(2) Our Bank has made a provision of 659.91 million for the year ended March 31, 2020 on account of COVID-19 and has not been considered in table
above.

Non-Performing Assets

Our Bank has suffered losses in the past through impairment of loans as delinquent borrowers were impacted by various factors
including recessionary conditions in the domestic economy, currency demonetization measures in 2016, COVID-19, regulatory
measures, increased competition and volatility in industrial growth that led to cash flow issues for micro banking customers,
adversely impacted earning capacity for MSMEs and CV customers. Our Bank has adopted several measures to refine its credit
selection processes and appraisal capabilities.

Once loan accounts are identified as non-performing, interest and other fees charged in the account, if uncollected, are reversed.
In compliance with regulations governing the presentation of financial information by banks, we report non-performing assets
net of cumulative provision. In accordance with the RBI guidelines, interest income from advances for NPAs is recognized
upon realization, rather than on an accrual basis as with all other loans. Any recoveries in the non-performing advances account
will be first appropriated to principal outstanding then interest outstanding and to fees/charges outstanding if any, except in
those cases where bank has a specific agreement with a borrower with regards to appropriation of recoveries.

Our Bank’s percentage of Gross NPAs to Total Advances decreased from 3.54% as of March 31, 2018 to 1.81% as of March
31, 2019 and subsequently increased to 2.79% as of March 31, 2020 and was 2.34% and 1.84% as of December 31, 2019 and
2020, respectively. Our Bank’s net NPA to net advances decreased from 1.86% as of March 31, 2018 to 0.44% as of March 31,
2019 and subsequently increased to 0.57% as of March 31, 2020 and was 2.78% and 0.78% as of December 31, 2019 and 2020,
respectively.

 

See “Risk Factors — Risks Relating to our Bank’s Business — If we are not able to control the level of non-performing assets
in our portfolio or any increase in our NPA portfolio, RBI mandated provisioning requirements could adversely affect our
business, financial conditions, results of operations and cash flows.”

The following tables set forth, for the periods indicated, information about our Bank’s NPA portfolio.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31,
2019 2020
@nillion, except percentages)
‘Non-Performing Assets
(i) Gross NPAs as at the year end 955.57 299.13
(ii) Closing balance of provision for NPAs 429.38 170.68
(iii) Closing balance of floating provisions 376.05 537.73
(iv) Net NPAs 176.18 128.14
(vi) Advances 33,609.03 37,822.63
(Vii) Gross Advances 34,414.46 38,531.04
(viii) Gross NPAs/ Gross Advances (%) (i/vii) 2.78% 0.78%
(x) Net NPAs/ Advances (%) (iv/vi) 0.52% 0.33%
(xi) Provision for NPAs as a percentage of Gross NPAs (iv/i)* 44.93% 57.06%
(xi) Provision coverage ratio ((including technical write-offs and floating provisions to an BL aR, Ba ee
extent utilized))
As of March 31,
2018 2019 2020
@umillion, except percentages)
Non-Performing Assets
() Gross NPAs as at the year end 565.69 496.21 1,012.50
(ii) Closing balance of provision for NPAs 210.83 287.29 412.30
(iii) Closing balance of floating provisions 62.58 323.15 532.18
(iv) Net NPAs 292.27 120.06, 203.74
(vi) Advances 15,686.78 26,795.84 35,319.44
(Vii) Gross Advances 15,960.19 27,406.29 36,263.92
(viii) Gross NPAs/ Gross Advances (%) (i/vii) 3.54% 1.81% 2.79%
(x) Net NPAs/ Advances (%) (iv/vi) 1.86% 0.44% 0.57%
(xi) Provision for NPAs as a percentage of Gross NPAs (iv/i)* 37.27% 57.90% 40.72%
(xii) Provision coverage ratio (including technical write-offs and floating 48.33% 75.80% 84.71%
provisions to an extent utilized))

 

 

 

 

* Provisions are excluding floating provision

The tables below set forth our Bank’s Gross NPAs by product segment as a percentage of the gross advances of the respective
products as of March 31, 2018, 2019, 2020 and as of December 31, 2019 and 2020:

233
