ICICI Bank 2013 Annual Report Download - page 115

F37
31. Description of contingent liabilities
The following table describes the nature of contingent liabilities of the Bank.
Sr.
no. Contingent liability Brief Description
1. Claims against
the Bank, not
acknowledged as
debts
This item represents certain demands made in certain tax and legal matters against the
Bank in the normal course of business and customer claims arising in fraud cases. In
accordance with the Bank’s accounting policy and Accounting Standard 29, the Bank
has reviewed and classified these items as possible obligations based on legal opinion/
judicial precedents/assessment by the Bank.
2. Liability for partly paid
investments
This item represents amounts remaining unpaid towards purchase of investments.
These payment obligations of the Bank do not have any profit/loss impact.
3. Liability on account of
outstanding forward
exchange contracts
The Bank enters into foreign exchange contracts in its normal course of business,
to exchange currencies at a pre-fixed price at a future date. This item represents the
notional principal amount of such contracts, which are derivative instruments. With
respect to the transactions entered into with its customers, the Bank generally enters
into off-setting transactions in the inter-bank market. This results in generation of a
higher number of outstanding transactions, and hence a large value of gross notional
principal of the portfolio, while the net market risk is lower.
4 Guarantees given on
behalf of constituents,
acceptances,
endorsements and
other obligations
This item represents the guarantees and documentary credits issued by the Bank in
favour of third parties on behalf of its customers, as part of its trade finance banking
activities with a view to augment the customers’ credit standing. Through these
instruments, the Bank undertakes to make payments for its customers’ obligations,
either directly or in case the customer fails to fulfill their financial or performance
obligations.
5 Currency swaps,
interest rate swaps,
currency options and
interest rate futures
This item represents the notional principal amount of various derivative instruments
which the Bank undertakes in its normal course of business. The Bank offers these
products to its customers to enable them to transfer, modify or reduce their foreign
exchange and interest rate risks. The Bank also undertakes these contracts to manage
its own interest rate and foreign exchange positions. With respect to the transactions
entered into with its customers, the Bank generally enters into off-setting transactions
in the inter-bank market. This results in generation of a higher number of outstanding
transactions, and hence a large value of gross notional principal of the portfolio, while
the net market risk is lower.
6 Other items for
which the Bank is
contingently liable
Other items for which the Bank is contingently liable primarily include the amount of
Government securities bought/sold and remaining to be settled on the date of financial
statements. This also includes the value of sell down options and other facilities
pertaining to securitisation the notional principal amounts of credit derivatives, amount
applied in public offers under Application Supported by Blocked Amounts (ASBA) and
the amount that the Bank is obligated to pay under capital contracts. Capital contracts
are job orders of a capital nature which have been committed.
32. Bancassurance
The following table sets forth, for the periods indicated, the break-up of income derived from bancassurance business.
` in million
Sr.
No. Nature of income Year ended
March 31, 2013
Year ended
March 31, 2012
1. Income from selling life insurance policies .................................................. 3,786.6 3,004.1
2. Income from selling non life insurance policies .......................................... 466.0 369.1
3. Income from selling mutual fund/collective investment scheme products 1,004.3 693.1
forming part of the Accounts (Contd.)
schedules