.e. 28.47% of Global

Liabilities, Demand Deposits i.e. 5.15% of Global Liabilities, Savings Deposits i.e.25.19% of Global Liabilities and Certificate of Deposits i.e. 1.66% of Global Liabilities.

Top 20 depositors of the bank at domestic operations constitute 4.40% of our total deposits of Global Operations.

Currency mismatch in the LCR:

As per the RBI guidelines while the LCR standard is required to be met on one single currency, in order to better capture potential currency mismatch the LCR in each currency needs to be monitored. Accordingly, Bank is maintaining LCR on daily basis in INR and the same is compared against the regulatory requirement, but on other significant currencies (A significant currency is one where aggregate liabilities denominated in that currency amount to 5 per cent or more of the bank’s total liabilities), bank is preparing LCR on monthly basis for the submission to RBI under “BLR-4 - LCR” and to monitor the same. Bank is not required to maintain LCR as per regulatory limits on each significant currency.

Considering the overall balance sheet of the bank,the impact of USD outflows at consolidated level is minimal. The outflows in USD of territories are managed by territory level and that of domestic treasury where adequate HQLA is maintained at Bank level.

The liquidity management for the Bank on enterprise wide basis is the responsibility of the Board of Directors. Board of Directors has delegated its responsibilities to a Committee of the Board called as the "Risk Management Committee of Board” and "Asset Liability Management Committee (ALCO)".The RMCB/ALCO is responsible for overseeing the inter linkages between different types of risk and its impact on liquidity.

Bank has Group ALM Policy which provides the broad guidelines under which all the entities within the Group operate in terms of liquidity and interest rate risk. The bank’s entities operating in foreign countries manage liquidity in the short-term on their own on an ongoing basis as per both respective territory’s ALM policy and Group ALM policy.

The guidelines of the Group ALM policy, unless otherwise specifically exempted, apply to overseas operations as well. All the legal entities of the bank i.e. subsidiaries, joint ventures and associates manage their operational liquidity on an ongoing basis their own according to their business models and liquidity requirement. As to the legal entities carrying out banking business, they have their own ALM Policy in line with the host country guidelines as well as RBI guidelines whichever is more stringent.

A-2 c) Net Stable Funding Ratio (NSFR)

The RBI guidelines stipulated the implementation of NSFR effective from 1st October 2021 at a consolidated level with disclosure from quarter ended December 2021. Accordingly, the bank is computing the Consolidated NSFR. The NSFR is defined as the amount of Available Stable Funding relative to the amount of Required Stable Funding.

Nsfr= Available Stable Funding (ASF)

Required Stable Funding (RSF)

Available stable funding (ASF) is measured based on the broad characteristics of relative stability of funding sources, including contractual maturity of its liabilities and the differences in the tendency of different types of funding providers to withdraw their funding. Required Stable Funding (RSF) is a function of the liquidity characteristics and residual maturities of the various assets held by the bank including Off-Balance Sheet (OBS) exposures.

The table attached herewith sets out the un-weighted and weighted value of the NSFR components as on March 31,2023 based on audited financials.

At a consolidated level, the NSFR of the bank comes out to 122.91 % as on March 31, 2023 against the requirement of 100% as per RBI guidelines.

Significant /Key Drivers:

The significant drivers of Available Stable Funding (ASF) are capital, Retail & small business customer deposits & wholesale funding.The capital constitutes 12%, Retail deposits & small business customer deposits constitute 66% & wholesale deposits constitute 22% of available stable funding after applying associated weights.

The total required stabel funding is mainly driven by performing loans and securities which include financing various stake holders such as retail and small Business customer, No-financial corporate clients, performing residential mortgages and investment in securities that do not qualify as HQLA. These together constitute for 69% of total RSF after applying the associated weights.

c) Sales and transfer to/from Held to Maturity (HTM) Category

During the year ended March 31,2023 and March 31, 2022 , the value of sales/transfers of securities to/from HTM category did not exceed 5.0% of the book value of investments held in HTM category at the beginning of the year. Sales and transfers of securities to/from HTM category does not include one-time transfer of securities, direct sales from HTM for bringing down SLR holdings consequent to a downward revision in SLR requirements by RBI, sales to RBI under open market operation auctions and government securities acquisition program, repurchase of government securities by Government of India and state development loans by concerned state government under buyback or switch operations and additional shifting of securities explicitly permitted by RBI.

iii) As per directions of RBI vide letter no 10655/21.04.048/2018-19 dated 21.06.2019 (as amemded from time to time) disclosure with respect to accounts kept as standard due to the Court order, 2 (two) accounts are classified as Standard as per Court orders, with aggregate outstanding of ' 208.54 Crores against which the Bank is holding provision of ' 60.03 Crores as on March 31, 2023 as per IRAC norms, including provision for unrealized interest.

The Bank is holding additional provision of Rs. 913.46 Crore as of March 31, 2023 over and above the IRAC norms in certain stressed standard advances on prudent basis.

RBI vide their Circular no DBR.No.BP BC.45/21.04.048/2018-19 dated 7th June 2019 ( as amended from time to time) on Prudential Framework for Resolution of Stressed Assets guidelines for implementation of Resolution Plan , also containing requirements of additional Provisions as per para 17 of this RBI circular. The outstanding in such cases as on March 31, 2023 is ' 348.28 Crores and in compliance with the above RBI circular, The Bank is holding additional provision of ' 719.70 Crores as on March 31, 2023.

Divergence in asset classification and provisioning

No Disclosure on divergence in asset classification and provisioning for NPAs is required w.r.t RBI's annual supervisory process for year ended Mar 31,2022, based on the conditions mentioned in RBI Master Direction No RBI/DOR/2021-22/83 DOR.ACC.REC.No.45/21.04.018/2021-22 dated 30-08-2021 (as amended from time to time).

Disclosure of transfer of Loan exposures

Disclosure as per the RBI Master directions ref no RBI/ DOR/2021-22/86 DOR.STR.REC.51/21.04.048/2021-22

“Master Direction - Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021” dated 24.09.2021 is as under:

i) In respect of "Loans not in default”@, that are transferred or acquired

As per the Reserve Bank of India (RBI) circular no. RBI/2015-16/376 DBR No. BPBC.92/21.04.048/2015-16 dated April 18, 2016 the Bank has opted to provide the liability for frauds over a period of four quarters. Accordingly, the carry forward provision for other than advances as on March 31, 2023 is Rs.13.59 Cr which is to be amortized in the subsequent quarters by the Bank

h) Details of Resolution plan implemented under Resolution Framework for COVID 19 related stress as per RBI circular RBI/2020-21/16 DOR.No.BPBC/3/21.04.048/2020-21 dated 06.August 2020 (RF 1.0) and 05.05.2021 (RF 2.0):-

The exposure to Capital Market of ' 3,997.06 Crores is within the limit of ' 24,519.49 Crores (i.e. 40% of Bank’s Net worth of ' 61,298.73 Crores as on March 31,2022).

The direct exposure to Capital Market of ' 3,997.06 Crores is within the limit of ' 12,259.75 Crores (i.e. 20% of the Bank’s net worth of ' 61,298.73 Crores as on March 31,2022).

For restructuring of dues in respect of listed companies, lenders may be ab initio compensated for their loss / sacrifice (diminution in fair value of account in net present value terms) by way of issuance of equities of the company upfront, subject to the extant regulations and statutory requirements.

- If such acquisition of equity shares results in exceeding the extant regulatory Capital Market Exposure (CME) limit, details of the same is as under- NA.

c) Risk Category wise Country Exposure

Total Net Funded Exposure as on 31.03.2023 is ' 1,63,083 Crores. Total assets of the bank as on 31.12.2022 were ' 13,92,767 Crores, 1% of which comes to ' 13,928 Crores. Total net funded exposure of three countries namely USA, UK and UAE are amounting to ' 39,760 Crore, ' 22,422 crores & ' 31,901 Crores respectively, is more than 1% of the total assets of the Bank . As the total net funded exposure of the Bank on USA, UK and UAE happens to be more than 1% of total assets , provision of ' 61.47 Crores for USA and ' 47.27 crores for UK and for UAE ' 47.08 crores has been made in terms of RBI guidelines. USA and UK are rated “BOBSOV1" and UAE is rated “BOBSOV2" by BoB internally. As per Export Credit Guarantee Corporation of India (ECGC) classification, USA and UK are in the “Insignificant Risk Category” i.e. ‘A1’ and UAE is in the “Low Risk Category” i.e. ‘A2’.

Unhedged Foreign Currency Exposure

The Bank has in place a policy and process for managing currency induced credit risk. The credit appraisal memorandum prepared at the time of origination and review of a credit facility is required to discuss the exchange risk that the customer is exposed to from all sources, including trade related, foreign currency borrowings and external commercial borrowings. It could cover the natural hedge available to the customer as well as other hedging methods adopted by the customer to mitigate exchange risk. For foreign currency loans granted by the Bank beyond a defined threshold the customer is encouraged to enter into appropriate risk hedging mechanisms with the Bank. Alternatively, the Bank satisfies itself that the customer has the financial capacity to bear the exchange risk in the normal course of its business and / or has other mitigants to reduce the risk. The Bank has a policy of monthly review of information on the unhedged portion of foreign currency exposures of customers during the periods of high volatility in exchange rates. A Board approved credit risk rating linked limit on unhedged foreign currency position of customers is applicable when extending credit facilities to a customer. The compliance with the limit is assessed by estimating the extent of drop in a customer’s annual Earnings Before Interest and Depreciation (‘EBID’) due to a potentially large adverse movement in exchange rate impacting the unhedged foreign currency exposure of the customer. Where a breach is observed in such a simulation, the customer is advised to reduce its unhedged exposure.

In accordance with RBI guidelines, as at March 31, 2023, the amount of bank’s credit exposure against Unhedged Foreign Currency Exposure of borrowers attracting 20-80 bps provisions was ' 281.71 Crores. The additional RWA on this exposure is ' 4,040.49 crores against this additional minimum capital requirement is ' 464.65 Crores.

Based on the available financial statements and the declarations from borrowers, the Bank has estimated the liability for Unhedged Foreign Currency in terms of RBI circular DBOD.No.BPBC.85/21.06.200/2013-14 dated January 15, 2014 and is holding a provision of ' 281.71 Crores as on March 31, 2023 (Previous Year: ' 196.58 Crores).

c) Disclosures on risk exposure in derivatives (i) Qualitative Disclosure

a) Foreign exchange risk management & Gold, Derivative management policy of the bank lays down the types of financial derivative instruments, scope of usages, approval procedures and the limits like open position limits, stop loss limits and counter party exposure limits for undertaking derivative transaction. The bank uses financial derivative transactions for hedging, it’s on or off balance sheet exposure as well as for market making .Basically, these products are used for hedging risk, reducing cost and increasing the yield in such transactions and for proprietary trading.

b) The types of risk to which the bank is exposed to are credit risk, market risk, country risk and operational risk, The Bank has risk management policies (approved by the Board), which is designed to measure the financial risks for transactions in the trading book on a regular basis, by way of MTM, Value at Risk (VaR) and PV01, and to set appropriate risk limits. These are monitored by means of reliable and up to date Management Information Systems by the Risk Management Department of the Bank from time to time who, in turn, appraises the risk profile to the Risk management Committee of the Board, which is presided over by the Bank’s Managing Director and CEO.

c) The counter parties to the transactions are banks and corporate entities. The deals are done under approved exposure limits. The bank has adopted the current exposure method prescribed by Reserve Bank of India for measuring Credit Exposure on Derivative products as per which the bank sums the total replacement cost (obtained by mark to market of all its contracts with positive value i.e. when the bank has to receive money from the counter party) and an amount for potential future changes in credit exposure calculated on the basis of the total notional principal amount of the contract multiplied by the relevant credit conversion factors according to the residual maturity as detailed herein under:-

Conversion factor to be applied on notional principal amount

d) The following sections outline the nature and terms of the derivative transactions generally undertaken by the Bank.

Interest rate contracts

Forward rate agreements give the buyer the ability to determine the underlying rate of interest for a specified period commencing on a specified future date (the settlement date). There is no exchange of principal and settlement is effected on the settlement date. The settlement amount is the difference between the contracted rate and the market rate prevailing on the settlement date.

Interest rate swaps involve the exchange of interest obligations with the counterparty for a specified period without exchanging the underlying (or notional) principal.

Interest rate caps and floors give the buyer the ability to fix the maximum or minimum rate of interest. The writer of the contract pays the amount by which the market rate exceeds or is less than the cap rate or the floor rate respectively. A combination of interest rate caps and floors can create structures such as interest rate collar, cap spreads and floor spreads.

Interest rate futures are standardized interest rate derivative contracts traded on a recognized stock exchange to buy or sell a notional security or any other interest bearing instrument or an index of such instruments or interest rates at a specified future date, at a price determined at the time of the contract.

Exchange rate contracts

Forward foreign exchange contracts are agreements to buy or sell fixed amounts of currency at agreed rates of exchange on future date. These instruments are carried at fair value, determined based on either FEDAI rates or market quotations.

Cross currency swaps are agreements to exchange principal amounts denominated in different currencies. Cross currency swaps may also involve the exchange of interest payments on one specified currency for interest payments in another specified currency for a specified period.

Currency options (including Exchange Traded Currency Option) give the buyer, on payment of a premium, the right but not an obligation, to buy or sell specified amounts of currency at agreed rates of exchange on or before a specified future date.

Currency futures contract is a standardized contract traded on an exchange, to buy or sell a certain underlying currency at a certain date in the future, at a specified price. The underlying instrument of a currency future contract is the rate of exchange between one unit of foreign currency and the INR.

The Bank’s derivative transactions relate to sales and trading activities. Sale activities include the structuring and marketing of derivatives to customers to enable them to hedge their market risks (both interest rate and exchange risks), within the framework of regulations as applicable from time to time. The Bank deals in derivatives on its own account (trading activity) principally for the purpose of generating a profit from short term fluctuations in price yields or implied volatility. The Bank also deals in derivatives to hedge the risk embedded in some of its Balance Sheet assets or liabilities.

Constituents involved in derivative business

The Treasury front-office enters into derivative transactions with customers and inter-bank counterparties. The Bank has an independent backoffice and mid-office as per regulatory guidelines.

Provisioning, collateral and credit risk mitigation

The Bank enters into derivative transactions with counter parties based on their business ranking and financial position. The Bank sets up appropriate limits upon evaluating the ability of the counterparty to honor its obligations in the event of crystallization of the exposure. Appropriate credit covenants are stipulated where required, as trigger events to call for collaterals or terminate a transaction and contain the risk.

For derivative contracts designated as hedging instruments, the Bank documents, at inception of the hedge, the relationship between the hedging instrument and the hedged item, the risk management objective for undertaking the hedge and the methods used to assess the hedge effectiveness. Hedge effectiveness is ascertained at the time of inception of the hedge and periodically thereafter. Hedge effectiveness is measured by the degree to which changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk are offset by changes in the fair value or cash flows of the hedging instrument using various qualitative and quantitative methods.

The hedge/non-hedge (market making) transactions are recorded separately. Derivative positions, unless designated as hedges, are marked-to-market (MTM) and the resulting losses, if any, are recognized in the Profit and Loss Account. Profit, if any is not recognized.

Income and Expenditure relating to interest rate swaps are recognized on accrual basis. Gains/losses on termination of the trading swaps are recorded on the termination date as income/expenditure.

As per the RBI Guideline RBI/2018-19/222 FMRD. DIRD.19/14.03.046/2018-19 dated June 26, 2019 Bank follows the ICAI guidelines for the hedge accounting of derivative contracts. For transactions designated as hedges, following treatment is followed-

• In case of a fair value hedge, the changes in the fair value of the hedging instruments and hedged items are recognized in the Profit and Loss Account,

• In case of cash flow hedges, the changes in fair value of effective portion are recognized in Reserves and Surplus under ‘Cash flow hedge reserve’ and ineffective portion of an effective hedging relationship, if any, is recognized in the Profit and Loss Account. The accumulated balance in the cash flow hedge reserve, in an effective hedging relationship, is recycled in the Profit and Loss Account at the same time that the impact from the hedged item is recognized in the Profit and Loss Account.

The Bank enters into derivative transactions with counterparties based on their business ranking and financial position. Appropriate credit covenants are stipulated where it is required, as trigger events to call for collaterals or terminate a transaction and minimize the risk. Further, to mitigate the current exposure in non-centrally cleared forex and derivative transactions, Bank has entered into Credit Support Annex (‘CSA’) agreements with major international counterparty banks and few Indian financial institutions. The Bank, at the minimum, confirms to the RBI guidelines with regard to provisioning requirements. Overdue receivables representing crystallized positive mark to market value of a derivative contract are transferred to the account of the borrower and treated as non-performing assets, if these remains unpaid for 90 days or more.

The notional principal amounts of derivatives reflect the volume of transactions outstanding as at the Balance Sheet date and do not represent the amounts at risk.

For the purpose of this disclosure, currency derivatives include currency options purchased and sold and cross currency interest rate swaps,Currency Futures.

For the purpose of this disclosure, interest rate derivatives include interest rate swaps,Forward rate agreements and interest rate caps and floors.

Credit Default Swaps (CDS)

As per RBI guidelines on CDS dated 23rd May, 2011 the banks are required to value their CDS contracts by using daily CDS curve published by FIMMDA Or any other proprietary model if it results in a more conservative valuation. The Bank uses the FIMMDA curve for valuing CDS positions; the Bank does not use any internal proprietary model for CDS valuation. However, the Bank does not have any CDS deal outstanding as on 31st March 2023 ( 31st March 2022 - Nil)

Number of Investors’ complaints pending at the beginning of the year was NIL. The Bank has received 917 Investors’ complaints during the year ended March 31,2023. 915 complaints have been disposed of during the year. There are 2 pending Investors' complaints at the end of the year.

Definitions of certain items in Business ratios / information:

1. Working funds to be reckoned as average of Total Assets (Excluding accumulated losses, if any) as reported to Reserve Bank of India in Form X, during the 12 months of the Financial Year.

2. Net Interest Income/ Average Earning Assets. Net Interest Income= Interest Income - Interest Expense

3. Return on Assets would be with reference to average working funds (i.e. total of assets excluding accumulated losses, if any).

4. For the purpose of computation of Business per Employee (Deposit plus Advances) inter Bank Deposits are excluded.

b) Disclosure Regarding Bancassurance Business

Income earned for marketing third party products

As a consistent practice, the Bank has continued to make provision of 20% on the secured sub- standard advances as against the regulatory minimum requirement of 15%. In addition to the above, the Bank has also continued to maintain provision on non-fund based facilities of NPA borrowers, by applying 50% Credit conversion factor (CCF), based on the asset class of the fund based facility of the borrower. The Bank also continues to make 100% provision on certain classes of non-performing retail advances.

Implementation of IFRS Converged Indian Accounting standards (Ind AS)

RBI vide Circular DBR.BPBC.No.29/21.07.001/2018-19 dated March 22, 2019 deferred implementation of Ind AS till further notice. However, RBI requires all banks to submit Proforma Ind AS financial statements every half year. Accordingly, the Bank is preparing and submitting to RBI Proforma Ind AS financial statements every half year after approval of Steering Committee headed by ED (R,C & SARG) formed for monitoring of implementation of Ind AS in the Bank.

h) Disclosure on amortization of expenditure on account of enhancement in family pension of employees of Banks

Bank has estimated the additional liability on account of revision in family pension for employees as per IBA Joint Note dated November 11, 2020, amounting to ' 1,454.41 Crores. However, RBI vide their Circular RBI/2021 -22/105 DOR. ACC. REC.57/21.04.018/2021 -22 dated 4th October 2021, has permitted Banks to amortize the said additional liability over a period of not exceeding 5 (five) years, beginning with financial year 2021-22, subject to a minimum of 1/5th of the total amount being expensed every year. Bank has opted the said provision, and accordingly charged an amount of ' 290.88 Crores to the Profit & Loss account for the FY ended March 31,2023 and the balance unamortized expense of ' 872.65 Crores has been carried forward. Had the Bank charged the entire additional liability to the Profit and Loss Account, the net profit (after tax) for the FY ended March 31, 2023 would have been lower by ' 653.00 Crores.

i. Reserves and Surplus Statutory Reserve

The Bank has made an appropriation of ' 3,527.40 Crores (Previous Year: ' 1,814.34 Crores) out of profits for the year ended March 31, 2023 to the Statutory Reserve pursuant to the requirements of Section 17 of the Banking Regulation Act, 1949 and RBI guidelines dated September 23, 2000

Capital Reserve

Capital Reserve includes appreciation arising on revaluation of immovable properties, amount subscribed by Government of India under the World Bank’s Scheme for Export Development Projects for small / medium scale industries and others.

During the year ended March 31, 2023, the Bank appropriated ' 92.57 Crores (Previous Year: ' 523.35 Crore), being the profit from sale of investments under HTM category and profit on sale of immovable properties, net of taxes and transfer to statutory reserve, from the Profit and Loss Account to the Capital Reserve

Investment Fluctuation Reserve

In accordance with RBI guidelines, banks are required to create an Investment Fluctuation Reserve (IFR) equivalent to 2% of their HFT and AFS investment portfolios, within a period of three years starting fiscal 2019, subject to profit availability after statutory appropriation. During the year ended March 31,2023, the Bank has made ' 30.00 Crores appropriation to the Investment Fluctuation Reserve from the Profit and Loss Account. (Previous Year: ' 2,368.42 Crore)

Disclosure in terms of Accounting Standards (AS) issued by the institute of Chartered Accountants of India

Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies (Accounting Standard -5)

Prior Period Items:

During the year, there were no material prior period income / expenditure items.

Accounting policy:

The Bank has continued to follow the same accounting policies and practices in preparation of financial results for the quarter / year ended March 31,2023 as followed in the previous financial year ended March 31, 2022. The Bank had, during the current financial year implemented the Hedge accounting for derivative contracts in respect of overseas investments made by International territories of the Bank and in respect of outstanding capital hedging deals towards net investments in overseas branches in accordance with the Guidance Note on Accounting for derivative contracts issued by Institute of Chartered Accountants of India. Hitherto, i.e. up to financial year 2021-22, the accounting for such contracts was being done as per Accounting Standard- 11. “The effects of charges in foreign exchange rates” issued by ICAI.

Consequent to this change, the profit for the year is higher by ' 6,026 lakhs and lower for the quarter by ' 9,629 lakhs.

B-3 Employee Benefits (Accounting Standard -15)

B-3.1 The Bank has adopted the Accounting Standard (AS-15) issued by ICAI.

B-3.2 Gratuity

The Bank pays gratuity to employees who Exit from Bank’s service, after initial service period of five years. Accordingly, the Bank makes contributions to an inhouse trust, towards funding this gratuity, payable every year. In accordance with the rule of Gratuity Fund, actuarial valuation of gratuity liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the Projected Unit credit actuarial method. The investment of the funds is made according to investment pattern prescribed by the Government of India.

The gratuity payable is worked out by way of three different schemes (BOBOSR,1979 /BPS, Gratuity Act,1972 and Bank of Baroda Gratuity Fund Rules) and the entitlement is based on what is most beneficial to employees.

B-3.3 Pension

B-3.3.1- Bank pays pension, a defined benefit plan covering the employees who have opted for pension and also to the employees joining the bank’s service on or after 29.9.1995 but before 01.04.2010. The plan provides for a pension on a monthly basis to these employees on their cessation from service of the Bank in terms of Bank of Baroda (Employees’) Pension Regulations, 1995. Employees covered under Bank of Baroda (Employees’) Pension Regulations, 1995 are not eligible for Bank’s contribution to Provident fund. At the time of cessation, those eligible for pension are paid commutation of Pension as provided by the said Regulations. While the Bank contributes its contribution at 10% of eligible employees’ Basic and certain allowances, additional contribution is also made based on the Actuarial calculations.

B33.2 New Pension Scheme- In terms of Bipartite Settlement and Joint Note dated 27.04.2010 between IBA and Employees Organizations’ on extending

another option for pension, employees joining the services of the Bank on or after 01.04.2010 are eligible for the Defined Contributory Pension Scheme, which was introduced by the Bank in terms of the Joint Note / Settlement dated 27.04.2010 similar to the one governed by the provisions of New Pension Scheme introduced for the employees of Central Government w.e.f 01.01.2004 and as modified from time to time. Hence they are not eligible for becoming members of Bank’s Provident Fund Scheme and Pension Scheme. In respect of the employees of the Bank, who have joined the services of the Bank on or after 01.04.2010, deduction towards New Pension Scheme at the rate of 10% of the basic pay and dearness allowance from the salary with a matching contribution is made by the Bank and remitted to the NSDL which maintains the accounts. Funds are managed by the Pension Fund Manager. However, in terms of 11th BPS / 8th Joint Note dated 11.11.2020, Bank’s contribution has been enhanced from 10% of pay plus dearness allowance to 14 % w.e.f. 11th November 2020.

B-3.4 Provident Fund

The Bank is statutorily required to maintain a provident fund as a part of its retirement benefits to its employees who joined Bank’s service on or before 31.03.2010. This fund is administered by a trust managed by the Bank. Each employee who is member of PF contributes 10% of their basic salary and eligible allowances and the Bank contributes an equal amount to the PF in case of PF optee. The investment of the fund is made according to investment pattern prescribed by the Government of India.

B-3.5 Leave Encashment

An employee is entitled to encash privilege leave standing to his/her credit subject to a maximum of 240 days on the date of superannuation/Voluntary Retirement/death.

However, on resignation, an employee is entitled to get encashment to the tune of 50% of the privilege leave standing to the credit subject to a maximum of 120 days.

B-3.6 Additional Retirement Benefit (ARB)

The scheme for additional retirement benefit provides that an officer who had joined the Bank prior to 01.07.1979 on his Retirement/ Voluntary retirement/ Death shall be eligible for payment of 6 months emoluments as additional retirement benefit, provided he had completed twenty-five years of service exclusively in Bank of Baroda (excluding eVB/eDB) and satisfy the conditions mentioned in BOB officer’s service regulations.

In the same manner, award staff member on Retirement/ Voluntary Retirement/ Death shall be eligible for additional retirement benefit, provided the staff member had completed thirty-years of service in Bank of Baroda.

However, in case of dismissal, discharge, termination, compulsory retirement and resignation, additional retirement benefit shall not be payable irrespective of any number of years of service.

Long Term Employee Benefits (Unfunded Obligation): Accumulating Compensated Absences (Privilege Leave) & Additional Retirement Benefits (ARB)

The following table sets out the status of Accumulating Compensated Absences (Privilege Leave) & ARB as per the actuarial valuation by the independent Actuary appointed by the Bank:-

The estimates of future salary growth, factored in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. Such estimates are very long term and are not based on limited past experience / immediate future. Empirical evidence also suggests that in very long term, consistent high salary growth rates are not possible. The said estimates and assumptions have been relied upon by the auditors.

B-4. Segment Reporting (Accounting Standard -17)

B-4.1 Segment Identification

I. Primary (Business Segment): The following are the primary segments of the Bank:-

i. Treasury

The Treasury Segment includes the entire

investment portfolio and trading in foreign exchange contracts and derivative contracts. The revenue of the treasury segment primarily consists of fees and gains or losses from trading operations and interest income on the investment portfolio.

ii. Corporate / Wholesale Banking

The Corporate / Wholesale Banking segment comprises the lending activities of borrowers having exposure of ' 7.50 Crores above.

iii. Retail Banking

The Retail Banking Segment comprises of borrower accounts having exposure of upto ' 7.50 Crores. Digital Banking sub segment under retail segment represents balances of Digital Banking Units functioning in the bank as per RBI directives.

iv. Other Banking Operations

Segments not classified under (i) to (iii) above are classified underthis primarysegment.

II) Secondary (Geographical Segment)

i) Domestic Operations - Branches/Offices having operations in India

ii) Foreign Operations - Branches/Offices having operations outside India and offshore banking units having operations in India

III. Segment revenue represents revenue from external customers.

IV. Allocation of Income, Expenses, Assets and Liabilities

Treasury banking operation is separate unit. The income and expenses of treasury operations are directly attributable to treasury segment.

The income and expense of other segments are recognised as under:

a) The interest income and interest expense are allocated on the basis of actual interest received for wholesale banking operations and on the basis of advances of wholesale banking operations respectively.

b) After allocation of above interest income and expense, the residual interest received/ paid is attribute to retail banking operations.

c) Other income/ other expenses are allocated in the proportion of Interest income earned by the wholesale banking / retail banking segment. Capital employed for each segment has been allocated proportionately to the assets of the respective segment.

The Bank has certain common assets and liabilities, which cannot be attributed to any segment, and the same are treated as unallocated.

In terms of RBI circular on notes to accounts, key management personnel are whole time directors of Board for Related Party Disclosure.

No disclosure is required in respect of related parties, which are “State Controlled Enterprises” as per paragraph no 9 of Accounting Standard (AS 18). Further in terms of paragraph 5 of AS 18, transactions in the nature of Banker-Customer relationship have not been disclosed including those with Key Management Personnel and relatives of Key Management Personnel.

B-6 Accounting Standard -19 - “Lease”

Premises taken on operating lease are given below:

Operating leases primarily comprise office premises and staff residences, which are renewable at the option of the Bank.

Amount of lease payments recognized in the Profit & Loss Account for operating leases is ' 806.89 Crores (Previous Year: ' 768.07 Crores)

B-7 Earning per Share (Accounting Standard -20)

The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard 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.

a) Current Tax:

During the year the Bank has debited to Profit & Loss Account '2,398.89 Crores (Previous Year ' 625.42 Crores) on account of current tax. The Current Tax in India has been calculated in accordance with the provisions of Income Tax Act 1961 after taking appropriate relief for taxes paid in foreign jurisdictions.

b) Deffered Tax:

During the year, '2,806.12 Crore has been Debited to Profit and Loss Account (Previous Year: '874.24 Crores Debited) on account of deferred tax. The Bank has a Net Deferred Tax Asset (DTA) of ' 6,579.63 Crores (Previous year: Net DTA of ' 9,348.63 Crores).

Tax Paid in advance/ Tax deducted at source appearing under Other Assets includes disputed amount adjusted by the department/ paid by the Bank in respect tax demands for various assessment years. No provision is considered necessary in respect of disputed Income Tax demands of ' 13,336.42 Crores (previous year ' 6,539.29 Crores) as in the bank’s view, duly supported by Tax Consultant view and/or decision in bank’s own appeals on same issues, additions / disallowances made are not sustainable.

B-9 AS 23 - Accounting for Investments in Associates in Consolidated financial Statements -

Since Investments of the bank in its Associates are participative in nature and the Bank having the power to exercise significant influence on their activities, such Investments are recognized in the Consolidated Financial Statements of the Bank.

B-10 Discontinuing operations (Accounting Standard- 24)

During the Financial year 2022-23, the Bank has not closed any of its overseas territories/ subsidiaries.

B-12 Impairment of Assets (Accounting Standard-28)

In terms of AS - 28 “Impairment of Assets” ' 1.43 Crores has been debited to Profit & Loss account wherein current value is less than cost of the property.

B-13 Provisions, Contingent Liabilities and Contingent Assets (Accounting Standard-29)

B-13.1 As per the policy of the Bank, provision for the claims not been acknowledged as debt, has been provided for.

a) Such liabilities as mentioned at Serial No (I) to (VI) of Schedule 12 of Balance Sheet are dependent upon the outcome of court judgment / arbitration awards / out of court settlement/disposal of appeals, the amount being called up, terms of contractual obligations, development and raising of demand by concerned parties respectively. No reimbursement is expected in such cases.

b) Contingent Assets are not recognised in the financial statements.

B-132 Description of contingent liabilities. (Also Refer Schedule 12)

a) Claims against the Bank not acknowledged as debts;

These represent claims filed against the Bank in the normal course of business relating to various legal cases currently in progress. These also include demands raised by income tax authorities and disputed by the Bank

b) Liability for partly paid investments

This represents amounts remaining unpaid towards liability for partly paid investments.

Liability for partly paid investments of '15.28 Cr represents amounts remaining unpaid towards liability for partly paid investments of Central Ware Housing Corporation and IL&FS infrastructure debt fund.

c) Liability on account of forward exchange and derivative contracts:

The Bank enters into foreign exchange contracts, currency options/swaps, interest rate/currency futures and forward rate agreements on its own account and for customers. Forward exchange contracts are commitments to buy or sell foreign currency at a future date at the contracted rate. Currency swaps are commitments to exchange cash flows byway of interest/ principal in two currencies, based on ruling spot rates.

Interest rate swaps are commitments to exchange fixed and floating interest rate cash flows. Interest rate futures are standardized, exchange-traded contracts that represent a pledge to undertake a certain interest rate transaction at a specified price, on a specified future date. Forward rate agreements are agreements to pay or receive a certain sum based on a differential interest rate on a notional amount for an agreed period. A foreign currency option is an agreement between two parties in which one grants to the other the right to buy or sell a specified amount of currency at a specific price within a specified time period or at a specified future time. An Exchange Traded Currency Option contract is a standardized foreign exchange derivative contract, which gives the owner the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date on the date of expiry. Currency Futures contract is a standardized, exchange-traded contract, to buy or sell a certain underlying currency at a certain date in the future, at a specified price. The amount of contingent liability represents the notional principal of respective forward exchange and derivative contracts.

d) Guarantees given on behalf of constituents

As a part of its banking activities, the Bank issues guarantees on behalf of its customers to enhance their credit standing. Guarantees represent irrevocable assurances that the Bank will make payments in the event of the customer failing to fulfill its financial or performance obligations.

e) Acceptances, endorsements and other obligations

These include documentary credit issued by the Bank on behalf of its customers and bills drawn by the Bank’s customers that are accepted or endorsed by the Bank.

f) And other items for which Bank is contingently liable.

C. Additional Disclosures

C-1 Balancing of Books and Reconciliation

Initial matching of debit and credit outstanding entries in various heads of accounts included in Inter office Adjustments has been completed up to 31.03.2023, the reconciliation of which is in progress. Balancing of Subsidiary Ledger Accounts, confirmation/ reconciliation of Inter-office accounts, Migration accounts, other office accounts including cash in ATM & with ATM agency etc. is in progress on an on-going basis. In the opinion of the management, the overall impact on the financial statements, if any, of the above, is not likely to be material.

C-2 Investments.

In terms of RBI Guidelines, during the year, the bank has transferred a portion of Investment from HTM category to AFS category and AFS to HTM Category. The resultant depreciation of ' 323.74 Crores (Previous Year: ' 4.99 Crores) has been charged to the Profit & Loss Account as on March 31,2023.

C-3 Payment to Micro, Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act, 2006

There have been no reported cases of delayed payments of the principal amount or interest due thereon to Micro & Small Enterprises and hence disclosure for payment of interest on delayed payments to MSME is not applicable. The details regarding Micro, Small and Medium Enterprises has been provided by the Management and relied upon by us.

C-4 Premises

C-4.1 Execution of conveyance deeds is pending in respect of certain properties amounting to ' 168.72 Crores (Previous Year: ' 168.72 Crores).

C-4.2 Depreciation on Revalued Portion: '1,249.38 Crores depreciation charged for FY 2022-23 (Previous year: '729.70. Crores) and Total depreciation charged during FY 2022-23 is '1,954.72 Crores (Previous Year: '1,389.72 Crores).

Appropriation of Recoveries in Non-Performing Assets is first appropriated towards charges, then interest income and last in principal outstanding.

C-6 During the year unclaimed dividend amount transferred to the Investor Education and Protection Fund (IEPF) without any delay is ' 6.20 Crores (Previous Year: ' 4.69 Crores).

C-7 As per RBI letters no. DBRNo.BP15199/ 21.04.048/ 2016-17 and DBR.No.BP1906/21.04.048/2017-18 dated June 23, 2017 and August 28, 2017 respectively, for the accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank is holding total provision of '7,336.98 Crores (100% of total outstanding) as on March 31,2023 (Previous Year ' 7,656.31 Crores being 100% of total outstanding).

C-8 Corporate social responsibility

Operating expenses include ' 13.50 Crores (previous year: ' 8.29 Crores) for the year ended March 31,2023 towards Corporate Social Responsibility (CSR), in accordance with Companies Act, 2013.

The Bank has spent total amount of ' 13.50 Crores upto 1% of the published profit of the Bank for the previous year, as part of its CSR for the year ended March 31, 2023. As a responsible bank, it has approached the mandatory requirements of CSR spends positively by laying a foundation on which it would build and scale future projects and partnerships. The Bank continues to evaluate strategic avenues for CSR expenditure in order to deliver maximum impact. In the years to come, the Bank will further strengthen its processes as per requirement.

'13.50 Crores upto 1% of published Net profit of previous year and ' Nil being appropriation of residual CSR fund lying in Sundry Deposit A/c.

C - 9 Disclosure on remuneration to Non-Executive Directors

Remuneration by way of sitting fees to the NonExecutive Directors for attending meetings of the Board and its committees during the year ended March 31, 2023 amounted to ' 1.50 Crores (Previous year: ' 1.22 Crores).

C-10 In terms of Reserve Bank of India (RBI) guidelines, Pillar 3 disclosures including leverage ratio, liquidity coverage ratio and Net stable funding ratio (NSFR) under the Basel- III framework are being made available on our website “https://www.bankofbaroda. in/shareholders-corner/disclosures-under-basel-iii". These disclosures have not been subjected to audit by Statutory Central Auditors of the Bank.

C-14 The Bank has continued to follow the same accounting policies and practices in preparation of financial results for the quarter / year ended March 31,2023 as followed in the previous financial year ended March 31, 2022. The Bank had, during the current financial year implemented the Hedge accounting for derivative contracts in respect of overseas investments made by International territories of the Bank and in respect of outstanding capital hedging deals towards net investments in overseas branches in accordance with the Guidance Note on Accounting for derivative contracts issued by Institute of Chartered Accountants of India (GN). Hitherto, i.e. up to financial year 2021-22, the accounting for such contracts was being done as per Accounting Standard- 11. “The effects of charges in foreign exchange rates” issued by ICAI.

Consequent to this change, the profit for the year is higher by ' 60.26 Crore.

C-15 Previous year’s figures have been regrouped where necessary to conform to current year classification.