मैट्रिक्स
 
 
moneycontrol.com भारत | लेखांकन नीति > Banks - Public Sector > लेखांकन नीति फॉलोड से इंडियन ओवरसीज बैंक - बीएसई: 532388, NSE: IOB

इंडियन ओवरसीज बैंक

बीएसई: 532388  |  NSE: IOB  |  ISIN: INE565A01014  |  Banks - Public Sector

खोजें इंडियन ओवरसीज बैंक कनेक्शन मार्च 17
लेखांकन नीति साल : मार्च '19

1.1 Sale and Transfers to/from HTM Category

Sale and transfer to/from HTM category (above the prescribed limit of 5%) during the current year: NIL (previous year NIL)

2. DERIVATIVES

2.1 Forward Rate Agreement / Interest Rate Swap

2.2 DISCLOSURES ON RISK EXPOSURE IN DERIVATIVES

2.2.1 Qualitative Disclosure Treasury (Foreign)

The Bank uses Interest Rate Swaps (IRS), Currency Swaps and Options for hedging purpose to mitigate interest rate risk and currency risk in banking book. Such transactions are entered only with Clients and Banks having agreements in place.

a) The Risk Management Policy of the Bank allows using of derivative products to hedge the risk in Interest/Exchange rates that arise on account of overseas borrowing/FCNR(B) portfolio/the asset liability mis-match, for funding overseas branches etc.

b) The Bank has a system of evaluating the derivatives exposure separately and placing appropriate credit lines for execution of derivative transactions duly reckoning the Net Worth and security backing of individual clients.

c) The Bank has set in place appropriate control systems to assess the risks associated in using derivatives as hedge instruments and proper risk reporting systems are in place to monitor all aspects relating to derivative transactions. The Derivative transactions were undertaken only with the Banks and counterparties well within their respective exposure limit approved by appropriate credit sanctioning authorities for each counter party.

d) The Bank has set necessary limits in place for using derivatives and its position is continuously monitored.

e) The Bank has a system of continuous monitoring appraisal of resultant exposures across the administrative hierarchy for initiation of necessary follow up actions.

f) Derivatives are used by the Bank to hedge the Bank’s Balance sheet.

g) The income from such derivatives are amortized and taken to profit and loss account on accrual basis over the life of the contract. In case of early termination of swaps undertaken for Balance Sheet Management, income on account of such gains would be recognized over the remaining contractual life of the swap or life of the assets/liabilities whichever is lower.

h) All the hedge transactions are accounted on accrual basis. Valuations of the outstanding contracts are done on Mark to Market basis. The Bank has duly approved Risk Management and Accounting procedures for dealing in Derivatives.

i) The derivative transactions are conducted in accordance with the extant guidelines of Reserve Bank of India.

Risk Management policies pertaining to derivatives with particular reference to the extent to which derivatives are used, the associated risks and business purposes served. Also to include

a) The structure and organization for management of risk in derivatives trading;

b) The scope and nature of risk measurement, risk reporting and risk monitoring systems;

c) Policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants; and

d) Accounting policy for recording hedge and non-hedge transactions; recognition of income, premiums and discounts; valuation of outstanding contracts; provisioning, collateral and credit risk mitigation.

Treasury (Domestic)

The Bank uses Rupee Interest Rate Swaps (IRS) for hedging purpose to mitigate interest rate risk in Govt. Securities and to reduce the cost of Subordinated Debt. In addition, the bank also enters into rupee interest rate swaps for trading purposes as per the policy duly approved by the Board. Swap transactions are entered only with Banks having ISDA agreements in place.

a) The bank has put in place an appropriate structure and organization for management of risk, which includes Treasury Department, Asset Liability Management Committee and Risk Management Committee of the Board.

b) Derivative transactions carry Market Risk (arising from adverse movement in interest rates), Credit risk (arising from probable counter party failure), Liquidity risk (arising from failure to meet funding requirements or execute the transaction at a reasonable price), Operational risk, Regulatory risk and Reputation risk. The Bank has laid down policies, set in place appropriate control systems to assess the risks associated in using derivatives and proper risk reporting and mitigation systems are in place to monitor all risks relating to derivative transactions. The IRS transactions were undertaken with only Banks as counter party and well within the exposure limit approved by the Board of Bank for each counter party.

c) Derivatives are used by the bank for trading and hedging. The bank has an approved policy in force for derivatives and has set necessary limits for the use of derivatives and the position is continuously monitored. The value and maturity of the hedges which are used only as back to back or to hedge bank’s Balance Sheet has not exceeded that of the underlying exposure.

d) The accounting policy for derivatives has been drawn up in accordance with RBI guidelines, as disclosed in Schedule 17 - Significant Accounting Policies (Policy No.6)

3.1.1 Provision Coverage Ratio

The Provision Coverage Ratio (PCR) computed as per the RBI guidelines stood at 71.39% as on 31.03.2019 (59.45% as on 31.03.2018).

4.1 Details of Single Borrower Limit (SBL), Group Borrower Limit (GBL) exceeded by the Bank:

The bank had taken single/group borrower exposure in excess of prudential limit prescribed by RBI in the cases given below:

DISCLOSURES IN TERMS OF ACCOUNTING STANDARDS 18.1 Accounting Standard 5 - Net Profit or Loss for the period, prior period items and changes in accounting policies

The financial statements have been prepared following the same accounting policies and practices as those followed for the year ended March 31, 2018, except for the treatment of depreciation on revalued portion of Fixed Assets in accordance with Accounting Standard 10 (revised 2016) on Property, Plant and Equipment as below:

- Depreciation on revalued portion of Fixed Assets has been transferred from the revaluation reserve to the revenue reserve instead of crediting to the Profit and Loss account.

4.2 Accounting Standard 9 - Revenue Recognition

Revenue has been recognized as described in item No. 2 of Significant Accounting Policies - Schedule 17.

4.3 Accounting Standard 15 - Employee Benefits

i. The Bank had adopted Accounting Standard 15 (Revised) “Employees Benefits” issued by the Institute of Chartered Accountants of India, with effect from 1st April, 2007.

ii. The summarized position of Post-employment benefits and long term employee benefits recognized in the Profit & Loss Account and Balance Sheet as required in accordance with Accounting Standard - 15 (Revised) are as under: -

(a) Defined Benefit Schemes:

Changes in the present value of the obligations

The estimates of future salary increases, considered in actuarial valuation, take into account actual return on plan assets, inflation, seniority, promotion and other relevant factors, such as supply and demand in employee market.

In respect of overseas branches, disclosures if any required for Employee Benefit Schemes are not made in the absence of information.

(h) The financial assumptions considered for the calculations are as under:-

Discount Rate: The discount rate has been chosen by reference to market yield on government bonds as on the date of valuation (Balance sheet dated 31.03.2019).

Expected Rate of Return: The Overall expected rate of return on assets is determined based on the market prices prevailing on that date applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to the improved stock market scenario.

Bank’s best estimate expected to be paid in next Financial Year for Gratuity is Rs. 225 Crore.

4.4 Accounting Standard 21 - Consolidated Financial Statements and Accounting Standard 23 - Accounting for Investments in Associates in Consolidated Financial Statements

As there is no subsidiary, no consolidated financial statement is considered necessary.

4.5 Accounting Standard 26 - Intangible Assets

The software acquired for core banking system is treated as intangible asset and amortized over a period of 3 years.

4.6 Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures

Our Bank (with 35% share) has floated a Joint Venture at Malaysia along with Bank of Baroda (40%) and Andhra Bank (25%) by name INDIA INTERNATIONAL BANK (MALAYSIA) BHD (IIBM). IIBM has an Authorized Capital of MYR 500 Mio. The Joint Venture’s Paid up Capital is MYR 330 Mio. (previous year MYR 330 Mio.) Our Bank’s share in the Assigned up Capital is 35% - MYR 115.500 Mio.

As on 31.03.2019, Bank’s investment value in the Joint Venture as per the books stands at Rs.193.44 Crore (Original Investment value Rs.199.58 Crores as reduced by Diminution in Value of Investments amounting to Rs.6.14 crore).

4.7 Accounting Standard 28 - Impairment of Assets

Fixed Assets owned by the Bank are treated as ‘Corporate Assets’ and are not ‘Cash Generating Units’ as defined by AS-28 issued by ICAI. In the opinion of the Management, there is no impairment of any of the Fixed Assets of the Bank.

4.8 Accounting Standard 29 - Provision for Contingent Liabilities and Contingent Assets:

The guidelines issued by the Institute of Chartered Accountant of India in this respect have been incorporated at the appropriate places.

5 Additional Disclosures

5.1 Concentration of Deposits, Advances, Exposures and NPAs

*Of the two awards received from Banking Ombudsman, Bangalore during 2017-18, both the awards were appealed during 2017-18 and during 2018-19, one appeal was set aside by the Appellate Authority, RBI, Mumbai in our favour and for another one , Bank has paid.

**For the award given by Banking Ombudsman, Chandigarh in 2018-19, Bank preferred appeal with Appellate Authority and the same is pending.

During the year 2009-10, the Bank has issued a Letter of Comfort (LOC) undertaking to maintain a minimum CRAR of 12% in respect of Bangkok branch and to arrange to convert retained earnings to capital funds and / or infuse further capital in order to restore the CRAR to a minimum of 12% subject to approval from RBI. The capital of Bangkok Branch stands at THB1798.891 mio as on 31.03.2019.

In the worst case scenario of the entire textile exposure of the branch becoming NPA, we may have to make additional provision to the extent of THB 315.051 mio being unsecured portion of standard textile advances. If this contingency arises, there would be no additional capital to be remitted as existing reserves are adequate to cover the unsecured amount.

During the year 2010-11, the Bank has issued a letter of comfort favoring Bank Negara Malaysia. The Bank in association with other Joint Venture partners will provide support to India International Bank (Malaysia) Bhd in funding, business and other matters as and when required and ensure that it complies with the requirements of the Malaysian Laws, Regulations and Policies in the conduct of its business operations and management.

The financial impact for the letter of comfort issued to Bank Negara Malaysia is to the tune of our share of 35% of the paid up capital of MYR 330 mio ie. MYR 115.500 mio. Our Bank has invested INR 199.58 crore towards the capital of MYR 115.500 mio on various dates.

*Fees/Remuneration received in respect of the Bancassurance Business undertaken by the Bank.

5.2 Disclosures relating to Securitisation NIL (previous year - NIL)

5.3 Credit Default Swaps (CDS) NIL (previous year - NIL)

5.4 Draw Down from Reserves

Pursuant to RBI and GOI guidance, the Board of Directors has accorded approval for the exercise of Regulatory Call option in view of the regulatory event of PCA framework under which the Bank is placed in respect of 10% Basel III Compliant Additional Tier I Perpetual Bonds - Series I aggregating Rs.1000 crore issued by the Bank in February 2015.

Coupon payment on redemption of Rs.1000 crore was made on 13.06.2018 on account of exercising regulatory call option on AT-I Bonds. The Bank had made coupon payment amounting to Rs.35.34 crore out of Statutory Reserves as per RBI Circular dated 02.02.2017.

6 Unhedged Foreign Currency Exposure (UFCE)

As per RBI circular ref to RBI/2013-14/620 & RBI/2013-14/448, data relating to UFCE of borrowers from individual branches is obtained through online and consolidated working of the required additional provision and capital for Exposures to entities with Unhedged Foreign Currency Exposure is done at Risk Management Department.

The Bank has estimated the provision towards Unhedged Foreign Currency Exposure to their constituents in terms of RBI Circular DBOD.NO.BPBC.85/21.06.200/2013-14 dated January 15, 2014 at Rs.6.09 crore. However, the Bank holds provision of Rs.11.08 crores as on 31.03.2019 against the same.

LCR for the bank as on 31.03.2019 stood at 387.13% which is well above the RBI stipulated level of 100% for the current calendar year. Bank is having a strong built up of High Quality Liquid Assets at Rs.42252.54 Crore as on 31.03.2019. Bank has government securities to the tune of Rs.5951.53 Crore in excess to the minimum SLR requirements, and has liquidity to meet sudden cash outflows.

The Bank has been maintaining HQLA mainly in the form of SLR investments over and above the mandatory requirements. Retail deposits constitute major portion of total funding sources, and such funding sources are well diversified. Management is of the view that the Bank has sufficient liquidity cover to meet its likely future short term requirements.

7 As per RBI directions vide letter No.DBR.NO.BP:15199/21.04.048/2016-17 dated June 23, 2017 in respect of certain Borrowal accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC) and vide letter no. DBR.NO.BPBC.1949/21.04.048/2017-18 dated August 28, 2017 in respect of certain Borrowal accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), the Bank was required to make additional provision as stated therein. Accordingly, the Bank has made adequate provision in respect of those accounts without availing any concession as per the latest RBI letter No.DBR.No.BP/8756/21.04.048/2017-18 dated 02.04.2018.

8 Comparative Figures

Previous year’s figures have been regrouped / rearranged / reclassified wherever necessary.

स्रोत: रेलीगरे टेचनोवा

न्यूज़ फ़्लैश

  • NEWS FLASH EVE : कंसो मुनाफा `142 Cr से घटकर `83 Cr (YoY)
  • NEWS FLASH EVE : कंसो आय `1135 Cr से घटकर `1035 Cr (YoY)

अभी देखें

योर मनी

OUR WINNING PICKS

DID YOU INVEST?

INTRADAY PICKS!

(August 06, 2018)

AT (Rs)



GAIN (Rs)

ALL TIME WINNERS

RECO PRICE

PEAK PRICE

OUR PACKAGES

Super Combo

Powerful mix of both trader and investor packs with timely expert advice.

Technical

Designed especially for traders looking to tap the profit opportunities of volatile markets.

Fundamental

For all investors looking to unearth stocks that are poised to move.