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RBI Master Circular No: RBI/2012-13/41 (02-Jul-12) Master Circular - Disclosure in Financial Statements - Notes to Accounts

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DBOD.BP.BC No.14/21.04.018/2012-13

The Chairmen/Chief Executives of
All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir,

Please refer to the Master Circular DBOD.BP.BC.No.16/21.04.018/2011-12 dated July 1, 2011 consolidating all operative instructions issued to banks till June 30, 2011 on matters relating to disclosures in the ''Notes to Accounts'' to the Financial Statements. The Master Circular has now been suitably updated by incorporating instructions issued upto June 30, 2012. The Master Circular has also been placed on the RBI web-site ( http://www.rbi.org.in).

2. It may be noted that all relevant instructions on the above subject contained in the circulars listed in the Annex have been consolidated. In addition, disclosure requirements contained in "Master Circular -- Prudential Guidelines on Capital Adequacy and Market Discipline - Implementation of the New Capital Adequacy Framework (NCAF)" will be applicable.

3. Further, Guidelines on Implementation of Basel III Capital Regulations in India have been issued vide Circular DBOD.No.BP.BC.98/21.06.201/2011-12 dated May 2, 2012. Disclosure requirements specified vide these guidelines, when effective, would be in addition to the instructions consolidated in this Master Circular.

Yours faithfully,

Deepak Singhal

Chief General Manager-in-charge

Purpose

To provide a detailed guidance to banks in the matter of disclosures in the ''Notes to Accounts'' to the Financial Statements.

Classification

A statutory guideline issued by the Reserve Bank of India under Section 35A of the Banking Regulation Act 1949.

Previous Guidelines superseded

Master Circular on ''Disclosure in Financial Statements -- Notes to Accounts'' issued vide DBOD.BP.BC No.16/21.04.018/2011-12 dated July 1, 2011.

Scope of application

To all scheduled commercial banks (excluding RRBs).

Structure

1

Introduction

2.1 Presentation
2.2 Minimum Disclosures
2.3 Summary of Significant Accounting Policies
2.4

Disclosure Requirements

3.1

Capital

3.2

Investments

3.2.1

Repo Transactions

3.2.2

Non-SLR Investment Portfolio

3.2.3

Sale and Transfers to/ from HTM Category

3.3

Derivatives

3.3.1

Forward Rate Agreement/ Interest Rate Swap

3.3.2

Exchange Traded Interest Rate Derivatives

3.3.3

Disclosures on risk exposure in derivatives

3.4

Asset Quality

3.4.1

Non-Performing Asset

3.4.2

Particulars of Accounts Restructured

3.4.3

Details of financial assets sold to Securitisation/ Reconstruction Company for Asset Reconstruction

3.4.4

Details of non performing asset purchased/sold

3.4.5

Provisions on Standard Assets

3.5

Business Ratio

3.6

Asset Liability Management - Maturity pattern of certain items of assets and liabilities

3.7

Exposures

3.7.1

Exposure to Real Estate Sector

3.7.2

Exposure to Capital Market

3.7.3

Risk Category wise Country Exposure

3.7.4

Details of Single Borrower Limit (SGL), Group Borrower Limit (GBL) exceeded by the bank

3.7.5

Unsecured advances

3.8

Disclosure of Penalties imposed by RBI

4.

Disclosure Requirements as per Accounting Standards where RBI has issued guidelines

4.1

Accounting Standard 5 -- Net Profit or Loss for the period, prior period items and changes in accounting policies

4.2

Accounting Standard 9 -- Revenue Recognition

4.3

Accounting Standard 15 -- Employee Benefits

4.4

Accounting Standard 17 -- Segment Reporting

4.5

Accounting Standard 18 -- Related Party Disclosures

4.6

Accounting Standard 21- Consolidated Financial Statements

4.7

Accounting Standard 22 -- Accounting for Taxes on Income

4.8

Accounting Standard 23 -- Accounting for Investments in Associates in Consolidated Financial Statements

4.9

Accounting Standard 24 -- Discontinuing Operations

4.10

Accounting Standard 25 -- Interim Financial Reporting

4.11

Other Accounting Standards

5.

Additional Disclosures

5.1

Provisions and contingencies

5.2

Floating Provisions

5.3

Draw Down from Reserves

5.4

Disclosure of Complaints

5.5

Disclosure of Letters of Comfort (LoCs) issued by banks

5.6

Provisioning Coverage Ratio (PCR)

5.7

Bancassurance Business

5.8 Concentration of Deposits, Advances, Exposures and NPAs
5.9 Sector-wise NPAs
5.10 Movement of NPAs
5.11 Overseas Assets, NPAs and Revenue
5.12 Off-balance Sheet SPVs sponsored
5.13 Unamortised Pension and Gratuity Liabilities
5.14 Disclosures on Remuneration
5.15 Disclosures relating to Securitisation
5.16 Credit Default Swaps
Annex List of Circulars consolidated by the Master Circular

1. Introduction

2.1 Presentation

2.2 Minimum Disclosures

2.3 Summary of Significant Accounting Policies

2.4 Disclosure Requirements

3.1 Capital

Particulars Current
Year 		Previous Year
  1. CRAR (%)
  2. CRAR - Tier I Capital (%)
  3. CRAR - Tier II Capital (%)
  4. Percentage of the shareholding of the Government of India in nationalized banks
  5. Amount of subordinated debt raised as Tier-II capital *
  6. Amount raised by issue of IPDI
  7. Amount raised by issue of Upper Tier II instruments**

*The total amount of subordinated debt through borrowings from Head Office for inclusion in Tier II capital may be disclosed in the balance sheet under the head 'Subordinated loan in the nature of long term borrowings in foreign currency from Head Office'.
** The total eligible amount of HO borrowings shall be disclosed in the balance sheet under the head ''Upper Tier II capital raised in the form of Head Office borrowings in foreign currency''.

3.2 Investments

Particulars Current Year Previous Year
(1) Value of Investments
  1. Gross Value of Investments
    (a) In India
    (b) Outside India
  2. Provisions for Depreciation
    (a) In India
    (b) Outside India
  3. Net Value of Investments
    (a) In India
    (b) Outside India
(2) Movement of provisions held towards depreciation on investments.
  1. Opening balance
  2. Add: Provisions made during the year
  3. Less: Write-off/ write-back of excess provisions during the year
  4. Closing balance

3.2.1 Repo Transactions (in face value terms)

Minimum outstanding during the year

Maximum outstanding during the year

Daily Average outstanding during the year

Outstanding as on March 31

Securities sold under repo
i. Government securities
ii. Corporate debt
securities

Securities purchased under reverse repo
i. Government securities
ii. Corporate debt
securities

3.2.2. Non-SLR Investment Portfolio

i) Issuer composition of Non SLR investments

No. Issuer Amount Extent of Private Placement Extent of ''Below Investment Grade'' Securities Extent of ''Unrated''
Securities 		Extent of ''Unlisted''
Securities
(1) (2) (3) (4) (5) (6) (7)
(i) PSUs
(ii) FIs
(iii) Banks
(iv) Private Corporates
(v) Subsidiaries/ Joint Ventures
(vi) Others
(vii) Provision held towards depreciation X X X X X X X X X X X X
Total *
Note: (1) *Total under column 3 should tally with the total of Investments included under the following categories in Schedule 8 to the balance sheet:
  1. Shares
  2. Debentures & Bonds
  3. Subsidiaries/joint ventures
  4. Others
(2) Amounts reported under columns 4, 5, 6 and 7 above may not be mutually exclusive.

ii) Non performing Non-SLR investments

Particulars
Opening balance
Additions during the year since 1st April
Reductions during the above period
Closing balance
Total provisions held

3.2.3 Sale and Transfers to/ from HTM Category

3.3 Derivatives

3.3.1 Forward Rate Agreement/ Interest Rate Swap

Particulars Current year Previous year
  1. The notional principal of swap agreements
  2. Losses which would be incurred if counterparties failed to fulfill their obligations under the agreements
  3. Collateral required by the bank upon entering into swaps
  4. Concentration of credit risk arising from the swaps $
  5. The fair value of the swap book @

Note: Nature and terms of the swaps including information on credit and market risk and the accounting policies adopted for recording the swaps should also be disclosed.
$ Examples of concentration could be exposures to particular industries or swaps with highly geared companies.
@ If the swaps are linked to specific assets, liabilities, or commitments, the fair value would be the estimated amount that the bank would receive or pay to terminate the swap agreements as on the balance sheet date. For a trading swap the fair value would be its mark to market value.

3.3.2 Exchange Traded Interest Rate Derivatives

S.No. Particulars

(i) Notional principal amount of exchange traded interest rate derivatives undertaken during the year (instrument-wise)
a)
b)
c)
(ii) Notional principal amount of exchange traded interest rate derivatives outstanding as on 31st March.....
(instrument-wise)
a)
b)
c)
(iii) Notional principal amount of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise)
a)
b)
c)
(iv) Mark-to-market value of exchange traded interest rate derivatives outstanding and not "highly effective" (instrument-wise)
a)
b)
c)

3.3.3 Disclosures on risk exposure in derivatives

Qualitative Disclosure

Quantitative Disclosures

Sl.
No 		Particular Currency Derivatives Interest rate derivatives

(i)

Derivatives (Notional Principal Amount)

a) For hedging

b) For trading

(ii)

Marked to Market Positions [1]

a) Asset (+)

b) Liability (-)

(iii)

Credit Exposure [2]

(iv)

Likely impact of one percentage change in interest rate (100*PV01)

a) on hedging
...

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