ICICI Bank 2016 Annual Report Download - page 180

Annual Report 2015-2016178
Schedules
forming part of the Accounts (Contd.)
Financial Statements of ICICI Bank Limited
39. Provisions and contingencies
The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in
prot and loss account.
` in million
Particulars Year ended
March 31, 2016
Year ended
March 31, 2015
Provisions for depreciation of investments 1,706.9 2,979.2
Provision towards non-performing and other assets172,156.7 31,412.7
Provision towards income tax
- Current 57,886.1 48,591.4
- Deferred (33,191.8) (2,195.7)
Provision towards wealth tax –50.0
Collective contingency and related reserve236,000.0 –
Other provisions and contingencies36,814.6 4,607.9
Total provisions and contingencies 141,372.5 85,445.5
1. Includes provision towards NPA amounting to ` 64,019.9 million (March 31, 2015: ` 30,232.5 million).
2. The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic
economic recovery has adversely impacted the borrowers in certain sectors like iron and steel, mining, power, rigs and
cement. While the banks are working towards resolution of stress on certain borrowers in these sectors, it may take some
time for solutions to be worked out, given the weak operating and recovery environment. In view of the above, the Bank has
on a prudent basis made a collective contingency and related reserve during the year ended March 31, 2016, amounting
to ` 36,000.0 million towards exposures to these sectors. This is over and above provisions made for non-performing and
restructured loans as per RBI guidelines.
3. Includes general provision towards standard assets amounting to ` 2,970.1 million (March 31, 2015: ` 3,847.9 million).
The Bank has assessed its obligations arising in the normal course of business, including pending litigations,
proceedings pending with tax authorities and other contracts including derivative and long term contracts. In
accordance with the provisions of Accounting Standard - 29 on ‘Provisions, Contingent Liabilities and Contingent
Assets’, the Bank recognises a provision for material foreseeable losses when it has a present obligation as a result of
a past event and it is probable that an outow of resources will be required to settle the obligation, in respect of which
a reliable estimate can be made. In cases where the available information indicates that the loss on the contingency
is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made as
contingent liabilities in the nancial statements. The Bank does not expect the outcome of these proceedings to have
a materially adverse effect on its nancial results.
The following table sets forth, for the periods indicated, the movement in provision for legal and fraud cases,
operational risk and other contingencies.
` in million
Particulars At
March 31, 2016
At
March 31, 2015
Opening provision 3,978.0 3,795.2
Movement during the year (net) 2,168.6 182.8
Closing provision 6,146.6 3,978.0
1. Excludes provision towards sundry expenses.