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State Bank of India

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Notes to Accounts Year End : Mar '16

1. Share Capital

a) During the year, the Bank received application money of Rs. 5,393.00
crore (Previous Year Rs. 2,970.00 crore), including share premium of Rs.
5,373.34 crore (Previous Year Rs. 2,959.95 crore), from Government of
India against preferential issue of 19,65,59,390 ( Previous Year
10,04,77,012) equity shares of Rs. 1 each to Government of India. The
equity shares were allotted on 29.09.2015.

b) The Bank received application money of Rs. 2,970.00 crore, including
share premium of Rs. 2,959.95 crore, from Government of India against
preferential issue of 10,04,77,012 equity shares of Rs. 1 each to
Government of India on 31.03.2015. The equity shares were allotted on

c) 9,720 Equity Shares of Rs. 1 each that had been issued as a part of
the Right Issue -2008 but allotment of which was kept in abeyance, were
allotted on 16.07.2015 and amount of Rs. 9,720.00 credited to Capital
Account and Rs. 15,35,760.00 credited to Share Premium Account. Balance
of such shares issued and kept in abeyance is 8,21,030 (Previous Year
8,30,750) of Rs. 1 each, since they are subject to title disputes or are

d) Expenses in relation to the issue of shares: Rs. 8.66 crore (Previous
Year Rs. Nil) is debited to Share Premium Account.

2. Innovative Perpetual Debt Instruments (IPDI)

The details of IPDI issued which qualify for hybrid Tier 1 Capital and
outstanding are as under:

b. Securities amounting to Rs. 2,827.96 crore (Previous Year Rs. 13,779.33
crore) are kept as margin with Clearing Corporation of India
Limited(CCIL) / NSCCL / MCX / uSEIL / NSEIL / BSE towards securities

c. During the year the Bank infused additional capital in its
subsidiaries and associates viz. i) State Bank of Patiala Rs. 799.99
crore, ii) SBI Foundation Rs. 1 crore, iii) Nagaland Rural Bank Rs. 0.97
crore and iv) Ellaquai Dehati Bank Rs. 8.90 crore.

d. During the year, State Bank of Travancore allotted 94,81,518 equity
shares of Rs. 10 each at a premium of Rs. 390.00 per share to the Bank
amounting to Rs. 379.26 crore under right issue and thus stake of the
Bank has increased from 78.91% to 79.09%.

e. During the year, the Bank has sold 24,00,000 equity shares of CCIL
at a profit of Rs. 108 crore. Thus, the Bank''s stake reduced from 26.00%
to 21.20%.

3. Repo Transactions (including Liquidity Adjustment Facility - LAF)

The details of securities sold and purchased under Repos and Reverse
Repos including LAF during the year are given below:

(A) Qualitative Risk Exposure

i. The Bank currently deals in over-the-counter (OTC) interest rate and
currency derivatives as also in Interest Rate Futures and Exchange
Traded Currency Derivatives. Interest Rate Derivatives dealt by the
Bank are rupee interest rate swaps, foreign currency interest rate
swaps and forward rate agreements, Cap, Floor and Collars. Currency
derivatives dealt by the Bank are currency swaps, rupee dollar options
and cross-currency options. The products are offered to the Bank''s
customers to hedge their exposures and the Bank enters into derivatives
contracts to cover such exposures. Derivatives are used by the Bank
both for trading as well as hedging balance sheet items. The Bank also
runs option position in uSD/ INR, which is managed through various
types of loss limits and Greek limits.

ii. Derivative transactions carry market risk i.e. the probable loss
the Bank may incur as a result of adverse movements in interest rates /
exchange rates / equity prices and credit risk i.e. the probable loss
the Bank may incur if the counterparties fail to meet their
obligations. The Bank''s Policy for Derivatives approved by the Board
prescribes the market risk parameters (cut-loss triggers, open position
limits, duration, modified duration, PV01 etc.) as well as customer
eligibility criteria (credit rating, tenure of relationship, limits and
customer appropriateness and suitability of policy (CAS) etc.) for
entering into derivative transactions. Credit risk is controlled by
entering into derivative transactions only with counterparties
satisfying the criteria prescribed in the Policy. Appropriate limits
are set for the counterparties taking into account their ability to
honour obligations and the Bank enters into ISDA agreement with each

iii. The Asset Liability Management Committee (ALCO) of the Bank
oversees efficient management of these risks. The Bank''s Market Risk
Management Department (MRMD) identifies, measures, monitors market risk
associated with derivative transactions, assists ALCO in controlling
and managing these risks and reports compliance with policy
prescriptions to the Risk Management Committee of the Board (RMCB) at
regular intervals.

iv. The accounting policy for derivatives has been drawn-up in
accordance with RBI guidelines, the details of which are presented
under Schedule 17: Significant Accounting Policies (SAP) for the
financial year 2015-16.

v. Interest Rate Swaps are mainly used at Foreign Offices for hedging
of the assets and liabilities.

vi. Apart from hedging swaps, swaps at Foreign Offices consist of back
to back swaps done at our Foreign Offices which are done mainly for
hedging of FCNR deposits at Global Markets, Kolkata.

vii. Majority of the swaps were done with First class counterparty

@ The swaps amounting to Rs. 7,811.17 crore (Previous Year Rs. 8,486.92
crore) entered with the Bank''s own foreign offices are not shown here as
they are for hedging of FCNB corpus and hence not marked to market.

# IRS/FRA amounting to Rs. 11,232.11 crore (Previous Year Rs. 14,072.53
crore) entered with the Bank''s own Foreign offices are not shown here as
they are for hedging of FCNB corpus and hence not marked to market.

* The forward contract deals with our own Foreign Offices are not
included. Currency Derivatives – Nil (Previous Year Rs. 7,757.17 crore)
and Interest Rate Derivatives – Nil (Previous Year Rs. 62.39 crore)

1. The outstanding notional amount of derivatives done between Global
Markets unit and International Banking Group as on 31st March 2016
amounted to Rs. 19,043.28 crore (Previous Year Rs. 30,379.01 crore) and the
derivatives done in- between SBI Foreign Offices as on 31st March 2016
amounted to Rs. 18,071.97 crore (Previous Year Rs. 14,995.17 crore).

2. The outstanding notional amount of interest rate derivatives which
are not marked-to-market (MTM) where the underlying Assets/Liabilities
are not marked to market as on 31st March 2016 amounted to Rs. 66,453.24
crore (Previous Year Rs. 1,29,113.66 crore).

Note :-

1. No breach of Prudential Norms since Exposure on BhEL was well
within the discretion given to banks by RBI for taking additional 5%
exposure over the prudential limits.

2. Exposures on all the Borrower Groups were within the Prudential
Norms during the year (F.Y. 2015-16).

d) Risk Category wise Country Exposure

As per the extant RBI guidelines, the country exposure of the Bank is
categorized into various risk categories listed in the following table.
The country exposure (net funded) of the Bank for any country does not
exceed 1% of its total assets except on uSA, hence provision for the
country exposure on uSA has been made.

4. Miscellaneous

a) Disclosure of Penalties

Rs. Nil (Previous year Rs. Nil) imposed by RBI.

Financial Intelligence unit- India, New Delhi imposed a penalty of Rs.
0.05 crore under Section 12 of the PMLA Act.

During the current year the hong Kong Monetary Authority have taken
disciplinary action under Section 21 of AML ordinance and imposed a
penalty of hKD 75,43,000. (Previous year, the Authority of Prudential
Control and Resolution, Paris, France has imposed a penalty of Euro
3,00,000 on SBI Paris branch).

b) Penalty for Bouncing of SGL forms

No penalty has been levied on the Bank for bouncing of SGL Forms.

5. Disclosure Requirements as per the Accounting Standards a)
Employee Benefits

i. Defned Benefit Plans

1. Employee''s Pension Plan and Gratuity Plan

The following table sets out the status of the Defned Benefit Pension
Plan and Gratuity Plan 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,
which has been relied upon by the auditors.

2. Employees'' Provident Fund

Actuarial valuation carried out in respect of interest shortfall in the
Provident Fund Trust of the Bank, as per Deterministic Approach shows
Nil liability, hence no provision is made in F.Y. 2015-16.

There is a guaranteed return applicable to liability under SBI
Employees Provident Fund. Fund has been crediting the interest at the
rate of interest as declared under Employees Provident Fund and
Miscellaneous Provisions Act 1952 and hence treated as a defned benefit

ii. Defned Contribution Plan:

The Bank has a Defned Contribution Pension Scheme (DCPS) applicable to
all categories of Officers and employees joining the Bank on or after
August 1, 2010. The Scheme is managed by NPS Trust under the aegis of
the Pension Fund Regulatory and Development Authority. National
Securities Depository Limited has been appointed as the Central Record
Keeping Agency for the NPS. During F.Y.2015-16, the Bank has
contributed Rs. 191.18 crore (Previous Year Rs. 145.51 crore).

iii. Long Term Employee Benefits (Unfunded Obligation):

(a) Accumulating Compensated Absences (Privilege Leave)

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

(b) Other Long Term Employee Benefits

Amount of Rs. (-) 7.62 crore (Previous Year Rs. (-)40.05 crore) is (written
back)/ provided towards Other Long Term Employee Benefits as per the
actuarial valuation by the independent Actuary appointed by the Bank
and is included under the head Payments to and Provisions for
Employees in Profit and Loss Account.

Details of Provisions made for various Other Long Term Employee Benefits
during the year:

b) Segment Reporting: 1. Segment Identification

I. Primary (Business Segment)

The following are the primary segments of the Bank:- - Treasury

- Corporate / Wholesale Banking

- Retail Banking

- Other Banking Business

The present accounting and information system of the Bank does not
support capturing and extraction of the data in respect of the above
segments separately. however, based on the present internal,
organizational and management reporting structure and the nature of
their risk and returns, the data on the primary segments have been
computed as under:

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 Corporate Accounts Group,
Mid Corporate Accounts Group and Stressed Assets

Management Group. These include
providing loans and transaction services to corporate and institutional
clients and further include non-treasury operations of foreign offices.

iii. Retail Banking - The Retail Banking Segment comprises of branches
in National Banking Group, which primarily includes Personal Banking
activities including lending activities to corporate customers having
banking relations with branches in the National Banking Group. This
segment also includes agency business and ATMs.

iv. Other Banking business – Segments not classified under (i) to (iii)
above are classified under this primary segment.

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. Pricing of Inter-segmental Transfers

The Retail Banking segment is the primary resource mobilizing unit. The
Corporate/ Wholesale Banking and Treasury segments are recipient of
funds from Retail Banking. Market related Funds Transfer Pricing
(MRFTP) is followed under which a separate unit called Funding Centre
has been created. The Funding Centre notionally buys funds that the
business units raise in the form of deposits or borrowings and
notionally sell funds to business units engaged in creating assets.

IV. Allocation of Expenses, Assets and Liabilities

Expenses incurred at Corporate Centre establishments directly
attributable either to Corporate / Wholesale and Retail Banking
Operations or to Treasury Operations segment, are allocated
accordingly. Expenses not directly attributable are allocated on the
basis of the ratio of number of employees in each segment/ratio of
directly attributable expenses.

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

c) Related Party Disclosures:

1. Related Parties



1. State Bank of Bikaner & Jaipur

2. State Bank of hyderabad

3. State Bank of Mysore

4. State Bank of Patiala

5. State Bank of Travancore


1. SBI (Mauritius) Ltd.

2. SBI Canada Bank

3. State Bank of India (California)

4. Commercial Indo Bank Llc , Moscow

5. PT Bank SBI Indonesia

6. Nepal SBI Bank Ltd.

7. Bank SBI Botswana Limited


1. SBI Capital Markets Ltd.

2. SBI DFhI Ltd.

3. SBI Mutual Fund Trustee Company Pvt. Ltd.

4. SBICAP Securities Ltd.

5. SBICAP Ventures Ltd.

6. SBICAP Trustee Company Ltd.

7. SBI Cards and Payment Services Pvt. Ltd.

8. SBI Fund Management Pvt. Ltd.

9. SBI Life Insurance Company Ltd.

10. SBI Pension Funds Pvt. Ltd.

11. SBI – SG Global Securities Services Pvt. Ltd.

12. SBI Global Factors Ltd.

13. SBI General Insurance Company Ltd.

14. SBI Payment Services Pvt. Ltd.

15. SBI Foundation


1. SBICAP (uK) Ltd.

2. SBI Funds Management (International) Pvt. Ltd.

3. SBICAP (Singapore) Ltd.

4. State Bank of India Servicos Limitada


1. GE Capital Business Process Management Services Pvt. Ltd

2. C-Edge Technologies Ltd.

3. Macquarie SBI Infrastructure Management Pte. Ltd.

4. Macquarie SBI Infrastructure Trustee Ltd.

5. SBI Macquarie Infrastructure Management Pvt. Ltd.

6. SBI Macquarie Infrastructure Trustee Pvt. Ltd.

7. Oman India Joint Investment Fund – Management Company Pvt. Ltd.

8. Oman India Joint Investment Fund – Trustee Company Pvt. Ltd.


i. Regional Rural Banks

1. Andhra Pradesh Grameena Vikas Bank

2. Arunachal Pradesh Rural Bank

3. Chhattisgarh Rajya Gramin Bank

4. Ellaquai Dehati Bank

5. Meghalaya Rural Bank

6. Langpi Dehangi Rural Bank

7. Madhyanchal Gramin Bank

8. Mizoram Rural Bank

9. Nagaland Rural Bank

10. Purvanchal Bank

11. Saurashtra Gramin Bank

12. utkal Grameen Bank

13. uttarakhand Gramin Bank

14. Vananchal Gramin Bank

15. Rajasthan Marudhara Gramin Bank

16. Telangana Grameena Bank

17. Kaveri Grameena Bank

18. Malwa Gramin Bank

ii. Others

1. SBI home Finance Ltd.(under liquidation)

2. The Clearing Corporation of India Ltd.

3. Bank of Bhutan Ltd.

D. Key Management Personnel of the Bank

1. Smt. Arundhati Bhattacharya, Chairman

2. Shri P. Pradeep Kumar, Managing Director (Corporate Banking Group)
(upto 31.10.2015)

3. Shri V.G. Kannan, Managing Director (Associates & Subsidiaries)

4. Shri B. Sriram, Managing Director (National Banking Group) (upto
01.11.2015) Managing Director (Corporate Banking Group) (from

5. Shri Rajnish Kumar, Managing Director (Compliance & Risk) (from
26.05.2015 to 01.11.2015)

Managing Director (National Banking Group) (from 02.11.2015)

6. Shri P. K. Gupta, Managing Director (Compliance & Risk) (from

2. Parties with whom transactions were entered into during the year

No disclosure is required in respect of related parties, which are
State-controlled Enterprises as per paragraph 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. Amount of lease payments recognized in the P&L Account for operating
leases is Rs. 2,110.27 crore (Rs. 1,659.09 crore)

e) Earnings per Share

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.

*Diluted earnings per share is computed taking into consideration the
amount received for equity shares allotted on 1st April 2016.

f) Accounting for Taxes on Income i. Current Tax :- During the year the
Bank has debited to Profit & Loss Account Rs.4,003.27crore (Previous Year
Rs.6,719.11 crore) 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

ii. Deferred Tax :-

During the year, Rs.245.47 crore has been debited to Profit and Loss
Account (Previous Year Rs.477.56 crore Credited) on account of deferred

iii. The Bank has a net Deferred Tax Liability (DTL) of Rs.2,212.44 crore
(Previous Year net DTL of Rs.1,987.14 crore), which comprises of DTL of
Rs.2,684.96 crore (Previous Year Rs.2,353.12 crore) included under ''Other
Liabilities and Provisions'' and Deferred Tax Assets (DTA) of Rs.472.52
crore (Previous Year Rs.365.98 crore) included under

d) Liability for Operating Leases

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.

a. Liability for Premises taken on Non-Cancellable operating lease are
given below

h) Impairment of Assets

In the opinion of the Bank''s Management, there is no indication of
impairment to the assets during the year to which Accounting Standard
28 – Impairment of Assets applies.

i) Description of Contingent Liabilities (AS-29)

Sr. Particulars Brief Description


1 Claims against the Bank The Bank is a party to various proceedings in
the normal course of business. The Bank does not acknowledged as not
expect the outcome of these proceedings to have a material adverse
effect on the Bank''s debts financial conditions, results of operations
or cash fows. The Bank is also a party to various taxation matters in
respect of which appeals are pending.

2 Liability on partly paid- This item represents amounts remaining
unpaid towards liability for partly paid investments. up investments/
Venture This also includes undrawn commitments for Venture Capital


3 Liability on account of The Bank enters into foreign exchange
contracts in its normal course of business to exchange outstanding
forward currencies at a pre-fixed price at a future date. Forward
exchange contracts are commitments exchange contracts to buy or sell
foreign currency at a future date at the contracted rate. The notional
amounts are recorded as Contingent Liabilities. With respect to the
transactions entered into with its customers, the Bank generally enters
into off-setting transactions in the interbank market. This results in
generation of a higher number of outstanding transactions, and hence a
large value of gross notional principal of the portfolio, while the net
market risk is lower.

4 Guarantees given on As a part of its commercial Banking activities,
the Bank issues documentary credits and behalf of constituents,
guarantees on behalf of its customers. Documentary credits enhance the
credit standing of acceptances, the customers of the Bank. Guarantees
generally represent irrevocable assurances that the endorsements and
other Bank will make payment in the event of the customer failing to
fulfill its financial or performance obligations.

5 Other items for which The Bank enters into currency options, forward
rate agreements, currency swaps and interest the Bank is contingently
rate swaps with inter-Bank participants on its own account and for
customers. Currency liable. swaps are commitments to exchange cash
fows by way of interest/principal in one currency against another,
based on predetermined rates. Interest rate swaps are commitments to
exchange fixed and foating interest rate cash fows. The notional amounts
that are recorded as Contingent Liabilities, are typically amounts used
as a benchmark for the calculation of the interest component of the
contracts. Further, these also include estimated amount of contracts
remaining to be executed on capital account and not provided for,
letter of comforts issued by the Bank on behalf of Associates &
Subsidiaries, Bank''s Liability under Depositors Education and Awareness
Fund A/c and other sundry contingent liabilities.

The Contingent Liabilities mentioned above are dependent upon the
outcome of Court/ arbitration/out of Court settlements, disposal of
appeals, the amount being called up, terms of contractual obligations,
devolvement and raising of demand by concerned parties, as the case may

5. Payment to Micro, Small & Medium Enterprises under the Micro, Small
& Medium Enterprises Development Act, 2006

As per the information available with the Bank, there has been no
reported cases of delayed payments of the principal amount or interest
due thereon to Micro, Small & Medium Enterprises.

6. Letter of Comfort issued for Subsidiaries

The Bank has issued no letters of comfort outstanding on behalf of its
subsidiaries as on 31st March 2016. (Previous Year: Rs. 715.16 crore).

7. Provisioning Coverage Ratio (PCR):

The Provisioning to Gross Non-Performing Assets ratio of the Bank as on
31st March 2016 is 60.69 % (Previous Year 69.13%).

Foreign Currency Exposure''. An amount of Rs. 161.21 crore (Previous Year
Rs. 293.08 crore) was held as on 31st March 2016 for Currency Induced
Credit Risk and Capital allocated for Currency Induced Credit Risk
amounting to Rs. 237.62 crore ( Previous Year Rs.408.44 crore).

18. Liquidity Coverage Ratio (LCR):

a. Standalone LCR

Liquidity Coverage Ratio (LCR) standard has been introduced with the
objective that a bank maintains an adequate level of unencumbered high
Quality Liquid Assets (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.

Stock of high quality liquid LCR has been assets (hQLAs)

defned as: Total net cash outfows over the next 30 calendar days

Liquid assets comprise of high quality assets that can be readily
encashed or used as collateral to obtain cash in a range of stress
scenarios. There are two categories of assets included in the stock of
hQLAs, viz. Level 1 and Level 2 assets. Level 1 assets are with 0%
haircut while in Level 2, 2A assets are with a minimum 15% haircut and
Level 2B assets, with a minimum 50% haircut. The total net cash
outfows is the total expected cash outfows minus total expected cash
infows for the subsequent 30 calendar days. Total expected cash
outfows are calculated by multiplying the outstanding balances of
various categories or types of liabilities and off-balance sheet
commitments by the rates at which they are expected to run off or be
drawn down. Total expected cash infows are calculated by multiplying
the outstanding balances of various categories of contractual
receivables by the rates at which they are expected to fow in up to an
aggregate cap of 75% of total expected cash outfows.

The above LCR disclosure template shows the average of the un-weighted
and weighted value of LCR components for the State Bank of India
including its Foreign Branches. The averages are computed based on the
month-end values for;

a. the entire Financial Year 2015-16

b. the quarter ended March 2016

Both the positions are above the minimum 70% prescribed by RBI (60%
upto December 2015 and 70% from 1st January 2016). Bank''s LCR comes out
to 75.23% based on average of twelve months (FY15-16) and 76.36% based
on average of last three months (Q4 FY15-16). The average hQLA for the
Q4 FY15-16 was Rs. 250,927 crore, of which Level 1 assets constituted on
an average 92% of total hQLA and cash, excess CRR, and 0% risk weighted
Marketable securities issued/guaranteed by foreign sovereigns.
Government securities consisting of 88% of Total Level 1 Assets. The
net cash outfows position has gone up in the Q4 FY15-16 on account of
growth of Balance Sheet size. Derivative exposures are considered
insignificant due to almost matching infows and outfows position. During
the last quarter USD was the significant Foreign Currency which
constituted more than 5% of the Balance Sheet of the Bank. Average uSD
LCR was 82% for Q4 FY15-16.

Liquidity Management in the Bank is driven by the ALM Policy, approved
by the Bank''s Board. The Domestic and International Treasuries are
reporting to the Asset Liability

Management Committee (ALCO). The ALCO has been empowered by the Bank''s
Board to formulate the Bank''s funding strategies to ensure that the
funding sources are well diversified and is consistent with the
operational requirements of the Bank. All the major decisions of ALCO
are being reported to the Bank''s Board periodically. In addition to
monthly LCR reporting, Bank prepares daily Structural Liquidity
statements to assess the liquidity needs of the Bank on an ongoing
basis. Further, Dynamic Liquidity Reports are also being prepared
periodically to forecast liquidity requirements and to strategize

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 suffcient liquidity cover to meet its likely future short term

b. Consolidated LCR

The RBI through a supplementary guideline issued on March 31, 2015 had
stipulated the implementation of LCR at a consolidated level from
January 1, 2016. Accordingly, SBI Group has been computing the
Consolidated LCR.

The entities covered in the Group LCR are six Domestic Banking and
seven Overseas Banking Subsidiaries. These are State Bank of India,
State Bank of Bikaner and Jaipur,

The Group 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

6. Inter Office Accounts

Inter Office Accounts between branches, controlling offices, local head
offices and corporate centre establishments are being reconciled on an
ongoing basis and no material effect is expected on the profit and loss
account of the current year.

7. Sale of Assets to Reconstruction Companies

Shortfall on account of sale of assets to Reconstruction Companies
during the year amounting to Rs. 461.39 crore (previous year Rs. 2,803.19
crore) is being amortized over a period of two years in terms of RBI
Circular DBOD.BP.BC.No.98/21.04.132/2013-14 dated February 26, 2014.
Consequently, Rs. 1,509.79 crore (previous year Rs. 623.78 crore) has been
charged to the Profit & Loss Account for the year ended March 31, 2016.
The amount unamortized as at March 31, 2016 is Rs. 1,131.01 crore
(previous year Rs. 2,179.42 crore).

8. Counter Cyclical Provisioning Buffer (CCPB)

RBI vide Circular No. DBR.No.BP.

BC.79/21.04.048/2014-15 dated March 30, 2015 on ''Utilization of
Floating Provisions/Counter Cyclical Provisioning Buffer'' has allowed
the banks, to utilize up to 50 per cent of CCPB held by them as on
December 31, 2014, for making specific provisions for Non- Performing
Assets (NPAs) as per the policy approved by the Bank''s Board of
Directors. Accordingly, the Bank has utilized the CCPB of Rs. 1149 crore
(previous year Rs. 382 crore) for making specific provision for NPAs, in
accordance with the board approved policy and approval of the Board.

9. Asset Quality Review (AQR)

During the year, as a part of Asset Quality Review (AQR) conducted by
RBI, the Bank has been advised to reclassify/make additional provision
in respect of certain advance accounts over two quarters ending
December 2015 and March 2016. The Bank has accordingly implemented the
RBI directions.

10. Food Credit

In accordance with RBI instruction, the Bank has made a provision of
7.5% amounting to Rs. 543.50 crore against outstanding in the food credit
advance to a State Government pending resolution by stakeholders.

12. Depreciation on Fixed Assets

During the current year, estimated useful life of a few assets such as
ATMs, cash dispensing machines, coin dispensing machine, computer
servers, computer software, networking equipment were changed . The
effect of which on the financial statements is considered not material.

13. Other income includes Rs. 2,033.83 crore on account of exchange gain
on repatriation of funds from foreign offices to India and restatement
of capital funds at historical costs at foreign offices.

14. In accordance with RBI circular dated July 16, 2015 investment in
Rural Infrastructure and Development Fund and other related deposits
have been re-classified to Schedule 11- Other Assets from Schedule 8 –
Investments. Consequently, interest on such deposits have been
re-classified to Others from Income from investments in Schedule 13
– Interest Earned.

15. Previous year figures have been regrouped/ reclassified, wherever
necessary, to conform to current year classification. In cases where
disclosures have been made for the first time in terms of RBI guidelines
/ Accounting Standards, previous year''s figures have not been mentioned.

Source :
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