Master Directions on Frauds — Classification and Reporting by commercial banks and select FIs dated July 1, 2016,
as amended

The RBI issued guidelines on the classification and reporting of fraud cases. The fraud cases have been classified into
misappropriation and criminal breach of trust, fraudulent encashment through forged instruments, manipulation of books
of account or through fictitious accounts and conversion of property, unauthorised credit facilities extended for reward or
for illegal gratification, negligence and cash shortages, cheating and forgery, fraudulent transactions involving in foreign
exchange and any other type of fraud not coming under the specific heads as above. The banks are required to submit
fraud related data to RBI through various returns/ reports.

Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“Prudential
Framework for Resolution of Stressed Assets”) The RBI has formulated the Prudential Framework for Resolution of
Stressed Assets, with a view to providing a framework for early recognition, reporting and time bound resolution of
stressed assets. RBI issued these directions in terms of the provisions of Section 35AA of the Banking Regulation Act,
for initiation of insolvency proceedings against specific borrowers under the Insolvency and Bankruptcy Code, 2016
(“IBC”). The Directions also provide prudential norms applicable to any restructuring/change in ownership, whether
under the IBC framework or outside the IBC.

Individual Housing Loans — Rationalisation of Risk Weights

The RBI has issued a notification on individual housing loans to rationalise the risk weights, irrespective of the amount.
Accordingly, the risk weights for all new housing loans to be sanctioned on or after October 16, 2020 and up to March
31, 2022 are such that the standard asset provisioning percentage is 0.25%, risk weight percentage is 35% for LTV ratio
more than 80 and the risk weight percentage is 50% for LTV ration more than 80 but less than 90.

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDDBFI Act”)

The RDDBFI Act was enacted for adjudication of disputes pertaining to debts due to banks and financial institutions
exceeding 22.00 million. The RDDBFI Act provides for the constitution of debt recovery tribunals, before which banks
and financial institutions may file applications for recovery of debts. Further, no court or other authority, except the
Supreme Court or a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution of India, shall have,
or is entitled to exercise, any jurisdiction, powers or authority in relation to the aforementioned matter. The tribunals may
pass orders for directions including inter- alia recovery of such dues by the bank as may be deemed fit along with a
recovery certificate to such effect from the presiding officer of the respective tribunal; attachment of the secured properties
towards the dues to the bank: injunctive orders restraining the debtors from alienating, transferring or disposing of such
secured properties; appointment of receivers and/or local commissioners with respect to such secured properties and
distribution of proceeds from sale of such secured properties towards dues. Pursuant to the recovery certificate being
issued, the recovery officer of the respective debt recovery tribunal shall effectuate the final orders of the debt recovery
tribunal in the application. Unless such final orders of the debt recovery tribunal have been passed with the consent of the
parties to an application, an appeal may be filed against such final orders of the debt recovery tribunal before the debt
recovery appellate tribunal, which is the appellate authority constituted under the RDDBFI Act.

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(“SARFAESI Act”)

The SARFAESI Act governs securitization of financial assets in India. The SARFAESI Act provides that any asset
securitization company may acquire the financial assets of a bank or financial institution by either entering into an
agreement with such bank or financial institution for the transfer of such assets to the company or by issuing a debenture
or bond or any other security in the nature of the debenture, for consideration, as per such terms and conditions as may
be mutually agreed between them. The SARFAESI Act further provides that if the bank or financial institution is a lender
in relation to any financial assets acquired by the asset securitization company as stated above, then such company shall
be deemed to be the lender in relation to those financial assets. Further, upon such acquisition, all material contracts
entered into by the bank or financial institution, in relation to the financial assets, shall also get transferred in favour of
the asset securitization company. The SARFAESI Act also enables banks and notified financial institutions to enforce the
underlying security of an NPA without court intervention. Pursuant to an asset being classified as an NPA, the security
interest can be enforced as per the procedure laid down in the Security Interest (Enforcement) Rules, 2002.

The Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (“Repo Directions”)
The Repo Directions are applicable to repurchase transactions undertaken on recognised stock exchanges, electronic

trading platforms authorised by the RBI and over-the-counter market. The securities eligible for repurchase under the
Repo Directions are government securities, listed corporate bonds and debentures subject to the condition that no

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