12.

13.

14,

experience an adverse impact on our financial condition and results of operations, which are largely dependent on the
performance, geo-political and other prevailing conditions affecting the economies of the state. For instance, our collection
efforts had to be intensified to manage the increase in overdues in Odisha due to cyclone Fani, floods in Kolhapur, Hubli
and Belgaum. Any similar events affecting these regions could compel us to dedicate greater resources to manage our
operations in these areas, thereby adversely impacting our overall operations. The market for our products in Tamil Nadu,
Maharashtra and Odisha may perform differently from, and be subject to, market and regulatory developments that are
different from the requirements in other States of India. There can be no assurance that the demand for our products will
grow, or will not decrease, in the future, in these regions.

Our deposits depend on a limited number of customers and a loss of such customers could materially and adversely
affect our deposit portfolio, funding sources, financial condition, results of operations and cash flows.

We are dependent on a limited number of customers for a portion of our deposits. Deposits from our 20 largest depositors
amounted to % 4,434.05 million, = 7,119.74 million, = 11,045.51 million and = 9,977.14 million as of March 31, 2018,
March 31, 2019 and March 31, 2020 and as of December 31, 2020 and represented 59.16%, 44.68%, 38.77% and 29.84%
of our total deposits as of March 31, 2018, March 31, 2019 and March 31, 2020 and as of December 31, 2020, respectively.
Our customers may reduce or withdraw their deposits from our Bank, with or without cause or notice, at any time.
Reduction or loss of such deposits expose us to an increasing funding risk, which could in turn adversely affect our
financial performance and results of operations. A reduction in the services we perform for such customers or the loss of
such major customers could result in a significant reduction of our deposits portfolio. Factors that may result in a loss of
a customer include our service performance, reduction in budgets due to macroeconomic factors or otherwise and shift in
policies and political or economic factors. There is significant competition for the services we provide and we are typically
not an exclusive service provider to our large customers. These factors may not be under our control or predicted with any
degree of certainty. Significant pricing or margin pressure exerted by our customers could also adversely affect our
business, financial condition, results of operations and cash flows. If any of our customers reduce or remove their deposit
accounts from our Bank, our deposits portfolio, funding sources, financial condition, results of operations, and cash flows
could be materially and adversely affected.

We have certain contingent liabilities that have not been provided for in our financial statements, which, if they
materialize, may adversely affect our results of operations, financial condition and cash flows.

As of December 31, 2020, we had the following contingent liabilities which have not been provided for:

 

 

 

 

 

 

 

 

 

As of December 31, 2020
Particulars (million)
Our Bank is contingently liable to financial institutions with respect to securitisation of loans and
advances to the extent of cash collateral and credit enhancements -
Service tax liability 5.97
Income tax liability 32.68
Undrawn commitments 2.99
Others 7AL
Total 48.76

 

 

 

For further information on our contingent liabilities, see “Financial Information” beginning on page 241. If the
aforementioned contingent liabilities materialize, our profitability and cash flows may be adversely affected.

Banking companies in India, including us, are currently required to report financial statements as per Indian GAAP.
However, we may be required to prepare our financial statements in accordance with Ind AS in the future. Differences
exist between Ind AS and Indian GAAP, which may be material to investors’ assessment of our financial condition.
The Ind AS financial information that we may be required to prepare in the future may not be comparable to the Indian
GAAP financial information we currently prepare.

The Ministry of Corporate Affairs, in its press release dated January 18, 2016, issued a roadmap for implementation of Ind
AS for scheduled commercial banks, insurance companies and NBFCs, which are also applicable to our Bank. Such
roadmap provided that these institutions were required to prepare Ind AS financial statements for accounting periods
commencing April 1, 2018 (including comparative financial statements for the corresponding periods in the previous year).
The RBI, by its circular dated February 11, 2016, required all scheduled commercial banks to comply with Ind AS for
financial statements commencing April 1, 2018 and also required such entities to prepare and submit proforma Ind AS
financial statements to the RBI since the six months ended September 30, 2016. Further, the RBI on October 13, 2017
advised SFBs to be prepared for implementation of the Ind AS accounting standards and instructed SFBs to submit
proforma financial statements under Ind AS on a quarterly basis from the quarter ended June 30, 2017, in the format
prescribed by them. In compliance with such regulatory requirements, we commenced submitting proforma Ind AS
financial statements from the quarter ended June 30, 2017 to the RBI. However, the RBI, through its notification dated

30
