1.  BASIS OF ACCOUNTING:
 
 The financial statements have been prepared in accordance with the
 historical cost convention except where otherwise stated and conform to
 the statutory provisions and practices prevailing within the banking
 industry in India and the guidelines / instructions of Reserve Bank of
 India issued from time to time.
 
 2.  TRANSACTIONS INVOLVING FOREIGN EXCHANGE:
 
 (a) Foreign Currency Assets and Liabilities have been translated at the
 exchange rates prevailing at the close of the year as per the
 guidelines issued by FEDAI. The resultant profit or loss is accounted
 for.
 
 (b) Income and Expenditure in foreign currency are translated at the
 exchange rates prevailing on the date of the respective transaction.
 
 (c) Forward Exchange Contracts:
 
 In accordance with the guidelines of FEDAI and the provisions of AS-11,
 outstanding forward exchange contracts in each currency are revalued at
 the Balance Sheet date at the corresponding forward rates for the
 residual maturity of the contract. The difference between revalued
 amount and the contracted amount is recognized as profit or loss, as
 the case may be.
 
 (d) Contingent liabilities on guarantees, letters of credit,
 acceptances and endorsements are reported at the rates prevailing on
 the Balance Sheet date.
 
 3.  INVESTMENTS
 
 Investments are categorized under the heads ‘Held to Maturity'',
 Available for Sale, and ‘Held For Trading'' and are valued category
 wise, in accordance with the guidelines of the Reserve Bank of India.
 
 4.  ADVANCES
 
 4.1 In accordance with the prudential norms issued by RBI:
 
 (i) Advances are classified into standard, sub-standard, doubtful and
 loss assets borrower-wise;
 
 (ii) Provisions are made for loan losses, and
 
 (iii) General provision for standard advances is made.
 
 4.2 Advances disclosed are net of provisions made for non-performing
 assets, ECGC claims settled, part recovery towards NPA accounts
 receipts under sundries, and provision made for sacrifice of
 interest/diminution in the value of restructured advances measured in
 present value terms as per RBI guidelines.
 
 5.  FIXED ASSETS AND DEPRECIATION :
 
 (a) Fixed assets (Premises portfolio) have been revalued during the
 year and accounted at their revalued cost. Fixed Assets other than
 premises portfolio have been accounted for at their historical cost.
 
 (b) Depreciation on assets other than computers has been provided for
 on the diminishing balance method at the rates specified in Schedule
 XIV to the Companies Act, 1956.
 
 (c) Depreciation on computers has been provided for on straight-line
 method at the rate of 33.33% as per the guidelines issued by the
 Reserve Bank of India.
 
 (d) Operating Software, which is an integral part of hardware, is
 capitalized and depreciation is provided for at the rate of 33.33% on
 straight-line method.
 
 (e) For premises, in which land cost and construction cost could not be
 ascertained separately, depreciation is provided for on the total cost.
 
 6.  EMPLOYEE BENEFITS:
 
 (a) Annual contribution to the approved Employees'' Gratuity Fund,
 approved Pension Fund and provision for Leave Encashment including Sick
 leave Benefits have been made on actuarial basis. Contribution to
 Provident Fund is accounted for on actual basis.
 
 (b) The effect of transitional liability till 31.03.2007 as required by
 Revised AS 15 has been recognised as an expense on straight line basis
 over a period of five years.
 
 (c) Consequent to reopening of pension option to Employees and
 enhancement in Gratuity limits, the additional liability have been
 amortised over a period of 5 years and 1/5th of the additional
 liability have been charged to the current year Profit & loss account
 vide RBI circular DBOD.  No. BP.BC.15896/21.04.018/2010-11 dated
 08.04.2011.
 
 7. PROVISION FOR TAXATION:
 
 Provision for taxation is made on the basis of the estimated tax
 liability with adjustment for deferred tax in terms of the Accounting
 Standard 22 (Accounting for Taxes on Income) formulated by the
 Institute of Chartered Accountants of India.
 
 8. REVENUE RECOGNITION:
 
 (a) Income and expenditure are accounted for on accrual basis.
 
 (b) The following items of income are recognized on realization basis,
 owing to the significant uncertainty in collection thereof: (i)
 Interest on non-performing advances, including overdue bills and
 dividend income on investments.
 
 (ii) Interest on non-performing investments.
 
 (iii) Interest on tax refund from Income Tax Department based on
 Assessment/appeals concluded before the end of financial year.
 
 
 9. NET PROFIT:
 
 The net profit as per the Profit & Loss account is arrived at after
 necessary provisions towards: –
 
 (a) Taxation.
 
 (b) Advances and other assets.
 
 (c) Shortfall in the value of investments
 
 (d) Staff Retirement benefits including revision in wages, reopening of
 Pension option and enhancement in Gratuity ceiling.
 
 (e) Other usual and necessary provisions.
 
 10. ACCOUNTING STANDARDS
 
 Accounting Standards as specified in section 211(3C) of the Companies
 Act 1956, to the extent they are applicable to Banking Companies and as
 per directions issued by the RBI from time to time, have been followed.
 
 11. SEGMENT INFORMATION:
 
 The reportable business segments have been classified in accordance
 with the guidelines issued by Reserve Bank of India. The directly
 attributable income and assets are considered under respective segments
 and the other income; expenses, other assets & liabilities are
 considered on appropriate basis.
 
 12.  EARNING PER SHARE:
 
 Basic and Diluted earnings per equity share are reported in accordance
 with the Accounting Standard 20 “Earnings per share” issued by the
 Institute of Chartered Accountants of India. Basic earnings per equity
 share are computed by dividing net profit by the weighted average
 number of equity shares outstanding for the period. Diluted earnings
 per equity share are computed using the weighted average number of
 equity shares and dilutive potential equity shares outstanding during
 the period.
 
 13. PROVISIONS, CONTINGENT LIABLITIES AND CONTINGENT ASSETS:
 
 As per the Accounting Standard 29 “Provisions, Contingent Liabilities
 and Contingent Assets” issued by The Institute of Chartered Accountants
 of India, the Bank recognises provisions only when it has a present
 obligation as a result of a past event and it is probable that an
 outflow of resources embodying economic benefits will be required to
 settle the obligation and when a reliable estimate of the amount of the
 obligation can be made.
 
 Contingent Assets are not recognized in the financial statements since
 this may result in the recognition of income that may never be
 realised.