17. PROVISIONS, CONTINGENT LIABLITIES AND
CONTINGENT ASSETS:

As per AS 29 “Provisions, Contingent Liabilities and
Contingent Assets”, the Bank recognises provisions only
when it has a present obligation as a result of a past event
and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and when a reliable estimate of the amount of the
obligation can be made.

Contingent liability is disclosed unless the possibility of
an outflow of resources embodying economic benefit
is remote. Contingent Assets are not recognised in the
financial statements.

18. SHARE ISSUE EXPENSES

Share issue expenses are charged to Share Premium
Account in the year of issue of shares.

Qualitative disclosures with regard to LCR

The Liquidity Coverage Ratio (LCR) is one of the Basel
Committee's key reforms to develop a more resilient banking
sector. The LCR, a global standard, is also used to measure
your Bank's liquidity position. LCR seeks to ensure that the
Bank has an adequate stock of unencumbered High-Quality
Liquid Assets (HQLA) that can be converted into cash easily and
immediately to meet its liquidity needs under a 30-day calendar
liquidity stress scenario. The LCR helps in improving the banking
sector's ability to absorb shocks arising from financial and
economic stress, whatever the source, thus reducing the risk of
spill over from the financial sector to the real economy. Based
on Basel III norms, your Bank's average LCR stood at 116.33
per cent on a consolidated basis for financial year 2025-26 as
against the regulatory threshold at 100 per cent.

The LCR standard aims to ensure that a bank maintains an
adequate level of unencumbered High Quality Liquid Assets
(HQLA) that can be converted into cash to meet its liquidity
needs for a 30 calendar day time horizon under a significantly
severe liquidity stress scenario. At a minimum, the stock of liquid
assets should enable the bank to survive until next 30 calendar
days under a severe liquidity stress scenario.

High Quality Liquid Assets (HQLA)

LCR =

Total net cash outflows over the next 30 calendar days

Liquid assets comprise of high-quality assets that can be readily
encashed or used as collateral to obtain cash in a range of
stress scenarios.

Here,

- HQLA comprises of level 1 and level 2 assets, in other
words these are cash or near to cash items which can
be easily used / discounted in the market in case of
need. While Level 1 assets are with 0% haircut, Level
2A and Level 2 B assets are with 15% and 50% haircuts
respectively.

- Net cash outflows are excess of total outflow over total
inflow under stressed situation as defined by Basel / RBI.
While arriving at the net cash outflow, the inflows are
taken with pre-defined hair-cuts and the outflows are taken
at pre-defined run-off factors. In order to determine cash
outflows, the Bank segregates its deposits into various
customer segments, viz., Retail (which include deposits
from individuals), Small Business Customers (those with
deposits upto ? 7.5), and Wholesale (which would cover
all residual deposits). Within Wholesale, deposits that are
attributable to clearing, custody, and cash management
services are classified as Operational Deposits. Other
contractual funding, including a portion of other liabilities
which are expected to run down in a 30 day time frame
are included in the cash outflows. These classifications,
based on extant regulatory guidelines, are part of the
Bank's LCR framework, and are also submitted to the RBI.

- Total expected cash inflows are calculated by multiplying
the outstanding balances of various categories of
contractual receivables by the rates at which they are
expected to flow in up to an aggregate cap of 75% of total
expected cash outflows. In case stressed inflows are more
than the stressed outflows, 25% of total outflows shall be
taken as total net cash outflows to arrive at the LCR.

level function and a separate sub-committee of the Board (R.Com.) keeps close watch on that. The periodical monitoring of the liquidity
management is being monitored by the ALCO at regular intervals. The entire liquidity management process of the Bank is being
governed by Global ALM Policy of the Bank. Liquidity for the Bank's domestic banking operations is directly managed at the Head
Office. The overseas branches and offshore unit of the Bank independently manage their liquidity requirements with support from the
Head Office. Similarly, the Bank's subsidiaries independently manage their liquidity requirements under guidance of the R.COM, which,
along with senior management of the subsidiaries, reviews the risk assessment of material risks at the subsidiaries. Further, the Bank
maintains suitable systems and processes to monitor liquidity requirements in other currencies as appropriate.

The average LCR based on averages of daily observations over previous 4 quarters (i.e. average for the FY 2025-26) for data till
March 31, 2026 was at 116.33% as against 118.62% for FY 2024-25 and well above the present prescribed minimum regulatory
requirement of 100%. The average HQLA for the financial year ended March 31, 2026 was ? 1,95,347.11 with 100.19% being Level 1
Assets whereas Level 2A and level 2 B assets constitute 0.53% and 0.12% respectively. The adjustment in average HQLA is (0.84%).
During the financial year, the weighted average HQLA level has increased by ? 18,258.88 primarily on account of increase in securities
under MSF & FALLCR along with excess SLR. Further, weighted average net cash outflows position has increased by ? 18,644.39
during the financial year, mainly on account of increase in cash outflows under the head unsecured wholesale funding.

The Bank has been maintaining HQLA mainly in the form of SLR investments over and above the mandatory requirements. Retail
deposits constitute major portion of total funding sources, which are well diversified. Management is of the view that the Bank has
sufficient liquidity cover to meet its likely future commitments.

#Items to be reported in the ‘no maturity' time bucket do not
have a stated maturity.

These may include, but are not limited to, items such as capital
with perpetual maturity, non-maturity deposits, short positions,
open maturity positions, non-HQLA equities, and physical traded
commodities. NSFR is computed based on consolidated basis
covering Domestic, Overseas Centres and Subsidiaries.

Qualitative disclosures with regard to NSFR

The objective of the Net Stable Funding Ratio (NSFR) is to
promote the resilience of bank's liquidity risk profiles and to
incentivize a more resilient banking sector over a longer time
horizon. Net Stable Funding Ratio (NSFR) guidelines ensure
reduction in funding risk over a longer time horizon by requiring
banks to fund their activities with sufficiently stable sources of
funding in order to mitigate the risk of future funding stress. The
NSFR is defined as the amount of Available Stable Funding
relative to the amount of Required Stable Funding.

Available Amount of Stable Funding (ASF)

NSFR = >100%

Required Amount of Stable Funding (RSF)

RBI issued the regulations on the implementation of the Net
Stable Funding Ratio in May 2018 with minimum requirement
of equal to at least 100%. The implementation is effective from
1st October, 2021. NSFR is computed at Bank's standalone and
consolidated level.

Available Stable Funding (ASF) is defined as the portion of
capital and liabilities expected to be reliable which is determined
by various factors/weights according to the nature and maturity
of liabilities viz. liabilities having maturity of 1 year or more
receiving 100% weight.

Required Stable Funding (RSF) is defined as the portion of on
balance sheet and off-balance sheet exposures which requires
to be funded on an ongoing basis. The amount of such stable
funding required is a function of the liquidity characteristics and
residual maturities of the various assets held.

Brief about NSFR of the Bank

The main drivers of the Available Stable Funding (ASF) are the
capital base, retail deposit base, and funding from non-financial
companies and long-term funding from institutional clients.
The capital base formed around 14%, retail deposits (including
deposits from small sized business customers) formed 64%
and wholesale funding formed 16% of the total Available Stable
Funding, after applying the relevant weights.

The Required Stable Funding primarily comprised lending
to corporates, retail clients and financial institutions which
constituted 52% of the total RSF after applying the relevant
weights. The stock of High-Quality Liquid Assets which majorly
includes cash and reserve balances with the RBI, government
debt issuances attracted no or low amount of stable funding due
to their high quality and liquid characteristic. Accordingly, the
HQLA and the deposits held for operational purpose constituted
only 2% of the Required Stable Funding after applying
the relevant weights. Other assets and Contingent funding
obligations, such as committed credit facilities, guarantees and
letters of credit constituted 46% of the Required Stable Funding.

Bank's NSFR comes to 125.30% at consolidated basis as
on 31st March 2026 and is above the minimum regulatory
requirement of 100% set out in the RBI. As on 31st March
2026, the weighted Available Stable Funding (ASF) position
stood at ? 8,11,799.91 and weighted Required Stable Funding

a) Qualitative Disclosure

The Bank enters into derivative contracts such
as interest rate derivatives, currency swaps and
currency options to hedge on balance sheet assets
and liabilities or to meet client requirements as well
as for trading purpose as per policy approved by
the Board. These products are used for hedging
risk, reducing cost and increasing the yield. In such
transactions, the types of risks to which the bank is
exposed to, are credit risk, market risk, operational
risk etc.

Risk management is an integral part of bank's
business management. Bank has risk management
policies designed to identify and analyse risks,
to set appropriate risk limits and to monitor these
risks and limits on an on-going basis by means of
reliable and up to date management information
systems. The risk management policies and major
control limits are approved by the Board of Directors
and they are monitored and reviewed regularly. The
organization of the Bank is conducive to managing
risks. There is sufficient awareness of the risks
and the size of exposure of the trading activities in
derivative operations.

The Bank has a Risk Management Committee of
Directors presided over by the Chairman.

The hedge/non-hedge (market making) transactions
are recorded separately. Income/expenditure on
hedging derivatives is accounted on accrual basis.

Forex forward contracts are marked to market and
the resultant gains and losses are recognized in the
profit and loss account.

Interest rate derivatives and currency derivatives
other than exchange traded derivatives for trading

purpose are marked to market and the resulting
losses, if any, are recognised in the Profit and Loss
account. Net Profit, if any, is ignored.

Exchange traded derivatives entered into for trading
purposes are valued at prevailing market rates
based on rates given by the Exchange and the
resultant gains and losses are recognized in the
Profit & Loss account.

Gains/losses on termination of the trading swaps
are recorded on the termination date as income/
expenditure. Any gain/loss on termination of hedging
swaps are deferred and recognised over the shorter
of the remaining contractual life of the swap or the
remaining life of the designated assets/liabilities.

Option fees/premium is amortised over the tenor of
the option contract.

Bank has a proper system of submitting periodical
reports to Senior and Top Management and Board
as well as regulatory authorities as required by RBI
and/or as per operational requirements. Bank has
clearly spelt derivative guidelines on various aspects
approved by the Board of Director. The derivative
transactions are subject to concurrent, internal,
statutory and regulatory audits.

The counter parties to the transactions are banks,
primary dealers and corporate entities. The deals
are done under approved exposure limits. The
Bank has adopted the Current Exposure Method
prescribed by Reserve Bank of India for measuring
Credit Exposures arising on account of interest
rate and foreign exchange derivative transactions.
Current exposure method is the sum of current
credit exposure and potential future exposure of
these contracts.

The current credit exposure is the sum of positive
mark to market value of these contracts i.e. when
the Bank has to receive money from the counter
party.

Potential future credit exposure is determined by
multiplying the notional principal amount of these
contracts irrespective of whether the contract has
zero, positive or negative mark to market value by
the relevant add-on factors as under according to
the nature and residual maturity of the instruments.

(vi) Implementation of IFRS converged Indian Accounting
Standards (Ind AS):

RBI vide its circular DBR.BP.BC.No.29/21.07.001/2018-
19 dated March 22, 2019, deferred implementation of
Ind AS till further notice as the legislative amendments
in Banking Regulation Act, 1949 as recommended by
RBI are under consideration of the Government of India.
However, RBI requires all banks to submit Proforma
Ind AS Financial Statements (PFS) every half year.
Accordingly, the Bank has been preparing and submitting
to RBI Proforma Ind AS Financial Statements (PFS) half¬
yearly with effect from September, 2021, after seeking
approval of Steering Committee formed for monitoring of
implementation of Ind-AS in the Bank. The PFS are also
presented to Audit Committee of Board and Board for
information and reporting. Recently, the RBI Vide circular
No.RBI/DOR/2026-27/398 dated 27.04.2026 has issued
guidelines as Reserve Bank of India (Commercial Banks -
Asset Classification, Provisioning and Income Recognition)
Directions, 2026 for implementation of ECL framework.
The directions will be effective from 01.04.2027. The Bank
has already appointed the consultant for the same and is
in process to implement the ECL framework.

(vii) Payment of DICGC Insurance Premium:

The deposit insurance premium as applicable was paid to
DICGC by Bank within the prescribed timelines.

(viii) Disclosure on amortisation of expenditure on account
of enhancement in family pension of employees of
banks

Reserve Bank of India vide its Circular No. RBI/2021-
22/105 DOR.ACC.REC.57/21.04.018/2021-22 dated

October 4, 2021, permitted Banks to amortise the
additional liability on account of revision in family pension
over a period not exceeding five years beginning with
the financial year ending March 31, 2022, subject to
a minimum of 1/5th of the total amount being expensed
every year. The Bank recognised the additional liability
on account of revision in family pension amounting to ?
612.09 and has opted to amortise the said liability over a
period not exceeding five years, beginning financial year
ending March 31,2022.

Accordingly, Bank has recognised ? Nil (Previous Year ?
41.21) as an expense in the Profit and Loss account, for
the year ended March 31, 2026 towards the said additional
liability and the unamortised amount of family pension
liability as on the date is ? Nil (Previous Year ? Nil).

(ix) In accordance with RBI circular no. DBR.No.BP.
BC.18/21.04.048/2018-19 dated January 1, 2019, on
“Micro, Small and Medium Enterprises (MSME) sector -
Restructuring of Advances”:

(xii) Income Tax:

(a) Claims against the Bank not acknowledged as debt appearing under contingent liabilities (Schedule 12) include disputed
income tax/interest tax liabilities of ? 2,057.06 (previous year ? 2,048.01) for which no provision is considered necessary
based on various judicial decisions in respect of past assessments on such disputes. Payments/adjustments against the
said disputed dues are included under Other Assets (Schedule 11).

(b) Provision for income tax for the year is arrived at after due consideration of the provisions of the applicable tax laws and
relevant judicial precedents on certain disputed issues.

(c) The Bank had exercised the irreversible option to shift from old tax regime to the new tax regime under section 115BAA of
the Income Tax Act, 1961, effective from the Assessment Year 2023-24.

(d) The Organisation for Economic Co-operation and Development (OECD) has published the model rules for global minimum
tax (Pillar Two model rules). As per the provisions of Pillar Two legislation, the Ultimate parent entity (UPE) of the Group
(the Bank, its branches, subsidiaries and / or other constituent entities) has consolidated revenues exceeding the threshold
prescribed under the OECD framework.

The Pillar Two legislation is not enacted by Government of India, where the Parent company is incorporated. Pillar Two
legislation has been enacted, or substantively enacted, in most of the other jurisdictions where the Group (the Bank, its
branches, subsidiaries and / or constituent entities) operates. Based on preliminary assessment, the Bank does not expect
a material financial impact from the application of Pillar Two legislation on its financial statements as on reporting date.
The evaluation of the exposure is based on broad review of the most recent tax filings, country-by-country reporting and
financial statements for the constituent entities in the Group. In the jurisdiction with lower corporate tax rate i.e. United
Arab Emirates, the Bank has recognized and disclosed separately, current tax expense towards the domestic minimum
top-up taxes under the local Pillar Two legislation.

The Bank has applied the exception to recognizing and disclosing information about deferred tax assets and liabilities
related to Pillar Two Income Taxes as mandated by AS-22 (amended). This exception applies immediately and
retrospectively.

Accordingly, during the year ended March 31, 2026, the Bank has subscribed an additional amount of ? 329.45 towards
the share capital of Madhya Pradesh Gramin Bank, being the sponsor bank of the Amalgamated RRB. During the year, the
Bank has received a capital redemption of ? 450.46 in case of Vidharbha Konkan Gramin Bank and ? 205.90 in case of
Aryavart Bank, being the face value of its investment in the RRB.

Further, in case of Vidharbha Konkan Gramin Bank and Aryavart Bank, the Bank has debited / credited its Consolidated
Profit and Loss Account by ? 330.38 (Credit) and ? 849.18 (Debit) respectively towards reversal of difference between the
carrying value of investments as on 01.05.2025 and the proceeds received for capital redemption and the same has been
shown under exceptional item in the Consolidated Financial Results.

On account of amalgamation of Madhyanchal Gramin Bank into Madhya Pradesh Gramin Bank, where the Bank is the
Sponsor Bank of the Amalgamated RRB, the carrying amount of bank investment in associate as on 01.05.2025 has been
adjusted by ? 171.87 in opening Reserves and Surplus of Consolidated Financial Results, in accordance with Accounting
Standard 23 - 'Accounting for Investments in Associates in Consolidated Financial Statements'.

(xv) In respect of RBI referred NCLT accounts (List 1 & 2) as on March 31, 2026, Bank holds 100% provision of the aggregate
outstanding value of ? 2,905.38 (Previous year ? 3,033.86).

(xvi) In terms of Bank's approved revaluation policy, during the year ended March 31, 2025 the immovable properties are revalued
based on the revaluation reports of Bank's approved valuers and the surplus arising from revaluation amounts to ?1,580.24 has
been added to “Revaluation Reserve”.

(xvii) Bank has raised Infrastructure Bonds amounting to ? 10,000 on Dec 26, 2025 at coupon rate of 7.23%.

(xviii) The Government of India has notified four New Labour Codes subsuming 29 legislations relating thereto effective November 21,
2025. Based on the broad assessment carried out by the management, the Bank continues to comply with the major provisions
having financial impact. The rules relating to said Labour Codes are yet to be notified and any resultant impact arising out of the
same shall be taken care on such notification

(xix) Other Income includes commission and brokerage income, fee and other charges, profit/ loss on sale of fixed assets (net),
profit/ loss on revaluation of investments (net) (FVTPL and HFT), earnings from foreign exchange and derivative transactions,
recoveries from accounts previously written off, dividend income, etc.

(xx) The Board of Directors has recommended a dividend of ? 4.65 per equity share (46.50%) for the year ended March 31, 2026
subject to requisite approvals.

(xxi) Balancing of Subsidiary Ledger Accounts, confirmation/reconciliation of balances with foreign branches, Inter-office accounts,
NOSTRO Accounts, Suspense, Draft Payable, Clearing Difference, other office accounts, etc. is in progress on an on-going
basis. In the opinion of the management, the overall unadjusted impact on the financial statements, if any, of pending final
clearance/adjustment of the above, is not likely to be significant.

(xxii) Other Income / Expenditure exceeding 1% of total income

Other Income: Other Income includes below income exceeding 1% of the total income of the Bank.

Disclosure requirements as per Accounting Standards (AS):

6.1 Accounting Standard - 5 Net Profit / loss for the period, Prior Period Items and changes in accounting policies:

(i) Prior Period Items:

During the year, there were no material prior period income / expenditure items.

(ii) Change in accounting policy:

There is no change in the Significant Accounting Policies followed during the year ended March 31, 2026 as compared to
those followed in the previous financial year ended March 31,2025.

6.2 Accounting Standard 9 - Revenue recognition

Certain items of income are recognised on realisation basis as per Accounting Policy para 3 of Schedule 17: Significant
Accounting Policies. However, the said income is not considered to be material.

6.3 Accounting Standard 15 - Employee Benefits:

The Bank has recognised Business Segments as Primary reporting segment and Geographical Segments as Secondary segment in
line with RBI guidelines in compliance with Accounting Standard 17.

Primary Segment: Business Segments

a) Treasury: ‘Treasury' segment includes the entire investment portfolio i.e. dealing in Government and other Securities, Money
Market Operations and Forex Operations including Derivative contracts.

b) Wholesale Banking: Wholesale Banking includes all lending activities to trust, partnership firms and companies which are not
included Retail Banking.

c) Retail Banking: Retail Banking segment comprises of Digital Banking and Other Retail Banking. Digital Banking includes digital
banking products acquired by DBUs. Other Retail Banking includes all housing loan accounts and borrower accounts having
exposure up to ? 7.50.

Pricing of Inter-Segmental transfers

Retail Banking Segment is a Primary resource mobilising unit and Wholesale Segment and Treasury Segment
compensates the Retail banking segment for funds lent by it to them taking into consideration the average cost of
deposits and borrowings incurred by it.

Allocation of Assets & Liabilities

a) Assets & Liabilities directly attributed to particular segment are allocated to the relative segment.

b) Assets & Liabilities not directly attributable to specific segment are allocated in proportion Earning Assets.

Allocation of Costs:

a) Expenses directly attributed to particular segment are allocated to the relative segment.

b) Expenses not directly attributable to specific segment are allocated in proportion to number of employees/business
managed.

Secondary Segment: Geographical Segments

a) Domestic Operations

b) International Operations