Disclosure of Capital Adequacy

Illustrative Capital Structure

• As per RBI’s capital adequacy norms capital funds are

classified into Tier-I and Tier-II capital.

• Tier-I capital of the bank consists of equity capital,

statutory reserves, other disclosed free reserves, capital

reserves and innovative perpetual debt instruments

eligible for inclusion in Tier-I capital that complies with

requirement specified by RBI.

• Tier-II capital consists of general provision and loss

reserves, upper Tier-II instruments and subordinate debt

instruments

• Bank has issued debt instruments that form a part of

Tier-I and Tier-II capital.

Illustrative Capital Structure

• Tier-I bonds are non-cumulative and perpetual in nature

with a call option after 10 years.

• Interest on Tier-I bonds is payable either annually or

semi-annually.

• Some of the Tier-I bonds have a step-up clause on

interest payment ranging up to 100 bps.

• Upper Tier-II bonds have an original maturity of 15 years

with a call option after 10 years.

Illustrative Capital Sturcture

•Interest on Upper Tier-II bonds is payable either annually

or semi-annually.

•Some of the Upper Tier-II debt instruments have a step-up

clause on interest payment ranging up to 100 bps.

•Lower Tier-II bonds have an original maturity between 5 to

10 years.

•Interest on lower Tier-II capital instruments is payable

either semi-annually or annually.

Equity Capital

• Bank has authorized share capital of XX crores

comprising XXXX equity shares of 10/- each.

• Bank has issued, subscribed and paid-up equity capital

of XX crores, constituting XXXX number of shares of

10/- each.

• Bank’s shares are listed on the National Stock Exchange

and the Bombay Stock Exchange.

• GDRs issued by the bank are listed on the London Stock

Exchange (LSE).

• During the year, the Bank has also allotted equity shares

to employees under its Employee Stock Option Plan.

Debt Instruments

• Bank has raised capital through

– Innovative Perpetual Debt Instrument (IPDI) eligible as Tier

I Capital

– Tier II capital in the form of Upper TierII

– Subordinated bonds (unsecured redeemable non-

convertible debentures)

• Perpetual Debt Instrument

• The Bank has raised Perpetual Debt Instruments eligible

as Tier I Capital

Date of Allotment Rate of

Interest

Period Amount

30 September 2006 10.05% Perpetuity XXX Cores

15 November 2006 7.167% Perpetuity USD XX million INR (XXX Cores)

Total XXX Cores

Conversion Rates XX / USD (as on 31/3/2011)

Tier I Capital

Date of Allotments Rate of Redemption

Rate of Interest

Amount

11 August 2006 10 August 2021 7.25% USD XX million INR (XXX crore)

24 November 2006 23 November 2021 9.35% XX Crore

6 February 2007 6 February 2022 9.5% XX Crore

28 June 2007 28 June 2022 7.125% USD XX million INR (XXX) Crore

Total XXX Crore

Tier II Capital

Date of Allotment Date of Redemption Rate of Interest Amount 20 Sep 2002 20 June 2012 9.3% XX

21 Dec 2002 21 Sep 2012 8.95% XX

26 July 2003 26 April 2011 6.70% XX

26 July 2003 24 April 2013 7.00% XX

15 June 2004 15 Oct 2013 6.5% XX

25 July 2005 25 July 2012 Average 1 year benchmark + 65 basis

XX

22 March 2006 22 July 2013 8.5% XX

22 March 2006 22 Jun 2013 8.32% XX

22 March 2006 22 March 2016 8.75% XX

22 March 2006 22 March 2016 8.56% XX

28 June 2006 28 Sep 2013 8.95% XX

30 March 2007 30 March 2017 9.1% XX

7 Nov 2008 7 Nov 2018 11.75% XX

28 March 2009 28 March 2019 9.95% XX

16 June 2009 16 June 2019 9.15% XX

Total XXX

Subordinated Debt

Capital

A Tier I Capital XXX

• Paid-up Share Capital XX

• Reserves and surplus (Excluding Foreign Currency

Translation Reserve)

XX

• Innovative Perpetual Debt Instruments XX

• Amount deducted from Tier 1 capital

• Investments in subsidiaries XX

• Deferred Tax Assets XX

Capital Fund

Capital

B Tier II Capital (net of deductions) (B.1+B.2+B.3-B.4) XX

B.1 Debt Capital Instruments eligible for inclusion as Upper Tier 2 Capital

•Total amount outstanding XX

• Of which amount raised during the current year XX

• Amount eligible as capital funds XX

B.2 Subordinated debt eligible for inclusion in Lower Tier Capital

• Total amount outstanding XX

• Of which amount raised during the current year XX

• Amount eligible as capital funds XX

Capital Fund

Capital

B.3 Other Tier II Capital - General provisions and loss reserves XX

B.4 Deductions from Tier II Capital

• Investments in Subsidiaries XX

C Total Eligible Capital XX

Capital Fund

Capital Adequacy

• Bank is subject to the capital adequacy guidelines

stipulated by RBI, which are based on the framework of

the Basel Committee on Banking Supervision.

• As per the capital adequacy guidelines under Basel I, the

bank is required to maintain a minimum ratio of total

capital to risk weighted assets (CRAR) of 9.0%, at least

half of which is required to be Tier 1 Capital.

Capital Adequacy

•As per Basel II guidelines, Bank is required to maintain a

minimum CRAR of 9.0%, with minimum Tier I Capital ratio

of 6.0%.

•In terms of RBI guidelines for implementation of Basel II,

capital charge for credit and market risk the bank is

required to maintain at the higher levels implied by Basel II

or 80% of the minimum capital requirement computed as

per the Basel I framework.

Capital Adequacy

•An assessment of the capital requirement of the bank is carried

out through a comprehensive projection of future businesses that

takes cognizance of

– strategic intent of the Bank,

– profitability of particular businesses

– opportunities for growth.

•Mapping of credit, operational and market risks to this projected

business growth enables assignment of capital that not only

adequately covers the minimum regulatory capital requirement but

also provides for growth.

•Calibration of risk to business is enabled by a strong risk culture in

the bank aided by effective, technology based risk management

systems.

Credit Risk Capital

Capital requirements for Credit Risk

• Portfolios subject to standardized approach XX

• Securitization exposures XX

Market Risk

Capital requirements for Market Risk

• Standardized duration approach XX

• Interest rate risk XX

• Foreign exchange risk (including gold) XX

• Equity risk XX

Capital Requirements for various Risks

Operational Risk Capital

Capital requirements for Operational risk

• Basic indicator approach XX

Capital Adequacy Ratio of the Bank (X%)

Tier I CRAR (X%)

Tier II CRAR (X%)

Capital Requirements for various Risks