Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Directions, 2025 (Updated as on May 18, 2026)

RBI/DOR/2025-26/241 DOR.ACC.REC.No.160/21.04.018/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Directions, 2025 (Updated as on May 18, 2026) Table of Contents Chapter-I Preliminary A. Short title and commencement B. Applicability Chapter-II Balance Sheet and Profit and Loss Account A. Format of the Balance Sheet and Profit and Loss Account B. Notes and instructions for compilation C. Guidance on specific issues with respect to certain Accounting Standards Chapter-III Disclosure in financial statements – Notes to Accounts A. General B. Presentation C. Disclosure requirements Chapter-IV Other instructions A. Inter - branch account – provisioning for net debit balance B. Reconciliation of Nostro account and treatment of outstanding entries C. Transfer to / appropriation from Reserve funds D. Provisioning for fraud E. Unreconciled balances F. Deferred tax liability (DTL) on Special Reserve created under Section 36(1) (viii) of the Income Tax Act, 1961 G. Window dressing Chapter-V Repeal and Other Provisions A. Repeal and saving B. Application of other laws not barred C. Interpretations Annex I In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified. Chapter-I Preliminary A. Short title and commencement 1. These Directions shall be called the Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Directions, 2025. 2. These Directions shall come into force with immediate effect. B. Applicability 3. These Directions shall be applicable to Local Area Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank'). Chapter-II Balance Sheet and Profit and Loss Account A. Format of the Balance Sheet and Profit and Loss Account 4. In terms of the provisions of Section 29 of the Banking Regulation Act, 1949 (BR Act, 1949), a bank shall in respect of all business transacted by it prepare a balance sheet and profit and loss account as on the last working day of the year or the period, as the case may be, in the Forms set out in the Third Schedule of the BR Act, 1949. In exercise of the powers conferred by Section 29(4) of the BR Act, 1949, the Government of India has specified the Forms in the Third Schedule, vide notification S.O.240(E) dated March 26, 1992, published in the Gazette of India. These are reproduced in Annex I to these Directions. B. Notes and instructions for compilation 5. A bank shall follow the general instructions for the compilation of balance sheet and profit and loss account as specified in subparagraph (1) below. A bank shall ensure strict compliance with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021, as amended from time to time, subject to Directions / Guidelines issued by the RBI. Note: Mere mention of an activity, transaction, or item in instructions for compilation does not imply that it is permitted, and the bank shall refer to the extant statutory and regulatory requirements while determining the permissibility or otherwise of an activity or transaction. (1) Instructions for compilation of balance sheet Item Sch Coverage Notes and instructions for compilation Capital 1 Nationalised Banks Capital (Fully owned by Central Government) Banks incorporated outside India: Capital Other Banks (Indian) Authorised Capital (__ shares of ₹ ___ each) Issued Capital (__ shares of ₹ ___ each) Subscribed Capital (__ shares of ₹ ___ each) Called up Capital (__ shares of ₹ ___ each) Less: Calls unpaid Add: Forfeited shares Paid up Capital Authorised, Issued, Subscribed, and Called-up capital shall be given separately. Calls in arrears will be deducted from Called-up capital while the paid-up value of forfeited shares shall be added thus arriving at the Paid-up capital. Where necessary, items which can be combined shall be shown under one head, for instance ‘Issued and Subscribed Capital’. Notes: 1. The changes in the above items, if any, during the year, say, fresh contribution made by Government, fresh issue of capital, capitalisation of reserves, etc., shall be explained in the notes. 2. Perpetual Non-Cumulative Preference Shares (PNCPS) included as part of Tier 1 regulatory capital shall be included here. Reserves and Surplus 2 (I) Statutory Reserves Reserves created out of the profits in compliance with Section 17(1) (read with paragraph 13 of this Master Direction) or any other section of the BR Act, 1949 shall be separately disclosed. (II) Capital Reserves The expression ‘Capital Reserves’ shall not include any amount regarded as free for distribution through the Profit and Loss Account. Surplus on revaluation shall be treated as Capital Reserves. (III) Share Premium Premium on issue of share capital shall be shown separately under this head. (IV) Revenue and Other Reserves 3 The expression ‘Revenue Reserve’ shall mean any reserve other than Capital Reserve. This item will include all reserves, other than those separately classified. The expression ‘reserve’ shall not include any amount retained by way of providing for depreciation, renewals, or diminution in value of assets or retained by way of providing for any known liability. (V) Balance in Profit and Loss Account Includes balance of profit after appropriations. In case of loss the balance shall be shown as a deduction. Notes: Movements in various categories of reserves shall be shown as indicated in the schedule. Deposits 3 A.I) Demand Deposits (i) From banks Includes all bank deposits repayable on demand. (ii) From others Includes all demand deposits of the non-bank sectors. Credit balances in overdrafts, cash credit accounts, deposits payable at call, overdue deposits, inoperative current accounts, matured time deposits, cash certificates and certificates of deposits, etc., shall be included under this category. (II) Savings Bank Deposits Includes all savings bank deposits (including inoperative savings bank accounts) (III) Term Deposits (i) From banks Includes all types of bank deposits repayable after a specified term. (ii) From others Includes all types of deposits of the non-bank sector repayable after a specified term. Fixed deposits, cumulative and recurring deposits, cash certificates, certificates of deposits, annuity deposits, deposits mobilised under various schemes, ordinary staff deposits, foreign currency non-resident deposits accounts, etc., shall be included under this category. B. i) ii) Deposits of branches in India Deposits of branches outside India The total of these two items should match the total deposits shown in the balance sheet.: 1. Interest payable on deposits which is accrued but not due shall not be included but shown under other liabilities. 2. Matured term deposits shall be treated as demand deposits. 3. Deposits under special schemes shall be included under term deposits if they are not payable on demand. When such deposits have matured for payment, they shall be shown under demand deposits. 4. Deposits from a bank will include deposits from the banking system in India, co-operative banks, foreign banks which may or may not have a presence in India. 5. A bank shall disclose by way of a footnote to this schedule, the amount of deposits against which lien is marked out of the total deposits. (For current and previous year) Borrowings 4 (I) Borrowings in India (i) RBI Includes repo, other borrowings or refinance obtained from RBI. (ii) Other banks Includes repo, other borrowings or refinance obtained from banks (including co-operative banks) and balances in Repo Account. (iii) Other institutions and agencies Includes borrowing / refinance obtained from Export-Import Bank of India, NABARD and other institutions, agencies (including liability against participation certificates-without risk sharing, if any) and balances in Repo Account. (II) Borrowings outside India Includes borrowings from outside India. Secured borrowings included in above This item shall be shown separately. Includes secured borrowings / refinance in India and outside India. Notes - General: 1. The total of I and II should match the total borrowings shown in the balance sheet. 2. Inter-office transactions shall not be shown as borrowings. 3. Refinance obtained by a bank from RBI and various institutions shall be shown under the head ‘Borrowings’. Accordingly, advances shall be shown at the gross amount on the asset side. 4. The following shall be included here: a) Perpetual Debt Instruments b) Tier 2 Capital Instruments / Upper Tier 2 Capital Instruments c) Perpetual Cumulative Preference Shares (PCPS) d) Redeemable Non-Cumulative Preference Shares (RNCPS) e) Redeemable Cumulative Preference Shares (RCPS) f) Subordinated Debt. Other Liabilities and Provisions 5 (I) Bills Payable Includes drafts, telegraphic transfers, traveller’s cheques, mail transfers payable, pay slips, bankers’ cheques and other miscellaneous items. (II) Inter-office adjustments (net) The inter-office adjustments balance, if in credit, shall be shown under this head. The bank should first segregate the credit entries outstanding for more than 5 years in the inter-branch account and transfer them to a separate Blocked Account which should be shown under ‘Other Liabilities and Provisions - Others’. While arriving at the net amount of inter-branch transactions for inclusion here, or Schedule 11, as the case may be, the aggregate amount of Blocked Account should be excluded and only the amount representing the remaining credit entries should be netted against debit entries. Only net position of inter-office accounts, shall be shown here. (III) Interest accrued Includes interest accrued but not due on deposits and borrowings. (IV) Others (including provisions) Includes net provision for income tax, other taxes like interest tax (less advance payment, tax deducted at source, etc.), deferred tax (if after netting as per AS 22 is a liability), floating provisions, and contingency funds which are not disclosed as reserves but are actually in the nature of reserves, other liabilities which are not disclosed under any of the major heads such as unclaimed dividend, provisions, and funds kept for specific purposes, unexpired discount, outstanding charges like rent, conveyance, etc. Aggregate Net Credit in the Clearing Differences transferred to a separate Blocked Account shall be shown here. Outstanding credit entries in nostro accounts transferred to Blocked Account shall also be shown here. Notes: 1. For arriving at the net balance of inter-office adjustments all connected inter-office accounts shall be aggregated and the net balance only will be shown, representing mostly items in transit and unadjusted items. 2. The interest accruing on all deposits, whether the payment is due or not, shall be treated as a liability. 3. It is proposed to show only deposits under the head ‘deposits’ and hence all surplus provisions for bad and doubtful debts, contingency funds, etc., which are not netted off against the relative assets, shall be brought under the head ‘Others (including provisions)’. 4. Provisions towards Standard Assets shall not be netted from gross advances and shown separately as ‘Provisions against Standard Assets’ under ‘Others’ in Schedule 5 of the Balance Sheet. 5. Where any item under the ‘Others (including provisions)’ exceeds one per cent of the total assets, particulars of all such items shall be disclosed in the notes to accounts. ASSETS Cash and balances with the RBI 6 (I) Cash in hand (including foreign currency notes) Includes cash in hand including foreign currency notes. (II) Balances with RBI (i) in Current Account (ii) in Other Accounts All type of reverse repos with the RBI including those under Liquidity Adjustment Facility shall be presented under sub-item (ii) ‘in Other Accounts’. Balances with banks and money at call and short notice 7 (I) (i) (a) (b) In India Balances with banks in Current Accounts in Other Deposit Accounts Includes all balances with banks in India (including Co-operative banks), except Money at Call and Short Notice as explained below. Balances in current account and other deposit accounts shall be shown separately. (ii) (a) (b) Money at Call and Short notice with banks with other institutions Includes the following if they are for original tenors up to and inclusive of 14 days: (i) Money lent in the call / notice money market (ii) Reverse Repo with banks and other institutions The balances in Reverse Repo A/C shall be classified under Schedule 7 under item I (ii) a or I (ii) b as appropriate. (II) (i) (ii) (iii) Outside India in Current Accounts in Other Deposit Accounts Money at Call and Short Notice Includes balances held outside India by the bank. The amounts held in ‘current accounts’ and ‘deposit accounts’ shall be shown separately. ‘Money at Call and Short Notice’ outside India includes deposits usually classified as per that foreign jurisdiction’s laws, regulations, or market practices as money at call and short notice where such money is lent. Investments 8 (I) Investments in India in (i) Government securities Includes Central and State Government Securities, and Government Treasury Bills. (ii) Other Approved Securities Securities other than Government Securities, which have been specified by the RBI as ‘approved securities’ under Section 5(a) of the BR Act, 1949, shall be included here. (iii) Shares Investments in shares of companies and corporations not included in item (ii) shall be included here. (iv) Debentures and Bonds Investments in debentures (as defined by the Companies Act, 2013) and bonds of companies and corporations not included in item (ii) shall be included here. (v) Subsidiaries and / or Joint Ventures Investments in subsidiaries and joint ventures (including associates) shall be included here (vi) Others Residual investments, if any, like mutual funds, gold, etc. (II) Investments outside India (i) Government Securities (including local authorities) All foreign Government Securities including securities issued by local authorities shall be classified under this head. (ii) Subsidiaries and / or Joint ventures abroad All investments made in the share capital of subsidiaries floated outside India and / or joint ventures abroad shall be classified under this head. (iii) Other investments All other investments outside India shall be shown under this head. Advances 9 A.(i) (ii) (iii) Bills purchased and discounted Cash credits, overdrafts and loans repayable on demand Term loans In classification under Section A, all outstanding advances net of provisions made, will be classified under three heads as indicated and shall include both secured and unsecured advances as well as overdue instalments. Receivables acquired under factoring shall be reported under ‘Bills purchased and Discounted’. All loans repayable on demand and short-term loans with original maturity up to one year shall be classified under ‘Cash credits, overdrafts and loans repayable on demand’. Outstanding balances on credit cards shall be included under this category. Other balances pertaining to credit operations, even if they are dues from other banks / organisations shall be shown as part of advances. However, where such dues are in the nature of fee or other revenue receivable the same may be shown as Other Assets. A ‘Term Loan’ is a loan which has a specified maturity and is payable in instalments or in bullet form. All ‘Term Loans’ with maturity in excess of one year shall be classified under this category (i.e., A(iii)) whereas as explained above short term loans with original maturity up to one year shall be categorised as loans repayable on demand. B.(i) Secured by tangible assets All advances or part of advances including advances against book debts which are secured by tangible assets shall be shown here. The bank shall specify that advances secured by tangible assets includes advances against book debts. (ii) Covered by Bank / Government Guarantee Advances to the extent they are covered by guarantees of Indian / foreign governments, Indian / foreign banks, Deposit Insurance and Credit Guarantee Corporation (DICGC), and Export Credit Guarantee Corporation of India (ECGC) shall be included here. Further, advances to the extent they are covered by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH), and individual schemes under National Credit Guarantee Trustee Company Ltd. (NCGTC) which are backed by explicit Central Government Guarantee*, shall also be included here. *Note: In terms of the Reserve Bank of India (Local Area Banks – Prudential Norms on Capital Adequacy) Directions, 2025 . (iii) Unsecured All advances not classified under (i) and (ii) shall be included here. Rights, licenses, authorisations, etc., charged to a bank as collateral should not be reckoned as tangible security and therefore such advances shall be reckoned as unsecured under this head, with a disclosure of the same in the notes to the account. Total of ‘A’ should tally with total of ‘B’. C. (I) (i) (ii) (iii) (iv) (II) (i) (ii) (iii) (iv) (v) Advances in India Priority Sector Public Sector Banks Others Advances outside India Due from banks Due from others Bills purchased and discounted Syndicated loans Others Advances shall be classified on the sectoral basis as indicated. Advances, which qualify as priority sector lending according to extant RBI instructions are to be classified under the head ‘Priority Sector’. Such advances shall be excluded from item (ii), i.e., advances to public sector. Advances to Central / State Governments and other Government undertakings including Government Companies and statutory corporations shall be included in the category ‘Public Sector’. All advances to the banking sector including Co-operative Banks shall come under the head ‘Banks’. All the remaining advances will be included under the head ‘Others’ and typically this category will include non-priority sector advances to the private, joint, and co-operative sectors. Notes: 1. Advances shall be reported net of provisions made thereon (other than provisions towards Standard Assets). To the extent that Floating provisions have not been treated as Tier 2 capital, they shall also be netted off from advances. 2. Term loans reported shall not include loans repayable on demand. 3. Consortium advances shall be reported net of share of other participating banks / institutions. 4. All interest-bearing loans and advances granted to bank’s own staff shall be included here. 5. Advances to other banks / organisations shall be included here. 6. Interest accrued but not due should not be reflected here. Instead, it shall be shown under ‘Interest accrued’ in other assets. 7. Rights, licenses, authorisations, etc., charged to the bank as security / collateral in respect of projects (including infrastructure projects) financed by them, shall not be reckoned as tangible security. Such advances shall be reckoned as unsecured. 8. Partial credit enhancement facilities to the extent drawn shall be treated as an advance. 9. The aggregate amount of inter - bank participations with risk sharing would be reduced from the aggregate advances outstanding by issuing bank. Participating bank shall show the amount of inter-bank participations under advances. Where the participation is without risk sharing, it shall be reflected by the participating bank as due from Banks under Schedule 9. 10. Reverse Repo with banks and other institutions having original tenors more than 14 days shall be shown under this Schedule under following head: i. A.(ii) ‘Cash credits, overdrafts and loans repayable on demand’ ii. B.(i) ‘Secured by tangible assets’ iii. C.(I).(iii) Banks (iv) ‘Others’ (as the case may be) Fixed Assets 10 (I) (i) (ii) (iii) (iv) Premises At cost as on March 31 of the preceding year Additions during the year Deductions during the year Depreciation to date Premises, including land, wholly or partly owned by the bank for the purpose of business including residential premises shall be shown against ‘Premises’. In the case of premises and other fixed assets, the previous balance, additions thereto and deductions therefrom during the year as also the total depreciation written off shall be shown. (II) (i) (ii) (iii) (iv) Other Fixed Assets (including furniture and fixtures) At cost as on March 31 of the preceding year Additions during the year Deductions during the year Depreciation to date Furniture and fixtures, vehicles, and all other fixed assets shall be shown under this head. Other Assets 11 (I) Inter-office adjustments (net) The inter-office adjustments balance, if in debit, shall be shown under this head. Only net position of inter-office accounts shall be shown here. For arriving at the net balance of inter-office adjustment accounts, all connected inter-office accounts shall be aggregated and the net balance, if in debit only shall be shown representing mostly items in transit and unadjusted items. (II) Interest accrued Interest accrued but not due on investments and advances and interest due but not collected on investments will be the main components of this item. As a bank normally debit the borrowers’ account with interest due on the balance sheet date, usually there may not be any amount of interest due on advances. Only such interest as can be realised in the ordinary course shall be shown under this head. (III) Tax paid in advance / tax deducted at source The amount of advance tax paid, tax deducted at source (TDS), etc., to the extent that these items are not set off against relative tax provisions shall be shown against this item. (IV) Stationery and stamps Only exceptional items of expenditure on stationery like bulk purchase of security paper, loose leaf, or other ledgers, etc., which are shown as quasi-asset to be written off over a period of time shall be shown here. The value shall be on a realistic basis and cost escalation shall not be taken into account, as these items are for internal use. (V) Non-banking assets acquired in satisfaction of claims Immovable properties / tangible assets acquired in satisfaction of claims are to be shown under this head. (VI) Others This will include items like claims which have not been met, for instance, clearing items, debit items representing addition to assets or reduction in liabilities which have not been adjusted for technical reasons, want of particulars, etc. Accrued income other than interest shall also be included here. All non-interest-bearing loans and advances granted to the bank’s staff shall be reported here. Cash Margin Deposit with The Clearing Corporation India Limited (CCIL) shall be shown here. Deposits placed with NABARD / SIDBI / NHB, etc., on account of shortfall in priority sector targets shall be included here. A bank shall also disclose the details of such deposits, both for the current year and previous year, as a footnote in Schedule 11 of the Balance Sheet. Where any item under ‘Others’ exceeds one per cent of the total assets, particulars of all such items shall be disclosed in the notes to accounts. Contingent Liabilities 12 (I) Claims against the bank not acknowledged as debts -- (II) Liability for partly paid investments Liability on partly paid shares, debentures, etc., will be included in this head. (III) Liability on account of outstanding forward exchange contracts Outstanding forward exchange contracts shall be included here. (IV) (i) (ii) Guarantees given on behalf of constituents In India Outside India Guarantees given for constituents shall be shown. (V) Acceptances, endorsements and other obligations This item will include letters of credit and bills accepted by the bank on behalf of its customers. (VI) Other items for which the bank is contingently liable Arrears of cumulative dividends, bills rediscounted, commitments of underwriting contracts, estimated amount of contracts remaining to be executed on capital account and not provided for etc., are to be included here. All unclaimed liabilities (where amount due has been transferred to the Depositors Education and Awareness Fund established under the Depositor Education and Awareness Fund Scheme, 2014) shall be shown here. The undrawn partial credit enhancement facilities shall be shown here. When Issued (‘WI’) securities should be recorded in books as an off-balance sheet item till issue of the security. The off-balance sheet net position in the ‘WI’ market should be marked to market scrip-wise on daily basis at the day’s closing price of the ‘WI’ security. In case the price of the ‘WI’ security is not available, the value of the underlying security determined as per extant regulations may be used instead. Depreciation, if any, should be provided for and appreciation, if any, should be ignored. On delivery, the underlying security may be classified in any of the three categories, viz., ‘Held to Maturity’, ‘Available for Sale’, or ‘FVTPL’, depending upon the nature contractual cash flow and the intent of holding, at the contracted price. Bills for collection -- -- Bills and other items in the course of collection and not adjusted will be shown against this item in the summary version only. No separate Schedule is proposed. (2) Instructions for compilation of profit and loss account Item Sch Coverage Notes and Instructions for compilation Interest earned 13 (I) Interest / discount on advances / bills Includes interest and discount on all types of loans and advances like cash credit, demand loans, overdrafts, export loans, term loans, domestic and foreign bills purchased and discounted (including those rediscounted), overdue interest and interest subsidy, if any, relating to such advances / bills. (II) Income on investments Includes all income derived from the investment portfolio by way of interest / discount and dividend. Any discount or premium on the securities under HTM, debt securities under AFS and FVTPL (where contractual cash flow meets criterion for solely payment of principal and interest), shall be amortised over the remaining life of the instrument. The amortised amount shall be reflected in the financial statements under item II ‘Income on Investments’ of Schedule 13: ‘Interest Earned’ with a contra in Schedule 8: ’Investments’. (III) Interest on balances with RBI and other Inter-bank funds Includes interest on balances with RBI and other banks, call loans, money market placements, etc. (IV) Others Includes any other interest / discount income not included in the above heads. Notes: The balances in Reverse Repo Interest Income Account shall be classified under Schedule 13 (under item III or IV as appropriate). Other Income 14 (I) Commission, Exchange and Brokerage Includes all remuneration on services such as commission on collections, commission / exchange on remittances and transfers, commission on letters of credit and bank guarantees, letting out of lockers, commission on Government business, commission on other permitted agency business including consultancy and other services, brokerage, etc., on securities. It does not include foreign exchange income. (II) (III) (IV) Profit on sale of investments Less: Loss on sale of investments Profit on revaluation of investments Less: Loss on revaluation of investments Profit on sale of land, buildings and other assets Less: Loss on sale of land, buildings and other assets Includes profit / loss on sale of securities, furniture, land and building, motor vehicles, gold, silver, etc. Only the net position shall be shown. If the net position is a loss, the amount shall be shown as a deduction. The net profit / loss on revaluation of assets as well as provision for depreciation (or reversal of excess depreciation) shall also be shown under this item. Provision for non-performing investments (NPI) shall not be shown here and instead reflected under Provisions and Contingencies. (V) Profit on exchange transactions Less: Loss on exchange transactions Includes profit / loss on dealing in foreign exchange, all income earned by way of foreign exchange, commission, and charges on foreign exchange transactions excluding interest which will be shown under interest head. Only the net position shall be shown. If the net position is a loss, it is to be shown as a deduction. (VI) Income earned by way of dividend etc. from subsidiaries, companies, joint ventures abroad / in India (VII) Miscellaneous income Includes recoveries from constituents for godown rents, income from bank’s properties, security charges, insurance etc., and any other miscellaneous income. In case any item under this head exceeds one percent of the total income, particulars shall be given in the notes. The fee received from the sale of Priority Sector Lending Certificates (PSLCs) shall be shown here. Interest expended 15 (I) Interest on deposits Includes interest paid on all types of deposits including deposits from banks and other institutions. (II) Interest on RBI / inter-bank borrowings Includes discount / interest on all borrowings and refinance from RBI and other banks. (III) Others Includes discount / interest on all borrowings / refinance from financial institutions. All other payments like interest on participation certificates, penal interest paid, etc., shall also be included here. Notes: 1. The balances in Repo Interest Expenditure Account shall be classified under Schedule 15 (under item II or III as appropriate). 2. While acquiring government and other approved securities, a bank should not capitalise the broken period interest paid to seller as part of cost of the investment, but instead book it as an expense. Operating Expenses 16 (I) Payments to and provisions for employees Includes staff salaries / wages, allowances, bonus, other staff benefits like provident fund, pension, gratuity, liveries to staff, leave fare concessions, staff welfare, and medical allowance to staff, etc. (II) Rent, taxes and lighting Includes rent paid by the bank on buildings, municipal and other taxes paid (excluding income tax and interest tax), electricity, and other similar charges and levies. House rent allowance and other similar payments to staff shall appear under the head ‘Payments to and provisions for employees’. (III) Printing and stationery Includes books and forms and stationery items used by the bank and other printing charges which are not incurred by way of publicity expenditure. (IV) Advertisement and publicity Includes expenditure incurred by the bank for advertisement and publicity purposes including printing charges of publicity material. (V) Depreciation on bank’s property Includes depreciation on bank’s own property, cars and other vehicles, furniture, electric fittings, vaults, lifts, leasehold properties, non-banking assets, etc. (VI) Directors’ fees, allowances and expenses Includes sitting fees, allowances and all other expenses incurred on behalf of directors. The daily allowance, hotel charges, conveyance charges, etc., which though in the nature of reimbursement of expenses incurred shall be included under this head. Similar expenses of Local Board members, committees of the Board, etc., shall also be included under this head. (VII) Auditors’ fees and expenses (including branch auditors’ fees) Includes the fees paid to the statutory auditors and branch auditors for professional services rendered and all expenses for performing their duties, even though they may be in the nature of reimbursement of expenses. If external auditors have been appointed by the bank themselves for internal inspections and audits and other services, the expenses incurred in that context including fees should not be included under this head but shall be shown under ‘other expenditure’. (VIII) Law charges All legal expenses and reimbursement of expenses incurred in connection with legal services shall be included here. (IX) Postage, Telegrams, Telephones, etc. Includes all postal charges like stamps, telephones, etc. (X) Repairs and maintenance Includes repairs to bank’s property, their maintenance charges, etc. (XI) Insurance Includes insurance charges on bank’s property, insurance premia paid to DICGC, etc., to the extent they are not recovered from the concerned parties. (XII) Other expenditure All expenses other than those not included in any of the other heads like licence fees, donations, subscriptions to papers, periodicals, entertainment expenses, travel expenses, etc., shall be included under this head. In case any particular item under this head exceeds one per cent of the total income, particulars shall be given in the notes. The fees paid for the purchase of the PSLCs shall be shown here. Provisions and Contingencies Includes all provisions made for bad and doubtful debts, provisions for taxation, provisions for non-performing investments, transfers to contingencies, and other similar items. C. Guidance on specific issues with respect to certain Accounting Standards 6. A bank shall also be guided by following with respect to relevant issues in the application of certain Accounting Standards for the bank. (1) Accounting Standard 5 - Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies (i) The objective of this Standard is to prescribe the classification and disclosure of certain items in the statement of profit and loss so that all enterprises prepare and present such a statement on a uniform basis. (ii) Accordingly, this Standard requires the classification and disclosure of extraordinary and prior period items, and the disclosure of certain items within profit or loss from ordinary activities. It also specifies the accounting treatment for changes in accounting estimates and the disclosures to be made in the financial statements regarding changes in accounting policies. (iii) Paragraph 4.3 of Preface to the Statements on Accounting Standards issued by the ICAI states that Accounting Standards are intended to apply only to items which are material. Since materiality is not objectively defined, it has been decided that a bank shall ensure compliance with the provisions of the Accounting Standard in respect of any item of prior period income or prior period expenditure which exceeds one percent of the total income / total expenditure of the bank if the income / expenditure is reckoned on a gross basis or one per cent of the net profit before taxes or net losses as the case may be if the income is reckoned net of costs. (iv) Since the format of the profit and loss accounts of a bank prescribed in Form B under Third Schedule to the BR Act, 1949 does not specifically provide for disclosure of the impact of prior period items on the current year’s profit and loss, such disclosures, wherever warranted, may be made in the ‘Notes on Accounts’ to the balance sheet of a bank. (2) Accounting Standard 9 – Revenue Recognition (i) Non-recognition of income by the bank in case of non-performing advances and non-performing investments, in compliance with the regulatory prescriptions of the RBI, shall not attract a qualification by the statutory auditors as this would be in conformity with provisions of the standard, as it recognises postponement of recognition of revenue where collectability of the revenue is significantly uncertain. (3) Accounting Standard 11 - The Effects of Changes in Foreign Exchange Rates AS 11 is applied in the context of the accounting for transactions in foreign currencies. The issues that arise in this context have been identified and a bank shall be guided by the following while complying with the provisions of the standard. (i) Exchange rate for recording foreign currency transactions (a) As per paragraphs 9 and 21 of the Standard, a foreign currency transaction shall be recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. A bank may face difficulty in applying the exchange rate prevailing at the date of the transaction in respect of the items which are not being recorded in Indian Rupees or are currently being recorded using a notional exchange rate. (b) A bank, which is in a position to apply the exchange rate prevailing on the date of the transaction for recording the foreign currency transactions as required under AS 11 shall comply with the requirements. A bank, which has an extensive branch network, have a high volume of foreign currency transactions and is not fully equipped on the technology front shall be guided by the following: (i) Paragraph 10 of the Standard allows, for practical reasons, the use of a rate that approximates the actual rate at the date of the transaction. The Standard also states that if exchange rates fluctuate significantly, the use of average rate for a period is unreliable. Since the enterprises are required to record the transactions at the date of the occurrence thereof, the weekly average closing rate of the preceding week can be used for recording the transactions occurring in the relevant week, if the same approximates the actual rate at the date of the transaction. In view of the practical difficulties which a bank may have in applying the exchange rates at the dates of the transactions and since the Standard allows the use of a rate that approximates the actual rate at the date of the transaction, the bank may use average rates as detailed below: (ii) FEDAI publishes a weekly average closing rate at the end of each week and a quarterly average closing rate at the end of each quarter for various currencies. (iii) In respect of those foreign currency transactions, which are currently not being recorded in Indian Rupees at the date of the transaction or are being recorded using a notional exchange rate shall now be recorded at the date of the transaction by using the weekly average closing rate of the preceding week, published by FEDAI, if the same approximates the actual rate at the date of the transaction. (iv) If the weekly average closing rate of the preceding week does not approximate the actual rate at the date of the transaction, the closing rate at the date of the transaction shall be used. For this purpose, the weekly average closing rate of the preceding week would not be considered approximating the actual rate at the date of the transaction if the difference between (A) the weekly average closing rate of the preceding week, and (B) the exchange rate prevailing at the date of the transaction, is more than three and a half percent of (B). (v) A bank is encouraged to equip itself to record the foreign currency transactions at the exchange rate prevailing on the date of the transaction. (ii) Closing rate (a) Paragraph 7 of the Standard defines ‘Closing rate’ as the exchange rate at the balance sheet date. (b) In order to ensure uniformity among banks, closing rate to be applied for the purposes of AS 11 (revised 2003) for the relevant accounting period shall be the last closing spot rate of exchange announced by FEDAI for that accounting period. (4) Accounting Standard 17 – Segment Reporting The indicative formats for disclosure under ‘AS 17 – Segment Reporting’ are as below. Format Business segments Notes: a) The business segments will be ‘Treasury’, ‘Corporate / Wholesale Banking’, ‘Retail Banking’, and ‘Other banking operations’. b) A bank shall adopt its own methods, on a reasonable and consistent basis, for allocation of expenditure among the segments. c) ‘Treasury’ shall include the entire investment portfolio. d) Retail Banking shall include exposures which fulfil the four criteria of orientation, product, granularity, and low value of individual exposures for retail exposures laid down in the Reserve Bank of India (Local Area Banks – Prudential Norms on Capital Adequacy) Directions, 2025 . Individual housing loans will also form part of Retail Banking segment for the purpose of reporting under AS-17. e) Corporate / Wholesale Banking includes all advances to trusts, partnership firms, companies, and statutory bodies, which are not included under ‘Retail Banking’. f) Other Banking Business includes all other banking operations not covered under ‘Treasury’, 'Wholesale Banking' and 'Retail Banking' segments. It shall also include all other residual operations such as para-banking transactions / activities. g) Besides the above-mentioned segments, a bank shall report additional segments within ‘Other Banking Business’ which meet the quantitative criterion prescribed in the AS 17 for identifying reportable segments. (5) Accounting Standard 18 – Related Party Disclosures The manner of disclosures required by paragraphs 23 to 26 of AS 18 is illustrated as below. It may be noted that the format given below is merely illustrative in nature and is not exhaustive. (Amount in ₹ crore) Items / Related Party Parent (as per ownership or control) Subsidiaries Associates / Joint Ventures Key Management Personnel Relatives of Key Management Personnel Total Borrowings # Deposits # Placement of deposits # Advances # Investments # Non-funded commitments # Leasing / HP arrangements availed # Leasing / HP arrangements provided # Purchase of fixed assets Sale of fixed assets Interest paid Interest received Rendering of services* Receiving of services* Management contracts* # The outstanding at the year end and the maximum during the year are to be disclosed. *Contract services etc. and not services like remittance facilities, locker facilities etc. Notes: i) Related parties for a bank are its parent, subsidiaries, associates / joint ventures, Key Management Personnel (KMP) and relatives of KMP. KMP are the whole-time directors for an Indian bank. Relatives of KMP would be on the lines indicated in Section 45S of the RBI Act, 1934. ii) The name and nature of related party relationship shall be disclosed, irrespective of whether there have been transactions, where control exists within the meaning of the Standard. Control would normally exist in case of parent-subsidiary relationship. The disclosures may be limited to aggregate for each of the above related party categories and would pertain to the year-end position as also the maximum position during the year. iii) Secrecy provisions: If in any of the above category of related parties there is only one related party entity, any disclosure would be tantamount to infringement of customer confidentiality. In terms of AS 18, the disclosure requirements do not apply in circumstances when providing such disclosures would conflict with the reporting enterprise’s duties of confidentiality as specifically required in terms of statute, by regulator or similar competent authority. Further, in case a statute or regulator governing an enterprise prohibits the enterprise from disclosing certain information, which is required to be disclosed, non-disclosure of such information would not be deemed as non-compliance with the Accounting Standards. On account of the judicially recognised common law duty of the bank to maintain the confidentiality of the customer details, it need not make such disclosures. In view of the above, where the disclosures under the Accounting Standards are not aggregated disclosures in respect of any category of related party, i.e., where there is only one entity in any category of related party, a bank need not disclose any details pertaining to that related party other than the relationship with that related party. (6) Accounting Standard 23 – Accounting for Investments in Associates in CFS (a) This Accounting Standard sets out principles and procedures for recognising, in the Consolidated Financial Statements (CFS), the effects of the investments in associates on the financial position and operating results of a group. (b) The Standard requires that an investment in an associate shall be accounted for in CFS under the equity method subject to certain exceptions. (c) The term ‘associate’ is defined as an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor. (d) ‘Significant influence’ is the power to participate in the financial and / or operating policy decisions of the investee but not control over those policies. Such an influence may be gained by share ownership, statute or agreement. (e) As regards share ownership, if an investor holds, directly or indirectly through subsidiaries 20 percent or more of the voting power of the investee, it is presumed that the investor has significant influence, unless it can be clearly demonstrated that this is not the case. Conversely, if the investor holds, directly or indirectly through subsidiaries less than 20 percent of the voting power of the investee, it is presumed that the investor does not have significant influence, unless such influence can be clearly demonstrated. A substantial or majority ownership by another investor does not necessarily preclude an investor from having significant influence. (f) The issue is whether conversion of debt into equity in an enterprise by a bank by virtue of which the bank holds more than 20 percent will result in an investor-associate relationship for the purpose of AS 23. From the above it is clear that though a bank may acquire more than 20 percent of voting power in the borrower entity in satisfaction of its advances it may be able to demonstrate that it does not have the power to exercise significant influence since the rights exercised by it are protective in nature and not participative. In such a circumstance, such investment may not be treated as investment in associate under this Accounting Standard. Hence, the test shall not be merely the proportion of investment but the intention to acquire the power to exercise significant influence. (7) Accounting Standard 24 - Discontinuing operations (i) This Standard establishes principles for reporting information about discontinuing operations. (ii) Merger / closure of branches of a bank by transferring the assets / liabilities to the other branches of the same bank may not be deemed as a discontinuing operation and hence this Accounting Standard will not be applicable to merger / closure of branches of a bank by transferring the assets / liabilities to the other branches of the same bank. (iii) Disclosures shall be required under the Standard only when: (a) discontinuing of the operation has resulted in shedding of liability and realisation of the assets by the bank or decision to discontinue an operation which will have the above effect has been finalised by the bank, and (b) the discontinued operation is substantial in its entirety. (8) Accounting Standard 25 – Interim Financial Reporting (i) This Standard prescribes the minimum content of an interim financial report and the principles for recognition and measurement in a complete or condensed financial statements for an interim period. (9) Accounting Standard 26 – Intangible asset (i) This Standard prescribes the accounting treatment for intangible assets that are not dealt with specifically in another accounting standard. (ii) With respect to computer software which has been customised for the bank’s use and is expected to be in use for some time, the detailed recognition and amortisation principle in respect of computer software prescribed in the Standard adequately addresses these issues and may be followed by the bank. (iii) It may be noted that intangible assets recognised and carried in the balance sheet of a bank in compliance with AS 26 shall attract provisions of Section 15(1) of the BR Act 1949, in terms of which a bank is prohibited from declaring any dividend until any expenditure not represented by tangible assets is carried in the balance sheet. (iv) A bank desirous of paying dividend while carrying any intangible assets in its books must seek exemption from Section 15(1) of the BR Act, 1949 from the Central Government. (10) Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures (i) This Standard is applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income, and expenses in the financial statements of ventures and investors, regardless of the structures or forms under which the joint venture activities take place. (ii) This Standard identifies three broad types of joint ventures, namely, jointly controlled operations, jointly controlled assets, and jointly controlled entities. (iii) In case of jointly controlled entities, where a bank is required to present CFS, the investment in joint ventures shall be accounted for as per provisions of this Standard. In respect of joint ventures in the form of jointly controlled operations and jointly controlled assets, this Accounting Standard is applicable for both solo financial statements as well as CFS. (iv) It is clarified that though paragraph 26 of the Accounting Standard prescribes that for the purpose of solo financial statements, investment in jointly controlled entities is to be accounted as per AS 13, such investment is to be reflected in the solo financial statements of the bank as per guidelines prescribed by RBI since AS 13 does not apply to banks. (v) RRBs sponsored by banks shall be treated as associates and AS 27 shall not apply for investment in RRBs. The investment in RRBs shall however, be accounted in the consolidated financial statements as per the provisions of Accounting Standard 23. (11) Accounting Standard 28 – Impairment of assets (i) This standard prescribes the procedures that an enterprise applies to ensure that its assets are carried at no more than their recoverable amount. (ii) It is clarified that the standard shall not apply to inventories, investments, and other financial assets such as loans and advances and shall generally be applicable to a bank in so far as it relates to fixed assets. (iii) The Standard shall generally apply to financial lease assets and non-banking assets acquired in settlement of claims only when the indications of impairment of the entity are evident. Chapter-III Disclosure in financial statements – Notes to Accounts 7. A bank shall disclose information as specified in this chapter in the ‘Notes to Accounts’ of the financial statements. Explanation 1: These disclosures are intended only to supplement and not to replace disclosure requirements under other laws, regulations, or accounting and financial reporting standards. Explanation 2: A bank is encouraged to make disclosures that are more comprehensive than the minimum required under these Directions, especially if such disclosures significantly aid in the understanding of the financial position and performance. A. General 8. The items listed in these Directions shall be disclosed in the ‘Notes to Accounts’ to the financial statements. A bank shall make additional disclosures where material. B. Presentation 9. In addition to the schedules to the balance sheet, a summary of ‘significant accounting policies’ and ‘Notes to Accounts’ shall be disclosed as separate Schedules. C. Disclosure requirements 10. A bank shall, at the minimum, furnish the following information in the ‘Notes to Accounts’. The bank shall note that mere mention of an activity, transaction or item in the disclosure template does not imply that it is permitted. The bank shall refer to the extant statutory and regulatory requirements while determining the permissibility or otherwise of an activity or transaction. The bank shall disclose comparative information in respect of the previous period for all amounts reported in the current period’s financial statements. Further, the bank shall include comparative information for narrative and descriptive information if it is relevant to understanding the current period’s financial statements. (1) Regulatory capital (i) Composition of regulatory capital (Amount in ₹ crore) Sr. No. Particulars Current Year Previous Year i) Tier 1 capital ii) Tier 2 capital iii) Total capital (Tier 1 + Tier 2) (i + ii) iv) Total Risk Weighted Assets (RWAs) v) Tier 1 Ratio (Tier 1 capital as a percentage of RWAs) vi) Tier 2 Ratio (Tier 2 capital as a percentage of RWAs) vii) Capital to Risk Weighted Assets Ratio (CRAR) (Total Capital as a percentage of RWAs) viii) Amount of paid-up equity capital raised during the year ix) Amount of non-equity Tier 1 capital raised during the year, of which: Give list* as per instrument type (perpetual non-cumulative preference shares, perpetual debt instruments, etc.). x) Amount of Tier 2 capital raised during the year, of which: Give list* as per instrument type (perpetual cumulative preference shares, debt capital instruments in Upper Tier 2, etc.). * Example: A bank may disclose as under Current year Previous year Amount of non-equity Tier 1 capital raised during the year of which: ### ### a) Perpetual Non-Cumulative Preference Shares b) Perpetual Debt Instruments ### ### ### ### (ii) Draw down from Reserves: Suitable disclosures mentioning the amount and the rationale for withdrawal shall be made regarding any draw down from reserves. (2) Asset liability management (i) Maturity pattern of certain items of assets and liabilities (Amount in ₹ crore) Day 1 2 to 7 days 8 to 14 days 15 to 30 days 31 days to 2 months Over 2 months and to 3 months Over 3 months and up to 6 Months Over 6 months and up to 1 year Over 1 year and up to 3 years Over 3 years and up to 5 years Over 5 years Total Deposits Advances Investments Borrowings Foreign Currency assets Foreign Currency liabilities Note: A bank shall be guided by the Reserve Bank of India (Local Area Banks – Asset Liability Management) Directions, 2025 , as amended from time to time, for associated guidelines on asset liability management. (3) Investments (i) Composition of investment portfolio (all amounts in ₹ crore) Current Year Previous Year HTM AFS FVTPL Subsidiaries, Associates & JVs HTM AFS FVTPL Subsidiaries, Associates & JVs At cost Fair Value HFT non-HFT At cost Fair Value At cost Fair Value HFT non-HFT At cost Fair Value I. Investments in India (i) Government securities (ii) Other approved securities (iii) Shares (iv) Debentures and Bonds (v) Subsidiaries, associates and joint ventures (vi) Others Total Less: Provisions for impairment / NPI Net II. Investments outside India (i) Government securities (including local authorities) (ii) Subsidiaries, associates and joint ventures (iii) Other investments Total Less: Provisions for impairment / NPI Net Total investments (I+II) (ii) Fair value hierarchy of investment portfolio measured at fair value on balance sheet (In ₹ Crore) Current Year Previous Year AFS FVTPL AFS FVTPL Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total I. Investments in India (i) Government securities (ii) Other approved securities (iii) Shares (iv) Debentures and Bonds (v) Subsidiaries, associates and joint ventures (vi) Others Total II. Investments outside India (i) Government securities (including local authorities) (ii) Subsidiaries, associates and joint ventures (iii) Other investments Total Total investments (I+II) (iii) Net gains / (losses) on Level 3 financial instruments recognised in AFS-Reserve and Profit and Loss Account Current Year Previous Year Recognised in AFS-Reserve Recognised in Profit and Loss Account Note: This disclosure shall exclude Level 3 assets where the valuation of the asset is the price declared by FBIL / FIMMDA for that asset. (iv) Details of sales made out of HTM: Details of sales made out of HTM shall be disclosed in the notes to accounts of the financial statements as per the format mentioned below. (all amounts in ₹ crore) Current Year Previous Year A Opening carrying value of securities in HTM B Carrying value of all HTM securities sold during the year C Less: Carrying values of securities sold under situations exempted from regulatory limit* D Carrying value of securities sold (D=B-C) E Securities sold as a percentage of opening carrying value of securities in HTM (E=D÷A) F Amount transferred to Capital Reserve in respect of HTM securities which were sold at a gain *In any financial year, the carrying value of investments sold out of HTM shall not exceed five per cent of the opening carrying value of the HTM portfolio. The five per cent threshold referred to above shall exclude sale of securities in the situations given under the Reserve Bank of India (Local Area Banks - Classification, Valuation and Operation of Investment Portfolio) Directions, 2025 . (v) Reclassification between categories of investments In terms of Reserve Bank of India (Local Area Banks – Classification, Valuation and Operation of Investment Portfolio) Directions, 2025 , when a bank reclassifies investments from one category to another category, it shall disclose the details of such reclassification including the reclassification adjustments in the notes to the financial statements. (vi) 4 Movement of provisions for non-performing investments (NPIs) (Amount in ₹ crore) Particulars Current Year Previous Year i) Movement of provisions held towards NPIs a) Opening balance b) Add: Provisions made during the year c) Less: Write off / write back of excess provisions during the year d) Closing balance (vii) Non-SLR investment portfolio (a) Non-performing non-SLR investments (Amount in ₹ crore) Sr. No. Particulars Current Year Previous Year a) Opening balance b) Additions during the year since 1st April c) Reductions during the above period d) Closing balance e) Total provisions held (b) Issuer composition of non-SLR investments (Amount in ₹ crore) Sr. No. Issuer Amount Extent of Private Placement Extent of ‘Below Investment Grade’ Securities Extent of ‘Unrated’ Securities Extent of ‘Unlisted’ Securities (1) (2) (3) (4) (5) (6) (7) Current year Previous Year Current year Previous Year Current year Previous Year Current year Previous Year Current year Previous Year a) PSUs b) FIs c) Banks d) Private Corporates e) Subsidiaries/ Joint Ventures f) Others g) Provision held towards NPI Total Note: 1. For a bank, the Total under column 3 shall match with the sum of total of Investments included under the following categories in Schedule 8 to the balance sheet: a) Investment in India in i) Shares ii) Debentures and Bonds iii) Subsidiaries and / or Joint Ventures iv) Others b) Investment outside India in (where applicable) i) Government securities (including local authorities) ii) Subsidiaries and / or joint ventures abroad iii) Other investments 2. Amounts reported under columns 4, 5, 6 and 7 above may not be mutually exclusive. (viii) Repo transactions (in face value and market value terms) (Amount in ₹ crore) Minimum outstanding during the year Maximum outstanding during the year Daily average outstanding during the year Outstanding as on March 31 FV MV FV MV FV MV FV MV i) Securities sold under repo a) Government securities b) Corporate debt securities c) Any other securities ii) Securities purchased under reverse repo a) Government securities b) Corporate debt securities c) Any other securities Notes: (i) ‘FV’ means Face Value and ‘MV’ means Market Value. (ii) The disclosure shall be as specified in the Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025 as amended from time to time. For ease of reference the disclosure template as on the date of issuance of this Master Direction has been reproduced here. (ix) Government Security Lending (GSL) transactions (in market value terms) As at … (current year balance sheet date) (Amount in ₹ crore) Minimum outstanding during the year Maximum outstanding during the year Daily average outstanding during the year Total volume of transactions during the year Outstanding as on March 31 Securities lent through GSL transactions Securities borrowed through GSL transactions Securities placed as collateral under GSL transactions Securities received as collateral under GSL Transactions As at … (previous year balance sheet date) (Amount in ₹ crore) Minimum outstanding during the year Maximum outstanding during the year Daily average outstanding during the year Total volume of transactions during the year Outstanding as on March 31 Securities lent through GSL transactions Securities borrowed through GSL transactions Securities placed as collateral under GSL transactions Securities received as collateral under GSL Transactions Note: The disclosure shall be as specified in the Reserve Bank of India (Government Securities Lending) Directions, 2023 , as amended from time to time. For ease of reference the disclosure template as on the date of issuance of this Direction has been reproduced here. (4) Asset quality (i) Classification of advances and provisions held Standard Non-Performing Total Total Standard Advances Sub-standard Doubtful Loss Total Non-Performing Advances Gross Standard Advances and NPAs Opening Balance Add: Additions during the year Less: Reductions during the year* Closing balance *Reductions in Gross NPAs due to: i) Upgradation ii) Recoveries (excluding recoveries from upgraded accounts) iii) Technical / Prudential Write-offs iv) Write-offs other than those under (iii) above Provisions (excluding Floating Provisions) Opening balance of provisions held Add: Fresh provisions made during the year Less: Excess provision reversed / Write-off loans Closing balance of provisions held Net NPAs Opening Balance Add: Fresh additions during the year Less: Reductions during the year Closing Balance Floating Provisions Opening Balance Add: Additional provisions made during the year Less: Amount drawn down during the year (Rationale for drawdown may be explained by way of a note below the table) Closing balance of floating provisions Technical write-offs and the recoveries made thereon Opening balance of Technical / Prudential written-off accounts Add: Technical / Prudential write-offs during the year Less: Recoveries made from previously technical / prudential written-off accounts during the year Closing balance Note: 1) While making disclosures in audited annual financial statements, a bank should invariably provide the figures for both the current and previous year to facilitate comparison. 2) Technical or prudential write-off is the amount of non-performing loans which are outstanding in the books of the branches but have been written-off (fully or partially) at Head Office level. Amount of Technical write-off should be certified by statutory auditors. 3) To the extent that floating provisions have not been reckoned for Tier 2 capital, they may be netted off from Gross NPAs to arrive at Net NPAs. Ratios (in percent) (to be computed as per applicable regulatory instructions) Current Year Previous Year Gross NPA to Gross Advances Net NPA to Net Advances Provision coverage ratio (ii) Sector-wise advances and Gross NPAs (Amounts in ₹ crore) Sr. No. Sector* Current Year Previous Year Outstanding Total Advances Gross NPAs Percentage of Gross NPAs to Total Advances in that sector Outstanding Total Advances Gross NPAs Percentage of Gross NPAs to Total Advances in that sector i) Priority Sector a) Agriculture and allied activities b) Advances to industries sector eligible as priority sector lending c) Services d) Personal loans Sub-total (i) ii) Non-priority Sector a) Agriculture and allied activities b) Industry c) Services d) Personal loans Sub-total (ii) Total (i + ii) *A bank shall also disclose in the format above, sub-sectors where the outstanding advances exceeds 10 percent of the outstanding total advances to that sector. For instance, if a bank’s outstanding advances to the mining industry exceed 10 percent of the outstanding total advances to ‘Industry’ sector it shall disclose details of its outstanding advances to mining separately in the format above under the ‘Industry’ sector. (iii) Overseas assets, NPAs and revenue (Amount in ₹ crore) Particulars Current Year Previous Year Total Assets Total NPAs Total Revenue Note: If a bank does not have any overseas assets, NPAs and revenues, in both the current and previous year it may omit this disclosure. (iv) Details of accounts subjected to restructuring (restructuring as defined as per applicable regulations) Agriculture and allied activities Corporates (excluding MSME) Micro, Small and Medium Enterprises (MSME) Retail (excluding agriculture and MSME) Total Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Standard Number of borrowers Gross Amount (₹ crore) Provision held (₹ crore) Sub-standard Number of borrowers Gross Amount (₹ crore) Provision held (₹ crore) Doubtful Number of borrowers Gross Amount (₹ crore) Provision held (₹ crore) Total Number of borrowers Gross Amount (₹ crore) Provision held (₹ crore) A bank shall disclose in its published Annual Balance Sheets the amount and number of accounts in respect of which applications for restructuring are under process, but the restructuring packages have not yet been approved. (v) Divergence in asset classification and provisioning: A bank shall make suitable disclosures as tabulated below, if either or both of the following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI as part of its supervisory process, exceeds five per cent of the reported profit before provisions and contingencies for the reference period, and (b) the additional Gross NPAs identified by the RBI as part of its supervisory process exceed five per cent of the reported incremental Gross NPAs for the reference period. Explanation: Reported incremental Gross NPAs refers to additions during the reference year to the Gross NPAs as disclosed in the Notes to the Financial Statements of the reference period. (Amount in ₹ crore) Sr. Particulars Amount 1. Gross NPAs as on March 31, 20XX* as reported by the bank 2. Gross NPAs as on March 31, 20XX as assessed by RBI 3. Divergence in Gross NPAs (2-1) 4. Net NPAs as on March 31, 20XX as reported by the bank 5. Net NPAs as on March 31, 20XX as assessed by RBI 6. Divergence in Net NPAs (5-4) 7. Provisions for NPAs as on March 31, 20XX as reported by the bank 8. Provisions for NPAs as on March 31, 20XX as assessed by RBI 9. Divergence in provisioning (8-7) 10 Reported Profit before Provisions and Contingencies for the year ended March 31, 20XX 11. Reported Net Profit after Tax (PAT) for the year ended March 31, 20XX 12. Adjusted (notional) Net Profit after Tax (PAT) for the year ended March 31, 20XX after considering the divergence in provisioning * March 31, 20XX is the close of the reference period in respect of which divergences were assessed The disclosures, as above, shall be made in the ‘Notes to Accounts’ in the ensuing Annual Financial Statements published immediately following communication of such divergence by RBI to the bank. (vi) Disclosure of transfer of loan exposure A Lender shall make appropriate disclosures in its financial statements, under ‘Notes to Accounts’, relating to the total amount of loans not in default / stressed loans transferred and acquired to / from other entities as prescribed below, on a quarterly basis: (a) In respect of loans not in default that are transferred or acquired, the disclosures should cover, inter alia, aspects such as weighted average maturity, weighted average holding period, retention of beneficial economic interest, coverage of tangible security coverage, and rating-wise distribution of rated loans. Specifically, a transferor should disclose all instances where it has agreed to replace loans transferred to transferee(s) or pay damages arising out of any representation or warranty. The disclosures should also provide break-up of loans transferred / acquired through assignment / novation and loan participation. (b) In the case of stressed loans transferred or acquired, the following disclosures should be made: Details of stressed loans transferred during the year (to be made separately for loans classified as NPA and SMA) (all amounts in ₹ crore) To ARCs To permitted transferees To other transferees (please specify) No: of accounts Aggregate principal outstanding of loans transferred Weighted average residual tenor of the loans transferred Net book value of loans transferred (at the time of transfer) Aggregate consideration Additional consideration realised in respect of accounts transferred in earlier years Details of loans acquired during the year (all amounts in ₹ crore) From Scheduled Commercial Banks, Regional Rural Bank, Co-operative Banks, All India Financial Institutions, Small Finance Banks and Non-Banking Finance Companies including Housing Finance Companies From ARCs Aggregate principal outstanding of loans acquired Aggregate consideration paid Weighted average residual tenor of loans acquired (c) The transferor(s) should also make appropriate disclosures with regard to the quantum of excess provisions reversed to the profit and loss account on account of sale of stressed loans. Also, the lenders should disclose the distribution of the SRs held by them across the various categories of Recovery Ratings assigned to such SRs by the credit rating agencies. Note: While making disclosures in audited annual financial statements, a bank should invariably provide the figures for both the current and previous year to facilitate comparison. (vii) Non-Fund Based (NFB) Credit Facilities: A bank shall disclose the details of NFB credit facilities in the format given below. As at 31st March 20XX As at 31st March 20XX Previous Year Previous Year Secured* Portion Unsecured Portion Secured* Portion Unsecured Portion I Outstanding Guarantees (₹ crore) i) In India ii) Outside India II Acceptances, Endorsements and other Obligations (₹ crore) III Other NFB Credit facilities (₹ crore) * Secured portion is as defined under Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 . Note: As regards NFB credit limits, the bank shall be guided by the Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 , as amended from time to time. These Directions shall come into force from April 1, 2026, or from any earlier date as decided by a bank as per its internal policy (“effective date”). Extension of any new NFB facility and renewal of an existing NFB facility after the effective date, shall be governed in terms of these Directions. All existing NFB facilities extended/ renewed till the effective date shall be governed by the existing instructions as applicable to the respective bank. (viii) Fraud accounts: A bank shall disclose details on the number and the amount involved in frauds as well as the provisioning thereon as per template given below. Current year Previous year Number of frauds reported Amount involved in fraud (₹ crore) Amount of provision made for such frauds (₹ crore) Amount of unamortised provision debited from ‘other reserves’ as at the end of the year (₹ crore) (ix) Disclosure under resolution framework for COVID-19-related Stress (a) A special window under the Prudential Framework was extended to enable the lenders to implement a resolution plan in respect of eligible corporate exposures, and personal loans, while classifying such exposures as Standard. (b) A bank shall make disclosures in the format prescribed below every half-year, i.e., in the financial statements as on September 30 and March 31, starting from the half-year ending September 30, 2021, till all exposures on which resolution plan was implemented are either fully extinguished or completely slip into NPA, whichever is earlier. Format for disclosures to be made half yearly starting September 30, 2021 (Amounts in ₹ crore) Type of borrower Exposure to accounts classified as Standard consequent to implementation of resolution plan– Position as at the end of the previous half-year (A) Of (A), aggregate debt that slipped into NPA during the half-year Of (A) amount written off during the half-year Of (A) amount paid by the borrowers during the half- year Exposure to accounts classified as Standard consequent to implementation of resolution plan – Position as at the end of this half-year Personal Loans Corporate persons* Of which MSMEs Others Total * As defined in Section 3(7) of the Insolvency and Bankruptcy Code, 2016 Note: A bank that is not required by the listing requirements or otherwise to publish quarterly / half-yearly statements, shall make the disclosures for the full year in the annual financial statements. (5) Exposures (i) Exposure to real estate sector (Amount in ₹ crore) Category Current Year Previous Year i) Direct exposure a) Residential Mortgages Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented. Individual housing loans eligible for inclusion in priority sector advances shall be shown separately. Exposure would also include non-fund based (NFB) limits. b) Commercial Real Estate Lending secured by mortgages on commercial real estate (office buildings, retail space, multipurpose commercial premises, multifamily residential buildings, multi tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits. c) Investments in Mortgage-Backed Securities (MBS) and other securitised exposures i. Residential ii. Commercial Real Estate ii) Indirect Exposure Fund based and non-fund-based exposures on National Housing Bank and Housing Finance Companies. Total Exposure to Real Estate Sector (ii) Exposure to capital market (Amount in ₹ crore) Particulars Current Year Previous Year i) Direct investment in equity shares, convertible bonds, convertible debentures and units of equity oriented mutual funds the corpus of which is not exclusively invested in corporate debt; ii) Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity oriented mutual funds; iii) Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security; iv) Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds, i.e., where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances; v) Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers; vi) Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources; vii) Bridge loans to companies against expected equity flows / issues; viii) Underwriting commitments taken up by the bank in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds; ix) Financing to stockbrokers for margin trading; x) All exposures to Venture Capital Funds (both registered and unregistered) Total exposure to capital market A bank may omit those line items which are not applicable / permitted or have nil exposure both in current and previous year. (iii) Risk category - wise country exposure (Amount in ₹ crore) Risk Category* Exposure (net) as at March… (Current Year) Provision held as at March… (Current Year) Exposure (net) as at March… (Previous Year) Provision held as at March… (Previous Year) Insignificant Low Moderately Low Moderate Moderately High High Very High Total *Till a bank moves over to internal rating systems, it shall use the seven-category classification followed by Export Credit Guarantee Corporation of India Ltd. (ECGC) for the purpose of classification and making provisions for country risk exposures. ECGC shall provide to a bank, on request, quarterly updates of their country classifications and shall also inform banks in case of any sudden major changes in country classification in the interim period. Note: If a bank has no exposure to country risk in both the current and previous year, it may omit disclosure of the table while mentioning that it has no exposure to country risk. (iv) Unsecured advances A bank shall disclose the total amount of advances for which intangible securities such as charge over the rights, licenses, and authority, etc. have been taken as also the estimated value of such intangible collateral as per the following format. (Amounts in ₹ crore) Particulars Current Year Previous Year Total unsecured advances of the bank Out of the above, amount of advances for which intangible securities such as charge over the rights, licenses, authority, etc. have been taken Estimated value of such intangible securities (v) Factoring exposures: Factoring exposures shall be separately disclosed. (vi) Intra - group exposures: A bank shall make the following disclosures for the current year with comparatives for the previous year: (a) Total amount of intra-group exposures (b) Total amount of top 20 intra-group exposures (c) Percentage of intra-group exposures to total exposure of the bank on borrowers / customers (d) Details of breach of limits on intra-group exposures and regulatory action thereon, if any. (vii) Unhedged foreign currency exposure: A bank shall disclose its policies to manage currency induced credit risk. (viii) Loans against gold and silver collateral (a) Details of loans extended against eligible gold and silver collateral Particulars Loan outstanding Average ticket size (₹ crore) Average LTV ratio Gross NPA (%) ₹ crore As % of Total Loans 1. Opening balance of the FY [(a)+(b)] (a) Consumption loans of which bullet repayment loans (b) Income generating loans 2. New loans sanctioned and disbursed during the FY [(c)+(d)] NA (c) Consumption loans NA of which bullet repayment loans (d) Income generating loans NA 3. Renewals sanctioned and disbursed during the FY NA 4. Top-up loans sanctioned and disbursed during the FY NA 5. Loans repaid during the FY [(e)+(f)] NA NA (e) Consumption loans NA NA of which bullet repayment loans NA NA (f) Income generating loans NA NA 6. Non-Performing Loans recovered during the FY [(g) + (h)] NA NA (g) Consumption loans NA NA of which bullet repayment loans NA (h) Income generating loans NA NA 7. Loans written off during the FY [(i) + (j)] NA NA (i) Consumption loans NA NA of which bullet repayment loans NA NA (j) Income generating loans NA NA 8. Closing balance at the end of FY [(k) + (l)] (k) Consumption loans of which bullet repayment loans (l) Income generating loans Note: (i) The bank shall be guided by the Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 , as amended from time to time. (ii) Information may be disclosed separately for loans against gold collateral and loans against silver collateral (iii) Average LTV ratio is Calculated as ratio of sum of LTVs of loans at the time of sanction to total number of such loans. (b) Details of gold and silver collateral and auctions Sr. No. Particulars (a) Unclaimed gold or silver collateral at the end of the financial year (in grams) (b) Number of loan accounts in which auctions were conducted (c) Total outstanding in loan accounts mentioned in (b) (d) Gold or silver collateral acquired during the FY due to default of loans (in grams) (e) Gold or silver collateral auctioned during the FY (in grams) (f) Recovery made through auctions during the FY (in ₹ crore) (g) Recovery percentage: (h) as % of value of gold or silver collateral (i) as % of outstanding loan Note (i) Weight and value of collateral to be calculated in accordance with the Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 (as amended from time to time). (ii) Unclaimed gold or silver collateral as defined under the Reserve Bank of India (Local Area Banks – Credit Facilities) Directions, 2025 (as amended from time to time). 1 [(ix) Exposures to Related Parties Details of exposures to related parties as defined in Reserve Bank of India (Local Area Banks – Credit Risk Management) Directions, 2025 : (Amount in ₹ crore) Sr. No. Particulars Previous Year Current Year A. Loans to Related Parties 1. Aggregate value of loans sanctioned to related parties during the year 2. Aggregate value of outstanding loans to related parties as on 31st March 3. Aggregate value of outstanding loans to related parties as a proportion of total credit exposure as on 31st March (in %) 4. Aggregate value of outstanding loans to related parties which are categorized as: (i) Special Mention Accounts as on 31st March (ii) Non-Performing Assets as on 31st March 5. Amount of provisions held in respect of loans to related parties as on 31st March B. Contracts and Arrangements involving Related Parties 6. Aggregate value of contracts and arrangements awarded to related parties during the year 7. Aggregate value of outstanding contracts and arrangements involving related parties as on 31st March (6) Concentration of deposits, advances, exposures and NPAs (i) Concentration of deposits (Amount in ₹ crore) Particulars Current Year Previous Year Total deposits of the twenty largest depositors Percentage of deposits of twenty largest depositors to total deposits of the bank (ii) Concentration of advances* (Amount in ₹ crore) Particulars Current Year Previous Year Total advances to the twenty largest borrowers Percentage of advances to twenty largest borrowers to total advances of the bank *Advances shall be computed based on credit exposure, i.e., funded and non-funded limits including derivative exposures where applicable. The sanctioned limits or outstanding, whichever are higher, shall be reckoned. However, in the case of fully drawn term loans, where there is no scope for re-drawal of any portion of the sanctioned limit, a bank may reckon the outstanding as the credit exposure (iii) Concentration of exposures** (Amount in ₹ crore) Particulars Current Year Previous Year Total exposure to the twenty largest borrowers / customers Percentage of exposures to the twenty largest borrowers / customers to the total exposure of the bank on borrowers / customers **Exposures shall be computed as per applicable RBI regulation. (iv) Concentration of NPAs (Amount in ₹ crore) Particulars Current Year Previous Year Total Exposure to the top twenty NPA accounts Percentage of exposures to the twenty largest NPA exposure to total Gross NPAs. (7) Derivatives (i) Details of derivative portfolio (all amounts in ₹ crore) Current year Previous Year Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Interest Rate Derivatives MTM – Assets MTM – Liabilities Net Gain / Loss recognised in Profit &Loss Account Exchange Rate Derivatives MTM – Assets MTM – Liabilities Net Gain / Loss recognised in Profit &Loss Account Other Derivatives (specify) MTM – Assets MTM – Liabilities Net Gain / Loss recognised in Profit &Loss Account (ii) Forward rate agreement / Interest rate swap (Amount in ₹ crore) Particulars Current Year Previous Year i) The notional principal of swap agreements ii) Losses which would be incurred if counterparties failed to fulfil their obligations under the agreements iii) Collateral required by the bank upon entering into swaps iv) Concentration of credit risk arising from the swaps (for example, exposures to particular industries, or swaps with highly geared companies.) v) The fair value of the swap book (Note - If the swaps are linked to specific assets, liabilities, or commitments, the fair value shall be the estimated amount that the bank would receive or pay to terminate the swap agreements as on the balance sheet date. For a trading swap the fair value shall be its mark to market value) Note: Nature and terms of the swaps including information on credit and market risk and the accounting policies adopted for recording the swaps shall also be disclosed. (iii) Exchange traded interest rate derivatives (Amount in ₹ crore) Sr. No. Particulars Current Year Previous Year i) Notional principal amount of exchange traded interest rate derivatives undertaken during the year (instrument wise) ii) Notional principal amount of exchange traded interest rate derivatives outstanding as on March 31 ….(instrument wise) iii) Notional principal amount of exchange traded interest rate derivatives outstanding and not ‘highly effective’ (instrument wise) iv) Mark to market value of exchange traded interest rate derivatives outstanding and not ‘highly effective’ (instrument wise) (iv) Disclosures on risk exposure in derivatives (a) Qualitative disclosures A bank shall disclose its risk management policies pertaining to derivatives with particular reference to the extent to which derivatives are used, the associated risks and business purposes served. The disclosure shall also include: (i) the structure and organisation for management of risk in derivatives trading, (ii) the scope and nature of risk measurement, risk reporting and risk monitoring systems, (iii) policies for hedging and / or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges / mitigants, and (iv) 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. (b) Quantitative disclosures (Amount in ₹ crore) Sr. No Particular Current Year Previous Year Currency Derivatives Interest rate derivatives Currency Derivatives Interest rate derivatives a) Derivatives (Notional Principal Amount) i) For hedging ii) For trading b) Marked to Market Positions [1] i) Asset (+) ii) Liability (-) c) Credit Exposure [2] d) Likely impact of one percentage change in interest rate (100*PV01) i) on hedging derivatives ii) on trading derivatives e) Maximum and Minimum of 100*PV01 observed during the year i) on hedging ii) on trading 1. The net position shall be shown either under asset or liability, as the case may be, for each type of derivatives. 2. A bank may adopt the Current Exposure Method on Measurement of Credit Exposure of Derivative Products as per extant RBI instructions. (8) Transfers to Depositor Education and Awareness Fund (DEA Fund) (Amount in ₹ crore) Sr. No. Particulars Current Year Previous Year i) Opening balance of amounts transferred to DEA Fund ii) Add: Amounts transferred to DEA Fund during the year iii) Less: Amounts reimbursed by DEA Fund towards claims iv) Closing balance of amounts transferred to DEA Fund A bank shall specify here that the closing balance of the amount transferred to DEA Fund, as disclosed above, are also included under 'Schedule 12 - Contingent Liabilities - Other items for which the bank is contingently liable' or 'Contingent Liabilities - Others,' as the case may be. (9) Disclosure of complaints (i) Summary information on complaints received by a bank from customers and from the Offices of Ombudsman (previously office of banking ombudsman) Sr. No Particulars Current Year Previous Year Complaints received by the bank from its customers 1. Number of complaints pending at beginning of the year 2. Number of complaints received during the year 3. Number of complaints disposed during the year 3.1 Of which, number of complaints rejected by the bank 4. Number of complaints pending at the end of the year Maintainable complaints received by the bank from Office of Ombudsman 5. Number of maintainable complaints received by the bank from Office of Ombudsman 5.1. Of 5, number of complaints resolved in favour of the bank by Office of Ombudsman 5.2 Of 5, number of complaints resolved through conciliation / mediation / advisories issued by Office of Ombudsman 5.3 Of 5, number of complaints resolved after passing of Awards by Office of Ombudsman against the bank 6. Number of Awards unimplemented within the stipulated time (other than those appealed) Note: Maintainable complaints refer to complaints on the grounds specifically mentioned in Integrated Ombudsman Scheme, 2021 (Previously Banking Ombudsman Scheme, 2006) and covered within the ambit of the Scheme. (ii) Top five grounds of complaints received by the bank from customers Grounds of complaints, (i.e. complaints relating to) Number of complaints pending at the beginning of the year Number of complaints received during the year % increase / decrease in the number of complaints received over the previous year Number of complaints pending at the end of the year Of 5, number of complaints pending beyond 30 days 1 2 3 4 5 6 Current Year Ground - 1 Ground - 2 Ground - 3 Ground - 4 Ground - 5 Others Total Previous Year Ground - 1 Ground - 2 Ground - 3 Ground - 4 Ground - 5 Others Total Note: As per Master List for identifying grounds of complaints as provided in Appendix 1 to circular CEPD.CO.PRD.Cir.No.01/13.01.013/2020-21 dated January 27, 2021 on ‘Strengthening the Grievance Redress Mechanism of Banks’. 1. ATM / Debit Cards 2. Credit Cards 3. Internet / Mobile / Electronic Banking 4. Account opening / difficulty in operation of accounts 5. Mis-selling / Para-banking 6. Recovery Agents / Direct Sales Agents 7. Pension and facilities for senior citizens / differently abled 8. Loans and advances 9. Levy of charges without prior notice / excessive charges / foreclosure charges 10. Cheques / drafts / bills 11. Non-observance of Fair Practices Code 12. Exchange of coins, issuance / acceptance of small denomination notes and coins 13. Bank Guarantees / Letter of Credit and documentary credits 14. Staff behaviour 15. Facilities for customers visiting the branch / adherence to prescribed working hours by the branch, etc 16. Others (10) Disclosure of penalties imposed by the RBI (i) Penalties imposed by the RBI under the provisions of the (i) BR Act, 1949, (ii) Payment and Settlement Systems Act, 2007, and (iii) Government Securities Act, 2006 (for bouncing of SGL) shall be disclosed in the ‘Notes to Accounts’ to the balance sheet in the concerned bank’s next Annual Report. (ii) A bank shall make appropriate disclosures on the nature of the breach, number of instances of default and the quantum of penalty imposed. (iii) The defaulting participant in a reverse repo transaction shall make appropriate disclosure on the number of instances of default as well as the quantum of penalty paid to the RBI during the financial year. (11) Disclosures on remuneration (i) A bank is required to make disclosure on remuneration of Whole Time Directors / Chief Executive Officers / Material Risk Takers on an annual basis at the minimum, in its Annual Financial Statements. (ii) The bank shall make the disclosures in table or chart format and make disclosures for previous as well as the current reporting year. (iii) Further, a bank (to the extent applicable), shall disclose the following information: Type of disclosure Information Qualitative (a) Information relating to the composition and mandate of the Nomination and Remuneration Committee. (b) Information relating to the design and structure of remuneration processes and the key features and objectives of remuneration policy. (c) Description of the ways in which current and future risks are taken into account in the remuneration processes. It should include the nature and type of the key measures used to take account of these risks. (d) Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration. (e) A discussion of the bank’s policy on deferral and vesting of variable remuneration and a discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and after vesting. (f) Description of the different forms of variable remuneration (i.e., cash and types of share-linked instruments) that the bank utilises and the rationale for using these different forms. Current Year Previous Year Quantitative disclosures (The quantitative disclosures should only cover Whole Time Directors / Chief Executive Officer / Material Risk Takers) (g) Number of meetings held by the Nomination and Remuneration Committee during the financial year and remuneration paid to its members. (h) (i) Number of employees having received a variable remuneration award during the financial year. (ii) Number and total amount of sign-on / joining bonus made during the financial year. (iii) Details of severance pay, in addition to accrued benefits, if any. (i) (i) Total amount of outstanding deferred remuneration, split into cash, shares and share linked instruments and other forms. (ii) Total amount of deferred remuneration paid out in the financial year. (j) Breakdown of amount of remuneration awards for the financial year to show fixed and variable, deferred and non-deferred. (k) (i) Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit and / or implicit adjustments. (ii) Total amount of reductions during the financial year due to ex post explicit adjustments. (iii) Total amount of reductions during the financial year due to ex post implicit adjustments. (l) Number of MRTs identified. (m) (i) Number of cases where malus has been exercised. (ii) Number of cases where clawback has been exercised. (iii) Number of cases where both malus and clawback have been exercised. General Quantitative Disclosure (n) • The mean pay for the bank as a whole (excluding sub-staff) and the deviation of the pay of each of its WTDs from the mean pay. (iv) A bank shall also disclose remuneration paid to the non-executive directors on an annual basis at the minimum, in its Annual Financial Statements. (v) Share-linked instruments should be fair valued on the date of grant by the bank using Black-Scholes model. The fair value thus arrived at should be recognised as an expense beginning with the accounting period for which approval has been granted. (12) Other Disclosures (i) Business ratios Particular Current Year Previous Year i) Interest Income as a percentage to Working Funds 1 ii) Non-interest income as a percentage to Working Funds 1 iii) Cost of Deposits iv) Net Interest Margin 2 v) Operating Profit as a percentage to Working Funds 1 vi) Return on Assets 3 vii) Business (deposits plus advances) per employee 4 (in ₹ crore) viii) Profit per employee (in ₹ crore) 1 Working funds to be reckoned as average of total assets (excluding accumulated losses, if any) as reported to RBI in Form X for Local Area Banks during the 12 months of the financial year. 2 Net Interest Margin = Net Interest Income / Average Earning Assets Where Net Interest Income= Interest Income – Interest Expense. 3 Return on Assets shall be with reference to average working funds (i.e., total of assets excluding accumulated losses, if any). 4 For the purpose of computation of business per employee (deposits plus advances), inter-bank deposits shall be excluded. (ii) Bancassurance business: The details of fees / brokerage earned in respect of insurance broking, agency and bancassurance business undertaken by a bank shall be disclosed for both the current year and previous year. (iii) Marketing and distribution: A bank shall disclose the details of fees / remuneration received in respect of the marketing and distribution function (excluding bancassurance business) undertaken by it. (iv) Disclosures regarding Priority Sector Lending Certificates (PSLCs): The amount of PSLCs (category-wise) sold and purchased during the year shall be disclosed. (v) Provisions and contingencies (Amount in ₹ crore) Provision debited to Profit and Loss Account Current Year Previous Year i) Provisions for NPI ii) Provision towards NPA iii) Provision made towards Income tax iv) Other Provisions and Contingencies (with details) (vi) Payment of DICGC Insurance Premium 2 [A bank shall disclose in the annual report that 'deposit insurance premium as applicable was paid to DICGC within the prescribed timelines'. In case the bank has not paid as per the required timelines, the same shall also be disclosed.] (vii) Disclosure of Letters of Comfort (LoCs) issued by banks: A bank should disclose the full particulars of all the Letters of Comfort (LoCs) issued by it during the year, including their assessed financial impact, as also their assessed cumulative financial obligations under the LoCs issued by it in the past and outstanding, in its published financial statements, as part of the ‘Notes to Accounts’. Chapter-IV Other instructions A. Inter - branch account – provisioning for net debit balance 11. A bank shall adhere to following guidelines for unreconciled inter-branch account entries. (1) The bank shall segregate the credit entries outstanding for more than five years in the inter-branch account and transfer them to a separate ‘Blocked Account’ which shall be shown under ‘Other Liabilities and Provisions – Others’. (2) Any adjustment from the Blocked Account should be permitted only with the authorisation of two officials, one of whom should be from the Controlling / Head Office if the amount exceeds ₹ One lakh. (3) The balance in Blocked Account shall be reckoned as a liability for the purpose of the maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). (4) The bank shall maintain category-wise (head-wise) accounts for various types of transactions put through inter-branch accounts, so that the netting can be done category-wise. As on the balance sheet date, the bank shall segregate the debit and credit entries remaining unreconciled for more than six months and arrive at the net position category-wise, while also considering the balance in the Blocked Account. (5) The net debit under all the categories of inter-branch accounts shall be aggregated and a provision equivalent to 100 per cent of the aggregate net debit shall be made. Provided that, the bank shall ensure that the net debit in one category is not set-off against net credit in another category. B. Reconciliation of Nostro account and treatment of outstanding entries 12. Treatment of outstanding entries in Nostro accounts shall of a bank shall be as under: (1) The bank shall take steps to have a strong control over reconciliation and put in place a system of real-time reconciliation, which provides for immediate escalation of differences, if any. (2) There shall be close monitoring of pending items in Nostro accounts by top management at short intervals. (3) All unreconciled credit entries in Nostro accounts which are outstanding for more than three years shall be transferred to a Blocked Account and shown as outstanding liabilities. (4) The balance in the Blocked Account shall be reckoned for the purpose of CRR / SLR. (5) A bank shall make 100 per cent provision in respect of all unreconciled debit entries in the Nostro accounts, which are outstanding for more than two years. (6) A bank which, in the past, was permitted to transfer to profit and loss account (followed by subsequent appropriation to general reserve) outstanding credit entries of individual value less than USD 2,500 or equivalent in Nostro accounts originated up to March 31, 2002, subject to certain conditions, shall ensure that any future claims in respect of these entries are honoured. Explanation: The amount appropriated to the general reserve shall not be available for the declaration of dividend. C. Transfer to / appropriation from Reserve funds 13. In terms of Section 17(1) of the BR Act, 1949 a bank is required to transfer, out of the balance of profit as disclosed in the profit and loss account, a sum equivalent to not less than 20 per cent of such profit to Reserve Fund. 14. Unless specifically allowed by extant regulations, the bank shall take prior approval from the RBI before any appropriation is made from the Statutory Reserve or any other reserve. 15. Banks are further advised that, (1) all expenses including provisions and write-offs recognised in a period, whether mandatory or prudential, shall be reflected in the profit and loss account for the period as an ‘above the line’ item (i.e., before arriving at the net profit / loss for the year); (2) draw down from reserves, with the prior approval of RBI, shall be effected only ‘below the line’ (i.e., after arriving at the net profit / loss for the year); and (3) suitable disclosures shall be made of such draw down in the ‘Notes on Accounts’ to the Balance Sheet. (4) Subject to compliance with applicable laws, a bank, without prior approval of RBI, can utilise the share premium account for meeting issue expenses of shares to the extent that such expenses are incremental costs directly attributable to the transaction that otherwise would have been avoided. Provided that, the share premium account shall not be utilised for writing off the expenses relating to the issue of debt instruments. Explanation: For the purposes of this Direction, issue expenses shall include registration and other regulatory fees, payments made to legal, accounting, and other professional advisers, printing costs, and stamp duties. D. Provisioning for fraud 16. In respect of provisioning for frauds, a bank that has reported the fraud within the prescribed time shall have the option to make the provision for the same over a period, not exceeding four quarters, commencing from the quarter in which the fraud has been detected. 17. Where the bank chooses to provide for the fraud over two to four quarters and this results in the full provisioning being made in more than one financial year, subject to compliance with applicable laws, it may debit reserves other than the Statutory Reserve by the amount remaining un-provided at the end of the financial year by credit to provisions. Provided that, it should subsequently proportionately reverse the debits to the reserves and complete the provisioning by debiting profit and loss account, in the successive quarters of the next financial year. 18. Where there has been delay, beyond the prescribed period, in reporting the fraud to the RBI, the entire provisioning is required to be made at once. E. Unreconciled balances 19. Unreconciled credit balances in any transitory account representing unclaimed balances shall not be transferred to the profit and loss account or to any reserves. F. Deferred tax liability (DTL) on Special Reserve created under Section 36(1) (viii) of the Income Tax Act, 1961 20. A bank shall make provisions for DTL on the Special Reserve created under Section 36(1)(viii) of Income Tax Act, 1961. G. Window dressing 21. A bank shall ensure that balance sheet and profit and loss account reflect true and fair picture of its financial position. 22. Instances of window dressing of financials, short provisioning, misclassification of NPAs, under-reporting / incorrect computation of exposure / risk weight, incorrect capitalisation of expenses, capitalisation of interest on NPAs, deliberate inflation of asset and liabilities at the end of the financial year and subsequent reversal immediately in next financial year, etc., shall be viewed seriously and appropriate penal action in terms of the provisions of the BR Act, 1949 shall be considered. Chapter-V Repeal and Other Provisions A. Repeal and saving 23. With the issue of these Directions, the existing Directions, instructions, and guidelines relating to Financial Statements- Presentation and Disclosures as applicable to Local Area Banks stands repealed, as communicated vide circular DOR.RRC.REC.302/33-01-010/2025-26 dated November 28, 2025 . The directions, instructions, and guidelines repealed prior to the issuance of these Directions shall continue to remain repealed. 24. Notwithstanding such repeal, any action taken or purported to have been taken, or initiated under the repealed Directions, instructions, or guidelines shall continue to be governed by the provisions thereof. All approvals or acknowledgments granted under these repealed lists shall be deemed as governed by these Directions. Further, the repeal of these directions, instructions, or guidelines shall not in any way prejudicially affect: a. any right, obligation or liability acquired, accrued, or incurred thereunder; b. any penalty, forfeiture, or punishment incurred in respect of any contravention committed thereunder; c. any investigation, legal proceeding, or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture, or punishment as aforesaid; and any such investigation, legal proceedings or remedy may be instituted, continued, or enforced and any such penalty, forfeiture or punishment may be imposed as if those directions, instructions, or guidelines had not been repealed. B. Application of other laws not barred 25. The provisions of these Directions shall be in addition to, and not in derogation of the provisions of any other laws, rules, regulations, or directions, for the time being in force. C. Interpretations 26. For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the RBI may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the RBI shall be final and binding. (Sunil T S Nair) Chief General Manager 1 Inserted with effect from April 01, 2026 vide Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) – Amendment Directions, 2026 dated January 5, 2026 . 2 Subtituted with effect from April 01, 2026 vide Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) – Second Amendment Directions, 2026 dated March 16, 2026 . 3 Substituted with effect from May 18, 2026, vide Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026 dated May 18, 2026 . 4 Substituted with effect from May 18, 2026, vide Reserve Bank of India (Local Area Banks – Financial Statements: Presentation and Disclosures) Third Amendment Directions, 2026 dated May 18, 2026 .