ICICI Bank 2007 Annual Report Download - page 62

Management’s Discussion & Analysis
60
RBI has separate guidelines for restructured loans. A fully secured standard asset can be restructured by
reschedulement of principal repayments and/or the interest element, but must be separately disclosed as
a restructured asset. The amount of sacrifice, if any, in the element of interest, measured in present value
terms, is either written off or provision is made to the extent of the sacrifice involved. Similar guidelines
apply to sub-standard loans. The sub-standard accounts which have been subjected to restructuring,
whether in respect of principal installment or interest amount are eligible to be upgraded to the standard
category only after the specified period, i.e., a period of one year after the date when first payment of
interest or of principal, whichever is earlier, falls due, subject to satisfactory performance during the
period.
We do not distinguish between provisions and write-offs while assessing the adequacy of our loan loss
coverage, as both provisions and write-offs represent a reduction of the principal amount of a non-
performing asset. In compliance with regulations governing the presentation of financial information by
banks, we report non-performing assets net of cumulative write-offs in our financial statements.
For restructured loans, provisions are made in accordance with the guidelines issued by RBI, which
require that the difference between the present values of the future interest as per the original loan
agreement and the present values of future interest on the basis of rescheduled terms be provided at
the time of restructuring.
The following table sets forth, at March 31, 2006 and March 31, 2007, data regarding the classification of
our gross assets (net of write-offs and unpaid interest on non-performing assets).
Rs. in billion
March 31, 2006 March 31, 2007
Standard assets Rs. 1,512.81 Rs. 2,036.46
of which: Restructured loans 55.46 50.41
Non-performing assets 22.73 41.68
Of which: Sub-standard 10.71 24.33
Doubtful assets 11.05 15.28
Loss assets 0.97 2.07
Total loan assets Rs.1,535.54 Rs. 2,078.14
(1) Includes loans, debentures, lease receivables and excludes preference shares.
(2) All amounts have been rounded off to the nearest Rs. 10.0 million.
The following table sets forth, at the dates indicated, data regarding our non-performing assets, or
NPAs.
Rs. in billion, except percentages
Year ended Gross NPA(1) Net NPA Net customer
assets
% of Net NPA
to Net customer
assets(3)
March 31, 2005 34.37 19.83 978.94 2.03%
March 31, 2006(2) 22.73 10.75 1,520.07 0.71%
March 31, 2007(2) 41.68 20.19 2,053.74 0.98%
(1) Net of write-offs and interest suspense.
(2) Excludes preference shares.
(3) Customer assets include advances and credit substitutes like debentures and bonds.
(4) All amounts have been rounded off to the nearest Rs. 10.0 million.