ICICI Bank 2012 Annual Report Download - page 173

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F95
b. Bank’s interest in insurance entities
The book value of the Bank’s total interest in its insurance subsidiaries at March 31, 2012, which is deducted from
capital for capital adequacy under Basel II is detailed in the following table.
` in billion
Name of the entity Country of
incorporation
Ownership
interest
Book value of
investment
ICICI Prudential Life Insurance Company Limited India 73.86% 35.93
ICICI Lombard General Insurance Company Limited India 73.44% 13.48
The quantitative impact on regulatory capital of using risk weighted investments method versus using the
deduction method at March 31, 2012 is set out in the following table.
` in billion
Method Quantitative impact
Deduction method 49.41
Capital at 9% based on risk weighted assets 4.45
2. CAPITAL STRUCTURE
a. Summary information on main terms and conditions/features of capital instruments
As per the RBI capital adequacy norms, ICICI Bank’s regulatory capital is classified into Tier-1 capital and Tier-2
capital.
Tier-1 capital includes paid-up equity capital, statutory reserves, other disclosed free reserves, capital reserves
and innovative perpetual debt instruments (Tier-1 bonds) eligible for inclusion in Tier-1 capital that comply with
requirement specified by RBI.
Tier-2 capital includes revaluation reserves (if any), general provision and loss reserve, investment reserve, upper
Tier-2 instruments (upper Tier-2 bonds) and subordinate debt instruments (lower Tier-2 bonds) eligible for inclusion
in Tier-2 capital.
ICICI Bank and its subsidiaries have issued debt instruments that form a part of Tier-1 and Tier-2 capital. The terms
and conditions that are applicable for these instruments comply with the stipulated regulatory requirements and
where required an independent legal opinion has been obtained for inclusion of these instruments in capital.
Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years. Interest on Tier-1 bonds
is payable either annually or semi-annually. These Tier-1 bonds have a step-up clause on interest payment ranging
up to 100 basis points.
The upper Tier-2 bonds are cumulative and have an original maturity of 15 years with call option after 10 years.
The interest on upper Tier-2 bonds is payable either annually or semi-annually. Some of the upper Tier-2 debt
instruments have a step-up clause on interest payment ranging up to 100 basis points.
The lower Tier-2 bonds (subordinated debt) are cumulative and have an original maturity between 5 to 15 years.
The interest on lower Tier-2 capital instruments is payable quarterly, semi-annually or annually.
RBI through its circular dated January 20, 2011 stipulated that henceforth capital instruments issued with step-
up option will not be eligible for inclusion in the capital funds. Capital issuances with step-up option prior to the
release of the above-mentioned circular would continue to remain eligible for inclusion in regulatory capital. The
Bank is in compliance with this stipulation and the existing Tier-1 and Tier-2 capital instruments with step-up option
have all been issued prior to January 20, 2011.
BASEL II – PILLAR 3 DISCLOSURES (CONSOLIDATED)
at March 31, 2012