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revenue in the year of receipt.
5.8. In addition to the specific provision on NPAs, general provisions are also made
for standard assets. These provisions are reflected in Balance Sheet under the head
‘Other Liabilities and Provisions’ and are not considered for arriving at net NPAs.
5.9. Advances are stated in Balance Sheet net of provision for NPAs.
5.10. Refinance provided to Agriculture and Rural Development Banks (ARDB’s) by
way of Subscription to Special Rural Housing Debentures (SRHDs) deemed to be
in the nature of advances are classified as Investments and is subject to the usual
prudential norms applicable to loans and advances.
5.11 The Bank provides additional provisioning of 15% in case of Specific Standard
Assets on occurrence of the following events on the date of adoption of accounts:
In case of performing assets, if there is an overdue of more than 30 days; or
Bank initiates the process of implementing a Resolution Plan involving restructuring.
The management at its discretion can make such additional provision by charging to
Profit & Loss Account or can utilize any additional provision standing in the books
of accounts (without reference to any specific account) for meeting such requirement
for provision against specific standard assets. The Additional provision of 15% on
performing assets shall include the regulatory provision on Standard Asset.
In case the specific standard asset turns into NPA, the provisions being maintained in
the Standard Asset Provision category will be utilized for creating provisions against
Sub-Standard category.
In case the specific asset revives and turns into performing asset, the management at its
discretion may reverse the excess provisions.
6. Derivative transactions
6.1. Interest rate swaps which hedge interest bearing assets or liability is accounted for
on accrual basis except the swap designated with an asset or liability that is carried
at market value or lower of cost in the financial statement.
6.2 Gain or losses on the termination of swaps are recognized over the shorter of
the remaining contractual life of the swap or the remaining life of the assets/
liabilities.
Annual Report 2020-21 | 287
5.8. In addition to the specific provision on NPAs, general provisions are also made
for standard assets. These provisions are reflected in Balance Sheet under the head
‘Other Liabilities and Provisions’ and are not considered for arriving at net NPAs.
5.9. Advances are stated in Balance Sheet net of provision for NPAs.
5.10. Refinance provided to Agriculture and Rural Development Banks (ARDB’s) by
way of Subscription to Special Rural Housing Debentures (SRHDs) deemed to be
in the nature of advances are classified as Investments and is subject to the usual
prudential norms applicable to loans and advances.
5.11 The Bank provides additional provisioning of 15% in case of Specific Standard
Assets on occurrence of the following events on the date of adoption of accounts:
In case of performing assets, if there is an overdue of more than 30 days; or
Bank initiates the process of implementing a Resolution Plan involving restructuring.
The management at its discretion can make such additional provision by charging to
Profit & Loss Account or can utilize any additional provision standing in the books
of accounts (without reference to any specific account) for meeting such requirement
for provision against specific standard assets. The Additional provision of 15% on
performing assets shall include the regulatory provision on Standard Asset.
In case the specific standard asset turns into NPA, the provisions being maintained in
the Standard Asset Provision category will be utilized for creating provisions against
Sub-Standard category.
In case the specific asset revives and turns into performing asset, the management at its
discretion may reverse the excess provisions.
6. Derivative transactions
6.1. Interest rate swaps which hedge interest bearing assets or liability is accounted for
on accrual basis except the swap designated with an asset or liability that is carried
at market value or lower of cost in the financial statement.
6.2 Gain or losses on the termination of swaps are recognized over the shorter of
the remaining contractual life of the swap or the remaining life of the assets/
liabilities.
Annual Report 2020-21 | 287
