A) Balancing of Accounts and Reconciliation
i. In certain Branches, the balancing / reconciliation of control accounts with subsidiary ledgers is in progress.
ii. Initial matching of debit and credit outstanding of old entries in Inter Branch Account (IBR DD), pertains prior to CBS System. Adjustments (including old outstanding entries) have been done up to 31.03.2026 and reconciliation is in progress.
iii. Reconciliation of Drafts payable, Debit Note Receivable/ Payable, RTGS/NEFT (Suspense) is in progress. Provisions have been made as per RBI norms. Reconciliation of Nostro accounts has been done as on 31.03.2026.
In the opinion of the management, the impact of the above para (i) to (iii), if any, on the Profit & Loss Account and Balance Sheet though not quantifiable, will not be material.
iv. In terms of Reserve Bank of India guidelines, segregation of Debit and Credit entries in Inter Branch Accounts pertaining to the period up to 30.09.2025 and remained outstanding as on 31.03.2026 has been done which has resulted in either net Debit in some heads or net credit in other heads. Provision is to be made in respect of Net Debit Entries outstanding for period exceeding 6 months. Similar guidelines have been followed for Imprest clearing Account also.
In Inter Branch Account there is net credit balance hence no provision is required to be made.
v. Credit entries outstanding in Blocked Unclaimed Deposit Account (New Blocked account) for the period 01.01.2016 to 31.03.2016 amounting to Rs. 36132 (inclusive of Rs 1889 as Revaluation amount) have been transferred to DEAF account during fiscal year ended 31st March 2026.
Further, the department transfers unreconciled entries pertaining to more than 10 years to DEAF account on quarterly basis.
As on 31.03.2026, there is no outstanding entry in Blocked Unclaimed Deposit Account (New Blocked Account).
B) Legal formalities are yet to be completed in respect of 3 Bank's properties having original value of Rs 332.43 crore and Revalued value (Gross) of Rs. 354 crore and Accumulated depreciation on original cost of Rs 52.25 crore and on revalued cost is Rs 4.80 crore as on 31.03.2026. (Previous year 2 Bank's properties having original cost of Rs 2.87 crore and Revaluation amount of Rs. 74.23 crore).
Data is presented as simple averages of daily observations over the previous quarter (i.e. the average is calculated over a period of 90 days). The simple average are calculated on daily observations over the previous quarters. The un-weighted value of inflows and outflows are calculated as the outstanding balances of various categories or types of liabilities, off balance sheet items or contractual receivables. The weighted value of HQLA are calculated as the value after haircuts are applied. The weighted value for inflows and outflows are calculated as the value after the inflow and outflow rates are applied. Total HQLA and total net cash outflows are disclosed as the adjusted value, where the adjusted value of HQLA is the value of total HQLA after the application of both haircuts and any applicable caps on Level 2B and Level 2 assets as indicated in this Framework. The adjusted value of net cash outflows is calculated after the cap on inflows is applied, if applicable.
QUALITATIVE DISCLOSURE ON BANK'S LIQUIDITY COVERAGE RATIO
Liquidity Coverage Ratio: The LCR standard aims to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be readily converted into cash at little/no loss of value to meet its liquidity needs for a 30-calendar daytime horizon under a liquidity stress scenario.
LCR has two components:
i. The value of the stock of High-Quality Liquid Assets (HQLA) as a Numerator.
ii. Total Net Cash Outflows: Total expected cash outflows minus Total expected cash inflows, in stress scenario, for the subsequent 30 calendar days as a denominator.
Definition of Liquidity Coverage Ratio (LCR):
Stock of high quality liquid assets (HQLAs) > 100% (w.e.f 01.04.2021)
Total net cash outflows over the next 30 calendar day
The Liquidity Coverage Ratio arrived for the quarter ended March 2026 was 130.34% (on basis of simple averages of daily observations during the period 01-01-2026 to 31-03-2026) against the regulatory requirement of 100%.
The main drivers of LCR of the bank are High Quality Liquid Assets (HQLAs) to meet liquidity needs of the bank at all times and basic funding from retail and small business customers.
i) Main drivers of LCR:
The Bank on a consolidated basis, during the quarter ended 31st March 2026, had maintained average HQLA (after haircut) of Rs.30376.67 Crore. The HQLA is primarily driven by Government securities in excess of minimum SLR, Government securities within 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 are important factors for Level 1 HQLA.
Level 2 HQLAs primarily consisted of corporate debt securities including commercial papers.
ii) Intra-period changes as well as changes over time:
LCR were 126.61%, 122.87% and 137.15% for the months ending January 2026, February 2026 and March 2026 respectively as against regulatory requirement of 100%.
iii) Composition of High-Quality Liquid Assets (HQLA)
HQLAs comprise of Level 1 and Level 2 assets. Level 2 assets are further divided into Level 2A and Level 2B assets, keeping in view their marketability and price volatility. Total weighted value (average) of HQLA for the quarter ended March 2026 is Rs. 30376.67 Crore.
The net cash outflows are calculated by applying RBI prescribed outflow factors to the various categories of liabilities (deposits, unsecured and secured wholesale borrowings), as well as to undrawn commitments and derivative-related exposures, netted by inflows from assets maturing within 30 days. Average LCR on a daily basis for the quarter ended 31st March 2026 is 130.34%, above RBI prescribed minimum requirement of 100%.
iv) 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. Top 20 depositors (other than Certificate of Deposits) of the Bank constitute 8.92% of our total deposits which is well within limit of 25% as per ALM Policy.
v) Derivative exposures and potential collateral calls:
Derivative exposure is shown as Net Derivative cash inflows within 30 days. Inflows from derivative exposure arose due to maturing forwards.
vi) 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. Further bank does not have exposure to any other significant currencies*, hence LCR is prepared for INR currency.
(*A significant currency is one where aggregate liabilities denominated in the currency amount to 5% or more of the bank's total liabilities).
vii) A description of the degree of centralization of liquidity management and interaction between the group's units: NIL
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". The committee is responsible for overseeing the inter linkages between different types of risk and its impact on liquidity.
Bank has ALM policy which provides the broad guidelines under which all the entities within the group operate in terms of liquidity and interest rate risk.
LCR is computed and monitored on daily basis by the Bank and the same is shared with Treasury/Mid office for liquidity management and discussed in Investment committee.
Further LCR for the latest month along with comparison of previous months is placed before ALCO on monthly basis. Moreover, LCR position along with other liquidity parameters is also placed before RMC.
Composition of High-Quality Liquid Assets (HQLA)
HQLAs comprise of Level 1 and Level 2 assets. Level 2 assets are further divided into Level 2A and Level 2B assets, keeping in view their marketability and price volatility. Total weighted value (average) of HQLA for the quarter ended March 2026 is Rs.30376.67 crore.
QUALITATIVE DISCLOSURE ON NET STABLE FUNDING RATIO
The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. "Available stable funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered for the NSFR, which extends to one year. The amount of stable funding required ("Required stable funding") (RSF) of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet (OBS) exposures.
Minimum Requirement of NSFR should be equal to at least 100% on an ongoing basis.
NSFR= Available Stable Funding [ASF! > 100 %
Required Stable Funding [RSF]
The minimum NSFR requirement set out in the RBI guideline for the standalone Bank and for Group is 100% w.e.f 1st October 2021.
As on 31st March 2026, PSB maintained weighted Available Stable Funding (ASF) of Rs.127807.50 crore against the weighted Required Stable Funding (RSF) of Rs. 100487.61 crore. The NSFR for the quarter ended March 31st, 2026, was at 127.19%.
As on 31st March 2025, PSB maintained weighted Available Stable Funding (ASF) of Rs.114080.83 crore against the weighted Required Stable Funding (RSF) of Rs. 88723.64 crore. The NSFR for the quarter ended March 31st, 2025, was at 128.58%.
Brief about NSFR of the Bank
The Available Stable Funding (ASF) mainly constitutes of the capital base, retail deposit base and funding from non-financial companies and long-term funding from institutional clients. After applying the relevant weights, the capital base remained around 12.10%, retail deposits (including deposit from small sized business customers) remained 68.56% and wholesale funding remained 15.39% of the total Available Stable Funding (ASF),
Required Stable Funding (RSF) consists of 30.14% from "Other unencumbered performing loans with risk weights greater than 35% under the Standardized Approach and residual maturities of one year or more, excluding loans to financial institutions" line item.
Main drivers of NSFR:
The Bank as on 31st March 2026, had maintained ASF of Rs. 127807.50 crore. ASF consists of 67.57% from less stable non-maturity deposits and term deposits with residual maturity of less than one year provided by retail and small business customers and 0.75 % from Stable non-maturity (demand) deposits and term deposits with residual maturity of less than one year provided by retail and small business customers.
NSFR for the quarter ended 31st March 2026 is 127.19%, above RBI prescribed minimum requirement of 100%.
NSFR has decreased from 128.58% as of 31.03.2025 to 127.19% as of 31.03.2026 mainly due to increase in Unencumbered performing loans with risk weights greater than 35% under the Standardized approach and residual maturities of one year or more, excluding loans to financial institutions.
d) Particulars of resolution plan and restructuring
The Bank holds an additional standard asset provision in respect of 1 borrower's account, in terms of RBI Circular DOR.STR.REC.84/21.04.048/2025-26 dated 28th November, 2025 on Reserve Bank of India (Commercial Banks - Resolution of Stressed Assets) Directions, 2025" amounting to Rs. 122.62 Crore as on 31.03.2026 (Rs.23.57 crores PY 31.03.2025). The details are as under:-
e) Divergence in asset classification and provisioning
As per RBI Master Direction No. DOR.ACC.REC.No.86/21.04.018/2025-26 dated 28.11.2025, on Reserve Bank of India (Commercial Banks - Financial Statements: Presentation and Disclosures) Directions, 2025, divergence in the asset classification and provisioning, Banks should disclose divergences in the asset classification and provisioning, Banks should disclose divergence, if either or both of the following conditions are satisfied:
(a) the additional provisioning for NPAs assessed by RBI as part of its supervisory process exceeds 5 percent of the reported profit before provisions and contingencies for the reference period, and (b) the additional Gross NPAs identified by RBI as part of its supervisory process exceed 5 percent of the reported incremental Gross NPAs for the reference period.
Divergences are within threshold limits in the Bank as specified above. Hence, no disclosure is required with respect to RBI's annual supervisory process for FY 2024-25.
f) Disclosure of transfer of loan exposures
In accordance with RBI circular no. DOR.STR.REC.No.78/21.04.048/2025-26 dated November 28, 2025 on Reserve Bank of India (Commercial Banks- Transfer and Distribution of Credit Risk) Directions, 2025; in respect of the details of loans transferred/acquired during the year ended 31st March 2026 are given below:
i) The bank has not transferred and acquired any Special Mention Account (SMA) during the quarter / year ended 31st March 2026. (31st March 2025 - Nil)
The Bank has estimated the liability towards Unhedged Foreign Currency Exposure in terms of RBI (Unhedged Foreign Currency Exposure) Directions, 2022 vide circular DOR.MRG.REC.76/00-00-007/2022-23 dated October 11, 2022 and is holding a provision of Rs. 1.29 crore as on 31st March 2026. (Rs.0.52 crore as on 31st March 2025).
Method to ascertain the amount of Unhedged Foreign Currency Exposure (UFCE):
The information on Un-hedged Foreign Currency Exposure (UFCE) is obtained from customer on quarterly basis and is measured by obtaining the information from the clients in two parts- i) where Exposure of borrower is up to Rs.50 crores with all the banks taken together and, ii) where Exposure of borrower is more than Rs.50 crores with all the banks taken together.
The total un-hedged exposure in foreign currency is converted to INR on FEDAI spot rate as on last working day of the corresponding quarter.
Banks shall assess the Un-hedged Foreign Currency Exposure (UFCE) of entities with FCE by obtaining information on UFCE from the concerned entity. Provided that the information on UFCE shall be obtained from entities on a quarterly basis based on statutory audit, internal audit or self-declaration by the concerned entity. Provided further that UFCE information shall be audited and certified by the statutory auditors of the entity, at least on an annual basis.
Method to estimate the extent of likely loss:
Reserve Bank of India Circular DBOD.No.BP.BC116/21.06.200/2013-14 on Capital and Provisioning requirements for exposure to entities with un hedged foreign currency exposure stating about the guidelines for USD/INR annualized volatility and directed FEDAI to publish the USD/INR annual volatility based on the RBI reference rate which has to be used for computation of likely loss.
FEDAI announces the 10-year (120 months rolling) LAV rates on the last working day of every month. On these rates, the bank calculates the likely loss (rate as given by FEDAI), current rate 12.23% of total Unhedged exposure of the entity with all the banks taken together.
f) Implementation of IFRS converged Indian Accounting Standards (Ind AS)
Bank is complying with the reporting requirements of statutory authorities in relation to IND-AS. The Proforma Ind AS Financial Statements are being submitted to RBI on half yearly basis. Bank has on boarded a consultant having considerable experience in the field of implementation of IND-AS. The consultant is assisting the bank in devising a road map with respect to smooth implementation of Ind AS.
h) Disclosure on amortization of expenditure on account of enhancement in family pension of employees of banks
The estimated additional Pension liability on account of revision in family pension was Rs 236.84 crore. RBI vide its Circular RBI/2021-22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated 4th October 2021, had permitted all member Banks of Indian Banks Association to amortize the said additional liability over a period not exceeding five years beginning with the financial year ending 31st March 2022, subject to a minimum of 1/5th of the total amount being charged every year. The Bank is amortizing the said liability over a period, not exceeding 5 years commencing from the financial year ended 31st March 2022, subject to a minimum of Rs 47.37 crore every year. Balance unamortized amount as on 31st March 2025 was Rs.47.36 crore. Accordingly, the Bank has charged an amount of Rs. 47.36 crore to the Profit & Loss account during current year ended 31st March 2026. The said liability stands fully charged as at 31st March, 2026.
i) Disclosure of Letter of Comfort (LOCs) issued by Banks
During FY 2025-26, Letter of Comfort (LoC) issued amounting to Rs. 17.35 crore against credit facility including Non Fund facility taken over from other banks.
During FY 2024-25, Letter of Comfort (LoC) issued amounting to Rs. Nil against credit facility including Non Fund facility taken over from other banks.
ii) Items under the subhead "Other Expenditure" under the head "Schedule 16 - Operating Expenses" exceeding 1% of Total Income: NIL
iii) Items under the head "Schedule 5(IV) - Other Liabilities and Provisions- "Others (including provisions)" exceeding 1% of Total Assets: NIL
iv) Items under the head "Schedule 11(VI) - Other Assets - "Others" exceeding 1% of Total Assets: NIL
14. Disclosure as per Accounting Standard (AS)
a) AS-3 Cash Flow Statement
The Bank prepares cash flow statement in line with requirements of AS-3 using indirect method.
b) AS-5 Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies
There are no material prior period items included in Profit & Loss Account required to be disclosed as per AS-5 read with RBI guidelines except those disclosed elsewhere in the notes.
c) AS-9 Revenue Recognition
Certain items of income are recognized on realization basis as disclosed at point no. D.1 -"Revenue Recognition" of Schedule 17 - Significant Accounting Policies. However, in terms of RBI guidelines, the said income is not considered to be material.
d) AS-10 Property Plant & Equipment/ Fixed Assets
The bank has conducted revaluation of its immovable properties during the financial year 2023-24 based on the reports obtained from the external independent valuers. The closing balance of Revaluation Reserve as on 31.03.2026 (Net of amount transferred to revenue reserve) is Rs. 1060.53 crore (Previous year Rs. 1063.46 crore).
e) AS 15 - Employees Benefit
Provisions for Pension, Gratuity, Leave Encashment and Other long term benefits have been made in accordance with the Revised Accounting Standard (AS - 15) Employees Benefits issued by the ICAI.
The summarized position of post-employment benefits recognized in the Profit & Loss A/c and Balance Sheet is as under:
iii) Review of Deferred Tax Assets has been carried out based on Bank management's estimate of possible tax benefits against timing difference in accordance with Accounting Standard - 22 "Accounting for Taxes on income" issued by The Institute of Chartered Accountants of India and Net Deferred Tax Assets of Rs 1127.00 crore is recognized as at 31st March 2026 (Rs. 1298.52 crore as at 31st March 2025).
iv) No provision has been considered necessary in respect of disputed demands of tax litigation aggregating to Rs.1041.50 crore (Previous year Rs. 977.18 crore) in view of decisions of appellate authorities / judicial pronouncements / opinions of legal experts.
v) The Government of India, vide the Taxation Laws (Amendment) Act, 2019, inserted section 115BAA in the Income Tax Act 1961 w.e.f. April 1, 2019. The Bank has evaluated the options available under section 115BAA of The Income Tax Act, 1961 and opted to continue to recognize the Taxes on Income for the year ended 31.03.2026 as per the earlier provisions.
l) AS 23 - Accounting for Investments in Associates in consolidated Financial Statements
The Bank does not have any s/associate and as such AS 23 is not applicable.
m) AS 26 - Intangible Assets
The application software in use in the Bank has been developed in house and has evolved over a period of time. Hence, the costs of software is essentially part of Bank's operational expenses like wages etc. and as such are charged to the respective heads of expenditure in the Profit and Loss Account.
n) AS 28 - Impairment of Assets
Fixed Assets possessed by Bank are treated as 'Corporate Assets' and not 'Cash Generating Units' as defined by AS-28. In the opinion of the Management, there is no impairment of the 'Fixed Assets' of material amount as of 31.03.2026/31.03.2025, requiring recognition in terms of AS-28 issued by the ICAI. The impairment of other assets including advances has been provided for as per Prudential Norms prescribed by the Reserve Bank of India.
o) AS 29 - Provisions, Contingent Liability and Contingent Assets
i) As per AS-29 - Provisions, Contingent Liabilities and Contingent Assets, issued by the Institute of Chartered Accountants of India, the Bank recognizes no provision for -
a) Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank, or
b) Any present obligation from the past events but is not recognized because
• It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
• A reliable estimate of the amount of obligation cannot be made.
Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.
p) Other significant accounting policies has been disclosed at the appropriate places in the Notes forming part of the accounts.
15. Disclosures in Terms of MSMED Act 2006
Guideline given in Micro, Small and Medium Enterprises Development Act 2006 have been complied with for purchases made during FY 2025-26 and payments have been made to the vendors in time as per Act. Since there had been no delay in payment, therefore no penal interest had been paid during FY 2025-26.
16. As per the Reserve Bank of India directions for initiating Insolvency Process- Provisioning Norms, vide letter No. DBR. No. BP:15199/21.04.048/2016-17 dated June 23, 2017, and DBR. No.BP.1907/21.04.048/2017-18 dated August 28, 2017, the bank is holding the provisioning of Rs.229.80 Crore (31st March, 2025- Rs. 230.05 Crore) as against the balance outstanding of Rs 229.80 crore (31st March, 2025 - Rs 230.05 crore) as on 31st March, 2026 in respect of NPA borrowal accounts referred in aforesaid circular.
18. The bank has funded exposure of Rs. 102.99 crore in 2 borrower's accounts during FY 202526 (Rs 99.98 Crore in 2 borrower's accounts during FY 2024-25) which are under litigation and respective adjudicating authorities have granted stay on downgrading. The bank has made adequate provisions for the accounts.
19. Pursuant to the RBI circular dated 19th December 2023, in respect of investment in Alternate Investment Fund (AIF), Nil (Nil for FY 2024-25) provision is required during the year ended 31st March 2026.
20. Schedule 13(II) - Income on investment includes income recognized on an accrual basis in respect of accretion of interest on recapitalization bonds. The total amount of such interest income recognized during FY 2025-26 is Rs 475.45 Crores (Rs 454.72 Crores for FY 2024-25).
21. In terms of RBI Circular no. DOR.STR.REC.No.78/21.04.048/2025-26 dated 28th November, 2025 on "Commercial Banks- Transfer and Distribution of Credit Risk"; Bank has participated in Inter-Bank-Participation Certificate (IBPC) on risk sharing basis for maximum period of 180 days, thereby increasing the Bank's Total Advances by Rs. 2590.89 crore as on 31.03.2026 (Rs 3063.99 crore as on 31.03.2025) to same extent.
22. The Board of the Bank has proposed dividend @ 3.90% i.e. of Rs. 0.39 per equity share (Face Value of ^ 10/- per share) for the Financial Year 2025-26 (@0.70% i.e. Rs. 0.07 per equity share for FY 2024-25) in Board Meeting dated April 27, 2026 subject to requisite approval from Shareholders.
23. The Bank is carrying a provision of Rs. 7.79 crore as on 31st March, 2026 (Rs. 8.51 Crore as on 31st March 2025) being 5% of outstanding food credit availed by the State Government of Punjab as per the RBI letter no. DBR (BP) No. 7201. 21.04.132 /2017-18 dated 08.02.2018 issued to SBI, the lead bank.
24. The financial statements for the year ended 31st March, 2026 have been prepared following the same accounting policies and practices as those followed in the earlier year ended 31st March, 2025.
25. Accounting Standard 11 -The Effects of Changes in foreign exchange rates: Net income on account of exchange differences credited to Profit and Loss account for the FY 2025-26 is Rs. 17.48 crore (Rs.11.95 crore for FY 2024-25).
26. The figures of previous period have been regrouped and reclassified wherever considered necessary in order to make them comparable with the figures of the current period.
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