With effect from Fiscal 2020, our Bank is charging borrowing cost upfront in the statement of profit and loss account as
compared to amortisation over the tenure of the borrowings. Borrowing cost includes arranger fees, processing fees, stamp duty
on issuance of debenture certificates and other associated transactions costs related to borrowing from banks and other financial
institutions. In Fiscal 2019, in accordance with AS 16, borrowing costs were recognized over the tenure of the borrowings. In
Fiscal 2020, in accordance with AS 16, borrowing costs are recognized upfront.

Fee on sale of Priority Sector Lending Certificates

We enter into transactions for the sale or purchase of Priority Sector Lending Certificates (PSLCs). In Fiscal 2019, the fee
received from sale of PSLCs was recorded as ‘miscellaneous income’ and the fee paid for purchase of PSLCs was recorded as
‘other expenditure’ in the profit and loss account. In Fiscal 2020, we commenced amortizing the income over the residual
quarters of the fiscal year.

For further information, see “Financial Information” beginning on page 241.

PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE

Income

Interest Earned

Interest earned consists of interest/ discount on advances/ bills, income on investments, interest on balances with Reserve Bank
of India and other inter-bank funds, and other interest.

Other Income

Other income consists principally of (i) commission, exchange and brokerage, (ii) profit on the sale of investments (net), (iii)
profit/ (loss) on sale of fixed assets (net), and (iv) miscellaneous income, which includes income from priority sector lending
certificates (““PSLC”), recoveries from assets written off, locker rent, etc.

Expenditure

Interest Expended

Interest expended include interest on deposits, interest on Reserve Bank of India/ inter-bank borrowings, and other interest such
as interest on borrowings from refinance agencies, interest on debentures and subordinated debt.

Operating Expenses

Our operating expenses includes (i) payments to and provision for employees, (ii) rent, taxes and lighting, (iii) printing and
stationery, (iv) advertisement and publicity, (v) depreciation on the Bank’s property, (vi) directors’ fees/ remuneration,
allowances and expenses, (vii) auditors’ fee and expenses, (viii) legal fees, (ix) postage, telegrams, telephones, etc., (x) repairs
and maintenance, (xi) insurance, and (xii) other expenditure, including professional fees.

Provisions and Contingencies

Our provisions and contingencies consist of (i) provision for non-performing assets (including write off), (ii) provision for
standard assets, (iii) provision for taxes, (iv) deferred tax charge, (v) provision for (write back of provision)/ depreciation on
investments, (vi) write-off advances, and (vii) other provisions and contingencies, including floating provision and contingent
provision for COVID-19.

RESULTS OF OPERATIONS

NINE MONTHS ENDED DECEMBER 31, 2020 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2019

The following table sets forth certain information with respect to our results of operations for the nine months ended December
31, 2019 and 2020:

 

 

 

 

 

 

Nine Months Ended December 31, 2019 Nine Months Ended December 31, 2020
Particulars @ million) Percentage of total @niillion) Percentage of total
income income
Income
Interest earned 5,632.15 89.92% 6,243.49 90.58%

 

 

 

 

 

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