ICICI Bank 2016 Annual Report Download - page 223

Annual Report 2015-2016 221
Schedules
forming part of the Consolidated Accounts (Contd.)
Consolidated Financial Statements
c. Mutual fund investments (other than venture capital fund) are stated at fair value, being the closing net asset
value at balance sheet date.
d. Investments other than mentioned above are valued at cost.
Unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual fund units are
taken to ’Revenue and other reserves’ in the balance sheet for general insurance business.
Insurance subsidiaries assess at each balance sheet date whether there is any indication that any investment
may be impaired. If any such indication exists, the carrying value of such investment is reduced to its recoverable
amount and the impairment loss is recognised in the revenue(s)/prot and loss account.
The total proportion of investments for which subsidiaries have applied accounting policies different from the Bank
as mentioned above, is approximately 21.48% of the total investments at March 31, 2016.
14. Provisions/write-offs on loans and other credit facilities
i) Loans and other credit facilities of the Bank are accounted for in accordance with the extant RBI guidelines as
given below:
a) The Bank classies its loans and investments, including at overseas branches and overdues arising from
crystallised derivative contracts, into performing and NPAs in accordance with RBI guidelines. Loans and
advances held at the overseas branches that are identied as impaired as per host country regulations for
reasons other than record of recovery, but which are standard as per the extant RBI guidelines, are classied
as NPAs to the extent of amount outstanding in the host country. Further, NPAs are classied into sub-
standard, doubtful and loss assets based on the criteria stipulated by RBI.
In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets at
rates prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided/written-off
as per the extant RBI guidelines. For loans and advances booked in overseas branches, which are standard
as per the extant RBI guidelines but are classied as NPAs based on host country guidelines, provisions are
made as per the host country regulations. For loans and advances booked in overseas branches, which are
NPAs as per the extant RBI guidelines and as per host country guidelines, provisions are made at the higher
of the provisions required under RBI regulations and host country regulations. Provisions on homogeneous
retail loans and advances, subject to minimum provisioning requirements of RBI, are assessed at a borrower
level, on the basis of the ageing of the loans in the non-performing category. In respect of loans classied
as fraud, the entire amount, without considering the value of security, is provided for over a period of four
quarters starting from the quarter in which fraud has been detected. In accounts where there has been delay
in reporting the fraud to the RBI, the entire amount is provided immediately. In respect of borrowers classied
as non-cooperative borrowers, wilful defaulters and NPAs covered under distressed assets framework of
RBI, the Bank makes accelerated provisions as per extant RBI guidelines.
The Bank holds specic provisions against non-performing loans and advances, and against certain
performing loans and advances in accordance with RBI directions. The Bank also holds provisions on loans
under SDR scheme of RBI. The assessment of incremental specic provisions is made after taking into
consideration the existing specic provision held. The specic provisions on retail loans and advances held
by the Bank are higher than the minimum regulatory requirements.
b) Provision due to diminution in the fair value of restructured/rescheduled loans and advances is made in
accordance with the applicable RBI guidelines.
In respect of non-performing loans and advances accounts subjected to restructuring, the account is
upgraded to standard only after the specied period i.e. a period of one year after the date when rst payment
of interest or of principal, whichever is later, falls due, subject to satisfactory performance of the account
during the period. A standard restructured loan is upgraded to the standard category when satisfactory
payment performance is evidenced during the specied period and after the loan reverts to the normal level
of standard asset provisions/risk weights.