1. REGULATORY CAPITAL
The Bank is subjected to Basel III capital adequacy guidelines stipulated by RBI with effect from April 1,2013. The guidelines provide a transition schedule for Basel III implementation till Oct. 1,2021. As per RBI Guidelines, Basel III has been completely implemented from Oct. 1,2021. As per guidelines, the Tier I capital is made up of Common Equity Tier I (CET I) and Additional Tier I Capital (AT 1).
Basel III guidelines require the Bank to maintain minimum capital to Risk Weighted Assets ratio (CRAR) of 11.50% with minimum CET I of 8.00% and minimum Tier I CRAR of 9.50% (both inclusive of Capital Conservation Buffer of 2.50%) as at March 31,2025.
LCR aims to ensure that a bank maintains an adequate level of unencumbered High-Quality Liquid Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30-calendar daytime horizon under a significantly severe liquidity stress scenario specified by RBI.
Minimum requirement of LCR as stipulated by RBI is 100% for the calendar year 2019 onwards. LCR is applicable to Bank's domestic operations as well as overseas operations.
High Quality Liquid Assets (HQLA):
Liquid assets comprise of high-quality assets that can be readily sold or used as collateral to obtain funds in a range of stress scenarios. They should be unencumbered i.e. without legal, regulatory or operational impediments. Assets are considered to be high quality liquid assets if they can be easily and immediately converted into cash at little or no loss of value. HQLA is categorized into two: a) Level 1 Assets, and b) Level 2 Assets. Level 2 Assets are further sub divided into Level 2A Assets & Level 2B Assets based on Liquidity & Price Volatility.
Level 1 assets are stock of HQLA without any haircut. Level 1 Assets mainly comprise Cash including excess Cash Reserve Ratio (CRR), Excess SLR (Statutory Liquidity Ratio), Marginal Standing Facility (2% of Net Demand and Time Liability w.e.f. 01st January 2022) & FALLCR (16.00% of Net Demand and Time Liability).
A haircut of 15% is applied on current market value of Level 2A asset. Level 2A assets mainly comprise of securities with 20% risk weight. A 50% haircut is applied on current market value of Level 2B asset. Level 2B assets should not be more than 15% of the total stock of HQLA. Level 2B assets mainly comprise Securities with risk weights higher than 20% but not higher than 50%.
Net Cash Outflows
The total net cash outflows are defined as the total expected cash outflows minus total expected cash inflows. In order to determine cash outflows, the Bank, in terms of RBI guidelines, segregates its deposits into various customer segments, viz Retail (which include deposits from Natural Persons), Small Business Customers (those with total aggregated funding up to Rs. 7.5 crore) and deposits from Non-Financial Customers (NFC) and Other Legal Entity Customers (OLE). Total expected cash inflows are calculated by multiplying the outstanding balances of various categories of contractual receivables by the rates at which they are expected to flow in, up to an aggregate cap of 75% of total expected cash outflows.
Brief about LCR of the Bank
The entities covered are Union Bank of India and Union Bank of India UK Ltd. The Bank during the three months ended 31st Mar 2025 maintained average HQLA of Rs. 2,84,439.29 Crore. Level 1 assets are the main drivers of HQLA for the bank. They contribute to 98% of the total stock of HQLA. Based on daily averages for the quarter ended 3151 March 2025, Facility to avail Liquidity for Liquidity Coverage Ratio constitutes the highest portion to HQLA i.e. around 68% of the total HQLA. Level 2 assets which are lower in quality as compared to Level 1 assets, constitute 2% of the total stock of HQLA against maximum permissible level of 40%.
Bank's exposure is mainly in Indian Rupee. Unsecured wholesale funding constitutes major portion of total funding sources. Retail deposits and deposits from small business customers contributed around 20% and 4% of the total weighted cash outflows, respectively. Deposits from non-financial corporates contributed around 30% of the total weighted cash outflows. The other contingent funding obligations primarily include bank guarantees (BGs) and letters of credit (LCs) issued on behalf of the Bank's clients. Inflows by various counterparties contribute around 75% of the total weighted cash inflows.
Bank has calculated LCR for all working days over the Mar 2025 quarter. The average of the daily observation of 68 data points is calculated. The average LCR for the quarter ended 31st Mar 2025 is 130.67% as against 130.61% for quarter ended 31st Dec 2024 and is well above the present minimum requirement prescribed by RBI of 100%.
Qualitative Disclosure:
The objective of the Net Stable Funding Ratio (NSFR) is to promote the resilience of bank's liquidity risk profiles and to incentivize a more resilient banking sector over a longer time horizon. The NSFR will require banks to maintain a stable funding profile in the form of Capital & liabilities in relation to the composition of their assets and off-balance sheet activities.
RBI issued the regulations on the implementation of the Net Stable Funding Ratio in May 2018 with minimum requirement of equal to at least 100%. The implementation is effective from 1st October 2021. NSFR is applicable to Bank's domestic operations as well as overseas operations and computed at standalone and consolidated level.
Available Stable Funding (ASF) is defined as the portion of capital and liabilities expected to be reliable which is determined by various factor weights according to the nature and maturity of liabilities with liabilities having maturity of 1 year or more receiving 100% weight.
Required Stable Funding (RSF) is defined as the portion of on balance sheet and off-balance sheet exposures which requires to be funded on an ongoing basis. The amount of such stable funding required is a function of the liquidity characteristics and residual maturities of the various assets held.
Brief about NSFR of the Bank
The entities covered are Union Bank of India and Union Bank of India UK Ltd. The main drivers of the Available Stable Funding (ASF) are the capital base, retail deposit base, and funding from non-financial companies and long-term funding from institutional clients. The capital base formed around 12%, retail deposits (including deposits from small sized business customers) formed 71% and wholesale funding formed 16% of the total Available Stable Funding, after applying the relevant weights.
The Required Stable Funding primarily comprised lending to corporates, retail clients and financial institutions which constituted 89% of the total RSF after applying the relevant weights. The stock of High-Quality Liquid Assets which majorly includes cash and reserve balances with the RBI, government debt issuances attracted no or low amount of stable funding due to their high quality and liquid characteristic. Accordingly, the HQLA constituted only 2% of the Required Stable Funding after applying the relevant weights. Other assets and Contingent funding obligations, such as committed credit facilities, guarantees and letters of credit constituted 9% of the Required Stable Funding.
Bank has maintained comfortable stable funding buffers with Available Stable Funding at consolidated level of Rs.10,17,065.46 Crores against Rs.8,12,945.81 Crores of Required Stable Funding, resulting in a consolidated NSFR of 125.11% as on 31st March 2025.
Note for Current Year
# It includes revaluation gain on investment in compliance with RBI Master Directions - Classification, Valuation and Operation on Investment Portfolio Sep 2023 and Reversal of NPI Provision.
## In compliance with RBI Master Directions - Classification, Valuation and Operation on Investment Portfolio Sep 2023, the balance of provision for depreciation as at March 31,2024, is reversed into the Revenue/General Reserve.
c. Sale and transfers to/from HTM category
The Bank has not made sales and transfers to/from HTM category during the financial year 2024-25 exceeding 5 per cent of the book value of investments held in HTM category at the beginning of the year. The 5 per cent threshold to above will exclude:
i) The one-time transfer of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken by banks at the beginning of the accounting year.
ii) Direct sale from HTM for bringing down SLR holding in HTM category consequent to a downward revision in SLR requirements by RBI.
iii) Sale to Reserve Bank of India under liquidity management operations of RBI like Open Market Operations (OMO) and the Government securities acquisition programme (GSAP).
iv) Repurchase of Government Securities by Government of India from banks under buyback / switch operations.
v) Repurchase of State Development Loans by respective state governments under buyback / switch operations.
vi) Additional shifting of securities explicitly permitted by the Reserve Bank of India.
e. Repo Transactions (in Face Value and Market Value terms)
The following tables set forth for the periods indicated, the details of securities sold and purchased under repo and reverse repo transactions respectively including transactions under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF).
I) Profit of ' 605.32 Crore (previous year ' 290.89 crore) on sale of "Held to Maturity" category securities have been taken to profit and loss account initially.
II) In respect of "Held to Maturity" category, the excess of acquisition cost over face value of the securities amortized during the year amounted to ' 496.30 crore (previous year ' 684.19 Crore).
Note: During previous year, only excess of acquisition cost over face value of the securities amortised during the year. However, as per RBI Master Direction -Classification, Valuation and Operation on Investment portfolio Sep 2023, excess of face value over acquisition cost also need to be accrued in the books from 01.04.2024.
III) Total investments made in shares, convertible debentures and units of equity linked mutual funds/venture capital funds and also advances against shares aggregate to ' 3,837.56 crore (previous year ' 4,373.62 crore).
IV) Pursuant to the RBI circular RBI/2023-24/90 DOR.STR.REC.58/21.04.048/2023-24 dated December 19, 2023 and RBI/2023-24/140 DOR.STR.REC.85/21.04.048/2023-24 dated March 27, 2024, Bank has made a provision of ' 15.20 Crore in respect of investments in Alternate Investment Funds (AIF) as on March 31,2025. And for the Previous Year Rs. 19.54 Crore was provided i.e. March 31,2024.
g. Central Government vide Gazette Notification no. CG-DL-E07042025-262339 dated April 07,2025 notified amalgamation of Chaitanya Godavari Grameena Bank (Sponsored by Union Bank of India), Andhra Pragathi Grameena Bank (Sponsored by Canara Bank), Saptagiri Grameena Bank (Sponsored by Indian Bank) and Andhra Pradesh Grameena Vikas Bank (Sponsored by State Bank of India) into a single Regional Rural Bank, called as Andhra Pradesh Grameena Bank under the sponsor of Union Bank of India. Accordingly, Chaitanya Godavari Grameena Bank, sponsored by our Bank will be amalgamated into Andhra Pradesh Grameena Bank (with Union Bank of India as the sponsor Bank) w.e.f. May 01,2025.
h. There is no material impact of changes in Significant Accounting Policies followed by the bank during the financial year ended March 31,2025 as those followed in the preceding financial year ended March 31,2024 except for the classification and valuation of investments which is as per the Master direction No. RBI/DOR/2023-24/104 DOR.MRG.36/21.04.141/2023-
24 dated September 12, 2023 on Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 issued by Reserve Bank of India applicable from April 1,2024.
The corresponding previous period and yearly previous figures in respect of March 31, 2024 and financial year ended March 31,2025 respectively are not comparable. The directions of Reserve Bank of India issued vide RBI/DOR/2023-24/104 DOR.MRG.36/21.04.141/2023-24 dated September 12, 2023 have resulted in net increase in income due to revaluation of investments (including security receipts) categorized under Fair Value through Profit and Loss (FVTPL) and Fair Value Held for Trading (FVHFT) by ' 1,175.41 Crore and Increase in General Reserve and AFS Reserve by '1,593.34 Crore and ' 96.51 Crore respectively (net of taxes) as on March 31,2025.
e. Divergence in asset classification & provisioning
Based on the conditions mentioned in RBI Master Direction on Financial Statements - Presentation and Disclosures circular No. RBI/DOR/2021-22/83 DOR.ACC.REC. No.45/21.04.018/2021-22 August 30, 2021 (updated from time to time), no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's supervisory process for the year ended March 31,2024.
f. Disclosure of transfer of loan exposure:
i) The Bank has not transferred any loans not in default during FY 2024-25.
As per RBI Guidelines post 8 years rating is not applicable. 100% provision has been made on the Book value of Security Receipts.
As per RBI Master Directions on Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 dated 12th September 2023, Standard Security Receipts are controlled @ Re. 1.00 w.e.f. April 01,2024.
*As per RBI circular no. RBI/DOR/2024-25/135 DOR. STR. REC.72/21.04.048/2024-25 dated 29.03.2025, SRs backed by Government Guarantee shall be valued periodically by reckoning the Net Asset Value (NAV) declared by the ARC based on the recovery ratings received for such instruments w.e.f. 29.03.2025.
We further inform that Nine new security receipts have been added in the SR portfolio during the period April 01, 2024 to March 31,2025.
g. Un-Hedged Foreign Currency Exposures
In terms of guidelines issued by Reserve Bank of India with regard to UFCE, Bank has approved Credit Risk Management policy. While framing the policy, bank has taken into consideration the exchange risks arising out of volatility in the forex market and accordingly has made suitable provisions to reduce the risks. Bank has also taken into consideration credit risks arising out of unhedged foreign currency exposure and accordingly Bank has put in place risk mitigation measures by incorporating additional loan pricing framework. Total provision made for exposures to entities with UFCE as on 31/03/2025 is ' 90.11 crores.
c. Disclosures on Risk Exposures in Derivatives
I) Qualitative disclosure:
a) The Bank deals in two groups of derivative transactions within the framework of RBI guidelines.
i) Over the Counter Derivatives
ii) Exchange Traded Derivatives
The Bank deals in Forward Rate Agreement, Interest Rate Swaps, Cross Currency Swap and Currency Options in Over the Counter Derivatives group.
In Exchange Traded Derivatives Group, the Bank trades in Currency Futures and Interest Rate Futures. The Bank is Trading & clearing member with three Exchanges viz. National Stock Exchange (NSE), Bombay Stock Exchange (BSE) & Metropolitan Stock Exchange (MSEIL), on their Currency Derivative segment, as permitted by Reserve Bank of India. The Bank carries out proprietary trading in currency futures on these exchanges. The Bank has set up the necessary infrastructure for Front, Mid and Back office operations. Daily Mark to Market (MTM) and Margin obligations are settled with the exchanges as per guidelines issued by the Regulators.
The Bank trades in Interest Rate Futures on National Stock Exchange. The bank has necessary infrastructure for Front, Mid and Back office operations in place. Daily Mark to Market (MTM) and Margin obligations are settled with the exchanges as per guidelines issued by the Regulators.
The Bank undertakes derivative transactions for proprietary trading/market making, hedging own balance sheet and for offering to customers, who use them for hedging their risks within the prevalent regulations. Proprietary trading/ market making positions are taken in Rupee Interest Rate Swap, Currency Futures and Interest Rate Futures. While derivative instruments present immense opportunity for making a quantum leap in non-interest income and also for hedging market risk, it exposes the Bank to various risks. The Bank has adopted the following mechanism for managing different risks arising out of derivative transactions.
In terms of the structure, operations in the Treasury Branch are segregated into following three functional areas, which are provided with trained officers with necessary systems support and their responsibilities are clearly defined.
I) Front Office (Dealing Room) - Ensures Compliance with trade origination requirements as per Bank's policy and RBI guidelines.
II) Mid-Office - Risk Management, Accounting Policies and Management
III) Back Office - Settlement, Reconciliation, Accounting.
Mid Office monitors transactions in the trading book and excesses, if any, are reported to Risk management Department for necessary action. Mid Office also measures the financial risk for transactions in the trading book on a daily basis, by way of Mark to Market. Daily Mark to Market position is reported to Risk Management Department, for onward reporting of the risk profile to the Directors' Committee on the Assets and Liability Management.
In case of corporate client's transactions are concluded only after the inherent credit exposures are quantified and approved in terms of approval process laid down in the Treasury Policy for customer appropriateness and suitability. The necessary documents like ISDA agreements are duly executed. The bank has adopted Current Exposure Method for monitoring credit exposures.
b) Treasury Policy of the Bank lays down the types of financial derivative instruments, scope of usages, and approval process as also the limits like the open position limits, deal size limits, stop loss limits and counterpart exposure limit for trading in approved instruments.
Various Risk Limits are set up and actual exposures are monitored vis-a-vis the limits.
These limits are set up considering market volatility, business strategy and management experience. Risk limits are in place for risk parameters viz. PV01, stop loss, counterparty credit exposure. Actual positions are measured against these limits periodically and breaches if any are reported promptly. The Bank ensures that the Gross PV01 position arising out of all non-option derivative contracts is within the 0.25% of net worth of the Bank.
c) The Bank also uses financial derivative transactions for hedging its own Balance Sheet Exposures. Treasury Policy of the Bank spells out approval process for hedging the exposures. The hedge transactions are monitored on a regular basis. The notional profit or loss calculated on Mark to Market basis, PV01 and VaR on these deals are reported to the Assets
Liability Committee (ALCO) every month. Hedge effectiveness is the degree to which changes in the fair value or cash flows of the hedged items that are attributed to a hedged risk are offset by changes in the fair value or cash flows of the hedging instruments. This exercise is carried out periodically to ensure hedge effectiveness.
d) The hedged/un-hedged transactions are recorded separately. The hedged transactions are accounted for on accrual basis. All trading contracts are mark-to-market and resultant gross gain or loss is recorded in income statement.
In case of Option contracts, guidelines issued by FEDAI from time to time for recognition of income, premium, and discount are being followed.
To mitigate the credit risk, the Bank has policy in place to sanction limits to the counterparty Banks and Counterparty clients. The Bank adopts Current Exposure method for monitoring counterparty exposure periodically. While sanctioning derivative limit, the competent authority may stipulate condition of obtaining collaterals/margin as deemed appropriate. The derivative limit is reviewed periodically along with other credit limits.
The customer related derivative transactions are covered with counterparty banks, on back-to-back basis for identical amount and tenure and the bank does not carry any market risk.
1. Credit Exposure of Currency Derivatives & Interest Rate Derivatives also includes the exposure on Hedging deals d. Credit Default Swaps:
Banks using a proprietary model for valuation of Credit default swaps (CDS) positions, shall disclose the valuation as per the proprietary model, including the rationale for using that model and an explanation of the valuation methodology in the Notes to Accounts in their financial statements. The disclosure shall also include the valuation as per the CDS curve published by Fixed Income Money Market and Derivatives Association of India (FIMMDA) or a benchmark recommended by FIMMDA. The Bank has not entered any Credit Default Swap transaction during the financial year 2024 - 25.
- In terms of master directions on customer service, the complaints redressed within the next working day need not be included in the statement of complaints. Hence, the complaints received and resolved within T+1 day is excluded while analyzing the complaints.
- Awards were not accepted by the complainant and hence lapsed as per provisions of RBIOS Clause 15(7) which states that "The Award passed under sub-clause (1) shall lapse and be of no effect unless the complainant furnishes a letter of acceptance of the Award in full and final settlement of the claim to the Regulated Entity concerned, within a period of 30 days from the date of receipt of the copy of the Award".
Corrective Steps taken to avoid recurrence of lapses by the bank as under:
RBI:
CRILIC reporting:
The Bank developed an appropriate MIS during October 2022, which considerably improved data quality. For further improvement in data quality and error free submission of CRILC return, the Bank onboarded M/s IRIS Business Services in the month of June-2023.
Risk Categorization:
Corrective steps taken by the Bank:
As against the erstwhile process of Branch Staff assigning the risk category, the Bank has implemented auto assignment of customer risk categorization at the time of onboarding of a customer. The same is live for newly onboarded customers.
FIU-IND:
Corrective steps taken by the Bank:
-> Conducting enhanced due diligence and ensuring KYC compliance.
-> Provision to capture beneficial owner made available in CBS of the Bank.
-> The Bank has established exclusive transaction monitoring vertical which consists of EFRMS, OTMS, AML for monitoring of transactions under various angles.
f. Implementation of IFRS converged Indian Accounting Standards (Ind AS)
The RBI vide circular DBR.BP.BC.No. 76/21.07.001/2015-16 dated 11th February 2016, has prescribed the roadmap for implementation of Indian Accounting Standards (Ind-AS) in the Banks and the Banks needs to disclose the strategy for Ind-AS implementation, including the progress made in this regard. Further RBI vide circular DBR.BP.BC.No. 29/21.07.001/2018-19 dated 22nd March 2019 deferred implementation of IND AS till further notice.
The Bank, accordingly, has appointed a Consultant to assist in implementation of the Ind-AS. Further, the Bank has procured the required software and onboarded the vendor for software implementation of Indian Accounting Standards (Ind-AS). The Bank has also constituted a Steering Committee to oversee the progress made and the Audit Committee of the Board is being apprised of the same from time to time. Further, in terms of DO.DBR.BP.No.2535/21.07.001/2017-18 dated 13th September 2017, the Bank had been submitting Proforma Ind AS financial statements to the RBI on quarterly basis till 31st March 2021. Thereafter, in term of RBI's (Department of Regulation) mail dated 8th August 2021, bank has been advised to submit Proforma Ind AS financial statements on half yearly basis. Last proforma financials for the half year ended 30th September 2024 was submitted to RBI vide letter dated 29th November 2024.
15. Disclosures as per Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI)
a. NET PROFIT OR LOSS FOR THE PERIOD,PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES(AS 5)
i) During the year there were no material and prior period income/expenditure items.
ii) There is no change in significant accounting policies adopted during the current Financial year as compared to those followed in previous Financial year.
b. REVENUE RECOGNITION (AS 9)
Income and Expenditure have been accounted for on accrual basis except certain items of income are recognized on realization basis as per Accounting Policy no.3.4 of Schedule 17 of Significant Accounting Policies which however, is not considered to be material.
c. EMPLOYEE BENEFITS (AS 15 - REVISED)
I. Short Term Employment Benefits:
The undiscounted amounts of short-term employee benefits (e.g. medical benefits) payable wholly within twelve months of rendering the service are treated as short term and recognized during the period in which the employee rendered the service.
II. Long Term Employee Benefits:
a. Defined Contribution Plans:
The Bank operates a new pension scheme (NPS) for all officers/employees joining the Bank on or after 1st April, 2010, which is a defined contribution plan, such new joinees not being entitled to become members of the existing Pension Scheme. As per the scheme, the covered employees contribute 10% of their basic pay plus dearness allowance to the scheme together with 14% contribution from the Bank. Pending completion of registration procedures of the employees concerned, these contributions retained with the Bank. The Bank recognizes such annual contributions in the year to which they relate. Upon receipt of the Permanent Retirement Account Number (PRAN), the consolidated contribution amounts are transferred to the NPS trust.
The Bank has Defined Contribution Pension Scheme (DCPS) applicable to all categories of officers and employees joining the Bank on or after April 1,2010. The scheme is managed by National Pension Scheme (NPS) Trust under the aegis of the Pension Fund Regulatory and Development Authority. Protean eGov Technologies Limited (earlier known as National Securities Depository Limited) has been appointed as the Central Record Keeping Agency for the NPS. During F.Y. 2024-25, the Bank has contributed '704.53 crores (Previous Year '644.84 crore) to NPS.
b. Defined Benefit Plan:
Gratuity, Pension and Leave Encashment are defined benefit plans. These are provided for on the basis of an actuarial valuation as per Accounting Standard-15 "Employee Benefit" issued by the Institute of Chartered Accountants of India, made at the end of each financial year, based on the projected unit credit method. Actuarial gains/losses are immediately taken to the Profit & Loss account.
Defined Benefit Plans - Employee's Pension plan and Gratuity plan:
The Bank has accounted for employee benefits as per Accounting Standards issued by the Institute of Chartered Accountants of India, as per actuarial valuation report for the year ended March 31,2025.
1. The Bank operates in four segments viz., Treasury, Retail, Corporate/Wholesale and Other Banking Operations. These segments have been identified in line with AS-17 on segment reporting issued by the Institute of Chartered Accountants of India (ICAI) after considering the nature and risk profile of the products and services, the target customer profiles, the organizational structure and the internal reporting system of the bank. The bank has disclosed the business segment as primary segment. The revenue and other parameters of foreign branches for the period are within the threshold limits stipulated as per AS-17 and hence the bank has only one reportable segment.
2. The Bank has disclosed 'Digital Banking' as a sub-segment of the Retail Banking segment as required by RBI guidelines.
3. Segment wise income and expenditure which are not directly allocable have been allocated to the reportable segments based on assumptions as considered appropriate by the management.
4. Segment Liabilities and Segment Capital are distributed in the ratio of their respective Segment Assets.
5. Figure of previous period have been regrouped/reclassified wherever necessary.
IV. In terms of RBI circular no. RBI/DOR/2021-22/83 DOR.ACC.REC.No.45/21.04.018/2021-22 dated August 30, 2021 (Updated
from time to time), the following disclosures are required:
a. In case of Other Liabilities and Provisions, any item under the head "Others (including provisions)" exceeds one per cent of the total assets,
b. In case of Other Assets, any item under the head "Others" exceeds one per cent of the total assets,
c. In case of Other Income, any item under the head "Miscellaneous Income" exceeds one per cent of the total income,
d. In case of Operating Expenses, any item under the head "Other expenditure" exceeds one per cent of the total income,
Parties with whom transactions were entered into during the year
No disclosure is required in respect of related parties, which are "State controlled Enterprises" as per paragraph 9 of Accounting Standard (AS) 18. Further, in terms of paragraph 6 of AS 18, transactions in the nature of Banker - Customer relationship have not been disclosed including those with Key Management Personnel and relatives of Key Management Personnel. Further, nationalised banks need not disclose their transactions with the subsidiaries as well as the RRBs sponsored by them. As per the RBI Master Direction on Financial Statements - Presentation & Disclosure, KMPs are construed to be the Whole Time Directors of the Bank.
f. LEASES (AS 19)
PREMISES TAKEN ON OPERATING LEASE
The Bank has no non-cancellable operating lease during the FY 2024-25. Hence, additional disclosure under AS-19 is not applicable.
However, the amount of lease payment recognized in the profit & loss account for operating lease is ' 886.04 crore (PY ' 818.04 crore).
g. EARNING PER SHARE (AS 20)
Basic earnings per equity share are computed by dividing net profit after tax by the weighted average number of equity shares outstanding during the year. The diluted earnings per equity share is computed using the weighted average number of equity shares and weighted average number of diluted potential equity shares outstanding during the year.
Corporate Taxation:
Provision for tax is made for both current and deferred taxes. Current tax is provided on the taxable income using applicable tax rates and tax laws. Deferred Tax Assets and Deferred Tax Liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates and the tax laws that have been enacted or substantively enacted till the date of the Balance Sheet.
Deferred Tax Assets are recognized only if there is virtual certainty of realization of such assets in future. Deferred Tax Assets/Liabilities are reviewed at each Balance Sheet date based on developments during the year.
i. INVESTMENT IN JOINT VENTURES (AS-27)
Investments in joint ventures include ' 420.43 Crores (Previous year ' 286.88 Crores) representing Bank's interest in Star Union Dai-ichi Life Insurance Co., ASREC (India) Limited and India International Bank (Malaysia) BHD.
j. IMPAIRMENT OF ASSET (AS-28)
Management has assessed at balance sheet date i.e. as on 3151 March 2025 that whether there is any indication that any of the fixed asset to be impaired and no such asset is identified/found where condition of impairment is attracted as specified in AS-28.
k. CONTINGENT LIABLITIES (AS-29)
Contingent liabilities referred to in Schedule-12 at S. No.(I) & (VI) (i) are dependent upon the outcome of court/arbitration/ out of court settlement, the amount being called up, terms of contractual obligations, devolvement and raising of demand by parties concerned, disposal of appeals respectively.
During the current year, there were no discontinued operations (as per AS 24).
l. Reward Points for Debit and Credit Cards:
During the year bank has carried out actuarial valuation of its liability towards the redemption of reward points for debit and credit cards holder which was earlier accounted for on actual redemption basis upto FY 2023-24. Accordingly, an amount of ' 63,26,71,344 has been booked under the head provision and contingencies.
16. REVALUATION OF PROPERTY
Land and Building have been last revalued as on 31.12.2022 at Fair Market Value as determined by approved valuer. As per AS-10 (revised), the depreciation on revalued portion is recouped from revaluation reserve resulting in decrease in revaluation reserve by ' 179.16 crore for the year ended 2024-25.
17. CLIMATE CONTROL:
Union Bank of India has a policy in place in name of "Sustainable Development and Business Responsibility Policy" which is reviewed on annual basis. Through this policy, the Bank is committed to make effort to protect and restore the environment. Bank has taken various initiatives like Electricity Conservations, avoid usage of plastic bottles for packaged drinking water etc. To manage Environmental, Social and Governance (ESG) and climate risk, the Bank's Board has put in place "ESG Risk Framework, Climate Risk Policy and Sustainable Financing Framework". The Bank has formed ESG Steering Committee to formulate and implement ESG strategy and transition in the Bank.
18. COMPLIANCE TO THE PROVISION OF MSME DEVELOPMENT ACT, 2006
Bank is complying with the extant provisions of MSME Development Act 2006 and there has been no reported cases of any delayed payments of principal or interest due there on to micro, small and medium enterprises.
19. BALANCING OF BOOKS, RECONCILIATION OF INTER BRANCH/BANK TRANSACTIONS
Suspense Accounts, Sundry Deposits etc., and Inter Office Accounts between branches, controlling offices, Head Office and any other establishments are being reconciled on an ongoing basis and Management is of the opinion that, there is no material effect on the profit and loss account of the current year.
The figures of the previous year have been regrouped/rearranged wherever considered necessary to conform to current year classification. In cases where disclosure have been made for the first time in terms of RBI guidelines/Accounting Standards, Previous year figures have not been mentioned.
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