1.  Revenue Recognition:
 
 1.1 Income and expenditure are generally recognised on accrual basis.
 In case of Non Performing Advances and Investments, overdue locker
 rent, interest on overdue bills, interest on tax refunds, such income
 is accounted for only on realization in accordance with the guidelines
 issued by RBI.
 
 1.2 Till March 2008, the Bank recognised interest on matured term
 deposits at the time of renewal / withdrawal of the same. In pursuance
 of RBI circular DBOD.No.Leg.BC.34/09.07.005/2008-09, the Bank has been
 providing interest on outstanding matured term deposits at the savings
 bank rate of 3.50% p.a.
 
 1.3 In accordance with the guidelines issued by the RBI, prior period
 disclosures are made in respect of any item which exceeds one percent
 of the total income/total expenditure as, accounted for in the proft
 and loss account.
 
 2.  Investments:
 
 2.1 The investment portfolio of the Bank is classifed in accordance
 with the Reserve Bank of India (RBI) guidelines, into “Held for
 Trading”, “Available for Sale” and “Held to Maturity” categories. These
 are further identifed as Performing or Non-performing as per Income
 Recognition, Asset Classifcation and Provisioning norms of RBI.
 However, for disclosure in the balance sheet, these are classifed under
 six groups as follows :
 
 - Government securities
 
 - Other approved securities
 
 - Shares
 
 - Debentures and Bonds
 
 - Subsidiary/sponsored institution
 
 - Others
 
 2.2 Basis of Classifcation:
 
 Classifcation of an Investment is done at the time of purchase into
 following categories:
 
 2.2.1 Held to Maturity
 
 These comprise of Investments which the bank intends to hold till
 maturity.
 
 2.2.2 Held for Trading
 
 Securities which are held for resale within 90 days from the date of
 purchase.
 
 2.2.3 Available for Sale
 
 Investments which cannot be classifed in the above two categories.
 
 2.3 Transfer of Securities between categories:
 
 The transfer / shifting of securities between the three categories of
 Investments is accounted at the least of acquisition cost/ book value /
 market value on the date of transfer and the depreciation, if any, on
 such transfer is fully provided for.
 
 2.4 Valuation:
 
 The valuation of Investments is made in accordance with the RBI
 guidelines.
 
 2.4.1 Held to Maturity
 
 The Investments classifed under this category are valued at acquisition
 cost. The excess of acquisition cost/book value over the face value is
 amortised equally over the remaining period of maturity.
 
 2.4.2 Available for Sale
 
 Investments under this category are valued scrip-wise and net
 depreciation in each classifcation of securities is provided for, while
 the net appreciation in each classifcation of securities is ignored.
 
 2.4.3 Held for Trading
 
 Investments under this category are valued scrip-wise on monthly basis
 and net depreciation under each classifcation is provided for, without
 adjusting the book value of the securities. However, unrealized gain on
 such valuation is ignored.
 
 2.5 Recognition of Income & Expenditure
 
 2.5.1 Dividend on equity and preference shares is recognised as income
 on receipt of the same and income from units of mutual fund is
 accounted on cash basis in accordance with the RBI guidelines.
 
 2.5.2 The proft or loss on sale/redemption of Investments is taken to
 the Proft and Loss Account. However, in case of proft on sale /
 redemption of Investments from “Held to Maturity” category, an
 equivalent amount is appropriated to the “Capital Reserve”.
 
 2.5.3 In respect of securities included in any of the three categories
 of Investments where interest/principal is in arrears for more than 90
 days, income is not reckoned and appropriate provision for the
 depreciation in the value of the Investments is made, as per prudential
 norms applicable to non-performing advances.  The depreciation /
 provision requirement in respect of non-performing Investments is not
 set off against the appreciation in respect of performing Investments.
 
 2.5.4 Brokerage, incentive, front-end fees, etc. received on purchase
 of securities are reduced from the cost of Investments.
 
 2.5.5 Expenses such as brokerage, fees, commission or taxes incurred at
 the time of acquisition of securities are charged to revenue.
 
 2.5.6 The excess of acquisition cost/book value over the face value on
 “Held To Maturity” category is amortised in “Schedule 14 – Other Income
 under sub-head – Proft /(Loss) on Revaluation of Investment” as a
 deduction in conformity with RBI guidelines. The book value of the
 securities has been reduced to that extent.
 
 2.6 Determination of Cost
 
 Cost of Investments is determined on the basis of weighted average cost
 method.
 
 3.  Advances – Provisioning & Classifcation:
 
 3.2 Advances are net of unrealized interest on non performing advances,
 Bills Rediscounted, DICGC/ECGC claims received and provision made for
 non-performing advances.
 
 4.  Fixed Assets/Depreciation:
 
 4.1 Premises, (other than those which are revalued) and other fxed
 assets are stated at historical cost less accumulated depreciation.
 Cost includes incidental expenses related to the acquisition and
 installation of the asset.
 
 4.2 Hitherto, the Bank provided for depreciation on immovable
 properties at the rates mentioned in Schedule XIV of the Companies Act,
 1956. Pursuant to the revaluation carried out on 31st March 2008, there
 has been a revision in the estimated remaining useful life of the
 revalued immovable properties. For the purpose of computing
 depreciation on such properties over their estimated remaining useful
 lives, all such revalued properties have been categorised into 6 slabs
 based on their remaining useful lives, as given in the following table.
 Rates of depreciation in respect of these properties have been arrived
 at in a manner so as to depreciate 95% of the revalued amount over
 their remaining estimated useful life.
 
 Residual life as on 31st March, 2008         Rate
 
 Upto 30 years                               4.75%
 
 31 – 40 years                               3.07%
 
 41 – 46 years                               2.32%
 
 47 – 52 years                               2.02%
 
 53 – 58 years                               1.79%
 
 Above 58 years                              1.63%
 
 4.3 In accordance with the Guidance note on treatment of Reserves
 created on revaluation of fxed assets issued by the Institute of
 Chartered Accountants of India, the additional depreciation relatable
 to revaluation is adjusted against Revaluation Reserve by transfer to
 Proft & Loss account.
 
 4.4 Leasehold land is amortised over the period of lease.
 
 4.5 Fixed assets are depreciated to the extent of 95% of original cost.
 If the book value of any asset is less than 5% of the original cost or
 revalued amount, as the case may be, no further depreciation is
 provided on such assets.
 
 4.6 Depreciation on Fixed Assets is provided on monthly pro rata basis
 from the month of acquisition. Depreciation is not provided on assets
 sold during the year.
 
 4.7 Depreciation on ATMs & Computers (including softwares forming
 integral part of hardware) is provided @ 33.33% on straight-line method
 basis in accordance with the guidelines of RBI.
 
 4.8 Depreciation on all Other Fixed Assets is provided as per
 straight-line method basis at the rates prescribed in Schedule XIV to
 the Companies Act, 1956.
 
 5.  Non-Banking Assets
 
 Non-Banking Assets are shown at cost or net realisable value whichever
 is lower and no depreciation is provided for the same.
 
 6.  Foreign exchange transactions
 
 6.1 Monetary Foreign currency assets and liabilities and outstanding
 forward exchange contracts, guarantees, acceptances, endorsements and
 other obligations are translated on the Balance Sheet date at the
 exchange rates notifed by Foreign Exchange Dealers’ Association of
 India (FEDAI), as per the guidelines issued by RBI and the resultant
 gain/ loss is taken to the Proft and Loss account.
 
 6.2 Foreign currency income and expenditure items are accounted at the
 exchange rates ruling on the date of transaction.
 
 7.  Employee Benefts
 
 7.1 Annual contribution to Gratuity, Pension Fund and Provision for
 leave encashment are determined and provided on the basis of actuarial
 valuation. The contributions to pension fund are made under a defned
 beneft scheme.
 
 As permitted by AS 15 vide para 145(b), the bank has opted for
 irrevocable choice to recognize the transitional liability in regard to
 Pension Fund, as an expense on a straight line basis over up to fve
 years from the date of adoption i.e. 1-4-2007.
 
 7.2 In respect of employees who have opted for Provident fund scheme, a
 matching contribution is made by the Bank.
 
 8.  Taxes on Income
 
 The provision for tax for the year comprises of, current tax liability
 computed in accordance with the applicable tax laws, appellate orders
 in favour of the Bank though contested by the tax department in some
 cases, as the case may be. Taxes include Deferred Tax Adjustment on
 account of timing differences between taxable income and accounting
 income and Fringe Beneft Tax.
 
 9.  Impairment of Assets
 
 The bank assesses at each balance sheet date whether there is any
 indication that an asset may be impaired. Impairment loss, if any, is
 provided in the proft and loss account to the extent the carrying
 amount of assets exceeds their estimated recoverable amount.
 
 10.  Earnings Per Share (“EPS”)
 
 Basic earnings per share is calculated by dividing the net proft or
 loss for the year attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the year.
 
 In computing the weighted average number of equity shares outstanding
 during the year, bonus shares issued during the year are considered for
 the entire period and the computation for earlier reported period is
 also adjusted for computing Earning Per Share as required by Accounting
 Standard 20 “Earning Per Share.”
 
 11.  Segment Reporting
 
 The Reserve Bank of India vide circular number DBOD
 No.BP.BC.81/21.04.018/ 2006-07 dated 18 April 2007 directed banking
 companies to make segment related disclosures under the heads mentioned
 hereunder.Taking into consideration the above referred guidelines, the
 nature of products and services, the risks and rewards associated with
 each of these categories; the internal reporting and organisational
 structure of the bank etc. the bank has identifed the following
 business segments for reporting purposes;
 
 1.  Treasury
 
 Treasury includes the entire investment portfolio and also the dealing
 in Government Securities and Money Market Operations.
 
 2.  Corporate/Wholesale Banking
 
 All advances (funded and non-funded) where the limit sanctioned or the
 outstanding as on 31st March, 2010 exceeds Rs.5 Crores or average
 annual turnover of last three years is Rs.50 crores or more are
 classifed under Corporate / Wholesale Banking.
 
 3.  Retail Banking
 
 Advances not classifed under the Corporate / Wholesale Banking segment
 are included in the Retail Banking segment
 
 4.  Other Banking Business
 
 It includes items which cannot be specifcally allocated to any of the
 above including items pertaining to para- banking business are shown
 under Other Banking Business.
 
 No geographic segments
 
 Since the operations of the bank are restricted within India, and no
 distinct geographic segments on the basis of risk and returns or
 distinction in the economic environment can be said to arise within
 India; no distinct geographical segments have been identifed and the
 bank is considered to operate only in the domestic segment.
 
 Pricing of inter segment transfers
 
 Banking Operation (BO) is considered as the primary resource mobilizing
 unit and Treasury Operation compensates the former for funds lent by
 BO. Till 31.03.2009 in computing the segment results, interest expenses
 were allocated to the treasury and corporate / wholesale segments by
 applying the cost of funds to the Average Investments / Advances and
 the balance was allocated to the retail segment and, operating expenses
 on the basis of segment assets. During the present fnancial year all
 expenses have been apportioned in the ratio of total income of each
 segment. The impact of change in the said policy is given in Notes to
 Accounts – Schedule 18 – Point no. 11.2
 
 Allocation of Costs
 
 Expenses directly attributable to particular segment are allocated to
 the relative segment.
 
 Allocation of Assets
 
 Fixed Assets are used across all segments and, therefore, treated as
 un-allocated assets. Revaluation Reserve related to these assets is
 similarly dealt with
 
 Allocation of Liabilities
 
 Liabilities are allocated in the ratio of segment assets.