1.  GENERAL:
 
 The accompanying Financial
 
 Statements have been prepared on historical cost basis and conform to
 the generally accepted accounting practices and statutory provisions
 unless otherwise stated.
 
 2.  REVENUE RECOGNITION:
 
 A.  INCOME:
 
 i) Interest and other income are recognised on accrual basis except the
 following, owing to significant uncertainties in collection thereof:
 
 (a) Interest and Other Income on Non- Performing Assets/Investments as
 per the norms prescribed by the Reserve Bank of India.
 
 (b) Funded Interest on Standard Restructured Advances as per the
 guidelines of Reserve Bank of India.
 
 (c) Interest on overdue bills
 
 ii) The following items of income are recognized on realisation basis:
 
 a) Commission on Letters of Credit and Guarantees and cross selling.
 
 b) Income from Merchant Banking activities.
 
 c) Dividend on investment in shares and units of Mutual Funds.
 
 d) Locker rentals.
 
 e) Insurance claims.
 
 B.  EXPENDITURE:
 
 Expenditure is charged on accrual basis except the following:
 
 i) Electricity, Water, Telephone, Rent, Property Taxes, Insurance,
 Annual Maintenance Contracts, Travelling and Conveyance.
 
 ii) Interest on Overdue Time Deposits.
 
 C.  In respect of compromise/settlement proposals, accounting for
 income / loss is recognized on complete closure/realisation.
 
 3.  TRANSACTIONS INVOLVING FOREIGN EXCHANGE:
 
 (i) All the monetary Assets and Liabilities in the form of balances
 with the banks abroad, deposits in Foreign Currency, overnight
 deposits/investments, Foreign Currency Loan accounts etc. and
 
 other obligations such as Letters of Credit, Guarantees including
 Letters of Comfort of Indian operations, other than Forward Exchange
 Contracts are translated at the end of the year at the closing rates as
 per AS 11 (Revised 2003), issued by the Institute of Chartered
 Accountants of India.
 
 (ii) Income and expenditure items are translated at the exchange rates
 prevailing on the date of the transaction as per AS 11 (Revised 2003),
 issued by the Institute of Chartered Accountants of India.
 
 (iii) Forward Exchange contracts outstanding as on Balance Sheet date
 are revalued in accordance with guidelines of FEDAI. The difference
 between the revalued amount and the contracted amount is recognized as
 profit or loss, as the case may be.
 
 4.  INVESTMENTS:
 
 (i) Investments are classified into Held-to-Maturity, Available-for-
 Sale and Held-for-Trading categories, in accordance with the
 guidelines issued by Reserve Bank of India.
 
 (ii) Bank decides the category of each investment at the time of
 acquisition and classifies the same accordingly.
 
 (iil) Held-to-Maturity category
 
 comprises securities acquired by the bank with the intention to hold
 them up to maturity. Held-for- Trading category comprises securities
 acquired by the bank with the intention of trading. Available -
 for-Sale securities are those, which do not qualify for being
 classified in either of the above categories.
 
 (iv) Investments classified as Held-to- Maturity (HTM) category are
 carried at acquisition cost unless it is more than the face/redemption
 value, in which case the premium is amortised over the period remaining
 to the maturity using the constant yield method.
 
 (v) (a) The individual scrips in the Available-for-Sale category are
 marked to market at quarterly intervals. The net depreciation under
 each of six classifications [(i)
 
 Government Securities (ii) Other approved securities (iii) Shares (iv)
 Debentures and bonds (v) Subsidiaries/Joint Ventures and (vi) Other
 Investments.] under which investments are presented in the balance
 sheet is fully provided for, whereas the net appreciation under any of
 the aforesaid classifications above is ignored.
 
 (b) The market value for the purpose of periodical valuation of
 investments, included in Available-for-Sale and Held-for-Trading
 categories is based on the market price available from the
 trades/quotes on stock exchanges, except, Central/State Government
 Securities, Other approved securities, Debentures and Bonds which are
 valued as per the prices/YTM rates declared by FIMMDA.
 
 (c) Unquoted shares are valued at break-up value ascertained from the
 latest balance sheet and in case the latest balance sheet is not
 available, the same are valued at Re1/- per company, as per RBI
 guidelines.
 
 (d) Investment in quoted Mutual Fund Units is valued as per Stock
 Exchange quotations. An investment in un-quoted Mutual Fund Units is
 valued on the basis of the latest re- purchase price declared by the
 Mutual Fund in respect of each particular Scheme. In case of funds with
 a lock-in period, where re- purchase price/market quote is not
 available, Units are valued at NAV.  If NAV is not available, then
 these are valued at cost, till the end of the lock-in period. Wherever
 the re- purchase price is not available, the Units are valued at the
 NAV of the respective scheme.
 
 (vi) The individual scrips in the Held- for-Trading category are
 marked to market at monthly intervals and the net depreciation under
 each of the six classifications under which investments are presented
 in the Balance Sheet is accounted in the Profit and Loss account and
 appreciation is ignored.
 
 (vii)The depreciation in value of investments, where interest/
 principal is in arrears, is not set-off against the appreciation in
 respect of other performing securities. These investments including
 Non- performing NON-SLR investments are classified as per RBI
 prudential norms and appropriate provisions are made as per RBI norms
 and no income on such investments is recognised.
 
 (viii) (a) Profit or Loss on sale of Government Securities is computed
 on the basis of weighted average cost of the respective security.
 
 (b) Profit or Loss on sale of investments in any category is taken to
 the Profit and Loss account. In case of profit on sale of investments
 in Held-to-Maturity category, an amount equivalent to net of
 applicable taxes and statutory reserve is appropriated to the Capital
 Reserve Account.
 
 (ix) Interest accrued upto the date of acquisition of securities i. e.
 broken period interest is excluded from the acquisition cost and
 recognised as interest expense. Broken period interest received on sale
 of securities is recognised as interest income.
 
 (x) The Bank has adopted the Uniform Accounting Procedure prescribed by
 the RBI for accounting of Repo and Reverse Repo transactions including
 transactions under the Liquidity Adjustment Facility (LAF) with the
 RBI.
 
 (xi) Upfront incentives, commissions including commission related to
 subscriptions, brokerage and commission on underwriting to the extent
 of devolvement and any other incentives and brokerage received are
 reduced from the cost of the respective investments. Brokerage paid on
 securities purchased is charged to revenue account.
 
 (xii)lnvestments in Regional Rural Banks and Sponsored Institutions
 have been accounted for on carrying cost basis.
 
 (xiii) Transfer of securities from one category to another is done at
 the least of the acquisition cost / book value / market value on the
 date of transfer.
 
 (xw) The excess in the provision for depreciation arising as a result
 of valuation of AFS category of investment is transferred to Investment
 Reserve net of applicable Taxes and transfer to
 
 Statutory Reserves. The said reserve will be utilized against
 depreciation, if any, in the valuation of AFS category of Investment in
 the subsequent period as per the RBI guidelines.
 
 5.  ADVANCES:
 
 (i) Classification and provisions for advances have been made as per
 the Income Recognition & Asset classification norms as prescribed by
 Reserve Bank of India.
 
 (ii) Provision for losses against advances is made on gross basis.
 
 (iii) Advances shown in the Balance Sheet are net of:
 
 (a) Provision for losses for Non Performing Assets in accordance with
 prudential accounting norms laid down by RBI;
 
 (b) Bills rediscounted with IDBI/SIDBI; and
 
 (c) Participation Certificates issued to other Banks.
 
 (iv) Contingency Provisions against Standard Assets is shown under
 Other Liabilities & Provisions as per RBI Guidelines.
 
 6.  FIXED ASSETS:
 
 (i) Premises and other fixed assets have been accounted for at the
 historical cost, except certain land and buildings which are stated at
 revalued amount.
 
 (ii) Premises include freehold as well as leasehold properties. The
 land and building allotted by Government/ Government agencies are
 capitalised based on letters of allotment / agreement / physical
 possession.
 
 (iii) Premises include work in progress on the date of the balance
 sheet.
 
 (iv) Depreciation is provided for on Straight Line Method at the rates
 fixed by the Bank as under:
 
 Premises 5%
 
 Furniture & Fixtures 10%
 
 Vehicles 20%
 
 Office Equipment /
 
 Electrical Fittings 20%
 
 ATMs & Computer Systems/
 
 Including System Software
 
 UPS, UPS Batteries, ATM,
 
 Access Locks & AC 33.33%
 
 Application Software* *(Computer Software not 100.00%
 
 forming an integral part of Hardware)
 
 (v) Depreciation on premises is provided on composite cost, where the
 value of land and building is not separately identifiable.
 
 (vi) Depreciation on additions to fixed assets, excluding premises
 procured during the second half of the financial year has been provided
 at 50% of the normal depreciation.  In respect of application software,
 depreciation @ 100% is charged irrespective of the date of purchase.
 
 (vii) Depreciation is not provided on assets sold / disposed off during
 the year.
 
 (viii) Depreciation on leased assets is charged on Straight Line Method
 over the primary period of lease.
 
 (ix) The Bank is having a Policy for revaluation of Banks Land and
 Building which includes appropriate frequency of revaluation, in
 consonance with Accounting Standard 10 issued by the Institute of
 Chartered Accountants of India.
 
 (x) In the case of Land and Building, which have been revalued, the
 depreciation is provided on the revalued amount and the incremental
 depreciation attributable to the revalued amount is adjusted to the
 Revaluation Reserve.
 
 (xi) Expenditure on miscellaneous civil works on the rented premises in
 respect of ATMs is being charged as Revenue expenditure to the profit
 and loss account.
 
 7.  EMPLOYEES BENEFITS:
 
 Employee Benefits
 
 Employee Benefits are being valued and disclosed in the Annual Accounts
 in accordance with Accounting Standard 15 (Revised).
 
 Short Term Employee Benefits
 
 Short Term Employee Benefits are accounted for as and when the
 liability becomes due.
 
 Long Term Employee Benefits
 
 Long Term Employee benefits are valued on the basis of actuarial
 
 valuation, adopting the Projected Unit Credit Method, as stipulated in
 AS 15 (Revised). In case of Pension and Gratuity, the Bank has been
 consistently following the Projected Unit Credit Method. The Bank has
 also been providing for Leave Encashment as per actuarial valuation
 adopting AS 15 and Projected Unit Credit Method stipulated in AS 15
 (Revised) has been adopted for this benefit with effect from
 01.04.2007.
 
 The following other benefits have also been recognised with effect from
 01.04.2007 as other Long Term Employee Benefits and provisions are made
 according to the Projected Unit Credit Method for actuarial valuation:-
 
 Sl. No BENEFITS
 
 1 Sick Leave
 
 2 Leave Travel Concession Home Travel Concession
 
 3 Silver Jubilee Award
 
 4 Resettlement Expenses
 
 Plan assets forming part of Long Term Employee Benefits are being
 valued at the Fair Market Value.
 
 Consequent on the re-opening of Pension option to employees and
 enhancement in Gratuity Limit due to amendment in the Payment of
 Gratuity Act, the Bank has opted to amortize the incremental liability,
 as per RBI Circular, over a period of five years (subject to a minimum
 of 1/5lh every year) beginning with the financial year ending 31st
 March 2011.
 
 8.  NET PROFIT:
 
 The net profit disclosed in the profit and loss account is after:
 
 (i) Provisions as per RBI guidelines for bad and doubtful Advances and
 investments.
 
 (ii) Transfer to/from contingency funds.
 
 (iii) Provisions for taxes in accordance with the statutory
 requirements.
 
 (iv) Other usual and necessary provisions.
 
 9.  PROVISION FOR TAXATION:
 
 Tax expenses for the period comprising current tax and Deferred Tax
 have been provided for in terms of Accounting Standard 22 issued by the
 Institute of Chartered Accountants of India.